Edgar Filing: IRSA INVESTMENTS & REPRESENTATIONS INC

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

[2] Calculated dividing occupied square meters by leaseable area on the last day of the period.

[3] Cost of acquisition plus improvements, less cumulative depreciation, plus adjustment for inflation, less allowance for impairment in value, plus recovery of allowances, if applicable.

[4] Excludes Museo de los Niños (3,732 sqm).

[5] Excludes Museo de los Niños (1,261 sqm).

form6k.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15b-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of February, 2014

IRSA Inversiones y Representaciones Sociedad Anónima

(Exact name of Registrant as specified in its charter)

IRSA Investments and Representations Inc.

(Translation of registrant´s name into English)

Republic of Argentina

(Jurisdiction of incorporation or organization)

Bolívar 108

(C1066AAB)

Buenos Aires, Argentina

(Address of principal executive offices)

Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANÓNIMA

(THE “COMPANY”)

REPORT ON FORM 6-K

Attached is an English translation of the Financial Results the six month periods ended December 31, 2013 and on December 31, 2012, filed with the Bolsa de Comercio de Buenos Aires and with the Comisión Nacional de Valores.

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Financial Statements

as of December 31, 2013 and for the six-month periods

ended December 31, 2013 and 2012

Legal information

Denomination: IRSA Inversiones y Representaciones Sociedad Anónima.

Fiscal year N°.: 71, beginning on July 1, 2013.

Legal address: 108 Bolívar St., 1st floor, Autonomous City of Buenos Aires, Argentina.

Company activity: Real estate investment and development.

Date of registration of the By-laws in the Public Registry of Commerce: June 23, 1943.

Date of registration of last amendment of the by-laws in the Public Registry of Commerce: March 15, 2013.

Expiration of the Company’s by-laws: April 5, 2043.

Registration number with the Superintendence: 213,036.

Capital: 578,676,460 shares.

Common Stock subscribed, issued and paid up (in thousands of Ps.): 578,676.

Parent Company: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (Cresud S.A.C.I.F. y A.).

Legal Address: 877 Moreno St., 23rd. floor, Autonomous City of Buenos Aires, Argentina.

Main activity: Real estate, agricultural, commercial and financial activities.

Interest of the Parent Company on the capital stock: 378,753,404 common shares.

Percentage of votes of the Parent Company on the equity: 65.45%

Type of stock	CAPITAL STATUS
Type of stock	Authorized for Public Offer of Shares (*)	Subscribed, Issued and Paid up (in thousands of Pesos)
Common stock with a face value of Ps.1 per share and entitled to 1 vote each	578,676,460	578,676

(*) Company not included in the Optional Statutory System of Public Offer of Compulsory Acquisition.

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Financial Position

as of December 31, 2013 and June 30, 2013

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

	Note	12.31.2013		06.30.2013
ASSETS
Non- Current Assets
Investment properties	9	4,187,479		3,992,530
Property, plant and equipment	10	204,482		212,673
Trading properties	11	183,140		178,425
Intangible assets	12	90,030		79,653
Investments in associates and joint ventures	7.8	1,528,849		1,423,936
Deferred income tax assets	24	231,672		85,236
Restricted assets	15	13,333		10,881
Income tax and Minimum Presumed Income tax ("MPIT") credit		141,516		130,086
Trade and other receivables	16	95,502		85,126
Investments in financial assets	17	873,654		267,455
Derivative financial instruments	18	8,367		21,208
Total Non-Current Assets		7,558,024		6,487,209
Current Assets
Trading properties	11	17,229		11,689
Inventories	13	15,830		16,321
Restricted assets	15	923		1,022
Income tax and Minimum Presumed Income tax ("MPIT") credit		1,737		-
Trade and other receivables	16	649,165		769,333
Investments in financial assets	17	247,349		244,053
Derivative financial instruments	18	24,009		-
Cash and cash equivalents	19	225,740		796,902
Total Current Assets		1,181,982		1,839,320
TOTAL ASSETS		8,740,006		8,326,529
SHAREHOLDERS' EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital		574,588		578,676
Treasury stock		4,088		-
Inflation adjustment of share capital and treasury stock		123,329		123,329
Share premium		793,123		793,123
Cost of treasury stock		(29,627	)	-
Acquisition of additional interest in subsidiaries		(20,782	)	(20,782	)
Reserve for share-based compensation	32	19,695		8,258
Legal reserve		116,840		85,140
Special reserve		375,487		395,249
Reserve for new developments		469,831		492,441
Cumulative translation adjustment		102,212		50,776
Retained earnings		(20,928	)	239,328
Total capital and reserves attributable to equity holders of the parent		2,507,856		2,745,538
Non-controlling interest		389,464		385,151
TOTAL SHAREHOLDERS' EQUITY		2,897,320		3,130,689
LIABILITIES
Non-Current Liabilities
Trade and other payables	20	217,842		211,118
Borrowings	23	3,423,327		2,922,642
Deferred income tax liabilities	24	398,183		395,936
Salaries and social security liabilities	21	4,447		3,160
Provisions	22	127,163		57,737
Total Non-Current Liabilities		4,170,962		3,590,593
Current Liabilities
Trade and other payables	20	644,104		677,010
Income tax and Minimum Presumed Income tax ("MPIT") liabilities		97,192		90,916
Salaries and social security liabilities	21	44,427		49,010
Derivative financial instruments	18	-		1,732
Borrowings	23	872,778		772,529
Provisions	22	13,223		14,050
Total Current Liabilities		1,671,724		1,605,247
TOTAL LIABILITIES		5,842,686		5,195,840
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		8,740,006		8,326,529

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Income

for the six and three-month periods beginning on July 1st and October 1st, 2013 and

2012 and ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

		Six months					Three months
	Note		12.31.2013		12.31.2012			12.31.2013		12.31.2012
Revenues	26		1,373,960		1,080,036			752,513		596,989
Costs	27		(641,870	)	(534,712	)		(348,170	)	(294,834	)
Gross Profit			732,090		545,324			404,343		302,155
Gain from disposal of investment properties	9		7,481		55,959			7,481		24,890
General and administrative expenses	28		(129,379	)	(108,986	)		(70,901	)	(65,453	)
Selling expenses	28		(65,761	)	(48,532	)		(35,075	)	(24,895	)
Other operating results, net	30		(17,344	)	115,109			(7,812	)	124,235
Profit from operations			527,087		558,874			298,036		360,932
Share of profit of associates and joint ventures	7.8		51,183		14,384			12,192		(2,347	)
Profit before financial results and income tax			578,270		573,258			310,228		358,585
Finance income	31		60,255		57,964			13,721		19,241
Finance cost	31		(726,448	)	(358,428	)		(418,247	)	(177,451	)
Other financial results	31		54,537		47,374			12,696		31,357
Financial results, net	31		(611,656	)	(253,090	)		(391,830	)	(126,853	)
(Loss) / Profit before income tax			(33,386	)	320,168			(81,602	)	231,732
Income tax	24		7,312		(74,289	)		20,260		(36,663	)
(Loss) / Profit for the period			(26,074	)	245,879			(61,342	)	195,069

Attributable to:
Equity holders of the parent			(21,678	)	223,782			(54,060	)	182,640
Non-controlling interest			(4,396	)	22,097			(7,282	)	12,429

(Loss) / Profit per share attributable to equity holders of the parent during the period:
Basic			(0.037	)	0.387			(0.093	)	0.316
Diluted			(0.037	)	0.387			(0.093	)	0.316

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

	IRSA Inversiones y Representaciones

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Comprehensive Income

for the six and three-month periods beginning on July 1st and on October 1st, 2013 and 2012 and ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

	Six months				Three months
		12.31.2013		12.31.2012		12.31.2013		12.31.2012
(Loss) / Profit for the period		(26,074	)	245,879		(61,342	)	195,069
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustment		71,776		23,733		48,483		13,243
Other comprehensive income for the period (i)		71,776		23,733		48,483		13,243
Total comprehensive income for the period		45,702		269,612		(12,859	)	208,312

Attributable to:
Equity holders of the parent		29,758		247,203		(17,535	)	195,571
Non-controlling interest		15,944		22,409		4,676		12,741

(i)	Components of other comprehensive income have no impact on income tax.

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

for the six-month periods ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

	Attributable to equity holders of the parent
	Share capital			Treasury stock		Inflation adjustment of share capital and treasury stock (2)		Share premium		Cost of treasury stock			Acquisition of additional interest in subsidiaries			Reserve for share-based compensation		Legal reserve		Special reserve (1)			Reserve for new developments			Cumulative translation adjustment		Retained earnings			Subtotal			Non-controlling interest			Total shareholders' equity
Balance at July 1st, 2013		578,676			-		123,329		793,123		-			(20,782	)		8,258		85,140		395,249			492,441			50,776		239,328			2,745,538			385,151			3,130,689
Loss for the period		-			-		-		-		-			-			-		-		-			-			-		(21,678	)		(21,678	)		(4,396	)		(26,074	)
Other comprehensive income for the period		-			-		-							-			-		-		-			-			51,436		-			51,436			20,340			71,776
Total comprehensive income for the period		-			-		-		-		-			-			-		-		-			-			51,436		(21,678	)		29,758			15,944			45,702
Appropriation of retained earnings approved by Shareholders’ meeting held 10.31.13		-			-		-		-		-			-			-		31,700		(19,762	)		(22,610	)		-		10,672			-			-			-
Dividends distribution – approved by Shareholders’ meeting held 10.31.13		-			-		-		-		-			-			-		-		-			-			-		(250,000	)		(250,000	)		-			(250,000	)
Reserve for share-based compensation (Note 32)		-			-		-		-		-			-			11,437		-		-			-			-		-			11,437			398			11,835
Purchase of Treasury stock,		(4,088	)		4,088		-		-		(29,627	)		-			-		-		-			-			-		-			(29,627	)		-			(29,627	)
Distribution of share capital of subsidiaries		-			-		-		-		-			-			-		-		-			-			-		-			-			(1,927	)		(1,927	)
Reimbursement of expired dividends		-			-		-		-		-			-			-		-		-			-			-		750			750			34			784
Dividends distributed by subsidiaries		-			-		-		-		-			-			-		-		-			-			-		-			-			(10,503	)		(10,503	)
Capital contribution of non-controlling interest		-			-		-		-		-			-			-		-		-			-			-		-			-			367			367
Balance at December 31, 2013		574,588			4,088		123,329		793,123		(29,627	)		(20,782	)		19,695		116,840		375,487			469,831			102,212		(20,928	)		2,507,856			389,464			2,897,320

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

(1)	Related to CNV General Resolution No. 609/12. See Note 25.

(2)	Includes Ps. 871 of Inflation adjustment treasury stock. See Note 25.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

for the six-month periods ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

	Attributable to equity holders of the parent
	Share capital		Inflation adjustment of share capital			Share premium		Acquisition of additional interest in subsidiaries			Reserve for share-based compensation		Legal reserve		Reserve for new developments		Cumulative translation adjustment			Retained earnings			Subtotal			Non-controlling interest			Total shareholders’ equity
Balance at July 1st, 2012		578,676		274,387			793,123		(15,714	)		2,595		71,136		419,783		14,502			510,853			2,649,341			390,428			3,039,769
Profit for the period		-		-			-		-			-		-		-		-			223,782			223,782			22,097			245,879
Other comprehensive income for the period		-		-			-		-			-		-		-		23,421			-			23,421			312			23,733
Total comprehensive income for the period		-		-			-		-			-		-		-		23,421			223,782			247,203			22,409			269,612
Appropriation of retained earnings approved by Shareholders’ meeting held 10.31.12		-		-			-		-			-		14,004		72,658		-			(86,662	)		-			-			-
Reclassification of the deferred tax liability – Approved by Shareholders’ meeting held 10.31.12		-		(151,058	)		-		-			-		-		-		-			151,058			-			-			-
Dividends distribution – approved by Shareholders’ meeting held 10.31.12		-		-			-		-			-		-		-		-			(180,000	)		(180,000	)		-			(180,000	)
Acquisition of non-controlling interest by business combination		-		-			-		-			-		-		-		-			-			-			102,723			102,723
Cumulative translation adjustment for interest held before business combination		-		-			-		-			-		-		-		(12,915	)		-			(12,915	)		-			(12,915	)
Reserve for share-based compensation (Note 32)		-		-			-		-			3,051		-		-		-			-			3,051			110			3,161
Dividends distributed by subsidiaries		-		-			-		-			-		-		-		-			-			-			(15,690	)		(15,690	)
Acquisition of additional interest in subsidiaries		-		-			-		(1,142	)		-		-		-		-			-			(1,142	)		-			(1,142	)
Distribution of share capital of subsidiaries		-		-			-		-			-		-		-		-			-			-			(39,572	)		(39,572	)
Reimbursement of expired dividends		-		-			-		-			-		-		-		-			591			591			35			626
Capital contribution of non-controlling interest		-		-			-		-			-		-		-		-			-			-			4,790			4,790
Balance at December 31, 2012		578,676		123,329			793,123		(16,856	)		5,646		85,140		492,441		25,008			619,622			2,706,129			465,233			3,171,362

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Consolidated Statements of Cash Flows

for the six-month periods ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

	Note	12.31.2013		12.31.2012
Operating activities:
Cash generated by operations	19	572,038		483,749
Income tax and Minimum Presumed Income tax paid		(150,057	)	(132,053	)
Net cash generated by operating activities		421,981		351,696
Investing activities:
Capital contributions in associates and joint ventures	7	(1,221	)	(22,360	)
Purchases of associates and joint ventures	3.7.8	(13,057	)	(32,000	)
Purchases of investment properties	9	(138,366	)	(87,757	)
Proceeds from sale of investment properties		127,852		81,731
Purchases of property, plant and equipment	10	(7,464	)	(7,085	)
Purchases of intangible assets	12	(202	)	(301	)
Purchase of investments in financial assets		(1,330,828	)	(570,734	)
Proceeds from sale of investments in financial assets		747,872		523,177
Advanced payments		(36,576	)	(9,750	)
Proceeds from sale of joint ventures		7,736		-
Acquisition of subsidiaries, net of cash acquired		-		(117,874	)
Interest received from financial assets		2,971		5,922
Loans granted to associates and joint ventures		-		(131	)
Dividends received		15,922		41,918
Net cash used in investing activities		(625,361	)	(195,244	)
Financing activities:
Proceeds from borrowings		145,057		388,717
Repayments of borrowings		(119,491	)	(132,939	)
Payment of non-convertible notes		(189,512	)	-
Payments of financial leasings		(758	)	(558	)
Dividends paid		(34,208	)	(171,545	)
Acquisition of non-controlling interest in subsidiaries		-		(1,142	)
Capital contribution of non-controlling interest		367		4,790
Interest paid		(181,310	)	(148,042	)
Capital reduction of subsidiaries		(1,927	)	(39,572	)
Loans from associates and joint ventures, net		12,550		48,431
Payment for acquisition of non-controlling interest		-		(3,584	)
Repurchase of treasury stock		(29,627	)	-
Payment of seller financing of shares		(1,640	)	(4,797	)
Payments of derivative financial instruments		(1,164	)	-
Proceeds from derivative financial instruments		3,060		-
Net cash used in financing activities		(398,603	)	(60,241	)
Net (decrease) / increase in cash and cash equivalents		(601,983	)	96,211
Cash and cash equivalents at beginning of year	19	796,902		259,169
Foreign exchange gain on cash and cash equivalents		30,821		10,657
Cash and cash equivalents at end of period		225,740		366,037

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

1.	The Group’s business and general information

IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA”, “the Company” / “Us” or “the Society”) was founded in 1943 and is engaged in a diversified range of real estate activities in Argentina since 1991.

IRSA and its subsidiaries are collectively referred to hereinafter as “the Group”.

As of December 31, 2013, the Group operates in six business segments. See Note 7 to the Condensed Consolidated Financial Statements as of June 30, 2013 for a description of such segments.

Group’s real estate business operations are conducted primarily through IRSA and IRSA’s principal subsidiary, Alto Palermo S.A. (“APSA”). Through APSA, the Group owns, manages and develops shopping centers across Argentina, a portfolio of office and other rental properties in the Autonomous City of Buenos Aires, and it entered the United States of America (“USA”) real estate market in 2009, mainly through the acquisition of non-controlling interests in office buildings and hotels. Through IRSA or APSA, the Group also develops residential properties for sale. The Group, through IRSA, is also involved in the operation of branded hotels. The Group uses the term “real estate” indistinctively in these consolidated financial statements to denote investment, development and/or trading properties activities.

The activities of the Group’s segment “Financial operations and others” are carried out mainly through Banco Hipotecario S.A. (“BHSA”), where IRSA has a 29.77% interest (without considering treasury shares of our own). BHSA is a commercial bank offering a wide variety of banking activities and related financial services to individuals, small and medium-sized companies and large corporations, including the provision of mortgaged loans. BHSA’s shares are listed on the Buenos Aires Stock Exchange (“BASE”). Besides that, the Group has a 42.95% interest in Tarshop S.A (“Tarshop”), a company which main activities are credit card and loan origination transactions.

IRSA’s shares are listed and traded on both the BASE and the New York Stock Exchange (“NYSE”). APSA’s shares are listed and traded on both the BASE and the NASDAQ of USA.

Cresud S.A.C.I.F y A. is our ultimate parent company and is a corporation incorporated and domiciled in Argentina. The address of its registered office is Moreno 877, Floor 23, Autonomous City of Buenos Aires, Argentina.

These Unaudited Condensed Interim Consolidated Financial Statements have been approved for issuance by the Board of Directors on February 10, 2014.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

2.	Basis of preparation of the Unaudited Condensed Interim Consolidated Financial Statements

2.1.	Basis of preparation

These Unaudited Condensed Interim Consolidated Financial Statements have been prepared in accordance with IAS 34 “Interim Financial Reporting”. Furthermore, some additional issues were included as required by the Business Companies Act and/or regulations of the CNV, including supplementary information provided in the last paragraph of section 1, Chapter III, Title IV of General Ruling 622/13 of the CNV. Such information is included in the Notes to the Unaudited Condensed Consolidated Interim Financial Statements.

These Unaudited Condensed Interim Consolidated Financial Statements should be read together with the annual consolidated financial statements of the Group as of June 30, 2013 prepared in accordance with IFRS in force. These Unaudited Condensed Interim Consolidated Financial Statements are presented in thousands of Argentine Pesos.

These Unaudited Condensed Interim Consolidated Financial Statements corresponding to the six-month periods ended December 31, 2013 and 2012 have not been audited. The management believes they include all necessary adjustments to fairly present the results of each period. The Company’s six-month periods ended December 31, 2013 and 2012 results do not necessarily reflect the proportion of the Group’s full-year results.

2.2. Significant accounting policies

The principal accounting policies applied in the presentation of these Unaudited Condensed Interim Consolidated Financial Statements are consistent with those applied in the preparation of the information under IFRS as of June 30, 2013, which are described in Note 2 of the annual consolidated financial statements.

2.3.	Use of estimates

The preparation of financial statements at a certain date requires the Management to make estimations and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual future results might differ from the estimates and evaluations made at the date of preparation of these financial statements.

In the preparation of these Unaudited Condensed Interim Consolidated Financial Statements, the significant judgments made by Management in applying the Group’s accounting policies and the main sources of uncertainty were the same applied by the Group in the preparation of the annual consolidated financial statements for the year ended June 30, 2013, save for changes in accrued income tax, provision for legal claims, allowance for bad debts and accrued supplementary rental.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

2.	Basis of preparation of the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

2.4.	Comparative Information

Balance items as of December 31, 2012 and June 30, 2013 shown in these financial statements for comparative purposes arise from Unaudited Condensed Interim Consolidated Financial Statements then ended. Certain reclassifications have been made in order to present figures comparatively with those of this period.

2.5. Seasonal effects on operations

The operations of the Group’s shopping centers are also subject to seasonal effects, which affect the level of sales recorded by lessees. During summer time (January and February), the lessees of shopping centers experience the lowest sales levels in comparison with the winter holidays (July) and year-end holidays (December) when they tend to record peaks of sales. Apparel stores generally change their collections during the spring and the fall, which impacts positively on shopping mall sales. Sale discounts at the end of each season also impact the business. As a consequence, a higher level of revenues is generally expected in the second half of the year rather than the first in shopping center operations.

In November, 2012, the Group took control over Ribgy 183 LLC (“Rigby”), a company that owns a rental office building located in New York, US (see Note 4 to the annual consolidated financial statements). Therefore, balances as of December 31, 2012 include Rigby's operations from the mentioned date.

3.	Acquisitions and disposals

For the six-month period ended as of December 31, 2013

Subscription of shares of Avenida Inc. and Avenida Compras S.A.

On August 29, 2013, the Group, through Torodur S.A., subscribed 3,703,704 shares of Avenida Inc., a Company incorporated in Delaware, United States, and 23,077 shares of Avenida Compras S.A., a Company incorporated in Buenos Aires, Argentina, representing 26.09% and 2.10%, of its outstanding capital, respectively. Additionally, Avenida Inc. owns 90.91% of Avenida Compras S.A., thus being the Group’s indirect interest in Avenida Compras of 25.81%. The transaction price was Ps. 13.0 million, which has already been fully paid. The Group has a warrant to increase its interest in Avenida Inc. up to 37.04%.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

3.	Acquisition and disposals (Continued)

Stock call Option agreement for Arcos del Gourmet S.A.

On September 16, 2013, APSA entered into an agreement with Messrs. Eduardo Giana, Pablo Bossi and Patricio Tobal (non-controlling shareholders of Arcos Gourmet S.A.), whereby the latter grant to APSA an exclusive and irrevocable option to purchase 10% of the equity interest in Arcos del Gourmet S.A.. The term to exercise the option runs from the execution of the agreement to December 31, 2018. The stock purchase price, in the event option is exercised, is US$ 8.0 million. Furthermore, in the mentioned agreement a payment of a fixed amount of Ps. 2 million was arranged, which was cancelled, and another variable amount payable monthly, which results from applying 4.5% on the amounts accrued in each previous calendar month for rental and right of admission, net of certain expenses, during 5 years counted from the opening of the shopping mall, in relation to the assignment of rights to earn dividends of Arcos during such period.

Condominios del Alto - Performance of Exchange Agreement

On November 14, 2013 Alto Palermo S.A. (“APSA”) and Condominios del Alto S.A. (Condominios) executed a conveyance deed whereby Condominios conveyed upon APSA freehold and full possession of the units agreed in exchange. Upon such execution, APSA stated that the mortgage on the property has been fully discharged.

Subscription of shares of Dolphin Fund Ltd. (“Dolphin”)

During the six-month period ended December 31, 2013, the Group has invested in participating units of Dolphin Fund Ltd. (a mutual fund) for the amount of US$ 105 million (see Note 39).

4. Financial risk management and fair value estimates

4.1	Financial risk

The group´s diverse activities are exposed to a variety of financial risk: market risk (including foreign currency risk, interest rate risk and price risk) credit risk, liquidity risk and capital risk.

The Unaudited Condensed Interim Consolidated Financial Statements do not include all the information and disclosures on financial risk management; therefore they should be read along with the annual consolidated financial statements for the year ended June 30, 2013. There have been no changes in the risk management or risk management policies applied by the Group since year end. See Note 39 for the effect of subsequent events.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

4. Financial risk management and fair value estimates (Continued)

4.2	Fair value estimates

Since June 30, 2013 to the date of these financial statements, there have been no significant changes in business on economic circumstances affecting the fair value of the Company's financial assets and liabilities (either measured at fair value or amortized cost), except for our investment in Supertel Hospitality Inc. ("Supertel"), which fair value was affected by the decrease in the market value of its common shares, because of the suspension of dividends’ payment. This had been decided in order to fortify its financial situation. Furthermore, there have been no transfers between the different hierarchies used to asses the fair value of the Company’s financial instruments. See Note 39 for the effect of subsequent events.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

5.	Segment information

Below is a summarized analysis of the lines of business of the Group for the period ended December 31, 2013:

	December 31, 2013
	Shopping Center			Offices and other properties			Sales and developments			Hotels			International			Financial operations and others			Total
Revenues		1,011,950			149,523			40,979			160,575			39,456			334			1,402,817
Costs		(455,548	)		(52,376	)		(21,344	)		(105,437	)		(26,455	)		(171	)		(661,331	)
Gross Profit		556,402			97,147			19,635			55,138			13,001			163			741,486
Gain from disposal of investment property		-			-			7,481			-			-			-			7,481
General and administrative expenses		(51,026	)		(21,736	)		(19,007	)		(28,952	)		(9,915	)		(55	)		(130,691	)
Selling expenses		(32,232	)		(9,892	)		(6,271	)		(19,974	)		-			317			(68,052	)
Other operating results, net		(13,786	)		(1,053	)		(1,779	)		177			187			(2,161	)		(18,415	)
Profit / (loss) from operations		459,358			64,466			59			6,389			3,273			(1,736	)		531,809
Share of profit / (loss) of associates and joint ventures		-			2,842			1,693			310			(49,008	)		86,933			42,770
Segment Profit / (Loss) before financial results and income tax		459,358			67,308			1,752			6,699			(45,735	)		85,197			574,579
Investment properties		2,296,287			797,348			367,575			-			887,130			-			4,348,340
Property, plant and equipment		17,936			19,880			3,867			162,690			219			-			204,592
Trading properties		-			-			114,587			-			93,420			-			208,007
Goodwill		1,667			9,392			-			-			61,807			-			72,866
Inventories		8,557			-			525			6,918			-			-			16,000
Investments in associates		-			26,936			33,613			21,649			1,208			1,172,048			1,255,454
Operating assets		2,324,447			853,556			520,167			191,257			1,043,784			1,172,048			6,105,259

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

5.	Segment information (Continued)

Below is a summarized analysis of the lines of business of the Group for the period ended December 31, 2012:

	December 31, 2012
	Shopping Center			Office and other properties			Sales and developments			Hotels			International			Financial operations and others			Total
Revenues		802,914			141,110			85,735			116,807			12,100			1,318			1,159,984
Costs		(379,454	)		(57,538	)		(63,009	)		(84,553	)		(10,292	)		(477	)		(595,323	)
Gross Profit		423,460			83,572			22,726			32,254			1,808			841			564,661
Gain from disposal of investment properties		-			-			55,959			-			-			-			55,959
General and administrative expenses		(37,398	)		(20,930	)		(20,060	)		(26,095	)		(6,638	)		(147	)		(111,268	)
Selling expenses		(25,752	)		(5,163	)		(9,471	)		(13,819	)		-			(638	)		(54,843	)
Other operating results, net		(9,048	)		(1,097	)		(8,082	)		385			134,061			(873	)		115,346
Profit / (Loss) from operations		351,262			56,382			41,072			(7,275	)		129,231			(817	)		569,855
Share of profit / (loss) of associates and joint ventures		-			-			1,053			59			(37,978	)		44,833			7,967
Segment profit / (loss) before financial results and income tax		351,262			56,382			42,125			(7,216	)		91,253			44,016			577,822
Investment properties		2,192,759			850,305			382,386			-			687,453			-			4,112,903
Property, plant and equipment		14,186			23,437			3,737			174,661			199			-			216,220
Trading properties		-			-			166,603			-			76,504			-			243,107
Goodwill		1,667			9,392			-			-			-			-			11,059
Inventories		9,733			-			480			5,984			-			-			16,197
Investments in associates		-			32,000			26,448			21,315			581			1,063,702			1,144,046
Operating assets		2,218,345			915,134			579,654			201,960			764,737			1,063,702			5,743,532

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

5.	Segment information (Continued)

Operating results of the Cyrsa S.A., Nuevo Puerto Santa Fe S.A. ("NPSF"), Canteras Natal Crespo S.A. (for the comparative period), Puerto Retiro S.A., Baicom Networks S.A. and Quality Invest S.A. joint ventures have been presented under the method of proportionate consolidation. Under this method, the income/loss generated by joint businesses is reported in the income statements line-by-line, 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, because the assets and income/loss generated by consolidated operations are similar to the assets and income/loss booked under the equity method. This is due to the fact that under the proportional consolidation method, revenues and expenses are reported separately, instead of offsetting and reporting them as a single item in the statement of income. Therefore, the proportional consolidation method is used by the Group’s Executive Committee to assess and understand the return and the results of operations of the business as a whole.

The following tables present a reconciliation between the total results of segment operations and the results of operations as per the statements of income. The adjustments relate to the presentation of the results of operations of joint ventures accounted for under the equity method under IFRS.

	December 31, 2013
	Total segment information			Adjustment for share of profit / (loss) of joint ventures			Adjustment to income for elimination of inter-segment transactions			As per statements of income
Revenues		1,402,817			(28,416	)		(441	)		1,373,960
Costs		(661,331	)		19,461			-			(641,870	)
Gross profit		741,486			(8,955	)		(441	)		732,090
Gain from disposal of investment properties		7,481			-			-			7,481
General and administrative expenses		(130,691	)		516			796			(129,379	)
Selling expenses		(68,052	)		2,224			67			(65,761	)
Other operating results, net		(18,415	)		1,493			(422	)		(17,344	)
Profit from operations		531,809			(4,722	)		-			527,087
Share of profit of associates and joint ventures		42,770			8,413			-			51,183
Segment profit before financial results and income tax		574,579			3,691			-			578,270

	December 31, 2012
	Total segment information			Adjustment for share of profit / (loss) of joint ventures			Adjustment to income for elimination of inter-segment transactions			As per statements of income
Revenues		1,159,984			(79,229	)		(719	)		1,080,036
Costs		(595,323	)		60,611			-			(534,712	)
Gross profit		564,661			(18,618	)		(719	)		545,324
Gain from disposal of investment properties		55,959			-			-			55,959
General and administrative expenses		(111,268	)		1,342			940			(108,986	)
Selling expenses		(54,843	)		6,259			52			(48,532	)
Other operating results, net		115,346			36			(273	)		115,109
Profit from operations		569,855			(10,981	)		-			558,874
Share of profit of associates		7,967			6,417			-			14,384
Profit Segment before financial results and income tax		577,822			(4,564	)		-			573,258

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

5. Segment information (Continued)

Total segment assets are allocated based on the operations of the segment and the physical location of the asset. In line with the discussion above, segment assets include the proportionate share of the assets of joint ventures. The statements of financial position under IFRS show the net investment in these joint ventures as a single item.

	December 31, 2013
Total reportable assets as per segment information		6,105,259
Investment properties		(160,861	)
Property, plant and equipment		(110	)
Trading properties		(7,638	)
Goodwill		(5,234	)
Inventories		(170	)
Investments in associates and joint ventures		273,395
Total assets as per the statements of financial position		6,204,641

6.	Information about main subsidiaries

The Group conducts its business through several operating and holding subsidiaries. The Group considers that the subsidiaries below are the ones with non-controlling interests material to the Group.

Summarized statements of financial position

	Panamerican Mall S.A. (“PAMSA”)				Rigby
	December 31, 2013		June 30, 2013		December 31, 2013		June 30, 2013
ASSETS
Total non-current assets		594,389		623,809		914,032		761,997
Total current assets		273,975		191,911		22,187		18,088
TOTAL ASSETS		868,364		815,720		936,219		780,085
LIABILITIES
Total non-current liabilities		19,624		23,239		534,203		439,432
Total current liabilities		63,786		58,681		3,538		5,961
TOTAL LIABILITIES		83,410		81,920		537,741		445,393
NET ASSETS		784,954		733,800		398,478		334,692

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

6.	Information about main subsidiaries (Continued)

Summarized statements of income and statements of comprehensive income

	PAMSA						Rigby
	December 31, 2013			December 31, 2012			December 31, 2013		December 31, 2012
Revenues		126,182			103,115			39,456		12,100
Profit before income tax		79,337			46,334			1,679		(4,046	)
Income tax expense		(28,318	)		(16,905	)		-		-
Profit for the period		51,019			29,429			1,679		(4,046	)
Total comprehensive income for the period		51,019			29,429			1,679		(4,046	)
Profit attributable to non-controlling interest		10,204			5,886			428		(1,225	)
Dividends paid to non-controlling interest		-			5,000			-		-

Summarized cash flows

	PAMSA						Rigby
	December 31, 2013			December 31, 2012			December 31, 2013			December 31, 2012
Net cash generated by operating activities		71,410			56,027			11,790			1,723
Net cash used in investing activities		(69,708	)		(40,365	)		(2,887	)		(1,381	)
Net cash used in financing activities		(4,404	)		(25,133	)		(7,556	)		3,697
Net increase in cash and cash equivalents		(2,702	)		(9,471	)		1,347			4,039
Foreign exchange gain on cash and cash equivalents		617			818			2,581			206
Cash and cash equivalents at beginning of period		11,416			29,885			11,491			486
Cash and cash equivalents at end of period		9,331			21,232			15,419			4,731

The information above is the amount before inter-company eliminations.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

7.	Interests in joint ventures

As of December 31 and June 30, 2013, the joint ventures of the Group were Cyrsa S.A., Puerto Retiro S.A., Baicom Networks S.A., Quality Invest S.A., NPSF and Entertainment Holding S.A. ("EHSA"). The shares in these joint ventures are not publicly traded.

In November 29, 2012, the Group acquired shares of common stock, representing 50% of EHSA´s capital stock and votes, for an amount of Ps. 21.2 million. The fair value of the net assets acquired determined as of the purchase date amounted to Ps. 5.4 million. Therefore, the Group recognized a goodwill of Ps. 26.6 million.

On September 25, 2013, Sociedad Rural Argentina (SRA), La Rural de Palermo S.A. (LRPSA), Boulevard Norte S.A. (BNSA), Ogden Argentina S.A. (OASA), EHSA, ENUSA and La Rural S.A. (LRSA) executed a joint venture agreement and a shareholder’s agreement mostly amending certain provisions set forth in prior agreements. The Company is now in the process of assessing any potential effect on the preliminary allocation of the purchase price of said acquisition.

Changes in the Group’s investments in joint ventures for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	December 31, 2013			June 30, 2013
Beginning of period / year		287,846			228,970
Acquisition of joint ventures		(12	)		25,899
Capital contributions		1,221			29,828
Sale of joint ventures		-			(5,774	)
Cash dividends (ii)		-			(1,250	)
Share of profit, net		11,253			10,173
End of period / year	(i) 300,308				287,846

(i)	Includes a balance of Ps. (23) reflecting interests in companies with negative equity as of December 31, 2013 which are disclosed in “Provisions” (see Note 22).

(ii)	During the year ended June 30, 2013, the Group cashed dividends from Nuevo Puerto Santa Fe S.A. in the amount of Ps. 1.3 million.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

8.	Interests in associates

As of June 30, 2013, the associates of the Group were New Lipstick LLC, BHSA, Tarshop S.A., Manibil S.A., Lipstick Management LLC, Banco de Crédito y Securitización S.A. (“BACS”) and Bitania 26 S.A..

During the current period, the Group has acquired interests in associates Avenida Inc. and Avenida Compras S.A. (see Note 3). Consequently, as of December 31, 2013 the associates of the Group are New Lipstick LLC, Rigby 183 LLC, BHSA, Tarshop S.A., Manibil S.A., Lipstick Management LLC, Banco de Crédito y Securitización S.A. (“BACS”), Bitania 26 S.A., Avenida Inc. and Avenida Compras S.A..

Changes in the Group’s investments in associates for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	December 31, 2013			June 30, 2013
Beginning of the period / year		1,096,999			1,216,845
Acquisition of associates		13,057			-
Capital contributions		-			37,610
Share of profit, net		39,930			(17,564	)
Currency translation adjustment		(14,034	)		(1,300	)
Cash dividends (ii)		(9,977	)		(35,277	)
Decrease for the taking over		-			(103,315	)
End of the period / year (i)		1,125,975			1,096,999

(i) Includes Ps. (102,543) and Ps. (39,091) reflecting interests in companies with negative equity as of December 31, 2013 and June 30, 2013, respectively, which are disclosed in “Provisions” (see Note 22).

(ii)During the period, the Group cashed dividends from BHSA and Manibil S.A. in the amount of Ps. 9.2 million and Ps. 0.8 million, respectively. During the year ended June 30, 2013, the Group cashed dividends from Manibil S.A. and BHSA in the amount of Ps. 4.8 million and Ps. 30.5 million, respectively.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

9.	Investment properties

Changes in the Group’s investment properties for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Shopping Center			Office and other rental properties			Undeveloped parcel of lands		Properties under development		Total
At July 1st, 2012:
Costs		3,048,649			1,049,407			365,828		50,262		4,514,146
Accumulated depreciation		(1,097,669	)		(141,251	)		-		-		(1,238,920	)
Residual value		1,950,980			908,156			365,828		50,262		3,275,226
Year ended June 30, 2013
Opening residual value		1,950,980			908,156			365,828		50,262		3,275,226
Additions		51,231			13,270			1,768		144,187		210,456
Currency translation adjustment		-			77,769			-		-		77,769
Acquisition of subsidiaries		-			679,219			-		-		679,219
Transfers		(86	)		86			-		-		-
Disposals		(65	)		(62,792	)		-		-		(62,857	)
Depreciation charge (i)		(142,162	)		(45,121	)		-		-		(187,283	)
Residual value at year end		1,859,898			1,570,587			367,596		194,449		3,992,530
At June 30, 2013:
Costs		3,099,729			1,755,496			367,596		194,449		5,417,270
Accumulated depreciation		(1,239,831	)		(184,909	)		-		-		(1,424,740	)
Residual value		1,859,898			1,570,587			367,596		194,449		3,992,530
Period ended December 31, 2013:
Opening residual value		1,859,898			1,570,587			367,596		194,449		3,992,530
Additions		13,420			12,375			111		112,460		138,366
Currency translation adjustment		-			155,049			-		-		155,049
Disposals		-			(1,435	)		-		-		(1,435	)
Depreciation charge (i)		(67,700	)		(29,331	)		-		-		(97,031	)
Residual value at period end		1,805,618			1,707,245			367,707		306,909		4,187,479
At December 31, 2013:
Costs		3,113,149			1,921,485			367,707		306,909		5,709,250
Accumulated depreciation		(1,307,531	)		(214,240	)		-		-		(1,521,771	)
Residual value		1,805,618			1,707,245			367,707		306,909		4,187,479

(i) Depreciation charges of investment properties were included in “Costs” in the Statements of Income (Note 28).

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

9. Investment properties (Continued)

The following amounts have been recognized in the statements of income:

	December 31, 2013			December 31, 2012
Rental and service income		1,189,911			945,352
Direct operating expenses		(528,259	)		(442,355	)
Gain from disposal of investment properties		7,481			55,959

Properties under development mainly comprise works in Shopping Neuquén S.A. and Arcos del Gourmet S.A. As of December 31, 2013 and June 30, 2013 works in Shopping Neuquén S.A. amount to Ps. 74,944 and Ps. 43,138, respectively. Works in Arcos del Gourmet as of December 31, 2013 and June 30, 2013 amount to Ps. 216,967 and Ps. 136,313, respectively.

As of December 31, 2013 contractual obligations mainly correspond to constructions regarding to both projects. In Shopping Neuquén S.A. contractual obligations amount to Ps. 205 million and the Project is expected to be completed in September, 2014. In Arcos del Gourmet S.A. contractual obligations amount to Ps. 234. On December 10, 2013, the Judicial Branch confirmed an injunction order that suspends the opening of the shopping center on the grounds that it does not have certain governmental permits. Even though the construction has all regulatory permits in place, the Company is carrying out specific actions, has challenged the ruling, and has requested that the injunction be lifted and has reasonable expectations of a favorable result.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

10.	Property, plant and equipment

Changes in the Group’s property, plant and equipment for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Hotels buildings and facilities			Buildings and facilities			Furniture and fixtures			Machinery and equipment			Vehicles			Total
At July 1st, 2012:
Costs		376,671			61,291			13,394			78,370			512			530,238
Accumulated depreciation		(194,849	)		(30,533	)		(9,513	)		(66,805	)		(505	)		(302,205	)
Residual value		181,822			30,758			3,881			11,565			7			228,033
Year ended June 30, 2013
Opening residual value		181,822			30,758			3,881			11,565			7			228,033
Additions		3,872			1,483			585			9,479			-			15,419
Currency translation adjustment		-			-			959			-			-			959
Disposals		-			-			(602	)		(3	)		-			(605	)
Depreciation charge (i)		(17,494	)		(6,720	)		(783	)		(6,129	)		(7	)		(31,133	)
Residual value at year end		168,200			25,521			4,040			14,912			-			212,673
At June 30, 2013:
Costs		380,543			62,773			14,336			87,846			512			546,010
Accumulated depreciation		(212,343	)		(37,252	)		(10,296	)		(72,934	)		(512	)		(333,337	)
Residual value		168,200			25,521			4,040			14,912			-			212,673
Period ended December 31, 2013
Opening residual value		168,200			25,521			4,040			14,912			-			212,673
Additions		1,560			1,179			537			4,188			-			7,464
Currency translation adjustment		-			-			39			-			-			39
Disposals		(2	)		-			-			(36	)		-			(38	)
Depreciation charge (i)		(7,069	)		(4,515	)		(422	)		(3,650	)		-			(15,656	)
Residual value at period end		162,689			22,185			4,194			15,414			-			204,482
At December 31, 2013:
Costs		382,101			63,952			14,912			91,998			512			553,475
Accumulated depreciation		(219,412	)		(41,767	)		(10,718	)		(76,584	)		(512	)		(348,993	)
Residual value		162,689			22,185			4,194			15,414			-			204,482

(i) Depreciation charges of property, plant and equipment were included in “Costs” and “General and administrative expenses” in the Statement of Income (Note 28).

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

11.	Trading properties

Changes in the Group’s trading properties for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Completed properties			Properties under development			Under developed sites			Total
At July 1st, 2012		13,726			82,958			80,139			176,823
Additions		19			1,463			-			1,482
Currency translation adjustment		-			17,757			-			17,757
Transfers		-			61,444			(61,444	)		-
Disposals		(5,948	)		-			-			(5,948	)
At June 30, 2013		7,797			163,622			18,695			190,114
Additions		1,400			1,450			-			2,850
Currency translation adjustment		-			11,509			-			11,509
Transfers		7,351			(7,351	)		-			-
Disposals		(4,104	)		-			-			(4,104	)
At December 31, 2013		12,444			169,230			18,695			200,369

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

12.

Intangible assets

Changes in the Group’s intangible assets for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Goodwill		Computer Software			Rights of use (ii)		Others			Total
At July 1st, 2012:
Costs		5,824		16,961			20,873		898			44,556
Accumulated depreciation		-		(14,486	)		-		(681	)		(15,167	)
Residual value		5,824		2,475			20,873		217			29,389
Year ended June 30, 2013:
Opening residual value		5,824		2,475			20,873		217			29,389
Additions		-		791			-		9			800
Currency translation adjustment		5,346		-			-		-			5,346
Acquisition of subsidiaries		45,723		-			-		-			45,723
Amortization charges (i)		-		(1,512	)		-		(93	)		(1,605	)
Residual value at year end		56,893		1,754			20,873		133			79,653
At June 30, 2013:
Costs		56,893		17,752			20,873		907			96,425
Accumulated depreciation		-		(15,998	)		-		(774	)		(16,772	)
Residual value		56,893		1,754			20,873		133			79,653
Period ended December 31, 2013:
Opening residual value		56,893		1,754			20,873		133			79,653
Additions		-		202			-		-			202
Currency translation adjustment		10,739		-			-		-			10,739
Amortization charges (i)		-		(524	)		-		(40	)		(564	)
Residual value at period end		67,632		1,432			20,873		93			90,030
Period ended December 31, 2013:
Costs		67,632		17,954			20,873		907			107,366
Accumulated depreciation		-		(16,522	)		-		(814	)		(17,336	)
Residual value		67,632		1,432			20,873		93			90,030

(i)	Amortization charges of intangible assets are included in “General and administrative expenses” in the Statement of Income (Note 28). There are no impairment charges for any of the years / period presented.

(ii)	Correspond to the project Arcos del Gourmet, which has not been amortized yet because it is still in the development stage.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

13.	Inventories

Group’s inventories as of December 31, 2013 and June 30, 2013 were as follows:

	December 31, 2013		June 30, 2013
Current
Hotel supplies		6,918		5,962
Materials and others items of inventories		8,912		10,359
Current inventories		15,830		16,321
Total inventories		15,830		16,321

14.	Financial instruments by category

Determination of fair values

IFRS 9 defines the fair value of a financial instrument as the amount for which an asset could be exchanged, or a financial liability settled, between knowledgeable, willing parties in an arm’s length transaction. All financial instruments recognized at fair value are allocated to one of the valuation hierarchy levels of IFRS 7. This valuation hierarchy provides for three levels.

In the case of Level 1, valuation is based on unadjusted quoted prices in active markets for identical financial assets or liabilities that the Group can refer to at the date of ended. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. The financial instruments the Group has allocated to this level mainly comprise equity investments, mutual funds and mortgage bonds for which quoted prices in active markets are available. In the case of shares, the Group allocates them to this level when either a stock market price is available or prices are provided by a price quotation on the basis of actual market transactions.

In the case of Level 2, fair value is determined by using valuation methods based on inputs directly or indirectly observable in the market. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. The financial instruments the Group has allocated to this level mainly comprise interest rate swaps and foreign currency future contracts.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

14. Financial instruments by category (Continued)

In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no market data are available. The inputs used reflect the Group’s assumptions regarding the factors which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group has allocated to this level shares and warrants of Supertel and the Arcos del Gourmet S.A.´s stock option (with a fair value of zero at the end of the period).

The Group’s Finance Division has a team in place in charge of estimating valuation of financial assets required to be reported in the financial statements, including the fair value of Level-3 instruments. The team directly reports to the Chief Financial Officer “CFO”.

The CFO and the valuation team discuss the valuation methods and results upon the acquisition of an asset and, if necessary, on a quarterly basis, in line with the Group’s quarterly reports.

According to the Group’s policy, transfers among the several categories of valuation tiers are recognized when occurred, or when there are changes in the prevailing circumstances requiring the transfer.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

14. Financial instruments by category (Continued)

The following tables present the Group’s financial assets and financial liabilities that are measured at fair value as of December 31, 2013 and June 30, 2013 and their allocation to the fair value hierarchy:

	December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Financial assets at fair value through profit or loss:
- Investment in equity securities in TGLT		64,883		-		-		64,883
- Investment in equity securities in Hersha		36,099		-		-		36,099
- Investment in equity securities in Supertel		-		-		57,408		57,408
- Mutual funds		737,637		-		-		737,637
- Banco Macro bonds		1,141		-		-		1,141
- Don Mario S.G.R.		12,777		-		-		12,777
- Governments Bonds		187,070		-		-		187,070
- Public companies securities		38		-		-		38
Derivative financial instruments:
- Foreign currency contracts		-		22,150		-		22,150
- Interest rate swaps		-		10,226		-		10,226
Cash and cash equivalents:
- Mutual funds		2,615		-		-		2,615
Total assets		1,042,260		32,376		57,408		1,132,044

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

14. Financial instruments by category (Continued)

	June 30, 2013
	Level 1		Level 2		Level 3		Total
Assets
Financial assets at fair value through profit or loss:
- Investment in equity securities in TGLT		56,859		-		-		56,859
- Investment in equity securities in Hersha		30,163		-		-		30,163
- Investment in equity securities in Supertel		-		-		139,120		139,120
- Mutual funds		74,957		-		-		74,957
- Mortgage bonds		540		-		-		540
- Non- Convertible Notes related parties (Note 33)		5,136		-		-		5,136
- Banco Macro bonds		781		-		-		781
- Don Mario S.G.R.		11,691		-		-		11,691
- Others		3		-		-		3
- Government Bonds		161,602		-		-		161,602
Derivative financial instruments:
- Interest rate swaps		-		4,259		-		4,259
- Warrants of Supertel		-		-		16,949		16,949
Cash and cash equivalents:
- Mutual funds		5,289		-		-		5,289
Total assets		347,021		4,259		156,069		507,349

As of December 31, 2013, the Group has no financial liabilities at fair value.

	June 30, 2013
	Level 1		Level 2		Level 3		Total
Liabilities
Derivative financial instruments:
- Foreign currency-contracts		-		1,732		-		1,732
Total liabilities		-		1,732		-		1,732

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

14.	Financial instruments by category (Continued)

The following table presents the changes in Level 3 instruments for the period ended December 31, 2013:

	Shares of Supertel			Warrants of Supertel			Total
Balance at June 30, 2013		139,120			16,949			156,069
Total losses for the period (i)		(81,712	)		(16,949	)		(98,661	)
Balance at December 31, 2013		57,408			-			57,408

(i) The loss is not realized as of December 31, 2013 and is accounted for under “Financial results, net” in the statement of income (Note 31).

Upon initial recognition (January, 2012), the consideration paid for the Shares and Warrants of Supertel was assigned to both instruments based on the relative fair values of those instruments upon acquisition. The fair value of these instruments exceeded the transaction price and were determined using a valuation technique that uses inputs not observables in the market. As a result of the use of this technique, the Group has not recognized a gain at the time of initial recognition in the amount of US$ 7.9 million. As of December 31, 2013, the fair value of the Warrants of Supertel determined using the mentioned technique was minor than the gain not recognized at the time of initial recognition; remaining thus the Warrants remain valued at an amount of 0.

According to Group estimates, all things being constant, a 10% decline in the price of the underlying assets of Shares and Warrants of Supertel (data observed in the market) of Level 3 as of December 31, 2013, would reduce pre-tax income by Ps. 3.7 million.

According to Group estimates, all things being constant, a 10% increase in the credit spread (data which is not observable in the market) of the Shares and Warrants of Supertel used in the valuation model applied to Level 3 financial instruments as of December 31, 2013, would reduce pre-tax income by Ps. 5.5 million. The rate used as of December 31, 2013 was 14.08%.

When no quoted prices in an active market are available, fair values (particularly with derivatives) are based on recognized valuation methods. The Group uses a range of valuation models for the measurement of Level 2 and Level 3 instruments, details of which may be obtained from the following table:

Description	Pricing model	Pricing method	Parameters
Foreign currency-contracts	Present value method	Theoretical price	Money market Interest-Rate curve; Foreign exchange curve.
Interest rate swaps	Discounted cash flow	-	Interest rate forward contract
Shares of Supertel	Binomial tree	Theoretical price	Underlying asset price (Market price); share price volatility (historical) and money market interest-rate curve (Libor curve).
Warrants of Supertel	Black-Scholes	Theoretical price	Underlying asset price (Market price); share price volatility (historical) and money market interest-rate curve (Libor curve).
Call option of Arcos	Discounted cash flow	-	Projected income and discounted interest Rate

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

15.	Restricted assets

Group’s restricted assets as of December 31, 2013 and June 30, 2013 were as follows:

	December 31, 2013		June 30, 2013
Non-current
Deposit in escrow		13,333		10,881
Total non-current restricted assets		13,333		10,881
Current
Deposit in escrow		923		1,022
Total current restricted assets		923		1,022
Total restricted assets		14,256		11,903

16.	Trade and other receivables

Group’s trade and other receivables as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013			June 30, 2013
Non-current
Trade, leases and services receivables		62,039			58,783
Consumer financing receivables		-			214
Less: allowance for trade receivables		(2,208	)		(2,266	)
Total Non-current trade receivables		59,831			56,731
Trade receivables of joint venture		2,592			2,147
VAT receivables		18,741			19,345
Loans granted		1,230			-
Prepaid expenses		9,401			5,210
Others		2,631			686
Total Non-current other receivables		34,595			27,388
Related parties (Note 33)		1,076			1,007
Total non-current trade and other receivables		95,502			85,126

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

16.	Trade and other receivables (Continued)

	December 31, 2013			June 30, 2013
Current
Consumer financing receivables		15,047			15,735
Sale, leases and services receivables		310,179			376,431
Receivables from hotel operations		34,171			26,201
Checks to be deposited		126,299			147,866
Trade and lease debtors under legal proceedings		53,535			50,145
Less: allowance for trade receivables		(77,126	)		(76,684	)
Total current trade receivables		462,105			539,694
Joint ventures receivables		15,639			20,555
VAT receivables		7,240			19,656
Other tax receivables		8,411			13,426
Loans granted		7,707			47,274
Prepaid expenses		32,622			49,271
Advance to vendors		77,719			40,710
Dividends received		3,427			2,828
Others		14,297			11,672
Less: allowance for other receivables		(198	)		(198	)
Total current other receivables		166,864			205,194
Related parties (Note 33)		20,196			24,445
Total current trade and other receivables		649,165			769,333
Total trade and other receivables		744,667			854,459

Movements on the Group’s allowance for trade and other receivables are as follows:

	December 31, 2013			June 30, 2013
Beginning of the period /year		79,148			68,107
Additions		7,926			18,792
Unused amounts reversed		(5,234	)		(5,967	)
Used during the period / year		(2,308	)		(1,549	)
Receivables written off		-			(235	)
End of the period / year		79,532			79,148

The creation and release of provision for impaired receivables have been included in “Selling expenses” in the statement of income (Note 28). Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

17.	Investments in financial assets

Group’s investments in financial assets as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013		June 30, 2013
Non-current
Financial assets at fair value
Investment in equity securities in TGLT S.A.		64,883		56,859
Investment in equity securities in Hersha		36,099		30,163
Investment in equity securities in Supertel		57,408		139,120
Don Mario S.G.R.		10,000		10,060
Mutual funds (Note 33) (i)		698,264		17,249
Others		-		3
Financial assets at amortized cost
Non-Convertible Notes related parties and others (Note 33)		7,000		14,001
Total investments in non-current financial assets		873,654		267,455
Current
Financial assets at fair value
Mutual funds		39,373		57,708
Mortgage bonds (Note 33)		-		540
Banco Macro bonds		1,141		781
Don Mario S.G.R.		2,777		1,631
Non-Convertible Notes related parties (Note 33)		-		5,136
Public companies securities		38		-
Government bonds		187,070		161,602
Financial assets at amortized cost
Non- Convertible Notes related parties (Note 33)		16,950		16,655
Total investments in current financial assets		247,349		244,053
Total investments in financial assets		1,121,003		511,508

(i)	During the period ended December 31, 2013, the Group has subscribed shares of Dolphin Fund Ltd. For an amount of US$ 105 million (see Note 39)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

18.	Derivative Financial instruments

Group’s derivative financial instruments as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013		June 30, 2013
Assets
Non-current
Interest rate swaps		8,367		4,259
Warrants of Supertel		-		16,949
Total non-current derivative financial instruments		8,367		21,208

Current
Interest rate swaps	1,859	-
Foreign currency contracts (Note 33)	22,150	-
Total current derivative financial instruments	24,009	-
Total assets	32,376	21,208

Liabilities
Current
Foreign currency-contracts	-	(1,732	)
Total current derivative financial instruments	-	(1,732	)
Total derivative financial instruments	32,376	19,476

19.	Cash flow information

The following table shows the amounts of cash and cash equivalents as of December 31, 2013 and June 30, 2013:

	December 31, 2013		June 30, 2013
Cash at bank and on hand		208,320		725,220
Time deposits in local currency		14,805		66,393
Mutual funds		2,615		5,289
Total cash and cash equivalents		225,740		796,902

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

19.	Cash flow information (Continued)

Following is a detailed description of cash flows generated by the Group’s operations for the six-month periods ended December 31, 2013 and 2012:

	Note	December 31, 2013			December 31, 2012
(Loss) / Profit for the period			(26,074	)		245,879
Adjustments for:
Income tax expense	24		(7,312	)		74,289
Retirement of obsolete properties, plant and equipment	10		38			243
Amortization and depreciation	28		113,251			107,095
Gain from disposal of investment properties	9		(7,481	)		(55,959	)
Dividends earned	31		(6,510	)		(14,017	)
Share-based payments	32		11,835			3,161
Profit / (loss) from purchase of subsidiaries and joint ventures	7		12			(137,062	)
(Gain) / loss on derivative financial instruments	31		(13,552	)		1,162
Changes in fair value of investments in financial assets	31		(40,985	)		(48,536	)
Interest expense, net	31		172,382			138,690
Provisions and allowances			48,607			52,958
Share of profit of associates and joint ventures	7.8		(51,183	)		(14,384	)
Loss / (gain) on repurchase of Non-Convertible notes	31		12,874			(42	)
Unrealized foreign exchange loss, net			453,851			140,250
Changes in operating assets and liabilities:
Decrease / (Increase) in inventories			491			(480	)
Decrease / (Increase) in trading properties			1,254			(1,633	)
Decrease / (Increase) in trade and other receivables			46,147			(54,288	)
(Decrease) / Increase in trade and other payables			(131,697	)		49,007
Decrease in salaries and social security liabilities			(3,296	)		(2,446	)
Decrease in provisions			(614	)		(138	)
Net cash generated by operating activities before income tax paid			572,038			483,749

The following table shows a detail of non-cash transactions occurred in the periods ended December 31, 2013 and 2012:

	December 31, 2013		December 31, 2012
Increase in investments in financial assets through an increase in borrowings		-		18,767
Reimbursement of expired dividends		784		626
Dividends payable		72,182		55,382
Increase of investment properties through a decrease in property, plant and equipment		-		4,669
Increase in borrowings through a decrease in dividends payable		160,173		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

20.	Trade and other payables

Group’s trade and other payables as of December 31, 2013 and June 30, 2013 were as follows:

	December 31, 2013		June 30, 2013
Non-current
Admission rights		114,666		112,655
Sale and rent payments received in advance		57,329		53,301
Guarantee deposits		19,206		17,350
Non-current trade payables		191,201		183,306
Tax payment facilities plan		14,663		15,640
Deferred income tax		8,505		8,637
Others		3,225		3,515
Non-current other payables		26,393		27,792
Related parties (Note 33)		248		20
Non-current trade and other payables		217,842		211,118
Current
Trade payables		63,435		59,637
Accrued invoices		93,236		76,339
Guarantee deposits		8,430		5,974
Admission rights		105,459		98,656
Sale and rent payments received in advance		183,520		191,478
Current trade payables		454,080		432,084
VAT payables		22,573		26,718
Deferred revenue		266		1,087
Other tax liabilities		36,410		30,889
Dividends payable to non-controlling shareholders		73,901		8,562
Others		7,829		6,399
Current other payables		140,979		73,655
Related parties (Note 33)		49,045		171,271
Current trade and other payables		644,104		677,010
Total trade and other payables		861,946		888,128

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

21.	Salaries and social security liabilities

Group’s Salaries and social security liabilities as of December 31 and June 30, 2013 were as follows:

	December 31, 2013		June 30, 2013
Non-Current
Social security payable		4,447		3,160
Total Non-Current salaries and social security liabilities		4,447		3,160

Current
Provision for vacation, bonuses and others	27,971	32,080
Social security payable	15,270	16,628
Others	1,186	302
Current salaries and social security liabilities	44,427	49,010
Total salaries and social security liabilities	48,874	52,170

22.	Provisions

The table below shows the movements in the Group's provisions for other liabilities categorized by type of provision:

	Labor, legal and other claims			Tax and social security			Investments in associates and joint ventures (*)		Total
At June 30, 2013		31,010			1,686			39,091		71,787
Additions		11,004			296			49,249		60,549
Recovery		(5,132	)		(430	)		-		(5,562	)
Used during the period		(614	)		-			-		(614	)
Currency translation adjustment		-			-			14,226		14,226
At December 31, 2013		36,268			1,552			102,566		140,386

(*)	Corresponds to equity interests with negative equity.

The breakdown of current and non-current provisions is as follows:

	December 31, 2013		June 30, 2013
Non-current		127,163		57,737
Current		13,223		14,050
		140,386		71,787

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

23.	Borrowings

The breakdown of the Group borrowings as of December 31, 2013 and June 30, 2013 was as follows:

								Book value
	Secured / unsecured	Currency	Rate	Effective interest rate %		Principal nominal value		December 31, 2013		June 30, 2013
Non-current
NCN IRSA due 2017	Unsecured	US$	Fixed		8.5%		150,000		918,903		784,855
NCN APSA due 2017	Unsecured	US$	Fixed		7.875%		110,000		702,432		575,705
NCN IRSA due 2020	Unsecured	US$	Fixed		11.5%		150,000		957,864		789,655
Seller financing of plot of land (vi)	Secured	US$	Fixed		3.5%		1,800		15,163		14,900
Seller financing of Soleil Factory (i)	Secured	US$	Fixed		5%		12,610		61,972		49,327
Seller financing of Zetol S.A. (iii)	Secured	US$	Fixed		3.5%		2,700		18,457		14,144
Bank loans	Unsecured	Ps.	Fixed		15.25%		5,932		5,157		-
Syndicated loan (iv)	Unsecured	Ps.	Fixed		-		215,890		125,539		175,604
Banco Provincia de Buenos Aires loan (v)	Unsecured	Ps.	Fixed		15.01%		25,778		12,808		19,163
Banco M&T loan	Secured	US$	Floating	Libor + 2.55%			75,000		484,415		399,691
Related party (Note 33)	Unsecured	Ps.	Floating	Badlar			97,104		119,457		98,328
Finance lease obligations	Secured	US$	Fixed		7.5%		499		1,160		1,270
Total Non-current borrowings									3,423,327		2,922,642

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

23.	Borrowings (Continued)

								Book value
	Secured / unsecured	Currency	Rate	Effective interest rate %		Nominal value of share capital		December 31, 2013		June 30, 2013
Current
NCN IRSA due 2017	Unsecured	US$	Fixed		8.5%		150,000		30,939		26,675
NCN APSA due 2017	Unsecured	US$	Fixed		7.875%		120,000		4,613		5,499
NCN IRSA due 2020	Unsecured	US$	Fixed		11.5%		150,000		49,290		40,604
NCN IRSA due 2013	Unsecured	Ps.	Floating	Badlar 2.49			153,152		-		52,240
NCN IRSA due 2014	Unsecured	US$	Fixed		7.45%		8,458		55,663		137,750
Short-term loans	Unsecured	Ps.	Fixed		15.25%		5,932		646		-
Bank overdrafts	Unsecured	Ps.	Floating		-		-		435,969		418,730
Syndicated loan (iv)	Unsecured	Ps.	Fixed		-		215,890		89,135		51,005
Banco Provincia de Buenos Aires loan (v)	Unsecured	Ps.	Fixed		15.01%		25,778		12,884		9,625
Seller financing of plot of land (vi)	Secured	US$	Fixed		3.5%		1,800		1,868		12,809
Seller financing of Soleil Factory (i)	Secured	US$	Fixed		5%		12,610		2,073		3,397
Seller financing of Arcos del Gourmet S.A. (ii)	Unsecured	US$	Fixed		11.69%		-		-		11,408
Seller financing of Zetol S.A. (iii)	Secured	US$	Fixed		3.5%		1,800		15,428		1,544
Related parties (Note 33)	Unsecured	US$	Fixed		1.5%		26,441		172,768		-
Finance lease obligations	Secured	US$	Fixed		7.5%		499		1,502		1,243
Total Current borrowings									872,778		772,529
Borrowings									4,296,105		3,695,171

NCN: Non-convertible notes.

(i) Seller financing of Soleil Factory (investment properties): Mortgage financing of US$ 20.7 million with a fixed 5% interest rate due in June 2017.

(ii) Seller financing - Arcos del Gourmet S.A. (intangible assets).

(ii) Seller financing of Zetol S.A. (trading properties): Mortgage financing of US$ 7 million with a fixed 3.5% interest rate. The balance is payable, by choice of the seller, in money or with the delivery of units in buildings to be built representative of 12% of the total marketable square meters built.

(iv) On November 16, 2012, the Company subscribed a syndicated loan for Ps. 118,000. Principal will be payable in 9 quarterly consecutive installments and shall accrue interest at rate of 15.01%. On June 12, 2013 the Company subscribes a new syndicated loan for Ps. 111,000. Principal will be payable in 9 quarterly consecutive installments and shall accrue interest at rate of 15.25%. Both loans have been entered into with various banking institutions, one of which is Banco Hipotecario (Note 33).

(v) On December 12, 2012, the Group subscribed a loan with Banco Provincia de Buenos Aires for Ps. 29 million. Principal will be repaid in 9 quarterly consecutive installments beginning in December 2013.

(vi) Seller financing of plot of land - Vista al Muelle S.A. in Canelones, Uruguay (Trading properties).

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

23.

Borrowings (Continued)

During the period ended December 31, 2013, the Group through APSA, acquired nominal value 770,000 of IRSA´s Non-convertible Notes due 2020, for a total amount of Ps. 7.2 million and nominal value 1,000,000 of IRSA´s Non-convertible Notes due 2017, for a total amount of Ps. 8.5 million. In addition, during the same period, the Group through PAMSA, acquired nominal value 3,125,000 of IRSA´s Non-convertible Notes due 2020, for a total amount of Ps. 25.8 million. This acquisitions of own Non-convertible Notes generated a loss of Ps. 12.9 million included in “Financial results, net”.

24.

Tax

The details of the provision for the Group’s income tax, were as follows:

	December 31, 2013			December 31, 2012
Current income tax		(143,166	)		(102,916	)
Deferred income tax		150,478			28,627
Income tax gain		7,312			(74,289	)

The gross movement on the deferred income tax account is as follows:

	December 31, 2013			June 30, 2013
Beginning of the period /year		(310,700	)		(376,977	)
Acquisition of subsidiary		-			(26,103	)
Currency translation adjustment		(6,289	)		(4,068	)
Income tax and deferred income tax		150,478			96,448
End of the period / year		(166,511	)		(310,700	)

The Group did not recognize deferred income tax assets of Ps. 33.2 million and Ps. 32.5 million as of December 31 and June 30, 2013, respectively. Although management believes that it will become profitable in the foreseeable future, as a result of the history of recent losses incurred during the development phase of the different Group’s business operations and the lack of verifiable and objective evidence due to the limited operating history of the Group itself, the Board of Directors has determined that there is sufficient uncertainty as to the generation of sufficient income to utilize the losses within a reasonable timeframe, therefore, no deferred tax asset is recognized in relation to these losses.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

24.

Tax (Continued)

Below is a reconciliation between income tax recognized and that which would result applying the prevailing tax rate on Profit before income tax for the six-month periods ended December 31, 2013 and 2012:

	December 31, 2013			December 31, 2012
Tax calculated at the tax rates applicable to profits in the respective countries		(2,685	)		122,628
Permanent differences:
Share of loss of associates and joint ventures		(17,914	)		(5,034	)
Unrecognized tax losses		22,087			(23,151	)
Non-taxable income		(12,117	)		(17,885	)
Others		3,317			(2,269	)
Income tax gain		(7,312	)		74,289

25.	Shareholders’ Equity

Special reserve

Pursuant to CNV General Ruling No. 609/12, the Company set up a special reserve reflecting the positive difference between the balance at the beginning of retained earnings disclosed in the first financial statements prepared according to IFRS and the balance at closing of retained earnings disclosed in the last financial statements prepared in accordance with previously effective accounting standards. This reserve may not be used to make distributions in kind or in cash, and may only be reversed to be capitalized, or otherwise to absorb potential negative balances in Retained Earnings.

Repurchase plan involving common shares and GDS issued by IRSA

On July 25, 2013, IRSA’s Board of Directors set forth the terms and conditions governing the purchase of the Company's own stock pursuant to Section 64 of Law No. 26,831 and the CNV’s regulations, for up to an aggregate amount of Ps. 200.0 million and up to 5% of the capital stock, in the form of shares or Global Depositary Shares (GDS) representing 10 shares each, and up to a daily limit of 25% of the average daily transaction volume experienced by the IRSA’s shares, along with the markets where they are listed, during the prior 90 business days, and at a price ranging from a minimum of Ps. 1 up to Ps. 8 per share. On September 18, 2013 the Board of Directors decided to increase the maximum price to Ps. 10.00 per common share and US$ 10.50 per GDS. On October 15, 2013, the Board of Directors approved a new increase to the maximum price, raising it to Ps. 11.00 per common share and US$ 11.50 per GDS. On October 22, 2013 the Board of Directors approved a new increase to the maximum price, raising it to Ps.14.50 per common share and US$ 15.00 per GDS. During the period ended December 31, 2013, the Company repurchased 256,624 common shares (nominal value Ps. 1 per share) for a total of Ps. 2.6 million and 350,977 GDS (representing 3,509,770 common shares) for a total amount of US$ 4.1 million.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

25.	Shareholders’ Equity (Continued)

Dividends

Dividends approved for distribution among shareholders for the year ended June 30, 2013 amounted to Ps. 250 million, which were approved at the Annual General Shareholders’ Meeting on October 31, 2013.

During the period ended December 31, 2013, the Company has paid dividends for an amount of Ps. 34.2 million.

26.

Revenues

	December 31, 2013		December 31, 2012
Base rent		499,306		385,864
Contingent rent		178,997		143,077
Admission rights		60,046		51,433
Averaging scheduled rent escalation		13,581		9,344
Parking fees		40,032		30,792
Letting fees		16,825		13,053
Service charges		365,784		293,683
Property management fee		13,035		16,317
Others		2,305		1,789
Total rental and service income		1,189,911		945,352
Sale of trading properties		23,140		16,559
Revenue from hotel operations		160,575		116,807
Consumer financing		334		1,318
Total other revenues		184,049		134,684
Total revenues		1,373,960		1,080,036

27.

Cost

	December 31, 2013		December 31, 2012
Costs of rental and services		528,259		442,355
Costs of sale and development		8,003		7,327
Costs from hotel operations		105,437		84,553
Costs from consumer financing		171		477
Total costs		641,870		534,712

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

28.	Expenses by nature

The Group disclosed expenses the statements of income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”.

The following tables provide the additional required disclosure of expenses by nature and their relationship to the function within the Group.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

28.	Expenses by nature (Continued)

For the period ended December 31, 2013:

	Group Costs
	Cost of sale and development		Cost of rental and services		Cost from consumer financing		Cost from hotel operations		General and administrative expenses		Selling expenses		Total
Leases and expenses		694		6,578		-		279		3,659		490		11,700
Depreciation and amortization		242		104,766		-		5,511		2,623		109		113,251
Allowance for trade and other receivables (charge and recovery)		-		-		-		-		-		2,692		2,692
Advertising and other selling expenses		-		94,259		-		2,078		-		12,873		109,210
Taxes, rates and contributions		1,314		38,800		-		243		3,162		33,666		77,185
Maintenance, security, cleaning, repairs and others		1,761		118,570		-		12,358		7,291		303		140,283
Fees and payments for services		28		14,144		169		1,006		17,699		2,966		36,012
Directors’ fees		-		-		-		-		40,177		-		40,177
Salaries, social security costs and other personnel expenses		77		143,855		-		59,407		45,442		10,482		259,263
Cost of sale of properties		3,862		-		-		6,374		-		-		10,236
Food, beverage and other lodging expenses		-		-		-		17,962		3,211		1,633		22,806
Others		25		7,287		2		219		6,115		547		14,195
Total expenses by nature		8,003		528,259		171		105,437		129,379		65,761		837,010

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

28.	Expenses by nature (Continued)

For the period ended December 31, 2012:

	Group costs
	Cost of sale and development		Cost of rental and services		Cost from consumer financing		Cost from hotel operations		General and administrative expenses		Selling expenses		Total
Leases and expenses		919		11,553		-		134		467		433		13,506
Depreciation and amortization		316		97,548		-		5,872		3,253		106		107,095
Allowance for trade and other receivables (charge and recovery)		-		-		-		-		-		2,480		2,480
Advertising and other selling expenses		-		71,813		-		2,452		-		8,919		83,184
Taxes, sales and contributions		605		29,543		-		-		2,637		25,157		57,942
Maintenance, security, cleaning, repair and others		877		103,447		29		10,978		5,313		311		120,955
Fees and payments for services		86		11,305		441		779		20,147		1,594		34,352
Directors’ fees		-		171		-		-		41,618		-		41,789
Salaries, social security costs and other personnel expenses		284		112,337		3		46,365		29,056		8,116		196,161
Cost of sale of properties		4,222		-		-		-		-		-		4,222
Food, beverage and other lodging expenses		-		-		-		17,645		1,443		391		19,479
Others		18		4,638		4		328		5,052		1,025		11,065
Total expenses by nature		7,327		442,355		477		84,553		108,986		48,532		692,230

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

29.	Employee costs

	December 31, 2013		December 31, 2012
Salaries, bonuses and social security expenses		247,021		193,000
Equity incentive plan cost		11,835		3,161
Defined contribution plan cost		407		-
Total employee costs		259,263		196,161

30.	Other operating results, net

	December 31, 2013			December 31, 2012
Gain from purchase of subsidiaries		-			137,062
Tax on shareholders´ personal assets		(2,582	)		(3,571	)
Donations		(7,534	)		(4,068	)
Judgments and other contingencies (1)		(6,865	)		(11,110	)
Others		(363	)		(3,204	)
Total other operating results, net		(17,344	)		115,109

(1)	Includes legal expenses.

31.	Financial result, net

	December 31, 2013			December 31, 2012
Finance income:
- Interest income		33,013			13,388
- Foreign exchange		20,732			30,517
- Dividends income		6,510			14,017
- Gain from repurchase of non-convertible Notes		-			42
Total finance income		60,255			57,964
Finance costs:
- Interest expense		(205,395	)		(152,078	)
- Foreign exchange		(496,636	)		(185,279	)
- Less from repurchase of non-convertible Notes		(12,874	)		-
- Other finance costs		(26,200	)		(23,792	)
Subtotal finance costs		(741,105	)		(361,149	)
Less: Finance costs capitalized		14,657			2,721
Total finance costs		(726,448	)		(358,428	)
Other finance costs:
- Fair value gain of financial assets at fair value through profit or loss, net		40,985			48,536
- Gain / (Loss) on derivative financial instruments, net		13,552			(1,162	)
Total other finance costs		54,537			47,374
Total financial results, net		(611,656	)		(253,090	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

32.	Share-based payments

Equity incentive plan

The Group incurred a charge of Ps. 11,835 million and Ps. 3,161 million for the six-month periods ended December 31, 2013 and 2012, respectively, related to the awards granted under the Equity Incentive Plan and were granted 1,713,059 shares over the period.

33.	Related party transactions

During the normal course of business, the Group conducts transactions with different entities or parties related to it. An individual or legal entity is considered a related party where:

-	An entity, individual or close relative of such individual exercises control, or joint control, or significant influence over the reporting entity, or is a member of the Board of Directors or the Senior Management of the entity or its controlling company.

-	An entity is a subsidiary, associate or joint venture of the entity or its controlling or controlled company.

The main transactions conducted with related parties are described in the annual Financial Statements for the fiscal year ended June 30, 2013.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

The following is a summary of the balances with related parties as of December 31, 2013:

		Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables			Trade and other payables			Borrowings			Borrowings			Derivative financial instruments
Related party	Description of transaction	non-current		current		non-current		current		non-current			current			non-current			current			current
Parent Company
Cresud S.A.C.I.F. y A.	Reimbursement of expenses		-		-		-		1,748		-			(1,507	)		-			-			-
	Corporate services		-		-		-		-		-			(28,238	)		-			-			-
	Sale of goods and services		-		-		-		701		-			-			-			-			-
	Borrowings		-		-		-		-		-			-			-			(172,706	)		-
	Non-Convertible Notes		7,000		16,950		-		-		-			-			(45,679	)		(1,658	)		-
	Shared based payments		-		-		-		1,097		-			-			-			-			-
Total Parent Company			7,000		16,950		-		3,546		-			(29,745	)		(45,679	)		(174,364	)		-
Associates
Banco Hipotecario S.A.	Reimbursement of expenses		-		-		-		1,673		-			(1,451	)		-			-			-
	Borrowings		-		-		-		-		-			-			(32,780	)		(17,221	)		-
	Derivatives		-		-		-		-		-			-			-			-			22,150
	Leases and/or rights of use		-		-		-		141		-			-			-			-			-
Lipstick Management LLC	Reimbursement of expenses		-		-		-		613		-			-			-			-			-
New Lipstick LLC	Reimbursement of expenses		-		-		-		1,841		-			-			-			-			-
Banco de crédito y securitización	Reimbursement of expenses		-		-		-		35		-			-			-			-			-
	Leases and/or rights of use		-		-		-		235		-			-			-			-			-
Tarshop S.A.	Leases and/or rights of use		-		-		-		-		(228	)		(401	)		-			-			-
	Reimbursement of expenses		-		-		-		695		-			-			-			-			-
Total Associates			-		-		-		5,233		(228	)		(1,852	)		(32,780	)		(17,221	)		22,150

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

		Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables		Trade and other payables			Borrowings			Borrowings			Derivative financial instruments
Related party	Description of transaction	non-current		current		non-current		Current		non-current		current			non-current			current			current
Joint ventures
	Contributions to be paid in		-		-		-		135		-		-			-			-			-
Baicom Networks S.A.	Management fees		-		-		-		8		-		-			-			-			-
	Borrowings		-		-		1,074		-		-		-			-			-			-
	Reimbursement of expenses		-		-		-		17		-		-			-			-			-
Boulevard Norte S.A.	Reimbursement of expenses		-		-		-		98		-		-			-			-			-
Cyrsa S.A.	Borrowings		-		-		-		-		-		-			(114,457	)		-			-
	Reimbursement of expenses		-		-		2,000		57		-		-			-			-			-
Nuevo Puerto Santa Fe S.A.	Reimbursement of expenses		-		-		-		495		-		-			-			(62	)		-
	Proceeds from leasing		-		-		-		6		-		(13	)		-			-			-
	Leases and/or rights of use		-		-		-		-		-		(279	)		-			-			-
	Management fees		-		-		-		1,399		-		-			-			-			-
Puerto Retiro S.A.	Contributions to be paid in		-		-		-		101		-		-			-			-			-
	Borrowings		-		-		-		4,371		-		-			-			-			-
	Reimbursement of expenses		-		-		-		196		-		-			-			-			-
Quality Invest S.A.	Management fees		-		-		-		68		-		(45	)		-			-			-
	Reimbursement of expenses		-		-		-		86		-		-			-			-			-
Total Joint Ventures			-		-		1,076		7,037		-		(337	)		(114,457	)		(62	)		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

		Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables		Trade and other payables			Borrowings		Borrowings		Derivative financial instruments
Related party	Description of transaction	non-current		current		non-current		current		non-current		current			non-current		current		current
Subsidiaries of the parent company
Cactus Argentina S.A.	Reimbursement of expenses		-		-		-		1		-		(7	)		-		-		-
Alafox S.A.	Reimbursement of expenses		-		-		-		4		-		-			-		-		-
Doneldon S.A.	Reimbursement of expenses		-		-		-		4		-		-			-		-		-
Exportaciones Agroindustriales	Reimbursement of expenses		-		-		-		-		-		(81	)		-		-		-
Futuros y Opciones.com S.A.	Reimbursement of expenses		-		-		-		113		-		(30	)		-		-		-
Sedelor S.A.	Reimbursement of expenses		-		-		-		4		-		-			-		-		-
Codalis S.A.	Reimbursement of expenses		-		-		-		4		-		-			-		-		-
FyO Trading S.A.	Reimbursement of expenses		-		-		-		2		-		-			-		-		-
Total Subsidiaries of the parent company			-		-		-		132		-		(118	)		-		-		-
Other related parties
Consultores Asset Management S.A.	Reimbursement of expenses		-		-		-		2,720		-		(41	)		-		-		-
Estudio Zang, Bergel y Viñes	Advances		-		-		-		4		-		-			-		-		-
	Legal services		-		-		-		10		-		(428	)		-		-		-
Dolphin Fund Ltd.	Subscription		698,264		-		-		-		-		-			-		-		-
	Reimbursement of expenses		-		-		-		133		-		-			-		-		-
Austral Gold	Reimbursement of expenses		-		-		-		9		-		(3	)		-		-		-
Ogden Argentina S.A.	Reimbursement of expenses		-		-		-		92		-		-			-		-		-
Elsztain Managing Partners	Reimbursement of expenses		-		-		-		-		-		(25	)		-		-		-
Fundación IRSA	Reimbursement of expenses		-		-		-		59		-		-			-		-		-
IRSA Real Estate Strategies LP	Capital contributions		-		-		-		-		-		(7	)		-		-		-
Inversiones Financieras del Sur S.A.	Borrowings		-		-		-		165		-		(4	)		-		-		-
IRSA Developments LP	Capital contributions		-		-		-				-		(4	)		-		-		-
Museo de los niños	Reimbursement of expenses		-		-		-		57		-		(5	)		-		-		-
	Leases and/or rights of use		-		-		-		697		-		(3	)		-		-		-
Total Other related parties			698,264		-		-		3,946		-		(520	)		-		-		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

		Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables			Trade and other payables			Borrowings			Borrowings			Derivative financial instruments
Related party	Description of transaction	non-current		current		non-current		current		non-current			current			non-current			current			current
Directors and Senior Management
Directors	Fees		-		-		-		302		-			(16,397	)		-			-			-
	Reimbursement of expenses		-		-		-		-		-			(76	)		-			-			-
	Guarantee deposits		-		-		-		-		(20	)		-			-			-			-
Total Directors and Senior Management			-		-		-		302		(20	)		(16,473	)		-			-			-
Total			705,264		16,950		1,076		20,196		(248	)		(49,045	)		(192,916	)		(191,647	)		22,150

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

The following is a summary of the balances with related parties as of June 30, 2013:

		Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables		Trade and other payables			Borrowings			Borrowings
Related party	Description of transaction	non-current		current		non-current		current		non-current		current			non-current			current
Parent company
Cresud S.A.C.I.F. y A.	Reimbursement of expenses		-		-		-		480		-		(10,565	)		-			-
	Corporate services		-		-		-		-		-		(33,927	)		-			-
	Sale of real estate property		-		-		-		701		-		-			-			-
	Non-Convertible Notes		14,001		16,655		-		-		-		-			-			-
	Shared based payments		-		-		-		1,331		-		-			-			-
Total Parent company			14,001		16,655		-		2,512		-		(44,492	)		-			-
Associates
Banco Hipotecario S.A.	Reimbursement of expenses		-		-		-		298		-		(372	)		-			-
	Borrowings		-		-		-		-		-		-			(35,557	)		(9,738	)
	Non-Convertible Notes		-		5,136		-		-		-		-			-			-
	Mortgage bonds		-		540		-		-		-		-			-			-
	Leases and/or rights of use		-		-		-		11		-		-			-			-
Lipstick Management LLC	Reimbursement of expenses		-		-		-		507		-		-			-			-
Manibil S.A.	Reimbursement of expenses		-		-		-		-		-		(781	)		-			-
New Lipstick LLC	Reimbursement of expenses		-		-		-		1,525		-		-			-			-
Tarshop S.A.	Reimbursement of expenses		-		-		-		1,759		-		(1,000	)		-			-
Total Associates			-		5,676		-		4,100		-		(1,154	)		(35,557	)		(9,738	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

		Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables		Trade and other payables			Borrowings			Borrowings
Related party	Description of transaction	non-current		current		non-current		current		non-current		current			non-current			current
Joint Ventures
Baicom Networks S.A.	Management fees		-		-		1,007		1		-		-			-			-
	Reimbursement of expenses		-		-		-		18		-		(2	)		-			-
Boulevard Norte S.A.	Reimbursement of expenses		-		-		-		29		-		-			-			-
Cyrsa S.A.	Borrowings		-		-		-		-		-		-			(98,328	)		-
	Reimbursement of expenses		-		-		-		84		-		(254	)		-			-
Nuevo Puerto Santa Fe S.A.	Reimbursement of expenses		-		-		-		275		-		(141	)		-			-
	Proceeds from leasing		-		-		-		11		-		(13	)		-			-
	Leases and/or rights of use		-		-		-		-		-		(248	)		-			-
	Management fees		-		-		-		629		-		-			-			-
Puerto Retiro S.A.	Contributions to be paid in		-		-		-		101		-		-			-			-
	Borrowings		-		-		-		3,916		-		-			-			-
	Reimbursement of expenses		-		-		-		180		-		-			-			-
Quality Invest S.A.	Management fees		-		-		-		46		-		(45	)		-			-
	Reimbursement of expenses		-		-		-		77		-		-			-			-
	Borrowings		-		-		-		500		-		-			-			-
Total Joint Ventures			-		-		1,007		5,867		-		(703	)		(98,328	)		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

		Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables		Trade and other payables			Borrowings		Borrowings
Related party	Description of transaction	non-current		current		non-current		current		non-current		current			non-current		current
Subsidiaries of the parent company
Helmir S.A.	Reimbursement of expenses		-		-		-		1		-		-			-		-
Alafox S.A.	Reimbursement of expenses		-		-		-		49		-		-			-		-
Doneldon S.A.	Reimbursement of expenses		-		-		-		39		-		-			-		-
Futuros y Opciones.com S.A.	Reimbursement of expenses		-		-		-		40		-		(8	)		-		-
Sedelor S.A.	Reimbursement of expenses		-		-		-		38		-		-			-		-
Codalis S.A.	Reimbursement of expenses		-		-		-		47		-		-			-		-
FyO Trading S.A.	Reimbursement of expenses		-		-		-		9		-		-			-		-
Total Subsidiaries of the parent company			-		-		-		223		-		(8	)		-		-
Other related parties
Consultores Asset Management S.A. (CAMSA)	Reimbursement of expenses		-		-		-		2,570		-		(41	)		-		-
Estudio Zang, Bergel y Viñes	Advances		-		-		-		14		-		-			-		-
	Legal services		-		-		-		22		-		(979	)		-		-
Dolphin Fund Ltd.	Subscription		17,249		-		-		-		-		-			-		-
	Reimbursement of expenses		-		-		-		133		-		-			-		-
Elsztain Realty Partners	Reimbursement of capital		-		-		-		-		-		(105,325	)		-		-
Decater	Reimbursement of capital		-		-		-		-		-		(6,661	)		-		-
Elsztain Managing Partners	Reimbursement of expenses		-		-		-		-		-		(61	)		-		-
Fundación IRSA	Reimbursement of expenses		-		-		-		51		-		(2	)		-		-
Inversiones Financieras del Sur S.A.	Reimbursement of expenses		-		-		-		261		-		(3	)		-		-
IRSA Developments LP	Reimbursement of expenses		-		-		-		32		-		(5	)		-		-
Museo de los niños	Reimbursement of expenses		-		-		-		133		-		(11	)		-		-
	Leases and/or rights of use		-		-		-		928		-		(3	)		-		-
Total Other related parties			17,249		-		-		4,144		-		(113,091	)		-		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

Related party	Description of transaction	Investments in financial assets		Investments in financial assets		Trade and other receivables		Trade and other receivables		Trade and other payables			Trade and other payables			Borrowings			Borrowings
		non-current		current		non-current		current		non-current			current			non-current			current
Directors and Senior Management
Directors	Management fees		-		-		-		7,599		-			(11,754	)		-			-
	Reimbursement of expenses		-		-		-		-		-			(69	)		-			-
	Guarantee deposits		-		-		-		-		(20	)		-			-			-
Total Directors and Senior Management			-		-		-		7,599		(20	)		(11,823	)		-			-
Total			31,250		22,331		1,007		24,445		(20	)		(171,271	)		(133,885	)		(9,738	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

The following is a summary of the transactions with related parties for the six-month period ended December 31, 2013:

Related party	Leases and/or rights of use			Management fees			Corporate services			Legal services			Financial operations			Donations			Fees and salaries
Parent company
Cresud S.A.C.I.F. y A.		827			-			(45,719	)		-			(10,376	)		-			-
Total Parent company		827			-			(45,719	)		-			(10,376	)		-			-
Associates
Banco Hipotecario S.A.		262			-			-			-			22,358			-			-
Banco de crédito y securitización		178			-			-			-			-			-			-
Tarshop S.A.		3,777			(239	)		-			-			-			-			-
Total Associates		4,217			(239	)		-			-			22,358			-			-
Join Ventures
Baicom Networks S.A.		-			6			-			-			59			-			-
Cyrsa S.A.		-			-			-			-			(8,628	)		-			-
Nuevo Puerto Santa Fe S.A.		(230	)		986			-			-			-			-			-
Puerto Retiro S.A.		-			-			-			-			456			-			-
Quality Invest S.A.		-			108			-			-			-			-			-
Total Join Ventures		(230	)		1,100			-			-			(8,113	)		-			-
Other related parties
Estudio Zang, Bergel & Viñes		-			-			-			(1,201	)		-			-			-
Fundación IRSA		-			-			-			-			-			(1,450	)		-
Isaac Elsztain e hijos S.C.A.		(219	)		-			-			-			-			-			-
Dolphin Fund Ltd.		-			-			-			-			286			-			-
Hamonet S.A.		(114	)		-			-			-			-			-			-
Inversiones Financieras del Sur S.A.		-			-			-			-			151			-			-
Total Other related parties		(333	)		-			-			(1,201	)		437			(1,450	)		-
Directors and Senior Management
Directors		-			-			-			-			-			-			(29,661	)
Total Directors and Senior Management		-			-			-			-			-			-			(29,661	)
Total		4,481			861			(45,719	)		(1,201	)		4,306			(1,450	)		(29,661	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

33.	Related party transactions (Continued)

The following is a summary of the transactions with related parties for the six-month period ended December 31, 2012:

Related party	Leases and/or rights of use		Management fees			Corporate services			Legal services			Financial operations			Donations			Fees and salaries
Parent company
Cresud S.A.C.I.F. y A.		704		(12,272	)		(33,048	)		-			3,241			-			-
Total Parent company		704		(12,272	)		(33,048	)		-			3,241			-			-
Associates
Banco Hipotecario S.A.		-		-			-			-			-			-			-
Tarshop S.A.		2,730		-			153			-			(189	)		-			-
Total Associates		2,730		-			153			-			(189	)		-			-
Join Ventures
Baicom Networks S.A.		-		6			-			-			47			-			-
Canteras Natal Crespo S.A.		-		48			-			-			5			-			-
Cyrsa S.A.		-		-			-			-			(2,792	)		-			-
Nuevo Puerto Santa Fe S.A.		-		-			-			-			-			-			705
Puerto Retiro S.A.		-		-			-			-			189			-			-
Quality Invest S.A.		-		-			-			-			10			-			108
Total Join Ventures		-		54			-			-			(2,541	)		-			813
Other related parties
Estudio Zang, Bergel & Viñes		-		-			-			(7,169	)		-			-			-
Fundación IRSA		-		-			-			-			-			(1,420	)		-
Isaac Elsztain e hijos S.C.A.		-		-			-			-			-			-			-
Consultores Assets Management S.A.		80		-			-			-			-			-			-
Hamonet S.A.		-		-			-			-			-			-			-
Inversiones Financieras del Sur S.A.		-		-			-			-			103			-			-
Total Other related parties		80		-			-			(7,169	)		103			(1,420	)		-
Directors and Senior Management
Directors		-		(41,618	)		-			-			-			-			-
Total Directors and Senior Management		-		(41,618	)		-			-			-			-			-
Total		3,514		(53,836	)		(32,895	)		(7,169	)		614			(1,420	)		813

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

34.	Negative working capital

As of the period-end, the Group has recorded negative working capital which is currently under consideration of the Board of Directors and Management.

35.	CNV General Resolution No. 622

As required by Section 1°, Chapter III, Title IV of CNV General Resolution No. 622, below there is a detail of the notes to the Unaudited Condensed Interim Consolidated Financial Statements that disclosure the information required by the Resolution in Exhibits.

Exhibit A - Property, plant and equipment	Note 9 Investment properties and Note 10 Property, plant and equipment
Exhibit B - Intangible assets	Note 12 Intangible assets
Exhibit C - Equity investments	Note 36 Equity investments
Exhibit D - Other investments	Note 14 Financial instruments by category
Exhibit E – Provisions	Note 16 Trading and other receivables and Note 22 Provisions
Exhibit F - Cost of sales and services provided	Note 37 Cost of sales and services provided
Exhibit G - Foreign currency assets and liabilities	Note 38 Foreign currency assets and liabilities

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

36.	Equity investments

										Issuer's information
												Last financial statements issued
Issuer and type of securities	Class / Items	Amount		Value recorded as of 12.31.13			Value recorded as of 06.30.13		Market value as of 12.31.13	Main activity	Registered office	Date		Common stock (nominal value)		Profit (loss) for the period			Shareholders' Equity		Interest in common stock
Joint Ventures
Baicom Networks S.A.	Common shares 1 vote		4,701,455		3,218			3,035	Not publicly traded	Real estate	Argentina		12.31.13		9,403		(414	)		6,436		50.00	%
	Irrevocable contributions				-			390
	Higher value				276			276

Cyrsa S.A.	Common shares 1 vote		119,608,531		137,847			129,627	Not publicly traded	Real estate	Argentina		12.31.13		239,217		16,441			275,694		50.00	%


Entertainment Holdings S.A.	Common shares 1 vote		22,395,574		22,783			12,709	Not publicly traded	Investment	Argentina		12.31.13		44,791		(5,786	)		47,009		50.00	%
	Irrevocable contributions				721			-
	Goodwill				26,647			24
	Higher value				(23,192	)		10,652

Entretenimiento Universal S.A.	Common shares 1 vote		300		(23	)		-	Not publicly traded	Event organization and others	Argentina		12.31.13		12		(2) 61			929		50.00	%

Nuevo Puerto Santa Fe S.A.	Common shares 1 vote		277,500		18,549			16,504	Not publicly traded	Commercial real estate	Argentina		12.31.13		27,750		4,091			37,099		50.00	%
	Goodwill				4,068			4,155
	Higher value				1,323			1,323

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

36.	Equity investments (Continued)

											Issuer's information
													Last financial statements issued
Issuer and type of securities	Class / Items	Amount		Value recorded as of 12.31.13			Value recorded as of 06.30.13			Value recorded as of 12.31.13	Main activities	Registered office	Date		Common stock (nominal value)		Profit (loss) for the period			Shareholders' Equity		Interest in common stock
Puerto Retiro S.A.	Common shares 1 vote		23,067,250		14,848			15,696		Not publicly traded	Real estate	Argentina		12.31.13		46,135		(1,696	)		29,696		50.00	%
	Higher value				29,209			29,209

Quality Invest S.A.	Common shares 1 vote		69,814,342		62,505			63,210		Not publicly traded	Real estate	Argentina		12.31.13		139,628,684		(1,410	)		126,010		50.00	%
	Irrevocable contributions				500			-
	Goodwill				3,911			3,911
	Higher value				(2,882	)		(2,875	)
Total Joint Ventures					300,308			287,846
Associates
Avenida Compras	Common shares 1 vote		23,077		(9	)		-		Not publicly traded	E-commerce	Argentina		12.31.13		1,100		(470	)		12,670		2.10	%
	Goodwill				18			-

Avenida Inc.	Common shares 1 vote		3,703,704		9,161			-		Not publicly traded	Investment	U.S.A.		12.31.13	(3) 2,000		(3) 499			(3) 2,210			24.79	%
	Higher value				4,595			-

Banco de Crédito & Securitización S.A. (1)	Common shares 1 vote		3,984,375		11,773			9,901		Not publicly traded	Financial	Argentina		12.31.13		62,500		39,327			184,430		6.38	%

Banco Hipotecario S.A. (1)	Common shares 1 vote		446,515,208		1,115,216			1,036,669		1.78	Financial	Argentina		12.31.13		1,500,000		420,950			3,846,935		29.77	%
	Higher value				(1,386	)		(371	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

36.	Equity investments (Continued)

											Issuer's information
													Last financial statements issued
Issuer and type of securities	Class / Items	Amount		Value recorded as of 12.31.13			Value recorded as of 06.30.13			Market value as of 12.31.13	Main activities	Registered office	Date		Common stock (nominal value)		Profit (loss) for the period			Shareholders' Equity			Interest in common stock
Bitania 26 S.A.	Common shares 1 vote		4,724,203		11,604			11,069		Not publicly traded	Real estate	Argentina		12.31.13		20,000		1,091			23,681			49.00	%
	Goodwill				1,736			1,736
	Higher value				8,309			8,535

Lipstick Management LLC	Common shares 1 vote		N/A		1,208			799		Not publicly traded	Management company	U.S.A.		12.31.13		N/A		446			2,441			49.00	%

Manibil S.A.	Common shares 1 vote		30,397,880		33,604			26,250		Not publicly traded	Real estate	Argentina		12.31.13		62,037		3,455			68,580			49.00	%
	Irrevocable contributions				-			6,500
	Goodwill				10			10

New Lipstick LLC	Common shares 1 vote		N/A		(102,543	)		(39,091	)	Not publicly traded	Real State	U.S.A.		12.31.13		N/A		(98,459	)		(395,629	)		49.87	%

Tarshop S.A.	Common shares 1 vote		133,796,440		37,965			39,140		Not publicly traded	Consumer financing	Argentina		12.31.13		133,796		(13,761	)		189,826			20.00	%
	Higher value				(5,286	)		(4,148	)
Total Associates					1,125,975			1,096,999
Total investments in associates and joint ventures					1,426,283			1,384,845

(1) The balances correspond to the financial statements of Banco Hipotecario S.A. and Banco de Crédito & Securitización S.A. prepared in accordance with the Central Bank of the Argentine Republic (“BCRA”) standards. For the purpose of the valuation of the investment in the Company, adjustments necessary to adequate the financial statements to the professional accounting standards have been considered.

(2) Correspond to the result of the year beginning January 1, 2013 and ended December 31, 2013.

(3) Amounts stated in US dollars (US$).

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

37.	Cost of sales and services provided

				12.31.13											12.31.12
Item	Service and other operating costs		Sale of			Hotels			Others		Total			Total
			trading properties
Inventories at the beginning of the year		-		190,114						-		196,077			181,615
							5,963
Currency translation adjustment		-		11,509			-			-		11,509			9,210
Additions		-		2,850			956			-		3,806			7,047
Sales		-		(4,104	)		-			-		(4,104	)		(4,222	)
Expenses incurred (Note 28)		528,259		8,003			105,437			171		641,870			534,712
Inventories at the end of the period		-		(200,369	)					-		(207,288	)		(193,650	)
							(6,919	)
Costs at 12.31.13		528,259		8,003			105,437			171		641,870			-
Costs at 12.31.12		442,355		7,327			84,553			477		-			534,712

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

38.	Foreign currency assets and liabilities

Book amounts of foreign currency assets and liabilities are as follows:

Items (3)	Amount of foreign currency (1)		Exchange rate prevailing (2)		Totals as of 12.31.13		Amount of foreign currency (1)		Exchange rate prevailing (2)		Total as of 06.30.13
Assets
Trade and other receivables
US Dollar		9,881		6.481		64,040		42,502		5.348		227,302
Euros		4		8.940		35		2		6.949		17
Swiss francs		55		7.302		400		77		5.660		437
Uruguayan Pesos		13,076		0.302		3,952		214		0.262		56
Total Trade and other receivables, net						68,427						227,812
Investments in financial assets
US Dollar		135,266		6.481		876,660		39,209		5.348		209,692
Total investments in financial assets						876,660						209,692
Derivative financial instruments
US Dollar				-		-		3,169		5.348		16,949
Total derivative financial instruments						-						16,949
Cash and cash equivalents
US Dollar		15,165		6.481		98,284		107,602		5.348		575,453
Euros		105		8.940		936		102		6.949		712
Reais		4		2.650		10		2		2.370		5
Swiss francs		-		7.302		1		-		5.660		-
Uruguayan Pesos		40		0.302		12		305		0.262		80
Pounds		2		10.700		25		2		8.080		20
Total Cash and cash equivalents						99,268						576,270
Total assets as of 12.31.13						1,044,355						-
Total assets as of 06.30.13						-						1,030,723

Liabilities
Trade and other liabilities
US Dollar		6,562		6.521		42,792		31,947		5.388		172,131
Euros		-		9.011		3		16		7.015		112
Uruguayan Pesos		290		0.303		88		-		0.262		-
Total Trade and other payables						42,883						172,243
Borrowings
US Dollar		464,551		6.521		3,029,334		458,572		5.388		2,470,785
Total Borrowings						3,029,334						2,470,785
Derivative financial instruments
US Dollar		-		6.521		-		321		5.388		1,732
Total derivative financial instruments						-						1,732
Total liabilities as of 12.31.13						3,072,217						-
Total liabilities as of 06.30.13						-						2,644,760

(1) Considering foreign currencies those that differ from Company’s functional currency at each period/year-end.

(2) Exchange rate as of December 31 and June 30, 2013 according to Banco Nación Argentina records.

(3) The Company uses derivative instruments as complement in order to reduce its exposure to exchange rate movements. (See Note 14).

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

39.	Subsequent events

· On January 9, 2014, RES entered into a credit facility of up to US$ 2,000,000 with Supertel Hospitality Inc. (SPPR). In the event SPPR successfully carries out an initial public offering not later than April 15, 2014, RES agrees to swap (capitalize) the balance of the loan at such time for shares of SPPR. In the event that SPPR fails to make an initial public offering within the term agreed, RES is entitled to a debt-for-equity swap until July 9, 2015 (subject to any limitation on shareholding that may apply). In such a case, the price at which debt will be swapped by equity shall be the higher of (a) the weighted average price of common shares of the company within a term of 5 days prior to the date RES decides to exercise the debt-for-equity swap option or (b) the higher of market price and book value.

· During the six-month period ended December 31, the Group has subscribed shares of Dolphin Fund Ltd. (“Dolphin”) for the amount of US$105 million. On November 3, 2013, Dolphin together with other investors, has made an offer to purchase shares of IDB Development Corporation (“IDBD”), an Israeli Company, within the framework of a debt restructuring process that its controlling company, IDBH, is currently negotiating with creditors, pursuant to Israel’s applicable laws.

On January 5, 2014, the competent court in dealing with IDBH debt restructuring has approved the offer made by Dolphin together with E.T.H.M.B.M. Extra Holdings Limited (“ETH”), a company incorporated under the laws of Israel, controlled by Mordechay Ben Moshé, in order to acquired approximately 53.3% of IDBD (the “Offer”). Such percentage may be increased subject to the sale of certain assets by IDBD over the year.

In the abovementioned offer, Dolphin together with other investors, have a 50% interest while ETH holds the remaining 50% of a total investment amount of US$ 272 million (NIS 950 million). As described above, the Group disbursed funds in Dolphin the amount of approximately US$ 105 million, which may partially reimbursed, depending on the final composition of the investor group.

IDBD is one of the Israeli biggest and most diversified investment groups, which is involved , through its subsidiaries, in several markets and industry, including real estate, retail, agribusiness, oil & gas production, insurance, telecommunications, etc.; controlling companies as Clal Insurance (Insurance Company), Cellcom (Mobile phone services), Koor Industries (owner of 40% of Makhteshim Agan Industries-Agrochemicals), Super-Sol (supermarket), PBC (Real Estate), among others.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Consolidated Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

39.	Subsequent events (Continued)

The transaction will be closed over the following months, while Dolphin has appointed Mr. Eduardo Sergio Elsztain to the board of IDBD.

· On January 14, 2014, IRSA signed the transfer deed for the sale of the 11th floor and seven parking units of the Building Maipú 1300. The total price of the transaction was Ps. 9.6 million (US$ 1.4 million). Such transaction generated a gain before tax of approximately Ps. 7.9 million.

· On January 24, 2014, IRSA signed the transfer deed for the sale of the 7th floor and 28 parking units of the Building Bouchard 551. The total price of the transaction was Ps. 124.6 million, equivalents to US$ 16.0 million. Such transaction generated a gain before tax of approximately Ps. 104.5 million.

· Following the end of the period, the Argentine Peso devalued against the US$ and other currencies by around 20%, which had a negative impact on the financial position and results of operations of the Company due mainly to the currency exposure of our net assets and liabilities in foreign currency as detailed in note 38 and net investments in subsidiaries, associates and joint ventures made in a functional currency other than the Argentine Peso.

According to the Company’s estimates, this leads to a pre-tax loss of Ps. 207.4 million, a gain under Other Comprehensive Income in the amount of Ps. 68.9 million and a reduction in Shareholders’ Equity by Ps. 138.5 million, all based on the Company’s position in foreign currency as of December 31, 2013, which has not been recognized in these financial statements.

The main assets of the Company— including shopping centers, offices and other income-generating real property, land reserves, hotels and property for sale—are valued for accounting purposes at historic cost, and thus the Company will not recognize any gain/loss as a result of such devaluation.

· On February 5, 2014 there was a widely known fire in Iron Mountain’s warehouse. Such company is a supplier of the Group and Group’s documentation was being kept in the mentioned warehouse. The Company is now assessing and identifying the content of information that may have sent to the site where the fire took place.

Free translation from the original prepared in Spanish for publication in Argentina

Limited Review Report

To the Shareholders, President and Board of Directors of

IRSA Inversiones y Representaciones Sociedad Anónima

C.U.I.T.: 30-52532274-9

Legal address: Bolívar 108 - 1° floor - Autonomous City of Buenos Aires

We have reviewed the accompanying unaudited condensed interim consolidated statement of financial position of IRSA Inversiones y Representaciones Sociedad Anónima and its subsidiaries as of December 31, 2013, and the related unaudited condensed interim consolidated statements of income and comprehensive income for the six and three-month periods ended December 31, 2013, and the unaudited condensed interim consolidated statements of changes of shareholders’ equity and unaudited condensed interim consolidated statements of cash flows for the six-month period ended December 31, 2013 and selected explanatory notes. The balances and other information corresponding to the fiscal year ended June 30, 2013 and the interim periods within that fiscal period are an integral part of these financial statements and, therefore, they should be considered in relation to these financial statements.

The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim consolidated financial statements in accordance with International Financial Reporting Standards. The IFRS as issued by the International Accounting Standard Board were adopted as accounting standards by the Argentine Federation of Professional Councils in Economic Sciences and incorporated by the National Securities Commission to its regulations. Therefore, the Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim consolidated financial statements in accordance with International Accounting Standard 34 "Interim Financial Reporting" (IAS 34). Our responsibility is to express a conclusion based on the review that we have performed with the scope detailed in paragraph 3.

We conducted our review in accordance with Technical Resolution No. 7 issued by the FACPCE for a review of interim financial statements. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit, the objective of which is to express an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Free translation from the original prepared in Spanish for publication in Argentina

Limited Review Report (Continued)

4.	Nothing came to our attention as a result of our review that caused us to believe that these unaudited condensed interim consolidated financial statements have not been prepared in all material respects in accordance with IAS 34.

5.	In accordance with current regulations, we hereby inform that :

the unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima are recorded in the "Inventory and Balance Sheet Book" and carried in all formal respects in conformity with legal requirements, and comply, as regards those matters that are within our competence, with the provisions set forth in the Commercial Companies Law and the corresponding resolutions of the National Securities Commission;

b)	the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal respects in accordance with applicable legal provisions;

c)	we have read the Business Summary (“Reseña Informativa”) on which, as regards these matters that are within our competence, we have no observations to make;

d)	at December 31, 2013, the debt of IRSA Inversiones y Representaciones Sociedad Anónima owed in favor of the Argentine Integrated Pension System which arises from accounting records and submissions amounted to Ps. 494,752, which was not callable at that date.

Autonomous City of Buenos Aires, February 10, 2014.

PRICE WATERHOUSE & Co. S.R.L.

(Partner)

C.P.C.E.C.A.B.A. Tº 1 Fº 17

Eduardo A. Loiácono

Public Accountant (U.B.A.)

C.P.C.E.C.A.B.A. Tº 326 Fº 94

ABELOVICH, POLANO & ASOCIADOS S.R.L.

(Partner)

C.P.C.E.C.A.B.A. Tº 1 Fº 30

Marcelo Héctor Fuxman

Public Accountant (U.B.A.)

C.P.C.E.C.A.B.A. Tº 134 Fº 85

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Financial Statements

as of December 31, 2013 and for the six-month periods

ended December 31, 2013 and 2012

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Statements of Financial Position

as of December 31, 2013 and June 30, 2013

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina

	Note	12.31.2013		06.30.2013
ASSETS
Non-current Assets
Investment properties	6	791,884		804,788
Property, plant and equipment	7	8,447		8,681
Trading properties	8	62,762		62,762
Intangible assets	9	5,826		5,938
Investments in subsidiaries, associates and joint ventures	5	3,714,370		3,570,642
Deferred income tax assets	20	195,529		47,144
Income tax and minimum presumed income tax credit		115,704		102,375
Trade and other receivables	12	250,666		85,862
Investments in financial assets	13	93		87
Total Non-current Assets		5,145,281		4,688,279
Current Assets
Trading properties	8	2,604		3,901
Inventories	10	525		463
Trade and other receivables	12	185,764		251,678
Investments in financial assets	13	29,592		72,713
Derivative financial instruments	14	1,837		-
Cash and cash equivalents	15	48,993		62,788
Total Current Assets		269,315		391,543
TOTAL ASSETS		5,414,596		5,079,822
SHAREHOLDERS’ EQUITY
Shared capital		574,588		578,676
Treasury stock		4,088		-
Inflation adjustment of share capital		123,329		123,329
Share premium		793,123		793,123
Cost of treasury stock		(29,627	)	-
Acquisition of additional interest in subsidiaries		(20,782	)	(20,782	)
Reserve for share-based payments		19,695		8,258
Legal reserve		116,840		85,140
Special reserve		375,487		395,249
Reserve for new developments		469,831		492,441
Cumulative translation adjustment		102,212		50,776
Retained earnings		(20,928	)	239,328
TOTAL SHAREHOLDERS’ EQUITY		2,507,856		2,745,538
LIABILITIES
Non-Current Liabilities
Trade and other payables	16	5,260		7,054
Borrowings	19	2,154,709		1,796,521
Provisions	18	9,705		6,877
Total Non-Current Liabilities		2,169,674		1,810,452
Current Liabilities
Trade and other payables	16	130,520		77,706
Minimum presumed income tax		10,252		10,536
Salaries and social security liabilities	17	3,444		5,490
Borrowings	19	587,623		423,835
Provisions	18	5,227		6,265
Total Current Liabilities		737,066		523,832
TOTAL LIABILITIES		2,906,740		2,334,284
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES		5,414,596		5,079,822

The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Statements of Income

for the six and three-month periods beginning on July 1st and October 1st, 2013 and 2012 and ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina.

		Six months					Three months
	Note		12.31.2013		12.31.2012			12.31.2013		12.31.2012
Revenues	22		138,886		137,461			67,821		67,940
Costs	23		(46,761	)	(54,105	)		(20,770	)	(26,594	)
Gross profit			92,125		83,356			47,051		41,346
Gain from disposal of investment properties	6		7,481		55,959			7,481		24,890
General and administrative expenses	24		(39,130	)	(38,918	)		(24,501	)	(26,026	)
Selling expenses	24		(13,077	)	(7,305	)		(4,319	)	(3,548	)
Other operating results, net	26		(4,685	)	(9,285	)		(1,975	)	(5,311	)
Profit from operations			42,714		83,807			23,737		31,351
Share of profit of subsidiaries, associates, and joint ventures	5		257,780		287,671			130,012		221,330
Profit from operations before financial results and income tax			300,494		371,478			153,749		252,681
Finance income	27		58,221		42,758			29,707		22,395
Finance cost	27		(526,867	)	(260,493	)		(317,344	)	(134,993	)
Other financial results	27		(1,911	)	26,438			(17,605	)	20,817
Financial results, net	27		(470,557	)	(191,297	)		(305,242	)	(91,781	)
(Loss) / Profit before income tax			(170,063	)	180,181			(151,493	)	160,900
Income tax	20		148,385		43,601			97,433		21,740
(Loss) / Profit for the period			(21,678	)	223,782			(54,060	)	182,640


(Loss) / Profit per share for the period:
Basic			(0.037	)	0.387			(0.093	)	0.316
Diluted			(0.037	)	0.387			(0.093	)	0.316

The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Statements of Comprehensive Income

for the six and three-month periods beginning on July 1st and October 1st, 2013 and 2012 and ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina.

	Six months				Three months
		12.31.2013		12.31.2012		12.31.2013		12.31.2012
(Loss) / Profit for the period		(21,678	)	223,782		(54,060	)	182,640
Other Comprehensive Income:
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustment of subsidiaries, associates, and joint ventures		51,436		23,421		36,525		12,931
Other comprehensive income for the period (i)		51,436		23,421		36,525		12,931
Total comprehensive income for the period		29,758		247,203		(17,535	)	195,571

(i)	Components of other comprehensive income have no impact on income tax.

The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity

for the six-month periods ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina.

	Share capital			Treasury Stock		Inflation adjustment of Share Capital and Treasury Stock (2)		Share premium		Cost of treasury stock			Acquisition of additional interest in subsidiaries			Reserve for share-based compensation		Legal reserve		Special reserve (1)			Reserve for new developments			Cumulative translation adjustment		Retained earnings			Total Shareholders’ equity
Balance at June 30, 2013		578,676			-		123,329		793,123		-			(20,782	)		8,258		85,140		395,249			492,441			50,776		239,328			2,745,538
Loss for the period		-			-		-		-		-			-			-		-		-			-			-		(21,678	)		(21,678	)
Other comprehensive income for the period		-			-		-		-		-			-			-		-		-			-			51,436		-			51,436
Total comprehensive income for the period		-			-		-		-		-			-			-		-		-			-			51,436		(21,678	)		29,758
Appropriation of retained earnings approved by Shareholders’ meeting held 10.31.13		-			-		-		-		-			-			-		31,700		(19,762	)		(22,610	)		-		10,672			-
Distribution of dividends approved by Shareholders’ meeting held 10.31.13		-			-		-		-		-			-			-		-		-			-			-		(250,000	)		(250,000	)
Reserve for share-based compensation		-			-		-		-		-			-			11,437		-		-			-			-		-			11,437
Purchase of Treasury stock		(4,088	)		4,088		-		-		(29,627	)		-			-		-		-			-			-		-			(29,627	)
Reimbursement of expired dividends		-			-		-		-		-			-			-		-		-			-			-		750			750
Balance at December 31, 2013		574,588			4,088		123,329		793,123		(29,627	)		(20,782	)		19,695		116,840		375,487			469,831			102,212		(20,928	)		2,507,856

The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements

(1)	Related to CNV General Resolution No. 609/12. See Note 21.

(2)	Includes Ps. 871 of inflation adjustment of Treasury Stock. See Note 21.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity

for the six-month periods ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina.

	Share capital		Inflation adjustment of share capital			Share premium		Acquisition of additional interest in subsidiaries			Reserve for share-based compensation		Legal reserve		Reserve for new developments		Cumulative translation adjustment			Retained earnings			Total Shareholders’ equity
Balance at July 1st, 2012		578,676		274,387			793,123		(15,714	)		2,595		71,136		419,783		14,502			510,853			2,649,341
Profit for the period		-		-			-		-			-		-		-		-			223,782			223,782
Other comprehensive income for the period		-		-			-		-			-		-		-		23,421			-			23,421
Total comprehensive income for the period		-		-			-		-			-		-		-		23,421			223,782			247,203
Appropriation of retained earnings approved by Shareholders’ meeting held 10.31.12		-		-			-		-			-		14,004		72,658		-			(86,662	)		-
Reclassification of the deferred tax liability – Approved by Shareholders’ meeting held 10.31.12		-		(151,058	)		-		-			-		-		-		-			151,058			-
Distribution of dividends approved by Shareholders’ meeting held 10.31.12		-		-			-		-			-		-		-		-			(180,000	)		(180,000	)
Reserve for share-based compensation		-		-			-		-			3,051		-		-		-			-			3,051
Cumulative translation adjustment for interest held before business combination		-		-			-		-			-		-		-		(12,915	)		-			(12,915	)
Acquisition of additional interest in subsidiaries		-		-			-		(1,142	)		-		-		-		-			-			(1,142	)
Reimbursement of expired dividends		-		-			-		-			-		-		-		-			591			591
Balance at December 31, 2012		578,676		123,329			793,123		(16,856	)		5,646		85,140		492,441		25,008			619,622			2,706,129

The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Unaudited Condensed Interim Separate Statements of Cash Flows

for the six-month periods ended December 31, 2013 and 2012

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for publication in Argentina.

	Note	12.31.2013		12.31.2012
Operating activities:
Cash generated from the operations	15	34,423		73,605
Minimum presumed income tax paid		(13,613	)	(10,466	)
Net cash generated by operating activities		20,810		63,139
Investing activities:
Capital contributions to subsidiaries, associates and joint ventures	5	(1,954	)	(82,101	)
Additions of investment properties	6	(1,856	)	(1,207	)
Proceeds from sale of investment properties	6	127,852		81,731
Proceed from sale of joint ventures		7,736		-
Additions of property, plant and equipment	7	(388	)	(326	)
Additions of intangible assets	9	-		(69	)
Additions of investments in financial assets		(125,516	)	-
Proceeds from sale of investments in financial assets		140,579		72,522
Interest received from subsidiaries, associates and joint ventures		1,986		7,330
Loans granted to subsidiaries, associates and joint ventures………………………………….		(141,198	)	(23,225	)
Loans repayments received from subsidiaries, associates and joint ventures ……………		7,267		17,520
Dividends received		162,497		142,410
Net cash generated by investing activities		177,005		214,585
Financing activities:
Bank overdrafts, net		55,098		12,220
Repayments of borrowings		-		(80,000	)
Payment of non-convertible notes		(148,281	)	-
Dividends paid	21	(19,810	)	(163,216	)
Interest paid		(105,749	)	(102,086	)
Repurchase of treasury stock		(29,627	)	-
Payment of borrowings from subsidiaries, associates and joint ventures		-		(2,665	)
Proceeds from borrowings from subsidiaries, associates and joint ventures		31,075		96,355
Payment of derivative financial instruments		(1,164	)	-
Net cash used in financing activities		(218,458	)	(239,392	)
Net increase in cash and cash equivalents		(20,643	)	38,332
Cash and cash equivalents at the beginning of the year	15	62,788		76,872
Foreign exchange gain on cash and cash equivalents		6,848		4,826
Cash and cash equivalents at end of period		48,993		120,030

The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.

	IRSA Inversiones y Representaciones Sociedad Anonima

	By:	/s/ Saúl Zang
		Saúl Zang
		Vice President I - Acting as President

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

1.	General information and company’s business

IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA” or the “Company”) was founded in 1943, primarily engaged in managing real estate holdings in Argentina since 1991.

IRSA is a corporation incorporated and domiciled in Argentina. The registered office is Bolívar 108, 1st Floor, Buenos Aires, Argentina.

The Company owns, manages and develops a portfolio of office and other rental properties in Buenos Aires. In addition, IRSA through its subsidiaries, associates and joint ventures manages and develops shopping centers and branded hotels across Argentina, and also office properties in the United States of America.

These Unaudited Condensed Interim Separate Financial Statements have been approved for issue by the Board of Directors on February 10, 2014.

2.	Basis of preparation of the Unaudited Condensed Interim Separate Financial Statements

2.1.	Basis of preparation

The Unaudited Condensed Interim Financial Statements have been prepared in accordance with the Technical Resolution No. 26 of the Argentine Federation of Professional Councils of Economic Science (“FACPCE”, as per its Spanish acronym) and with IAS 34 “Interim Financial Reporting”. Furthermore, some additional issues were included as required by the Business Companies Act and/or regulations of the CNV, including supplementary information provided in the last paragraph of section 1, Chapter III, Title IV of General Ruling 622/13 of the CNV. Such information is included in the Notes to these Unaudited Condensed Interim Separate Financial Statements according to IFRS.

These Financial Statements should be read together with the annual separate financial statements of the Company as of June 30, 2013 prepared in accordance with the Technical Resolution No. 26. These Unaudited Condensed Interim Separate Financial Statements are presented in Argentine Pesos.

These Unaudited Condensed Interim Separate Financial Statements corresponding to the six and three-month periods ended December 31, 2013 and 2012 have not been audited. The Company’s Management believes they include all necessary adjustments to fairly present the results of each period. The Company’s six and three-month periods ended December 31, 2013 and 2012 results do not necessarily reflect the proportion of the Company’s full-year results.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

2.	Basis of preparation of the Unaudited Condensed Interim Separate Financial Statements (Continued)

2.2. Significant accounting policies

The principal accounting policies adopted for the preparation of these Unaudited Condensed Interim Financial Statements are consistent with those applied in the preparation of the information under RT 26 as of June 30, 2013, and are based on those IFRS in force as of June 30, 2013 (except for the accounting of investments in subsidiaries, associates and joint ventures, which are accounted for under the equity method as required in RT 26). In addition, the most significant accounting policies are described in the Annual Separate Financial Statements.

2.3. Use of estimates

The preparation of financial statements at a certain date requires the Management to make estimates and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual results might differ from the estimates and evaluations made at the date of preparation of these financial statements.

In the preparation of these Unaudited Condensed Interim Separate Financial Statements, the main significant judgments made by Management in applying the Company’s accounting policies and the major sources of uncertainty were the same that the Company used in the preparation of financial statements as of and for the fiscal year ended June 30, 2013, save for changes in accrued income tax, provision for legal claims, allowance for bad debts and accrued supplementary rental.

2.4.	Comparative Information

Balance items as of December 31, 2012 and June 30, 2013 shown in these financial statements for comparative purposes arise from financial statements then ended. Certain reclassifications have been made in order to present figures comparatively with those of this period.

3. Acquisitions and disposals

See acquisitions and disposals made by the Company for the six-month period ended December 31, 2013 in Note 3 to the Unaudited Condensed Interim Consolidated Financial Statements.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

4. Financial risk management and fair value estimates

4.1	Financial risks

The Company’s activities are exposed to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and price risk), credit risk, liquidity risk and capital risk.

The Unaudited Condensed Interim Financial Statements do not include all the information and disclosures of the risk management, so they should be read together with the annual separate financial statements as of June 30, 2013. There have been no changes in the risk management or risk management policies applied by the Company since the end of the annual fiscal year.

4.2	Fair value estimates

Since June 30, 2013 there have been no significant changes in business or economic circumstances affecting the fair value of the Company's financial assets or liabilities (either measured at fair value or amortized cost) (see Note 3 to the Unaudited Condensed Interim Consolidated Financial Statements), nor any transfers between the different hierarchies used to assess the fair value of the Company's financial instruments.

5.	Information about principal subsidiaries, associates and joint ventures

The Company conducts its business through several operating and holding subsidiaries, associates and joint ventures.

Set out below is the summarized financial information for investments in subsidiaries, associates and joint ventures for the six-month period ended December 31, 2013 and for the year ended June 30, 2013:

Subsidiaries, Associates and Joint ventures

	December 31, 2013			June 30, 2013
Beginning of period / year		3,570,642			3,357,430
Capital contribution		1,954			143,634
Disposal of subsidiaries		-			(5,436	)
Share of profit, net		257,780			346,772
Translation adjustment		51,436			36,274
Cash dividends (i)		(177,017	)		(308,479	)
Reimbursement of expired dividends		750			591
Acquisition of non-controlling interest		-			(4,420	)
Reserve for share-based payments		8,825			4,276
End of the period / year		3,714,370			3,570,642

(i) During the period ended December 31, 2013, BHSA, Palermo Invest S.A., Inversora Bolivar S.A., APSA, E-Commerce Latina S.A., Manibil S.A., distributed dividends for an amount of Ps. 1.5 million, Ps. 4.8 million, Ps. 3.5 million, Ps. 160.2 million, Ps. 6.2 million and Ps. 0.8 million, respectively. During the year ended June 30, 2013, APSA, Nuevas Fronteras S.A., BHSA and Manibil S.A. distributed dividends for an amount of Ps. 292.9 million, Ps. 5.6 million, Ps. 5.1 million and Ps. 4.8 million, respectively.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

6. Investment properties

Changes in Company’s investment properties for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Offices and other rental properties portfolio			Undeveloped parcel of lands		Total
At July 1st, 2012:
Costs		908,650			117,556		1,026,206
Accumulated depreciation		(135,773	)		-		(135,773	)
Residual value		772,877			117,556		890,433
Year ended June 30, 2013:
Additions		4,788			5		4,793
Disposals		(62,700	)		-		(62,700	)
Depreciation charge (i)		(27,738	)		-		(27,738	)
Residual value at year end		687,227			117,561		804,788
At June 30, 2013:
Costs		849,275			117,561		966,836
Accumulated depreciation		(162,048	)		-		(162,048	)
Residual value		687,227			117,561		804,788
Period ended December 31, 2013:
Additions		1,856			-		1,856
Disposals		(1,435	)		-		(1,435	)
Depreciation charge (i)		(13,325	)		-		(13,325	)
Residual value at period end		674,323			117,561		791,884
At December 31, 2013:
Costs		849,697			117,561		967,258
Accumulated depreciation		(175,374	)		-		(175,374	)
Residual value		674,323			117,561		791,884

(i) Depreciation charges of investment properties were included in “Costs” in the Statement of Income (Note 24).

The following amounts have been recognized in the statement of income:

	December 31, 2013			December 31, 2012
Rental and service income		132,191			125,162
Direct operating expenses		(44,001	)		(49,841	)
Gain from disposal of investment properties		7,481			55,959

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

7. Property, plant and equipment

Changes in Company’s property, plant and equipment for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Buildings and facilities			Furniture and fixtures			Machinery and equipment			Vehicles			Total
At July 1st, 2012:
Costs		18,189			3,650			11,131			221			33,191
Accumulated depreciation		(11,326	)		(2,610	)		(10,269	)		(221	)		(24,426	)
Residual value		6,863			1,040			862			-			8,765
Year ended June 30, 2013:
Additions		1,067			62			578			-			1,707
Disposals		-			(602	)		-			-			(602	)
Depreciation charge (i)		(687	)		(58	)		(444	)		-			(1,189	)
Residual value at year end		7,243			442			996			-			8,681
At June 30, 2013:
Costs		19,256			3,110			11,709			221			34,296
Accumulated depreciation		(12,013	)		(2,668	)		(10,713	)		(221	)		(25,615	)
Residual value		7,243			442			996			-			8,681
Period ended December 31, 2013:
Additions		23			2			363			-			388
Disposals		-			-			-			-			-
Depreciation charge (i)		(337	)		(31	)		(254	)		-			(622	)
Residual value at period end		6,929			413			1,105			-			8,447
At December 31, 2013:
Costs		19,279			3,112			12,072			221			34,684
Accumulated depreciation		(12,350	)		(2,699	)		(10,967	)		(221	)		(26,237	)
Residual value		6,929			413			1,105			-			8,447

(i) Depreciation charges of property, plant and equipment were included in “Costs” and “General and administrative expenses” in Statement of Income (Note 24).

8. Trading properties

Changes in Company’s trading properties for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Completed properties			Properties under development		Under developed sites		Total
At July 1st, 2012		9,160			52,205		9,750		71,115
Disposals (i)		(4,452	)		-		-		(4,452	)
At June 30, 2013		4,708			52,205		9,750		66,663
Disposals (i)		(1,297	)		-		-		(1,297	)
At December 31, 2013		3,411			52,205		9,750		65,366

(i) Corresponds to the carrying amount of properties transferred included in "Cost" in the statement of income (Note 24).

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

9. Intangible assets

Changes in Company’s intangible assets for the six-month period ended December 31, 2013 and for the year ended June 30, 2013 were as follows:

	Goodwill		Computer Software			Total
At July 1st, 2012:
Costs		5,481		1,601			7,082
Accumulated depreciation		-		(1,095	)		(1,095	)
Residual value		5,481		506			5,987
Year ended June 30, 2013:
Additions		-		224			224
Amortization charge (i)		-		(273	)		(273	)
Residual value at year end		5,481		457			5,938
At June 30, 2013:
Costs		5,481		1,825			7,306
Accumulated depreciation		-		(1,368	)		(1,368	)
Residual value		5,481		457			5,938
Period ended December 31, 2013:
Additions		-		-			-
Amortization charge (i)		-		(112	)		(112	)
Residual value at period end		5,481		345			5,826
At December 31, 2013:
Costs		5,481		1,825			7,306
Accumulated depreciation		-		(1,480	)		(1,480	)
Residual value		5,481		345			5,826

(i) Amortization charges of intangible assets are included in “General and administrative expenses” in the statement of income (Note 24).

10. Inventories

Company’s inventories as of December 31, 2013 and June 30, 2013 were as follows:

	December 31, 2013		June 30, 2013
Current
Materials and other inventories (i)		525		463
Total inventories		525		463

(i)	The cost of inventories is recorded in “Costs” in the statement of income (Note 24).

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

11.	Financial instruments by category

Determination of fair values

See determination of fair value in Note 14 to the Unaudited Condensed Interim Consolidated Financial Statements.

The following tables show the financial assets and financial liabilities of the Company that are measured at fair value as of December 31 and June 30, 2013 and their allocation to the fair value hierarchy:

	December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Financial assets at fair value through profit or loss:
- Investment in equity securities of TGLT		93		-		-		93
- Mutual funds		22,777		-		-		22,777
- Other investments		6,815		-		-		6,815
Derivative financial instruments:
- Interest rate swaps		-		1,837		-		1,837
Cash and cash equivalents:
- Mutual funds		81		-		-		81
Total assets		29,766		1,837		-		31,603

	June 30, 2013
	Level 1		Level 2		Level 3		Total
Assets
Financial assets at fair value through profit or loss:
- Investment in equity securities of TGLT		84		-		-		84
- Mutual funds		2,851		-		-		2,851
- Bonds		69,865		-		-		69,865
Cash and cash equivalents:
- Mutual funds		67		-		-		67
Total assets		72,867		-		-		72,867

The derivative financial instruments are classified as Level 2 since their fair value is calculated under the discounted cash flow method. The main parameter used in that model is interest rate futures (see Note 14).

As of December 31 and June 30, 2013 the Company does not have liabilities measured at fair value.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

12.	Trade and other receivables

Company’s trade and other receivables, as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013			June 30, 2013
Non-current
Sale, leases and services receivable		919			1,702
Total non-current trade receivables		919			1,702
Trade receivables of joint ventures		2,592			2,147
Others		599			527
Total non-current other receivables		3,191			2,674
Related parties (Note 29)		246,556			81,486
Total non-current trade and other receivables		250,666			85,862
Current
Sale, leases and services receivable		26,984			143,831
Checks to be deposited		804			85
Debtors under legal proceedings		8,093			6,010
Less: allowance for trade receivables		(8,336	)		(5,359	)
Total trade receivables		27,545			144,567
Trade receivables of joint ventures		15,639			20,555
Gross sales tax credit		1,165			1,165
Other tax receivables		1,643			2,182
Prepaid expenses		1,060			3,070
Expenses and services to recover		2,988			2,077
Advance payments		2,932			2,973
Others		1,104			668
Less: allowance for other receivables		(23	)		(23	)
Total current other receivables		26,508			32,667
Related parties (Note 29)		131,711			74,444
Total current trade and other receivables		185,764			251,678
Total trade and other receivables		436,430			337,540

Movements on the Company’s allowance for trade and other receivables are as follows:

	December 31, 2013			June 30, 2013
Beginning of period / year		5,382			4,783
Additions of the period / year		4,443			1,491
Unused amounts reversed		(1,466	)		(892	)
End of period / year		8,359			5,382

The creation and release of provision for impaired receivables have been included in “Selling expenses” in the statement of income (Note 24). Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

13. Investments in financial assets

Company’s investments in financial assets as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013		June 30, 2013
Non-current
Financial assets at fair value
Investment in equity securities in TGLT		93		84
Government bonds		-		3
Total non-current investments in financial assets		93		87
Current
Financial assets at fair value
Mutual funds		22,777		2,851
Government bonds		6,815		69,862
Total current investments in financial assets		29,592		72,713
Total investments in financial assets		29,685		72,800

14.	Derivative financial instruments

Company’s derivative financial instruments as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013		June 30, 2013
Assets
Current
Interest rate swaps (i)		1,837		-
Total derivative financial instruments		1,837		-

(i) During this six-month period, the Company entered into interest rate swaps with diverse financial institutions. The total amount of underlying assets for these agreements amounts to Ps. 180 million and are due in september, october and december 2014.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

15.	Cash flow information

The following table shows the amounts of cash and cash equivalents as of December 31, 2013 and June 30, 2013:

	December 31, 2013		June 30, 2013
Cash at bank and on hand		48,912		62,721
Mutual funds		81		67
Total cash and cash equivalents		48,993		62,788

Following is a detailed description of cash flows generated by the Company’s operations for the six-month periods ended December 31, 2013 and 2012:

	Note	December 31, 2013			December 31, 2012
(Loss) / Profit for the period			(21,678	)		223,782
Adjustments for:
Income tax expense	20		(148,385	)		(43,601	)
Amortization and depreciation	24		14,059			14,750
Gain from disposal of investment properties	6		(7,481	)		(55,959	)
Disposals of unused property, plant and equipment	7		-			243
Share-based payments	25, 28		2,612			625
Changes in fair value of investments in financial assets	27		2,584			(26,438	)
Loss on derivative financial instruments			(673	)		-
Interest expense, net			123,605			104,527
Provisions			17,893			28,517
Share of profit of subsidiaries, associates and joint ventures			(257,780	)		(287,671	)
Unrealized foreign exchange loss, net			342,103			109,175
Increase in inventories			(62	)		(6	)
Decrease in trading properties			1,297			3,145
Decrease in trade and other receivables			777			15,922
Decrease in trade and other payables			(31,675	)		(8,874	)
Decrease in salaries and social security liabilities			(2,046	)		(4,532	)
Decrease in provisions			(727	)		-
Net cash generated by operating activities			34,423			73,605

Additional information

		December 31, 2013		December 31, 2012
Increase in investments in financial assets through an increase in borrowings			-		18,767
Dividends receivable			-		5,615
Borrowing capitalization to subsidiaries, associates and joint ventures			-		4,647
Acquisition of non-controlling interest			-		1,142
Reimbursement of expired dividends	5		750		591
Dividends payable			70,017		52,487
Reserve for share-based payments	5		8,825		2,426
Cumulative translation adjustment			51,436		10,506
Decrease in borrowings through a decrease in equity investments in subsidiaries, associates and joint ventures			14,520		-
Increase in borrowings through a decrease in dividends payable			160,173		-
Increase in trade and other receivables through a decrease in investments in financial assets			36,091		-
Increase in trade and other receivables through a decrease in borrowings			15,599		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

16. Trade and other payables

Company’s trade and other payables as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013		June 30, 2013
Non-current
Sales, rent and services payments received in advance		597		2,027
Guarantee deposits		4,287		4,768
Total non-current trade payables		4,884		6,795
Others		357		242
Total non-current other payables		357		242
Related parties (Note 29)		19		17
Total non-current trade and other payables		5,260		7,054

Current
Trade payables		4,555		8,401
Provisions for accrued invoices		8,560		13,220
Sales, rent and services payments received in advance		17,588		22,707
Guarantee deposits		6,025		3,779
Total current trade payables		36,728		48,107
VAT payables		3,111		7,974
Dividends payable to non-controlling shareholders		70,017		-
Other tax payables		3,910		3,250
Others		3,505		6,352
Total current other payables		80,543		17,576
Related parties (Note 29)		13,249		12,023
Total current trade and other payables		130,520		77,706
Total trade and other payables		135,780		84,760

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

17. Salaries and social security liabilities

Company’s Salaries and social security liabilities as of December 31, 2013 and June 30, 2013 are as follows:

	December 31, 2013		June 30, 2013
Current
Provision for vacation and bonuses		2,692		4,505
Social security payable		734		967
Salaries payable		18		18
Total salaries and social security liabilities		3,444		5,490

18. Provisions

The table below shows the movements in Company's provisions:

	Labor, legal and other claims
At June 30, 2013		13,142
Additions, net		2,517
Used during the period		(727	)
At December 31, 2013		14,932

The breakdown of total current and non-current provisions is as follows:

	December 31, 2013	June 30, 2013
Non-current	9,705	6,877
Current	5,227	6,265
	14,932	13,142

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

19. Borrowings

Company’s borrowings as of December 31, 2013 and June 30, 2013 were as follows:

									Book value
	Secured/ unsecured	Currency	Fixed/ floating	Effective interest rate %			Principal nominal value		December 31, 2013		June 30, 2013
Non-current
IRSA NCN due 2017 (Note 29)	Unsecured	US$	Fixed		8.50	%		150,000		976,255		805,868
IRSA NCN due 2020	Unsecured	US$	Fixed		11.50	%		150,000		957,864		789,655
Related parties (Note 29)	Unsecured	Ps.	Floating	Badlar				148,018		166,511		139,383
Related parties (Note 29)	Unsecured	US$	Floating	Libor 3m+200				8,012		52,247		43,169
Related parties (Note 29)	Unsecured	US$	Fixed		7.50	%		255		1,667		18,428
Finance lease obligations	Secured	US$	Fixed		7.50	%		126		165		18
Total non-current borrowings										2,154,709		1,796,521
Current
IRSA NCN due 2013	Unsecured	Ps.	Floating	Badlar +2.49%				153,152		-		52,240
IRSA NCN due 2014	Unsecured	US$	Fixed		7.45	%		8,458		55,663		137,750
IRSA NCN due 2017 (Note 29)	Unsecured	US$	Fixed		8.5	%		150,000		33,768		27,749
IRSA NCN due 2020	Unsecured	US$	Fixed		11.5	%		150,000		49,290		40,604
Bank overdrafts	Unsecured	Ps.	Floating		-			-		157,286		100,214
Finance lease obligations	Secured	US$	Fixed		7.50	%		126		233		105
Related parties (Note 29)	Unsecured	Ps.	Floating	Badlar				67,369		-		8
Related parties (Note 29)	Unsecured	US$	Fixed		3.60	%		11,760		98,156		64,533
Related parties (Note 29)	Secured	US$	Fixed		1.00	%		16,825		16,870		-
Related parties (Note 29)	Unsecured	US$	Floating	Libor 3m+200				8,012		801		170
Related parties (Note 29)	Unsecured	US$	Fixed		1.5	%		26,441		172,706		-
Related parties (Note 29)	Unsecured	Ps.	Floating	Badlar				25,585		2,850		462
Total Current borrowings										587,623		423,835
Total borrowings										2,742,332		2,220,356

NCN: Non-convertible Notes

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

20. Current and deferred income tax

The details of the provision for the Company’s income tax are as follows:

	December 31, 2013		December 31, 2012
Deferred income tax		148,385		43,601
Income tax		148,385		43,601

The gross movement on the deferred income tax account is as follows:

	December 31, 2013		June 30, 2013
Beginning of period / year		47,144		(19,179	)
Income tax gain		148,385		66,323
End of period / year		195,529		47,144

Below is a reconciliation between income tax expense and the amount that would arise using the income tax rate applicable to Profit Before Income Tax for the six-month periods ended December 31, 2013 and 2012:

	December 31, 2013			December 31, 2012
Net income at tax rate		(59,522	)		63,063
Permanent differences:
Share of loss from subsidiaries, associates and joint ventures		(90,223	)		(100,685	)
Non-deductible items		128			64
Others		1,232			(6,043	)
Income tax expense		(148,385	)		(43,601	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

21. Shareholders' Equity

Dividends paid during the period ended December 31, 2013, amounted to Ps. 19.8 million.

See Note 25 to the Unaudited Condensed Interim Consolidated Financial Statements.

22. Revenues

	December 31, 2013		December 31, 2012
Rental and scheduled rent increases		101,764		90,440
Expenses		27,993		32,777
Property management fee		2,071		1,775
Others		363		170
Total rental and service income		132,191		125,162
Sale of trading properties		6,695		12,299
Total other revenue		6,695		12,299
Total revenues		138,886		137,461

23.

Costs

	December 31, 2013		December 31, 2012
Leases and services costs		44,001		49,841
Cost of sales and development		2,760		4,264
Total cost of property operations		46,761		54,105
Total costs		46,761		54,105

24.	Expenses by nature

The Company disclosed expenses in the statements of income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”.

The following tables provide the additional required disclosure of expenses by nature and their relationship to the function within the Company.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

24. Expenses by nature (Continued)

For the period ended December 31, 2013:

	Costs
	Cost of rental and services		Cost of sale and development		General and administrative expenses		Selling expenses		Total
Leases and service charges		1,466		236		481		-		2,183
Depreciation and amortization		13,520		2		482		55		14,059
Allowances for trade and other receivables		-		-		-		2,977		2,977
Salaries, social security costs and other personnel expenses		6,586		77		17,708		4,183		28,554
Directors’ fees		-		-		12,399		-		12,399
Fees and payments for services		1,526		28		3,691		540		5,785
Maintenance, security, cleaning, repairs and others		16,948		128		250		26		17,352
Taxes, rates and contributions		3,284		969		57		3,590		7,900
Advertising and other selling expenses		-		-		-		1,135		1,135
Cost of sale of trading properties		-		1,297		-		-		1,297
Others		671		23		4,062		571		5,327
Total expenses by nature		44,001		2,760		39,130		13,077		98,968

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

24. Expenses by nature (Continued)

For the period ended December 31, 2012:

	Costs
	Cost of rental and services		Cost of sale and development		General and administrative expenses		Selling expenses		Total
Leases and service charges		1,830		561		189		-		2,580
Depreciation and amortization		14,288		1		441		20		14,750
Allowances for trade and other receivables		-		-		-		400		400
Salaries, social security costs and other personnel expenses		5,243		59		12,856		2,130		20,288
Directors’ fees		-		-		18,596		-		18,596
Fees and payments for services		1,598		40		3,277		544		5,459
Maintenance, security, cleaning, repairs and others		21,466		29		1,181		67		22,743
Taxes, rates and contributions		4,546		419		187		2,961		8,113
Advertising and other selling expenses		-		-		-		1,043		1,043
Cost of sale of trading properties		-		3,145		-		-		3,145
Others		870		10		2,191		140		3,211
Total expenses by nature		49,841		4,264		38,918		7,305		100,328

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

25.	Employee costs

	December 31, 2013		December 31, 2012
Salaries and social security costs		23,795		18,895
Share-based compensation		2,612		625
Pension costs – defined contribution plan		407		29
Other expenses and benefits		1,740		739
Total employee costs		28,554		20,288

26. Other operating results, net

	December 31, 2013			December 31, 2012
Personal assets tax		(1,718	)		(1,901	)
Donations		(367	)		(178	)
Lawsuits and other contingencies (1)		(2,747	)		(5,868	)
Others		147			(1,338	)
Total other operating results, net		(4,685	)		(9,285	)

(1)	Includes judicial costs and expenses

27. Financial results, net

	December 31, 2013			December 31, 2012
Finance income:
- Interest income		8,621			9,959
- Foreign exchange gains		49,600			32,799
Total finance income		58,221			42,758

Finance costs:
- Interest expense		(132,226	)		(114,486	)
- Foreign exchange losses		(388,097	)		(140,378	)
- Other finance costs		(6,544	)		(5,629	)
Total finance costs		(526,867	)		(260,493	)
Other financial results:
- Fair value (loss) / gain of investments in financial assets		(2,584	)		26,438
- Gain on derivative financial instruments		673			-
Total other financial results		(1,911	)		26,438
Total financial results, net		(470,557	)		(191,297	)

28. Share-based payments

For more details on share-based payments, see Note 32 to the Unaudited Condensed Interim Consolidated Financial Statements.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29. Related party transactions

The following is a summary of the balances with related parties as of December 31, 2013:

Related party	Description of Transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current		Trade and other payables current			Borrowings non-current			Borrowings current
Parent Company
CRESUD S.A.C.I.F. y A.	Sale of good and/or services		-		701		-		-			-			-
	Borrowings		-		-		-		-			-			(172,706	)
	Corporate services		-		-		-		(7,815	)		-			-
	Non-Convertible Notes		-		-		-		-			(28,040	)		(1,469	)
	Reimbursement of expenses		-		1,718		-		-			-			-
	Share-based payments				559		-		-			-			-
Total Parent Company			-		2,978		-		(7,815	)		(28,040	)		(174,175	)
Subsidiaries
E - Commerce Latina S.A.	Reimbursement of expenses		-		25		-		-			-			-
	Management fees		-		4		-		-			-			-
	Borrowings		-		-		-		-			(9,671	)		-
Alto Palermo S.A.	Reimbursement of expenses		-		3,198		-		-			-			-
	Non-Convertible Notes		-		-		-		-			(11,542	)		(488	)
	Share-based payments		-		-		-		(79	)		-			-
	Borrowings		-		-		-		-			-			(115,026	)
Solares de Santa Maria S.A.	Reimbursement of expenses		-		4,537		-		-			-			-
Solares de Santa Maria S.A.	Borrowings		6		-		-		-			-			-
Palermo Invest S.A.	Reimbursement of expenses		-		36		-		-			-			-
Palermo Invest S.A.	Borrowings		-		-		-		-			(2,780	)		-
Unicity S.A.	Reimbursement of expenses		-		13		-		-			-			-
Unicity S.A.	Contributions to be paid in		-		44		-		-			-			-
Ritelco S.A.	Borrowings		-		-		-		-			(56,452	)		(801	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29. Related party transactions (Continued)

Related party	Description of transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current			Trade and other payables Current			Borrowings non-current			Borrowings current
Subsidiaries
Inversora Bolivar S.A.	Reimbursement of expenses		-		46		-			-			-			-
Inversora Bolivar S.A.	Borrowings		-		-		-			-			(11,479	)		-
Hoteles Argentinos S.A.	Hotel services		-		84					(1,308	)		-			-
Tyrus S.A.	Borrowings		246,550		53,058		-			-			-			-
Llao Llao Resorts S.A.	Hotel services		-		2,574		-			(209	)		-			-
	Management fees		-		553		-			-			-			-
	Guarantee deposits		-		-		(11	)		-			-			-
Nuevas Fronteras S.A.	Reimbursement of expenses		-		2		-			(14	)		-			-
	Management fees		-		173		-			-			-			-
	Borrowings		-		-		-			-			(25,586	)		(2,850	)
Efanur S.A.	Borrowings		-		54,637		-			-			-			-
Total Subsidiaries			246,556		118,984		(11	)		(1,610	)		(117,510	)		(119,165	)
Subsidiaries CRESUD
Futuros y Opciones.com S.A.	Reimbursement of expenses		-		-		-			(29	)		-			-
Sociedad Anónima Carnes Pampeanas S.A.	Reimbursement of expenses		-		-		-			(9	)		-			-
Cactus S.A.	Reimbursement of expenses		-		-		-			(7	)		-			-
Total Subsidiaries CRESUD			-		-		-			(45	)		-			-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29. Related party transactions (Continued)

Related party	Description of transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current		Trade and other payables Current			Borrowings non-current			Borrowings current
Subsidiaries APSA
Arcos del Gourmet S.A.	Reimbursement of expenses		-		28		-		-			-			-
Emprendimientos Recoleta S.A.	Reimbursement of expenses		-		-		-		(8	)		-			-
Emprendimientos Recoleta S.A.	Non-Convertible Notes		-		-		-		-			(9,410	)		(481	)
Fibesa S.A.	Reimbursement of expenses		-		120		-		-			-			-
	Leases and/or rights of use		-		189		-		-			-			-
	Share-based payments		-		61		-		-			-			-
Panamerican Mall S.A.	Reimbursement of expenses		-		87		-		-			-			-
Panamerican Mall S.A.	Non-Convertible Notes		-		-		-		-			(36,400	)		(1,860	)
Conil S.A.	Reimbursement of expenses		-		81		-		-			-			-
Shopping Neuquén S.A.	Reimbursement of expenses		-		4		-		-			-			-
Total Subsidiaries APSA			-		570		-		(8	)		(45,810	)		(2,341	)
Subsidiaries TYRUS
Irsa International LLC	Reimbursement of expenses		-		1,115		-		(871	)		-			-
Real Estate Investment Group LP	Reimbursement of expenses		-		44		-		(34	)		-			-
Real Estate Investment Group V LP	Reimbursement of expenses		-		15		-		-			-			-
Real Estate Strategies LP	Reimbursement of expenses		-		1,710		-		-			-			-
New Lipstick LLC	Reimbursement of expenses		-		1,571		-		-			-			-
Imadison LLC	Reimbursement of expenses		-		1,101		-		-			-			-
Total Subsidiaries TYRUS			-		5,556		-		(905	)		-			-
Associates
Banco de Crédito y Securitización S.A.	Reimbursement of expenses		-		35		-		-			-			-
Banco de Crédito y Securitización S.A.	Leases and/or rights of use		-		235		-		-			-			-
Banco Hipotecario S.A.	Reimbursement of expenses		-		-		-		(594	)		-			-
Total Associates			-		270		-		(594	)		-			-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29. Related party transactions (Continued)

Related party	Description of transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current			Trade and other payables Current			Borrowings non-current			Borrowings current
Joint Ventures
Cyrsa S.A.	Reimbursement of expenses		-		2		-			-			-			-
Cyrsa S.A.	Borrowings		-		-		-			-			(114,457	)		-
Baicom Networks S.A.	Reimbursement of expenses		-		15		-			-			-			-
Puerto Retiro S.A.	Reimbursement of expenses		-		194		-			-			-			-
Total Joint Ventures			-		211		-			-			(114,457	)		-
Joint Ventures APSA
Nuevo Puerto Santa Fé S.A.	Reimbursement of expenses		-		2		-			-			-			-
Quality Invest S.A.	Reimbursement of expenses		-		34		-			-			-			-
Quality Invest S.A.	Management fees		-		-		-			(45	)		-			-
Total Joint Ventures APSA			-		36		-			(45	)		-			-
Other related parties
Consultores Asset Management S.A.	Reimbursement of expenses		-		2,624		-			(36	)		-			-
Austral Gold S.A.	Reimbursement of expenses		-		2		-			(3	)		-			-
Dolphin Fund Ltd.	Reimbursement of expenses		-		133		-			-			-			-
Estudio Zang, Bergel & Viñes	Advances		-		4		-			-			-			-
Estudio Zang, Bergel & Viñes	Legal services		-		-		-			(149	)		-			-
Museo de los Niños	Leases and/or rights of use		-		-		-			(3	)		-			-
Fundación IRSA	Reimbursement of expenses		-		41		-			-			-			-
Total Other related parties			-		2,804		-			(191	)		-			-
Directors and Senior Management
Directors	Reimbursement of expenses		-		302		-			-			-			-
	Fees		-		-		-			(2,036	)		-			-
	Guarantee deposits		-		-		(8	)		-			-			-
Total Directors and Senior Management			-		302		(8	)		(2,036	)		-			-
Total			246,556		131,711		(19	)		(13,249	)		(305,817	)		(295,681	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29. Related party transactions (Continued)

The following is a summary of the balances with related parties as of June 30, 2013:

Related party	Description of transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current		Trade and other payables Current			Borrowings non-current			Borrowings current

Parent Company
CRESUD S.A.C.I.F. y A.	Sale of good and/or services		-		701		-		-			-			-
	Corporate services		-		-		-		(8,503	)		-			-
	Reimbursement of expenses		-		471		-		-			-			-
	Share-based payments		-		559		-		-			-			-
Total Parent Company			-		1,731		-		(8,503	)		-			-
Subsidiaries
E - Commerce Latina S.A.	Reimbursement of expenses		-		17		-		-			-			-
	Management fees		-		1		-		-			-			-
	Borrowings		-		-		-		-			(11,371	)		-
Alto Palermo S.A. (APSA)	Reimbursement of expenses		-		2,183		-		-			-			-
	Leases and/or rights of use		-		-		-		(311	)		-			-
	Corporate services		-		2,257		-		-			-			-
	Share-based payments		-		-		-		(72	)		-			-
	Borrowings		-		-		-		-			-			(64,533	)
Solares de Santa Maria S.A.	Reimbursement of expenses		-		3,925		-		-			-			-
Solares de Santa Maria S.A.	Borrowings		5		-		-		-			-			-
Palermo Invest S.A.	Reimbursement of expenses		-		19		-		-			-			-
Palermo Invest S.A.	Borrowings		-		86		-		-			(5,431	)		(8	)
Unicity S.A.	Reimbursement of expenses		-		7		-		-			-			-
Ritelco S.A.	Reimbursement of expenses		-		10		-		(15	)		-			-
Ritelco S.A.	Borrowings		-		-		-		-			(47,036	)		(170	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29.	Related party transactions (Continued)

Related party	Description of transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current			Trade and other payables current			Borrowings non-current			Borrowings current
Subsidiaries
Inversora Bolivar S.A.	Reimbursement of expenses		-		27		-			-			-			-
Inversora Bolivar S.A.	Borrowings		-		1,420		-			-			(13,228	)		-
Hoteles Argentinos S.A.	Hotel services		-		53		-			(1,081	)		-			-
Tyrus S.A.	Reimbursement of expenses		-		120		-			-			-			-
Tyrus S.A.	Borrowings		81,481		-		-			-			-			-
Llao Llao Resorts S.A.	Hotel services		-		1,472		-			-			-			-
	Management fees		-		553		-			-			-			-
	Guarantee deposits		-		-		(9	)		-			-			-
Nuevas Fronteras S.A.	Reimbursement of expenses		-		1		-			-			-			-
	Management fees		-		159		-			(8	)		-			-
	Borrowings		-		-		-			-			(25,585	)		(462	)
Efanur S.A.	Reimbursement of expenses		-		75		-			-			-			-
Efanur S.A.	Borrowings		-		44,430		-			-			-			-
Total Subsidiaries			81,486		56,815		(9	)		(1,487	)		(102,651	)		(65,173	)
Subsidiaries CRESUD
Futuros y Opciones.com S.A.	Reimbursement of expenses		-		-		-			(2	)		-			-
Alafox S.A.	Reimbursement of expenses		-		46		-			-			-			-
Codalis S.A.	Reimbursement of expenses		-		44		-			-			-			-
Helmir S.A.	Reimbursement of expenses		-		1		-			-			-			-
Doneldon S.A.	Reimbursement of expenses		-		36		-			-			-			-
Sedelor S.A.	Reimbursement of expenses		-		35		-			-			-			-
Total Subsidiaries CRESUD			-		162		-			(2	)		-			-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29.	Related party transactions (Continued)

Related party	Description of transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current		Trade and other payables current			Borrowings non-current			Borrowings current
Subsidiaries APSA
Arcos del Gourmet S.A.	Reimbursement of expenses		-		13		-		-			-			-
Emprendimientos Recoleta S.A.	Reimbursement of expenses		-		-		-		(1	)		-			-
Emprendimientos Recoleta S.A.	Non-Convertible Notes		-		-		-		-			(7,077	)		(446	)
Fibesa S.A.	Reimbursement of expenses		-		128		-		-			-			-
Fibesa S.A.	Share-based payments		-		63		-		-			-			-
Panamerican Mall S.A.	Reimbursement of expenses		-		78		-		-			-			-
Panamerican Mall S.A.	Non-Convertible Notes		-		-		-		-			(12,050	)		(764	)
Shopping Neuquén S.A.	Reimbursement of expenses		-		1		-		-			-			-
Torodur S.A.	Reimbursement of expenses		-		162		-		-			-			-
Total Subsidiaries APSA			-		445		-		(1	)		(19,127	)		(1,210	)
Subsidiaries TYRUS							-
Irsa International LLC	Reimbursement of expenses		-		995		-		(720	)		-			-
Real Estate Investment Group LP	Reimbursement of expenses		-		38		-		(28	)		-			-
Real Estate Investment Group. V LP	Reimbursement of expenses		-		12		-		-			-			-
Irsa Development LP	Reimbursement of expenses		-		2		-		-			-			-
Real Estate Strategies LP	Reimbursement of expenses		-		1,350		-		-			-			-
New Lipstick LLC	Reimbursement of expenses		-		1,301		-		-			-			-
Imadison LLC	Reimbursement of expenses		-		909		-		-			-			-
Jiwin S.A.	Reimbursement of expenses		-		3		-		-			-			-
Zetol S.A.	Reimbursement of expenses		-		149		-		-			-			-
Total Subsidiaries TYRUS			-		4,759		-		(748	)		-			-
Associates
Manibil S.A.	Reimbursement of expenses		-		-		-		(781	)		-			-
Banco Hipotecario S.A.	Reimbursement of expenses		-		-		-		(90	)		-			-
Total Associates			-		-		-		(871	)		-			-
Associates APSA
Tarshop S.A.	Reimbursement of expenses		-		8		-		-			-			-
Total Associates APSA			-		8		-		-			-			-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29.	Related party transactions (Continued)

Related party	Description of transaction	Trade and other receivables non-current		Trade and other receivables current		Trade and other payables non-current			Trade and other payables current			Borrowings non-current			Borrowings current
Joint Ventures
Cyrsa S.A.	Reimbursement of expenses		-		-					(10	)		-			-
Cyrsa S.A.	Borrowings		-		-					-			(98,328	)
Baicom Networks S.A.	Reimbursement of expenses		-		16					(2	)		-
Puerto Retiro S.A.	Reimbursement of expenses		-		178					-			-			-
Total Joint Ventures			-		194		-			(12	)		(98,328	)		-
Joint Ventures APSA
Nuevo Puerto Santa Fé S.A.	Reimbursement of expenses		-		3					-			-			-
Quality Invest S.A.	Reimbursement of expenses		-		26					-			-			-
Quality Invest S.A.	Management fees		-		-					(45	)		-			-
Total Joint Ventures APSA			-		29		-			(45	)		-			-
Other related parties
Consultores Asset Management S.A.	Reimbursement of expenses		-		2,482					(36	)		-			-
Dolphin Fund Ltd.	Reimbursement of expenses		-		133					-			-			-
Estudio Zang, Bergel & Viñes	Advances		-		11					-			-			-
Estudio Zang, Bergel & Viñes	Legal services		-		12					(314	)		-			-
Museo de los Niños	Leases and/or rights of use		-		26					(3	)		-			-
Fundación IRSA	Reimbursement of expenses		-		38					(1	)		-			-
Total Other related parties			-		2,702					(354	)		-			-
Directors and Senior Management
Directors	Fees		-		7,599		-			-			-			-
Directors	Guarantee deposits		-		-		(8	)		-			-			-
Total Directors and Senior Management			-		7,599		(8	)		-			-			-
Total			81,486		74,444		(17	)		(12,023	)		(220,106	)		(66,383	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29. Related party transactions (Continued)

The following is a summary of the transactions with related parties for the six-month period ended December 31, 2013:

Related party	Leases and/or rights of use		Management fees		Corporate services			Legal services		Financial operations			Fees and Salaries
Parent Company
Cresud S.A.C.I.F. y A		827		-		(6,045	)		-		(12,534	)		-
Total Parent Company		827		-		(6,045	)		-		(12,534	)		-
Subsidiaries
Alto Palermo S.A. (APSA)		2,295		-		-			-		(2,105	)		-
E-Commerce Latina S.A.		-		2		-			-		(1,237	)		-
Inversora Bolivar S.A.		-		-		-			-		(1,455	)		-
Llao Llao Resorts S.A.		67		-		-			-		-			-
Ritelco S.A.		-		-		-			-		(10,031	)		-
Nuevas Fronteras S.A.		-		137		-			-		(2,388	)		-
Hoteles Argentinos S.A.		-		-		-			-		(227,000	)		-
Efanur S.A.		-		-		-			-		10,208			-
Tyrus S.A.		-		-		-			-		33,265			-
Palermo Invest S.A.		-		-		-			-		(404,000	)		-
Total Subsidiaries		2,362		139		-			-		25,626			-
Subsidiaries APSA
Fibesa S.A.		562		-		-			-		-			-
Panamerican Mall S.A.		-		-		-			-		(1,754	)		-
Emprendimientos Recoleta S.A.		-		-		-			-		(507,000	)		-
Total Subsidiaries APSA		562		-		-			-		(2,261	)		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29.	Related party transactions (Continued)

Related party	Leases and/or rights of use			Management fees		Corporate services			Legal services			Financial operations			Fees and Salaries
Associates		-			-		-			-			-			-
Banco de Crédito y Securitización S.A.		178			-		-			-			-			-
Total Associates		178			-		-			-			-			-
Associates APSA
Tarshop S.A.		2,265			-		-			-			-			-
Total Associates APSA		2,265			-		-			-			-			-
Joint Ventures
Canteras Natal Crespo S.A.		-			24		-			-			-			-
Cyrsa S.A.		-			-		-			-			(8,628	)		-
Total Joint Ventures		-			24		-			-			(8,628	)		-
Other related parties
Estudio Zang, Bergel & Viñes		-			-		-			(129	)		-			-
Isaac Elsztain e Hijos S.C.A.		(109	)		-		-			-			-			-
Hamonet S.A.		(57	)		-		-			-			-			-
Total Other related parties		(166	)		-		-			(129	)		-			-
Directors and Senior Management
Directors		-			-		-			-			-			(3,668	)
Total Directors and Senior Management		-			-		-			-			-			(3,668	)
Total		6,028			163		(6,045	)		(129	)		2,203			(3,668	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29.	Related party transactions (Continued)

The following is a summary of the transactions with related parties for the six-month period ended December 31, 2012:

Related party	Commissions		Leases and/or rights of use		Management fees			Corporate services		Legal services		Financial operations			Donations		Fees and Salaries
Parent Company
Cresud S.A.C.I.F. y A		-		704		(12,272	)		43		-		297			-		-
Total Parent Company		-		704		(12,272	)		43		-		297			-		-
Subsidiaries
Alto Palermo S.A. (APSA)		-		2,223		1,100			178		-		7,176			-		-
E-Commerce Latina S.A.		-		-		3			-		-		(360	)		-		-
Inversora Bolivar S.A.		-		-		-			-		-		(405	)		-		-
Ritelco S.A.		-		-		-			-		-		(509	)
Llao Llao Resorts S.A.		-		60		-			-		-		83			-		-
Nuevas Fronteras S.A.		-		-		273			-		-		(694	)		-		-
Efanur S.A.		-		-		-			-		-		650			-		-
Tyrus S.A.		-		-		-			-		-		87			-		-
Palermo Invest S.A.		-		-		-			-		-		(156	)		-		-
Total Subsidiaries		-		2,283		1,376			178		-		5,872			-		-
Subsidiaries APSA
Fibesa S.A.		-		437		35			-		-		-			-		-
Panamerican Mall S.A.		-		-		-			-		-		(365	)		-		-
Emprendimientos Recoleta S.A.		-		-		-			-		-		(214	)		-		-
Total Subsidiaries APSA		-		437		35			-		-		(579	)		-		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

29.	Related party transactions (Continued)

Related party	Commissions		Leases and/or rights of use		Management fees			Corporate services		Legal services			Financial operations			Donations		Fees and Salaries
Associates APSA
Tarshop S.A.		-		1,608		153			-		-			-			-		-
Total Associates APSA		-		1,608		153			-		-			-			-		-
Joint Ventures
Canteras Natal Crespo S.A.		-		-		48			-		-			5			-		-
Cyrsa S.A.		-		-		-			-		-			(2,792	)		-		-
Total Joint Ventures		-		-		48			-		-			(2,787	)		-		-
Other related parties
Estudio Zang, Bergel & Viñes		-		-		-			-		(516	)		-			-		-
Isaac Elsztain e Hijos S.C.A.		-		-		-			-		-			-			-		-
Hamonet S.A.		-		-		-			-		-			-			-		-
Consultores Assets Management S.A.		-		80		-			-		-			-			-		-
Total Other related parties		-		80		-			-		(516	)		-			-		-
Directors and Senior Management
Directors		-		-		(4,366	)		-		-			-			-		-
Total Directors and Senior Management		-		-		(4,366	)		-		-			-			-		-
Total				5,112		(15,026	)		221		(516	)		2,803			-		-

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

30. Negative working capital

At the end of the period, the Company had negative working capital. This situation is presently being considered by the Board of Directors and by Management.

31. Special reserve

32.	CNV General Resolution No. 622

As required by Section 1°, Chapter III, Title IV of CNV General Resolution No. 622, below there is a detail of the notes to the Unaudited Condensed Interim Separate Financial Statements that disclosure the information required by the Resolution in Exhibits.

Exhibit A - Property, plant and equipment	Note 6 Investment properties and Note 7 Property, plant and equipment
Exhibit B- Intangible assets	Note 9 Intangible assets
Exhibit C - Equity investments	Note 33 Equity investments
Exhibit D- Other investments	Note 11 Financial instruments by category
Exhibit E- Provisions	Note 12 Trade and other receivables and Note 18 Provisions
Exhibit F- Cost of sales and services provided	Note 8 Trading properties and Note 24 Expenses by nature
Exhibit G- Foreign currency assets and liabilities	Note 34 Foreign currency assets and liabilities

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

33.	Equity investments

											Issuer's information
													Last financial statements issued
Issuer and type of securities	Class / Items	Amount		Value recorded as of 12.31.13			Value recorded as of 06.30.13			Market value as of 12.31.13	Main activity	Registered office	Date		Common stock (nominal value)		Profit (loss) for the period		Shareholders' Equity		Interest in common stock
Alto Palermo S.A. (APSA)	Common shares 1 vote				890,813			811,428		50.00	Real estate	Argentina		12.31.13		126,014		240,569		931,976		95.58	%
			120,448,003
	Higher value				437,134			445,930
	Intergroup transactions				(38,512	)		(26,469	)

Banco Hipotecario S.A. (1)	Common shares 1 vote				187,255			174,127		1.78	Financing	Argentina		12.31.13		1,500,000		420,950		3,846,935		5.13	%
			75,000,000
	Higher value				2			4

Banco de Crédito & Securitización S.A. (1)	Common shares 1 vote		3,984,375		11,773			9,901		Not publicly traded	Financing	Argentina		12.31.13		62,500		39,327		184,430		6.38	%

Cyrsa S.A.	Common shares 1 vote				137,847			129,627		Not publicly traded	Real estate	Argentina		12.31.13		239,217		16,441		275,694		50.00	%
			119,608,531

E-Commerce Latina S.A.	Common shares 1 vote				224,743			214,962		Not publicly traded	Investment	Argentina		12.31.13		82,844		15,370		225,083		100.00	%
			82,843,824
	Irrevocable contributions				340			600
	Goodwill				(1,511	)		(1,511	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

33.	Equity investments (Continued)

										Issuer's information
												Last financial statements issued
Class / Items	Amount		Value recorded			Value recorded			Market value	Main activity	Registered office	Date		Common stock (nominal value)		Profit (loss) for the period			Shareholders' Equity			Interest in common stock
Common shares 1 vote		900,000		(9,340	)		63,262		Not publicly traded	Investment	Uruguay		12.31.13		205,000		(72,602	)		(9,119	)		100.00	%
Irrevocable contributions				221			-

Common shares 1 vote		15,366,840		9,595			11,877		Not publicly traded	Hotel	Argentina		12.31.13		19,209		(2,852	)		11,994			80.00	%
Higher value				853			920

Common shares 1 vote		78,881,328		249,907			239,039		Not publicly traded	Investment	Argentina		12.31.13		82,919		14,904			263,228			95.13	%
Irrevocable contributions				504			209
Higher value				6,428			6,428

Common shares 1 vote		73,580,206		31,739			31,205		Not publicly traded	Hotel	Argentina		12.31.13		147,160		(333	)		63,477			50.00	%
Irrevocable contributions				-			700
Higher value				107			113

Common shares 1 vote		30,397,880		33,604			26,250		Not publicly traded	Real estate	Argentina		12.31.13		62,037		3,455			68,580			49.00	%
Irrevocable contributions				-			6,500
Goodwill				10			10

Common shares 1 vote		57,256,512		46,673			45,591		Not publicly traded	Hotel	Argentina		12.31.13		75,004		1,418			61,141			76.34	%
Lower value				(16,593	)		(17,083	)

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

33.	Equity investments (Continued)

											Issuer's information
													Last financial statements issued
Issuer and type of securities	Class / Items	Amount		Value recorded as of 12.31.13			Value recorded as of 06.30.13			Market value as of 12.31.13	Main activity	Registered office	Date		Common stock (nominal value)		Profit (loss) for the period		Shareholders' Equity		Interest in common stock
Palermo Invest S.A.	Common shares 1 vote		152,809,249		200,916			191,257		Not publicly traded	Investment	Argentina		12.31.13		152,809		14,447		201,140		100.00	%
	Irrevocable contributions				224			10
	Higher value				323			325
	Intergroup transactions				(29,987	)		(29,987	)

Ritelco S.A.	Common shares 1 vote		181,016,717		302,446			272,783		Not publicly traded	Investment	Uruguay		12.31.13		67,019		29,639		302,470		100.00	%
	Irrevocable contributions				24			25
	Intergroup transactions				(190	)		(190	)

Solares de Santa María S.A.	Common shares 1 vote		306,254,825		302,333			294,731		Not publicly traded	Real estate	Argentina		12.31.13		338,193		781		334,467		90.56	%
	Intergroup transactions				(166,521	)		(166,521	)
	Irrevocable contributions				548			6,894

Tyrus S.A.	Common shares 1 vote		3,196,347,364		872,629			672,079		Not publicly traded	Investment	Uruguay		12.31.13		834,104		21,457		872,629		100.00	%
	Irrevocable contributions				-			127,662

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

33.	Equity investments (Continued)

Issuer's information

Last financial statements issued

Issuer and type of securities

Class / Items

Amount

Value recorded as of 12.31.13

Value recorded as of 06.30.13

Market value

as of 12.31.13

Main activity

Registered office

Date

Common stock (nominal value)

Profit (loss) for the period

Shareholders' Equity

Interest in common stock

Unicity S.A.

Common shares 1 vote

36,788,366

27,940

27,653

Not publicly traded

Investment

Argentina

12.31.13

41,518

(16,000

)

31,638

88.61

Irrevocable contributions

301

Total investments in subsidiaries, associates and joint ventures as of 12.31.13

3,714,370

Total investments in subsidiaries, associates and joint ventures as of 06.30.13

3,570,642

(1) The amounts correspond to financial statements of Banco Hipotecario S.A. and Banco de Crédito & Securitización S.A. prepared in accordance with the Central Bank of the Argentine Republic (“BCRA”) standards. For the purpose of the valuation of the investment in the Company, adjustments necessary to adequate the financial statements to the professional accounting standards have been considered.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

34.	Foreign currency assets and liabilities

Book amounts of foreign currency assets and liabilities are as follows:

Items	Amount of foreign currency (1)		Prevailing exchange rate (2)		Totals as of 12.31.13		Amount of foreign currency (1)		Prevailing exchange rate (2)		Total as of 06.30.13
Assets
Trade and other receivables
US Dollar		62,248		6.481		403,430		55,210		5.348		295,265
Swiss Francs		55		7.302		400		69		5.660		390
Euros		1		8.939		7		2		6.949		15
Total trade and other receivables, net						403,837						295,670
Investments in financial assets
US Dollar		1,649		6.481		10,687		6,118		5.348		32,718
Total investments in financial assets						10,687						32,718
Derivative financial instruments
US Dollar		-		-		-		-		-		-
Total derivative financial instruments						-						-
Cash and cash equivalents
US Dollar		7,235		6.481		46,892		10,736		5.348		57,415
Euros		85		8.939		762		85		6.949		590
Reais		1		2.650		2		-		-		-
Swiss Francs		-		7.302		1		-		-		-
Pounds		1		10.700		9		1		8.080		8
Total cash and cash equivalents						47,666						58,013
Total assets as of 12.31.13						462,190
Total assets as of 06.30.13												386,401
Liabilities
Trade and other liabilities
US Dollar		3,193		6.521		20,820		5,050		5.388		27,207
Euros		-		9.011		3		-		-		-
Total trade and other payables						20,823						27,207
Borrowings
US Dollar		371,576		6.521		2,423,050		345,950		5.388		1,863,978
Total borrowings						2,423,050						1,863,978
Total liabilities as of 12.31.13						2,443,873
Total liabilities as of 06.30.13												1,891,185

(1) Considering foreign currencies those that differ from Company’s functional currency at each period/year-end.

(2) Exchange rate as of December 31 and June 30, 2013 according to Banco Nación Argentina records.

IRSA Inversiones y Representaciones Sociedad Anónima

Notes to the Unaudited Condensed Interim Separate Financial Statements (Continued)

(All amounts in thousands of Argentine Pesos, except shares and per share data and as otherwise indicated)

Free translation from the original prepared in Spanish for the publication in Argentina

35.	Subsequent Events

Following the end of the period, the Argentine Peso devalued against the US$ and other currencies by around 20%, which had a negative impact on the financial position and results of operations of the Company due mainly to the currency exposure of our net assets and liabilities in foreign currency as detailed in note 34 and net investments in subsidiaries, associates and joint ventures made in a functional currency other than the Argentine Peso.

According to the Company’s estimates, this leads to a pre-tax loss of Ps. 210.8 million, a gain under Other Comprehensive Income in the amount of Ps. 49.4 million and a reduction in Shareholders’ Equity by Ps. 161.4 million, all based on the Company’s position in foreign currency as of December 31, 2013, which has not been recognized in these financial statements.

The main assets of the Company— including offices and other income-generating real property, land reserves and property for sale—are valued for accounting purposes at historic cost, and thus the Company will not recognize any gain/loss as a result of such devaluation.

See subsequent events in Note 39 to Unaudited Condensed Interim Consolidated Financial Statements.

IRSA Inversiones y Representaciones Sociedad Anónima

Information required by Section 68 of the Buenos Aires Stock Exchange Regulations and Section 12,

Chapter III, Title IV of the National Securities Commission Regulations

Unaudited Statement of Financial Position as of December 31, 2013

Stated in thousands of pesos

Free translation from the original prepared in Spanish for publication in Argentina

1. Specific and significant systems that imply contingent lapsing or rebirth of benefits envisaged by such provisions.

None.

2. Significant changes in the Company´s activities or other similar circumstances that occurred during the fiscal years included in the financial statements, which affect their comparison with financial statements filed in previous fiscal years, or that could affect those to be filed in future fiscal years.

See Note 2.1.

3. Breakdown of accounts receivables and liabilities by maturity date.

			Falling due (Point 3.a.)		Without term (Point 3.b)		Without term (Point 3.b)		To be due (Point 3.c.)
	12.31.13	Items			Current		Non-current		Up to 3 months		From 3 to 6 months		From 6 to 9 months			From 9 to 12 months		From 1 to 2 years		From 2 to 3 years			From 3 to 4 years		From 4 years on		Total
Accounts receivable		Trade and other receivables		5,541		531		321		112,371		67,319		-			-		3,791		-			-		246,556		436,430
		Total		5,541		531		321		112,371		67,319		-			-		3,791		-			-		246,556		436,430
Liabilities		Trade and other payables		5,509		-		-		114,295		6,498		3,170			1,050		4,596		354			-		308		135,780
		Borrowings		-		-		-		263,425		209,871		(347	)		114,674		191,917		(1,392	)		1,002,329		961,855		2,742,332
		Salaries and social security liabilities		-		-		-		856		1,311		-			1,277		-		-			-		-		3,444
		Provisions		-		5,227		-		-		-		-			-		9,705		-			-		-		14,932
		Total		5,509		5,227		-		378,576		217,680		2,823			117,001		206,218		(1,038	)		1,002,329		962,163		2,896,488

IRSA Inversiones y Representaciones Sociedad Anónima

Information required by Section 68 of the Buenos Aires Stock Exchange Regulations and Section 12,

Chapter III, Title IV of the National Securities Commission Regulations

Unaudited Statement of Financial Position as of December 31, 2013

Stated in thousands of pesos

Free translation from the original prepared in Spanish for publication in Argentina

4.a. Breakdown of accounts receivable and liabilities by currency and maturity.

		Current			Non-current			Totals
Items		Local Currency	Foreign Currency	Total	Local Currency	Foreign Currency	Total	Local Currency	Foreign Currency	Total
Accounts receivable	Trade and other receivables	31,899	153,863	185,762	694	249,974	250,668	32,593	403,837	436,430
	Total	31,899	153,863	185,762	694	249,974	250,668	32,593	403,837	436,430
Liabilities	Trade and other payables	113,822	16,700	130,522	1,135	4,123	5,258	114,957	20,823	135,780
	Borrowings	158,539	429,084	587,623	160,743	1,993,966	2,154,709	319,282	2,423,050	2,742,332
	Salaries and social security liabilities	3,444	-	3,444	-	-	-	3,444	-	3,444
	Provisions	5,227	-	5,227	9,705	-	9,705	14,932	-	14,932
	Total	281,032	445,784	726,816	171,583	1,998,089	2,169,672	452,615	2,443,873	2,896,488

4.b.

Breakdown of accounts receivable and liabilities by adjustment clause.

As of December 31, 2013 there are not receivable and liabilities subject to adjustment clause.

IRSA Inversiones y Representaciones Sociedad Anónima

Information required by Section 68 of the Buenos Aires Stock Exchange Regulations and Section 12,

Chapter III, Title IV of the National Securities Commission Regulations

Unaudited Statement of Financial Position as of December 31, 2013

Stated in thousands of pesos

Free translation from the original prepared in Spanish for publication in Argentina

4.c. Breakdown of accounts receivable and liabilities by interest clause.

		Current				Non current								Total
		Accruing interes		Non-accruing		Accruing interest		Non- accruing			Accruing interest		Non- accruing
		Fixed Rate	Floating Rate	interes	Total	Fixed Rate	Floating Rate	nterest		Total	Fixed Rate	Floating Rate	interest
Accounts receivable	Trade and other receivables	108,140	-	77,622	185,762	246,550	6	4,112		250,668	354,690	6	81,734	436,430
	Total	108,140	-	77,622	185,762	246,550	6	4,112		250,668	354,690	6	81,734	436,430
Liabilities	Trade and other payables	-	-	130,522	130,522	-	-	5,258		5,258	-	-	135,780	135,780
	Borrowings	343,689	157,231	86,703	587,623	1,991,605	164,148	(1,044	)	2,154,709	2,335,294	321,379	85,659	2,742,332
	Salaries and social security liabilities	-	-	3,444	3,444	-	-	-		-	-	-	3,444	3,444
	Provisions	-	-	5,227	5,227	-	-	9,705		9,705	-	-	14,932	14,932
	Total	343,689	157,231	225,896	726,816	1,991,605	164,148	13,919		2,169,672	2,335,294	321,379	239,815	2,896,488

IRSA Inversiones y Representaciones Sociedad Anónima

Information required by Section 68 of the Buenos Aires Stock Exchange Regulations and Section 12,

Chapter III, Title IV of the National Securities Commission Regulations

Unaudited Statement of Financial Position as of December 31, 2013

Stated in thousands of pesos

Free translation from the original prepared in Spanish for publication in Argentina

5. Related parties.

a.	Interest in related parties:


Name of the entity	% of ownership interest held by the Company
Direct Controlling interest of IRSA:
APSA		95.68	%
E-Commerce Latina S.A.		100.00	%
Efanur S.A.		100.00	%
Hoteles Argentinos S.A.		80.00	%
Inversora Bolívar S.A.		100.00	%
Llao Llao Resorts S.A.		50.00	%
Nuevas Fronteras S.A.		76.34	%
Palermo Invest S.A.		100.00	%
Ritelco S.A.		100.00	%
Solares de Santa María S.A.		100.00	%
Tyrus S.A.		100.00	%
Unicity S.A.		100.00	%

b.	Related parties debit/credit balances. See Note 29 to the Unaudited Condensed Interim Separate Financial Statements.

6.	Loans to directors.

See Note 29 to the Unaudited Condensed Interim Separate Financial Statements.

7.	Inventories.

In view of the nature of the inventories, no physical inventories are performed and there are no slow turnover assets.

8.	Current values.

See Notes 6, 7, 8 and 10 to the Condensed Interim Separate Financial Statements.

9.	Appraisal revaluation of property, plant and equipment.

None.

IRSA Inversiones y Representaciones Sociedad Anónima

Information required by Section 68 of the Buenos Aires Stock Exchange Regulations and Section 12,

Chapter III, Title IV of the National Securities Commission Regulations

Unaudited Statement of Financial Position as of December 31, 2013

Stated in thousands of pesos

Free translation from the original prepared in Spanish for publication in Argentina

10.	Obsolete unused property, plant and equipment.

None.

11.	Equity interest in other companies in excess of that permitted by section 31 of law N° 19,550.

None.

12.	Recovery values

See Notes 6, 7, 8 and 10 to the Condensed Interim Separate Financial Statements.

13.	Insurances

Insured Assets

Real Estate	Insured amounts (1)		Accounting values		Risk covered
EDIFICIO REPÚBLICA		96,361		202,975	All operational risk with additional coverage and minor risks
BOUCHARD 551		63,303		88,891	All operational risk with additional coverage and minor risks
MORENO 877		49,508		67,748	All operational risk with additional coverage and minor risks
BOUCHARD 710		39,587		61,714	All operational risk with additional coverage and minor risks
MAIPU 1300		25,787		29,786	All operational risk with additional coverage and minor risks
SUIPACHA 652		17,041		8,788	All operational risk with additional coverage and minor risks
AVDA. DE MAYO 595		5,148		3,164	All operational risk with additional coverage and minor risks
LIBERTADOR 498		3,423		3,431	All operational risk with additional coverage and minor risks
DIQUE IV		3,056		55,429	All operational risk with additional coverage and minor risks
RIVADAVIA 2768		369		378	All operational risk with additional coverage and minor risks
MADERO 1020		216		145	All operational risk with additional coverage and minor risks
CONSTITUCIÓN 1159		191		8,762	All operational risk with additional coverage and minor risks
SUBTOTAL		303,990		531,211
SINGLE POLICY		15,000		-	Third party liability

(1)

The insured amounts are in thousands of U.S.dollars.

In our opinion, the above-described insurance policies cover current risks adequately.

IRSA Inversiones y Representaciones Sociedad Anónima

Information required by Section 68 of the Buenos Aires Stock Exchange Regulations and Section 12,

Chapter III, Title IV of the National Securities Commission Regulations

Unaudited Statement of Financial Position as of December 31, 2013

Stated in thousands of pesos

Free translation from the original prepared in Spanish for publication in Argentina

14.	Allowances and provisions that, taken individually or as a whole, exceed 2% of the shareholder´s equity.

None.

15.	Contingent situations at the date of the financial statements which probabilities are not remote and the effects on the Company´s financial position have not been recognized.

Not applicable.

16.	Status of the proceedings leading to the capitalization of irrevocable contributions towards future subscriptions.

Not applicable.

17.	Unpaid accumulated dividends on preferred shares.

None.

18.	Restrictions on distributions of profits.

According to the Argentine laws, 5% of the profit of the year is separated to constitute legal reserves until they reach legal capped amounts (20% of total capital). These legal reserves are not available for dividend distribution.

In addition, according to CNV General Resolution No. 609/12, a special reserve was constituted which could not be released to make distributions in cash or in kind. See Note 25 to the Condensed Interim Consolidated Financial Statements.

IRSA NCN due 2017 and IRSA NCN due 2020 both contain certain customary covenants and restrictions, including amount others, limitations for the incurrence of additional indebtedness, restricted payments, disposal of assets, and entering into certain transactions with related companies. Restricted Payments include restrictions on the payment of dividends.

Autonomous City of Buenos Aires, February 10, 2014.

Free translation from the original prepared in Spanish for publication in Argentina

Limited Review Report

To the Shareholders, President and Board of Directors of

IRSA Inversiones y Representaciones Sociedad Anónima

Legal address: Bolívar 108 - 1° floor

Autonomous City of Buenos Aires

C.U.I.T.: 30-52532274-9

We have reviewed the accompanying unaudited condensed interim separate statement of financial position of IRSA Inversiones y Representaciones Sociedad Anónima as of December 31, 2013, and the related unaudited condensed interim separate statements of income and comprehensive income for the six and three-month periods ended December 31, 2013, and the unaudited condensed interim separate statements of changes of shareholders’ equity and cash flows for the six-month period then ended and selected explanatory notes. The balances and other information corresponding to the fiscal year ended June 30, 2013 and the interim periods within that fiscal year are an integral part of these financial statements and, therefore, they should be considered in relation to these financial statements.

The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim separate financial statements in accordance with professional accounting standards of Technical Resolution No. 26 of the Argentine Federation of Professional Councils in Economic Sciences added by the National Securities Commission to its regulations. Those standards differ from the International Financial Reporting Standards and, especially, from the International Accounting Standard No 34 "Interim Financial Reporting" (IAS 34) approved by the International Accounting Standard Board and used for the preparation of the unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima. Our responsibility is to express a conclusion based on the review that we have performed with the scope detailed in paragraph 3.

We conducted our review in accordance with Technical Resolution No. 7 issued by the Argentine Federation of Professional Councils in Economic Sciences for a review of interim financial statements. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit, the objective of which is to express an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Free translation from the original prepared in Spanish for publication in Argentina

Limited Review Report (Continued)

Nothing came to our attention as a result of our review that caused us to believe that these unaudited condensed interim separate financial statements have not been prepared in all material respects in accordance with Technical Resolution No. 26 of the Argentine Federation of Professional Councils in Economic Sciences for separate financial statements of a parent company.

5.	In accordance with current regulations, we hereby inform that:

the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima are recorded in the "Inventory and Balance Sheet Book" and comply, as regards those matters that are within our competence, with the provisions set forth in the Commercial Companies Law and the corresponding resolutions of the National Securities Commission;

b)	the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal respects in accordance with applicable legal requirements;

we have read the additional information to the unaudited condensed interim separate financial statements required by Article 68 of the Buenos Aires Stock Exchange Regulations and article 12, Chapter III, Title IV of the National Securities Commission, on which, as regards those matters that are within our competence, we have no observations to make;

d)	at December 31, 2013, the debt of IRSA Inversiones y Representaciones Sociedad Anónima owed in favor of the Argentine Integrated Pension System which arises from accounting records and submissions amounted to Ps. 494,752 which was not callable at that date.

Autonomous City of Buenos Aires, February 10, 2014.

PRICE WATERHOUSE & Co. S.R.L.

(Partner)

C.P.C.E.C.A.B.A. Tº 1 Fº 17

Eduardo A. Loiácono

Public Accountant (U.B.A.)

C.P.C.E.C.A.B.A. Tº 326 Fº 94

ABELOVICH, POLANO & ASOCIADOS S.R.L.

(Partner)

C.P.C.E.C.A.B.A. Tº 1 Fº 30

Marcelo Héctor Fuxman

Public Accountant (U.B.A.)

C.P.C.E.C.A.B.A. Tº 134 Fº 85

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

I. Brief comment on the Company’s activities during the period, including references to significant events occurred after the end of the period.

Buenos Aires, February 10, 2014 - IRSA Inversiones y Representaciones Sociedad Anónima (NYSE: IRS) (BASE: IRSA), Argentina’s leading real estate company, announces today the results of its operations for the first six months of fiscal year 2014 ended December 31, 2013.

Consolidated Income

(In millions of ARS, excluding joint businesses)

	IIQ 14			IIQ 13		YoY var			6M 14		6M 13	YoY var
Revenues		752.5			597.0		26.1	%	1,374.0		1,080.0		27.2	%
Operating Income / (Loss)		298.0			360.9		-17.4	%	527.1		558.9		-5.7	%
Depreciation and Amortization		58.1			56.6		2.6	%	113.3		107.1		5.7	%
EBITDA		356.2			417.6		-14.7	%	640.3		666.0		-3.8	%
Net Income for the period		(61.3	)		195.1		-131.4	%	(26.1	)	245.9		-110.6	%
Attributable to shareholders’ equity		(54.1	)		182.6		-129.6	%	(21.7	)	223.8		-109.7	%
Attributable to non controlling interest		(7.3	)		12.4		-158.6	%	(4.4	)	22.1		-119.9	%

„	Revenues grew by 26.1% in the second quarter of 2014 compared to the same quarter of 2013, and by 27.2% in the six-month period compared to the first six months of the previous fiscal year mainly driven by the Shopping Centers segment, and partially by the International and Hotels segments.

„

Consolidated operating income for the first six months amounted to ARS 527.1 million, i.e. 5.7% lower than in the same six-month period of last year, mainly due to a fall in sales of investment properties compared to those in 2013 and due to the consolidation of the investment in Madison, recorded in the second quarter of 2013, which generated a profit of ARS 137.1 million.

„	A net loss was recorded for the first six months of the fiscal year in the amount of 26.1 million, due to a drop in net financial results, which –cumulatively- as of December 31, 2013 recorded a loss of ARS 611.7 million, including financial costs and exchange differences.

„

The fluctuations in the Argentine Peso value against the U.S. Dollar had an impact on our Financial Results. The accounting policies applied in the preparation of our Financial Statements record the revaluation of liabilities exposed to foreign currency, while most of our assets remain valued at historical cost.

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

II. Shopping Centers (through our subsidiary Alto Palermo S.A.)

During the second quarter of 2014, our shopping centers maintained their growth rate in terms of sales a strong 98.8% occupancy level.

In turn, our tenants’ sales grew by 28.6% in the first six-month period of the year compared to the same period of the previous year. All our shopping centers showed good performance, which reflects our strong market position. In this way, Revenues and EBITDA from this segment recorded increases of 26.0% and 24.7%, respectively.

Financial indicators of the Shopping Centers segment

(In millions of ARS)

	IIQ 14		IIQ 13		YoY var			6M 14	6M 13	YoY var
Revenues		556.1		447.3		24.3	%	1,012.0	802.9		26.0	%
Operating Income		252.2		197.3		27.8	%	459.4	351.3		30.8	%
Depreciation and Amortization		37.0		38.3		-3.3	%	73.8	76.3		-3.2	%
EBITDA		289.2		235.6		22.8	%	533.2	427.5		24.7	%

Operating indicators of the Shopping Centers segment

(In millions of ARS, except as indicated)

	IIQ 14			IQ 14			IVQ 13			IIIQ 13			IIQ 13
Gross Leaseable Area (sqm)		310,304			307,721			308,793			308,793			309,021
Tenants’ Sales (12 month cumulative)		14,278			13,277			12,482			11,751			13,967
Occupancy [1]		98.8	%		98.6	%		99.1	%		98.7	%		98.8	%

[1]	Percentage over gross leaseable area as of period end.

Operating data of our Shopping Centers

Shopping Center	Date of Acquisition	Gross Leaseable Area (sqm)[1]		Stores		APSA’s Interest			Occupancy [2]			Book Value (ARS thousand) [3]
Alto Palermo	Nov-97		19,400		145		100.0	%		100.0	%		230,674
Abasto Shopping[4]	Jul-94		38,003		141		100.0	%		99.9	%		283,112
Alto Avellaneda	Nov-97		36,693		107		100.0	%		100.0	%		137,229
Paseo Alcorta	Jun-97		14,289		62		100.0	%		95.6	%		121,349
Patio Bullrich	Oct-98		11,736		84		100.0	%		96.7	%		119,967
Buenos Aires Design	Nov-97		14,550		171		53.7	%		99.9	%		16,511
Dot Baires Shopping	May-09		46,719		153		80.0	%		99.0	%		455,832
Soleil	Jul-10		15,190		78		100.0	%		100.0	%		92,557
Alto Noa Shopping	Mar-95		19,158		89		100.0	%		100.0	%		32,847
Alto Rosario Shopping[5]	Nov-04		29,501		145		100.0	%		95.6	%		123,307
Mendoza Plaza Shopping	Dec-94		41,108		146		100.0	%		100.0	%		110,197
Córdoba Shopping	Dec-06		15,671		105		100.0	%		97.9	%		68,065
La Ribera Shopping	Aug-11		8,286		51		50.0	%		95.6	%		18,371
Total Shopping Centers			310,304		1,477					98.8	%		1,810,018

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

Cumulative tenants’ sales as of December 31

(By Shopping Center, for the second quarter and the first six-month period of each fiscal year, in millions of ARS)

Shopping Center	IIQ 14		IIQ 13		YoY var			6M 14	6M 13	YoY var
Alto Palermo		591.8		458.2		29.2	%	1,057.8	813.5		30.0	%
Abasto Shopping		692.9		550.8		25.8	%	1,253.9	989.8		26.7	%
Alto Avellaneda		670.5		530.0		26.5	%	1,189.1	953.0		24.8	%
Paseo Alcorta		331.3		245.0		35.2	%	566.9	420.1		35.0	%
Patio Bullrich		203.3		159.5		27.4	%	352.7	283.0		24.6	%
Buenos Aires Design		69.7		62.7		11.1	%	136.3	119.9		13.6	%
Dot Baires Shopping		580.5		452.1		28.4	%	1,018.7	798.0		27.7	%
Soleil		174.7		88.4		97.7	%	319.1	158.5		101.3	%
Alto Noa Shopping		194.7		166.2		17.1	%	363.5	306.4		18.6	%
Alto Rosario Shopping		376.8		292.6		28.8	%	677.7	535.7		26.5	%
Mendoza Plaza Shopping		391.7		318.0		23.2	%	741.0	587.4		26.2	%
Córdoba Shopping		153.1		125.2		22.2	%	275.1	221.1		24.4	%
La Ribera Shopping		65.4		47.8		36.8	%	131.4	101.1		30.0	%
Total		4,496.4		3,496.4		28.6	%	8,083.2	6,287.5		28.6	%

Cumulative tenants’ sales as of December 31

(By Type of Business, for the second quarter and the first six-month period of each fiscal year, in millions of ARS)

Type of business	IIQ 14	IIQ 13	YoY var		6M 14	6M 13	YoY var
Anchor Store	319.0	250.8	27.2	%	556.8	438.8	26.9	%
Clothes and Footwear	2,210.1	1,827.9	27.3	%	4,018.0	3,144.4	27.8	%
Entertainment	93.2	83.9	10.8	%	259.9	219.0	18.7	%
Home	926.1	620.5	49.3	%	1,483.1	1,141.4	29.9	%
Restaurant	350.9	270.3	29.8	%	721.4	558.6	29.1	%
Miscellaneous	563.6	425.9	32.4	%	983.0	751.6	30.8	%
Services	33.5	17.1	95.5	%	61.0	33.7	80.9	%
Total	4,496.4	3,496.4	28.6	%	8,083.2	6,287.5	28.6	%

Cumulative revenues from leases as of December 31

(Detailed revenues, for the second quarter and the first six-month period of each fiscal year, in millions of ARS)

Detailed Revenues	IIQ14		IIQ13		YoY var			6M 14	6M 13	YoY var
Base Rent		188.2		149.6		25.8	%	362.9	287.4		26.3	%
Percentage Rent		108.1		88.0		22.8	%	181.2	144.6		25.3	%
Total Rent		296.3		237.6		24.7	%	544.1	432.0		25.9	%
Admission rights		31.6		27.2		16.0	%	60.1	51.3		17.1	%
Fees		8.6		8.8		-2.3	%	16.8	13.1		28.9	%
Parking		20.4		15.7		29.7	%	40.0	30.8		30.0	%
Management fees		5.6		4.5		24.9	%	10.9	8.6		27.1	%
Other		1.0		1.1		-9.1	%	2.0	1.5		33.3	%
Total Revenues before Common Expenses and Common Promotional Fund		363.5		294.9		23.2	%	673.9	537.3		25.4	%
Common Expenses and Common Promotional Fund		192.6		152.4		26.4	%	338.1	265.6		27.3	%
Total Revenues		556.1		447.3		24.3	%	1,012.0	802.9		26.0	%

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

III. Offices

The A+ office local market of the City of Buenos Aires remains firm. Though USD rental prices per square meter decreased compared to 2013, sale prices remain stable above USD 4,000 per square meter, showing a solid demand for Premium office spaces in the City of Buenos Aires.

Evolution of A+ offices’ profitability in the City of Buenos Aires

Source: LJ Ramos

in ARS MM	IIQ 14		IIQ 13		YoY var			6M 14	6M 13	YoY var
Revenues		75.5		70.8		6.7	%	149.5	141.1		6.0	%
Operating Income		34.7		25.3		37.1	%	64.5	56.4		14.3	%
Depreciation and Amortization		8.6		9.5		-9.9	%	17.1	18.3		-6.8	%
EBITDA		43.3		34.8		24.3	%	81.5	74.7		9.2	%

	IIQ 14			IQ 14			IVQ13			IIIQ13			IIQ13
Gross Leaseable Area *		131,014			131,115			131,085			141,287			141,287
Occupancy		98.7	%		97.3	%		97.1	%		97.3	%		96.5	%
Rent ARS/sqm		157.7			142.0			138.7			128.8			123.1
Rent USD/sqm		24.2			25.6			25.7			25.1			25.0

*Premium portfolio

„	Revenues from the Offices segment increased by 6.7% in the quarter under review compared to the same period of the previous fiscal year and 6.0% compared to the relevant six-month period of the previous fiscal year.

„	The Premium portfolio’s occupancy level reached 98.7% during the period under review, above the occupancy observed during the previous quarter.

„	EBITDA grew 9.2% in the first six months of 2014 compared to 2013 and the EBITDA/Revenue margin for the period, excluding revenues from common maintenance expenses, was 63.0%.

Below is information on our offices and other rental properties segment as of December 31, 2013.

Operating Data of the Offices segment

(In thousands of ARS, except as indicated)

	Date of Acquisition		Gross Leaseable Area sqm (1)		Occupancy(2)			Interest			Book Value (3)
Offices
Edificio República	Apr-08			19,884		97.3	%		100	%		203,967
Torre Bankboston	Aug-07			14,873		100.0	%		100	%		144,227
Bouchard 551	Mar-07			12,081		100.0	%		100	%		89,202
Intercontinental Plaza	Nov-97			22,535		100.0	%		100	%		61,991
Bouchard 710	Jun-05			15,044		100.0	%		100	%		61,925
Dique IV, Juana Manso 295	Dec-97			11,298		94.4	%		100	%		60,850
Maipú 1300	Sep-95			9,399		97.3	%		100	%		29,873
Libertador 498	Dec-95			620		100.0	%		100	%		3,434
Suipacha 652/64	Nov-91			11,453		100.0	%		100	%		8,809
Madero 1020	Dec-95								100	%		145
Dot Building (7)	Nov-06			11,242		100.0	%		96	%		100,056
Other (4)		N/A		2,585		89.4	%		-			391
Subtotal Offices				131,014		98.7	%		-			764,870

Other Properties
Commercial Properties(5)		N/A		312		-			-			747
Santa María del Plata S.A.	Jul-97			60,100		-			100	%		12,512
Nobleza Piccardo (8)	May-11			48,590		100.0	%		50	%		10,387
Other Properties (6)		N/A		3,996		100.0	%		-			8,762
Subtotal Other Properties				112,998		99.7	%		-			32,408

TOTAL OFFICES AND OTHER				244,012		99.2	%		-			797,278

Notes:

(1) Total leaseable area for each property as of December 31, 2012. Excludes common areas and parking.

(2) Calculated dividing occupied square meters by leaseable area as of December 31, 2012.

(3) Cost of acquisition, plus improvements, less accumulated depreciation, plus adjustment for inflation, less allowance for impairment.

(4) Includes the following properties: Av. de Mayo 595, and Costeros Dique IV.

(5) Includes the following properties: Constitución 1111 and Casona de Abril.

(6) Includes the following property: Constitución 1159.

(7) Through Alto Palermo S.A.

(8) Through Quality Invest S.A.

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

IV. Sales and Developments

Construction decelerated its growth rate during the first months of the fiscal year, though in terms of prices, the sqm of new apartments in the City of Buenos Aires remains stable.

The construction business is expected to grow in the second quarter of the fiscal year thanks to the continuity of the policies aimed at encouraging capital expenditures. In particular, there is the Argentine Credit Program (PRO.CRE.AR, as per the acronym in Spanish) which has started to have a greater impact in the course of the current year. The amounts contributed by the Argentine Credit Program (PRO.CRE.AR) are equivalent to 6.3% of GDP construction.

Sales and Developments in ARS MM	IIQ 14		IIQ 13		YoY var			6M 14	6M 13	YoY var
Revenues		24.9		33.2		-25.0	%	41.0	85.7		-52.2	%
Operating Income		6.8		10.3		-34.0	%	0.1	41.1		-99.9	%
Depreciation and Amortization		-		-		-		-	-		-
EBITDA		6.8		10.3		-34.0	%	0.1	41.1		-99.9	%

►

During the first six months of 2014, sales totaled ARS 41.0 million, 52.2% below last year’s recorded sales, mainly due to the impact that “Horizon” project had in our recorded sales of the first semester of fiscal year 2013. For this six-month period of fiscal year 2014, our sales were related to residual units of project “Torres Rosario”, while in 2013 our sales were larger due to the impact of Horizon project.

Sales and Developments Table

(In thousands of ARS, except as indicated)

DEVELOPMENT	6M 14	6M 13	YoY var
Residential Apartments
Caballito Nuevo	-	6,168		-100.0	%
Torres de Rosario	16,445	4,260		286.0	%
Libertador 1703 and 1755 (Horizons)	17,838	69,120		-74.2	%
Other Residential Apartments	44	811		-94.6	%
Subtotal Residential Apartments	34,327	80,359		-57.3	%
Residential Communities
Abril/Baldovinos	1,750	1,113		57.2	%
El Encuentro	4,902	4,207		16.5	%
Subtotal Residential Communities	6,652	5,320		25.0	%
Land Reserves				-
Terreno Rosario	-	-		-
Canteras Natal Crespo	-	56		-100.0	%
Subtotal Land Reserves	-	56		-100.0	%
TOTAL	40,979	85,735		-52.2	%

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

DEVELOPMENT	Date of Acquisition		Area intended for sales		IRSA’s Effective Interest			Percentage Built			Percentage Sold			Book Value (ARS thousand)
			(sqm)(1)									(2)
Residential Apartments
Caballito Nuevo	Nov-97			67		100.0	%		100.0	%		99.1	%		313
Torres de Rosario(3)	Apr-99			2,509		95.7	%		100.0	%		60.0	%		2,083
Libertador 1703 and 1755 (Horizons) (7)	Jan-07			44,648		50.0	%		100.0	%		100.0	%		7,638
Other Residential Apartments (4)		-		138,520											76,189
Subtotal Residential Apartments				185,744											86,223

Residential Communities
Abril/Baldovinos (5)	Jan-95			5,137		100.0	%		100.0	%		99.5	%		2,357
El Encuentro	Nov-97			13,690		100.0	%		100.0	%		85.0	%		366
Subtotal Residential Communities				18,827											2,723

Land Reserves
Puerto Retiro	May-97			82,051		50.0	%		0.0	%		0.0	%		51,337
Santa María del Plata	Jul-97			715,951		100.0	%		0.0	%		10.0	%		158,951
Pereiraola	Dec-96			1,299,630		100.0	%		0.0	%		100.0	%		8,200
Terreno Rosario (3)	Apr-99			31,000		95.7	%		0.0	%		100.0	%		7,629
Terreno Baicom	Dec-09			34,500		50.0	%		0.0	%		0.0	%		4,459
UOM Lujan	May-08			1,176,000		95.7	%		0.0	%		100.0	%		33,905
Terreno Catalinas Norte	Dec-09			42,625		100.0	%		0.0	%		100.0	%		109,151
Pilar	May-97			740,237		100.0	%		0.0	%		0.0	%		1,550
Espacio Aéreo Coto (3)	Sep-97			16,167		95.7	%		0.0	%		0.0	%		8,946
Other Land Reserves (6)		-		13,680,711											9,088
Subtotal Land Reserves				17,818,872											393,216
TOTAL				18,023,443											482,162

Notes:

(1) Total property area intended for sale upon completion of the development or acquisition and before sale of any of the units (including parking and storage spaces, but excluding common areas). In the case of Land Reserves, the land area was considered.

(2) The percentage sold is calculated dividing the square meters sold by the total saleable square meters.

(3) Through Alto Palermo S.A.-

(4) Includes the following properties: Torres de Abasto through APSA (fully sold), units to be received in Beruti through APSA, Torres Jardín, Edificios Cruceros (fully sold), San Martin de Tours, Rivadavia 2768, Alto Palermo Park (fully sold), Minetti D (fully sold), Dorrego 1916 (fully sold), Padilla 902 (fully sold), Caballito and Pereiraola plots through IRSA.

(5) Includes sales of shares in Abril.-

(6) Includes the following land reserves: Terreno Pontevedra, Isla Sirgadero, Terreno San Luis, Mariano Acosta, Merlo and Intercontinental Plaza II through IRSA, Zetol and Vista al Muelle through Liveck and C.Gardel 3134 (fully sold), C.Gardel 3128 (fully sold), Aguero 596 (fully sold), República Arabe Siria (fully sold), Terreno Mendoza (fully sold), Zelaya 3102, Conil, Soleil air space and Others APSA (through APSA).-

(7) Owned by CYRSA S.A.

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

Hotels

Our hotels in the city of Buenos Aires have recovered during this six-month period historical occupancy levels. This resulted in an increase in revenues from the hotels segment. Llao Llao, the hotel owned by the company in the city of Bariloche has also recovered its historical income and occupancy levels after two years of a poor volume of business.

Hotels (in ARS MM)	IIQ 14		IIQ 13		YoY var			6M 14	6M 13	YoY var
Revenues		87.6		63.0		39.1	%	160.6	116.8		37.5	%
Operating Income		5.7		-1.4		-		6.4	-7.3		-
Depreciation and Amortization		3.7		5.3		-30.9	%	7.2	9.9		-27.3	%
EBITDA		9.3		3.9		138.2	%	13.6	2.7		410.1	%

►	During the first six months of 2014 the hotels segment recorded an increase in revenues of 37.5%, EBITDA for the period was ARS 13.6 million, 10.9 million higher than the amount recorded during the first six months of fiscal year 2013.

The following is information on our hotels as of December 31, 2013:

	Date of Acquisition	IRSA’s Interest			Number of Rooms		Average Occupancy (1)			Average Rate per Room (ARS)(1)		Book Value (in thousands of ARS)
Intercontinental (2)	Nov-97		76.34	%		309		71.9	%		883		46,499
Sheraton Libertador(3)	Mar-98		80.00	%		200		82.7	%		820		31,740
Llao Llao(4)	Jun-97		50.00	%		201		61.8	%		1,755		84,451
Total						710		72.0	%		1,077		162,690

Notes:
1) Cumulative average for the 6-month period.
2) Through Nuevas Fronteras S.A. (IRSA’s subsidiary).
3) Through Hoteles Argentinos S.A.
4) Through Llao Llao Resorts S.A.

	IIQ 14			IQ 14			IVQ 13			IIIQ 13			IIQ 13
Average Occupancy*		75.6	%		68.4	%		66.6	%		64.9	%		69.4	%
Average Rate per Room (USD/night)*		168			183			158			176			179
Average Rate per Room (ARS/night)*		1,093			1,061			849			903			882

*Average for the 3-month period.

Revenues

(In million ARS)

	IIQ 14		IIQ 13		YoY var			6M 14	6M 13	YoY var
Intercontinental		33.3		25.1		32.5	%	58.1	43.8		32.7	%
Sheraton Libertador		20.0		15.0		33.2	%	37.3	26.7		39.7	%
Llao Llao		34.4		22.9		50.2	%	65.2	46.4		40.7	%
Terrenos Bariloche		-		-		-		-	-		-
Total		87.6		63.0		39.1	%	160.6	116.8		37.5	%

VI.	International

	IIQ 14		IIQ 13		YoY var			6M 14	6M 13	YoY var
Revenues		20.1		12.1		66.1	%	39.5	12.1		226.1	%
Operating Income / (Loss)		0.1		134.6		-99.9	%	3.3	129.2		-97.5	%
Depreciations and Amortizations		9.7		6.0		60.5	%	16.7	6.0		177.0	%
EBITDA		9.8		140.6		-93.1	%	20.0	135.3		-85.2	%

►

The International segment exhibited a rise in revenues for the first six months of fiscal year 2014; due to an increase rent levels and occupancy rates of our buildings in New York City. The operating income compared to the previous period fell by 97.5% as during the second quarter of fiscal year 2013 due to the income of ARS 137 million generated by the consolidation of our investment in Madison in our Financial Statements of 2Q13.

Interest in Metropolitan 885 Third Ave. LLC (“Metropolitan”) through New Lipstick LLC (“New Lipstick”)

IRSA indirectly holds a 49.8% interest in New Lipstick LLC, a holding company that is owner of Metropolitan, a company whose main asset is the so-called “Lipstick” office building.

The Lipstick Building is a landmark building in the City of New York, located in Midtown Manhattan, the gross leaseable area of which is larger than 57,500 sqm. As of December 31, 2013, the building occupancy rate reached 86.1% of its area generating an average rental price of 66.6 USD/sqm.

Lipstick	Dec-13			Dec-12			YoY var
Gross Leaseable Area (sqm)		58,019			58,019			-
Occupancy		86.1	%		85.9	%		0.2	%
Rental price (USD/sqm)		66.6			63.8			3.4	%

Interest in Building located at 183 Madison Ave, New York, NY

Through our subsidiaries IRSA International LLC and Imadison LLC, we own 74.5% of the building located at Madison 183, Manhattan. The property has 19 floors and the net leaseable area is larger than 23,200 sqm. As of December 31, 2013, 94.7% of the building was occupied, at an average rental price of approximately 39.1 USD/sqm.

Madison 183	Dec-13			Dec-12			YoY var
Gross Leaseable Area (sqm)		23,489			23,489			-
Occupancy		94.7	%		95.9	%		-1.2	%
Rental price (USD/sqm)		39.1			42.5			8.7	%

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

Investment in Supertel Hospitality Inc.

As of December 31, 2013, jointly with other shareholders, we held the equivalent to 34% of the voting rights at the shareholders’ meetings of Supertel Hospitality Inc., a REIT listed on NASDAQ under the symbol “SPPR”. Supertel Hospitality Inc. has a portfolio of 69 medium-class and long-stay hotels with 6,066 rooms in 21 states of the United States of America, which are managed by various operators and franchises such as Comfort Inn, Days Inn, Hampton Inn, Holiday Inn, Sleep Inn and Super 8, among others.

VII. Financial Transactions and Others

Interest in Banco Hipotecario S.A. (“BHSA”)

BHSA is a leading bank in the mortgage lending segment, in which IRSA held a 29.77% interest as of December 31, 2013 (excluding portfolio shares). For further information please refer to http://www.cnv.gob.ar or http://www.hipotecario.com.ar. During the first six months of fiscal year 2014, BHSA’s contribution to IRSA’s income amounted to ARS 86.5 million, compared to the ARS 44.0 million recorded in the same period of fiscal year 2013. On September 20, 2013, IRSA received dividends paid by Banco Hipotecario for ARS 9.1 million.

VIII. Reconciliation with Consolidated Income Statement as of December 31*

(ARS million)

Below is an explanation of the reconciliation of the company’s income by segment with its consolidated income statement. The difference lies in the presence of joint businesses included in the segment but not in the income statement.

	Total Segment			Joint Businesses			Inter-segment eliminations			Income Statement			Var a/a
		6M 14	6M 13		6M 14	6M 13		6M 14	6M 13		6M 14	6M 13
Revenue		1,402.8	1,160.0		-28.4	-79.2		-0.4	-0.7		1,374.0	1,080.0		27.2	%
Cost		-661.3	-595.3		19.5	60.6		-	-		-641.9	-534.7		20.0	%
Gross Profit		741.5	564.7		-8.9	-18.6		-0.4	-0.7		732.1	545.3		34.3	%
Income / (loss) from sale of investment properties		7.5	56.0		-	-		-	-		7.5	56.0		-86.6	%
General and administrative expenses		-130.7	-111.3		0.5	1.3		0.7	0.9		-129.4	-109.0		18.7	%
Selling expenses		-68.1	-54.8		2.2	6.3		0.1	0.1		-65.8	-48.5		35.7	%
Other operating income, net		-18.4	115.3		1.5	0.0		-0.4	-0.3		-17.3	115.1		-115.0	%
Operating Income (Loss)		531.8	569.9		-4.7	-11.0		-	-		527.1	558.9		-5.7	%
Income / (loss) from interests in equity investees and joint businesses		42.8	7.9		8.4	6.4		-	-		51.2	14.4		255.6	%
Segment Income before financial gain (loss) and income tax		574.6	577.8		3.7	-4.6		-	-		578.3	573.3		0.9	%

*Includes Puerto Retiro, Baicom, CYRSA, Nuevo Puerto Santa Fe and Quality (San Martín Plot).

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

IX. Financial Debt and Other Indebtedness

Consolidated Financial Debt as of December 31, 2013

Description	Currency	Amount (USD MM) 1		Interest Rate			Maturity
Bank Overdraft	ARS		41.5	Variable			< 180 days
IRSA’s Tranche I Series I Notes	USD		150.0		8.50	%	Feb-17
IRSA’s Tranche II Series II Notes2	USD		150.0		11.50	%	Jul-20
IRSA’s Tranche III Series IV Notes	USD		16.9		7.45	%	Feb-14
Madison Building Mortgage	USD		75.0		4.22	%	Aug-17
IRSA’s Total Debt			433.5
Bank Overdraft	ARS		26.7	Variable			< 30 days
APSA’s Tranche I Series I Notes3	USD		120.0		7.875	%	May-17
Arcos Syndicated Loan	ARS		18.1		15.01	%	Nov-15
Other Loans	ARS		4.4		15.01	%	Dec-15
Neuquén Syndicated Loan	ARS		17.0		15.25	%	Jun-16
Seller financing	ARS		13.9		5.00	%	Jul-17
Total APSA’s Debt4			200.1
Total Consolidated Debt			633.6
Consolidated Cash			34.6
Repurchase of Debt			19.1
Net Consolidated Debt			579.9

1 Principal face value in USD at an exchange rate of 6.521 ARS = 1 USD, without considering elimination of balances with companies pursuant to Section 33.
2 As of December 31, 2012 APSA had repurchased USD 3.9 million in principal amount.
3 As of December 31, 2012 APSA had repurchased USD 10.0 million in principal amount.
4 APSA excludes Convertible Notes due 2014. Outstanding principal balance: USD 31.7 million.

Evolution of Exchange Rate

During the last months, the depreciation of the Argentine Peso to the U.S. Dollar accelerated as compared to the previous months. Whereas in the second quarter of fiscal year 2013 the Argentine currency depreciated 8.6%, this year the quarterly depreciation was equal to 21.0%. In January the Argentine Peso pegging to the US Dollar declined by 22.8% compared to the last value recorded in December 2013. Given that a significant portion of our debt is denominated in USD, this process had an adverse impact on our Financial Results. Most of our assets are positively correlated to U.S. Dollar; however, they are mostly valued at historical cost plus investments, and are not affected by any kind of revaluation due to the fluctuation of market prices.

Below is the evolution of the exchange rate as published by Banco de la Nación Argentina:

Significant Events

Shareholders’ Meeting

Treatment and allocation of income for the year ended June 30, 2013 in the amount of ARS 238,737,000. Consideration of a dividend payment in cash and/or in kind, up to the amount of ARS 250,000,000, equivalent to 43.28% of the capital stock allocated to profit for the year ended June 30, 2013. Payment represented an amount per share of ARS 0.4328 and an amount per ADR of ARS 4.3282.

·	Consideration of the share and GDS repurchase program issued by the company

·	Revision of shared services agreement

·	Consideration of issuance of a Public Tender Offer for Voluntary Acquisition of Shares (OPVA) in our controlled company Alto Palermo SA (APSA)

Subsequent Events

Investment in Dolphin Fund:

In the six-month period ended December 31, 2013, the Group has subscribed for shares in Dolphin Fund Ltd. (“Dolphin”) in the amount of USD 105 million. On November 3, 2013, Dolphin together with other investors made an offer to purchase shares in IDB Development Corporation (“IDBD”), an Israeli company, under a debt restructuring process that its parent company, IDB Holding Corporation Ltd. (“IDBH”), was negotiating with its creditors, pursuant to the provisions of applicable Israeli laws.

On January 5, 2014, the court hearing IDBH debt restructuring case approved the offer made by Dolphin together with E.T.H.M.B.M Extra Holdings Limited (“ETH”), a company incorporated under the laws of Israel, controlled by Mordechay Ben Moshé, to acquire approximately 53.3% of IDBD (the “Offer”). Such percentage may be increased subject to the sale of certain assets by IDBD in the course of the current year.

Under such Offer, Dolphin, together with other investors, holds a 50% interest while ETH holds the remaining 50% interest, and the total investment amount equals USD 272 million (NIS 950 million) approximately. As described above, the Group made disbursements in Dolphin in the approximate amount of USD 105 million, which may be reimbursed in part, depending on the final composition of the investment group.

IDBD is one of the largest and most diversified investment groups in Israel, and it is engaged through its subsidiaries in a great number of markets and businesses such as real estate, retail, agricultural business, oil and gas production, insurance, telecommunications, etc.; it controls companies such as Clal Insurance (Insurance Company), Cellcom (Mobile Service Provider), Koor Industries (owner of a 40% interest in Makhteshim Agan Industries (Agrochemicals), Super-Sol (supermarkets), PBC (Real Estate), among others.

The acquisition will be effective in the upcoming months; in the meantime, Dolphin has assigned Mr. Eduardo Sergio Elsztain in the Board of Directors of IDBD.

Partial sale of “La Nación” Building:

On January 24, 2014 the company sold 2,863 sqm consisting in an office floor together with the relevant parking spaces, in the Bouchard Plaza building. The transaction amount was ARS 124.6 million, equivalent to USD 16.0 million. The gross transaction amount equals ARS 104.5 million that will impact our next quarter’s Financial Results.

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

X. Balance Sheet Structure.

	12.31.13	06.30.13
Non-current Assets	7,558,024	6,487,209
Current Assets	1,181,982	1,839,320
Total	8,740,006	8,326,529
Non-current Liabilities	4,170,962	3,590,593
Current Liabilities	1,671,724	1,605,247
Subtotal	5,842,686	5,195,840
Non-controling interés	389,464	385,151
Shareholders’ Equity	2,507,856	2,745,538
Total	8,740,006	8,326,529

XI. Consolidated financial results.

	12.31.13		12.31.12
Operating income	527,087		558,874
Results from interests in equity investees and joint businesses	51,183		14,384
Income before financial results and income tax	578,270		573,258
Financial income	60,255		57,964
Financial cost	(726,448	)	(358,428	)
Other financial results	54,537		47,374
Financial results, net	(611,656	)	(253,090	)
Income / (loss) before income tax	(33,386	)	320,168
Income tax	7,312		(74,289	)
Profit / (loss) for the period	(26,074	)	245,879
Other comprehensive income for the period	71,776		23,733
Total comprehensive income for the period	45,702		269,612
Atributable to:
Controlling company’s shareholders	29,758		247,203
Non-controlling interest	15,944		22,409

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

XII.	Consolidated cash flow.

	12.31.13		12.31.12
Net cash generated by operating activities	421,981		351,696
Net cash used in investing activities	(625,361	)	(195,244	)
Net cash used in financing activities	(398,603	)	(60,241	)
Net (decrease) / increase in cash and cash equivalents	(601,983	)	96,211

XIII.

Comparable statistics.

Summary of property units sold in ARS thousands.

	12.31.13	12.31.12
Residential Apartments
Torres Jardin	44	-
Caballito Nuevo	-	6,168
Torres de Rosario	16,445	4,260
Libertador 1703 y 1755 (Horizons)	17,838	69,120
Other	-	811
Residential Communities
Abril / Baldovinos (2)	1,750	1,113
El Encuentro	4,902	4,207

Land Reserves
Canteras Natal Crespo	-	56
Total	40,979	85,735

XIV.	Comparative ratios.

	12.31.13		06.30.13
Liquidity
Current Assets	1,181,982	=0.71	1,839,320	=1.15
Current Liabilities	1,671,724	=0.71	1,605,247	=1.15
Indebtedness
Total Liabilities	5,842,686	=2.02	5,195,840	=1.66
Shareholders’ Equity	2,897,320	=2.02	3,130,689	=1.66
Solvency
Shareholders’ Equity	2,897,320	=0.50	3,130,689	=0.60
Total Liabilities	5,842,686	=0.50	5,195,840	=0.60
Capital Assets
Non-current Assets	7,558,024	=0.86	6,487,209	=0.78
Total Assets	8,740,006	=0.86	8,326,529	=0.78

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of December 31, 2013

X. Brief comment on prospects for the next period

Our shopping centers maintain their growth rate and continue to exhibit sound invoicing figures and occupancy rates close to 100%, hand in hand with our tenants’ strong commitment, who keep choosing our spaces both in the City of Buenos Aires and the inner regions of Argentina, to position their brands.

We expect that during fiscal year 2014 we will continue to consolidate as the leading shopping center company in Argentina, adding new properties and footage to our current portfolio, including new top brands among our tenants and devising new ways to continue offering the best commercial proposals to our visitors.

In this sense, we have completed development of our “Arcos District” project located in the neighborhood of Palermo, in the City of Buenos Aires. This project consists in an urban model, offering a variety of premium brands in an open-air environment, with approximately 14,000 sqm of gross leaseable area and 65 stores. This shopping center started to be developed in December 2011 and while it was expected to be opened in December 2013, we have been served with an injunction order to suspend opening on the grounds that the Shopping Center failed to have certain governmental permits. The company has applied for revocation of such injunction order and is taking any actions required to open its Shopping Center No. 14. We expect that this new proposal, which also introduces a cultural space in the retail concept, will achieve the same degree of success of our former developments.

On the other hand, this year we will continue working on the development of our next shopping center in the City of Neuquén. Shopping Neuquén, the gross leaseable area of which is about 10,000 sqm, will be our sixth development located in the inner regions of our country, and in view of the progress shown by the city in the last years, we expect that this project will achieve the same success as other developments of this nature in the provinces where we operate. It is scheduled to open in the spring of 2014. In addition, we continue evaluating the best timing to launch other projects on the large extent of lands reserved by the company for future business developments.

In addition, we will continue making efforts as done so far to improve our shopping centers’ service offerings, mainly aimed at maintaining our occupancy rates at about 100%, increasing the number of visitors at our shopping centers and increasing the invoicing figures of our brands. Accordingly, we will continue partnering with financial institutions to offer sales promotions with credit cards, as they have proved to be highly effective in terms of sales and have been eagerly endorsed by the public.

Regarding the Offices business, we expect to continue our sales of non-strategic portfolio assets for attractive prices as we have actively done during the past months. In addition, we will strive to achieve maximum occupancy in our buildings and the best possible lease agreements, trying to attract new firms wishing to relocate in the spaces we offer. Moreover, we are deciding on the most suitable timing for launching our “Catalinas Norte” project, which is strategically located and will add approximately 35,000 sqm of gross leaseable area to our portfolio.

In view of the recent changes in the exchange rate in Argentina, an improved performance of the office segment and in our hotels in the country is expected for the next quarter.

Regarding the Sales and Developments segment, we expect to continue selling non-strategic assets and small land reserves and to make progress in sales and title deed execution for the residential projects Caballito Nuevo, Torres Rosario and El Encuentro.

As concerns our investments outside Argentina, we will continue to work towards increasing occupancy and income levels in our Lipstick and Madison buildings. Moreover, we expect to retain our investment share in Dolphin and complete the announced transaction to acquire, together with other investors, about 53.3% in the Israeli company IDBD, one of the largest and most diversified investment groups in Israel, which is engaged through its subsidiaries in various markets and businesses such as real estate, retail, agricultural business, oil and gas production, insurance, telecommunications, etc.

Given the quality of the real estate assets in our portfolio, the Company’s financial position and low indebtedness level, its experience in taking advantage of market opportunities and its credentials in the capital markets, we are confident that that we will remain on the growth track, consolidating the best real estate portfolio of Argentina and taking advantage of opportunities that may arise abroad.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Buenos Aires, Argentina.

	IRSA Inversiones y Representaciones Sociedad Anónima

	By:	/S/ Saúl Zang
		Saúl Zang
		Responsible for the relationship with the markets

February 28, 2014