UNITED STATES
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
February 2014
Date of Report (Date of Earliest Event Reported)
Embotelladora Andina S.A.
(Exact name of registrant as specified in its charter)
Andina Bottling Company, Inc.
(Translation of Registrant´s name into English)
Avda. Miraflores 9153
Renca
Santiago, Chile
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x |
| Form 40-F o |
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes o |
| No x |
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes o |
| No x |
Indicate by check mark whether the registrant by furnishing the information contained in this Form 6-K 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 |
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Financial Position
At December, 31 2013 and 2012
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Financial Position
REPORT OF INDEPENDENT AUDITORS
Santiago February 27, 2014
To Shareholders and Directors
Embotelladora Andina S.A.
We have audited the accompanying consolidated financial statements of Embotelladora Andina S.A. and subsidiaries, which comprise the consolidated statement of financial position as of December 31, 2013, and the consolidated statements of changes in equity and the consolidated statements of cash flows for the year then ended and the related notes to the consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in conformity with International Financial Reporting Standards; . this includes the design, implementation and maintenance of an internal control relevant to the preparation and fair presentation of consolidated financial statements that are free of material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in Chile. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Embotelladora Andina S.A. and subsidiaries as of December 31, 2013, and the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
Other matter
The Financial Statements of Embotelladora Andina S.A. and its subsidiaries for the year ended December 31, 2012 were audited by other auditors who issued their report without any observations on February 28, 2013.
Eduardo Vergara D. |
| PRICEWATERHOUSE COOPERS |
ID:6.810.153-0 |
|
|
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Financial Position
At December 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
ASSETS |
| NOTE |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
| 5 |
| 79,976,126 |
| 55,522,255 |
|
Other financial assets |
| 6 |
| 36,471,637 |
| 128,581 |
|
Other non-financial assets |
| 7.1 |
| 9,695,804 |
| 18,202,838 |
|
Trade and other receivable |
| 8 |
| 195,434,075 |
| 152,816,916 |
|
Accounts receivable from related parties |
| 12.1 |
| 8,028,987 |
| 5,324,389 |
|
Inventories |
| 9 |
| 125,853,991 |
| 89,319,826 |
|
Current income tax assets |
| 10.1 |
| 3,989,697 |
| 2,879,393 |
|
Total current assets excluding assets held for sale |
|
|
| 459,450,317 |
| 324,194,198 |
|
Non-current assets held for sale |
|
|
| 1,133,769 |
| 2,977,969 |
|
Total Current Assets |
|
|
| 460,584,086 |
| 327,172,167 |
|
|
|
|
|
|
|
|
|
Non-Current Assets:: |
|
|
|
|
|
|
|
Other financial assets |
| 6 |
| 7,922,287 |
| — |
|
Other non-financial assets |
| 7.2 |
| 28,796,153 |
| 26,927,090 |
|
Trade and other receivable |
| 8 |
| 7,631,253 |
| 6,724,077 |
|
Accounts receivable from related parties |
| 12.1 |
| 18,765 |
| 7,197 |
|
Investments under equity method of accounting |
| 14.1 |
| 68,673,399 |
| 73,080,061 |
|
Intangible assets other than goodwill |
| 15.1 |
| 700,606,492 |
| 464,582,273 |
|
Goodwill |
| 15.2 |
| 115,779,067 |
| 64,792,741 |
|
Property, plant and equipment |
| 11.1 |
| 692,949,808 |
| 576,550,725 |
|
Total Non-Current Assets |
|
|
| 1,622,377,224 |
| 1,212,664,164 |
|
Total Assets |
|
|
| 2,082,961,310 |
| 1,539,836,331 |
|
The accompanying notes 1 to 30 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Financial Position
At December 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
LIABILITIES AND EQUITY |
| NOTE |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 16 |
| 106,877,255 |
| 106,248,019 |
|
Trade and other accounts payable |
| 17 |
| 210,446,298 |
| 184,317,773 |
|
Accounts payable to related parties |
| 12.2 |
| 43,425,287 |
| 32,727,212 |
|
Provisions |
| 18 |
| 269,906 |
| 593,457 |
|
Income tax payable |
| 10.2 |
| 3,679,057 |
| 1,114,810 |
|
Other non-financial liabilities |
| 19 |
| 37,446,336 |
| 20,369,549 |
|
Total Current Liabilities |
|
|
| 402,144,139 |
| 345,370,820 |
|
|
|
|
|
|
|
|
|
Non-Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 16 |
| 605,362,059 |
| 173,880,195 |
|
Trade and other payables |
|
|
| 1,262,043 |
| 1,930,233 |
|
Provisions |
| 18 |
| 77,542,388 |
| 6,422,811 |
|
Deferred income tax liabilities |
| 10.4 |
| 105,537,484 |
| 111,414,626 |
|
Post-employment benefit liabilities |
| 13.3 |
| 8,758,111 |
| 7,037,122 |
|
Other non-financial liabilities |
| 19 |
| 922,498 |
| 175,603 |
|
Total Non-Current Liabilities |
|
|
| 799,384,583 |
| 300,860,590 |
|
|
|
|
|
|
|
|
|
Equity: |
| 20 |
|
|
|
|
|
Issued capital |
|
|
| 270,737,574 |
| 270,759,299 |
|
Treasury shares |
|
|
| — |
| (21,725 | ) |
Retained earnings |
|
|
| 243,192,801 |
| 239,844,662 |
|
Other reserves |
|
|
| 346,738,667 |
| 363,581,513 |
|
Equity attributable to equity holders of the parent |
|
|
| 860,669,042 |
| 874,163,749 |
|
Non-controlling interests |
|
|
| 20,763,546 |
| 19,441,172 |
|
Total Equity |
|
|
| 881,432,588 |
| 893,604,921 |
|
Total Liabilities and Equity |
|
|
| 2,082,961,310 |
| 1,539,836,331 |
|
The accompanying notes 1 to 30 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Income by Function
For the years ended December 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
| 01.01.2013 |
| 01.01.2012 |
|
ESTADO DE RESULTADOS |
| NOTE |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Net sales |
|
|
| 1,521,681,335 |
| 1,172,292,817 |
|
Cost of sales |
|
|
| (914,817,748 | ) | (698,955,215 | ) |
Gross Profit |
|
|
| 606,863,587 |
| 473,337,602 |
|
Other income, by function |
| 24 |
| 6,434,020 |
| 3,265,998 |
|
Distribution expenses |
|
|
| (163,022,685 | ) | (122,818,941 | ) |
Administrative expenses |
|
|
| (272,556,438 | ) | (196,355,000 | ) |
Other expenses, by function |
| 25 |
| (30,462,097 | ) | (15,420,008 | ) |
Other gains |
| 27 |
| 740,373 |
| (2,336,215 | ) |
Finance income |
| 26 |
| 4,973,312 |
| 2,728,059 |
|
Finance costs |
| 26 |
| (28,944,023 | ) | (11,172,753 | ) |
Share of profit of investments using equity method of accounting |
| 14.3 |
| 783,418 |
| 1,769,898 |
|
Foreign exchange differences |
|
|
| (7,694,834 | ) | (4,471,031 | ) |
Loss from differences in indexed financial assets and liabilities |
|
|
| (3,881,145 | ) | (1,753,801 | ) |
Net income before income taxes |
|
|
| 113,233,488 |
| 126,773,808 |
|
Income tax expense |
| 10.3 |
| (22,966,264 | ) | (38,504,636 | ) |
Net income |
|
|
| 90,267,224 |
| 88,269,172 |
|
|
|
|
|
|
|
|
|
Net income attributable to: |
|
|
|
|
|
|
|
Equity holders of the parent |
|
|
| 88,982,678 |
| 87,636,961 |
|
Non-controlling interests |
|
|
| 1,284,546 |
| 632,211 |
|
Net income |
|
|
| 90,267,224 |
| 88,269,172 |
|
Earnings per Share, basic and diluted |
|
|
| Ch$ |
| Ch$ |
|
Earnings per Series A Share |
| 20.5 |
| 89.53 |
| 104.12 |
|
Earnings per Series B Share |
| 20.5 |
| 98.48 |
| 114.53 |
|
The accompanying notes 1 to 30 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
| 01.01.2013 |
| 01.01.2012 |
|
|
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Net income |
| 90,267,224 |
| 88,269,172 |
|
Other Comprehensive Income; |
|
|
|
|
|
Components of other comprehensive income that are not re-measured to net income for the period, before taxes |
|
|
|
|
|
Actuarial gains (losses) from defined benefit plans |
| (1,411,030 | ) | — |
|
Components of other comprehensive income that will be re-measured to net income for the period, before taxes |
|
|
|
|
|
Gains (losses) from exchange rate translation differences |
| (18,877,527 | ) | (42,186,310 | ) |
Gains (losses) from cash flow hedging |
| 2,961,146 |
| — |
|
Income tax related to components of other comprehensive income that are not re-measured to net income for the period |
|
|
|
|
|
Income tax related to defined benefit plans |
| 282,206 |
| — |
|
Income tax related to components of other comprehensive income that will be re-measured to net income for the period |
|
|
|
|
|
Income tax related to exchange rate translation differences |
| 1,096,509 |
| 1,089,225 |
|
Income tax related to cash flow hedging |
| (703,002 | ) | — |
|
Total comprehensive income |
| 73,615,526 |
| 47,172,087 |
|
Total comprehensive income attributable to: |
|
|
|
|
|
Equity holders of the parent |
| 72,139,832 |
| 46,541,295 |
|
Non-controlling interests |
| 1,475,694 |
| 630,792 |
|
Total comprehensive income |
| 73,615,526 |
| 47,172,087 |
|
The accompanying notes 1 to 30 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
for the years ended December 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||||
|
| Issued capital |
| Treasury |
| Translation |
| Cash flow |
| Actuarial gains or |
| Other |
| Total |
| Retained |
| Controlling Equity |
| Non-Controlling |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance at 01.01.2013 |
| 270,759,299 |
| (21,725 | ) | (63,555,545 | ) | — |
| — |
| 427,137,058 |
| 363,581,513 |
| 239,844,662 |
| 874,163,749 |
| 19,441,172 |
| 893,604,921 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| 88,982,678 |
| 88,982,678 |
| 1,284,546 |
| 90,267,224 |
|
Other comprehensive income |
| — |
| — |
| (17,972,166 | ) | 2,258,144 |
| (1,128,824 | ) | — |
| (16,842,846 | ) | — |
| (16,842,846 | ) | 191,148 |
| (16,651,698 | ) |
Comprehensive income |
| — |
| — |
| (17,972,166 | ) | 2,258,144 |
| (1,128,824 | ) | — |
| (16,842,846 | ) | 88,982,678 |
| 72,139,832 |
| 1,475,694 |
| 73,615,526 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| (85,634,539 | ) | (85,634,539 | ) | (153,320 | ) | (85,787,859 | ) |
Decrease of Capital |
| (21,725 | ) | 21,725 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Total changes in equity |
| (21,725 | ) | 21,725 |
| (17,972,166 | ) | 2,258,144 |
| (1,128,824 | ) | — |
| (16,842,846 | ) | 3,348,139 |
| (13,494,707 | ) | 1,322,374 |
| (12,172,333 | ) |
Ending balance at 12.31.2013 |
| 270,737,574 |
| — |
| (81,527,711 | ) | 2,258,144 |
| (1,128,824 | ) | 427,137,058 |
| 346,738,667 |
| 243,192,801 |
| 860,669,042 |
| 20,763,546 |
| 881,432,588 |
|
|
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||||
|
| Issued capital |
| Treasury |
| Translation |
| Cash flow |
| Actuarial gains or |
| Other |
| Total |
| Retained |
| Controlling Equity |
| Non-Controlling |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance at 01.01.2012 |
| 230,892,178 |
| — |
| (22,459,879 | ) | — |
| — |
| 5,435,538 |
| (17,024,341 | ) | 208,102,068 |
| 421,969,905 |
| 9,015 |
| 421,978,920 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| 87,636,961 |
| 87,636,961 |
| 632,211 |
| 88,269,172 |
|
Other comprehensive income |
| — |
| — |
| (41,095,666 | ) | — |
| — |
| — |
| (41,095,666 | ) | — |
| (41,095,666 | ) | (1,419 | ) | (41,097,085 | ) |
Comprehensive income |
| — |
| — |
| (41,095,666 | ) | — |
| — |
| — |
| (41,095,666 | ) | 87,636,961 |
| 46,541,295 |
| 630,792 |
| 47,172,087 |
|
Dividends |
| 39,867,121 |
| — |
| — |
| — |
| — |
| — |
| — |
|
|
| 39,867,121 |
| — |
| 39,867,121 |
|
Increase (decrease) through transactions in own shares |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| (55,894,367 | ) | (55,894,367 | ) | — |
| (55,894,367 | ) |
Equity Issuance —Polar acquisition |
| — |
| — |
| — |
| — |
| — |
| 421,701,520 |
| 421,701,520 |
| — |
| 421,701,520 |
| 18,801,365 |
| 440,502,885 |
|
Purchase of treasury-stock |
| — |
| (21,725 | ) | — |
| — |
| — |
| — |
| — |
| — |
| (21,725 | ) | — |
| (21,725 | ) |
Total changes in equity |
| 39,867,121 |
| (21,725 | ) | (41,095,666 | ) | — |
| — |
| 421,701,520 |
| 380,605,854 |
| 31,742,594 |
| 452,193,844 |
| 19,432,157 |
| 471,626,001 |
|
Ending balance at 12.31.2012 |
| 270,759,299 |
| (21,725 | ) | (63,555,545 | ) | — |
| — |
| 427,137,058 |
| 363,581,513 |
| 239,844,662 |
| 874,163,749 |
| 19,441,172 |
| 893,604,921 |
|
The accompanying notes 1 to 30 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
| 01.01.2013 |
| 01.01.2012 |
|
Cash flows provided by (used in) Operating Activities |
| NOTE |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash flows provided by Operating Activities |
|
|
|
|
|
|
|
Receipts from customers (including taxes) |
|
|
| 1,954,744,395 |
| 1,557,595,968 |
|
Receipts from premiums and claims, annuities and other policy benefits benefits |
|
|
| 77,300 |
| — |
|
Payments to Operating Activities |
|
|
|
|
|
|
|
Payments to suppliers for goods and services (including taxes) |
|
|
| (1,349,009,473 | ) | (1,038,437,026 | ) |
Payments to employees |
|
|
| (153,571,748 | ) | (109,386,885 | ) |
Other payments for operating activities (value-added taxes on purchases and sales and others) |
|
|
| (222,218,717 | ) | (188,266,514 | ) |
Dividends received |
|
|
| 2,085,031 |
| 725,000 |
|
Interest payments |
|
|
| (23,319,351 | ) | (7,608,496 | ) |
Interest received |
|
|
| 3,295,309 |
| 1,874,032 |
|
Income tax payments |
|
|
| (33,410,166 | ) | (23,229,558 | ) |
Other cash movements |
|
|
| (6,587,855 | ) | (4,409,721 | ) |
Net cash flows generated from Operating Activities Flujos de efectivo netos procedentes de actividades de operación |
|
|
| 172,084,725 |
| 188,856,800 |
|
|
|
|
|
|
|
|
|
Cash flows generated from (used in) Investing Activities |
|
|
|
|
|
|
|
Cash flows from the sale of equity investees (sale of investment in Leao Alimentos e Bebidas Ltd.) |
|
|
| 3,704,831 |
| — |
|
Cash flows used in the purchase of non-controlling interests (Purchase 40% Sorocaba Refrescos) |
|
|
| — |
| (35,877,240 | ) |
Cash flows used to obtain control of subsidiaries or other businesses (Purchase Compañía de Bebidas Ipiranga) |
|
|
| (261,244,818 | ) | — |
|
Cash flows from change in controls of subsidiaries and others (Capital decrease in Envases CMF S.A.) |
|
|
| — |
| 1,150,000 |
|
Proceeds from sale of property, plant and equipment |
|
|
| 6,861,329 |
| 611,634 |
|
Purchase of property, plant and equipment |
|
|
| (183,697,386 | ) | (143,763,670 | ) |
Proceeds from other long term assets (term deposits over 90 days) |
|
|
| 19,423,100 |
| 14,864,854 |
|
Purchase of other long term assets (term deposits over 90 days) |
|
|
| (52,076,837 | ) | (1,455,348 | ) |
Payments on forward, term, option and financial exchange agreements |
|
|
| (873,453 | ) | (1,360,880 | ) |
Receipts from forward, term, option and financial exchange agreements |
|
|
| 11,216,678 |
| 881,832 |
|
Other cash movements |
|
|
| 9,137,035 |
| 8,778,615 |
|
Net cash flows used in Investing Activities |
|
|
| (447,549,521 | ) | (156,170,203 | ) |
|
|
|
|
|
|
|
|
Cash Flows generated from (used in) Financing Activities |
|
|
|
|
|
|
|
Proceeds from long-term loans obtained |
|
|
| — |
| 61,053,312 |
|
Proceeds from short-term loans obtained |
|
|
| 246,038,498 |
| 197,968,578 |
|
Total loan proceeds |
|
|
| 246,038,498 |
| 259,021,890 |
|
Loans payments |
|
|
| (266,229,556 | ) | (188,693,538 | ) |
Payments of finance lease liabilities |
|
|
| (1,959,307 | ) | (16,438 | ) |
Purchase of treasury shares |
|
|
| — |
| (21,725 | ) |
Dividend payments by the reporting entity |
|
|
| (73,041,053 | ) | (69,766,002 | ) |
Other inflows (outflows) of cash (Placement and payment of capital quotas of public liabilities) |
|
|
| 398,297,274 |
| (4,075,171 | ) |
Net cash flows generated by (used in) Financing Activities |
|
|
| 303,105,856 |
| (3,550,984 | ) |
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents before exchange differences |
|
|
| 27,641,060 |
| 29,135,613 |
|
|
|
|
|
|
|
|
|
Effects of exchange differences on cash and cash equivalents |
|
|
| (3,187,189 | ) | (4,911,280 | ) |
Net decrease in cash and cash equivalents |
|
|
| 24,453,871 |
| 24,224,333 |
|
Cash and cash equivalents — beginning of year |
| 5 |
| 55,522,255 |
| 31,297,922 |
|
Cash and cash equivalents - end of year |
| 5 |
| 79,976,126 |
| 55,522,255 |
|
The accompanying notes 1 to 30 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Notes to the Consolidated Interim Financial Statements
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2
NOTE 1 - CORPORATE INFORMATION
Embotelladora Andina S.A. is registered under No. 00124 of the Securities Registry and is regulated by the Chilean Superintendence of Securities and Insurance (SVS) pursuant to Law 18.046.
The principal activities of Embotelladora Andina S.A. (hereafter “Andina,” and together with its subsidiaries, the “Company”) are to produce and sell Coca-Cola products and other Coca-Cola beverages. After the merger and recent acquisitions, the Company has operations in Chile, Brazil, Argentina and Paraguay. In Chile, the geographic areas in which the Company has distribution franchises are regions II, III, IV, XI, XII, Metropolitan Region, Rancagua and San Antonio. In Brazil, the Company has distribution franchises in the states of Rio de Janeiro, Espírito Santo, Niteroi, Vitoria, Nova Iguaçu, part of Sao Paulo and part of Minas Gerais. In Argentina, the Company has distribution franchises in the provinces of Mendoza, Córdoba, San Luis, Entre Ríos, Santa Fe, Rosario, Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro, La Pampa and the western zone of the Province of Buenos Aires. In Paraguay the franchised territory coveres the whole country.
The Company has distribution licenses from The Coca-Cola Company in all of its territories: Chile, Brasil, Argentina and Paraguay. The licenses for the territories in Chile expire in 2014 and 2018; in Argentina expire in 2017; in Brazil expire in 2017; and in Paraguay expire in 2014. All these licenses are issued at The Coca-Cola Company´s discretion. The Company currently expects that these licenses will be renewed with similar terms and conditions upon expirations.
As of December 31, 2013, the Freire Group and its related companies hold 55.68% of the outstanding shares with voting rights, corresponding to the Series A shares.
The head office of Embotelladora Andina S.A. is located on Miraflores 9153, municipality of Renca, Santiago, Chile. Its taxpayer identification number is 91.144.000-8.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Periods covered
These consolidated financial statements encompass the following periods:
Consolidated statements of financial position: For the years ended at December 31, 2013 and December 31, 2012.
Consolidated statements of income by function and comprehensive income: For the years ended at December 31, 2013 and 2012.
Consolidated statements of cash flows: For the years ended at December 31, 2013 and 2012 , using de “direct method”.
Consolidated statements of changes in equity: For the years ended at December 31, 2013 and 2012.
Rounding: The consolidated financial statements are presented in thousands of Chilean pesos and all values are rounded to the nearest thousand, except where otherwise indicated.
2.2 Basis of preparation
The Company’s Consolidated Financial Statements for the years ended December 31, 2013, and December 31, 2012 were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (hereinafter “IASB”).
These financial statements comprise the consolidated statements of financial position of Embotelladora Andina S.A. and its subsidiaries as of December 31, 2013 and 2012, consolidated statements of income by function, consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows in Spanish language, for the periods ended December 31, 2013 and 2012, which were approved by the Board of Directors during their meeting held on February 27, 2013.
For the convenience of the reader, these consolidated financial statements have been translated from Spanish to English.
These Consolidated Financial Statements have been prepared based on accounting records kept by the Parent Company and other entities forming part thereof. Each entity prepares its financial statements following the accounting principles and standards applicable in each country, adjustments and reclassifications have been made, as necessary, in the consolidation process to align such principles and standards to be in accordance with IFRS.
2.3 Basis of consolidation
2.3.1 Subsidiaries
The consolidated statements of financial position incorporate the financial statements of the Company and the companies controlled by the Company (its subsidiaries). Control is obtained when the Company has power over the investee, when it has exposure or is entitled to variable yields from its involvement in the investee and when it has the ability to use its power to influence the amount of investor yields. They include assets and liabilities as of December 31, 2013 and 2012 and results of operations and cash flows for the years ended December 31, 2013 and 2012. Income or losses from subsidiaries acquired or sold are included in the consolidated financial statements from the effective date of acquisition through to the effective date of disposal, as applicable.
The acquisition method is used to account for the acquisition of subsidiaries. The acquisition cost is the fair value of assets, equity securities and liabilities incurred or assumed on the date that control is obtained. Identifiable assets acquired and identifiable liabilities and contingencies assumed in a business combination are accounted for initially at their fair values at the acquisition date. Goodwill is initially measured as the excess of the aggregate of the acquisition cost and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.
Intercompany transactions, balances, income, expenses and unrealized gains and losses on transactions between Group companies are eliminated. Accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the Company, where necessary.
The interest of non-controlling shareholders is presented under equity and consolidated income statements by function, in the items “Non-Controlling Interest” and Earnings attributable to non-controlling interests”, respectively.
The consolidated financial statements include all assets, liabilities, income, expenses, and cash flows after eliminating intercompany balances and transactions.
The list of subsidiaries included in the consolidation is detailed as follows:
|
|
|
| Holding control (percentage) |
| ||||||||||
|
|
|
| 12-31-2013 |
| 12-31-2012 |
| ||||||||
Taxpayer ID |
| Name of the Company |
| Direct |
| Indirect |
| Total |
| Direct |
| Indirect |
| Total |
|
59.144.140-K |
| Abisa Corp S.A. |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
Foreign |
| Aconcagua Investing Ltda. |
| 0.71 |
| 99.28 |
| 99.99 |
| 0.71 |
| 99.28 |
| 99.99 |
|
96.842.970-1 |
| Andina Bottling Investments S.A. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
96.972.760-9 |
| Andina Bottling Investments Dos S.A. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
Foreign |
| Andina Empaques Argentina S.A. |
| — |
| 99.98 |
| 99.98 |
| — |
| 99.98 |
| 99.98 |
|
96.836.750-1 |
| Andina Inversiones Societarias S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
76.070.406-7 |
| Embotelladora Andina Chile S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
Foreign |
| Embotelladora del Atlántico S.A. (1) |
| 0.92 |
| 99.07 |
| 99.99 |
| — |
| 99.98 |
| 99.98 |
|
Foreign |
| Coca Cola Polar Argentina S.A. (1) |
| — |
| — |
| — |
| 5.00 |
| 94.99 |
| 99.99 |
|
96.705.990-0 |
| Envases Central S.A. |
| 59.27 |
| — |
| 59.27 |
| 59.27 |
| — |
| 59.27 |
|
96.971.280-6 |
| Inversiones Los Andes Ltda. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
Foreign |
| Paraguay Refrescos S.A. |
| 0.08 |
| 97.75 |
| 97.83 |
| 0.08 |
| 97.75 |
| 97.83 |
|
76.276.604-3 |
| Red de Transportes Comerciales Ltda.(2) |
| 99.90 |
| 0.09 |
| 99.99 |
| — |
| — |
| — |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
78.536.950-5 |
| Servicios Multivending Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
78.775.460-0 |
| Sociedad de Transportes Trans-Heca Limitada.(2) |
| — |
| 99.99 |
| 99.99 |
| — |
| — |
| — |
|
78.861.790-9 |
| Transportes Andina Refrescos Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
76.389.720-6 |
| Vital Aguas S.A. |
| 66.50 |
| — |
| 66.50 |
| 66.5 |
| — |
| 66.50 |
|
96.845.500-0 |
| Vital Jugos S.A. |
| 15.00 |
| 50.00 |
| 65.00 |
| 15.00 |
| 50.00 |
| 65.00 |
|
(1) On January 1, 2013, Embotelladora del Atlántico S.A absorbed Coca-Cola Polar Argentina S.A.
(2) Corresponds to Chilean companies constituted to reorganize the distribution process in Chile, in parts of Santiago and the Rancagua region. Total assets of both companies at December 31, 2013 amounts to ThCh$954,091.
2.3.2 Investments under equity method of accounting
Associates are all entities over which the Company exercises significant influence but does not have control. Investments in associates are accounted for using the equity method of accounting.
The Company’s share in profit or loss in associates subsequent to the acquisition date is recognized in the income statement.
Unrealized gains in transactions between the Company and its associates are eliminated to the extent of the Company´s interests in those associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment on the asset transferred. Accounting policies of the associates are changed, where necessary, to ensure conformity with the policies adopted by the Company.
2.4 Financial reporting by operating segment
IFRS 8 requires that entities disclose information on the results of operating segments. In general, this is information that Management and the Board of Directors use internally to assess performance of segments and allocate resources to them. Therefore, the following operating segments have been determined based on geographic location:
· Chilean operations
· Brazilian operations
· Argentine operations
· Paraguayan operations
2.5 Foreign currency translation
2.5.1 Functional currency and presentation currency
Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Chilean pesos, which is the parent company’s functional currency and the Company´s presentation currency.
2.5.2 Balances and transactions
Foreign currency transactions are translated into the functional currency using the foreign exchange rates prevailing on the dates of the transactions. Losses and gains in foreign currency resulting from the liquidation of these transactions and the translation at the closing exchange rate of monetary assets and liabilities denominated in foreign currency are recognized in the income statements by function under the exchange rate difference account, except when they correspond to cash flow hedging; in which case they are presented in the comprehensive income statement.
The exchange rates at the close of each of the periods presented were as follows:
|
| Exchange rate to the Chilean peso |
| ||||||||||
Date |
| US$ |
| R$ Brazilian |
| A$ Argentine |
| UF ¨Unidad de |
| Paraguayan |
| € |
|
12.31.2013 |
| 524.61 |
| 223.94 |
| 80.45 |
| 23,309.56 |
| 0.1144 |
| 724.30 |
|
12.31.2012 |
| 479.96 |
| 234.87 |
| 97.59 |
| 22,840.75 |
| 0.1100 |
| 634.45 |
|
2.5.3 Translation of foreign subsidiaries
The financial position and results of all entities in the Company (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(i) Assets and liabilities for each statement of financial position are translated at the closing exchange rate as of the reporting date;
(ii) Income and expenses of each income statement are translated at average exchange rates for the period; and
(iii) All resulting translation differences are recognized in other comprehensive income.
The companies that have a functional currency different from the presentation currency of the parent company are:
Company |
| Functional currency |
Rio de Janeiro Refrescos Ltda. (Brazil Segment) |
| R$ Brazilian Real |
Embotelladora del Atlántico S.A. (Argentina Segment) |
| A$ Argentine Peso |
Andina Empaques Argentina S. A. (Argentina Segment) |
| A$ Argentine Peso |
Paraguay Refrescos S. A. (Paraguay Segment) |
| G$ Paraguayan Guaraní |
In the consolidation, the translation differences arising from the translation of a net investment in foreign entities are recognized in other comprehensive income. Exchange differences from accounts receivable which are considered to be part of an equity investment are recognized as comprehensive income net of deferred taxes, if applicable. On disposal of the investment, such translation differences are recognized in the income statement as part of the gain or loss on the disposal of the investment.
2.6 Property, plant, and equipment
Assets included in property, plant and equipment are recognized at their historical cost or fair value on IFRS transition date, less depreciation and cumulative impairment losses.
Historical cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items less government subsidies resulting from the difference between market interest rates and the government´s preferential credit rates. Historical cost also includes revaluations and price-level restatement of opening balances (attributable cost) at January 1, 2009, in accordance with exemptions in IFRS 1.
Subsequent costs are included in the asset´s carrying amount or recognized as a separate asset only when it is probable that future economic benefits associated with the items of property, plant and equipment will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The other repairs and maintenance are charged to the income statement in the reporting period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives.
The estimated useful lives by asset category are:
Assets |
| Range in years |
|
Buildings | 30-50 |
| |
Plant and equipment |
| 10-20 |
|
Warehouse installations and accessories |
| 10-30 |
|
Other accessories |
| 4-5 |
|
Motor vehicles |
| 5-7 |
|
Other property, plant and equipment |
| 3-8 |
|
Bottles and containers |
| 2-8 |
|
The residual value and useful lives of assets are reviewed and adjusted at the end of each reporting period, if appropriate.
When the value of an asset is greater than its estimated recoverable amount, the value is written down immediately to its recoverable amount.
Gains and losses on disposals of property, plant, and equipment are calculated by comparing the proceeds to the carrying amount and are charged to the income statement.
Items that are available for sale, and comply with the conditions of IFRS 5 “Non-current assets held for sale and discontinued operations” are separated from property, plant and equipment and are presented within current assets at the lower value between the book value and its fair value less selling costs.
2.7 Intangible assets and Goodwill
2.7.1 Goodwill
Goodwill represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the net identifiable assets of the subsidiary and the fair value of the non-controlling interest in the subsidiary on the acquisition date. Goodwill is recognized separately and tested annually for impairment. Goodwill is carried at cost less accumulated impairment losses.
Gains and losses on the sale of an entity include the carrying amount of goodwill related to that entity.
Goodwill is assigned to each cash generating unit (CGU) or group of cash-generating units; from where it is expected to benefit from the synergies arising from the business combination. Such CGUs or groups of cash-generating units represent the lowest level of the Organization, on which Administration controls its internal management.
2.7.2 Distribution rights
Distribution rights are contractual rights to produce and distribute products under the Coca-Cola brand in certain territories in Argentina, Brazil, Chile and Paraguay which were acquired during the Business Combination. Distribution rights have an indefinite useful life and are not amortized, as the Company believes that the agreements will be renewed indefinitely by the Coca-Cola Company with similar terms and conditions. They are subject to impairment tests on an annual basis..
2.7.3 Software
Correspond to internal and external software development, which are capitalized as they demonstrate the associated future benefits. The mentioned software are amortized in a period of four years.
2.8 Impairment losses
Assets that have an indefinite useful life, such as intangibles related to distribution rights and goodwill, are not amortized and are tested annually for impairment. Assets that are subject to amortization are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying value of the asset exceeds its recoverable amount. The recoverable amount is the greater of an asset’s fair value less costs to sell or its value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets, different from goodwill that would have suffered an impairment loss undergo this review annually or when there is evidence of the existence of a possible impairment.
2.9 Financial assets
The Company classifies its financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
2.9.1 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired principally for the purpose of selling in the short term. Assets in this category are classified as current assets.
Gains or losses from changes in fair value of financial assets at fair value through profit and loss are recognized in the income statement under finance income or expenses during the year in which they incur.
2.9.2 Loans and receivables
Loans and receivables are not quoted in an active market. They are included in current assets, unless they are due more than 12 months from the reporting date, in which case they are classified as non-current assets. Loans and receivables are included in trade and other receivables in the consolidated statement of financial position and they are recorded at their amortized cost. Loans and accounts receivable are financial assets with fixed and determinable payments that are not quoted on an active market.
2.9.3 Financial assets held to maturity
Other financial assets corresponds to bank deposits that the Company’s management has the positive intention and ability to hold until their maturity. They are recorded in current assets because they mature in less than 12 months from the reporting date and are presented at their amortized cost, less impairment.
Accrued interest is recognized in the consolidated income statement under finance income during the year in which it occurs.
2.10 Derivatives financial instruments and hedging activities
The Company uses derivative financial instruments to mitigate the risks relating to changes in foreign currency and exchange rates associated with, raw materials, property, planta and equipment and loan obligations.
The method to recognize the resulting loss or gain, depends on whether the derivative has been designated as a hedging instrument. Within the consolidated statement of financial position these instruments are classified within current and non-current assets and liabilities, depending on the nature of the hedged items.
2.10.1 Derivative financial instruments designated for hedging
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recorded in aseets, liabilities and equity, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
2.10.2 Derivative financial instruments not designated for hedging
Derivatives are accounted for at fair value. If positive, they are recorded under “other current financial assets��. If negative, they are recorded under “other current financial liabilities.”
The Company’s derivatives agreements do not qualify for hedge accounting pursuant to IFRS requirements. Therefore, the changes in fair value are immediately recognized in the income statement under “other income and losses”
The Company does not use hedge accounting for its foreign investments.
The Company also evaluates the existence of derivatives implicitly in financial instrument contracts to determine whether their characteristics and risks are closely related to the master agreement, as stipulated by IAS 39.
Fair value hierarchy
The Company records an asset and liabilities as of December 31, 2013 and 2012 based on its derivative foreign exchange contracts, and these are classified within the other financial assets (current assets and non-current) and other current financial liabilities (current and non-current financial liabilities), respectively. These contracts are carried at fair value in the statement of financial position. The Company uses the following hierarchy for determining and disclosing financial instruments at fair value by valuation method:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the assets or liabilities that are not based on information observable market data.
During the period ended December 31, 2013, there were no transfers of items between fair value measurement categories; all of which were valued during the period using Level 2.
2.11 Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method. The cost of finished goods and of work in progress includes raw materials, direct labor, other direct costs and manufacturing overhead (based on operating capacity) to bring the goods to marketable condition, but it excludes interest expenses. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
Estimates are also made for obsolescence of raw materials and finished products based on turnover and age of the related goods.
2.12 Trade receivable
Trade accounts receivable are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment, given their short term nature. A provision is made for impairment of trade receivables when there is objective evidence that the Company may not be able to collect the full amount according to the original terms of the receivable, based either on individual or on global aging analyses. The carrying amount of the asset is reduced by the provision amount and the loss is recognized in administrative expenses in the consolidated income statement by function.
2.13 Cash and cash equivalents
Cash and cash equivalents include cash on hand, time deposits with banks and other short-term highly liquid and low risk of change in value investments with original maturities of three months or less.
2.14 Other financial liabilities
Bank borrowings are initially recognized at fair value, net of transaction costs. These liabilities are subsequently carried at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest rate method.
2.15 Government subsidies
Government subsidies are recognized at fair value when it is certain that the subsidy will be received and that the Company will meet all the established conditions.
Subsidies for operating costs are deferred and recognized on the income statement in the period that the operating costs incur.
Subsidies for purchases of property, plant and equipment are deducted from the costs of the related asset in property, plant and equipment and depreciation is recognized on the income statement, on a straight-line basis during the estimated useful life of the related asset.
2.16 Income tax
The Company and its subsidiaries in Chile account for income tax according to the net taxable income calculated based on the rules in the Income Tax Law. Subsidiaries in other countries account for income taxes according to the tax regulations of the country in which they operate.
Deferred income taxes are calculated using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements, using the tax rates that have been enacted on the balance sheet date and are expected to apply when the deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be ultilized.
The Company does not recognize deferred income taxes for temporary differences from investments in subsidiaries and associates in which the Company can control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in the foreseeable future.
2.17 Employee benefits
The Company provides for post-retirement compensation to its retirees according to their years of service and the individual and collective contracts in place. This provision is accounted for at the actuarial value in accordance with IAS 19.
The results from the update of actuarial variables, were directly recorded under results within sales and administrative expenses until December 31, 2012. From the year 2013, and according to the modifications established by IAS 19, variations in actuarial variables are prospectively recognized within other comprehensive income.
The Company also has an executive retention plan. It is accounted for as a liability according to the guidelines of the plan. This plan grants certain executives the right to receive a fixed cash payment on a pre-set date once they have completed the required years of employment.
The Company and its subsidiaries have made a provision account for the cost of vacation and other employee benefits on an accrual basis. These liabilities are recorded under provisions.
2.18 Provisions
Provisions for litigation and other contingencies are recognized when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.
2.19 Leases
a) Operating leases
Operating lease payments are recognized as an expense on a straight-line basis over the term of the lease.
b) Finance leases
Leases of property, plant and equipment where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased assets and the present value of the minimum lease payments.
2.20 Deposits for returnable containers
This liability comprises of cash collateral received from customers for bottles and other returnable containers made available to them.
This liability pertains to the deposit amount that is reimbursed when the customer or distributor returns the bottles and cases in good condition, together with the original invoice. The liability is estimated based on the number of bottles given to clients and distributors, the estimated amount of bottles in circulation, and a historical average weighted value per bottle or case.
Deposits for returnable containers are presented as current liability because the Company does not have legal rights to defer settlement for a period in excess of one year. However, the Company does not anticipate any material cash settlements for such amounts during the upcoming year.
2.21 Revenue recognition
Revenue is measured at fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s business. Revenue presents amounts receivable for goods supplied net of value-added tax, returns, rebates, and discounts and net of sales between the companies that are consolidated.
The Company recognizes revenue when the amount of revenue can be reliably measured and it is probable that the future economic benefits will flow to the Company.
Revenues are recognized once the products are physically delivered to customers.
2.22 Contributions of The Coca-Cola Company
The Company receives certain discretionary contributions from The Coca-Cola Company, related to the financing of advertising and promotional programs for its products in the territories where it has distribution licenses. The contribution received are recorded as a reduction in marketing expenses in the consolidated income statement. Given its discretionary nature, the portion of contributions received in one period does not imply it will be repeated in the following period.
In certain limited situations, there is a legally binding agreement with The Coca-Cola Company through which the Company receives contributions for the building and acquisition of specific items of property, plant and equipment. In such situations, payments received pursuant to these agreements are recorded as a reduction of the cost of the related assets.
2.23 Dividend payments
Dividend payments to the Company’s shareholders are recognized as a liability in the Company´s consolidated financial statements, based on the obligatory 30% minimum in accordance with the Corporations Law.
2.24 Critical accounting estimates and judgments
The Company makes estimates and judgments concerning the future. Actual results may differ from previously estimated amounts. The estimates and judgments that might have a material impact on future financial statements are explained below:
2.24.1 Impairment of goodwill and intangible assets with indefinite useful lives
The Company tests annually whether goodwill and intangible assets with indefinite useful lives (such as distribution rights) have suffered any. The recoverable amounts of cash generating units are determined based on value-in-use calculations. The key variables used in the calculations include the volume of sales, prices, marketing expenses and other economic factors. The estimation of these variables requires an use of estimates and judgments as they are subject to inherent uncertainties; however, the assumptions are consistent with the Company´s internal planning. Therefore, management evaluates and updates estimates according to the conditions affecting the variables. If these assets are considered to have been impaired, they will be written off at their estimated fair value or future recovery value according to the discounted cash flows analysis. Free cash flows discounted in the Parent Company’s cash generating unit in Chile as those from the subsidiaries in Brazil, Argentina and Paraguay generated a higher value than the respective assets, including the goodwill from the Brazilian, Argentinean and Paraguayan subsidiaries..
2.24.2 Fair Value of Assets and Liabilities
IFRS requires in certain cases that assets and liabilities be recorded at their fair value. Fair value is the amount at which an asset can be purchased or sold or a liability can be incurred or liquidated in an actual transaction among parties under mutually independently agreed conditions which are different from a forced liquidation.
The basis for measuring assets and liabilities at fair value are the current prices in the active market. For those that are not traded in an active market, the Company determines fair value based on the best information available by using valuation techniques.
In the case of the valuation of intangibles recognized as a result of acquisitions from business combinations, the Company estimates the fair value based on the “multi-period excess earning method”, which involves the estimation of future cash flows generated by the intangible assets, adjusted by cash flows which do not come from these, but from other assets. The Company also applies estimations over the time period during which the intangible assets will generate cash flows, cash flows amounts, cash flows from other assets and a discount rate.
Other assets acquired and liabilities assumed in the business combination are carried at fair value using valuation methods that are considered appropriate under the circumstances. Assumptions include the depreciated cost of recovery and recent transaction values for comparable assets, among others. These valuation techniques require certain inputs to be estimated, including the estimation of future cash flows.
2.24.3 Allowances for doubtful accounts
The Company evaluates the collectability of trade receivables using several factors. When the Company becomes aware of a specific inability of a customer to fulfill its financial commitments, a specific provision for doubtful accounts is estimated and recorded, which reduces the recognized receivable to the amount that the Company estimates to be able to collect. In addition to specific provisions, allowances for doubtful accounts are also determined based on historical collection history and a general assessment of trade receivables, both outstanding and past due, among other factors. Historically, doubtful accounts have represented an average of less than 1% of consolidated net sales.
2.24.4 Useful life, residual value and impairment of property, plant, and equipment
Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of those assets. Changes in circumstances, such as technological advances, changes to the Company’s business model, or changes in its capital strategy might modify the effective useful lives as compared to our estimates. Whenever the Company determines that the useful life of property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned usage of manufacturing equipment, dispensers, transportation equipment and computer software could make the useful lives of assets shorter. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of any of those assets may not be recovered. The estimate of future cash flows is based, among other factors, on certain assumptions about the expected operating profits in the future. The Company´s estimation of discounted cash flows may differ from actual cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in operating profit. If the sum of the projected discounted cash flows (excluding interest) is less than the carrying amount of the asset, the asset shall be written-off to its estimated recoverable value.
2.24.5 Liabilities for deposits of returnable container
The Company records a liability for deposits received in exchange for bottles and cases provided to its customers and distributors. This liability represents the amount of deposits that must be reimbursed returned if the customer or distributor returns the bottles and cases in good condition, together with the original invoice. This liability is estimated on the basis of the number of bottles given on loan to customers and distributors, estimates of bottles in circulation and the weighted average historical cost per bottle or case. Management makes several assumptions in order to estimate this liability, including the number of bottles in circulation, the amount of deposit that must be reimbursed and the timing of disbursements.
2.25 New IFRS and interpretations of the IFRS Interpretations Committee (IFRSIC)
a) The following standards, amendments and interpretations are mandatory for the first time for financial years beginning on January 1, 2013
Standards and interpretations |
| Mandatory for |
|
|
|
IAS 19 Revised “Employee Benefits” |
| 01/01/2013 |
|
|
|
IAS 27 “Separate Financial Statements” |
| 01/01/2013 |
|
|
|
IFRS 10 “Consolidated Financial Statements” |
| 01/01/2013 |
|
|
|
IFRS 11 “Joint Agreements” |
| 01/01/2013 |
|
|
|
IFRS 12 “Disclosure of Interests in Other Entities” |
| 01/01/2013 |
IFRS 13 “Fair Value Measurement” |
| 01/01/2013 |
|
|
|
IFRIC 20 ““Stripping Costs” in the production phase of a surface mine” |
| 01/01/2013 |
Amendments and improvements |
| Mandatory for |
|
|
|
IAS 1 “Presentation of Financial Statements” |
| 07/01/2012 |
|
|
|
IAS 28 “Investments in Associates and Joint Ventures” |
| 01/01/2013 |
|
|
|
IFRS 7 “Financial Instruments: Disclosures” |
| 01/01/2013 |
|
|
|
IFRS 1 “First Time Adoption of International Financial Reporting Standards” |
| 01/01/2013 |
|
|
|
IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Agreements” and IFRS 12 “Disclosure of Interest in Other Entities”. |
| 01/01/2013 |
Improvements to International Financial Reporting Standards (2011) |
| 01/01/2013 |
|
|
|
IFRS 1 “First Time Adoption of International Financial Reporting Standards” — it clarifies that an entity may apply IFRS 1 more than once, under certain circumstances. |
|
|
|
|
|
IFRS 1 “First Time Adoption of International Financial Reporting Standards” — It clarifies that an entity may chose to adopt IAS 23, “Borrowing Costs” on the transition date or since a previous date” |
|
|
|
|
|
IAS 1 “Presentation of Financial Statements” - It clarifies requirements of comparative information when the entity presents a third balance column. |
|
|
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|
IFRS 1 “First Time Adoption of International Financial Reporting Standards” — As a consequence of the previous amendment to IAS 1, it clarifies that an entity adopting IFRS for the first time can deliver information in notes for all periods presented. |
|
|
|
|
|
IAS 16 “Property, Plant and Equipment” — It clarifies that the spare parts and service equipment will be classified as Property, Plant and Equipment rather than inventory, as they meet the definition of Property, Plant and Equipment. |
|
|
|
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|
IAS 32 “Presentation of Financial Instruments” — It clarifies the treatment of income tax relative to distribution and transaction costs. |
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|
IAS 34 “Interim Financial Information” — It clarifies then presentation requirements of assets and liabilities by segments during interim periods, ratifying the same applicable requirements to the annual financial statements. |
|
|
The adoption of standards, amendments and interpretations previously described, does not have a material impact on the consolidated financial statements of the Company.
b) New standards, interpretations and amendments issued, not applicable for the year 2013, for which early adoption of the same has been taken, are as follows.
Standards and interpretations |
| Mandatory for |
|
|
|
IFRS 9 “Financial Instruments” Issued in December 2009, it amends the classification and measurement of financial assets. It establishes two measurement categories: amortized cost and fair value. All equity instruments are measured at fair value. A debt instrument is measured at amortized cost only if the entity keeps it to obtain contractual cash flows and if cash flows represent principal and interest. Subsequently this standard was amended in November 2010 to include the treatment and classification of financial liabilities. For liabilities the standard keeps most of the requirements of IAS 39. These include amortized cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in the cases where the option of fair value of financial liabilities is taken, the part of the change in fair value attributable to changes in the risk of the entity’s credit is recognized within other comprehensive income instead of income, unless this produces an accounting asymmetry. Early adoption is allowed. |
| Not determined |
|
|
|
IFRIC 21 “Liens” Issued in May 2013. Defines a lien as an outflow of resources embodying economic benefits is imposed by the government entities in accordance with current legislation. Indicates the accounting treatment for a liability to pay a tax if that person is within the scope of IAS 37. It’s about when to recognize a liability for charges imposed by a public authority to operate in a specific market. Submit a liability to be recognized when the event giving rise to the obligation and the payment can not be prevented from occurring. The obligating event generator can occur gradually or at a specific date in time. Early adoption is permitted. |
| 01/01/2014 |
Amendments and improvements |
| Mandatory for |
|
|
|
IAS 32 “Presentation of Financial Instruments” Issued in December 2011 - It clarifies the requirements for offsetting financial assets and liabilities in the financial statement. Specifically, it indicates that the offsetting right must be available on the date of the financial statement and not be dependent on a future event. It also indicates that it must be legally obligatory for counterparts both in the normal course of business, as well as in the case of default, insolvency or bankruptcy. Early adoption is permitted. |
| 01/01/2014 |
|
|
|
IAS 27 “Separate Financial Statements” and IFRS 10 “Consolidated Financial |
| 01/01/2014 |
Statements” and IFRS 12 “Disclosure of Interests in Other Entities” Issued in October 2012. The modifications include the definition of an investment entity and introduce an exception to consolidate certain subsidiaries owned by investment firms. This amendment requires an entity to measure investment these subsidiaries at fair value through profit or loss in accordance with IFRS 9 “Financial Instruments” in the consolidated and separate financial statements. The amendment also introduces new disclosure requirements relating to investment firms in IFRS 12 and IAS 27. |
|
|
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|
|
IAS 36 “Impairment of Assets” Issued in May 2013 - It modifies the information disclosure of the recoverable amount of non-financial assets by aligning them with the requirements of IFRS 13. It requires disclosure of information about the recoverable amount of assets that are impaired if that amount is based on fair value less selling costs. Additionally, it requires among other things, that discount rates used in determining present values of the recoverable amount must be disclosed. Early adoption is permitted. |
| 01/01/2014 |
|
|
|
IAS 39 “ Financial Instruments: Recognition and Measurement ” |
| 01/01/2014 |
|
|
|
IFRS 9 “Financial Instruments” Issued in November 2013, a main aspect of the amendments include a substantial review of hedge accounting to allow entities to better reflect its risk management activities in the financial statements.
In addition, and although not related to hedge accounting, this amendment allows an early adoption of the requirement to recognize the changes in the fair value attributable to changes in the entity’s credit risk (for financial liabilities that are designated under the fair value option) in other comprehensive income. Such amendment can be applied without having to adopt the rest of IFRS 9. |
| Not determined |
|
|
|
IAS 19 “Employee Benefits” Issued in November 2013, this amendment applies to contributions in defined benefit plans from employees or third parties. The purpose of the amendments is to simplify accounting of contributions that are independent of the number of years of service of employees, for example, employee contributions calculated according to a fixed percentage of the salary. |
| 07/01/2014 |
Amendments and improvements |
| Mandatory for |
|
|
|
Improvements to International Financial Reporting Standards (2012) Issued in December 2013. |
| 07/01/2014 |
|
|
|
IFRS 2 “Share-based payments” - Clarifies the definition of “consolidation (or irreversibility) conditions of the vesting conditions” and “Market conditions” separately defines the “Performance conditions” and “Service conditions” are defined. This amendment should be applied prospectively to share-based payment transactions granted on or after July 1, 2014. Early adoption is permitted. |
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IFRS 3 “Business Combinations” - The standard is amended to clarify that an obligation to pay contingent consideration which meets the definition of a financial instrument is classified as a financial liability or as equity, on the basis of the definitions in IAS 32, ‘Financial instruments: Presentation’. The standard is further amended to clarify that all non-equity contingent consideration, both financial and non-financial, is measured at fair value at each reporting date, with changes in fair value recognized in results. Consequential changes are also made to IFRS 9, IAS 37 and IAS 39. This amendment should be applied prospectively for business combinations where the acquisition date is on or after 1 July 2014. Early adoption is permitted if and when amendments to IFRS 9 and IAS 7 issued also as part of 2012 improvement plan, are also adopted early. |
|
|
|
|
|
IFRS 8 “Operating Segments” - The standard is amended to include the requirement of disclosure of judgments made by management in the aggregation of operating segments. This includes a description of the segments that have been added and the economic indicators that have been evaluated in determining that added segments share similar economic characteristics. The standard was further amended to require a reconciliation of the segments’ assets to the entity’s assets, when segment assets are reported. Early adoption is permitted. |
|
|
|
|
|
IFRS 13 “Fair Value Measurement” - When IFRS 13 was published, as a result paragraphs B5.4.12 of IFRS 9 and GA79 of IAS 39 were eliminated. This generated a doubt as to whether entities no longer had the ability to measure the short term accounts receivable and payable by the nominal amounts if the effect of not updating them was immaterial. IASB has changed the basis of the conclusions of IFRS 13 to clarify that it had no intention of eliminating the ability to measure the short-term accounts receivable and payable by nominal amounts in such cases. |
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|
IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets” - Both rules are amended to clarify the treatment of the gross carrying amount and the accumulated depreciation when the entity is using the revaluation model. In these cases, the book value of the asset is updated to the revalued amount and the division of such revaluation between the gross carrying amount and the accumulated depreciation is treated in one of the following ways: 1) update the gross carrying amount in a manner consistent with the revaluation of the carrying amount and the accumulated depreciation is adjusted to equal |
|
|
the difference between the gross carrying value and the carrying value after taking into account accumulated impairment losses; or 2) accumulated depreciation is eliminated against the gross carrying amount of the asset. Early adoption is permitted. |
|
|
|
|
|
IAS 24 “Related Party Disclosures” - The standard is amended to include, as a related entity, an entity that provides key management personnel services to the reporting entity or the parent company of the reporting entity (“the managing body”). The entity that reports is not obligated to disclose the compensation paid by the managing body for workers or administrators of the managing body, but it is obligated to reveal the amounts charged to the reporting entity by the managing body for services rendered by key management personnel. Early adoption is permitted. |
|
|
|
|
|
Improvements to International Financial Reporting Standards (2013) Issued in December 2013. |
|
|
|
|
|
IFRS 1 “First Time Adoption of International Financial Reporting Standards” - Clarifies that when a new version of a rule is not mandatory, but is available for early adoption, an adopter of IFRS for the first time, can choose to apply the old version or the new version of the standard, as long as it applies the same standard in all periods reported. |
|
|
|
|
|
IFRS 3 “Business Combinations” - The standard is amended to clarify that IFRS is not applicable to the accounting for the formation of a joint arrangement under IFRS 11. The amendment also clarifies that the exemption of the scope is only applied in the financial statements of the joint arrangement itself. |
| 07/01/2014 |
|
|
|
IFRS 13 “Fair Value Measurement” - Clarifies that portfolio exception defined in IFRS 13, that allows an entity to measure fair value of a group of financial assets and liabilities by its net value, is applicable to all contracts (including non-financial contracts) within the scope of IAS 39 or IFRS 9. The amendment is mandatory for periods beginning on July 1, 2014. An entity must apply the amendments prospectively since the beginning of the annual period where IFRS 13 is being applied. |
|
|
|
|
|
IAS 40 “Investment Property” - The standard is amended to clarify that IAS 40 and IFRS 3 are not mutually exclusive. IAS 40 provides a guide to distinguish between investment properties and owner-occupied properties. In the preparation of financial information, you must also consider IFRS 3 application to determine whether the acquisition of an investment property is not a business combination. The amendment applies to periods beginning on July 1, 2014, but it is possible to apply it to individual investment property acquisitions before that date, if and only if the information needed to apply the amendment is available. |
|
|
The Company´s management considers the adoption of standards, amendments and interpretations previously described, will not significantly impact the consolidated financial statements of the Company in the period of its first application.
NOTE 3 — BUSINESS COMBINATIONS
a) Merger with Embotelladoras Coca-Cola Polar S.A.:
On March 30, 2012, after completion of due-diligence procedures, the Company signed a Promissory Merger Agreement with Embotelladoras Coca-Cola Polar S.A. (“Polar”). Polar is also a Coca-Cola bottler with operations in Chile, servicing territories in the II, III, IV, XI and XII regions; in Argentina, servicing territories in Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro La Pampa and the western zone of the province of Buenos Aires; and in Paraguay, servicing the whole country. The merger was made in order to reinforce the Company’s leading position among other Coca-Cola bottlers in South America.
Prior to the finalization of the merger and the approval of the shareholders at the Shareholders´Meetings of the Company and Polar, dividends were distributed among their respective shareholders, in addition to those already declared and distributed from 2011 results. Dividends distributed by the Company and Polar amounted to Ch$28,155,862,307 and Ch$29,565,609,857, respectively, which represented Ch$35.27 per each Series A share and Ch$38.80 per each Series B share.
The physical exchange of shares took place on October 16, 2012, when the former shareholders of Polar obtained a 19.68% ownership interest in the merged Company. Based upon the terms of the executed agreements, the Company took actual controls over day-to-day operations of Polar as of October 1, 2012, when it began to consolidate Polar’s operational results. As a result of Embotelladora Andina becoming the legal successor of Polar’s rights and obligations, the Company indirectly acquired additional ownership interests in Vital Jugos S.A., Vital Aguas S.A. and Envases Central S.A. in addition to its existing ownership interests in those entities. The Company’s current ownership enables it to exercise controls over these entities, and thus, consolidate them into its consolidated financial statements from October 1, 2012.
As part of the business combination, the Company obtained controls over Vital Jugos S.A. and Vital Aguas S.A. because of the combination of its news shares and existing shares in these entities. Under IFRS 3, because the business combination of Vital Jugos S.A. and Vital Aguas S.A, and Envases Central S.A. was achieved in stages, carrying value of the Company´s previously held equity interest in these entities is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in the income statement of the period in which control is obtained. The Company has not recognized any gain or loss in its 2012 income statement due to the fact that carrying values of these investments were not significantly different from their fair values.
A total of 93,152,097 Series A shares and 93,152,097 Series B shares were issued at closing in exchange for 100% of Polar’s outstanding shares. The total purchase price was ThCh$461,568,641 based on a share price of Ch$2,220 per Series A share and Ch$2,735 per Series B share on October 1, 2012. There are no contingent purchase price provisions. Transaction related costs of Ch$4,517,661 were expensed as incurred, and recorded as a component of other expenses by function in the Company’s accompanying consolidated income statement.
The fair value of Polar’s net assets acquired is as follows:
|
| ThCh$ |
|
Total current assets acquired, including cash amounting to ThCh$4,760,888 |
| 66,536,012 |
|
Property, plant and equipment |
| 153,012,024 |
|
Other non-current assets |
| 15,221,922 |
|
Contractual rights to distribute Coca-Cola products (“Distribution Rights”) |
| 459,393,920 |
|
Total Assets |
| 694,163,878 |
|
Indebtedness |
| (99,924,279 | ) |
Other liabilities (includes deferred taxes of ThCh$81,672,940) |
| (149,131,027 | ) |
Total liabilities |
| (249,055,306 | ) |
Net assets acquired |
| 445,108,572 |
|
Goodwill |
| 16,460,068 |
|
Total consideration excluding non-controlling interests (purchase price) |
| 461,568,640 |
|
The Company determines the fair value of its distribution rights, property, plant and equipment using third-party valuations. Distribution rights are expected to be tax deductible for income tax purposes.
The Company expects to recover goodwill through related synergies with the available distribution capacity. Goodwill has been assigned to the cash generating units of the Company in Chile (ThCh$8,503,023), Argentina (ThCh$1,041,633), and Paraguay (ThCh$6,915,412). Goodwill is not expected to be tax deductible for income tax purposes.
Condensed financial information of Polar for the period between October 1, 2012 and December 31, 2012 is as follows:
|
| Millions Ch$ |
|
Net sales |
| 93,918 |
|
Income before taxes |
| 5,466 |
|
Net income |
| 4,648 |
|
The proforma consolidated statement of income for the period between January 1 and Decemeber 31, 2012 is as follows:
|
| Millions Ch$ |
|
|
| (Unaudited) |
|
Net sales |
| 1,427,936 |
|
Income before taxes |
| 130,246 |
|
Net income |
| 91,371 |
|
b) Acquisition of Companhia de Bebidas Ipiranga:
On June 18, 2013 the Board of Directors of Embotelladora Andina S.A., unanimously approved the acquisition of the Brazilian company Companhia de Bebidas Ipiranga. The aforementioned company is dedicated to the marketing and distribution of Coca-Cola products in parts of the territories of São Paulo and Minas Gerais, serving approximately 23,000 customers. Such approval was materialized in a purchase and sale agreement signed on July 10, 2013.
After the transaction was approved by Coca-Cola and the Administrative Council of Economic Defense of Brazil, on October 11, 2013 the Brazilian subsidiary, Rio de Janeiro Refrescos Ltda., materialized the acquisition of 100% of the shares of Companhia de Bebidas Ipiranga. The acquisition price was ThR$1,155,446 (equivalent to ThCh$261,244,818) and was paid in cash by Rio de Janeiro Refrescos Ltda.
The related transaction costs of ThCh$578,864 were charged to results at the time they were incurred, and were recorded as other expenses by function within the Company’s consolidated income statements.
Estimated fair value of the net assets acquired of Companhia de Bebidas Ipiranga is as follows:
|
| ThCh$ |
|
Total current assets acquired, including cash in the amount of ThCh$8,963,612 |
| 14,117,173 |
|
Trade accounts receivable |
| 11,462,843 |
|
Inventories |
| 6,930,932 |
|
Property, plant and equipment |
| 68,575,023 |
|
Deferred tax assets |
| 85,404,849 |
|
Other non-current assets |
| 6,702,764 |
|
Contractual rights to distribute Coca-Cola products (“Distribution Rights”) |
| 228,359,641 |
|
Total assets |
| 421,553,225 |
|
Indebtedness |
| (30,392,168 | ) |
Suppliers |
| (12,471,093 | ) |
Contingencies |
| (70,902,559 | ) |
Deferred taxes |
| (91,830,873 | ) |
Other liabilities |
| (9,966,908 | ) |
Total liabilities |
| (215,563,601 | ) |
Net asset acquired |
| 205,989,624 |
|
Goodwill |
| 55,255,194 |
|
Total value transferred (purchase price) |
| 261,244,818 |
|
The fair value of distribution rights and property, plant and equipment, was calculated by the Company, using valuation models such as discounted cash flow. Distribution rights are expected to be tax deductible for income tax purposes.
The Company expects to recover goodwill through synergies related to available production capacity. Goodwill has been assigned to the Company’s Cash Generating Unit in Brazil in the amount of ThCh$55,255,194. Goodwill is expected to be tax deductible for income tax purposes.
The condensed income statement of Companhia de Bebidas Ipiranga for the period between October 11, 2013 and December 31, 2013 is as follows:
|
| Millions Ch$ |
|
Net sales |
| 49,366 |
|
Income before taxes |
| 4,767 |
|
Net income |
| 5,367 |
|
The proforma consolidated statement of income for the period between January 1 and Decemeber 31, 2013 is as follows:
|
| Millions Ch$ |
|
|
| (Unaudited) |
|
Net sales |
| 1,640,705 |
|
Income before taxes |
| 110,320 |
|
Net income |
| 86,423 |
|
NOTE 4 — REPORTING BY SEGMENT
The Company provides information by segments according to IFRS 8 “Operating Segments,” which establishes standards for reporting by operating segment and related disclosures for products and services, and geographic areas.
The Company’s Board of Directors and Management measures and assesses performance of operating segments based on the operating income of each of the countries where there are franchises.
The operating segments are determined based on the presentation of internal reports to the Company´s chief operating decision-maker. The chief operating decision-maker has been identified as the Company´s Board of Directors who makes the Company´s strategic decisions.
The following operating segments have been determined for strategic decision making based on geographic location:
· Chilean operations
· Brazilian operations
· Argentine operations
· Paraguayan operations
The four operating segments conduct their businesses through the production and sale of soft drinks, other beverages, and packaging.
The income and expense relating to corporate management are assigned to the Chilean operation in the operating segment.
The total income by segment includes sales to unrelated customers and inter-segment sales, as indicated in the Company’s consolidated statement of income.
A summary of the Company’s operating segments in accordance to IFRS is as follows:
For the year ended December 31, 2013 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Eliminations |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net sales |
| 477,917,942 |
| 441,229,098 |
| 491,861,272 |
| 112,253,531 |
| (1,580,508 | ) | 1,521,681,335 |
|
Finance income |
| 1,751,973 |
| 48,638 |
| 3,035,143 |
| 137,558 |
| — |
| 4,973,312 |
|
Finance costs |
| (16,619,213 | ) | (5,407,881 | ) | (6,524,560 | ) | (392,369 | ) | — |
| (28,944,023 | ) |
Finance income, net |
| (14,867,240 | ) | (5,359,243 | ) | (3,489,417 | ) | (254,811 | ) | — |
| (23,970,711 | ) |
Depreciation and amortization |
| (35,967,369 | ) | (17,282,433 | ) | (19,611,566 | ) | (10,475,516 | ) | — |
| (83,336,884 | ) |
Total expenses |
| (416,153,361 | ) | (400,992,474 | ) | (420,250,552 | ) | (88,290,637 | ) | 1,580,508 |
| (1,324,106,516 | ) |
Net income of the segment reported |
| 10,929,972 |
| 17,594,948 |
| 48,509,737 |
| 13,232,567 |
| — |
| 90,267,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associates using equity method of accounting |
| 724,629 |
| — |
| 58,789 |
| — |
| — |
| 783,418 |
|
Income tax expense |
| 15,339,760 |
| 7,743,806 |
| (1,853,334 | ) | 1,736,032 |
| — |
| 22,966,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets, total |
| 839,228,543 |
| 217,662,566 |
| 750,945,405 |
| 275,124,796 |
| — |
| 2,082,961,310 |
|
Investments in associates using equity method of accounting |
| 17,881,972 |
| — |
| 50,791,427 |
| — |
| — |
| 68,673,399 |
|
Capital expenditures and other |
| 57,545,219 |
| 52,271,592 |
| 317,965,173 |
| 17,160,220 |
| — |
| 444,942,204 |
|
Segment liabilities, total |
| 533,848,083 |
| 133,383,094 |
| 491,975,856 |
| 42,321,689 |
| — |
| 1,201,528,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows generated from (used in) Operating Activities |
| 78,994,275 |
| 35,501,051 |
| 37,067,316 |
| 20,522,083 |
| — |
| 172,084,725 |
|
Cash flows used in Investing Activities |
| (76,510,197 | ) | (51,754,052 | ) | (302,125,052 | ) | (17,160,220 | ) | — |
| (447,549,521 | ) |
Cash flows generated from (used in) Financing Activities |
| 282,137,848 |
| 19,569,666 |
| 7,924,748 |
| (6,526,406 | ) | — |
| 303,105,856 |
|
For the year ended December 31, 2013 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Eliminations |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2013 |
| 374,873,021 |
| 315,336,485 |
| 451,596,741 |
| 32,028,300 |
| (1,541,730 | ) | 1,172,292,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 803,029 |
| 301,025 |
| 1,602,098 |
| 21,907 |
| — |
| 2,728,059 |
|
Net sales |
| (7,540,887 | ) | (2,277,362 | ) | (1,231,153 | ) | (123,351 | ) | — |
| (11,172,753 | ) |
Finance income |
| (6,737,858 | ) | (1,976,337 | ) | 370,945 |
| (101,444 | ) | — |
| (8,444,694 | ) |
Finance costs |
| (24,290,171 | ) | (11,201,323 | ) | (16,064,773 | ) | (2,267,871 | ) | — |
| (53,824,138 | ) |
Finance income, net |
| (320,646,059 | ) | (284,555,281 | ) | (392,538,658 | ) | (25,556,545 | ) | 1,541,730 |
| (1,021,754,813 | ) |
Depreciation and amortization |
| 23,198,933 |
| 17,603,544 |
| 43,364,255 |
| 4,102,440 |
| — |
| 88,269,172 |
|
Total expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income of the segment reported |
| 1,120,893 |
| — |
| 649,005 |
| — |
|
|
| 1,769,898 |
|
|
| 7,378,459 |
| 10,204,847 |
| 20,365,279 |
| 556,051 |
|
|
| 38,504,636 |
|
Share of profit of associates using equity method of accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
| 756,203,625 |
| 200,769,953 |
| 324,432,040 |
| 258,430,713 |
|
|
| 1,539,836,331 |
|
|
| 17,848,009 |
| — |
| 55,232,052 |
| — |
|
|
| 73,080,061 |
|
Segment assets, total |
| 57,115,820 |
| 46,833,922 |
| 69,605,956 |
| 6,085,212 |
|
|
| 179,640,910 |
|
Investments in associates using equity method of accounting |
| 367,012,519 |
| 108,896,064 |
| 130,102,661 |
| 40,220,166 |
|
|
| 646,231,410 |
|
Capital expenditures and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities, total |
| 62,059,810 |
| 42,711,789 |
| 74,224,089 |
| 9,861,112 |
|
|
| 188,856,800 |
|
|
| (39,707,483 | ) | (43,996,852 | ) | (69,604,445 | ) | (2,861,423 | ) |
|
| (156,170,203 | ) |
Cash flows generated from (used in) Operating Activities |
| (38,808,788 | ) | 2,720,303 |
| 32,537,501 |
| — |
|
|
| (3,550,984 | ) |
NOTE 5 — CASH AND CASH EQUIVALENTS
Cash and cash equivalents are detailed as follows as of December 31, 2013 and and 2012 :
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Cash |
| 505,545 |
| 871,173 |
|
Bank balances |
| 23,317,938 |
| 24,171,486 |
|
Time deposits |
| 16,233,044 |
| 783,223 |
|
Mutual funds |
| 39,919,599 |
| 29,696,373 |
|
Total cash and cash equivalents |
| 79,976,126 |
| 55,522,255 |
|
By currency |
| ThCh$ |
| ThCh$ |
|
Dollar |
| 10,021,933 |
| 5,067,208 |
|
Euro |
| 522 |
| — |
|
Argentine Peso |
| 7,947,636 |
| 5,181,955 |
|
Chilean Peso |
| 30,452,472 |
| 14,089,380 |
|
Paraguayan Guaraní |
| 3,970,265 |
| 6,112,524 |
|
Brazilian Real |
| 27,583,298 |
| 25,071,188 |
|
Total cash and cash equivalents |
| 79,976,126 |
| 55,522,255 |
|
5.1 Time deposits
Time deposits defined as cash and cash equivalents are detailed as follows at December 31, 2013 and 2012:
Placement |
| Institution |
| Currency |
| Principal |
| Annual |
| 12.31.2013 |
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
12-11-2013 |
| Banco Chile |
| Chilean peso |
| 3,000,000 |
| 4.68 |
| 3,007,800 |
|
12-18-2013 |
| Banco Chile |
| Chilean peso |
| 4,340,000 |
| 4.56 |
| 4,347,147 |
|
12-18-2013 |
| Banco HSBC |
| Chilean peso |
| 2,579,000 |
| 4.56 |
| 2,583,247 |
|
12-18-2013 |
| Banco Santander |
| Chilean peso |
| 4,340,000 |
| 4.92 |
| 4,347,705 |
|
12-18-2013 |
| Banco Votorantim |
| Brazilian real |
| 16,702 |
| 8.82 |
| 17,578 |
|
12-31-2013 |
| Banco Regional S.A.E.C.A |
| Paraguayan guaraní |
| 1.929.567 |
| 3.50 |
| 1,929,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 16,233,044 |
|
Placement |
| Institution |
| Currency |
| Principal |
| Annual |
| 12.31.2012 |
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
12-28-2012 |
| Banco Regional SAECA |
| Paraguayan guarani |
| 783,223 |
| 3.50 |
| 783,223 |
|
|
|
|
| Total |
|
|
|
|
| 783,223 |
|
5.2 Money Market
Money market mutual fund´s shares are valued using the share values at the close of each reporting period. Below is a description for the end of each period:
Institution |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Mutual fund Soberano Banco Itaú — Brasil |
| 20,414,604 |
| 18,235,213 |
|
Mutual fund Corporativo Banchile — Chile |
| 9,720,215 |
| — |
|
Western Assets Institutional Cash Reserves — USA |
| 6,427,025 |
| 3,472,196 |
|
Mutual fund Corporativo Banco Itaú — Chile |
| — |
| 1,989,833 |
|
Mutual fund Wells Fargo — USA |
| 133,378 |
| 137,500 |
|
Mutual fund Corporativo Banco BBVA — Chile |
| — |
| 2,081,666 |
|
Mutual fund Banco Galicia — Argentina |
| 3,224,247 |
| 946,885 |
|
Mutual fund Patrimonio Banco Caja Económica Federal - Brasil |
| — |
| 2,833,080 |
|
UBS |
| 130 |
| — |
|
|
|
|
|
|
|
Total mutual fund |
| 39,919,599 |
| 29,696,373 |
|
NOTE 6 — OTHER CURRENT FINANCIAL ASSETS
Below are the financial instruments held by the Company at December 31, 2013 and 2012, other than cash and cash equivalents. They consist of time deposits with maturities in the short term (more than 90 days),restricted mutual funds and derivative contracts. Detail of financial instruments are detailed as follows:
a) Current year 2013
Time deposits
Placement |
| Maturity |
| Institution |
| Currency |
| Principal |
| Annual |
| 12.31.2013 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
09-13-2013 |
| 02-13-2014 |
| Banco HSBC — Chile |
| Chilean peso |
| 1,650,000 |
| 5.40 |
| 1,676,978 |
|
09-30-2013 |
| 03-26-2014 |
| Banco Santander — Chile |
| Chilean peso |
| 1,600,000 |
| 5.52 |
| 1,622,571 |
|
10-10-2013 |
| 02-13-2014 |
| Banco Santander — Chile |
| Chilean peso |
| 1,000,000 |
| 5.52 |
| 1,012,573 |
|
10-10-2013 |
| 03-26-2014 |
| Banco HSBC — Chile |
| Chilean peso |
| 2,380,000 |
| 5.16 |
| 2,407,973 |
|
11-20-2013 |
| 04-22-2014 |
| Banco HSBC — Chile |
| Chilean peso |
| 3,630,000 |
| 4.56 |
| 3,648,852 |
|
11-20-2013 |
| 04-22-2014 |
| Banco BBVA — Chile |
| Chilean peso |
| 3,630,000 |
| 4.44 |
| 3,648,356 |
|
11-20-2013 |
| 04-22-2014 |
| Banco Itaú — Chile |
| Chilean peso |
| 3,630,000 |
| 4.50 |
| 3,648,604 |
|
12-11-2013 |
| 05-29-2014 |
| Banco HSBC — Chile |
| Chilean peso |
| 3,000,000 |
| 4.92 |
| 3,008,200 |
|
12-18-2013 |
| 04-22-2014 |
| Banco de Chile- Chile |
| Chilean peso |
| 6,200,000 |
| 4.80 |
| 6,210,747 |
|
12-18-2013 |
| 04-22-2014 |
| Banco Santander — Chile |
| Chilean peso |
| 6,200,000 |
| 4.92 |
| 6,211,014 |
|
10-15-2013 |
| 04-14-2014 |
| Banco Bradesco |
| Brazilean real |
| 25,662 |
| 10.01 |
| 26,129 |
|
|
|
|
|
|
|
|
| Subtotal |
|
|
| 33,121,997 |
|
Bonds
Institution |
| 12.31.2013 |
|
|
| ThCh$ |
|
Bonos Provincia Buenos Aires - Argentina |
| 7,468 |
|
Rights from future contracts
|
|
|
| 12.31.2013 |
|
|
|
|
| ThCh$ |
|
Rights from future contracts (see note 21) |
|
|
| 3,342,172 |
|
Total other current financial assets |
| Total |
| 36,471,637 |
|
b) Non-current year 2013
Rights from future contracts
|
| 12.31.2013 |
|
|
| ThCh$ |
|
Rights from future contracts (see note 21) |
| 7,922,287 |
|
c) Current year 2012
Time deposits
Placement |
| Maturity |
| Institution |
| Currency |
| Principal |
| Annual |
| 12.31.2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03-25-2012 |
| 03-20-2013 |
| Banco Votorantim - Brasil |
| Brazilean real |
| 16,480 |
| 8.82 |
| 17,280 |
|
|
|
|
|
|
|
|
| Total |
|
|
| 17,280 |
|
Mutual fund
Institution |
|
|
| THCH$ |
|
Mutual fund Banco Galicia (1) |
|
|
| 111.301 |
|
|
| Subtotal |
| 111.301 |
|
|
|
|
|
|
|
Total other current financial assets |
| Total |
| 128.581 |
|
(1) These are financial investments the use of which is restricted because they were made to comply with the guarantees of derivatives transactions performed by the Company.
NOTE 7 — CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS
NOTE 7.1 Other current non-financial assets
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Prepaid expenses |
| 4,959,328 |
| 3,513,515 |
|
Fiscal credits |
| 4,386,106 |
| 14,118,736 |
|
Prepaid insurance |
| 112,460 |
| 182,015 |
|
Custom deposits (Argentina) |
| 11,252 |
| 239,879 |
|
Other current assets |
| 226,658 |
| 148,693 |
|
Total |
| 9,695,804 |
| 18,202,838 |
|
NOTE 7.2 Other non-current, non-financial assets
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Judicial deposits (1) |
| 21,357,404 |
| 18,002,490 |
|
Prepaid expenses |
| 4,067,531 |
| 2,515,235 |
|
Fiscal credits |
| 2,816,784 |
| 5,880,191 |
|
Others |
| 554,434 |
| 529,174 |
|
Total |
| 28,796,153 |
| 26,927,090 |
|
(1) See note 22.2
NOTE 8 — TRADE AND OTHER RECEIVABLES
The composition of trade and other receivables is detailed as follows:
|
| 12.31.2013 |
| 12.31.2012 |
| ||||||||
Trade and other receivables |
| Assets before |
| Allowance for |
| Commercial |
| Assets |
| Allowance for |
| Commercial |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Current commercial debtors |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 153,734,921 |
| (2,628,832 | ) | 151,106,089 |
| 115,998,388 |
| (1,458,801 | ) | 114,539,587 |
|
Other current debtors |
| 34,433,688 |
| — |
| 34,433,688 |
| 15,782,069 |
| — |
| 15,782,069 |
|
Current commercial debtors |
| 188,168,609 |
| (2,628,832 | ) | 185,539,777 |
| 131,780,457 |
| (1,458,801 | ) | 130,321,656 |
|
Prepayments suppliers |
| 4,926,329 |
| — |
| 4,926,329 |
| 4,021,021 |
| — |
| 4,021,021 |
|
Other current accounts receivable |
| 5,018,016 |
| (50,047 | ) | 4,967,969 |
| 18,502,187 |
| (27,948 | ) | 18,474,239 |
|
Commercial debtors and other current accounts receivable |
| 198,112,954 |
| (2,678,879 | ) | 195,434,075 |
| 154,303,665 |
| (1,486,749 | ) | 152,816,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 92,283 |
| — |
| 92,283 |
| 124,767 |
| — |
| 124,767 |
|
Other non-current debtors |
| 7,538,970 |
| — |
| 7,538,970 |
| 6,599,310 |
|
|
| 6,599,310 |
|
Non-current accounts receivable |
| 7,631,253 |
| — |
| 7,631,253 |
| 6,724,077 |
| — |
| 6,724,077 |
|
Trade and other receivable |
| 205,744,207 |
| (2,678,879 | ) | 203,065,328 |
| 161,027,742 |
| (1,486,749 | ) | 159,540,993 |
|
Aging of debtor portfolio |
| Number of |
| 12.31.2013 |
| Number of |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
|
|
| ThCh$ |
|
Up to date non-securitized portfolio |
| 38,701 |
| 44,992,572 |
| 8,514 |
| 59,686,698 |
|
1 and 30 days |
| 68,206 |
| 100,449,837 |
| 30,523 |
| 51,451,804 |
|
31 and 60 days |
| 1,256 |
| 3,387,111 |
| 484 |
| 784,192 |
|
61 and 90 days |
| 392 |
| 585,664 |
| 346 |
| 951,083 |
|
91 and 120 days |
| 353 |
| 365,714 |
| 273 |
| 316,787 |
|
121 and 150 days |
| 287 |
| 235,232 |
| 282 |
| 34,370 |
|
151 and 180 days |
| 253 |
| 412,096 |
| 264 |
| 307,727 |
|
181 and 210 days |
| 219 |
| 1,284,030 |
| 280 |
| 176,493 |
|
211 and 250 days |
| 300 |
| 450,165 |
| 276 |
| 251,247 |
|
More than 250 days |
| 1,134 |
| 1,664,783 |
| 1,362 |
| 2,162,754 |
|
Total |
| 111,101 |
| 153,827,204 |
| 42,604 |
| 116,123,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12.31.2013 |
|
|
| 12.31.2012 |
|
|
|
|
| ThCh$ |
|
|
| ThCh$ |
|
Current comercial debtors |
|
|
| 153,734,921 |
|
|
| 115,998,388 |
|
Non-current comercial debtors |
|
|
| 92,283 |
|
|
| 124,767 |
|
Total |
|
|
| 153,827,204 |
|
|
| 116,123,155 |
|
The movement of allowance for doubtful accounts between January 1 and December 31, 2013 and 2012 are presented below:
|
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 1,486,749 |
| 1,544,574 |
|
Bad debt expense |
| 2,519,653 |
| 976,331 |
|
Write-off of accounts receivable |
| (1,278,400 | ) | (843,766 | ) |
Decrease due to foreign exchange differences |
| (49,123 | ) | (190,390 | ) |
Movement |
| 1,192,130 |
| (57,825 | ) |
Ending balance |
| 2,678,879 |
| 1,486,749 |
|
NOTE 9 — INVENTORIES
The composition of inventory balances is detailed as follows:
|
| Current |
| ||
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Raw materials |
| 64,227,397 |
| 41,942,176 |
|
Finished goods |
| 25,526,110 |
| 22,792,255 |
|
Spare parts |
| 20,708,225 |
| 14,479,488 |
|
Merchandise |
| 14,713,305 |
| 8,797,194 |
|
Supplies |
| 1,251,866 |
| 1,125,276 |
|
Work in progress |
| 324,781 |
| 705,637 |
|
Other inventories |
| 2,510,771 |
| 1,504,926 |
|
Obsolescence provision (1) |
| (3,408,464 | ) | (2,027,126 | ) |
Total |
| 125,853,991 |
| 89,319,826 |
|
The cost of inventory recognized as cost of sales is ThCh$914,817,748 and ThCh$698,955,215 at December 31, 2013 and 2012, respectively.
(1) The provision for obsolescence is primarily related more to the obsolescence of parts classified as inventories than finished goods and raw materials
NOTE 10 — CURRENT AND DEFERRED INCOME TAXES
For the year ended Decemberr 31, 2013, the Company had a taxable profits fund of ThCh$58,767,054, comprised of profits with credits for first category income tax amounting to ThCh$50,858,123 and profits without credits amounting to ThCh$7,908,931.
10.1 Current tax assets
Current tax receivables break down as follows:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Monthly provisional payments |
| 3,756,220 |
| 2,319,627 |
|
Tax credits (1) |
| 233,477 |
| 559,766 |
|
Total |
| 3,989,697 |
| 2,879,393 |
|
(1) Tax credits correspond to income tax credits on training expenses, purchase of property, plant and equipment and donations iones.
10.2 Current tax liabilities
Current tax payables correspond to the following items:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Income tax expense |
| 3,679,057 |
| 355,363 |
|
Other |
| — |
| 759,447 |
|
Total |
| 3,679,057 |
| 1,114,810 |
|
10.3 Income tax expense
The current and deferred income tax expenses for the years ended December 31, 2013 and 2012 are detailed as follows:
Item |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Current income tax expense |
| 31,237,950 |
| 31,849,744 |
|
Adjustment to current income tax from the previous fiscal year |
| 1,051,182 |
| 172,055 |
|
Other current income tax expenses |
| 1,688,450 |
| 823,616 |
|
Current income tax expense |
| 33,977,582 |
| 32,845,415 |
|
Deferred income tax expenses |
| (11,001,197 | ) | 5,616,047 |
|
Other loss (income) for deferred income tax |
| (10,121 | ) | 43,174 |
|
Total deferred income tax expenses |
| (11,011,318 | ) | 5,659,221 |
|
Total income tax expense |
| 22,966,264 |
| 38,504,636 |
|
10.4 Deferred income taxes
The net cumulative balances of temporary differences which give rise to deferred tax assets and liabilities are shown below:
|
| 12.31.2013 |
| 12.31.2012 |
| ||||
Temporary differences |
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
| 1,056,518 |
| 49,845,214 |
| 432,181 |
| 29,494,188 |
|
Obsolescence provision |
| 965,678 |
| — |
| 637,675 |
| — |
|
Employee benefits |
| 2,088,002 |
| 31,116 |
| 1,807,163 |
| — |
|
Post-employment benefits |
| 53,660 |
| 109,700 |
| — |
| 277,510 |
|
Tax loss carried-forwards (1) y (2) |
| 6,889,833 |
| — |
| 9,026,314 |
| — |
|
Tax Goodwill Brazil (5) |
| 58,617,580 |
| — |
| — |
| — |
|
Contingency provision (5) |
| 26,495,935 |
| — |
| 2,020,821 |
| — |
|
Foreign exchange differences (Foreign Subsidiaries) (4) |
| — |
| 2,456,789 |
| — |
| 9,145,349 |
|
Allowance for doubtful accounts |
| 328,046 |
| — |
| 350,319 |
| — |
|
Tax resulting from holding inventories (Argentina) |
| 1,154,458 |
| — |
| 150,486 |
| — |
|
Tax incentives (Brazil) (3) |
| — |
| — |
| — |
| 10,930,694 |
|
Assets and liabilities for placement of bonds |
| — |
| 516,364 |
| 370,245 |
| 77,316 |
|
Lease liabilities (5) |
| 3,807,924 |
| 11,924 |
| 430,476 |
| — |
|
Inventories |
| 425,384 |
| 415,379 |
| — |
| 127,550 |
|
Distribution rights (5) |
| — |
| 153,253,820 |
| — |
| 76,559,423 |
|
Others |
| 850,620 |
| 1,630,816 |
| 997,372 |
| 1,025,648 |
|
Subtotal |
| 102,733,638 |
| 208,271,122 |
| 16,223,052 |
| 127,637,678 |
|
Net Liabilities |
| — |
| 105,537,484 |
| — |
| 111,414,626 |
|
(1) Tax losses associated mainly with our subsidiary in Chile - Embotelladora Andina Chile S.A., which is in the process of implementation of their manufacturing and commercial operations, the amount totals to ThCh$6,693,607 and other minor subsidiaries in Chile ThCh$196,226. Tax losses in Chile do not have an expiration date.
(2) Tax losses associated with Ex Coca-Cola Polar Argentina S.A. (currently Embotelladora del Atlántico S.A), which were used during the 2013 period. The outstanding amount as of December 31, 2012 was ThCh$5,280,865.
(3) This corresponds to tax incentives in Brazil that consist of a tax withholding reduction that are recorded under income statement, but under tax rules they must be recorded in equity, and cannot be distributed as dividends. Given the purchase of Companhia de Bebidas Ipiranga during the year 2013 and the new repatriation structure of flows from Brazil, the possibility of paying taxes is remote, whereby during the year 2013 the deferred tax mentioned has been reversed. The reserved amount totals ThCh$ 14,055,018.
(4) Corresponds to deferred tax exchange differences generated upon translation of debts in foreign currency in the Brazilian subsidiary, Rio de Janeiro Refrescos Ltda. that in terms of tax, are recognized in Brazil at the time they are perceived.
(5) Corresponds to increases in deferred taxes arising from the purchase of Companhia de Bebidas Ipiranga, explained in note 3 “Business Combinations”.
10.5 Deferred tax liability movement
The movement in deferred income tax accounts is as follows:
Item |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Opening Balance |
| 111,414,626 |
| 35,245,490 |
|
Increase from business combination |
| 6,938,385 |
| 76,544,806 |
|
Increase in deferred tax liabilities |
| (12,592,600) |
| 4,453,994 |
|
Decrease due to foreign currency translation |
| (222,927 | ) | (4,829,664 | ) |
Movements |
| (5,877,142 | ) | 76,169,136 |
|
Ending balance |
| 105,537,484 |
| 111,414,626 |
|
10.6 Distribution of domestic and foreign tax expenses
As of December 31, 2013 and 2012, domestic and foreign tax expenses are detailed as follows:
Income tax |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Current income taxes |
|
|
|
|
|
Foreign |
| (18,135,554 | ) | (25,054,795 | ) |
Domestic |
| (15,842,028 | ) | (7,790,620 | ) |
Current income tax expense |
| (33,977,582 | ) | (32,845,415 | ) |
|
|
|
|
|
|
Deferred income taxes |
|
|
|
|
|
Foreign |
| 10,509,053 |
| (6,071,382 | ) |
Domestic |
| 502,265 |
| 412,161 |
|
Deferred income tax expense |
| 11,011,318 |
| (5,659,221 | ) |
Income tax expense |
| (22,966,264 | ) | (38,504,636 | ) |
10.7 Reconciliation of effective rate
Below is the reconciliation between tax expenses using legal rate and tax expenses using effective rate:
Reconciliation of effective rate |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Net income before taxes |
| 113,233,488 |
| 126,773,808 |
|
Tax expense at legal rate (20.0%) |
| (22,646,698 | ) | (25,354,762 | ) |
Effect of a different tax rate in other jurisdictions |
| (8,244,382 | ) | (12,034,351 | ) |
|
|
|
|
|
|
Permanent differences: |
|
|
|
|
|
Non-taxable revenues |
| 14,908,228 |
| 3,302,249 |
|
Non-deductible expenses |
| (6,750,973 | ) | (3,154,544 | ) |
Tax effect of change in tax rate |
| — |
| (826,898 | ) |
Other decreases in charges for legal taxes |
| (232,439 | ) | (436,330 | ) |
Adjustments to tax expense |
| 7,924,816 |
| (1,115,523 | ) |
|
|
|
|
|
|
Tax expense at effective rate |
| (22,966,264 | ) | (38,504,636 | ) |
Effective rate (1) |
| 20.3 | % | 30.4 | % |
(1) The strong decrease of the effective rate is due to the reversal of ThCh$14,055,018 of deferred taxes with credit to 2013 income in the subsidiary, Rio de Janeiro Refrescos Ltda. This reversal originates in that the probability of paying taxes on the use of tax incentives in Brazil for any dividend payments to the parent company in Chile went from probable to remote, given the new repatriation structure of flows from Brazil, from a scheme based on dividends to a combined form of interest returns on inter-company credits and dividends.
Below are the income tax rates applicable in each jurisdiction where the Company operates:
|
| Rate |
| ||
Country |
| 2013 |
| 2012 |
|
Chile |
| 20 | % | 20 | % |
Brazil |
| 34 | % | 34 | % |
Argentina |
| 35 | % | 35 | % |
Paraguay |
| 10 | % | 10 | % |
NOTE 11 — PROPERTY, PLANT AND EQUIPMENT
11.1 Balances
Property, plant and equipment are detailed below at the end of each period:
|
| Property, plant and equipment, |
| Cumulative depreciation and |
| Property, plant and equipment, |
| ||||||
Item |
| 12.31.2013 |
| 12.31.2012 |
| 12.31.2013 |
| 12.31.2012 |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Construction in progress |
| 36,544,802 |
| 61,735,710 |
| — |
| — |
| 36,544,802 |
| 61,735,710 |
|
Land |
| 76,063,090 |
| 57,134,715 |
| — |
| — |
| 76,063,090 |
| 57,134,715 |
|
Buildings |
| 192,480,646 |
| 163,759,761 |
| (40,664,034 | ) | (31,980,362 | ) | 151,816,612 |
| 131,779,399 |
|
Plant and equipment |
| 441,676,692 |
| 346,179,261 |
| (200,955,598 | ) | (169,999,912 | ) | 240,721,094 |
| 176,179,349 |
|
Information technology |
| 16,144,001 |
| 12,429,618 |
| (10,559,816 | ) | (6,629,395 | ) | 5,584,185 |
| 5,800,223 |
|
Fixed facilities and accessories |
| 45,615,919 |
| 40,282,483 |
| (12,407,955 | ) | (15,443,891 | ) | 33,207,964 |
| 24,838,592 |
|
Vehicles |
| 28,724,536 |
| 11,134,161 |
| (13,602,672 | ) | (3,298,464 | ) | 15,121,864 |
| 7,835,697 |
|
Leasehold improvements |
| 770,928 |
| 130,240 |
| (203,887 | ) | (120,818 | ) | 567,041 |
| 9,422 |
|
Other property, plant and equipment (1) |
| 378,989,105 |
| 294,974,382 |
| (245,665,949 | ) | (183,736,764 | ) | 133,323,156 |
| 111,237,618 |
|
Total |
| 1,217,009,719 |
| 987,760,331 |
| (524,059,911 | ) | (411,209,606 | ) | 692,949,808 |
| 576,550,725 |
|
(1) Other property, plant and equipment is composed of bottles, market assets, furniture and other minor assets.
The net balance of each of these categories at December 31, 2013 and 2012 is detailed as follows:
Other property, plant and equipment |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bottles |
| 71,654,957 |
| 59,983,147 |
|
Marketing and promotional assets |
| 42,683,677 |
| 40,251,550 |
|
Other property, plant and equipment |
| 18,984,522 |
| 11,002,921 |
|
Total |
| 133,323,156 |
| 111,237,618 |
|
The Company has insurance to protect its property, plant and equipment and its inventory from potential losses. The geographic distribution of those assets is detailed as follows:
Chile | : | Santiago, Puente Alto, Maipú, Renca, Rancagua y San Antonio, Antofagasta, Coquimbo and Punta Arenas. |
Argentina | : | Buenos Aires, Mendoza, Córdoba y Rosario, Bahía Blanca, Chacabuco, La Pampa, Neuqén, Comodoro Rivadavia, Trelew, andTierra del Fuego |
Brazil | : | Río de Janeiro, Niteroi, Campos, Cabo Frío, Nova Iguazú, Espirito Santo, Vitoria parts Sao Paulo and Minas Gerais. |
Paraguay | : | Asunción, Coronel Oviedo, Ciudad del Este and Encarnación. |
11.2 Movements
Movements in property, plant and equipment are detailed as follows between January 1 and December 31, 2013 and 2012:
|
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, net |
| Fixed facilities |
| Vehicles, net |
| Leasehold |
| Other |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 61,735,710 |
| 57,134,715 |
| 131,779,399 |
| 176,179,349 |
| 5,800,223 |
| 24,838,592 |
| 7,835,697 |
| 9,422 |
| 111,237,618 |
| 576,550,725 |
|
Additions |
| 99,023,742 |
| 13,048,106 |
| 5,123,731 |
| 16,777,829 |
| 469,280 |
| 479,487 |
| 1,097,294 |
| 7,535 |
| 43,207,810 |
| 179,234,814 |
|
Disposals |
| — |
| (733,044 | ) | (230,659 | ) | (2,198,991 | ) | (213 | ) | (700,111 | ) | — |
| — |
| (2,030,783 | ) | (5,893,801 | ) |
Transfers between items of property, plant and equipment |
| (120,904,100 | ) | (182,817 | ) | 16,005,001 |
| 61,071,686 |
| 1,666,511 |
| 10,979,455 |
| 6,629,711 |
| 639,213 |
| 24,095,340 |
| — |
|
Transfer to (from) investment property |
| — |
| — |
| — |
| (1,565,232 | ) | — |
| — |
| — |
| — |
| — |
| (1,565,232 | ) |
Additions from business combinations (1) |
| 18,282 |
| 9,124,967 |
| 13,469,878 |
| 25,832,574 |
| 551,976 |
| — |
| 2,027,699 |
| — |
| 7,692,513 |
| 58,717,889 |
|
Depreciation expense |
| — |
| — |
| (3,912,718 | ) | (28,448,397 | ) | (1,694,902 | ) | (2,346,228 | ) | (2,153,714 | ) | (89,976 | ) | (42,943,717 | ) | (81,589,652 | ) |
Increase (decrease) due to foreign currency translation differences |
| (3,319,254 | ) | (1,389,534 | ) | (8,451,502 | ) | (5,130,748 | ) | (150,635 | ) | 2,412,608 |
| (313,103 | ) | 847 |
| (3,345,472 | ) | (19,686,793 | ) |
Other increase (decrease) |
| (9,578 | ) | (939,303 | ) | (1,966,518 | ) | (1,796,976 | ) | (1,058,055 | ) | (2,455,839 | ) | (1,720 | ) | — |
| (4,590,153 | ) | (12,818,142 | ) |
Total movimientos |
| (25,190,909 | ) | 18,928,375 |
| 20,037,213 |
| 64,541,745 |
| (216,038 | ) | 8,369,372 |
| 7,286,167 |
| 557,619 |
| 22,085,538 |
| 116,399,083 |
|
Ending balance at December 31, 2013 |
| 36,544,802 |
| 76,063,090 |
| 151,816,612 |
| 240,721,094 |
| 5,584,185 |
| 33,207,964 |
| 15,121,864 |
| 567,041 |
| 133,323,156 |
| 692,949,808 |
|
(1) Corresponds to balances incorporated as of October 11, 2013, resulting from the acquisition of Companhia de Bebidas Ipiranga, pursuant to the description in Note 3b).,
|
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, net |
| Fixed facilities |
| Vehicles, net |
| Leasehold |
| Other |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 47,924,160 |
| 34,838,977 |
| 65,354,562 |
| 109,316,370 |
| 2,143,340 |
| 15,450,209 |
| 1,938,804 |
| 23,980 |
| 73,074,065 |
| 350,064,467 |
|
Additions |
| 59,622,568 |
| — |
| 163,015 |
| 16,253,430 |
| 590,141 |
| 33,027 |
| 1,623,662 |
| — |
| 50,800,843 |
| 129,086,686 |
|
Disposals |
| — |
| — |
| — |
| (425,844 | ) | (32,575 | ) | — |
| — |
| — |
| (712,471 | ) | (1,170,890 | ) |
Transfers between items of property, plant and equipment |
| (62,379,694 | ) | (263,320 | ) | 33,207,590 |
| 20,739,334 |
| 2,326,639 |
| 11,403,778 |
| 4,676,401 |
| — |
| (9,710,728 | ) | — |
|
Transfer to (from) investment property |
| — |
| — |
| (2,977,969 | ) | — |
| — |
| — |
| — |
| — |
| — |
| (2,977,969 | ) |
Additions from business combinations (1) |
| 18,267,801 |
| 25,288,317 |
| 46,717,142 |
| 58,602,133 |
| 2,068,712 |
| 24,765 |
| 591,579 |
|
|
| 40,370,384 |
| 191,930,833 |
|
Depreciation expense |
| — |
| — |
| (2,958,099 | ) | (20,058,072 | ) | (1,043,395 | ) | (1,645,825 | ) | (728,228 | ) | (11,624 | ) | (26,831,414 | ) | (53,276,657 | ) |
Increase (decrease) due to foreign currency translation differences |
| (1,699,125 | ) | (2,729,259 | ) | (7,833,909 | ) | (8,547,363 | ) | (236,756 | ) | (422,406 | ) | (133,634 | ) | (2,934 | ) | (13,619,288 | ) | (35,224,674 | ) |
Other increase (decrease) |
| — |
| — |
| 107,067 |
| 299,361 |
| (15,883 | ) | (4,956 | ) | (132,887 | ) | — |
| (2,133,773 | ) | (1,881,071 | ) |
Total movimientos |
| 13,811,550 |
| 22,295,738 |
| 66,424,837 |
| 66,862,979 |
| 3,656,883 |
| 9,388,383 |
| 5,896,893 |
| (14,558 | ) | 38,163,553 |
| 226,486,258 |
|
Ending balance at December 31, 2012 |
| 61,735,710 |
| 57,134,715 |
| 131,779,399 |
| 176,179,349 |
| 5,800,223 |
| 24,838,592 |
| 7,835,697 |
| 9,422 |
| 111,237,618 |
| 576,550,725 |
|
(1) Corresponds to balances incorporated as of October 1, 2012 as a result of the consolidation of Embotelladoras Coca-Cola Polar S.A. and certain other companies explained in note 3b).
NOTE 12 — RELATED PARTY DISCLOSURES
Balances and transactions with related parties as of December 31, 2013 and 2012 are detailed as follows:
12.1 Accounts receivable:
12.1.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean peso |
| 2,441,871 |
| — |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Chilean peso |
| 4,958,064 |
| 4,893,956 |
|
96.517.210-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Chilean peso |
| 607,913 |
| 358,859 |
|
Extranjera |
| Montevideo Refrescos S.A. |
| Related to Shareholder |
| Uruguay |
| Dollar |
| — |
| 51,215 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Dollar |
| 20,368 |
| 20,058 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Chilean peso |
| 771 |
| 301 |
|
|
|
|
| Total |
|
|
|
|
| 8,028,987 |
| 5,324,389 |
|
12.1.2 Non current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean peso |
| 18,765 |
| 7,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 18,765 |
| 7,197 |
|
12.2 Accounts payable:
12.2.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean peso |
| 11,942,070 |
| 8,680,945 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Argentine peso |
| 2,500,343 |
| 11,624,070 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brasil |
| Brazilean real |
| 9,613,040 |
| 6,721,378 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Chilean peso |
| 4,882,720 |
| 5,441,206 |
|
Foreign |
| Coca-Cola Perú |
| Related to Shareholder |
| Perú |
| Dollar |
| 3,489,376 |
| — |
|
Foreign |
| Leão Júnior S.A. |
| Associate |
| Brasil |
| Brazilean real |
| 10,683,703 |
| — |
|
Foreign |
| Socoraba Refrescos S.A. |
| Associate |
| Brasil |
| Brazilean real |
| 83,128 |
| — |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Chilean peso |
| 230,907 |
| 259,613 |
|
|
|
|
| Total |
|
|
|
|
| 43,425,287 |
| 32,727,212 |
|
12.3 Transactions:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of concentrates |
| Chilean peso |
| 110,774,146 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean peso |
| 5,429,796 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean peso |
| 2,646,654 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of services and others |
| Chilean peso |
| 5,571,189 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean peso |
| 33,459,965 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean peso |
| 3,373,064 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of packaging |
| Chilean peso |
| 2,822,034 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of services and others |
| Chilean peso |
| 145,773 |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean peso |
| 28,698,682 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean peso |
| 2,383,113 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Purchase of concentrates |
| Brazilean real |
| 97,171,997 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Reimbursement and other purchases |
| Brazilean real |
| 630,511 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Advertising participation payment |
| Brazilean real |
| 14,788,823 |
|
Foreign |
| Sorocaba Refrescos S. A. |
| Associate |
| Brazil |
| Purchase of products |
| Brazilean real |
| 2,788,906 |
|
Foreign |
| Leao Alimentos e Bebidas Ltda. |
| Associate |
| Brazil |
| Purchase of products |
| Brazilean real |
| 31,991,055 |
|
Foreign |
| Sistema de Alimentos e Bebidas do Brasil Ltda. |
| Associate |
| Brazil |
| Purchase of products |
| Brazilean real |
| 24,283,921 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Purchase of concentrates |
| Argentine peso |
| 95,897,878 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising rights, rewards and others |
| Argentine peso |
| 2,321,031 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Collection of advertising participation |
| Argentine peso |
| 8,534,260 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Purchase of raw materials |
| Chilean peso |
| 1,406,642 |
|
Foreign |
| Coca-Cola Perú |
| Related to Shareholder |
| Perú |
| Purchase of concentrates and marketing expenses recovery |
| Chilean peso |
| 1,426,307 |
|
84.505.800-8 |
| Vendomática S.A. |
| Related to director |
| Chile |
| Sale of finished products |
| Chilean peso |
| 883,534 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Investment in mutual funds |
| Chilean peso |
| 54,441,000 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Redemption of mutual funds |
| Chilean peso |
| 54,953,000 |
|
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of concentrates |
| Chilean peso |
| 76,756,589 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean peso |
| 3,184,671 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean peso |
| 2,731,636 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of finished products |
| Chilean peso |
| 1,245,309 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of services and others |
| Chilean peso |
| 1,016,520 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of raw materials and others |
| Chilean peso |
| 3,686,498 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean peso |
| 28,986,747 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean peso |
| 2,722,611 |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean peso |
| 10,293,435 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean peso |
| 2,244,302 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brasil |
| Purchase of concentrates |
| Brazilean real |
| 78,524,183 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brasil |
| Reimbursement and other purchases |
| Brazilean real |
| 1,335,869 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brasil |
| Advertising participation payment |
| Brazilean real |
| 14,502,915 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Purchase of concentrates |
| Argentine peso |
| 68,569,280 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising rights, rewards and others |
| Argentine peso |
| 2,624,656 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Collection of advertising participation |
| Argentine peso |
| 5,419,055 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Purchase of raw materials |
| Chilean peso |
| 1,873,336 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Investment in mutual funds |
| Chilean peso |
| 61,042,686 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Redemption of mutual funds |
| Chilean peso |
| 59,455,046 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Redemption of time deposits |
| Chilean peso |
| 223,027 |
|
84.505.800-8 |
| Vendomática S.A. |
| Related to director |
| Chile |
| Sale of finished products |
| Chilean peso |
| 1,358.380 |
|
79.753.810-8 |
| Claro y Cía. |
| Related to partner |
| Chile |
| Legal Counseling charges |
| Chilean peso |
| 349,211 |
|
93.899.000-K |
| Vital Jugos S.A. (1) |
| Associate |
| Chile |
| Sale of raw material and materials |
| Chilean peso |
| 4,697,898 |
|
93.899.000-K |
| Vital Jugos S.A. (1) |
| Associate |
| Chile |
| Purchase of finished products |
| Chilean peso |
| 18,656,191 |
|
96.705.990-0 |
| Envases Central S.A. (1) |
| Associate |
| Chile |
| Purchase of finished products |
| Chilean peso |
| 14,618,933 |
|
96.705.990-0 |
| Envases Central S. A. (1) |
| Associate |
| Chile |
| Sale of raw materials and materials |
| Chilean peso |
| 2,479,381 |
|
76.389.720-6 |
| Vital Aguas S.A. (1) |
| Associate |
| Chile |
| Purchase of finished products |
| Chilean peso |
| 4,065,125 |
|
(1) Corresponds to transactions generated with Vital Aguas S.A:, Vital Jugos S.A. and Envases Central S.A. up until before taking control over those companies as a result of what has been described in Note 3b)
12.4 Key management compensation
Salaries and benefits paid to the Company’s key management personnel including directors and managers, are detailed as follows:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Executive wages, salaries and benefits |
| 4,965,149 |
| 4,511,609 |
|
Director allowances |
| 1,512,000 |
| 1,302,000 |
|
Accrued benefits in the last five years and paid during the period |
| 196,819 |
| 723,298 |
|
Total |
| 6,673,968 |
| 6,536,907 |
|
NOTE 13 — EMPLOYEE BENEFITS
As of December 31, 2013 and 2012, the Company had recorded reserves for profit sharing and for bonuses totaling ThCh$8,749,678 and ThCh$8,240,460, respectively.
This liability is included in other non-current non-financial liabilities in the statement of financial position.
Employee benefits expense is allocated between the cost of sales, cost of marketing, distribution costs and administrative expenses.
13.1 Personnel expenses
Personnel expenses included in the consolidated statement of income statement are as follows:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Wages and salaries |
| 164,138,911 |
| 116,549,091 |
|
Employee benefits |
| 36,190,649 |
| 29,023,263 |
|
Severance and post-employment benefits |
| 4,519,576 |
| 2,474,611 |
|
Other personnel expenses |
| 9,334,468 |
| 7,218,448 |
|
Total |
| 214,183,604 |
| 155,265,413 |
|
13.2 Number of Employees
|
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
Number of employees |
| 16,587 |
| 13,762 |
|
|
|
|
|
|
|
Number of average employees |
| 15,913 |
| 12,028 |
|
13.3 Post-employment benefits
This item represents post employment benefits which are determined as stated in Note 2.17.
Post-employment benefits |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Non-current provision |
| 8,758,111 |
| 7,037,122 |
|
Total |
| 8,758,111 |
| 7,037,122 |
|
13.4 Post-employment benefits movement
The movements of post-employment benefits for the years ended December 31, 2013 and 2012 are detailed as follows:
Movements |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 7,037,122 |
| 5,130,015 |
|
Increase due to merger |
| — |
| 189,921 |
|
Service costs |
| 1,957,686 |
| 1,500,412 |
|
Interest costs |
| 133,561 |
| 158,235 |
|
Net actuarial losses |
| 1,411,030 |
| 1,010,136 |
|
Benefits paid |
| (1,781,288 | ) | (951,597 | ) |
Total |
| 8,758,111 |
| 7,037,122 |
|
13.5 Assumptions
The actuarial assumptions used at December 31, 2013 and 2012 were:
Assumptions |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
Discount rate (1) |
| 4.8% |
| 5.1% |
|
Expected salary increase rate (1) |
| 4.1% |
| 4.4% |
|
Turnover rate |
| 5.4% |
| 5.4% |
|
Mortality rate (2) |
| RV-2009 |
| RV-2009 |
|
Retirement age of women |
| 60 años |
| 60 años |
|
Retirement age of men |
| 65 años |
| 65 años |
|
(1) The discount rate and the expected salary increase rate are calculated in real terms, which do not include an inflation adjustment. The rates shown above are presented in nominal terms to facilitate a better understanding by the reader.
(2) Mortality assumption tables prescribed for use by the Chilean Superintendence of Securities and Insurance.
NOTE 14 — INVESTMENTS IN ASSOCIATES USING EQUITY METHOD OF ACCOUNTING
14.1 Balances
Investments in associates using equity method of accounting are detailed as follows:
|
|
|
| Country of |
| Functional |
| Carrying Value |
| Percentage interest |
| ||||
Taxpayer ID |
| Name |
| Incorporation |
| Currency |
| 12.31.2013 |
| 12.31.2012 |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| % |
| % |
|
86.881.400-4 |
| Envases CMF S.A. (1) |
| Chile |
| Chilean peso |
| 17,881,972 |
| 17,848,010 |
| 50.00 | % | 50.00 | % |
Foreign |
| Leao Alimentos e Bebidas Ltda. (4) |
| Brazil |
| Brazilean real |
| 17,354,749 |
| — |
| 10.87 | % | — |
|
Foreign |
| Kaik Participacoes Ltda. (2) |
| Brazil |
| Brazilean real |
| 1,165,044 |
| 1,172,641 |
| 11.32 | % | 11.31 | % |
Foreign |
| SRSA Participacoes Ltda. |
| Brazil |
| Brazilean real |
| 100,874 |
| — |
| 40.00 | % | — |
|
Foreign |
| Sistema de Alimentos de Bebidas Do Brasil Ltda. (2) y (4) |
| Brazil |
| Brazilean real |
| — |
| 9,587,589 |
| — |
| 5.74 | % |
Foreign |
| Sorocaba Refrescos S.A.(3) |
| Brazil |
| Brazilean real |
| 32,170,760 |
| 34,709,914 |
| 40.00 | % | 40.00 | % |
Foreign |
| Holdfab2 Participacoes Societarias Ltda. (4) |
| Brazil |
| Brazilean real |
| — |
| 9,761,907 |
| — |
| 36.40 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 68,673,399 |
| 73,080,061 |
|
|
|
|
|
(1) In these companies, regardless of the percentage of ownership interest, it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions..
(2) In these companies, regardless of the percentage of ownership interest held,it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions.
(3) Corresponds to the purchase of a 40% ownership interest in the Brazilian company during the last quarter of 2012..
(4) During the year 2013 through corporate restructuring that occurred in Brazil, interests held in Sistema de Alimentos de Bebidas Do Brasil Ltda. and Holdfab 2 Participacoes Societarias Ltda., were merged into a new company called Leao Alimentos e Bebidas Ltda. Subsequently and according to the current sales volume of Rio de Janeiro Refrescos Ltda., part of the investment in the new company was sold to the rest of the bottlers for an amount of ThCh$ 3,704,831 at carrying value.
14.2 Movement
The movement of investments in associates using equity method of accounting is shown below, for the year ended December 31, 2013 and 2012:
Details |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening Balance |
| 73,080,061 |
| 60,290,966 |
|
Capital increases in equity investees |
| — |
| 2,380,320 |
|
Acquisition of Sorocaba Refrescos S.A. (40%) |
| — |
| 34,513,444 |
|
Investment in Holdfab 2 Soc Participacoes Ltda and SABB in exchange for interest in the new company Leao Alimentos e Bebidas Ltda. |
| (19,349,496 | ) | — |
|
Increase in interest in new company Leao Alimentos e Bebidas Ltda. By 9.57% |
| 18,928,747 |
| — |
|
Increase of 1.30% participation in Leon Alimentos e Bebidas Ltda. for acquisition of the Compañía de Bebidas Ipiranga, October 11, 2013. |
| 2,089,253 |
| — |
|
Dividends received |
| (2,085,031 | ) | — |
|
Variation minimum dividend equity investees |
| 22,459 |
| (402,148 | ) |
Participación en ganancia ordinaria |
| 1,325,518 |
| 2,409,110 |
|
Amortization of unrealized earnings equity investees |
| 85,266 |
| 7,791 |
|
Other increases (decreases) on investments in equity investees (Sale of Leon Alimentos y Bebidas Ltda. quotas) |
| (3,704,831 | ) | — |
|
Decrease due to foreign currency translation differences |
| (1,718,547 | ) | (3,652,740 | ) |
Deconsolidation of certain investments under equity method of accounting due to Polar merger (1) |
| — |
| (22,466,682 | ) |
Ending Balance |
| 68,673,399 |
| 73,080,061 |
|
(1) Corresponds to the proportional equity value recorded as of September 30, 2012 for the equity investees Vital Aguas S.A. Vital Jugos S.A. and Envases Central, as explained in note 3 b) as a result of the merger with Embotelladoras Coca-Cola Polar, they are now considered subisidiaries and are incorporated into the Company´s consolidation as of October 1, 2012.
The main movements for the years ended 2013 and 2012 are detailed as follows:
· During the year 2013, Envases CMF S.A. has distributed dividends of ThCh$1,340,492.
· During the year 2013, Sorocaba Refrescos S.A. has distributed dividends of ThCh$ 744,539.
· During the first quarter of 2013, there is a reorganization of the companies that manufacture juice products and mate in Brazil, with the merger of Holdfab2 Participações Ltda. and Sistema de Alimentos de Bebidas Do Brasil Ltda. into a single company that is the legal continuing entity, namely Leao Alimentos e Bebidas Ltda.
· In November 2012, pursuant the Shareholders’ Agreements, Coca-Cola Embonor S.A. purchased 7.1% ownership interest in Vital Aguas S.A. at carrying amount and 7.0% ownership interest in Vital Jugos S.A. at carrying amount. The disbursements received for these transactions amounted to ThCh$2,112,582.
· Subsequent to the merger with Embotelladoras Coca-Cola Polar S.A., detailed in Note 1b), on October 1, 2012, the Company acquired control of Vital Jugos S.A., Vital Aguas S.A. and Envases Central S.A.. Subsequent to the merger, the Company holds 72.0%, 73.6% and 59.27% ownership interest in these entities, respectively.
· On August 30, 2012, Rio de Janeiro Refrescos Ltda. (“RJR”), a subsidiary of Embotelladora Andina S.A. in Brazil, and Renosa Industria Brasileira de Bebidas S.A. (the other shareholder of this subsidiary) signed a promissory purchase agreement containing the conditions leading to the acquisition by RJR of 100% of the equity interest held by Renosa in Sorocaba Refrescos S.A. which is equivalent to 40% of the total shares of Sorocaba. The promissory agreement should be fulfilled within a period of 180 days. The agreement was materialized during the month of October with a payment of 146.9 million reals.
· In accordance with the Special Shareholders’ Meeting of our equity investee, Vital Jugos S.A., held on April 10, 2012, a capital increase was agreed in the amount of ThCh$6,960,000, with 60% of the increase being paid on May 15, 2012 and the balance thereof will be paid during the course of the year. The Company met that capital increase in the percentage of the outstanding ownership at that date of 57% contributing ThCh$2,380,320.
14.3 Reconciliation of share of profit in investments in associates:
Details |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Share of profit of associates |
| 1,325,518 |
| 2,409,110 |
|
|
|
|
|
|
|
Non-realized earnings in inventory acquired from associates and not sold at the end of period, presented as a discount in the respective asset account (containers and/or inventories) |
| (627,366 | ) | (647,003 | ) |
Amortization of gain on sale of property plant and equipment to Envases CMF |
| 85,266 |
| 85,266 |
|
Amortization of fair value adjustments related to Vital acquisition |
| — |
| (77,475 | ) |
Income Statement Balance |
| 783,418 |
| 1,769,898 |
|
14.4 Summary financial information of associates:
The attached table presents summarized information regarding the Company´s equity investees as of December 31, 2013:
|
| Envases |
| Sorocaba |
| Kaik |
| SRSA |
| Leao Alimentos |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Total assets |
| 59,975,360 |
| 40,921,923 |
| 10,292,225 |
| 4,840,920 |
| 368,833,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
| 22,932,419 |
| 20,611,212 |
| 42 |
| 4,588,736 |
| 211,848,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
| 42,698,148 |
| 5,907,901 |
| 381,033 |
| — |
| 297,404,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) of associate |
| — |
| 706,155 |
| 381,033 |
| 247,705 |
| 6,779,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting date |
| 12-31-2013 |
| 11-30-2013 |
| 11-30-2013 |
| 11-30-2013 |
| 11-30-2013 |
|
NOTE 15 — INTANGIBLE ASSETS AND GOODWILL
15.1 Intangible assets other than goodwill
Intangible assets other than goodwill as of the end of each reporting period are detailed as follows:
|
| December 31, 2013 |
| December 31, 2012 |
| ||||||||
|
| Gross |
| Cumulative |
| Net |
| Gross |
| Cumulative |
| Net |
|
Detalle |
| Amount |
| Amortization |
| Amount |
| Amount |
| Amortization |
| Amount |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Distribution rights (1) |
| 691,355,453 |
| — |
| 691,355,453 |
| 459,320,270 |
| — |
| 459,320,270 |
|
Software |
| 21,106,268 |
| (12,308,966 | ) | 8,797,302 |
| 13,597,796 |
| (8,743,750 | ) | 4,854,046 |
|
Others |
| 532,912 |
| (79,175 | ) | 453,737 |
| 497,998 |
| (90,041 | ) | 407,957 |
|
Total |
| 712,994,633 |
| (12,388,141 | ) | 700,606,492 |
| 473,416,064 |
| (8,833,791 | ) | 464,582,273 |
|
(1) According to what is described in note 3 Business Combinations, it corresponds to the rights to produce and distribute Coca-Cola products in the territories where Embotelladoras Coca-Cola Polar S.A maintained franchises in Chile, Argentina and Paraguay and in the territories in parts of Sao Paulo and Minas Gerais maintained by Companhia de Bebidas Ipiranga. Such distribution rights are composed as follows and are not subject to amortization:
|
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Chile |
| 300,305,727 |
| 300,305,727 |
|
Brasil |
| 226,182,916 |
| — |
|
Paraguay |
| 162,904,834 |
| 156,627,248 |
|
Argentina |
| 1,961,976 |
| 2,387,295 |
|
Total |
| 691,355,453 |
| 459,320,270 |
|
The movement and balances of identifiable intangible assets are detailed as follows for the period January 1 to December 31, 2013 and 2012:
|
| December 31, 2013 |
| December 31, 2012 |
| ||||||||||||
|
| Distribution |
|
|
|
|
|
|
| Distribution |
|
|
|
|
|
|
|
Description |
| Rights |
| Rights |
| Software |
| Total |
| Rights |
| Rights |
| Software |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 459,320,270 |
| 407,957 |
| 4,854,046 |
| 464,582,273 |
| — |
| 422,463 |
| 716,394 |
| 1,138,857 |
|
Additions |
| 228,359,641 |
| — |
| 1,034,159 |
| 229,393,800 |
| 459,393,920 |
| — |
| 1,083,184 |
| 460,477,104 |
|
Increase due to merger |
|
|
| 56,000 |
| 4,709,903 |
| 4,765,903 |
| — |
| — |
| 3,506,266 |
| 3,506,266 |
|
Amortization |
| — |
| (4,948 | ) | (1,747,232 | ) | (1,752,180 | ) | — |
| (6,585 | ) | (547,481 | ) | (554,066 | ) |
Other increases (decreases)(1) |
| 3,675,542 |
| (5,272 | ) | (53,574 | ) | 3,616,696 |
| (73,650 | ) | (7,921 | ) | 95,683 |
| 14,112 |
|
Ending balance |
| 691,355,453 |
| 453,737 |
| 8,797,302 |
| 700,606,492 |
| 459,320,270 |
| 407,957 |
| 4,854,046 |
| 464,582,273 |
|
(1) Mainly corresponds to the restatement due to the effect of conversion of foreign subsidiaries’ distribution rights.
15.2 Goodwill
Movement in goodwill is detailed as follows:
Year ended December 31,2013
|
|
|
|
|
|
|
| Foreign currency |
|
|
|
|
|
|
|
|
|
|
| translation differences where |
|
|
|
|
|
|
|
|
|
|
| functional currency is |
|
|
|
|
|
|
|
|
| Disposals or |
| different from |
|
|
|
Cash generating unit |
| 01.01.2013 |
| Additions |
| impairments |
| presentation currency |
| 12.31.2013 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile operation |
| 8,503,023 |
| 19,465 |
| — |
| — |
| 8,522,488 |
|
Brazilian operation |
| 35,536,967 |
| 55,255,194 | (1) | — |
| (2,132,658 | ) | 88,659,503 |
|
Argentine operation |
| 13,837,339 |
| — |
| — |
| (2,432,843 | ) | 11,404,496 |
|
Paraguayan operation |
| 6,915,412 |
| — |
| — |
| 277,168 |
| 7,192,580 |
|
Total |
| 64,792,741 |
| 55,274,659 |
| — |
| (4,288,333 | ) | 115,779,067 |
|
Year ended December 31,2012
|
|
|
|
|
|
|
| Foreign currency |
|
|
|
|
|
|
|
|
|
|
| translation differences where |
|
|
|
|
|
|
|
|
|
|
| functional currency is |
|
|
|
|
|
|
|
|
| Disposals or |
| different from |
|
|
|
Cash generating unit |
| 01.01.2012 |
| Additions (2) |
| impairments |
| presentation currency |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile operation |
| — |
| 8,503,023 |
| — |
| — |
| 8,503,023 |
|
Brazilian operation |
| 41,697,004 |
| — |
| — |
| (6,160,037 | ) | 35,536,967 |
|
Argentine operation |
| 15,855,174 |
| 1,041,633 |
| — |
| (3,059,468 | ) | 13,837,339 |
|
Paraguayan operation |
| — |
| 6,915,412 |
| — |
| — |
| 6,915,412 |
|
Total |
| 57,552,178 |
| 16,460,068 |
| — |
| (9,219,505 | ) | 64,792,741 |
|
(1) As explained in Note 3 “Business Combinations”, corresponds to goodwill generated in the fair value valuation of assets and liabilities resulting from the adcquisition of Compañía de Bebidas Ipiranga.
(2) As explained in Note 3 “Business Combinations”, corresponds to goodwill generated in the fair value valuation of assets and liabilities resulting from the merger with Embotelladoras Coca-Cola Polar S.A..
NOTE 16 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
Liabilities are detailed as follows:
Current |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 70,356,550 |
| 87,278,613 |
|
Bonds payable |
| 15,589,444 |
| 4,376,648 |
|
Deposits in guarantee |
| 14,577,572 |
| 13,851,410 |
|
Forward contract obligations (see note 21) |
| 1,037,473 |
| 394,652 |
|
Leasing agreements |
| 5,316,216 |
| 346,696 |
|
Total |
| 106,877,255 |
| 106,248,019 |
|
Non-current |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 68,086,431 |
| 46,353,758 |
|
Bonds payable |
| 532,376,302 |
| 126,356,040 |
|
Forward contract obligations (see note 21) |
| 948,481 |
| — |
|
Leasing agreements |
| 3,950,845 |
| 1,170,397 |
|
Total |
| 605,362,059 |
| 173,880,195 |
|
16.1.1 Bank obligations, current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| Up to |
| 90 days |
| at |
| at |
| ||||||||
Tax ID, |
| Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| 90 days |
| up to 1 year |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 6.60 | % | 6.60 | % | — |
| — |
| — |
| 9,171,557 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 5.76 | % | 5.76 | % | 5,914 |
| 660,000 |
| 665,914 |
| 671,827 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 6.82 | % | 6.82 | % | — |
| — |
| — |
| 2,323,515 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 6.39 | % | 6.39 | % | — |
| 1,932,039 |
| 1,932,039 |
| 32,069 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 6.84 | % | 6.84 | % | — |
| — |
| — |
| 2,695,242 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 6.49 | % | 6.49 | % | — |
| — |
| — |
| 384,618 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Dollar |
| At maturity |
| 3.36 | % | 3.36 | % | — |
| — |
| — |
| 1,452,145 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Pesos chilenos |
| At maturity |
| 6.84 | % | 6.84 | % | — |
| — |
| — |
| 2,828,742 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.951.000-4 |
| Banco HSBC |
| Chile |
| Pesos chilenos |
| At maturity |
| 6.80 | % | 6.80 | % | — |
| — |
| — |
| 7,562,333 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Unidades de fomento |
| At maturity |
| 3.84 | % | 3.84 | % | 20,396 |
| 23,903,953 |
| 23,924,349 |
| — |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean peso |
| Monthly |
| 1.10 | % | 1.10 | % | 7,184 |
| 31,129 |
| 38,313 |
| — |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean peso |
| At maturity |
| 6.85 | % | 6.85 | % | — |
| — |
| — |
| 10,694,653 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean peso |
| At maturity |
| 4.30 | % | 4.30 | % | — |
| — |
| — |
| 5,031,567 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean peso |
| At maturity |
| 6.83 | % | 6.83 | % | — |
| — |
| — |
| 10,335,540 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean peso |
| At maturity |
| 6.80 | % | 6.80 | % | — |
| — |
| — |
| 7,018,620 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Dollar |
| At maturity |
| 2.20 | % | 2.20 | % | — |
| — |
| — |
| 4,832,261 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.032.000-8 |
| BBVA |
| Chile |
| Chilean peso |
| At maturity |
| 6.25 | % | 6.25 | % | — |
| — |
| — |
| 7,521,185 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.032.000-8 |
| BBVA |
| Chile |
| Chilean peso |
| At maturity |
| 6.50 | % | 6.50 | % | 1,887,000 |
| — |
| 1,887,000 |
| — |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Chilean peso |
| Semiannually |
| 4.29 | % | 4.29 | % | — |
| 199,487 |
| 199,487 |
| 674,516 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Ciudad de Bs.As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 119,660 |
| 1,061,931 |
| 1,181,591 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| Monthly |
| 14.80 | % | 9.90 | % | 139,345 |
| 670,411 |
| 809,756 |
| 949,545 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| Monthly |
| 9.90 | % | 9.90 | % | 57,200 |
| 170,553 |
| 227,753 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| At maturity |
| 18.85 | % | 18.85 | % | 13,295 |
| 5,148,756 |
| 5,162,051 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 25,899 |
| 67,879 |
| 93,778 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Monthly |
| 15.00 | % | 15.00 | % | — |
| — |
| — |
| 27,447 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| At maturity |
| 14.50 | % | 14.50 | % | — |
| — |
| — |
| 645,870 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 7,428 |
| 78,438 |
| 85,866 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| At maturity |
| 21.00 | % | 21.00 | % | 73,045 |
| — |
| 73,045 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Macro Bansud |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 54,117 |
| 143,100 |
| 197,217 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Macro Bansud |
| Argentina |
| Argentine peso |
| At maturity |
| 21.00 | % | 21.00 | % | 22,738 |
| — |
| 22,738 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Patagonia |
| Argentina |
| Argentine peso |
| At maturity |
| 12.50 | % | 12.50 | % | — |
| — |
| — |
| 3,896,499 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Santander Río |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 6,386 |
| 268,138 |
| 274,524 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| BBVA Banco Francés |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 49,880 |
| 134,975 |
| 184,855 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| BBVA Banco Francés |
| Argentina |
| Argentine peso |
| At maturity |
| 21.00 | % | 21.00 | % | 8,862,492 |
| — |
| 8,862,492 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 81,011 |
| 238,331 |
| 319,342 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Monthly |
| 15.00 | % | 15.00 | % | — |
| — |
| — |
| 96,370 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 20,994 |
| 404,761 |
| 425,755 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| At maturity |
| 21.00 | % | 21.00 | % | 7,578,030 |
| — |
| 7,578,030 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco Santa Fe |
| Argentina |
| Argentine peso |
| At maturity |
| 12.85 | % | 12.85 | % | — |
| — |
| — |
| 6,500,755 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Comercial Bank of China |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 28,234 |
| 353,977 |
| 382,211 |
| — |
|
Foreign |
| Andina Empaques Argentina S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs.As. |
| Argentina |
| Argentine peso |
| At maturity |
| 15.25 | % | 15.25 | % | 2,017 |
| 89,388 |
| 91,405 |
| — |
|
Foreign |
| Andina Empaques Argentina S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs.As. |
| Argentina |
| Argentine peso |
| At maturity |
| 21.00 | % | 21.00 | % | 23,623 |
| — |
| 23.623 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Standard Bank |
| Argentina |
| Argentine peso |
| At maturity |
| 15.50 | % | 15.50 | % | — |
| — |
| — |
| 913 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| VOTORANTIM |
| Brazil |
| Brazilean real |
| Monthly |
| 9.40 | % | 9.40 | % | 5,617 |
| 122,776 |
| 128,393 |
| 134,864 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| ITAÚ - Finame |
| Brazil |
| Brazilean real |
| Monthly |
| 6.63 | % | 6.63 | % | 671,921 |
| 1,641,343 |
| 2,313,264 |
| 941,997 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilean real |
| Monthly |
| 7.15 | % | 7.15 | % | 77,865 |
| 222,132 |
| 299,997 |
| 328,872 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Dollar |
| Monthly |
| 2.992 | % | 2.992 | % | 4,058,976 |
| 5,201,855 |
| 9,260,831 |
| 525,091 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda |
| Brazil |
| Foreign |
| Banco Citibank |
| Brazil |
| Brazilean real |
| Monthly |
| 3.06 | % | 3.06 | % | 572,058 |
| — |
| 572,058 |
| — |
|
Foreign |
| Rio de Janeiro Refrescos Ltda |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilean real |
| Quarterly |
| 12.41 | % | 12.41 | % | 182,409 |
| 419,894 |
| 602,303 |
| — |
|
Foreign |
| Rio de Janeiro Refrescos Ltda |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Quarterly |
| 11.79 | % | 11.79 | % | 39,699 |
| 2,296,540 |
| 2,336,239 |
| — |
|
Foreign |
| Rio de Janeiro Refrescos Ltda |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 4.50 | % | 4.50 | % | 48,497 |
| 142,240 |
| 190,737 |
| — |
|
Foreign |
| Rio de Janeiro Refrescos Ltda |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 7.00 | % | 7.00 | % | 2,466 |
| 7,128 |
| 9,594 |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 70,356,550 |
| 87,278,613 |
|
16.1.2 Bank obligations, non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| 1 year |
|
|
|
|
| Total |
| ||||||||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| up to 3 |
| 3 years |
| More than |
| at |
| at |
| ||||||||||||
Tax ID, |
| Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| years |
| up to 5 years |
| 5 years |
| 12.31.2013 |
| 12.31.2012 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Votorantim |
| Brazil |
| Brazilean real |
| Monthly |
| 9.40 | % | 9.40 | % | 64,928 |
| — |
| — |
| 64,928 |
| 202,358 |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 6.63 | % | 6.63 | % | 9,443,298 |
| 1,043,036 |
| — |
| 10,486,334 |
| 4,069,577 |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander Río |
| Brazil |
| Brazilean real |
| Monthly |
| 7.15 | % | 7.15 | % | 783,623 |
| — |
| — |
| 783,623 |
| 1,134,032 |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Dollar |
| Monthly |
| 2.992 | % | 2.992 | % | 6,294,711 |
| 22,118,118 |
| — |
| 28,412,829 |
| 34,056,374 |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilean real |
| Quarterly |
| 12.41 | % | 12.41 | % | 979,753 |
| — |
| — |
| 979,753 |
| — |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Quarterly |
| 11.79 | % | 11.79 | % | 6,124,108 |
| 6,124,108 |
| 3,827,567 |
| 16,075,783 |
| — |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 4.50 | % | 4.50 | % | 379,308 |
| 21,685 |
| — |
| 400,993 |
| — |
| ||||
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 7.00 | % | 7.00 | % | 18,998 |
| 3,958 |
| — |
| 22,956 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| Monthly |
| 9.90 | % | 9.90 | % | 397,956 |
| — |
| — |
| 397,956 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Nación Bicentenario (1) |
| Argentina |
| Argentine peso |
| Monthly |
| 14.80 | % | 9.90 | % | 1,504,443 |
| — |
| — |
| 1,504,443 |
| 2,895,961 |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 238,331 |
| — |
| — |
| 238,331 |
| 674,591 |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 801,980 |
| — |
| — |
| 801,980 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 67,879 |
| — |
| — |
| 67,879 |
| 192,130 |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 130,730 |
| — |
| — |
| 130,730 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Ciudad de Bs. As.. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 2,156,125 |
| — |
| — |
| 2,156,125 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| BBVA Banco Francés |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 511,539 |
| — |
| — |
| 511,539 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Santander Río |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 536,356 |
| — |
| — |
| 536,356 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Macro Bansud |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 547,844 |
| — |
| — |
| 547,844 |
| — |
| ||||
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Comercial Bank of China |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 2,863,994 |
| — |
| — |
| 2,863,994 |
| — |
| ||||
Foreign |
| Andina Empaques Argentina S.A |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| At maturity |
| 15.25 | % | 15.25 | % | 715,111 |
| — |
| — |
| 715,116 |
|
|
| ||||
96.705.990-0 |
| Envases Central |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Chilean peso |
| At maturity |
| 4.29 | % | 4.29 | % | 386,939 |
| — |
| — |
| 386,939 |
| 568,735 |
| ||||
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 5.76 | % | 5.76 | % | — |
| — |
| — |
| — |
| 660,000 |
| ||||
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean peso |
| At maturity |
| 6.39 | % | 6.39 | % | — |
| — |
| — |
| — |
| 1,900,000 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 68,086,431 |
| 46,353,758 |
| ||||
(1) The Bicentennial loan granted at a prime rate by Banco de la Nacion Argentina to Embotelladora del Atlántico S.A. is a benefit from the Argentine government to encourage investment projects. Embotelladora del Atlántico S.A. registered investment projects and received this loan at a prime rate of 9.9% annually.
16.2.1 Bonds payable
|
| Current |
| Non-Current |
| Total |
| ||||||
Composition of bonds payable |
| 12.31.2013 |
| 12.31.2012 |
| 12.31.2013 |
| 12.31.2012 |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bonds (face value) |
| 16,260,180 |
| 4,728,582 |
| 538,269,015 |
| 127,169,976 |
| 554,529,195 |
| 131,898,558 |
|
Expenses of bond issuance and discounts on placement |
| (670,736 | ) | (351,934 | ) | (5,892,713 | ) | (813,936 | ) | (6,563,449 | ) | (1,165,870 | ) |
Net balance presented in statement of financial position |
| 15,589,444 |
| 4,376,648 |
| 532,376,302 |
| 126,356,040 |
| 547,965,746 |
| 130,732,688 |
|
16.2.2 Current and non-current balances
Obligations with the public correspond to bonds in UF issued by the parent company on the Chilean market and bonds in US dollars issued by the parent company on the international market. In August 2013, the Company placed 2 new series, Series C for UF 1,000,000 and Series D for UF 4,000,000. On October 1, 2013 the Company placed in the United States of America a bond for MUS$575. Following is a breakdown of these instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Date |
|
|
|
|
|
Bond registration or |
|
|
| Face |
| Unit of |
| Interest |
| Final |
| Interest |
| amortization |
|
|
|
|
|
identification number |
| Series |
| amount |
| adjustment |
| rate |
| maturity |
| payment |
| of capital |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Bonds, current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registro 640 SVS 08.23.2010 |
| A |
| 1,000,000 |
| Unidad de Fomento |
| 3.0 | % | 08-15-2017 |
| Semi- annually |
| 02-15-2014 |
| 6,087,682 |
| 255,057 |
|
Registro 254 SVS 06.13.2001 |
| B |
| 3,067,680 |
| Unidad de Fomento |
| 6.5 | % | 06-01-2026 |
| Semi- annually |
| 06-01-2014 |
| 4,262,972 |
| 3,964,645 |
|
Registro 641 SVS 08.23.2010 |
| C |
| 1,500,000 |
| Unidad de Fomento |
| 4.0 | % | 08-15-2031 |
| Semi- annually |
| 02-15-2021 |
| 519,326 |
| 508,880 |
|
Registro 759 SVS 08.20.2013 |
| C |
| 1,000,000 |
| Unidad de Fomento |
| 3.5 | % | 08-16-2020 |
| Semi- annually |
| 02-16-2017 |
| 303,298 |
| — |
|
Registro 760 SVS 08.20.2013 |
| D |
| 4,000,000 |
| Unidad de Fomento |
| 3.8 | % | 08-16-2034 |
| Semi- annually |
| 02-16-2032 |
| 1,316,268 |
| — |
|
Yankee Bonds |
| — |
| 575,000,000 |
| Dollar |
| 5.0 | % | 10-01-2023 |
| Semi- annually |
| 10-01-2023 |
| 3,770,634 |
| — |
|
Total current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16,260,180 |
| 4,728,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registro 640 SVS 08.23.2010 |
| A |
| 1,000,000 |
| Unidad de Fomento |
| 3.0 | % | 08-15-2017 |
| Semi- annually |
| 02-15-2015 |
| 17,482,170 |
| 22,840,750 |
|
Registro 254 SVS 06.13.2001 |
| B |
| 3,068,680 |
| Unidad de Fomento |
| 6.5 | % | 06-01-2026 |
| Semi- annually |
| 06-01-2015 |
| 67,623,955 |
| 70,068,101 |
|
Registro 641 SVS 08.23.2010 |
| C |
| 1,500,000 |
| Unidad de Fomento |
| 4.0 | % | 08-15-2031 |
| Semi- annually |
| 02-15-2021 |
| 34,964,340 |
| 34,261,125 |
|
Registro 759 SVS 08.20.2013 |
| C |
| 1,000,000 |
| Unidad de Fomento |
| 3.5 | % | 08-16-2020 |
| Semi- annually |
| 02-16-2017 |
| 23,309,560 |
| — |
|
Registro 760 SVS 08.20.2013 |
| D |
| 4,000,000 |
| Unidad de Fomento |
| 3.8 | % | 08-16-2034 |
| Semi- annually |
| 02-16-2032 |
| 93,238,240 |
| — |
|
Yankee Bonds |
| — |
| 575,000,000 |
| Dollar |
| 5.0 | % | 10-01-2023 |
| Semi- annually |
| 10-01-2023 |
| 301,650,750 |
| — |
|
Total non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 538,269,015 |
| 127,169,976 |
|
Accrued interest included in the current portion of bonds totaled ThCh$6,550,485 and ThCh$1,156,542 at December 31, 2013 and December 31, 2012, respectively.
16.2.3 Non-current maturities
|
|
|
| Year of maturity |
| Total non- |
| ||||||
|
| Series |
| 2015 |
| 2016 |
| 2017 |
| Después |
| 12.31.2013 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Registro 640 SVS 08.23.2010 |
| A |
| 5,827,390 |
| 5,827,390 |
| 5,827,390 |
| — |
| 17,482,170 |
|
Registro 254 SVS 06.13.2001 |
| B |
| 4,134,658 |
| 4,403,409 |
| 4,689,629 |
| 54,396,259 |
| 67,623,955 |
|
Registro 641 SVS 08.23.2010 |
| C |
| — |
| — |
| — |
| 34,964,340 |
| 34,964,340 |
|
Registro 759 SVS 08.20.2013 |
| C |
| — |
| — |
| 5,827,390 |
| 17,482,170 |
| 23,309,560 |
|
Registro 760 SVS 08.20.2013 |
| D |
| — |
| — |
| — |
| 93,238,240 |
| 93,238,240 |
|
Yankee Bonds |
| — |
| — |
| — |
| — |
| 301,650,750 |
| 301,650,750 |
|
|
|
|
| 9,962,048 |
| 10,230,799 |
| 16,344,409 |
| 501,731,759 |
| 538,269,015 |
|
16.2.4 Market rating
The bonds issued on the Chilean market had the following rating at December 31, 2013
AA : ICR Compañía Clasificadora de Riesgo Ltda. rating
AA : Fitch Chile Clasificadora de Riesgo Limitada rating
The rating of bonds issued on the international market as of December 31, 2013 is the following:
BBB : Standard&Poors rating
A- : Fitch Chile Clasificadora de Riesgo Limitada rating
16.2.5 Restrictions
The following restrictions apply to the issuance and placement of the Company’s Series B bonds on the Chilean market in 2001, as well as Series A and C bonds issued in 2010, as well as the C and D Series 2013.for a total of UF 11,200,000. Of that amount, UF 10,567,680 is outstanding
· Embotelladora Andina S.A. must maintain a debt level in which consolidated financial liabilities do not exceed 1.20 times the consolidated equity. As defined in the debt agreements, consolidated financial liabilities will be considered to be current interest-accruing liabilities, namely: (i) Other financial liabilities, plus (ii) Other non-current financial liabilities. Total equity plus non-controlling interests will be considered consolidated equity.
As of December 31, 2013 the amounts included in this restriction are the following: |
| ThCh$ |
|
Other current financial liabilities |
| 106,877,255 |
|
Other non-current financial liabilities |
| 605,362,059 |
|
Total consolidated outstanding liabilities |
| 881,432,588 |
|
Based on these numbers the level of indebtedness amounts to 0.81 times the consolidated equity.
· Embotelladora Andina S.A. must maintain a net financial indebtedness that does not exceed 1.5 times in its quarterly financial statements, measured against its consolidated financial statements. For these effects, financial indebtedness level shall be defined as the ratio between net financial debt and total equity of the issuer (equity attributable to controlling shareholders plus non controlling interest). On the other hand, net financial debt is the difference between financial debt and cash balance of the issuer.
As of December 31, 2013 the amounts included in this restriction are as follows: |
| ThCh$ |
|
Cash and cash equivalents |
| 79,976,126 |
|
Other current financial liabilities |
| 106,877,255 |
|
Other non-current financial liabilities |
| 605,362,059 |
|
Total Consolidated Equity |
| 881,432,588 |
|
Based on these figures, the level of indebtedness amounts to 0.72 times of consolidated equity.
· Consolidated assets must be kept free of any pledge, mortgage or lien for an amount at least equal to 1.30 times of the consolidated unsecured current liabilities of the issuer.
As of December 31, 2013 values of the items included in this restriction are: |
| ThCh$ |
|
Consolidated Assets free of pledges, mortgages or other encumbrances |
| 1,968,835,018 |
|
Non-guaranteed Consolidated Liabilities |
| 1,201,528,722 |
|
Based on these figures, the consolidated assets free of liens, mortgages or other charges equivalent to 1.64 times of the unsecured consolidated liabilities.
· Must be maintained and in no way forfeited, sold, assigned or transferred to a third party. This franchise is for the elaboration, production, sale and distribution of Coca-Cola products and brands according to the bottlers’ agreement or periodically renewable licenses.
· The territory now under franchise to the Company by The Coca-Cola Company in Argentina or Brazil, which is used for the preparation, production, sale and distribution of Coca-Cola products and brands, must not be forfeited, sold, assigned or transferred to a third party, provided such territory represents more than 40% of the adjusted consolidated operating flow of the Company.
· Not invest in instruments issued by related parties, nor engage in other activities with these parties that are not related to their general purpose, in conditions that are less favorable to the Issuer than those existing in the market.
· Maintain in quarterly financial statement, a Net Financial Hedging higher than 3 must be maintained. Net Financial Hedging shall be the ratio between EBITDA of the issuer for the last 12 months and the net financial expenses (financial income less financial expenses) of the issuer for the last 12 months. However, this restriction will be deemed to be not in compliance when such net financial hedging level is lower than the level of the two previous consecutive quarters.
As of December 31, 2013, the values of the items included in these restrictions are as follows:: |
| ThCh$ |
|
(+) Ebitda consolidated between January 1 and December 31, 2013 |
| 254,621,348 |
|
(+) Finance income consolidated between January 1 and December 31, 2013 |
| 4,973,312 |
|
(-)Finance costs consolidated between January 1 and December 31, 2012 |
| 28,944,023 |
|
Based on these figures, the level of net financial coverage (EBITDA / (Finance costs - Interest income)) totals 10.62 times.
The Company was in compliance with all financial covenants at December 31, 2013 and 2012.
16.2.6 Repurchased bond
In addition to UF bonds, the Company holds bonds issued by itself that it has repurchased in full through companies that are integrated in the consolidation:
Through its subsidiaries, Abisa Corp S.A. (formerly Pacific Sterling), Embotelladora Andina S.A. repurchased its Yankee Bonds issued on the U.S. Market during the years 2000, 2001, 2002, 2007 and 2008. The entire placement amounted to US$350 million, of which US$200 million are outstanding and are presented after deducting the long-term liability from the other financial liabilities item.
The subsidiary Rio de Janeiro Refrescos Ltda. maintains a liability corresponding to a bond issuance for US $75 million due in December 2020 and semi-annual interest payments. On September 30, 2013 these titles are entirely belong to Andina and as of December 31, 2012 belong to the subsidiary Abisa Corp S.A., (former Pacific Sterling). On January 1, 2013, Abisa Corp S.A. transferred the totality of this asset to Embotelladora Andina S.A., passing the latter to be the creditor of the above mentioned Brazilian subsidiary. As a result, in these consolidated financial statements the assets and liabilities related to the transaction have been eliminated. In addition, the transaction has been treated as a net investment of the group in the Brazilian subsidiary, consequently the effects of exchange rate differences between the dollar and the functional currency of each one have been carried to other comprehensive income.
16.3.1 Forward contract obligations
Please see details in Note 21.
16.4.1 Current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortización |
| Effective |
| Nominal |
| Up to |
| 90 days |
| at |
| At |
| ||||||
Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| year |
| rate |
| rame |
| 90 days |
| 1 year |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 10.21 | % | 10.22 | % | 27,525 |
| 82,573 |
| 110,098 |
| 255,122 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilean real |
| Monthly |
| 9.65 | % | 9.47 | % | 1,743 |
| 5,228 |
| 6,971 |
| 45,493 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Alfa |
| Brazil |
| Brazilean real |
| Monthly |
| 13.00 | % | 13.00 | % | 469,444 |
| 901,383 |
| 1,370,828 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilean real |
| Monthly |
| 13.06 | % | 13.06 | % | 64,999 |
| 181,334 |
| 246,334 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Citibank |
| Brazil |
| Brazilean real |
| Monthly |
| 12.70 | % | 12.70 | % | 744,815 |
| 849,647 |
| 1,594,463 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilean real |
| Monthly |
| 12.68 | % | 12.68 | % | 464,899 |
| 1,317,775 |
| 1,782,674 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 13.49 | % | 13.49 | % | 63,481 |
| 84,785 |
| 148,266 |
| — |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollar |
| Monthly |
| 12.00 | % | 12.00 | % | 13,520 |
| 43,065 |
| 56,582 |
| 46,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 5,316,216 |
| 346,696 |
|
16.4.2 Non-current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 year to |
| 3 years |
| More |
| at |
| at |
| ||||||
Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| year |
| rate |
| rate |
| 3 years |
| 5 years |
| 5 years |
| 12.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 10.21 | % | 10.22 | % | 824,548 |
| — |
| — |
| 824,548 |
| 599,593 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilean real |
| Monthly |
| 9.65 | % | 9.47 | % | 53,764 |
| — |
| — |
| 53,764 |
| 63,561 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Alfa |
| Brazil |
| Brazilean real |
| Monthly |
| 13.00 | % | 13.00 | % | 192,802 |
| — |
| — |
| 192,802 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilean real |
| Monthly |
| 13.06 | % | 13.06 | % | 248,187 |
| — |
| — |
| 248,187 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Citibank |
| Brazil |
| Brazilean real |
| Monthly |
| 12.70 | % | 12.70 | % | 671,942 |
| — |
| — |
| 671,942 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilean real |
| Monthly |
| 12.68 | % | 12.68 | % | 1,437,383 |
| — |
| — |
| 1,437,383 |
| — |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 13.49 | % | 13.49 | % | 26,057 |
| — |
| — |
| 26,057 |
| — |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollar |
| Monthly |
| 12.00 | % | 12.00 | % | 216,570 |
| 279,592 |
| — |
| 496,162 |
| 507,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 3,950,845 |
| 1,170,397 |
|
NOTE 17 — TRADE AND OTHER CURRENT ACCOUNTS PAYABLE
a) Trade and other current accounts payable are detailed as follows:
Item |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Trade accounts payable |
| 162,980,833 |
| 159,211,448 |
|
Withholdings |
| 41,564,170 |
| 23,529,819 |
|
Others |
| 5,901,295 |
| 1,576,506 |
|
Total |
| 210,446,298 |
| 184,317,773 |
|
b) The Company maintains commercial lease agreements for forklifts, vehicles, properties and machinery. These lease agreements have an average duration of one to five years excluding the renewal option of the agreements. No restrictions exist regarding the lessee by virtue of these lease agreements.
Future payments of the Company´s operating leases are as follows:
|
| 12.31.2013 |
|
|
| ThCh$ |
|
Maturity within one year |
| 3,983,386 |
|
Maturity between one year and eigth years |
| 2,686,172 |
|
Total |
| 6,669,558 |
|
Total expenses related to operating leases maintained by the Company as of December 31, 2013 and 2012 amounted to ThCh$5,261,246 and ThCh$5,661,057, respectively.
NOTE 18 — CURRENT AND NON-CURRENT PROVISIONS
18.1 Balances
The balances of provisions recorded by the Company at December 31, 2013 and 2012 are detailed as follows:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Litigation (1) |
| 77,812,294 |
| 6,821,165 |
|
Others |
| — |
| 195,103 |
|
Total |
| 77,812,294 |
| 7,016,268 |
|
|
|
|
|
|
|
Current |
| 269,906 |
| 593,457 |
|
Non-current |
| 77,542,388 |
| 6,422,811 |
|
Total |
| 77,812,294 |
| 7,016,268 |
|
(1) Corresponds to the provision for probable fiscal, labor and trade contingency losses, based on the opinion of our legal advisors, according to the following breakdown:
Detail (see note 22.1) |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Tax Contingencies |
| 73,238,000 |
| 3,972,366 |
|
Labor Contingencies |
| 4,077,980 |
| 2,378,416 |
|
Civil Contingencies |
| 496,314 |
| 470,383 |
|
Total |
| 77,812,294 |
| 6,821,165 |
|
18.2 Movements
Movement of provisions is detailed as follows:
|
| 12.31.2013 |
| 12.31.2012 |
| ||||||||
Description |
| Litigation |
| Others |
| Total |
| Litigation |
| Others |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening Balance |
| 6,821,165 |
| 195,103 |
| 7,016,268 |
| 7,970,835 |
| — |
| 7,970,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase due to business combination |
| 70,902,559 |
| — |
| 70,902,559 |
| 325,174 |
| 136,826 |
| 462,000 |
|
Additional provisions |
| — |
| — |
| — |
| 65,745 |
| 62,372 |
| 128,117 |
|
Increase (decrease) in existing provisions |
| 2,109,425 |
| (195,103 | ) | 1,914,322 |
| 851,150 |
| — |
| 851,150 |
|
Payments |
| (2,201,350 | ) | — |
| (2,201,350 | ) | (1,168,725 | ) | — |
| (1,168,725 | ) |
Increase (decrease) due to foreign exchange differences |
| 180,495 |
| — |
| 180,495 |
| (1,223,014 | ) | (4,095 | ) | (1,227,109 | ) |
Ending Balance |
| 77,812,294 |
| — |
| 77,812,294 |
| 6,821,165 |
| 195,103 |
| 7,016,268 |
|
NOTE 19 — OTHER CURRENT AND NON-CURRENT NON-FINANCIAL LIABILITIES
Other current and non-current liabilities at each reporting period end are detailed as follows:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Minimum Dividend |
| 1,451,092 |
| — |
|
Dividend payable |
| 13,489,949 |
| 99,427 |
|
Employee remuneration payable |
| 8,749,678 |
| 8,240,460 |
|
Accrued vacations |
| 12,690,387 |
| 11,392,231 |
|
Other |
| 1,987,728 |
| 813,034 |
|
Total |
| 38,368,834 |
| 20,545,152 |
|
|
|
|
|
|
|
Current |
| 37,446,336 |
| 20,369,549 |
|
Non-current |
| 922,498 |
| 175,603 |
|
Total |
| 38,368,834 |
| 20,545,152 |
|
NOTE 20 — EQUITY
As a result of the merger agreement with Embotelladoras Coca-Cola Polar S.A described in note 3a), during 2012, 93,152,097 Series A shares and 93,152,097 Series B shares were issued and exchanged for 100% of the outstanding shares of Embotelladoras Coca-Cola Polar S.A. The value in legal terms of this new issuance amounted to ThCh$39,867,121.
20.1 Share capital
On August 21, 2013 saw the decline of paid capital as of right for not having alienated third 67 shares of Series A and 8,065 Series B shares, which the Company acquired in 2012, to shareholders exercised their right to retire when it was merged with Embotelladoras Coca-Cola Polar S.A, thus passing the capital paid a total of ThCh $ 270,759,299 to a total of M ThCh$ 270,737,574.
The paid-in capital of the Company totaled ThCh$270,759,299 as of September 30, 2013, The distribution and classification of these is detailed as follows:
20.1.1 Number of shares:
|
| Number of shares subscribed |
| Number of shares paid in |
| Number of voting shares |
| ||||||
Series |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A |
| 473,289,301 |
| 473,289,368 |
| 473,289,301 |
| 473,289,368 |
| 473,289,301 |
| 473,289,368 |
|
B |
| 473,281,303 |
| 473,289,368 |
| 473,281,303 |
| 473,289,368 |
| 473,281,303 |
| 473,289,368 |
|
20.1.2 Capital:
|
| Subscribed Capital |
| Paid-in capital |
| ||||
Series |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
A |
| 135,379,504.0 |
| 135,379,649.5 |
| 135,379,504.0 |
| 135,379,649.5 |
|
B |
| 135,358,070.0 |
| 135,379,649.5 |
| 135,358,070.0 |
| 135,379,649.5 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 270,737,574.0 |
| 270,759,299.0 |
| 270,737,574.0 |
| 270,759,299.0 |
|
20.1.3 Rights of each series:
· Series A : Elect 12 of the 14 directors
· Series B : Receives an additonal 10% of dividends distributed to Series A and elects 2 of the 14 Directors.
20.2 Dividend policy
According to Chilean law, cash dividends must be paid equal to at least 30% of annual net profit, barring a unanimous vote by shareholders to the contrary. If there is no net profit in a given year, the Company will not be legally obligated to pay dividends from retained earnings. At the April 2013 Annual Shareholders Meeting, the shareholders authorised to pay out of the 2012 earnings into 2 additional dividend payments with one being in May and the other being in the second half of 2013
Pursuant to Circular Letter N° 1,945 of the Chilean Superintendence of Securities and Insurance dated September 29, 2009, the Company’s Board of Directors decided to maintain the initial adjustments from adopting IFRS as retained earnings for future distribution.
Retained earnings at the date of IFRS adoption amounted to ThCh$19,260,703, of which ThCh$4,009,618 have been realized at December 31, 2013 and are available for distribution as dividends in accordance with the following:
Description |
| Event when amount is |
| Amount of |
| Realized at |
| Amount of |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Revaluation of assets |
| Sale or impairment |
| 12,538,123 |
| (2,014,700 | ) | 10,523,423 |
|
Foreign currency translation differences of investments in related companies |
| Sale or impairment |
| 6,393,518 |
| (1,481,482 | ) | 4,912,036 |
|
Full absorption cost accounting |
| Sale of products |
| 813,885 |
| (813,885 | ) | — |
|
Post-employment benefits actuarial calculation |
| Termination of employees |
| 929,560 |
| (443,007 | ) | 486,553 |
|
Deferred taxes complementary accounts |
| Amortization |
| (1,414,383 | ) | 743,455 |
| (670,928 | ) |
Total |
|
|
| 19,260,703 |
| (4,009,619 | ) | 15,251,084 |
|
The dividends declared and paid during 2013 and 2012 are presented below:
Dividend payment date |
| Dividend type |
| Profits imputable to |
| Ch$ per |
| Ch$ per |
| ||
2012 |
| January |
| Interim |
| 2011 |
| 8.50 |
| 9.35 |
|
2012 |
| May |
| Definitivo |
| 2011 |
| 10.97 |
| 10.067 |
|
2012 |
| May |
| Additional |
| Retained Earnings |
| 24.30 |
| 26.73 |
|
2012 |
| October |
| Interim |
| 2012 |
| 12.24 |
| 13.46 |
|
2012 |
| December |
| Interim |
| 2012 |
| 24.48 |
| 26.93 |
|
2013 |
| May |
| Additional |
| 2012 |
| 12.30 |
| 13.53 |
|
2013 |
| June |
| Interim |
| 2013 |
| 12.30 |
| 13.53 |
|
2013 |
| November |
| Additional |
| 2012 |
| 47.00 |
| 51.70 |
|
2013 |
| December |
| Interim (1) |
| 2013 |
| 13.1 |
| 14.41 |
|
(1) At December 31, 2013 this dividend is outstanding and, as agreed by the Board December 2013, will be available to shareholders starting on January 23, 2014
20.3 Reserves
The balance of other reserves include the following:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Polar acquisition |
| 421,701,520 |
| 421,701,520 |
|
Foreign currency translation reserves |
| (81,527,711 | ) | (63,555,545 | ) |
Cash flow hedging reserve |
| 2,258,144 |
| — |
|
Reserve for employee benefit actuarial gains or losses |
| (1,128,824 | ) | — |
|
Legal and statutory reserves |
| 5,435,538 |
| 5,435,538 |
|
|
|
|
|
|
|
Total |
| 346,738,667 |
| 363,581,513 |
|
20.3.1 Polar acquisition
This amount corresponds to the fair value of the issuance of shares of Embotelladora Andina S.A. used to acquire Embotelladoras Coca-Cola Polar S.A..
20.3.2 Cash flow hedging reserve
They arise from the fair value valuation of the existing derivative contracts that have been qualified for hedge accounting at the end of each financial period. When contracts are expired, these reserves are adjusted and recognized in the income statement in the corresponding period (see Note 21).
20.3.3 Reserve for employee benefit actuarial gains or losses
Corresponds to the restatement effect of employee benefits actuarial losses, that according to IAS 19 amendments must be carried to other comprehensive income.
20.3.4 Legal and statutory reserves
In accordance with Official Circular No. 456 issued by the Chilean Superintendence of Securities and Insurance, the legally required price-level restatement of paid-in capital for 2009 is presented as part of other equity reserves and is accounted for as a capitalization from Other Reserves with no impact on net income or retained earnings under IFRS. This amount totaled ThCh$5,435,538 at December 31, 2009.
20.3.5 Foreign currency translation reserves
This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the consolidated financial statements. Additionally exchange differences between accounts receivable kept by the companies in Chile with foreign subsidiaries are presented in this account, which have been treated as investment equivalents accounted for using the equity method. A breakdown of translation reserves is presented below:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Brazil |
| (36,125,708 | ) | (26,905,052 | ) |
Argentina |
| (46,087,935 | ) | (29,448,998 | ) |
Paraguay |
| 8,586,782 |
| 24,248 |
|
Exchange rate differences in related companies |
| (7,900,850 | ) | (7,225,743 | ) |
Total |
| (81,527,711 | ) | (63,555,545 | ) |
The movement of this reserve for the fiscal periods ended December 31, 2013 and 2012 respectively is detailed as follows:
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Brazil |
| (9,220,656 | ) | (25,630,195 | ) |
Argentina |
| (16,638,937 | ) | (10,376,803 | ) |
Paraguay |
| 8,562,534 |
| 24,248 |
|
Exchange rate differences in related companies |
| (675,107 | ) | (5,112,916 | ) |
Total |
| (17,972,166 | ) | (41,095,666 | ) |
20.4 Non-controlling interests
This is the recognition of the portion of equity and income from subsidiaries that are owned by third parties, Details of this account at December 31, 2013 and 2012 are as follows:
|
| Non-controlling Interests |
| ||||||||||
|
| Percentage % |
| Shareholders Equity |
| Income |
| ||||||
Description |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Embotelladora del Atlántico S.A. |
| 0.0171 |
| 0.0243 |
| 13,118 |
| 10,763 |
| 2,692 |
| 3,468 |
|
Andina Empaques Argentina S.A. |
| 0.0209 |
| 0.0244 |
| 1,760 |
| 1,977 |
| 406 |
| 439 |
|
Paraguay Refrescos S.A. |
| 2.1697 |
| 2.1697 |
| 5,051,217 |
| 4,697,403 |
| 287,112 |
| 89,012 |
|
Inversiones Los Andes Ltda. |
| 0.0001 |
| 0.0001 |
| 51 |
| 53 |
| — |
| 1 |
|
Transportes Polar S.A. |
| — |
| 0.0001 |
| — |
| 6 |
| — |
| — |
|
Vital S.A. |
| 35.0000 |
| 35.0000 |
| 9,216,505 |
| 8,811,764 |
| 502,397 |
| 130,874 |
|
Vital Aguas S.A. |
| 33.5000 |
| 33.5000 |
| 1,913,632 |
| 1,807,913 |
| 115,774 |
| 81,651 |
|
Envases Central S.A. |
| 40.7300 |
| 40.7300 |
| 4,567,226 |
| 4,111,258 |
| 376,163 |
| 326,764 |
|
Andina Inversiones Societarias S.A. |
| 0.0001 |
| 0.0001 |
| 37 |
| 35 |
| 2 |
| 2 |
|
Total |
|
|
|
|
| 20,763,546 |
| 19,441,172 |
| 1,284,546 |
| 632,211 |
|
20.5 Earnings per share
The basic earnings per share presented in the statement of comprehensive income are calculated as the quotient between income for the period and the average number of shares outstanding during the same period.
The earnings per share used to calculate basic and diluted earnings per share is detailed as follows:
|
| 12.31.2013 |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 42,373,551 |
| 46,609,127 |
| 88,982,678 |
|
Average weighted number of shares |
| 473,289,301 |
| 473,281,303 |
| 946,570,604 |
|
Earnings per basic and diluted share (in Chilean pesos) |
| 89.53 |
| 98.48 |
| 94.01 |
|
|
| 12.31.2012 |
| ||||
Earnings per��share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 41,732,721 |
| 45,904,240 |
| 87,636,961 |
|
Average weighted number of shares |
| 400,809,380 |
| 400,809,380 |
| 801,618,760 |
|
Earnings per basic and diluted share (in Chilean pesos) |
| 104.12 |
| 114.53 |
| 109.32 |
|
NOTE 21 — DERIVATIVE ASSETS AND LIABILITIES
The company held the following derivative liabilities at December 31, 2013 and 2012:
21.1 Currency forwards of items recognized for accounting purposes:
a) Cross Currency Swap Itau Credit.
As of December 31, 2013, the Company had derivative contracts to ensure bank liabilities denominated in dollars in Brazil for an amount of ThUS$71,429, to convert them to liabilities expressed in Reales. The valuation of these contracts was performed at their fair values, yielding a receivable value at December 31, 2013, of ThCh$6,817,409 which is presented as other current and non-current financial assets. In addition excess value above hedged items for an amount of ThCh$1,371,220, resulting from the derivative contract has been recognized within other equity reserves of the controller as of December 31, 2013.
b) Cross Currency Swaps, related to U.S. Bond.
As of December 31, 2013, the Company had derivative contracts to ensure obligations with the public issued in U.S. dollars for an amount of US$570 millions to convert them to UF and Real liabilities. Valuation of these contracts was performed at their fair values, yielding a receivables value at December 31, 2013 of ThCh$2,497,092 which is presented as other non-current financial assets. In addition excess value above hedged items for an amount of ThCh$866,924, resulting from the derivative contract has been recognized within other equity reserves of the controller as of December 31, 2013. The ineffective portion of this SWAP was carried to other gains and losses for an amount of ThCh$559,875.
21.2 Currency forwards for highly probable expected transactions:
In 2012 and 2013, the Company made agreements to hedge the exchange rate in the purchases of raw materials for the years 2012 and 2013. The outstanding agreements totaled ThUS$103,315 (ThUS$140,000 at December 31, 2012). Those agreements were recorded at fair value, resulting in a net gains of ThCh$1,711,816 for the year ended at December 31, 2013 (net loss of ThCh$1,102,412 at December 31, 2012). Derivative contratcts originate assets and liabilities at 31 December 2013 amount to ThCh $ 1,949,958 and ThCh$1,985,954, respectively (liabilities ThCh$394,652 at December 31, 2012). Since these agreements did not meet the documentation requirements of IFRS to be considered hedge accounting, they were accounted for as investment contracts and the effects are recorded directly in the income statement.
Fair value hierarchy
The Company keeps an asset related to foreign currency derivative contracts as of December 31, 2013 for an amount of ThCh$11,264,459 and liabilities for the same concept in an amount of ThCh$1,985,954 (liability of ThCh$394,652 as of December 31, 2012), which were classified under current liabilities and are accounted for at their fair value in the consolidated statement of financial position. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included in level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3: Inputs for assets and liabilities that are not based on observable market data..
During the period ended December 31, 2013 and 2012, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.
|
| Fair Value Measurements at December, 31 2013 |
|
|
| ||||
|
| Quoted prices in |
| Observable |
| Unobservable |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
| — |
| 3,342,172 |
| — |
| 3,342,172 |
|
Other non-current financial assets |
|
|
| 7,922,287 |
|
|
| 7,922,287 |
|
Total assets |
| — |
| 11,264,459 |
| — |
| 11,264,459 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current libilities |
|
|
|
|
|
|
|
|
|
Other current financial liabilities |
| — |
| 1,037,473 |
| — |
| 1,037,473 |
|
Other non-current financial liabilitioes |
| — |
| 948,481 |
| — |
| 948,481 |
|
Total liabilities |
| — |
| 1,985,954 |
| — |
| 1,985,954 |
|
|
| Fair Value Measurements at December, 31 2012 |
|
|
| ||||
|
| Quoted prices in |
| Observable |
| Unobservable |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Current financial liabilities |
| — |
| 394,652 |
| — |
| 394,652 |
|
Total liabilities |
| — |
| 394,652 |
| — |
| 394,652 |
|
NOTE 22 — CONTINGENCIES AND COMMITMENTS
22.1 Lawsuits and other legal actions:
In the opinion of the Company’s legal counsel, the Parent Company and its subsidiaries do not face judicial or extra-judicial contingencies that might result in material or significant losses or gains, except for the following:
1) Embotelladora del Atlántico S.A. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling ThCh$1,599,639. Management considers it unlikely that non-provisions contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. Additionally Embotelladora del Atlántico S.A. maintains time deposits for an amount of ThCh$899,601 to guaranty judicial liabilities.
2) Rio de Janeiro Refrescos Ltda. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling ThCh$75,942,748. Management considers it unlikely that non-provisions contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. As it is customary in Brazil, Rio de Janeiro Refrescos Ltda. maintains judicial deposits and assets given in pledge to secure the compliance of certain processes, irrespective of whether these have been classified as a possible or probable remote loss. The amounts deposited or pledged as a legal guarantee as of December 31, 2013 and 2012 amounted to ThCh$112,428,189 and ThCh$18,002,490, respectively.
a) Tax contingencies resulting from credits on tax on industrialized products-IPI.
Rio de Janeiro Refrescos is a party to a series of proceedings under way, in which the Brazilian federal tax authorities demand payment of value-added tax on industrialized products (Imposto sobre Produtos Industrializados, or IPI) allegedly owed by ex-Companhia de Bebidas Ipiranga totaling approximately R$1,379,707,155.
The Company rejects the position of the Brazilian tax authority in these procedures, and considers that Companhia de Bebidas Ipiranga was entitled to claim IPI tax credits in connection with purchases of certain exempt raw materials from suppliers located in the Manaus free trade zone.
Based on the opinion of its advisers, and judicial outcomes to date, Management estimates that these procedures do not represent probable losses, and to carry out provisions on these causes, under accounting criteria is not applicable.
Notwithstanding the above, the accounting standards of financial information related to business combination in terms of distribution of the purchase price, establish that contingencies must be valued one by one according to their probability of occurrence and discounted to fair value from the date on which it is deemed the loss can be generated. According to this criteria, an initial provision has been made in the business combination accounting for an amount of R$200.6 million equivalent to ThCh$44,939,519.
b) Tax contingencies on ICMS and IPI causes.
They refer mainly to tax settlements issued by advance appropriation of ICMS credits on fixed assets, payment of the replacement of ICMS tax to the operations, untimely IPI credits calculated on bonuses, among others.
The Company does not consider that these judgments will result in significant losses, given that their loss is considered unlikely. However, the accounting standards of financial information related to business combination in terms of distribution of the purchase price, establish contingencies must be valued one by one according to their probability of occurrence and discounted to fair value from the date on which it is deemed that the loss can be generated. According to this criteria, an initial provision has been made in the business combination accounting for an amount of R$126.3 million equivalent to ThCh$28,298,481.
3) Embotelladora Andina S.A. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling ThCh$269,907. La Administración considera improbable que las contingencias no provisionadas afecten los resultados y el patrimonio de la Compañía, de acuerdo a la opinión de sus asesores legales. Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors
22.2 Direct guarantees and restricted assets:
Guarantees and restricted assets as of December 31, 2013 and 2012 are detailed as follows:
Guarantees that involve assets included in the financial statements:
|
| Provided by |
|
|
| Committed assets |
| Carrying |
| Balance pending payment on the |
| Date of guarantee release |
| ||||||
Guarantee in favor of |
| Name |
| Relationship |
| Guarantee |
| Type |
| 31-12-2013 |
| 31-12-2013 |
| 31-12-2012 |
| 2014 |
| 2015 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| Thch$ |
| ThCh$ |
| ThCh$ |
|
Other creditors |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Other debtors |
| 2.105 |
| 2.105 |
|
|
|
|
| 20.105 |
|
San Francisco warehouse |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 6.788 |
| 6.788 |
|
|
|
|
| 6.788 |
|
Gas licuado Lipigas S.A. |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 1.140 |
| 1.140 |
|
|
|
|
| 1.140 |
|
Nazira Tala |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 3.416 |
| 3.416 |
|
|
|
|
| 3.416 |
|
Nazira Tala |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 3.508 |
| 3.508 |
|
|
|
|
| 3.508 |
|
Inmob. e Invers. Supetar Ltda. |
| Transportes Polar S.A. |
| Subsidiary |
| Cash |
| Cash and cash equivalents |
| 3.216 |
| 3.216 |
|
|
|
|
| 3.216 |
|
María Lobos Jamet |
| Transportes Polar S.A. |
| Subsidiary |
| Cash |
| Cash and cash equivalents |
| 1.000 |
| 1.000 |
|
|
| 1.000 |
|
|
|
Reclamantes ações trabalhistas |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-financial assets |
| 16.232.506 |
| 16.232.506 |
| 18.002.490 |
|
|
| 16.232.506 |
|
Miscellaneous |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Property, plant and equipment |
| Property, plant and equipment |
| 15.337.887 |
| 15.337.887 |
|
|
|
|
| 15.337.887 |
|
Government institutions |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-financial assets |
| 6.550.967 |
| 6.550.967 |
|
|
|
|
| 6.550.967 |
|
Government institutions |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Property, plant and equipment |
| Propiedades, Planta y Equipo |
| 74.306.829 |
| 74.306.829 |
|
|
|
|
| 74.306.829 |
|
Distribuidora Baraldo S.H. |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 1.609 |
| 1.609 |
| 1.741 |
|
|
| 1.609 |
|
Acuña Gomez |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 2.414 |
| 2.414 |
| 2.611 |
|
|
| 2.414 |
|
Municipalidad Gral. Alvear |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 10.397 |
| 10.397 |
| 11.249 |
|
|
| 10.397 |
|
Municipalidad San Martin Mza |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 28.962 |
| 28.962 |
| 31.334 |
|
|
| 28.962 |
|
Nicanor López |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 1.726 |
| 1.726 |
| 1.867 |
|
|
| 1.726 |
|
Labarda |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 29 |
| 29 |
| 31 |
|
|
| 29 |
|
Municipalidad Bariloche |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 437.326 |
| 437.326 |
|
|
|
|
| 437.326 |
|
Municipalidad San Antonio Oeste |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 3.421 |
| 3.421 |
|
|
|
|
| 3.421 |
|
Municipalidad Chivilcoy |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 10.008 |
| 10.008 |
|
|
|
|
| 10.008 |
|
Municipalidad Carlos Casares |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-current financial assets |
| 1.110.693 |
| 1.110.693 |
|
|
|
|
| 1.110.693 |
|
CICSA |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantees CICSA for packaging |
| Other current financial assets |
| 44.811 |
| 44.811 |
|
|
| 44.811 |
|
|
|
Others |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantee deposit for rentals |
| Other current financial assets |
| 14.282 |
| 14.282 |
|
|
| 14.282 |
|
|
|
Aduana de Ezeiza |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Import machinery |
| Other current financial assets |
| 11.252 |
| 11.252 |
|
|
| 11.252 |
|
|
|
|
|
|
|
|
|
|
|
|
| 114.126.292 |
|
|
|
|
|
|
|
|
|
Guarantees that not- involve assets included in the financial statements:
|
| Provided by |
|
|
| Committed assets |
| Balance pending payment on the |
| Date of guarantee release |
| ||||||
Guarantee in favor of |
| Name |
| Relationship |
| Guarantee |
| Type |
| 31-12-2013 |
| 31-12-2012 |
| 2014 |
| 2015 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Linde Gas Chile |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| 472.149 |
| — |
| — |
| 472.149 |
|
Central de Restaurantes Aramark Ltda. |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| 243.515 |
| — |
| — |
| 243.515 |
|
Echeverría, Izquierdo Ingeniería y Construcción. |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| 487.776 |
| 1.019.190 |
|
|
| 487.776 |
|
Processes workers |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 556.149 |
| 583.288 |
| — |
| 556.149 |
|
Processes administrative |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 2.001.285 |
| 1.211.956 |
| — |
| 2.001.285 |
|
Governo Federal |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 85.047 |
| 89.197 |
| — |
| 85.047 |
|
Governo Estadual |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 9.174.320 |
| 9.622.011 |
| — |
| 9.174.320 |
|
Otros |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 204.520 |
| 10.885 |
| — |
| 204.520 |
|
NOTE 23 — FINANCIAL RISK MANAGEMENT
The Company’s businesses are exposed to a variety of financial and market risks (including foreign exchange risk, fair value interest rate risk and price risk). The Company’s global risk management program focuses on the uncertainty of financial markets and seeks to minimize potential adverse effects on the performance of the Company. The Company uses derivatives to hedge certain risks. Below is a description of the primary policies established by the Company to manage financial risks.
Interest Rate Risk
As of December 31, 2013, the Company carried all of its debt liabilities at UF fixed rate (UF is variable). As a result, the risk of fluctuations in market interest rates on the Company’s cash flows is low.
The Company’s greater indebtedness corresponds to bonds of own issuance which are denominated in Unidades de Fomento, that is indexed to inflation in Chile (the Company’s sales are correlated with UF variations). If inflation in Chile, would have generated a UF variation of 4% during the period between January 1 and December 31, 2013 (instead of 2.05%, excluding changes in the level of sales), the Company’s income would have been lower by ThCh$5,204,394.
Exchange Rate Risk
The company is exposed to three types of risk caused by exchange rate volatility:
a) Exposure of foreign investment: this risk originates from the translation of net investment from the functional currency of each country (Brazilian Real, Paraguayan Guaraní, Argentine Peso) to the Parent Company’s reporting currency (Chilean Peso). Appreciation or devaluation of the Chilean Peso with respect to each of the functional currencies of each country, originates decreases and increases in equity, respectively. The Company does not perform hedges regarding this risk.
a.1 Investment in Argentina
As of December 31, 2013, the Company maintains a net investment of ThCh$85,208,413 in Argentina, composed by the recognition of assets amounting to ThCh$218,591,509 and liabilities amounting to ThCh$133,383,094. These investments reported 29% of the Company’s sales revenues.
As of December 31, 2013, the Argentine peso devalued 21.3% during 2013 with respect to the Chilean peso .
There are currently exchange restrictions in Argentina and a parallel foreign exchange market with a higher exchange rate than the official exchange rate.
If the official exchange rate in Argentina devalued reaching the informal value of $11.8 (54% devaluation), as a result the Company would have a lower income from the operation in Argentina of ThCh$6,217,050, and a decrease in equity of ThCh$24,152,319, originated by a lower asset recognition of ThCh$59,665,147 and a lower liabilities recognition of ThCh$35,512,827.
a.2 Investment in Brazil
As of December 31, 2013, the Company maintains a net investment of ThCh$258,969,548 in Brazil, composed by the recognition of assets amounting to ThCh$750,945,404 and liabilities amounting to ThCh$491,975,856. These investments reported 32% of the Company’s sales revenues.
As of December 31, 2013, the Brazilian Real devalued 4.9% during 2013 with respect to the Chilean peso.
If the exchange rate of the Brazilian Real devalued an additional 5% with respect to the Chilean Peso, as a result the Company would have a lower income from the operation in Brazil of ThCh$2,146,913, and a decrease in equity of ThCh$7,060,589, originated by a lower asset recognition of ThCh$14,730,330 and a lower liabilities recognition of ThCh$7,669,740.
a.3 Investment in Paraguay
As of December 31, 2013, the Company maintains a net investment of ThCh$232,803,106 in Paraguay, composed by the recognition of assets amounting to ThCh$275,124,795 and liabilities amounting to ThCh$42,321,689. These investments reported 7% of the Company’s sales revenues.
As of December 31, 2013, the Paraguayan Guarani appreciated 5.3% during 2013 with respect to the Chilean peso .
If the exchange rate of the Paraguayan Guaraní devalued an additional 5% with respect to the Chilean Peso, as a result the Company would have a greater income from the operation in Paraguay of ThCh$707,175, and an increase in equity of ThCh$11,428,274, originated by a higher asset recognition of ThCh$13,674,695 and a greater liabilities recognition of ThCh$2,246,421.
b) Net exposure of assets and liabilities in foreign currency: the risk stems mostly from carrying liabilities in dollars, so the volatility of the US dollar with respect to the functional currency of each country generates a variation in the valuation of these obligations, with consequent effect on results.
As of December 31. 2013, the Company maintains a net liability position totaling ThCh$335,043,304, basically composed of obligations with the public and bank liabilities for ThCh$345,065,237 offset partially by financial assets denominated in dollars for ThCh$10,021,933.
Of total financial liabilities denominated in US dollars, ThCh$39,643,853 come from debts taken by the Brazilian operation and are exposed to the volatility of the Brazilian Real against the U.S. dollar. On the other hand ThCh$305,421,384 of U.S. dollar liabilities correspond to Chilean operations, which are exposed to the volatility of the Chilean Peso against the U.S. dollar.
In order to protect the Company from the effects on income resulting from the volatility of the Brazilian Real and the Chilean Peso against the U.S. dollar, the Company maintains derivative contracts (cross currency swaps) derivative to cover almost 100% of U.S. dollar-denominated financial liabilities.
By designating such contracts as hedging derivatives, the effects on income for variations in the Chilean Peso and the Brazilian Real against the U.S. dollar, are mitigated annulling its exposure to exchange rate.
The Company’s net exposure as of December 31, 2013 to foreign currency over existing assets and liabilities, discounting the derivatives contracts, is an active position of ThCh$1,418,329.
c) Assets purchased or indexed to foreign currency exposure: this risk originates from purchases of raw materials and investments in property, plant and equipment, whose values are expressed in a currency other than the functional currency of the subsidiary. Changes in the value of costs or investments can be generated through time, depending on the volatility of the exchange rate.
Annual purchases of raw materials denominated or indexed in U.S. dollars, amounts to 19.1% of our cost of sales or approximately US$334 million.
In addition, and depending on market conditions, the Company carries out foreign currency derivatives contracts to lessen the effect of the exchange rate over cash expenditures expressed in US dollars which mainly correspond to payment to suppliers of raw materials and fixed assets. US$103.3 million for future purchases have been hedged as of December 31.
According to the percentage of purchases of raw materials which are carried out or indexed to U.S. dollars, a possible return of currencies with respect to the U.S. dollar by 5% in the four countries where the Company operates, and discounting derivatives contracts taken to mitigate the effect of currency volatility, keeping everything constant, would lead to a lower accumulated result amounting to ThCh$6,843,447 as of December 31, 2013. Currently, the Company has contracts to hedge this effect only in Chile.
d) Commodities risk
The Company is subject to a risk of price fluctuations in the international markets for sugar, aluminum and PET resin, which are inputs required to produce beverages and, as a whole, account for 35% to 40% of operating costs. Procurement and anticipated purchase contracts are made frequently to minimize and/or stabilize this risk. When allowed by market conditions commodity hedges have also been used. The possible effects that exist in the present consolidated integral statements of a 5% eventual rise in prices of its main raw materials, would be a reduction in our accumulated results for the year ended December 31, 2013 of approximately ThCh$8,173,520. To minimize and/or stabilize such risk, anticipated purchase and supply agreements are frequently obtained when market conditions are favorable. Derivative instruments for commodities have also been used
Liquidity risk
The products we sell are mainly paid for in cash and short term credit, therefore the Company´s main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where the Company operates; and (iii) public equity offerings.
The following table presents our contractual and commercial obligations as of December 31, 2013:
|
| Year of maturity |
| ||||||||
Item |
| 2014 |
| 2015 |
| 2016 |
| 2017 |
| 2018 and |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank debt |
| 82,627,968 |
| 31,769,834 |
| 24,665,353 |
| 14,442,700 |
| 7,521,826 |
|
Bonds payable |
| 35,640,832 |
| 35,472,307 |
| 35,303,894 |
| 40,915,559 |
| 674,147,357 |
|
Operating lease obligations |
| 5,268,690 |
| 3,833,152 |
| 1,384,789 |
| 980,571 |
| 1,111,455 |
|
Purchase obligations |
| 136,916,969 |
| 65,857,682 |
| 49,066,655 |
| 10,907,445 |
| 111,077,469 |
|
Total |
| 260,454,459 |
| 136,932,975 |
| 110,420,691 |
| 67,246,275 |
| 793,858,107 |
|
NOTE 24 — OTHER INCOME
Other operating income is detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Gain on disposal of property, plant and equipment |
| 3,345,299 |
| 2,304,613 |
|
Adjustment of judicial deposit (Brazil) |
| 2,048,403 |
| 748,299 |
|
Other |
| 1,040,318 |
| 213,086 |
|
Total |
| 6,434,020 |
| 3,265,998 |
|
NOTE 25 — OTHER EXPENSES
Other expenses are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
|
Detalle |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Bajas y castigo de activo fij Disposal and write-off of property, plant and equipment |
| 7,546,982 |
| 2,119,279 |
|
Tax on bank debits |
| 6,189,979 |
| 4,487,209 |
|
Contingencies |
| 4,510,908 |
| 2,012,879 |
|
Distribution Restructuring Project (Chile) |
| 3,148,187 |
| — |
|
Non-operating fees |
| 2,560,619 |
| 650,912 |
|
Fiscal Credit Provision (Brazil) |
| 1,970,894 |
| — |
|
Judicial Deposits Provision (Brazil) |
| 1,255,090 |
| — |
|
Donations |
| 582,000 |
| 815,945 |
|
Business combination related expenses |
| 772,689 |
| 4,517,661 |
|
Others |
| 1,924,749 |
| 816,123 |
|
Total |
| 30,462,097 |
| 15,420,008 |
|
��
NOTE 26 — FINANCIAL INCOME AND COSTS
Financial income and costs break down as follows:
a) Finance income
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Interest income |
| 4,497,802 |
| 2,487,739 |
|
Other interest income |
| 475,510 |
| 240,320 |
|
Total |
| 4,973,312 |
| 2,728,059 |
|
b) Finance costs
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Bond interest |
| 12,441,966 |
| 5,473,534 |
|
Bank loan interest |
| 14,283,636 |
| 4,594,167 |
|
Other interest costs |
| 2,218,421 |
| 1,105,052 |
|
Total |
| 28,944,023 |
| 11,172,753 |
|
NOTE 27 — OTHER INCOME AND (EXPENSES)
Other gains and (losses) are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Restructuring of operations (new Renca plant) |
| (94,143 | ) | (1,212,579 | ) |
Gains (loss) on derivative transactions |
| 1,711,816 |
| (1,102,412 | ) |
Losses on ineffective portion of hedge derivatives |
| (559,875 | ) | — |
|
Other income and (expenses) |
| (317,425 | ) | (21,224 | ) |
Total |
| 740,373 |
| (2,336,215 | ) |
NOTE 28 — THE ENVIRONMENT (Unaidited)
The Company has made disbursements totaling ThCh$5,045,186 for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analysis, consulting on environmental impacts and others
These disbursements by country are detailed as follows:
|
| Year ended December 31, 2013 |
| Future commitments |
| ||||
Country |
| Recorded as |
| Capitalized to |
| To be |
| To be capitalized |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chile |
| 997,952 |
| 228,651 |
| — |
| 181,745 |
|
Argentina |
| 1,104,822 |
| 2,685 |
| 76,982 |
| 17,559 |
|
Brasil |
| 1,157,782 |
| 990,102 |
| 1,301,587 |
| 2,497,254 |
|
Paraguay |
| 496,990 |
| 66,203 |
| — |
| 67,467 |
|
Total |
| 3,757,546 |
| 1,287,641 |
| 1,378,569 |
| 2,764,025 |
|
NOTE 29 - Auditors´ fees
Details of the fees paid to the external auditors are as follows:
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 12.31.2013 |
| 12.31.2012 |
|
|
| THCH$ |
| THCH$ |
|
Remuneration of the Auditor for auditing services |
| 792,525 |
| 474,066 |
|
Total |
| 792,525 |
| 474,066 |
|
NOTE 30 — SUBSEQUENT EVENTS
On January 23, 2014, the dividend payment approved in December 2013 was paid out equivalent to 13.1 Chilean Pesos per each Series A share and 14.41 Chilean Pesos per each Series B share.
During the month of 2014, the Argentine peso devalued significantly, trading at levels that rimmed 8 Argentine Pesos per U.S. dollar. This situation resulted in an exhange rate difference loss from the receivable dividend from the Argentine subsidiary, Embotelladora del Atlántico S.A. totaling ThCh$1,165,000, and a decrease in equity due to the effect upon translation totaling ThCh$11,974,555
Except as noted above, there are no subsequent events that could significantly affect the Company’s consolidated financial position.
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Financial Position
as of September 30, 2013 and December 31, 2012
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Financial Position
ÍNDICE
1 | |
|
|
3 | |
|
|
Intermediate Consolidated Statements of Comprehensive Income | 4 |
|
|
5 | |
|
|
6 | |
|
|
7 |
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Financial Position
As of September 30, 2013 and December 31, 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
ASSETS |
| NOTE |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
| 4 |
| 89,834,543 |
| 55,522,255 |
|
Other financial assets |
| 5 |
| 22,919,281 |
| 128,581 |
|
Other non-financial assets |
| 6.1 |
| 9,519,502 |
| 18,202,838 |
|
Trade and other receivable |
| 7 |
| 141,945,122 |
| 152,816,916 |
|
Accounts receivable from related parties |
| 11.1 |
| 9,181,540 |
| 5,324,389 |
|
Inventories |
| 8 |
| 108,181,297 |
| 89,319,826 |
|
Current income tax assets |
| 9.1 |
| 7,333,031 |
| 2,879,393 |
|
Total current assets excluding assets held for sale |
|
|
| 388,914,316 |
| 324,194,198 |
|
Non-current assets held for sale |
|
|
| 1,438,957 |
| 2,977,969 |
|
Total Current Assets |
|
|
| 390,353,273 |
| 327,172,167 |
|
|
|
|
|
|
|
|
|
Non-Current Assets:: |
|
|
|
|
|
|
|
Other non-financial assets |
| 6.2 |
| 27,793,574 |
| 26,927,090 |
|
Trade and other receivable |
| 7 |
| 8,133,700 |
| 6,724,077 |
|
Accounts receivable from related parties |
| 11.1 |
| 10,766 |
| 7,197 |
|
Investments under equity method of accounting |
| 13.1 |
| 72,459,409 |
| 73,080,061 |
|
Intangible assets other than goodwill |
| 14.1 |
| 471,972,085 |
| 464,582,273 |
|
Goodwill |
| 14.2 |
| 62,268,986 |
| 64,792,741 |
|
Property, plant and equipment |
| 10.1 |
| 611,022,928 |
| 576,550,725 |
|
Total Non-Current Assets |
|
|
| 1,253,661,448 |
| 1,212,664,164 |
|
Total Assets |
|
|
| 1,644,014,721 |
| 1,539,836,331 |
|
The accompanying notes 1 to 29 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. Y FILIALES
Consolidated Interim Statements of Financial Position
as of September 30, 2013 and December 31, 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
LIABILITIES AND EQUITY |
| NOTE |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
LIABILITIES |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 15 |
| 91,710,752 |
| 106,248,019 |
|
Trade and other accounts payable |
| 16 |
| 168,923,086 |
| 184,317,773 |
|
Accounts payable to related parties |
| 11.2 |
| 27,350,228 |
| 32,727,212 |
|
Provisions |
| 17 |
| 191,366 |
| 593,457 |
|
Income tax payable |
| 9.2 |
| 13,261 |
| 1,114,810 |
|
Other non-financial liabilities |
| 18 |
| 70,444,313 |
| 20,369,549 |
|
Total Current Liabilities |
|
|
| 358,633,006 |
| 345,370,820 |
|
|
|
|
|
|
|
|
|
Non-Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 15 |
| 286,207,834 |
| 173,880,195 |
|
Trade and other payables |
|
|
| 1,542,164 |
| 1,930,233 |
|
Provisions |
| 17 |
| 6,620,542 |
| 6,422,811 |
|
Deferred income tax liabilities |
| 9.4 |
| 116,218,669 |
| 111,414,626 |
|
Post-employment benefit liabilities |
| 12.3 |
| 7,888,250 |
| 7,037,122 |
|
Other non-financial liabilities |
| 18 |
| 373,897 |
| 175,603 |
|
Total Non-Current Liabilities |
|
|
| 418,851,356 |
| 300,860,590 |
|
|
|
|
|
|
|
|
|
Equity: |
| 19 |
|
|
|
|
|
Issued capital |
|
|
| 270,737,574 |
| 270,759,299 |
|
Treasury shares |
|
|
| — |
| (21,725 | ) |
Retained earnings |
|
|
| 219,452,339 |
| 239,844,662 |
|
Other reserves |
|
|
| 355,863,488 |
| 363,581,513 |
|
Equity attributable to equity holders of the parent |
|
|
| 846,053,401 |
| 874,163,749 |
|
Non-controlling interests |
|
|
| 20,476,958 |
| 19,441,172 |
|
Total Equity |
|
|
| 866,530,359 |
| 893,604,921 |
|
Total Liabilities and Equity |
|
|
| 1,644,014,721 |
| 1,539,836,331 |
|
The accompanying notes 1 to 29 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Income by Function
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
|
| NOTE |
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09.30.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net sales |
|
|
| 1,046,221,060 |
| 768,539,345 |
| 342,886,524 |
| 244,440,784 |
|
Cost of sales |
|
|
| (627,488,846 | ) | (462,335,544 | ) | (206,339,168 | ) | (148,338,856 | ) |
Gross Profit |
|
|
| 418,732,214 |
| 306,203,801 |
| 136,547,356 |
| 96,101,928 |
|
Other income, by function |
| 23 |
| 11,689,061 |
| 1,054,599 |
| 9,661,534 |
| 282,940 |
|
Distribution expenses |
|
|
| (112,786,628 | ) | (80,072,367 | ) | (38,299,174 | ) | (25,852,314 | ) |
Administrative expenses |
|
|
| (200,554,692 | ) | (135,993,954 | ) | (65,581,951 | ) | (42,009,319 | ) |
Other expenses, by function |
| 24 |
| (22,007,580 | ) | (9,665,816 | ) | (11,666,017 | ) | (3,377,286 | ) |
Other gains |
| 26 |
| (263,021 | ) | (1,220,305 | ) | (644,009 | ) | (1,461,297 | ) |
Finance income |
| 25 |
| 2,400,797 |
| 2,022,563 |
| 1,152,184 |
| 567,000 |
|
Finance costs |
| 25 |
| (16,491,868 | ) | (6,653,343 | ) | (6,405,620 | ) | (2,605,350 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of investments using equity method of accounting |
| 13.3 |
| 500,031 |
| 1,758,313 |
| (124,921 | ) | 679,366 |
|
Foreign exchange differences |
|
|
| (2,292,116 | ) | (4,006,332 | ) | (1,750,833 | ) | (1,766,407 | ) |
Loss from differences in indexed financial assets and liabilities |
|
|
| (1,534,741 | ) | (505,552 | ) | (1,611,834 | ) | 105,486 |
|
Net income before income taxes |
|
|
| 77,391,457 |
| 72,921,607 |
| 21,276,715 |
| 20,664,747 |
|
Income tax expense |
| 9.3 |
| (21,620,484 | ) | (23,957,184 | ) | (6,541,956 | ) | (7,773,250 | ) |
Net income |
|
|
| 55,770,973 |
| 48,964,423 |
| 14,734,759 |
| 12,891,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to: |
|
|
|
|
|
|
|
|
|
|
|
- Equity holders of the parent |
|
|
| 55,065,531 |
| 48,962,821 |
| 14,655,623 |
| 12,890,994 |
|
- Non-controlling interests |
|
|
| 705,442 |
| 1,602 |
| 79,136 |
| 503 |
|
Net income |
|
|
| 55,770,973 |
| 48,964,423 |
| 14,734,759 |
| 12,891,497 |
|
Earnings per Share, basic and diluted |
|
|
| $ |
| $ |
| $ |
| $ |
|
Earnings per Series A Share |
| 19.5 |
| 55.40 |
| 61.34 |
| 14.75 |
| 16.15 |
|
Earnings per Series B Share |
| 19.5 |
| 60.94 |
| 67.46 |
| 16.22 |
| 17.76 |
|
The accompanying notes 1 to 29 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Comprehensive Income
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
|
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net income |
| 55,770,973 |
| 48,964,423 |
| 14,734,759 |
| 12,891,497 |
|
Other comprehensive income before tax: |
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
|
Foreign currency translation differences, before taxes |
| (16,663,370 | ) | (40,895,038 | ) | (16,423,364 | ) | (15,910,753 | ) |
Gains on hedging operations |
| 1,659,777 |
| — |
| (140,749 | ) | — |
|
Income tax effect relating to foreign exchange translation differences included within other comprehensive income |
| 8,182,756 |
| 1,006,302 |
| 7,555,206 |
| 60,360 |
|
Income tax relating to cash flow hedges included within other comprehensive income |
| (564,324 | ) | — |
| 47,855 |
| — |
|
Total comprehensive income |
| 48,385,812 |
| 9,075,687 |
| 5,773,707 |
| (2,958,896 | ) |
Total Comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
- Equity holders of the parent |
| 47,347,506 |
| 9,077,017 |
| 5,500,454 |
| (2,958,674 | ) |
- Non-controlling interests |
| 1,038,306 |
| (1,330 | ) | 273,253 |
| (222 | ) |
Total comprehensive income |
| 48,385,812 |
| 9,075,687 |
| 5,773,707 |
| (2,958,896 | ) |
The accompanying notes 1 to 29 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES Consolidated Interim Statements of Changes in Equity
for the periods ended September 30, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||
|
| Issued |
| Treasury |
| Translation |
| Cash flow |
| Other |
| Total |
| Retained earnings |
| Controlling Equity |
| Non-Controlling |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance at 01.01.2013 |
| 270,759,299 |
| (21,725 | ) | (63,555,545 | ) | — |
| 427,137,058 |
| 363,581,513 |
| 239,844,662 |
| 874,163,749 |
| 19,441,172 |
| 893,604,921 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| — |
| — |
| — |
| — |
| — |
| — |
| 55,065,531 |
| 55,065,531 |
| 705,442 |
| 55.770.973 |
|
Other comprehensive income |
| — |
| — |
| (8,813,478 | ) | 1,095,453 |
| — |
| (7,718,025 | ) | — |
| (7,718,025 | ) | 332,864 |
| (7.385.161 | ) |
Comprehensive income |
| — |
|
|
| (8,813,478 | ) | 1,095,453 |
| — |
| (7,718,025 | ) | 55,065,531 |
| 47,347,506 |
| 1,038,306 |
| 48.385.812 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (75,457,854 | ) | (75,457,854 | ) | (2,520 | ) | (75,460,374 | ) |
Decrease of Capital |
| (21,725 | ) | 21,725 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Total changes in equity |
| (21,725 | ) | (21,725 | ) | (8,813,478 | ) | 1,095,453 |
| — |
| (7,718,025 | ) | (20,392,323 | ) | (28,110,348 | ) | 1,035,786 |
| (27,074,562 | ) |
Ending balance at 09.30.2013 |
| 270,737,574 |
| — |
| (72,369,023 | ) | 1,095,453 |
| 427,137,058 |
| 355,863,488 |
| 219,452,339 |
| 846,053,401 |
| 20,476,958 |
| 866,530,359 |
|
|
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||
|
| Issued |
| Treasury |
| Translation |
| Cash flow |
| Other |
| Total |
| Retained earnings |
| Controlling Equity |
| Non-Controlling |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance at 01.01.2012 |
| 230,892,178 |
| — |
| (22,459,879 | ) | — |
| 5,435,538 |
| (17,024,341 | ) | 208,102,068 |
| 421,969,905 |
| 9,015 |
| 421,978,920 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| — |
| — |
| — |
| — |
| — |
| — |
| 48,962,821 |
| 48,962,821 |
| 1,602 |
| 48.964.423 |
|
Other comprehensive income |
| — |
| — |
| (39,885,804 | ) | — |
| — |
| (39,885,804 | ) | — |
| (39,885,804 | ) | (2,932 | ) | (39.888.736 | ) |
Comprehensive income |
| — |
| — |
| (39,885,804 | ) | — |
| — |
| (39,885,804 | ) | 48,962,821 |
| 9,077,017 |
| (1,330 | ) | 9.075.687 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (19,398,405 | ) | (19,398,405 | ) | — |
| (19,398,405 | ) |
Increase (decrease) through transactions in own shares |
| — |
| (21,725 | ) | — |
| — |
| — |
| — |
| — |
| (21,725 | ) | — |
| (21,725 | ) |
Total changes in equity |
| — |
| (21,725 | ) | (39,885,804 | ) | — |
| — |
| (39,885,804 | ) | 29,564,416 |
| (10,343,113 | ) | (1,330 | ) | (10,344,443 | ) |
Ending balance at 09.30.2012 |
| 230,892,178 |
| (21,725 | ) | (62,345,683 | ) | — |
| 5,435,538 |
| (56,910,145 | ) | 237,666,484 |
| 411,626,792 |
| 7,685 |
| 411,634,477 |
|
The accompanying notes 1 to 29 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. Y FILIALES
Consolidated Interim Statements of Cash Flows
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
| 01.01.2013 |
| 01.01.2012 |
|
|
| NOTE |
| 09.30.2013 |
| 09.30.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash flows generated from (used in) Operating Activities |
|
|
|
|
|
|
|
Receipts from Operating Activities |
|
|
|
|
|
|
|
Receipts from customers (including taxes) |
|
|
| 1,379,712,726 |
| 1,054,795,664 |
|
Receipts from premiums and claims, annuities and other policy benefits benefits |
|
|
| 24,848 |
| — |
|
Payments to Operating Activities |
|
|
|
|
|
|
|
Payments to suppliers for goods and services (including taxes) |
|
|
| (959,448,912 | ) | (744,370,707 | ) |
Payments to employees |
|
|
| (107,342,929 | ) | (69,658,699 | ) |
Other payments for operating activities (value-added taxes on purchases and sales and others) |
|
|
| (154,202,160 | ) | (129,488,236 | ) |
Dividends received |
|
|
| 2,085,031 |
| 725,000 |
|
Interest payments |
|
|
| (17,347,355 | ) | (3,633,257 | ) |
Interest received |
|
|
| 1,527,052 |
| 1,285,034 |
|
Income tax payments |
|
|
| (24,731,355 | ) | (15,554,163 | ) |
Other cash movements |
|
|
| (1,961,575 | ) | (2,744,013 | ) |
Net cash flows generated from Operating Activities |
|
|
| 118,315,371 |
| 91,356,623 |
|
Cash flows generated from (used in) Investing Activities |
|
|
|
|
|
|
|
Cash flows from the sale of equity investees (sale of investment in Leao Alimentos e Bebidas Ltd.) |
|
|
| 3,809,524 |
| — |
|
Cash flows from change in controls of subsidiaries and others (Capital decrease in Envases CMF S.A. and sale of 43% interest in Vital S.A., net of cash previously held) |
|
|
| — |
| 1,150,000 |
|
Cash flows used in the purchase of non-controlling interests (capital contribution in Vital Jugos S.A. after its proportional sale) |
|
|
| — |
| (2,380,320 | ) |
Loans to related entities |
|
|
| (44,584 | ) | — |
|
Proceeds from sale of property, plant and equipment |
|
|
| 6,776,252 |
| 350,152 |
|
Purchase of property, plant and equipment |
|
|
| (136,351,323 | ) | (84,330,926 | ) |
Proceeds from other long term assets (term deposits over 90 days) |
|
|
| 16,491 |
| 14,664,327 |
|
Purchase of other long term assets (term deposits over 90 days) |
|
|
| (22,371,167 | ) | (1,196,939 | ) |
Payments on forward, term, option and financial exchange agreements |
|
|
| (849,032 | ) | (265,580 | ) |
Receipts from forward, term, option and financial exchange agreements |
|
|
| 430,222 |
| 229,005 |
|
Other cash movements |
|
|
| — |
| 1,134,868 |
|
Net cash flows used in Investing Activities |
|
|
| (148,583,617 | ) | (70,645,413 | ) |
Cash Flows generated from (used in) Financing Activities |
|
|
|
|
|
|
|
Payments to acquire or redeem the entity’s shares |
|
|
| — |
| (21,725 | ) |
Proceeds from long-term loans obtained |
|
|
| — |
| 28,000,000 |
|
Proceeds from short-term loans obtained |
|
|
| 221,791,913 |
| 118,194,465 |
|
Total loan proceeds |
|
|
| 221,791,913 |
| 146,194,465 |
|
Loans payments |
|
|
| (244,042,515 | ) | (108,321,396 | ) |
Payments of finance lease liabilities |
|
|
| (24,975 | ) | — |
|
Dividend payments by the reporting entity |
|
|
| (26,327,813 | ) | (34,939,673 | ) |
Other cash movements |
|
|
| 113,565,625 |
| (1,707,399 | ) |
Net cash flows generated by (used in) Financing Activities |
|
|
| 64,962,235 |
| 1,204,272 |
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents before exchange differences |
|
|
| 34,693,989 |
| 21,915,482 |
|
|
|
|
|
|
|
|
|
Effects of exchange differences on cash and cash equivalents |
|
|
| (381,701 | ) | (4,299,450 | ) |
|
|
|
|
|
|
|
|
|
|
|
| 34,312,288 |
| 17,616,032 |
|
Net decrease in cash and cash equivalents |
|
|
| 55,522,255 |
| 31,297,922 |
|
Cash and cash equivalents — beginning of year |
| 4 |
| 89,834,543 |
| 48,913,954 |
|
Cash and cash equivalents - end of year |
| 4 |
| 48,083,818 |
| 43,018,357 |
|
The accompanying notes 1 to 29 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Notes to the Consolidated Interim Financial Statements
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2
NOTE 1 - CORPORATE INFORMATION
Securities Registration and description of business activitiesEmbotelladora Andina S.A. is registered under No. 00124 of the Securities Registry and is regulated by the Chilean Superintendence of Securities and Insurance (SVS) pursuant to Law 18.046.
The principal activities of Embotelladora Andina S.A. (hereafter “Andina,” and together with its subsidiaries, the “Company”) are to produce and sell Coca-Cola products and other Coca-Cola beverages. The Company has operations in Chile, Brazil, Argentina and Paraguay. In Chile, the geographic areas in which the Company has distribution franchises are regions II, III, IV, XI, XII, Metropolitan Region, Rancagua and San Antonio. In Brazil, the Company has distribution franchises in the states of Rio de Janeiro, Espírito Santo, Niteroi, Vitoria, and Nova Iguaçu. In Argentina, the Company has distribution franchises in the provinces of Mendoza, Córdoba, San Luis, Entre Ríos, Santa Fe, Rosario, Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro, La Pampa and the western zone of the Province of Buenos Aires. In Paraguay the franchised territory coveres the whole country.
The Company has distribution licenses from The Coca-Cola Company in all of its territories: Chile, Brasil, Argentina and Paraguay. The licenses for the territories in Chile expire in 2013 and 2018; in Argentina expire in 2013 and 2017; in Brazil expire in 2017; and in Paraguay expire in 2014. All these licenses are issued at The Coca-Cola Company´s discretion. The Company currently expects that these licenses will be renewed with similar terms and conditions upon expirations.
As of September 30, 2013, the Freire Group and its related companies hold 55.68% of the outstanding shares with voting rights, corresponding to the Series A shares.
The head office of Embotelladora Andina S.A. is located on Miraflores 9153, municipality of Renca, Santiago, Chile. Its taxpayer identification number is 91.144.000-8.
a) Merger with Embotelladoras Coca-Cola Polar S.A.
On March 30, 2012, after completion of due-diligence procedures, the Company signed a Promissory Merger Agreement with Embotelladoras Coca-Cola Polar S.A. (“Polar”). Polar is also a Coca-Cola bottler with operations in Chile, servicing territories in the II, III, IV, XI and XII regions; in Argentina, servicing territories in Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro La Pampa and the western zone of the province of Buenos Aires; and in Paraguay, servicing the whole country. The merger was made in order to reinforce the Company’s leading position among other Coca-Cola bottlers in South America.
The merger with Polar is accounted for as an acquisition of Polar by the Company. Prior to closing, the merger was approved by the shareholders of both companies, the Chilean Superintendence of Securities and Insurance, and the Coca-Cola Company. The terms of the merger prescribes the newly issued shares of the Company to be exchanged at a rate of 0.33269 Series A shares and 0.33269 Series B shares for each share of Polar.
Prior to the finalization of the merger and the approval of the shareholders at the Shareholders´Meetings of the Company and Polar, dividends were distributed among their respective shareholders, in addition to those already declared and distributed from 2011 results. Dividends distributed by the Company and Polar amounted to Ch$28,155,862,307 and Ch$29,565,609,857, respectively, which represented Ch$35.27 per each Series A share and Ch$38.80 per each Series B share.
The physical exchange of shares took place on October 16, 2012, when the former shareholders of Polar obtained a 19.68% ownership interest in the merged Company. Based upon the terms of the executed agreements, the Company took actual controls over day-to-day operations of Polar as of October 1, 2012, when it began to consolidate Polar’s operational results. As a result of Embotelladora Andina becoming the legal successor of Polar’s rights and obligations, the Company indirectly acquired additional ownership interests in Vital Jugos S.A., Vital Aguas S.A. and Envases Central S.A. in addition to its existing ownership interests in those entities. The Company’s current ownership enables it to exercise controls over these entities, and thus, consolidate them into its consolidated financial statements from October 1, 2012.
As part of the business combination, the Company obtained controls over Vital Jugos S.A. and Vital Aguas S.A. because of the combination of its news shares and existing shares in these entities. Under IFRS 3, because the business combination of Vital Jugos S.A. and Vital Aguas S.A, and Envases Central S.A. was achieved in stages, carrying value of the Company´s previously held equity interest in these entities is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in the income statement of the period in which control is obtained. The Company has not recognized any gain or loss in its 2012 income statement due to the fact that carrying values of these investments were not significantly different from their fair values.
A total of 93,152,097 Series A shares and 93,152,097 Series B shares were issued at closing in exchange for 100% of Polar’s outstanding shares. The total purchase price was ThCh$461,568,641 based on a share price of Ch$2,220 per Series A share and Ch$2,735 per Series B share on October 1, 2012. There are no contingent purchase price provisions. Transaction related costs of Ch$4,517,661 were expensed as incurred, and recorded as a component of other expenses by function in the Company’s accompanying consolidated income statement.
The fair value of Polar’s net assets acquired is as follows:
|
| ThCh$ |
|
Total current assets acquired, including cash amounting to ThCh$4,760,888 |
| 66,536,012 |
|
Property, plant and equipment |
| 153,012,024 |
|
Other non-current assets |
| 15,221,922 |
|
Contractual rights to distribute Coca-Cola products (“Distribution Rights”) |
| 459,393,920 |
|
Total Assets |
| 694,163,878 |
|
Indebtedness |
| (99,924,279 | ) |
Other liabilities (includes deferred taxes of ThCh$81,672,940) |
| (149,131,027 | ) |
Total liabilities |
| (249,055,306 | ) |
Net assets acquired |
| 445,108,572 |
|
Goodwill |
| 16,460,068 |
|
Total consideration excluding non-controlling interests (purchase price) |
| 461,568,640 |
|
The Company determines the fair value of its distribution rights, property, plant and equipment using third-party valuations. Distribution rights are expected to be tax deductible for income tax purposes.
The Company expects to recover goodwill through related synergies with the available distribution capacity. Goodwill has been assigned to the cash generating units of the Company in Chile (ThCh$8,503,023), Argentina (ThCh$1,041,633), and Paraguay (ThCh$6,915,412). Goodwill is not expected to be tax deductible for income tax purposes.
Condensed financial information of Polar for the period between January 1, 2012 and September 30, 2012 is as follows:
|
| ThCh$ |
|
Net sales |
| 233,679,974 |
|
Income before taxes |
| 6,449,689 |
|
Net income |
| 6,444,237 |
|
The proforma consolidated statement of income for the period between January 1 and September 30, 2012 is as follows:
|
| ThCh$ |
|
Net sales |
| 1,023,691,846 |
|
Income before taxes |
| 79,866,623 |
|
Net income |
| 55,740,310 |
|
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Periods covered
These consolidated financial statements encompass the following periods:
Consolidated interim statements of financial position: For the period ended at September 30, 2013 and December 31, 2012.
Consolidated interim statements of income by function and comprehensive income: For the periods from January 1 to September 30, 2013 and 2012 and for the interim three-month periods between April 1 and September 30, 2013 and 2012 .
Consolidated interim statements of cash flows: For the periods from January 1 to September 30, 2013 and 2012, using the “direct method”.
Consolidated interim statements of changes in equity: For the periods between January 1 and September 30, 2013 and 2012 .
The consolidated interim financial statements are presented in thousands of Chilean pesos and all values are rounded to the nearest thousand, unless otherwise stated.
2.2 Basis of preparation
The Company’s Consolidated Interim Financial Statements for the periods ended September 30, 2013, and December 31, 2012 were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (hereinafter “IASB”).
These financial statements comprise the consolidated statements of financial position of Embotelladora Andina S.A. and its subsidiaries as of September 30, 2013 and December, 31 2012, consolidated statements of income by function, consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows in Spanish language, for the periods ended September 30, 2013 and 2012, which were approved by the Board of Directors during their meeting held on November 19, 2013.
For the convenience of the reader, these consolidated financial statements have been translated from Spanish to English.
These Consolidated Financial Statements have been prepared based on accounting records kept by the Parent Company and other entities forming part thereof. Each entity prepares its financial statements following the accounting principles and standards applicable in each country, adjustments and reclassifications have been made, as necessary, in the consolidation process to align such principles and standards to be in accordance with IFRS.
2.3 Basis of consolidation
2.3.1 Subsidiaries
The Consolidated Financial Statements include the Financial Statements of the Parent Company and those companies under it controls (its subsidiaries). The Company has control when it has the power to govern the financial and operating policies of a company as well as to obtain benefits from its activities. They include assets and liabilities as of September 30, 2013 and December 31, 2012 and results of operations and cash flows for the periods ended September 30, 2013 and 2012. Income or losses from subsidiaries acquired or sold are included in the consolidated financial statements from the effective date of acquisition through to the effective date of disposal, as applicable.
The acquisition method is used to account for the acquisition of subsidiaries. The acquisition cost is the fair value of assets, equity securities and liabilities incurred or assumed on the date that control is obtained. Identifiable assets acquired and identifiable liabilities and contingencies assumed in a business combination are accounted for initially at their fair values at the acquisition date. Goodwill is initially measured as the excess of the aggregate of the acquisition cost and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.
Intercompany transactions, balances, income, expenses and unrealized gains and losses on transactions between Group companies are eliminated. Accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the Company, where necessary.
The equity attributable for non-controlling interests and the results of the consolidated subsidiaries are recorded in equity under “non-controlling interests”, in the Consolidated Statement of Financial Position and under “net income attributable to non-controlling interests” in the Consolidated Income Statements by Function.
The consolidated financial statements include all assets, liabilities, income, expenses, and cash flows after eliminating intercompany balances and transactions.
The list of subsidiaries included in the consolidation is detailed as follows:
|
|
|
| Holding control (percentage) |
| ||||||||||
|
|
|
| 09-30-2013 |
| 12-31-2012 |
| ||||||||
Taxpayer ID |
| Name of the Company |
| Direct |
| Indirect |
| Total |
| Direct |
| Indirect |
| Total |
|
59.144.140-K |
| Abisa Corp S.A. |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
Foreign |
| Aconcagua Investing Ltda. |
| 0.71 |
| 99.28 |
| 99.99 |
| 0.71 |
| 99.28 |
| 99.99 |
|
96.842.970-1 |
| Andina Bottling Investments S.A. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
96.972.760-9 |
| Andina Bottling Investments Dos S.A. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
Foreign |
| Andina Empaques Argentina S.A. |
| — |
| 99.98 |
| 99.98 |
| — |
| 99.98 |
| 99.98 |
|
96.836.750-1 |
| Andina Inversiones Societarias S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
76.070.406-7 |
| Embotelladora Andina Chile S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
Foreign |
| Embotelladora del Atlántico S.A. (1) |
| 0.92 |
| 99.07 |
| 99.99 |
| — |
| 99.98 |
| 99.98 |
|
Foreign |
| Coca Cola Polar Argentina S.A. (1) |
| — |
| — |
| — |
| 5.00 |
| 94.99 |
| 99.99 |
|
96.705.990-0 |
| Envases Central S.A. |
| 59.27 |
| — |
| 59.27 |
| 59.27 |
| — |
| 59.27 |
|
96.971.280-6 |
| Inversiones Los Andes Ltda. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
Foreign |
| Paraguay Refrescos S.A. |
| 0.08 |
| 97.75 |
| 97.83 |
| 0.08 |
| 97.75 |
| 97.83 |
|
76.276.604-3 |
| Red de Transportes Comerciales Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| — |
| — |
| — |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
78.536.950-5 |
| Servicios Multivending Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
78.861.790-9 |
| Transportes Andina Refrescos Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
76.389.720-6 |
| Vital Aguas S.A. |
| 66.50 |
| — |
| 66.50 |
| 66.5 |
| — |
| 66.50 |
|
96.845.500-0 |
| Vital Jugos S.A. |
| 15.00 |
| 50.00 |
| 65.00 |
| 15.00 |
| 50.00 |
| 65.00 |
|
(1) On January 1, 2013, Embotelladora del Atlántico S.A absorbed Coca-Cola Polar Argentina S.A.
2.3.2 Investments under equity method of accounting
Associates are all entities over which the Company exercises significant influence but does not have control. Investments in associates are accounted for using the equity method of accounting.
The Company’s share in profit or loss in associates subsequent to the acquisition date is recognized in the income statement.
Unrealized gains in transactions between the Company and its associates are eliminated to the extent of the Company´s interests in those associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment on the asset transferred. Accounting policies of the associates are changed, where necessary, to ensure with the policies adopted by the Company.
2.4 Financial reporting by operating segment
IFRS 8 requires that entities disclose information on the results of operating segments. In general, this is information that Management and the Board of Directors use internally to assess performance of segments and allocate resources to them. Therefore, the following operating segments have been determined based on geographic location:
· Chilean operations
· Brazilian operations
· Argentine operations
· Paraguayan operations
2.5 Foreign currency translation
2.5.1 Functional currency and presentation currency
Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Chilean pesos, which is the parent company’s functional currency and the Company´s presentation currency.
2.5.2 Balances and transactions
Foreign currency transactions are translated into the functional currency using the foreign exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities dominated in foreign currencies at the closing exchange rates are recognized in the income statement by function.
The exchange rates at the close of each of the periods presented were as follows:
|
| Exchange rate to the Chilean peso |
| ||||||||||
Date |
| US$ |
| R$ Brazilian |
| A$ Argentine |
| UF ¨Unidad |
| Paraguayan |
| € |
|
09.30.2013 |
| 504.20 |
| 226.10 |
| 87.04 |
| 23,091.03 |
| 0.1142 |
| 682.00 |
|
12.31.2012 |
| 479.96 |
| 234.87 |
| 97.59 |
| 22,840.75 |
| 0.1100 |
| 634.45 |
|
09.30.2012 |
| 473.77 |
| 233.32 |
| 100.87 |
| 22,591.05 |
| 0.1100 |
| 609.35 |
|
2.5.3 Translation of foreign subsidiaries
The financial position and results of all entities in the Company (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(iv) Assets and liabilities for each statement of financial position are translated at the closing exchange rate as of the reporting date;
(v) Income and expenses of each income statement are translated at average exchange rates for the period; and
(vi) All resulting translation differences are recognized in other comprehensive income.
The companies that have a functional currency different from the presentation currency of the parent company are:
Company |
| Functional currency |
Rio de Janeiro Refrescos Ltda. (Brazil Segment) |
| R$ Brazilian Real |
Embotelladora del Atlántico S.A. (Argentina Segment) |
| A$ Argentine Peso |
Andina Empaques Argentina S. A. (Argentina Segment) |
| A$ Argentine Peso |
Paraguay Refrescos S. A. (Paraguay Segment) |
| G$ Paraguayan Guaraní |
In the consolidation, the translation differences arising from the translation of a net investment in foreign entities are recognized in other comprehensive income. Exchange differences from accounts receivable which are considered to be part of an equity investment are recognized as comprehensive income net of deferred taxes, if applicable. On disposal of the investment, such translation differences are recognized in the income statement as part of the gain or loss on the disposal of the investment.
2.6 Property, plant, and equipment
Assets included in property, plant and equipment are recognized at their historical cost or fair value on IFRS transition date, less depreciation and cumulative impairment losses.
Historical cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items less government subsidies resulting from the difference between market interest rates and the government´s preferential credit rates. Historical cost also includes revaluations and price-level restatement of opening balances (attributable cost) at January 1, 2009, in accordance with exemptions in IFRS 1.
Subsequent costs are included in the asset´s carrying amount or recognized as a separate asset only when it is probable that future economic benefits associated with the items of property, plant and equipment will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The other repairs and maintenance are charged to the income statement in the reporting period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives.
The estimated useful lives by asset category are:
Assets |
| Range in years |
Buildings |
| 30-50 |
Plant and equipment |
| 10-20 |
Warehouse installations and accessories |
| 10-30 |
Other accessories |
| 4-5 |
Motor vehicles |
| 5-7 |
Other property, plant and equipment |
| 3-8 |
Bottles and containers |
| 2-8 |
The residual value and useful lives of assets are reviewed and adjusted at the end of each reporting period, if appropriate.
When the value of an asset is greater than its estimated recoverable amount, the value is written down immediately to its recoverable amount.
Gains and losses on disposals of property, plant, and equipment are calculated by comparing the proceeds to the carrying amount and are charged to the income statement.
Items available for sale and that meet the conditions under IFRS 5 “Non-Current Assets Available for Sale” are recorded separately from property, plant and equipment and are stated under current assets at the lower value between carrying amount and fair value less costs to sell.
2.7 Intangible assets and Goodwill
2.7.1 Goodwill
Goodwill represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the net identifiable assets of the subsidiary and the fair value of the non-controlling interest in the subsidiary on the acquisition date. Goodwill is recognized separately and tested annually for impairment. Goodwill is carried at cost less accumulated impairment losses.
Gains and losses on the sale of an entity include the carrying amount of goodwill related to that entity.
Goodwill is allocated to each of the cash-generating units (CGU) in order to test for impairment. The allocation is made to CGUs that are expected to benefit from the synergies of the business combination.
2.7.2 Distribution rights
Distribution rights are contractual rights to produce and distribute products under the Coca-Cola brand in certain territories in Argentina, Chile and Paraguay which were acquired during the Polar merger, as discussed in Note 1 b). Distribution rights have an indefinite useful life and are not amortized, as the Company believes that the agreements will be renewed indefinitely by the Coca-Cola Company with similar terms and conditions. They are subject to impairment tests on an annual basis.
2.7.3 Water rights
Water rights that have been paid for are included in the Company´s intangible assets and carried at acquisition cost. They are not amortized since they have no expiration date, but are annually tested for impairment.
2.8 Impairment losses
Assets that have an indefinite useful life, such as intangibles related to distribution rights and goodwill, are not amortized and are tested annually for impairment. Assets that are subject to amortization are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying value of the asset exceeds its recoverable amount. The recoverable amount is the greater of an asset’s fair value less costs to sell or its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets other than goodwill, that are impaired, are reviewed at each reporting date for possible reversal of the impairment.
2.9 Financial assets
The Company classifies its financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
2.9.1 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired principally for the purpose of selling in the short term. Assets in this category are classified as current assets.
Gains or losses from changes in fair value of financial assets at fair value through profit and loss are recognized in the income statement under finance income or expenses during the year in which they incur.
2.9.2 Loans and receivables
Loans and receivables are not quoted in an active market. They are included in current assets, unless they are due more than 12 months from the reporting date, in which case they are classified as non-current assets. Loans and receivables are included in trade and other receivables in the consolidated statement of financial position and they are recorded at their amortized cost.
2.9.3 Available for sale
Other financial assets include to bank deposits that the Company’s management has intention and ability to hold until their maturities. They are recorded in current assets as they mature in less than 12 months from the reporting date. They are recorded at their amortized cost less impairment.
Accrued interest is recognized in the consolidated income statement under finance income during the period in which they incur.
2.10 Derivatives financial instruments and hedging activities
The Company uses derivative financial instruments to mitigate the risks relating to changes in foreign currency and exchange rates associated with loan obligations. Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognizing the resulting gain or loss, as well as its classification, depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged.
Prior to January 1, 2013, the Company’s derivatives agreements did not qualify for hedge accounting pursuant to IFRS requirements. Therefore, the changes in fair value were immediately recognized in the income statement under “other income and losses”.
For the period ended September 30, 2013, the Company´s derivative agreements qualify for hedge accounting and designates derivatives as hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedges). The Company documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions.
The Company does not designate derivatives as hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedge) or hedges of a net investment in a foreign operation (net investment hedge).
The full fair value of a hedging derivative is classified as a non-current financial asset or liability when the remaining hedged item is more than 12 months, and as a current financial current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current financial asset or liability.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the statement of income. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the statement of income. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of income.
2.10.1 Derivative financial instruments designated for hedging
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recorded in the heritage, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
2.10.2 Derivative financial instruments not designated for hedging
Derivatives are accounted for at fair value. If positive, they are recorded under “other current financial assets”. If negative, they are recorded under “other current financial liabilities.”
The Company’s derivatives agreements do not qualify for hedge accounting pursuant to IFRS requirements. Therefore, the changes in fair value are immediately recognized in the income statement under “other income and losses”
The Company does not use hedge accounting for its foreign investments.
The Company also evaluates the existence of derivatives implicitly in financial instrument contracts to determine whether their characteristics and risks are closely related to the master agreement, as stipulated by IAS 39.
Fair value hierarchy
The Company records an asset as of September 30, 2013 and a liability as of December 31, 2012 based on its derivative foreign exchange contracts, and these are classified within the other financial assets (current assets) and other current financial liabilities (current financial liabilities), respectively. These contracts are carried at fair value in the statement of financial position. The Company uses the following hierarchy for determining and disclosing financial instruments at fair value by valuation method:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the assets or liabilities that are not based on information observable market data.
During the period ended September 30, 2013, there were no transfers of items between fair value measurement categories; all of which were valued during the period using Level 2.
2.11 Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method. The cost of finished goods and of work in progress includes raw materials, direct labor, other direct costs and manufacturing overhead (based on operating capacity) to bring the goods to marketable condition, but it excludes interest expenses. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
Estimates are also made for obsolescence of raw materials and finished products based on turnover and age of the related goods.
2.12 Trade receivable
Trade accounts receivable are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment, given their short term nature. A provision is made for impairment of trade receivables when there is objective evidence that the Company may not be able to collect the full amount according to the original terms of the receivable, based either on individual or on global aging analyses. The carrying amount of the asset is reduced by the provision amount and the loss is recognized in administrative expenses in the consolidated income statement by function.
2.13 Cash and cash equivalents
Cash and cash equivalents include cash on hand, time deposits with banks and other short-term highly liquid and low risk of change in value investments with original maturities of three months or less.
2.14 Other financial liabilities
Bank borrowings are initially recognized at fair value, net of transaction costs. These liabilities are subsequently carried at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest rate method.
2.15 Government subsidies
Government subsidies are recognized at fair value when it is certain that the subsidy will be received and that the Company will meet all the established conditions.
Subsidies for operating costs are deferred and recognized on the income statement in the period that the operating costs incur.
Subsidies for purchases of property, plant and equipment are deducted from the costs of the related asset in property, plant and equipment and depreciation is recognized on the income statement, on a straight-line basis during the estimated useful life of the related asset.
2.16 Income tax
The Company and its subsidiaries in Chile account for income tax according to the net taxable income calculated based on the rules in the Income Tax Law. Subsidiaries in other countries account for income taxes according to the tax regulations of the country in which they operate.
Deferred income taxes are calculated using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements, using the tax rates that have been enacted on the balance sheet date and are expected to apply when the deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be ultilized.
The Company does not recognize deferred income taxes for temporary differences from investments in subsidiaries and associates in which the Company can control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in the foreseeable future.
2.17 Employee benefits
The Company provides for post-retirement compensation to its retirees according to their years of service and the individual and collective contracts in place. This provision is accounted for at the actuarial value in accordance with IAS 19. The gains or losses arising from changes in assumptions (turnover, mortality, retirement, and other rates) are recorded directly in income.
The Company also has an executive retention plan. It is accounted for as a liability according to the guidelines of the plan. This plan grants certain executives the right to receive a fixed cash payment on a pre-set date once they have completed the required years of employment.
The Company and its subsidiaries have made a provision account for the cost of vacation and other employee benefits on an accrual basis. These liabilities are recorded under provisions.
2.18 Provisions
Provisions for litigation and other contingencies are recognized when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.
2.19 Leases
c) Operating leases
Operating lease payments are recognized as an expense on a straight-line basis over the term of the lease.
d) Finance leases
Leases of property, plant and equipment where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased assets and the present value of the minimum lease payments.
2.20 Deposits for returnable containers
This liability comprises of cash collateral received from customers for bottles and other returnable containers made available to them.
This liability pertains to the deposit amount that is reimbursed when the customer or distributor returns the bottles and cases in good condition, together with the original invoice. The liability is estimated based on the number of bottles given to clients and distributors, the estimated amount of bottles in circulation, and a historical average weighted value per bottle or case.
Deposits for returnable containers are presented as current liability because the Company does not have legal rights to defer settlement for a period in excess of one year. However, the Company does not anticipate any material cash settlements for such amounts during the upcoming year.
2.21 Revenue recognition
Revenue is measured at fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s business. Revenue presents amounts receivable for goods supplied net of value-added tax, returns, rebates, and discounts and net of sales between the companies that are consolidated.
The Company recognizes revenue when the amount of revenue can be reliably measured and it is probable that the future economic benefits will flow to the Company.
Revenues are recognized once the products are physically delivered to customers.
2.22 Contributions of The Coca-Cola Company
The Company receives certain discretionary contributions from The Coca-Cola Company, related to the financing of advertising and promotional programs for its products in the territories where it has distribution licenses. The contribution received are recorded as a reduction in marketing expenses in the consolidated income statement. Given its discretionary nature, the portion of contributions received in one period does not imply it will be repeated in the following period.
In certain limited situations, there is a legally binding agreement with The Coca-Cola Company through which the Company receives contributions for the building and acquisition of specific items of property, plant and equipment. In such situations, payments received pursuant to these agreements are recorded as a reduction of the cost of the related assets.
2.23 Dividend payments
Dividend payments to the Company’s shareholders are recognized as a liability in the Company´s consolidated financial statements, based on the obligatory 30% minimum in accordance with the Corporations Law.
2.24 Critical accounting estimates and judgments
The Company makes estimates and judgments concerning the future. Actual results may differ from previously estimated amounts. The estimates and judgments that might have a material impact on future financial statements are explained below:
2.24.1 Impairment of goodwill and intangible assets with indefinite useful lives
The Company tests annually whether goodwill and intangible assets with indefinite useful lives (such as distribution rights) have suffered any. The recoverable amounts of cash generating units are determined based on value-in-use calculations. The key variables used in the calculations include the volume of sales, prices, marketing expenses and other economic factors. The estimation of these variables requires an use of estimates and judgments as they are subject to inherent uncertainties; however, the assumptions are consistent with the Company´s internal planning. Therefore, management evaluates and updates estimates according to the conditions affecting the variables. If these assets are considered to have been impaired, they will be written off at their estimated fair value or future recovery value according to the discounted cash flows analysis. The risk free discounted Brazil, Argentina and Paraguay ; and there was an excess of the value-in-use over the respective assets, including goodwill in the Brazilian , Argentine and Paraguayan subsidiaries.
2.24.2 Fair Value of Assets and Liabilities
IFRS requires in certain cases that assets and liabilities be recorded at their fair value. Fair value is the amount at which an asset can be purchased or sold or a liability can be incurred or liquidated in an actual transaction among parties under mutually independently agreed conditions which are different from a forced liquidation.
The basis for measuring assets and liabilities at fair value are the current prices in the active market. For those that are not traded in an active market, the Company determines fair value based on the best information available by using valuation techniques.
The Company estimated the fair value of the intangible assets acquired from the Polar merger based on the multiple period excess earning method, which implies the estimation of future cash flows generated by those intangible assets, adjusted by cash flows that are generated from assets other than those intangible assets. The Company also applies estimations over the time period during which the intangible assets will generate cash flows, cash flows amounts, cash flows from other assets and a discount rate.
Other assets acquired and liabilities assumed in the business combination are carried at fair value using valuation methods that are considered appropriate under the circumstances. Assumptions include the depreciated cost of recovery and recent transaction values for comparable assets, among others. These valuation techniques require certain inputs to be estimated, including the estimation of future cash flows.
2.24.3 Allowances for doubtful accounts
The Company evaluates the collectability of trade receivables using several factors. When the Company becomes aware of a specific inability of a customer to fulfill its financial commitments, a specific provision for doubtful accounts is estimated and recorded, which reduces the recognized receivable to the amount that the Company estimates to be able to collect. In addition to specific provisions, allowances for doubtful accounts are also determined based on historical collection history and a general assessment of trade receivables, both outstanding and past due, among other factors. The balance of the Company’s trade receivables was ThCh$150,078,822 at September 30, 2013 (ThCh$159,540,993 at December 31, 2012), net of an allowance for doubtful accounts provision of ThCh$2,324,884 at September 30, 2013 (ThCh$1,486,749 at December 31, 2012). Historically, doubtful accounts have represented an average of less than 1% of consolidated net sales.
2.24.4 Useful life, residual value and impairment of property, plant, and equipment
Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of those assets. Changes in circumstances, such as technological advances, changes to the Company’s business model, or changes in its capital strategy might modify the effective useful lives as compared to our estimates. Whenever the Company determines that the useful life of property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned usage of manufacturing equipment, dispensers, transportation equipment and computer software could make the useful lives of assets shorter. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of any of those assets may not be recovered. The estimate of future cash flows is based, among other factors, on certain assumptions about the expected operating profits in the future. The Company´s estimation of discounted cash flows may differ from actual cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in operating profit. If the sum of projected discounted cash flows (excluding interests) is lower than the carrying value of the asset, the asset will be written down to its estimated fair value.
2.24.5 Liabilities for deposits of returnable container
The Company records a liability for deposits received in exchange for bottles and cases provided to its customers and distributors. This liability represents the amount of deposits that must be reimbursed returned if the customer or distributor returns the bottles and cases in good condition, together with the original invoice. This liability is estimated on the basis of the number of bottles given on loan to customers and distributors, estimates of bottles in circulation and the weighted average historical cost per bottle or case. Management makes several assumptions in order to estimate this liability, including the number of bottles in circulation, the amount of deposit that must be reimbursed and the timing of disbursements.
2.25 New IFRS and interpretations of the IFRS Interpretations Committee (IFRSIC)
c) The following standards, amendments and interpretations are mandatory for the first time for financial years beginning on January 1, 2013
Standards and interpretations |
| Mandatory for the |
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IAS 19 Revised “Employee Benefits” Issued in June 2011, it supersedes IAS 19 (1998). This revised standard modifies how to recognize and measure expenses for defined benefit plans and termination benefits. Essentially, this modification eliminates the corridor method or fluctuation band and requites that the actuarial fluctuation of the period be recognized in Other Comprehensive Income. Additionally it includes modifications to disclosures of all employee benefits. |
| 01/01/2013 |
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IAS 27 “Separate Financial Statements” Issued in May 2011, it supersedes IAS 27 (2008). The change of this standard is restricted only to separate financial statements. Under this change, the definition of control and consolidation were removed and included under IFRS 10. Early adoption is permitted in conjunction with IFRS 10, IFRS 11 and IFRS 12 and the modification to IAS 28. |
| 01/01/2013 |
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|
IFRS 10 “Consolidated Financial Statements” Issued in May 2011, it replaces the SIC-12 “Consolidation of special purpose entities” and guidance on control and consolidation of IAS 27 “Consolidated financial statements”. It provides clarifications and new parameters for the definition of control, as well as the principles for the preparation of consolidated financial statements. Early adoption is permitted in conjunction with IFRS 11, IFRS 12 and amendments to IAS 27 and 28. |
| 01/01/2013 |
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|
IFRS 11 “Joint Agreements” Issued in May 2011, it replaces IAS 31 “Interests in joint ventures” and SIC-13 “Jointly controlled entities”. It provides a more realistic reflection of the joint agreements focusing on the rights and obligations arising from the agreements rather than its legal form. Some of the modifications include the elimination of the concept of jointly controlled assets and the option of proportional consolidation of entities under joint agreements. Early adoption is permitted in conjunction with IFRS 10, IFRS 12 and amendments to IAS 27 and 28. |
| 01/01/2013 |
IFRS 13 “Fair Value Measurement” Issued in May 2011, it brings together in a single standard the source of fair value measurement of assets and liabilities and disclosure requirements, and incorporates new concepts and clarifications for their measurement. |
| 01/01/2013 |
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|
IFRIC 20 ““Stripping Costs” in the production phase of a surface mine” Issued in October 2011, it regulates the recognition of costs for the removal of mine waste materials “Stripping Costs” in the production phase of a mine as an asset, the initial and subsequent measurement of this asset. In addition, interpretation requires mining entities reporting under to write-off existing “Stripping Costs” assets to opening retained earnings if they cannot be attributed to an identifiable component of a deposit . |
| 01/01/2013 |
Amendments and improvements |
| Mandatory for the |
|
|
|
IAS 1 “Presentation of Financial Statements” Issued in June 2011, the main modification of this amendment is a requirement for entities to group items presented in Other Comprehensive Income on the basis whether they are potentially reclassifiable to income statement subsequently. Early adoption is permitted. |
| 07/01/2012 |
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|
IAS 28 “Investments in Associates and Joint Ventures” Issued in May 2011, it regulates the accounting treatment of these investments through the application of the equity method. Early adoption is permitted in conjunction with IFRS 10, IFRS 11 and IFRS 12 and amendment to IAS 27. |
| 01/01/2013 |
|
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|
IFRS 7 “Financial Instruments: Disclosures” Issued in December 2011, it includes improvements in current disclosures of offsetting financial assets and liabilities, in order to increase the convergence between IFRS and U.S. GAAP. These disclosures focus on quantitative information on the recognized financial instruments that are offset in the financial statement. Early adoption is permitted |
| 01/01/2013 |
|
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|
IFRS 1 “First Time Adoption of International Financial Reporting Standards” Issued in March 2012, it provides an exception for retroactive application to the recognition and measurement of the loans received from the Government with interest rates below market, at the date of transition. Early adoption is permitted. |
| 01/01/2013 |
Improvements to International Financial Reporting Standards Issued in May 2012. |
| 01/01/2013 |
|
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|
IFRS 1 “First Time Adoption of International Financial Reporting Standards” — it clarifies that an entity may apply IFRS 1 more than once, under certain circumstances. |
|
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IFRS 1 “First Time Adoption of International Financial Reporting Standards” — It clarifies that an entity may chose to adopt IAS 23, “Borrowing Costs” on the transition date or since a previous date” |
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IAS 1 “Presentation of Financial Statements” - It clarifies requirements of comparative information when the entity presents a third balance column. |
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IFRS 1 “First Time Adoption of International Financial Reporting Standards” — As a consequence of the previous amendment to IAS 1, it clarifies that an entity adopting IFRS for the first time can deliver information in notes for all periods presented. |
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IAS 16 “Property, Plant and Equipment” — It clarifies that the spare parts and service equipment will be classified as Property, Plant and Equipment rather than inventory, as they meet the definition of Property, Plant and Equipment. |
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IAS 32 “Presentation of Financial Instruments” — It clarifies the treatment of income tax relative to distribution and transaction costs. |
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IAS 34 “Interim Financial Information” — It clarifies then presentation requirements of assets and liabilities by segments during interim periods, ratifying the same applicable requirements to the annual financial statements. |
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IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Agreements” and IFRS 12, “Disclosure of Interest in Other Entities” Issued in July 2012 — They clarify transitional provisions for IFRS 10, indicating that it is necessary to apply them the first day of the annual period in which the standard is adopted. Therefore, it may be necessary to make modifications to the comparative information presented in that period, if the evaluation of control over investment differs from what was recognized according to IAS 27/SIC 12. |
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|
The adoption of standards, amendments and interpretations previously described, does not have a material impact on the consolidated financial statements of the Company.
d) New standards, interpretations and amendments issued, not applicable for the year 2013, for which early adoption of the same has been taken, are as follows.
Standards and interpretations |
| Mandatory |
|
|
|
IFRS 9 “Financial Instruments” Issued in December 2009 - It modifies the classification and measurement of financial assets. Subsequently this standard was modified in November 2010 to include the treatment and classification of financial liabilities. Early adoption is permitted. |
| 01/01/2015 |
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IFRIC 21“Levies” Issued in May 2013 - It defines a levy as an outflow of resources embodying economic benefits imposed by the Government to the entities in accordance with the legislation in force. It indicates the accounting treatment for a liability to pay a levy if that liability is within the scope of IAS 37. It states when a liability should be recognized for levies imposed by a public authority to operate in a specific market. It proposes that the liability is recognized when there is a source of obligation and payment cannot be avoided. The source of the obligation may occur at a certain date or gradually over time. Early adoption is permitted. |
| 01/01/2014 |
Amendments and improvements |
| Mandatory |
|
|
|
IAS 32 “Presentation of Financial Instruments” Issued in December 2011 - It clarifies the requirements for offsetting financial assets and liabilities in the financial statement. Specifically, it indicates that the offsetting right must be available on the date of the financial statement and not be dependent on a future event. It also indicates that it must be legally obligatory for counterparts both in the normal course of business, as well as in the case of default, insolvency or bankruptcy. Early adoption is permitted. |
| 01/01/2014 |
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IAS 36 “Impairment of Assets” Issued in May 2013 - It modifies the information disclosure of the recoverable amount of non-financial assets by aligning them with the requirements of IFRS 13. It requires disclosure of information about the recoverable amount of assets that are impaired if that amount is based on fair value less selling costs. Additionally, it requires among other things, that discount rates used in determining present values of the recoverable amount must be disclosed. Early adoption is permitted. |
| 01/01/2014 |
The Company´s management considers the adoption of standards, amendments and interpretations previously described, will not significantly impact the consolidated financial statements of the Company in the period of its first application.
NOTE 3 — REPORTING BY SEGMENT
The Company provides information by segments according to IFRS 8 “Operating Segments,” which establishes standards for reporting by operating segment and related disclosures for products and services, and geographic areas.
The Company’s Board of Directors and Management measures and assesses performance of operating segments based on the operating income of each of the countries where there are franchises.
The operating segments are determined based on the presentation of internal reports to the Company´s chief operating decision-maker. The chief operating decision-maker has been identified as the Company´s Board of Directors who makes the Company´s strategic decisions.
The following operating segments have been determined for strategic decision making based on geographic location:
· Chilean operations
· Brazilian operations
· Argentine operations
· Paraguayan operations
The four operating segments conduct their businesses through the production and sale of soft drinks, other beverages, and packaging.
The income and expense relating to corporate management are assigned to the Chilean operation in the operating segment.
The total income by segment includes sales to unrelated customers and inter-segment sales, as indicated in the Company’s consolidated statement of income.
A summary of the Company’s operating segments in accordance to IFRS is as follows:
For the period ended September 30, 2013 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Eliminations |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
| ThCh$ |
|
Net sales |
| 338,542,264 |
| 305,612,579 |
| 324,479,255 |
| 79,082,975 |
| (1,496,013 | ) | 1,046,221,060 |
|
Finance income |
| 1,116,684 |
| 18,071 |
| 1,151,817 |
| 114,225 |
| — |
| 2,400,797 |
|
Finance costs |
| (9,530,053 | ) | (3,589,453 | ) | (3,073,036 | ) | (299,326 | ) | — |
| (16,491,868 | ) |
Finance income, net |
| (8.413.369) |
| (3,571,382 | ) | (1,921,219 | ) | (185,102 | ) | — |
| (14,091,072 | ) |
Depreciation and amortization |
| (26.731.018) |
| (11,501,360 | ) | (12,471,399 | ) | (7,688,927 | ) | — |
| (58,392,704 | ) |
Total expenses |
| (293,362,623 | ) | (281,858,477 | ) | (279,415,682 | ) | (64,825,542 | ) | 1,496,013 |
| (917,966,311 | ) |
Net income of the segment reported |
| 10,035,254 |
| 8,681,360 |
| 30,670,955 |
| 6,383,404 |
| — |
| 55,770,973 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associates using equity method of accounting |
| 29,854 |
| — |
| 470,177 |
| — |
| — |
| 500,031 |
|
Income tax expense |
| 4,853,414 |
| 3,361,589 |
| 12,664,924 |
| 740,557 |
| — |
| 21,620,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets, total |
| 825,873,960 |
| 200,851,916 |
| 350,679,142 |
| 266,609,703 |
| — |
| 1,644,014,721 |
|
Investments in associates using equity method of accounting |
| 17,494,271 |
| — |
| 54,965,138 |
| — |
| — |
| 72,459,409 |
|
Capital expenditures and other |
| 41,632,284 |
| 36,211,149 |
| 44,980,654 |
| 13,527,236 |
| — |
| (136,351,323 | ) |
Segment liabilities, total |
| 441,219,182 |
| 118,507,802 |
| 176,746,764 |
| 41,010,614 |
| — |
| 777,484,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows generated from (used in) Operating Activities |
| 49,743,388 |
| 8,901,016 |
| 45,641,373 |
| 14,029,594 |
| — |
| 118,315,371 |
|
Cash flows used in Investing Activities |
| (58,148,593 | ) | (35,736,658 | ) | (41,171,130 | ) | (13,527,236 | ) | — |
| (148,583,617 | ) |
Cash flows generated from (used in) Financing Activities |
| 48,524,655 |
| 22,464,578 |
| (1,905,102 | ) | (4,121,896 | ) | — |
| 64,962,235 |
|
For the period ended September 30, 2012 |
| Chile |
| Argentina |
| Brazil |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
| 238,989,393 |
| 201,673,848 |
| 327,876,104 |
| 768,539,345 |
|
Finance income |
| 615,013 |
| 283,541 |
| 1,124,009 |
| 2,022,563 |
|
Finance costs |
| (4,704,486 | ) | (1,524,993 | ) | (423,864 | ) | (6,653,343 | ) |
Finance income, net |
| (4,089,473 | ) | (1,241,452 | ) | 700,145 |
| (4,630,780 | ) |
Depreciation and amortization |
| (15,700,651 | ) | (7,502,777 | ) | (12,434,600 | ) | (35,638,028 | ) |
Total expenses |
| (208,121,919 | ) | (184,621,328 | ) | (286,562,867 | ) | (679,306,114 | ) |
Net income of the segment reported |
| 11,077,350 |
| 8,308,291 |
| 29,578,782 |
| 48,964,423 |
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associates using equity method of accounting |
| 924,498 |
| — |
| 833,815 |
| 1,758,313 |
|
Income tax expense |
| 4,675,564 |
| 4,865,295 |
| 14,416,325 |
| 23,957,184 |
|
|
|
|
|
|
|
|
|
|
|
Segment assets, total |
| 332,546,927 |
| 117,504,435 |
| 272,584,691 |
| 722,636,053 |
|
Investments in associates using equity method of accounting |
| 40,309,277 |
| — |
| 20,761,014 |
| 61,070,291 |
|
Capital expenditures and other |
| 39,763,916 |
| 22,646,998 |
| 24,300,332 |
| 86,711,246 |
|
Segment liability, total |
| 172,581,636 |
| 63,546,441 |
| 74,873,499 |
| 311,001,576 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows generated from Operating Activities |
| 40,214,241 |
| 6,689,444 |
| 44,452,938 |
| 91,356,623 |
|
Cash flows used in Investing Activities |
| (25,111,881 | ) | (21,235,268 | ) | (24,298,264 | ) | (70,645,413 | ) |
Cash flows generated from (used in) Financing Activities |
| (10,810,139 | ) | 12,255,743 |
| (241,332 | ) | 1,204,272 |
|
NOTE 4 — CASH AND CASH EQUIVALENTS
Cash and cash equivalents are detailed as follows as of September 30, 2013 and December 31, 2012:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Cash |
| 763,131 |
| 871.173 |
|
Bank balances |
| 11,100,753 |
| 24.171.486 |
|
Time deposits |
| 49,947,300 |
| 783.223 |
|
Money market funds |
| 28,023,359 |
| 29.696.373 |
|
Total cash and cash equivalents |
| 89,834,543 |
| 55.522.255 |
|
By currency |
| ThCh$ |
| ThCh$ |
|
Dollar |
| 5,515,503 |
| 5,067,208 |
|
Argentine Peso |
| 570,925 |
| 5,181,955 |
|
Chilean Peso |
| 52,544,166 |
| 14,089,380 |
|
Paraguayan Guaraní |
| 4,101,760 |
| 6,112,524 |
|
Brazilian Real |
| 27,102,189 |
| 25,071,188 |
|
Total cash and cash equivalents |
| 89,834,543 |
| 55,522,255 |
|
4.1 Time deposits
Time deposits defined as cash and cash equivalents are detailed as follows at September 30, 2013 and December 31, 2012:
Placement |
| Institution |
| Currency |
| Principal |
| Annual |
| Balance |
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
07-12-2013 |
| Banco de Chile |
| Chilean Pesos |
| 1,500,000 |
| 5.04 | % | 1,516,800 |
|
09-05-2013 |
| Banco de Chile |
| Chilean Pesos |
| 10,500,000 |
| 5.16 | % | 10,537,625 |
|
09-05-2013 |
| Banco HSBC - Chile |
| Chilean Pesos |
| 10,500,000 |
| 5.16 | % | 10,537,625 |
|
09-05-2013 |
| Banco BBVA - Chile |
| Chilean Pesos |
| 10,500,000 |
| 5.04 | % | 10,536,745 |
|
09-05-2013 |
| Banco Santander-Chile |
| Chilean Pesos |
| 10,500,000 |
| 5.16 | % | 10,537,625 |
|
09-13-2013 |
| Banco del Estado -Chile |
| Chilean Pesos |
| 4,200,000 |
| 5.28 | % | 4,210,472 |
|
10-30-2012 |
| Banco del Estado -Chile |
| Unidades de Fomento |
| 754,479 |
| 3.60 | % | 754,479 |
|
09-18-2013 |
| Banco Votorantim -Brasil |
| Brazilian Real |
| 16,863 |
| 8.82 | % | 17,422 |
|
09-30-2013 |
| Banco Regional SAECA |
| Paraguayan Guaraní |
| 1,298,507 |
| 3.50 | % | 1,298,507 |
|
|
|
|
| Total |
|
|
|
|
| 49,947,300 |
|
Placement |
| Institution |
| Currency |
| Principal |
| Annual |
| Balance |
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
12-28-2012 |
| Banco Regional SAECA |
| Paraguayan Guaraní |
| 783,223 |
| 3.50 |
| 783,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 783,223 |
|
4.2 Money Market
Money market mutual fund´s shares are valued using the share values at the close of each reporting period. Below is a description for the end of each period:
Institution |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Mutual fund Soberano Banco Itaú — Brasil |
| 24,252,732 |
| 18,235,213 |
|
Mutual fund Corporate Banchile — Chile |
| 1,007,728 |
| — |
|
Western Assets Institutional Cash — USA |
| 976,973 |
| 3,472,196 |
|
Mutual fund Select Banco Itaú — Chile |
| 622,812 |
| — |
|
Mutual fund Corporate Banco Itaú — Chile |
| — |
| 1,989,833 |
|
Mutual Fund Competitivo Banco BCI — Chile |
| 512,000 |
| — |
|
Mutual fund Wells Fargo Bank — USA |
| 151,114 |
| 137,500 |
|
Mutual fund Corporativo Banco BBVA — Chile |
| 500,000 |
| 2,081,666 |
|
Mutual fund Banco Galicia — Argentina |
| — |
| 946,885 |
|
Mutual fund Patrimonio Banco Caixa Económica Federal - Brasil |
| — |
| 2,833,080 |
|
|
|
|
|
|
|
Total mutual fund |
| 28,023,359 |
| 29,696,373 |
|
NOTE 5 — OTHER CURRENT FINANCIAL ASSETS
Below are the financial instruments held by the Company at September 30, 2013 and December 31, 2012, other than cash and cash equivalents. They consist of time deposits with maturities in the short term (more than 90 days),restricted mutual funds and derivative contracts. Detail of financial instruments are detailed as follows:
Time deposits
Placement |
| Maturity |
|
|
|
|
|
|
| Annual |
|
|
|
date |
| date |
| Institution |
| Currency |
| Principal |
| Rate |
| 09.30.2013 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
07-12-2013 |
| 10-22-2013 |
| Banco HSBC - Chile |
| Chilean Pesos |
| 6,220,000 |
| 5.40 |
| 6,294,640 |
|
09-13-2013 |
| 12-17-2013 |
| Banco Santander - Chile |
| Chilean Pesos |
| 4,300,000 |
| 5.28 |
| 4,310,721 |
|
09-13-2013 |
| 12-17-2013 |
| Banco del Estado - Chile |
| Chilean Pesos |
| 4,300,000 |
| 5.28 |
| 4,310,721 |
|
09-13-2013 |
| 12-17-2013 |
| Banco BBVA - Chile |
| Chilean Pesos |
| 4,200,000 |
| 5.28 |
| 4,210,472 |
|
09-13-2013 |
| 02-13-2014 |
| Banco HSBC - Chile |
| Chilean Pesos |
| 1,650,000 |
| 5.40 |
| 1,654,208 |
|
09-30-2013 |
| 03-26-2014 |
| Banco Santander - Chile |
| Chilean Pesos |
| 1,600,000 |
| 5.52 |
| 1,600,000 |
|
06-06-2013 |
| 10-04-2013 |
| Banco BBVA Francés - Argentina |
| Argentine peso |
| 12,620 |
| 16.35 |
| 13,276 |
|
|
|
|
|
|
|
|
| Subtotal |
|
|
| 22,394,038 |
|
Bonds
Institution |
|
|
| 09.30.2013 |
|
|
|
|
| ThCh$ |
|
Bonds Provincia Buenos Aires - Argentina |
|
|
| 9,076 |
|
|
| Subtotal |
| 9,076 |
|
Derivative contracts
|
|
|
| 09.30.2013 |
|
|
|
|
| ThCh$ |
|
Please see details in Note 20 |
|
|
| 516,167 |
|
|
| Subtotal |
| 516,167 |
|
|
|
|
|
|
|
Total other current financial assets |
| Total |
| 22,919,281 |
|
Time deposits
Placement |
| Maturity |
|
|
|
|
|
|
| Annual |
|
|
|
date |
| date |
| Institution |
| Currency |
| Principal |
| Rate |
| 12.31.2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03-25-2012 |
| 03-20-2013 |
| Banco Votorantim - Brasil |
| R$ |
| 16,480 |
| 8.82 |
| 17,280 |
|
|
|
|
|
|
|
|
| Total |
|
|
| 17,280 |
|
Mutual Funds
Institution |
|
|
| ThCh$ |
|
Mutual Funds Banco Galicia (1) |
|
|
| 111,301 |
|
|
| Subtotal |
| 111,301 |
|
|
|
|
|
|
|
Total other current financial assets |
| Total |
| 128,581 |
|
(1) These are financial investments the use of which is restricted because they were made to comply with the guarantees of derivatives transactions performed by the Company.
NOTE 6 — CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS
Note 6.1 Other current non-financial assets
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Prepaid expenses |
| 5,114,830 |
| 3,513,515 |
|
Fiscal credits |
| 3,419,192 |
| 14,118,736 |
|
Prepaid insurance |
| 675,400 |
| 182,015 |
|
Custom deposits (Argentina) |
| 72,277 |
| 239,879 |
|
Other current assets |
| 237,803 |
| 148,693 |
|
Total |
| 9,519,502 |
| 18,202,838 |
|
Note 6.2 Other non-current, non-financial assets
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Judicial deposits (1) |
| 18,621,418 |
| 18,002,490 |
|
Prepaid expenses |
| 3,740,026 |
| 2,515,235 |
|
Fiscal credits |
| 4,819,020 |
| 5,880,191 |
|
Others |
| 613,110 |
| 529,174 |
|
Total |
| 27,793,574 |
| 26,927,090 |
|
(1) See note 21.2
NOTE 7 — TRADE AND OTHER RECEIVABLES
The composition of trade and other receivables is detailed as follows:
|
| 09.30.2013 |
| 12.31.2012 |
| ||||||||
Trade and other receivables |
| Assets before |
| Allowance for |
| Commercial |
| Assets |
| Allowance for |
| Commercial |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Current commercial debtors |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 95,179,852 |
| (2,281,934 | ) | 92,897,918 |
| 115,998,388 |
| (1,458,801 | ) | 114,539,587 |
|
Other current debtors |
| 33,116,799 |
| — |
| 33,116,799 |
| 15,782,069 |
| — |
| 15,782,069 |
|
Current commercial debtors |
| 128,296,651 |
| (2,281,934 | ) | 126,014,717 |
| 131,780,457 |
| (1,458,801 | ) | 130,321,656 |
|
Prepayments suppliers |
| 5,070,519 |
| — |
| 5,070,519 |
| 4,021,021 |
| — |
| 4,021,021 |
|
Other current accounts receivable |
| 10,902,836 |
| (42,950 | ) | 10,859,886 |
| 18,502,187 |
| (27,948 | ) | 18,474,239 |
|
Commercial debtors and other current accounts receivable |
| 144,270,006 |
| (2,324,884 | ) | 141,945,122 |
| 154,303,665 |
| (1,486,749 | ) | 152,816,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 339,502 |
| — |
| 339,502 |
| 124,767 |
| — |
| 124,767 |
|
Other non-current debtors |
| 7,794,198 |
| — |
| 7,794,198 |
| 6,599,310 |
| — |
| 6,599,310 |
|
Non-current accounts receivable |
| 8,133,700 |
| — |
| 8,133,700 |
| 6,724,077 |
| — |
| 6,724,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivable |
| 152,403,706 |
| (2,324,884 | ) | 150,078,822 |
| 161,027,742 |
| (1,486,749 | ) | 159,540,993 |
|
Aging of debtor portfolio |
| Number of |
| 09.30.2013 |
| Number of |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
|
|
| ThCh$ |
|
Up to date non-securitized portfolio |
| 1,611 |
| 33,213,021 |
| 8,514 |
| 59,686,698 |
|
1 and 30 days |
| 39,797 |
| 54,477,354 |
| 30,523 |
| 51,451,804 |
|
31 and 60 days |
| 960 |
| 1,974,075 |
| 484 |
| 784,192 |
|
61 and 90 days |
| 438 |
| 738,150 |
| 346 |
| 951,083 |
|
91 and 120 days |
| 345 |
| 1,479,956 |
| 273 |
| 316,787 |
|
121 and 150 days |
| 314 |
| 346,128 |
| 282 |
| 34,370 |
|
151 and 180 days |
| 469 |
| 372,835 |
| 264 |
| 307,727 |
|
181 and 210 days |
| 413 |
| 256,673 |
| 280 |
| 176,493 |
|
211 and 250 days |
| 349 |
| 453,220 |
| 276 |
| 251,247 |
|
More than 250 days |
| 1,427 |
| 2,207,942 |
| 1,362 |
| 2,162,754 |
|
Total |
| 46,123 |
| 95,519,354 |
| 42,604 |
| 116,123,155 |
|
|
| 09.30.2013 |
|
| 12.31.2012 |
|
|
| ThCh$ |
|
| ThCh$ |
|
Current comercial debtors |
| 95,179,852 |
|
| 115,998,388 |
|
Non-current comercial debtors |
| 339,502 |
|
| 124,767 |
|
Total |
| 95,519,354 |
|
| 116,123,155 |
|
The movement of allowance for doubtful accounts between January 1 and September 30, 2013 and January 1 and December 31,2012 are presented below:
|
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Opening balance |
| 1,486,749 |
| 1,544,574 |
|
Bad debt expense |
| 1,873,334 |
| 976,331 |
|
Write-off of accounts receivable |
| (1,096,427 | ) | (843,766 | ) |
Decrease due to foreign exchange differences |
| 61,228 |
| (190,390 | ) |
Movement |
| 838,135 |
| (57,825 | ) |
|
|
|
|
|
|
Ending balance |
| 2,324,884 |
| 1,486,749 |
|
NOTE 8 — INVENTORIES
The composition of inventory balances is detailed as follows:
|
| Current |
| ||
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Raw materials |
| 51,287,267 |
| 41,942,176 |
|
Finished goods |
| 27,137,547 |
| 22,792,255 |
|
Spare parts |
| 18,500,869 |
| 14,479,488 |
|
Merchandise |
| 11,535,100 |
| 8,797,194 |
|
Supplies |
| 1,334,453 |
| 1,125,276 |
|
Work in progress |
| 193,182 |
| 705,637 |
|
Other inventories |
| 916,900 |
| 1,504,926 |
|
Obsolescence provision (1) |
| (2,724,021 | ) | (2,027,126 | ) |
Total |
| 108,181,297 |
| 89,319,826 |
|
The cost of inventory recognized as cost of sales is ThCh$627,488,846 and ThCh$462,335,544 at September 30, 2013 and 2012, respectively.
(1) The provision for obsolescence is primarily related more to the obsolescence of parts classified as inventories than finished goods and raw materials.
NOTE 9 — CURRENT AND DEFERRED INCOME TAXES
For the period ended September 30, 2013, the Company had a taxable profits fund of ThCh$60,065,814, comprised of profits with credits for first category income tax amounting to ThCh$59,745,125 and profits without credits amounting to ThCh$320,689.
9.1 Current tax assets
Current tax receivables break down as follows:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Monthly provisional payments |
| 4,966,971 |
| 2,319,627 |
|
Tax credits (1) |
| 520,886 |
| 559,766 |
|
Other tax assets |
| 1,845,174 |
| — |
|
Total |
| 7,333,031 |
| 2,879,393 |
|
(1) Tax credits correspond to income tax credits on training expenses, purchase of property, plant and equipment and donations.
9.2 Current tax liabilities
Current tax payables correspond to the following items:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Income tax expense |
| 13,261 |
| 355,363 |
|
Other |
| — |
| 759,447 |
|
Total |
| 13,261 |
| 1,114,810 |
|
9.3 Income tax expense
The current and deferred income tax expenses for the periods ended September 30, 2013 and 2012 are detailed as follows:
Item |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Current income tax expense |
| 16,905,837 |
| 19,225,027 |
|
Adjustment to current income tax from the previous fiscal year |
| (2,480,072 | ) | 125,303 |
|
Other current income tax expenses |
| 1,394,116 |
| 348,643 |
|
Current income tax expense |
| 15,819,881 |
| 19,698,973 |
|
Deferred income tax expenses |
| 5,800,603 |
| 4,258,211 |
|
Total deferred income tax expenses |
| 5,800,603 |
| 4,258,211 |
|
Total income tax expense |
| 21,620,484 |
| 23,957,184 |
|
9.4 Deferred income taxes
The net cumulative balances of temporary differences which give rise to deferred tax assets and liabilities are shown below:
|
| 09.30.2013 |
| 12.31.2012 |
| ||||
Temporary differences |
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Property, plant and equipment |
| 1,126,419 |
| 29,635,382 |
| 432,181 |
| 29,494,188 |
|
Obsolescence provision |
| 849,542 |
| — |
| 637,675 |
| — |
|
Employee benefits |
| 2,380,437 |
| — |
| 1,807,163 |
| — |
|
Post-employment benefits |
| 57,565 |
| 419,089 |
| — |
| 277,510 |
|
Tax loss carried-forwards (1) and (2) |
| 5,216,533 |
| — |
| 9,026,314 |
| — |
|
Contingency provision |
| 2,159,862 |
| — |
| 2,020,821 |
| — |
|
Foreign exchange differences (Foreign Subsidiaries) (4) |
| — |
| 7,514,197 |
| — |
| 9,145,349 |
|
Allowance for doubtful accounts |
| 392,037 |
| — |
| 350,319 |
| — |
|
Tax resulting from holding inventories (Argentina) |
| 134,217 |
| — |
| 150,486 |
| — |
|
Tax incentives (Brazil) (3) |
| — |
| 13,305,465 |
| — |
| 10,930,694 |
|
Assets and liabilities for placement of bonds |
| — |
| 148,632 |
| 370,245 |
| 77,316 |
|
Lease liabilities |
| 314,824 |
| — |
| 430,476 |
| — |
|
Inventories |
| — |
| 187,544 |
| — |
| 127,550 |
|
Distribution rights |
| — |
| 77,065,069 |
| — |
| 76,559,423 |
|
Others |
| 475,378 |
| 1,050,105 |
| 997,372 |
| 1,025,648 |
|
Subtotal |
| 13,106,814 |
| 129,325,483 |
| 16,223,052 |
| 127,637,678 |
|
Net Liabilities |
| — |
| 116,218,669 |
| — |
| 111,414,626 |
|
(1) Tax losses associated mainly with our subsidiary in Chile - Embotelladora Andina Chile S.A., which is in the process of implementation of their manufacturing and commercial operations, the amount totals to ChTh$4,997,162 and other minor subsidiaries in Chile ThCh$219,371. Tax losses in Chile do not have an expiration date.
(2) Tax losses associated with Ex Coca-Cola Polar Argentina S.A. (currently Embotelladora del Atlántico S.A), which were used during the 2013 period. The outstanding amount as of December 31, 2012 was ThCh$5,280,865.
(3) This corresponds to tax incentives in Brazil that consist of a tax withholding reduction that are recorded under income statement, but under tax rules they must be recorded in equity, and cannot be distributed as dividends.
(4) Deferred tax generated by exchange differences upon translation of intercompany accounts with the Brazilian subsidiary - Rio de Janeiro Refrescos Ltda. that are recorded to other comprehensive income, but under tax rules they are taxable in Brazil as they incur.
9.5 Deferred tax liability movement
The movement in deferred income tax accounts is as follows:
Item |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Opening Balance |
| 111,414,626 |
| 35,245,490 |
|
Increase due to merger |
| — |
| 76,544,806 |
|
Increase in deferred tax liabilities |
| 5,235,274 |
| 4,453,994 |
|
Decrease due to foreign currency translation |
| (431,231 | ) | (4,829,664 | ) |
Movements |
| 4,804,043 |
| 76,169,136 |
|
Ending balance |
| 116,218,669 |
| 111,414,626 |
|
9.6 Distribution of domestic and foreign tax expenses
As of September 30, 2013 and 2012, domestic and foreign tax expenses are detailed as follows:
Income tax |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Current income taxes |
|
|
|
|
|
Foreign |
| (9,983,656 | ) | (16,444,731 | ) |
Domestic |
| (5,836,225 | ) | (3,254,242 | ) |
Current income tax expense |
| (15,819,881 | ) | (19,698,973 | ) |
|
|
|
|
|
|
Deferred income taxes |
|
|
|
|
|
Foreign |
| (6,783,412 | ) | (3,159,592 | ) |
Domestic |
| 982,809 |
| (1,098,619 | ) |
Deferred income tax expense |
| (5,800,603 | ) | (4,258,211 | ) |
Income tax expense |
| (21,620,484 | ) | (23,957,184 | ) |
9.7 Reconciliation of effective rate
Below is the reconciliation between tax expenses using legal rate and tax expenses using effective rate:
Reconciliation of effective rate |
| 09.30.2013) |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Net income before taxes |
| 77,391,457 |
| 72,921,607 |
|
Tax expense at legal rate (20.0%) |
| (15,478,291 | ) | (14,584,321 | ) |
Effect of a different tax rate in other jurisdictions |
| (7,008,880 | ) | (7,692,026 | ) |
|
|
|
|
|
|
Permanent differences: |
|
|
|
|
|
Non-taxable revenues |
| 2,578,451 |
| 1,184,576 |
|
Non-deductible expenses |
| (735,510 | ) | (1,475,496 | ) |
Tax Effect of the Use of Previously Unrecognized Tax Losses |
| 43,373 |
| — |
|
Tax effect of Previously Unrecognized Tax Benefit in the Income Statement |
| 98,206 |
| — |
|
Tax effect of change in tax rate |
| — |
| (848,018 | ) |
Tax effect of tax provided in Excess of Prior Period |
| (160,820 | ) | — |
|
Other decreases in charges for legal taxes |
| (957,013 | ) | (541,899 | ) |
Adjustments to tax expense |
| 866,687 |
| (1,680,837 | ) |
|
|
|
|
|
|
Tax expense at effective rate |
| (21,620,484 | ) | (23,957,184 | ) |
Effective rate |
| 27.9 | % | 32.9 | % |
Below are the income tax rates applicable in each jurisdiction where the Company operates:
|
| Rate |
| ||
Country |
| 2013 |
| 2012 |
|
Chile |
| 20 | % | 20 | % |
Brasil |
| 34 | % | 34 | % |
Argentina |
| 35 | % | 35 | % |
Paraguay |
| 10 | % | — |
|
NOTA 10 — PROPERTY, PLANT AND EQUIPMENT
10.1 Balances
Property, plant and equipment are detailed below at the end of each period:
|
| Property, plant and equipment, |
| Cumulative depreciation and |
| Property, plant and equipment, |
| ||||||
Item |
| 09.30.2013 |
| 12.31.2012 |
| 09.30.2013 |
| 12.31.2012 |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Construction in progress |
| 63,385,329 |
| 61,735,710 |
| — |
| — |
| 63,385,329 |
| 61,735,710 |
|
Land |
| 67,827,066 |
| 57,134,715 |
| — |
| — |
| 67,827,066 |
| 57,134,715 |
|
Buildings |
| 167,369,570 |
| 163,759,761 |
| (31,250,817 | ) | (31,980,362 | ) | 136,118,753 |
| 131,779,399 |
|
Plant and equipment |
| 358,461,737 |
| 346,179,261 |
| (170,849,530 | ) | (169,999,912 | ) | 187,612,207 |
| 176,179,349 |
|
Information technology |
| 13,588,654 |
| 12,429,618 |
| (8,433,989 | ) | (6,629,395 | ) | 5,154,665 |
| 5,800,223 |
|
Fixed facilities and accessories |
| 44,325,934 |
| 40,282,483 |
| (14,898,568 | ) | (15,443,891 | ) | 29,427,366 |
| 24,838,592 |
|
Vehicles (2) |
| 11,871,782 |
| 11,134,161 |
| (2,408,509 | ) | (3,298,464 | ) | 9,463,273 |
| 7,835,697 |
|
Leasehold improvements |
| 742,500 |
| 130,240 |
| (172,775 | ) | (120,818 | ) | 569,725 |
| 9,422 |
|
Other property, plant and equipment (1) |
| 325,213,455 |
| 294,974,382 |
| (213,748,911 | ) | (183,736,764 | ) | 111,464,544 |
| 111,237,618 |
|
Total |
| 1,052,786,027 |
| 987,760,331 |
| (441,763,099 | ) | (411,209,606 | ) | 611,022,928 |
| 576,550,725 |
|
(1) Other property, plant and equipment is composed of bottles, market assets, furniture and other minor assets.
(2) As of December 31, 2012 there were finance lease agreements for vehicles in the subsidiary Rio de Janeiro Refrescos Ltda. and Tetrapak equipment in Argentina.
(1) The net balance of each of these categories at September 30, 2013 and December 31, 2012 is detailed as follows
Other property, plant and equipment |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bottles |
| 60,487,976 |
| 59,983,147 |
|
Marketing and promotional assets |
| 35,888,065 |
| 40,251,550 |
|
Other property, plant and equipment |
| 15,088,503 |
| 11,002,921 |
|
Total |
| 111,464,544 |
| 111,237,618 |
|
The Company has insurance to protect its property, plant and equipment and its inventory from potential losses. The geographic distribution of those assets is detailed as follows:
Chile : Santiago, Puente Alto, Maipú, Renca, Rancagua y San Antonio, Antofagasta, Coquimbo and Punta Arenas.
Argentina : Buenos Aires, Mendoza, Córdoba y Rosario, Bahía Blanca, Chacabuco, La Pampa, Neuqén, Comodoro Rivadavia, Trelew, andTierra del Fuego
Brazil : Río de Janeiro, Niteroi, Campos, Cabo Frío, Nova Iguazú, Espirito Santo and Vitoria.
Paraguay : Asunción, Coronel Oviedo, Ciudad del Este and Encarnación.
10.2 Movements
Movements in property, plant and equipment are detailed as follows between January 1 and September 30, 2013 and January 1 and December 31, 2012
For the period ended 09.30.2013 |
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, net |
| Fixed facilities |
| Vehicles, net |
| Leasehold |
| Other |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 61,735,710 |
| 57,134,715 |
| 131,779,399 |
| 176,179,349 |
| 5,800,223 |
| 24,838,592 |
| 7,835,697 |
| 9,422 |
| 111,237,618 |
| 576,550,725 |
|
Additions |
| 70,930,612 |
| 13,168,665 |
| 4,212,100 |
| 10,185,576 |
| 687,619 |
| 233,395 |
| 656,100 |
| 7,535 |
| 22,603,380 |
| 122,684,982 |
|
Disposals |
| — |
| (467,626 | ) | (407,242 | ) | (1,542,122 | ) | (213 | ) | (700,111 | ) | — |
| — |
| (1,315,587 | ) | (4,432,901 | ) |
Transfers between items of property, plant and equipment |
| (67,216,653 | ) | (265,819 | ) | 8,626,737 |
| 32,273,729 |
| 1,363,503 |
| 9,233,429 |
| 2,259,803 |
| 754,207 |
| 12,971,064 |
| — |
|
Transfer to (from) investment property |
| — |
| — |
| — |
| (1,565,232 | ) | — |
| — |
| — |
| — |
| — |
| (1,565,232 | ) |
Depreciation expense |
| — |
| — |
| (2,926,887 | ) | (20,596,833 | ) | (1,709,079 | ) | (1,501,766 | ) | (1,090,423 | ) | (208,913 | ) | (29,166,165 | ) | (57,200,066 | ) |
Increase (decrease) due to foreign currency translation differences |
| (2,064,340 | ) | (803,568 | ) | (3,647,466 | ) | (5,371,523 | ) | (986,009 | ) | (299,698 | ) | (196,173 | ) | 7,474 |
| 1,578,459 |
| (11,782,844 | ) |
Other increase (decrease) |
| — |
| (939,301 | ) | (1,517,888 | ) | (1,950,737 | ) | (1,379 | ) | (2,376,475 | ) | (1,731 | ) | — |
| (6,444,225 | ) | (13,231,736 | ) |
Total movements |
| 1,649,619 |
| 10,692,351 |
| 4,339,354 |
| 11,432,858 |
| (645,558 | ) | 4,588,774 |
| 1,627,576 |
| 560,303 |
| 226,926 |
| 34,472,203 |
|
Ending balance at September 30, 2013 |
| 63,385,329 |
| 67,827,066 |
| 136,118,753 |
| 187,612,207 |
| 5,154,665 |
| 29,427,366 |
| 9,463,273 |
| 569,725 |
| 111,464,544 |
| 611,022,928 |
|
For the year ended 12.31.2012 |
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, net |
| Fixed facilities |
| Vehicles, net |
| Leasehold |
| Other |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 47,924,160 |
| 34,838,977 |
| 65,354,562 |
| 109,316,370 |
| 2,143,340 |
| 15,450,209 |
| 1,938,804 |
| 23,980 |
| 73,074,065 |
| 350,064,467 |
|
Additions |
| 59,622,568 |
| — |
| 163,015 |
| 16,253,430 |
| 590,141 |
| 33,027 |
| 1,623,662 |
| — |
| 50,800,843 |
| 129,086,686 |
|
Disposals |
| — |
| — |
| — |
| (425,844 | ) | (32,575 | ) | — |
| — |
| — |
| (712,471 | ) | (1,170,890 | ) |
Transfers between items of property, plant and equipment |
| (62,379,694 | ) | (263,320 | ) | 33,207,590 |
| 20,739,334 |
| 2,326,639 |
| 11,403,778 |
| 4,676,401 |
| — |
| (9,710,728 | ) | — |
|
Transfers to assets held for sale, current |
| — |
| — |
| (2,977,969 | ) | — |
| — |
| — |
| — |
| — |
| — |
| (2,977,969 | ) |
Additions due to merger (1) |
| 18,267,801 |
| 25,288,317 |
| 46,717,142 |
| 58,602,133 |
| 2,068,712 |
| 24,765 |
| 591,579 |
|
|
| 40,370,384 |
| 191,930,833 |
|
Depreciation expense |
| — |
| — |
| (2,958,099 | ) | (20,058,072 | ) | (1,043,395 | ) | (1,645,825 | ) | (728,228 | ) | (11,624 | ) | (26,831,414 | ) | (53,276,657 | ) |
Increase (decrease) due to foreign currency translation differences |
| (1,699,125 | ) | (2,729,259 | ) | (7,833,909 | ) | (8,547,363 | ) | (236,756 | ) | (422,406 | ) | (133,634 | ) | (2,934 | ) | (13,619,288 | ) | (35,224,674 | ) |
Other increases (decreases) |
| — |
| — |
| 107,067 |
| 299,361 |
| (15,883 | ) | (4,956 | ) | (132,887 | ) | — |
| (2,133,773 | ) | (1,881,071 | ) |
Total movements |
| 13,811,550 |
| 22,295,738 |
| 66,424,837 |
| 66,862,979 |
| 3,656,883 |
| 9,388,383 |
| 5,896,893 |
| (14,558 | ) | 38,163,553 |
| 226,486,258 |
|
Ending balance at December 31, 2012 |
| 61,735,710 |
| 57,134,715 |
| 131,779,399 |
| 176,179,349 |
| 5,800,223 |
| 24,838,592 |
| 7,835,697 |
| 9,422 |
| 111,237,618 |
| 576,550,725 |
|
(1) Corresponds to balances incorporated as of October 1, 2012 as a result of the consolidation of Embotelladoras Coca-Cola Polar S.A. and certain other companies explained in note 1 b).
NOTE 11 — RELATED PARTY DISCLOSURES
Balances and transactions with related parties as of September 30, 2013 and December 31, 2012 are detailed as follows:
11.1 Accounts receivable:
11.1.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 4,930,949 |
| — |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Chilean pesos |
| 3,978,854 |
| 4,893,956 |
|
96.517.210-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Chilean pesos |
| 252,847 |
| 358,859 |
|
Foreign |
| Montevideo Refrescos S.A. |
| Related to Shareholder |
| Uruguay |
| Dollars |
| — |
| 51,215 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Dollars |
| 17,890 |
| 20,058 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Chilean pesos |
| 1,000 |
| 301 |
|
|
|
|
| Total |
|
|
|
|
| 9,181,540 |
| 5,324,389 |
|
11.1.2 Non current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 10,766 |
| 7,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 10,766 |
| 7,197 |
|
11.2 Accounts Payable:
11.2.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| — |
| 8,680,945 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Argentine peso |
| 5,378,311 |
| 11,624,070 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Brazilian Real |
| 5,868,507 |
| 6,721,378 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Chilean pesos |
| 4,159,737 |
| 5,441,206 |
|
Foreign |
| Coca-Cola Perú |
| Shareholder |
| Peru |
| Dollars |
| 4,673,124 |
| — |
|
Foreign |
| Leão Júnior S.A. |
| Associate |
| Brazil |
| Brazilian Real |
| 6,993,602 |
| — |
|
Foreign |
| SRSA Participações Ltda |
| Associate |
| Brazil |
| Brazilian Real |
| 65,881 |
| — |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Chilean pesos |
| 211,066 |
| 259,613 |
|
|
|
|
| Total |
|
|
|
|
| 27,350,228 |
| 32,727,212 |
|
11.3 Transactions:
Taxpayer ID |
| Company |
| Relationship |
| Country of |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of concentrates |
| Chilean pesos |
| 69,179,140 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean pesos |
| 4,536,533 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean pesos |
| 1,856,956 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of services and others |
| Chilean pesos |
| 1,008,863 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean pesos |
| 22,781,024 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean pesos |
| 1,984,244 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of packaging |
| Chilean pesos |
| 1,790,307 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of services and others |
| Chilean pesos |
| 0 |
|
96.891.720-K |
| Embonor S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 12,118,216 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 894,191 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Purchase of concentrates |
| Brazilian Reais |
| 70,099,813 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Reimbursement and other purchases |
| Brazilian Reais |
| 461,073 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Advertising participation payment |
| Brazilian Reais |
| 10,608,567 |
|
Extranjera |
| Sorocaba Refrescos S. A. |
| Associate |
| Brazil |
| Purchase of products |
| Brazilian Reais |
| 2,721,360 |
|
Extranjera |
| Leao Alimentos e Bebidas Ltda. |
| Associate |
| Brazil |
| Purchase of products |
| Brazilian Reais |
| 23,352,943 |
|
Extranjera |
| Sistema de Alimentos e Bebidas do Brasil Ltda. |
| Associate |
| Brazil |
| Purchase of products |
| Brazilian Reais |
| 20,376,730 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Purchase of concentrates |
| Argentine pesos |
| 52,753,761 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising rights, rewards and others |
| Argentine pesos |
| 1,263,451 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Collection of advertising participation |
| Argentine pesos |
| 4,912,564 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Purchase of raw materials |
| Chilean pesos |
| 1,012,489 |
|
Foreign |
| Coca-Cola Peru |
| Related to shareholder |
| Peru |
| Purchase of concentrates and marketing expenses recovery |
| Chilean pesos |
| 274,442 |
|
84.505.800-8 |
| Vendomática S.A. |
| Related to director |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 655,576 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Investment in mutual funds |
| Chilean pesos |
| 8,499,000 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Redemption of mutual funds |
| Chilean pesos |
| (8,499,000 | ) |
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of concentrates |
| Chilean pesos |
| 76,756,589 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean pesos |
| 3,184,671 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean pesos |
| 2,731,636 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 1,245,309 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of services and others |
| Chilean pesos |
| 1,016,520 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of raw materials and others |
| Chilean pesos |
| 3,686,498 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean pesos |
| 28,986,747 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean pesos |
| 2,722,611 |
|
96.891.720-K |
| Embonor S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 10,293,435 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 2,244,302 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Purchase of concentrates |
| Brazilian Real |
| 78,524,183 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Reimbursement and other purchases |
| Brazilian Reail |
| 1,335,869 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Advertising participation payment |
| Brazilian Real |
| 14,502,915 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Purchase of concentrates |
| Argentine pesos |
| 68,569,280 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising rights, rewards and others |
| Argentine pesos |
| 2,624,656 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Collection of advertising participation |
| Argentine pesos |
| 5,419,055 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Purchase of raw materials |
| Chilean pesos |
| 1,873,336 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Investment in mutual funds |
| Chilean pesos |
| 61,042,686 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Redemption of mutual funds |
| Chilean pesos |
| 59,455,046 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Redemption of time deposits |
| Chilean pesos |
| 223,027 |
|
84.505.800-8 |
| Vendomática S.A. |
| Related to director |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 1,358,380 |
|
79.753.810-8 |
| Claro y Cía. |
| Related to partner |
| Chile |
| Legal Counseling charges |
| Chilean pesos |
| 349,211 |
|
93.899.000-K |
| Vital Jugos S.A. (1) |
| Associate |
| Chile |
| Sale of raw material and materials |
| Chilean pesos |
| 4,697,898 |
|
93.899.000-K |
| Vital Jugos S.A. (1) |
| Associate |
| Chile |
| Purchase of finished products |
| Chilean pesos |
| 18,656,191 |
|
96.705.990-0 |
| Envases Central S.A. (1) |
| Associate |
| Chile |
| Purchase of finished products |
| Chilean pesos |
| 14,618,933 |
|
96.705.990-0 |
| Envases Central S. A. (1) |
| Associate |
| Chile |
| Sale of raw materials and materials |
| Chilean pesos |
| 2,479,381 |
|
76.389.720-6 |
| Vital Aguas S.A. (1) |
| Associate |
| Chile |
| Purchase of finished products |
| Chilean pesos |
| 4,065,125 |
|
(1) Corresponds to transactions generated with Vital Aguas S.A:, Vital Jugos S.A. and Envases Central S.A. up until before taking control over those companies as a result of what has been described in Note 1b)
11.4 Key management compensation
Salaries and benefits paid to the Company’s key management personnel including directors and managers, are detailed as follows:
Description |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Executive wages, salaries and benefits |
| 3,176,518 |
| 3,317,033 |
|
Director allowances |
| 1,134,000 |
| 924,000 |
|
Total |
| 4,310,518 |
| 4,241,033 |
|
NOTE 12 — EMPLOYEE BENEFITS
As of September 30, 2013 and December 31, 2012, the Company had recorded reserves for profit sharing and for bonuses totaling ThCh$6,881,804 and ThCh$8,240,460, respectively.
This liability is included in other non-current non-financial liabilities in the statement of financial position.
Employee benefits expense is allocated between the cost of sales, cost of marketing, distribution costs and administrative expenses.
12.1 Personnel expenses
Personnel expenses included in the consolidated statement of income statement are as follows:
Description |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Wages and salaries |
| 112,428,704 |
| 73,461,236 |
|
Employee benefits |
| 24,310,580 |
| 18,960,577 |
|
Severance and post-employment benefits |
| 2,573,825 |
| 1,761,018 |
|
Other personnel expenses |
| 5,545,768 |
| 4,315,748 |
|
Total |
| 144,858,877 |
| 98,498,579 |
|
12.2 Number of Employees
|
| 09.30.2013 |
| 09.30.2012 |
|
Number of employees |
| 12,354 |
| 7,372 |
|
Number of average employees |
| 11,967 |
| 6,836 |
|
12.3 Post-employment benefits
This item represents post employment benefits which are determined as stated in Note 2.17.
Post-employment benefits |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh |
|
|
|
|
|
|
|
Non-current provision |
| 7,888,250 |
| 7,037,122 |
|
Total |
| 7,888,250 |
| 7,037,122 |
|
12.4 Post-employment benefits movement
The movements of post-employment benefits for the period ended September 30, 2013 and the year ended December 31, 2012 are detailed as follows:
Movements |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 7,037,122 |
| 5,130,015 |
|
Increase due to merger |
| — |
| 189,921 |
|
Service costs |
| 1,044,394 |
| 1,500,412 |
|
Interest costs |
| 99,485 |
| 158,235 |
|
Net actuarial losses |
| 1,011,151 |
| 1,010,136 |
|
Benefits paid |
| (1,303,902 | ) | (951,597 | ) |
Total |
| 7,888,250 |
| 7,037,122 |
|
12.5 Assumptions
The actuarial assumptions used at September 30, 2013 and December 31, 2012 were:
Assumption |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
Discount rate (1) |
| 3.8% |
| 5.1% |
|
Expected salary increase rate (1) |
| 3.1% |
| 4.4% |
|
Turnover rate |
| 5.2% |
| 5.4% |
|
Mortality rate (2) |
| RV-2009 |
| RV-2009 |
|
Retirement age of women |
| 60 years |
| 60 years |
|
Retirement age of men |
| 65 years |
| 65 years |
|
(1) The discount rate and the expected salary increase rate are calculated in real terms, which do not include an inflation adjustment. The rates shown above are presented in nominal terms to facilitate a better understanding by the reader.
(2) Mortality assumption tables prescribed for use by the Chilean Superintendence of Securities and Insurance.
NOTA 13 — INVESTMENTS IN ASSOCIATES USING EQUITY METHOD OF ACCOUNTING
13.1 Balances
Investments in associates using equity method of accounting are detailed as follows:
|
|
|
| Country of |
| Functional |
| Carrying Value |
| Percentage interest |
| ||||
Taxpayer ID |
| Name |
| Incorporation |
| Currency |
| 09.30.2013 |
| 12.31.2012 |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| % |
| % |
|
86.881.400-4 |
| Envases CMF S.A. (1) |
| Chile |
| Chilean Peso |
| 17,494,271 |
| 17,848,010 |
| 50.00 | % | 50.00 | % |
Foreign |
| Leao Alimentos e Bebidas Ltda. (4) |
| Brazil |
| Brazilian Real |
| 20,901,289 |
| — |
| 9.57 | % | — |
|
Foreign |
| Kaik Participacoes Ltda. (2) |
| Brazil |
| Brazilian Real |
| 1,158,756 |
| 1,172,641 |
| 11.32 | % | 11.31 | % |
Foreign |
| SRSA Participacoes Ltda. (4) |
| Brazil |
| Brazilian Real |
| 87,997 |
| — |
| 40.00 | % | — |
|
Foreign |
| Sistema de Alimentos de Bebidas Do Brasil Ltda. (2) and (4) |
| Brazil |
| Brazilian Real |
| — |
| 9,587,589 |
| — |
| 5.74 | % |
Foreign |
| Sorocaba Refrescos S.A.(3) |
| Brazil |
| Brazilian Real |
| 32,817,096 |
| 34,709,914 |
| 40.00 | % | 40.00 | % |
Foreign |
| Holdfab2 Participacoes Societarias Ltda. (4) |
| Brazil |
| Brazilian Real |
| — |
| 9,761,907 |
| — |
| 36.40 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 72,459,409 |
| 73,080,061 |
|
|
|
|
|
(1) In these companies, regardless of the percentage of ownership interest held in 2011, it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions.
(2) In these companies, regardless of the percentage of ownership interest held,it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions.
(3) Corresponds to the purchase of a 40% ownership interest in the Brazilian company during the last quarter of 2012.
(4) During the year 2013 through corporate restructuring that occurred in Brazil, interests held in Sistema de Alimentos de Bebidas Do Brasil Ltda. and Holdfab 2 Participacoes Societarias Ltda., were merged into a new company called Leao Alimentos e Bebidas Ltda. Proceeds from the transaction increased value generated in the associated investment in Brazil that took up other income according to ThCh$ $ 7,068,820 Subsequently and according to the current sales volume of Rio de Janeiro Refrescos Ltda., part of the investment in the new company was sold to the rest of the bottlers for an amount of ThCh$ 3,809,524 at carrying value, and consequently eliminating the proportional part of the excess value obtained in the corporate restructuring for an amount of ThCh$1,585,705.
13.2 Movement
The movement of investments in associates using equity method of accounting is shown below, for the period ended September 30, 2013 and the year ended December 31, 2012:
Details |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening Balance |
| 73,080,061 |
| 60,290,966 |
|
Capital increases in equity investees |
| — |
| 2,380,320 |
|
Acquisition of Sorocaba Refrescos S.A. (40%) |
| — |
| 34,513,444 |
|
Investment in Holdfab 2 Soc Participacoes Ltda and SABB in exchange for interest in the new company Leao Alimentos e Bebidas Ltda. |
| (19,349,496 | ) | — |
|
Increase in interest in new company Leao Alimentos e Bebidas Ltda. By 9.57% |
| 15,217,069 |
| — |
|
Dividends received |
| (1,686,484 | ) | (402,148 | ) |
Share of profit |
| 994,433 |
| 2,409,110 |
|
Amortization of property plant and equipment sold to Envases CMF |
| 63,950 |
| 85,266 |
|
Amortization of Fair Value in Vital Jugos S. A. |
| — |
| (77,475 | ) |
Other increases (decreases) Investments in associates |
| 5,803,653 |
| — |
|
Decrease due to foreign currency translation differences |
| (1,663,777 | ) | (3,652,740 | ) |
Deconsolidation of certain investments under equity method of accounting due to Polar merger (1) |
| — |
| (22,466,682 | ) |
Ending Balance |
| 72,459,409 |
| 73,080,061 |
|
(1) Corresponds to the proportional equity value recorded as of September 30, 2012 for the equity investees Vital Aguas S.A. Vital Jugos S.A. and Envases Central, as explained in note 1 b) as a result of the merger with Embotelladoras Coca-Cola Polar, they are now considered subisidiaries and are incorporated into the Company´s consolidation as of October 1, 2012.
The main movements for the periods ended 2013 and 2012 are detailed as follows:
· During the period 2013, Envases CMF S.A. has distributed dividends of ThCh$1,340,492.
· During the period 2013, Sorocaba Refrescos S.A. has distributed dividends of ThCh$ 744,539.
· During the first quarter of 2013, there is a reorganization of the companies that manufacture juice products and mate in Brazil, with the merger of Holdfab2 Participações Ltda. and Sistema de Alimentos de Bebidas Do Brasil Ltda. into a single company that is the legal continuing entity, namely Leao Alimentos e Bebidas Ltda.
· In November 2012, pursuant the Shareholders’ Agreements, Coca-Cola Embonor S.A. purchased 7.1% ownership interest in Vital Aguas S.A. at carrying amount and 7.0% ownership interest in Vital Jugos S.A. at carrying amount. The disbursements received for these transactions amounted to ThCh$2,112,582.
· Subsequent to the merger with Embotelladoras Coca-Cola Polar S.A., detailed in Note 1b), on October 1, 2012, the Company acquired control of Vital Jugos S.A., Vital Aguas S.A. and Envases Central S.A.. Subsequent to the merger, the Company holds 72.0%, 73.6% and 59.27% ownership interest in these entities, respectively.
On August 30, 2012, Rio de Janeiro Refrescos Ltda. (“RJR”), a subsidiary of Embotelladora Andina S.A. in Brazil, and Renosa Industria Brasileira de Bebidas S.A. (the other shareholder of this subsidiary) signed a promissory purchase agreement containing the conditions leading to the acquisition by RJR of 100% of the equity interest held by Renosa in Sorocaba Refrescos S.A. which is equivalent to 40% of the total shares of Sorocaba. The promissory agreement should be fulfilled within a period of 180 days. The agreement was materialized during the month of October with a payment of 146.9 million reals.
· In accordance with the Special Shareholders’ Meeting of our equity investee, Vital Jugos S.A., held on April 10, 2012, a capital increase was agreed in the amount of ThCh$6,960,000, with 60% of the increase being paid on May 15, 2012 and the balance thereof will be paid during the course of the year. The Company met that capital increase in the percentage of the outstanding ownership at that date of 57% contributing ThCh$2,380,320.
13.3 Reconciliation of share of profit in investments in associates:
Details |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Share of profit of associates |
| 994,433 |
| 2,207,681 |
|
|
|
|
|
|
|
Non-realized earnings in inventory acquired from associates and not sold at the end of period, presented as a discount in the respective asset account (containers and/or inventories) |
| (473,662 | ) | (435,842 | ) |
Amortization of gain on sale of property plant and equipment to Envases CMF |
| 63,950 |
| 63,949 |
|
Amortization of fair value adjustments related to Vital acquisition |
| (84,690 | ) | (77,475 | ) |
Income Statement Balance |
| 500,031 |
| 1,758,313 |
|
13.4 Summary financial information of associates:
The attached table presents summarized information regarding the Company´s equity investees as of September 30, 2013:
|
| Envases CMF |
| Sorocaba |
| Kaik |
| SRSA |
| Leao |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Total assets |
| 55,669,562 |
| 38,594,752 |
| 10,236,676 |
| 2,541,030 |
| 344,692,697 |
|
Total liabilities |
| 19,359,390 |
| 18,624,848 |
| 42 |
| 2,321,038 |
| 187,194,592 |
|
Total revenue |
| 29,170,154 |
| 4,996,317 |
| 230,101 |
| — |
| 208,765,567 |
|
Net income (loss) of associate |
| 1,048,513 |
| 176,680 |
| 230,101 |
| 215,470 |
| 6,489,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting date |
| 09/30/2013 |
| 08/31/2013 |
| 08/31/2013 |
| 08/31/2013 |
| 08/31/2013 |
|
NOTA 14 — INTANGIBLE ASSETS AND GOODWILL
14.1 Intangible assets other than goodwill
Intangible assets other than goodwill as of the end of each reporting period are detailed as follows:
|
| September 30, 2013 |
| December 31, 2012 |
| ||||||||
|
| Gross |
| Cumulative |
| Net |
| Gross |
| Cumulative |
| Net |
|
Description |
| Amount |
| Amortization |
| Amount |
| Amount |
| Amortization |
| Amount |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Water rights |
| 485,019 |
| (84,322 | ) | 400,697 |
| 497,998 |
| (90,041 | ) | 407,957 |
|
Distribution rights (1) |
| 465,038,236 |
| — |
| 465,038,236 |
| 459,320,270 |
| — |
| 459,320,270 |
|
Software |
| 15,908,107 |
| (9,374,955 | ) | 6,533,152 |
| 13,597,796 |
| (8,743,750 | ) | 4,854,046 |
|
Total |
| 481,431,362 |
| (9,459,277 | ) | 471,972,085 |
| 473,416,064 |
| (8,833,791 | ) | 464,582,273 |
|
(1) In accordance with what has been described in note 1b) corresponds to the rights to produce and distribute products under the Brand of Coca-Cola in the franchise territories maintained by Embotelladoras Coca-Cola Polar S.A. in Chile, Argentina and Paraguay. Such distribution rights are not subject to amortization and are composed as follows:
|
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Chile |
| 300,305,727 |
| 300,305,727 |
|
Paraguay |
| 162,609,819 |
| 156,627,248 |
|
Argentina |
| 2,122,690 |
| 2,387,295 |
|
Total |
| 465,038,236 |
| 459,320,270 |
|
The movement and balances of identifiable intangible assets are detailed as follows for the period January 1 to September 30, 2013 and January 1 to December 31, 2012:
14.2 Goodwill
Movement in goodwill is detailed as follows:
Period ended September 31,2013
Cash generating unit |
| 01.01.2013 |
| Additions |
| Disposals or |
| Foreign currency |
| 09.30.2013 |
|
|
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Chile operation |
| 8,503,023 |
| — |
| — |
| — |
| 8,503,023 |
|
Brazilian operation |
| 35,536,967 |
| — |
| — |
| (1,289,245 | ) | 34,247,722 |
|
Argentine operation |
| 13,837,339 |
| — |
| — |
| (1,498,652 | ) | 12,338,687 |
|
Paraguayan operation |
| 6,915,412 |
| — |
| — |
| 264,142 |
| 7,179,554 |
|
Total |
| 64,792,741 |
| — |
| — |
| (2,523,755 | ) | 62,268,986 |
|
Year ended December 31, 2012
Cash generating unit |
| 01.01.2012 |
| Additions (1) |
| Diposals or |
| Foreign currency |
| 12.31.2012 |
|
|
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh$ |
|
Chile operation |
| — |
| 8,503,023 |
| — |
| — |
| 8,503,023 |
|
Brazilian operation |
| 41,697,004 |
| — |
| — |
| (6,160,037 | ) | 35,536,967 |
|
Argentine operation |
| 15,855,174 |
| 1,041,633 |
| — |
| (3,059,468 | ) | 13,837,339 |
|
Paraguayan operation |
| — |
| 6,915,412 |
| — |
| — |
| 6,915,412 |
|
Total |
| 57,552,178 |
| 16,460,068 |
| — |
| (9,219,505 | ) | 64,792,741 |
|
(1) As explained in note 1b), this corresponds to goodwill generated in the fair value valuation of assets acquired and liabilities assumed from the merger with Embotelladoras Coca-Cola Polar S.A.
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
Liabilities are detailed as follows:
Current |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 65,604,452 |
| 87,278,613 |
|
Bonds payable |
| 11,281,322 |
| 4,376,648 |
|
Deposits in guarantee |
| 14,528,622 |
| 13,851,410 |
|
Forward contract obligations (see note 20) |
| — |
| 394,652 |
|
Leasing agreements |
| 296,356 |
| 346,696 |
|
Total |
| 91,710,752 |
| 106,248,019 |
|
Non-current |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 48,937,587 |
| 46,353,758 |
|
Bonds payable |
| 235,892,394 |
| 126,356,040 |
|
Leasing agreements |
| 1,377,853 |
| 1,170,397 |
|
Total |
| 286,207,834 |
| 173,880,195 |
|
15.1.1 OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| Up to |
| 90 days |
| At |
| At |
| ||||||||
Tax ID, |
| Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| 90 days |
| up to 1 year |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.60 | % | 6.60 | % | — |
| — |
| — |
| 9,171,557 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 5.76 | % | 5.76 | % | 353,285 |
| 330,000 |
| 683,285 |
| 671,827 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.82 | % | 6.82 | % | — |
| — |
| — |
| 2,323,515 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.39 | % | 6.39 | % | — |
| 1,900,974 |
| 1,900,974 |
| 32,069 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.84 | % | 6.84 | % | — |
| — |
| — |
| 2,695,242 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.49 | % | 6.49 | % | — |
| — |
| — |
| 384,618 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Dollars |
| At maturity |
| 3.36 | % | 3.36 | % | — |
| — |
| — |
| 1,452,145 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.84 | % | 6.84 | % | — |
| — |
| — |
| 2,828,742 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 5.86 | % | 5.86 | % | 32,076 |
| — |
| 32,076 |
| — |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.951.000-4 |
| Banco HSBC |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.80 | % | 6.80 | % | — |
| — |
| — |
| 7,562,333 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Unidades de Fomento |
| At maturity |
| 3.84 | % | 3.84 | % | 17,688 |
| 23,679,851 |
| 23,697,539 |
| — |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.85 | % | 6.85 | % | — |
| — |
| — |
| 10,694,653 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Chilean Pesos |
| At maturity |
| 4.30 | % | 4.30 | % | — |
| — |
| — |
| 5,031,567 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.83 | % | 6.83 | % | — |
| — |
| — |
| 10,335,540 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.80 | % | 6.80 | % | — |
| — |
| — |
| 7,018,620 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Dollars |
| At maturity |
| 2.20 | % | 2.20 | % | — |
| — |
| — |
| 4,832,261 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.032.000-8 |
| BBVA |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.25 | % | 6.25 | % | — |
| — |
| — |
| 7,521,185 |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Chilean Pesos |
| Semiannually |
| 4.29 | % | 4.29 | % | — |
| 205,884 |
| 205,884 |
| 674,516 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco de la Ciudad de Bs.As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | — |
| 382,976 |
| 382,976 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| Monthly |
| 14.80 | % | 9.90 | % | 220,562 |
| 644,741 |
| 865,303 |
| 949,545 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| Monthly |
| 9.90 | % | 9.90 | % | 82,211 |
| 164,022 |
| 246,233 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Nación |
| Argentina |
| Argentine peso |
| At maturity |
| 18.85 | % | 18.85 | % | 1,648,680 |
| 4,177,920 |
| 5,826,600 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 28,182 |
| 73,440 |
| 101,622 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Monthly |
| 15.00 | % | 15.00 | % | — |
| — |
| — |
| 27,447 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| At maturity |
| 14.50 | % | 14.50 | % | — |
| — |
| — |
| 645,870 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 137,500 |
| 439,552 |
| 577,052 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| At maturity |
| 16.75 | % | 16.75 | % | 8,135,667 |
| — |
| 8,135,667 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Macro Bansud |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 56,785 |
| 149,369 |
| 206,154 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Macro Bansud |
| Argentina |
| Argentine peso |
| At maturity |
| 16.40 | % | 16.40 | % | 4,319,351 |
| — |
| 4,319,351 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Patagonia |
| Argentina |
| Argentine peso |
| At maturity |
| 12.50 | % | 12.50 | % | — |
| — |
| — |
| 3,896,499 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Patagonia |
| Argentina |
| Argentine peso |
| At maturity |
| 17.00 | % | 17.00 | % | 3,479,445 |
| — |
| 3,479,445 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santander Río |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 6,546 |
| 193,403 |
| 199,949 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| BBVA Banco Francés |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 52,171 |
| 140,886 |
| 193,057 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| BBVA Banco Francés |
| Argentina |
| Argentine peso |
| At maturity |
| 17.50 | % | 17.50 | % | 865,880 |
| — |
| 865,880 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 87,365 |
| 257,856 |
| 345,221 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Monthly |
| 15.00 | % | 15.00 | % | — |
| — |
| — |
| 96,370 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 22,560 |
| 274,720 |
| 297,280 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| At maturity |
| 16.50 | % | 16.50 | % | 6,011,417 |
| — |
| 6,011,417 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco Santa Fe |
| Argentina |
| Argentine peso |
| At maturity |
| 12.85 | % | 12.85 | % | — |
| — |
| — |
| 6,500,755 |
|
Foreing |
| Andina Empaques Argentina S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs.As. |
| Argentina |
| Argentine peso |
| At maturity |
| 16.75 | % | 16.75 | % | 780,535 |
| — |
| 780,535 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Standard Bank |
| Argentina |
| Argentine peso |
| At maturity |
| 15.50 | % | 15.50 | % | — |
| — |
| — |
| 913 |
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| VOTORANTIM |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.40 | % | 9.40 | % | 5,665 |
| 124,059 |
| 129,724 |
| 134,864 |
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| ITAÚ - Finame |
| Brazil |
| Brazilian Real |
| Monthly |
| 6.63 | % | 6.63 | % | 647,556 |
| 1,521,946 |
| 2,169,502 |
| 941,997 |
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| Banco Santander |
| Brazil |
| Brazilian Real |
| Monthly |
| 7.15 | % | 7.15 | % | 78,399 |
| 224,720 |
| 303,119 |
| 328,872 |
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| Banco Itaú |
| Brazil |
| Dollars |
| Monthly |
| 2.992 | % | 2.992 | % | 4,098,038 |
| 3,747,626 |
| 7,845,664 |
| 525,091 |
|
Foreing |
| Operación Swap |
| Brasil |
| O-E |
| Banco Itaú |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.52 | % | 9.12 | % | (4,197,057 | ) | — |
| (4,197,057 | ) | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 65.604.452 |
| 87.278.613 |
|
15.1.2 Bank loans, non current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 year |
| 3 years |
| More than |
| at |
| at |
| ||||||||
Tax ID, |
| Name |
| Countr |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| up to 3 years |
| up to 5 years |
| 5 years |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| Banco Votorantim |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.40 | % | 9.40 | % | 97.960 |
| — |
| — |
| 97,960 |
| 202,358 |
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| Banco Itaú |
| Brazil |
| Brazilian Real |
| Monthly |
| 6.63 | % | 6.63 | % | 8.503.889 |
| 1,242,091 |
| — |
| 9,745,980 |
| 4,069,577 |
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| Banco Santander Río |
| Brazil |
| Brazilian Real |
| Monthly |
| 7.15 | % | 7.15 | % | 869.331 |
| — |
| — |
| 869,331 |
| 1,134,032 |
|
Foreing |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| O-E |
| Banco Itaú |
| Brazil |
| Dollars |
| Monthly |
| 2.992 | % | 2.992 | % | 20.490.191 |
| 8,196,076 |
| — |
| 28,686,267 |
| 34,056,374 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| Monthly |
| 14.80 | % | 9.90 | % | 1.930.721 |
| — |
| — |
| 1,930,721 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco de la Nación Argentina |
| Argentina |
| Argentine peso |
| Monthly |
| 9.90 | % | 9.90 | % | 512.569 |
| — |
| — |
| 512,569 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Nación Bicentenario (1) |
| Argentina |
| Argentine peso |
| Monthly |
| 14.80 | % | 9.90 | % | — |
| — |
| — |
| — |
| 2,895,961 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 343.808 |
| — |
| — |
| 343,808 |
| 674,591 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 1.030.880 |
| — |
| — |
| 1,030,880 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 97.920 |
| — |
| — |
| 97,920 |
| 192,130 |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 169.728 |
| — |
| — |
| 169,728 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 1.357.824 |
| — |
| — |
| 1,357,824 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Ciudad de Bs. As. |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 1.357.824 |
|
|
|
|
| 1,357,824 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| BBVA Banco Francés |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 464.349 |
| 139,804 |
| — |
| 604,153 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santander Río |
| Argentina |
| Argentine peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 676.998 |
| — |
| — |
| 676,998 |
| — |
|
Foreing |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Macro Bansud |
| Argentina |
| Argentine peso |
| Monthly |
| 15.25 | % | 15.25 | % | 492.306 |
| 154,179 |
| — |
| 646,485 |
| — |
|
96.705.990-0 |
| Envases Central |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Unidad de Fomento |
| At maturity |
| 4.29 | % | 4.29 | % | 479.139 |
| — |
| — |
| 479,139 |
| 568,735 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 5.76 | % | 5.76 | % | 330.000 |
| — |
| — |
| 330,000 |
| 660,000 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean Pesos |
| At maturity |
| 6.39 | % | 6.39 | % | — |
| — |
| — |
| — |
| 1,900,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 48,937,587 |
| 46,353,758 |
|
(1) The Bicentennial loan granted at a prime rate by Banco de la Nacion Argentina to Embotelladora del Atlántico S.A. is a benefit from the Argentine government to encourage investment projects. Embotelladora del Atlántico S.A. registered investment projects and received this loan at a prime rate of 9.9% annually.
15.2.1 Bonds payable
|
| Current |
| Non-Current |
| Total |
| ||||||
Composition of bonds payable |
| 09.30.2013 |
| 12.31.2012 |
| 09.30.2013 |
| 12.31.2012 |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Bonds (face value) |
| 11,841,414 |
| 4,728,582 |
| 236,353,166 |
| 127,169,976 |
| 248,194,580 |
| 131,898,558 |
|
Expenses of bond issuance and discounts on placement |
| (560,092 | ) | (351,934 | ) | (460,772 | ) | (813,936 | ) | (1,020,864 | ) | (1,165,870 | ) |
Net balance presented in statement of financial position |
| 11,281,322 |
| 4,376,648 |
| 235,892,394 |
| 126,356,040 |
| 247,173,716 |
| 130,732,688 |
|
15.2.2 Current and non-current balances
The bonds correspond to Series A, B and C UF bonds issued on the Chilean market. These instruments are further described below :
|
|
|
|
|
|
|
|
|
|
|
|
|
| Date |
|
|
|
|
|
Bond registration or |
|
|
| Face |
| Unit of |
| Interest |
| Final |
| Interest |
| amortization |
| Par value |
| ||
identification number |
| Series |
| amount |
| adjustment |
| rate |
| maturity |
| payment |
| of capital |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Bonds, current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVS Registration No, 640, 8/23/2010 |
| A |
| 1,000,000 |
| UF |
| 3.0 | % | 08.15.2017 |
| Semi- annually |
| 02.15.2014 |
| 5,858,709 |
| 255,057 |
|
SVS Registration No, 254, 6/13/2001 |
| B |
| 3,298,646 |
| UF |
| 6.5 | % | 06.01.2026 |
| Semi- annually |
| 12.01.2013 |
| 5,276,425 |
| 3,964,645 |
|
SVS Registration No, 641, 8/23/2010 |
| C |
| 1,500,000 |
| UF |
| 4.0 | % | 08.15.2031 |
| Semi- annually |
| 02.15.2021 |
| 171,486 |
| 508,880 |
|
SVS Registration No, 759, 8/20/2013 |
| C |
| 1,000,000 |
| UF |
| 3.5 | % | 08.16.2020 |
| Semi- annually |
| 02.16.2017 |
| 100,152 |
| — |
|
SVS Registration No, 760, 8/20/2013 |
| D |
| 4,000,000 |
| UF |
| 3.8 | % | 08.16.2034 |
| Semi- annually |
| 02.16.2032 |
| 434,642 |
| — |
|
Total current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,841,414 |
| 4,728,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVS Registration No, 640, 8/23/2010 |
| A |
| 1,000,000 |
| UF |
| 3.0 | % | 08.15.2017 |
| Semi- annually |
| 02.15.2014 |
| 17,318,272 |
| 22,840,750 |
|
SVS Registration No, 254, 6/13/2001 |
| B |
| 3,298,646 |
| UF |
| 6.5 | % | 06.01.2026 |
| Semi- annually |
| 12.01.2013 |
| 68,943,198 |
| 70,068,101 |
|
SVS Registration No, 641, 8/23/2010 |
| C |
| 1,500,000 |
| UF |
| 4.0 | % | 08.15.2031 |
| Semi- annually |
| 02.15.2021 |
| 34,636,545 |
| 34,261,125 |
|
SVS Registration No, 759, 8/20/2013 |
| C |
| 1,000,000 |
| UF |
| 3.5 | % | 08.16.2020 |
| Semi- annually |
| 02.16.2017 |
| 23,091,030 |
| — |
|
SVS Registration No, 760, 8/20/2013 |
| D |
| 4,000,000 |
| UF |
| 3.8 | % | 08.16.2034 |
| Semi- annually |
| 02.16.2032 |
| 92,364,121 |
| — |
|
Total non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 236,353,166 |
| 127,169,976 |
|
Accrued interest included in the current portion of bonds totaled ThCh$ 2,341,960 and ThCh$1,156,542 at September 30, 2013 and December 31, 2012, respectively
15.2.3 Non-current maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| Year of maturity |
| non-current |
| ||||||||
|
| Series |
| 2014 |
| 2015 |
| 2016 |
| 2017 |
| Después |
| 09.30.2013 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
SVS Registration 640, 8/23/2010 |
| A |
| — |
| 5,772,758 |
| 5,772,758 |
| 5,772,756 |
| — |
| 17,318,272 |
|
SVS Registration 254, 6/13/2001 |
| B |
| 1,953,225 |
| 4,095,895 |
| 4,362,127 |
| 4,645,664 |
| 53,886,287 |
| 68,943,198 |
|
SVS Registration 641,08/23/2010 |
| C |
| — |
| — |
| — |
| — |
| 34,636,545 |
| 34,636,545 |
|
SVS Registration 759, 8/20/2013 |
| C |
| — |
| — |
| — |
| 5,772,758 |
| 17,318,272 |
| 23,091,030 |
|
SVS Registration 760,08/20/2013 |
| D |
| — |
| — |
| — |
| — |
| 92,364,121 |
| 92,364,121 |
|
Total |
|
|
| 1,953,225 |
| 9,868,653 |
| 10,134,885 |
| 16,191,178 |
| 198,205,225 |
| 236,353,166 |
|
15.2.4 Market rating
The bonds issued on the Chilean market had the following rating at September 30, 2013
AA + | : | Rating assigned by ICR Compañía Clasificadora de Riesgo Ltda. |
AA + | : | Rating assigned by Feller & Rate |
15.2.5 Restrictions
The following restrictions apply to the issuance and placement of the Company’s Series B bonds on the Chilean market in 2001, as well as Series A and C bonds issued in 2010, as well as the C and D Series 2013.for a total of UF 11,200,000. Of that amount, UF 10,647,105 is outstanding:
· Embotelladora Andina S.A. must maintain a debt level in which consolidated financial liabilities do not exceed 1.20 times the consolidated equity. As defined in the debt agreements, consolidated financial liabilities will be considered to be current interest-accruing liabilities, namely: (i) Other financial liabilities, plus (ii) Other non-current financial liabilities. Total equity plus non-controlling interests will be considered consolidated equity.
As of September 30, 2013 the amounts included in this restriction are the following: |
| ThCh$ |
|
Other current financial liabilities |
| 91,710,752 |
|
Other non-current financial liabilities |
| 286,207,834 |
|
Total consolidated outstanding liabilities |
| 866,530,359 |
|
Based on these figures Consolidated Assets free from pledges, mortgages and other taxes are equal to 0.44 times of non consolidated outstanding liabilities
· Embotelladora Andina S.A. must maintain a net financial indebtedness that does not exceed 1.5 times in its quarterly financial statements, measured against its consolidated financial statements. For these effects, financial indebtedness level shall be defined as the ratio between net financial debt and total equity of the issuer (equity attributable to controlling shareholders plus non controlling interest). On
the other hand, net financial debt is the difference between financial debt and cash balance of the issuer.
As of September 30, 2013 the amounts included in this restriction are as follows: |
| ThCh$ |
|
Cash and cash equivalents |
| 89,834,543 |
|
Other current financial liabilities |
| 91,710,752 |
|
Other non-current financial liabilities |
| 286,207,834 |
|
Total Consolidated Equity |
| 866,530,359 |
|
Based on these figures, the level of indebtedness amounts to 0.33 times of consolidated equity.
· Consolidated assets must be kept free of any pledge, mortgage or lien for an amount at least equal to 1.30 times of the consolidated unsecured current liabilities of the issuer.
As of September 30, 2013 values of the items included in this restriction are |
| ThCh$ |
|
Consolidated Assets free of pledges, mortgages or other encumbrances |
| 1,609,071,357 |
|
Non-guaranteed Consolidated Liabilities |
| 777,484,362 |
|
Based on these figures, the consolidated assets free of liens, mortgages or other charges equivalent to 2.07 times of the unsecured consolidated liabilities.
· Must be maintained and in no way forfeited, sold, assigned or transferred to a third party. This franchise is for the elaboration, production, sale and distribution of Coca-Cola products and brands according to the bottlers’ agreement or periodically renewable licenses.
· The territory now under franchise to the Company by The Coca-Cola Company in Argentina or Brazil, which is used for the preparation, production, sale and distribution of Coca-Cola products and brands, must not be forfeited, sold, assigned or transferred to a third party, provided such territory represents more than 40% of the adjusted consolidated operating flow of the Company.
· Not invest in instruments issued by related parties, nor engage in other activities with these parties that are not related to their general purpose, in conditions that are less favorable to the Issuer than those existing in the market.
· Maintain in quarterly financial statement, a Net Financial Hedging higher than 3 must be maintained. Net Financial Hedging shall be the ratio between EBITDA of the issuer for the last 12 months and the net financial expenses (financial income less financial expenses) of the issuer for the last 12 months. However, this restriction will be deemed to be not in compliance when such net financial hedging level is lower than the level of the two previous consecutive quarters.
As of September 30, 2013, the values of the items included in these restrictions are as follows: |
| ThCh$ |
|
(+) Ebitda consolidated between January 1 and September 30, 2013 |
| 163,783,598 |
|
(+) Ebitda consolidated between January 1 and December 31, 2012 |
| 207,988,797 |
|
(-) Ebitda consolidated between January 1 and September 30, 2012 |
| 125,775,508 |
|
Ebitda consolidated 12 months (between October 1, 2012 and September 30, 2013) |
| 245,996,887 |
|
|
|
|
|
(+) Finance income consolidated between January 1 and September 30, 2013 |
| 2,400,797 |
|
(+)Finance income consolidated between January 1 and December 31, 2012 |
| 2,728,059 |
|
(-)Finance income consolidated between January 1 and September 30, 2012 |
| 2,022,563 |
|
Finance income consolidated 12 months (between October 1, 2012 and September 30, 2013) |
| 3,106,293 |
|
|
|
|
|
(+)Finance costs consolidated between January 1 and September 30, 2013 |
| 16,491,868 |
|
(+)Finance costs consolidated between January 1 and December 31, 2012 |
| 11,172,753 |
|
(-)Finance costs consolidated between January 1 and September 30, 2012 |
| 6,653,343 |
|
Finance costs consolidated 12 months (between October 1, 2012 and September 30, 2013) |
| 21,011,278 |
|
Based on these figures, the level of net financial coverage (EBITDA / (Finance costs - Interest income)) totals 13.74 times
The Company was in compliance with all financial covenants at September 30, 2013 and December 31, 2012
15.2.6 Repurchased bond
In addition to UF bonds, the Company holds bonds issued by itself that it has repurchased in full through companies that are integrated in the consolidation:
Through its subsidiaries, Abisa Corp S.A. (formerly Pacific Sterling), Embotelladora Andina S.A. repurchased its Yankee Bonds issued on the U.S. Market during the years 2000, 2001, 2002, 2007 and 2008. The entire placement amounted to US$350 million, of which US$200 million are outstanding and are presented after deducting the long-term liability from the other financial liabilities item.
The subsidiary Rio de Janeiro Refrescos Ltda. maintains a liability corresponding to a bond issuance for US $75 million due in December 2020 and semi-annual interest payments. On September 30, 2013 these titles are entirely belong to Andina and as of December 31, 2012 belong to the subsidiary Abisa Corp S.A., (former Pacific Sterling). On January 1, 2013, Abisa Corp S.A. transferred the totality of this asset to Embotelladora Andina S.A., passing the latter to be the creditor of the above mentioned Brazilian subsidiary. As a result, in these consolidated financial statements the assets and liabilities related to the transaction have been eliminated. In addition, the transaction has been treated as a net investment of the group in the Brazilian subsidiary, consequently the effects of exchange rate differences between the dollar and the functional currency of each one have been carried to other comprehensive income.
15.3.1 Forward contract obligations
Please see details in Note 20.
15.4.1 Current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortización |
| Effective |
| Nominal |
| Up to |
| 90 days |
| at |
| at |
| ||||||
Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| 90 días |
| 1 año |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian Real |
| Monthly |
| 10.21 | % | 10.22 | % | 39,251 |
| 186,396 |
| 225,647 |
| 255,122 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.65 | % | 9.47 | % | 2,255 |
| 11,547 |
| 13,802 |
| 45,493 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 16,733 |
| 40,174 |
| 56,907 |
| 46,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 296,356 |
| 346,696 |
|
15.4.2 Non-current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 years to |
| 3 years to |
| More |
| at |
| at |
| ||||||||
Tax ID, |
| Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| 3 years |
| 5 years |
| 5 years |
| 09.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian Real |
| Monthly |
| 10.21 | % | 10.22 | % | 832,482 |
| — |
| — |
| 832,482 |
| 599,593 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.65 | % | 9.47 | % | 54,281 |
| — |
| — |
| 54,281 |
| 63,561 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 202,030 |
| 289,060 |
| — |
| 491,090 |
| 507,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 1,377,853 |
| 1,170,397 |
|
NOTE 16 — TRADE AND OTHER CURRENT ACCOUNTS PAYABLE
c) Trade and other current accounts payable are detailed as follows:
Item |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Trade accounts payable |
| 141,290,548 |
| 159,211,448 |
|
Withholdings |
| 26,908,041 |
| 23,529,819 |
|
Others |
| 724,497 |
| 1,576,506 |
|
Total |
| 168,923,086 |
| 184,317,773 |
|
d) The Company maintains commercial lease agreements for forklifts, vehicles, properties and machinery. These lease agreements have an average duration of one to five years excluding the renewal option of the agreements. No restrictions exist regarding the lessee by virtue of these lease agreements.
Future payments of the Company´s operating leases are as follows:
|
| 09.30.2013 |
|
|
| ThCh$ |
|
|
|
|
|
Maturity within one year |
| 1,039,958 |
|
Maturity between one year and five years |
| 1,295,039 |
|
Total |
| 2,334,997 |
|
Total expenses related to operating leases maintained by the Company as of September 30, 2013 and 2012 amounted to ThCh$4,198,439 and ThCh$5,661,057, respectively.
NOTA 17 — CURRENT AND NON-CURRENT PROVISIONS
17.1 Balances
The balances of provisions recorded by the Company at September 30, 2013 and December 31, 2012 are detailed as follows:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Litigation (1) |
| 6,811,908 |
| 6,821,165 |
|
Others |
| — |
| 195,103 |
|
Total |
| 6,811,908 |
| 7,016,268 |
|
|
|
|
|
|
|
Current |
| 191,366 |
| 593,457 |
|
Non-current |
| 6,620,542 |
| 6,422,811 |
|
Total |
| 6,811,908 |
| 7,016,268 |
|
(1) These provisions correspond mainly to provisions for probable losses due to fiscal, labor and trade contingencies based on the opinion of management after consultation with its legal counsel.
17.2 Movements
Movement of provisions is detailed as follows:
|
| 09.30.2013 |
| 12.31.2012 |
| ||||||||
Description |
| Litigation |
| Others |
| Total |
| Litigation |
| Others |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Opening Balance |
| 6,821,165 |
| 195,103 |
| 7,016,268 |
| 7,970,835 |
| — |
| 7,970,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase due to merger |
| — |
| — |
| — |
| 325,174 |
| 136,826 |
| 462,000 |
|
Additional provisions |
| — |
| — |
| — |
| 65,745 |
| 62,372 |
| 128,117 |
|
Increase (decrease) in existing provisions |
| 955,505 |
| (195,103 | ) | 760,402 |
| 851,150 |
| — |
| 851,150 |
|
Payments |
| (710,211 | ) | — |
| (710,211 | ) | (1,168,725 | ) | — |
| (1,168,725 | ) |
Increase (decrease) due to foreign exchange differences |
| (254,551 | ) | — |
| (254,551 | ) | (1,223,014 | ) | (4,095 | ) | (1,227,109 | ) |
Ending Balance |
| 6,811,908 |
| — |
| 6,811,908 |
| 6,821,165 |
| 195,103 |
| 7,016,268 |
|
NOTE 18 — OTHER CURRENT AND NON-CURRENT NON-FINANCIAL LIABILITIES
Other current and non-current liabilities at each reporting period end are detailed as follows:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Dividend payable |
| 51,231,239 |
| 99,427 |
|
Employee remuneration payable |
| 6,881,804 |
| 8,240,460 |
|
Accrued vacations |
| 11,472,107 |
| 11,392,231 |
|
Other |
| 1,233,060 |
| 813,034 |
|
Total |
| 70,818,210 |
| 20,545,152 |
|
|
|
|
|
|
|
Current |
| 70,444,313 |
| 20,369,549 |
|
Non-current |
| 373,897 |
| 175,603 |
|
Total |
| 70,818,210 |
| 20,545,152 |
|
NOTE 19 — EQUITY
As a result of the merger agreement with Embotelladoras Coca-Cola Polar S.A described in note 1b), during 2012, 93,152,097 Series A shares and 93,152,097 Series B shares were issued and exchanged for 100% of the outstanding shares of Embotelladoras Coca-Cola Polar S.A. The value in legal terms of this new issuance amounted to ThCh$39,867,121.
19.1 Share capital
On August 21, 2013 saw the decline of paid capital as of right for not having alienated third 67 shares of Series A and 8,065 Series B shares, which the Company acquired in 2012, to shareholders exercised their right to retire when it was merged with Embotelladoras Coca-Cola Polar S.A, thus passing the capital paid a total of ThCh $ 270,759,299 to a total of M ThCh$ 270,737,574.
The paid-in capital of the Company totaled ThCh$270,759,299 as of September 30, 2013, The distribution and classification of these is detailed as follows:
19.1.1 Number of shares:
Series |
| Number of |
| Number of |
| Number of |
|
A |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
|
B |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
|
19.1.2 Capital:
Series |
| Subscribed |
| Paid-in |
|
|
| ThCh$ |
| ThCh$ |
|
A |
| 135,379,504 |
| 135,379,504 |
|
B |
| 135,358,070 |
| 135,358,070 |
|
Total |
| 270,737,574 |
| 270,737,574 |
|
19.1.3 Rights of each series:
· Series A : Elect 12 of the 14 directors
· Series B : Receives an additonal 10% of dividends distributed to Series A and elects 2 of the 14 Directors:
19.2 Dividend policy
According to Chilean law, cash dividends must be paid equal to at least 30% of annual net profit, barring a unanimous vote by shareholders to the contrary. If there is no net profit in a given year, the Company will not be legally obligated to pay dividends from retained earnings. At the April 2013 Annual Shareholders Meeting, the shareholders authorised to pay out of the 2012 earnings into 2 additional dividend payments with one being in May and the other being in the second half of 2013.
Regarding Circular Letter N°1945 of the Chilean Superintendence of Securities and Insurance, the Company does not present any adjustments to be made in order to determine distributable net earnings to comply with minimum legal amounts.
Pursuant to Circular Letter N° 1,945 of the Chilean Superintendence of Securities and Insurance dated September 29, 2009, the Company’s Board of Directors decided to maintain the initial adjustments from adopting IFRS as retained earnings for future distribution.
Retained earnings at the date of IFRS adoption amounted to ThCh$19,260,703, of which ThCh$4,678,368 have been realized at September 30, 2013 and are available for distribution as dividends in accordance with the following:
Description |
| Event when amount is |
| Amount of |
| Realized at |
| Amount of |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Revaluation of assets |
| Sale or impairment |
| 12,538,123 |
| (2,334,086 | ) | 10,204,037 |
|
Foreign currency translation differences of investments in related companies |
| Sale or impairment |
| 6,393,518 |
| (1,481,482 | ) | 4,912,036 |
|
Full absorption cost accounting |
| Sale of products |
| 813,885 |
| (813,885 | ) | — |
|
Post-employment benefits actuarial calculation |
| Termination of employees |
| 929,560 |
| (428,539 | ) | 501,021 |
|
Deferred taxes complementary accounts |
| Amortization |
| (1,414,383 | ) | 743,455 |
| (670,928 | ) |
Total |
|
|
| 19,260,703 |
| (4,314,537 | ) | 14,946,166 |
|
The dividends declared and paid during 2013 and 2012 are presented below:
Dividend payment date |
| Dividend type |
| Profits imputable to dividends |
| Ch$ per |
| Ch$ per |
| |
2012 | January |
| Interim |
| 2011 |
| 8.50 |
| 9.35 |
|
2012 | May |
| Final |
| 2011 |
| 10.97 |
| 12.067 |
|
2012 | May |
| Additional |
| Retained Earnings |
| 24.30 |
| 26.73 |
|
2012 | October |
| Interim |
| 2012 |
| 12.24 |
| 13.46 |
|
2012 | December |
| Interim |
| 2012 |
| 24.48 |
| 26.93 |
|
2013 | May |
| Additional |
| 2012 |
| 12.30 |
| 13.53 |
|
2013 | June |
| Interim |
| 2013 |
| 12.30 |
| 13.53 |
|
2013 | November |
| Additional (1) |
| 2013 |
| 47.00 |
| 51.70 |
|
(1) At September 30, 2013 this dividend is outstanding and, as agreed by the Board October 2013, will be available to shareholders starting on November 15, 2013
19.3 Reserves
The balance of other reserves include the following:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Polar acquisition |
| 421,701,520 |
| 421,701,520 |
|
Foreign currency translation reserves |
| (72,369,023 | ) | (63,555,545 | ) |
Cash Flow Hedging Reserve |
| 1,095,453 |
| — |
|
Legal and statutory reserves |
| 5,435,538 |
| 5,435,538 |
|
Total |
| 355,863,488 |
| 363,581,513 |
|
19.3.1 Polar acquisition
This amount corresponds to the fair value of the issuance of shares of Embotelladora Andina S.A. used to acquire Embotelladoras Coca-Cola Polar S.A.
19.3.2 Cash Flow Hedging Reserve
They arise from the fair value valuation of the existing derivative contracts that have been qualified for hedge accounting at the end of each financial period. When contracts are expired, these reserves are adjusted and recognized in the income statement in the corresponding period.
19.3.3 Legal and statutory reserves
In accordance with Official Circular No. 456 issued by the Chilean Superintendence of Securities and Insurance, the legally required price-level restatement of paid-in capital for 2009 is presented as part of other equity reserves and is accounted for as a capitalization from Other Reserves with no impact on net income or retained earnings under IFRS. This amount totaled ThCh$5,435,538 at December 31, 2009.
19.3.4 Foreign currency translation reserves
This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the consolidated financial statements. Foreign currency translation differences between the receivable held by Abisa Corp S.A. and owed by Rio de Janeiro Refrescos Ltda. are also shown in this account, which has been treated as an investment in Equity Investees (associates and joint ventures). Foreign currency translation reserves are detailed as follows:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Brazil |
| (32,361,032 | ) | (26,905,052 | ) |
Argentina |
| (39,320,642 | ) | (29,448,998 | ) |
Paraguay |
| 8,295,646 |
| 24,248 |
|
Exchange rate differences in related companies |
| (8,982,995 | ) | (7,225,743 | ) |
Total |
| (72,369,023 | ) | (63,555,545 | ) |
The movement of this reserve for the fiscal periods ended September 30, 2013 and December 31, 2012 respectively is detailed as follows:
Description |
| 09.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Brazil |
| (5,455,980 | ) | (25,630,195 | ) |
Argentina |
| (9,871,644 | ) | (10,376,803 | ) |
Paraguay |
| 8,271,398 |
| 24,248 |
|
Exchange rate differences in related companies |
| (1,757,252 | ) | (5,112,916 | ) |
Total |
| (8,813,478 | ) | (41,095,666 | ) |
19.4 Non-controlling interests
This is the recognition of the portion of equity and income from subsidiaries that are owned by third parties, Details of this account at September 30, 2013 are as follows:
|
| Non-controlling Interests |
| ||||
|
| Percentage |
| Shareholders |
|
|
|
Description |
| % |
| Equity |
| Income |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
Embotelladora del Atlántico S.A. |
| 0.0171 |
| 12,576 |
| 1,113 |
|
Andina Empaques Argentina S.A. |
| 0.0209 |
| 1,782 |
| 286 |
|
Paraguay Refrescos S.A. |
| 2.1697 |
| 4,894,908 |
| 138,503 |
|
Inversiones Los Andes Ltda. |
| 0.0001 |
| 49 |
| (2 | ) |
Transportes Polar S.A. |
| 0.0001 |
| 1 |
| — |
|
Vital S.A. |
| 35.0000 |
| 9,183,277 |
| 318,450 |
|
Vital Aguas S.A. |
| 33.5000 |
| 1,854,216 |
| 21,625 |
|
Envases Central S.A. |
| 40.7300 |
| 4,530,113 |
| 225,466 |
|
Andina Inversiones Societarias S.A. |
| 0.0001 |
| 36 |
| 1 |
|
Total |
|
|
| 20,476,958 |
| 705,442 |
|
19.5 Earnings per share
The basic earnings per share presented in the statement of comprehensive income are calculated as the quotient between income for the period and the average number of shares outstanding during the same period.
The earnings per share used to calculate basic and diluted earnings per share is detailed as follows:
|
| 09.30.2013 |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 26,222,206 |
| 28,843,325 |
| 55,065,531 |
|
Average weighted number of shares |
| 473,289,301 |
| 473,281,303 |
| 946,570,604 |
|
Earnings per basic and diluted share (in pesos) |
| 55.40 |
| 60.94 |
| 58.17 |
|
|
| 09.30.2012 |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 23.315.629 |
| 25.647.192 |
| 48.962.821 |
|
Average weighted number of shares |
| 380.137.271 |
| 380.137.271 |
| 760.274.542 |
|
Earnings per basic and diluted share (in pesos |
| 61.34 |
| 67.46 |
| 64.40 |
|
NOTA 20 — DERIVATIVE ASSETS AND LIABILITIES
The company held the following derivative liabilities at September 30, 2013 and December 31, 2012:
20.1 Currency forwards of items recognized for accounting purposes:
As of September 30, 2013, the Company maintained contracts to ensure bank liabilities in Brazil denominated in dollars for an amount of MUS$71,429 to convert them to Brazilian Reais at a different interest rate. The valuation of these contracts was recorded at their fair values, yielding an amount receivable on September 30, 2013 of ThCh$4,197,057 which is presented by deducting the current financial obligations. In addition, excess value of ThCh$1,095,453, generated in the derivative contract have been recognized within other equity reserves of the controller as of September 30, 2013.
20.2 Currency forwards for highly probable expected transactions:
In 2011, 2012 and 2013, the Company made agreements to hedge the exchange rate in the purchases of raw materials for the years 2012 and 2013. The outstanding agreements totaled ThUS$40,500 (ThUS$140,000 at December 31, 2012). Those agreements were recorded at fair value, resulting in a net loss of ThCh$392,273 for the year ended at September 30, 2013 (net loss of ThCh$462,002 at September 30, 2012), and liabilities for derivative contracts of ThCh$516,167 were recognized at September 30, 2013 (and liabilities ThCh$394,652 at December 31, 2012). Since these agreements did not meet the documentation requirements of IFRS to be considered hedge accounting, they were accounted for as investment contracts and the effects are recorded directly in the income statement.
Fair value hierarchy
The Company had a total assets related to its foreign exchange forward contracts of ThCh$516,167 and liabilities to ThCh$394,652 at September 30, 2013 and December 31, 2012, respectively, which are classified within the other current non-financial liabilities and are carried at fair value on the statement of financial position. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included in level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3: Inputs for assets and liabilities that are not based on observable market data.
During the period ended september 30, 2013 and December 31, 2012, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.
|
| Fair Value Measurements at september, 30 2013 |
|
|
| ||||
|
| Quoted prices in |
|
|
|
|
|
|
|
|
| for identical |
| Observable |
| Unobservable |
|
|
|
|
| Assets |
| market data |
| market data |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
| — |
| 516,167 |
| — |
| 516,167 |
|
Total liabilities |
| — |
| 516,167 |
| — |
| 516,167 |
|
|
| Fair Value Measurements at December , 31 2012 |
|
|
| ||||
|
| Quoted prices in |
|
|
|
|
|
|
|
|
| for identical |
| Observable |
| Unobservable |
|
|
|
|
| liabilities |
| market data |
| market data |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Current financial liabilities |
| — |
| 394,652 |
| — |
| 394,652 |
|
Total liabilities |
| — |
| 394,652 |
| — |
| 394,652 |
|
NOTE 21 — CONTINGENCIES AND COMMITMENTS
21.1 Lawsuits and other legal actions:
The Parent Company and its Subsidiaries are subject to litigation or potential litigation, in and out of court, that may result in material or significant losses or gains, in the opinion of the Company’s legal counsel, detailed as follows:
1) Embotelladora del Atlántico S.A. is a party to labor and other lawsuits. Accounting provisions have been made for the contingent liabilities as a result of these lawsuits, totaling ThCh$1,674,323. Management considers it is unlikely that the non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. The Company also hasThCh$ 1,083,683 in deposits to guarantee judicial duties.
2) Rio de Janeiro Refrescos Ltda. is involved in current lawsuits and probable lawsuits regarding labor, tax and other matters. Accounting provisions to cover contingent liabilities have been made, totaling ThCh$4,946,291. Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, based on the opinion of its legal counsel. As it is required in Brazil, the Company has been required by the tax authorities to guarantee contingencies in the amounts of ThCh$17,537,735 at September 30, 2013 and ThCh$18,002,490 at December 31, 2012
3) Embotelladora Andina S. A. is involved in tax, commercial, labor and other lawsuits. Accounting provisions to cover contingent liabilities due to these lawsuits have been made, totaling ThCh$191,366. Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.
21.2 Direct guarantees and restricted assets:
Guarantees and restricted assets as of September 30, 2013 and December 31, 2012 are detailed as follows:
Guarantees that involve assets included in the financial statements:
|
| Provided by |
|
|
| Committed assets |
| Carrying |
| Balance pending payment on the |
| Date of guarantee release |
| ||||||
Guarantee in favor of |
| Name |
| Relationship |
| Guarantee |
| Type |
| 09.30.2013 |
| 09.30.2013 |
| 12.31.2012 |
| 2013 |
| 2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Proveedores Varios |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Other debtors |
| 21.172 |
| 21.172 |
| — |
| — |
| 21.172 |
|
Bodega San Francisco |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 6.788 |
| 6.788 |
| — |
| — |
| 6.788 |
|
Gas licuado Lipigas S.A. |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 1.140 |
| 1.140 |
| — |
| — |
| 1.140 |
|
Nazira Tala |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 3.416 |
| 3.416 |
| — |
| — |
| 3.416 |
|
Nazira Tala |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 3.508 |
| 3.508 |
| — |
| — |
| 3.508 |
|
Inmob. e Invers. Supetar Ltda. |
| Transportes Polar S.A. |
| Subsidiary |
| Cash |
| Cash and cash equivalents |
| 3.216 |
| 3.216 |
| — |
| — |
| 3.216 |
|
María Lobos Jamet |
| Transportes Polar S.A. |
| Subsidiary |
| Cash |
| Cash and cash equivalents |
| 1.000 |
| 1.000 |
| — |
| 1.000 |
| — |
|
Reclamantes ações trabalhistas |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-financial assets |
| 17.537.735 |
| 17.537.735 |
| 17.045.911 |
| — |
| 17.537.735 |
|
Diversos |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Property, plant and equipment, net |
| Property, plant and equipment |
| 15.554.926 |
| 15.554.926 |
| 16.051.409 |
| — |
| 15.554.926 |
|
Distribuidora Baraldo S.H. |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 1.741 |
| 1.741 |
| 1.741 |
| — |
| 1.741 |
|
Acuña Gomez |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 2.611 |
| 2.611 |
| 2.611 |
| — |
| 2.611 |
|
Municipalidad Gral. Alvear |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 11.249 |
| 11.249 |
| 11.249 |
| — |
| 11.249 |
|
Municipalidad San Martín Mza |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 31.334 |
| 31.334 |
| 31.334 |
| — |
| 31.334 |
|
Nicanor López |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 1.867 |
| 1.867 |
| 1.867 |
| — |
| 1.867 |
|
Labarda |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 31 |
| 31 |
| 31 |
| — |
| 31 |
|
Municipalidad Bariloche |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 473.149 |
| 473.149 |
| — |
| — |
| 473.149 |
|
Municipalidad San Antonio Oeste |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 3.701 |
| 3.701 |
| — |
| — |
| 3.701 |
|
Municipalidad Chivilcoy |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 10.828 |
| 10.828 |
| — |
| — |
| 10.828 |
|
Municipalidad Carlos Casares |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 1.201.674 |
| 1.201.674 |
| — |
| — |
| 1.201.674 |
|
CICSA |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantees CICSA for packaging |
| Other financial assets |
| 48.482 |
| 48.482 |
| — |
| — |
| — |
|
Locadores Varios |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Rent deposit guarantees |
| Other financial assets |
| 11.623 |
| 11.623 |
| — |
| — |
| — |
|
Aduana de Ezeiza |
| Embotelladora Andina S.A. |
| Subsidiary |
| Machinery import |
| Other financial assets |
| 12.173 |
| 12.173 |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
| 34.943.364 |
|
|
|
|
|
|
|
|
|
Guarantees that not- involve assets included in the financial statements:
|
| Provided by |
|
|
| Committed assets |
| Carrying |
| Balance pending payment on the |
| Date of guarantee release |
| ||||||
Guarantee in favor of |
| Name |
| Relationship |
| Guarantee |
| Type |
| 09.30.2013 |
| 09.30.2013 |
| 12.31.2012 |
| 2013 |
| 2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Linde Gas Chile |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 302.520 |
| — |
| — |
| 302.520 |
|
Central de Restaurantes Aramark Ltda. |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 243.515 |
| — |
| — |
| 243.515 |
|
Thermo Electron Chile S.A. |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 101.708 |
| — |
| 101.708 |
| — |
|
Inmobiliaria Vistamar SpA |
| Vital Aguas S.A. |
| Subsidiary |
| Time deposit - Endorsable |
| Promissory note payable at sight |
| — |
| 28.000 |
| — |
| — |
| — |
|
Inmobiliaria Vistamar SpA |
| Vital Aguas S.A. |
| Subsidiary |
| Time deposit - Endorsable |
| Promissory note payable at sight |
| — |
| 28.000 |
| — |
| — |
| — |
|
Processes workers |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 561,501 |
| 579,423 |
| — |
| 561,501 |
|
NOTE 22 — FINANCIAL RISK MANAGEMENT
The Company’s businesses are exposed to a variety of financial and market risks (including foreign exchange risk, fair value interest rate risk and price risk). The Company’s global risk management program focuses on the uncertainty of financial markets and seeks to minimize potential adverse effects on the performance of the Company. The Company uses derivatives to hedge certain risks. Below is a description of the primary policies established by the Company to manage financial risks.
Interest rate risk
As of September 30, 2013, the Company carried all of its debts at a fixed rate. Consequently, the risk of fluctuations in market interest rates as compared to the Company’s cash flows is low.
Notwithstanding the above, the Company’s most significant indebtedness comes from the issuance of Bonds that are denominated in Unidades de Fomento (which is indexed to the inflation in Chile) If the inflation in Chile had reached 2% for the period January 01 to September 30, 2013 (instead of 1.1%), the Company’s results would have been decreased by ThCh$2,437,172.
Foreign currency risk
Sales revenues earned by the Company are linked to the local currencies of countries in which it operates, details of which are as follows:
Chilean Peso |
| Brazilean Real |
| Argentine Peso |
| Paraguayan |
|
32 | % | 31 | % | 29 | % | 8 | % |
Since the Company’s income is not tied to the US dollar, the policy of managing that risk, meaning the gap between assets and liabilities denominated in that currency, has been to hold financial investments in dollar—denominated instruments for at least the equivalent of the liabilities denominated in that currency (if US dollar liabilities exist).
Additionally and depending on market conditions, the Company’s policy is also to make foreign currency hedge contracts to reduce the foreign exchange rate impact on cash outflows expressed in US dollars, corresponding mainly to payments made to raw material suppliers. In accordance with the percentage at of raw material purchases that are indexed to the US dollar, if the currencies were to devalue by 5% in the four countries where the Company operates, and considering other factors remain constant, it would generate a cumulative decrease in income at September 30, 2013 of ThCh$4,480,585. Currently, the Company holds derivative contracts to cover this effect in Chile and Argentina, which do not qualify for hedge accounting according to IAS 39.
The exposure to foreign currency exchange conversion differences of subsidiaries abroad (Brazil, Argentina and Paraguay), due to the differences between monetary assets and liabilities (that is, those denominated in a local currency and consequently exposed to foreign currency translation risk from translation of their functional currency to the presentation currency of the consolidated statements) is hedged only when it is predicted that material adverse differences could occur and when the costs associated with such hedging is deemed reasonable by management. Currently, the Company does not have any of such hedge agreements.
In the period January to September 2013, the Brazilian real and the Argentine peso presented an average devaluation of 3.9% and 4.3%, respectively, with regard to the reporting currency. In the same period in 2013, the Paraguayan Guaraní has presented a 4.7% appreciation with respect to the reporting currency.
Currently in Argentina, there are foreign exchange restrictions and there is a parallel currency market with an exchange rate which is higher than the official rate. If the Argentine peso were to devalue by an additional 25% with respect to the Chilean peso, the effects upon translation would amount to a higher loss of ThCh$ 1,744,839. On the other hand, at equity level, this would result in a decrease in equity of ThCh$13,724,516.
If the Brazilian real devalued by at least 1.1% with respect to the Chilean peso, the effect upon translation would amount to a higher gain of thCh$332,548. On the other hand, at equity level, this would result in a smaller decrease in equity of ThCh$1,612,288.
If the Paraguayan Guaraní would have appreciated by an additional 3.1% with respect to the Chilean peso, the effect upon translation would amount to a greater profit of ThCh$247,772. On the other hand, at the equity level, this greater appreciation would result in a higher equity increase of ThCh$7,682,344.
Commodities risk
The Company is subject to a risk of price fluctuations in the international markets for sugar, aluminum and PET resin, which are inputs required to produce beverages and, as a whole, account for 35% to 40% of operating costs. Procurement and anticipated purchase contracts are made frequently to minimize and/or stabilize this risk. When allowed by market conditions commodity hedges have also been used. The possible effects that exist in the present consolidated integral statements of a 5% eventual rise in prices of its main raw materials, would be a reduction in our accumulated results for the year ended September 30, 2013 of approximately ThCh$8,173,520. To minimize and/or stabilize such risk, anticipated purchase and supply agreements are frequently obtained when market conditions are favorable. Derivative instruments for commodities have also been used.
Liquidity risk
The products we sell are mainly paid for in cash and short term credit, therefore the Company´s main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where the Company operates; and (iii) public equity offerings.
The following table presents our contractual and commercial obligations as of September 30, 2013:
|
| Year of maturity |
| ||||||||
Item |
| 2013 |
| 2014 |
| 2015 |
| 2016 |
| 2017 and |
|
|
| ThCh$ |
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Bank debt |
| 29,644,219 |
| 46,376,464 |
| 19,129,429 |
| 16,394,885 |
| 12,043,524 |
|
Bonds payable |
| 4,158,607 |
| 20,384,837 |
| 20,212,939 |
| 16,982,757 |
| 308,427,604 |
|
Operating lease obligations |
| 2,346,091 |
| 3,568,424 |
| 1,349,583 |
| 847,018 |
| 641,417 |
|
Purchase obligations |
| 80,616,886 |
| 107,558,256 |
| 65,587,658 |
| 29,871,577 |
| 122,321,757 |
|
Total |
| 116,765,803 |
| 177,887,981 |
| 106,279,609 |
| 64,096,237 |
| 443,434,302 |
|
NOTA 23 — OTHER INCOME
Other operating income is detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
Description |
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Gain on disposal of property, plant and equipment |
| 3,692,030 |
| 348,112 |
| 2,371,772 |
| 114,214 |
|
Adjustment of judicial deposit (Brazil) |
| 425,040 |
| 611,549 |
| 170,703 |
| 148,948 |
|
Gain on sale of investments SAAB |
| 434,580 |
| — |
| — |
| — |
|
Leao Junior |
| 7,068,820 |
| — |
| 7,068,820 |
| — |
|
Other |
| 68,591 |
| 94,938 |
| 50,239 |
| 19,778 |
|
Total |
| 11,689,061 |
| 1,054,599 |
| 9,661,534 |
| 282,940 |
|
NOTE 24 — OTHER EXPENSES
Other expenses are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
Description |
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Tax on bank debits |
| 4,479,344 |
| 2,986,064 |
| 1,588,114 |
| 872,612 |
|
Loss on sale of interest in Leao Jr (Brazil) |
| 1,585,707 |
| — |
| 2 |
| — |
|
Write-off of property, plant and equipment |
| 5,799,801 |
| 982,125 |
| 3,438,705 |
| 717,516 |
|
Restructuring distribution Project (Chile) |
| 1,455,703 |
| — |
| 225,507 |
| — |
|
Taxes prior periods |
| 3,344,873 |
| — |
| 3,344,873 |
| — |
|
Provisions |
| 2,035,934 |
| 1,356,175 |
| 1,133,759 |
| 504,646 |
|
Professional service fees |
| 1,231,958 |
| 497,105 |
| 1,083,510 |
| 186,851 |
|
Loss on sale of property, plant and equipment |
| 229,218 |
| 933,268 |
| 108,659 |
| 319,362 |
|
Merger Andina-Polar (see note 13.2) |
| 193,639 |
| 1,820,618 |
| 5,463 |
| 179,320 |
|
Other |
| 1,651,403 |
| 1,090,461 |
| 737,425 |
| 596,979 |
|
Total |
| 22,007,580 |
| 9,665,816 |
| 11,666,017 |
| 3,377,286 |
|
NOTE 25 — FINANCIAL INCOME AND COSTS
Financial income and costs break down as follows:
c) Finance income
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
Description |
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Interest income |
| 2,243,010 |
| 1,825,215 |
| 1,109,699 |
| 548,857 |
|
Other interest income |
| 157,787 |
| 197,348 |
| 42,485 |
| 18,143 |
|
Total |
| 2,400,797 |
| 2,022,563 |
| 1,152,184 |
| 567,000 |
|
a) Finance costs
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
Description |
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09 .30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bond interest |
| 5,723,401 |
| 3,800,749 |
| 2,646,612 |
| 1,253,673 |
|
Bank loan interest |
| 8,287,212 |
| 2,397,699 |
| 2,310,220 |
| 1,293,658 |
|
Other interest costs |
| 2,481,255 |
| 454,895 |
| 1,448,788 |
| 58,019 |
|
Total |
| 16,491,868 |
| 6,653,343 |
| 6,405,620 |
| 2,605,350 |
|
NOTE 26 — OTHER INCOME AND EXPENSES
Other gains and losses are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
Description |
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Restructuring of operations (new Renca plant) |
| — |
| (750,874 | ) | — |
| (350,421 | ) |
Gains on derivative transactions |
| 392,273 |
| (462,002 | ) | (472,880 | ) | (1,107,780 | ) |
Mulct and penalties |
| (13,299 | ) | — |
| — |
| — |
|
Other income and expenses |
| (641,995 | ) | (7,429 | ) | (171,129 | ) | (3,096 | ) |
Total |
| (263,021 | ) | (1,220,305 | ) | (644,009 | ) | (1,461,297 | ) |
NOTE 27 — THE ENVIRONMENT
The Company has made disbursements totaling ThCh$2,298,781 for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analysis, consulting on environmental impacts and others.
These disbursements by country are detailed as follows:
|
| Period ended September 30, 2013 |
| Future commitments |
| ||||
Country |
| Recorded as |
| Capitalized to |
| Recorded |
| Capitalized to |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chile |
| 534,256 |
| 239,459 |
| 549,493 |
| 502,916 |
|
Argentina |
| 784,538 |
| 13,292 |
| 261,757 |
| 1,622,730 |
|
Brazil |
| 433,174 |
| 257,068 |
| 531,521 |
| 1,164,040 |
|
Paraguay |
| 29,993 |
| 7,001 |
| — |
| 3,847 |
|
Total |
| 1,781,961 |
| 516,820 |
| 1,342,771 |
| 3,293,533 |
|
NOTE 28 - Auditors´ fees
Details of the fees paid to the external auditors are as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 07.01.2013 |
| 07.01.2012 |
|
Description |
| 09.30.2013 |
| 09.30.2012 |
| 09.30.2013 |
| 09.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Remuneration of the Auditor for auditing services |
| 282,486 |
| 338,733 |
| 184,548 |
| 336,603 |
|
Remuneration of the Auditor for tax services |
| 36,151 |
| 36,514 |
| 22,561 |
| 25,833 |
|
Remuneration of the Auditor for other services |
| 18,043 |
| 130,207 |
| 11,494 |
| 130,207 |
|
Total |
| 336,680 |
| 505,454 |
| 218,603 |
| 492,643 |
|
NOTE 29 — SUBSEQUENT EVENTS
1. On October 1, 2013, the Company issued and placed bonds in international markets under Rule 144A and Regulation S of the Securities Act of the United States of America, for an amount of U.S. $ 575 million, a rate of 5% per annum, payable in 2023.
In accordance with applicable law, these securities are not subject to registration with the Securities and Exchange Commission of the United States of America, considering that no public offer of the same in Chile have made, either be registered with the Superintendency Securities and Insurance
2. On October 11th, 2013, Rio de Janeiro Refrescos Ltda., closed the acquisition of 100% of the capital stock of Companhia de Bebidas Ipiranga in an all-cash transaction. This acquisition was previously arranged between the parties through an agreement signed on July 10th, 2013. The final price paid amounted R$1,155,445,998
Except as provided above, between September 30, 2013 and the date of issuance of this report there are no other subsequent events significantly affecting the presentation of these financial statements.
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, in the city of Santiago, Chile.
| EMBOTELLADORA ANDINA S.A. | |
| By: | /s/ Andrés Wainer |
| Name: | Andrés Wainer |
| Title: | Chief Financial Officer |
Santiago, March 6th, 2014