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
April 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 |
The Company is filing herewith certain financial information which the Company duly made public on May 29, 2013 (unaudited financial information) and August 27, 2013 (limited audit financial information) respectively, in each case by publication on the Company’s website.
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Financial Position
at March 31, 2013 and December 31, 2012
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Financial Position
3 | |
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5 | |
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Intermediate Consolidated Statements of Comprehensive Income | 6 |
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7 | |
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8 | |
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9 |
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Financial Position
as of March 31, 2013 and December 31, 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
ASSETS |
| NOTE |
| 03.31.2012 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
| 4 |
| 46,197,144 |
| 55,522,255 |
|
Other financial assets |
| 5 |
| 41,157 |
| 128,581 |
|
Other non-financial assets |
| 6.1 |
| 18,771,616 |
| 18,202,838 |
|
Trade and other accounts receivable, net |
| 7 |
| 131,676,791 |
| 152,816,916 |
|
Accounts receivable from related companies |
| 11.1 |
| 4,224,123 |
| 5,324,389 |
|
Inventory |
| 8 |
| 103,230,041 |
| 89,319,826 |
|
Current tax assets |
| 9.1 |
| 4,333,809 |
| 2,879,393 |
|
Assets classified as available for sale |
|
|
| 4,527,989 |
| 2,977,969 |
|
Total Current Assets |
|
|
| 313,002,670 |
| 327,172,167 |
|
|
|
|
|
|
|
|
|
Non-Current Assets:: |
|
|
|
|
|
|
|
Other non-financial, non-current assets |
| 6.2 |
| 27,338,284 |
| 26,927,090 |
|
Trade and other accounts receivable, net |
| 7 |
| 8,026,976 |
| 6,724,077 |
|
Accounts receivable from related companies, net |
| 11.1 |
| 7,636 |
| 7,197 |
|
Equity method investments |
| 13.1 |
| 75,008,073 |
| 73,080,061 |
|
Intangible assets others than goodwill, net |
| 14.1 |
| 476,471,357 |
| 464,582,273 |
|
Goodwill |
| 14.2 |
| 64,461,061 |
| 64,792,741 |
|
Property, plant and equipment, net |
| 10.1 |
| 579,547,502 |
| 576,550,725 |
|
Total Non-Current Assets |
|
|
| 1,230,860,889 |
| 1,212,664,164 |
|
Total Assets |
|
|
| 1,543,863,559 |
| 1,539,836,331 |
|
The accompanying notes 1 to 28 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Financial Position
as of March 31, 2013 and December 31, 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
LIABILITIES AND NET EQUITY |
| NOTE |
| 03.31.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
LIABILITIES |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 15 |
| 111,870,070 |
| 106,248,019 |
|
Trade and other accounts payable |
| 16 |
| 148,793,117 |
| 184,317,773 |
|
Accounts payable to related companies |
| 11.2 |
| 20,940,905 |
| 32,727,212 |
|
Provisions |
| 17 |
| 1,366,814 |
| 593,457 |
|
Income tax payable |
| 9.2 |
| 3,696,679 |
| 1,114,810 |
|
Other non-financial liabilities |
| 18 |
| 13,988,760 |
| 20,369,549 |
|
Total Current Liabilities |
|
|
| 300,656,345 |
| 345,370,820 |
|
|
|
|
|
|
|
|
|
Non-Current Liabilities: |
|
|
|
|
|
|
|
Other long - term-current financial liabilities |
| 15 |
| 176,649,430 |
| 173,880,195 |
|
Trade and other accounts payable, long-term |
|
|
| 1,818,832 |
| 1,930,233 |
|
Provisions |
| 17 |
| 6,544,941 |
| 6,422,811 |
|
Deferred tax liabilities |
| 9.4 |
| 113,228,855 |
| 111,414,626 |
|
Post-employment benefit liabilities |
| 12.2 |
| 6,842,821 |
| 7,037,122 |
|
Other non-current liabilities |
| 18 |
| 246,212 |
| 175,603 |
|
Total Non-Current Liabilities |
|
|
| 305,331,091 |
| 300,860,590 |
|
|
|
|
|
|
|
|
|
Equity: |
| 19 |
|
|
|
|
|
Issued capital |
|
|
| 270,759,299 |
| 270,759,299 |
|
Treasury stock |
|
|
| (21,725 | ) | (21,725 | ) |
Retained earnings |
|
|
| 266,144,982 |
| 239,844,662 |
|
Accumulated other comprehensive income and capital reserves |
|
|
| 380,667,563 |
| 363,581,513 |
|
Equity attributable to equity holders of the parent |
|
|
| 917,550,119 |
| 874,163,749 |
|
Non-controlling interests |
|
|
| 20,326,004 |
| 19,441,172 |
|
Total Equity |
|
|
| 937,876,123 |
| 893,604,921 |
|
Total Liabilities and Equity |
|
|
| 1,543,863,559 |
| 1,539,836,331 |
|
The accompanying notes 1 to 28 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Income by Function
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
| 01.01.2013 |
| 01.01.2012 |
|
|
| NOTE |
| 03.31.2013 |
| 03.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
Net sales |
|
|
| 376,665,958 |
| 289,628,428 |
|
Cost of sales |
|
|
| (220,561,691 | ) | (169,808,197 | ) |
Gross Profit |
|
|
| 156,104,267 |
| 119,820,231 |
|
Other income |
| 23 |
| 426,029 |
| 388,715 |
|
Distribution expenses |
|
|
| (39,315,729 | ) | (29,686,920 | ) |
Administrative and sales expenses |
|
|
| (71,172,782 | ) | (48,567,225 | ) |
Other expenses |
| 24 |
| (3,789,298 | ) | (3,826,211 | ) |
Other income (expenses) |
| 26 |
| (1,682,852 | ) | (316,271 | ) |
Finance income |
| 25 |
| 629,200 |
| 720,851 |
|
Finance costs |
| 25 |
| (5,571,611 | ) | (1,830,488 | ) |
Share in profit of equity method investees |
| 13.3 |
| 527,533 |
| 1,334,764 |
|
Foreign exchange difference |
|
|
| 989,260 |
| (1,317,806 | ) |
Loss from indexed financial assets and liabilities |
|
|
| (276,299 | ) | (448,829 | ) |
Net income before taxes |
|
|
| 36,867,718 |
| 36,270,811 |
|
Income tax expense |
| 9.3 |
| (10,032,403 | ) | (11,561,610 | ) |
Net income |
|
|
| 26,835,315 |
| 24,709,201 |
|
|
|
|
|
|
|
|
|
Net income attributable to |
|
|
|
|
|
|
|
Net income attributable to equity holders of the parent |
|
|
| 26,300,320 |
| 24,708,322 |
|
Net income attributable to non-controlling interests |
|
|
| 534,995 |
| 879 |
|
Net income |
|
|
| 26,835,315 |
| 24,709,201 |
|
Earnings per Share, basic and diluted |
|
|
| Ch$ |
| Ch$ |
|
Earnings per Series A Share |
| 19.5 |
| 26.46 |
| 30.95 |
|
Earnings per Series B Share |
| 19.5 |
| 29.11 |
| 34.05 |
|
The accompanying notes 1 to 28 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Comprehensive Income
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
| 01.01.2013 |
| 01.01.2012 |
|
|
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Net income |
| 26,835,315 |
| 24,709,201 |
|
Foreign exchange translation adjustment, before taxes |
| 11,317,469 |
| (10,323,655 | ) |
Income tax effect related to losses from foreign exchange rate translation differences included within other comprehensive income |
| (170,474 | ) | (358,648 | ) |
Comprehensive income |
| 37,982,310 |
| 14,026,898 |
|
Comprehensive income attributable to: |
|
|
|
|
|
Equity holders of the parent |
| 37,097,478 |
| 14,028,194 |
|
Non-controlling interests |
| 884,832 |
| (1,296 | ) |
Total comprehensive income |
| 37,982,310 |
| 14,026,898 |
|
The accompanying notes 1 to 28 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
as of March 31, 2013 and 2012
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||
|
| Issued capital |
| Treasury |
| Translation reserves |
| Other reserves |
| Total |
| Retained earnings |
| Controlling Equity |
| Non-Controlling |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Initial 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 |
| — |
| — |
| — |
| — |
|
|
| 26,300,320 |
| 26,300,320 |
| 534,995 |
| 26.835.315 |
|
Other comprehensive income |
| — |
| — |
| 10,797,158 |
| — |
| 10,797,158 |
| — |
| 10,797,158 |
| 349,837 |
| 11.146.995 |
|
Comprehensive income |
| — |
|
|
| 10,797,158 |
| — |
| 10,797,158 |
| 26,300,320 |
| 37,097,478 |
| 884,832 |
| 37.982.310 |
|
Increase (decrease) due to transfers and other changes |
| — |
| — |
| — |
| 6,288,892 |
| 6,288,892 |
| — |
| 6,288,892 |
| — |
| 6.288.892 |
|
Total changes in equity |
| — |
| — |
| 10,797,158 |
| 6,288,892 |
| 17,086,050 |
| 26,300,320 |
| 43,386,370 |
| 884,832 |
| 44,271,202 |
|
Ending balance at 03.31.2013 |
| 270,759,299 |
| (21,725 | ) | (52,758,387 | ) | 433,425,950 |
| 380,667,563 |
| 266,144,982 |
| 917,550,119 |
| 20,326,004 |
| 937,876,123 |
|
|
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||
|
| Issued capital |
| Treasury |
| Translation reserves |
| Other reserves |
| Total |
| Retained earnings |
| Controlling Equity |
| Non-Controlling |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Initial 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 |
| — |
| — |
| — |
| — |
| — |
| 24,708,322 |
| 24,708,322 |
| 879 |
| 24.709.201 |
|
Other comprehensive income |
| — |
| — |
| (10,680,128 | ) | — |
| (10,680,128 | ) | — |
| (10,680,128 | ) | (2,175 | ) | (10.682.303 | ) |
Comprehensive income |
| — |
| — |
| (10,680,128 | ) | — |
| (10,680,128 | ) | 24,708,322 |
| 14,028,194 |
| (1,296 | ) | 14.026.898 |
|
Total changes in equity |
| — |
| — |
| (10,680,128 | ) | — |
| (10,680,128 | ) | 24,708,322 |
| 14,028,194 |
| (1,296 | ) | 14,026,898 |
|
Ending balance at 12.31.2012 |
| 230,892,178 |
| — |
| (33,140,007 | ) | 5,435,538 |
| (27,404,469 | ) | 232,810,390 |
| 435,998,099 |
| 7,719 |
| 436,005,818 |
|
The accompanying notes 1 to 28 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Cash Flows
(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 |
| 03.31.2013 |
| 03.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash flows provided by Operating Activities |
|
|
|
|
|
|
|
Receipts from customers (including taxes) |
|
|
| 558,959,306 |
| 416,639,865 |
|
Cash flows used in Operating Activities |
|
|
|
|
|
|
|
Supplier payments (including taxes) |
|
|
| (415,706,245 | ) | (300,113,133 | ) |
Payroll |
|
|
| (40,361,869 | ) | (27,758,475 | ) |
Other payments for operating activities |
|
|
| (67,569,276 | ) | (52,661,312 | ) |
Dividends received |
|
|
| — |
| 725,000 |
|
Interest payments classified as from operations |
|
|
| (1,655,862 | ) | (401,738 | ) |
Interest received classified as from operations |
|
|
| 442,525 |
| 361,534 |
|
Income tax payments |
|
|
| (10,935,220 | ) | (4,883,116 | ) |
Cash flows used in other operating activities |
|
|
| (1,889,451 | ) | (1,039,785 | ) |
Net cash flows provided by Operating Activities |
|
|
| 21,283,908 |
| 30,868,840 |
|
Cash flows provided by (used in) Investing Activities |
|
|
|
|
|
|
|
Capital decrease in Envases CMF S.A. and Sale of 43% interest in Vital S.A., net of cash previously held |
|
|
| — |
| 1,150,000 |
|
Proceeds from sale of property, plant and equipment |
|
|
| 2,567,135 |
| 8,824 |
|
Purchase of property, plant and equipment |
|
|
| (34,627,459 | ) | (20,838,364 | ) |
Proceeds from the maturity of marketable securities |
|
|
| — |
| 8,295,270 |
|
Purchase of marketable securities |
|
|
| — |
| (1,180,000 | ) |
Payments on forward, term, option and financial exchange agreements |
|
|
| (517,094 | ) | (546,882 | ) |
Other cash inputs (outputs) |
|
|
| 66,795 |
| 89,035 |
|
Net cash flows used in Investing Activities |
|
|
| (32,510,623 | ) | (13,022,117 | ) |
|
|
|
|
|
|
|
|
Cash Flows provided by (used in) Financing Activities |
|
|
|
|
|
|
|
Short-term loans obtained |
|
|
| 71,227,887 |
| 30,767,971 |
|
Loan payments |
|
|
| (67,785,572 | ) | (32,277,436 | ) |
Financial lease liability payments |
|
|
| (15,748 | ) | — |
|
Dividend payments by the reporting entity |
|
|
| (1,670,632 | ) | (6,556,927 | ) |
Net cash flows used in Financing Activities |
|
|
| 1,755,935 |
| (8,066,392 | ) |
Increase (Decrease) in Cash and cash equivalents, before effects of variations in foreign exchange rates |
|
|
| (9,470,780 | ) | 9,780,331 |
|
Effects of variations in foreign exchange rates on cash and cash equivalents |
|
|
| 145,669 |
| (876,433 | ) |
Net decrease in cash and cash equivalents |
|
|
| (9,325,111 | ) | 8,903,898 |
|
Cash and cash equivalents — beginning of year |
| 4 |
| 55,522,255 |
| 31,297,922 |
|
Cash and cash equivalents - end of year |
| 4 |
| 46,197,144 |
| 40,201,820 |
|
The accompanying notes 1 to 28 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
NOTE 1 - CORPORATE INFORMATION
a) Securities Registration and description of business
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.
Embotelladora Andina S.A. (hereafter “Andina,” and together with its subsidiaries, the “Company”) engages mainly in the production and sale of 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 is the whole country.
The Company holds separate distribution licenses from The Coca-Cola Company for all of its territories. The licenses for the territories in Chile expire in 2013 and 2018; in Argentina they expire in 2013 and 2017; in Brazil they expire in 2017; while in Paraguay it expires in 2014. All these licenses are renewable on similar terms, unless either the Company or The Coca-Cola Company choose not to do so. The Company currently expect that the licenses will be renewed upon expiration based on similar terms and conditions.
As of Mach 31, 2013 the Freire Group and related companies hold 55.35% of the outstanding shares with voting rights corresponding to the Series A shares.
The main offices of Embotelladora Andina S.A. are located at Avenue El Golf 40, 4th floor, municipality of Las Condes, Santiago, Chile. Its taxpayer identification number is 91.144.000-8.
b) 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; 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 Paraguay, servicing the whole country. The merger was made in order to reinforce the Company’s leadership position among Coca-Cola bottlers in South America.
NOTE 1 - CORPORATE INFORMATION (Continued)
The merger is being accounted for as the acquisition of Polar by the Company. Prior to closing, the merger was approved by the shareholders of both of the companies, as well as the Chilean Superintendence of Securities and Insurance, and the Coca-Cola Company. The terms of the merger prescribed the exchange of newly issued Company shares at a rate of 0.33269 Series A shares and 0.33269 Series B shares, for each outstanding share of Polar.
The physical exchange of shares took place on October 16, 2012, with which former shareholders of Polar then having a 19.68% ownership interest in the merged Company. Based upon the terms of the executed agreements, the actual control over day-to-day operations of Polar transferred to the Company as of October 1, 2012, and the Company began consolidating Polar’s operations from that date forward. Additionally and as a result of Embotelladora Andina becoming the legal successor of Polar’s rights and obligations, the Company indirectly acquired additional ownership interest in Vital Jugos S.A., Vital Aguas S.A. and Envases Central S.A. that added to its previous ownership interest in those entities. The Company’s current ownership enables it to exercise control over these entities, and thus incorporate them into the consolidation of the consolidated financial statements beginning October 1, 2012.
Under IFRS 3, because the acquisition of control over Vital Jugos S.A. and Vital Aguas S.A, and Envases Central S.A. was made in stages, the preexisting equity method investment must be valued at fair value at the time of de-recognition, with the differences between fair value and book value being recognized in the result of the period in which control is obtained. The Company has not recognized a gain (or loss) in its 2012 results, because book values of the equity method investments approximated their fair values at the date of de-recognition.
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$4,517,661 were expensed as incurred, and recorded as a component of other expenses by function in the Company’s accompanying consolidated income statement..
NOTE 1 - CORPORATE INFORMATION (Continued)
The fair value of Polar’s net assets acquired is as follows:
|
| ThCh$ |
|
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) |
| (149,131,026 | ) |
Total liabilities |
| (249,055,305 | ) |
Net Assets AcquiredAmounts attributed to non-controlling interests |
| 445,108,573 |
|
Goodwill |
| 16,460,068 |
|
Total consideration excluding non-controlling interests |
| 461,568,641 |
|
The Company carried out the fair value of distribution rights, property, plant and equipment with the assistance of 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 unit of the Company in Chile (ThCh$8,503,023), Argentina (ThCh$1,041,633), and Paraguay (ThCh$6,915,412). Goodwill is not expected to be tax deductible for income tax purposes.
Condensed financial information of Polar for the period between January 1, 2013 and March 31, 2013 is as follows:
|
| ThCh$ |
|
Net sales |
| 87,620,026 |
|
Income before taxes |
| 7,019,422 |
|
Net income |
| 6,509,636 |
|
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Periods covered
Consolidated statements of financial position: At March 31, 2013 and December, 2012.
Consolidated income statements by function and comprehensive income: For the years ended March 31, 2013 and 2012.
Consolidated statements of cash flows: For the years ended March 31, 2013 and 2012, using the “direct method”.
Consolidated statements of changes in equity: For the years ended March 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 accompany consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (“IASB”).
Those Spanish language IFRS consolidated financial statements consisted of consoliated statements of financial position as of March, 31 2013 and 2012 along with consolidated income statements by function, consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows (and related disclosures), each for the two years then ended. Those Spanish language IFRS consolidated financial statements were then subsequently approved by the Company’s shareholders during its May 28, 2013 meeting.
The accompanying English language IFRS consolidated financial statements are consistent with the previously issued Spanish language IFRS consolidated financial statements.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
These Consolidated Financial Statements have been prepared based on accounting records kept by the Embotelladora Andina S.A. (“Parent Company”) and by 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 and then adapt them to IFRS.
For the convenience of the reader, these consolidated financial statements have been translated from Spanish to English, as explained above.
2.3 Basis of consolidation
2.3.1 Subsidiaries
The Consolidated Financial Statements include the Financial Statements of the Parent Company and the companies it controls (its subsidiaries). The Company has control when it has the power to direct the financial and operating policies of a company so as to obtain benefits from its activities. They include assets and liabilities as of March 31, 2013 and December 31,2012 and results of operations and cash flows for the years ended March 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 the effective date of sale, as applicable.
The acquisition method is used to account for the acquisition of subsidiaries. The acquisition cost is the fair value of assets, of equity securities and of 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 value as of the acquisition date. The excess acquisition cost plus non-controlling interest above the fair value of the Group’s share in identifiable net assets acquired is recognized as goodwill. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in income.
Intra-group transactions, balances, and unrealized gains and losses, are eliminated. Whenever necessary, the accounting policies of subsidiaries are modified to ensure uniformity with the policies adopted by the Company.
The value of non-controlling interest in equity and the results of the consolidated subsidiaries is presented in Equity; non-controlling interests, in the Consolidated Statement of Financial Position and in “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 intra-group balances and transactions.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The list of subsidiaries included in the consolidation is detailed as follows:
|
|
|
| Percentage Interest |
| ||||||||||
|
|
|
| 03-31-2013 |
| 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 |
| 95.00 |
| 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 |
|
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. |
| 17.10 |
| 49.40 |
| 66.50 |
| 17.10 |
| 49.40 |
| 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 Coca-Cola Polar Argentina S.A. was absorbed byEmbotelladora del Atlántico S.A.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.3.2 Equity method investments
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 and are initially recognized at cost.
The Company’s share in income and losses subsequent to the acquisition of associates is recognized in income.
Unrealized gains in transactions between the Company and its associates are eliminated to the extent of the interest the Company holds in those associates. Unrealized losses are also eliminated unless there is evidence in the transaction of an impairment loss on the asset being transferred. Whenever necessary, the accounting policies of associates are adjusted for reporting purposes to assure uniformity with the policies adopted by the Company.
2.4 Financial reporting by operating segment
IFRS 8 requires that entities disclose information on the revenues of operating segments. In general, this is information that Management and the Board of Directors use internally to evaluate the profitability of segments and decide how to 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 currency of presentation
The items included in the financial statements of each of the entities in the Company are valued using the currency of the main economic environment in which the entity does business (“functional currency”). The consolidated financial statements are presented in Chilean pesos, which is the parent company’s functional currency and presentation currency.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.5.2 Balances and transactions
Foreign currency transactions are converted to the functional currency using the foreign exchange rate prevailing on the date of each transaction. The gains and losses resulting from the settlement of these transactions and the conversion of the foreign currency—denominated assets and liabilities at the closing foreign exchange rates are recognized in the income account by function.
The foreign exchange rates and values prevailing at the close of each of the periods presented were:
|
| Exchange rate to the Chilean peso |
| ||||||||||
Date |
| US$ |
| R$ Brazilian |
| A$ Argentine |
| UF ¨Unidad |
| Paraguayan |
| € |
|
03.31.2013 |
| 472.03 |
| 234.40 |
| 92.16 |
| 22,869.38 |
| 0.1181 |
| 605.40 |
|
03.31.2012 |
| 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 operations of all entities in the Company (none of which use the currency of a hyperinflationary economy) operating under a functional currency other than the presentation currency are translated to the presentation currency as follows:
(i) Assets and liabilities in each statement of financial position are translated at the closing foreign exchange rate as of the reporting date;
(ii) Income and expenses of each income statement account are translated at the average foreign exchange rate for the period; and
(iii) All resulting translation differences are recognized as other comprehensive income.
The companies that use 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 conversion of a net investment in foreign entities are recognized in other comprehensive income. Exchange rate differences from accounts receivable which are considered to be part of an equity investment, have been recognized as comprehensive income net of deferred taxes, if applicable. On disposal of the investment, those translation differences are recognized in the income statement as part of the gain or loss on the disposal of the investment.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.6 Property, plant, and equipment
The assets included in property, plant and equipment are recognized at their historical cost or the cost given as of the date of application of IFRS, less depreciation and cumulative impairment losses.
The cost of property, plant and equipment includes expenses directly attributable to the acquisition of the items less government subsidies resulting from the difference between the market interest rates of the financial liabilities and the preferential government credit rates. The historical cost also includes revaluations and price-level restatement of opening balances (attributed cost) at January 1, 2009, due to first-time exemptions in IFRS.
Subsequent costs are included in the value of the original asset or recognized as a separate asset only when it is likely that the future economic benefit associated with the elements of property, plant and equipment will flow to the Company and the cost of the element can be dependably determined. The value of the component that is substituted is derecognized. The remaining repairs and maintenance are charged to the income statement in the fiscal period in which they incurred.
Land is not depreciated. Other assets, net of residual value, are depreciated by distributing the cost of the different components on a straight line basis over the estimated useful life, which is the period during which the Company expects to use them.
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 revised and adjusted at each reporting date, if necessary,
When the value of an asset is higher than its estimated recoverable amount, the value is reduced immediately to the recoverable amount.
Gains and losses on the disposal of property, plant, and equipment are calculated by comparing the disposal proceeds to the carrying amount, and are charged to the income statement.
Items available for sale and that fulfill the conditions under IFRS 5 “Non-Current Assets Available for Sale” are separate from property, plant and equipment are presented under current assets as the lower value between book value and fair value less costs of sale
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.7 Intangible assets and Goodwill
2.7.1 Goodwill
Goodwill represents the excess cost of acquisition and non-controlling interest over the fair value of the Company’s share in identifiable net assets of the subsidiary on the acquisition date. The 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 the goodwill related to that entity.
The goodwill is allocated to cash-generating units (CGU) in order to test for impairment losses. The allocation is made to CGUs that are expected to benefit from the business combination that generated the goodwill.
2.7.2 Distribution rights
Distribution rights correspond to contractual rights to produce and distribute products under the Coca-Cola brand in certain territories in Argentina, Chile and Paraguay acquired during the Polar merger. Distribution rights have an indefinite useful life and are not amortized, given that that the Company believes that the bottling agreements will be indefinitely renewed by the Coca-Cola Company upon similar terms and conditions. They are subject to impairment tests on a yearly basis.
2.7.3 Water rights
Water rights that have been paid for are included in the group of intangible assets, 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 annually tested for impairment loss. Amortizable assets and property, plant and equipment are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount might not be recoverable. The carrying value of the asset exceeding its recoverable amount is recognized as an impairment loss. The recoverable amount is the higher of an asset’s fair value less costs to sell or its value in use.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In order to evaluate impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash generating units). Non-financial assets other than goodwill that were impaired are reviewed at each reporting date to determine if the impairment loss should be reversed.
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 accounts receivable, and assets held until maturity. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at the time of 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 available for sale. A financial asset is classified in this category if it is acquired mainly for the purpose of being sold in the short term. Assets in this category are classified as current assets.
Losses or gains 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 occur.
2.9.2 Loans and accounts receivable
Loans and accounts receivable are not quoted in an active market. They are recorded 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 accounts receivable are included in trade and other accounts receivable in the consolidated statement of financial position and they are presented at their amortized cost.
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.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.10 Derivatives and hedging
The derivatives held by the Company correspond to transactions hedged against foreign currency exchange rate risk and the price of raw materials, property, plant and equipment, loan obligations and materially offset the risks that are hedged.
The method to recognize the resulting loss or gain, as well as its classification within the balance, depends on if the derivative has been appointed as a hedging instrument and of the item being hedged.
2.10.1 Hedging derivative instruments
Hedging derivative instruments are recorded at fair value and the effect is recorded under assets, liabilities, income and expenses, along with any change in the reasonable value of the hedged asset or liability attributable to the risk covered.
2.10.2 Non-hedging derivative instruments
The 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 as hedges 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 has also evaluated the derivatives implicit in financial contracts and instruments to determine whether their characteristics and risks are closely related to the master agreement, as stipulated by IAS 39.
Fair value hierarchy
The Company has recorded a liability as of March 31, 2012 and December 31, 2012 foreign exchange derivatives contracts classified within the other current financial liabilities (current financial liabilities). These contracts are carried at fair value in 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: Assumptions different to quoted prices included in Level 1 and that are applicable to assets and liabilities, be it directly (as price) or indirectly (i.e. derived from a price).
Level 3: Assumptions for assets and liabilities that are not based on information observed directly in the market.
During the years ended March 31, 2013 and 2012, there were no transfers of items between fair value measurements categories all of which were valued during the period using Level 2.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.11 Inventory
Inventories are valued at the lower of cost and net realizable value. Cost is determined by using the weighted average cost method. The cost of finished products 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 expense. The net realizable value is the estimated selling price in the ordinary course of business, less any variable cost of sale.
Estimates are also made for obsolescence of raw materials and finished products based on turnover and ageing of the items involved.
2.12 Trade receivable
Trade accounts receivable are recognized initially at amortized cost, given the short term in which they are recovered, less any impairment loss. A provision is made for impairment losses on trade accounts receivable when there is objective evidence that the Company will be incapable of collecting all sums owed according to the original terms of the receivable, based either on individual analyses or on global aging analyses. The carrying amount of the asset is reduced as the provision is used and the loss is recognized in administrative and sales expenses in the consolidated income statement by function.
2.13 Cash and cash equivalents
Cash and cash equivalents include cash at banks and on hand, time deposits in banks and other short-term, highly liquid investments and low risk of change in value with purchased original maturities of three months or less.
2.14 Other financial liabilities
Bank funding such as debt securities issued are initially recognized at fair value, net of transaction costs. Liabilities with third parties are later valued at amortized cost. Any difference between the funding obtained (net of the costs required to obtain it) and the reimbursement amount is recognized in the income statement during the term of the debt using the effective interest rate method.
2.15 Government subsidies
Government subsidies are recognized at their fair value when it is sure that the subsidy will be received and that the Company will meet all the established conditions.
Operating cost-related subsidies are deferred and recognized on the income statement in the period of the corresponding operating cost.
Subsidies for the purchase of property, plant and equipment are deducted from the cost of the related asset in property, plant and equipment and recognized on the income statement, on a straight-line basis during the estimated useful life of the related asset.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.16 Income tax
The Company and its subsidiaries in Chile account for income tax according to the net taxable income calculated by the rules in the Income Tax Law. Subsidiaries abroad account for income taxes according to the regulations of the country in which they operate.
Deferred taxes are calculated using the balance sheet - liability method on the temporary differences between the tax basis of assets and liabilities and their carrying amounts in the consolidated financial statements, using the tax rate in the year of reversal of the difference.
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be offset.
The Company does not recognize deferred taxes for temporary differences from investments in subsidiaries and associates in which the Company can control the timing of reversal and it is likely that they will not be reversed in the foreseeable future.
2.17 Employee benefits
The Company has established a provision for post-retirement compensation according to years of service that will be paid to its employees according to the individual and collective contracts in place. This provision is accounted for at the actuarial value in accordance with IAS 19. The positive or negative effect on compensation because of changes in estimates (turnover, mortality, retirement, and other rates) is 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. This liability is 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 can be reliably estimated.
2.19 Leases
a) Operating
Operating lease payments are recognized as an expense on a straight-line basis over the term of the lease.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) Financial
Property, plant and equipment assets where the Company substantially maintains all the risks and benefits derived from them are classified as financial leases. Financial leases are capitalized at the inception of the lease at the lesser of the fair value of property plant and equipment asset leased and the present value of the minimum lease payments.
2.20 Deposits for returnable containers
This is a liability comprised of cash collateral received from customers for bottles and other returnable containers made available to them.
The liability pertains to the deposit amount that is reimbursed if the customer or distributor returns the bottles and cases in good condition, together with the original invoice. Estimation of the liability is based on the inventory of bottles given as a loan 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 a current liability because the Company does not have a legal right 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 is presented net of value-added tax, returns, rebates, and discounts and net of sales between the companies that are consolidated.
The Company recognizes revenue when earned and 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 clients.
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 licensing. The resources 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 elements of property, plant and equipment. In those situations, payments received pursuant to these agreements are recorded as a reduction of the cost of the respective assets acquired.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.23 Dividend payments
Dividend payments to the Company’s shareholders are recognized as a liability in the consolidated financial statements of the Company, 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 about 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 of indefinite useful life
The Company tests if goodwill and intangible assets of indefinite useful life (such as distribution rights) have suffered impairment loss on an annual basis or whenever there are indicators of impairment. The recoverable amounts of cash generating units are determined based on calculations of the value in use. The key variables that management calculates include the volume of sales, prices, marketing expenses and other economic factors. The estimation of these variables requires a material administrative judgment as those variables imply inherent uncertainties. However, the assumptions are consistent with our internal planning. Therefore, management evaluates and updates estimates according to the conditions affecting the variables. If these assets are deemed to have become impaired, they will be written off at their estimated fair value or future recovery value according to discounted cash flows.
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 the amount at which a liability can be incurred or liquidated in an actual transaction among parties duly informed under conditions of mutual independence, different from a forced liquidation.
The basis for measuring assets and liabilities at fair value are the current prices in the active market. Lacking such an active market, the Company estimates said values based on the best information available, including the use of models or other valuation techniques.
The Company estimated the fair value of the intangible assets acquired as a result of the Polar merger based on the multiple period excess earning method, which implies the estimation of future cash flows generated by the intangible asset, adjusted by cash flows that do not come from the intangible asset, but from other assets. For this, the Company estimated the time during which the intangible asset will generate cash flows, the cash flows themselves, cash flows from other assets and a discount rate.
Other assets acquired and implicit liabilities in the business combination are carried at fair value using valuation methods that are considered appropriate under the circumstances including the cost of depreciated recovery and recent transaction values for comparable assets, among others. These methodologies require certain inputs to be estimated, including the estimation of future cash flows.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.24.3 Allowances for doubtful accounts
The Company evaluates the possibility of collecting trade accounts receivable 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 will ultimately be collected. In addition to specifically identifying potential uncollectible customer accounts, allowances for doubtful accounts are determined based on historical collection history and a general assessment of trade accounts receivable, both outstanding and past due, among other factors. The balance of the Company’s trade accounts receivable was ThCh$139,703,767 at March 31, 2013 (ThCh$159,540,993 at December 31, 2012), net of an allowance for doubtful accounts provision of ThCh$2,369,678 at March 31, 2013 (ThCh$1,486,749 at December 31, 2012).
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 use of manufacturing equipment, dispensers, and transportation equipment or computer software could make the useful lives of assets shorter. The Company reviews the impairment of long-lived assets each time events or changes in circumstances indicate that the book value of any of those assets might not be recovered. The estimate of future cash flows is based, among other things, on certain assumptions about the expected operating profits in the future. Company estimates of non-discounted cash flows may differ from real cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in the operating profit. If the sum of non-discounted cash flows that have been projected (excluding interest) is less than the carrying value of the asset, the asset will be written down to its estimated fair value.
2.24.5 Liabilities for returnable container collateral
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 the deposit that must be returned if the client or distributor returns the bottles and cases in good condition, together with the original invoice. This liability is estimated on the basis of an inventory 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 must make several assumptions in relation to this liability in order to estimate the number of bottles in circulation, the amount of the deposit that must be reimbursed and the timing of disbursements.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.25 New IFRS and interpretations of the IFRS Interpretations Committee (IFRSIC)
The following IFRS and Interpretations of the IFRSIC have been published:
New Standards |
| Mandatory |
|
IFRS 9 Financial instruments: Classification and measurement |
| January 1, 2015 |
|
IFRS 10 Consolidated Financial Statements |
| January 1, 2013 |
|
IFRS 11 Joint Arrangements |
| January 1, 2013 |
|
IFRS 12 Disclosure of Interests in Other Entities |
| January 1, 2013 |
|
IFRS 13 Fair Value Measurement |
| January 1, 2013 |
|
IFRS 9 “Financial Instruments”
This Standard introduces new requirements for the classification and measurement of financial assets and early application is permitted. All financial assets must be classified in their entirety on the basis of the Company’s business model for financial asset management and the characteristics of contractual cash flows of financial assets. Under this standard, financial assets are measured at the amortized cost or fair value. Only financial assets classified as measured at the amortized cost must be impairment-tested. This standard applies to years beginning on or after January 1, 2015, and it can be adopted earlier.
IFRS 10 “Consolidated Financial Statements” / IAS 27 “Separate Financial Statements”
This Standard supersedes the part of IAS 27 on Separate and Consolidated Financial Statements that spoke of accounting for consolidated financial statements. It also includes matters in SIC-12, Special-Purpose Entities. IFRS 10 establishes one single control model that applies to all entities (including special purpose or structured entities). The changes made by IFRS 10 will require that management exercise significant professional judgment in determining which entity is controlled and which must be consolidated.
IFRS 11 “Joint Arrangements”/ IAS 28 “Investments in Associates and Joint Ventures”
IFRS 11 supersedes IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities — Non-Monetary Contributions by Joint Ventures. IFRS 11 uses some of the terms used in IAS 31, but with different meanings. IAS 31 identifies three types of joint ventures, but IFRS 11 only considers of two types (joint ventures and joint operations) when there is a joint control. Since IFRS 11 uses the IFRS 10 principle of control to identify control, determining whether there is a joint control can change. Moreover, IFRS 11 takes away the alternative of accounting for jointly controlled entities (JCEs) using a proportional consolidation. Instead, JCEs meeting the definition of joint ventures must be accounted for using the equity method. An entity must recognize the assets, liabilities, income and expenses, if any, of joint operations, which include jointly controlled assets, former jointly controlled operations and former JCEs.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
IFRS 12 “Disclosure of Interests in Other Entities”
IFRS 12 includes all consolidation-related disclosures that were previously in IAS 27 as well as all disclosures previously included in IAS 31 and IAS 28. These disclosures relate to the interests in related companies, joint arrangements, associates and structured entities. A number of new disclosures are also required.
IFRS 13 “Fair Value Measurement”
IFRS 13 establishes a new guide on how to measure fair value, when required or permitted by IFRS. When an entity must use the fair value remains the same. The standard changes the definition of fair value—Fair Value: The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Some new disclosures are also added.
Additionally it incorporates some new disclosures
Improvements and amendments |
| Mandatory application | |
|
|
| |
IFRS 7 | Financial Instruments: Disclosure |
| January 1, 2013 |
IFRS 10 | Consolidated Financial Statements |
| January 1, 2013 |
IFRS 11 | Joint Arrangements |
| January 1, 2013 |
IFRS 12 | Disclosure of Interests in Other Entities |
| January 1, 2013 |
IAS 1 | Presentation of Financial Statements |
| January 1, 2013 |
IAS 16 | Property, Plant and Equipment |
| January 1, 2013 |
IAS 19 | Employee Benefits |
| January 1, 2013 |
IAS 27 | Consolidated and Separate Financial Statements |
| January 1, 2013 |
IAS 28 | Investments in Associates and Joint Ventures |
| January 1, 2013 |
IAS 32 | Financial Instruments — Presentation |
| January 1, 2013 |
IAS 34 | Interim Financial Reporting |
| January 1, 2013 |
IFRS 7 Financial Instruments: Disclosure
An amendment to IAS 7 was issued in December 2011 that requires entities to disclose under financial information the effects or possible effects of the compensation agreements of the financial instruments over the entity’s financial position. The rule is applicable beginning January 1, 2013.
IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities
June 28, 2012 the IASB issued amendments to clarify the transition guidance to IFRS 10 Consolidated Financial Statements. The amendments also provide additional transition exceptions in the application of IFRS 10, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in other Entities, limiting the requirement to provide restated comparative information only for the preceding comparative period. On the other hand, for the first year that IFRS 12 is applied, the requirement to present comparative information for the disclosures related to unconsolidated structured entities is removed. Effective date for the amendments are the annual periods beginning on or after January 1, 2013, also aligned with the effective date of IFRS 10, 11 and 12.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
IAS 1 “Presentation of Financial Statements”
Annual Improvements 2009-2011 Cycle issued in May 2012, amended paragraphs 10, 38 and 41, eliminated paragraphs 39-40 and added paragraphs 38A-38D and 40A-40D, clarifying the difference between voluntary additional comparative information and the minimum required comparative information. Generally the minimum comparative period required is the previous period. An entity must include comparative information in the notes related to the financial statements when the entity voluntarily supplies comparative information beyond the minimum comparative period required. The additional comparative period does not need to contain a complete set of financial statements. Also, opening balances of the financial statements (known as the third balance sheet) must be presented in the following circumstances: when the entity changes its accounting policies; carries out retroactive restatements or reclassifications, and that this change has a material effect on the financial statement. The initial balance of the financial statement would be as of the previous period. However, contrary to voluntary comparative information, the related notes are not required to accompany the third balance sheet. An entity will apply these amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors for annual periods beginning on January 1, 2013. Early adoption is permitted as long as it is disclosed.
IAS 16 “Property, Plant and Equipment”
Annual Improvements 2009-2011 Cycle issued in May 2012, amended paragraph 8. The amendment clarifies that spare parts and auxiliary equipment that fulfill the definition of property, plant and equipment are not considered inventory. An entity will apply this amendment retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors for annual periods beginning on January 1, 2013. Early adoption is permitted as long as it is disclosed.
IAS 19 — “Employee Benefits”
On June 16 2011, the IASB published an amended IAS 19 — Employee Benefits that change accounting for defined benefit plans and termination benefits. The amendments require recognition of changes in the defined benefit liability (asset) plan, eliminating the use of the corridor approach and accelerating the recognition of past service costs. Changes in the defined benefit liability (asset) plan are separated in three components: service cost, net interest on liability (asset) for defined benefits and re-measurements of liability (asset) for defined benefits.
Net interest is calculated using the rate of return for high-quality corporate bonds. This could be lower than the rate currently used to calculate the expected return over plan assets, resulting in a decrease of earnings for the period. The amendments are effective for annual periods beginning on or after January 1, 2013, early adoption is permitted. Retrospective application is required with certain exceptions.
IAS 27 — Consolidated and Separate Financial Statements
In May 2011, IASB issued a revised IAS 27 with an amended title — Separate Financial Statements. IFRS 10 Consolidated Financial Statements establishes a single control model that applies to all entities and the requirements relating the preparation of consolidated financial statements.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
IAS 28 — Investments in Associates and Joint Ventures
Issued in May 2011, IAS 28 Investments in Associates and Joint Ventures, prescribes accounting of investments in associates and establishes the requirements of application on the equity method to investments in associates and joint ventures.
IAS 32 “Financial Instruments — Presentation”
Annual Improvements 2009-2011 Cycle issued in May 2012, amended paragraphs 35, 37 and 39 and added paragraph 35A, that clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with IAS 12 Income Taxes. The amendment removes existing income tax requirements from IAS 32 and requires entities to apply the requirements in IAS 12 to any income tax arising from distributions to equity holders. An entity will apply these amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and applies to annual periods beginning on January 1, 2013. Early adoption is permitted as long as it disclosed.
IAS 32 amendments issued in December 2011 clarify the differences in the application regarding compensation and reduce the diversity in the current application. The rule is applicable beginning January 1, 2014 and early application is permitted.
IAS 34 “Interim Financial Reporting”
Annual Improvements 2009-2011 Cycle issued in May 2012, amended paragraph 16A. The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 Operating Segments. Amended paragraph 16A establishes that total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity’s previous annual financial statements for that reportable segment.
An entity will apply this amendment retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and applies to annual periods beginning on January 1, 2013. Early adoption is permitted as long as it disclosed.
Management of the Company and its subsidiaries have studied the impact of these new standards and have asserted they do not materially impact these consolidated financial statements.
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, services, and geographic areas.
The Company’s Board of Directors and Management measures and evaluates performance of segments according to 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 senior officer in charge of operating decisions. That officer has been identified as the Company Board of Directors as the board makes strategic decisions.
The segments defined by the Company for strategic decision-making are geographic. Therefore, the reporting segments correspond to:
· Chilean operations
· Brazilian operations
· Argentine operations
· Paraguayan operations
The four operating segments conduct their business through the production and sale of soft drinks, other beverages, and packaging.
The income and expense related 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 operations by segment of the Company is detailed as follows, according to IFRS:
NOTE 3 — REPORTING BY SEGMENT (Continued)
A summary of the Company’s segment operations in accordance to IFRS is as follows:
For the year ended March 31, 2013 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Consolidated Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue from external customers |
| 120,083,511 |
| 107,630,146 |
| 119,321,387 |
| 29,630,914 |
| 376,665,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
| 162,256 |
| 15,217 |
| 414,290 |
| 37,437 |
| 629,200 |
|
Interest expense |
| (2,222,088 | ) | (749,321 | ) | (2,496,381 | ) | (103,821 | ) | (5,571,611 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
| (2,059,832 | ) | (734,104 | ) | (2,082,091 | ) | (66,384 | ) | (4,942,411 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| (8,849,231 | ) | (3,705,083 | ) | (4,166,107 | ) | (2,470,499 | ) | (19,190,920 | ) |
Total significant expenses items |
| (101,850,575 | ) | (98,668,714 | ) | (102,837,544 | ) | (22,340,479 | ) | (325,697,312 | ) |
Net income of the segment reported |
| 7,323,873 |
| 4,522,245 |
| 10,235,645 |
| 4,753,552 |
| 26,835,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of the entity in income of associates accounted for using the equity method, total |
| 83,634 |
| — |
| 443,899 |
| — |
| 527,533 |
|
Income tax expense (income) |
| 1,387,627 |
| 2,018,253 |
| 6,371,327 |
| 255,196 |
| 10,032,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets, total |
| 753,054,914 |
| 186,953,088 |
| 326,641,935 |
| 277,213,622 |
| 1,543,863,559 |
|
Carrying amount in associates and joint ventures accounted for using the equity method, total |
| 18,094,238 |
| — |
| 56,913,835 |
| — |
| 75,008,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures and other |
| 15,370,478 |
| 7,172,779 |
| 7,868,522 |
| 4,215,680 |
| 34,627,459 |
|
Liabilities of the segments, total |
| 308,330,377 |
| 103,160,501 |
| 154,769,759 |
| 39,726,799 |
| 605,987,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by in Operating Activities |
| 10,419,597 |
| (1,451,997 | ) | 8,639,998 |
| 3,676,310 |
| 21,283,908 |
|
Cash flows used in Investing Activities |
| (12,851,633 | ) | (6,882,899 | ) | (7,886,009 | ) | (4,890,082 | ) | (32,510,623 | ) |
Cash flows used in Financing Activities |
| (4,240,933 | ) | 6,450,537 |
| (453,669 | ) | — |
| 1,755,935 |
|
NOTE 3 — REPORTING BY SEGMENT (Continued)
For the year ended March 31, 2012 |
| Chile |
| Argentina |
| Brazil |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Operating revenue from external customers |
| 89,110,633 |
| 76,295,911 |
| 124,221,884 |
| 289,628,428 |
|
Interest income |
| 192,549 |
| 148,343 |
| 379,959 |
| 720,851 |
|
Interest expense |
| (1,342,839 | ) | (383,333 | ) | (104,316 | ) | (1,830,488 | ) |
Interest income, net |
| (1,150,290 | ) | (234,990 | ) | 275,643 |
| (1,109,637 | ) |
Depreciation and amortization |
| (4,930,879 | ) | (2,443,042 | ) | (4,543,200 | ) | (11,917,121 | ) |
Total significant expenses items |
| (76,578,045 | ) | (69,230,006 | ) | (106,084,418 | ) | (251,892,469 | ) |
|
|
|
|
|
|
|
|
|
|
Net income of the segment reported |
| 6,451,419 |
| 4,387,873 |
| 13,869,909 |
| 24,709,201 |
|
|
|
|
|
|
|
|
|
|
|
Share of the entity in income of associates accounted for using the equity method, total |
| 853,090 |
| — |
| 481,674 |
| 1,334,764 |
|
Income tax expense (income) |
| 1,911,216 |
| 2,530,106 |
| 7,120,288 |
| 11,561,610 |
|
|
|
|
|
|
|
|
|
|
|
Segment assets, total |
| 330,988,903 |
| 109,804,674 |
| 284,006,885 |
| 724,800,462 |
|
|
|
|
|
|
|
|
|
|
|
Carrying amount in associates and joint ventures accounted for using the equity method, total |
| 37,678,958 |
| — |
| 23,385,271 |
| 61,064,229 |
|
Capital expenditures and other |
| 9,017,674 |
| 4,428,647 |
| 7,392,043 |
| 20,838,364 |
|
Liabilities of the segments, total |
| 160,757,586 |
| 54,304,068 |
| 73,732,991 |
| 288,794,645 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by in Operating Activities |
| 16,251,222 |
| 5,308,646 |
| 9,308,972 |
| 30,868,840 |
|
Cash flows used in Investing Activities |
| (714,276 | ) | (4,934,805 | ) | (7,373,036 | ) | (13,022,117 | ) |
Cash flows used in Financing Activities |
| (6,600,857 | ) | (1,391,375 | ) | (74,160 | ) | (8,066,392 | ) |
NOTE 4 — CASH AND CASH EQUIVALENTS
Cash and cash equivalents are detailed as follows as of March 31, 2013 and December 31, 2012
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Cash |
| 371,559 |
| 871,173 |
|
Bank balances |
| 21,289,320 |
| 24,171,486 |
|
Time deposits |
| 772,157 |
| 783,223 |
|
Money market funds |
| 23,764,108 |
| 29,696,373 |
|
Cash and cash equivalents |
| 46,197,144 |
| 55,522,255 |
|
By currency |
| M$ |
| ThCh$ |
|
Dollar |
| 4,311,004 |
| 5,067,208 |
|
Argentine Peso |
| 3,223,178 |
| 5,181,955 |
|
Chilean Peso |
| 7,318,357 |
| 14,089,380 |
|
Paraguayan Guaraní |
| 5,946,787 |
| 6,112,524 |
|
Brazilian Real |
| 25,397,818 |
| 25,071,188 |
|
Cash and cash equivalents |
| 46,197,144 |
| 55,522,255 |
|
4.1 Time deposits
Time deposits defined as Cash and cash equivalents are detailed as follows at March 31, 2013 and December, 31 2012:
Issuance |
| Entity |
| Currency |
| Capital |
| Annual |
| 12.31.2012 |
|
|
|
|
|
|
| THCH$ |
| % |
| THCH$ |
|
03.27.2013 |
| Banco Regional SAECA — Paraguay |
| Paraguayan Guaraní |
| 772,157 |
| 3.50 |
| 772,157 |
|
|
|
|
| Total |
|
|
|
|
| 772,157 |
|
Issuance |
| Entity |
| Currency |
| Capital |
| Annual |
| 12.31.2011 |
|
|
|
|
|
|
| THCH$ |
| % |
| THCH$ |
|
12.28.2012 |
| Banco Regional SAECA — Paraguay |
| Paraguayan Guaraní |
| 783,223 |
| 3.50 |
| 783,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 783,223 |
|
NOTE 4 — CASH AND CASH EQUIVALENTS (Continued)
4.2 Money Market
Money market mutual fund shares are valued at the share value at the close of each fiscal period. Below is a description for the end of each period:
Institution |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Mutual fund Select Banco Itaú — Chile |
| 792,121 |
| 1,989,833 |
|
Mutual fund Soberano Banco Itaú — Brasil |
| 21,789,523 |
| 18,235,213 |
|
Mutual fund Corporativo Banco BBVA — Chile |
| 900,202 |
| 2,081,666 |
|
Western Assets Institutional Cash |
| 147,004 |
| 3,472,196 |
|
Mutual fund Banco Galicia |
| — |
| 946,885 |
|
Mutual fund Patrimonio Banco Caixa Económica Federal - Brasil |
| — |
| 2,833,080 |
|
Mutual fund Wells Fargo Bank |
| 135,258 |
| 137,500 |
|
|
|
|
|
|
|
Total mutual fund |
| 23,764,108 |
| 29,696,373 |
|
NOTE 5 — OTHER CURRENT FINANCIAL ASSETS
Below are the financial instruments held by the Company at March 31, 2013 at December 31, 2012, other than cash and cash equivalents. They consist of time deposits expiring in the short term (more than three months), restricted mutual funds and derivative contracts. The detail of financial instruments is detailed as follows:
Time deposits
Placement |
| Maturity |
|
|
|
|
|
|
| Annual |
|
|
|
date |
| date |
| Maturity |
| Currency |
| Principal |
| Rate |
| 03.31.2013 |
|
|
|
|
| date |
|
|
| ThCh$ |
| % |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02.06.2013 |
| 06.06.2013 |
| BBVA Banco Francés — Argentina |
| $ Arg |
| 12,441 |
| 15.5 |
| 12,721 |
|
03.18.2013 |
| 03.14.2014 |
| Banco Votorantim - Brasil |
| R$ |
| 16,447 |
| 8.82 |
| 17,487 |
|
Total |
|
|
|
|
|
|
|
|
|
|
| 30,208 |
|
Bonds
Institution |
| ThCh$ |
|
Bonds Provinicia Buenos Aires - Argentina |
| 10,949 |
|
Subtotal |
| 10,949 |
|
Total other current financial assets |
| 41,157 |
|
NOTE 5 — OTHER CURRENT FINANCIAL ASSETS (Continued)
Time deposits
Placement |
| Maturity |
|
|
|
|
|
|
| Annual |
|
|
|
date |
| date |
| Entity |
| Currency |
| Principal |
| Rate |
| 12.31.2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
03.25.2012 |
| 03.20.2013 |
| Banco Votorantin - Brasil |
| R$ |
| 16,480 |
| 8.82 |
| 17,280 |
|
|
|
|
|
|
|
|
| Subtotal |
|
|
| 17,280 |
|
Mutual Funds
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 6 — CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS
Note 6.1 Other current non-financial assets
Descrption |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Prepaid insurance |
| 221,809 |
| 182,015 |
|
Prepaid expenses |
| 5,141,150 |
| 3,513,515 |
|
Fiscal credits |
| 12,933,561 |
| 14,118,736 |
|
Other current assets |
| 475,096 |
| 388,572 |
|
Total |
| 18,771,616 |
| 18,202,838 |
|
Note 6.2 Other non-current, non-financial assets
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Prepaid expenses |
| 2,637,846 |
| 2,515,235 |
|
Fiscal credits |
| 5,856,469 |
| 5,880,191 |
|
Judicial deposits (1) |
| 18,306,450 |
| 18,002,490 |
|
Others |
| 537,519 |
| 529,174 |
|
Total |
| 27,338,284 |
| 26,927,090 |
|
(1) See note 21.1 2)
NOTE 7 — TRADE AND OTHER ACCOUNTS RECEIVABLE
The composition of trade and other accounts receivable is detailed as follows:
|
| 03.31.2013 |
| 12.31.2012 |
| ||||||||
Trade and other accounts receivable |
| Assets before |
| Allowance for |
| Commercial |
| Assets |
| Allowance |
| Commercial |
|
Current commercial debtors |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Trade debtors |
| 90,948,452 |
| (2,343,285 | ) | 88,605,167 |
| 115,998,388 |
| (1,458,801 | ) | 114,539,587 |
|
Other current debtors |
| 20,726,615 |
| — |
| 20,726,615 |
| 15,782,069 |
| — |
| 15,782,069 |
|
Current commercial debtors |
| 111,675,067 |
| (2,343,285 | ) | 109,331,782 |
| 131,780,457 |
| (1,458,801 | ) | 130,321,656 |
|
Prepayments suppliers |
| 4,357,887 |
| — |
| 4,357,887 |
| 4,021,021 |
| — |
| 4,021,021 |
|
Other current accounts receivable |
| 18,013,515 |
| (26,393 | ) | 17,987,122 |
| 18,502,187 |
| (27,948 | ) | 18,474,239 |
|
Commercial debtors and other current accounts receivable |
| 134,046,469 |
| (2,369,678 | ) | 131,676,791 |
| 154,303,665 |
| (1,486,749 | ) | 152,816,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 8,024,173 |
| — |
| 8,024,173 |
| 6,599,310 |
| — |
| 6,599,310 |
|
Other non-current debtors |
| 2,803 |
| — |
| 2,803 |
| 124,767 |
| — |
| 124,767 |
|
Non-current accounts receivable |
| 8,026,976 |
| — |
| 8,026,976 |
| 6,724,077 |
| — |
| 6,724,077 |
|
Trade and other accounts receivable |
| 142,073,445 |
| (2,369,678 | ) | 139,703,767 |
| 161,027,742 |
| (1,486,749 | ) | 159,540,993 |
|
|
|
|
|
|
| N° |
|
|
|
|
| Number of |
|
|
| Number of |
|
|
|
Aging of debtor portfolio |
| clients |
| 03.31.2013 |
| clients |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
|
|
| ThCh$ |
|
Up to date non-securitized portfolio |
| 9,913 |
| 42,660,009 |
| 8,514 |
| 59,686,698 |
|
1 and 30 days |
| 33,709 |
| 42,616,325 |
| 30,523 |
| 51,451,804 |
|
31 and 60 days |
| 2,338 |
| 999,368 |
| 484 |
| 784,192 |
|
61 and 90 days |
| 687 |
| 969,598 |
| 346 |
| 951,083 |
|
91 and 120 days |
| 276 |
| 138,140 |
| 273 |
| 316,787 |
|
121 and 150 days |
| 206 |
| 2,078 |
| 282 |
| 34,370 |
|
151 and 180 days |
| 221 |
| 697,971 |
| 264 |
| 307,727 |
|
181 and 210 days |
| 197 |
| 191,695 |
| 280 |
| 176,493 |
|
211 and 250 days |
| 204 |
| 28,126 |
| 276 |
| 251,247 |
|
More than 250 days |
| 168 |
| 10,669,315 |
| 1,362 |
| 8,637,297 |
|
Total |
| 47,919 |
| 98,972,625 |
| 42,604 |
| 122,597,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 03.31.2013 |
|
|
| 12.31.2012 |
|
|
|
|
| ThCh$ |
|
|
| ThCh$ |
|
Current comercial debtors |
|
|
| 90,948,452 |
|
|
| 115,998,388 |
|
Non-current comercial debtors |
|
|
| 8,024,173 |
|
|
| 6,599,310 |
|
Total |
|
|
| 98,972,625 |
|
|
| 122,597,698 |
|
NOTE 7 — TRADE AND OTHER ACCOUNTS RECEIVABLE (Continued)
The change in the allowance for uncollectible receivables between January 1 and March 31, 2013, and January 1 and December 31, 2012 is presented below:
Item |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Initial balance |
| 1,486,749 |
| 1,544,574 |
|
Bad debt expense |
| 1,092,273 |
| 976,331 |
|
Write-off of accounts receivable |
| (187,022 | ) | (843,766 | ) |
Increase (decrease) because of foreign exchange |
| (22,322 | ) | (190,390 | ) |
Movement |
| 882,929 |
| (57,825 | ) |
Ending balance |
| 2,369,678 |
| 1,486,749 |
|
NOTE 8 — INVENTORY
The composition of inventory balances is detailed as follows:
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Raw materials |
| 49,291,482 |
| 41,942,176 |
|
Merchandise |
| 13,940,338 |
| 8,797,194 |
|
Production inputs |
| 425,743 |
| 1,125,276 |
|
Products in progress |
| 616,879 |
| 705,637 |
|
Finished goods |
| 25,016,021 |
| 22,792,255 |
|
Spare parts |
| 15,206,592 |
| 14,479,488 |
|
Other inventory |
| 490,377 |
| 1,504,926 |
|
Obsolescence provision (1) |
| (1,757,391 | ) | (2,027,126 | ) |
Total |
| 103,230,041 |
| 89,319,826 |
|
The cost of inventory recognized as a cost of sales totaled ThCh$220,561,691, ThCh$169,808,197 at March 31, 2013 and 2012 respectively.
(1) The provision for obsolescence is primarily related to the obsolescence of parts classified as inventories and less finished goods and raw materials.
NOTE 9 — INCOME TAX AND DEFERRED TAXES
At the end of the period to March 31, 2013 the parent company has a Tax Income Fund amounting to M$64,446,138, consisting of profits with income tax credits from 1st. category by M$58,729,942 and utilities no credit for M $ 5,716,196
9.1 Current tax assets
Current tax receivables break down as follows:
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Monthly provisional payments |
| 3,307,131 |
| 2,319,627 |
|
Tax credits (1) |
| 1,026,678 |
| 559,766 |
|
Total |
| 4,333,809 |
| 2,879,393 |
|
(1) That item corresponds to income tax credits on account of training expenses, purchase of property, plant and equipment and donations.
9.2 Current tax liabilities
Current tax payables correspond to the following items:
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Income tax |
| 3,626,315 |
| 355,363 |
|
Other |
| 70,364 |
| 759,447 |
|
Balance |
| 3,696,679 |
| 1,114,810 |
|
NOTE 9 — INCOME TAX AND DEFERRED TAXES (Continued)
9.3 Tax expense
The current and deferred income tax expenses for the periods ended March 31, 2013
and 2012 are detailed as follows:
Item |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Current tax expense |
| 9,146,633 |
| 8,697,277 |
|
Adjustment to current tax from previous year |
| 97,312 |
| 256 |
|
Other current tax expenses |
| (11,896 | ) | 322,703 |
|
Total net current tax expense |
| 9,232,049 |
| 9,020,236 |
|
Deferred tax expenses |
| 896,078 |
| 2,541,374 |
|
Other current tax deferred |
| (95.724 | ) | — |
|
Total deferred tax expenses |
| 800.354 |
| 2.541.374 |
|
Income tax expense |
| 10.032.403 |
| 11.561.610 |
|
NOTE 9 — INCOME TAX AND DEFERRED TAXES (Continued)
9.4 Deferred taxes
The net cumulative balances of temporary differences created deferred tax assets and liabilities, which are shown below:
|
| 03.31.2013 |
| 12.31.2012 |
| ||||
Temporary differences |
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
| 754,255 |
| 29,595,215 |
| 432,181 |
| 29,494,188 |
|
Obsolescence provision |
| 821,385 |
| — |
| 637,675 |
| — |
|
Employee benefits |
| 1,825,186 |
| — |
| 1,807,163 |
| — |
|
Post-employment benefits |
| — |
| 260,685 |
| — |
| 277,510 |
|
Tax loss carry-forwards (1) and (2) |
| 9,172,182 |
| — |
| 9,026,314 |
| — |
|
Contingency provision |
| 2,415,783 |
| — |
| 2,020,821 |
| — |
|
Foreign exchange rate difference (Foreign Subsidiaries) (4) |
| — |
| 9,082,265 |
| — |
| 9,145,349 |
|
Allowance for doubtful accounts |
| 336,755 |
| — |
| 350,319 |
| — |
|
Tax incentives (Brazil) (3) |
| — |
| 12,059,757 |
| — |
| 10,930,694 |
|
Assets and liabilities for placement of bonds |
| 370,245 |
| 136,765 |
| 370,245 |
| 77,316 |
|
Leasing liabilities |
| 383,508 |
| — |
| 430,476 |
| — |
|
Inventories |
| 142,113 |
| 357,471 |
| 150,486 |
| 127,550 |
|
Distribution rights |
| — |
| 77,667,486 |
| — |
| 76,559,423 |
|
Other |
| 401,943 |
| 692,566 |
| 997,372 |
| 1,025,648 |
|
Subtotal |
| 16,623,355 |
| 129,852,210 |
| 16,223,052 |
| 127,637,678 |
|
Net Liabilities |
| — |
| 113,228,855 |
| — |
| 111,414,626 |
|
(1) Tax losses associated with our subsidiary in Chile Chile Andina SA, which is in the process of implementing its manufacturing and business operations, the amount amounts to M $ 4,048,984. The tax losses in Chile do not have expiration.
(2) Tax losses associated with the Ex - Coca Cola Polar Argentina SA, (now Embotelladora del Altántico S.A.) which are being exploited to the extent that Embotelladora del Altántico S.A. generate taxable profits. The amount in effect at March 31, 2013 amounted to M $ 4,971,605.
(3) Corresponds to tax incentives in Brazil that consist of a tax withholding reduction that are financially recorded under results, but under tax rules they must be controlled in equity accounts, and cannot be distributed as dividends.
(4) Deferred tax generated by exchange rate difference upon translation of intercompany accounts with the Brazilian subsidiary Rio de Janeiro Refrescos Ltda. that financially are carried to comprehensive results, but under tax rules they are taxable in Brazil at the moment they are received.
NOTE 9 — INCOME TAX AND DEFERRED TAXES (Continued)
9.5 Deferred tax liability movement
Movement in deferred accounts is detailed as follows:
Item |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Initial Balance |
| 111,414,626 |
| 35,245,490 |
|
Increase due to merger |
| — |
| 76,544,806 |
|
Increase in deferred tax liabilities |
| 874,398 |
| 4,453,994 |
|
Decrease due to foreign currency translation |
| 939,831 |
| (4,829,664 | ) |
Movements |
| 1,814,229 |
| 76,169,136 |
|
Ending balance |
| 113,228,855 |
| 111,414,626 |
|
9.6 Distribution of domestic and foreign tax expenses
As of March 31, 2013 and 2012, domestic and foreign tax expenses are detailed as follows:
Income tax |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Current taxes |
|
|
|
|
|
Foreign |
| (7,936,245 | ) | (7,440,621 | ) |
Domestic |
| (1,295,804 | ) | (1,579,615 | ) |
Current tax expense |
| (9,232,049 | ) | (9,020,236 | ) |
Deferred taxes |
|
|
|
|
|
Foreign |
| (708,531 | ) | (2,209,773 | ) |
Domestic |
| (91,823 | ) | (331,601 | ) |
Deferred tax expense |
| (800,354 | ) | (2,541,374 | ) |
Income tax expense |
| (10,032,403 | ) | (11,561,610 | ) |
NOTE 9 — INCOME TAX AND DEFERRED TAXES (Continued)
9.7 Reconciliation of effective rate
Below is the reconciliation of tax expenses at the legal rate and tax expenses at the effective rate:
Reconciliation of effective rate |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Income before taxes |
| 36,867,718 |
| 36,270,811 |
|
Tax expense at legal rate (18.5%) |
| — |
| (6,710,100 | ) |
Tax expense at legal rate (20%) |
| (7,373,544 | ) | — |
|
Effect of a different tax rate in other jurisdictions |
| (4,122,671 | ) | (4,233,151 | ) |
|
|
|
|
|
|
Permanent differences: |
|
|
|
|
|
Non-taxable revenues |
| 1,946,140 |
| 966,507 |
|
Non-deductible expenses |
| (764,423 | ) | (1,190,499 | ) |
Other increases (decreases) in charge for legal taxes |
| 282,095 |
| (394,367 | ) |
Adjustments to tax expenses |
| 1,463,812 |
| (618,359 | ) |
|
|
|
|
|
|
Tax expense at the effective rate |
| (10,032,403 | ) | (11,561,610 | ) |
Effective rate |
| 27.2 | % | 31.9 | % |
Below are the income tax rates applicable in each jurisdiction where the Company does business:
|
| Rate |
| ||
País |
| 2013 |
| 2012 |
|
Chile |
| 20 | % | 18.5 | % |
Brasil |
| 34 | % | 34 | % |
Argentina |
| 35 | % | 35 | % |
Paraguay |
| 10 | % | — |
|
NOTE 10 — PROPERTY, PLANT AND EQUIPMENT
10.1 Balances
Property, plant and equipment are itemized below for the close of each fiscal period:
|
| Property, plant and equipment, gross |
| Cumulative depreciation and impairment |
| Property, plant and equipment, net |
| ||||||
Item |
| 03.31.2013 |
| 12.31.2012 |
| 03.31.2013 |
| 12.31.2012 |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Construction in progress |
| 57,774,362 |
| 61,735,710 |
| — |
| — |
| 57,774,362 |
| 61,735,710 |
|
Land |
| 56,864,666 |
| 57,134,715 |
| — |
| — |
| 56,864,666 |
| 57,134,715 |
|
Buildings |
| 160,759,195 |
| 163,759,761 |
| (31,006,222 | ) | (31,980,362 | ) | 129,752,973 |
| 131,779,399 |
|
Plant and equipment |
| 345,491,311 |
| 346,179,261 |
| (165,151,637 | ) | (169,999,912 | ) | 180,339,674 |
| 176,179,349 |
|
Information technology |
| 12,338,109 |
| 12,429,618 |
| (6,743,828 | ) | (6,629,395 | ) | 5,594,281 |
| 5,800,223 |
|
Fixed facilities and accessories |
| 41.609.910 |
| 40,282,483 |
| (17,516,421 | ) | (15,443,891 | ) | 20,093,489 |
| 24,838,592 |
|
Vehicles |
| 12,818,657 |
| 11,134,161 |
| (4,055,746 | ) | (3,298,464 | ) | 8,762,911 |
| 7,835,697 |
|
Improvements to leased property |
| 129,977 |
| 130,240 |
| (123,300 | ) | (120,818 | ) | 6,677 |
| 9,422 |
|
Other property, plant and equipment (1) |
| 319.999.754 |
| 294,974,382 |
| (203,641,285 | ) | (183,736,764 | ) | 116,358,469 |
| 111,237,618 |
|
Item |
| 1,007,785,941 |
| 987,760,331 |
| (428,238,439 | ) | (411,209,606 | ) | 579,547,502 |
| 576,550,725 |
|
(1) Other property, plant and equipment is composed of bottles, market assets, furniture and other minor goods.
(2) As of December 31, 2012 there were financial lease agreements for the purchase of vehicles in the subsidiary Rio de Janeiro Refrescos Ltda., and Tetrapak equipment in Argentina
The net balance of each of these categories at March 31, 2013 and December 31, 2012 is detailed as follows:
Other property, plant and equipment |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bottles |
| 61,135,046 |
| 59,983,147 |
|
Marketing and promotional assets |
| 42,032,723 |
| 40,251,550 |
|
Other property, plant and equipment |
| 13,190,700 |
| 11,002,921 |
|
Total |
| 116,358,469 |
| 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 y Punta Arenas.
Argentina : Buenos Aires, Mendoza, Córdoba y Rosario, Bahía Blanca, Chacabuco, La Pampa, Neuqén, Comodoro Rivadavia, Trelew, Tierra 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.
NOTE 10 — PROPERTY, PLANT AND EQUIPMENT (Continued)
10.2 Movements
Movements in property, plant and equipment are detailed as follows between January 1 and March 31, 2013 and Januanry 1 at December 31, 2012
For the year ended 03.31.2013 |
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, net |
| Fixed facilities and |
| Vehicles, net |
| Improvements to |
| Other property, |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial 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 |
| 15,416,812 |
| 562,426 |
| 79,377 |
| 2,699,447 |
| 148,031 |
| 3,872 |
| — |
| — |
| 11,670,766 |
| 30,580,731 |
|
Disposals |
| — |
| — |
| — |
| (2,084,215 | ) | (220 | ) | — |
| — |
| — |
| (736,435 | ) | (2,820,870 | ) |
Transfers between items of property, plant and equipment |
| (18,893,500 | ) | — |
| 859,893 |
| 11,857,225 |
| 35,489 |
| 6,267 |
| 1,313,929 |
| — |
| 4,820,697 |
| — |
|
Transfers to assets held for sale, current |
| — |
| — |
| — |
| (1,565,232 | ) | — |
| — |
| — |
| — |
| — |
| (1,565,232 | ) |
Depreciation expense |
| — |
| — |
| (969,774 | ) | (6,645,729 | ) | (374,908 | ) | (464,589 | ) | (372,999 | ) | (2,753 | ) | (9,975,798 | ) | (18,806,550 | ) |
Increase (decrease) in foreign currency translation |
| (484,660 | ) | 106,825 |
| (839,259 | ) | (51,805 | ) | (12,993 | ) | (142,381 | ) | (13,716 | ) | 8 |
| 50,395 |
| (1,387,586 | ) |
Other increases (decreases) |
| — |
| (939,300 | ) | (1,156,663 | ) | (49,366 | ) | (1,341 | ) | (148,272 | ) | — |
| — |
| (708,774 | ) | (3,003,716 | ) |
Total movements |
| (3,961,348 | ) | (270,049 | ) | (2,026,426 | ) | 4,160,325 |
| (205,942 | ) | (745,103 | ) | 927,214 |
| (2,745 | ) | 5,120,851 |
| 2,996,777 |
|
Ending balance |
| 57,774,362 |
| 56,864,666 |
| 129,752,973 |
| 180,339,674 |
| 5,594,281 |
| 24,093,489 |
| 8,762,911 |
| 6,677 |
| 116,358,469 |
| 579,547,502 |
|
NOTE 10 – PROPERTY, PLANT AND EQUIPMENT (Continued)
For the year ended 12.31.2012 |
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, net |
| Fixed facilities and |
| Vehicles, net |
| Improvements |
| Other property, |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial 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) in foreign currency translation |
| (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 |
| 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 Embotellaoras 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 March 31, 2012 and December 31, 2012 are detailed as follows:
11.1 Accounts receivable:
11.1.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 12.31.2012 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.891.720-K |
| Embonor S.A. |
| Related to shareholder |
| Chile |
| Chilean pesos |
| 3,910,674 |
| 4,893,956 |
|
96.517.210-2 |
| Embotelladora Iquique S.A. |
| Related to shareholder |
| Chile |
| Chilean pesos |
| 291,758 |
| 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 |
| 21,485 |
| 20,058 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Chilean pesos |
| 206 |
| 301 |
|
|
|
|
| Total |
|
|
|
|
| 4,224,123 |
| 5,324,389 |
|
11.1.2 Non current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 12.31.2012 |
| 12.31.2011 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 7,636 |
| 7,197 |
|
|
|
|
| Total |
|
|
|
|
| 7,636 |
| 7,197 |
|
NOTE 11 — RELATED PARTY DISCLOSURES (Continued)
11.2 Accounts Payable:
11.2.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country of |
| Currency |
| 03.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 3,248,906 |
| 8,680,945 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Related to shareholder |
| Argentina |
| Argentine peso |
| 7,890,745 |
| 11,624,070 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Brazilian Reais |
| 5,920,212 |
| 6,721,378 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Chilean pesos |
| 3,633,515 |
| 5,441,206 |
|
89.996.200-1 |
| Envases del Pacifico S.A. |
| Related to director |
| Chile |
| Chilean pesos |
| 247,527 |
| 259,613 |
|
|
|
|
| Total |
|
|
|
|
| 20,940,905 |
| 32,727,212 |
|
NOTE 11 — RELATED PARTY DISCLOSURES (Continued)
11.3 Transactions:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
96.714.870-9 |
| Coca Cola de Chile S.A. |
| Shareholder |
| Chile |
| Concentrate purchase |
| Chilean pesos |
| 26,955,333 |
96.714.870-9 |
| Coca Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean pesos |
| 2,540,081 |
96.714.870-9 |
| Coca Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean pesos |
| 866,516 |
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean pesos |
| 12,537,228 |
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean pesos |
| 810,445 |
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of packaging materials |
| Chilean pesos |
| 514,587 |
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of services and others |
| Chilean pesos |
| 149,430 |
96.891.720-K |
| Embonor S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 4,547,409 |
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products dos |
| Chilean pesos |
| 301,996 |
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brasil |
| Concentrate purchase |
| Brazilian Reais |
| 24,455,159 |
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brasil |
| Reimbursement and other purchases |
| Brazilian Reais |
| 173,042 |
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brasil |
| Advertising participation payment |
| Brazilian Reais |
| 4,378,561 |
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Related to shareholder |
| Argentina |
| Concentrate purchase |
| Argentine pesos |
| 23,358,869 |
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Related to shareholder |
| Argentina |
| Advertising rights, rewards and others |
| Argentine pesos |
| 150,395 |
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Related to shareholder |
| Argentina |
| Collection of advertising participation |
| Argentine pesos |
| 1,760,122 |
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Raw materials purchased |
| Chilean pesos |
| 230,294 |
Foreingn |
| Coca Cola Perú |
| Related to shareholder |
| Chile |
| Purchase of finished products |
| Chilean pesos |
| 551,228 |
NOTE 11 — RELATED PARTY DISCLOSURES (Continued)
Taxpayer ID |
| Company |
| Relationship |
| Country of |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
96.714.870-9 |
| Coca Cola de Chile S.A. |
| Shareholder |
| Chile |
| Concentrate purchase |
| 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 dos |
| Chilean pesos |
| 2,244,302 |
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brasil |
| Concentrate purchase |
| Brazilian Reais |
| 78,524,183 |
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brasil |
| Reimbursement and other purchases |
| Brazilian Reais |
| 1,335,869 |
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brasil |
| Advertising participation payment |
| Brazilian Reais |
| 14,502,915 |
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Related to shareholder |
| Argentina |
| Concentrate purchase |
| Argentine pesos |
| 68,569,280 |
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Related to shareholder |
| Argentina |
| Advertising rights, rewards and others |
| Argentine pesos |
| 2,624,656 |
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Related to shareholder |
| Argentina |
| Collection of advertising participation |
| Argentine pesos |
| 5,419,055 |
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Raw materials purchased |
| 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 |
| Vendomatica 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 |
| 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)
NOTE 11 — RELATED PARTY DISCLOSURES (Continued)
11.4 Payroll and benefits of the Company’s key employees
As of March 31, 2013 and 2012, Salary and benefits paid to the Company’s key employees, corresponding to directors and managers, are detailed as follows:
Full description |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Executive wages, salaries and benefits |
| 1,251,777 |
| 1,928,313 |
|
Director allowances |
| 378,000 |
| 276,000 |
|
Total |
| 1,629,777 |
| 2,204,313 |
|
NOTE 12 — EMPLOYEE BENEFITS
As of March 31, 2013 and December 31 , 2012, the Company had recorded reserves for profit sharing and for bonuses totaling ThCh 3,445,106 and ThCh$8,240,460, respectively.
This liability is shown in accrued other non-current non-financial liabilities in the statement of financial position.
The charge against income in the statement of comprehensive income is allocated between the cost of sales, the cost of marketing, distribution costs and administrative expenses.
12.1 Personnel expenses
As of March 31, 2013 and 2012, Personnel expenses included in the statement of consolidated income statement were:
Description |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Wages and salaries |
| 38,019,643 |
| 25,049,252 |
|
Employee benefits |
| 9,902,282 |
| 6,506,252 |
|
Severance and post-employment benefits |
| 1,171,379 |
| 615,221 |
|
Other personnel expenses |
| 2,334,409 |
| 1,554,348 |
|
Total |
| 51,427,713 |
| 33,725,073 |
|
NOTE 12 — EMPLOYEE BENEFITS (Continued)
12.2 Post-employment benefits
This item represents the post employment benefits valued pursuant to Note 2.17.
Post-employment benefits |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Non-current provision |
| 6,842,821 |
| 7,037,122 |
|
Total |
| 6,842,821 |
| 7,037,122 |
|
12.3 Post-employment benefit movement
The movements of post-employment benefits for the period January 1 to March 31, 2013 and the year ended December 31, 2012 are detailed as follows:
Movements |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Initial balance |
| 7,037,122 |
| 5,130,015 |
|
Increase due to merger |
| — |
| 189,921 |
|
Service costs |
| 193,443 |
| 1,500,412 |
|
Interest costs |
| 32,487 |
| 158,235 |
|
Net actuarial losses |
| 299,219 |
| 1,010,136 |
|
Benefits paid |
| (719,450 | ) | (951,597 | ) |
Total |
| 6,842,821 |
| 7,037,122 |
|
12.4 Assumptions
The actuarial assumptions used at March 31, 2013 and December 31, 2012 were
Assumption |
| 2012 |
| 2012 |
|
|
|
|
|
|
|
Discount rate (1) |
| 4.2% |
| 5.1% |
|
Expected salary increase rate (1) |
| 3.5% |
| 4.4% |
|
Turnover rate |
| 5.4% |
| 5.4% |
|
Mortality rate (2) |
| RV-2009 |
| RV-2009 |
|
Retirement age of women |
| 60 años |
| 60 years |
|
Retirement age of men |
| 65 años |
| 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.
NOTE 13 — INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
13.1 Balances
Investments in associates recorded using the equity method are detailed as follows:
|
|
|
| Country of |
| Functional |
| Carrying Value |
| Percentage interest |
| ||||
Taxpayer ID |
| Name |
| Incorporation |
| Currency |
| 03.31.2013 |
| 12.31.2012 |
| 03.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| % |
| % |
|
86.881.400-4 |
| Envases CMF S.A. (1) |
| Chile |
| Pesos |
| 18,094,238 |
| 17,848,010 |
| 50.00 | % | 50.00 | % |
Foreing |
| LEAO Alimentos e Bebidas Ltda. (4) |
| Brasil |
| Brazilian Real |
| 20,928,102 |
| — |
| 9.57 | % | — |
|
Foreign |
| Kaik Participacoes Ltda. (2) |
| Brasil |
| Brazilian Real |
| 1,182,954 |
| 1,172,641 |
| 11.31 | % | 11.31 | % |
Extranjera |
| SRSA Participacoes Ltda. (4) |
| Brasil |
| Brazilian Real |
| 67,735 |
| — |
| 40,00 | % | — |
|
Foreign |
| Sistema de Alimentos de Bebidas Do Brasil Ltda. (2) and (4) |
| Brasil |
| Brazilian Real |
| — |
| 9,587,589 |
| — |
| 5.74 | % |
Foreign |
| Sorocaba Refrescos S.A.(3) |
| Brasil |
| Brazilian Real |
| 34,735,044 |
| 34,709,914 |
| 40.00 | % | 40.00 | % |
Foreign |
| Holdfab2 Participacoes Societarias Ltda. (4) |
| Brasil |
| Brazilian Real |
| — |
| 9,761,907 |
| — |
| 36.40 | % |
|
| Total |
|
|
|
|
| 75,008,073 |
| 73,080,061 |
|
|
|
|
|
(1) In these companies, regardless of the percentage of ownership interest held in 2011, 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 has been 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 for an amount of ThCh33,496,920 during the last quarter of 2012.
(4) During the year 2013 through corporate restructuring occurred in Brazil, which had in Sistema de Alimentos y Bbeidas Do Brasil Ltda and Holdfab 2 Participacoes Societarias Ltda. were merged into a new company called LEAO Alimentos e Bebidas Ltda. .Teh amounts investment by merging with respect to the shares received from the new Company were valued at book value, giving a negative goodwill of M$6,288,892, which is reflected in other reserves in shareholders’ waiting to be valuations made according to fair value that are required by the international financial reporting standards
NOTE 13 — INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD (Continued)
13.2 Movement
The movement of investments in associates recorded using the equity method is shown below, for the period ended March 31, 2012 and the year ended December 31, 2012:
Details |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Initial 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 |
|
Low investment in Holdfab 2 Participacoes Soc. Ltda.and SABB exchanged for a new participation in Leao Alimentos e Bebidas Ltda. |
| (20,161,893 | ) | — |
|
Increase by 9.57% percentaje in new company Leao Alimentos e Bebidas Ltda |
| 24,889,394 |
| — |
|
Dividends received |
| — |
| (402,148 | ) |
Share in operating income (a) |
| 675,105 |
| 2,409,110 |
|
Goodwill in sale of property plant and equipment to Envases CMF |
| 21,317 |
| 85,266 |
|
Amortization Fair Value Vital Jugos S. A. (a) |
| — |
| (77,475 | ) |
Decrease in foreign currency translation |
| (3,495,911 | ) | (3,652,740 | ) |
Deconsolidation of certain equity method investments due to Polar merger |
| — |
| (22,466,682 | ) |
Ending balance |
| 75,008,073 |
| 73,080,061 |
|
(a) Refer to table below for a reconciliation of these amounts to those recorded in the accompanying consolidated income statement.
NOTE 13 — INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD (Continued)
The main movements for the periods ended 2013 and 2012 are detailed as follows:
· During 2012 Envases CMF S.A. has not paid dividends, notwithstanding the above, it is recognized the minimum dividend established by IFRS amounting to M $ 402,148
· In accordance with the Special Shareholders’ Meeting of our equity investee, Vital Jugos S.A., held 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 Andina Company met that capital increase in the percentage of the outstanding ownership at that date of 57% contributing ThCh$2,380,320.
· After the merger with Embotelladoras Coca-Cola Polar, identified in Note 1b) the Andina Company acquired control in Vital Jugos S.A., Vital Aguas S.A. and Envases Central as of October 1, 2012, since it now holds an ownership interest of 72.0%, 73.6% and 59.27% respectively, and the substantive participating rights of other shareholders that previously existed are no longer in effect.
· In November of 2012 and exercising the faculties given by the Shareholders’ Agreements, Coca-Cola Embonor S.A., purchased at book value 7.1% ownership interest in Vital Aguas S.A. and 7.0% ownership interest in Vital Jugos S.A. The disbursements received for these transactions amounted to ThCh$2,112,582
· On August 30, 2012, Rio de Janeiro Refrescos Ltda. (“RJR”), a subsidiary of Embotelladora Andina S.A. in Brazil, on one part; and, on the other, Renosa Industria Brasileira de Bebidas S.A. have 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 reais.
· During the first quarter of 2013, there is a rearrangement in the Companies processors of juice products and mate in Brazil, merging companies Holdfab 2 Participacoes Ltda. and Sistema e Alimentos y Bebidas do Brasil Ltda in one company that is the legal successor called LEAO Alimentos y Bebidas Ltda..
NOTE 13 — INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD (Continued)
· In accordance with the Special Shareholders’ Meeting of Envases CMF S.A., held during December 2011, a capital reduction was agreed in the amount of ThCh$2,300,000, of which the Company shall receive ThCh$1,150,000, which was paid during the month of January 2012.
· After the merger with Embotelladoras Coca-Cola Polar, identified in Note 1b) the Andina Company acquired control in Vital Jugos S.A., Vital Aguas S.A. and Envases Central as of October 1, 2012, since it now holds an ownership interest of 72.0%, 73.6% and 59.27% respectively, and the substantive participating rights of other shareholders that previously existed are no longer in effect.
· In November of 2012 and exercising the faculties given by the Shareholders’ Agreements, Coca-Cola Embonor S.A., purchased at book value 7.1% ownership interest in Vital Aguas S.A. and 7.0% ownership interest in Vital Jugos S.A. The disbursements received for these transactions amounted to ThCh$2,112,582.
· On August 30, 2012, Rio de Janeiro Refrescos Ltda. (“RJR”), a subsidiary of Embotelladora Andina S.A. in Brazil, on one part; and, on the other, Renosa Industria Brasileira de Bebidas S.A. have signed a promissory purchase agreement containing the conditions leading to the acquisition by RJR of 100% of the equity interest held by Renosa in Sorocaba Refrescos S.A. which is equivalent to 40% of the total shares of Sorocaba. The promissory agreement should be fulfilled within a period of 180 days. The agreement was materialized during the month of October with a payment of 146.9 million reais. The Company is still in the process of completing its equity method purchase price allocation for this transaction. Specifically, it is in the process of finalizing amounts to be assigned to non-monetary assets at the investee level.
13.3 Reconciliation of Income by Investment in Associates:
Details |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Equity in income of associates |
| 675,105 |
| 1,570,709 |
|
|
|
|
|
|
|
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) |
| (168,889 | ) | (257,262 | ) |
Amortization of gain sale of property plant and equipment Envases CMF |
| 21,317 |
| 21,317 |
|
Amortization of fair value adjustments related to Vital acquisition |
| — |
| — |
|
Income Statement Balance |
| 527,533 |
| 1,334,764 |
|
NOTE 13 — INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD (Continued)
13.4 Summary financial information of associates:
The attached table presents summarized information regarding the Company´s equity investees as of March 31, 2013:
|
| Envases CMF |
| Sorocaba |
| Kaik |
| SRSA |
| Leao |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Total assets |
| 54,598,170 |
| 42,554,727 |
| 10,450,445 |
| 4,730,621 |
| 333,476,227 |
|
Total liabilities |
| 16,990,208 |
| 21,929,444 |
| 44 |
| 4,561,284 |
| 171,410,427 |
|
Total revenue |
| 10,953,927 |
| — |
| — |
| — |
| 12,800,688 |
|
Net income (loss) of associate |
| 462,413 |
| 155,844 |
| 76,577 |
| 34,531 |
| 4,567,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting date |
| 03/31/2013 |
| 03/28/2013 |
| 02/28/2013 |
| 02/28/2013 |
| 02/28/2013 |
|
NOTE 14 — INTANGIBLE ASSETS AND GOODWILL
14.1 Intangible assets not considered goodwill
Intangible assets not considered as goodwill as of the end of each period are detailed as follows:
|
| March 31, 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 |
| 491,318 |
| (86,448 | ) | 404,870 |
| 497,998 |
| (90,041 | ) | 407,957 |
|
Distribution rights |
| 470,750,414 |
| — |
| 470,750,414 |
| 459,320,270 |
| — |
| 459,320,270 |
|
Software |
| 14,041,306 |
| (8,725,233 | ) | 5,316,073 |
| 13,597,796 |
| (8,743,750 | ) | 4,854,046 |
|
Total |
| 485,283,038 |
| (8,811,681 | ) | 476,471,357 |
| 473,416,064 |
| (8,833,791 | ) | 464,582,273 |
|
The movement and balances of identifiable intangible assets are detailed as follows for the period January 1 to March 31, 2013 and January 1 to December 31, 2012:
NOTE 14 — INTANGIBLE ASSETS AND GOODWILL (Continued)
The movement and balances of identifiable intangible assets are detailed as follows for the period January 1 to March 31, 2013 and January 1 to December 31, 2012:
|
| March 31, 2013 |
| December 31, 2012 |
| ||||||||||||
|
| Distribution |
| Water |
|
|
|
|
| Distribution |
| Water |
|
|
|
|
|
Description |
| Rights |
| rights |
| Software |
| Total |
| Rights |
| rights |
| Software |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| M$ |
| M$ |
| M$ |
| M$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial balance |
| 459.320.270 |
| 407.957 |
| 4.854.046 |
| 464.582.273 |
| — |
| 422.463 |
| 716.394 |
| 1.138.857 |
|
Additions |
| — |
| — |
| 849.865 |
| 849.865 |
| — |
| — |
| 3.506.266 |
| 3.506.266 |
|
Increase due to merger (1) |
| — |
| — |
| — |
| — |
| 459.393.920 |
| — |
| 1.083.184 |
| 460.477.104 |
|
Amortization |
| — |
| (1.448 | ) | (382.922 | ) | (384.370 | ) | — |
| (6.585 | ) | (547.481 | ) | (554.066 | ) |
Other increases (decreases) |
| 11.430.144 |
| (1.639 | ) | (4.916 | ) | 11.423.589 |
| (73.650 | ) | (7.921 | ) | 95.683 |
| 14.112 |
|
Final balance |
| 470.750.414 |
| 404.870 |
| 5.316.073 |
| 476.471.357 |
| 459.320.270 |
| 407.957 |
| 4.854.046 |
| 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. Said distribution rights are not subject to amortization and are composed as follows:
|
| M$ |
|
Chile |
| 300,305,727 |
|
Paraguay |
| 156,627,248 |
|
Argentina |
| 2,387,295 |
|
Total |
| 459,320,270 |
|
NOTE 14 — INTANGIBLE ASSETS AND GOODWILL (Continued)
14.2 Goodwill
Movement in goodwill is detailed as follows:
Period ended March 31, 2013
Cash generating unit |
| 01.01.2013 |
| Additions |
| Disposals or |
| Foreign currency |
| 03.31.2013 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chile operation |
| 8,503,023 |
| — |
| — |
| — |
| 8,503,023 |
|
Brazilian operation |
| 35,536,967 |
| — |
| — |
| (69,642 | ) | 35,467,325 |
|
Argentine operation |
| 13,837,339 |
| — |
| — |
| (772,874 | ) | 13,064,465 |
|
Paraguayan operation |
| 6,915,412 |
| — |
| — |
| 510,836 |
| 7,426,248 |
|
Total |
| 64,792,741 |
| — |
| — |
| (331,680 | ) | 64,461,061 |
|
(1) As explained in note 1b), corresponds to goodwill generated in the fair value valuation of assets and liabilities stemming from the merger with Embotelladoras Coca-Cola Polar S.A.
Year ended December 31, 2012
Cash generating unit |
| 01.01.2012 |
| Additions |
| Disposals 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 |
|
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
Liabilities are detailed as follows:
Current |
| 12.31.2012 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 91,098,195 |
| 87,278,613 |
|
Bonds payable |
| 5,140,319 |
| 4,376,648 |
|
Deposits in guarantee |
| 14,011,033 |
| 13,851,410 |
|
Forward contract obligations (see note 20) |
| 1,280,623 |
| 394,652 |
|
Leasing agreements |
| 339,900 |
| 346,696 |
|
Total |
| 111,870,070 |
| 106,248,019 |
|
Non-current |
| 12.31.2012 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 49,031,685 |
| 46,353,758 |
|
Bonds payable |
| 126,470,748 |
| 126,356,040 |
|
Leasing agreements |
| 1,146,997 |
| 1,170,397 |
|
Total |
| 176,649,430 |
| 173,880,195 |
|
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES (Continued)
15.1.1 Bank loans, 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 |
| 03.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Nación Bicentenario |
| Argentina |
| Argentine Peso |
| Monthly |
| 14.80 | % | 9.90 | % | 301,130 |
| 869,886 |
| 1,171,016 |
| 949,545 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Trimestral |
| 15.00 | % | 15.00 | % | — |
| 182,016 |
| 182,016 |
| 96,370 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia |
| Argentina |
| Argentine Peso |
| Trimestral |
| 15.00 | % | 15.00 | % | — |
| 51,840 |
| 51,840 |
| 27,447 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco BBVA Bicentenario |
| Argentina |
| Argentine Peso |
| Monthly |
| 15.25 | % | 15.25 | % | — |
| 180,976 |
| 180,976 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| At maturity |
| 12.85 | % | 12.85 | % | 6,840,602 |
| — |
| 6,840,602 |
| 6,500,755 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia |
| Argentina |
| Argentine Peso |
| At maturity |
| 16.00 | % | 16.00 | % | 432,898 |
| — |
| 432,898 |
| 645,870 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Patagonia |
| Argentina |
| Argentine Peso |
| At maturity |
| 13.75 | % | 13.75 | % | 3,692,762 |
| — |
| 3,692,762 |
| 3,896,499 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Standard Bank |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.50 | % | 15.50 | % | — |
| — |
| — |
| 913 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Nación |
| Argentina |
| Argentine Peso |
| At maturity |
| 14.75 | % | 14.75 | % | 1,843,200 |
| — |
| 1,843,200 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia |
| Argentina |
| Argentine Peso |
| At maturity |
| 12.20 | % | 12.20 | % | 2,425,953 |
| — |
| 2,425,953 |
| — |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Votorantim |
| Brasil |
| Brazilian Real |
| Monthly |
| 9.40 | % | 9.40 | % | 33,757 |
| 101,012 |
| 134,769 |
| 134,864 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Itaú |
| Brasil |
| Brazilian Real |
| Monthly |
| 6.63 | % | 6.63 | % | 274,170 |
| 771,112 |
| 1,045,282 |
| 941,997 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Santander |
| Brasil |
| Brazilian Real |
| Monthly |
| 7.15 | % | 7.15 | % | 81,739 |
| 233,659 |
| 315,398 |
| 328,872 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Santander |
| Brasil |
| Brazilian Real |
| Monthly |
| 2.99 | % | 3.52 | % | — |
| — |
| — |
| 525,091 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Itaú |
| Brasil |
| Brazilian Real |
| Monthly |
| 9.52 | % | 9.52 | % | — |
| 1,240,722 |
| 1,240,722 |
| — |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.84 | % | 6.84 | % | 2,876,921 |
| — |
| 2,876,921 |
| 2,828,742 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| Semiannually |
| 5.76 | % | 5.76 | % | 360,835 |
| 330,000 |
| 690,835 |
| 671,827 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.60 | % | 6.60 | % | 9,321,377 |
| — |
| 9,321,377 |
| 9,171,557 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.82 | % | 6.82 | % | 62,707 |
| 2,300,000 |
| 2,362,707 |
| 2,323,515 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.84 | % | 6.84 | % | 2,741,113 |
| — |
| 2,741,113 |
| 2,695,242 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.39 | % | 6.39 | % | — |
| 1,350 |
| 1,350 |
| 32,069 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Dollars |
| At maturity |
| 3.36 | % | 3.36 | % | 23,527 |
| 1,416,690 |
| 1,440,217 |
| 1,452,145 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-k |
| Banco Santander |
| Chile |
| Dollars |
| At maturity |
| 2.20 | % | 2.20 | % | — |
| 4,782,468 |
| 4,782,468 |
| 4,832,261 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-k |
| Banco Santander |
| Chile |
| Chilean pesos |
| At maturity |
| 6.80 | % | 6.80 | % | 138,320 |
| 7,000,000 |
| 7,138,320 |
| 7,018,620 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.49 | % | 6.49 | % | 403,100 |
| — |
| 403,100 |
| 384,618 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.032.000-8 |
| Banco BBVA |
| Chile |
| Chilean pesos |
| At maturity |
| 6.25 | % | 6.25 | % | 5,045,000 |
| — |
| 5,045,000 |
| 7,521,185 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.83 | % | 6.83 | % | 260,530 |
| 10,250,000 |
| 10,510,530 |
| 10,335,540 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.951.000-4 |
| Banco HSBC |
| Chile |
| Chilean pesos |
| At maturity |
| 6.80 | % | 6.80 | % | 189,833 |
| 7,500,000 |
| 7,689,833 |
| 7,562,333 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-k |
| Banco Santander |
| Chile |
| Chilean pesos |
| At maturity |
| 6.85 | % | 6.85 | % | — |
| 10,870,174 |
| 10,870,174 |
| 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 | % | — |
| 5,091,959 |
| 5,091,959 |
| 5,031,567 |
|
93.899.000-K |
| Vital Jugos S.A. |
| Chile |
| 97.036.000-k |
| Banco Santander |
| Chile |
| Chilean pesos |
| At maturity |
| 9.50 | % | 9.50 | % | 133,223 |
| — |
| 133,223 |
| — |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco Bice |
| Chile |
| Chilean pesos |
| At maturity |
| 4.680 | % | 4.68 | % | — |
| 441,634 |
| 441,634 |
| 674,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 91,098,195 |
| 87,278,613 |
|
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES (Continued)
15.1.2 Bank loans, non current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total | ||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 year |
| 3 years |
| More |
| at |
| at | ||||||||
Tax ID, |
| Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| up to 3 years |
| up to 5 years |
| 5 years |
| 03.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Nación Bicentenario(1) |
| Argentina |
| Argentine Peso |
| At maturity |
| 14.80% |
| 14.80% |
| 1,950,579 |
| 556,741 |
| — |
| 2,507,320 |
| 2,895,961 |
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| BancoNación Bicentenario |
| Argentina |
| Argentine Peso |
| At maturity |
| 9.90% |
| 9.90% |
| 521,011 |
| 151,962 |
| — |
| 672,973 |
| — |
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco Santa Fe |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.00% |
| 15.00% |
| 546,048 |
| — |
| — |
| 546,048 |
| 674,591 |
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco Santa Fe |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.25% |
| 15.25% |
| 944,640 |
| — |
| — |
| 944,640 |
| — |
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.00% |
| 15.00% |
| 155,520 |
| — |
| — |
| 155,520 |
| 192,130 |
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.25% |
| 15.25% |
| 239,616 |
| — |
| — |
| 239,616 |
| — |
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| BBVA Banco Francés |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.25% |
| 15.25% |
| 740,624 |
| — |
| — |
| 740,624 |
| — |
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Votorantim |
| Brasil |
| Brazilian Real |
| Monthly |
| 9.40% |
| 9.40% |
| 168,749 |
| — |
| — |
| 168,749 |
| 202,358 |
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Itaú |
| Brasil |
| Brazilian Real |
| Monthly |
| 6.63% |
| 6.63% |
| 3,860,306 |
| 600,507 |
| — |
| 4,460,813 |
| 4,069,577 |
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Santander |
| Brasil |
| Brazilian Real |
| Monthly |
| 7.15% |
| 7.15% |
| 881,559 |
| 181,751 |
| — |
| 1,063,310 |
| 1,134,032 |
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Itaú |
| Brasil |
| Brazilian Real |
| Monthly |
| 2.99% |
| 3.52% |
| 21,501,640 |
| 12,900,984 |
| — |
| 34,402,624 |
| 34,056,374 |
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 5.76% |
| 5.76% |
| 660,000 |
| — |
| — |
| 660,000 |
| 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 |
| — |
| — |
| 1,900,000 |
| 1,900,000 |
96.705.999-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Chilean pesos |
| At maturity |
| 4.29% |
| 4.29% |
| 569,448 |
| — |
| — |
| 569,448 |
| 568,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 49,031,685 |
| 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. The loan has been recorded in the financial statements at the fair value, i.e. using the market rate of 14.8% per annum. The interest differential of ThCh$ 382,028 is recorded as a component of the fixed asset balance and depreciated over its estimated useful life.
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES (Continued)
15.2.1 Bonds payable
|
| Current |
| Non-Current |
| Total |
| ||||||
Composition of bonds payable |
| 03.31.2013 |
| 12.31.2012 |
| 03.31.2013 |
| 12.31.2012 |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bonds (face rate interest) |
| 5,396,827 |
| 4,728,582 |
| 127,329,379 |
| 127,169,976 |
| 132,726,206 |
| 131,898,558 |
|
Expenses of bond issuance and discounts on placement |
| (256,508 | ) | (351,934 | ) | (858,631 | ) | (813,936 | ) | (1,115,139 | ) | (1,165,870 | ) |
Net balance presented in statement of financial position |
| 5,140,319 |
| 4,376,648 |
| 126,470,748 |
| 126,356,040 |
| 131,611,067 |
| 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 :
Bond registration or |
|
|
|
|
|
|
|
|
|
|
|
|
| Next |
|
|
|
|
|
identification number |
|
|
| Face |
| Unit of |
| Interest |
| Final |
| Interest |
| amortization |
| Par value |
| ||
Bond registration or |
| Series |
| amount |
| adjustment |
| rate |
| maturity |
| payment |
| of capital |
| 03.31.2013 |
| 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 |
| 82,774 |
| 255,057 |
|
SVS Registration No, 254, 6/13/2001 |
| B |
| 3,298,646 |
| UF |
| 6.5 | % | 06.01.2026 |
| Semi- annually |
| 06/01/2013 |
| 5,148,905 |
| 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 |
| 165,148 |
| 508,880 |
|
Total current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,396,827 |
| 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 |
| 22,869,380 |
| 22,840,750 |
|
SVS Registration No, 254, 6/13/2001 |
| B |
| 3,298,646 |
| UF |
| 6.5 | % | 06.01.2026 |
| Semi- annually |
| 06/01/2013 |
| 70,155,929 |
| 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 |
| 34,304,070 |
| 34,261,125 |
|
Total non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 127,329,379 |
| 127,169,976 |
|
Accrued interest included in the current portion of bonds totaled ThCh$ 1,820,310 and ThCh$1,156,542 at March 31, 2013 and December 31, 2012, respectively
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES (Continued)
15.2.3 Non-current maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| Year of maturity |
| non-current |
| ||||||||
|
| Series |
| 2014 |
| 2015 |
| 2016 |
| 2017 |
| After |
| 03.31.2013 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
SVS Registration 640, 8/23/2010 |
| A |
| 5,717,345 |
| 5,717,345 |
| 5,717,345 |
| 5,717,345 |
| — |
| 22,869,380 |
|
SVS Registration 254, 6/13/2001 |
| B |
| 3,808,991 |
| 4,056,579 |
| 4,320,255 |
| 4,601,070 |
| 53,369,034 |
| 70,155,929 |
|
SVS Registration 641,08/23/2010 |
| C |
| — |
| — |
| — |
| — |
| 34,304,070 |
| 34,304,070 |
|
Total |
|
|
| 9,526,336 |
| 9,773,927 |
| 10,037,600 |
| 10,318,415 |
| 87,673,104 |
| 127,329,379 |
|
15.2.4 Restrictions
The bonds issued on the Chilean market had the following rating at March 31, 2013
AA + | : | Clasificación correspondiente a Fitch Chile |
AA + | : | Clasificación correspondiente a 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 in 2010, for a total of UF 6,200,000. Of that amount, UF 5,798,646.34 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 in the case of Series B bonds. 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 March 31, 2013 the amounts included in this indicadion are the following: |
| ThCh$ |
|
Other financial liabilities |
| 111,870,070 |
|
Other non-current financial liabilities |
| 176,649,430 |
|
Total Equity Consolidated |
| 937,876,123 |
|
Based on these figures, the level of indebtedness amounts to 0.31 times the consolidated equity.
For Series A and C bonds, 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 March 31, 2013 the amounts included in this indicadion are the following: |
| ThCh$ |
|
Cash and cash equivalents |
| 46,197,144 |
|
Other financial liabilities |
| 111,870,070 |
|
Other non-current financial liabilities |
| 176,649,430 |
|
Total Equity Consolidated |
| 937,876,123 |
|
Based on these figures, the level of indebtedness amounts to 0.26 times shareholders’ equity ..
· Consolidated assets must be kept free of any pledge, mortgage or lien for an amount at least equal to 1.30 times the consolidated unsecured current liabilities of the issuer.
As of March 31, 2013 the amounts included in this restriction are the following: |
| ThCh$ |
|
Consolidated Assets free from pledges, mortgages and other taxes: |
| 1,523,689,912 |
|
Non-guaranteed outstanding liabilities |
| 288,519,500 |
|
Based on these figures Consolidated Assets free from pledges, mortgages and other taxes are equal to 5.28 times of non consolidated no garantizado.
· For Series B bonds the franchise of The Coca-Cola Company in Chile, called Metropolitan Region, 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.
· For Series B bonds, 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.
· For A and C lines, 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.
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES (Continued)
· For A and C lines, 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 the mentioned net financial hedging level is lower than the lever before mentioned for two consecutive quarters.
At March 31, 2013 the values of the items included in this indicator are: |
| ThCh$ |
|
(+) Consolidated Ebitda between January 1 and March 31, 2013 |
| 64,806,676 |
|
(+) Consolidated Ebitda between January 1 and December 31, 2012 |
| 207,987,799 |
|
(-) Consolidated Ebitda between January 1 and March 31, 2012 |
| 53,483,207 |
|
Consolidated EBITDA 12 months (between April 1 2012 and March 31, 2013) |
| 219,311,268 |
|
|
|
|
|
(+) Consolidated financial income between January 1 and March 31, 2013 |
| 629,200 |
|
(+) Consolidated financial income between January 1 and December 31, 2012 |
| 2,728,059 |
|
(-) Consolidated financial income between January 1 and March 31, 2012 |
| 720,851 |
|
Consolidated financial income 12 months (between April 1 2012 and March 31, 2013) |
| 2,636,408 |
|
|
|
|
|
(+)Consolidated financial expenses between January 1 and March 31, 2013 |
| 5,571,611 |
|
(+)Consolidated financialexpenses between January 1 and December 31, 2012 |
| 11,172,753 |
|
(-)Consolidated financial expenses between January 1 and March 31, 2012 |
| 1,830,488 |
|
Consolidated financial expenses 12 months (between April 1 2012 and March 31, 2013) |
| 14,913,876 |
|
Based on these figures, the level of net financial coverage (EBITDA / (Finance costs - Interest income)) totals 17.9 times.
The Company was in compliance with all financial covenants at March 31, 2013 and December 31, 2012
15.2.6 Fair value of financial liabilities
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.
Rio de Janeiro Refrescos Ltda. holds a liability corresponding to a US$75 million bond issue expiring in December 2020, with semi-annual interest payments. At March 31, 2013 and December 31, 2012, those bonds were held in full by Abisa Corp S.A., (formerly Pacific Sterling). Consequently, the assets and liabilities relating to that transaction have been eliminated from these consolidated financial statements. Furthermore, that transaction has been treated as an investment by the Company in the Brazilian subsidiary, so the effects of foreign exchange differences between the dollar and the functional currency of each of the entities have been charged to other comprehensive income.
15.3.1 Forward contract obligations
Please see the explanation in Note 20.
NOTE 15 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES (Continued)
15.4.1 Current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| Up to |
| 90 days |
| at |
| at |
| ||||||
Name |
| Country |
| Tax ID, |
| Year |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| 90 days |
| 1 year |
| 03.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Itaú |
| Brasil |
| Brazilian Real |
| Monthly |
| 10.21 | % | 10.22 | % | 66,349 |
| 199,045 |
| 265,394 |
| 255,122 |
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Alfa |
| Brasil |
| Brazilian Real |
| Monthly |
| 9.65 | % | 9.47 | % | 6,988 |
| 20,965 |
| 27,953 |
| 45,493 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 11,122 |
| 35,431 |
| 46,553 |
| 46,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 339,900 |
| 346,696 |
|
15.4.2 Noncurrent liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 years to |
| 3 years to |
| More |
| at |
| at |
| ||||||
Name |
| Country |
| Tax ID, |
| Year |
| Year |
| Currency |
| Year |
| Rate |
| Rate |
| 3 years |
| 5 years |
| 5 years |
| 03.31.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Itaú |
| Brasil |
| Brazilian Real |
| Monthly |
| 10.21 | % | 10.22 | % | 607,998 |
| — |
| — |
| 607,998 |
| 599,593 |
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Santander |
| Brasil |
| Brazilian Real |
| Monthly |
| 9.65 | % | 9.47 | % | 53,818 |
| — |
| — |
| 53,818 |
| 63,561 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 163,251 |
| 321,930 |
| — |
| 485,181 |
| 507,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 1,146,997 |
| 1,170,397 |
|
NOTE 16 — TRADE AND OTHER CURRENT ACCOUNTS PAYABLE
a) Trade and other current accounts payable are detailed as follows:
Item |
| 12.31.2012 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Trade accounts payable |
| 132,791,597 |
| 159,211,448 |
|
Withholdings |
| 11,461,492 |
| 23,529,819 |
|
Others |
| 4,540,028 |
| 1,576,506 |
|
Total |
| 148,793,117 |
| 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 the following:
|
| 03.31.2013 |
|
|
| ThCh$ |
|
Maturity within one year term |
| 3,386,068 |
|
Maturity after a term of one year to less than five years |
| 2,157,798 |
|
Total |
| 5,543,866 |
|
Total expenses related to operating leases maintained by the Company as of March 31, 2013 and 2012amounted to ThCh$1,763,758 and ThCh$1,795,055, respectively.
NOTE 17 — CURRENT AND NON-CURRENT PROVISIONS
17.1 Balances
The balances of provisions recorded by the Company at March 31, 2013 and December 31, 2012 are detailed as follows:
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Litigation (1) |
| 6,953,386 |
| 6,821,165 |
|
Others |
| 958,369 |
| 195,103 |
|
Total |
| 7,911,755 |
| 7,016,268 |
|
|
|
|
|
|
|
Current |
| 1,366,814 |
| 593,457 |
|
Non-current |
| 6,544,941 |
| 6,422,811 |
|
Total |
| 7,911,755 |
| 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 in the main items included under provisions is detailed as follows:
|
| 03.31.2013 |
| 12.31.2012 |
| ||||||||
Description |
| Litigation |
| Others |
| Total |
| Litigation |
| Others |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Initial Balance at January 1 |
| 6,821,165 |
| 195,103 |
| 7,016,268 |
| 7,970,835 |
| — |
| 7,970,835 |
|
Increase due to mergen |
|
|
|
|
|
|
| 325,174 |
| 136,826 |
| 462,000 |
|
Additional provisions |
| — |
| — |
| — |
| 65,745 |
| 62,372 |
| 128,117 |
|
Increase (decrease) in existing provisions |
| 58,245 |
| — |
| 58,245 |
| 851,150 |
| — |
| 851,150 |
|
Payments |
| 183,387 |
| 774,692 |
| 958,079 |
| (1,168,725 | ) | — |
| (1,168,725 | ) |
|
| (187,627 | ) | — |
| (187,627 | ) |
|
|
|
|
|
|
Increase (decrease) foreign exchange rate difference |
| 78,216 |
| (11,426 | ) | 66,790 |
| (1,223,014 | ) | (4,095 | ) | (1,227,109 | ) |
Ending Balance |
| 6,953,386 |
| 958,369 |
| 7,911,755 |
| 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 year end are detailed as follows:
Description |
| 03.31.2012 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Dividend payable |
| 369,402 |
| 99,427 |
|
Employee remuneration payable |
| 3,445,106 |
| 8,240,460 |
|
Accrued vacations |
| 9,722,143 |
| 11,392,231 |
|
Other |
| 698,321 |
| 813,034 |
|
Total |
| 14,234,972 |
| 20,545,152 |
|
|
|
|
|
|
|
Current |
| 13,988,760 |
| 20,369,549 |
|
Non-current |
| 246,212 |
| 175,603 |
|
Total |
| 14,234,972 |
| 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 Paid-in Capital
The paid-in capital of the Company totaled ThCh$270,759,299 as of March 31, 2013, divided into 946,578,736 Series A and B shares. The distribution and classification of these is detailed as follows:
19.1.1 Number of shares:
Series |
| Number of |
| Number of |
| Number of |
|
A |
| 473,289,368 |
| 473,289,368 |
| 473,289,368 |
|
B |
| 473,289,368 |
| 473,289,368 |
| 473,289,368 |
|
19.1.2 Capital:
Series |
| Subscribed |
| Paid-in |
|
|
| ThCh$ |
| ThCh$ |
|
A |
| 135,379,649.5 |
| 135,379,649.5 |
|
B |
| 135,379,649.5 |
| 135,379,649.5 |
|
Total |
| 270,759,299.0 |
| 270,759,299.0 |
|
19.1.3 Rights of each series:
· Series A: Elect 12 of the 14 directors
· Series B: Receives an additional 10% of dividends distributed to Series A and elects 2 of the 14 directors .
NOTE 19 — EQUITY (Continued)
19.2 Dividend policy
According to Chilean law, cash dividends must be paid equal to at least 30% of annual net profits, 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, 2012 Annual Shareholders Meeting, the shareholders authorized the Board of Directors to pay interim dividends during July and October 2012 and January 2013, at its discretion.
During 2012, the Shareholders’ Meeting approved an extraordinary dividend payment against the retained earnings fund. It is not guaranteed that those payments will be repeated in the future.
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 of 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$4,839,831 have been realized at March 31, 2013 and are available for distribution as dividends in accordance with the following:
Concept |
| Event when amount is |
| Amount of |
| Realized at |
| Amount of |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Revaluation of assets |
| Sale or impairment |
| 12,538,123 |
| (2,899,090 | ) | 9,639,033 |
|
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 |
| (478,487 | ) | 451,073 |
|
Deferred taxes complementary accounts |
| Amortization |
| (1,414,383 | ) | 833,113 |
| (581,270 | ) |
Total |
|
|
| 19,260,703 |
| (4,839,831 | ) | 14,420,872 |
|
NOTE 19 — EQUITY (Continued)
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 |
|
19.3 Reserves
Reserves |
| 2013 |
| 2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Polar acquisition |
| 421,701,520 |
| 421,701,520 |
|
Foreign currency translation reserves |
| (52,758,387 | ) | (63,555,545 | ) |
Otras reservas varias |
| 6,288,892 |
| — |
|
Legal and statutory reserves |
| 5,435,538 |
| 5,435,538 |
|
Total |
| 380,667,563 |
| 363,581,513 | ) |
19.3.1 Polar acquisition
This amount corresponds to the 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 Other reserves
Represents the excess of the value of the percentage shares in the new company received LEAO Alimentos e Bebidas Ltda., above the book values of the companies in which Rio de Janeiro Refrescos Ltda. had interests; “Sistema de Alimentos y Bebidas do Brasil Ltda. y Holdfab 2 Participacoes Societarias Ltda. “which were merged into the new company. The securities investment by merging with respect to the shares received from the new Company were valued at book values
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 was accounted for as a capitalization from Other Reserves with no impact on net income or retained earnings under IFRS. This amount totaled ThCh$5,435,538 at December 31, 2009.
19.3.4 Foreign currency translation reserves
This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the consolidated financial statements. Foreign currency translation differences between the receivable held by Abisa Corp S.A. and owed by Rio de Janeiro Refrescos Ltda. are also shown in this account, which has been treated as an investment in Equity Investees (associates and joint ventures). Foreign currency translation reserves are detailed as follows:
NOTE 19 — EQUITY (Continued)
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| (27,402,495 | ) | (26,905,052 | ) |
Embotelladora del Atlántico S.A |
| (34,234,689 | ) | (29,448,998 | ) |
Paraguay Refrescos S.A. |
| 15,896,238 |
| 24,248 |
|
Exchange rate differences in related companies |
| (7,017,441 | ) | (7,225,743 | ) |
Total |
| (52,758,387 | ) | (63,555,545 | ) |
The movement of this reserve for the fiscal periods ended March 31, 2013 and December 31, 2012 respectively is detailed as follows:
Description |
| 03.31.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| (497,443 | ) | (25,630,195 | ) |
Embotelladora del Atlántico S.A |
| (4,785,691 | ) | (10,376,803 | ) |
Paraguay Refrescos S.A. |
| 15,871,990 |
| 24,248 |
|
Exchange rate differences in related companies |
| 208,302 |
| (5,112,916 | ) |
Total |
| 10,797,158 |
| (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, The detail of this account at March 31, 2013 is as follows:
|
| Non-controlling Interests |
| ||||
|
| Percentage |
| Shareholders |
|
|
|
Description |
| % |
| Equity y |
| Income |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Embotelladora del Atlántico S.A. |
| 0.0171 |
| 9,520 |
| 818 |
|
Andina Empaques Argentina S.A. |
| 0.0209 |
| 1,712 |
| 113 |
|
Paraguay Refrescos S.A. |
| 2.1697 |
| 5,152,824 |
| 103,139 |
|
Inversiones Los Andes Ltda. |
| 0.0001 |
| 53 |
| 1 |
|
Transportes Polar S.A. |
| 0.0001 |
| 1 |
| — |
|
Vital S.A. |
| 35.0000 |
| 8,978,544 |
| 166,780 |
|
Vital Aguas S.A. |
| 33.5000 |
| 1,882,826 |
| 74,913 |
|
Envases Central S.A. |
| 40.7300 |
| 4,300,489 |
| 189,230 |
|
Andina Inversiones Societarias S.A. |
| 0.0001 |
| 35 |
| 1 |
|
Total |
|
|
| 20,326,004 |
| 534,995 |
|
NOTE 19 — EQUITY (Continued)
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 year 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:
|
| 03.31.2013 |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 12,523,962 |
| 13,776,358 |
| 26,300,320 |
|
Average weighted number of shares |
| 473,289,368 |
| 473,289,368 |
| 946,578,736 |
|
Earnings per basic and diluted share (in pesos) |
| 26.46 |
| 29.11 |
| 27.78 |
|
|
| 03.31.2012 |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 11,765,868 |
| 12,942,454 |
| 24,708,322 |
|
Average weighted number of shares |
| 380,137,271 |
| 380,137,271 |
| 760,274,542 |
|
Earnings per basic and diluted share (in pesos) |
| 30.95 |
| 34.05 |
| 32.50 |
|
NOTE 20 — DERIVATIVE ASSETS AND LIABILITIES
The company held the following derivative liabilities at March 31, 2013 and December 31, 2012:
20.1 Currency forwards of items recognized for accounting purposes:
As of Marchr 31, 2013, the Company had agreements to guaranty bank liabilities in Brazil denominated in US dollars for an amount of ThUS$71.429, to convert them to reais at a different tax rate. The valuation of said agreements was at fair value with a net loss of ThCh$1,126,060. The effect of these agreements have been recognized as current financial liabilities and financial costs within the statement of income as of March 31, 2012.
20.2 Currency forwards for highly probable expected transactions:
During 2011, 2012 and 2013 the Company made agreements to hedge the exchange rate in the purchases of raw materials and future flows in 2012 and 2013. At March 31, 2013 The outstanding agreements totaled ThUS$88,405 at March 31, 2013 ThUS$ 88,405 (ThUS$140,000 at December 31, 2012). Those agreements were recorded at fair value, resulting in a net loss of ThCh$1,424,444 for the year ended at March 31, 2013 (net loss of ThCh$256,584 at March 31, 2012), and liabilities for derivative contracts of ThCh$1,280,623 were recognized at March 31, 2013 (ThCh$394,652 at March 31, 2012). Since these agreements did not meet the documentation requirements of IFRS to be considered hedges, they were accounted for as investment contracts and the effects recorded directly in income.
Fair value hierarchy
The Company had total assets related to its foreign exchange forward contracts of ThCh$1,280,623 and liabilities to ThCh$394,652 at March 31, 2013 and 2012, respectively, which are classified within the other current non-financial liabilities and are carried at fair value on the statement of financial position. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Assumptions different to quoted prices included in level 1 and that are applicable to assets and liabilities, be it directly (as Price) or indirectly (i.e. derived from a Price)
Level 3: Assumptions for assets and liabilities that are not based on information observed directly in the market.
NOTE 20 — DERIVATIVE ASSETS AND LIABILITIES (Continued)
During the year ended March 31, 2013 and 2012, there were no transfers of items between fair value measurements categories all of which were valued during the period using level 2
|
| Fair Value Measurements at Marchr 31, 2013 |
|
|
| ||||
|
| Quoted prices in |
| Significant |
|
|
|
|
|
|
| actives markets |
| other |
| Significant |
|
|
|
|
| for Identical |
| observable |
| unobservable |
|
|
|
|
| Asset |
| Inputs |
| Inputs |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Current financial liabilities |
| — |
| 1,280,623 |
| — |
| 1,280,623 |
|
Total liabilities |
| — |
| 1,280,623 |
| — |
| 1,280,623 |
|
|
| Fair Value Measurements at December 31, 2012 |
|
|
| ||||
|
| Quoted prices in |
| Significant |
|
|
|
|
|
|
| actives markets |
| other |
| Significant |
|
|
|
|
| for Identical |
| observable |
| unobservable |
|
|
|
|
| Asset |
| Inputs |
| Inputs |
| 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 face litigation or potential litigation, in and out of court, that might 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 contingency of a probable loss because of these lawsuits, totaling ThCh$1,230,185. Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel.
2) Rio de Janeiro Refrescos Ltda. is involved in current lawsuits and probable lawsuits regarding labor, tax and other matters. The accounting provisions to cover contingencies of a probable loss total ThCh$5,314,755. Management considers it unlikely that non-provisioned contingencies will affect income and equity of the Company, based on the opinion of its legal counsel. As it is customary in Brazil, the Company has been required by the tax authorities to guarantee contingencies in the amounts of ThCh$18,306,450 at March 31, 2013 and ThCh$18,002,490 at March 31, 2012.
3) Embotelladora Andina S. A. is involved in tax, commercial, labor and other lawsuits. The accounting provisions to cover contingencies for probable losses because of these lawsuits total ThCh$175,984. Management considers it unlikely that non-provisioned contingencies will affect income and equity of the company, in the opinion of its legal advisors.
NOTE 21 — CONTINGENCIES AND COMMITMENTS
21.2 Direct guarantees and restricted assets:
Guarantees and restricted assets as of March 31, 2013 and December 31, 2012 are detailed as follows:
|
| Provided by |
| Committed assets |
| Carrying |
| Balance pending payment on |
| Date of guarantee release |
| ||||||||
Guarantee in favor |
| Name |
| Relationship |
| Guarantee |
| Type |
| amount at |
| 2013 |
| 2012 |
| 2013 |
| 2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
a) Guarantees that compromise assets included in the Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aduana de Ezeiza |
| Embotelladora del Atlántico S.A. |
| Subsidia |
| Cash |
| Other non-financial assets |
| 196,755 |
| 196,755 |
| — |
| 196,755 |
| — |
|
Municipalidad Gral. Alvear |
| Embotelladora del Atlántico S.A. |
| Subsidia |
| Cash |
| Other non-financial assets |
| 11,910 |
| 11,910 |
| 19,993 |
| — |
| — |
|
Municipalidad San Martín |
| Embotelladora del Atlántico S.A. |
| Subsidia |
| Cash |
| Other non-financial assets |
| 33,178 |
| 33,178 |
| 35,132 |
| — |
| — |
|
Poder Judiciario |
| Rio de Janeiro Refrescos Ltda. |
| Subsidia |
| Guarantee receipt |
| Other non-financial assets |
| 18,459,944 |
| 18,459,944 |
| 18,002,490 |
| — |
| — |
|
Varios Acreedores |
| Rio de Janeiro Refrescos Ltda. |
| Subsidia |
| Property, plant and equipment |
| Property, plant and equipment |
| 1,471,860 |
| 1,471,860 |
| 1,679,818 |
| — |
| — |
|
|
|
|
|
|
|
|
| Total |
| 20,173,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Guarantees provided without compromisto asset included in the Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aduana de Ezeiza |
| Embotelladora del Atlántico S.A. |
| Subsidia |
| Guarantee insurance |
| Import |
| — |
| 33,177 |
| 35,132 |
| — |
| 33,177 |
|
Estado rio de Janeiro |
| Rio de Janeiro Refrescos Ltda. |
| Subsidia |
| Guarantee receipt |
| Guarantee receipt |
| — |
| 12,099,474 |
| 11,240,243 |
| — |
| — |
|
Central de Restaurantes Aramark Ltda. |
| Embotelladora Andina S.A. |
| Matriz |
| Guarantee receipt |
| Guarantee receipt |
| — |
| 243,515 |
| — |
| — |
| — |
|
Linde Gas Chile S.A. |
| Embotelladora Andina S.A. |
| Matriz |
| Guarantee receipt |
| Guarantee receipt |
| — |
| 141,609 |
| 143,988 |
| — |
| — |
|
Linde Gas Chile S.A. |
| Embotelladora Andina S.A. |
| Matriz |
| Guarantee receipt |
| Guarantee receipt |
| — |
| 287,976 |
| 287,976 |
| — |
| — |
|
Echeverría Izquierdo Ingeniería y Construcción Ltda. |
| Embotelladora Andina S.A. |
| Matriz |
| Guarantee receipt |
| Guarantee receipt |
| — |
| 452,442 |
| — |
| — |
| — |
|
NOTE 22 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s businesses are exposed to diverse financial and market risks (including foreign exchange rate risk, fair value interest rate risk and price risk). The Company’s global risk management program concentrates on the uncertainty of financial markets and tries to minimize potentially adverse effects on the financial returns 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 March 31, 2013, the Company carried all of its debt 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 for 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 1% (instead of 0.12%) for the period January 01 to March 31, 2013, the Company’s results would have decreased by ThCh$1,159,455
Foreign currency risk
Sales revenues earned by the Company are linked to the local currencies of countries in which it does business, the detail of which is detailed as follows:
Chilean Peso |
| Brazilean Real |
| Argentine Peso |
| Paraguayan |
|
32 | % | 32 | % | 28 | % | 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 remaining everything constant, it would generate a cumulative decrease in income March 31, 2013 of ThCh$1,963,300. 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
NOTE 22 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
The exposure to foreign currency exchange conversion differences of subsidiaries abroad (Brazil, Argentina and Paraguay), because of the difference between monetary assets and liabilities (i.e., those denominated in a local currency and consequently exposed to foreign currency translation risk from translation from their functional currency to the presentation currency of the consolidated statements) is only hedged when it is predicted that material adverse differences could occur and when the cost associated with such hedging is deemed reasonable by management. Currently the Company does not have these kinds of hedge agreements.
In the period January to March 2013, the Brazilian real and the Argentine peso devaluations have presented average of 14.4% and 16.4% respectively with respect to the presentation currency for the same period of 2012. In the same period of 2013 Paraguayan Guarani presented with respect to appreciation to the presentation currency of 5.8% over the same period of 2012.
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 an additional 25% with respect to the Chilean peso, the effects upon results for the concept of translation from foreign subsidiaries would amount to a higher loss of ThCh$1,353,601. On the other hand, at equity level, this would result that the remainder of the translation of asset and liability accounts would lead to a decrease in equity of ThCh$23,792,014.
If the Brazilian real devalued at least 2.4% with respect to the Chilean peso, the effect upon results for the concept of translation from foreign subsidiaries would amount to a higher gain of thCh$285,405. On the other hand, at equity level, this would result that the remainder of the translation of asset and liability accounts would lead to a smaller decrease in equity of ThCh$6,527,385
If the Paraguayan Guarani appreciated 3.0% with respect to the Chilean peso, the effect upon results for the concept of translation from foreign subsidiaries would amount to a higher gain of thCh$125,156. On the other hand, at equity level, this would result that the remainder of the translation of asset and liability accounts would lead to an increase in equity of ThCh$8,668,411.
Commodities risk
The Company faces 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 warranted 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 March 31, 2013 of approximately ThCh$2,369,684. To minimize and/or stabilize said risk, anticipated purchase and supply agreements are frequently obtained when market conditions are favorable. Derivative instruments for commodities have also been used.
NOTE 22 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
Liquidity risk
The products we sell are mainly paid for in cash and short term credit, therefore our main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the
investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where we have operations; and (iii) public equity offerings.
The following table presents our contractual and commercial obligations as of March 31, 2013
|
| Year of maturity |
| ||||||||
Item |
| 2013 |
| 2014 |
| 2015 |
| 2016 |
| 2017 and |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank debt |
| 95,602,503 |
| 18,246,000 |
| 14,281,607 |
| 12,696,487 |
| 10,102,925 |
|
Bonds payable |
| 10,264,230 |
| 15,931,909 |
| 15,761,871 |
| 15,591,833 |
| 131,486,846 |
|
Purchase obligations |
| 42,450,378 |
| 5,415,240 |
| 4,423,912 |
| 4,343,418 |
| 552,729 |
|
Operating lease obligations |
| 4,697,482 |
| 1,386,046 |
| 975,917 |
| 570,311 |
| — |
|
Total |
| 153,014,593 |
| 40,979,195 |
| 35,443,307 |
| 33,202,049 |
| 142,142,500 |
|
NOTE 23 — OTHER INCOME
Other operating income is detailed as follows
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Gain on disposal of property, plant and equipment |
| 215,065 |
| 55,158 |
|
Adjustment judicial deposit (Brazil) |
| 161,091 |
| 265,019 |
|
Other |
| 49,873 |
| 68,538 |
|
Total |
| 426,029 |
| 388,715 |
|
NOTE 24 — OTHER EXPENSES
Other expenses are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
|
Item |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Tax on bank debits |
| 1,532,224 |
| 1,118,659 |
|
Loss on sale participation Leao Jr. (Brasil) |
| 1,176,284 |
| — |
|
Write-off of property, plant and equipment |
| — |
| 264,609 |
|
Contingencies |
| 493,204 |
| 469,710 |
|
Professional service fees |
| 50,716 |
| 162,127 |
|
Loss on the sale of property, plant and equipment |
| 63,049 |
| 115,518 |
|
Merger Andina-Polar (see note 13.2) |
| 80,194 |
| 1,394,793 |
|
Other |
| 393,627 |
| 300,795 |
|
Total |
| 3,789,298 |
| 3,826,211 |
|
NOTE 25 — FINANCIAL INCOME AND COSTS
Financial income and costs break down as follows:
a) Finance income
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Interest income |
| 539,240 |
| 586,330 |
|
Other interest income |
| 89,960 |
| 134,521 |
|
Total |
| 629,200 |
| 720,851 |
|
a) Finance costs
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bond interest |
| 1,732,124 |
| 1,273,789 |
|
Bank loan interest |
| 3,646,281 |
| 372,688 |
|
Other interest costs |
| 193,206 |
| 184,011 |
|
Total |
| 5,571,611 |
| 1,830,488 |
|
NOTE 26 — OTHER INCOME AND EXPENSES
Other gains and losses are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
|
Description |
| 03.31.2013 |
| 03.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Restructuring of operations (new Renca plant) |
| (104,743 | ) | (57,088 | ) |
Gain (loss) derivatives transactions |
| (1,424,444 | ) | (256,584 | ) |
Other income and outlays |
| (153,665 | ) | (2,599 | ) |
Total |
| (1,682,852 | ) | (316,271 | ) |
NOTE 27 — ENVIRONMENT (UNAUDITED)
The Company has made disbursements totaling ThCh$1,506,020 for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analyses, consulting on environmental impacts and other,
These disbursements by country are detailed as follows:
|
| Year ended March 31, 2013 |
| Future commitments |
| ||||
Country |
| Recorded as |
| Capitalized to |
| Recorded |
| Capitalized to |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Chile |
| 674,893 |
| 124,388 |
| — |
| — |
|
Argentina |
| — |
| 193,041 |
| 717,156 |
| 1,941,479 |
|
Brazil |
| 232,411 |
| 257,068 |
| 286,725 |
| 268,623 |
|
Paraguay |
| 21,346 |
| 2,873 |
| — |
| 3,983 |
|
Total |
| 928,650 |
| 577,370 |
| 1,003,881 |
| 2,214,085 |
|
NOTE 28 — SUBSEQUENT EVENTS
On April 25, 2013, final additional dividend number N° 184 was agreed to pay from retained earnings as follows:
a) Ch$12.3 for each series A share; and
b) Ch$13.53 for each series B share.
On April 25, 2013, final additional dividend number 185 was agreed to pay from retained earnings as follows:
a) Ch$47.0 for each series A share; and
b) Ch$51.7 for each series B share.
Except as stated above between March 31, 2013 and the date of issue of this report there are no subsequent events that could significantly affect the presentation of the statements of financial position.
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Intermediate Consolidated Statements of Financial Position
as of June 30 (unaudited ), 2013 and December 31, 2012
Intermediate Consolidated Statements of Financial Position
ÍNDICE
1 | |
|
|
3 | |
|
|
5 | |
|
|
Intermediate Consolidated Statements of Comprehensive Income | 6 |
|
|
7 | |
|
|
8 | |
|
|
9 |
Report of the Independents auditors
Santiago, August 27, 2013
To the Shareholders and Directors
Embotelladora Andina S.A.
We have reviewed the interim consolidated statements of financial position of Embotelladora Andina S.A. and subsidiaries as of June 30, 2013 and the interim consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2013, as well as the corresponding interim statements of cash flows and of changes in shareholders´ equity for the six-month period then ended. The interim consolidated statements of results and comprehensive results for the three-month and six-month periods ended on June 30, 2012 and the corresponding interim statements of cash flows and of changes in shareholders´ equity for the six-month period then ended, were reviewed by other auditors, whose report dated July 31, 2012, stated that based upon their review they had no knowledge of any significant amendment that must be carried out so that those statements would be in accordance with IAS 34 incorporated under International Financial Reporting Standards. Other auditors whose report dated February 28, 2013, expressed an opinion without amendments over those financial statements in accordance with International Financial Reporting Standards audited the consolidated statements of financial position of Embotelladora Andina S.A. and subsidiaries as of December 31, 2012.
Management’s Responsibility for the Consolidated Interim Financial Statements
Management is responsible for the preparation and fair presentation of the interim financial information in accordance with IAS 34 “Interim financial reports” incorporated in the International financial reporting standards (IFRS). This responsibility includes the design, implementation and maintenance of an internal control sufficient to provide a reasonable basis for the preparation and fair presentation of the interim financial information, in accordance with the preparation and presentation framework of applicable financial information.
Auditor’s Responsibility
It is our responsibility to make our reviews in accordance with generally accepted auditing standards in Chile applicable to reviews of interim financial reports. A review of interim financial reports consists mainly of applying analytical procedures and conducting inquires of the persons responsible for financial and accounting matters. The scope of a review is substantially less than that of an audit in accordance with generally accepted auditing standards in Chile, the purpose of which is to express an opinion on the financial information. Therefore, we do not express such an opinion.
Conclusion
Based on our review, we are not aware of any significant modification that should be made to the interim consolidated financial statements and the interim consolidated statements income and comprehensive income for the three-month and six-month periods ended June 30, 2013, and the corresponding interim statements of cash flows and of changes in shareholders´ equity for the six-month period then ended, in order for them to be in conformity with IAS 34, incorporated in the International Financial Reporting Standards.
(signed) |
|
Eduardo Vergara D. |
|
Chilean Tax Id Nº: 6.810.153-0 |
|
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Financial Position
As of June 30, 2013 and December 31, 2012
(Translation of consolidated financial statements originally issued in Spanish – See Note 2.2)
ASSETS |
| NOTE |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
| (unaudited) |
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
| 4 |
| 48,083,818 |
| 55,522,255 |
|
Other financial assets |
| 5 |
| 1,347,996 |
| 128,581 |
|
Other non-financial assets |
| 6.1 |
| 9,351,855 |
| 18,202,838 |
|
Trade and other receivable |
| 7 |
| 128,638,475 |
| 152,816,916 |
|
Accounts receivable from related parties |
| 11.1 |
| 3,717,739 |
| 5,324,389 |
|
Inventories |
| 8 |
| 98,051,169 |
| 89,319,826 |
|
Current income tax assets |
| 9.1 |
| 7,896,254 |
| 2,879,393 |
|
Total current assets excluding assets held for sale |
|
|
| 297,087,306 |
| 324,194,198 |
|
Non-current assets held for sale |
|
|
| 1,550,021 |
| 2,977,969 |
|
Total Current Assets |
|
|
| 298,637,327 |
| 327,172,167 |
|
|
|
|
|
|
|
|
|
Non-Current Assets:: |
|
|
|
|
|
|
|
Other non-financial assets |
| 6.2 |
| 28,238,171 |
| 26,927,090 |
|
Trade and other receivable |
| 7 |
| 7,819,518 |
| 6,724,077 |
|
Accounts receivable from related parties |
| 11.1 |
| 8,266 |
| 7,197 |
|
Investments under equity method of accounting |
| 13.1 |
| 65,930,766 |
| 73,080,061 |
|
Intangible assets other than goodwill |
| 14.1 |
| 471,402,644 |
| 464,582,273 |
|
Goodwill |
| 14.2 |
| 63,679,751 |
| 64,792,741 |
|
Property, plant and equipment |
| 10.1 |
| 599,647,840 |
| 576,550,725 |
|
Total Non-Current Assets |
|
|
| 1,236,726,956 |
| 1,212,664,164 |
|
Total Assets |
|
|
| 1,535,364,283 |
| 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 June 30, 2013 and December 31, 2012
(Translation of consolidated financial statements originally issued in Spanish – See Note 2.2)
LIABILITIES AND EQUITY |
| NOTE |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
| (unaudited) |
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 15 |
| 139,586,802 |
| 106,248,019 |
|
Trade and other accounts payable |
| 16 |
| 129,822,289 |
| 184,317,773 |
|
Accounts payable to related parties |
| 11.2 |
| 27,399,669 |
| 32,727,212 |
|
Provisions |
| 17 |
| 506,110 |
| 593,457 |
|
Income tax payable |
| 9.2 |
| 1,281,496 |
| 1,114,810 |
|
Other non-financial liabilities |
| 18 |
| 63,644,389 |
| 20,369,549 |
|
Total Current Liabilities |
|
|
| 362,240,755 |
| 345,370,820 |
|
|
|
|
|
|
|
|
|
Non-Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 15 |
| 175,858,938 |
| 173,880,195 |
|
Trade and other payables |
|
|
| 1,899,556 |
| 1,930,233 |
|
Provisions |
| 17 |
| 6,796,030 |
| 6,422,811 |
|
Deferred income tax liabilities |
| 9.4 |
| 116,298,059 |
| 111,414,626 |
|
Post-employment benefit liabilities |
| 12.3 |
| 7,056,527 |
| 7,037,122 |
|
Other non-financial liabilities |
| 18 |
| 246,451 |
| 175,603 |
|
Total Non-Current Liabilities |
|
|
| 308,155,561 |
| 300,860,590 |
|
|
|
|
|
|
|
|
|
Equity: |
| 19 |
|
|
|
|
|
Issued capital |
|
|
| 270,759,299 |
| 270,759,299 |
|
Treasury shares |
|
|
| (21,725 | ) | (21,725 | ) |
Retained earnings |
|
|
| 209,005,510 |
| 239,844,662 |
|
Other reserves |
|
|
| 365,018,659 |
| 363,581,513 |
|
Equity attributable to equity holders of the parent |
|
|
| 844,761,743 |
| 874,163,749 |
|
Non-controlling interests |
|
|
| 20,206,224 |
| 19,441,172 |
|
Total Equity |
|
|
| 864,967,967 |
| 893,604,921 |
|
Total Liabilities and Equity |
|
|
| 1,535,364,283 |
| 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 (unaudited)
(Translation of consolidated financial statements originally issued in Spanish – See Note 2.2)
|
|
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
|
| NOTE |
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net sales |
|
|
| 703,329,507 |
| 524,098,561 |
| 326,663,549 |
| 234,470,133 |
|
Cost of sales |
|
|
| (421,144,650 | ) | (313,996,688 | ) | (200,582,959 | ) | (144,188,491 | ) |
Gross Profit |
|
|
| 282,184,857 |
| 210,101,873 |
| 126,080,590 |
| 90,281,642 |
|
Other income, by function |
| 23 |
| 2,027,527 |
| 771,659 |
| 1,601,498 |
| 382,944 |
|
Distribution expenses |
|
|
| (74,487,454 | ) | (54,220,052 | ) | (35,171,725 | ) | (24,533,132 | ) |
Administrative expenses |
|
|
| (134,972,741 | ) | (93,984,635 | ) | (63,799,959 | ) | (45,417,410 | ) |
Other expenses, by function |
| 24 |
| (10,341,563 | ) | (6,288,530 | ) | (6,552,265 | ) | (2,462,319 | ) |
Other gains |
| 26 |
| 380,988 |
| 240,992 |
| 2,063,840 |
| 557,263 |
|
Finance income |
| 25 |
| 1,248,613 |
| 1,455,563 |
| 619,413 |
| 734,712 |
|
Finance costs |
| 25 |
| (10,086,249 | ) | (4,047,993 | ) | (4,514,638 | ) | (2,217,505 | ) |
Share of profit of investments using equity method of accounting |
| 13.3 |
| 624,953 |
| 1,078,947 |
| 97,420 |
| (255,817 | ) |
Foreign exchange differences |
|
|
| (541,283 | ) | (2,239,925 | ) | (1,530,543 | ) | (922,119 | ) |
Loss from differences in indexed financial assets and liabilities |
|
|
| 77,092 |
| (611,039 | ) | 353,391 |
| (162,210 | ) |
Net income before income taxes |
|
|
| 56,114,740 |
| 52,256,860 |
| 19,247,022 |
| 15,986,049 |
|
Income tax expense |
| 9.3 |
| (15,078,527 | ) | (16,183,934 | ) | (5,046,124 | ) | (4,622,324 | ) |
Net income |
|
|
| 41,036,213 |
| 36,072,926 |
| 14,200,898 |
| 11,363,725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to: |
|
|
|
|
|
|
|
|
|
|
|
- Equity holders of the parent |
|
|
| 40,409,906 |
| 36,071,827 |
| 14,109,586 |
| 11,363,505 |
|
- Non-controlling interests |
|
|
| 626,307 |
| 1,099 |
| 91,312 |
| 220 |
|
Net income |
|
|
| 41,036,213 |
| 36,072,926 |
| 14,200,898 |
| 11,363,725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share, basic and diluted |
|
|
| $ |
| $ |
| $ |
| $ |
|
Earnings per Series A Share |
| 19.5 |
| 41.29 |
| 45.19 |
| 14.29 |
| 14.24 |
|
Earnings per Series B Share |
| 19.5 |
| 45.42 |
| 49.71 |
| 15.72 |
| 15.66 |
|
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 (unaudited)
(Translation of consolidated financial statements originally issued in Spanish – See Note 2.2)
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
|
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net income |
| 41,036,213 |
| 36,072,926 |
| 14,200,898 |
| 11,363,725 |
|
Other comprehensive income before tax: |
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
|
Foreign currency translation differences, before taxes |
| (240,006 | ) | (24,984,285 | ) | (11,557,475 | ) | (14,660,630 | ) |
Gains on hedging operations |
| 1,800,526 |
| — |
| 1,800,526 |
| — |
|
Income tax effect relating to foreign exchange translation differences included within other comprehensive income |
| 627,550 |
| 945,942 |
| 798,024 |
| 1,304,590 |
|
Income tax relating to cash flow hedges included within other comprehensive income |
| (612,179 | ) | — |
| (612,179 | ) | — |
|
Total comprehensive income |
| 42,612,104 |
| 12,034,583 |
| 4,629,794 |
| (1,992,315 | ) |
Total Comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
- Equity holders of the parent |
| 41,847,052 |
| 12,035,691 |
| 4,749,574 |
| (1,992,503 | ) |
- Non-controlling interests |
| 765,052 |
| (1,108 | ) | (119,780 | ) | 188 |
|
Total comprehensive income |
| 42,612,104 |
| 12,034,583 |
| 4,629,794 |
| (1,992,315 | ) |
The accompanying notes 1 to 29 form an integral part of these financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES (unaudited)
Consolidated Interim Statements of Changes in Equity
for the periods ended June 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 |
| — |
| — |
| — |
| — |
| — |
| — |
| 40,409,906 |
| 40,409,906 |
| 626,307 |
| 41.036.213 |
|
Other comprehensive income |
| — |
| — |
| 248,799 |
| 1,188,347 |
| — |
| 1,437,146 |
| — |
| 1,437,146 |
| 138,745 |
| 1.575.891 |
|
Comprehensive income |
| — |
|
|
| 248,799 |
| 1,188,347 |
| — |
| 1,437,146 |
| 40,409,906 |
| 41,847,052 |
| 765,052 |
| 42.612.104 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (71,249,058 | ) | (71,249,058 | ) | — |
| (71,249,058 | ) |
Total changes in equity |
| — |
| — |
| 248,799 |
| 1,188,347 |
| — |
| 1,437,146 |
| (30,839,152 | ) | (29,402,006 | ) | 765,052 |
| (28,636,954 | ) |
Ending balance at 06.30.2013 (Unaudited) |
| 270,759,299 |
| (21,725 | ) | (63,306,746 | ) | 1,188,347 |
| 427,137,058 |
| 365,018,659 |
| 209,005,510 |
| 844,761,743 |
| 20,206,224 |
| 864,967,967 |
|
|
|
|
|
|
| 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 |
| — |
| — |
| — |
| — |
| — |
| — |
| 36,071,827 |
| 36,071,827 |
| 1,099 |
| 36.072.926 |
|
Other comprehensive income |
| — |
| — |
| (24,036,136 | ) | — |
| — |
| (24,036,136 | ) | — |
| (24,036,136 | ) | (2,207 | ) | (24.038.343) |
|
Comprehensive income |
| — |
| — |
| (24,036,136 | ) | — |
| — |
| (24,036,136 | ) | 36,071,827 |
| 12,035,691 |
| (1,108 | ) | 12.034.583 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (19,398,405 | ) | (19,398,405 | ) | — |
| (19,398,405 | ) |
Total changes in equity |
| — |
| — |
| (24,036,136 | ) | — |
| — |
| (24,036,136 | ) | 16,673,422 |
| (7,362,714 | ) | (1,108 | ) | (7,363,822 | ) |
Ending balance at 06.30.2012 (Unaudited) |
| 230,892,178 |
| — |
| (46,496,015 | ) | — |
| 5,435,538 |
| (41,060,477 | ) | 224,775,490 |
| 414,607,191 |
| 7,907 |
| 414,615,098 |
|
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 (unaudited)
(Translation of consolidated financial statements originally issued in Spanish — See Note 2.2)
|
|
|
| 01.01.2013 |
| 01.01.2012 |
|
Cash flows generated from (used in) Operating Activities |
| NOTE |
| 06.30.2013 |
| 06.30.2012 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Receipts from Operating Activities |
|
|
|
|
|
|
|
Receipts from customers (including taxes) |
|
|
| 954,277,973 |
| 758,384,521 |
|
Payments to Operating Activities |
|
|
|
|
|
|
|
Payments to suppliers for goods and services (including taxes) |
|
|
| (655,311,121 | ) | (541,857,021 | ) |
Payments to employees |
|
|
| (74,494,857 | ) | (50,337,920 | ) |
Other payments for operating activities (value-added taxes on purchases and sales and others) |
|
|
| (121,753,889 | ) | (94,289,663 | ) |
Dividends received |
|
|
| 2,085,032 |
| 725,000 |
|
Interest payments |
|
|
| (14,811,902 | ) | (2,907,105 | ) |
Interest received |
|
|
| 913,794 |
| 850,077 |
|
Income tax payments |
|
|
| (16,596,263 | ) | (11,559,964 | ) |
Other cash movements |
|
|
| (2,557,992 | ) | (2,090,508 | ) |
Net cash flows generated from Operating Activities |
|
|
| 71,750,775 |
| 56,917,417 |
|
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 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 | ) |
Proceeds from sale of property, plant and equipment |
|
|
| 2,941,154 |
| 337,907 |
|
Purchase of property, plant and equipment |
|
|
| (93,463,111 | ) | (56,145,218 | ) |
Proceeds from other long term assets (term deposits over 90 days) |
|
|
| 26,790 |
| 14,664,327 |
|
Purchase of other long term assets (term deposits over 90 days) |
|
|
| (37,667 | ) | (1,197,942 | ) |
Payments on forward, term, option and financial exchange agreements |
|
|
| (849,032 | ) | (126,751 | ) |
Receipts from forward, term, option and financial exchange agreements |
|
|
| 34,838 |
| 207,015 |
|
Other cash movements |
|
|
| 84,739 |
| 815,307 |
|
Net cash flows used in Investing Activities |
|
|
| (87,557,458 | ) | (42,675,675 | ) |
Cash Flows generated from (used in) Financing Activities |
|
|
|
|
|
|
|
Proceeds from long-term loans obtained |
|
|
| — |
| 28,000,000 |
|
Proceeds from short-term loans obtained |
|
|
| 171,379,067 |
| 66,478,315 |
|
Total loan proceeds |
|
|
| 171,379,067 |
| 94,478,315 |
|
Loans payments |
|
|
| (135,335,022 | ) | (59,301,852 | ) |
Payments of finance lease liabilities |
|
|
| (27,009 | ) | — |
|
Dividend payments by the reporting entity |
|
|
| (25,725,706 | ) | (33,819,096 | ) |
Other cash movements |
|
|
| (1,769,109 | ) | (1,634,773 | ) |
Net cash flows generated by (used in) Financing Activities |
|
|
| 8,522,221 |
| (277,406 | ) |
Net (decrease) increase in cash and cash equivalents before exchange differences |
|
|
|
|
|
|
|
Effects of exchange differences on cash and cash equivalents |
|
|
| (7,284,462 | ) | 13,964,336 |
|
|
|
|
| (153,975 | ) | (2,243,901 | ) |
Net decrease in cash and cash equivalents |
|
|
| (7,438,437 | ) | 11,720,435 |
|
Cash and cash equivalents — beginning of year |
| 4 |
| 55,522,255 |
| 31,297,922 |
|
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 June 30, 2013, the Freire Group and its related companies hold 55.35% 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.
c) 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.
NOTE 1 - CORPORATE INFORMATION (Continued)
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$4,517,661 were expensed as incurred, and recorded as a component of other expenses by function in the Company’s accompanying consolidated income statement.
NOTE 1 - CORPORATE INFORMATION (Continued)
The fair value of Polar’s net assets acquired is as follows:
|
| ThCh$ |
|
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$6,915,412). Goodwill is not expected to be tax deductible for income tax purposes.
Condensed financial information of Polar for the period between January 1, 2012 and June 30, 2012 is as follows:
|
| (unaudited) |
|
|
| ThCh$ |
|
Net sales |
| 156,990,658 |
|
Income before taxes |
| 8,332,841 |
|
Net income |
| 7,913,732 |
|
The proforma consolidated statement of income for the period between January 1 and June 30, 2012 is as follows:
|
| (unaudited) |
|
|
| ThCh$ |
|
Net sales |
| 696,369,222 |
|
Income before taxes |
| 74,724,358 |
|
Net income |
| 43,877,795 |
|
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 June 30, 2013( unaudited) and December 31, 2012.
Consolidated interim statements of income by function and comprehensive income: For the periods from January 1 to June 30, 2013 and 2012 (unaudited) and for the interim three-month periods between April 1 and June 30, 2013 and 2012 (unaudited).
Consolidated interim statements of cash flows: For the periods from January 1 to June 30, 2013 (unaudited) and 2012, using the “direct method”.
Consolidated interim statements of changes in equity: For the periods between January 1 and June 30, 2013 and 2012 (unaudited).
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 June 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 June 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 June 30, 2013 and 2012, which were approved by the Board of Directors during their meeting held on August 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 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 June 30, 2013 and December 31, 2012 and results of operations and cash flows for the periods ended June 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) |
| ||||||||||
|
|
|
| 06-30-2013 (unaudited) |
| 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 |
|
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 |
| € |
|
06.30.2013 |
| 507.16 |
| 228.90 |
| 94.13 |
| 22,852.67 |
| 0.1141 |
| 659.93 |
|
12.31.2012 |
| 479.96 |
| 234.87 |
| 97.59 |
| 22,840.75 |
| 0.1100 |
| 634.45 |
|
06.30.2012 |
| 501.84 |
| 248.28 |
| 110.85 |
| 22,627.36 |
| — |
| 635.08 |
|
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 June 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 income statement, 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 June 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 June 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 rate discount rate in Brazil, Argentina and Paraguay was 15%; 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$136,457,993 at June 30, 2013 (ThCh$159,540,993 at December 31, 2012), net of an allowance for doubtful accounts provision of ThCh$2,246,317 at June 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)
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 the |
|
|
|
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 |
|
|
|
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 |
|
|
|
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 |
|
|
|
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 |
|
|
|
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 |
|
|
|
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 |
|
|
|
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 |
|
|
|
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 |
|
|
|
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. |
|
|
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 |
|
|
|
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 |
|
|
|
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 June 30, 2013 (unaudited) |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Eliminations |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
| ThCh$ |
|
Net sales |
| 227,717,946 |
| 200,295,964 |
| 222,088,390 |
| 54,259,702 |
| (1,032,495 | ) | 703,329,507 |
|
Finance income |
| 419,035 |
| 17,426 |
| 721,694 |
| 90,458 |
| — |
| 1,248,613 |
|
Finance costs |
| (6,000,841 | ) | (1,935,096 | ) | (1,943,440 | ) | (206,872 | ) | — |
| (10,086,249 | ) |
Finance income, net |
| (5,581,806 | ) | (1,917,670 | ) | (1,221,746 | ) | (116,414 | ) | — |
| (8,837,636 | ) |
Depreciation and amortization |
| (17,661,164 | ) | (7,488,591 | ) | (8,414,923 | ) | (5,050,666 | ) | — |
| (38,615,344 | ) |
Total expenses |
| (190,378,891 | ) | (185,872,076 | ) | (195,336,194 | ) | (44,285,648 | ) | 1,032,495 |
| (614,840,314 | ) |
Net income of the segment reported |
| 14,096,085 |
| 5,017,627 |
| 17,115,527 |
| 4,806,974 |
| — |
| 41,036,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associates using equity method of accounting |
| (26,439 | ) | — |
| 651,392 |
| — |
| — |
| 624,953 |
|
Income tax expense |
| 3,453,737 |
| 2,397,874 |
| 8,887,624 |
| 339,292 |
| — |
| 15,078,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets, total |
| 757,860,048 |
| 197,659,466 |
| 315,297,032 |
| 264,547,737 |
| — |
| 1,535,364,283 |
|
Investments in associates using equity method of accounting |
| 17,172,788 |
| — |
| 48,757,978 |
| — |
| — |
| 65,930,766 |
|
Capital expenditures and other |
| (29,945,979 | ) | (19,854,926 | ) | (34,019,883 | ) | (9,642,323 | ) | — |
| (93,463,111 | ) |
Segment liabilities, total |
| 382,354,590 |
| 101,407,506 |
| 150,866,698 |
| 35,767,522 |
| — |
| 670,396,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows generated from (used in) Operating Activities |
| 30,827,445 |
| (2,242,981 | ) | 31,930,088 |
| 11,236,223 |
| — |
| 71,750,775 |
|
Cash flows used in Investing Activities |
| (28,299,479 | ) | (19,300,604 | ) | (30,315,052 | ) | (9,642,323 | ) | — |
| (87,557,458 | ) |
Cash flows generated from (used in) Financing Activities |
| (9,864,287 | ) | 20,165,552 |
| (1,050,218 | ) | (728,826 | ) | — |
| 8,522,221 |
|
For the period ended June 30, 2012 (unaudited) |
| Chile |
| Argentina |
| Brazil |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
| 162,723,505 |
| 136,974,726 |
| 224,400,330 |
| 524,098,561 |
|
Finance income |
| 441,372 |
| 252,315 |
| 761,876 |
| 1,455,563 |
|
Finance costs |
| (2,927,370 | ) | (886,213 | ) | (234,410 | ) | (4,047,993 | ) |
Finance income, net |
| (2.485.998 | ) | (633,898 | ) | 527,466 |
| (2,592,430 | ) |
Depreciation and amortization |
| (10.188.682 | ) | (5,098,492 | ) | (8,691,958 | ) | (23,979,132 | ) |
Total expenses |
| (140,050,105 | ) | (125,513,295 | ) | (195,890,673 | ) | (461,454,073 | ) |
Net income of the segment reported |
| 9,998,720 |
| 5,729,041 |
| 20,345,165 |
| 36,072,926 |
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associates using equity method of accounting |
| 856,568 |
| — |
| 222,379 |
| 1,078,947 |
|
Income tax expense |
| (2,711,594 | ) | (3,350,662 | ) | (10,121,678 | ) | (16,183,934 | ) |
|
|
|
|
|
|
|
|
|
|
Segment assets, total |
| 325,959,196 |
| 116,324,624 |
| 269,276,847 |
| 711,560,667 |
|
Investments in associates using equity method of accounting |
| 40,194,091 |
| — |
| 21,451,555 |
| 61,645,646 |
|
Capital expenditures and other |
| 27,977,721 |
| 14,276,334 |
| 16,271,483 |
| 58,525,538 |
|
Segment liability, total |
| 168,623,307 |
| 59,717,742 |
| 68,604,520 |
| 296,945,569 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows generated from Operating Activities |
| 27,929,102 |
| 750,582 |
| 28,237,733 |
| 56,917,417 |
|
Cash flows used in Investing Activities |
| (13,184,060 | ) | (13,221,197 | ) | (16,270,418 | ) | (42,675,675 | ) |
Cash flows generated from (used in) Financing Activities |
| (9,676,482 | ) | 9,520,350 |
| (121,274 | ) | (277,406 | ) |
NOTE 4 — CASH AND CASH EQUIVALENTS
Cash and cash equivalents are detailed as follows as of June 30, 2013 and December 31, 2012:
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Cash |
| 667,115 |
| 871,173 |
|
Bank balances |
| 17,797,411 |
| 24,171,486 |
|
Time deposits |
| 4,043,610 |
| 783,223 |
|
Money market funds |
| 25,575,682 |
| 29,696,373 |
|
Total cash and cash equivalents |
| 48,083,818 |
| 55,522,255 |
|
By currency |
| ThCh$ |
| ThCh$ |
|
Dollar |
| 7,871,253 |
| 5,067,208 |
|
Argentine Peso |
| 3,566,587 |
| 5,181,955 |
|
Chilean Peso |
| 11,598,935 |
| 14,089,380 |
|
Paraguayan Guaraní |
| 5,142,659 |
| 6,112,524 |
|
Brazilian Real |
| 19,904,384 |
| 25,071,188 |
|
Total cash and cash equivalents |
| 48,083,818 |
| 55,522,255 |
|
4.1 Time deposits
Time deposits defined as cash and cash equivalents are detailed as follows at June 30, 2013 and December 31, 2012:
Placement |
| Institution |
| Currency |
| Principal |
| Annual |
| Balance |
|
|
|
|
|
|
| ThCh$ |
| % |
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
06-10-2013 |
| Banco Santander |
| Chilean Pesos |
| 1,100,000 |
| 5.16 | % | 1,103,153 |
|
06-10-2013 |
| Banco HSBC |
| Chilean Pesos |
| 1,520,000 |
| 5.16 | % | 1,524,353 |
|
06-28-2013 |
| Banco Regional SAECA |
| Paraguayan Guaraní |
| 1,416,104 |
| 3.50 | % | 1,416,104 |
|
|
|
|
| Total |
|
|
|
|
| 4,043,610 |
|
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 |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Mutual fund Soberano Banco Itaú — Brasil |
| 15,016,049 |
| 18,235,213 |
|
Western Assets Institutional Cash |
| 6,865,391 |
| 3,472,196 |
|
Mutual fund Select Banco Itaú — Chile |
| 3,158,015 |
| 1,989,833 |
|
Mutual Fund Competitivo Banco BCI — Chile |
| 384,228 |
| — |
|
Mutual fund Wells Fargo Bank |
| 151,999 |
| 137,500 |
|
Mutual fund Corporativo Banco BBVA — Chile |
| — |
| 2,081,666 |
|
Mutual fund Banco Galicia |
| — |
| 946,885 |
|
Mutual fund Patrimonio Banco Caixa Económica Federal - Brasil |
| — |
| 2,833,080 |
|
|
|
|
|
|
|
Total mutual fund |
| 25,575,682 |
| 29,696,373 |
|
NOTE 5 — OTHER CURRENT FINANCIAL ASSETS
Below are the financial instruments held by the Company at June 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 |
| 06.30.2013 |
|
date |
| date |
| Institution |
| Currency |
| Principal |
| Rate |
| (unaudited) |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
06-06-2013 |
| 10-04-2013 |
| BBVA Banco Francés - Argentina |
| $Arg |
| 13,649 |
| 15.5 |
| 13,795 |
|
03-18-2013 |
| 03-14-2014 |
| Banco Votorantim - Brasil |
| R$ |
| 17,072 |
| 8.82 |
| 17,255 |
|
|
|
|
|
|
|
|
| Subtotal |
|
|
| 31,050 |
|
Bonds
Institution |
|
|
| 06.30.2013 |
|
|
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
|
Bonds Provincia Buenos Aires - Argentina |
|
|
| 10,873 |
|
|
| Subtotal |
| 10,873 |
|
Derivative contracts
|
|
|
| 06.30.2013 |
|
|
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
|
Please see details in Note 20 |
|
|
| 1,306,073 |
|
|
| Subtotal |
| 1,306,073 |
|
|
|
|
|
|
|
Total other current financial assets |
| Total |
| 1,347,996 |
|
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 |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Prepaid insurance |
| 849,276 |
| 182,015 |
|
Prepaid expenses |
| 6,205,446 |
| 3,513,515 |
|
Fiscal credits |
| 1,925,092 |
| 14,118,736 |
|
Custom deposits (Argentina) |
| 116,013 |
| 239,879 |
|
Other current assets |
| 256,028 |
| 148,693 |
|
Total |
| 9,351,855 |
| 18,202,838 |
|
Note 6.2 Other non-current, non-financial assets
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Prepaid expenses |
| 2,915,047 |
| 2,515,235 |
|
Fiscal credits |
| 4,878,815 |
| 5,880,191 |
|
Judicial deposits (1) |
| 19,895,980 |
| 18,002,490 |
|
Others |
| 548,329 |
| 529,174 |
|
Total |
| 28,238,171 |
| 26,927,090 |
|
(2) See note 21.2
NOTE 7 — TRADE AND OTHER RECEIVABLES
The composition of trade and other receivables is detailed as follows:
|
| 06.30.2013 (unaudited) |
| 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 |
| 80,185,444 |
| (2,219,359 | ) | 77,966,085 |
| 115,998,388 |
| (1,458,801 | ) | 114,539,587 |
|
Other current debtors |
| 29,820,264 |
| — |
| 29,820,264 |
| 15,782,069 |
| — |
| 15,782,069 |
|
Current commercial debtors |
| 110,005,708 |
| (2,219,359 | ) | 107,786,349 |
| 131,780,457 |
| (1,458,801 | ) | 130,321,656 |
|
Prepayments suppliers |
| 18,872,275 |
| — |
| 18,872,275 |
| 4,021,021 |
| — |
| 4,021,021 |
|
Other current accounts receivable |
| 2,006,809 |
| (26,958 | ) | 1,979,851 |
| 18,502,187 |
| (27,948 | ) | 18,474,239 |
|
Commercial debtors and other current accounts receivable |
| 130,884,792 |
| (2,246,317 | ) | 128,638,475 |
| 154,303,665 |
| (1,486,749 | ) | 152,816,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 7,817,267 |
| — |
| 7,817,267 |
| 6,599,310 |
| — |
| 6,599,310 |
|
Other non-current debtors |
| 2,251 |
| — |
| 2,251 |
| 124,767 |
| — |
| 124,767 |
|
Non-current accounts receivable |
| 7,819,518 |
| — |
| 7,819,518 |
| 6,724,077 |
| — |
| 6,724,077 |
|
Trade and other receivable |
| 138,704,310 |
| (2,246,317 | ) | 136,457,993 |
| 161,027,742 |
| (1,486,749 | ) | 159,540,993 |
|
Aging of debtor portfolio |
| Number of |
| 06.30.2013 |
| Number of |
| 12.31.2012 |
|
|
|
|
| ThCh$ |
|
|
| ThCh$ |
|
Up to date non-securitized portfolio |
| 4,587 |
| 17,884,537 |
| 8,514 |
| 59,686,698 |
|
1 and 30 days |
| 29,484 |
| 37,525,320 |
| 30,523 |
| 51,451,804 |
|
31 and 60 days |
| 565 |
| 499,482 |
| 484 |
| 784,192 |
|
61 and 90 days |
| 545 |
| 1,117,216 |
| 346 |
| 951,083 |
|
91 and 120 days |
| 713 |
| 22,710,509 |
| 273 |
| 316,787 |
|
121 and 150 days |
| 303 |
| 807,550 |
| 282 |
| 34,370 |
|
151 and 180 days |
| 290 |
| 555,640 |
| 264 |
| 307,727 |
|
181 and 210 days |
| 357 |
| 706,984 |
| 280 |
| 176,493 |
|
211 and 250 days |
| 369 |
| 411,515 |
| 276 |
| 251,247 |
|
More than 250 days |
| 337 |
| 5,783,958 |
| 1,362 |
| 8,637,297 |
|
Total |
| 37,550 |
| 88,002,711 |
| 42,604 |
| 122,597,698 |
|
|
| 06.30.2013 |
|
|
| 12.31.2012 |
|
|
| (unaudited) |
|
|
| ThCh$ |
|
|
| ThCh$ |
|
|
|
|
|
Current comercial debtors |
| 80,185,444 |
|
|
| 115,998,388 |
|
Non-current comercial debtors |
| 7,817,267 |
|
|
| 6,599,310 |
|
Total |
| 88,002,711 |
|
|
| 122,597,698 |
|
The movement of allowance for doubtful accounts between January 1 and June 30, 2013 and January 1 and December 31,2012 are presented below:
|
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Opening balance |
| 1,486,749 |
| 1,544,574 |
|
Bad debt expense |
| 1,842,517 |
| 976,331 |
|
Write-off of accounts receivable |
| (1,076,188 | ) | (843,766 | ) |
Decrease due to foreign exchange differences |
| (6,761 | ) | (190,390 | ) |
Movement |
| 759,568 |
| (57,825 | ) |
Ending balance |
| 2,246,317 |
| 1,486,749 |
|
NOTE 8 — INVENTORIES
The composition of inventory balances is detailed as follows:
|
| Current |
| ||
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Raw materials |
| 42,627,644 |
| 41,942,176 |
|
Finished goods |
| 27,518,019 |
| 22,792,255 |
|
Spare parts |
| 13,809,602 |
| 14,479,488 |
|
Merchandise |
| 10,101,051 |
| 8,797,194 |
|
Supplies |
| 5,482,241 |
| 1,125,276 |
|
Work in progress |
| 177,528 |
| 705,637 |
|
Other inventories |
| 917,605 |
| 1,504,926 |
|
Obsolescence provision (1) |
| (2,582,521 | ) | (2,027,126 | ) |
Total |
| 98,051,169 |
| 89,319,826 |
|
The cost of inventory recognized as cost of sales is ThCh$421,144,650 and ThCh$313,996,688 at June 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 June 30, 2013, the Company had a taxable profits fund of ThCh$34,563,910, comprised of profits with credits for first category income tax amounting to ThCh$34,338,113 and profits without credits amounting to ThCh$225,797.
9.1 Current tax assets
Current tax receivables break down as follows:
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Monthly provisional payments |
| 7,812,787 |
| 2,319,627 |
|
Tax credits (1) |
| 83,467 |
| 559,766 |
|
Total |
| 7,896,254 |
| 2,879,393 |
|
(2) 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 |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
Income tax expense |
| 1,281,496 |
| 355,363 |
|
Other |
| — |
| 759,447 |
|
Total |
| 1,281,496 |
| 1,114,810 |
|
9.3 Income tax expense
The current and deferred income tax expenses for the periods ended June 30, 2013 and 2012 are detailed as follows:
Item |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
|
Current income tax expense |
| 11,081,681 |
| 12,674,424 |
|
Adjustment to current income tax from the previous fiscal year |
| (2,544,819 | ) | 208,755 |
|
Other current income tax expenses |
| 384,194 |
| 472,839 |
|
Current income tax expense |
| 8,921,056 |
| 13,356,018 |
|
Deferred income tax expenses |
| 6,157,471 |
| 2,827,916 |
|
Total deferred income tax expenses |
| 6,157,471 |
| 2,827,916 |
|
Total income tax expense |
| 15,078,527 |
| 16,183,934 |
|
9.4 Deferred income taxes
The net cumulative balances of temporary differences which give rise to deferred tax assets and liabilities are shown below:
|
| 06.30.2013 (unaudited) |
| 12.31.2012 |
| ||||
Temporary differences |
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
| 1,336,322 |
| 29,544,341 |
| 432,181 |
| 29,494,188 |
|
Obsolescence provision |
| 560,565 |
| — |
| 637,675 |
| — |
|
Employee benefits |
| 1,644,274 |
| 5,018 |
| 1,807,163 |
| — |
|
Post-employment benefits |
| 51,976 |
| 329,605 |
| — |
| 277,510 |
|
Tax loss carried-forwards (1) and (2) |
| 4,806,994 |
| — |
| 9,026,314 |
| — |
|
Contingency provision |
| 2,622,264 |
| — |
| 2,020,821 |
| — |
|
Foreign exchange differences (Foreign Subsidiaries) (4) |
| — |
| 7,691,488 |
| — |
| 9,145,349 |
|
Allowance for doubtful accounts |
| 371,258 |
| — |
| 350,319 |
| — |
|
Tax resulting from holding inventories (Argentina) |
| — |
| — |
| 150,486 |
| — |
|
Tax incentives (Brazil) (3) |
| — |
| 12,534,065 |
| — |
| 10,930,694 |
|
Assets and liabilities for placement of bonds |
| 370,247 |
| 133,607 |
| 370,245 |
| 77,316 |
|
Lease liabilities |
| 193,382 |
| 217,248 |
| 430,476 |
| — |
|
Inventories |
| 208,305 |
| 239,335 |
| — |
| 127,550 |
|
Distribution rights |
| — |
| 77,110,657 |
| — |
| 76,559,423 |
|
Others |
| 412,076 |
| 1,070,358 |
| 997,372 |
| 1,025,648 |
|
Subtotal |
| 12,577,663 |
| 128,875,722 |
| 16,223,052 |
| 127,637,678 |
|
Net Liabilities |
| — |
| 116,298,059 |
| — |
| 111,414,626 |
|
(5) 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$4,527,247 and other minor subsidiaries in Chile ThCh$279,747. Tax losses in Chile do not have an expiration date.
(6) 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$5,280,865.
(7) This corresponds to tax incentives in Brazil that consist of a tax withholding reduction that are recorded under income statement, but under tax rules they must be recorded in equity, and cannot be distributed as dividends.
(8) Deferred tax generated by exchange differences upon translation of intercompany accounts with the Brazilian subsidiary - Rio de Janeiro Refrescos Ltda. that are recorded to other comprehensive income, but under tax rules they are taxable in Brazil as they incur.
9.5 Deferred tax liability movement
The movement in deferred income tax accounts is as follows:
Item |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
| ThCh$ |
|
|
| ThCh$ |
|
|
|
|
|
|
|
|
|
Opening Balance |
| 111,414,626 |
| 35,245,490 |
|
Increase due to merger |
| — |
| 76,544,806 |
|
Increase in deferred tax liabilities |
| 4,324,861 |
| 4,453,994 |
|
Decrease due to foreign currency translation |
| 558,572 |
| (4,829,664 | ) |
Movements |
| 4,883,433 |
| 76,169,136 |
|
Ending balance |
| 116,298,059 |
| 111,414,626 |
|
9.6 Distribution of domestic and foreign tax expenses
As of June 30, 2013 and 2012, domestic and foreign tax expenses are detailed as follows:
Income tax |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
|
Current income taxes |
|
|
|
|
|
Foreign |
| (5,574,998 | ) | (10,963,827 | ) |
Domestic |
| (3,346,058 | ) | (2,392,191 | ) |
Current income tax expense |
| (8,921,056 | ) | (13,356,018 | ) |
|
|
|
|
|
|
Deferred income taxes |
|
|
|
|
|
Foreign |
| (6,049,791 | ) | (2,508,513 | ) |
Domestic |
| (107,680 | ) | (319,403 | ) |
Deferred income tax expense |
| (6,157,471 | ) | (2,827,916 | ) |
Income tax expense |
| (15,078,527 | ) | (16,183,934 | ) |
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 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Net income before taxes |
| 56,114,740 |
| 52,256,860 |
|
Tax expense at legal rate (18.5%) |
| — |
| (9,667,519 | ) |
Tax expense at legal rate (20.0%) |
| (11,222,948 | ) | — |
|
Effect of a different tax rate in other jurisdictions |
| (4,122,064 | ) | (5,890,906 | ) |
|
|
|
|
|
|
Permanent differences: |
|
|
|
|
|
Non-taxable revenues |
| 1,091,815 |
| 484,633 |
|
Non-deductible expenses |
| (399,847 | ) | (605,284 | ) |
Other decreases in charges for legal taxes |
| (425,483 | ) | (504,858 | ) |
Adjustments to tax expense |
| 266,485 |
| (625,509 | ) |
|
|
|
|
|
|
Tax expense at effective rate |
| (15,078,527 | ) | (16,183,934 | ) |
Effective rate |
| 26.9 | % | 31.0 | % |
Below are the income tax rates applicable in each jurisdiction where the Company operates:
|
| Rate |
| ||
Country |
| 2013 |
| 2012 |
|
Chile |
| 20 | % | 18.5 | % |
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 |
| 06.30.2013 |
| 12.31.2012 |
| 06.30.2013 |
| 12.31.2012 |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
| (unaudited) |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Construction in progress |
| 45,401,949 |
| 61,735,710 |
| — |
| — |
| 45,401,949 |
| 61,735,710 |
|
Land |
| 69,017,856 |
| 57,134,715 |
| — |
| — |
| 69,017,856 |
| 57,134,715 |
|
Buildings |
| 171,126,271 |
| 163,759,761 |
| (31,081,984 | ) | (31,980,362 | ) | 140,044,287 |
| 131,779,399 |
|
Plant and equipment |
| 354,627,266 |
| 346,179,261 |
| (167,117,533 | ) | (169,999,912 | ) | 187,509,733 |
| 176,179,349 |
|
Information technology |
| 13,556,807 |
| 12,429,618 |
| (8,127,019 | ) | (6,629,395 | ) | 5,429,788 |
| 5,800,223 |
|
Fixed facilities and accessories |
| 46,979,591 |
| 40,282,483 |
| (17,337,727 | ) | (15,443,891 | ) | 29,641,864 |
| 24,838,592 |
|
Vehicles (2) |
| 11,648,348 |
| 11,134,161 |
| (2,342,555 | ) | (3,298,464 | ) | 9,305,793 |
| 7,835,697 |
|
Leasehold improvements |
| 722,741 |
| 130,240 |
| (142,787 | ) | (120,818 | ) | 579,954 |
| 9,422 |
|
Other property, plant and equipment (1) |
| 322,777,378 |
| 294,974,382 |
| (210,060,762 | ) | (183,736,764 | ) | 112,716,616 |
| 111,237,618 |
|
Total |
| 1,035,858,207 |
| 987,760,331 |
| (436,210,367 | ) | (411,209,606 | ) | 599,647,840 |
| 576,550,725 |
|
(3) Other property, plant and equipment is composed of bottles, market assets, furniture and other minor assets.
(4) 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 June 30, 2013 and December 31, 2012 is detailed as follows
Other property, plant and equipment |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Bottles |
| 61,073,221 |
| 59,983,147 |
|
Marketing and promotional assets |
| 32,325,259 |
| 40,251,550 |
|
Other property, plant and equipment |
| 19,318,136 |
| 11,002,921 |
|
Total |
| 112,716,616 |
| 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 June 30, 2013 and January 1 and December 31, 2012
For the period ended 06.30.2013 |
| 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 |
| 27,239,588 |
| 13,061,528 |
| 4,294,756 |
| 5,979,481 |
| 185,795 |
| 96,888 |
| 563,242 |
| — |
| 27,503,751 |
| 78,925,029 |
|
Disposals |
| (5,505 | ) | — |
| (6,501 | ) | (2,320,603 | ) | (212 | ) | — |
| — |
| — |
| 517,911 |
| (1,814,910 | ) |
Transfers between items of property, plant and equipment |
| (42,978,492 | ) | — |
| 8,621,639 |
| 26,044,111 |
| 1,236,259 |
| 5,949,767 |
| 1,863,593 |
| 595,811 |
| (1,332,688 | ) | — |
|
Depreciation expense |
| — |
| — |
| (1,976,489 | ) | (13,888,799 | ) | (885,046 | ) | (1,003,377 | ) | (809,747 | ) | (25,633 | ) | (19,284,343 | ) | (37,873,434 | ) |
Increase (decrease) due to foreign currency translation differences |
| (589,352 | ) | (239,086 | ) | (1,511,853 | ) | (2,667,504 | ) | (905,852 | ) | (91,734 | ) | (146,992 | ) | 354 |
| (519,263 | ) | (6,671,282 | ) |
Other increase (decrease) |
| — |
| (939,301 | ) | (1,156,664 | ) | (1,816,302 | ) | (1,379 | ) | (148,272 | ) | — |
| — |
| (5,406,370 | ) | (9,468,288 | ) |
Total movements |
| (16,333,761 | ) | 11,883,141 |
| 8,264,888 |
| 11,330,384 |
| (370,435 | ) | 4,803,272 |
| 1,470,096 |
| 570,532 |
| 1,478,998 |
| 23,097,115 |
|
Ending balance at June 30, 2013 (unaudited) |
| 45,401,949 |
| 69,017,856 |
| 140,044,287 |
| 187,509,733 |
| 5,429,788 |
| 29,641,864 |
| 9,305,793 |
| 579,954 |
| 112,716,616 |
| 599,647,840 |
|
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 June 30, 2013 and December 31, 2012 are detailed as follows:
11.1 Accounts receivable:
11.1.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Chilean pesos |
| 2,933,776 |
| 4,893,956 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 429,259 |
|
|
|
96.517.210-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Chilean pesos |
| 352,316 |
| 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 |
| 1,983 |
| 20,058 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Chilean pesos |
| 405 |
| 301 |
|
|
|
|
| Total |
|
|
|
|
| 3,717,739 |
| 5,324,389 |
|
11.1.2 Non current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 8,266 |
| 7,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 8,266 |
| 7,197 |
|
11.2 Accounts Payable:
11.2.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
| 9,162,463 |
| 11,624,070 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Brazilian Real |
| 3,974,519 |
| 6,721,378 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Chilean pesos |
| 2,588,169 |
| 5,441,206 |
|
Foreign |
| Coca-Cola Perú |
| Shareholder |
| Peru |
| Dollars |
| 5,039,241 |
| — |
|
Foreign |
| Leão Júnior S.A. |
| Associate |
| Brazil |
| Brazilian Real |
| 2,394,553 |
| — |
|
Foreign |
| SRSA Participações Ltda |
| Associate |
| Brazil |
| Brazilian Real |
| 4,091,585 |
| — |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Chilean pesos |
| 149,139 |
| 259,613 |
|
|
|
|
| Total |
|
|
|
|
| 27,399,669 |
| 32,727,212 |
|
11.3 Transactions:
Taxpayer ID |
| Company |
| Relationship |
| Country of |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of concentrates |
| Chilean pesos |
| 57,104,352 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean pesos |
| 4,643,210 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean pesos |
| 1,348,027 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of services and others |
| Chilean pesos |
| 780,073 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean pesos |
| 17,999,222 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean pesos |
| 1,705,955 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of packaging |
| Chilean pesos |
| 1,444,581 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of services and others |
| Chilean pesos |
| 162,385 |
|
96.891.720-K |
| Embonor S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 8,913,473 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 604,579 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Purchase of concentrates |
| Brazilian Reais |
| 41,739,858 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Reimbursement and other purchases |
| Brazilian Reais |
| 351,623 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to shareholder |
| Brazil |
| Advertising participation payment |
| Brazilian Reais |
| 7,362,687 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Purchase of concentrates |
| Argentine pesos |
| 41,860,731 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising rights, rewards and others |
| Argentine pesos |
| 1,233,538 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Collection of advertising participation |
| Argentine pesos |
| 3,509,567 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Purchase of raw materials |
| Chilean pesos |
| 713,453 |
|
Foreign |
| Coca-Cola Peru |
| Related to shareholder |
| Peru |
| Purchase of concentrates and marketing expenses recovery |
| Chilean pesos |
| 297,343 |
|
84.505.800-8 |
| Vendomática S.A. |
| Related to director |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 497,793 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Investment in mutual funds |
| Chilean pesos |
| 6,758,000 |
|
97.032.000-8 |
| BBVA Administradora General de Fondos |
| Related to director |
| Chile |
| Redemption of mutual funds |
| Chilean pesos |
| 6,758,000 |
|
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 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
|
Executive wages, salaries and benefits |
| 2,393,288 |
| 2,604,657 |
|
Director allowances |
| 756,000 |
| 552,000 |
|
Total |
| 3,149,288 |
| 3,156,657 |
|
NOTE 12 — EMPLOYEE BENEFITS
As of June 30, 2013 and December 31, 2012, the Company had recorded reserves for profit sharing and for bonuses totaling ThCh$5,267,355 and ThCh$8,240,460, respectively.
This liability is included in other non-current non-financial liabilities in the statement of financial position.
Employee benefits expense is allocated between the cost of sales, cost of marketing, distribution costs and administrative expenses.
12.1 Personnel expenses
Personnel expenses included in the consolidated statement of income statement are as follows:
Description |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
|
Wages and salaries |
| 75,677,330 |
| 49,639,223 |
|
Employee benefits |
| 18,863,659 |
| 12,562,612 |
|
Severance and post-employment benefits |
| 2,047,704 |
| 1,279,880 |
|
Other personnel expenses |
| 3,651,395 |
| 2,879,273 |
|
Total |
| 100,240,088 |
| 66,360,988 |
|
12.2 Number of Employees
|
| 06.30.2013 |
| 06.30.2012 |
|
|
|
|
|
|
|
Number of employees |
| 11,760 |
| 6,790 |
|
|
|
|
|
|
|
Number of average employees |
| 11,738 |
| 6,694 |
|
12.3 Post-employment benefits
This item represents post employment benefits which are determined as stated in Note 2.17.
Post-employment benefits |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh |
|
|
|
|
|
|
|
Non-current provision |
| 7,056,527 |
| 7,037,122 |
|
Total |
| 7,056,527 |
| 7,037,122 |
|
12.4 Post-employment benefits movement
The movements of post-employment benefits for the period ended June 30, 2013 and the year ended December 31, 2012 are detailed as follows:
Movements |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 7,037,122 |
| 5,130,015 |
|
Increase due to merger |
| — |
| 189,921 |
|
Service costs |
| 341,870 |
| 1,500,412 |
|
Interest costs |
| 66,336 |
| 158,235 |
|
Net actuarial losses |
| 576,697 |
| 1,010,136 |
|
Benefits paid |
| (965,498 | ) | (951,597 | ) |
Total |
| 7,056,527 |
| 7,037,122 |
|
12.5 Assumptions
The actuarial assumptions used at June 30, 2013 and December 31, 2012 were:
Assumption |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
Discount rate (1) |
| 4.2 | % | 5.1 | % |
Expected salary increase rate (1) |
| 3.5 | % | 4.4 | % |
Turnover rate |
| 5.4 | % | 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 |
| 06.30.2013 |
| 12.31.2012 |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| % |
| % |
|
86.881.400-4 |
| Envases CMF S.A. (1) |
| Chile |
| Chilean Peso |
| 17,172,787 |
| 17,848,010 |
| 50.00 | % | 50.00 | % |
Foreign |
| Leao Alimentos e Bebidas Ltda. (4) |
| Brazil |
| Brazilian Real |
| 14,135,227 |
| — |
| 9.57 | % | — |
|
Foreign |
| Kaik Participacoes Ltda. (2) |
| Brazil |
| Brazilian Real |
| 1,156,874 |
| 1,172,641 |
| 11.32 | % | 11.31 | % |
Foreign |
| SRSA Participacoes Ltda. (4) |
| Brazil |
| Brazilian Real |
| 81,128 |
| — |
| 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 |
| 33,384,750 |
| 34,709,914 |
| 40.00 | % | 40.00 | % |
Foreign |
| Holdfab2 Participacoes Societarias Ltda. (4) |
| Brazil |
| Brazilian Real |
| — |
| 9,761,907 |
| — |
| 36.40 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 65,930,766 |
| 73,080,061 |
|
|
|
|
|
(5) 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.
(6) 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.
(7) Corresponds to the purchase of a 40% ownership interest in the Brazilian company for an amount of ThCh33,496,920 during the last quarter of 2012.
(8) 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$ 3,809,524 at carrying value, and consequently eliminating the proportional part of the excess value obtained in the corporate restructuring for an amount of ThCh$1,585,705.
13.2 Movement
The movement of investments in associates using equity method of accounting is shown below, for the period ended June 30, 2013 and the year ended December 31, 2012:
Details |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| 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. |
| (14,368,373 | ) | — |
|
Increase in interest in new company Leao Alimentos e Bebidas Ltda. By 9.57% |
| 12,800,688 |
| — |
|
Dividends received |
| (1,682,883 | ) | (402,148 | ) |
Share of profit |
| 871,881 |
| 2,409,110 |
|
Amortization of property plant and equipment sold to Envases CMF |
| 42,633 |
| 85,266 |
|
Amortization of Fair Value in Vital Jugos S. A. |
| — |
| (77,475 | ) |
Decrease due to foreign currency translation differences |
| (4,813,241 | ) | (3,652,740 | ) |
Deconsolidation of certain investments under equity method of accounting due to Polar merger (1) |
| — |
| (22,466,682 | ) |
Ending Balance |
| 65,930,766 |
| 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 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$2,380,320.
13.3 Reconciliation of share of profit in investments in associates:
Details |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
|
Share of profit of associates |
| 871,881 |
| 1,459,285 |
|
|
|
|
|
|
|
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) |
| (289,561 | ) | (371,321 | ) |
Amortization of gain on sale of property plant and equipment to Envases CMF |
| 42,633 |
| 42,633 |
|
Amortization of fair value adjustments related to Vital acquisition |
| — |
| (51,650 | ) |
Income Statement Balance |
| 624,953 |
| 1,078,947 |
|
13.4 Summary financial information of associates:
The attached table presents summarized information regarding the Company´s equity investees as of June 30, 2013:
|
| Envases CMF |
| Sorocaba |
| Kaik |
| SRSA |
| Leao |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Total assets |
| 54,742,106 |
| 38,890,191 |
| 10,220,045 |
| 3,899,072 |
| 345,318,844 |
|
Total liabilities |
| 19,032,268 |
| 18,271,365 |
| 43 |
| 3,696,252 |
| 185,341,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
| 19,439,751 |
| 5,188,747 |
| 89,307 |
| — |
| 137,460,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) of associate |
| 440,979 |
| 580,004 |
| 89,307 |
| 198,242 |
| 5,532,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting date |
| 06/30/2013 |
| 05/31/2013 |
| 05/31/2013 |
| 05/31/2013 |
| 05/31/2013 |
|
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:
|
| June 30, 2013 (unaudited) |
| December 31, 2012 |
| ||||||||
|
| Gross |
| Cumulative |
| Net |
| Gross |
| Cumulative |
| Net |
|
Description |
| Amount |
| Amortization |
| Amount |
| Amount |
| Amortization |
| Amount |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Water rights |
| 493,740 |
| (89,743 | ) | 403,997 |
| 497,998 |
| (90,041 | ) | 407,957 |
|
Distribution rights (1) |
| 465,061,853 |
| — |
| 465,061,853 |
| 459,320,270 |
| — |
| 459,320,270 |
|
Software |
| 14,875,801 |
| (8,939,007 | ) | 5,936,794 |
| 13,597,796 |
| (8,743,750 | ) | 4,854,046 |
|
Total |
| 480,431,394 |
| (9,028,750 | ) | 471,402,644 |
| 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:
|
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Chile |
| 300,305,727 |
| 300,305,727 |
|
Paraguay |
| 162,460,528 |
| 156,627,248 |
|
Argentina |
| 2,295,598 |
| 2,387,295 |
|
Total |
| 465,061,853 |
| 459,320,270 |
|
The movement and balances of identifiable intangible assets are detailed as follows for the period January 1 to June 30, 2013 and January 1 to December 31, 2012:
|
| June 30, 2013 (unaudited) |
| December 31, 2012 |
| ||||||||||||
|
| Distribution |
| Water |
|
|
|
|
| Distribution |
| Water |
|
|
|
|
|
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 |
| — |
| — |
| 1,902,326 |
| 1,902,326 |
| — |
| — |
| 3,506,266 |
| 3,506,266 |
|
Increase due to merger |
| — |
| — |
| — |
| — |
| 459,393,920 |
| — |
| 1,083,184 |
| 460,477,104 |
|
Amortization |
| — |
| (2,895 | ) | (741,910 | ) | (744,805 | ) | — |
| (6,585 | ) | (547,481 | ) | (554,066 | ) |
Other increases (decreases) |
| 5.741.583 |
| (1,065 | ) | (77,668 | ) | 5,662,850 |
| (73,650 | ) | (7,921 | ) | 95,683 |
| 14,112 |
|
Ending balance |
| 465,061,853 |
| 403,997 |
| 5,936,794 |
| 471,402,644 |
| 459,320,270 |
| 407,957 |
| 4,854,046 |
| 464,582,273 |
|
14.2 Goodwill
Movement in goodwill is detailed as follows:
Period ended June 31,2013 (unaudited)
|
|
|
|
|
|
|
| Foreign currency |
|
|
|
Cash generating unit |
| 01.01.2013 |
| Additions |
| Disposals or |
| different from |
| 06.30.2013 |
|
|
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Chile operation |
| 8,503,023 |
| — |
| — |
| — |
| 8,503,023 |
|
Brazilian operation |
| 35,536,967 |
| — |
| — |
| (876,959 | ) | 34,660,008 |
|
Argentine operation |
| 13,837,339 |
| — |
| — |
| (493,582 | ) | 13,343,757 |
|
Paraguayan operation |
| 6,915,412 |
| — |
| — |
| 257,551 |
| 7,172,963 |
|
Total |
| 64,792,741 |
| — |
| — |
| (1,112,990 | ) | 63,679,751 |
|
Year ended December 31, 2012
|
|
|
|
|
|
|
| Foreign currency |
|
|
|
|
|
|
|
|
|
|
| translation differences where |
|
|
|
|
|
|
|
|
|
|
| functional currency is |
|
|
|
|
|
|
|
|
| Diposals or |
| different from |
|
|
|
Cash generating unit |
| 01.01.2012 |
| Additions (1) |
| 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 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 |
| 06.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 117,501,064 |
| 87,278,613 |
|
Bonds payable |
| 7,486,476 |
| 4,376,648 |
|
Deposits in guarantee |
| 14,089,783 |
| 13,851,410 |
|
Forward contract obligations (see note 20) |
| — |
| 394,652 |
|
Leasing agreements |
| 509,479 |
| 346,696 |
|
Total |
| 139,586,802 |
| 106,248,019 |
|
Non-current |
| 06.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 52,921,389 |
| 46,353,758 |
|
Bonds payable |
| 121,643,951 |
| 126,356,040 |
|
Leasing agreements |
| 1,293,598 |
| 1,170,397 |
|
Total |
| 175,858,938 |
| 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 |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.83 | % | 6.83 | % | 0 |
| 10,335,540 |
| 10,335,540 |
| 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 | % | 0 |
| 668,712 |
| 668,712 |
| 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 | % | 0 |
| 2,323,523 |
| 2,323,523 |
| 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 | % | 32,059 |
| 1,900,000 |
| 1,932,059 |
| 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 | % | 0 |
| 0 |
| 0 |
| 2,828,742 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Chilean pesos |
| At maturity |
| 6.84 | % | 6.84 | % | 0 |
| 0 |
| 0 |
| 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 | % | 0 |
| 0 |
| 0 |
| 384,618 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| Dollars |
| At maturity |
| 3.35 | % | 3.35 | % | 12,583 |
| 1,521,480 |
| 1,534,063 |
| 1,452,145 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.951.000-4 |
| Banco HSBC |
| Chile |
| Chilean pesos |
| At maturity |
| 6.80 | % | 6.80 | % | 0 |
| 7,562,333 |
| 7,562,333 |
| 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 | % | 12,500 |
| 23,435,413 |
| 23,447,913 |
| 10,694,653 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Unidades de Fomento |
| At maturity |
| 4.30 | % | 4.30 | % | 0 |
| 5,142,879 |
| 5,142,879 |
| 5,031,567 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Chilean pesos |
| At maturity |
| 6.85 | % | 6.85 | % | 0 |
| 10,964,038 |
| 10,964,038 |
| 10,335,540 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Chilean pesos |
| At maturity |
| 6.84 | % | 6.84 | % | 0 |
| 7,017,290 |
| 7,017,290 |
| 7,018,620 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97,036,000-K |
| Banco Santander |
| Chile |
| Dollars |
| At maturity |
| 2.50 | % | 2.50 | % | 0 |
| 5,166,134 |
| 5,166,134 |
| 4,832,261 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.032.000-8 |
| BBVA |
| Chile |
| Chilean pesos |
| At maturity |
| 8.01 | % | 8.01 | % | 10,986,052 |
| 0 |
| 10,986,052 |
| 7,521,185 |
|
76.389.720-6 |
| Vital Aguas S. A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean pesos |
| Daily |
| 9.72 | % | 9.72 | % | 65,083 |
| 0 |
| 65,083 |
| 0 |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Chilean pesos |
| Semiannually |
| 4.29 | % | 4.29 | % | 0 |
| 340,141 |
| 340,141 |
| 674,516 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Nación |
| Argentina |
| Argentine Peso |
| Monthly |
| 14.80 | % | 9.90 | % | 203,371 |
| 747,130 |
| 950,501 |
| 949,545 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 0 |
| 294,543 |
| 294,543 |
| 96,370 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 0 |
| 88,011 |
| 88,011 |
| 27,447 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco BBVA |
| Argentina |
| Argentine Peso |
| Monthly |
| 15.25 | % | 15.25 | % | 25,302 |
| 176,494 |
| 201,796 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Nación |
| Argentina |
| Argentine Peso |
| Monthly |
| 14.80 | % | 9.90 | % | 74,782 |
| 199,556 |
| 274,338 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| At maturity |
| 16.00 | % | 16.00 | % | 0 |
| 34,596 |
| 34,596 |
| 645,870 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santander Río |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 0 |
| 111,657 |
| 111,657 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 0 |
| 57,836 |
| 57,836 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 0 |
| 71,264 |
| 71,264 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 0 |
| 276,304 |
| 276,304 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 0 |
| 276,304 |
| 276,304 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Macro |
| Argentina |
| Argentine Peso |
| Monthly |
| 15.25 | % | 15.25 | % | 51,248 |
| 154,924 |
| 206,172 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco BBVA |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.25 | % | 15.25 | % | 7,037,399 |
| 0 |
| 7,037,399 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Nación |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.50 | % | 15.50 | % | 4,712,497 |
| 0 |
| 4,712,497 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Nuevo Banco Santa Fe |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.00 | % | 15.00 | % | 6,549,329 |
| 0 |
| 6,549,329 |
| 6,500,755 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.50 | % | 15.50 | % | 6,537,050 |
| 0 |
| 6,537,050 |
| 0 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Patagonia |
| Argentina |
| Argentine Peso |
| At maturity |
| 13.75 | % | 13.75 | % | 0 |
| 0 |
| 0 |
| 3,896,499 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Standard Bank |
| Argentina |
| Argentine Peso |
| At maturity |
| 15.50 | % | 15.50 | % | 0 |
| 0 |
| 0 |
| 913 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| VOTORANTIM |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.40 | % | 9.40 | % | 32,930 |
| 98,524 |
| 131,454 |
| 134,864 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| ITAÚ - Finame |
| Brazil |
| Brazilian Real |
| Monthly |
| 6.63 | % | 6.63 | % | 425,788 |
| 1,462,390 |
| 1,888,178 |
| 941,997 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| Banco Santander |
| Brazil |
| Brazilian Real |
| Monthly |
| 7.15 | % | 7.15 | % | 79,576 |
| 227,744 |
| 307,320 |
| 328,872 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| Banco Santander |
| Brazil |
| Brazilian Real |
| Monthly |
| 2.99 | % | 3.52 | % | 0 |
| 0 |
| 0 |
| 525,091 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| ITAÚ |
| Brazil |
| Dollars |
| Monthly |
| 2.992 | % | 2.992 | % | 0 |
| 4,693,698 |
| 4,693,698 |
| 0 |
|
Foreign |
| Operación Swap |
| Brazil |
| O-E |
| ITAU |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.52 | % | 9.12 | % | 0 |
| (4,684,943 | ) | (4,684,943 | ) | 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 117,501,064 |
| 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 |
| years |
| up to 5 years |
| 5 years |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh$ |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| Banco Votorantim |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.40 | % | 9.40 | % | 131,985 |
| — |
| — |
| 131,985 |
| 202,358 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| Banco Itaú |
| Brazil |
| Brazilian Real |
| Monthly |
| 6.63 | % | 6.63 | % | 7,281,018 |
| 1,273,288 |
| — |
| 8,554,306 |
| 4,069,577 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| Banco Santander Río |
| Brazil |
| Brazilian Real |
| Monthly |
| 7.15 | % | 7.15 | % | 938,326 |
| 20,928 |
| — |
| 959,254 |
| 1,134,032 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| O-E |
| Banco Itaú |
| Brazil |
| Dollars |
| Monthly |
| 2.992 | % | 2.992 | % | 18,112,857 |
| 13,584,643 |
| — |
| 31,697,500 |
| 34,056,374 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Nación Bicentenario |
| Argentina |
| Argentine Peso |
| Monthly |
| 14.80 | % | 9.90 | % | 532,148 |
| 88,691 |
| — |
| 620,839 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Nación Bicentenario |
| Argentina |
| Argentine Peso |
| Monthly |
| 14.80 | % | 9.90 | % | 1,977,188 |
| 348,630 |
| — |
| 2,325,818 |
| 2,895,961 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 464,767 |
| — |
| — |
| 464,767 |
| 674,591 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 391,228 |
| — |
| — |
| 391,228 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 453,001 |
| — |
| — |
| 453,001 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santa Fe |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 447,118 |
| — |
| — |
| 447,118 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.00 | % | 15.00 | % | 132,370 |
| — |
| — |
| 132,370 |
| 192,130 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| Monthly |
| 16.00 | % | 16.00 | % | 214,146 |
| — |
| — |
| 214,146 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 1,675,514 |
| — |
| — |
| 1,675,514 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Ciudad de Bs. As. |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 1,675,514 |
| — |
| — |
| 1,675,514 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco BBVA Bicentenario |
| Argentina |
| Argentine Peso |
| Monthly |
| 15.25 | % | 15.25 | % | 529,406 |
| 176,494 |
| — |
| 705,900 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Santander Río |
| Argentina |
| Argentine Peso |
| Quarterly |
| 15.25 | % | 15.25 | % | 836,722 |
| — |
| — |
| 836,722 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Macro |
| Argentina |
| Argentine Peso |
| Monthly |
| 15.25 | % | 15.25 | % | 535,495 |
| 200,811 |
| — |
| 736,306 |
| — |
|
96.705.990-0 |
| Envases Central |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Unidad de Fomento |
| At maturity |
| 4.29 | % | 4.29 | % | 569,101 |
| — |
| — |
| 569,101 |
| 568,735 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.004.000-5 |
| Banco Chile |
| Chile |
| $ Chilenos |
| 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 |
| $ Chilenos |
| At maturity |
| 6.39 | % | 6.39 | % | — |
| — |
| — |
| — |
| 1,900,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 52,921,389 |
| 46,353,758 |
|
(2) 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. The loan has been recorded in the financial statements at the fair value, i.e. using the market rate of 14.8% per annum. The interest differential of ThCh$ 382,028 is recorded as a component of the property, plant and equipment balance and depreciated over its estimated useful life.
15.2.1 Bonds payable
|
| Current |
| Non-Current |
| Total |
| ||||||
Composition of bonds payable |
| 06.30.2013 |
| 12.31.2012 |
| 06.30.2013 |
| 12.31.2012 |
| 06.30.2013 |
| 12.31.2012 |
|
|
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Bonds (face value) |
| 7,688,358 |
| 4,728,582 |
| 122,506,614 |
| 127,169,976 |
| 130,194,972 |
| 131,898,558 |
|
Expenses of bond issuance and discounts on placement |
| (201,882 | ) | (351,934 | ) | (862,663 | ) | (813,936 | ) | (1,064,545 | ) | (1,165,870 | ) |
Net balance presented in statement of financial position |
| 7,486,476 |
| 4,376,648 |
| 121,643,951 |
| 126,356,040 |
| 129,130,427 |
| 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 |
| 06.30.2013 |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
| 3,110,364 |
| 255,057 |
|
SVS Registration No, 254, 6/13/2001 |
| B |
| 3.298.646 |
| UF |
| 6.5 | % | 06.01.2026 |
| Semi- annually |
| 12.01.2013 |
| 4,071,661 |
| 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 |
| 506,333 |
| 508,880 |
|
Total current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,688,358 |
| 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 |
| 19,996,086 |
| 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 |
| 68,231,523 |
| 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 |
| 34,279,005 |
| 34,261,125 |
|
Total non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 122,506,614 |
| 127,169,976 |
|
Accrued interest included in the current portion of bonds totaled ThCh$ 1,143,546 and ThCh$1,156,542 at June 30, 2013 and December 31, 2012, respectively
15.2.3 Non-current maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| Year of maturity |
| non-current |
| ||||||||
|
| Series |
| 2014 |
| 2015 |
| 2016 |
| 2017 |
| Después |
| 06.30.2013 |
|
|
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
SVS Registration 640, 8/23/2010 |
| A |
| 2,856,583 |
| 5,713,167 |
| 5,713,167 |
| 5,713,169 |
| — |
| 19,996,086 |
|
SVS Registration 254, 6/13/2001 |
| B |
| 1,933,063 |
| 4,053,615 |
| 4,317,098 |
| 4,597,708 |
| 53,330,039 |
| 68,231,523 |
|
SVS Registration 641,08/23/2010 |
| C |
| — |
| — |
| — |
| — |
| 34,279,005 |
| 34,279,005 |
|
Total |
|
|
| 4,789,646 |
| 9,766,782 |
| 10,030,265 |
| 10,310,877 |
| 87,609,044 |
| 122,506,614 |
|
15.2.4 Market rating
The bonds issued on the Chilean market had the following rating at June 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, for a total of UF 6,200,000. Of that amount, UF 5,647,105 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 in the case of Series B bonds. 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 June 30, 2013 the amounts included in this restriction are the following: (unaudited) |
| ThCh$ |
|
Other current financial liabilities |
| 139,586,802 |
|
Other non-current financial liabilities |
| 175,858,938 |
|
Total consolidated outstanding liabilities |
| 864,967,967 |
|
Based on these figures Consolidated Assets free from pledges, mortgages and other taxes are equal to 0.36 times of non consolidated outstanding liabilities
· For Series A and C bonds, 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 June 30, 2013 the amounts included in this restriction are as follows: (unaudited) |
| ThCh$ |
|
Cash and cash equivalents |
| 48,083,818 |
|
Other current financial liabilities |
| 139,586,802 |
|
Other non-current financial liabilities |
| 175,858,938 |
|
Total Consolidated Equity |
| 864,967,967 |
|
Based on these figures, the level of indebtedness amounts to 0.31 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 June 30, 2013 values of the items included in this restriction are |
| ThCh$ |
|
Consolidated Assets free of pledges, mortgages or other encumbrances |
| 1,513,884,116 |
|
Non-guaranteed Consolidated Liabilities |
| 670,396,316 |
|
Based on these figures, the consolidated assets free of liens, mortgages or other charges equivalent to 2.26 times of the unsecured consolidated liabilities.
· For Series B bonds the franchise of The Coca-Cola Company in Chile, namely Metropolitan Region, 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.
· For Series B bonds, 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.
· For A and C lines, 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.
· �� For A and C lines, 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 June 30, 2013, the values of the items included in these restrictions are as follows: |
| ThCh$ |
|
(+) Ebitda consolidated between January 1 and June 30, 2013 |
| 111,340,006 |
|
(+) Ebitda consolidated between January 1 and December 31, 2012 |
| 207,987,799 |
|
(-) Ebitda consolidated between January 1 and June 30, 2012 |
| 85,876,318 |
|
Ebitda consolidated 12 months (between July 1, 2012 and June 30, 2013) |
| 233,451,487 |
|
|
|
|
|
(+) Finance income consolidated between January 1 and June 30, 2013 |
| 1,248,613 |
|
(+)Finance income consolidated between January 1 and December 31, 2012 |
| 2,728,059 |
|
(-)Finance income consolidated between January 1 and June 30, 2012 |
| 1,455,563 |
|
Finance income consolidated 12 months (between July 1, 2012 and June 30, 2013) (unaudited) |
| 2,521,109 |
|
|
|
|
|
(+)Finance costs consolidated between January 1 and June 30, 2013 |
| 10,086,249 |
|
(+)Finance costs consolidated between January 1 and December 31, 2012 |
| 11,172,753 |
|
(-)Finance costs consolidated between January 1 and June 30, 2012 |
| 4,047,993 |
|
Finance costs consolidated 12 months (between July 1, 2012 and June 30, 2013) (unaudited) |
| 17,211,009 |
|
Based on these figures, the level of net financial coverage (EBITDA / (Finance costs - Interest income)) totals 15.9 times
The Company was in compliance with all financial covenants at June 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 $75 million due in December 2020 and semi-annual interest payments. On June 30, 2013 these titles are entirely belong to Andina and as of December 31, 2012 belong to the subsidiary Abisa Corp S.A., (former Pacific Sterling). On January 1, 2013, Abisa Corp S.A. transferred the totality of this asset to Embotelladora Andina S.A., passing the latter to be the creditor of the above mentioned Brazilian subsidiary. As a result, in these consolidated financial statements the assets and liabilities related to the transaction have been eliminated. In addition, the transaction has been treated as a net investment of the group in the Brazilian subsidiary, consequently the effects of exchange rate differences between the dollar and the functional currency of each one have been carried to other comprehensive income.
15.3.1 Forward contract obligations
Please see details in Note 20.
15.4.1 Current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortización |
| Effective |
| Nominal |
| Up to |
| 90 days |
| at |
| at |
| ||||||
Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Year |
| Rate |
| Rate |
| 90 días |
| 1 año |
| (unaudited) |
| 12.31.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian Real |
| Monthly |
| 10.21 | % | 10.22 | % | 115,473 |
| 316,014 |
| 431,487 |
| 255,122 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.65 | % | 9.47 | % | 6,742 |
| 21,212 |
| 27,954 |
| 45,493 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 11,360 |
| 38,678 |
| 50,038 |
| 46,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 509,479 |
| 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 |
| (unaudited) |
| 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 | % | 755,279 |
| — |
| — |
| 755,279 |
| 599,593 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian Real |
| Monthly |
| 9.65 | % | 9.47 | % | 45,317 |
| — |
| — |
| 45,317 |
| 63,561 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 166,746 |
| 326,256 |
| — |
| 493,002 |
| 507,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 1,293,598 |
| 1,170,397 |
|
NOTE 16 — TRADE AND OTHER CURRENT ACCOUNTS PAYABLE
c) Trade and other current accounts payable are detailed as follows:
Item |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Trade accounts payable |
| 120,739,355 |
| 159,211,448 |
|
Withholdings |
| 9,015,304 |
| 23,529,819 |
|
Others |
| 67,630 |
| 1,576,506 |
|
Total |
| 129,822,289 |
| 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:
|
| 06.30.2013 |
|
|
| (unaudited) |
|
|
| ThCh$ |
|
Maturity within one year |
| 1,734,075 |
|
Maturity between one year and five years |
| 1,472,921 |
|
Total |
| 3,206,996 |
|
Total expenses related to operating leases maintained by the Company as of June 30, 2013 and 2012 amounted to ThCh$3,114,662 and ThCh$3,782,343, respectively.
NOTA 17 — CURRENT AND NON-CURRENT PROVISIONS
17.1 Balances
The balances of provisions recorded by the Company at June 30, 2013 and December 31, 2012 are detailed as follows:
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Litigation (1) |
| 7,152,606 |
| 6,821,165 |
|
Others |
| 149,534 |
| 195,103 |
|
Total |
| 7,302,140 |
| 7,016,268 |
|
|
|
|
|
|
|
Current |
| 506,110 |
| 593,457 |
|
Non-current |
| 6,796,030 |
| 6,422,811 |
|
Total |
| 7,302,140 |
| 7,016,268 |
|
(2) 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:
|
| 06.30.2013 (unaudited) |
| 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 |
| 34,091 |
| — |
| 34,091 |
| 65,745 |
| 62,372 |
| 128,117 |
|
Increase (decrease) in existing provisions |
| 377,948 |
| (45,569 | ) | 332,379 |
| 851,150 |
| — |
| 851,150 |
|
Payments |
| (419,509 | ) | — |
| (419,509 | ) | (1,168,725 | ) | — |
| (1,168,725 | ) |
Increase (decrease) due to foreign exchange differences |
| 338,911 |
| — |
| 338,911 |
| (1,223,014 | ) | (4,095 | ) | (1,227,109 | ) |
Ending Balance |
| 7,152,606 |
| 149,534 |
| 7,302,140 |
| 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 |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Dividend payable |
| 47,091,650 |
| 99,427 |
|
Employee remuneration payable |
| 5,267,355 |
| 8,240,460 |
|
Accrued vacations |
| 10,608,593 |
| 11,392,231 |
|
Other |
| 923,242 |
| 813,034 |
|
Total |
| 63,890,840 |
| 20,545,152 |
|
|
|
|
|
|
|
Current |
| 63,644,389 |
| 20,369,549 |
|
Non-current |
| 246,451 |
| 175,603 |
|
Total |
| 63,890,840 |
| 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
The paid-in capital of the Company totaled ThCh$270,759,299 as of June 30, 2013, divided into 946,578,736 Series A and B shares. The distribution and classification of these is detailed as follows:
19.1.1 Number of shares:
Series |
| Number of shares |
| Number of |
| Number of |
|
A |
| 473,289,368 |
| 473,289,368 |
| 473,289,368 |
|
B |
| 473,289,368 |
| 473,289,368 |
| 473,289,368 |
|
19.1.2 Capital:
Series |
| Subscribed |
| Paid-in |
|
|
| ThCh$ |
| ThCh$ |
|
A |
| 135,379,649,5 |
| 135,379,649,5 |
|
B |
| 135,379,649,5 |
| 135,379,649,5 |
|
Total |
| 270,759,299,0 |
| 270,759,299,0 |
|
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$4,678,368 have been realized at June 30, 2013 and are available for distribution as dividends in accordance with the following:
|
| Event when amount is |
| Amount of |
| Realized at |
| Amount of |
|
Description |
| realized |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Revaluation of assets |
| Sale or impairment |
| 12,538,123 |
| (2,708,761 | ) | 9,829,362 |
|
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 |
| (423,945 | ) | 505,615 |
|
Deferred taxes complementary accounts |
| Amortization |
| (1,414,383 | ) | 749,705 |
| (664,678 | ) |
Total |
|
|
| 19,260,703 |
| (4,678,368 | ) | 14,582,335 |
|
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 |
| Retained Earnings |
| 12.30 |
| 13.53 |
|
2013 |
| June |
| Interim |
| 2013 |
| 12.30 |
| 13.53 |
|
An additional dividend declared at the Regular Shareholders’ meeting during the month of April 2013 was Ch$47 per Series A share and Ch$51 per Series B share, will be paid during the second half of 2013.
19.3 Reserves
The balance of other reserves include the following:
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Polar acquisition |
| 421,701,520 |
| 421,701,520 |
|
Foreign currency translation reserves |
| (63,306,746 | ) | (63,555,545 | ) |
Cash Flow Hedging Reserve |
| 1,188,347 |
| — |
|
Legal and statutory reserves |
| 5,435,538 |
| 5,435,538 |
|
Total |
| 365,018,659 |
| 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$5,435,538 at December 31, 2009.
19.3.4 Foreign currency translation reserves
This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the consolidated financial statements. Foreign currency translation differences between the receivable held by Abisa Corp S.A. and owed by Rio de Janeiro Refrescos Ltda. are also shown in this account, which has been treated as an investment in Equity Investees (associates and joint ventures). Foreign currency translation reserves are detailed as follows:
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Brazil |
| (31,506,842 | ) | (26,905,052 | ) |
Argentina |
| (32,671,514 | ) | (29,448,998 | ) |
Paraguay |
| 8,191,850 |
| 24,248 |
|
Exchange rate differences in related companies |
| (7,320,240 | ) | (7,225,743 | ) |
Total |
| (63,306,746 | ) | (63,555,545 | ) |
The movement of this reserve for the fiscal periods ended June 30, 2013 and December 31, 2012 respectively is detailed as follows:
Description |
| 06.30.2013 |
| 12.31.2012 |
|
|
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Brazil |
| (4,601,790 | ) | (25,630,195 | ) |
Argentina |
| (3,222,516 | ) | (10,376,803 | ) |
Paraguay |
| 8,167,602 |
| 24,248 |
|
Exchange rate differences in related companies |
| (94,497 | ) | (5,112,916 | ) |
Total |
| 248,799 |
| (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 June 30, 2013 are as follows:
|
| Non-controlling Interests |
| ||||
|
| Percentage |
| Shareholders |
|
|
|
Description |
| % |
| Equity |
| Income |
|
|
|
|
| (unaudited) |
| (unaudited) |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Embotelladora del Atlántico S.A. |
| 0.0171 |
| 16,109 |
| 679 |
|
Andina Empaques Argentina S.A. |
| 0.0209 |
| 1,859 |
| 221 |
|
Paraguay Refrescos S.A. |
| 2.1697 |
| 4,858,385 |
| 104,298 |
|
Inversiones Los Andes Ltda. |
| 0.0001 |
| 49 |
| (2 | ) |
Transportes Polar S.A. |
| 0.0001 |
| 1 |
| — |
|
Vital S.A. |
| 35.0000 |
| 9,119,279 |
| 254,452 |
|
Vital Aguas S.A. |
| 33.5000 |
| 1,863,778 |
| 31,187 |
|
Envases Central S.A. |
| 40.7300 |
| 4,346,729 |
| 235,471 |
|
Andina Inversiones Societarias S.A. |
| 0.0001 |
| 35 |
| 1 |
|
Total |
|
|
| 20,206,224 |
| 626,307 |
|
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:
|
| 06.30.2013 (unaudited) |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 19,541,445 |
| 21,494,768 |
| 41,036,213 |
|
Average weighted number of shares |
| 473,289,368 |
| 473,289,368 |
| 946,578,736 |
|
Earnings per basic and diluted share (in pesos) |
| 41.29 |
| 45.42 |
| 43.35 |
|
|
| 06.30.2012 (unaudited) |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 17,177,927 |
| 18,894,999 |
| 36,072,926 |
|
Average weighted number of shares |
| 380,137,271 |
| 380,137,271 |
| 760,274,542 |
|
Earnings per basic and diluted share (in pesos |
| 45.19 |
| 49.71 |
| 47.45 |
|
NOTA 20 — DERIVATIVE ASSETS AND LIABILITIES
The company held the following derivative liabilities at June 30, 2013 and December 31, 2012:
20.1 Currency forwards of items recognized for accounting purposes:
As of June 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 June 30, 2013 of ThCh$4,684,943 which is presented by deducting the current financial obligations. In addition, excess value of ThCh$1,800,526, generated in the derivative contract have been recognized within other equity reserves of the controller as of June 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$70,400 (ThUS$140,000 at December 31, 2012). Those agreements were recorded at fair value, resulting in a net loss of ThCh$831,652 for the year ended at June 30, 2013 (net gain of ThCh$645,778 at June 30, 2012), and liabilities for derivative contracts of ThCh$1,306,073 were recognized at June 30, 2013 ( 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$1,306,073 and liabilities to ThCh$394,652 at June 30, 2013 and December 31, 2012, respectively, which are classified within the other current non-financial liabilities and are carried at fair value on the statement of financial position. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included in level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3: Inputs for assets and liabilities that are not based on observable market data.
During the period ended June 30, 2013 (unaudited) and December 31, 2012, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.
|
| Fair Value Measurements at June, 30 2013 (unaudited) |
|
|
| ||||
|
| Quoted prices in |
|
|
|
|
|
|
|
|
| for identical |
| Observable |
| Unobservable |
|
|
|
|
| Assets |
| market data |
| market data |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
| — |
| 1,306,073 |
| — |
| 1,306,073 |
|
Total liabilities |
| — |
| 1,306,073 |
| — |
| 1,306,073 |
|
|
| 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$1,609,600. 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.
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$5,186,430. 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$18,246,116 at June 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$138,708. Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.
21.2 Direct guarantees and restricted assets:
Guarantees and restricted assets as of June 30, 2013 and December 31, 2012 are detailed as follows:
Guarantees that involve assets included in the financial statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Provided by |
|
|
| Committed assets |
| Carrying |
| Balance pending payment on the |
| Date of guarantee release |
| ||||||||
Guarantee in favor of |
| Name |
| Relationship |
| Guarantee |
| Type |
| 06.30.2013 |
| 06.30.2013 |
| 12.31.2012 |
| 2013 |
| 2014 |
| ||
|
|
|
|
|
|
|
|
|
| (unaudited) |
| (unaudited) |
|
|
| (unaudited) |
| (unaudited) |
| ||
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ||
Inversiones San Javier |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 130 |
| 130 |
| — |
| — |
| — |
| ||
Guillermo Ogalde Toro |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 500 |
| 500 |
| — |
| — |
| — |
| ||
Bodega San Francisco |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 6,788 |
| 6,788 |
| — |
| — |
| — |
| ||
Gas licuado Lipigas S.A. |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash |
| Cash and cash equivalents |
| 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 |
| 5,453,260 |
| 5,453,260 |
| 5,096,382 |
| — |
| 5,453,260 |
| ||
Previdencia Social |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-financial assets |
| 7,296,140 |
| 7,296,140 |
| 7,635,430 |
| — |
| 7,296,140 |
| ||
Prefeitura |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-financial assets |
| 206,132 |
| 206,132 |
| 223,577 |
| — |
| 206,132 |
| ||
Governo Federal |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-financial assets |
| 334,634 |
| 334,634 |
| 362,954 |
| — |
| 334,634 |
| ||
Governo Estadual |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-financial assets |
| 4,955,950 |
| 4,955,950 |
| 7,126,776 |
| — |
| 4,955,950 |
| ||
Diversos |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Property, plant and equipment, net |
| Property, plant and equipment |
| 1,564,489 |
| 1,564,489 |
| 1,696,889 |
| — |
| 1,564,489 |
| ||
Municipalidad Gral. Alvear |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 7,120 |
| 12,165 |
| 12,165 |
| — |
| 12,165 |
| ||
Municipalidad Bariloche |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 330,780 |
| 511,690 |
| — |
| — |
| 511,690 |
| ||
Municipalidad San Antonio Oeste |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 4,003 |
| 4,003 |
| — |
| — |
| 4,003 |
| ||
Municipalidad Chivilcoy |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 8,403 |
| 8,403 |
| — |
| — |
| 8,403 |
| ||
Municipalidad Carlos Casares |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash |
| Other non-financial assets |
| 1,299,559 |
| 1,299,559 |
| — |
| — |
| 1,299,559 |
| ||
Banco Galicia |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantee for finish operations |
| Other financial assets |
| — |
| — |
| 602,294 |
| — |
| — |
| ||
Banco Galicia |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantee for finish operations |
| Other financial assets |
| — |
| — |
| 579,284 |
| — |
| — |
| ||
|
|
|
|
|
|
|
|
|
| 21,480,167 |
|
|
|
|
|
|
|
|
| ||
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 |
| 06.30.2013 |
| 06.30.2013 |
| 12.31.2012 |
| 2013 |
| 2014 |
|
|
|
|
|
|
|
|
|
|
| (unaudited) |
| (unaudited) |
|
|
| (unaudited) |
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Processes workers |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 568,468 |
| 616,577 |
| — |
| 568,468 |
|
Administrative processes |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 2,045,617 |
| 1,281,123 |
| — |
| 2,045,617 |
|
Federal Government |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 86,931 |
| 94,288 |
| — |
| 86,931 |
|
State Government |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 9,377,543 |
| 10,171,147 |
| — |
| 9,377,543 |
|
Others |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| — |
| 125,060 |
| 11,506 |
| — |
| 125,060 |
|
Ezeiza customs |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantee insurance |
| Export |
| — |
| 33,886 |
| 22,656 |
| — |
| 33,886 |
|
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 June 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 1% for the period January 01 to June 30, 2013 (instead of 0.001%), the Company’s results would have been decreased by ThCh$1,323,394.
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 | % | 32 | % | 28 | % | 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 June 30, 2013 of ThCh$3,359,448. Currently, the Company holds derivative contracts to cover this effect in Chile and Argentina, which do not qualify for hedge accounting according to IAS 39.
The exposure to foreign currency exchange conversion differences of subsidiaries abroad (Brazil, Argentina and Paraguay), due to the differences between monetary assets and liabilities (that is, those denominated in a local currency and consequently exposed to foreign currency translation risk from translation of their functional currency to the presentation currency of the consolidated statements) is hedged only when it is predicted that material adverse differences could occur and when the costs associated with such hedging is deemed reasonable by management. Currently, the Company does not have any of such hedge agreements.
In the period January to June 2013, the Brazilian real and the Argentine peso presented an average devaluation of 2.6% and 3.7%, respectively, with regard to the reporting currency. In the same period in 2013, the Paraguayan Guaraní has presented a 5.0% appreciation with respect to the reporting currency.
Currently in Argentina, there are foreign exchange restrictions and there is a parallel currency market with an exchange rate which is higher than the official rate. If the Argentine peso were to devalue by an additional 25% with respect to the Chilean peso, the effects upon translation would amount to a higher loss of ThCh$ 1,001,968. On the other hand, at equity level, this would result in a decrease in equity of ThCh$13,744,896.
If the Brazilian real devalued by at least 8.4% with respect to the Chilean peso, the effect upon translation would amount to a higher gain of thCh$1,297,413. On the other hand, at equity level, this would result in a smaller decrease in equity of ThCh$11,901,032.
If the Paraguayan Guaraní would have appreciated by an additional 2.2% with respect to the Chilean peso, the effect upon translation would amount to a greater profit of ThCh$130,616. On the other hand, at the equity level, this greater appreciation would result in a higher equity increase of ThCh$5,490,164.
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 June 30, 2013 of approximately ThCh$5,498,260. To minimize and/or stabilize such risk, anticipated purchase and supply agreements are frequently obtained when market conditions are favorable. Derivative instruments for commodities have also been used.
Liquidity risk
The products we sell are mainly paid for in cash and short term credit, therefore the Company´s main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where the Company operates; and (iii) public equity offerings.
The following table presents our contractual and commercial obligations as of June 30, 2013:
|
| Year of maturity (unaudited) |
| ||||||||
Item |
| 2013 |
| 2014 |
| 2015 |
| 2016 |
| 2017 and |
|
|
| ThCh$ |
| ThCh$ |
| ThCh $ |
| ThCh $ |
| ThCh $ |
|
Bank debt |
| 96,457,249 |
| 48,010,648 |
| 20,369,557 |
| 16,625,191 |
| 11,212,833 |
|
Bonds payable |
| 5,636,113 |
| 15,743,820 |
| 15,658,122 |
| 15,486,727 |
| 130,738,113 |
|
Operating lease obligations |
| 2,277,824 |
| 1,806,754 |
| 1,292,370 |
| 463,747 |
| 357,705 |
|
Purchase obligations |
| 110,001,650 |
| 82,886,123 |
| 65,479,190 |
| 29,971,644 |
| 123,829,245 |
|
Total |
| 214,372,836 |
| 148,447,345 |
| 102,799,239 |
| 62,547,309 |
| 266,137,896 |
|
NOTA 23 — OTHER INCOME
Other operating income is detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
Description |
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Gain on disposal of property, plant and equipment |
| 1,251,063 |
| 233,898 |
| 1,074,217 |
| 178,740 |
|
Adjustment of judicial deposit (Brazil) |
| 254,337 |
| 462,601 |
| 67,916 |
| 197,582 |
|
Gain on sale of investments SAAB |
| 434,580 |
| — |
| 434,580 |
| — |
|
Other |
| 87,547 |
| 75,160 |
| 24,785 |
| 6,622 |
|
Total |
| 2,027,527 |
| 771,659 |
| 1,601,498 |
| 382,944 |
|
NOTE 24 — OTHER EXPENSES
Other expenses are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
Description |
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Tax on bank debits |
| 2,891,230 |
| 2,113,452 |
| 1,403,775 |
| 1,063,295 |
|
Loss on sale of interest in Leao Jr (Brazil) |
| 1,585,705 |
| — |
| 318,781 |
| — |
|
Write-off of property, plant and equipment |
| 2,361,096 |
| 264,609 |
| 2,361,096 |
| — |
|
Restructuring distribution Project (Chile) |
| 1,230,196 |
| — |
| 1,230,196 |
|
|
|
Provisions |
| 902,175 |
| 851,529 |
| 408,971 |
| 381,819 |
|
Professional service fees |
| 148,448 |
| 310,254 |
| 97,732 |
| 148,127 |
|
Loss on sale of property, plant and equipment |
| 120,559 |
| 613,906 |
| 57,509 |
| 498,388 |
|
Merger Andina-Polar (see note 13.2) |
| 188,176 |
| 1,641,298 |
| 107,981 |
| 246,505 |
|
Other |
| 913,978 |
| 493,482 |
| 566,224 |
| 124,185 |
|
Total |
| 10,341,563 |
| 6,288,530 |
| 6,552,265 |
| 2,462,319 |
|
NOTE 25 — FINANCIAL INCOME AND COSTS
Financial income and costs break down as follows:
b) Finance income
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
Description |
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Interest income |
| 1,133,311 |
| 1,276,358 |
| 594,071 |
| 690,028 |
|
Other interest income |
| 115,302 |
| 179,205 |
| 25,342 |
| 44,684 |
|
Total |
| 1,248,613 |
| 1,455,563 |
| 619,413 |
| 734,712 |
|
b) Finance costs
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
Description |
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bond interest |
| 3,076,789 |
| 2,547,076 |
| 1,344,665 |
| 1,273,287 |
|
Bank loan interest |
| 5,976,992 |
| 1,104,041 |
| 2,330,711 |
| 731,353 |
|
Other interest costs |
| 1,032,468 |
| 396,876 |
| 839,261 |
| 212,865 |
|
Total |
| 10,086,249 |
| 4,047,993 |
| 4,514,638 |
| 2,217,505 |
|
NOTE 26 — OTHER INCOME AND EXPENSES
Other gains and losses are detailed as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
Description |
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Restructuring of operations (new Renca plant) |
| (370,583 | ) | (400,453 | ) | (265,840 | ) | (343,365 | ) |
Gains on derivative transactions |
| 865,153 |
| 645,778 |
| 2,289,597 |
| 902,362 |
|
Other income and expenses |
| (113,582 | ) | (4,333 | ) | 40,083 |
| (1,734 | ) |
Total |
| 380,988 |
| 240,992 |
| 2,063,840 |
| 557,263 |
|
NOTE 27 — THE ENVIRONMENT
The Company has made disbursements totaling ThCh$1,965,791 for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analysis, consulting on environmental impacts and others.
These disbursements by country are detailed as follows:
|
| Period ended June 30, 2013 |
| Future commitments |
| ||||
|
| (unaudited) |
| (unaudited) |
| ||||
|
|
|
| Capitalized to |
|
|
| Capitalized to |
|
|
|
|
| property, |
| Recorded |
| property, |
|
|
| Recorded as |
| plant and |
| as |
| plant and |
|
Country |
| expenses |
| equipment |
| expenses |
| equipment |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chile |
| 534,256 |
| 239,459 |
| 549,493 |
| 502,916 |
|
Argentina |
| 464,840 |
| — |
| 532,388 |
| 1,982,986 |
|
Brazil |
| 433,174 |
| 257,068 |
| 531,521 |
| 1,164,040 |
|
Paraguay |
| 29,993 |
| 7,001 |
| — |
| 3,847 |
|
Total |
| 1,462,263 |
| 503,528 |
| 1,613,402 |
| 3,653,789 |
|
NOTE 28 - Auditors´ fees
Details of the fees paid to the external auditors are as follows:
|
| 01.01.2013 |
| 01.01.2012 |
| 04.01.2013 |
| 04.01.2012 |
|
Description |
| 06.30.2013 |
| 06.30.2012 |
| 06.30.2013 |
| 06.30.2012 |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| 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
On July 10, 2013, “Rio de Janeiro Refrescos Ltda.”, a subsidiary of the Company in Brazil, signed a purchase agreement for 100% of the shares of “Companhia de Bebidas Ipiranga” (Ipiranga).
Ipiranga is a company dedicated to the production, marketing and distribution of Coca-Cola brand products in parts of the territories of the States of São Paulo and Minas Gerais, serving approximately 23,000 customers. Sales during the year 2012 amounted to MR$695 and EBITDA during the same period reached MR$112.
The agreed upon value of the transaction amounts to MR$1,218 million. To establish the payment value for the shares of the company, the net debt of Ipiranga will be subtracted from this amount upon materialization of the transaction.
The materialization of the purchase agreement is subject to the fulfillment of certain conditions, one of them being the approval of the transaction by the “Conselho Administrativo de Defensa Economica” (the Brazilian Antitrust authority) and The Coca-Cola Company.
Except as provided above, between June 30, 2013 and the date of issuance of this report there are no other subsequent events significantly affecting the presentation of these financial statements.
REPORT OF INDEPENDENT AUDITORS
(Translation of the original in Spanish)
Santiago, February 20, 2012
To the Shareholders and Directors of
Embotelladoras Coca-Cola Polar S.A.
We have audited the accompanying consolidated statements of financial position of Embotelladoras Coca-Cola Polar S.A. and subsidiaries as of December 31, 2011 and 2010 and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended. These financial statements (including the related notes thereto) are the responsibility of the management of Embotelladoras Coca-Cola Polar S.A.. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of the associates mentioned in Note 11, which statements represent for Embotelladoras Coca-Cola Polar S.A. a total investment in associates using the equity method of accounting of ThCh4 6,658,180 (ThCh$ 2,838,428 in 2010) and a share of profit of associates using the equity method of accounting of ThCh$ 178,446 (loss of ThCh$ 46,818 in 2010). Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for the associates mentioned in Note 11, is based solely on the report of the other auditors.
We conducted our audits in accordance with auditing standards generally accepted in Chile. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes the examination, on a test basis, of evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Embotelladoras Coca-Cola Polar S.A. and subsidiaries as of December 31, 2011 and 2010, and the integral results of their operations and their cash flows for the years then ended, in conformity with International Financial Reporting Standards.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2011 and 2010
|
|
|
| December, 31 |
| ||
ASSETS |
| Note |
| 2011 |
| 2010 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash and cash equivalents |
| (5) |
| 21,655,721 |
| 34,271,600 |
|
Other financial assets |
| (16.1 a) |
| — |
| 281,917 |
|
Other non-financial assets |
|
|
| 1,445,854 |
| 1,070,363 |
|
Trade and other receivables |
| (16.1 a) |
| 30,917,590 |
| 25,068,412 |
|
Accounts receivable from related parties |
| (10 a) |
| 4,714,831 |
| 7,238,,689 |
|
Inventories |
| (4) |
| 23,099,370 |
| 16,077,892 |
|
Current income tax receivables |
|
|
| 2,217,661 |
| 1,423,756 |
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
| 84,051,027 |
| 85,432,629 |
|
|
|
|
|
|
|
|
|
Other financial assets |
| (16.1 a) |
| — |
| 11,466,245 |
|
Other non-financial assets |
|
|
| 1,614,484 |
| 1,216,672 |
|
Investments in associates using equity method of accounting |
| (11 d) |
| 6,658,180 |
| 2,838,428 |
|
Intangible assets other than goodwill |
| (13) |
| 2,660,960 |
| 1,606,117 |
|
Goodwill |
| (14) |
| 9,454,266 |
| 9,311,567 |
|
Property, plant and equipment |
| (7 a) |
| 167,627,602 |
| 123,233,569 |
|
Deferred income tax assets |
| (6 b) |
| 6,053,408 |
| 3,829,416 |
|
|
|
|
|
|
|
|
|
Total non-current assets |
|
|
| 194,068,900 |
| 153,502,014 |
|
|
|
|
|
|
|
|
|
Total assets |
|
|
| 278,119,927 |
| 238,934,643 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
as of December 31, 2011 and 2010
|
|
|
| December, 31 |
| ||
LIABILITIES |
| Note |
| 2011 |
| 2010 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Other financial liabilities |
| (16) |
| 10,179,516 |
| 7,603,664 |
|
Trade and other payables |
| (16) |
| 43,003,149 |
| 29,782,574 |
|
Accounts payable to related parties |
| (10 b) |
| 6,807,547 |
| 5,161,658 |
|
Other provisions |
| (12 a) |
| 1,913,943 |
| 782,326 |
|
Current income tax payables |
|
|
| — |
| 737,558 |
|
Other non-financial liabilities |
| (15 e) |
| 3,376,811 |
| 1,416,026 |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
| 65,280,966 |
| 45,483,806 |
|
|
|
|
|
|
|
|
|
Other financial liabilities |
| (16.2 b) |
| 69,590,825 |
| 71,139,639 |
|
Other accounts payable |
| (16.2 b) |
| 4,928,209 |
| 4,042,293 |
|
Deferred income tax liabilities |
| (6 b) |
| 10,125,957 |
| 8,839,439 |
|
|
|
|
|
|
|
|
|
Total non-current liabilities |
|
|
| 84,644,991 |
| 84,021,371 |
|
|
|
|
|
|
|
|
|
Share capital |
|
|
| 39,685,061 |
| 39,685,061 |
|
Accumulated earnings |
|
|
| 91,212,166 |
| 86,982,115 |
|
Share premium |
|
|
| 182,060 |
| 182,060 |
|
Other reserves |
| (15 f) |
| (4,818,067 | ) | (18,727,653 | ) |
|
|
|
|
|
|
|
|
Total equity attributable to owners of the controllers |
|
|
| 126,261,220 |
| 108,121,583 |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
| (15 i) |
| 1,932,750 |
| 1,307,883 |
|
|
|
|
|
|
|
|
|
Total equity |
|
|
| 128,193,970 |
| 109,429,466 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
| 278,119,927 |
| 238,934,643 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2011 and 2010
|
|
|
| December 31, |
| ||
|
| Note |
| 2011 |
| 2010 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Revenue |
| (8 a) |
| 294,865,067 |
| 230,401,341 |
|
Cost of sales |
| (8 b) |
| (181,893,101 | ) | (140,770,667 | ) |
|
|
|
|
|
|
|
|
Gross margin |
|
|
| 112,971,966 |
| 86,630,674 |
|
|
|
|
|
|
|
|
|
Other income |
| (8 a) |
| 1,061,810 |
| 4,816,521 |
|
Distribution costs |
| (8 b) |
| (39,396,954 | ) | (28,678,805 | ) |
Administrative expenses |
| (8 b) |
| (15,875,727 | ) | (11,479,300 | ) |
Other expenses, by function |
| (8 b) |
| (25,214,963 | ) | (19,775,798 | ) |
Other losses |
| (8 d) |
| (5,627,310 | ) | (1,801,346 | ) |
Finance income |
|
|
| 1,021,628 |
| 1,565,211 |
|
Finance costs |
| (8 c) |
| (3,377,351 | ) | (4,233,080 | ) |
Share of profit (loss) of associates using equity method of accounting |
| (11 d) |
| 178,446 |
| (46,818 | ) |
Losses on foreign exchange differences |
|
|
| (399,910 | ) | (1,830,776 | ) |
Gains on indexation differences |
|
|
| 6,943 |
| 1,897 |
|
|
|
|
|
|
|
|
|
Earnings before income tax |
|
|
| 25,348,578 |
| 28,168,380 |
|
Income tax expense |
| (6 c) |
| (1,766,758 | ) | (1,065,360 | ) |
|
|
|
|
|
|
|
|
Earnings for the year |
|
|
| 23,581,820 |
| 27,103,020 |
|
|
|
|
|
|
|
|
|
Earnings attributable to: |
|
|
|
|
|
|
|
Owners of the controllers |
|
|
| 23,240,036 |
| 26,746,755 |
|
Non-controlling interests |
| (15 h) |
| 341,784 |
| 356,265 |
|
|
|
|
|
|
|
|
|
Earnings for the year |
|
|
| 23,581,820 |
| 27,103,020 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
Earnings per share (basic & diluted) |
| (15 d) |
| 83.00 |
| 95.52 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Continued)
For the years ended on December 31, 2011 and 2010
|
| December, 31 |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Earnings for the year |
| 23,581,820 |
| 27,103,020 |
|
|
|
|
|
|
|
Foreign currency translation differences |
| 14,192,669 |
| (9,831,775 | ) |
|
|
|
|
|
|
Total comprehensive income for the year |
| 37,774,489 |
| 17,271,245 |
|
|
|
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
Owners of the controllers |
| 37,149,622 |
| 17,037,291 |
|
Non-controlling interests |
| 624,867 |
| 233,954 |
|
|
|
|
|
|
|
Total comprehensive income for the year |
| 37,774,489 |
| 17,271,245 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2011 and 2010
|
|
|
|
|
| Other reserves |
|
|
| Total equity |
|
|
|
|
| ||
|
|
|
|
|
| Various |
|
|
| Accumulated |
| attributable |
| Non- |
|
|
|
|
| Share |
| Share |
| other |
| Translation |
| earnings |
| to owners of |
| controlling |
|
|
|
|
| capital |
| premium |
| reserves |
| Reserves |
| (loss) |
| the controllers |
| interests |
| Total equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance at 01.01.2011 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (15,484,337 | ) | 86,982,115 |
| 108,121,583 |
| 1,307,883 |
| 109,429,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the year |
| — |
| — |
| — |
| — |
| 23,240,036 |
| 23,240,036 |
| 341,784 |
| 23,581,820 |
|
Other Comprehensive Income |
| — |
| — |
| — |
| 13,909,586 |
| — |
| 13,909,586 |
| 283,083 |
| 14,192,669 |
|
Dividends |
| — |
| — |
| — |
| — |
| (19,009,985 | ) | (19,009,985 | ) | — |
| (19,009,985 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Equity |
| — |
| — |
| — |
| 13,909,586 |
| 4,230,051 |
| 18,139,637 |
| 624,867 |
| 18,764,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance at 12.31.2011 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (1,574,751 | ) | 91,212,166 |
| 126,261,220 |
| 1,932,750 |
| 128,193,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance at 01.01.2010 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (5,774,873 | ) | 72,256,534 |
| 103,105,466 |
| 1,073,929 |
| 104,179,395 |
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the year |
| — |
| — |
| — |
| — |
| 26,746,755 |
| 26,746,755 |
| 356,265 |
| 27,103,020 |
|
Other Comprehensive Income |
| — |
| — |
| — |
| (9,709,464 | ) | — |
| (9,709,464 | ) | (122,311 | ) | (9,831,775 | ) |
Dividends |
| — |
| — |
| — |
| — |
| (12,021,174 | ) | (12,021,174 | ) | — |
| (12,021,174 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Equity |
| — |
| — |
| — |
| (9,709,464 | ) | 14,725,581 |
| 5,016,117 |
| 233,954 |
| 5,250,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance at 12.31.2010 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (15,484,337 | ) | 86,982,115 |
| 108,121,583 |
| 1,307,883 |
| 109,429,466 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. Y SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended on December 31, 2011 and 2010
|
|
|
| December 31, |
| ||
Consolidated statement of cash flows (direct method) |
| Note |
| 2011 |
| 2010 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash flows generated from (used in) operating activities |
|
|
|
|
|
|
|
Proceeds of sales of goods and services |
|
|
| 375,096,531 |
| 279,016,420 |
|
Payments to suppliers of goods and services |
|
|
| (259,387,461 | ) | (193,181,807 | ) |
Payment to and on behalf of employees |
|
|
| (37,403,128 | ) | (32,182,254 | ) |
Payments for other operating activities |
|
|
| (3,662,502 | ) | — |
|
Payments for restructuring disbursements |
|
|
| (19,307,304 | ) | (17,477,785 | ) |
Income tax paid |
|
|
| (5,070,148 | ) | (3,742,023 | ) |
Other cash (outflows) inflows |
|
|
| (654,320 | ) | 2,121,001 |
|
|
|
|
|
|
|
|
|
Cash flow generated from (used in) operating activities |
|
|
| 49,611,668 |
| 34,553,552 |
|
|
|
|
|
|
|
|
|
Cash flows generated from (used in) investment activities |
|
|
|
|
|
|
|
Interest received |
|
|
| 1,445,594 |
| 1,532,823 |
|
Purchases of property, plant and equipment |
|
|
| (50,766,634 | ) | (37,453,319 | ) |
Purchases of intangible assets |
|
|
| (1,109,668 | ) | (246,893 | ) |
Cash flows used to purchase non-controlling interests |
|
|
| (3,248,760 | ) | — |
|
Cash flows from other investment activities |
|
|
| 11,652,690 |
| — |
|
|
|
|
|
|
|
|
|
Cash flow generated from (used in) investment activities |
|
|
| (42,026,778 | ) | (36,167,389 | ) |
|
|
|
|
|
|
|
|
Cash flows generated from (used in) financing activities |
|
|
|
|
|
|
|
Proceeds from short term loans |
|
|
| 5,192,000 |
| — |
|
Proceeds from long term loans |
|
|
| 6,140,100 |
| — |
|
Repayments of loans |
|
|
| (12,579,785 | ) | (10,754,467 | ) |
Interest paid |
|
|
| (3,542,214 | ) | (2,934,177 | ) |
Dividends paid |
|
|
| (17,049,200 | ) | (14,420,000 | ) |
Other cash inflows |
| (16.2 a) |
| — |
| 55,233,308 |
|
|
|
|
|
|
|
|
|
Cash flow generated from (used in) financing activities |
|
|
| (21,839,099 | ) | 27,124,664 |
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
| (14,254,209 | ) | 25,510,827 |
|
EFFECTS OF EXCHANGE RATE DIFFERENCES ON CASH AND CASH EQUIVALENTS |
|
|
| 1,638,330 |
| (641,592 | ) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR |
|
|
| 34,271,600 |
| 9,402,365 |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF THE YEAR |
| (5) |
| 21,655,721 |
| 34,271,600 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31, 2011 AND 2010
NOTE 1 - CORPORATE INFORMATION
Embotelladoras Coca-Cola Polar S.A. (“Coca-Cola Polar” or “the Company”) and Subsidiaries (“the Group”) is the owner of franchised bottlers of The Coca-Cola Company in Chile, Argentina and Paraguay. Each territory has a separate and independent franchising agreement with The Coca-Cola Company covering the production and distribution of products under the Coca-Cola brand.
Coca-Cola Polar operates Coca-Cola franchises in Chile’s II, III, IV, XI and XII Regions.
Coca-Cola Polar Argentina S.A. operates the franchises of the provinces of Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Rio Negro, La Pampa and the western part of the province of Buenos Aires.
Paraguay Refrescos S.A. has franchises for the whole of the Republic of Paraguay.
The franchises for these territories operate under a renewable period of 5 years. The next renewal period of these franchises is in 2014.
The parent Embotelladoras Coca-Cola Polar S.A. is a corporation regulated by the Superintendency of Securities and Insurance (“SVS”) and is registered in the Securities Register in Santiago, Chile under No.0388. The Company’s shares are traded on the Chilean stock market exchange.
Embotelladoras Coca-Cola Polar S.A. is domiciled at Avenida Nueva Tajamar 481, 4th floor, South Tower, Las Condes, Santiago, Chile and its tax registration number is 93.473.000-3.
The Board of Directors approved the consolidated financial statements as of December 31, 2011 at its meeting held on February 20, 2012, which will be approved at the 2012 Annual General Meeting of Shareholders .
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Accounting Period
The consolidated financial statements cover the following periods:
· | Consolidated statements of financial position: |
| As of December 31, 2011 and 2010. |
· | Consolidated statements of comprehensive income and cash flows: |
| For the years ended December 31, 2011 and 2010 |
· | Consolidated statement of changes in equity: |
| For the years ended December 31, 2011 and 2010 |
b) Basis of preparation
These consolidated financial statements of Embotelladoras Coca Cola Polar S.A. have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (“IASB”).
The accounting policies have been applied consistently in all the years in these consolidated financial statements.
These consolidated financial statements have been prepared under the historic cost convention, except for financial assets at fair value through profit and loss.
The figures included in the accompanying consolidated financial statements are expressed in thousands of Chilean pesos which is the Company’s functional currency and Group’s presentation currency.
c) Consolidation
Subsidiaries are all entities over which the Group has the power to govern their operating and financial policies. Subsidiaries are consolidated from the date on which control is transferred to the Group and are de-consolidated from the date on which the control ceases.
The group uses the purchase method to account for the acquisition of a subsidiary. The cost of an acquisition is determined as the fair value of the assets transferred, equity interests issued and liabilities incurred assumed on the date of acquisition. The identifiable assets acquired, and the liabilities and contingent liabilities assumed in a business combination, are measured initially at their fair values on the date of acquisition, regardless of the size of any minority interest. The excess of the acquisition cost over the fair value of the Group’s net identifiable assets acquired is recognized as goodwill. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized immediately in the consolidated statement of comprehensive income.
Intercompany transactions, balances, income, expenses and unrealized gains between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction shows impairment in the value of the asset transferred. Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The following companies are included in the consolidation:
|
|
|
|
|
| Shareholding Percentage |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| December 31, |
|
|
|
|
| Country |
| December 31, 2011 |
| 2010 |
| ||||
Tax ID No. |
| Entity |
| of Origin |
| Direct |
| Indirect |
| Total |
| Total |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Chile |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
96.971.280-6 |
| Inversiones Los AndesLtda. |
| Chile |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
Foreign |
| Coca-Cola Polar Argentina S.A. |
| Argentina |
| 5.00 |
| 95.00 |
| 100.00 |
| 100.00 |
|
Foreign |
| Paraguay Refrescos S.A. |
| Paraguay |
| 0.08 |
| 98.00 |
| 98.00 |
| 98.00 |
|
Foreign |
| Kopolar Refrescos S.A. |
| Paraguay |
| 0.17 |
| 99.83 |
| 100.00 |
| 100.00 |
|
Foreign |
| Aconcagua Investing S.A. |
| British Vírgin |
| 0.71 |
| 99.29 |
| 100.00 |
| 100.00 |
|
|
|
|
| Islands |
|
|
|
|
|
|
|
|
|
d) Foreign currency translation
· Functional and presentation currency
Items included in the consolidated financial statements of each of the Group´s companies are measured using the currency of the primary economic environment in which each company operates (functional currency). The consolidated financial statements are presented in Chilean pesos which is the Company’s functional currency and the Group’s presentation currency.
· Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and the translation at each period’s closing exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of comprehensive income.
The exchange rates and amounts outstanding at the close of each year are as follows:
Date |
| Ch$ / US$ |
| Arg$ /US$ |
| GS/ US$ |
| Ch$ / UF |
|
December 31, 2011 |
| 519.20 |
| 4.30 |
| 4,400.00 |
| 22,294.03 |
|
December 31, 2010 |
| 468.01 |
| 3.97 |
| 4,600.00 |
| 21,455.55 |
|
· Group companies
The results and financial position of all the Group entities (none of which has a currency of a hyper-inflationary economy) which have a functional currency different from the presentation currency as follows:
a) Assets and liabilities for each statement of financial position are translated at the closing exchange rate on the financial position date;
b) Income and expenses in each statement of income are translated at the monthly average exchange rate; and
c) All resulting exchange differences from (a) and (b) above are recognized in other comprensive income.
The Group´s companies which have a functional currency other than presentation currency are:
Company |
| Functional Currency |
|
|
|
Coca Cola Polar Argentina S.A. |
| Argentine pesos |
Paraguay Refrescos S.A. |
| Guaranies |
Kopolar Refrescos S.A. |
| Guaranies |
For the purposes of consolidation, exchange differences resutling from the translation of the net investment in foreign entities, debt and other financial instruments designated as hedges for such investments, are recognized in equity (other comprensive income).
When a foreign investment is realized, such exchange differences are recognized in the consolidated statement of comprehensive income in the corresponding period.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the exchange rate on the date of closing.
e) Investment in Associates
Associates are all entities over which the Group has significant influence. Investments in associates are accounted for using the equity method. The Group’s investment in associates considers the goodwill identified at the time of the acquisition (net of any accumulated impairment loss).
The Group’s post-acquisition share of profit or loss of the associates is recognized in the consolidated statement of comprehensive income and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income.
When the Group’s share of loss of an associate equals or exceeds its interest of the associate, including any unsecured account receivables, the Group does not recognize any further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealized earnings on transactions between the Group and its associates are eliminated in proportion to the Group’s interest in the associate. Unrealized losses are eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of the associates have been changed where necessary to ensure consistency with the policies adopted by the Group.
f) Goodwill
Goodwill represents the excess between the acquisition cost and the Group’s interest in the fair value of the net identifiable assets of a subsidiary or associate on the date of acquisition.
In the case of the acquisition of subsidiaries, this excess is treated as goodwill, while in the acquisition of associates, it is considered as part of Investments in associates under the equity method of accounting.
Goodwill is not subject to amortization. It is tested for impairment annually and impairment los, if any, is recognized in the consolidated statements of comprehensive income. For the purposes of impairment testing, goodwill is allocated to cash-generating units, which represent the Group’s investments in the countries where it operates.
In the event of the disposal of the investment, goodwill forms part of the total cost of the investment.
g) Intangible Assets
· Rights
These relate to premiums paid by the Argentine subsidiary relating to the acquisition of territories and acquisition of rights to operate and distribute products of the Benedictino brand made by Embotelladoras Coca-Cola Polar S.A.
The rights are recorded at historic cost and are not subject to amortization as they have indefinite useful lives.
Impairment is tested annually and impairment losses, if any, is recognized to the consolidated statement of comprehensive income. For the purpose of impairment testing, goodwill is allocated to cash-generating units, which represent the Group’s investments in the countries where it operates or the specific category that originated it.
· Software
Software licenses acquired are capitalized based on the costs incurred in acquiring or maintaining computer software programs. These costs are amortized over the terms of their estimated useful lives.
Costs associated with the development or maintenance of computer software programs are recorded as an expense as incurred. Disbursements directly associated with the production of “specific and identifiable” computer software programs controlled by the Group, and which will generate economic benefits over and above their costs for more than a year, are recognized as intangible assets. Direct costs include the costs of the employees who develop the computer software programs and a portion of the corresponding indirect costs.
h) Property, Plant and Equipment
The Company recognizes property, plant and equipment at their historic cost (which include the attributable costs determined by revaluations made in accordance with IFRS 1, First time adoption of IFRS), less accumulated depreciation. The historic cost includes all expenditure that is directly attributable to the acquisition of the assets.
Finance costs attributable to the construction of property, plant and equipment are capitalized at their cost until the date when they are ready to be used.
Subsequent costs relating to the repairs and maintenance of the assets are recognized as expenses incurred. However, any costs that meet the following conditions:
· that these assets will generate future economic benefits for the Company; and
· that the costs of these assets can be measured reliably.
are included in the value of the asset or recorded as a separate asset.
Residual values and remaining useful lives of the assets are reviewed and adjusted, if appropriate, at the end of each reporting period.
Depreciation of property, plant and equipment is calculated using the straight-line method over the useful lives of the assets. The useful lives determined by types of assets are as follows:
Assets |
| Range of years |
|
Buildings |
| 40 - 80 |
|
Plant and equipment: |
|
|
|
Machinery |
| 15 - 20 |
|
Transportation equipment |
| 10 |
|
Computer equipment |
| 3 |
|
Motor vehicles |
| 10 |
|
Other property, plant and equipment: |
|
|
|
Market assets |
| 8 |
|
Crates & bottles |
| 4 - 8 |
|
Gains and losses on disposal of property, plant and equipment relate to the difference between the proceeds of the transaction and the carrying value of the assets, which are recognized in the consolidated statement of comprehensive income in the period in which they incur, within in Other revenue or Other expenses.
i) Impairment of Non-Financial Assets
Assets that have an indefinite useful life and are not subject to amortization are tested annually for impairment. Assets subject to amortization are reviewed for impairment when economic events or changes in circumstances indicate that their carrying value may not be recoverable. When the book value of an asset exceeds its recoverable value, an impairment is recognized in the consolidated statement of income and its carrying amount is reduced to the recoverable value.
The recoverable value of an asset is defined as the higher of the net sale price and its value in use. The net sale price is fair value less the costs to sell. Value in use is the present value of the estimated future cash flows to be generated by the continual use of an asset and by its disposal value at the end of its useful life. The present value is determined by using a discount rate that reflects the present value of such cash flows and the specific risks of the asset. Recoverable amounts are estimated for each asset or, if not possible, for the cash generating unit that represents the smallest group of assets that generate separately identifable cash flows.
The carrying values of non-financial assets other than goodwill that have been written down for impairment are reviewed on each reporting date for possible reversal of the impairment which, if any, are recorded as a gain in the period of such reversal.
j) Financial Assets
The Company classifies its financial assets in the following categories: (a) financial assets at fair value through profit and loss, and (b) loans and receivables. The Company has no financial assets classified as investments held to maturity or assets 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 intial recognition and re-evaluates this classification on the date of each closing.
· Financial assets at fair value through profit and loss
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Financial assets defined in this category are recognized at fair value and any changes to the these fair values are recognized in the consolidated statement of comprehensive income.
· Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. They arise when the Group provides money, goods or services directly to a debtor without the intention to negotiate the account receivable. They are included in current assets, except for those with maturities of over 12 months from the date of the statement of financial position which are classified as non-current assets. Loans and receivables are included in Trade and other receivables in the consolidated statement of financial position.
Financial assets in this category are initially recognized at their fair value. They are subsequently measured using the amortized-cost method based on the effective interest rate, which are recognized in finance income for the period between its intial recognition and its settlement. As accounts receivable have short term maturities, the Company recognizes them at their nominal values.
The Company evaluates at the date of each closing whether there is objective evidence that a financial asset or a group of financial assets have suffered impairment. Potential impairment indicators of accounts receivable include the debtors´financial difficulties, potential bankruptcy proceedings, financial reorganization, default and non-payment.
Should impairment exist; a provision is made to recognize impairment losses. The amount of this provision is the difference between the carrying value of the asset and the present value of the estimated future cash flows to be recovered, discounted at the effective interest rate. The carrying value of the asset is reduced by the provision and the amount of the loss is charged to the consolidated statement of comprehensive income. Subsequent reversals of amounts previously recognized as impaired, are recognized as a credit to the consolidated statement of comprehensive income in the period that it incurs.
k) Inventories
Inventories are stated at the lower of cost and net realization value, less a provision for obsolescence. Net realization value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Cost includes purchase price plus necessary additional costs until the products are sold. Cost is determined using the weighted average method. The cost of inventories subject to manufacturing processes includes the cost of raw materials, direct workforce and indirect overhead manufacturing costs (on the basis of the normal operating capacity).
Provision for obsolescence of inventories is estimanted for those items that are not probable to be used or sold. This is determined on an individual basis, considering the aging of the items, among other information, according to management´s judgment and experience. The obsolescence loss is recognized directly in the consolidated statement of comprehensive income.
l) Trade receivables
Trade receivables, as indicated in Note 2 j), are shown at their nominal value due to their short term maturities, less the allowance for doubtful accounts. The allowance for doubtful accounts of trade receivables is considered when there is objective evidence that the Group may not collect all the amounts due in accordance with the original terms of the accounts receivable. The allowance amoun is recognized in the consolidated statement of comprehensive income.
m) Statement of cash flows
· Cash and cash equivalents
The parent company and its subsidiaries have considered cash and cash equivalents as cash on hand, time deposits and other short-term highly liquid investments with original maturities of three months or less.
· Classification of interest and dividends paid
Cash flows used in payments of interest and dividends are shown in Net cash flow in financing activities.
n) Trade payables
Trade payables are initially recognized at their fair value and are subsequently measured at their amortized cost using the effective interest method.
o) Interest-Bearing Loans and Debt Issue Obligations
Loans and debt issues are initially recognized at fair value, net of transaction costs. These obligations with third parties are subsequently measured at their amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statement of comprehensive income over the period of the obligations using the effective interest method.
p) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events; resources will be required to settle the obligation; and the amount has been reliably measured.
Provisions are measured at the present value of the expenditure expected to be required to settle the obligation, using an interest rate that reflects current market conditions of the time value of money and specific risks of the obligation. The increase in the provision due to passage of time is recognized as interest expense.
q) Guarantee deposits
Returnable crates and bottles are recorded in property, plant and equipment. For those that have been delivered to the sales channels for marketing purposes, a financial liability is recognized to reflect the obligation to reimburse the guarantee deposits made by customers. This financial liability is measured at amortized cost and is released when the obligation is settled.
r) Current and deferred income taxes
The parent company and its subsidiaries have recognized their tax rights and obligations based on current legislation.
The current tax expense is recorded in the consolidated statement of comprehensive income. Income tax payable is calculated based on the taxable income for the year using the applicable tax rates enacted at the date of the statement of financial position, any adjustments to taxes payable of previous years and the effect of movements in deferred income tax assets and liabilities.
Deferred income taxes are recognized on temporary differences arising between the assets and liabilities and their carrying amounts shown in the financial statements. Deferred income tax assets and liabilities are determined using the tax rates that have been enacted at the date of the statement of financial position and are expected to apply when the related deferred income tax asset is realized or thedeferred income tax liability is settled.
Deferred income tax on temporary differences arising on investments in subsidiaries and associates is not provided for when timing of the reversal of the temporary differences is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
s) Employee Benefits
· Profit-sharing and bonuses
The Company has no contractual or obligatory incentive plans. However, the incentives for the senior executives are calculated based on expected returns and individual performance. These benefits are provided for at the close of the financial year.
t) Dividend distribution
Dividend distribution to the Company’s shareholders is recognized as a liability in the consolidated financial statements.
This liability is accrued when the dividends are approved by the shareholder or are established by law (minimum obligatory).
u) Operating segments
IFRS 8 requires entities to adopt “the management view” for disclosing information on the results of their operating segments. This is generally the information that management uses internally to assess the performance of segments and to allocate resources. The following reportable operating segments have therefore been determined:
· Operations in Chile
· Operations in Argentina
· Operations in Paraguay
v) Revenue recognition
Revenue is measured at fair value of the sale of goods and services, net of taxes and discounts.
The Company recognized revenue based on the following criteria:
· Sale of goods
Revenues are recognized when all the significant risks and rewards of titles to the goods have been passed on to the customer.
· Interest
Interest income is recognized using the effective interest method.
w) Critical accounting estimates and assumptions
The estimates and assumptions that have a significant risk of causing a material adjustment to the financial statements wihin the next financial year are addressed below.
i) Revision of carrying values of goodwill and provision for impairments
The Group annually tests whether goodwill has suffered any loss for impairment in accordance with the guidelines stated in IAS 36. The recoverable amounts of the cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates for the preparation of the future cash flows, including the projection of the Group’s future operations, projection of economic factors that affect revenues and costs, and the determination of the discount rate to be applied.
ii) Guarantee deposits
As disclosed in Note 2 q), the Company has an obligation to reimburse customers their packaging (crates and bottles) guarantee deposits. This obligation is written down when it has been settled. The Company therefore considers that this obligation has been settled when a) customers return the packaging and request for the refund of their deposit, or b) the packaging ceases to exist or is damaged. The valuation of this liability assumes that, in the absence of the circumstance described in a) above, the obligation will remain unchanged to the extent that it cannot be shown, through physical counts and other testing methods, that the packaging has ceased to exist.
x) New and amendments IFRSs and Interpretations of the IFRSs
New standards, amendments and interpretations effective for periods on or after January 1, 2012:
|
| New standards, interpretations & amendments |
| Effective date |
IAS 24 |
| Related party disclosures |
| January 1, 2011 |
IAS 32 |
| Financial instruments: presentation |
| February 1, 2010 |
IFRS 1 |
| First time adoption of IFRS |
| July 1, 2010 |
IFRIC 14 |
| Advance payment of obligations |
| January 1, 2011 |
IFRIC 19 |
| Extinguishing Financial Liabilities with Equity Instruments |
| July 1, 2010 |
These newly-issued standards, amendments and interpretations are not currently significant for the Group.
New standards, amendments and interpretations issued but not in effect for the financial year starting January 1, 2012, and not early adopted.
IAS 12 |
| Income tax |
| January 1, 2012 |
IAS 1 |
| Presentation of financial statements |
| July 1, 2012 |
IFRS 1 |
| First time adoption of IFRS |
| July 1, 2011 |
IFRS 7 |
| Financial instruments: disclosures |
| July 1, 2011 |
IAS 19 |
| Employee benefits |
| January 1, 2013 |
IFRS 9 |
| Financial instruments |
| January 1, 2013 |
IFRS 10 |
| Consolidated financial statements |
| January 1, 2013 |
IFRS 11 |
| Joint ventures |
| January 1, 2013 |
IFRS 12 |
| Disclosure of interests in other entities |
| January 1, 2013 |
IAS 27 |
| Separate financial statements |
| January 1, 2013 |
IAS 28 |
| Investments in associates and joint ventures |
| January 1, 2013 |
IFRS 13 |
| Fair value measurement |
| January 1, 2013 |
IFRSIC 20 |
| Shipping Costs |
| January 1, 2013 |
The Company’s management believes that the adoption of the above-described standards, amendments and interpretations will have no significant impact on the consolidated financial statements of Embotelladoras Coca-Cola Polar S.A. and subsidiaries.
NOTE 3 - FINANCIAL INFORMATION BY OPERATING SEGMENT
As indicated in Note 2 u), management has determined the operating segments based on the internal reports which are used for making strategic decisions. Management mainly make strategic decisions based on gepgraphic location, therefore, operating segments are as follows:
· Operations in Chile
· Operations in Argentina
· Operations in Paraguay
All the reportable operating segments generate their revenues from the production and commercialization of Coca-Cola products, as mentioned in Note 1.
There are no customers that represent more than 10% of the Company’s revenues.
The following shows financial information on the different operating segments and their reconciliation with the consolidated financial statements of Embotelladoras Coca-Cola Polar S.A. and its subsidiaries:
|
| Chilean |
| Argentine |
| Paraguayan |
|
|
| Consolidated |
|
|
| operation |
| operation |
| operation |
| Eliminations |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For the year ended December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
Revenue from extrernal customers |
| 94,308,914 |
| 96,206,745 |
| 104,349,408 |
| — |
| 294,865,067 |
|
Revenue between segments |
| 1,772,962 |
| — |
| — |
| (1,772,962 | ) | — |
|
Finance income |
| 714,511 |
| — |
| 916,417 |
| (609,300 | ) | 1,021,628 |
|
Finance costs |
| (3,286,343 | ) | (57,470 | ) | (642,838 | ) | 609,300 |
| (3,377,351 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Net finance income |
| (2,571,832 | ) | (57,470 | ) | 273,579 |
| — |
| (2,355,723 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciations and amortization |
| (4,810,177 | ) | (3,271,723 | ) | (5,189,224 | ) | — |
| (13,271,124 | ) |
Total of significant revenue items |
| 659,981 |
| 129,372 |
| 272,457 |
| — |
| 1,061,810 |
|
Total of significant expense items |
| (83,801,434 | ) | (92,734,192 | ) | (81,955,546 | ) | 1,772,962 |
| (256,718,210 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the year |
| 5,558,414 |
| 272,732 |
| 17,750,674 |
| — |
| 23,581,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associate using equity method of accounting |
| 178,446 |
| — |
| — |
| — |
| 178,446 |
|
Income tax expense (recovery) |
| (1,217,230 | ) | 1,304,384 |
| (1,853,912 | ) | — |
| (1,766,758 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
| 94,181,721 |
| 80,536,489 |
| 108,948,541 |
| (5,546,824 | ) | 278,119,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates using equity method of accounting |
| 6,658,180 |
| — |
| — |
| — |
| 6,658,180 |
|
Capital expenditure |
| 14,027,904 |
| 16,240,498 |
| 21,578,527 |
| — |
| 51,846,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
| 107,712,798 |
| 31,837,025 |
| 15,922,958 |
| (5,546,824 | ) | 149,925,957 |
|
|
| Chilean |
| Argentine |
| Paraguayan |
|
|
| Consolidated |
|
|
| operation |
| operation |
| operation |
| Eliminations |
| total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For theyear ended December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
Revenue from extrernal customers |
| 83,907,441 |
| 73,438,848 |
| 73,055,052 |
| — |
| 230,401,341 |
|
Revenue between segments, |
| 2,170,493 |
| — |
| — |
| (2,170,493 | ) | — |
|
Finance income |
| 2,116,380 |
| 7,337 |
| 202,107 |
| (760,613 | ) | 1,565,211 |
|
Finance costs |
| (1,172,468 | ) | (2,523,176 | ) | (698,049 | ) | 760,613 |
| (4,233,080 | ) |
|
|
|
|
|
|
|
|
|
|
| �� |
Net finance income |
| 343,912 |
| (2,515,839 | ) | (495,942 | ) | — |
| (2,667,869 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciations and amortization |
| (4,287,307 | ) | (2,822,598 | ) | (3,578,758 | ) | — |
| (10,688,663 |
|
Total of significant revenue items |
| 4,446,326 |
| 139,707 |
| 230,488 |
| — |
| 4,816,521 |
|
Total of significant expense items |
| (74,794,830 | ) | (71,082,645 | ) | (51,051,328 | ) | 2,170,493 |
| (194,758,310 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) for the year |
| 11,786,035 |
| (2,842,527 | ) | 18,159,512 |
| — |
| 27,103,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of loss of associate using equity method of accounting |
| (46,818 | ) | — |
| — |
| — |
| (46,818 | ) |
Income tax expense (recovery) |
| (2,128,486 | ) | 2,799,041 |
| (1,735,915 | ) | — |
| (1,065,360 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
| 107,609,369 |
| 58,660,380 |
| 75,475,241 |
| (2,810,347 | ) | 238,934,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates using equity method of accounting |
| 2,838,432 |
| — |
| — |
| — |
| 2,838,432 |
|
Capital expenditure |
| 10,898,827 |
| 14,588,605 |
| 17,593,590 |
| — |
| 43,081,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
| 86,029,398 |
| 33,704,453 |
| 12,581,674 |
| (2,810,347 | ) | 129,505,177 |
|
NOTE 4 - INVENTORIES
The composition of the balance of inventories at each year end is as follows:
|
| As of December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Raw materials |
| 13,582,785 |
| 8,822,574 |
|
Merchandise |
| 1,796,829 |
| 1,983,462 |
|
Supplies for production |
| 555,240 |
| 485,090 |
|
Work in progress |
| 776,623 |
| 531,080 |
|
Finished goods |
| 4,736,564 |
| 3,445,028 |
|
Others |
| 1,651,329 |
| 810,658 |
|
|
|
|
|
|
|
Total |
| 23,099,370 |
| 16,077,892 |
|
The Company determines the cost of inventories using the weighted average method.
The cost of inventories recorded to Cost of sales for each year end is as follows:
|
| For the year ended December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Cost of inventories |
| 177,447,651 |
| 135,101,628 |
|
The obsolescence expense of inventories, recorded in the statement of comprehensive for of each year, is as follows:
|
| For the year ended December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Obsolescence expense |
| 141,120 |
| 231,585 |
|
NOTE 5 - CASH AND CASH EQUIVALENTS
The detail of cash and cash equivalents at the end of each year is as follows:
|
| As of December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Cash on hand |
| 46,468 |
| 79,378 |
|
Cash at bank |
| 6,625,418 |
| 5,074,392 |
|
Term deposits |
| 14,983,835 |
| 23,889,730 |
|
Mutual funds |
| — |
| 5,228,100 |
|
Total |
| 21,655,721 |
| 34,271,600 |
|
|
| As of December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
US Dollar |
| 1,478,095 |
| 24,634,550 |
|
Argentine Peso |
| 3,187,243 |
| 1,675,178 |
|
Guaraní |
| 16,278,044 |
| 6,924,486 |
|
Chilean Peso |
| 712,339 |
| 1,037,386 |
|
Total |
| 21,655,721 |
| 34,271,600 |
|
There are no differences between cash and cash equivalents in the consolidated statements of financial position and cash and cash equivalents in the consolidated statements of cash flows.
· Term deposits
Term deposits, with original maturities of less than three months, are recorded at their amortized cost. Detail for the two year ends is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance |
|
Lodgement |
|
|
|
|
|
|
|
|
| Annual |
|
|
| as of December 31, |
|
date |
| Entity |
| Country |
| Currency |
| Principal |
| rate |
| Maturity |
| 2011 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
|
|
| ThCh$ |
|
12-30-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 910,074 |
| 2.0 |
| 01-02-2012 |
| 910,074 |
|
10-31-2011 |
| Itau S.A. |
| Paraguay |
| Guaraníes |
| 600,000 |
| 6.7 |
| 01-02-2012 |
| 606,608 |
|
10-27-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 1,200,000 |
| 7.5 |
| 01-25-2012 |
| 1,216,027 |
|
10-27-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 1,200,000 |
| 7.5 |
| 01-25-2012 |
| 1,216,027 |
|
10-27-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 1,680,000 |
| 8.5 |
| 01-25-2012 |
| 1,705,430 |
|
10-27-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 1,920,000 |
| 8.5 |
| 01-25-2012 |
| 1,949,063 |
|
11-30-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 960,000 |
| 7.5 |
| 02-29-2012 |
| 966,156 |
|
11-30-2011 |
| Itau S.A. |
| Paraguay |
| Guaraníes |
| 600,000 |
| 7.0 |
| 02-28-2012 |
| 603,567 |
|
11-30-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 600,000 |
| 7.5 |
| 02-28-2012 |
| 603,822 |
|
11-30-2011 |
| HSBC Bank Paraguay |
| Paraguay |
| Guaraníes |
| 540,000 |
| 6.6 |
| 02-28-2012 |
| 543,027 |
|
12-29-2011 |
| Itau S.A. |
| Paraguay |
| Guaraníes |
| 1,980,000 |
| 7.2 |
| 03-28-2012 |
| 1,980,787 |
|
12-29-2011 |
| Itau S.A. |
| Paraguay |
| Dollars |
| 882,090 |
| 2.0 |
| 01-30-2012 |
| 882,187 |
|
12-28-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 1,200,000 |
| 8.0 |
| 03-27-2012 |
| 1,200,789 |
|
12-28-2011 |
| HSBC Bank Paraguay |
| Paraguay |
| Guaraníes |
| 600,000 |
| 5.5 |
| 01-27-2012 |
| 600,271 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
| 14,983,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance |
|
Lodgement |
|
|
|
|
|
|
|
|
| Annual |
|
|
| as of December 31, |
|
date |
| Entity |
| Country |
| Currency |
| Principal |
| Rate |
| Maturity |
| 2010 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
|
|
| ThCh$ |
|
10-29-2010 |
| taú S.A. |
| Paraguay |
| Guaraníes |
| 985,000 |
| 4.0 |
| 01-25-2011 |
| 1,000,000 |
|
10-27-2010 |
| BBVA Paraguay S.A. |
| Paraguay |
| Dollars |
| 1,400,000 |
| 3.5 |
| 01-26-2011 |
| 1,408,800 |
|
10-27-2010 |
| Itaú S.A. |
| Paraguay |
| Guaraníes |
| 492,500 |
| 4.0 |
| 01-27-2011 |
| 500,000 |
|
10-26-2010 |
| HSBC Bank Py S.A. |
| Paraguay |
| Guaraníes |
| 492,500 |
| 5.0 |
| 02-25-2011 |
| 500,000 |
|
12-29-2010 |
| BBVA Paraguay S.A. |
| Paraguay |
| Guaraníes |
| 1,000,000 |
| 6.5 |
| 03-30-2011 |
| 1,000,000 |
|
12-30-2010 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 787,049 |
| 6.6 |
| 03-31-2011 |
| 787,049 |
|
12-31-2010 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 909,501 |
| 2.8 |
| 01-03-2011 |
| 909,501 |
|
12-29-2010 |
| Banco Penta S.A. |
| Chile |
| Dollars |
| 9,828,210 |
| 1.6 |
| 05-15-2011 |
| 9,828,210 |
|
12-29-2010 |
| Banco Penta S.A. |
| Chile |
| Dollars |
| 5,382,115 |
| 1.7 |
| 06-02-2011 |
| 5,382,115 |
|
12-29-2010 |
| Banco Penta S.A. |
| Chile |
| Dollars |
| 2,574,055 |
| 1.9 |
| 07-07-2011 |
| 2,574,055 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
| 23,889,730 |
|
There are no material differences between the carrying value of term deposits and their fair value.
· Mutual Funds
Mutual fund are valued at the market price at the end of each year. Variations in the value of the market value during the respective years are recognized as a charge or credit to income.
These mutual funds correspond to short-term low-risk investments. The portfolio consists of national debt instruments issued by Banco Central de Chile and the country’s principal financial institutions.
The following is the detail at the year ended December 31, 2010:
|
|
|
|
|
| Balance |
|
|
|
|
|
|
| as of December 31, |
|
Institution |
| Country |
| Currency |
| 2010 |
|
|
|
|
|
|
| ThCh$ |
|
Fondos Mutuos Banchile |
| Chile |
| Chilean pesos |
| 80,000 |
|
Fondos Mutuos Penta |
| Chile |
| Dollars |
| 5,148,000 |
|
Total |
|
|
|
|
| 5,228,100 |
|
NOTE 6 - CURRENT AND DEFERRED INCOME TAXES
a) General Information
The parent company and subsidiaries have recognized their tax rights and obligations on the basis of each country’s current regulations.
Consolidated income tax as of December 31, 2011 and 2010 has been calculated on the basis of taxable income of ThCh$ 19,995,045 and ThCh$ 23,742,136 respectively, and provided for.
As of December 31, 2011, the Chilean companies show the following tax credits pending distribution:
|
| Taxable income |
|
|
| ||||
|
| With credit |
| With credit |
| Without |
|
|
|
Company |
| 17.0% |
| 20.0% |
| credit |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Embotelladoras Coca-Cola Polar S.A. |
| 1,247,120 |
| 3,576,368 |
| 892,520 |
| 5,716,008 |
|
Transportes Polar S.A. |
| — |
| 392,806 |
| 120,646 |
| 513,452 |
|
Inversiones Los Andes Ltda. |
| 145,528 |
| — |
| 66,820 |
| 212,348 |
|
Total |
| 1,392,648 |
| 3,969,174 |
| 1,079,986 |
| 6,441,808 |
|
b) Deferred income taxes
The balances of deferred income tax assets and liabilities at the end of each year are as follows:
|
| December 31, |
| ||||||
|
| 2011 |
| 2010 |
| ||||
|
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Allowance for doubtful accounts |
| 166,943 |
| — |
| 119,090 |
| — |
|
Vacations provision |
| 73,187 |
| — |
| 57,400 |
| — |
|
Litigation provision |
| 359,312 |
| — |
| 86,490 |
| — |
|
Inventories |
| 321 |
| 99,257 |
| 6,711 |
| 101,087 |
|
Property, plant and equipment |
| — |
| 7,440,433 |
| — |
| 6,802,727 |
|
Lease obligations |
| 518,523 |
| — |
| 409,474 |
| — |
|
Tax losses carried forward |
| 4,227,229 |
| — |
| 3,092,283 |
| — |
|
Advance payments |
| — |
| 79,903 |
| 37,063 |
| 1,895 |
|
Foreign subsidiaries dividends |
| — |
| 1,986,281 |
| — |
| 1,790,446 |
|
Credit on bond placement |
| 332,569 |
| — |
| — |
| — |
|
Bond placement issue costs |
| — |
| 78,678 |
| — |
| 89,828 |
|
Others |
| 375,324 |
| 441,405 |
| 20,905 |
| 53,456 |
|
Total |
| 6,053,408 |
| 10,125,957 |
| 3,829,416 |
| 8,839,439 |
|
Movement in deferred income taxes for the years ended December 31, 2011 and 2010 are as follows:
|
| For the year ended December 31, |
| ||||||
|
| 2011 |
| 2010 |
| ||||
|
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 3,829,416 |
| 8,839,439 |
| 1,393,576 |
| 8,192,839 |
|
Increase on deferred income taxes |
| 2,041,704 |
| 1,023,750 |
| 2,563,446 |
| 1,125,134 |
|
Increase (decrease) on foreign currency translation |
| 182,288 |
| 262,768 |
| (127,606 | ) | (478,534 | ) |
Movements |
| 2,223,992 |
| 1,286,518 |
| 2,435,840 |
| 646,600 |
|
Closing balance |
| 6,053,408 |
| 10,125,957 |
| 3,829,416 |
| 8,839,439 |
|
c) Income tax expense
The following shows the composition of the income tax expense for each year:
|
| For the year ended December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Current income tax expense |
| (2,533,730 | ) | (2,816,748 | ) |
Adjustments to previous year´s current income tax |
| (124,763 | ) | 112,671 |
|
Other current tax expense |
| 145,524 |
| 10,085 |
|
|
|
|
|
|
|
Current income tax expense |
| (2,512,969 | ) | (2,693,992 | ) |
|
|
|
|
|
|
Credit (charge) for movements in deferred income taxes |
| 733,834 |
| 1,637,678 |
|
Other credits (charges) for deferred income taxes |
| 12,377 |
| (9,046 | ) |
|
|
|
|
|
|
Deferred income taxes |
| 746,211 |
| 1,628,632 |
|
|
|
|
|
|
|
Income tax expense, net |
| (1,766,758 | ) | (1,065,360 | ) |
Income tax expense shown by the Chilean and foreign countries at the end of each year is as follows:
|
| For the year ended December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Foreign |
| (1,498,698 | ) | (1,677,469 | ) |
Chilean |
| (1,014,571 | ) | (1,016,523 | ) |
|
|
|
|
|
|
Current income tax expense |
| (2,512,969 | ) | (2,693,992 | ) |
|
|
|
|
|
|
Foreign |
| 948,870 |
| 2,740,594 |
|
Chilean |
| (202,659 | ) | (1,111,962 | ) |
|
|
|
|
|
|
Deferred income tax recovery |
| 746,211 |
| 1,628,632 |
|
|
|
|
|
|
|
Income tax expense, net |
| (1,766,758 | ) | (1,065,360 | ) |
d) Reconciliation of tax expense using the statutory rate and using the effective rate
|
| For the year ended December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Earnings before income taxes |
| 25,438,578 |
| 28,168,380 |
|
|
|
|
|
|
|
Income tax expense using statutory rate (20.0%) |
| 5,069,716 |
| — |
|
Income tax expense using statutory rate (17.0%) |
| — |
| 4,788,625 |
|
|
| (2,115,211 | ) | (2,422,320 | ) |
Permanent differences: |
|
|
|
|
|
Non-taxable income |
| (1,655,434 | ) | (1,880,386 | ) |
Non-deductible expenses for tax purposes |
| 434,901 |
| 566,809 |
|
Others |
| 32,786 |
| 12,632 |
|
|
|
|
|
|
|
Adjustments to tax expense |
| (1,187,747 | ) | (1,300,945 | ) |
|
|
|
|
|
|
Tax expense using the effective rate |
| 1,766,758 |
| 1,065,360 |
|
|
|
|
|
|
|
Effective rate |
| 7.0 | % | 3.8 | % |
The income tax rate applicable in each of the countries where the Company operates is 20.0% in Chile, 10% in Paraguay and 35% in Argentina.
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT
a) Balances
The following shows property, plant and equipment as of December 31, 2011 and 2010:
|
| Property, |
| Accumulated |
| Property, plant and |
| ||||||
|
| plant and equipment, gross |
| depreciation and impairment |
| equipment, net |
| ||||||
|
| 12.31.2011 |
| 12.31.2010 |
| 12.31.2011 |
| 12.31.2010 |
| 12.31.2011 |
| 12.31.2010 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Construction in progress |
| 13,823,900 |
| 11,671,145 |
| — |
| — |
| 13,823,900 |
| 11,671,145 |
|
Land |
| 11,512,013 |
| 10,780,083 |
| — |
| — |
| 11,512,013 |
| 10,780,083 |
|
Buildings |
| 31,930,930 |
| 22,786,013 |
| 2,369,664 |
| 1,689,855 |
| 29,561,266 |
| 21,096,158 |
|
Plant and equipment |
| 69,077,285 |
| 50,794,843 |
| 12,301,838 |
| 8,289,232 |
| 56,775,447 |
| 42,505,611 |
|
Computer equipment |
| 5,450,946 |
| 3,659,887 |
| 3,208,220 |
| 2,484,977 |
| 2,242,726 |
| 1,174,910 |
|
Motor vehicles |
| 1,218,311 |
| 1,150,944 |
| 322,875 |
| 281,643 |
| 895,436 |
| 869,301 |
|
Other property, plant and equipment |
| 75,784,536 |
| 50,619,487 |
| 22,967,722 |
| 15,483,126 |
| 52,816,814 |
| 35,136,361 |
|
Total |
| 208,797,921 |
| 151,462,402 |
| 41,170,319 |
| 28,228,833 |
| 167,627,602 |
| 123,233,569 |
|
b) Additional information
The amount of fully depreciated property, plant and equipment but till in use as of December 31, 2011 and 2010 is ThCh$ 3,706,653 and ThCh$ 2,764,235, respectively.
Total expenditure in property, plant and equipment under construction as of the end of each year amount to ThCh$ 13,823,900 in 2011 (ThCh$ 11,671,145 in 2010).
c) Movement
The movement in property, plant and equipment during botyears are as follows:
|
|
|
|
|
|
|
| Plant and |
| Computer |
|
|
| Other property, |
| Property, plant, |
|
|
| Construction |
|
|
| Buildings |
| equipment, |
| equipment, |
| Motor |
| plant and equip., |
| and equipment |
|
|
| in progress |
| Land |
| net |
| net |
| net |
| vehicles, net |
| net |
| net |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For the year ended 12.31.2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 11,671,145 |
| 10,780,083 |
| 21,096,158 |
| 42,505,611 |
| 1,174,910 |
| 869,301 |
| 35,136,361 |
| 123,233,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
| 16,384,954 |
| 222,613 |
| 638,019 |
| 8,384,994 |
| 956,438 |
| 310,966 |
| 24,948,945 |
| 51,846,929 |
|
Tranfers |
| 14,993,346 |
| — |
| 7,694,902 |
| 7,315,004 |
| 647,216 |
| — |
| (663,776 | ) | — |
|
Dispoals / Write-offs |
| (615 | ) | (230,861 | ) | (355,299 | ) | (2,561,537 | ) | (53 | ) | (210,345 | ) | (887,794 | ) | (4,246,504 | ) |
Depreciation |
| — |
| — |
| (678,085 | ) | (3,443,533 | ) | (611,073 | ) | (107,848 | ) | (8,559,680 | ) | (13,400,219 | ) |
Foreign currency translation |
| 761,762 |
| 740,178 |
| 1,165,571 |
| 4,574,908 |
| 75,288 |
| 33,362 |
| 2,842,758 |
| 10,193,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total movement |
| 2,152,755 |
| 731,930 |
| 8,465,108 |
| 14,269,836 |
| 1,067,816 |
| 26,135 |
| 17,680,453 |
| 44,394,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance |
| 13,823,900 |
| 11,512,013 |
| 29,561,266 |
| 56,775,447 |
| 2,242,726 |
| 895,436 |
| 52,816,814 |
| 167,627,602 |
|
|
|
|
|
|
|
|
| Plant and |
| Computer |
|
|
| Other property, |
| Property, plant, |
|
|
| Construction |
|
|
| Buildings |
| equipment, |
| equipment, |
| Motor |
| plant and equip., |
| and equipment |
|
|
| in progress |
| Land |
| net |
| net |
| net |
| vehicles, net |
| net |
| net |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For the year ended 12.31.2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 3,957,698 |
| 10,771,385 |
| 19,571,140 |
| 33,722,245 |
| 1,096,243 |
| 786,215 |
| 29,565,320 |
| 99,470,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
| 22,541,177 |
| 509,086 |
| 565,842 |
| 3,713,308 |
| 529,205 |
| 261,030 |
| 14,961,374 |
| 43,081,022 |
|
Transfers |
| (14,692,368 | ) | — |
| 2,773,490 |
| 11,875,864 |
| 146,741 |
| 9,977 |
| (113,704 | ) | — |
|
Disposals/ Write-offs |
| — |
| — |
| (136,506 | ) | (1,811,842 | ) | (4,615 | ) | (24,319 | ) | ()758,640 |
| (2,735,922 | ) |
Depreciation |
| — |
| — |
| (408,244 | ) | (2,463,370 | ) | (533,101 | ) | (110,507 | ) | (6,598,485 | ) | (10,113,707 | ) |
Foreign currency translation |
| (135,362 | ) | (500,388 | ) | (1,269,564 | ) | (2,530,594 | ) | (59,563 | ) | (53,095 | ) | (1,919,504 | ) | (6,468,070 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total movement |
| 7,713,447 |
| 8,698 |
| 1,525,018 |
| 8,783,366 |
| 78,667 |
| 83,086 |
| 5,571,041 |
| 23,763,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance |
| 11,671,145 |
| 10,780,083 |
| 21,096,158 |
| 42,505,611 |
| 1,174,910 |
| 869,301 |
| 35,136,361 |
| 123,233,569 |
|
NOTE 8 - REVENUE AND EXPENSES
a) Operating Revenue
- Revenues from Ordinary Activities
Revenues from ordinary activities relate to sales of goods.
- Other revenue
Details of other revenue during each year are as follows:
|
| For the year ended |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Rentals |
| 30,659 |
| 31,059 |
|
Compensation under Arbitration |
| — |
| 4,301,518 |
|
VPP Adjustment |
| 392,739 |
| — |
|
Reverse of provision of containers |
| 334,601 |
| 161,144 |
|
Gain on disposal of property, plant and equipment |
| 6,505 |
| 13,842 |
|
Gain on disposal of scraps |
| 215,719 |
| 215,904 |
|
Other |
| 81,587 |
| 93,054 |
|
|
|
|
|
|
|
Total |
| 1,061,810 |
| 4,816,521 |
|
b) Operating Costs and Expenses
The detail of operating costs and expenses during each year is as follows:
|
| FOR THE YEAR ENDED DECEMBER 31, |
| ||||||||||||||||||
|
| Cost of sales |
| Distribution costs |
| Administrative expenses |
| Other expenses, |
|
|
| Total costs and expenses |
| ||||||||
|
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Raw materials |
| 153,058,126 |
| 114,707,706 |
| 355,282 |
| 315,316 |
| 5,497 |
| 4,879 |
| 2,176 |
| 1,932 |
| 153,421,081 |
| 115,029,833 |
|
Depreciation |
| 8,186,568 |
| 6,890,028 |
| 290,846 |
| 240,760 |
| 364,366 |
| 314,803 |
| 4,429,344 |
| 3,243,072 |
| 13,271,124 |
| 10,688,663 |
|
Maintenance and repairs |
| 4,025,853 |
| 3,398,498 |
| 662,053 |
| 260,956 |
| 75,270 |
| 63,802 |
| 559,786 |
| 471,183 |
| 5,322,962 |
| 4,194,439 |
|
Employee expenses |
| 14,492,342 |
| 13,967,643 |
| 7,280,443 |
| 5,659,534 |
| 9,428,132 |
| 6,500,012 |
| 11,474,233 |
| 9,769,700 |
| 42,675,150 |
| 35,896,889 |
|
Publicity and promotion |
| — |
| — |
| — |
| — |
| — |
| — |
| 5,144,845 |
| 3,205,636 |
| 5,144,845 |
| 3,205,636 |
|
Freight and other distribution expense |
| 42,864 |
| 29,219 |
| 28,937,447 |
| 20,983,402 |
| 24,564 |
| 24,966 |
| 937,389 |
| 790,100 |
| 29,942,264 |
| 21,827,687 |
|
Other costs & expenses |
| 2,087,348 |
| 1,777,573 |
| 1,870,883 |
| 1,218,837 |
| 5,977,898 |
| 4,570,838 |
| 2,667,190 |
| 2,294,175 |
| 12,603,319 |
| 9,861,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| 181,893,101 |
| 140,770,667 |
| 39,396,954 |
| 28,678,805 |
| 15,875,727 |
| 11,479,300 |
| 25,214,963 |
| 19,775,798 |
| 262,380,745 |
| 200,704,570 |
|
The increase in publicity and promotion expenses over the previous year relates mainly to the introduction of an increase in market assets in Paraguay and Argentina in 2010. This plan was implemented with the Company’s own resources and contributions from Coca-Cola, plus a commitment by our company for 2011.
c) Finance Costs
The detail of finance costs for each year is as follows:
|
| For the year ended |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 739,967 |
| 3,198,805 |
|
Bonds |
| 1,160,735 |
| 703,254 |
|
Bond indexation adjustments |
| 1,476,649 |
| 331,021 |
|
Total |
| 3,377,351 |
| 4,233,080 |
|
Addicionally, an amount of ThCh$2,350,010 of finance cost arising from property, plant and equipment was capitalized in accordance with criteria described in note 2 h).
d) Other Losses
Other losses for each year are as follows:
|
| For the year ended |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Restructuring costs |
| 3,597,527 |
| 330,971 |
|
Write-off of property, plant and equipment |
| 211,390 |
| 142,549 |
|
Donations |
| 27,485 |
| 74,705 |
|
Provision for litigations |
| 173,668 |
| 116,553 |
|
Provision for tax contingency |
| 350,000 |
| — |
|
Tax on bank charges |
| 1,223,933 |
| 1,086,574 |
|
Others |
| 43,307 |
| 49,994 |
|
|
|
|
|
|
|
Total |
| 5,627,310 |
| 1,801,346 |
|
Restructuring costs relate to the closure of the Neuquén production plant of the subsidiary Coca-Cola Polar Argentina S.A., whose business was absorbed by the new plant built in Bahía Blanca, in accordance with the restructuring plans agreed by the Board of Directors during 2010.
NOTE 9 - EMPLOYEE BENEFITS
As of December 31, 2011 and December 31, 2010 the Company shows a provision for profit sharing and bonuses of ThCh$ 1,176,697 and ThCh$ 304,667 respectively.
These employee benefits are recorded in the costs of sales, distribution, administrative expenses and other expenses by function in the consolidated statement of comprehensive income.
· Employee Expenses
Employee expenses included in the consolidated statement of comprehensive results for each period were as follows:
|
| For the year ended December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Wages and salaries |
| 33,841,493 |
| 29,480,963 |
|
Short-term employee benefits |
| 6,370,964 |
| 4,887,693 |
|
Severance benefits |
| 1,168,528 |
| 463,879 |
|
Other personnel expenses |
| 627,394 |
| 443,222 |
|
|
|
|
|
|
|
Total |
| 42,008,379 |
| 35,275,757 |
|
NOTE 10 - RELATED PARTIES
Balances and transactions with related parties are as follows:
a) Receivables from related parties
|
|
|
|
|
| Country |
|
|
|
|
|
|
|
Tax ID No. |
| Company |
| Relationship |
| of origin |
| Currency |
| 12.31.2011 |
| 12.31.2010 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Related to shareholder |
| Chile |
| Ch$ |
| 2,539,352 |
| 568,425 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| US$/ Arg $ |
| 2,149,758 |
| 6,626,413 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Ch$ |
| 589 |
| 377 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Ch$ |
| 20,671 |
| 43,474 |
|
96.705.990-0 |
| Envases Central S.A. |
| Associate |
| Chile |
| Ch$ |
| 4,461 |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
| 4,714,831 |
| 7,238,689 |
|
b) Payables to related parties
|
|
|
|
|
| Country |
|
|
|
|
|
|
|
Tax ID No |
| Company |
| Relationship |
| of origin |
| Currency |
| 12.31.2011 |
| 12.31.2010 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Related to shareholder |
| Chile |
| Ch$ |
| 2,168,751 |
| 1,139,568 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| US$/ Arg $ |
| 2,861,401 |
| 2,520,087 |
|
96.705.990-0 |
| Envases Central S.A. |
| Associate |
| Chile |
| Ch$ |
| 342,161 |
| 302,748 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| US$ |
| 27,478 |
| 56,932 |
|
76.389.720-6 |
| Vital Aguas S.A. |
| Associate |
| Chile |
| Ch$ |
| 293,497 |
| 290,455 |
|
93.899.000-k |
| Vital S.A. |
| Associate |
| Chile |
| Ch$ |
| 716,666 |
| 673,505 |
|
76.105.924-6 |
| Inversiones Las Niñas Dos S.A. |
| Director in common |
| Chile |
| Ch$ |
| 268,043 |
| 83,428 |
|
79.891.340-9 |
| Inversiones Las Hualtatas S.A. |
| Director in common |
| Chile |
| Ch$ |
| 129,550 |
| 94,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
| 6,807,547 |
| 5,161,658 |
|
c) Transactions with related parties
|
|
|
|
|
| Country |
|
|
|
|
| For the year ended |
| ||
Tax ID. No. |
| Company |
| Relationship |
| of origin |
| Transaction |
| Currency |
| 2011 |
| 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
79.889.560-5 |
| Constructora Las Américas Ltda. |
| Director in common |
| Chile |
| Services |
| Ch$ |
| — |
| 171,248 |
|
79.927.360-8 |
| Inversiones Las Viñas Ltda. |
| Director in common |
| Chile |
| Services |
| Ch$ |
| — |
| 114,881 |
|
76.105.924-6 |
| Inversiones Las Niñas Dos S.A. |
| Director in common |
| Chile |
| Services |
| Ch$ |
| 280,000 |
| 431,507 |
|
79.891.340-9 |
| Inversiones Las Hualtatas S.A. |
| Director in common |
| Chile |
| Services |
| Ch$ |
| 430,000 |
| 440,000 |
|
96.773.130-7 |
| Viña Caliterra S.A. |
| Director in common |
| Chile |
| Office rental |
| Ch$ |
| 22,254 |
| 21,581 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Related to shareholder |
| Chile |
| Reimb. Publicity expenses |
| Ch$ |
| 498,017 |
| 588,546 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Related to shareholder |
| Chile |
| Purchase of raw materials |
| Ch$ |
| 13,620,532 |
| 15,582,048 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Sale of raw materials |
| Ch$ |
| 47,729 |
| 37,688 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Purchase of finished products |
| US$ |
| 120,138 |
| 133,801 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Purchase of finished products |
| Ch$ |
| 15,333 |
| 19,841 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Purchase of finished products |
| Ch$ |
| 66,024 |
| 157,081 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| Reimb. Publicity expenses |
| Argentine $ |
| 3,148,484 |
| 2,912,134 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| Reimb. Publicity expenses |
| US$ |
| 3,808,956 |
| 2,993,756 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| Purchase of raw materials |
| Argentine $ |
| 20,706,081 |
| 15,580,697 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| Purchase of raw materials |
| US$ |
| 22,504,073 |
| 15,693,726 |
|
96.705.990-0 |
| Envases Central S.A. |
| Associate |
| Chile |
| Purchase of finished products |
| Ch$ |
| 3,240,651 |
| 2,451,222 |
|
76.389.720-6 |
| Vital Aguas S.A. |
| Associate |
| Chile |
| Purchase of finished products |
| Ch$ |
| 2,935,343 |
| 3,462,524 |
|
93.899.000-k |
| Vital S.A. |
| Associate |
| Chile |
| Purchase of finished products |
| Ch$ |
| 6,657,730 |
| 5,508,048 |
|
Transactions with related parties are carried out on market conditions similar to those that would be applicable to unrelated third parties.
d) Key Management Personnel
Remuneration and benefits were received by the Company’s key management personnel during each year end as follows:
|
| For the year ended December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Wages and salaries |
| 4,178,403 |
| 3,886,922 |
|
Board of Director´s fees |
| 183,239 |
| 179,419 |
|
Short-term employee benefits |
| 1,027,098 |
| 327,650 |
|
Termination benefits |
| 983,361 |
| 41,035 |
|
|
|
|
|
|
|
Total |
| 6,372,101 |
| 4,435,026 |
|
The key management personnel of the Company are directors, managers and assistant managers.
The immediate and ultimate controller of Embotelladoras Coca-Cola Polar S.A. is Inversiones Los Aromos Ltda., for which no financial statements are available to the public.
NOTE 11 - INVESTMENTS IN ASSOCIATES
a) Valuation and Composition
Investments in associates are valued as described in Note 2 e) at the end of each year.
Investments in Vital Aguas S.A., Vital S.A. and Envases Central S.A. are shown as Investment in associates because Embotelladoras Coca-Cola Polar S.A. has a significant influence on those entities through having the right to appoint a director.
b) Acquisition of shares in Vital S.A.
In January 2011, Embotelladoras Coca-Cola Polar S.A. acquired 1,382,198 shares in Vital S.A., equivalent to a 15% shareholding, for an amount of ThCh$ 2,393,760.
In March 2011, Vital S.A. raised its capital by an issuance of 10,000 shares for cash. Embotelladoras Coca-Cola Polar S.A. acquired 1,500 shares for an amount of ThCh$ 855,000.
c) Summary of Information on Investments in Associates
The detail of investments in associates is as follows:
|
|
|
| Investments in Associates |
| ||||||
Tax No. |
|
|
| 76.389.720-6 |
| 96.705.990-0 |
| 76.530.790-2 |
| 93.899.000-K |
|
Name of associate |
|
|
| Vital Aguas S.A |
| Envases Central S.A. |
| Embotelladora del |
| Vital S.A. |
|
Country of origin/Functional currency |
|
|
| Chile / Chilean peso |
| Chile / Chilean peso |
| Chile / Chilean peso |
| Chile / Chilean peso |
|
Principal activities |
|
|
| Production & distribution of |
| Production & bottling of soft |
| Production & |
| Production & distribution of |
|
Investment cost |
| ThCh$ |
| 2,182,376 |
| 460,673 |
| 593,741 |
| 3,248,760 |
|
Carrying value |
| ThCh$ |
| 2,489,472 |
| 841,328 |
| — |
| 3,327,379 |
|
December 31, |
|
|
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
|
Shareholding |
| % |
| 17.10 |
| 17.10 |
| 9.36 |
| 9.36 |
| — |
| 25.00 |
| 15.00 |
| — |
|
Total current assets |
| ThCh$ |
| 2,712,174 |
| 2,434,638 |
| 7,315,342 |
| 4,637,407 |
| — |
| 773 |
| 9,752,638 |
| — |
|
Total non-current assets |
| ThCh$ |
| 5,5419,764 |
| 5,278,268 |
| 10,156,208 |
| 10,081,291 |
| — |
| — |
| 21,121,931 |
| — |
|
Total assets |
| ThCh$ |
| 8,131,938 |
| 7,712,906 |
| 17,471,550 |
| 14,718,698 |
| — |
| 773 |
| 30,874,569 |
| — |
|
|
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
| ThCh$ |
| 2,636,569 |
| 2,707,697 |
| 6,907,962 |
| 4,997,969 |
| — |
| — |
| 8,953,403 |
| — |
|
Total non-current liabilities |
| ThCh$ |
| 270,500 |
| 309,220 |
| 1,573,321 |
| 1,211,686 |
| — |
| — |
| 1,304,768 |
| — |
|
Total liabilities |
| ThCh$ |
| 2,907,069 |
| 3,016,917 |
| 8,481,283 |
| 6,209,655 |
| — |
| — |
| 10,258,171 |
| — |
|
|
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
| ThCh$ |
| 12,016,685 |
| 10,696,776 |
| 32,486,458 |
| 28,748,096 |
| — |
| — |
| 39,735,231 |
| — |
|
Total expenses |
| ThCh$ |
| (11,696,261 | ) | (10,759,966 | ) | (32,005,233 | ) | (29,132,927 | ) | — |
| — |
| (39,211,101 | ) | — |
|
Earnings (Loss) for the year |
| ThCh$ |
| 320,424 |
| (63,190 | ) | 481,225 |
| (384,831 | ) | — |
| — |
| 524,130 |
| — |
|
d) Movement in investments in associates
Movement in investments in associates during each year are as follows:
|
| For the year ended |
| ||
|
| December 31, |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 2,838,428 |
| 2,885,246 |
|
|
|
|
|
|
|
Additions |
| 3,248,760 |
| — |
|
Share of profit (loss) |
| 178.446 |
| (46,818 | ) |
Other increases |
| 392,546 |
| — |
|
Closing balance |
| 6,658,180 |
| 2,838,428 |
|
NOTE 12 - OTHER PROVISIONS
a) As of the end of each year, information relating to provisions is as follows:
|
| Current |
| ||
|
| 12.31.2011 |
| 12.31.2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Provision for legal claims: |
|
|
|
|
|
Labor lawsuits |
| 561,238 |
| 412,809 |
|
Profit sharing and bonuses |
| 1,176,697 |
| 304,667 |
|
Other provisions |
| 176,008 |
| 64,850 |
|
|
|
|
|
|
|
Total |
| 1,913,943 |
| 782,326 |
|
|
| Estimated date of |
| Explanation of |
Details of the Provisions |
| outflow of funds |
| Uncertainty |
Labor lawsuits |
| Second half 2012 |
| Provision amount is calculated based on estimates on the labor lawyer’s report. |
Profit sharing & bonuses |
| First half 2012 |
| The use of this provision is dependent on compliance with expected profitability & individual performance. |
b) The movement in provisions during each year is as follows:
|
| For the year ended 12.31.2011 |
| For the year year 12.31.2010 |
| ||||||||||||
|
|
|
| Profit |
|
|
|
|
| Provision for |
| Profit |
|
|
|
|
|
|
| Provision for |
| sharing and |
| Other |
|
|
| Legal |
| sharing and |
| Other |
|
|
|
|
| Legal claims |
| bonuses |
| provisions |
| Total |
| Claims |
| bonuses |
| Provisions |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Initial balance |
| 412,809 |
| 304,667 |
| 64,850 |
| 782,326 |
| 440,303 |
| 286,973 |
| 33,492 |
| 760,768 |
|
|
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Changes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increases in existing provisions |
| 89,174 |
| 847,124 |
| 112,739 |
| 1,049,037 |
| 15,511 |
| 32,949 |
| 31,422 |
| 79,882 |
|
Increase (decrease) in foreign exchange differences |
| 59,255 |
| 24,906 |
| (1,581 | ) | 82,580 |
| (43,005 | ) | (15,255 | ) | (64 | ) | (58,324 | ) |
Closing balance |
| 561,238 |
| 1,176,697 |
| 176,008 |
| 1,913,943 |
| 412,809 |
| 304,667 |
| 64,850 |
| 782,326 |
|
c) Contingencies
· Tax Contingency
In August 2004 and 2005, the Chilean tax authority (“Servicio de Impuestos Internos”) issued 2 tax notices against the Company on its historic financial information, totalling of ThCh$ 365,959 and ThCh$ 800,506, respectively.
On January 11, 2012, the Company was notified of the tax charge amounting to ThCh$ 207,351, which is recognized in these consolidated financial statements. This settlement concluded the process and there are no further proceedings pending regarding this matter.
NOTE 13 - INTANGIBLE ASSETS OTHER THAN GOODWILL
a) Intangible assets at the close of each year are as follows:
|
| As of December 31, 2011 |
| As of December 31, 2010 |
| ||||||||
|
| Gross |
| Accumulated |
| Net |
| Gross |
| Accumulated |
| Net |
|
|
| value |
| amortization |
| value |
| value |
| amortization |
| value |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights (1) |
| 1,385,512 |
| — |
| 1,385,512 |
| 1,365,507 |
| — |
| 1,365,507 |
|
Software |
| 1,579,649 |
| (304,201 | ) | 1,275,448 |
| 465,481 |
| (224,871 | ) | 240,610 |
|
Total |
| 2,965,161 |
| (304,201 | ) | 2,660,960 |
| 1,830,988 |
| (224,871 | ) | 1,606,117 |
|
b) Movement in intangible assets during each year are as follows:
|
| For the year ended |
| ||||||||||
|
| December 31, 2011 |
| December 31,2010 |
| ||||||||
|
| Rights(1) |
| Software |
| Total |
| Rights(1) |
| Software |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 1,365,507 |
| 240,610 |
| 1,606,117 |
| 1,471,619 |
| 84,367 |
| 1,555,986 |
|
Additions |
| — |
| 1,109,668 |
| 1,109,668 |
| — |
| 209,534 |
| 209,534 |
|
Amortization |
| — |
| (75,268 | ) | (75,268 | ) | — |
| (51,528 | ) | (51,528 | ) |
Increase (decrease) in foreign exchange differences |
| 20,005 |
| 438 |
| 20,443 |
| (106,112 | ) | (1,763 | ) | (107,875 | ) |
Closing balance |
| 1,385,512 |
| 1,275,448 |
| 2,660,960 |
| 1,365,507 |
| 240,610 |
| 1,606,117 |
|
According to all estimates including cash-flow projections of the cash-generating units to which the rights are allocated to, it is concluded that the value is recoverable at the end of the year.
(1) As described in Note 2 g), the rights are recorded at their historic cost and are not amortized.
NOTE 14 - GOODWILL
The balances and movement of goodwill for each year are the following:
Cash generating |
| January 1, 2011 |
| Additions |
| Disposal |
| Currency |
| Balance as of |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chilean operation |
| 1,901,275 |
| — |
| — |
| — |
| 1,901,275 |
|
Argentine operation |
| 6,018,867 |
| — |
| — |
| 135,333 |
| 6,154,200 |
|
Paraguayan operation |
| 1,391,425 |
| — |
| — |
| 7,366 |
| 1,398,791 |
|
Total |
| 9,311,567 |
| — |
| — |
| 142,699 |
| 9,454,266 |
|
|
|
|
|
|
|
|
| Currency |
|
|
|
Cash generating |
| January 1, 2010 |
|
|
|
|
| translation |
| Balance as of |
|
unit |
| (Openinig balance) |
| Additions |
| Disposal |
| differences |
| December 31, 2010 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chilean operation |
| 1,901,275 |
| — |
| — |
| — |
| 1,901,275 |
|
Argentine operation |
| 6,736,682 |
| — |
| — |
| (717,815 | ) | 6,018,867 |
|
Paraguayan operation |
| 1,395,108 |
| — |
| — |
| (3,683 | ) | 1,391,425 |
|
Total |
| 10,033,065 |
| — |
| — |
| (721,498 | ) | 9,311,567 |
|
According to all estimates including cash-flow projections for determining the value in use of the cash-generating units to which goodwill are allocated to, it is believed that the value at the year ends are recoverable.
NOTE 15 - EQUITY
As of December 31, 2011, the company’s share capital consists of the following:
a) Number of Shares
|
| No. Shares |
| No. Shares |
| No. shares with |
|
Series |
| subscribed |
| paid |
| voting rights |
|
Ordinary shares |
| 280,000,000 |
| 280,000,000 |
| 280,000,000 |
|
The Company’s shares have no restrictions on dividend payments or capital reductions, and they are of no par value.
b) Share capital
|
| Subscribed |
| Paid |
|
|
| ThCh$ |
| ThCh$ |
|
Share capital |
| 39,685,061 |
| 39,685,061 |
|
c) Distribution of shareholders
|
| Percentage |
| Number of |
|
Type of shareholders |
| Interest |
| shareholders |
|
|
| % |
|
|
|
Interest of 10% or more |
| 86.28 |
| 2 |
|
Less than 10% interest: |
|
|
|
|
|
Investment UF 200 or more |
| 13.66 |
| 45 |
|
Investment less than UF 200 |
| 0.06 |
| 56 |
|
Total |
| 100.00 |
| 103 |
|
Controllers of the Company (1) |
| 86.28 |
| 2 |
|
(1) The controllers of the Company are Inversiones Los Aromos Ltda. and Coca-Cola Interamerican Corporation, which have shareholdings of 56.88% and 29.40%, respectively.
d) Earnings per share
The basic earnings per share shown in the consolidated statement of comprehensive income is calculated by dividing Earnings attributable to the owners of the controller by the total subscribed and paid shares.
There are no diluting factors that differentiate basic earnings from diluted earnings.
|
| For the year ended |
| ||
|
| 2011 |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Earnings attributable to the owners of the controller |
| 23,240,036 |
| 26,746,755 |
|
Total number of subscribed and paid shares |
| 280,000,000 |
| 280,000,000 |
|
Earnings per basic share — basic and diluted |
| 83.00 |
| 95.52 |
|
e) Dividends
As agreed at the shareholders meeting, it is established that the amount of the annual dividend will the equivalent to 50% the earnings for each year.
The following shows the dividends distributed during 2011 and 2010:
Dividend Distributed |
| ||||||||||
|
|
|
|
|
|
|
|
|
| Against |
|
Payment |
| Type of |
| Dividend |
| Dividend |
| Amount of |
| result for |
|
date |
| dividend |
| number |
| per share |
| Dividend |
| year |
|
|
|
|
|
|
|
|
| ThCh$ |
|
|
|
Oct-10 |
| Interim |
| 40 |
| 23.60 |
| 6,608,000 |
| 2010 |
|
May-11 |
| Final |
| 41 |
| 48.05 |
| 13,454,000 |
| 2010 |
|
Oct-11 |
| Interim |
| 42 |
| 12.84 |
| 3,595,200 |
| 2011 |
|
As described in Note 2 t), as of December 31, 2011 and 2010 dividends have been provisioned for ThCh$ 3,376,811 and ThCh$ 1,416,026, respectively.
Regarding the net distributable earnings considered for calculating the minimum obligatory and additional dividends, the ordinary shareholders agreed not to make any adjustments to the Earnings attributable to the owners of the controller. The shareholders also agreed that the adjustments for the IFRS 1 application determined as of December 31, 2008 will be deducted from Accumulated earnings, should dividends be distributed.
f) Equity Reserves
Other Reserves
These relate to the monetary correction of share capital as of December 31, 2008 amounting to ThCh$ 3,243,316 which, as stated the SVS Circular 456 dated June 20, 2008, was recorded as a charge to Equity reserves.
Translation reserves
These were as described in Note 2 d. iii). Details of translation reserves by company in the consolidated statement of financial position at the end of each year is as follows:
Company |
| 12.31.2011 |
| 12.31.2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Inversiones Los Andes Ltda. |
| (999,323 | ) | (14,558,984 | ) |
Kopolar Refrescos S.A. |
| 5,376 |
| (3,607 | ) |
Coca-Cola Polar Argentina S.A. |
| (576,117 | ) | (915,709 | ) |
Aconcagua Investing S.A. |
| (4,687 | ) | (6,037 | ) |
Total |
| (1,574,751 | ) | (15,484,337 | ) |
The movement of the foreign currency translation differences of Inversiones Los Andes Ltda. derives mainly from its investments in the subsidiaries Paraguay Refrescos S.A. and Coca-Cola Polar Argentina S.A., whose functional currencies are the guaraní and Argentine peso, respectively. During the year, these currencies appreciated against the Chilean peso which implied a positive translation effect of ThCh$ 12,584,209.
g) Capital Management
The objective of the Company is to maintain an optimal level of capitalization that allows it to ensure access to the financial markets for the development of its medium and long-term objectives, optimizing the return for its shareholders and maintaining a stable financial position.
The Company considers capital as the equity of the parent corresponding to shares subscribed and paid, translation reserves and accumulated earnings.
As of the date of these consolidated financial statements, there are no restrictions relating to capital requirements.
h) Non-controlling interests
This recognizes the portion of the equity and income of the subsidiaries held by non-controlling interests. Details for the years ended December 31, 2011 and 2010 are as follows:
|
| Non-controlling interests |
| ||||||||||
|
|
|
|
|
| Earnings for the year ended |
| ||||||
|
| Percentage |
| Equity |
| December 31, |
| ||||||
Company |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
|
|
| % |
| % |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Paraguay Refrescos S.A. |
| 2.00 |
| 2.00 |
| 1,932,727 |
| 1,307,866 |
| 341,779 |
| 356,260 |
|
Inversiones Los Andes Ltda. |
| 0.01 |
| 0.01 |
| 22 |
| 16 |
| 4 |
| 4 |
|
Transportes Polar S.A. |
| 0.01 |
| 0.01 |
| 1 |
| 1 |
| 1 |
| 1 |
|
Total |
|
|
|
|
| 1,932,750 |
| 1,307,883 |
| 341,784 |
| 356,265 |
|
NOTE 16 - FINANCIAL INSTRUMENTS
Details of financial assets and liabilities and their categories at the end of each year are as follows:
|
| As of 12.31.2011 |
| As of 12.31.2010 |
| ||||
Financial Assets |
| Current |
| Non-Current |
| Current |
| Non-current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
At fair value through profit and loss |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| — |
| — |
| 5,228,100 |
| — |
|
Loans and receivable |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 21,655,721 |
| — |
| 29,043,500 |
| — |
|
Other financial assets |
| — |
| — |
| 281,917 |
| 11,466,245 |
|
Trade and other receivables |
| 26,736,139 |
| — |
| 20,057,437 |
| — |
|
Accounts receivable from related parties |
| 4,714,831 |
| — |
| 7,238,689 |
| — |
|
Total |
| 53,106,691 |
| — |
| 61,849,643 |
| 11,466,245 |
|
|
| 12.31.2011 |
| 12.31.2010 |
| ||||
Financial Liabilities |
| Current |
| Non-Current |
| Current |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Measured at amortized cost: |
|
|
|
|
|
|
|
|
|
Other financial liabilities |
|
|
|
|
|
|
|
|
|
Bank loans |
| 9,946,361 |
| 15,017,396 |
| 7,370,509 |
| 16,566,210 |
|
Bonds payable |
| 233,155 |
| 54,573,429 |
| 233,155 |
| 54,573,429 |
|
Trade and other payables |
| 43,003,149 |
| 4,928,209 |
| 29,960,937 |
| 4,042,293 |
|
Accounts payable to related parties |
| 6,807,547 |
| — |
| 4,983,295 |
| — |
|
Total |
| 59,990,212 |
| 74,519,034 |
| 42,547,896 |
| 75,181,932 |
|
Trade and other receivables exclude advances to suppliers as these are not financial instruments.
16.1 Financial Assets
a) Loans and Receivables
i) Cash and Cash Equivalents
The detail of cash and cash equivalents is shown in Note 5.
ii) Other financial assets
At December 31, 2010, other financial assets correspond to fixed income instruments as detailed below:
|
|
|
|
|
|
|
| As of 12.31.2010 |
| ||
Institution |
| Maturity |
| Interest Rate |
| Currency |
| Current |
| Non current |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deutsche Bank |
| March 2011 |
| 9.22 |
| Dollars |
| 211,438 |
| 8,599,684 |
|
Deutsche Bank |
| March 2011 |
| 9.22 |
| Dollars |
| 70,479 |
| 2,866,561 |
|
Total |
|
|
|
|
|
|
| 281,917 |
| 11,466,245 |
|
iii) Trade and other receivables
The composition of trade and other receivables at the close of each year is as follows:
|
| As of |
| ||
|
| 12.31.2011 |
| 12.31.2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Trade receivables, gross |
| 23,978,121 |
| 17,512,884 |
|
Allowance for doubtful accounts |
| (810,806 | ) | (580,747 | ) |
Othee receivables (*) |
| 7,750,275 |
| 8,136,275 |
|
Total |
| 30,917,590 |
| 25,068,412 |
|
(*) Other receivables mainly include advances to suppliers, monthly tax credits and loans to employee personnel.
Allowance for doubtful accounts
The movement in allowance for doubtful accounts are as follows:
|
| For the year ended |
| ||
Movement |
| 12.31.2011 |
| 12.31.2010 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 580,747 |
| 626,637 |
|
|
|
|
|
|
|
Increases (Decreases) |
| 221,778 |
| (18,054 | ) |
Increases (Decreases) for foreign exchange differences |
| 8,281 |
| (27,836 | ) |
Closing balance |
| 810,806 |
| 580,747 |
|
Detail of trade and other receivable soverdue but not provided are as follows:
|
| As of 12.31.2011 |
| ||||||
|
| Up to |
| 3 to 6 |
| 6 to 12 |
| More than 12 |
|
|
| 3 months |
| months |
| months |
| months |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net |
| 15,584 |
| 175,857 |
| — |
| — |
|
Total |
| 15,584 |
| 175,857 |
| — |
| — |
|
|
| As of 12.31.2010 |
| ||||||
|
| Up to |
| 3 to 6 |
| 6 to 12 |
| More than 12 |
|
|
| 3 months |
| Months |
| months |
| months |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net |
| 168,561 |
| — |
| — |
| — |
|
Total |
| 168,561 |
| — |
| — |
| — |
|
iv) Accounts Receivable from Related Parties
The detail of accounts receivable from related parties is shown in Note 10.
b) Financial Assets — Local and Foreign Currencies
Financial assets by currency at year end are as follow:
|
| As of |
| ||||||
|
| 12.31.2011 |
| 12.31.2010 |
| ||||
Financial Assets |
| Current |
| Non-Current |
| Current |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Cash and cash equivalents |
| 21,655,721 |
| — |
| 34,271,600 |
| — |
|
Chilean $ |
| 712,339 |
| — |
| 1,037,386 |
| — |
|
Argentine $ |
| 3,187,243 |
| — |
| 1,675,178 |
| — |
|
Guaraníes |
| 16,278,044 |
| — |
| 6,924,486 |
| — |
|
US Dollars |
| 1,478,095 |
| — |
| 24,634,550 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Other financial assets |
| — |
| — |
| 281,917 |
| 11,466,245 |
|
US Dollars |
| — |
| — |
| 281,917 |
| 11,466,245 |
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
| 26,736,139 |
| — |
| 20,057,437 |
| — |
|
Chilean $ |
| 12,468,051 |
| — |
| 10,480,480 |
| — |
|
Argentine $ |
| 9,815,837 |
| — |
| 5,953,413 |
| — |
|
Guaraníes |
| 4,452,251 |
| — |
| 3,623,544 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from related parties |
| 4,714,831 |
| — |
| 7,238,689 |
| — |
|
Chilean $ |
| 2,546,103 |
|
|
| 612,276 |
|
|
|
Argentine $ |
| 1,691,238 |
|
|
| 615,696 |
|
|
|
US Dollars |
| 477,490 |
|
|
| 6,010,717 |
|
|
|
Total |
| 53,106,691 |
| — |
| 61,849,643 |
| 11,466,245 |
|
16.2 Financial Liabilities
a) Bonds Payable
On August 23, 2010, the Company registered in the Securities Register of the SVS two lines of bonds amounting to UF 2,500,000 each with terms of 10 and 30 years, respectively.
On September 1, 2010, the Company placed 2 series of UF bonds on the domestic market, with the following conditions:
Registration No. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
& identification |
| Nominal |
| Term |
| Years |
| Amortization |
| Nominal |
| Effective |
| Nominal |
|
of the instrument |
| value |
| (years) |
| grace |
| interest |
| principal |
| rate |
| value |
|
|
| UF |
|
|
|
|
|
|
|
|
| % |
| % |
|
640 / Series A |
| 1,000,000 |
| 7 |
| 3 |
| Semi-annual |
| Semi-annual |
| 3.00 |
| 3.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
641 / Series C |
| 1,500,000 |
| 21 |
| 10 |
| Semi-annual |
| Semi-annual |
| 4.00 |
| 3.63 |
|
Credit Rating
The credit rating of the bonds issued on the Chilean market as of December 31, 2011 is as follows:
AA - : Rating of Fitch Chile
AA - : Rating of Feller & Rate
Covenants
The Company’s issue and placement of bonds on the Chilean market is subject to the following covenants:
a) Compliance with applicable laws, regulations and other legal provisions.
b) Not to make investments in instruments issued by related parties nor carry out operations with such parties that are outside the normal course of business, on conditions that are more unfavorable to the issuer compared to those prevailing in the market.
c) Maintain in its quarterly financial statements a level of net financial debt not exceeding 1.5 times, measured on figures in its consolidated statement of financial position. For these purposes, the level of net financial debt is the ratio of net financial debt to the issuer’s total equity (equity attributable to owners of the controllers plus non-controlling interest). Net financial debt is considered to be the difference between the financial debt and cash of the issuer.
d) Maintain in its quarterly financial statements a level of net financial coverage of more than 3 times. Net financial coverage is considered to be the ratio of the EBITDA of the issuer in the last 12 months to net financial expenses (financial income less financial expenses) in the last 12 months. However, this covenant shall be considered to be not complied with only when the level of net financial coverage is below the level indicated for two consecutive quarters.
e) Maintain in its quarterly financial statements assets free of liens amounting to at least 1.3 times its unsecured total liabilities.
The Company is in compliance with all the financial covenants as of December 31, 2011.
16.2 b) Financial Liabilities — Summary
The detail of financial liabilities at the end of each year is as follows:
At December 31, 2011 |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Effective |
| Nominal |
|
|
| Current |
| Non-Current |
| ||||||||||
|
|
|
|
|
| Country |
|
|
|
|
| Rate |
| Rate |
|
|
| Maturity |
| Total |
| Maturity |
| Total |
| ||||||
Tax ID No. |
| Name |
|
|
| of |
|
|
| Amortization |
| (Annual) |
| (Annual) |
|
|
| Up to |
| 3 to 12 |
| 12.31.2011 |
| 1 to 3 |
| 3 to 5 |
| 5 year |
| 12.31.2011 |
|
Debtor |
| Debtor |
| Creditor |
| creditor |
| Currency |
| Principal |
| % |
| % |
| Principal |
| 3 months |
| months |
| Current |
| years |
| years |
| or more |
| Non-Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| Semi-annual |
| 5.8 |
| 5.8 |
| 1,980,000 |
| — |
| 677,107 |
| 677,107 |
| 1,320,000 |
| — |
| — |
| 1.320.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,817,500 |
| — |
| 11,777 |
| 11,777 |
| 2,817,500 |
| — |
| — |
| 2.817.500 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,300,000 |
| — |
| 2,324,386 |
| 2,324,386 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,300,000 |
| — |
| 23,515 |
| 23,515 |
| 2,300,000 |
| — |
| — |
| 2.300.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.6 |
| 6.6 |
| 1,165,000 |
| — |
| 1,175,932 |
| 1,175,932 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,682,500 |
| — |
| 12,742 |
| 12,742 |
| 2,682,500 |
| — |
| — |
| 2.682.500 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.4 |
| 6.4 |
| 1,900,000 |
| 31,124 |
| — |
| 31,124 |
| 1,900,000 |
| — |
| — |
| 1.900.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| US$ |
| At maturity |
| 2.2 |
| 2.2 |
| 5,192,000 |
| 28,664 |
| 5,192,000 |
| 5,220,664 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| US$ |
| At maturity |
| 3.4 |
| 3.4 |
| 1,557,600 |
| — |
| 12,290 |
| 12,290 |
| 1,557,600 |
| — |
| — |
| 1.557.600 |
|
Sub total Bank loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 59,788 |
| 9,429,749 |
| 9,489,537 |
| 12,577,600 |
| — |
| — |
| 12,577,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 640 / Bonos Serie A |
| Chile |
| UF |
| Semi-annual |
| 3.16 |
| 3.0 |
| 22,121,981 |
| 291,532 |
| — |
| 291,532 |
| 5,530,495 |
| 11,060,991 |
| 5,530,495 |
| 22.121.981 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 641 / Bonos Serie C |
| Chile |
| UF |
| Semi-annual |
| 3.63 |
| 4.0 |
| 34,981,244 |
| 398,447 |
| — |
| 398,447 |
| — |
|
|
| 34,891,244 |
| 34.891.244 |
|
Sub total Bonds payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 689,979 |
| — |
| 689,979 |
| 5,530,495 |
| 11,060,991 |
| 40,421,739 |
| 57,013,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 749,767 |
| 9,429,749 |
| 10,179,516 |
| 18,108,095 |
| 11,060,991 |
| 40,421,739 |
| 69,590,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Trade creditors |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 6,953,396 |
| 6,953,396 |
| — |
| 6,953,396 |
| — |
| — |
| — |
| — |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Trade creditors |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 650,789 |
| 650,789 |
| — |
| 650,789 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Trade creditors |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 12,313,018 |
| 12,313,018 |
| — |
| 12,313,018 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 3,413,792 |
| 3,413,792 |
| — |
| 3,413,792 |
| — |
| — |
| — |
| — |
|
Foreign |
| Kopolar Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 520,695 |
| 520,695 |
| — |
| 520,695 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Euros |
|
|
|
|
|
|
| 806,507 |
| 278,344 |
| 53,815 |
| 332,159 |
| 474,348 |
| — |
| — |
| 474.348 |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Trade creditors |
| Argentina |
| US$ |
|
|
|
|
|
|
| 1,610,768 |
| 929,489 |
| 33,597 |
| 963,086 |
| 360,113 |
| 276,958 |
| 10,611 |
| 647.682 |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| US$ |
|
|
|
|
|
|
| 7,858,271 |
| 4,723,490 |
| 1,455,200 |
| 6,178,690 |
| 1,679,581 |
| — |
| — |
| 1.679.581 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Other accounts payable |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 4,878,870 |
| 4,548,378 |
| — |
| 4,548,378 |
| 16,525 |
| 16,525 |
| 297,442 |
| 330.492 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Other accounts payable |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 564,521 |
| 564,521 |
| — |
| 564,521 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Other accounts payable |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 5,025,874 |
| 4,868,261 |
| 157,613 |
| 5,025,874 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Other accounts payable |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 1,518,166 |
| 1,518,166 |
| — |
| 1,518,166 |
| — |
| — |
| — |
| — |
|
Foreign |
| Kopolar Refrescos S.A. |
| Other accounts payable |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 20,585 |
| 20,585 |
| — |
| 20,585 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Crate/bottles guarantee |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 886,063 |
| — |
| — |
| — |
| — |
| 886,063 |
| — |
| 886.063 |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Crate/bottles guarantee |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 910,043 |
| — |
| — |
| — |
| — |
| 910,043 |
| — |
| 910.043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total trade and other payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 41.302.924 |
| 1.700.225 |
| 43.003.149 |
| 2,530,567 |
| 2,089,589 |
| 308,053 |
| 4,928,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Coca- Cola de Chile S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 2,168,751 |
| 2,168,751 |
| — |
| 2,168,751 |
| — |
| — |
|
|
|
|
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Coca- Cola de Argentina S.A. |
| Argentina |
| Argentine $ |
| At maturity |
|
|
|
|
| 2,861,401 |
| 2,861,401 |
| — |
| 2,861,401 |
| — |
| — |
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Envases Central S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 342,161 |
| 342,161 |
| — |
| 342,161 |
| — |
| — |
|
|
|
|
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Cervecería Austral S.A. |
| Chile |
| US$ |
| At maturity |
|
|
|
|
| 27,478 |
| 27,478 |
| — |
| 27,478 |
| — |
| — |
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital Aguas S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 293,497 |
| 293,497 |
| — |
| 293,497 |
| — |
| — |
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 716,666 |
| 716,666 |
| — |
| 716,666 |
| — |
| — |
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Inversiones Las Niñas Dos S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 268,043 |
| 268,043 |
| — |
| 268,043 |
| — |
| — |
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Inversiones Las Hualtatas S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 129,550 |
| 129,550 |
| — |
| 129,550 |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total accounts payable to related parties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6.807.547 |
|
|
| 6.807.547 |
| — |
| — |
| — |
| — |
| ||
Total financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 48,860,238 |
| 11,129,974 |
| 59,990,212 |
| 20,638,662 |
| 13,150,580 |
| 40,729,792 |
| 74,519,034 |
|
16.2 b) Financial Liabilities — Summary, continued
At December 31, 2010 |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Effective |
| Nominal |
|
|
| Current |
| Non-Current |
| ||||||||||
|
|
|
|
|
| Country |
|
|
|
|
| Rate |
| Rate |
|
|
| Maturity |
| Total |
| Maturity |
| Total |
| ||||||
Tax ID No. |
| Name |
|
|
| of |
|
|
| Amortization |
| (Annual) |
| (Annual) |
|
|
| Up to |
| 3 to 12 |
| 12.31.2010 |
| 1 to 3 |
| 3 to 5 |
| 5 year |
| 12.31.2010 |
|
Debtor |
| Debtor |
| Creditor |
| creditor |
| Currency |
| Principal |
| % |
| % |
| Principal |
| 3 months |
| months |
| Current |
| years |
| years |
| or more |
| Non-Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| Semi-annual |
| 5.8 |
| 5.8 |
| 2,640,000 |
| — |
| 683,655 |
| 683,655 |
| 1,320,000 |
| 660,000 |
| — |
| 1.980.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 4.5 |
| 4.5 |
| 2,817,500 |
| — |
| 138,350 |
| 138,350 |
| 2,817,500 |
| — |
| — |
| 2.817.500 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 4.4 |
| 4.4 |
| 1,165,000 |
| — |
| 1,172,451 |
| 1,172,451 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| Chilean $ |
| At maturity |
| 4.7 |
| 4.7 |
| 4,600,000 |
| — |
| 4,633,316 |
| 4,633,316 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Banco Deutsche Bank |
| Germany |
| US$ |
| At maturity |
| 10.0 |
| 10.0 |
| 11,853,904 |
| — |
| 272,638 |
| 272,638 |
| 11,473,185 |
| — |
| — |
| 11.473.185 |
|
Sub total Bank loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| 6,900,410 |
| 6,900,410 |
| 15,610,685 |
| 660,000 |
| — |
| 16,270,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 640 / Bonos Serie A |
| Chile |
| UF |
| Semi-annual |
| 3.16 |
| 3.0 |
| 21,175,304 |
| 250,607 |
| — |
| 250,607 |
| — |
| 10,644,986 |
| 10,644,986 |
| 21.289.972 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 641 / Bonos Serie C |
| Chile |
| UF |
| Semi-annual |
| 3.63 |
| 4.0 |
| 33,398,125 |
| 452,647 |
| — |
| 452,647 |
| — |
| — |
| 33,578,982 |
| 33.578.982 |
|
Sub total Bonds payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 703,254 |
| — |
| 703,254 |
| — |
| 10,644,986 |
| 44,223,968 |
| 54,868,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 703,254 |
| — |
| 7,603,664 |
| 15,610,685 |
| 11,304,986 |
| 44,223,968 |
| 71,139,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Trade creditors |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 5,785,884 |
| 5,785,884 |
| — |
| 5,785,884 |
| — |
| — |
| — |
| — |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Trade creditors |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 775,000 |
| 775,000 |
| — |
| 775,000 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Trade creditors |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 8,939,100 |
| 8,939,100 |
| — |
| 8,939,100 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 2,806,717 |
| 2,806,717 |
| — |
| 2,806,717 |
| — |
| — |
| — |
| — |
|
Foreign |
| Kopolar Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 286,792 |
| 286,792 |
| — |
| 286,792 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Trade creditors |
| France |
| US$ |
|
|
|
|
|
|
| 351,000 |
| 351,000 |
| — |
| 351,000 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Trade creditors |
| Argentina |
| US$ |
|
|
|
|
|
|
| 299,925 |
| 299,925 |
| — |
| 299,925 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| US$ |
|
|
|
|
|
|
| 6,251,097 |
| 3,688,618 |
| 435,073 |
| 4,123,691 |
| 2,127,406 |
| — |
| — |
| 2.127.406 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Other accounts payable |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 1,906,921 |
| 1,560,918 |
| — |
| 1,560,918 |
| 31,754 |
| 31,754 |
| 282,495 |
| 346.003 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Other accounts payable |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 149,6970 |
| 149,970 |
| — |
| 149,970 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Other accounts payable |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 3,599,817 |
| 3,495,716 |
| 47,176 |
| 3,542,892 |
| 38,816 |
| — |
| — |
| 56.925 |
|
Foreign |
| Paraguay Refrescos S.A. |
| Other accounts payable |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 1,125,868 |
| 1,125,868 |
| — |
| 1,125,868 |
| — |
| — |
| — |
| — |
|
Foreign |
| Kopolar Refrescos S.A. |
| Other accounts payable |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 34,817 |
| 34,817 |
| — |
| 34,817 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Crate/bottles guarantee |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 787,228 |
| — |
| — |
| — |
| — |
| 787,228 |
| — |
| 787.228 |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Crate/bottles guarantee |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 724,731 |
| — |
| — |
| — |
| — |
| 724,731 |
| — |
| 724.731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total trade and other payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 29.300.325 |
| 482.249 |
| 29.782.574 |
| 2,197,976 |
| 1,543,713 |
| 300,604 |
| 4,042,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Coca- Cola de Chile S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 1,139,568 |
| 1,139,568 |
| — |
| 1,139,568 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Coca- Cola de Argentina S.A. |
| Argentina |
| Argentine $ |
| At maturity |
|
|
|
|
| 2,520,087 |
| 2,520,087 |
| — |
| 2,520,087 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Envases Central S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 302,748 |
| 302,748 |
| — |
| 302,748 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Cervecería Austral S.A. |
| Chile |
| US$ |
| At maturity |
|
|
|
|
| 56,932 |
| 56,932 |
| — |
| 56,932 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital Aguas S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 290,455 |
| 290,455 |
| — |
| 290,455 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 673,505 |
| 673,505 |
| — |
| 673,505 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Inversiones Las Niñas Dos S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 83,428 |
| 83,428 |
| — |
| 83,428 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Inversiones Las Hualtatas S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 94,935 |
| 94,935 |
| — |
| 94,935 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total accounts payable to related parties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5.161.658 |
| — |
| 5.161.658 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 35,165,237 |
| 7,382,659 |
| 42,547,896 |
| 17,808,661 |
| 12,848,699 |
| 44,524,572 |
| 75,181,932 |
|
16.3 Financial Liabilities — Maturity Analysis
The following shows a maturities analysis of the financial liabilities at the year end, which include the contractual interest payable (not accrued at the date of closing):
|
|
|
|
|
| Maturity |
| Total as of |
| ||
|
| Less than |
| 1 to 3 |
| 3 to 5 |
| 5 years |
| December 31, |
|
|
| 1 year | �� | years |
| years |
| or more |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 9,489,537 |
| 12,577,600 |
| — |
| — |
| 22,067,137 |
|
Bonds payable |
| 1,988,405 |
| 9,508,825 |
| 14,542,936 |
| 52,053,224 |
| 78,093,390 |
|
Trade and other payables |
| 43,003,149 |
| 2,530,567 |
| 2,089,589 |
| 308,053 |
| 47,931,358 |
|
Accounts payable related parties |
| 6,807,547 |
| — |
| — |
| — |
| 6,807,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial liabilities |
| 61,288,638 |
| 24,616,992 |
| 16,632,525 |
| 52,361,277 |
| 154,899,432 |
|
|
|
|
|
|
| Maturity |
| Total as of |
| ||
|
| Less than |
| 1 to 3 |
| 3 to 5 |
| 5 years |
| December 31, |
|
|
| 1 year |
| years |
| years |
| or more |
| 2010 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 7,901,695 |
| 16,877,668 |
| 660,000 |
| — |
| 25,439,363 |
|
Bonds payable |
| 1,913,621 |
| 3,827,241 |
| 14315,427 |
| 57,013,624 |
| 77,069,913 |
|
Trade and other payables |
| 29,960,937 |
| 2,197,976 |
| 1,543,713 |
| 300,604 |
| 34,003,230 |
|
Accounts payable related parties |
| 4,983,295 |
| — |
| — |
| — |
| 4,983,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financial Liabilities |
| 44,759,548 |
| 22,902,885 |
| 16,519,140 |
| 57,314,228 |
| 141,495,801 |
|
16.4 Fair Value of Financial Instruments
The market value of financial instruments recorded at fair value through profit and loss has been obtained by using the market-price method (type 1 valuation). The valuation process does not currently consider the valuation methods by approximation or internal price modeling, therefore, all financial instruments are valued at fair value which are obtained through direct market quotations.
The prices and discount rates used for valuation purposes are obtained from banks and recognized price makers, of generalized, recurring and agreed quotation by the market, which ensures the reliability of the reference prices.
There are no significant differences as of December 31, 2011 and 2010 between the carrying and fair values of the financial instruments.
16.5 Financial Risk Management
In carrying its daily business, Coca-Cola Polar is subject to by various factors that may impact on the achievement of its financial profitability and sustainability objectives. These factors can impact the organization through different transmission mechanisms, generating scenarios of financial uncertainty which could result in non-compliance by suppliers of inputs and counterparties of financial transactions, contractions of liquidity, significant variations in the value of assets and liabilities held in portfolio.
Coca-Cola Polar therefore identifies the significant risks as follows:
· Credit risk
The concept of credit risk is employed by Coca-Cola Polar to refer to financial uncertainty, in different time horizons, related to compliance with the obligations signed by counterparties, at the time of exercising contractual rights for receiving cash or other financial assets by Coca-Cola Polar.
Exposures
The exposure of the financial assets consists of cash and cash equivalents and trade and other receivables, which account for 41% and 50%, respectively. However, the exposure related to trade receivables ceases to be significant when considering that the average collection time is no more than 20 days.
Financial assets that are not overdue or impaired
The business scarcely shows signs of fall in overdue accounts receivable related to the different sales channels. Historic evidence shows average collection times of less than one month, with periods overdue not exceeding 10 days.
Investment decisions in financial instruments (e.g. fixed income) have historically tried to seek issuers with an external credit rating such as to safeguard the financial objectives for which these transactions are carried out. Long-term investments require the issuer to have a rating of at least A1 (Moody’s) /A (Fitch), while short-term investments are preferred to be made with institutions with the best credit ratings from the same international agencies and/or the regulatory institutions of the countries in which the Company operates.
The following are the credit ratings of the financial institutions where short-term investments are made:
|
|
|
| Credit |
| Rating |
|
Entity |
| Amount |
| rating |
| agency |
|
|
| ThCh$ |
|
|
|
|
|
Banco Regional SAECA |
| 4,308,284 |
| A+ |
| Feller Rate |
|
BBVA Paraguay SA |
| 5,459,104 |
| AA |
| Feller Rate |
|
Itau S.A. |
| 4,073,149 |
| AA |
| Feller Rate |
|
HSBC Bank Paraguay |
| 1,143,298 |
| AA |
| Feller Rate |
|
Total |
| 14,983,835 |
|
|
|
|
|
Financial assets that would have been overdue or impaired if they had not been restructured
The Company has no significant financial assets that have been restructured in this period.
Overdue or impaired financial assets
Overdue and impaired financial assets are set out in Note 16.1 a.ii).
· Financial risk
The concept of financial risk is employed by Coca-Cola Polar to refer to financial uncertainty, at different time horizons, related to its capacity to respond to those cash requirements that support its operations, both in normal conditions and in exceptional ones.
Liabilities by maturity are set out in Note 16.3.
· Market risk
The concept of market risk is employed by Coca-Cola Polar to refer to financial uncertainty, at different time horizons, related to the future behavior of market variables relevant to its financial performance.
The Company is mainly faced by variations in the value of future expenditure related to liabilities expressed on dollars in each of the markets where it currently operates. Variations in the dollar exchange rate against the guaraní are risk factors that affect the Company.
The sensitivity analysis shows the effects of the impact on results that may occur as a result of variations in the relevant exchange rates associated with the financial instruments that generate exposure to the Company.
|
|
|
|
|
|
|
| Market |
| Exchange |
| Sensitivity |
| Effect on |
|
Classification |
| Group |
| Type |
| Exposure |
| variable |
| rate |
| (1) |
| results |
|
|
|
|
|
|
| ThCh$ |
|
|
|
|
|
|
| ThCh$ |
|
Financial assets |
| Cash and cash equivalents |
| Balance in banks & deposits |
| 1,478,095 |
| USD / GS |
| 4.455 |
| + 37.1 | % | 549,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - 11.2 | % | (165,892 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable from related parties |
| Accounts receivable from related parties |
| 477,490 |
| USD / GS |
| 4.455 |
| +37.1 | % | 177,384 |
|
|
|
|
|
|
|
|
|
|
|
|
| -11.2 | % | (53,590 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
| Other financial liabilities |
| Other financial liabilities |
| 6,790,554 |
| USD / $Ch |
| 519.20 |
| + 29.0 | % | (1,971,510 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - 15.7 | % | 1,065,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Trade and other payables |
| Trade creditors |
| 7,858,271 |
| USD / GS |
| 4.455 |
| + 37.1 | % | (2,919,290 | ) |
|
|
|
|
|
|
|
|
|
|
|
| - 11.2 | % | 881,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Trade and other payables |
| Trade creditors |
| 1,610,768 |
| USD / $Arg |
| 4,30 |
| 0.0 | % | — |
|
|
|
|
|
|
|
|
|
|
|
|
| - 29.7 | % | 478,665 |
|
(1) The exchange-rate variations were obtained by considering the maximum and minimum parities in the last 4 years with respect to the closing exchange rate.
· Financial risk management method
The management of Coca-Cola Polar understands that having an institutional framework for protecting the entity´s financial objectives, through financial-risk management, is an essential element in achieving the long-term objectives for the interests of the Company.
It is therefore a priority for Coca-Cola Polar to constantly complement current risk evaluation with a robust strategy in terms of the procedures adopted and their consistency with the business cycle, nature of the operations and the markets in which it operates.
The Company’s strategy has the following components:
· Corporate governance structure
· Clear segregation of functions
· Protection of the principles of Independence in decision-taking
· Control environment
· Methodologies
· Information systems
· Procedures
· Contingency plans
NOTE 17 - LOCAL AND FOREIGN CURRENCIES
a) Assets
|
| December 31, gap 2011 |
| December 31, gap 2010 |
| ||||
ASSETS |
| Current |
| Non-Current |
| Current |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 21,655,721 |
| — |
| 34,271,600 |
| — |
|
Chilean $ |
| 712,339 |
| — |
| 1,037,386 |
| — |
|
Argentine $ |
| 3,187,243 |
| — |
| 1,675,178 |
| — |
|
Guaraníes |
| 16,278,044 |
| — |
| 6,924,486 |
| — |
|
US Dollars |
| 1,478,095 |
| — |
| 24,634,550 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Other financial assets |
| — |
| — |
| 281,917 |
| 11,466,245 |
|
US Dollars |
| — |
| — |
| 281,917 |
| 11,466,245 |
|
|
|
|
|
|
|
|
|
|
|
Other non-financial assets |
| 1,445,854 |
| 1,614,484 |
| 1,070,363 |
| 1,216,672 |
|
Chilean $ |
| 519,015 |
| 226,551 |
| 326,179 |
| 749,163 |
|
Argentine $ |
| 241,526 |
| 907,545 |
| 147,523 |
| 287,578 |
|
Guaraníes |
| 493,515 |
| 344,065 |
| 198,454 |
| 124,714 |
|
US Dollars |
| 191,798 |
| 136,323 |
| 398,207 |
| 55,217 |
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
| 30,917,590 |
| — |
| 25,068,412 |
| — |
|
Chilean $ |
| 12,468,051 |
| — |
| 10,480,480 |
| — |
|
Argentine $ |
| 9,815,837 |
| — |
| 5,953,413 |
| — |
|
Guaraníes |
| 8,633,702 |
| — |
| 8,634,519 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from related entities |
| 4,714,831 |
| — |
| 7,238,689 |
| — |
|
Chilean $ |
| 2,546,103 |
| — |
| 612,276 |
| — |
|
Argentine $ |
| 1,691,238 |
| — |
| 615,696 |
| — |
|
US Dollars |
| 477,490 |
| — |
| 6,010,717 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Inventories |
| 23,099,370 |
| — |
| 16,077,892 |
| — |
|
Chilean $ |
| 7,094,796 |
| — |
| 5,502,270 |
| — |
|
Argentine $ |
| 5,427,463 |
| — |
| 4,692,608 |
| — |
|
Guaraníes |
| 10,577,111 |
| — |
| 5,883,014 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Current tax assets |
| 2,217,661 |
| — |
| 1,423,756 |
| — |
|
Argentine $ |
| 274,966 |
| — |
| 304,009 |
| — |
|
Chilean $ |
| 1,353,337 |
| — |
| 1,068,748 |
| — |
|
Guaraníes |
| 589,358 |
| — |
| 50,999 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Investments in associates using the |
| — |
| 6,658,180 |
| — |
| 2,838,428 |
|
equity method of accounting |
|
|
|
|
|
|
|
|
|
Chilean $ |
| — |
| 6,658,180 |
| — |
| 2,838,428 |
|
|
|
|
|
|
|
|
|
|
|
Intangible assets other than goodwill |
| — |
| 2,660,960 |
| — |
| 1,606,117 |
|
Chilean $ |
| — |
| 1,766,229 |
| — |
| 792,630 |
|
Argentine $ |
|
|
| 894,731 |
| — |
| 813,487 |
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
| — |
| 9,454,266 |
| — |
| 9,311,567 |
|
Chilean $ |
| — |
| 3,889,750 |
| — |
| 3,889,750 |
|
Argentine $ |
| — |
| 5,520,319 |
| — |
| 5,384,986 |
|
Guaraníes |
| — |
| 44,197 |
| — |
| 36,831 |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
| — |
| 167,627,602 |
| — |
| 123,233,569 |
|
Chilean $ |
| — |
| 50,398,834 |
| — |
| 42,078,635 |
|
Argentine $ |
| — |
| 47,631,403 |
| — |
| 34,524,037 |
|
Guaraníes |
| — |
| 69,597,365 |
| — |
| 46,630,897 |
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax assets |
| — |
| 6,053,408 |
| — |
| 3,829,416 |
|
Chilean $ |
| — |
| 902,272 |
| — |
| 169,557 |
|
Argentine $ |
| — |
| 4,805,033 |
| — |
| 3,143,417 |
|
Guaraníes |
| — |
| 346,103 |
| — |
| 516,442 |
|
Total |
| 84,051,027 |
| 194,068,900 |
| 85,432,629 |
| 153,502,014 |
|
NOTE 17 - LOCAL AND FOREIGN CURRENCIES
b) Liabilities
|
| DECEMBER 31, 2011 |
| ||||||||||||
|
| Current |
| Non-Current |
| ||||||||||
|
| Maturity |
| Balance at |
| Maturity |
| Balcance at |
| ||||||
|
| One to three |
| Three to twelve |
| 12.31.2011 |
| One to three |
| Three to five |
| Over five |
| 12.31.2011 |
|
|
| months |
| months |
| Current |
| years |
| years |
| years |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities |
| 749,767 |
| 9,429,749 |
| 10,179,516 |
| 18,108,095 |
| 11,060,991 |
| 40,421,739 |
| 69,590,825 |
|
Chilean $ |
| 31,124 |
| 4,225,459 |
| 4,256,583 |
| 11,020,000 |
| — |
| — |
| 11,020,000 |
|
Unidad de Fomento (UF) |
| 689,979 |
| — |
| 689,979 |
| 5,530,495 |
| 11,060,991 |
| 40,421,739 |
| 57,013,225 |
|
US Dollars |
| 28,664 |
| 5,204,290 |
| 5,232,954 |
| 1,557,600 |
| — |
| — |
| 1,557,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
| 41,302,924 |
| 1,700,225 |
| 43,003,149 |
| 2,530,567 |
| 2,089,589 |
| 308,053 |
| 4,928,209 |
|
Chilean $ |
| 12,717,084 |
| — |
| 12,717,084 |
| 16,525 |
| 902,588 |
| 297,442 |
| 1,216,555 |
|
Argentine $ |
| 17,181,279 |
| 157,613 |
| 17,338,892 |
| — |
| 910,043 |
| — |
| 910,043 |
|
Guaraníes |
| 5,473,238 |
| — |
| 5,473,238 |
| — |
| — |
| — |
| — |
|
Euros |
| 278,344 |
| 53,815 |
| 332,159 |
| 474,348 |
| — |
| — |
| 474,348 |
|
US Dollars |
| 5,652,979 |
| 1,488,797 |
| 7,141,776 |
| 2,039,694 |
| 276,958 |
| 10,611 |
| 2,327,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties |
| 6,807,547 |
| — |
| 6,807,547 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| 3,918,668 |
| — |
| 3,918,668 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 2,861,401 |
| — |
| 2,861,401 |
| — |
| — |
| — |
| — |
|
US Dollars |
| 27,478 |
| — |
| 27,478 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other short-term provisions |
| 170,996 |
| 1,742,947 |
| 1,913,943 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| — |
| 884,500 |
| 884,500 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 165,462 |
| 321,267 |
| 486,729 |
| — |
| — |
| — |
| — |
|
Guaraníes |
| 5,534 |
| 537,180 |
| 542,714 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax liabilities |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Guaraníes |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-financial liabilities |
| — |
| 3,376,811 |
| 3,376,811 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| — |
| 3,376,811 |
| 3,376,811 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities |
| — |
| — |
| — |
| — |
| — |
| 10,125,957 |
| 10,125,957 |
|
Chilean $ |
| — |
| — |
| — |
| — |
| — |
| 5,717,888 |
| 5,717,888 |
|
Argentine $ |
| — |
| — |
| — |
| — |
| — |
| 3,165,841 |
| 3,165,841 |
|
Guaraníes |
| — |
| — |
| — |
| — |
| — |
| 1,242,228 |
| 1,242,228 |
|
Total |
| 49,031,234 |
| 16,249,732 |
| 65,280,966 |
| 20,638,662 |
| 13,150,580 |
| 50,855,749 |
| 84,644,991 |
|
NOTE 17 - LOCAL AND FOREIGN CURRENCIES
c) Liabilities, continued
LIABILITIES
|
| DECEMBER 31, 2010 |
| ||||||||||||
|
| Current |
| Non-Current |
| ||||||||||
|
| Maturity |
| Balance at |
| Maturity |
| Balance at |
| ||||||
|
| One to three |
| Three to twelve |
| 12.31.2011 |
| One to three |
| Three to five |
| Over five |
| 12.31.2010 |
|
|
| months |
| months |
| Current |
| years |
| years |
| years |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities |
| 703,254 |
| 6,900,410 |
| 7,603,664 |
| 15,610,685 |
| 11,304,986 |
| 44,223,968 |
| 71,139,639 |
|
Chilean $ |
| — |
| 6,627,772 |
| 6,627,772 |
| 4,137,500 |
| 660,000 |
| — |
| 4,797,500 |
|
Unidad de Fomento (UF) |
| 703,254 |
| — |
| 703,254 |
| — |
| 10,644,986 |
| 44,223,968 |
| 54,868,954 |
|
US Dollars |
| — |
| 272,638 |
| 272,638 |
| 11,473,185 |
| — |
| — |
| 11,473,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
| 29,300,325 |
| 482,249 |
| 29,782,574 |
| 2,197,976 |
| 1,543,713 |
| 300,604 |
| 4,042,293 |
|
Chilean $ |
| 8,271,772 |
| — |
| 8,271,772 |
| 31,754 |
| 818,982 |
| 282,495 |
| 1,133,231 |
|
Argentine $ |
| 12,434,816 |
| 47,176 |
| 12,481,992 |
| 38,816 |
| 724,731 |
| 18,109 |
| 781,656 |
|
Guaraníes |
| 4,254,194 |
| — |
| 4,254,194 |
| — |
| — |
| — |
| — |
|
Euros |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
US Dollars |
| 4,339,543 |
| 435,073 |
| 4,774,616 |
| 2,127,406 |
| — |
| — |
| 2,127,406 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties |
| 5,161,658 |
| — |
| 5,161,658 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| 2,584,639 |
| — |
| 2,584,639 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 2,520,087 |
| — |
| 2,520,087 |
| — |
| — |
| — |
| — |
|
US Dollars |
| 56,932 |
| — |
| 56,932 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other short-term provisions |
| 64,850 |
| 717,476 |
| 782,326 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| 55,264 |
| 154,750 |
| 210,014 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 5,468 |
| 176,846 |
| 182,314 |
| — |
| — |
| — |
| — |
|
Guaraníes |
| 4,118 |
| 385,880 |
| 389,998 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax liabilities |
| 737,558 |
| — |
| 737,558 |
| — |
| — |
| — |
| — |
|
Guaraníes |
| 737,558 |
| — |
| 737,558 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-financial liabilities |
| — |
| 1,416,026 |
| 1,416,026 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| — |
| 1,416,026 |
| 1,416,026 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities |
| — |
| — |
| — |
| — |
| — |
| 8,839,439 |
| 8,839,439 |
|
Chilean $ |
| — |
| — |
| — |
| — |
| — |
| 4,985,802 |
| 4,985,802 |
|
Argentine $ |
| — |
| — |
| — |
| — |
| — |
| 2,904,809 |
| 2,904,809 |
|
Guaraníes |
| — |
| — |
| — |
| — |
| — |
| 948,828 |
| 948,828 |
|
Total |
| 35,967,645 |
| 9,516,161 |
| 45,483,806 |
| 17,808,661 |
| 12,848,699 |
| 53,364,011 |
| 84,021,371 |
|
NOTE 18 - GUARANTEES AND COMMITMENTS
The Company has no guarantees or commitments to disclose as of December 31, 2011.
NOTE 19 - SUBSEQUENT EVENTS
On February 2, 2012, the Company and its controllers, Inversiones Los Aromos Limitada, and, Embotelladora Andina S.A. and its controller, Inversiones Freire Limitada and Inversiones Freire Dos Limitada (jointly, “Freire”), signed a memorandum of understanding, which contains the general conditions leading to the merger by incorporation to take place between Embotelladoras Coca-Cola Polar S.A. and the Company, which would be the acquiring company (“Memorandum of Understanding”).
According to the aforementioned memorandum, since the date of signing, a promissory merger agreement will be negotiated in good faith which will contain the final terms and conditions thereof, and every reasonable effort will be made in order to conclude this process on a date yet to be determined but in any event, no later than March 15, 2012, along with a shareholders agreement format that will be signed between Freire and Inversiones Los Aromos Limitada once the merger materializes. The operation will be materialized through a merger by absorption and the exchange of newly issued shares of the Company, at a rate of 0.33269 Series A Company shares and 0.33269 Series B Company shares, per each share of Embotelladoras Coca-Cola Polar S.A.
Closing of the merger first requires the approval of the Chilean Superintendence of Securities and Insurance, the Boards of Directors and shareholders of both companies, and the Coca-Cola Company. It also requires registration of new shares to be issued in the exchange; That Aromos or its partners adhere to the shareholders agreement Andean driver, on the same terms and conditions applicable to Freire or its partners.
There have been no events of a financial or other nature between December 31, 2011 and the date of issue of these consolidated financial statements that significantly affect the balances or their interpretation.
Apart from shareholder meetings, there are no other levels that have the power to amend these consolidated financial statements once issued.
NOTE 20 - THE ENVIRONMENT
The Company has a long-term sustainable development policy for its operations, in harmony with the environment. In this context, investments are made in installations, equipment and industrial plants that contemplate state-of-the-art technology, in line with the latest developments in these matters.
The parent and subsidiaries have obtained their certification under the ISO 14.001 and 9.001 international quality standards.
Disbursements made by the parent and subsidiaries relating to environmental activities during 2011 amount to ThCh$ 100,658 (ThCh$ 87,529 in 2010).
The principal actions for environmental protection carried out by the Company are as follows:
a) Preventative maintenance of boilers in order to reduce oil consumption and minimize the emission of toxic gases.
b) The Company has treatment plants in all its production centers through which the industrial liquid waste is treated, in order to reintroduce it into the public network in accordance with current legislation.
c) Controlled handling of waste: plastics, cardboard, packaging and solid materials, handing them over to specialist recycling companies.
Disbursements related to environmental activities are recorded as production expenses in the period in which they are made.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
as of June 30, 2012 and December 31, 2011
|
|
|
| June, 30 |
| December, 31 |
|
ASSETS |
| Note |
| 2012 |
| 2011 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash and cash equivalents |
| (5 | ) | 14,073,693 |
| 21,655,721 |
|
Other non-financial assets |
|
|
| 1,751,225 |
| 1,445,854 |
|
Trade and other receivables |
| (16.1 a | ) | 27,938,614 |
| 30,917,590 |
|
Accounts receivable from related parties |
| (10 a | ) | 2,178,498 |
| 4,714,831 |
|
Inventories |
| (4 | ) | 22,902,098 |
| 23,099,370 |
|
Current income tax receivables |
|
|
| 513,052 |
| 2,217,661 |
|
|
|
|
|
|
|
|
|
Total Current assets |
|
|
| 69,357,180 |
| 84,051,027 |
|
|
|
|
|
|
|
|
|
Other non-financial assets |
|
|
| 1,754,869 |
| 1,614,484 |
|
Investments in associates using equity method of accounting |
| (11 d | ) | 7,399,340 |
| 6,658,180 |
|
Intangible assets other than goodwill |
| (13 | ) | 2,510,064 |
| 2,660,960 |
|
Goodwill |
| (14 | ) | 8,999,777 |
| 9,454,266 |
|
Property, plant and equipment |
| (7 a | ) | 167,308,110 |
| 167,627,602 |
|
Deferred income tax assets |
| (6 b | ) | 6,756,502 |
| 6,053,408 |
|
|
|
|
|
|
|
|
|
Total non-current assets |
|
|
| 194,728,662 |
| 194,068,900 |
|
|
|
|
|
|
|
|
|
Total assets |
|
|
| 264,085,842 |
| 278,119,927 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated interim financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
as of June 30, 2012 and December 31, 2011
|
|
|
| June, 31 |
| December, 31 |
|
LIABILITIES |
| Note |
| 2012 |
| 2011 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Other financial liabilities |
| (16.2 b | ) | 26,058,173 |
| 10,179,516 |
|
Trade and other payables |
| (16.2 b | ) | 36,412,245 |
| 43,003,149 |
|
Accounts payable to related parties |
| (10 b | ) | 17,367,534 |
| 6,807,547 |
|
Other provisions |
| (12 a | ) | 1,711,170 |
| 1,913,943 |
|
Other non-financial liabilities |
| (15 e | ) | 2,341,974 |
| 3,376,811 |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
| 83,891,096 |
| 65,280,966 |
|
|
|
|
|
|
|
|
|
Other financial liabilities |
| (16.2 b | ) | 71,561,181 |
| 69,590,825 |
|
Other accounts payable |
| (16.2 b | ) | 4,819,367 |
| 4,928,209 |
|
Deferred income tax liabilities |
| (6 b | ) | 8,088,813 |
| 10,125,957 |
|
|
|
|
| , |
|
|
|
Total non-current liabilities |
|
|
| 84,469,361 |
| 84,644,991 |
|
|
|
|
|
|
|
|
|
Share capital |
|
|
| 39,685,061 |
| 39,685,061 |
|
Accumulated earnings |
|
|
| 70,488,382 |
| 91,212,166 |
|
Share Premium |
|
|
| 182,060 |
| 182,060 |
|
Other reserves |
| (15 f | ) | (16,168,584 | ) | (4,818,067 | ) |
|
|
|
|
|
|
|
|
Total equity attributable to owners of controllers |
|
|
| 94,186,919 |
| 126,261,220 |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
| (15 h | ) | 1,538,466 |
| 1,932,750 |
|
|
|
|
|
|
|
|
|
Total equity |
|
|
| 95,725,385 |
| 128,193,970 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
| 264,085,842 |
| 278,119,927 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated interim financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
For the three-month and six-months period June 30, 2012 and 2011
|
|
|
| Period April 1 – June 30 |
| Period January 1 - June 30 |
| ||||
|
| Note |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Revenue |
| (8 a | ) | 70,898,665 |
| 62,223,870 |
| 157,243,843 |
| 131,227,364 |
|
Cost of sales |
| (8 b | ) | (44,531,830 | ) | (39,768,570 | ) | (97,401,461 | ) | (81,284,331 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
| 26,366,835 |
| 22,455,300 |
| 59,842,382 |
| 49,943,033 |
|
Other income |
| (8 a | ) | 961,211 |
| 106,071 |
| 1,008,980 |
| 147,372 |
|
Distribution costs |
| (8 b | ) | (11,132,629 | ) | (8,245,188 | ) | (24,072,966 | ) | (17,169,446 | ) |
Administrative expenses |
| (8 b | ) | (3,416,715 | ) | (3,677,987 | ) | (6,887,451 | ) | (7,290,700 | ) |
Other expenses, by function |
| (8 b | ) | (8,219,624 | ) | (6,462,416 | ) | (17,033,071 | ) | (12,685,208 | ) |
Other losses |
| (8 d | ) | (1,661,807 | ) | (3,475,657 | ) | (2,357,277 | ) | (4,222,438 | ) |
Finance income |
|
|
| 175,095 |
| 321,088 |
| 430,660 |
| 631,172 |
|
Finance costs |
| (8 c | ) | (1,286,887 | ) | (1,577,500 | ) | (2,762,560 | ) | (2,787,995 | ) |
Share of profit of associates using equity method of accounting |
| (11 d | ) | (6,943 | ) | 18,880 |
| 115,160 |
| 130,023 |
|
Foreing exchange gains (losses) |
|
|
| (301,334 | ) | (661,354 | ) | 42,750 |
| 209,916 |
|
Gains on indexation differences |
|
|
| 2,956 |
| 1,096 |
| 6,233 |
| 1,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income tax |
|
|
| 1,480,158 |
| (1,197,667 | ) | 8,332,840 |
| 6,903,971 |
|
Income tax expense (recovery) |
| (6 c | ) | 318,375 |
| 840,364 |
| (419,108 | ) | 406,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the period |
|
|
| 1,798,533 |
| (357,303 | ) | 7,913,732 |
| 7,310,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings attributable to: |
|
|
|
|
|
|
|
|
|
|
|
Owners of the controllers |
|
|
| 1,774,271 |
| (381,329 | ) | 7,806,579 |
| 7,190,991 |
|
Non-controlling interests |
| (15 h | ) | 24,262 |
| 24,026 |
| 107,153 |
| 119,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the period |
|
|
| 1,798,533 |
| (357,303 | ) | 7,913,732 |
| 7,310,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ch$ |
| Ch$ |
| Ch$ |
| Ch$ |
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (basic & diluted) |
| (15 d | ) | 6.34 |
| (1.36 | ) | 27.88 |
| 25.68 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated interim financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
(Continued)
For three-month and six-month periods ended on June 30, 2012 and 2011
|
| Period April 1 - June 30 |
| Period January 1 - June, 30 |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Earnings for the period |
| 1,798,533 |
| (357,303 | ) | 7,913,732 |
| 7,310,727 |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences |
| 369,501 |
| (1,320,916 | ) | (11,477,023 | ) | 11,824,653 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
| 2,168,034 |
| (1,678,219 | ) | (3,563,291 | ) | 19,135,380 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
Owners of the controllers |
| 2,113,961 |
| (1,709,746 | ) | (3,543,938 | ) | 18,729,887 |
|
Non-controling interests |
| 54,073 |
| 31,257 |
| (19,353 | ) | 405,493 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
| 2,168,034 |
| (1,678,219 | ) | (3,563,291 | ) | 19,135,380 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated interim financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
For the six-month periods ended June 30, 2012 and for the year ended December 31, 2011
|
|
|
|
|
| Other reserves |
|
|
| Total equity |
|
|
|
|
| ||
|
|
|
|
|
| Various |
|
|
|
|
| attributable |
| Non- |
|
|
|
|
| Share |
| Share |
| other |
| Translation |
| Accumulated |
| to owners of |
| controling |
|
|
|
|
| capital |
| premium |
| reserves |
| reserves |
| earnings |
| the controllers |
| interests |
| Total equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance at 01.01.2012 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (1,574,751 | ) | 91,212,166 |
| 126,261,220 |
| 1,932,750 |
| 128,193,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the period |
| — |
| — |
| — |
| — |
| 7,806,579 |
| 7,806,579 |
| 107,153 |
| 7,913,732 |
|
Other Comprehensive Income |
| — |
| — |
| — |
| (11,350,517 | ) | — |
| (11,350,517 | ) | (126,506 | ) | (11,477,023 | ) |
Dividends |
| — |
| — |
| — |
| — |
| (28,530,363 | ) | (28,530,363 | ) | (374,931 | ) | (28,905,294 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Equity |
| — |
| — |
| — |
| (11,350,517 | ) | (20,723,784 | ) | (32,074,301 | ) | (394,284 | ) | (32,468,585 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance at 06.30.2012 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (12,925,268 | ) | 70,488,382 |
| 94,186,919 |
| 1,538,466 |
| 95,725,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance at 01.01.2011 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (15,484,337 | ) | 86,982,115 |
| 108,121,583 |
| 1,307,883 |
| 109,429,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the year |
| — |
| — |
| — |
| — |
| 23,240,036 |
| 23,240,036 |
| 341,784 |
| 23,581,820 |
|
Other Comprehensive Income |
| — |
| — |
| — |
| 13,909,586 |
| — |
| 13,909,586 |
| 283,083 |
| 14,192,669 |
|
Dividends |
| — |
| — |
| — |
| — |
| (19,009,985 | ) | (19,009,985 | ) | — |
| (19,009,985 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Equity |
| — |
| — |
| — |
| 13,909,586 |
| 4,230,051 |
| 18,139,637 |
| 624,867 |
| 18,764,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance at 12.31.2011 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (1,574,751 | ) | 91,212,166 |
| 126,261,220 |
| 1,932,750 |
| 128,193,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance at 01.01.2011 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (15,484,337 | ) | 86,982,115 |
| 108,121,583 |
| 1,307,883 |
| 109,429,466 |
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the period |
| — |
| — |
| — |
| — |
| 7,190,991 |
| 7,190,991 |
| 119,736 |
| 7,310,727 |
|
Other Comprehensive Income |
| — |
| — |
| — |
| 11,538,896 |
| — |
| 11,538,896 |
| 285,757 |
| 11,824,653 |
|
Dividends |
| — |
| — |
| — |
| — |
| (14,195,271 | ) | (14,195,271 | ) | — |
| (14,195,271 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Equity |
| — |
| — |
| — |
| 11,538,896 |
| (7,004,280 | ) | 4,534,616 |
| 405,493 |
| 4,940,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance at 06.30.2011 |
| 39,685,061 |
| 182,060 |
| (3,243,316 | ) | (3,945,441 | ) | 79,977,835 |
| 112,656,199 |
| 1,713,376 |
| 114,369,575 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated interim financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. Y SUBSIDIARIAS
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
For the six-month periods ended June 30, 2012 and 2011
|
|
|
| Period January 1 - June 30, |
| ||
Direct method |
| Note |
| 2012 |
| 2011 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash flows generated from (used in) operating activities |
|
|
|
|
|
|
|
Proceeds from sales of goods and of services |
|
|
| 211,320,774 |
| 173,006,867 |
|
Payments to suppliers of goods and services |
|
|
| (150,042,463 | ) | (118,083,906 | ) |
Payments to and on behalf of employees |
|
|
| (23,875,472 | ) | (18,269,419 | ) |
Payments for restructuring disbursements |
|
|
| — |
| (2,450,555 | ) |
Payments for other operating activities |
|
|
| (12,883,213 | ) | (11,014,167 | ) |
Income tax paid |
|
|
| (1,365,887 | ) | (1,850,330 | ) |
Other cash outflows |
|
|
| (2,296,222 | ) | (590,006 | ) |
|
|
|
|
|
|
|
|
Cash flow generated from operating activities |
|
|
| 20,857,517 |
| 20,748,484 |
|
|
|
|
|
|
|
|
|
Cash flows generated from (used in) investment activities |
|
|
|
|
|
|
|
Interest received |
|
|
| 428,067 |
| 957,198 |
|
Purchases of property, plant and equipment |
|
|
| (18,833,072 | ) | (22,353,149 | ) |
Purchases of intangible assets |
|
|
| (69,501 | ) | (38,873 | ) |
Cash flows used to purchase non-controlling interests |
|
|
| (622,000 | ) | (3,248,760 | ) |
Cash flows for other investment activities |
|
|
| 790,000 |
| 11,652,690 |
|
|
|
|
|
|
|
|
|
Cash flow used in investment activities |
|
|
| (18,306,506 | ) | (13,030,894 | ) |
|
|
|
|
|
|
|
|
Cash flows generated from (used in) financing activities |
|
|
|
|
|
|
|
Proceeds from short-term loans |
|
|
| 10,080,904 |
| — |
|
Proceeds from long-term loans |
|
|
| 7000,000 |
| — |
|
Repayments of loans |
|
|
| — |
| (8,903,868 | ) |
Interest paid |
|
|
| (1,666,766 | ) | (1,927,473 | ) |
Dividends paid |
|
|
| (23,625,624 | ) | (13,454,000 | ) |
|
|
|
|
|
|
|
|
Cash flow used in financing activities |
|
|
| (8,211,486 | ) | (24,285,341 | ) |
|
|
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
| (5,660,475 | ) | (16,567,751 | ) |
EFFECTS OF EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS |
|
|
| (1,921,553 | ) | 1,559,358 |
|
CASH AND CASH EQUIVALENTS AT BEGINING OF THE PERIOD |
|
|
| 21,655,721 |
| 34,271,600 |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD |
| (5 | ) | 14,073,693 |
| 19,263,207 |
|
The accompanying Notes 1 to 20 form an integral part of these consolidated interim financial statements.
EMBOTELLADORAS COCA-COLA POLAR S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1 - CORPORATE INFORMATION
1.1 General Information
Embotelladoras Coca-Cola Polar S.A. (“Coca-Cola Polar” or “the Company”) and Subsidiaries (“the Group”) is the owner of franchised bottlers of The Coca-Cola Company in Chile, Argentina and Paraguay. Each territory has a separate and independent franchising agreement with The Coca-Cola Company covering the production and distribution of products under the Coca-Cola brand.
Coca-Cola Polar operates Coca-Cola franchises in Chile’s II, III, IV, XI and XII Regions.
Coca-Cola Polar Argentina S.A. operates the franchises of the provinces of Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Rio Negro, La Pampa and the western part of the province of Buenos Aires.
Paraguay Refrescos S.A. has franchises for the whole of the Republic of Paraguay.
The franchises for these territories operate under a renewable period of 5 years. The next renewal period of these franchises is in 2014.
The parent Embotelladoras Coca-Cola Polar S.A. is a corporation regulated by the Superintendency of Securities and Insurance (“SVS”) and is registered in the Securities Register in Santiago, Chile under No.0388. The Company’s shares are traded on the Chilean stock exchange.
Embotelladoras Coca-Cola Polar S.A. is domiciled at Avenida Nueva Tajamar 481, 4th floor, South Tower, Las Condes, Santiago, Chile and its tax registration number is 93.473.000-3.
The Board of Directors approved the consolidated interim financial statements as of June 30, 2012 at its meeting held on August 9, 2012.
1.2 Merger of the Company
According to the information reported to the SVS on March 30, 2012, Embotelladoras Coca Cola Polar S.A. (“Kopolar”) and its shareholders, and Embotelladora Andina S.A. (“Andina”) and its shareholders, signed a merger agreement, which state the following key terms and conditions:
a) Kopolar is merged by incorporation with Andina (“Merger”). Kopolar will be dissolved and will, therefore, transfer to Andina all of its assets and liabilities. For this purpose, Andina will issue 186,304,194 new shares, which will represent 19.68% of the total shares into which the capital of Andina will be divided following the Merger (the “Merger Shares”). The operation will be materialized through an exchange of newly issued shares of the Company, at a rate of 0.33269 Series A Company shares and 0.33269 Series B Company shares, per each share of Kopolar (“Exchange Ratio”).
b) A public deed of formalization will be signed declaring that the Merger has been completed on the date of such deed. The signing of the formalization deed will be subject to compliance or renunciation, as the case may be, with the following conditions precedent: (i) that all the permits and authorizations necessary for the completion of the Merger and others required by law, regulations, by—laws and/or contracts signed by Andina or Kopolar are obtained promptly; (ii) that the authorizations of The Coca-Cola Company (“KO”) be obtained promptly to carry out the Merger; (iii) that, except for the Merger Shares, the number of shares in which the capital of Andina is divided remains unchanged, as well as their preferences and shares in which the capital of Kopolar is divided; (iv) that there is no official order or legal proceedings brought by third parties in order to obstruct the validity or detain the Merger process which the Parties believe has some possibility of success; and (v) that the options that shareholders of Andina and of Kopolar might exercise due to the Merger does not exceed 5% of the total shares issued with voting rights of Andina or Kopolar prior to the Merger, as applicable.
c) The Merger Agreement should be completed and the Formalization Deed must be signed no later than September 30, 2012 provided that, during that term, the conditions crecedent have been met or renounced, as the case may be.
d) The following documents will be used as a basis of the merger: (i) the merger report as referred to in article 99 of the Corporations Law No 18.046, (ii) the statement of financial position of Andina and Polar as of March 31, 2012 and audited by their respective auditors, and (iii) the pro-forma consolidated the statement of financial position of Kopolar and Andina.
e) The Board of Directors of Andina will distribute the Merger Shares among the shareholders of Kopolar prorated to each share that has been registered in their name in the Shareholders Register five days prior to the date from which the Exchange Right can be exercised.
f) Prior to completing the Merger, and subject to the approval of their shareholders, Andina and Kopolar will distribute dividends to their respective shareholders, in addition to those already declared and distributed, of Ch$28,155,862,307 and Ch$29,565,609,857 respectively, which represents Ch$35.27 per Series A share and Ch$38.80 per Series B share in the case of Andina and Ch$105.59 per share in the case of Kopolar.
g) The Parties agree under the Chilean law and to resolve any matter arising from the Merger Agreement through arbitration.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
y) Accounting Periods
The consolidated interim financial statements cover the following periods:
· |
| Consolidated interim statements of financial position: |
| For the periods ended June 30, 2012 and December 31, 2011 |
· |
| Consolidated interim statements of comprehensive income and cash flows: |
| For the three-month and six-month periods ended June 30, 2012 and 2011 |
· |
| Consolidated interim statement of changes in equity: |
| For the six-month ended June 30, 2012 and the year ended December 31, 2011 |
z) Basis of preparation
These consolidated interim financial statements of Embotelladoras Coca Cola Polar S.A. have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (“IASB”).
The accounting policies have been applied consistently in all the periods compared in these consolidated interim financial statements.
These consolidated interim financial statements have been prepared under the historic cost convention, except for financial assets valued at fair value through profit and loss.
The figures included in the accompanying consolidated financial statements are expressed in thousands of Chilean pesos, which are the Company’s functional currency and the Group´s presentation currency.
aa) Consolidation
Subsidiaries are all entities over which the Group has the power to govern their operating and financial policies. Subsidiaries are consolidated from the date on which control is transferred to the Group and are de-consolidated from the date on which the control ceases.
The group uses the purchase method to account for the acquisition of a subsidiary. The cost of an acquisition is determined as the fair value of the assets transferred, equity interests issued and liabilities incurred assumed on the date of acquisition. The identifiable assets acquired, and the liabilities and contingent liabilities assumed in a business combination, are measured initially at their fair values on the date of acquisition, regardless of the size of any minority interest. The excess of the acquisition cost over the fair value of the Group’s net identifiable assets acquired is recognized as goodwill. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized immediately in the consolidated statement of comprehensive income.
Intercompany transactions, balances, income, expenses and unrealized gains between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction shows impairment in the value of the asset transferred. Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The following companies are included in the consolidation:
|
|
|
|
|
| Shareholding Percentage |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| December 31, |
|
|
|
|
| Country |
| June 30, 2012 |
| 2011 |
| ||||
Tax ID No. |
| Entity |
| of Origin |
| Direct |
| Indirect |
| Total |
| Total |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Chile |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
96.971.280-6 |
| Inversiones Los AndesLtda. |
| Chile |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
Foreign |
| Coca-Cola Polar Argentina S.A. |
| Argentina |
| 5.00 |
| 95.00 |
| 100.00 |
| 100.00 |
|
Foreign |
| Paraguay Refrescos S.A. |
| Paraguay |
| 0.08 |
| 97.75 |
| 97.83 |
| 98.00 |
|
Foreign |
| Kopolar Refrescos S.A. (*) |
| Paraguay |
| — |
| — |
| — |
| 100.00 |
|
Foreign |
| Aconcagua Investing S.A. |
| British Vírgin |
| 0.71 |
| 99.29 |
| 100.00 |
| 100.00 |
|
|
|
|
| Islands |
|
|
|
|
|
|
|
|
|
(*) In January 2012, Kopolar Refrescos S.A. was absorbed by Paraguay Refrescos S.A.
bb) Foreign currency translation
· Functional and presentation currency
Items included in the consolidated financial statements of each of the Group´s companies are measured using the currency of the primary economic environment in which each company operates (functional currency). The consolidated financial statements are presented in Chilean pesos which is the Company’s functional currency and the Group’s presentation currency.
· Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and the translation at each period’s closing exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of comprehensive income.
The exchange rates and amounts outstanding at the close of each period are the following:
Date |
| Ch$ / US$ |
| Arg$ /US$ |
| GS/ US$ |
| Ch$ / UF |
|
June 30, 2012 |
| 501.84 |
| 4.53 |
| 4,510.00 |
| 22,627.36 |
|
December 31, 2011 |
| 519.20 |
| 4.30 |
| 4,400.00 |
| 22,294.03 |
|
June 30, 2011 |
| 468.15 |
| 4.11 |
| 4,000.00 |
| 21,889.89 |
|
· Group companies
The results and financial position of all the Group entities (none of which has a currency of a hyper-inflationary economy) which have a functional currency different from the presentation currency as follows:
a) Assets and liabilities for each statement of financial position are translated at the closing exchange rate on the financial position date;
b) Income and expenses in each statement of income are translated at the monthly average exchange rate; and
c) All resulting exchange differences from (a) and (b) above are recognized in other comprensive income.
The Group´s companies which have a functional currency other than presentation currency are:
Company |
| Functional Currency |
|
|
|
Coca Cola Polar Argentina S.A. |
| Argentine pesos |
Paraguay Refrescos S.A. |
| Guaranies |
For the purposes of consolidation, exchange differences resutling from the translation of the net investment in foreign entities, debt and other financial instruments designated as hedges for such investments, are recognized in equity (other comprensive income).
When a foreign investment is realized, such exchange differences are recognized in the consolidated statement of comprehensive income in the corresponding period.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the exchange rate on the date of closing.
cc) Investment in Associates
Associates are all entities over which the Group has significant influence. Investments in associates are accounted for using the equity method. The Group’s investment in associates considers the goodwill identified at the time of the acquisition (net of any accumulated impairment loss).
The Group’s post-acquisition share of profit or loss of the associates is recognized in the consolidated statement of comprehensive income and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income.
When the Group’s share of loss of an associate equals or exceeds its interest of the associate, including any unsecured account receivables, the Group does not recognize any further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealized earnings on transactions between the Group and its associates are eliminated in proportion to the Group’s interest in the associate. Unrealized losses are eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of the associates have been changed where necessary to ensure consistency with the policies adopted by the Group.
dd) Goodwill
Goodwill represents the excess between the acquisition cost and the Group’s interest in the fair value of the net identifiable assets of a subsidiary or associate on the date of acquisition.
In the case of the acquisition of subsidiaries, this excess is treated as goodwill, while in the acquisition of associates, it is considered as part of Investments in associates under the equity method of accounting.
Goodwill is not subject to amortization. It is tested for impairment annually and impairment loss, if any, is recognized in the consolidated statements of comprehensive income. For the purposes of impairment testing, goodwill is allocated to cash-generating units, which represent the Group’s investments in the countries where it operates.
In the event of the disposal of the investment, the goodwill forms part of the total cost of the investment.
ee) Intangible Assets
· Rights
These relate to premiums paid by the Argentine subsidiary relating to the acquisition of territories and acquisition of rights to operate and distribute products of the Benedictino brand made by Embotelladoras Coca-Cola Polar S.A.
The rights are recorded at historic cost and are not subject to amortization as they have indefinite useful lives.
Impairment is tested annually and impairment losses, if any, is recognized to the consolidated statement of comprehensive income. For the purpose of impairment testing, goodwill is allocated to cash-generating units, which represent the Group’s investments in the countries where it operates or the specific category that originated it.
· Software
Software licenses acquired are capitalized based on the costs incurred in acquiring or maintaining computer software programs. These costs are amortized over the terms of their estimated useful lives.
Costs associated with the development or maintenance of computer software programs are recorded as an expense as incurred. Disbursements directly associated with the production of “specific and identifiable” computer software programs controlled by the Group, and which will generate economic benefits over and above their costs for more than a year, are recognized as intangible assets. Direct costs include the costs of the employees who develop the computer software programs and a portion of the corresponding indirect costs.
ff) Property, Plant and Equipment
The Company recognizes property, plant and equipment at their historic cost (which include the attributable costs determined by revaluations made in accordance with IFRS 1, First time adoption of IFRS), less accumulated depreciation. The historic cost includes all expenditure that is directly attributable to the acquisition of the assets.
Finance costs attributable to the construction of property, plant and equipment are capitalized at their cost until the date when they are ready to be used.
Subsequent costs relating to the repairs and maintenance of the assets are recognized as expenses incurred. However, any costs that meet the following conditions:
· that these assets will generate future economic benefits for the Company; and
· that the costs of these assets can be measured reliably.
are included in the value of the asset or recorded as a separate asset.
Residual values and remaining useful lives of the assets are reviewed and adjusted, if appropriate, at the end of each reporting period.
Depreciation of property, plant and equipment is calculated using the straight-line method over the useful lives of the assets. The useful lives determined by types of assets are as follows:
Assets |
| Range years |
|
Buildings |
| 40 - 80 |
|
Plant and equipment: |
|
|
|
Machinery |
| 15 - 20 |
|
Transportation equipment |
| 10 |
|
Computer equipment |
| 3 |
|
Motor vehicles |
| 10 |
|
Other property, plant and equipment: |
|
|
|
Market assets |
| 8 |
|
Crates & bottles |
| 4 - 8 |
|
Gains and losses on disposal of property, plant and equipment relate to the difference between the proceeds of the transaction and the carrying value of the assets, which are recognized in the consolidated statement of comprehensive income in the period in which they incur, within in Other revenue or Other expenses.
gg) Impairment of Non-Financial Assets
Assets that have an indefinite useful life and are not subject to amortization are tested annually for impairment. Assets subject to amortization are reviewed for impairment when economic events or changes in circumstances indicate that their carrying value may not be recoverable. When the book value of an asset exceeds its recoverable value, an impairment is recognized in the consolidated statement of income and its carrying amount is reduced to the recoverable value.
The recoverable value of an asset is defined as the higher of the net sale price and its value in use. The net sale price is fair value less the costs to sell. Value in use is the present value of the estimated future cash flows to be generated by the continual use of an asset and by its disposal value at the end of its useful life. The present value is determined by using a discount rate that reflects the present value of such cash flows and the specific risks of the asset. Recoverable amounts are estimated for each asset or, if not possible, for the cash generating unit that represents the smallest group of assets that generate separately identifable cash flows.
The carrying values of non-financial assets other than goodwill that have been written down for impairment are reviewed on each reporting date for possible reversal of the impairment which, if any, are recorded as a gain in the period of such reversal.
hh) Financial Assets
The Company classifies its financial assets in the following categories: (a) financial assets at fair value through profit and loss, and (b) loans and receivables. The Company has no financial assets classified as investments held to maturity or assets 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 intial recognition and re-evaluates this classification on the date of each closing.
· Financial assets at fair value with changes to results
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Financial assets defined in this category are recognized at fair value and any changes to the these fair values are recognized in the consolidated statement of comprehensive income.
· Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. They arise when the Group provides money, goods or services directly to a debtor without the intention to negotiate the account receivable. They are included in current assets, except for those with maturities of over 12 months from the date of the statement of financial position which are classified as non-current assets. Loans and receivables are included in Trade and other receivables in the consolidated statement of financial position.
Financial assets in this category are initially recognized at their fair value. They are subsequently measured using the amortized-cost method based on the effective interest rate, which are recognized in finance income for the period between its intial recognition and its settlement. As accounts receivable have short term maturities, the Company recognizes them at their nominal values.
The Company evaluates at the date of each closing whether there is objective evidence that a financial asset or a group of financial assets have suffered impairment. Potential impairment indicators of accounts receivable include the debtors´financial difficulties, potential bankruptcy proceedings, financial reorganization, default and non-payment.
Should impairment exist; a provision is made to recognize impairment losses. The amount of this provision is the difference between the carrying value of the asset and the present value of the estimated future cash flows to be recovered, discounted at the effective interest rate. The carrying value of the asset is reduced by the provision and the amount of the loss is charged to the consolidated statement of comprehensive income. Subsequent reversals of amounts previously recognized as impaired, are recognized as a credit to the consolidated statement of comprehensive income in the period that it incurs.
ii) Inventories
Inventories are stated at the lower of cost and net realization value, less a provision for obsolescence. Net realization value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Cost includes purchase price plus necessary additional costs until the products are sold. Cost is determined using the weighted average method. The cost of inventories subject to manufacturing processes includes the cost of raw materials, direct workforce and indirect overhead manufacturing costs (on the basis of the normal operating capacity).
Provision for obsolescence of inventories is estimanted for those items that are not probable to be used or sold. This is determined on an individual basis, considering the aging of the items, among other information, according to management´s judgment and experience. The obsolescence loss is recognized directly in the consolidated statement of comprehensive income.
jj) Trade receivables
Trade receivables, as indicated in Note 2 j), are shown at their nominal value due to their short term maturities, less the allowance for doubtful accounts. The allowance for doubtful accounts of trade receivables is considered when there is objective evidence that the Group may not collect all the amounts due in accordance with the original terms of the accounts receivable. The allowance amount is recognized in the consolidated statement of comprehensive income.
kk) Statement of cash flows
· Cash and cash equivalents
The parent company and its subsidiaries have considered cash and cash equivalents as cash on hand, time deposits and other short-term highly liquid investments with original maturities of three months or less.
· Classification of interests and dividends paid
Cash flows used in payments of interest and dividends are shown in Net cash flow in financing activities.
ll) Trade payables
Trade payables are initially recognized at their fair value and are subsequently measured at their amortized cost using the effective interest method.
mm) Interest-Bearing Loans and Debt Issue Obligations
Loans and debt issues are initially recognized at fair value, net of transaction costs. These obligations with third parties are subsequently measured at their amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statement of comprehensive income over the period of the obligations using the effective interest method.
nn) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events; resources will be required to settle the obligation; and the amount has been reliably measured.
Provisions are measured at the present value of the expenditure expected to be required to settle the obligation, using an interest rate that reflects current market conditions of the time value of money and specific risks of the obligation. The increase in the provision due to passage of time is recognized as interest expense.
oo) Deposits in guarantee
Returnable crates and bottles are recorded in property, plant and equipment. For those that have been delivered to the sales channels for the marketing of its products, a financial liability is recorded to reflect the obligation to reimburse the deposits in guarantee made by customers. This financial liability is valued at amortized cost and is extinguished when the obligation is settled.
pp) Current and and deferred income taxes
The parent company and its subsidiaries have recognized their tax rights and obligations based on current legislation.
The current tax expense is recorded in the consolidated statement of comprehensive income. Income tax payable is calculated based on the taxable income for the year using the applicable tax rates enacted at the date of the statement of financial position, any adjustments to taxes payable of previous years and the effect of movements in deferred income tax assets and liabilities.
Deferred income taxes are recognized on temporary differences arising between the assets and liabilities and their carrying amounts shown in the financial statements. Deferred income tax assets and liabilities are determined using the tax rates that have been enacted at the date of the statement of financial position and are expected to apply when the related deferred income tax asset is realized or thedeferred income tax liability is settled.
Deferred income tax on temporary differences arising on investments in subsidiaries and associates is not provided for when timing of the reversal of the temporary differences is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
qq) Employee Benefits
· Profit-sharing and bonuses
The Company has no contractual or obligatory incentive plans. However, the incentives for the senior executives are calculated based on expected returns and individual performance. These benefits are provided for at the close of the financial year.
rr) Dividend distribution
Dividend distribution to the Company’s shareholders is recognized as a liability in the consolidated financial statements.
This liability is accrued when the dividends are approved by the shareholder or are established by law (minimum obligatory).
ss) Operating segments
IFRS 8 requires entities to adopt “the management view” for disclosing information on the results of their operating segments. This is generally the information that management uses internally to assess the performance of segments and to allocate resources. The following reportable operating segments have therefore been determined:
· Operations in Chile
· Operations in Argentina
· Operations in Paraguay
tt) Revenue recognition
Revenue is measured at fair value of the sale of goods and services, net of taxes and discounts.
The Company recognized revenue based on the following criteria:
· Sale of goods
Revenues are recognized when all the significant risks and rewards of titles to the goods have been passed on to the customer.
· Interest
Interest income is recognized using the effective interest method.
uu) Critical accounting estimates and assumptions
The estimates and assumptions that have a significant risk of causing a material adjustment to the financial statements wihin the next financial year are addressed below.
i) Revision of carrying values of goodwill and provision for impairments
The Group annually tests whether goodwill has suffered any loss for impairment in accordance with the guidelines stated in IAS 36. The recoverable amounts of the cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates for the preparation of the future cash flows, including the projection of the Group’s future operations, projection of economic factors that affect revenues and costs, and the determination of the discount rate to be applied.
ii) Guarantee deposits
As disclosed in Note 2 q), the Company has an obligation to reimburse customers their packaging (crates and bottles) guarantee deposits. This obligation is written down when it has been settled. The Company therefore considers that this obligation has been settled when a) customers return the packaging and request for the refund of their deposit, or b) the packaging ceases to exist or is damaged. The valuation of this liability assumes that, in the absence of the circumstance described in a) above, the obligation will remain unchanged to the extent that it cannot be shown, through physical counts and other testing methods, that the packaging has ceased to exist.
vv) New and amendments IFRSs and Interpretations of the IFRSs
New standards, amendments and interpretations effective for periods on or after January 1, 2012:
|
|
|
| Date of obligatory application |
|
|
| New standards, interpretations & amendments |
| (financial statements starting in) |
|
|
|
|
|
|
|
IFRS 1 |
| First-time adoption of IFRS |
| July 1, 2011 |
|
IFRS 7 |
| Financial instruments |
| July 1, 2011 |
|
These newly-issued standards, amendments and interpretations are not currently significant for the Group.
New standards, amendments and interpretations issued but not in effect for the financial year starting January 1, 2012, and not early adopted.
IAS 12 |
| Income tax |
| January 1, 2012 |
|
IAS 1 |
| Presentation of financial statements |
| July 1, 2012 |
|
IAS 19 |
| Employee benefits |
| January 1, 2013 |
|
IFRS 9 |
| Financial instruments |
| January 1, 2015 |
|
IFRS 10 |
| Consolidated financial statements |
| January 1, 2013 |
|
IFRS 11 |
| Joint ventures |
| January 1, 2013 |
|
IFRS 12 |
| Disclosure of interests in other entities |
| January 1, 2013 |
|
IAS 27 |
| Separate financial statements |
| January 1, 2013 |
|
IFRS 13 |
| Fair value measurement |
| January 1, 2013 |
|
IFRS 7 |
| Financial instruments - Disclosure |
| January 1, 2013 |
|
IAS 32 |
| Financial instruments - Presentation |
| January 1, 2014 |
|
IFRIC 20 |
| Stripping Costs |
| January 1, 2013 |
|
The Company’s management believes that the adoption of the above-described standards, amendments and interpretations will have no significant impact on the consolidated financial statements of Embotelladoras Coca-Cola Polar S.A. and subsidiaries.
NOTE 3 - FINANCIAL INFORMATION BY OPERATING SEGMENT
As indicated in Note 2 u), management has determined the operating segments based on the internal reports which are used for making strategic decisions. Management mainly make strategic decisions based on gepgraphic location, therefore, operating segments are as follows:
· Operations in Chile
· Operations in Argentina
· Operations in Paraguay
All the reportable operating segments generate their revenues from the production and commercialization of Coca-Cola products, as mentioned in Note 1.
There are no customers that represent more than 10% of the Company’s revenues.
The following shows financial information on the different operating segments and their reconciliation with the consolidated financial statements of Embotelladoras Coca-Cola Polar S.A. and its subsidiaries:
|
| Chilean |
| Argentine |
| Paraguayan |
|
|
| Consolidated |
|
|
| operation |
| operation |
| operation |
| Eliminations |
| total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For the period ended June 30, 2012 |
|
|
|
|
|
|
|
|
|
|
|
Revenue from extrernal customers |
| 52,683,772 |
| 54,073,250 |
| 50,486,821 |
| — |
| 157,243,843 |
|
Revenue between segments |
| 850,605 |
| — |
| — |
| (850,605 | ) | — |
|
Finance income |
| 32,088 |
| — |
| 398,572 |
| — |
| 430,660 |
|
Finance costs |
| (2,333,989 | ) | (150,720 | ) | (277,851 | ) | — |
| (2,762,560 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Net finance income |
| (2,301,901 | ) | (150,720 | ) | 120,721 |
| — |
| (2,331,900 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| (2,783,402 | ) | (2,003,445 | ) | (3,109,576 | ) | — |
| (7,896,423 | ) |
Total significant revenue items |
| 831,533 |
| 15,355 |
| 162,092 |
| — |
| 1,008,980 |
|
Total significant expense items |
| (46,142,076 | ) | (52,097,785 | ) | (42,721,512 | ) | 850,605 |
| (140,110,768 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) for the period |
| 3,138,531 |
| (163,345 | ) | 4,398,546 |
| — |
| 7,913,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associate using equity method of accounting |
| 115,160 |
| — |
| — |
| — |
| 115,160 |
|
Income tax expense (recovery) |
| (556,569 | ) | 708,828 |
| (571,367 | ) | — |
| (419,108 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
| 105,172,185 |
| 73,710,240 |
| 91,503,468 |
| (6,300,681 | ) | 264,085,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates using equity method of accounting |
| 7,399,340 |
| — |
| — |
| — |
| 7,399,340 |
|
Capital expenditure |
| 7,509,927 |
| 3,511,613 |
| 8,401,920 |
| — |
| 19,423,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
| 125,166,662 |
| 29,523,525 |
| 17,628,977 |
| (6,300,681 | ) | 166,018,483 |
|
|
| Chilean |
| Argentine |
| Paraguayan |
|
|
| Consolidated |
|
|
| operation |
| operation |
| operation |
| Eliminations |
| total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For the period ended June 30, 2011 |
|
|
|
|
|
|
|
|
|
|
|
Revenue from extrernal customers |
| 44,565,075 |
| 40,992,893 |
| 45,669,396 |
| — |
| 131,227,364 |
|
Revenue between segments |
| 1,050,678 |
| — |
| — |
| (1,050,678 | ) | — |
|
Finance income |
| 193,932 |
| — |
| 437,240 |
| — |
| 631,172 |
|
Finance costs |
| (2,361,863 | ) | (347,162 | ) | (78,970 | ) | — |
| (2,787,995 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Net finance income |
| (2,167,931 | ) | (347,162 | ) | 358,270 |
|
|
| (2,156,823 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| (2,360,732 | ) | (1,563,344 | ) | (2,325,797 | ) | — |
| (6,249,873 | ) |
Total significant revenue items |
| 18,050 |
| 13,673 |
| 115,649 |
| — |
| 147,372 |
|
Total significant expense items |
| (38,595,124 | ) | (41,696,356 | ) | (36,416,511 | ) | 1,050,678 |
| (115,657,313 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) for the period |
| 2,510,016 |
| (2,600,296 | ) | 7,401,007 |
| — |
| 7,310,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit of associate using equity method of accounting |
| 130,023 |
| — |
| — |
| — |
| 130,023 |
|
Income tax expense (recovery) |
| (737,224 | ) | 2,086,484 |
| (942,504 | ) | — |
| 406,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
| 94,082,831 |
| 63,876,302 |
| 97,174,716 |
| (2,990,705 | ) | 252,143,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates using equity method of accounting |
| 6,609,757 |
| — |
| — |
| — |
| 6,609,757 |
|
Capital expenditure |
| 5,342,998 |
| 7,414,500 |
| 8,674,680 |
| — |
| 21,432,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
| 86,458,713 |
| 21,439,952 |
| 16,992,122 |
| (2,990,708 | ) | 121,900,079 |
|
NOTE 4 - INVENTORIES
The composition of the balance of inventories at each period end is as follows:
|
| As of June 30, |
| ||
|
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
|
Raw materials |
| 12,397,051 |
| 13,582,785 |
|
Merchandise |
| 2,162,209 |
| 1,796,829 |
|
Supplies for production |
| 450,874 |
| 555,240 |
|
Work in progress |
| 723,893 |
| 776,623 |
|
Finished goods |
| 6,133,012 |
| 4,736,564 |
|
Others |
| 1,035,059 |
| 1,651,329 |
|
|
|
|
|
|
|
Balance |
| 22,902,098 |
| 23,099,370 |
|
The Company determines the cost of inventories using the weighted average method.
The cost of inventories recorded to Cost of sales during each period is as follows:
|
| Period April 1 — June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Cost of inventories |
| 36,488,814 |
| 33,810,985 |
| 82,034,672 |
| 68,503,336 |
|
The expense for obsolescence of inventories, recorded in the statement of comprehensive income for each period, is as follows:
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Obsolescence expense |
| — |
| 20,971 |
| — |
| 37,850 |
|
NOTE 5 - CASH AND CASH EQUIVALENTS
The detail of cash and cash equivalents at the end of each period is as follows:
|
| June 30, |
| December 31, |
|
|
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
|
Cash on hand |
| 144,467 |
| 46,468 |
|
Cash at bank |
| 4,559,226 |
| 6,625,418 |
|
Term deposits |
| 2,200,000 |
| 14,983,835 |
|
Mutual funds |
| 7,170,000 |
| — |
|
|
|
|
|
|
|
Total |
| 14,073,693 |
| 21,655,721 |
|
|
| June 30, |
| December 31, |
|
|
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
|
US Dollar |
| 968,322 |
| 1,478,095 |
|
Argentine Peso |
| 324,220 |
| 3,187,243 |
|
Guaraní |
| 4,848,572 |
| 16,278,044 |
|
Chilean Peso |
| 7,932,579 |
| 712,339 |
|
|
|
|
|
|
|
Cash & Cash Equivalents |
| 14,073,693 |
| 21,655,721 |
|
There are no differences between cash and cash equivalents in the consolidated statements of financial position and cash and cash equivalents in the consolidated statements of cash flows.
· Term deposits
Term deposits, with original maturities of less than three months, are recorded at their amortized cost. The detail for the two periods is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at |
|
Lodgement |
|
|
|
|
|
|
|
|
| Annual |
|
|
| June 30, |
|
date |
| Entity |
| Country |
| Currency |
| Principal |
| rate |
| Maturity |
| 2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
|
|
| ThCh$ |
|
06-29-2012 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 2,200,000 |
| 3.5 |
| 07-02-2012 |
| 2,200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
| 2,200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at |
|
Lodgement |
|
|
|
|
|
|
|
|
| Annual |
|
|
| December 31, |
|
date |
| Entity |
| Country |
| Currency |
| Principal |
| Rate |
| Maturity |
| 2012 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
|
|
| ThCh$ |
|
12-30-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 910,074 |
| 2.0 |
| 01-02-2012 |
| 910,074 |
|
10-31-2011 |
| Itau S.A. |
| Paraguay |
| Guaraníes |
| 600,000 |
| 6.7 |
| 01-02-2012 |
| 606,608 |
|
10-27-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 1,200,000 |
| 7.5 |
| 01-25-2012 |
| 1,216,027 |
|
10-27-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 1,200,000 |
| 7.5 |
| 01-25-2012 |
| 1,216,027 |
|
10-27-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 1,680,000 |
| 8.5 |
| 01-25-2012 |
| 1,705,430 |
|
10-27-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 1,920,000 |
| 8.5 |
| 01-25-2012 |
| 1,949,063 |
|
11-30-2011 |
| Banco Regional SAECA |
| Paraguay |
| Guaraníes |
| 960,000 |
| 7.5 |
| 02-29-2012 |
| 966,156 |
|
11-30-2011 |
| Itau S.A. |
| Paraguay |
| Guaraníes |
| 600,000 |
| 7.0 |
| 02-28-2012 |
| 603,567 |
|
11-30-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 600,000 |
| 7.5 |
| 02-28-2012 |
| 603,822 |
|
11-30-2011 |
| HSBC Bank Paraguay |
| Paraguay |
| Guaraníes |
| 540,000 |
| 6.6 |
| 02-28-2012 |
| 543,027 |
|
12-29-2011 |
| Itau S.A. |
| Paraguay |
| Guaraníes |
| 1,980,000 |
| 7.2 |
| 03-28-2012 |
| 1,980,787 |
|
12-29-2011 |
| Itau S.A. |
| Paraguay |
| Dollars |
| 882,090 |
| 2.0 |
| 01-30-2012 |
| 882,187 |
|
12-28-2011 |
| BBVA Paraguay SA |
| Paraguay |
| Guaraníes |
| 1,200,000 |
| 8.0 |
| 03-27-2012 |
| 1,200,789 |
|
12-28-2011 |
| HSBC Bank Paraguay |
| Paraguay |
| Guaraníes |
| 600,000 |
| 5.5 |
| 01-27-2012 |
| 600,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
| 14,983,835 |
|
There are no material differences between the carry value of term deposits and their fair value.
· Mutual Funds
Mutual fund are valued at the market price at the end of each year. Variations in the value of the market value during the respective years are recognized as a charge or credit to income.
These mutual funds correspond to short-term low-risk investments. The portfolio consists of national debt instruments issued by Banco Central de Chile and the country’s principal financial institutions.
The following is the detail at period ended June 30, 2012:
|
|
|
|
|
|
|
|
|
| Balance at |
|
|
|
|
|
|
|
|
|
|
| June 30, |
|
Institution |
| Country |
|
|
| Currency |
|
|
| 2012 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
Fondos Mutuos Banchile |
| Chile |
|
|
| Chilean pesos |
|
|
| 1,280,000 |
|
Fondos Mutuos Santander |
| Chile |
|
|
| Chilean pesos |
|
|
| 5,890,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
| 7,170,000 |
|
NOTE 6 — CURRENT AND DEFERRED INCOME TAXES
e) General Information
The parent company and subsidiaries have recognized their tax rights and obligations on the basis of each country’s current regulations.
Consolidated income tax for the period ended June 30, 2012 and for the year ended December 31, 2011 has been calculated and provided for on the basis of taxable income of ThCh$ 10.984.385 and ThCh$ 23,742,136, respectively.
For the period ended June 30, 2012 the Chilean companies show the following tax credits pending distribution:
|
| Taxable earnings |
|
|
| ||||
|
| With credit |
| With credit |
| Without |
|
|
|
Company |
| 17.0% |
| 20.0% |
| credit |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Transportes Polar S.A. |
| — |
| 381,876 |
| — |
| 381,876 |
|
Inversiones Los Andes Ltda. |
| 145,524 |
| — |
| 66,821 |
| 212,345 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 145,524 |
| 381,876 |
| 66,821 |
| 594,221 |
|
f) Deferred income taxes
The balances of deferred income tax assets and liabilities at the end of each period are as follows:
|
| June 30, |
| December 31, |
| ||||
|
| 2012 |
| 2011 |
| ||||
|
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Allowance for doubtful accounts |
| 131,459 |
| — |
| 166,943 |
| — |
|
Vacations provision |
| 60,654 |
| — |
| 73,187 |
| — |
|
Litigation provision |
| 253,962 |
| — |
| 359,312 |
| — |
|
Inventories |
| 295 |
| 115,285 |
| 321 |
| 99,257 |
|
Property, plant and equipment |
| — |
| 7,436,131 |
| — |
| 7,440,433 |
|
Lease obligations |
| 556,228 |
| — |
| 518,523 |
| — |
|
Tax loss carried forward |
| 5,078,554 |
| — |
| 4,227,229 |
| — |
|
Advance payments |
| 14,256 |
| 832 |
| — |
| 79,903 |
|
Foreign subsidiaries dividends |
| — |
| — |
| — |
| 1,986,281 |
|
Credit on bond placement |
| 332,569 |
| — |
| 332,569 |
| — |
|
Bond placement issue costs |
| — |
| 78,678 |
| — |
| 78,678 |
|
Others |
| 328,525 |
| 457,887 |
| 375,324 |
| 441,405 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 6,756,502 |
| 8,088,813 |
| 6,053,408 |
| 10,125,957 |
|
Movement in deferred income taxes in the period ended June 30, 2012 and year ended December 31, 2011are as follows:
|
| June 30, |
| December 31, |
| ||||
|
| 2012 |
| 2011 |
| ||||
|
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 6,053,408 |
| 10,125,957 |
| 3,829,416 |
| 8,839,439 |
|
Increase (decrease) on deferred income taxes |
| 1,124,329 |
| (1,676,142 | ) | 2,041,704 |
| 1,023,750 |
|
Increase (decrease) on foreign currency translation |
| (421,235 | ) | (361,002 | ) | 182,288 |
| 262,768 |
|
Movement |
| 703,094 |
| (2,037,144 | ) | 2,223,992 |
| 1,286,518 |
|
|
|
|
|
|
|
|
|
|
|
Closing balance |
| 6,756,502 |
| 8,088,813 |
| 6,053,408 |
| 10,125,957 |
|
g) Income tax expense
The following shows the composition of income tax expense for each period:
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Current income tax expense |
| (877,410 | ) | (340,597 | ) | (1,967,712 | ) | (1,267,441 | ) |
Adjustments to previous year´s current income tax |
| (23,635 | ) | (32,352 | ) | (121,440 | ) | (32,532 | ) |
Other current income tax expense |
| 2,182 |
| (15,103 | ) | 4,098 |
| 34,067 |
|
|
|
|
|
|
|
|
|
|
|
Current tax expense |
| (898,863 | ) | (388,052 | ) | (2,085,054 | ) | (1,265,726 | ) |
|
|
|
|
|
|
|
|
|
|
Credit (charge) for movement in deferred income taxes |
| 1,224,245 |
| 1,215,645 |
| 1,672,953 |
| 1,661,793 |
|
Other credits (charges) for deferred income taxes |
| (7,007 | ) | 12,771 |
| (7,007 | ) | 10,689 |
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax recovery |
| 1,217,238 |
| 1,228,416 |
| 1,665,946 |
| 1,672,482 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
| 318,375 |
| 840,364 |
| (419,108 | ) | 406,756 |
|
Income tax expense shown by the Chilean and foreign countries for each period is as follows:
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Foreign |
| 734,115 |
| (243,361 | ) | 174,587 |
| (689,100 | ) |
Chilean |
| (1,632,978 | ) | (144,691 | ) | (2,259,641 | ) | (576,626 | ) |
|
|
|
|
|
|
|
|
|
|
Current income tax expense |
| (898,863 | ) | (388,052 | ) | (2,085,054 | ) | (1,265,726 | ) |
|
|
|
|
|
|
|
|
|
|
Foreign |
| (433,157 | ) | 1,227,205 |
| (37,126 | ) | 1,833,080 |
|
Chilean |
| 1,650,395 |
| 1,211 |
| 1,703,072 |
| (160,598 | ) |
|
|
|
|
|
|
|
|
|
|
Deferred income tax recovery |
| 1,217,238 |
| 1,228,416 |
| 1,665,946 |
| 1,672,482 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
| 318,375 |
| 840,364 |
| (419,108 | ) | 406,756 |
|
h) Reconciliation of tax expense using the statutory rate and using the effective rate
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
Concept |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Earnings before income taxes |
| 1,480,158 |
| (1,197,667 | ) | 8,332,840 |
| 6,903,971 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense using statutory rate (18.5%) |
| 273,829 |
| — |
| 1,541,575 |
| — |
|
Income tax expense using statutory rate (20%) |
| — |
| (239,533 | ) | — |
| 1,380,794 |
|
|
|
|
|
|
|
|
|
|
|
Permanent differences: |
|
|
|
|
|
|
|
|
|
Non-taxable revenue |
| (716,712 | ) | (578,000 | ) | (1,456,801 | ) | (1,845,003 | ) |
Non-deductible expenses for tax purposes |
| 91,599 |
| 48,300 |
| 190,004 |
| 169,504 |
|
Others |
| 32,909 |
| (71,131 | ) | 144,330 |
| (112,051 | ) |
|
|
|
|
|
|
|
|
|
|
Adjustments to income tax expense |
| (592,204 | ) | (600,831 | ) | (1,122,467 | ) | (1,787,550 | ) |
|
|
|
|
|
|
|
|
|
|
Income tax expense using the effective rate |
| (318,375 | ) | (840,364 | ) | 419,108 |
| (406,756 | ) |
|
|
|
|
|
|
|
|
|
|
Effective rate |
| -21.5 | % | 70.2 | % | 5.0 | % | -5.9 | % |
The income tax rate applicable in each of the countries where the Company operates is 18.5% in Chile, 10% in Paraguay and 35% in Argentina.
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT
d) Balances
The following shows property, plant and equipment as of June 30, 2012 and December 31, 2011:
|
| Property, |
| Accumulated |
| Property, plant and |
| ||||||
|
| plant and equipment, gross |
| depreciation and impairment |
| equipment, net |
| ||||||
|
| 06.30.2012 |
| 12.31.2011 |
| 06.30.2012 |
| 12.31.2011 |
| 06.30.2012 |
| 12.31.2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Construction in progress |
| 15,424,880 |
| 13,823,900 |
| — |
| — |
| 15,424,880 |
| 13,823,900 |
|
Land |
| 11,025,496 |
| 11,512,013 |
| — |
| — |
| 11,025,496 |
| 11,512,013 |
|
Buildings |
| 32,766,947 |
| 31,930,930 |
| 2,708,529 |
| 2,369,664 |
| 30,058,418 |
| 29,561,266 |
|
Plant and equipment |
| 68,687,879 |
| 69,077,285 |
| 13,541,165 |
| 12,301,838 |
| 55,146,714 |
| 56,775,447 |
|
Computer equipment |
| 5,701,334 |
| 5,450,946 |
| 3,435,573 |
| 3,208,220 |
| 2,265,761 |
| 2,242,726 |
|
Motor vehicles |
| 1,191,825 |
| 1,218,311 |
| 345,400 |
| 322,875 |
| 846,425 |
| 895,436 |
|
Other property, plant and equipment |
| 78,397,833 |
| 75,784,536 |
| 25,857,417 |
| 22,967,722 |
| 52,540,416 |
| 52,816,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| 213,196,194 |
| 208,797,921 |
| 45,888,084 |
| 41,170,319 |
| 167,308,110 |
| 167,627,602 |
|
e) Additional information
The amount of fully depreciated property, plant and equipment but still in use as of June 30, 2012 and December 31, 2011 is ThCh$ 4,697,962 and ThCh$ 3,706,653, respectively.
Total expenditure in property, plant and equipment under construction for each period ended amounting to ThCh$ 15,424,880 in 2012 (ThCh$ 13,823,900 in 2011).
f) Movement
The movement in property, plant and equipment during both periods was as follows:
|
|
|
|
|
|
|
| Plant and |
| Computer |
|
|
| Other property, |
| Property, plant, |
|
|
| Construction |
|
|
| Buildings |
| equipment, |
| equipment, |
| Motor |
| plant and equip., |
| and equipment |
|
|
| in progress |
| Land |
| Net |
| net |
| net |
| vehicles, net |
| net |
| net |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For the period ended 06.30.2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 13,823,900 |
| 11,512,013 |
| 29,561,266 |
| 56,775,447 |
| 2,242,726 |
| 895,436 |
| 52,816,814 |
| 167,627,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
| 6,172,298 |
| — |
| 231,143 |
| 2,920,325 |
| 440,345 |
| 69,438 |
| 9,589,911 |
| 19,423,460 |
|
Transfers |
| (3,985,175 | ) | — |
| 2,427,155 |
| 2,162,447 |
| 65,820 |
| — |
| (670,247 | ) | — |
|
Disposals / Write-offs |
| — |
| — |
| — |
| (1,004,378 | ) | (1,185 | ) | (15,653 | ) | (1,125,484 | ) | (2,146,700 | ) |
Depreciation for period |
| — |
| — |
| (462,294 | ) | (1,869,638 | ) | (401,369 | ) | (53,182 | ) | (5,040,111 | ) | (7,826,594 | ) |
Foreign currency translation |
| (586,143 | ) | (486,517 | ) | (1,698,852 | ) | (3,837,489 | ) | (80,576 | ) | (49,614 | ) | (3,030,467 | ) | (9,769,658 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total movement |
| 1,600,980 |
| (486,517 | ) | 497,152 |
| (1,628,733 | ) | 23,035 |
| (49,011 | ) | (276,398 | ) | (319,492 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance |
| 15,424,880 |
| 11,025,496 |
| 30,058,418 |
| 55,146,714 |
| 2,265,761 |
| 846,425 |
| 52,540,416 |
| 167,308,110 |
|
|
|
|
|
|
|
|
| Plant and |
| Computer |
|
|
| Other property, |
| Property, plant, |
|
|
| Construction |
|
|
| Buildings |
| equipment, |
| equipment, |
| Motor |
| plant and equip., |
| and equipment |
|
|
| in progress |
| Land |
| net |
| net |
| net |
| vehicles, net |
| net |
| net |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
For the period ended 12.31.2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 11,671,145 |
| 10,780,083 |
| 21,096,158 |
| 42,505,611 |
| 1,174,910 |
| 869,301 |
| 35,136,361 |
| 123,233,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
| 16,384,954 |
| 222,613 |
| 638,019 |
| 8,384,994 |
| 956,438 |
| 310,966 |
| 24,948,945 |
| 51,846,929 |
|
Transfers |
| 14,993,346 |
| — |
| 7,694,902 |
| 7,315,004 |
| 647,216 |
| — |
| (663,776 | ) | — |
|
Disposals / Write-offs |
| (615 | ) | (230,861 | ) | (355,299 | ) | (2,561,537 | ) | (53 | ) | (210,345 | ) | (887,794 | ) | (4,246,504 | ) |
Depreciation for period |
| — |
| — |
| (678,085 | ) | (3,443,533 | ) | (611,073 | ) | (107,848 | ) | (8,559,680 | ) | (13,400,219 | ) |
Foreign currency traslation |
| 761,762 |
| 740,178 |
| 1,165,571 |
| 4,574,908 |
| 75,288 |
| 33,362 |
| 2,842,758 |
| 10,193,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total movement |
| 2,152,755 |
| 731,930 |
| 8,465,108 |
| 14,269,836 |
| 1,067,816 |
| 26,135 |
| 17,680,453 |
| 44,394,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance |
| 13,823,900 |
| 11,512,013 |
| 29,561,266 |
| 56,775,447 |
| 2,242,726 |
| 895,436 |
| 52,816,814 |
| 167,627,602 |
|
NOTE 8 - REVENUE AND EXPENSES
a) Operating Revenue
· Revenue from Ordinary Activities
Revenue from ordinary activities relate to sales of goods.
· Other revenue
Details of other revenue during each period are as follows:
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Rentals |
| 5,760 |
| 7,602 |
| 11,1472 |
| 15,232 |
|
Disposal of brand Cantarina |
| 790,000 |
| — |
| 790,000 |
| — |
|
Gain on disposal of property, plant and equipment |
| 29,451 |
| 4,002 |
| 29,451 |
| 4,002 |
|
Gain on disposal of scraps |
| 79,805 |
| 86,226 |
| 11,325 |
| 115,618 |
|
Other |
| 56,195 |
| 8,241 |
| 66,732 |
| 12,520 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 961,211 |
| 106,071 |
| 1,008,980 |
| 147,372 |
|
b) Operating Costs and Expenses
The detail of operating costs and expenses during each period was as follows:
|
| PERIOD APRIL 1 - JUNE 30, |
| ||||||||||||||||||
|
| Cost of sales |
| Distribution costs |
| Administrative expenses |
| Other expenses, |
| Total costs and expenses |
| ||||||||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials |
| 36,470,405 |
| 33,765,378 |
| 18,409 |
| 45,607 |
| — |
| — |
| — |
| — |
| 36,488,814 |
| 33,810,985 |
|
Depreciation |
| 2,438,683 |
| 2,080,990 |
| 149,211 |
| 112,892 |
| 172,633 |
| 131,471 |
| 1,321,912 |
| 1,055,759 |
| 4,082,439 |
| 3,381,112 |
|
Maintenance & repairs |
| 1,101,161 |
| 750,236 |
| 182,758 |
| 212,250 |
| 47,791 |
| 222,334 |
| 167,849 |
| 90,162 |
| 1,499,559 |
| 1,274,982 |
|
Employee expenses |
| 4,092,141 |
| 2,846,876 |
| 2,151,929 |
| 1,506,500 |
| 2,190,866 |
| 1,917,266 |
| 3,428,332 |
| 2,401,251 |
| 11,863,268 |
| 8,671,893 |
|
Publicity & promotion |
| — |
| — |
| — |
| — |
| — |
| — |
| 2,230,701 |
| 1,873,500 |
| 2,230,701 |
| 1,873,500 |
|
Freight & other distribution expense |
| 6,237 |
| — |
| 8,106,599 |
| 5,991,545 |
| 4,347 |
| 2,443 |
| 248,633 |
| 114,083 |
| 8,365,816 |
| 6,108,071 |
|
Other costs & expenses |
| 423,203 |
| 325,090 |
| 523,723 |
| 376,394 |
| 1,001,078 |
| 1,404,473 |
| 822,197 |
| 927,661 |
| 2,770,201 |
| 3,033,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| 44,531,830 |
| 39,768,570 |
| 11,132,629 |
| 8,245,188 |
| 3,416,715 |
| 3,677,987 |
| 8,219,624 |
| 6,462,416 |
| 67,300,798 |
| 58,154,161 |
|
|
| PERIOD JANUARY 1 - JUNE 30, |
| ||||||||||||||||||
|
| Cost of sales |
| Distribution costs |
| Administrative expenses |
| Other expenses, |
| Total costs and expenses |
| ||||||||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials |
| 81,901,407 |
| 68,457,729 |
| 133,265 |
| 45,607 |
| — |
| — |
| — |
| — |
| 82,034,672 |
| 68,503,336 |
|
Depreciation |
| 4,650,967 |
| 3,739,874 |
| 288,626 |
| 268,330 |
| 341,087 |
| 274,410 |
| 2,615,743 |
| 1,967,259 |
| 7,896,423 |
| 6,249,873 |
|
Maintenance & repairs |
| 1,967,811 |
| 1,637,801 |
| 323,626 |
| 282,345 |
| 73,722 |
| 262,218 |
| 350,277 |
| 183,599 |
| 2,715,436 |
| 2,365,963 |
|
Employee expenses |
| 8,414,646 |
| 6,920,444 |
| 4,729,810 |
| 3,158,668 |
| 4,085,318 |
| 3,831,878 |
| 6,671,239 |
| 5,046,981 |
| 23,901,013 |
| 18,957,971 |
|
Publicity & promotion |
| — |
| — |
| — |
| — |
| — |
| — |
| 5,206,515 |
| 3,547,857 |
| 5,206,515 |
| 3,547,857 |
|
Freight & other distribution expense |
| 15,278 |
| — |
| 17,405,850 |
| 12,602,961 |
| 9,861 |
| 6,645 |
| 482,562 |
| 222,690 |
| 17,913,551 |
| 12,832,296 |
|
Other costs & expenses |
| 451,352 |
| 528,483 |
| 1,191,789 |
| 811,535 |
| 2,377,463 |
| 2,915,549 |
| 1,706,735 |
| 1,716,822 |
| 5,727,339 |
| 5,972,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| 97,401,461 |
| 81,284,331 |
| 24,072,966 |
| 17,169,446 |
| 6,887,451 |
| 7,290,700 |
| 17,033,071 |
| 12,685,208 |
| 145,349,949 |
| 118,429,685 |
|
The increase in publicity and promotion expenses over the previous year relates mainly to the introduction of an increase in market assets in Paraguay and Argentina in 2011. This plan was implemented with the Company’s own resources and contributions from Coca-Cola, plus a commitment by the Company for 2012.
c) Finance Costs
The detail of finance costs in each period is as follows:
|
| Period April 1- June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Bank loans |
| 552,292 |
| 397,700 |
| 922,575 |
| 829,073 |
|
Bonds |
| 494,846 |
| 383,018 |
| 983,141 |
| 847,043 |
|
Bond indexation adjustments |
| 239,749 |
| 796,782 |
| 856,844 |
| 1,111,879 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 1,286,887 |
| 1,577,500 |
| 2,762,560 |
| 2,787,995 |
|
e) Other Losses
Other losses for each period are as follows:
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Donations |
| 6,500 |
| 13,100 |
| 27,410 |
| 18,700 |
|
Write-off of property, plant and equipment |
| 76,598 |
| 145,708 |
| 98,902 |
| 165,578 |
|
Merger fees |
| 280,433 |
| — |
| 442,541 |
| — |
|
Litigation provision |
| 70,209 |
| 17,100 |
| 106,883 |
| 48,505 |
|
Dividend distribution tax |
| 802,080 |
| — |
| 802,080 |
| — |
|
Restructuring costs |
| — |
| 2,901,104 |
| — |
| 3,182,754 |
|
Tax on bank charges |
| 285,451 |
| 286,514 |
| 653,199 |
| 596,415 |
|
Others |
| 140,536 |
| 112,131 |
| 226,262 |
| 210,486 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 1,661,807 |
| 3,475,657 |
| 2,357,277 |
| 4,222,438 |
|
Restructuring costs relate to the closure of the Neuquén production plant of the subsidiary Coca-Cola Polar Argentina S.A., whose business was absorbed by the new plant built in Bahía Blanca, in accordance with the restructuring plans agreed by the Board of Directors during 2010.
NOTE 9 - EMPLOYEE BENEFITS
As of June 30, 2012 and December 31, 2011 the Company shows a provision for profit sharing and bonuses of ThCh$ 975,067 and ThCh$ 1,176,697, respectively.
These employee benefits are recorded in the costs of sales, distribution, administrative expenses and other expenses by function in the consolidated statement of comprehensive income.
· Employee Expenses
Employee expenses included in the consolidated statement of comprehensive results for each period were as follows:
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Wages and salaries |
| 9,594,945 |
| 6,979,360 |
| 19,316,714 |
| 15,382,471 |
|
Short-term employee benefits |
| 1,928,416 |
| 1,459,879 |
| 3,381,295 |
| 2,761,751 |
|
Severance benefits |
| 105,512 |
| 129,178 |
| 489,048 |
| 291,430 |
|
Other personnel expenses |
| 234,395 |
| 103,476 |
| 713,956 |
| 522,319 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 11,863,268 |
| 8,671,893 |
| 23,901,013 |
| 18,957,971 |
|
NOTE 10 - RELATED PARTIES
Balances and transactions with related parties as of each period end are as follows:
a) Receivables from related parties
|
|
|
|
|
| Country |
|
|
|
|
|
|
|
Tax ID No. |
| Company |
| Relationship |
| of origin |
| Currency |
| 06.30.2012 |
| 12.31.2011 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Related to shareholder |
| Chile |
| Ch$ |
| 1,438,714 |
| 2,539,352 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| US$/ Arg $ |
| 682,683 |
| 2,149,758 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Ch$ |
| 265 |
| 589 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Ch$ |
| 23,520 |
| 20,671 |
|
96.705.990-0 |
| Envases Central S.A. |
| Associate |
| Chile |
| Ch$ |
| — |
| 4,461 |
|
79.891.340-9 |
| Inversiones Las Hualtatas S.A. |
| Director in common |
| Chile |
| Ch$ |
| 33,316 |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
| 2,178,498 |
| 4,714,831 |
|
b) Payables to related parties
|
|
|
|
|
| Country |
|
|
|
|
|
|
|
Tax ID No |
| Company |
| Relationship |
| of origin |
| Currency |
| 06.30.2012 |
| 12.31.2011 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Related to shareholder |
| Chile |
| Ch$ |
| 11,890,560 |
| 2,168,751 |
|
Foreign |
| Coca-Cola de Argentina S.A. |
| Related to shareholder |
| Argentina |
| US$/ Arg $ |
| 4,617,009 |
| 2,861,401 |
|
96.705.990-0 |
| Envases Central S.A. |
| Associate |
| Chile |
| Ch$ |
| 478,077 |
| 342,161 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| US$ |
| 45,383 |
| 27,478 |
|
76.389.720-6 |
| Vital Aguas S.A. |
| Associate |
| Chile |
| Ch$ |
| 159,753 |
| 293,497 |
|
93.899.000-k |
| Vital S.A. |
| Associate |
| Chile |
| Ch$ |
| 141,148 |
| 716,666 |
|
76.105.924-6 |
| Inversiones Las Niñas Dos S.A. |
| Director in common |
| Chile |
| Ch$ |
| 35,604 |
| 268,043 |
|
79.891.340-9 |
| Inversiones Las Hualtatas S.A. |
| Director in common |
| Chile |
| Ch$ |
| — |
| 129,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
| 17,367,534 |
| 6,807,547 |
|
c) Transactions
Transactions with related parties are carried out on market conditions similar to those that would be applicable to unrelated third parties.
e) Key Management Personnel
Remuneration and benefits were received by the Company’s key management personnel during each year end as follows:
|
| Period April 1 - June 30, |
| Period January 1 - June 30, |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Wages and salaries |
| 905,297 |
| 863,649 |
| 1,830,576 |
| 1,781,005 |
|
Board of Director´s fees |
| 2,053 |
| 39,423 |
| 88,684 |
| 89,559 |
|
Short-term employee benefits |
| 109,410 |
| 103,850 |
| 212,283 |
| 178,212 |
|
Termination benefits |
| — |
| 19,408 |
| — |
| 19,408 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 1,016,760 |
| 1,026,330 |
| 2,131,543 |
| 2,068,184 |
|
The key management personnel of the Company are directors, managers and assistant managers.
The immediate and ultimate controller of Embotelladoras Coca-Cola Polar S.A. is Inversiones Los Aromos Ltda., for which no financial statements are available to the public.
NOTE 11 - INVESTMENTS IN ASSOCIATES
e) Valuation and Composition
Investments in associates are valued as described in Note 2 e) at the end of each year.
Investments in Vital Aguas S.A., Vital S.A. and Envases Central S.A. are shown as Investment in associates because Embotelladoras Coca-Cola Polar S.A. has a significant influence on those entities through having the right to appoint a director.
f) Acquisition of shares in Vital S.A.
In January 2011, Embotelladoras Coca-Cola Polar S.A. acquired 1,382,198 shares in Vital S.A., equivalent to a 15% shareholding, for an amount of ThCh$ 2,393,760.
In March 2011, Vital S.A. raised its capital by an issuance of 10,000 shares for cash. Embotelladoras Coca-Cola Polar S.A. acquired 1,500 shares for an amount of ThCh$ 855,000.
In April 2012, Vital S.A. agreed to increase its share capital of ThCh$ 6,960,000. 60% of this increase was paid on May 15, 2012. Coca-Cola Polar S.A., agreed to this increase in capital and paid in May 2012 an amount of ThCh$ 626,000 which correspondes to its shareholding percentage.
g) Summary of Information on Investments in Associates
The detail of investments in associates is as follows:
Tax No. |
| 76.389.720-6 |
| 96.705.990-0 |
| 93.899.000-K |
| ||
Name of associate |
| Vital Aguas S.A |
| Envases Central S.A. |
| Vital S.A. |
| ||
Country of origin/Functional currency |
| Chile / Chilean peso |
| Chile / Chilean peso |
| Chile / Chilean peso |
| ||
|
|
|
|
|
|
|
|
|
|
Principal activities |
|
|
| Production & distribution of |
| Production & bottling of soft |
| Production & distribution of |
|
Investment cost |
| ThCh$ |
| 2,182,376 |
| 460,673 |
| 3,870,760 |
|
Carrying value |
| ThCh$ |
| 2,484,193 |
| 877,871 |
| 4,037,275 |
|
June 30, |
|
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
Shareholding |
| % |
| 17.10 |
| 17.10 |
| 9.36 |
| 9.36 |
| 15.00 |
| 15.00 |
|
Total current assets |
| ThCh$ |
| 1,580,384 |
| 1,571,053 |
| 5,739,154 |
| 5,360,791 |
| 11,107,278 |
| 8,589,9740 |
|
Total non-current assets |
| ThCh$ |
| 5,466,746 |
| 5,430,907 |
| 9,961,471 |
| 10,385,542 |
| 23,991,906 |
| 19,162,447 |
|
Total assets |
| ThCh$ |
| 7,047,130 |
| 7,001,960 |
| 15,700,625 |
| 15,746,333 |
| 35,099,184 |
| 27,752,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
| ThCh$ |
| 1,578,230 |
| 1,529,149 |
| 5,068,268 |
| 5,495,119 |
| 8,537,442 |
| 5,946,876 |
|
Total non-current liabilities |
| ThCh$ |
| 274,904 |
| 260,444 |
| 1,251,595 |
| 1,792,649 |
| 1,179,718 |
| 1,165,994 |
|
Total liabilities |
| ThCh$ |
| 1,853,134 |
| 1,789,593 |
| 6,319,863 |
| 7,287,768 |
| 9,717,160 |
| 7,112,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
| ThCh$ |
| 6,158,572 |
| 6,039,509 |
| 16,751,213 |
| 15,680,365 |
| 24,311,988 |
| 20,209,090 |
|
Total expenses |
| ThCh$ |
| (6,189,444) |
| (5,731,586 | ) | (16,360,718 | ) | (15,730,843 | ) | (23,752,682 | ) | (19,661,808 | ) |
Earnings (Loss) for the period |
| ThCh$ |
| (30,872) |
| 307,923 |
| 390,405 |
| (50,478 | ) | 559,306 |
| 547,282 |
|
h) Movement in investments in associates
Movements in investments in associates for the period ended June 30, 2012 and year ended December 31, 2011 are as follows:
|
| 30/06/2012 |
| 31/12/2011 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 6,658,180 |
| 2,838,428 |
|
|
|
|
|
|
|
Additions |
| 626,000 |
| 3,248,760 |
|
Share of earnings (loss) |
| 115,160 |
| 178,446 |
|
Other increases (decreases) |
| — |
| 392,546 |
|
Movements |
| 741,160 |
| 3,819,752 |
|
Closing balance |
| 7,399,340 |
| 6,658,180 |
|
NOTE 12 - OTHER PROVISIONS
d) As of the end of each period, information relating to provisions is the folllowing:
|
| Current |
| ||
Detail |
| 06.30.2012 |
| 12.31.2011 |
|
|
| ThCh$ |
| ThCh$ |
|
Provision for legal claims: |
|
|
|
|
|
Labor lawsuits |
| 585,758 |
| 561,238 |
|
Profit sharing and bonuses |
| 975,067 |
| 1,176,697 |
|
Other provisions |
| 150,345 |
| 176,008 |
|
Total |
| 1,711,170 |
| 1,913,943 |
|
|
| Estimated date of |
| Explanation of |
Details of the Provisions |
| outflow of funds |
| uncertainty |
Labor lawsuits |
| Fisrst half 2013 |
| Provision amount is calculated based on estimates on the labor lawyer’s report. |
Profit sharing and bonuses |
| First half 2013 |
| The use of this provision is dependent on compliance with expected profitability and individual performance. |
e) The movement in provisions during each period was as follows:
|
| For the period ended 06.30.2012 |
| For the period ended 12.31.2011 |
| ||||||||||||
|
|
|
| Profit |
|
|
|
|
| Provision for |
| Profit |
|
|
|
|
|
|
| Provision for |
| sharing and |
| Other |
|
|
| Legal |
| sharing and |
| Other |
|
|
|
|
| Legal claims |
| bonuses |
| provisions |
| Total |
| Claims |
| bonuses |
| provisions |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 561,238 |
| 1,176,697 |
| 176,008 |
| 1,913,943 |
| 412,809 |
| 304,667 |
| 64,850 |
| 782,326 |
|
|
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Changes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increases (decrease) in existing provisions |
| 70,967 |
| (177,846 | ) | (12,151 | ) | (119,030 | ) | 89,174 |
| 847,124 |
| 112,739 |
| 1,049,037 |
|
Increase (decrease) in foreign exchange differences |
| (46,447 | ) | (23,784 | ) | (13,512 | ) | (83,743 | ) | 59,255 |
| 24,906 |
| (1,581 | ) | 82,580 |
|
Change in provisions |
| 24,520 |
| (201,630 | ) | (25,663 | ) | (202,773 | ) | 148,429 |
| 872,030 |
| 111,158 |
| 1,131,617 |
|
Closing balance |
| 585,758 |
| 975,067 |
| 150,345 |
| 1,711,170 |
| 561,238 |
| 1,176,697 |
| 176,008 |
| 1,913,943 |
|
f) Contingencies
· Tax Contingency
In August 2004 and 2005, the Chilean tax authority (“Servicio de Impuestos Internos”) issued 2 tax notices against the Company on its historic financial information, totalling of ThCh$ 365,959 and ThCh$ 800,506, respectively.
On January 11, 2012, the Company was notified of the tax charge amounting to ThCh$ 207,351, which is recognized in these consolidated financial statements. This settlement concluded the process and there are no further proceedings pending regarding this matter.
NOTE 13 - INTANGIBLE ASSETS OTHER THAN GOODWILL
d) Intangible assets at period ended June 30, 2012 and year ended December 31, 2011 are as follows:
|
| June 30, 2012 |
| December 31, 2011 |
| ||||||||
|
| Gross |
| Accumulated |
| Net |
| Gross |
| Accumulated |
| Net |
|
|
| value |
| depreciation |
| value |
| value |
| depreciation |
| value |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights (1) |
| 1,318,871 |
| — |
| 1,318,871 |
| 1,385,512 |
| — |
| 1,385,512 |
|
Software |
| 1,627,222 |
| (436,029 | ) | 1,191,193 |
| 1,579,649 |
| (304,201 | ) | 1,275,448 |
|
Total |
| 2,946,093 |
| (436,029 | ) | 2,510,064 |
| 2,965,161 |
| (304,201 | ) | 2,660,960 |
|
Movement in intangible assets during the period ended June 30, 2012 and year ended December 31, 2011 are as follows:
|
| June 30, 2012 |
| December 31,2011 |
| ||||||||
|
| Rights(1) |
| Software |
| Total |
| Rights(1) |
| Software |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 1,385,512 |
| 1,275,448 |
| 2,660,960 |
| 1,365,507 |
| 240,610 |
| 1,606,117 |
|
Additions |
| — |
| 69,501 |
| 69,501 |
| — |
| 1,109,668 |
| 1,109,668 |
|
Amortization |
| — |
| (147,331 | ) | (147,331 | ) | — |
| (75,268 | ) | (75,268 | ) |
Increase (decrease) in foreign exchange differences |
| (66,641 | ) | (6,425 | ) | (73,066 | ) | 20,005 |
| 438 |
| 20,443 |
|
Movements |
| (66,641 | ) | (84,255 | ) | (150,896 | ) | 20,005 |
| 1,034,838 |
| 1,054,843 |
|
Closing balance |
| 1,318,871 |
| 1,191,193 |
| 2,510,064 |
| 1,385,512 |
| 1,275,448 |
| 2,660,960 |
|
According to all estimates including cash-flow projections of the cash-generating units to which the rights are allocated to, it is concluded that the value is recoverable at the end of the each period.
(2) As described in Note 2 g), the rights are recorded at their historic cost and are not amortized.
NOTE 14 - GOODWILL
Balances of and movements in goodwill for the period ended June 30, 2012 and the year ended December 31, 2011 are as follows:
|
|
|
|
|
|
|
| Currency |
|
|
|
Cash generating |
| 1.1.2012 |
|
|
|
|
| translation |
|
|
|
unit |
| (Opening balance) |
| Additions |
| Disposals |
| differences |
| 06.30.2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chilean operation |
| 1,901,275 |
| — |
| — |
| — |
| 1,901,275 |
|
Argentine operation |
| 6,154,200 |
| — |
| — |
| (450,806 | ) | 5,703,394 |
|
Paraguayan operation |
| 1,398,791 |
| — |
| — |
| (3,683 | ) | 1,395,108 |
|
Total |
| 9,454,266 |
| — |
| — |
| (454,489 | ) | 8,999,777 |
|
|
|
|
|
|
|
|
| Currency |
|
|
|
Cash generating |
| 1.1.2011 |
|
|
|
|
| translation |
|
|
|
unit |
| (Opening balance) |
| Additions |
| Disposals |
| differences |
| 12.31.2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chilean operation |
| 1,901,275 |
| — |
| — |
| — |
| 1,901,275 |
|
Argentine operation |
| 6,018,867 |
| — |
| — |
| 135,333 |
| 6,154,200 |
|
Paraguayan operation |
| 1,391,425 |
| — |
| — |
| 7,366 |
| 1,398,791 |
|
Total |
| 9,311,567 |
| — |
| — |
| 142,699 |
| 9,454,266 |
|
According to all estimates including cash-flow projections for determining the value in use of the cash-generating units to which goodwill are allocated to, it is believed that the value at the year ends are recoverable.
NOTE 15 - EQUITY
As of June 30, 2012, the Company’s share capital consists of the following:
i) Number of Shares
|
| No. Shares |
| No. Shares |
| No. shares with |
|
Series |
| subscribed |
| paid |
| voting rights |
|
Ordinary shares |
| 280,000,000 |
| 280,000.000 |
| 280,000,000 |
|
The Company’s shares have no restrictions on dividend payments or capital reductions, and they are of no par value.
j) Share Capital
|
| Subscribed |
| Paid |
|
|
| ThCh$ |
| ThCh$ |
|
Share capital |
| 39,685,061 |
| 39,685,061 |
|
k) Distribution of shareholders
|
| Percentage |
| Number of |
|
Type of shareholder |
| Interest |
| shareholders |
|
|
| % |
|
|
|
Interest of 10% or more |
| 86,28 |
| 2 |
|
Less than 10% interest: |
|
|
|
|
|
Investment UF 200 or more |
| 13,64 |
| 39 |
|
Investment less than UF 200 |
| 0,08 |
| 56 |
|
Total |
| 100,00 |
| 97 |
|
Controller of the Company (1) |
| 86,28 |
| 2 |
|
(2) The controllers of the Company are Inversiones Los Aromos Ltda. and Coca-Cola Interamerican Corporation, which have shareholdings of 56.88% and 29.40%, respectively.
l) Earnings per share
The basic earnings per share shown in the consolidated statement of comprehensive income is calculated by dividing Earnings attributable to the owners of the controller by the total subscribed and paid shares.
There are no diluting factors that differentiate basic earnings from diluted earnings.
|
| Period April 1 - June 30 |
| January 1 — June 30 |
| ||||
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Earning attributable to the owners of the controllers |
| 1,774,271 |
| (381,329 | ) | 7,806,579 |
| 7,190,991 |
|
Total suscribed and paid shares |
| 280,000,000 |
| 280,000,000 |
| 280,000,000 |
| 280,000,000 |
|
Earnings per share — basic and diluted |
| 6.34 |
| (1.36 | ) | 27.88 |
| 25.68 |
|
m) Dividends
As agreed at the shareholders meeting, it is established that the amount of the annual dividend will the equivalent to 50% the earnings for each period.
The following shows the dividends distributed during 2012 and 2011:
Dividend Distributed
Payment |
| Type of |
| Dividend |
| Pesos |
| Amount of |
| Against |
|
date |
| dividend |
| number |
| per share |
| Dividend |
| result for |
|
|
|
|
|
|
|
|
| ThCh$ |
| year |
|
May-11 |
| Final |
| 41 |
| 48.05 |
| 13,454,000 |
| 2010 |
|
October-11 |
| Interim |
| 42 |
| 12.84 |
| 3,595,200 |
| 2011 |
|
May-12 |
| Final |
| 43 |
| 28.66 |
| 8,024,800 |
| 2011 |
|
June-12 |
| Eventual |
| 44 |
| 76.93 |
| 21,540,400 |
| Cumulated |
|
As described in Note 2 t), as of June 30, 2012 and December 31, 2011 dividends have been provided for ThCh$ 2,341,974 and ThCh$ 3,376,811, respectively.
Regarding the net distributable earnings considered for calculating the minimum obligatory and additional dividends, the ordinary shareholders agreed not to make any adjustments to the Earnings attributable to the owners of the controller. The shareholders also agreed that the adjustments for the IFRS 1 application determined as of December 31, 2008 will be deducted from Accumulated earnings, should dividends be distributed.
n) Equity Reserves
i) Other Reserves
These relate to the monetary correction of share capital as of December 31, 2008 amounting to ThCh$ 3,243,316 which, as stated the SVS Circular 456 of June 20, 2008, was recorded as a charge to Equity reserves.
ii) Translation reserves
These were as described in Note 2 d. iii). Details of translation reserves by company in the consolidated statement of financial position at the end of each period are as follows:
Company |
| 06.30.2012 |
| 12.31.2011 |
|
|
| ThCh$ |
| ThCh$ |
|
Inversiones Los Andes Ltda. |
| (11,960,216 | ) | (999,323 | ) |
Kopolar Refrescos S.A. |
| — |
| 5,376 |
|
Paraguay Refrescos S.A. |
| 609 |
| — |
|
Coca-Cola Polar Argentina S.A. |
| (960,974 | ) | (576,117 | ) |
Aconcagua Investing S.A. |
| (4,687 | ) | (4,687 | ) |
Total |
| (12,925,268 | ) | (1,574,751 | ) |
The movement of the foreign currency translation differences of Inversiones Los Andes Ltda. derives mainly from its investments in the subsidiaries Paraguay Refrescos S.A. and Coca-Cola Polar Argentina S.A., whose functional currencies are the guaraní and Argentine peso, respectively. During the period, these currencies depreciated against the Chilean peso which implied a negative translation effect of ThCh$ 10,960,983.
h) Capital Management
The objective of the Company is to maintain an optimal level of capitalization that allows it to ensure access to the financial markets for the development of its medium and long-term objectives, optimizing the return for its shareholders and maintaining a stable financial position.
The Company considers capital as the equity of the parent corresponding to shares subscribed and paid, translation reserves and accumulated earnings.
As of the date of these consolidated interim financial statements, there are no restrictions relating to capital requirements.
i) Non-controlling interests
This recognizes the portion of the equity and income of the subsidiaries held by non-controlling interests. Details are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Percentage |
| Equity |
| Earnings (loss) |
| ||||||||||
|
|
|
|
|
|
|
|
|
| Period April 1 — |
| Period January 1 — |
| ||||
Company |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
|
|
| % |
| % |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Paraguay Refrescos S.A. |
| 2.17 |
| 2.00 |
| 1,538,444 |
| 1,932,727 |
| 24,262 |
| 24,025 |
| 107,151 |
| 119,733 |
|
Inversiones Los Andes Ltda. |
| 0.01 |
| 0.01 |
| 21 |
| 22 |
| — |
| 1 |
| 1 |
| 1 |
|
Transportes Polar S.A. |
| 0.01 |
| 0.01 |
| 1 |
| 1 |
| — |
| — |
| 1 |
| 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
| 1,538,466 |
| 1,932,750 |
| 24,262 |
| 24,026 |
| 107,153 |
| 119,736 |
|
NOTE 16 - FINANCIAL INSTRUMENTS
The following provides a detail of financial assets and liabilities and their categories at the end of each period:
|
| 06.30.2012 |
| 12.31.2011 |
| ||||
Financial Assets |
| Current |
| Non-Current |
| Current |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
At fair value through profit and loss: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 7,170,000 |
| — |
| — |
| — |
|
Loans and receivables: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 6,903,693 |
| — |
| 21,655,721 |
| — |
|
Trade and other receivables |
| 22,485,709 |
| — |
| 26,736,139 |
| — |
|
Accounts receivable from related parties |
| 2,178,498 |
| — |
| 4,714,831 |
| — |
|
Total |
| 38,737,900 |
| — |
| 53,106,691 |
| — |
|
|
| 06.30.2012 |
| 12.31.2011 |
| ||||
Financial Liabilities |
| Current |
| Non-Current |
| Current |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Measured at amortized cost: |
|
|
|
|
|
|
|
|
|
Other financial liabilities: |
|
|
|
|
|
|
|
|
|
Bank loans |
| 25,381,889 |
| 13,695,520 |
| 9,946,361 |
| 15,017,396 |
|
Bonds payable |
| 676,284 |
| 57,865,661 |
| 233,155 |
| 54,573,429 |
|
Trade and other payables |
| 36,412,245 |
| 4,819,367 |
| 43,003,149 |
| 4,928,209 |
|
Accounts payable to related parties |
| 17,367,534 |
| — |
| 6,807,547 |
| — |
|
Total |
| 79,837,952 |
| 76,380,548 |
| 59,990,212 |
| 74,519,034 |
|
Trade and other receivables exclude advances to suppliers as these are not financial instruments.
16.1 Financial Assets
a) Loans and Receivables
i) Cash and Cash Equivalents
The detail of cash and cash equivalents is shown in Note 5.
ii) Trade and other Receivables
The composition of trade and other receivables at the close of each period is as follows:
|
| 06.30.2012 |
| 12.31.2011 |
|
|
| ThCh$ |
| ThCh$ |
|
Trade receivables, gross |
| 17,276,931 |
| 23,978,121 |
|
Allowance for doubtful accounts |
| (840,119 | ) | (810,806 | ) |
Other accounts receivable (*) |
| 11,501,802 |
| 7,750,275 |
|
Total |
| 27,938,614 |
| 30,917,590 |
|
(*) Other receivables mainly include advances to suppliers, monthly tax credits and loans to employee personnel.
Allowance for Doubtful Debtors
Movement in allowance for doubtful accounts are as follows:
Movement |
| 06.30.2012 |
| 12.31.2011 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 810,806 |
| 580,747 |
|
|
|
|
|
|
|
Increases (Decreases) |
| 47,018 |
| 221,778 |
|
Increases (Decreases) for foreign exchange differences |
| (17,705 | ) | 8,281 |
|
Movement |
| 29,313 |
| 230,059 |
|
Closing balance |
| 840,119 |
| 810,806 |
|
Detail of trade and other receivable soverdue but not provided are as follows:
|
| 06.30.2012 |
| ||||||
|
| Up to |
| 3 to 6 |
| 6 to 12 |
| More than 12 |
|
|
| 3 months |
| months |
| months |
| months |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net |
| 326,991 |
| — |
| — |
| — |
|
Total |
| 326,991 |
| — |
| — |
| — |
|
|
| 12.31.2011 |
| ||||||
|
| Up to |
| 3 to 6 |
| 6 to 12 |
| More than 12 |
|
Concept |
| 3 months |
| Months |
| months |
| months |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net |
| 15,584 |
| 175,857 |
| — |
| — |
|
Total |
| 15,584 |
| 175,857 |
| — |
| — |
|
iii) Accounts Receivable from Related Entities
The detail of accounts receivable from related parties is shown in Note 10.
b) Financial Assets — Local and Foreign Currencies
Financial assets by currency at period end are as follow:
Financial Assets |
| 06.30.2012 |
| 12.31.2011 |
| ||||
|
| Current |
| Non-Current |
| Current |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Cash and cash equivalents |
| 14,073,693 |
| — |
| 21,655,721 |
| — |
|
Chilean $ |
| 7,932,579 |
| — |
| 712,339 |
| — |
|
Argentine $ |
| 324,220 |
| — |
| 3,187,243 |
| — |
|
Guaraníes |
| 4,848,572 |
| — |
| 16,278,044 |
| — |
|
US Dollars |
| 968,322 |
| — |
| 1,478,095 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivable |
| 22,485,709 |
| — |
| 26,736,139 |
| — |
|
Chilean $ |
| 12,206,255 |
| — |
| 12,468,051 |
| — |
|
Argentine $ |
| 8,431,227 |
| — |
| 9,815,837 |
| — |
|
Guaraníes |
| 1,848,227 |
| — |
| 4,452,251 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from related parties |
| 2,178,498 |
| — |
| 4,714,831 |
| — |
|
Chilean $ |
| 1,495,815 |
| — |
| 2,546,103 |
| — |
|
Argentine $ |
| 682,683 |
| — |
| 1,691,238 |
| — |
|
US Dollars |
| — |
| — |
| 477,490 |
| — |
|
Total |
| 38,737,900 |
| — |
| 53,106,691 |
| — |
|
16.2 Financial Liabilities
a) Bonds Payable
On August 23, 2010, the Company registered in the Securities Register of the SVS two lines of bonds amounting to UF 2,500,000 each with terms of 10 and 30 years, respectively.
On September 1, 2010, the Company placed 2 series of UF bonds on the domestic market, with the following conditions:
Registration No. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
& identification |
| Nominal |
| Term |
| Years |
| Amortization |
| Nominal |
| Effective |
| Nominal |
|
of the instrument |
| value |
| (years) |
| grace |
| interest |
| principal |
| rate |
| value |
|
|
| UF |
|
|
|
|
|
|
|
|
| % |
| % |
|
640 / Series A |
| 1.000.000 |
| 7 |
| 3 |
| Semi-annual |
| Semi-annual |
| 3.00 |
| 3.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
641 / Series C |
| 1.500.000 |
| 21 |
| 10 |
| Semi-annual |
| Semi-annual |
| 4.00 |
| 3.63 |
|
Credit Rating
The credit rating of the bonds issued on the Chilean market as of December 31, 2011 is as follows:
AA - : Rating of Fitch Chile
AA - : Rating of Feller & Rate
Covenants
The Company’s issue and placement of bonds on the Chilean market is subject to the following covenants:
a) Compliance with applicable laws, regulations and other legal provisions.
b) Not to make investments in instruments issued by related parties nor carry out operations with such parties that are outside the normal course of business, on conditions that are more unfavorable to the issuer compared to those prevailing in the market.
c) Maintain in its quarterly financial statements a level of net financial debt not exceeding 1.5 times, measured on figures in its consolidated statement of financial position. For these purposes, the level of net financial debt is the ratio of net financial debt to the issuer’s total equity (equity attributable to owners of the controllers plus non-controlling interest). Net financial debt is considered to be the difference between the financial debt and cash of the issuer.
d) Maintain in its quarterly financial statements a level of net financial coverage of more than 3 times. Net financial coverage is considered to be the ratio of the EBITDA of the issuer in the last 12 months to net financial expenses (financial income less financial expenses) in the last 12 months. However, this covenant shall be considered to be not complied with only when the level of net financial coverage is below the level indicated for two consecutive quarters.
e) Maintain in its quarterly financial statements assets free of liens amounting to at least 1.3 times its unsecured total liabilities.
The Company is in compliance with all the financial covenants as of June 30, 2012.
16.2 b)Financial Liabilities — Summary
The detail of financial liabilities at the end of each period is as follows:
At June 30, 2012 |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Effective |
| Nominal |
|
|
| Current |
| Non-Current |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Rate |
| Rate |
|
|
| Maturity |
| Total |
| Maturity |
| Total |
| ||||||
Tax ID No. |
| Name |
|
|
| Country of |
|
|
| Amortization |
| (Annual) |
| (Annual) |
|
|
| Up to |
| 3 to 12 |
| 06.30.2012 |
| Uno a Tres |
| 3 to 5 |
| 5 year |
| 06.30.2012 |
|
Debtor |
| Debtor |
| Creditor |
| creditor |
| Currency |
| Principal |
| % |
| % |
| Principal l |
| 3 months |
| months |
| Current |
| Años |
| years |
| or more |
| Non-Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| Semi-annual |
| 5.8 |
| 5.8 |
| 1,650,000 |
|
|
| 675,048 |
| 675,048 |
| 990,000 |
| — |
|
|
| 990.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,817,500 |
|
|
| 2,827,671 |
| 2,827,671 |
|
|
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,300,000 |
|
|
| 2,323,515 |
| 2,323,515 |
|
|
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity o |
| 6.8 |
| 6.8 |
| 2,300,000 |
|
|
| 23,515 |
| 23,515 |
| 2,300,000 |
| — |
|
|
| 2.300.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity o |
| 6.6 |
| 6.6 |
| 1,165,000 |
|
|
| 1,175,933 |
| 1,175,933 |
|
|
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,682,500 |
|
|
| 2,694,732 |
| 2,694,732 |
|
|
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.4 |
| 6.4 |
| 1,900,000 |
| 32,069 |
| — |
| 32,069 |
| 1,900,000 |
| — |
|
|
| 1.900.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.6 |
| 6.6 |
| 9,080,000 |
|
|
| 9,164,898 |
| 9,164,898 |
| — |
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 7,000,000 |
|
|
| 6,650 |
| 6,650 |
| 7,000,000 |
| — |
|
|
| 7.000.000 |
|
0-E |
| Coca-Cola Polar Argentina S.A. |
| Banco Standard |
| Argentina |
| Argentine $ |
| At maturity |
| 13.5 |
| 13.5 |
| 982,116 |
| 982,115 |
| — |
| 982,115 |
|
|
| — |
|
|
| — |
|
0-E |
| Coca-Cola Polar Argentina S.A. |
| Banco Galicia |
| Argentina |
| Argentine $ |
| At maturity |
| 15.0 |
| 15.0 |
| 362,442 |
| 362,442 |
| — |
| 362,442 |
|
|
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| US$ |
| At maturity |
| 2.2 |
| 2.2 |
| 5,018,400 |
| 5,101,181 |
| — |
| 5,101,181 |
| — |
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| US$ |
| At maturity |
| 3.4 |
| 3.4 |
| 1,505,520 |
| — |
| 12,120 |
| 12,120 |
| 1,505,520 |
| — |
|
|
| 1.505.520 |
|
Sub total Bank loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,477,807 |
| 18,904,082 |
| 25,381,889 |
| 13,695,520 |
| — |
|
|
| 13,695,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 640 / Bonos Serie A |
| Chile |
| UF |
| Semi-annual |
| 3.16 |
| 3.0 |
| 22,359,613 |
| 311,092 |
| — |
| 311,092 |
| 8,419,777 |
| 11,226,369 |
| 2,806,593 |
| 22.452.739 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 641 / Bonos Serie C |
| Chile |
| UF |
| Semi-annual |
| 3.63 |
| 4.0 |
| 35,266,042 |
| 365,192 |
| — |
| 365,192 |
| — |
| — |
| 35,412,922 |
| 35.412.922 |
|
Sub total Bonds payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 676,284 |
| — |
| 676,284 |
| 8,419,777 |
| 11,226,369 |
| 38,219,515 |
| 57,865,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,154,091 |
| 18,904,082 |
| 26,058,173 |
| 22,115,297 |
| 11,226,369 |
| 38,219,515 |
| 71,561,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Ctas. por Pagar Comerciales |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 5,429,007 |
| 5,429,007 |
| — |
| 5,429,007 |
| — |
| — |
|
|
| — |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Ctas. por Pagar Comerciales |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 823,486 |
| 823,486 |
| — |
| 823,486 |
| — |
| — |
|
|
| — |
|
0-E |
| Coca-Cola Polar Argentina S.A |
| Ctas. por Pagar Comerciales |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 9,476,107 |
| 9,476,107 |
| — |
| 9,476,107 |
| — |
| — |
|
|
| — |
|
0-E |
| Paraguay Refrescos S.A. |
| Ctas. por Pagar Comerciales |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 3,658,462 |
| 3,658,462 |
| — |
| 3,658,462 |
| — |
| — |
|
|
| — |
|
0-E |
| Paraguay Refrescos S.A. |
| Ctas. por Pagar Comerciales |
| Paraguay |
| Euros |
|
|
|
|
|
|
| 906,187 |
| 192,736 |
| 223,773 |
| 416,509 |
| 489,678 |
| — |
|
|
| 489.678 |
|
0-E |
| Coca-Cola Polar Argentina S.A |
| Ctas. por Pagar Comerciales |
| Argentina |
| US$ |
|
|
|
|
|
|
| 1,050,224 |
| 462,159 |
| 34,449 |
| 496,608 |
| 321,205 |
| 232,411 |
|
|
| 553.616 |
|
0-E |
| Paraguay Refrescos S.A. |
| Ctas. por Pagar Comerciales |
| Paraguay |
| US$ |
|
|
|
|
|
|
| 6,425,595 |
| 3,131,006 |
| 1,788,096 |
| 4,919,102 |
| 1,506,493 |
| — |
|
|
| 1.506.493 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Otras cuentas por pagar |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 3,767,466 |
| 3,137,966 |
| 305,763 |
| 3,443,729 |
| 33,050 |
| 33,050 |
| 257,637 |
| 323.737 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Otras cuentas por pagar |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 330,686 |
| 330,686 |
| — |
| 330,686 |
| — |
| — |
|
|
| — |
|
0-E |
| Coca-Cola Polar Argentina S.A |
| Otras cuentas por pagar |
| Argentina |
| Argentine $s |
|
|
|
|
|
|
| 4,386,600 |
| 4,191,381 |
| 152,587 |
| 4,343,968 |
| 36,542 |
| 6,090 |
|
|
| 42.632 |
|
0-E |
| Paraguay Refrescos S.A. |
| Otras cuentas por pagar |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 3,074,581 |
| 3,074,581 |
| — |
| 3,074,581 |
| — |
| — |
|
|
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Garantías por Envases |
| Chile |
| Chilean $s |
|
|
|
|
|
|
| 1,014,654 |
| — |
| — |
|
|
| — |
| 1,014,654 |
|
|
| 1.014.654 |
|
0-E |
| Coca-Cola Polar Argentina S.A |
| Garantías por Envases |
| Argentina |
| Argentine $s |
|
|
|
|
|
|
| 888,557 |
| — |
| — |
|
|
| — |
| 888,557 |
|
|
| 888.557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total trade and other payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 33.907.577 |
| 2.504.668 |
| 36.412.245 |
| 2,386,968 |
| 2,174,762 |
| 257,637 |
| 4,819,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Coca- Cola de Chile S.A. |
| Chile |
| Chilean $s |
| At maturity |
|
|
|
|
| 11,890,560 |
| 11,890,560 |
| — |
| 11,890,560 |
| — |
| — |
| — |
| — |
|
0-E |
| Coca-Cola Polar Argentina S.A |
| Coca- Cola de Argentina S.A. |
| Argentina |
| Argentine $/US$ |
| At maturity |
|
|
|
|
| 4,617,009 |
| 4,617,009 |
| — |
| 4,617,009 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Envases Central S.A. |
| Chile |
| Chilean $s |
| At maturity |
|
|
|
|
| 478,077 |
| 478,077 |
| — |
| 478,077 |
| — |
| — |
| — |
| — |
|
0-E |
| Coca-Cola Polar Argentina S.A |
| Cervecería Austral S.A. |
| Chile |
| US$ |
| At maturity |
|
|
|
|
| 45,383 |
| 45,383 |
| — |
| 45,383 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital Aguas S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 159,753 |
| 159,753 |
| — |
| 159,753 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 141,148 |
| 141,148 |
| — |
| 141,148 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Inversiones Las Niñas Dos S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 35,604 |
| 35,604 |
| — |
| 35,604 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total accounts payable to related parties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17.367.534 |
| — |
| 17.367.534 |
| — |
| 17,367,534 |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 58,429,202 |
| 21,408,750 |
| 79,837,952 |
| 24,502,265 |
| 13,401,131 |
| 38,477,152 |
| 76,380,548 |
|
At December 31, 2011 |
| ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Effective |
| Nominal |
|
|
| Current |
| Non-Current |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| Rate |
| Rate |
|
|
| Maturity |
| Total |
| Maturity |
| Total |
| ||||||
Tax ID No. |
| Name |
|
|
| Country of |
|
|
| Amortization |
| (Annual) |
| (Annual) |
|
|
| Up to |
| 3 to 12 |
| 31.12.2011 |
| 1 to 3 |
| 3 to 5 |
| 5 year |
| 12.31.2011 |
|
Debtor |
| Debtor |
| Creditor |
| creditor |
| Currency |
| Principal |
| % |
| % |
| Principal |
| 3 months |
| months |
| Current |
| years |
| years |
| or more |
| Non-Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| Semi-annual |
| 5.8 |
| 5.8 |
| 1,980,000 |
| — |
| 677,107 |
| 677,107 |
| 1,320,000 |
| — |
| — |
| 1.320.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,817,500 |
| — |
| 11,777 |
| 11,777 |
| 2,817,500 |
| — |
| — |
| 2.817.500 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,300,000 |
| — |
| 2,324,386 |
| 2,324,386 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,300,000 |
| — |
| 23,515 |
| 23,515 |
| 2,300,000 |
| — |
| — |
| 2.300.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.6 |
| 6.6 |
| 1,165,000 |
| — |
| 1,175,932 |
| 1,175,932 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.8 |
| 6.8 |
| 2,682,500 |
| — |
| 12,742 |
| 12,742 |
| 2,682,500 |
| — |
| — |
| 2.682.500 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| Chilean $ |
| At maturity |
| 6.4 |
| 6.4 |
| 1,900,000 |
| 31,124 |
| — |
| 31,124 |
| 1,900,000 |
| — |
| — |
| 1.900.000 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco Santander |
| Chile |
| US$ |
| At maturity |
| 2.2 |
| 2.2 |
| 5,192,000 |
| 28,664 |
| 5,192,000 |
| 5,220,664 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Banco de Chile |
| Chile |
| US$ |
| At maturity |
| 3.4 |
| 3.4 |
| 1,557,600 |
|
|
| 12,290 |
| 12,290 |
| 1,557,600 |
| — |
| — |
| 1.557.600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub total Bank loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 59,788 |
| 9,429,749 |
| 9,489,537 |
| 12,577,600 |
| — |
| — |
| 12,577,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 640 / Bonos Serie A |
| Chile |
| UF |
| Semi-annual |
| 3.16 |
| 3.0 |
| 21,175,304 |
| 291,532 |
| — |
| 291,532 |
| 5,530,495 |
| 11,060,991 |
| 5,530,495 |
| 22.121.981 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Nº 641 / Bonos Serie C |
| Chile |
| UF |
| Semi-annual |
| 3.63 |
| 4.0 |
| 33,398,125 |
| 398,447 |
| — |
| 398,447 |
| — |
|
|
| 34,891,244 |
| 34.891.244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub total Bonds payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 689,979 |
| — |
| 689,979 |
| 5,530,495 |
| 11,060,991 |
| 40,421,739 |
| 57,013,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 749,767 |
| 9,429,749 |
| 10,179,516 |
| 18,108,095 |
| 11,060,991 |
| 40,421,739 |
| 69,590,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Trade creditors |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 6,953,396 |
| 6,953,396 |
| — |
| 6,953,396 |
| — |
| — |
| — |
| — |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Trade creditors |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 650,789 |
| 650,789 |
| — |
| 650,789 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Trade creditors |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 12,313,018 |
| 12,313,018 |
| — |
| 12,313,018 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 3,413,792 |
| 3,413,792 |
| — |
| 3,413,792 |
| — |
| — |
| — |
| — |
|
Foreign |
| Kopolar Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 520,695 |
| 520,695 |
| — |
| 520,695 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| Euros |
|
|
|
|
|
|
| 806,507 |
| 278,344 |
| 53,815 |
| 332,159 |
| 474.348 |
| — |
| — |
| 474.348 |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Trade creditors |
| Argentina |
| US$ |
|
|
|
|
|
|
| 1,610,768 |
| 929,489 |
| 33,597 |
| 963,086 |
| 360.113 |
| 276.958 |
| 10.611 |
| 647.682 |
|
Foreign |
| Paraguay Refrescos S.A. |
| Trade creditors |
| Paraguay |
| US$ |
|
|
|
|
|
|
| 7,858,271 |
| 4,723,490 |
| 1,455,200 |
| 6,178,690 |
| 1.679.581 |
| — |
| — |
| 1.679.581 |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Other accounts payable |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 4,878,870 |
| 4,548,378 |
| — |
| 4,548,378 |
| 16.525 |
| 16.525 |
| 297.442 |
| 330.492 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| Other accounts payable |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 564,521 |
| 564,521 |
| — |
| 564,521 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Other accounts payable |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 5,025,874 |
| 4,868,261 |
| 157,613 |
| 5,025,874 |
| — |
| — |
| — |
| — |
|
Foreign |
| Paraguay Refrescos S.A. |
| Other accounts payable |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 1,518,166 |
| 1,518,166 |
| — |
| 1,518,166 |
| — |
| — |
| — |
| — |
|
Foreign |
| Kopolar Refrescos S.A. |
| Other accounts payable |
| Paraguay |
| Guaraníes |
|
|
|
|
|
|
| 20,585 |
| 20,585 |
| — |
| 20,585 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Crate/bottles guarantee |
| Chile |
| Chilean $ |
|
|
|
|
|
|
| 886,063 |
| — |
| — |
| — |
| — |
| 886.063 |
| — |
| 886.063 |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Crate/bottles guarantee |
| Argentina |
| Argentine $ |
|
|
|
|
|
|
| 910,043 |
| — |
| — |
| — |
| — |
| 910.043 |
| — |
| 910.043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total trade and other payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 41.302.924 |
| 1.700.225 |
| 43.003.149 |
| 2,530,567 |
| 2,089,589 |
| 308,053 |
| 4,928,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Coca- Cola de Chile S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 2,168,751 |
| 2,168,751 |
| — |
| 2,168,751 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Coca- Cola de Argentina S.A. |
| Argentina |
| Argentine $ |
| At maturity |
|
|
|
|
| 2,861,401 |
| 2,861,401 |
| — |
| 2,861,401 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Envases Central S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 342,161 |
| 342,161 |
| — |
| 342,161 |
| — |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Polar Argentina S.A |
| Cervecería Austral S.A. |
| Chile |
| US$ |
| At maturity |
|
|
|
|
| 27,478 |
| 27,478 |
| — |
| 27,478 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital Aguas S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 293,497 |
| 293,497 |
| — |
| 293,497 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Vital S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 716,666 |
| 716,666 |
| — |
| 716,666 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Inversiones Las Niñas Dos S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 268,043 |
| 268,043 |
| — |
| 268,043 |
| — |
| — |
| — |
| — |
|
93.473.000-3 |
| Emb. Coca-Cola Polar S.A |
| Inversiones Las Hualtatas S.A. |
| Chile |
| Chilean $ |
| At maturity |
|
|
|
|
| 129,550 |
| 129,550 |
| — |
| 129,550 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total accounts payable to related parties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6.807.547 |
|
|
| 6.807.547 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 48,860,238 |
| 11,129,974 |
| 59,990,212 |
| 20,638,662 |
| 13,150,580 |
| 40,729,792 |
| 74,519,034 |
|
16.3 Financial Liabilities — Maturity Analysis
The following shows a maturity analysis of the financial liabilities at the year end, which include the contractual interest payable (not accrued at the date of closing):
|
|
|
|
|
|
|
| Total |
| ||
|
|
|
|
|
| Maturity |
| As at |
| ||
|
| Less than |
| 1 to 3 |
| 3 to 5 |
| 5 years |
| June 30, |
|
Description |
| 1 year |
| years |
| years |
| or more |
| 2012 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 25,381,889 |
| 13,695,520 |
| — |
| — |
| 39,077,409 |
|
Bonds payable |
| 2,018,134 |
| 12,395,191 |
| 14,591,926 |
| 49,246,687 |
| 78,251,939 |
|
Trade creditors and other payables |
| 36,412,245 |
| 2,386,968 |
| 2,174,762 |
| 257,637 |
| 41,231,612 |
|
Accounts payable related parties |
| 17,367,534 |
| — |
| — |
| — |
| 17,367,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial liabilities |
| 81,179,802 |
| 28,477,679 |
| 16,766,688 |
| 49,504,324 |
| 175,928,494 |
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
|
|
| Maturity |
| As at |
| ||
|
| Less than |
| 1 to 3 |
| 3 to 5 |
| 5 years |
| December 31, |
|
Description |
| 1 year |
| years |
| years |
| or more |
| 2011 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 9,489,537 |
| 12,577,600 |
| — |
| — |
| 22,067,137 |
|
Bonds payable |
| 1,988,405 |
| 9,508,825 |
| 14,542,936 |
| 52,053,224 |
| 78,093,390 |
|
Trade and other payables |
| 43,003,149 |
| 2,530,567 |
| 2,089,589 |
| 308,053 |
| 47,931,358 |
|
Accounts payable related parties |
| 6,807,547 |
| — |
| — |
| — |
| 6,807,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financial Liabilities |
| 61,288,638 |
| 24,616,992 |
| 16,632,525 |
| 52,361,277 |
| 154,899,432 |
|
16.4 Fair Value of Financial Instruments
The market value of financial instruments recorded at fair value through profit and loss has been obtained by using the market-price method (type 1 valuation). The valuation process does not currently consider the valuation methods by approximation or internal price modeling, therefore, all financial instruments are valued at fair value which are obtained through direct market quotations.
The prices and discount rates used for valuation purposes are obtained from banks and recognized price makers, of generalized, recurring and agreed quotation by the market, which ensures the reliability of the reference prices.
There are no significant differences as of June 30, 2012 and December 31, 2011 between the book and fair values of the financial instruments.
16.5 Financial Risk Management
In carrying its daily business, Coca-Cola Polar is subject to by various factors that may impact on the achievement of its financial profitability and sustainability objectives. These factors can impact the organization through different transmission mechanisms, generating scenarios of financial uncertainty which could result in non-compliance by suppliers of inputs and counterparties of financial transactions, contractions of liquidity, significant variations in the value of assets and liabilities held in portfolio.
Coca-Cola Polar therefore identifies the significant risks as follows:
· Credit risk
The concept of credit risk is employed by Coca-Cola Polar to refer to financial uncertainty, in different time horizons, related to compliance with the obligations signed by counterparties, at the time of exercising contractual rights for receiving cash or other financial assets by Coca-Cola Polar.
j) Exposures
The exposure of the financial assets consists of cash and cash equivalents and trade and other receivables, which account for 36% and 58%, respectively. However, the exposure related to trade receivables ceases to be significant when considering that the average collection time is no more than 20 days.
k) Financial assets that are not overdue or impaired
The business scarcely shows signs of fall in overdue accounts receivable related to the different sales channels. Historic evidence shows average collection times of less than one month, with periods overdue not exceeding 10 days.
Investment decisions in financial instruments (e.g. fixed income) have historically tried to seek issuers with an external credit rating such as to safeguard the financial objectives for which these transactions are carried out. Long-term investments require the issuer to have a rating of at least A1 (Moody’s) /A (Fitch), while short-term investments are preferred to be made with institutions with the best debt credit ratings from the same international agencies and/or the regulatory institutions of the countries in which the Company operates.
The following are the credit ratings of the financial institutions where short-term investments are made:
|
|
|
| Credit |
| Rating |
|
Entity |
| Amount |
| rating |
| agency |
|
|
| M$ |
|
|
|
|
|
Banco Regional SAECA |
| 2,200,000 |
| A+ |
| Feller Rate |
|
Banchile S.A. |
| 1,280,000 |
| AA |
| Feller Rate |
|
Banco Santander |
| 5,890,000 |
| AA |
| Feller Rate |
|
|
|
|
|
|
|
|
|
Total |
| 9,370,000 |
|
|
|
|
|
· Financial assets that would have been overdue or impaired if they had not been restructured
The Company has no significant financial assets that have been restructured in this period.
l) Overdue or impaired financial assets
Overdue and impaired financial assets are set out in Note 16.1 a.ii).
m) Financial risk
The concept of financial risk is employed by Coca-Cola Polar to refer to financial uncertainty, at different time horizons, related to its capacity to respond to those cash requirements that support its operations, both in normal conditions and in exceptional ones.
Liabilities by maturity are set out in Note 16.3.
n) Market risk
The concept of market risk is employed by Coca-Cola Polar to refer to financial uncertainty, at different time horizons, related to the future behavior of market variables relevant to its financial performance.
The Company is mainly faced by variations in the value of future disbursements related to liabilities expressed on dollars in each of the markets where it currently operates. Variations in the dollar exchange rate against the guaraní are risk factors that affect the Company.
The sensitivity analysis shows the effects of the impact on results that might occur as a result of variations in the relevant exchange rates associated with the financial instruments that generate exposure to the Company.
|
|
|
|
|
|
|
| Market |
| Exchange |
| Sensitivity |
| Effect on |
|
Classification |
| Group |
| Type |
| Exposure |
| variable |
| rate |
| (1) |
| results |
|
|
|
|
|
|
| ThCh$ |
|
|
|
|
|
|
| ThCh$ |
|
Financial assets |
| Cash and cash equivalents |
| Balance in banks & deposits |
| 933,672 |
| USD / GS |
| 4.489 |
| + 36.1 | % | 337,154 |
|
|
|
|
|
|
|
|
|
|
|
|
| - 11.9 | % | (111,067 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
| Other financial liabilities |
| Other financial liabilities |
| 6,618,821 |
| USD / $Ch |
| 501,84 |
| + 33.5 | % | (2,217,089 | ) |
|
|
|
|
|
|
|
|
|
|
|
| - 12.8 | % | 845,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Trade and other payables |
| Trade creditors |
| 6,425,595 |
| USD / GS |
| 4.489 |
| + 36.1 | % | (2,320,314 | ) |
|
|
|
|
|
|
|
|
|
|
|
| - 11.9 | % | 764,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Trade and other payables |
| Trade creditors |
| 1,050,224 |
| USD / $Arg |
| 4,53 |
| 0.0 | % | — |
|
|
|
|
|
|
|
|
|
|
|
|
| - 33.2 | % | 348,451 |
|
(2) The exchange-rate variations were obtained by considering the maximum and minimum parities in the last 4 years with respect to the closing exchange rate.
· Financial risk management method
The management of Coca-Cola Polar understands that having an institutional framework for protecting the entity´s financial objectives, through financial-risk management, is an essential element in achieving the long-term objectives for the interests of the Company.
It is therefore a priority for Coca-Cola Polar to constantly complement current risk evaluation with a robust strategy in terms of the procedures adopted and their consistency with the business cycle, nature of the operations and the markets in which it operates.
The Company’s strategy has the following components:
· Corporate governance structure
· Clear segregation of functions
· Protection of the principles of Independence in decision-taking
· Control environment
· Methodologies
· Information systems
· Procedures
· Contingency plans
NOTE 17 - LOCAL AND FOREIGN CURRENCIES
c) Assets
|
| June 30, 2012 |
| December 31, 2011 |
| ||||
ASSETS |
| Current |
| Non-Current |
| Current |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Cash and cash equivalents |
| 14,073,693 |
| — |
| 21,655,721 |
| — |
|
Chilean $ |
| 7,932,579 |
| — |
| 712,339 |
| — |
|
Argentine $ |
| 324,220 |
| — |
| 3,187,243 |
| — |
|
Guaraníes |
| 4,848,572 |
| — |
| 16,278,044 |
| — |
|
US Dollars |
| 968,322 |
| — |
| 1,478,095 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Other non-financial assets |
| 1,751,225 |
| 1,754,869 |
| 1,445,854 |
| 1,614,484 |
|
Chilean $ |
| 565,332 |
| 166,061 |
| 519,015 |
| 226,551 |
|
Argentine $ |
| 182,667 |
| 1,136,380 |
| 241,526 |
| 907,545 |
|
Guaraníes |
| 301,804 |
| 249,922 |
| 493,515 |
| 344,065 |
|
US Dollars |
| 701,422 |
| 202,506 |
| 191,798 |
| 136,323 |
|
|
|
|
|
|
|
|
|
|
|
Trade and othe receivables |
| 27,938,614 |
| — |
| 30,917,590 |
| — |
|
Chilean $ |
| 12,206,255 |
| — |
| 12,468,051 |
| — |
|
Argentine $ |
| 8,431,227 |
| — |
| 9,815,837 |
| — |
|
Guaraníes |
| 7,301,132 |
| — |
| 8,633,702 |
| — |
|
|
|
|
| — |
|
|
|
|
|
Accounts receivable from related parties |
| 2,178,498 |
| — |
| 4,714,831 |
| — |
|
Chilean $ |
| 1,495,815 |
| — |
| 2,546,103 |
| — |
|
Argentine $ |
| 682,683 |
| — |
| 1,691,238 |
| — |
|
US Dollars |
| — |
| — |
| 477,490 |
| — |
|
|
|
|
| — |
|
|
|
|
|
Inventories |
| 22,902,098 |
| — |
| 23,099,370 |
| — |
|
Chilean $ |
| 7,873,106 |
| — |
| 7,094,796 |
| — |
|
Argentine $ |
| 6,013,088 |
| — |
| 5,427,463 |
| — |
|
Guaraníes |
| 9,015,904 |
| — |
| 10,577,111 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Current income tax assets |
| 513,052 |
| — |
| 2,217,661 |
| — |
|
Argentine $ |
| 139,518 |
| — |
| 274,966 |
| — |
|
Chilean $ |
| 150,324 |
| — |
| 1,353,337 |
| — |
|
Guaraníes |
| 223,210 |
| — |
| 589,358 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Investments in associates using the |
| — |
| 7,399,340 |
| — |
| 6,658,180 |
|
equity method of accounting |
|
|
|
|
|
|
|
|
|
Chilean $ |
| — |
| 7,399,340 |
| — |
| 6,658,180 |
|
|
|
|
|
|
|
|
|
|
|
Intangible assets other than goodwill |
| — |
| 2,510,064 |
| — |
| 2,660,960 |
|
Chilean $ |
| — |
| 1,667,366 |
| — |
| 1,766,229 |
|
Argentine $ |
| — |
| 842,698 |
|
|
| 894,731 |
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
| — |
| 8,999,777 |
| — |
| 9,454,266 |
|
Chilean $ |
| — |
| 3,889,750 |
| — |
| 3,889,750 |
|
Argentine $ |
| — |
| 5,069,513 |
| — |
| 5,520,319 |
|
Guaraníes |
| — |
| 40,514 |
| — |
| 44,197 |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
| — |
| 167,308,110 |
| — |
| 167,627,602 |
|
Chilean $ |
| — |
| 54,788,824 |
| — |
| 50,398,834 |
|
Argentine $ |
| — |
| 45,262,048 |
| — |
| 47,631,403 |
|
Guaraníes |
| — |
| 67,257,238 |
| — |
| 69,597,365 |
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax assets |
|
|
| 6,756,502 |
| — |
| 6,053,408 |
|
Chilean $ |
| — |
| 798,320 |
| — |
| 902,272 |
|
Argentine $ |
| — |
| 5,530,610 |
| — |
| 4,805,033 |
|
Guaraníes |
| — |
| 427,572 |
| — |
| 346,103 |
|
|
|
|
|
|
|
|
|
|
|
Total |
| 69,357,180 |
| 194,728,662 |
| 84,051,027 |
| 194,068,900 |
|
d) Liabilities
LIABILITIES
|
| JUNE 30, 2012 |
| ||||||||||||
|
| Current |
| Non-Current |
| ||||||||||
|
| Maturity |
| Total |
| Maturity |
| Total |
| ||||||
|
| One to three |
| Three to twelve |
| 06.30.2012 |
| One to three |
| Three to five |
| Over five |
| 06.302012 |
|
|
| months |
| months |
| Current |
| years |
| years |
| years |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities |
| 7,154,091 |
| 18,904,082 |
| 26,058,173 |
| 22,115,297 |
| 11,226,369 |
| 38,219,515 |
| 71,561,181 |
|
Chilean $ |
| 32,069 |
| 18,891,962 |
| 18,924,031 |
| 12,190,000 |
| — |
| — |
| 12,190,000 |
|
Unidad de Fomento (UF) |
| 676,284 |
| — |
| 676,284 |
| 8,419,777 |
| 11,226,369 |
| 38,219,515 |
| 57,865,661 |
|
Argentine pesos |
| 1,344,557 |
| — |
| 1,344,557 |
| — |
| — |
| — |
| — |
|
US Dollars |
| 5,101,181 |
| 12,120 |
| 5,113,301 |
| 1,505,520 |
| — |
| — |
| 1,505,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
| 33,907,577 |
| 2,504,668 |
| 36,412,245 |
| 2,386,968 |
| 2,174,762 |
| 257,637 |
| 4,819,367 |
|
Chilean $ |
| 9,721,145 |
| 305,763 |
| 10,026,908 |
| 33,050 |
| 1,047,704 |
| 257,637 |
| 1,338,391 |
|
Argentine $ |
| 13,667,488 |
| 152,587 |
| 13,820,075 |
| 36,542 |
| 894,647 |
| — |
| 931,189 |
|
Guaraníes |
| 6,733,043 |
| — |
| 6,733,043 |
| — |
| — |
| — |
| — |
|
Euros |
| 192,736 |
| 223,773 |
| 416,509 |
| 489,678 |
| — |
| — |
| 489,678 |
|
US Dollars |
| 3,593,165 |
| 1,822,545 |
| 5,415,710 |
| 1,827,698 |
| 232,411 |
| — |
| 2,060,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties |
| 17,367,534 |
| — |
| 17,367,534 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| 12,705,142 |
| — |
| 12,705,142 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 4,617,009 |
| — |
| 4,617,009 |
| — |
| — |
| — |
| — |
|
US Dollars |
| 45,383 |
| — |
| 45,383 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other short-term provisions |
| 150,345 |
| 1,560,825 |
| 1,711,170 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| — |
| 826,338 |
| 826,338 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 150,345 |
| 292,062 |
| 442,407 |
| — |
| — |
| — |
| — |
|
Guaraníes |
| — |
| 442,425 |
| 442,425 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-financial liabilities |
| 2,341,974 |
| — |
| 2,341,974 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| 2,341,974 |
| — |
| 2,341,974 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities |
| — |
| — |
| — |
| — |
| — |
| 8,088,813 |
| 8,088,813 |
|
Chilean $ |
| — |
| — |
| — |
| — |
| — |
| 3,919,832 |
| 3,919,832 |
|
Argentine $ |
| — |
| — |
| — |
| — |
| — |
| 3,318,290 |
| 3,318,290 |
|
Guaraníes |
| — |
| — |
| — |
| — |
| — |
| 850,691 |
| 850,691 |
|
Total |
| 60,921,521 |
| 22,969,575 |
| 83,891,096 |
| 24,502,265 |
| 13,401,131 |
| 46,595,965 |
| 84,469,361 |
|
|
| DECEMBER 31, 2011 |
| ||||||||||||
|
| Current |
| Non-Current |
| ||||||||||
|
| Maturity |
| Total |
| Maturity |
| Total |
| ||||||
|
| One to three |
| Three to twelve |
| 12.31.2011 |
| One to three |
| Three to five |
| Over five |
| 12.31.2011 |
|
|
| months |
| months |
| Current |
| years |
| years |
| years |
| Non-Current |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities |
| 749,767 |
| 9,429,749 |
| 10,179,516 |
| 18,108,095 |
| 11,060,991 |
| 40,421,739 |
| 69,590,825 |
|
Chilean $ |
| 31,124 |
| 4,225,459 |
| 4,256,583 |
| 11,020,000 |
| — |
| — |
| 11,020,000 |
|
Unidad de Fomento (UF) |
| 689,979 |
| — |
| 689,979 |
| 5,530,495 |
| 11,060,991 |
| 40,421,739 |
| 57,013,225 |
|
US Dollars |
| 28,664 |
| 5,204,290 |
| 5,232,954 |
| 1,557,600 |
| — |
| — |
| 1,557,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
| 41,302,924 |
| 1,700,225 |
| 43,003,149 |
| 2,530,567 |
| 2,089,589 |
| 308,053 |
| 4,928,209 |
|
Chilean $ |
| 12,717,084 |
| — |
| 12,717,084 |
| 16,525 |
| 902,588 |
| 297,442 |
| 1,216,555 |
|
Argentine $ |
| 17,181,279 |
| 157,613 |
| 17,338,892 |
| — |
| 910,043 |
| — |
| 910,043 |
|
Guaraníes |
| 5,473,238 |
| — |
| 5,473,238 |
| — |
| — |
| — |
| — |
|
Euros |
| 278,344 |
| 53,815 |
| 332,159 |
| 474,348 |
| — |
| — |
| 474,348 |
|
US Dollars |
| 5,652,979 |
| 1,488,797 |
| 7,141,776 |
| 2,039,694 |
| 276,958 |
| 10,611 |
| 2,327,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties |
| 6,807,547 |
| — |
| 6,807,547 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| 3,918,668 |
| — |
| 3,918,668 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 2,861,401 |
| — |
| 2,861,401 |
| — |
| — |
| — |
| — |
|
US Dollars |
| 27,478 |
| — |
| 27,478 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other short-term provisions |
| 170,996 |
| 1,742,947 |
| 1,913,943 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| — |
| 884,500 |
| 884,500 |
| — |
| — |
| — |
| — |
|
Argentine $ |
| 165,462 |
| 321,267 |
| 486,729 |
| — |
| — |
| — |
| — |
|
Guaraníes |
| 5,534 |
| 537,180 |
| 542,714 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax liabilities |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Guaraníes |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-financial liabilities |
| — |
| 3,376,811 |
| 3,376,811 |
| — |
| — |
| — |
| — |
|
Chilean $ |
| — |
| 3,376,811 |
| 3,376,811 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities |
| — |
| — |
| — |
| — |
| — |
| 10,125,957 |
| 10,125,957 |
|
Chilean $ |
| — |
| — |
| — |
| — |
| — |
| 5,717,888 |
| 5,717,888 |
|
Argentine $ |
| — |
| — |
| — |
| — |
| — |
| 3,165,841 |
| 3,165,841 |
|
Guaraníes |
| — |
| — |
| — |
| — |
| — |
| 1,242,228 |
| 1,242,228 |
|
Total |
| 49,031,234 |
| 16,249,732 |
| 65,280,966 |
| 20,638,662 |
| 13,150,580 |
| 50,855,749 |
| 84,644,991 |
|
NOTE 18 - GUARANTEES AND COMMITMENTS
The Company has no guarantees or commitments to disclose as of June 30, 2012.
NOTE 19 - SUBSEQUENT EVENTS
Regarding the Merger process, July 25, 2012 was set as the deadline for the shareholders to make use of the Right to Withdrawal as referred to in Article 69 and following of the Companies Act, however, none have been exercised. The requirement was that the exercise does not exceed 5% of the total shares issued with voting rights of Andina or Kopolar prior to the Merger.
Except the abovementioned, between June 30, 2012 and the date of issuance of these consolidated interim financial statements, no financial or other events have occurred that could significantly affect the balances or their interpretation.
NOTE 20 - THE ENVIRONMENT
The Company has a long-term sustainable development policy for its operations, in harmony with the environment. In this context, investments are made in installations, equipment and industrial plants that contemplate state-of-the-art technology, in line with the latest developments in these matters.
The parent and subsidiaries have obtained their certification under the ISO 14.001 and 9.001 international quality standards.
Disbursements made by the parent and subsidiaries relating to environmental activities during 2012 amount to ThCh$ 55,879 (ThCh$ 46,566 in 2011).
The principal actions for environmental protection carried out by the Company are as follows:
a) Preventative maintenance of boilers in order to reduce oil consumption and minimize the emission of toxic gases.
b) The Company has treatment plants in all its production centers through which the industrial liquid waste is treated, in order to reintroduce it into the public network in accordance with current legislation.
c) Controlled handling of waste: plastics, cardboard, packaging and solid materials, handing them over to specialist recycling companies.
Disbursements related to environmental activities are recorded as production expenses in the period in which they are made.
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 | |
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Santiago, April 28th, 2014 |
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