##### Table of Contents

 

 

**United States**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**
 
**

**FORM 20-F**

 

**
 
**

 

**OR**

 

**For the fiscal year ended: June 30, 2009**

**OR**

 

**OR**

 

**Date of event requiring this shell company report             **

**For the transition period from              to            **

**Commission file number: 128 0-30982**

 

**
 
**

**Alto Palermo S.A. (APSA)**

**(Exact name of Registrant as specified in its charter)**

 

**
 
**

**Republic ofArgentina**

**(Jurisdiction of incorporation or organization)**

**Moreno 877, 22nd Floor**

**Buenos Aires, Argentina**

**(Address of principal executive offices)**

**Gabriel Blasi – CFO**

**Tel + (54 11) 4323 7449**

**Moreno 877 21st Floor (C1091AAQ) Buenos Aires**

 

**
 
**

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

 

 

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

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

 

**
 
**

The number of outstanding shares of the issuer’s common stock as of June 30, 2009 was 782,064,214 

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes     ̈  No 

Indicate by check mark whether the registrant has submitted electronically andposted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit and post such files).     ̈  Yes     ̈  No 

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

Large acceleratedfiler   ̈    Accelerated filer  x    Non-accelerated filer   ̈

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

 

If “Other” has been checked in response to the previous question, indicate by check markwhich financial statement item the registrant has elected to follow.     ̈  Item 17    x  Item18 

If this is an annual report, indicate by check mark whether the registrant is a **shell company** (as defined in Rule 12b-2 of theExchange Act).     ̈  Yes    x  No 

 

 

 

Table of Contents
**Table of Contents**

**ALTO PALERMO S.A. (APSA)**

 
   **Page No.**Disclosure Regarding Forward-Looking Information  5Certain Measurements and Terms  6Presentation of Financial and Certain Other Information  6Market Data  7  **Part I**  Item 1  Identity of Directors, Senior Management and Advisers  8Item 2  Offer Statistics and Expected Timetable  8Item 3  Key Information  8  
(a)    Selected Financial Data
  8  
(b)    Capitalization and Indebtedness
  12  
(c)    Reasons for the Offer and Use of Proceeds
  12  
(d)    Risk Factors
  12Item 4  Information on the Company  30  
(a)    History and Development of the Company
  30  
(b)    Business Overview
  38  
(c)    Organizational Structure
  83  
(d)    Property, Plants and Equipment
  84Item 4A  Unresolved staff comments  85Item 5  Operating and Financial Review and Prospects  85  
(a)    Operating Results
  85  
(b)    Liquidity and Capital Resources
  118  
(c)    Research and Development, Patents and Licenses, etc.
  123  
(d)    Trend Information
  123  
(e)    Off-Balance Sheet Arrangements
  124  
(f)     Tabular Disclosure of Contractual Obligations
  124  
(g)    Safe Harbor
  124Item 6  Directors, Senior Management and Employees  125  
(a)    Directors and Senior Management
  125
 

2 

Table of Contents  
(b)    Compensation
  130  
(c)    Board Practices
  131  
(d)    Employees
  131  
(e)    Share Ownership
  132Item 7  Major Shareholders and Related Party Transactions  133  
(a)    Major Shareholders
  133  
(b)    Related Party Transactions
  135  
(c)    Interests of Experts and Counsel
  138Item 8  Financial Information  138  
(a)    Consolidated Statements and Other Financial Information
  138  
(b)    Significant Changes
  141Item 9  The Offer and Listing  144  
(a)    The Offer and Listing Details
  144  
(b)    Plan of Distribution
  145  
(c)    Markets
  145  
(d)    Selling Shareholders
  148  
(e)    Dilution
  148  
(f)     Expenses of the Issue
  148Item 10  Additional Information  148  
(a)    Share Capital
  148  
(b)    Memorandum and Articles of Association
  148  
(c)    Material Contracts
  153  
(d)    Exchange Controls
  153  
(e)    Taxation
  158  
(f)     Dividends and Paying Agents
  166  
(g)    Statement by Experts
  166  
(h)    Documents on Display
  166  
(i)     Subsidiary Information
  166Item 11  Quantitative and Qualitative Disclosures About Market Risk  166Item 12  Description of Securities Other than Equity Securities  169
 

3 

Table of Contents  **Part II**  Item 13  Defaults, Dividend Arrearages and Delinquencies  169Item 14  Material Modifications to the Rights of Security Holders and Use of Proceeds  169Item 15  Controls and Procedures  169  
(a)    Disclosure Control and Procedures
  169  
(b)    Management’s Annual Report on Internal Control Over FinancialReporting
  170  
(c)    Attestation Report of the Registered Public AccountingFirm
  170  
(d)    Changes in Internal Control Over Financial Reporting
  170Item 16  Reserved  170  Item 16.A. Audit Committee Financial Expert  170  Item 16.B. Code of Ethics  171  Item 16.C. Principal Accountant Fees and Services  171  Item 16.D. Exemptions from the Listing Standards for Audit Committees  172  Item 16.E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers  172  Item 16.F. Change in Registrant’s Certifying Account  172  Item 16.G. Corporate Governance  172  **Part III**  Item 17  Financial Statements  175Item 18  Financial Statements  175Item 19  Exhibits  175  Signatures  177
 

4 

Table of Contents
**DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION**

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. 

This annual report includes forward-looking statements, principally under the captions “Summary” “Risk Factors”,“Operating and Financial Review and Prospects” and “Business Overview”. We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trendsaffecting our business. Many important factors, in addition to those discussed elsewhere in this annual report, could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among otherthings: 

Factors that could cause actual results to differ materially and adversely include, but are not limited to:

 
 • 
changes in general economic, business, political or other conditions in Argentina or changes in general economic or business conditions in LatinAmerica and in the United States of America; 

 
 • 
changes in capital markets in general that may affect policies or attitudes toward lending to Argentina or Argentine companies;

 
 • 
inflation; 

 
 • 
interest rates; 

 
 • 
government regulation; 

 
 • 
adverse legal or regulatory disputes or proceedings; 

 
 • 
fluctuations and declines in the value of Argentine public debt; 

 
 • 
competition in the shopping center and related industries; 

 
 • 
deterioration in regional and national business and economic conditions in Argentina; 

 
 • 
fluctuations and declines in the exchange rate of the Peso; and 

 
 • 
the risk factors discussed under “Risk Factors.” 

The words “believe”, “may”, “will”, “aim”, “estimate”, “continue”,“anticipate”, “intend”, “expect”, “forecast”, “foresee”, “understand”, and similar words are intended to identify forward-looking statements. Forward-looking statements include informationconcerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition.Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this Form because of new information, future events or otherfactors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this Form might not occur and are not guarantees of future performance. 

 

5 

Table of Contents
**CERTAIN MEASUREMENTS AND TERMS**

As used throughout this annual report, the terms “Alto Palermo”, the “Company”, “we”, “us”, and“our” refer to Alto Palermo S.A. (APSA), together with our consolidated subsidiaries, except where we make clear that such terms refer only to the parent company. 

In Argentina the standard measure of area in the real estate market is the square meter (m2), while in the United States and certain other jurisdictions, thestandard measure of area is the square foot (sq. ft.). All units of area shown in this annual report (*e.g.*, gross leasable area of buildings and size of undeveloped land) are expressed in terms of square meters. One square meter is equal toapproximately 10.764 square feet. 

As used herein: “GLA or gross leasable area”, in the case of shopping centers,refers to the total leasable area of the property, regardless of our ownership interest in such property (excluding common areas and parking and space occupied by supermarkets, hypermarkets, gas stations and co-owners, except where specificallystated). 

**PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION**

In this annual report where we refer to “Peso,” “Pesos,” or “Ps.” we mean Argentine pesos, the lawful currencyin Argentina; when we refer to “U.S. dollars,” or “US$” we mean United States dollars, the lawful currency of the United States of America; and when we refer to “Central Bank” we mean the Argentine Central Bank.

This annual report contains our audited consolidated financial statements as of June 30, 2009 and 2008 and for the yearsended June 30, 2009, 2008 and 2007 (our consolidated financial statements). Our consolidated financial statements have been audited by Price Waterhouse & Co. S.R.L., Buenos Aires, Argentina, a member firm of PricewaterhouseCoopers, anindependent registered public accounting firm whose report is included herein. 

We prepare our consolidated financialstatements in Pesos and in conformity with generally accepted accounting principles in Argentina, as set forth by the *Federación Argentina de Consejos Profesionales de Ciencias Económicas* (“FACPCE”) and as implemented,adapted, amended, revised and/or supplemented by the *Consejo Profesional de Ciencias Económicas de la Ciudad Autónoma de Buenos Aires* (“CPCECABA”) (collectively, “Argentine GAAP”) and the regulations of the*Comisión Nacional de Valores* which differ in certain significant respects from generally accepted accounting principles in the United States of America (“U.S. GAAP”). Such differences involve methods of measuring the amountsshown in our consolidated financial statements, as well as additional disclosures required by U.S. GAAP and Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). See Note 19 to our consolidated financial statementscontained elsewhere in this annual report for a description of the principal differences between Argentine GAAP and U.S. GAAP, as they relate to us, and reconciliation to U.S. GAAP of net income and shareholders’ equity. 

Additionally, after considerable inflation levels for the second half of 2002 and the first months of 2003, on March 25, 2003, theArgentine government instructed the *Comisión Nacional de Valores* to issue the necessary regulations to preclude companies under its supervision from presenting price-level restated financial statements. Therefore, on April 8,2003, the *Comisión Nacional de Valores* issued a resolution providing for the discontinuance of inflation accounting as of March 1, 2003. We complied with the *Comisión Nacional de Valores* resolution and accordinglyrecorded the effects of inflation until February 28, 2003. Comparative figures were restated until that date, using a conversion factor of 1.1232. Since Argentine GAAP required companies to discontinue inflation adjustments only as ofOctober 1, 2003, the application of the *Comisión Nacional de Valores* resolution represented a departure from Argentine GAAP. However, due to low inflation rates during the period from March to September 2003, such a departure didnot have a material effect on our consolidated financial statements. 

Resolution CD 93/2005, issued by the CPCECABA providedfor the accounting treatment of differences between the tax basis and book basis of non-monetary items for deferred income tax calculation purposes when companies prepare price-level restated financial statements. This resolution mandated companiesto treat these

 

6 

Table of Contents
differences as temporary but allowed a one-time accommodation to continue treating those differences as permanent. As a result, we elected to continue treating differences as permanent. Inaddition, the new standards provided for the recognition of deferred income taxes on a non-discounted basis. 

Certain amountswhich appear in this annual report (including percentage amounts) may not sum due to rounding. Solely for the convenience of the reader, we have translated certain Peso amounts into U.S. dollars at the exchange rate quoted by the Central Bank forJune 30, 2009, which was Ps.3.797 = US$1.00. We make no representation that the Peso or U.S. dollar amounts actually represent or could have been or could be converted into U.S. dollars at the rates indicated, at any particular rate or at all.

References to fiscal years 2005, 2006, 2007, 2008 and 2009 are to the fiscal years ended June 30, 2005, 2006, 2007, 2008and 2009, respectively. 

**MARKET DATA**

Market data used throughout this annual report were derived from reports prepared by unaffiliated third-party sources. Such reportsgenerally state that the information contained therein has been obtained from sources believed by such sources to be reliable. Certain market data which appear herein (including percentage amounts) may not sum due to rounding. 

 

7 

Table of Contents
**PART I**

 
**ITEM 1.****Identity of Directors, Senior Management and Advisers**
This item is not applicable. 

 
**ITEM 2.****Offer Statistics and Expected Timetable**
This item is not applicable. 

 
**ITEM 3.****Key Information**
***A. Selected consolidated financial data***

The following selected consolidated financial data has been derived fromour audited consolidated financial statements as of the dates and for each of the periods indicated below. This information should be read in conjunction with and is qualified in its entirety by reference to our Audited Consolidated FinancialStatements and the discussion in Operating and Financial Review and Prospects included elsewhere in this annual report. The selected consolidated statement of operations data for the years ended June 30, 2009, 2008 and 2007 and the selectedconsolidated balance sheet data as of June 30, 2009 and 2008 have been derived from our Consolidated Financial Statements included in this annual report which have been audited by Price Waterhouse & Co. S.R.L., Buenos Aires, Argentina,a member firm of PricewaterhouseCoopers, an independent registered public accounting firm. 

The selected consolidatedstatement of income data for the years ended June 30, 2006 and 2005 and the selected consolidated balance sheet data as of June 30, 2007 and 2006 have been derived from our Audited Consolidated Financial Statements as of June 30, 2007and 2006 and for the years ended June 30, 2007, 2006 and 2005 which are not included herein. 

The selected consolidatedbalance sheet data as of June 30, 2005 has been derived from our Audited Consolidated Financial Statements as of June 30, 2006 and 2005 and for the years ended June 30, 2006, 2005 and 2004, which are not included herein. 

Certain reclassifications have been made to the Audited Consolidated Financial Statements as of June 30, 2007 and 2006 and for theyears ended June 30, 2007, 2006 and 2005, and to the audited consolidated financial statements as of June 30, 2006 and 2005 and for the years ended June 30, 2006, 2005 and 2004 in order to conform to the presentation of theConsolidated Financial Statements. 

The management of our subsidiary Tarshop S.A. (“Tarshop”) has reassessed themethod for allocating its expenses between “Costs”, “Selling expenses” and “Administrative expenses”. This change was made taking into account the expansion of the company’s commercial force driven by itscommercial strategy, which has led to an increase in the loan portfolio and in the number of branches. Consequently, as a result of a study mainly based on the distribution of the number of employees assigned to each task, expenses have beenallocated on the basis of that structure, which according to management projections and representations will be maintained in the future. Below is a detail of the captions affected at year end: 

 
   **As of June 30, 2008**  **As of June 30, 2007**  **As of June 30, 2006**  **As of June 30, 2005**   **As**