UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
COMPAÑIA CERVECERIAS UNIDAS S.A.
(Exact name of Registrant as specified in its charter)
UNITED BREWERIES COMPANY, INC.
(Translation of Registrant's name into English)
Republic of Chile
(Jurisdiction of incorporation or organization)
Vitacura 2670, Twenty-Third Floor, Santiago, Chile
(Address of principal executive offices)
_________________________________________
Securities registered or to be registered pursuant to section 12(b) of the Act.
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-FXForm 40-F ___
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 ___ NoX
Attached is a press release of the Company dated September 30, 2008
FOR IMMEDIATE RELEASE
For more information contact:
Rosita Covarrubias / Macarena Gili
Investor Relations Department
Compañía Cervecerías Unidas S.A.
www.ccu-sa.com
(56-2) 427-3581 or 427-3416
CONVERGENCE TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
(Santiago, Chile, September 30, 2008) In compliance with Oficio Circular N 457 of Superindendencia de Valores y Seguros (SVS), attached you will find the information regarding the adoption of the International Financial Reporting Standards (IFRS), as per the following detail:
- Main Accounting Policies applicable in IFRS.
- Entities Functional Currency.
- Net worth reconciliation as of December 31st, 2007. As requested in the Oficio Circular mentioned above, this is a preliminary estimate and variations to the figures informed could arise due to the complexity of matters involved.
- Main Accounting Policies applicable in IFRS
Compañía Cervecerías Unidas S.A. (CCU) and its affiliates will adopt all the International Financial Reporting Standards. With regards to the identified items in which the adoption could have effects, the Management has approved the following main accounting policies:
- Price level restatement:
- From then on the price level restatement will be discontinued for all non-monetary items
- Sales Account Receivables: acknowledgement in sales of the implicit interest considering specifically defined terms (IAS 39).
- Inventories: valued by absorption, without price level restatement, controlled on the basis of FIFO method (IAS 2).
- Advertising expenses not related to future services: to be charged as expenses in the Profit and Loss Statement (IAS 38).
- Expenses and discounts related to the funding obtainment: to be shown as a lower liability balance, applying the effective rate method.
- Fixed Assets: they are appraised according to the following criteria (IAS 16 and IFRS 1):
- Biological assets: to maintain the historic cost registration, as indicated on IAS 41.
- Business Combinations: the investments are to be valued as per the following (IFRS 1, IFRS 3):
- Goodwill: to maintain the book value, no further amortization and it is subject to impairment tests (IFRS 3).
- Negative Goodwill: to eliminate this record (IFRS 3).
- Brands: to adjust their value to historic cost, no further amortization and remain subject to impairment tests (IAS 38).
- Provisions for severance related to years of service: to adjust them based on actuarial studies (IAS 19).
- Bottles and containers collateral deposits: to maintain the criteria of adjusting the liability based on an estimate of bottles and containers in control of clients and final consumers. This issue remains pending of the final definition of the present discussions held at the IASB interpretation commission (IFRIC).
- Financial Assets and Liabilities: in general, financial investments are registered at fair value. In the future they will be classified in 3 groups, as stated in IAS 39, in accordance with the financial administration policies defined in each circumstance. With regards to derivatives, regardless of what can be defined for future operations, they will remain registered at fair value through profit and loss.
- Dividends payable: for reporting purposes, the minimum legal payable will be registered as liability.
- For the inception, the price level restatement booked in non-monetary assets and liabilities will be eliminated with the exception of what indicates IFRS 1 for fixed assets and intangible assets. Notwithstanding, the paid capital balance will remain with its price level restatement, considering that it has been legally capitalized.
- For the inception: book value and for land, specific appraisal.
- From then on, amortized cost.
- For existing investments: Accounting value as Fair value.
- For new investments: Acquisition method (fair value).
II. Entities functional currency
Compania Cervecerias Unidas S.A. performed the Entity Functional Currency analysis according to the International Accounting Standard N 21, The effects of change in foreign exchange rates, hereafter IAS 21.
Considering the application of the IAS 21 analysis, according to IFRS:
The currency of influence in the selling prices and product costing of CCU for it's companies in Chile, is the Chilean Peso for all analyzed businesses, thus being it it's Functional Currency. Moreover, for all the overseas companies, which are considered as an extension of its operations, the Functional Currency is the Chilean Peso.
The currency of influence in the selling prices and product costing of CCU for its companies in Argentina, is the Argentine Peso for all the businesses analyzed, being it's Functional Currency.
We inform here that we have our external auditors formal approval of the analysis performed with regards to the Functional Currency of Compania Cervecerias Unidas S.A. and affiliates. The auditors' review was based on information prepared by the Company.
III. Net worth reconciliation as of December 31st, 2007
ASSETS | Balance as of Dec 31st, 2007 Chilean GAAP |
Balance as of Dec 31st, 2007 Chilean GAAP-Functional Currency | MIGRATION TO IFRS EFFECT | IFRS BALANCE |
M$ | M$ | M$ | M$ | |
TOTAL CURRENT ASSETS | 334,405,228 | 334,379,508 | (3,948,325) | 330,431,182 |
Cash and cash equivalent | 116,768,826 | 116,768,826 | 0 | 116,768,826 |
Financial assets | 290,189 | 290,189 | 313,677 | 603,866 |
Accounts receivable-sales | 104,759,040 | 104,745,453 | (91,231) | 104,654,221 |
Accounts receivable-other | 15,300,735 | 15,300,544 | 0 | 15,300,544 |
Accounts receivable from related companies | 5,733,556 | 5,733,554 | 0 | 5,733,554 |
Inventories (net) | 77,380,594 | 77,407,498 | (2,913,938) | 74,493,560 |
Pre-paid taxes | 2,935,373 | 2,935,372 | 0 | 2,935,372 |
Deferred taxes | 1,582,061 | 1,582,061 | 1,759,575 | 3,341,635 |
Other current assets | 9,654,856 | 9,616,012 | (3,016,408) | 6,599,604 |
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TOTAL FIXED ASSETS | 393,980,914 | 380,374,121 | 41,254,683 | 421,628,804 |
Land | 20,200,877 | 19,465,259 | 83,499,108 | 102,964,367 |
Constructions and other infrastructure works | 113,067,071 | 107,582,329 | (2,038,000) | 105,544,329 |
Machinery and equipment | 303,358,773 | 283,193,658 | (27,299,508) | 255,894,151 |
Other fixed assets | 378,190,426 | 360,408,666 | (12,906,918) | 347,501,748 |
Increase arising from technical appraisal | 9,535,008 | 8,867,784 | 0 | 8,867,784 |
Depreciation (less) | (430,371,240) | (399,143,576) | 0 | (399,143,576) |
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TOTAL OTHER ASSETS | 98,230,345 | 91,353,807 | (9,375,331) | 81,978,475 |
Investment in unconsolidated affiliates | 31,525,454 | 31,477,626 | (58,109) | 31,419,517 |
Investment in other companies | 19,743 | 19,743 | 0 | 19,743 |
Goodwill | 29,709,060 | 25,025,930 | 0 | 25,025,930 |
Negative Goodwill (less) | (623,484) | (385,233) | 385,233 | 0 |
Accounts receivable-long term | 27,037 | 27,037 | 0 | 27,037 |
Accounts receivable from related companies-long term | 284,457 | 284,457 | 0 | 284,457 |
Deferred taxes-long term | 0 | 0 | 0 | 0 |
Intangibles (net) | 7,723,319 | 6,641,402 | (1,542,561) | 5,098,841 |
Other | 29,564,759 | 28,262,844 | (8,159,893) | 20,102,951 |
TOTAL ASSETS | 826,616,487 | 806,107,435 | 27,931,026 | 834,038,461 |
LIABILITIES AND SHAREHOLDERS' EQUITY | Balance as of Dec 31st, 2007 Chilean GAAP |
Balance as of Dec 31st, 2007 Chilean GAAP-Functional Currency | MIGRATION TO IFRS EFFECT | IFRS BALANCE |
M$ | M$ | M$ | M$ | |
TOTAL CURRENT LIABILITIES | 150,715,084 | 150,715,084 | 752,864 | 151,467,949 |
Short term borrowings-banks and financial institutions | 6,351,351 | 6,351,351 | 0 | 6,351,351 |
Dividend and bond payables short term portion | 19,673,340 | 19,673,340 | 0 | 19,673,340 |
Accounts payable | 60,370,067 | 60,370,067 | 0 | 60,370,067 |
Other payables | 6,557,196 | 6,557,196 | 0 | 6,557,196 |
Accounts payable to related companies | 3,443,606 | 3,443,606 | 0 | 3,443,606 |
Provisions and retentions | 48,231,585 | 48,231,585 | 752,864 | 48,984,449 |
Income tax | 5,085,117 | 5,085,117 | 0 | 5,085,117 |
Deferred taxes | 0 | 0 | 0 | 0 |
Other current liabilities | 1,002,824 | 1,002,824 |
| 1,002,824 |
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TOTAL LONG-TERM LIABILITIES | 219,511,210 | 219,511,210 | 7,838,987 | 227,350,197 |
Long term borrowings banks and financial institutions | 107,110,542 | 107,110,542 | (1,596,838) | 105,513,704 |
Bond payables long term portion | 55,973,638 | 55,973,638 | 125,235 | 56,098,872 |
Documents payable-long term | 1,393,209 | 1,393,209 | 0 | 1,393,209 |
Other payables-long term | 1,169,252 | 1,169,252 | 0 | 1,169,252 |
Long term accounts payable to related companies | 610,093 | 610,093 | 0 | 610,093 |
Long term provisions | 11,953,355 | 11,953,355 | 2,912,084 | 14,865,439 |
Deferred taxes-long term | 15,124,808 | 15,124,808 | 6,398,506 | 21,523,314 |
Other long term liabilities | 26,176,314 | 26,176,314 | 0 | 26,176,314 |
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MINORITY INTEREST | 54,594,332 | 52,104,201 | (457,361) | 51,646,841 |
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TOTAL SHAREHOLDERS' EQUITY | 401,795,860 | 383,776,940 | 19,796,535 | 403,573,475 |
Common Stock | 197,925,086 | 197,925,086 | 0 | 197,925,086 |
Equity price restatement reserve | 0 | 0 | 0 | 0 |
Share premium | 15,479,173 | 15,479,173 | 0 | 15,479,173 |
Other reserves | (21,788,821) | (21,788,821) | 0 | (21,788,821) |
Retained earnings | 210,180,422 | 192,161,501 | 19,796,535 | 211,958,036 |
Reserve for future dividends | 0 | 0 | 0 | 0 |
Accumulated profit | 145,950,841 | 127,931,920 | 19,796,535 | 147,728,455 |
Accumulated loss (less) | 0 | 0 | 0 | 0 |
Current year's profit (loss) | 79,199,216 | 79,199,216 | 0 | 79,199,216 |
Provisory dividend (less) | (14,969,635) | (14,969,635) | 0 | (14,969,635) |
Development period accumulated deficit | 0 | 0 | 0 | 0 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 826,616,487 | 806,107,435 | 27,931,026 | 834,038,461 |
Also, for presentation effects, the difference of the minimum required dividend to be paid will be reclassified of the equity, and it represents a total of M$8,790,133.
CCU is a diversified beverage company operating principally in Chile and Argentina. CCU is the largest Chilean brewer, the second-largest Argentine brewer, the third-largest Chilean soft drink producer, the second-largest Chilean wine producer, the largest Chilean mineral water producer, one of the largest pisco producers and also participates in the rum and confectionery industries in Chile. The Company has licensing agreements with Heineken Brouwerijen B.V., Anheuser-Busch Incorporated, PepsiCo Inc., Paulaner Brauerei AG, Schweppes Holdings Limited, Guinness Brewing Worldwide Limited and Société des Produits Nestlé S.A. For more information, visit www.ccu-sa.com.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Compañía Cervecerías Unidas S.A.
(United Breweries Company, Inc.)
/s/ Ricardo Reyes
Chief Financial Officer
Date: September 30, 2008