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
September 2015
Date of Report (Date of Earliest Event Reported)
Embotelladora Andina S.A.
(Exact name of registrant as specified in its charter)
Andina Bottling Company, Inc.
(Translation of Registrant´s name into English)
Avda. Miraflores 9153
Renca
Santiago, Chile
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes o No x
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes o No x
Indicate by check mark whether the registrant by furnishing the information contained in this Form 6-K is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes o No x
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Financial Statements
as of June 30, 2015 (unaudited) and December 31, 2014
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Financial Statements
1 | |
|
|
3 | |
|
|
5 | |
|
|
6 | |
|
|
Interim Statements of Changes in Equity for the period ended at June 30, 2015 and 2014 (unaudited) | 7 |
|
|
8 | |
|
|
9 |
REPORT OF INDEPENDENT AUDITORS
(Free translation from the original in Spanish)
Santiago, August 25, 2015
To the Board of Directors and Shareholders of Embotelladora Andina S.A.
We have reviewed the accompanying consolidated interim statement of financial position of Embotelladora Andina S.A. and its subsidiaries as of June 30, 2015, the related consolidated interim statements of income and comprehensive income for the six and three-month periods ended June 30, 2015 and the related statements of changes in equity and cash flows for the six-month period then ended.
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 the standards established by the Chilean Superintendency of Securities and Insurance as described in Note 2. This responsibility includes the design, implementation and maintenance of internal control sufficient to provide a reasonable basis for the preparation and fair presentation of the interim financial information in accordance with the applicable framework for the preparation and presentation of financial information.
Auditor’s responsibilities
Our responsibility is to perform our review in accordance with the Chilean auditing standards applicable for the review of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Chile, the objective of which is the expression of an opinion regarding the financial information taken as a whole. Accordingly, we do not express such an opinion.
Conclusion
Based on our review, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial information, for them to be in conformity with the standards established by the Chilean Superintendency of Securities and Insurance described in Note 2 to the interim consolidated financial statements.
Basis of accounting
As described in Note 2 to the interim consolidated financial statements, on October 17, 2014, the Chilean Superintendency of Securities and Insurance, by virtue of its authority, issued Official Memorandum N° 856, instructing regulatory entities to record against equity those differences in deferred tax assets and liabilities arising as a direct effect of increase on the corporate tax rate introduced by Law 20,780. This fact has given rise to a change in the framework for preparation and presentation of financial information applied to that date, which corresponded to International Financial Reporting Standards. This change in the accounting framework does not have effects on the consolidated interim statements of income and comprehensive income for the six- and three-month periods ended on June 30, 2015 and 2014 and the corresponding consolidated interim statements of changes in equity and cash flows for the six-month periods then ended, that are presented for comparative purposes. As of December 31, 2014, the effects of the change in the accounting framework are described in Note 10. Our conclusion is not modified regarding this matter.
Other matters — Consolidated financial statements as of December 31, 2014
On February 26, 2015 we issued an unqualified opinion on the consolidated financial statements as of December 31, 2014 and 2013 of Embotelladora Andina S.A. and its subsidiaries, in which is included the statement of financial position as of December 31, 2014 as presented in the accompanying consolidated interim financial statements, and corresponding notes.
Other matters — Interim consolidated financial statements as of June 30, 2014
We performed the review of the consolidated interim financial statements of income and comprehensive income for the six- and three-month periods ended on June 30, 2014 and the corresponding consolidated interim statements of changes in equity and cash flows for the six-month periods then ended, and their corresponding notes, and in our report dated August 26, 2014, we concluded that we were unaware of significant modifications that had to be made to the interim financial information for them to be in conformity with IAS 34, incorporated in the International Financial Reporting Standards.
Sergio Tubio L.
RUT: 21.175.581-4
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Statements of Financial Position
as of June 30, 2015 (unaudited) and December 31, 2014
ASSETS |
| NOTE |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 5 |
| 63,879,882 |
| 79,514,434 |
|
Other financial assets |
| 6 |
| 118,357,660 |
| 106,577,042 |
|
Other non-financial assets |
| 7.1 |
| 8,612,266 |
| 7,787,181 |
|
Trade and other accounts receivable, net |
| 8 |
| 133,930,336 |
| 198,110,424 |
|
Accounts receivable from related companies |
| 12.1 |
| 3,635,943 |
| 5,994,453 |
|
Inventory |
| 9 |
| 142,546,358 |
| 149,727,618 |
|
Current tax assets |
| 10.2 |
| 6,961,348 |
| 6,025,049 |
|
Total Current Assets |
|
|
| 477,923,793 |
| 553,736,201 |
|
|
|
|
|
|
|
|
|
Non-Current Assets: |
|
|
|
|
|
|
|
Other financial assets |
| 6 |
| 107,718,019 |
| 51,026,773 |
|
Other non-financial assets |
| 7.2 |
| 24,851,880 |
| 33,056,780 |
|
Trade and other receivables |
| 8 |
| 7,922,041 |
| 7,097,809 |
|
Accounts receivable from related parties |
| 12.1 |
| 2,500 |
| 24,752 |
|
Investments accounted for under the equity method |
| 14.1 |
| 59,928,177 |
| 66,050,213 |
|
Intangible assets other than goodwill |
| 15.1 |
| 693,910,461 |
| 728,181,279 |
|
Goodwill |
| 15.2 |
| 107,612,274 |
| 116,924,199 |
|
Property, plant and equipment |
| 11.1 |
| 665,403,446 |
| 713,075,285 |
|
Total Non-Current Assets |
|
|
| 1,667,348,798 |
| 1,715,437,090 |
|
Total Assets |
|
|
| 2,145,272,591 |
| 2,269,173,291 |
|
The accompanying notes 1 to 31 form an integral part of these Interim financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Statements of Financial Position
as of June 30, 2015 (unaudited) and December 31, 2014
LIABILITIES AND EQUITY |
| NOTA |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
LIABILITIES |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 16 |
| 81,753,811 |
| 83,402,440 |
|
Trade and other accounts payable |
| 17 |
| 153,608,363 |
| 228,179,112 |
|
Accounts payable to related parties |
| 12.2 |
| 42,485,638 |
| 55,966,789 |
|
Provisions |
| 18 |
| 419,276 |
| 365,832 |
|
Income taxes payable |
| 10.2 |
| 1,887,174 |
| 2,931,206 |
|
Other non-financial liabilities |
| 19 |
| 53,031,291 |
| 39,367,048 |
|
Total Current Liabilities |
|
|
| 333,185,553 |
| 410,212,427 |
|
|
|
|
|
|
|
|
|
Non-Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 16 |
| 727,526,683 |
| 726,616,440 |
|
Trade and other payables |
|
|
| 2,617,699 |
| 1,216,434 |
|
Provisions |
| 18 |
| 69,694,899 |
| 77,446,513 |
|
Deferred income tax liabilities |
| 10.4 |
| 126,980,671 |
| 126,126,147 |
|
Post-employment benefit liabilities |
| 13.3 |
| 8,609,445 |
| 8,125,107 |
|
Other non-financial liabilities |
| 19 |
| 332,332 |
| 432,490 |
|
Total Non-Current Liabilities |
|
|
| 935,761,729 |
| 939,963,131 |
|
|
|
|
|
|
|
|
|
Equity: |
| 20 |
|
|
|
|
|
Issued capital |
|
|
| 270,737,574 |
| 270,737,574 |
|
Retained earnings |
|
|
| 250,023,509 |
| 247,817,939 |
|
Other reserves |
|
|
| 334,549,563 |
| 378,738,982 |
|
Equity attributable to equity holders of the parent |
|
|
| 855,310,646 |
| 897,294,495 |
|
Non-controlling interests |
|
|
| 21,014,663 |
| 21,703,238 |
|
Total Equity |
|
|
| 876,325,309 |
| 918,997,733 |
|
Total Liabilities and Equity |
|
|
| 2,145,272,591 |
| 2,269,173,291 |
|
The accompanying notes 1 to 31 form an integral part of these Interim financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Statements of Income by Function for the period ended
at June 30, 2015 and 2014 (unaudited)
|
|
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
INCOME STATEMENTS |
| NOTE |
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net sales |
|
|
| 913,480,982 |
| 834,343,108 |
| 409,760,400 |
| 386,032,432 |
|
Cost of sales |
| 24 |
| (539,563,387 | ) | (507,440,465 | ) | (245,532,999 | ) | (240,918,261 | ) |
Gross Profit |
|
|
| 373,917,595 |
| 326,902,643 |
| 164,227,401 |
| 145,114,171 |
|
Other income |
| 25 |
| 2,490,569 |
| 1,653,067 |
| 1,957,250 |
| 1,338,294 |
|
Distribution expenses |
| 24 |
| (95,445,112 | ) | (86,093,486 | ) | (43,507,129 | ) | (39,943,396 | ) |
Administrative expenses |
| 24 |
| (173,411,259 | ) | (160,752,906 | ) | (81,602,923 | ) | (77,172,536 | ) |
Other expenses |
| 26 |
| (8,045,833 | ) | (9,464,632 | ) | (3,695,366 | ) | (5,722,726 | ) |
Other (loss) gains |
| 28 |
| (2,939,619 | ) | (612,288 | ) | (1,592,877 | ) | (1,470,780 | ) |
Financial income |
| 27 |
| 4,848,053 |
| 4,177,824 |
| 2,308,220 |
| 2,379,987 |
|
Financial expenses |
| 27 |
| (30,368,316 | ) | (31,362,712 | ) | (14,968,800 | ) | (17,734,682 | ) |
Share of profit of investments accounted for using the equity method |
| 14.3 |
| (327,585 | ) | 1,509,146 |
| (1,247,962 | ) | 967,086 |
|
Foreign exchange differences |
|
|
| (1,536,295 | ) | (1,641,888 | ) | (804,305 | ) | (412,192 | ) |
Loss from differences in indexed financial assets and liabilities |
|
|
| (3,289,075 | ) | (8,819,834 | ) | (3,286,580 | ) | (5,536,146 | ) |
Net income before income taxes |
|
|
| 65,893,123 |
| 35,494,934 |
| 17,786,929 |
| 1,807,080 |
|
Income tax expense |
| 10.3 |
| (21,047,995 | ) | (7,098,620 | ) | (9,205,891 | ) | 1,889,389 |
|
Net income |
|
|
| 44,845,128 |
| 28,396,314 |
| 8,581,038 |
| 3,696,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to |
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the parent |
|
|
| 44,752,575 |
| 28,532,633 |
| 8,687,934 |
| 4,197,798 |
|
Non-controlling interests |
|
|
| 92,553 |
| (136,319 | ) | (106,896 | ) | (501,329 | ) |
Net income |
|
|
| 44,845,128 |
| 28,396,314 |
| 8,581,038 |
| 3,696,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share, basic and diluted |
|
|
| Ch$ |
| Ch$ |
| Ch$ |
| Ch$ |
|
Earnings per Series A Share |
| 20.5 |
| 45.03 |
| 28.71 |
| 8.74 |
| 3.72 |
|
Earnings per Series B Share |
| 20.5 |
| 49.53 |
| 31.58 |
| 9.62 |
| 4.09 |
|
The accompanying notes 1 to 31 form an integral part of these Interim financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Statements of Comprehensive Income
for the period ended at June 30, 2015 and 2014 (unaudited)
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
|
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net income |
| 44.845.128 |
| 28.396.314 |
| 8.581.038 |
| 3.696.469 |
|
Other Comprehensive Income: |
|
|
|
|
|
|
|
|
|
Components of other comprehensive income that will be re-measured to net income for the period, before taxes |
|
|
|
|
|
|
|
|
|
Actuarial losses from defined benefit plans |
| (346,613 | ) | — |
| (346,613 | ) | — |
|
Income tax related to components of other comprehensive income that will be re-measured to net income for the period |
|
|
|
|
|
|
|
|
|
Income tax related to exchange rate translation differences |
| (50,967,830 | ) | 45,318,544 |
| 1,371,693 |
| 12,375,113 |
|
Income tax related to cash flow hedges |
| 7,716,316 |
| (2,066,294 | ) | (5,560,593 | ) | (8,236,670 | ) |
Income tax related to components of other comprehensive income that are not re-measured to net income for the period |
|
|
|
|
|
|
|
|
|
Income tax benefit related to defined benefit plans |
| 80,303 |
| — |
| 80,303 |
| — |
|
|
|
|
|
|
|
|
|
|
|
Income tax related to components of other comprehensive income that will be re-measured to net income for the period |
|
|
|
|
|
|
|
|
|
Income tax related to exchange rate translation differences |
| 1,848,055 |
| (1,310,358 | ) | (773,558 | ) | (415,605 | ) |
Income tax related to cash flow hedges |
| (2,868,980 | ) | 480,621 |
| 1,521,815 |
| 2,593,140 |
|
Total comprehensive income |
| 306,379 |
| 70,818,827 |
| 4,874,085 |
| 10,012,447 |
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
Equity holders of the parent |
| 563,156 |
| 70,442,649 |
| 5,254,495 |
| 10,435,885 |
|
Non-controlling interests |
| (256,777 | ) | 376,178 |
| (380,410 | ) | (423,438 | ) |
Total comprehensive income |
| 306,379 |
| 70,818,827 |
| 4,874,085 |
| 10,012,447 |
|
The accompanying notes 1 to 31 form an integral part of these Interim financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Statements of Changes in Equity for the period ended
at June 30, 2015 and 2014 (unaudited)
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||||
|
| Issued capital |
| Translation reserves |
| Cash flow hedge reserve |
| Actuarial |
| Other |
| Total |
| Retained |
| Controlling |
| Non- |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance at 01/01/2015 |
| 270,737,574 |
| (53,285,698 | ) | 6,125,615 |
| (1,237,993 | ) | 427,137,058 |
| 378,738,982 |
| 247,817,939 |
| 897,294,495 |
| 21,703,238 |
| 918,997,733 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| — |
| — |
| — |
| — |
| — |
| — |
| 44,752,575 |
| 44,752,575 |
| 92,553 |
| 44.845.128 |
|
Other comprehensive income |
| — |
| (48,770,445 | ) | 4,847,336 |
| (266,310 | ) | — |
| (44,189,419 | ) | — |
| (44,189,419 | ) | (349,330 | ) | (44.538.749 | ) |
Comprehensive income |
| — |
| (48,770,445 | ) | 4,847,336 |
| (266,310 | ) | — |
| (44,189,419 | ) | 44,752,575 |
| 563,156 |
| (256,777 | ) | 306.379 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (42,547,005 | ) | (42,547,005 | ) | (431,798 | ) | (42,978,803 | ) |
Total changes in equity |
| — |
| (48,770,445 | ) | 4,847,336 |
| (266,310 | ) | — |
| (44,189,419 | ) | 2,205,570 |
| (41,983,849 | ) | (688,575 | ) | (42,672,424 | ) |
Ending balance at 06/30/2015 |
| 270,737,574 |
| (102,056,143 | ) | 10,972,951 |
| (1,504,303 | ) | 427,137,058 |
| 334,549,563 |
| 250,023,509 |
| 855,310,646 |
| 21,014,663 |
| 876,325,309 |
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||||
|
| Issued capital |
| Translation reserves |
| Cash flow hedge reserve |
| Actuarial |
| Other |
| Total |
| Retained |
| Controlling |
| Non- |
| Total Equity |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening balance at 01/01/2014 |
| 270,737,574 |
| (81,527,711 | ) | 2,258,144 |
| (1,128,824 | ) | 427,137,058 |
| 346,738,667 |
| 243,192,801 |
| 860,669,042 |
| 20,763,546 |
| 881,432,588 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| — |
| — |
| — |
| — |
| — |
| — |
| 28,532,633 |
| 28,532,633 |
| (136,319 | ) | 28.396.314 |
|
Other comprehensive income |
| — |
| 43,495,689 |
| (1,585,673 | ) | — |
| — |
| 41,910,016 |
| — |
| 41,910,016 |
| 512,497 |
| 42.422.513 |
|
Comprehensive income |
| — |
| 43,495,689 |
| (1,585,673 | ) | — |
| — |
| 41,910,016 |
| 28,532,633 |
| 70,442,649 |
| 376,178 |
| 70.818.827 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (33,148,845 | ) | (33,148,845 | ) | (3,164 | ) | (33,152,009 | ) |
Total changes in equity |
| — |
| 43,495,689 |
| (1,585,673 | ) | — |
| — |
| 41,910,016 |
| (4,616,212 | ) | 37,293,804 |
| 373,014 |
| 37,666,818 |
|
Ending balance at 06/30/2014 |
| 270,737,574 |
| (38,032,022 | ) | 672,471 |
| (1,128,824 | ) | 427,137,058 |
| 388,648,683 |
| 238,576,589 |
| 897,962,846 |
| 21,136,560 |
| 919,099,406 |
|
The accompanying notes 1 to 31 form an integral part of these Interim financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Statements of Cash Flows for the period ended
at June 30, 2015 and 2014 (unaudited)
|
|
|
| 01.01.2015 |
| 01.01.2014 |
|
Cash flows provided by (used in) Operating Activities |
| NOTE |
| 06.30.2015 |
| 06.30.2014 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Cash flows provided by Operating Activities |
|
|
|
|
|
|
|
Receipts from customers (including taxes) |
|
|
| 1,209,346,576 |
| 1,134,292,719 |
|
Payments for Operating Activities |
|
|
|
|
|
|
|
Payments to suppliers for goods and services (including taxes) |
|
|
| (812,230,088 | ) | (766,744,413 | ) |
Payments to employees |
|
|
| (108,805,368 | ) | (94,708,206 | ) |
Other payments for operating activities (value-added taxes on purchases, sales and others) |
|
|
| (143,852,773 | ) | (157,002,695 | ) |
Interest payments |
|
|
| 1,000,000 |
| 380,019 |
|
Interest received |
|
|
| (30,783,993 | ) | (27,448,669 | ) |
Income tax payments |
|
|
| 2,894,117 |
| 2,116,596 |
|
Other cash movements |
|
|
| (21,922,081 | ) | (15,185,311 | ) |
Cash flows provided by Operating Activities |
|
|
| (3,700,632 | ) | (2,871,085 | ) |
Cash flows provided by (used in) Operating Activities |
|
|
| 91,945,758 |
| 72,828,955 |
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in) Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of property, plant and equipment |
|
|
| 1,925,892 |
| 19,725 |
|
Purchase of property, plant and equipment |
|
|
| (40,393,832 | ) | (58,016,868 | ) |
Proceeds from other long term assets (term deposits over 90 days) |
|
|
| 105,304,300 |
| 35,120,000 |
|
Purchase of other long term assets (term deposits over 90 days) |
|
|
| (131,216,537 | ) | (87,200,000 | ) |
Payments on forward, term, option and financial exchange agreements |
|
|
| 2,303,654 |
| 2,455,959 |
|
Receipts from forward, term, option and financial exchange agreements |
|
|
| (62,076,523 | ) | (107,621,184 | ) |
|
|
|
|
|
|
|
|
Flujos de efectivo procedentes de (utilizado Cash Flows generated from (used in) Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term loans obtained |
|
|
| — |
| 1,700,007 |
|
Proceeds from short-term loans obtained |
|
|
| 53,175,983 |
| 76,541,845 |
|
Proceeds from loans obtained |
|
|
| 53,175,983 |
| 78,241,852 |
|
Loan payments |
|
|
| (64,095,605 | ) | (98,313,922 | ) |
Financial lease liability payments |
|
|
| (1,385,741 | ) | (4,170,196 | ) |
Dividend payments by the reporting entity |
|
|
| (24,573,945 | ) | (26,842,017 | ) |
Other inflows (outflows) of cash (Placement and payment of public obligations) |
|
|
| (5,239,506 | ) | 67,066,338 |
|
Net cash flows (used in) generated by Financing Activities |
|
|
| (42,118,814 | ) | 15,982,055 |
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents before exchange differences |
|
|
| (12,249,579 | ) | (18,810,174 | ) |
Effects of exchange differences on cash and cash equivalents |
|
|
| (3,384,973 | ) | 2,163,002 |
|
Net decrease in cash and cash equivalents |
|
|
| (15,634,552 | ) | (16,647,172 | ) |
Cash and cash equivalents — beginning of year |
| 5 |
| 79,514,434 |
| 79,976,126 |
|
Cash and cash equivalents - end of year |
| 5 |
| 63,879,882 |
| 63,328,954 |
|
The accompanying notes 1 to 31 form an integral part of these Interim financial statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Notes to the Interim Consolidated Financial Statements
at June 30, 2015 (unaudited)
NOTE 1 - CORPORATE INFORMATION
Embotelladora Andina S.A. is registered under No. 00124 of the Securities Registry and is regulated by the Chilean Superintendence of Securities and Insurance (SVS) pursuant to Law 18.046.
The principal activities of Embotelladora Andina S.A. (hereafter “Andina,” and together with its subsidiaries, the “Company”) are to produce and sell Coca-Cola products and other Coca-Cola beverages. After the merger and recent acquisitions, the Company has operations in Chile, Brazil, Argentina and Paraguay. In Chile, the geographic areas in which the Company has distribution franchises are regions II, III, IV, XI, XII, Metropolitan Region, Rancagua and San Antonio. In Brazil, the Company has distribution franchises in the states of Rio de Janeiro, Espírito Santo, Niteroi, Vitoria, Nova Iguaçu, part of Sao Paulo and part of Minas Gerais. In Argentina, the Company has distribution franchises in the provinces of Mendoza, Córdoba, San Luis, Entre Ríos, Santa Fe, Rosario, Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro, La Pampa and the western zone of the Province of Buenos Aires. In Paraguay the franchised territory coveres the whole country. The Company has distribution licenses from The Coca-Cola Company in all of its territories: Chile, Brazil, Argentina and Paraguay. The licenses for the territories in Chile expire in 2018 and 2019; in Argentina expire in 2017; in Brazil expire in 2017; and the Paraguayan franchise expired in December 2014, and an extension has been granted until August 2015 within the normal renewal process, after which the long-term agreement should be signed or a new extension shall be granted until the long-term agreement is signed. 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 expiration.
As of June 30, 2015, the Freire Group and its related companies hold 55.68% of the outstanding shares with voting rights, corresponding to the Series A shares.
The head office of Embotelladora Andina S.A. is located on Miraflores 9153, municipality of Renca, Santiago, Chile. Its taxpayer identification number is 91.144.000-8.
NOTE 2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Periods covered
These Interim consolidated financial statements encompass the following periods:
Interim consolidated statement of financial position: At June 30, 2015 (unaudited) and December 31, 2014.
Interim consolidated income statements by function and comprehensive income: For the periods ended June 30, 2015 and 2014 (unaudited) and for the three-month interim periods between April 1 and June 30, 2015 and 2014 (unaudited).
Interim consolidated statements of cash flows: For the periods ended June 30, 2015 and 2014 (unaudited), using the “direct method”.
Interim consolidated statements of changes in equity: For the periods ended June 30, 2015 and 2014 (unaudited).
2.2 Basis of preparation
The Company’s Interim Consolidated Financial Statements for the periods ended June 30, 2015 and December 31, 2014 were prepared in accordance with Rules and instructions issued by the Chilean Superintendence of Securities and Insurance (“SVS”), which take precedence over the International Financial Reporting Standards (hereinafter “IFRS”) issued by the International Accounting Standards Board (hereinafter “IASB”). The rules and instructions issued by the SVS do not differ from IFRS, except as set forth in the Circular Letter N ° 856, issued by the SVS on October 17, 2014, which has no effect on the interim consolidated statements of income and comprehensive income for the three-month and six-month periods ended on June 30, 2015 and 2014, and the corresponding interim consolidated statements of changes in equity and cash flows for the six-month periods then ended, that are presented for comparative purposes. The effects on the consolidated statement of financial position as of December 31, 2014 are presented in Note 10.5.
Circular Letter N° 856 issued by the SVS on October 17, 2014, established that the differences in assets and liabilities due to deferred taxes resulting from the first category tax rate increase introduced by Law N° 20.780 and tax reform issued on September 26, 2014, and that as of the last quarter 2014 the Company increased net liabilities in ThCh$23,773,346, must be accounted for during the corresponding period against equity and not against income as indicated by IAS 12.
The criteria used and the effects from rate changes resulting from the Chilean tax reform, are discussed in notes numbers 2.16 and 10 “Income tax and deferred taxes”.
The consolidated financial statements are presented under the historical cost criteria, although modified by the revaluation of certain financial instruments, derivative instruments and investment properties.
Those Spanish language IFRS consolidated financial statements consisted of consolidated statements of financial position as of June, 30 2015 and 2014 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 consolidated financial statements prepared in accordance with Rules and instructions issued by the Chilean Superintendence of Securities and Insurance (“SVS”) were then subsequently approved by the Board of Directors during their meeting held on August 25, 2015.
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 Rules and instructions issued by the Chilean Superintendence of Securities and Insurance (“SVS”) and IFRS.
2.3 Basis of consolidation
2.3.1 Subsidiaries
These consolidated financial statement incorporate the financial statements of the Company and the companies controlled by the Company (its subsidiaries). Control is obtained when the Company has power over the investee, when it has exposure or is entitled to variable returns from its involvement in the investee and when it has the ability to use its power to influence the amount of investor returns. They include assets and liabilities as of June 30, 2015 and December 31, 2014 and results of operations and cash flows for the periods ended June 30, 2015 and 2014. 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 consideration transferred for the acquisition of the subsidiary is the fair value of assets transferred, equity securities issued, liabilities incurred to the former owners of the acquire 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 consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the consideration is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement. All acquisition related costs are expensed in the period incurred.
Intercompany transactions, balances, income, expenses and unrealized gains and losses on transactions between Group companies are eliminated. Accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the Company, where necessary.
The interest of non-controlling shareholders is presented in “Non-Controlling Interest” in the consolidated income statement and Earnings attributable to non-controlling interests”, in the consolidated statement of changes in equity.
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) |
| ||||||||||
|
|
|
| 06-30-2015 |
| 12-31-2014 |
| ||||||||
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. |
| 99.98 |
| 0.01 |
| 99.99 |
| 99.98 |
| 0.01 |
| 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. |
| 0.92 |
| 99.07 |
| 99.99 |
| 0.92 |
| 99.07 |
| 99.99 |
|
96.705.990-0 |
| Envases Central S.A. |
| 59.27 |
| — |
| 59.27 |
| 59.27 |
| — |
| 59.27 |
|
96.971.280-6 |
| Inversiones Los Andes Ltda. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
Foreign |
| Paraguay Refrescos S.A. |
| 0.08 |
| 97.75 |
| 97.83 |
| 0.08 |
| 97.75 |
| 97.83 |
|
76.276.604-3 |
| Red de Transportes Comerciales Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
78.536.950-5 |
| Servicios Multivending Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
78.775.460-0 |
| Sociedad de Transportes Trans-Heca Limitada |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
78.861.790-9 |
| Transportes Andina Refrescos Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
76.389.720-6 |
| Vital Aguas S.A. |
| 66.50 |
| — |
| 66.50 |
| 66.50 |
| — |
| 66.50 |
|
93.899.000-k |
| Vital Jugos S.A. |
| 15.00 |
| 50.00 |
| 65.00 |
| 15.00 |
| 50.00 |
| 65.00 |
|
2.3.2 Investments accounted for under the equity method
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, and its share of post acquisition movements in other comprehensive income is recognized in OCI with corresponding adjustment to the carrying amount of the investment.
Unrealized gains in transactions between the Company and its associates are eliminated to the extent of the Company´s interests in those associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment on the asset transferred. Accounting policies of the associates are changed, where necessary, to ensure conformity with the policies adopted by the Company.
2.4 Financial reporting by operating segment
IFRS 8 requires that entities disclose information on the results of operating segments. In general, this is information that Management and the Board of Directors use internally to assess performance of segments and allocate resources to them. Therefore, the following operating segments have been determined based on geographic location:
· Chilean operations
· Brazilian operations
· Argentine operations
· Paraguayan operations
2.5 Foreign currency translation
2.5.1 Functional currency and presentation currency
Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Chilean pesos, which is the parent company’s functional currency and the Company´s presentation currency.
2.5.2 Balances and transactions
Foreign currency transactions are translated into the functional currency using the foreign exchange rates prevailing on the dates of the transactions. Losses and gains in foreign currency resulting from the liquidation of these transactions and the translation at the closing exchange rate of monetary assets and liabilities denominated in foreign currency are recognized in the income statements under foreign exchange rate differences, except when they correspond to cash flow hedges; in which case they are presented in the statement of comprehensive income.
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 |
| € |
|
06.30.2015 |
| 639.04 |
| 205.97 |
| 70.32 |
| 24,982.96 |
| 0.1237 |
| 712.34 |
|
12.31.2014 |
| 606.75 |
| 228.43 |
| 70.96 |
| 24,627.10 |
| 0.1311 |
| 738.05 |
|
06.30.2014 |
| 552.72 |
| 250.95 |
| 67.96 |
| 24,023.61 |
| 0.1261 |
| 756.84 |
|
2.5.3 Translate of foreign subsidiaries
The financial position and results of all entities in the Company (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(i) Assets and liabilities for the statement of financial position are translated at the closing exchange rate as of the reporting date;
(ii) Income and expenses of the income statement are translated at average exchange rates for the period; and
(iii) All resulting translation differences are recognized in other comprehensive income.
The companies that have a functional currency different from the presentation currency of the parent company are:
Company |
| Functional currency |
Rio de Janeiro Refrescos Ltda. |
| R$Brazilian Real |
Embotelladora del Atlántico S.A. |
| A$Argentine Peso |
Andina Empaques Argentina S.A. |
| A$Argentine Peso |
Paraguay Refrescos S.A. |
| G$Paraguayan Guaraní |
In consolidation, translation differences arising from the translation of net investments 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 the IFRS transition date, less depreciation and cumulative impairment losses.
Historical cost of property, plant and equipment includes expenditures that are 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 restatements of opening balances (attributable cost) at January 1, 2009, in accordance with the 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. 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 |
Software licenses, furniture and supplies |
| 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 financial statement reporting period, if appropriate.
When the value of an asset is greater than its estimated recoverable amount, the value is written down immediately to its recoverable amount.
Gains and losses on disposals of property, plant, and equipment are calculated by comparing the proceeds to the carrying amount and are charged to the income statement.
Items that are available for sale, and comply with the conditions of IFRS 5 “Non-current assets held for sale and discontinued operations” are separated from property, plant and equipment and are presented within current assets at the lower value between the book value and its fair value less selling costs.
2.7 Intangible assets and Goodwill
2.7.1 Goodwill
Goodwill represents the excess of the consideration transferred 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 or more frequently if events or changes in circumstances indicate a potential impairment. Goodwill is carried at cost less accumulated impairment losses.
Gains and losses on the sale of an entity include the carrying amount of goodwill related to that entity.
Goodwill is assigned to each cash generating unit (CGU) or group of cash-generating units; from where it is expected to benefit from the synergies arising from the business combination. Such CGUs or groups of CGUs represent the lowest level in the organization at which goodwill is monitored for internal management purposes.
2.7.2 Distribution rights
Distribution rights are contractual rights to produce and distribute products under the Coca-Cola brand in certain territories in Argentina, Brazil, Chile and Paraguay which were acquired during Business Combination. Distribution rights have an indefinite useful life and are not amortized, as the Company believes that the agreements will be renewed indefinitely by the Coca-Cola Company with similar terms and conditions. They are subject to impairment tests on an annual basis.
2.7.3 Software
Carrying amounts correspond to internal and external software development costs, which are capitalized once the recognition criteria in IAS 38, Intangible Assets, have been met. Software is amortized in administrative expenses in the consolidated income statement over a period of four years.
2.8 Impairments of non-financial assets
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 or more frequently if events or changes in circumstances indicate a potential 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).
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, financial assets held to maturity, 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.
At each reporting date the Company assesses if there is evidence of impairment for any asset or group of financial assets.
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.
Derivatives are also categorized as held for trading unless they are designated as hedges.
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 financial income or expense during the year in which they incur.
2.9.2 Loans and receivables
Loans and accounts receivable are financial assets with fixed and determinable payments that are not quoted in an active market period. 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 less a provision for impairment.
An impairment is recorded on trade accounts receivable 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 loss is recognized in administrative expenses in the consolidated income statement.
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 carried at cost, which approximates their fair value considering their short-term nature.
Accrued interest is recognized in the consolidated income statement under financial income during the year in which it occurs.
��
2.10 Derivatives financial instruments and hedging activities
The Company uses derivative financial instruments to mitigate risks relating to changes in foreign currency and exchange rates associated with raw materials, property, plant and equipment, and 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 depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
2.10.1 Derivative financial instruments designated as cash flow hedges
The group 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 group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.
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 consolidated income statement within “other gains (losses)”
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when foreign currency denominated financial liabilities are translated into their functional currencies). The gain or loss relating to the effective portion of cross currency swaps hedging the effects of changes in foreign exchange rates are recognized in the consolidated income statement within “foreign exchange differences”. 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 consolidated income statement.
2.10.2 Derivative financial instruments not designated for hedging
The fair value of derivative financial instruments that do not qualify for hedge accounting pursuant to IFRS are immediately recognized in the consolidated income statement under “Other income and losses”. The fair value of these derivatives are recorded under “other current financial assets” or “other current financial liabilities” in the statement of financial position.”
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 assets and liabilities as of June 30, 2015 and December 31, 2014 based on its derivative foreign exchange contracts, which are classified within other financial assets (current assets and non-current) and other current financial liabilities (current and non-current financial liabilities), respectively. These contracts are carried at fair value in the statement of financial position. The Company uses the following hierarchy for determining and disclosing financial instruments at fair value by valuation method:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the assets or liabilities that are not based on observable market data information.
During the period ended June 30, 2015, 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 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. 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 receivables
Trade accounts receivables are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment, given their short term nature. A provision for impairment is made 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.
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.
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. For the periods ended June 30, 2015 and 2014, no borrowing costs have been capitalized.
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 are incurred.
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 or substantively 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. In the case of the approved tax reform in Chile by Law 20,780 dated September 26, 2014 and according to circular letter N° 856 dated October 17, 2014 issued by the Chilean Superintendence of Securities and Insurance, the effects resulting from changes in in rates were accounted for under equity accounts in the last quarter 2014.
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 utilized.
The Company does not recognize deferred income taxes for temporary differences from investments in subsidiaries 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, the amount of deferred tax not recognized in this connection amounted to ThCh$70,472,036 at June 30, 2015 (ThCh$62,662,666 at December 31, 2014).
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 recognized in the balance sheet at the present value of the defined benefit obligation using the projected unit credit method based on discounted estimated future cash outflows using interest rates of high-quality corporate bonds denominated in the currency in which the benefits will be paid and with terms approximating the terms of the related pension obligation.
Actuarial variables updated income are recorded under other comprehensive income, beginning 2013, according to amendments established by IAS 19.
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 recorded a provision to account for the cost of vacations 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 event, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle the bligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
2.19 Leases
a) Operating leases
Operating lease payments are recognized as an expense on a straight-line basis over the term of the lease.
b) Finance leases
Leases of property, plant and equipment where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased assets and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges.
The interest element is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
2.20 Deposits for returnable containers
This liability comprises of cash collateral, or deposit, 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 containers 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 containers.
Deposits for returnable containers are presented as a current liability in other financial liabilities 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 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 contributions 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 loss of impairment. The recoverable amounts of cash generating units are determined based on value-in-use calculations. The key variables used in the calculations include sales volumes and prices, discount rates, marketing expenses and other economic factors including inflation. 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 end past results. 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. Discounted cash flows in the Company’s cash generating units in Chile, Brazil, Argentina and Paraguay generated a higher value than the carrying values of the respective net assets, including goodwill.
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 their current prices in an active market. For those that are not traded in an active market, the Company determines fair value based on the best information available by using valuation techniques.
In the case of the valuation of intangibles recognized as a result of acquisitions from business combinations, the Company estimates the fair value based on the “multi-period excess earning method”, which involves the estimation of future cash flows generated by the intangible assets, adjusted by cash flows which do not come from these, but from other assets. The Company also applies estimations over the time period during which the intangible assets will generate cash flows, cash flows from other assets, and a discount rate.
Other assets acquired and liabilities assumed in a 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.
2.24.4 Useful life, residual value and impairment of property, plant, and equipment
Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of those assets. Changes in circumstances, such as technological advances, changes to the Company’s business model, or changes in its capital strategy might modify the effective useful lives as compared to our estimates. Whenever the Company determines that the useful life of property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned usage of manufacturing equipment, dispensers, transportation equipment and computer software could make the useful lives of assets shorter. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of any of those assets may not be recovered. The estimate of future cash flows is based, among other factors, on certain assumptions about the expected operating profits in the future. The Company´s estimation of discounted cash flows may differ from actual cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in operating profit. If the sum of the projected discounted cash flows (excluding interest) is less than the carrying amount of the asset, the asset shall be written-off to its estimated recoverable value.
2.24.5 Liabilities for deposits of returnable container
The Company records a liability for deposits received in exchange for bottles and containers provided to its customers and distributors. This liability represents the amount of deposits that must be reimbursed if the customer or distributor returns the bottles and containers 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 container. 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, interpretations and amendments have been adopted in these consolidated financial statements:
Amendment to IAS 19 “Employee Benefits”, regarding defined benefit plans. Published in November 2013. This amendment applies to employee or third party contributions to defined benefit plans. The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary.
Improvements to International Financial Reporting Standards (2012) |
| Mandatory for the |
|
|
|
IFRS 3 “Business Combinations” - The standard is amended to clarify that the obligation to pay contingent consideration which complies with the definition of financial instrument is classified as financial liability or as equity, based on IAS 32 definitions, and that all non-equity contingent consideration, both financial and non-financial, is measured at fair value at each reporting date with changes in fair value recognized in results. Consequently, changes are also introduced to IFRS 9, IAS 37 and IAS 39. The amendment applies for future periods to business combinations whose acquisition date is July 1, 2014 or later. |
| 07/01/2014 |
|
|
|
IFRS 8 “Operating Segments” - The standard is amended to include the disclosure requirement of management judgement in the aggregation of operating segments. The standard was additionally amended to require a reconciliation between the segment’s assets with the entity’s assets, when assets are reported by segment. |
| 07/01/2014 |
|
|
|
IFRS 13 “Fair Value Measurement” - The IASB has amended the basis of the conclusions of IFRS 13 to clarify that the ability to measure short term accounts receivable and accounts payable in nominal amounts is not removed if there is no significant effect of not updating. |
| 07/01/2014 |
|
|
|
IAS 16 - “Property, plant and equipment”, and IAS 38 “Intangible assets” - Both standards are amended regarding treatment of gross value in accounting books and accumulated depreciation when the entity uses the revaluation model. |
| 07/01/2014 |
|
|
|
IAS 24 - Disclosure information on related parties” - The standard is amended to include as a related company, an entity that provides key directing personnel to the reporting company or to the parent company of the reporting company (“the managing company”). |
| 07/01/2014 |
Improvements to International Financial Reporting Standards (2013) |
| Mandatory for |
|
|
|
IFRS 3 “Business Combinations” - The standard is amended to clarify that IFRS 3 is not applicable to accounting of a joint venture under IFRS 11. The amendment also clarifies that the exemption scope is only applied to the financial statements of the joint agreement in itself. |
| 07/01/2014 |
|
|
|
IFRS 13 “Fair Value Measurement” - Clarifies that the portfolio exemption under IFRS 13, which allows an entity to measure fair value of a group of financial assets and liabilities over its net value, is applicable to all contracts (including non-financial contracts) within the scope of IAS 39 or IFRS 9. An entity must apply amendments for future periods from the beginning of the yearly period in which IFRS 13 is applied |
| 07/01/2014 |
The Company´s management considers the adoption of standards, amendments and interpretations previously described, will not have a significantly impact on the consolidated financial statements of the Company in the period of their adoption.
b) The new standards, interpretations and amendments issued, which are not in force for the 2015 period, for which no early adoption has been adopted are as follow.
Standards and interpretations |
| Mandatory for the |
|
|
|
IFRS 9 “Financial Instruments” - Amends classification and measurement of financial assets. Establishes two measurement categories: amortized cost and fair value. All equity instruments are measured at fair value. This standard was subsequently amended to include treatment and classification of financial liabilities. The main change is that if the fair value of financial liabilities is adopted, the change in fair value attributable to changes in the entity’s own credit risk is recognized in other comprehensive income instead of income, unless this generates an accounting asymmetry. Early adoption is permitted. |
| 01/01/2018 |
Amendments and improvements |
| Mandatory for the |
|
|
|
IFRS 11”Joint Arrangements” - This amendment incorporates guidance to the standard regarding how to account for the acquisition of an interest in a joint operation which constitutes a business, thus specifying the appropriate treatment for said acquisition. |
| 01/01/2016 |
|
|
|
IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets”- The amendment clarifies that the use of asset amortization methods based on revenue is not appropriate, given that the revenue generated by the activity that includes use of assets generally reflects other factors different from the use of economic benefits embedded in the asset. Likewise, it clarifies that revenues in general are an inappropriate base to measure consumption of economic benefits embedded in the intangible asset. |
| 01/01/2016 |
|
|
|
IAS 16 “Property, Plant and Equipment” and IAS 38 “Agriculture”- The amendment modifies financial information regarding “bearer plants” such as vines, rubber and palm oil trees. The amendment defines the concept of a “bearer plant” and establishes that it should be accounted for as property, plant and equipment, because its operation is similar to that of a production facility. As a result, it is brought into the scope of IAS 16 rather than IAS 41. Products grown in bearer plants will remain within scope of IAS 41. |
| 01/01/2016 |
Amendment to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”. The amendment clarifies the application of consolidation exception for investment entities and its subsidiaries. IFRS 10 clarifies regarding the consolidation exception available for entities in group structures which include investment entities. Amendment to IAS 28 allows that an entity other than an investment entity, but that has ownership interest in an Associate or Joint Venture that is an investment entity, an accounting policy option in the application of the equity method. The entity may choose to maintain the fair value measurement applied by the associate or joint venture that is an investment entity, or, it may consolidate at the investment entity’s level (associate or joint venture) |
| 01/01/2016 |
|
|
|
Amendment to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in associates and joint ventures”. Published in September 2014. This amendment addresses an inconsistency between the requirements of IFRS 10 and IAS 28 in the treatment of the sale or contribution of assets between an investor and the associate or joint venture. The main consequence of the amendments is that a gain or complete loss is recognized when the transaction involves a business (you are an affiliate or not) and a gain or partial loss when the transaction involves assets that do not constitute a business, even if these are assets in a subsidiary. |
| 01/01/2016 |
|
|
|
Amendment to IAS 1 “Presentation of Financial Statements”. Published in December, 2014. The amendment clarifies application guidance of IAS 1 on materiality and aggregates, presentation of subtotals, structure of the financial statements and disclosure of accounting policies. The amendments form part of IASB’s Disclosure Initiative. |
| 01/01/2016 |
|
|
|
IFRS 7 “Financial Instruments: Disclosures” There are two amendments to IFRS 7. (1) Service Agreements: if an entity transfers a financial asset to a third party under conditions that allow the grantor to write off the asset, IFRS 7 requires disclosure of any type of continued implication that the entity may still have in the transferred assets. IFRS 7 provides guidance regarding continued implication in this context. The amendment is prospective with the option to retroactive application. This also affects IFRS 1 to give the same option to those who apply IFRS for the first time. (2) Interim Financial Statements: The amendment clarifies the additional disclosure required by IFRS 7 amendments, “Offsetting financial assets and financial liabilities” is not specifically required for all interim periods, unless required by IAS 34. The amendment is retroactive. |
| 01/01/2016 |
|
|
|
IFRS 19 “Employee Benefits” - The amendment clarifies that in order to determine the liabilities’ discount rate for post-employment benefits it should be denominated in the same currency as the benefits to be paid and not the currency from the country where it has been generated. The evaluation of the existence of a broad market for high quality corporate bonds is based on corporate bonds denominated in that currency, not on corporate bonds from a specific country. Likewise, where a broad market for high quality corporate bonds in that currency does not exist, government bonds should be used in the corresponding currency. The amendment is retroactive but limited to the beginning of the first period presented. |
| 01/01/2016 |
|
|
|
IAS 34 “Interim Financial Reporting” The amendment clarifies the meaning of “elsewhere in the interim report”. The new amendment to IAS 34 requires a cross-reference of the interim financial statements as to the location of said information. The amendment is retroactive. |
| 01/01/2016 |
The Company´s management considers the adoption of standards, amendments and interpretations previously described, will not have a significantly impact on the consolidated financial statements of the Company in the period of their adoption.
NOTE 3 — BUSINESS COMBINATIONS
a) Merger with Embotelladoras Coca-Cola Polar S.A.:
On March 30, 2012, after completion of due-diligence procedures, the Company signed a Promissory Merger Agreement with Embotelladoras Coca-Cola Polar S.A. (“Polar”). Polar is also a Coca-Cola bottler with operations in Chile, servicing territories in the II, III, IV, XI and XII regions; in Argentina, servicing territories in Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro, La Pampa and the western zone of the province of Buenos Aires; and in Paraguay servicing the whole country. The merger was made in order to reinforce the Company’s leading position among other Coca-Cola bottlers in South America.
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 control over day-to-day operations of Polar as of October 1, 2012, when it began to consolidate Polar’s operating 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 control 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., Vital Aguas S.A. and Envases Central 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 was re-measured to fair value at the acquisition date. 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.
The Company determined the fair value of its distribution rights, and property, plant and equipment using discounted cash flow models, replacement costs for similar assets, and market based appraisals. 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 Company´s operating segments 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.
b) Acquisition of Companhia de Bebidas Ipiranga:
On June 18, 2013 the Board of Directors of Embotelladora Andina S.A., unanimously approved the acquisition of the Brazilian company Companhia de Bebidas Ipiranga. The aforementioned company is dedicated to the marketing and distribution of Coca-Cola products in parts of the territories of São Paulo and Minas Gerais, serving approximately 23,000 customers. Such approval was reflected in a purchase and sale agreement signed on July 10, 2013.
After the transaction was approved by Coca-Cola and the Administrative Council of Economic Defense of Brazil, on October 11, 2013 the Brazilian subsidiary, Rio de Janeiro Refrescos Ltda., completed the acquisition of 100% of the shares of Companhia de Bebidas Ipiranga. The acquisition price was ThR$1,155,446 (equivalent to ThCh$ 261,244,818) and was paid in cash by Rio de Janeiro Refrescos Ltda. using proceeds from intercompany loans and a capital contribution from the parent.
The purchase of Ipiranga generated the recognition of an intangible asset denominated “contractual rights to distribute the products of Coca-Cola” an amount of ThCh$228,359,641 and a goodwill an amount of ThCh$55,255,194.
The Company expects to recover goodwill through synergies related to available production capacity. Goodwill has been assigned to the Company’s Brazil operating segment in the amount of ThCh$55,255,194. Goodwill is expected to be tax deductible for income tax purposes.
NOTE 4 — REPORTING BY SEGMENT
The Company provides information by segments according to IFRS 8 “Operating Segments,” which establishes standards for reporting by operating segment and related disclosures for products and services, and geographic areas.
The Company’s Board of Directors and Management measures and assesses performance of operating segments based on the operating income of each of the countries where there are Coca-Cola franchises.
The operating segments are determined based on the presentation of internal reports to the Company´s chief operating decision-maker. The chief operating decision-maker has been identified as the Company´s Board of Directors who makes the Company´s strategic decisions.
The following operating segments have been determined for strategic decision making based on geographic location:
· Chilean operations
· Brazilian operations
· Argentine operations
· Paraguayan operations
The four operating segments conduct their businesses through the production and sale of soft drinks and other beverages, as well as packaging materials.
Total income by segment includes sales to unrelated customers and inter-segment sales, as indicated in the Company’s consolidated statement of income.
Net expenses related to corporate management, have been assigned to the Chilean operating segment.
A summary of the Company’s operating segments in accordance to IFRS is as follows:
For the period ended June 30, 2015 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Intercompany |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net sales |
| 253,086,105 |
| 284,357,980 |
| 314,147,302 |
| 62,631,205 |
| (741,610 | ) | 913,480,982 |
|
Cost of sales |
| (151,875,773 | ) | (163,921,152 | ) | (186,801,705 | ) | (37,706,367 | ) | 741,610 |
| (539,563,387 | ) |
Distribution expenses |
| (25,449,965 | ) | (42,213,486 | ) | (24,414,656 | ) | (3,367,005 | ) | — |
| (95,445,112 | ) |
Administrative expenses |
| (54,375,344 | ) | (51,765,105 | ) | (57,319,325 | ) | (9,951,485 | ) | — |
| (173,411,259 | ) |
Finance income |
| 1,177,600 |
| 284,117 |
| 3,140,501 |
| 245,835 |
| — |
| 4,848,053 |
|
Finance expense |
| (8,542,810 | ) | (3,687,249 | ) | (18,121,584 | ) | (16,673 | ) | — |
| (30,368,316 | ) |
Interest expense, net |
| (7,365,210 | ) | (3,403,132 | ) | (14,981,083 | ) | 229,162 |
| — |
| (25,520,263 | ) |
Share of the entity in income of associates accounted for using the equity method, total |
| 303,176 |
| — |
| (630,761 | ) | — |
| — |
| (327,585 | ) |
Income tax expense |
| (6,401,882 | ) | (5,905,088 | ) | (6,795,352 | ) | (1,945,673 | ) | — |
| (21,047,995 | ) |
Other income (loss) |
| (5,964,741 | ) | (4,359,519 | ) | (2,026,706 | ) | (969,287 | ) | — |
| (13,320,253 | ) |
Net income of the segment reported |
| 1,956,366 |
| 12,790,498 |
| 21,177,714 |
| 8,920,550 |
| — |
| 44,845,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| 19,817,888 |
| 10,078,753 |
| 14,101,073 |
| 6,549,591 |
| — |
| 50,547,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
| 247,441,086 |
| 82,760,825 |
| 122,763,020 |
| 24,958,862 |
| — |
| 477,923,793 |
|
Non current assets |
| 646,793,405 |
| 120,320,428 |
| 636,707,348 |
| 263,527,617 |
| — |
| 1,667,348,798 |
|
Segment assets, total |
| 894,234,491 |
| 203,081,253 |
| 759,470,368 |
| 288,486,479 |
| — |
| 2,145,272,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount in associates and joint ventures accounted for using the equity method, total |
| 17,314,691 |
| — |
| 42,613,486 |
| — |
| — |
| 59,928,177 |
|
Capital expenditures and other |
| 18,217,590 |
| 10,357,863 |
| 9,272,752 |
| 2,545,627 |
| — |
| 40,393,832 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
| 82,006,035 |
| 93,692,128 |
| 136,700,575 |
| 20,786,815 |
| — |
| 333,185,553 |
|
Non-current liabilities |
| 536,516,493 |
| 10,701,524 |
| 369,849,911 |
| 18,693,799 |
| — |
| 935,761,729 |
|
Segment liabilities, total |
| 618,522,530 |
| 104,393,652 |
| 506,550,486 |
| 39,480,614 |
| — |
| 1,268,947,282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used) in Operating Activities |
| 61,608,350 |
| 13,469,627 |
| 17,306,123 |
| (438,342 | ) | — |
| 91,945,758 |
|
Cash flows (used in) provided by Investing Activities |
| (44,841,132 | ) | (10,355,962 | ) | (6,987,573 | ) | 108,144 |
| — |
| (62,076,523 | ) |
Cash flows provided by (used in) Financing Activities |
| (20,779,988 | ) | (4,306,727 | ) | (16,312,260 | ) | (719,839 | ) | — |
| (42,118,814 | ) |
For the period ended June 30, 2014 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Intercompany |
| Consolidated |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Net sales |
| 238,052,862 |
| 197,762,897 |
| 339,278,004 |
| 59,563,085 |
| (313,740 | ) | 834,343,108 |
|
Cost of sales |
| (143,230,804 | ) | (115,027,596 | ) | (212,495,580 | ) | (37,000,225 | ) | 313,740 |
| (507,440,465 | ) |
Distribution expenses |
| (25,067,956 | ) | (30,936,003 | ) | (26,857,712 | ) | (3,231,815 | ) | — |
| (86,093,486 | ) |
Administrative expenses |
| (50,431,894 | ) | (38,778,412 | ) | (62,300,105 | ) | (9,242,495 | ) | — |
| (160,752,906 | ) |
Finance income |
| 1,982,729 |
| 29,670 |
| 2,076,643 |
| 88,782 |
| — |
| 4,177,824 |
|
Finance expense |
| (8,667,921 | ) | (4,088,147 | ) | (18,444,166 | ) | (162,478 | ) | — |
| (31,362,712 | ) |
Interest expense, net |
| (6,685,192 | ) | (4,058,477 | ) | (16,367,523 | ) | (73,696 | ) | — |
| (27,184,888 | ) |
Share of the entity in income of associates accounted for using the equity method, total |
| (1,055 | ) | — |
| 1,510,201 |
| — |
| — |
| 1,509,146 |
|
Income tax expense |
| (1,444,069 | ) | (1,132,176 | ) | (3,106,786 | ) | (1,415,589 | ) | — |
| (7,098,620 | ) |
Other income (loss) |
| (10,738,316 | ) | (4,485,510 | ) | (3,917,286 | ) | 255,537 |
| — |
| (18,885,575 | ) |
Net income of the segment reported |
| 453,576 |
| 3,344,723 |
| 15,743,213 |
| 8,854,802 |
| — |
| 28,396,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| 19,273,091 |
| 8,613,671 |
| 16,080,206 |
| 6,272,526 |
| — |
| 50,239,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
| 221,898,225 |
| 65,189,500 |
| 141,953,166 |
| 23,971,227 |
| — |
| 453,012,118 |
|
Non current assets |
| 623,930,137 |
| 111,472,544 |
| 698,038,573 |
| 272,867,152 |
| — |
| 1,706,308,406 |
|
Segment assets, total |
| 845,828,362 |
| 176,662,044 |
| 839,991,739 |
| 296,838,379 |
| — |
| 2,159,320,524 |
|
Carrying amount in associates and joint ventures accounted for using the equity method, total |
| 17,752,040 |
| — |
| 58,254,171 |
| — |
| — |
| 76,006,211 |
|
Capital expenditures and other |
| 26,161,556 |
| 11,760,974 |
| 12,622,197 |
| 7,472,141 |
| — |
| 58,016,868 |
|
|
| 112,226,584 |
| 85,760,968 |
| 99,443,458 |
| 16,166,258 |
| — |
| 313,597,268 |
|
Current liabilities |
| 696,936,227 |
| 10,655,812 |
| 201,116,251 |
| 17,915,560 |
| — |
| 926,623,850 |
|
Non-current liabilities |
| 809,162,811 |
| 96,416,780 |
| 300,559,709 |
| 34,081,818 |
| — |
| 1,240,221,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used) in Operating Activities |
| 35,731,562 |
| (5,905,617 | ) | 29,504,696 |
| 13,498,314 |
| — |
| 72,828,955 |
|
Cash flows (used in) Investing Activities |
| (75,785,597 | ) | (11,741,249 | ) | (12,622,197 | ) | (7,472,141 | ) | — |
| (107,621,184 | ) |
Cash flows provided by (used in) Financing Activities |
| 19,274,385 |
| 11,607,854 |
| (14,080,832 | ) | (819,352 | ) | — |
| 15,982,055 |
|
NOTE 5 — CASH AND CASH EQUIVALENTS
Cash and cash equivalents are detailed as follows as of June 30, 2015 and December 31, 2014:
Description |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Cash |
| 563,897 |
| 595,442 |
|
Bank balances |
| 16,179,468 |
| 13,931,375 |
|
Time deposits |
| 6,488,038 |
| 13,159,563 |
|
Mutual funds |
| 40,648,479 |
| 51,828,054 |
|
Total cash and cash equivalents |
| 63,879,882 |
| 79,514,434 |
|
By currency |
| ThCh$ |
| ThCh$ |
|
Dollar |
| 5,819,309 |
| 5,747,745 |
|
Euro |
| 11,145 |
| 15 |
|
Argentine Peso |
| 473,854 |
| 1,317,489 |
|
Chilean Peso |
| 14,399,570 |
| 17,708,037 |
|
Paraguayan Guaraní |
| 7,594,389 |
| 9,385,359 |
|
Brazilian Real |
| 35,581,615 |
| 45,355,789 |
|
Total cash and cash equivalents |
| 63,879,882 |
| 79,514,434 |
|
5.1 Time deposits
Time deposits defined as cash and cash equivalents are detailed as follows at June 30, 2015 and December 31, 2014:
Placement |
| Institution |
| Currency |
| Principal |
| Annual |
| 06.30.2015 |
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
06-19-2015 |
| Banco Santander |
| Chilean pesos |
| 900,000 |
| 2,90 | % | 900,504 |
|
06-26-2015 |
| Banco Santander |
| Chilean pesos |
| 1,500,000 |
| 2,88 | % | 1,500,480 |
|
06-30-2015 |
| Banco Regional S.A.E.C,A. |
| Paraguayan Guaranies |
| 4,087,054 |
| 4,00 | % | 4,087,054 |
|
Total |
|
|
|
|
|
|
|
|
| 6,488,038 |
|
Placement |
| Institution |
| Currency |
| Principal |
| Annual |
| 12.31.2014 |
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
11-28-2014 |
| Banco de Chile |
| Chilean pesos |
| 3,800,000 |
| 3.60 |
| 3,810,980 |
|
11-28-2014 |
| Banco Santander |
| Chilean pesos |
| 2,500,000 |
| 3.72 |
| 2,508,525 |
|
12-31-2014 |
| Banco Regional S.A.E.C.A. |
| Paraguayan Guaranies |
| 4,218,542 |
| 4.00 |
| 4,218,542 |
|
12-19-2014 |
| Banco Citibank NA |
| Paraguayan Guaranies |
| 1,310,758 |
| 4.75 |
| 1,310,758 |
|
12-19-2014 |
| Banco Itaú Paraguay S.A. |
| Paraguayan Guaranies |
| 1,310,758 |
| 4.50 |
| 1,310,758 |
|
|
|
|
| Total |
|
|
|
|
| 13,159,563 |
|
5.2 Money Market
Money market mutual fund´s shares are valued using the share values at the close of each reporting period. Below is a description for the end of each period:
Institution |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Mutual fund Soberano Banco Itaú — Brazil |
| 11,261,778 |
| 41,354,014 |
|
Mutual fund Bradesco — Brazil |
| 9,760,181 |
| — |
|
Mutual fund Santander — Brazil |
| 9,754,848 |
| — |
|
Mutual fund Corporativo Banchile — Chile |
| 5,352,094 |
| 7,006,132 |
|
Western Assets Institutional Cash Reserves — USA |
| 4,354,829 |
| 3,313,647 |
|
Mutual fund Wells Fargo — USA |
| 162,468 |
| 154,261 |
|
Mutual fund Banco Galicia — Argentina |
| 2,281 |
| — |
|
Total mutual funds |
| 40,648,479 |
| 51,828,054 |
|
NOTE 6 — OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS
Below are the financial instruments held by the Company at June 30, 2015 and December 31, 2014, other than cash and cash equivalents. They consist of time deposits with short-term maturities (more than 90 days), restricted mutual funds and derivative contracts. Financial instruments are detailed as follows:
a) Current year 2015
Time deposits
Placement |
| Maturity |
| Institution |
| Currency |
| Principal |
| Annual |
| 06.30.2015 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
08-29-2014 |
| 08-31-2015 |
| Banco Itaú - Chile |
| Unidad de Fomento |
| 6,000,000 |
| 0.60 | % | 6,251,361 |
|
08-29-2014 |
| 08-31-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 6,000,000 |
| 0.70 | % | 6,256,631 |
|
09-26-2014 |
| 09-30-2015 |
| Banco HSBC - Chile |
| Unidad de Fomento |
| 8,950,000 |
| 0.54 | % | 9,293,944 |
|
10-07-2014 |
| 09-24-2015 |
| Banco de Chile - Chile |
| Unidad de Fomento |
| 4,650,000 |
| 0.35 | % | 4,815,860 |
|
11-06-2014 |
| 08-13-2015 |
| Banco de Chile - Chile |
| Unidad de Fomento |
| 4,000,000 |
| 1.60 | % | 4,144,560 |
|
11-06-2014 |
| 11-12-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 4,000,000 |
| 1.58 | % | 4,144,022 |
|
11-06-2014 |
| 08-13-2015 |
| Banco Itaú - Chile |
| Unidad de Fomento |
| 4,000,000 |
| 1.47 | % | 4,141,065 |
|
12-10-2014 |
| 08-13-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 6,580,000 |
| 3.28 | % | 6,797,932 |
|
12-12-2014 |
| 08-13-2015 |
| Banco Itaú - Chile |
| Unidad de Fomento |
| 400,000 |
| 3.50 | % | 413,670 |
|
12-19-2014 |
| 08-26-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 4,100,000 |
| 3.86 | % | 4,245,316 |
|
12-19-2014 |
| 08-26-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 3,500,000 |
| 3.59 | % | 3,618,911 |
|
12-26-2014 |
| 10-27-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 2,000,000 |
| 2.75 | % | 2,057,727 |
|
12-29-2014 |
| 10-27-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 4,750,000 |
| 2.81 | % | 4,887,467 |
|
12-30-2014 |
| 10-27-2015 |
| Banco de Chile - Chile |
| Unidad de Fomento |
| 3,500,000 |
| 2.55 | % | 3,596,348 |
|
01-02-2015 |
| 10-27-2015 |
| Banco de Chile - Chile |
| Unidad de Fomento |
| 4,000,000 |
| 2.74 | % | 4,113,083 |
|
02-20-2015 |
| 08-26-2015 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 3,500,000 |
| 0.60 | % | 3,571,156 |
|
05-15-2015 |
| 02-11-2016 |
| Banco BTG Pactual- Chile |
| Unidad de Fomento |
| 4,000,000 |
| 1.15 | % | 4,030,885 |
|
05-15-2015 |
| 02-11-2016 |
| Banco Itaú - Chile |
| Unidad de Fomento |
| 3,500,000 |
| 0.94 | % | 3,526,081 |
|
05-15-2015 |
| 02-11-2016 |
| Banco de Chile - Chile |
| Unidad de Fomento |
| 3,500,000 |
| 0.85 | % | 3,525,674 |
|
06-03-2015 |
| 01-15-2016 |
| Banco Itaú - Chile |
| Unidad de Fomento |
| 5,000,000 |
| 0.91 | % | 5,016,221 |
|
06-03-2015 |
| 01-15-2016 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 5,000,000 |
| 0.91 | % | 5,016,220 |
|
06-03-2015 |
| 05-27-2016 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 5,000,000 |
| 1.00 | % | 5,016,559 |
|
06-03-2015 |
| 05-09-2016 |
| Banco de Chile - Chile |
| Unidad de Fomento |
| 7,500,000 |
| 1.00 | % | 7,524,839 |
|
06-03-2015 |
| 05-09-2016 |
| Banco de Chile - Chile |
| Unidad de Fomento |
| 7,500,000 |
| 1.00 | % | 7,524,838 |
|
04-21-2015 |
| 07-01-2015 |
| Banco Galicia - Argentina |
| Argentinean pesos (1) |
| 163,838 |
| 22.95 | % | 170,933 |
|
05-04-2015 |
| 07-03-2015 |
| Banco Santander - Argentina |
| Argentinean pesos (1) |
| 168,761 |
| 21.70 | % | 174,405 |
|
05-18-2015 |
| 07-06-2015 |
| Banco Industrial - Argentina |
| Argentinean pesos (1) |
| 281,268 |
| 22.50 | % | 288,668 |
|
05-26-2015 |
| 07-13-2015 |
| Banco Santander - Argentina |
| Argentinean pesos (1) |
| 232,046 |
| 21.10 | % | 236,730 |
|
06-01-2015 |
| 07-20-2015 |
| Banco Industrial - Argentina |
| Argentinean pesos (1) |
| 189,856 |
| 22.50 | % | 193,261 |
|
06-09-2015 |
| 08-10-2015 |
| Banco Industrial - Argentina |
| Argentinean pesos (1) |
| 196,887 |
| 23.00 | % | 199,535 |
|
|
|
|
|
|
|
|
| Subtotal |
|
|
| 114,793,902 |
|
(1) Corresponds to time deposits entered into in order to guaranty derivative operations in Argentina
|
|
|
| 06.30.2015 |
|
|
|
|
| ThCh$ |
|
Mutual funds |
|
|
|
|
|
Western Assets Institutional Cash Reserves - USA |
|
|
| 1,208,294 |
|
|
|
|
|
|
|
Bonds |
|
|
|
|
|
Bonos Provincia Buenos Aires - Argentina |
|
|
| 2,471 |
|
|
|
|
|
|
|
Guarantee Funds |
|
|
|
|
|
Guarantee funds for derivative operations Rofex-Argentina (1) |
|
|
| 1,593,838 |
|
|
|
|
|
|
|
Derivative futures contracts |
|
|
|
|
|
Derivative futures contracts (see note Note 21) |
|
|
| 759,155 |
|
|
|
|
|
|
|
Total other current financial assets |
| Total |
| 118,357,660 |
|
(1) Corresponds to funds that should remain restricted according to the partial results from derivative operations in Argentina.
b) Non current 2015
Time Deposits
Placement |
| Maturity |
| Institution |
| Currency |
| Principal |
| Annual |
| 06.30.2015 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
06-03-2015 |
| 08-09-2016 |
| Banco BTG Pactual- Chile |
| Unidad de Fomento |
| 4,350,000 |
| 1.30 | % | 4,365,388 |
|
06-22-2015 |
| 08-09-2016 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 3,000,000 |
| 1.06 | % | 3,002,306 |
|
06-30-2015 |
| 08-09-2016 |
| Banco Santander - Chile |
| Unidad de Fomento |
| 2,800,000 |
| 1.02 | % | 2,800,000 |
|
03-16-2015 |
| 03-16-2017 |
| Banco Santander - Chile |
| Brazilean Real |
| 18,475 |
| 8.82 | % | 18,475 |
|
Sub Total |
|
|
|
|
|
|
|
|
|
|
| 10.186.169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative futures contracts |
|
|
|
|
|
|
|
|
|
|
| ||
Derivative futures contracts (see note Note 21) |
|
|
|
|
|
|
| 97,531,850 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other non-current financial assets |
|
|
| Total |
|
|
| 107,718,019 |
|
c) Current year 2014
Time deposits
Placement |
| Maturity |
| Institution |
| Currency |
| Principal |
| Annual |
| 12.31.2014 |
|
|
|
|
|
|
|
|
| ThCh$ |
| % |
| ThCh$ |
|
08-14-2014 |
| 02-13-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 4,500,000 |
| 1.65 | % | 4,632,134 |
|
08-14-2014 |
| 02-13-2015 |
| Banco de Chile - Chile |
| Unidad de fomento |
| 4,500,000 |
| 1.25 | % | 4,625,025 |
|
08-14-2014 |
| 02-13-2015 |
| Banco Estado - Chile |
| Unidad de fomento |
| 4,500,000 |
| 1.15 | % | 4,623,248 |
|
08-19-2014 |
| 02-13-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 5,480,000 |
| 1.45 | % | 5,633,637 |
|
08-29-2014 |
| 08-31-2015 |
| Banco Itaú - Chile |
| Unidad de fomento |
| 6,000,000 |
| 0.60 | % | 6,143,820 |
|
08-29-2014 |
| 08-31-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 6,000,000 |
| 0.70 | % | 6,145,932 |
|
09-26-2014 |
| 05-13-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 8,950,000 |
| 0.15 | % | 9,127,301 |
|
09-26-2014 |
| 09-30-2015 |
| Banco HSBC - Chile |
| Unidad de fomento |
| 8,950,000 |
| 0.54 | % | 9,136,789 |
|
10-07-2014 |
| 09-24-2015 |
| Banco de Chile - Chile |
| Unidad de fomento |
| 4,650,000 |
| 0.35 | % | 4,738,930 |
|
11-06-2014 |
| 08-13-2015 |
| Banco de Chile - Chile |
| Unidad de fomento |
| 4,000,000 |
| 1.60 | % | 4,053,000 |
|
11-06-2014 |
| 11-12-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 4,000,000 |
| 1.58 | % | 4,052,877 |
|
11-06-2014 |
| 08-13-2015 |
| Banco Itaú - Chile |
| Unidad de fomento |
| 4,000,000 |
| 1.47 | % | 4,052,197 |
|
12-10-2014 |
| 08-13-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 6,580,000 |
| 3.28 | % | 6,592,590 |
|
12-10-2014 |
| 05-13-2015 |
| Banco Itaú - Chile |
| Unidad de fomento |
| 3,290,000 |
| 3.87 | % | 3,297,427 |
|
12-12-2014 |
| 08-13-2015 |
| Banco Itaú - Chile |
| Unidad de fomento |
| 400,000 |
| 3.50 | % | 400,739 |
|
12-19-2014 |
| 08-26-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 4,100,000 |
| 3.86 | % | 4,105,275 |
|
12-19-2014 |
| 08-26-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 3,500,000 |
| 3.59 | % | 3,504,188 |
|
12-26-2014 |
| 10-27-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 2,000,000 |
| 2.75 | % | 2,000,764 |
|
12-29-2014 |
| 10-27-2015 |
| Banco Santander - Chile |
| Unidad de fomento |
| 4,750,000 |
| 2.81 | % | 4,750,742 |
|
12-30-2014 |
| 10-27-2015 |
| Banco de Chile - Chile |
| Unidad de fomento |
| 3,500,000 |
| 2.55 | % | 3,500,248 |
|
11-28-2014 |
| 03-02-2015 |
| Banco Citibank NA - Paraguay |
| Paraguayan guaraníes |
| 1,310,758 |
| 4.75 | % | 1,310,758 |
|
11-28-2014 |
| 03-02-2015 |
| Banco BBVA Paraguay S.A. |
| Paraguayan guaraníes |
| 1,310,758 |
| 4.75 | % | 1,310,758 |
|
11-03-2014 |
| 01-02-2015 |
| Banco Galicia - Argentina |
| Argentine pesos (1) |
| 366,130 |
| 20.75 | % | 366,130 |
|
11-05-2014 |
| 01-05-2015 |
| Banco HSBC - Argentina |
| Argentine pesos (1) |
| 148,668 |
| 20.00 | % | 148,668 |
|
11-07-2014 |
| 01-06-2015 |
| Banco Galicia - Argentina |
| Argentine pesos (1) |
| 365,348 |
| 20.75 | % | 365,348 |
|
11-17-2014 |
| 01-16-2015 |
| Banco Industrial - Argentina |
| Argentine pesos (1) |
| 291,128 |
| 22.00 | % | 291,128 |
|
12-17-2014 |
| 02-18-2015 |
| Banco Industrial - Argentina |
| Argentine pesos (1) |
| 152,652 |
| 21.00 | % | 152,652 |
|
11-21-2014 |
| 01-20-2015 |
| Banco Galicia - Argentina |
| Argentine pesos (1) |
| 304,783 |
| 20.75 | % | 304,783 |
|
12-09-2014 |
| 02-09-2015 |
| Banco Santander Río - Argentina |
| Argentine pesos (1) |
| 349,255 |
| 20.90 | % | 349,255 |
|
12-16-2014 |
| 02-18-2015 |
| Banco Industrial - Argentina |
| Argentine pesos (1) |
| 370,189 |
| 21.00 | % | 370,189 |
|
12-19-2014 |
| 02-18-2015 |
| Banco Santander Río - Argentina |
| Argentine pesos (1) |
| 383,087 |
| 20.90 | % | 383,087 |
|
12-22-2014 |
| 02-18-2015 |
| Banco ICB - Argentina |
| Argentine pesos (1) |
| 160,501 |
| 20.00 | % | 160,501 |
|
12-29-2014 |
| 02-27-2015 |
| Banco Santander Río - Argentina |
| Argentine pesos (1) |
| 211,092 |
| 20.90 | % | 211,092 |
|
Subtotal |
|
|
|
|
|
|
|
|
|
|
| 100,841,212 |
|
(1) Corresponds to time deposits entered into in order to guaranty derivative operations in Argentina
|
| 12.31.2014 |
|
|
| ThCh$ |
|
Mutual funds |
|
|
|
Banco Crédito e Inversiones - Chile |
| 23,514 |
|
Western Assets Institutional Cash Reserves - USA |
| 1,107,579 |
|
|
| 1,131,093 |
|
Bonds |
|
|
|
Bonds Provincia Buenos Aires - Argentina |
| 3,584 |
|
|
|
|
|
Guarantee Funds |
|
|
|
Guarantee funds for derivative operations Rofex-Argentina (1) |
| 1,729,820 |
|
|
|
|
|
Derivative futures contracts |
|
|
|
Derivative futures contracts (see note Note 21) |
| 2,871,333 |
|
|
|
|
|
Total other current financial assets |
| 106,577,042 |
|
(1) Corresponds to funds that should remain restricted according to the partial results from derivative operations in Argentina.
d) Non current 2014
|
| 12.31.2014 |
|
|
| ThCh$ |
|
Time Deposits |
|
|
|
Banco Votorantim |
| 19,533 |
|
|
| 19,533 |
|
|
|
|
|
Derivative futures contracts |
|
|
|
Derivative futures contracts (see note Note 21) |
| 51,007,240 |
|
Total other non-current financial assets |
| 51,026,773 |
|
NOTE 7 — CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS
Note 7.1 Other current non-financial assets
|
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Description |
|
|
|
|
|
Prepaid expenses |
| 7,238,877 |
| 6,178,285 |
|
Fiscal credits |
| — |
| 1,466,228 |
|
Prepaid insurance |
| 1,183,427 |
| 53,402 |
|
Prepaid insurance (Argentine) |
| 9,835 |
| 9,924 |
|
Other current assets |
| 180,127 |
| 79,342 |
|
Total |
| 8,612,266 |
| 7,787,181 |
|
Note 7.2 Other non-current, non-financial assets
|
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Description |
|
|
|
|
|
Judicial deposits (See note 22.2) |
| 16,556,791 |
| 22,717,093 |
|
Prepaid expenses |
| 4,374,893 |
| 5,624,838 |
|
Fiscal credits |
| 3,466,333 |
| 4,409,561 |
|
Others |
| 453,863 |
| 305,288 |
|
Total |
| 24,851,880 |
| 33,056,780 |
|
NOTE 8 — TRADE AND OTHER RECEIVABLES
The composition of trade and other receivables is detailed as follows:
|
| 06.30.2015 |
| 12.31.2014 |
| ||||||||
Trade and other receivables |
| Assets |
| Allowance for |
| Commercial |
| Assets |
| Allowance |
| Commercial |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Current commercial debtors |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 101,363,828 |
| (6,123,385 | ) | 95,240,443 |
| 164,026,718 |
| (7,028,207 | ) | 156,998,511 |
|
Other current debtors |
| 32,855,572 |
| — |
| 32,855,572 |
| 30,963,659 |
| — |
| 30,963,659 |
|
Current commercial debtors |
| 134,219,400 |
| (6,123,385 | ) | 128,096,015 |
| 194,990,377 |
| (7,028,207 | ) | 187,962,170 |
|
Prepayments suppliers |
| 3,343,237 |
| — |
| 3,343,237 |
| 6,017,624 |
| — |
| 6,017,624 |
|
Other current accounts receivable |
| 2,548,929 |
| (57,845 | ) | 2,491,084 |
| 4,189,001 |
| (58,371 | ) | 4,130,630 |
|
Commercial debtors and other current accounts receivable |
| 140,111,566 |
| (6,181,230 | ) | 133,930,336 |
| 205,197,002 |
| (7,086,578 | ) | 198,110,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current accounts receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade debtors |
| 83,445 |
| — |
| 83,445 |
| 100,105 |
| — |
| 100,105 |
|
Other non-current debtors |
| 7,838,596 |
| — |
| 7,838,596 |
| 6,997,704 |
| — |
| 6,997,704 |
|
Non-current accounts receivable |
| 7,922,041 |
| — |
| 7,922,041 |
| 7,097,809 |
| — |
| 7,097,809 |
|
Trade and other receivable |
| 148,033,607 |
| (6,181,230 | ) | 141,852,377 |
| 212,294,811 |
| (7,086,578 | ) | 205,208,233 |
|
Aging of debtor portfolio |
| Number of |
| 06.30.2015 |
|
|
| Number of |
| 12.31.2014 |
|
|
|
|
| ThCh$ |
|
|
|
|
| ThCh$ |
|
Up to date non-securitized portfolio |
| 48,109 |
| 32,371,074 |
|
|
| 25,834 |
| 59,916,856 |
|
1 and 30 days |
| 67,927 |
| 55,122,124 |
|
|
| 63,235 |
| 92,184,412 |
|
31 and 60 days |
| 654 |
| 3,292,640 |
|
|
| 583 |
| 1,309,832 |
|
61 and 90 days |
| 324 |
| 1,088,193 |
|
|
| 396 |
| 420,965 |
|
91 and 120 days |
| 280 |
| 1,313,204 |
|
|
| 334 |
| 481,396 |
|
121 and 150 days |
| 231 |
| 845,934 |
|
|
| 210 |
| 353,768 |
|
151 and 180 days |
| 260 |
| 209,211 |
|
|
| 197 |
| 207,522 |
|
181 and 210 days |
| 393 |
| 849,672 |
|
|
| 306 |
| 568,956 |
|
211 and 250 days |
| 287 |
| 930,526 |
|
|
| 199 |
| 548,469 |
|
More than 250 days |
| 2,038 |
| 5,424,695 |
|
|
| 1,248 |
| 8,134,647 |
|
Total |
| 120,503 |
| 101,447,273 |
|
|
| 92,542 |
| 164,126,823 |
|
|
| 06.30.2015 |
|
|
|
|
| 12.31.2014 |
|
|
| ThCh$ |
|
|
|
|
| ThCh$ |
|
Current comercial debtors |
| 101,363,828 |
|
|
|
|
| 164,026,718 |
|
Non-current comercial debtors |
| 83,445 |
|
|
|
|
| 100,105 |
|
Total |
| 101,447,273 |
|
|
|
|
| 164,126,823 |
|
The movement in the allowance for doubtful accounts between January 1 and June 30, 2015 and January 1 and December 31, 2014, are presented below:
|
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 7,086,578 |
| 2,678,879 |
|
Bad debt expense |
| 2,634,395 |
| 4,459,276 |
|
Provision reversal for charges against clients |
| (3,382,009 | ) | (35,827 | ) |
Change due to foreign exchange differences |
| (157,734 | ) | (15,750 | ) |
Movement |
| (905,348 | ) | 4,407,699 |
|
Ending balance |
| 6,181,230 |
| 7,086,578 |
|
NOTE 9 — INVENTORIES
The composition of inventories is detailed as follows:
Details |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Raw materials |
| 83,794,940 |
| 74,691,675 |
|
Finished goods |
| 31,212,791 |
| 47,894,403 |
|
Spare parts and supplies |
| 27,277,472 |
| 26,213,284 |
|
Work in progress |
| 210,239 |
| 289,740 |
|
Other inventories |
| 3,079,427 |
| 3,039,477 |
|
Obsolescence provision (1) |
| (3,028,511 | ) | (2,400,961 | ) |
Total |
| 142,546,358 |
| 149,727,618 |
|
The cost of inventory recognized as cost of sales is ThCh$ 539,563,387 and ThCh$ 507,440,465 at June 30, 2015 and 2014, respectively.
(1) The provision for obsolescence is primarily related more to the obsolescence of parts classified as inventories than finished goods and raw materials.
NOTE 10 — CURRENT AND DEFERRED INCOME TAXES
For the period ended June 30, 2015, the Company had taxable profits of ThCh$ 64,344,562, comprised of profits with credits for first category income tax amounting to ThCh$53,682,038 and profits without credits amounting to ThCh$ 10,662,524.
10.1 Tax Reform
On September 29, 2014, the Official Daily Newspaper published Law N°20,780 which amends the Chilean tax regime, with the main following changes:
· It establishes a new system of semi-integrated taxation, which can be used as an alternative to the integrated regime of attributed income. Taxpayers may opt freely to any of the two to pay their taxes. In the case of Embotelladora Andina S.A. by a general rule established by law the semi-integrated taxation system applies, which should be subsequently ratified by a future General Shareholders Meeting.
· The semi-integrated system establishes the gradual increase in the first category tax rate for the business years 2014, 2015, 2016, 2017 and 2018 onwards, increasing to 21%, 22.5%, 24%, 25.5% and 27% respectively.
· Regarding the amendments to deferred taxes resulting from rate changes to be applied during the reversal period of differences between the bases of valuation of assets and liabilities by deferred taxes, were recognized on December 31, 2014, according to Circular Letter N° 856 of the SVS with a charge to accumulated earnings, amounting to a total of ThCh$23,615,151.
10.2 Current tax assets
Current tax payables correspond to the following items:
Description |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Monthly provisional payments |
| 6,900,421 |
| 5,727,642 |
|
Tax credits (1) |
| 60,927 |
| 297,407 |
|
Total |
| 6,961,348 |
| 6,025,049 |
|
(1) Tax credits correspond to income tax credits on training expenses, purchase of property, plant and equipment, and donations.
10.2 Current tax liabilities
Current tax payables correspond to the following items:
Description |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Income tax expense |
| 1,887,174 |
| 2,931,206 |
|
Total |
| 1,887,174 |
| 2,931,206 |
|
10.3 Income tax expense
The current and deferred income tax expenses for the years ended June 30, 2015 and 2014 are detailed as follows:
Item |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Current income tax expense |
| 17,108,433 |
| 4,124,808 |
|
Adjustment to current income tax from the previous fiscal year |
| (129,752 | ) | 1,457,089 |
|
Withholding tax expense foreign subsidiaries |
| 4,367,141 |
| 1,924,166 |
|
Other deferred tax expense (income) |
| 1,098,212 |
| 498,759 |
|
Current income tax expense |
| 22,444,034 |
| 8,004,822 |
|
Income (expense) for the creation and reversal of current tax difference |
| (1,396,039 | ) | (906,202 | ) |
Expense (income) for deferred taxes |
| (1,396,039 | ) | (906,202 | ) |
Total income tax expense |
| 21,047,995 |
| 7,098,620 |
|
10.4 Deferred income taxes
The net cumulative balances of temporary differences which give rise to deferred tax assets and liabilities are shown below:
|
| 06.30.2015 |
| 12.31.2014 |
| ||||
Temporary differences |
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
| 1,807,023 |
| 48,406,638 |
| 1,825,735 |
| 50,035,641 |
|
Obsolescence provision |
| 1,806,609 |
| — |
| 1,789,886 |
| — |
|
Employee benefits |
| 1,726,713 |
| — |
| 3,092,399 |
| — |
|
Post-employment benefits |
| — |
| 1,027,292 |
| 82,299 |
| 798,459 |
|
Tax loss carried-forwards (1) |
| 10,015,602 |
| — |
| 12,301,624 |
| — |
|
Tax Goodwill Brazil |
| 42,666,844 |
| — |
| 51,257,770 |
| — |
|
Contingency provision |
| 31,463,241 |
| — |
| 29,553,200 |
| — |
|
Foreign exchange differences (Foreign Subsidiaries) (2) |
| — |
| 1,715,149 |
| — |
| 2,612,804 |
|
Allowance for doubtful accounts |
| 777,470 |
| — |
| 977,330 |
| — |
|
Contributions of The Coca-Cola Company (Argentine) |
| 1,899,047 |
| — |
| 1,892,625 |
| — |
|
Assets and liabilities for placement of bonds |
| — |
| 802,289 |
| — |
| 809,091 |
|
Lease liabilities |
| 2,191,370 |
| — |
| 4,441,730 |
| — |
|
Inventories |
| — |
| 95,111 |
| — |
| 78,337 |
|
Distribution rights |
| — |
| 170,032,241 |
| — |
| 178,308,862 |
|
Others |
| 1,088,517 |
| 344,387 |
| 939,033 |
| 1,636,584 |
|
Subtotal |
| 95,442,436 |
| 222,423,107 |
| 108,153,631 |
| 234,279,778 |
|
Net Liabilities |
| — |
| 126,980,671 |
| — |
| 126,126,147 |
|
(1) Tax losses associated mainly with our subsidiary in Chile - Embotelladora Andina Chile S.A., the amount totals to ThCh$9,601,307 and other minor subsidiaries in Chile ThCh$414,295. Tax losses in Chile do not have an expiration date
(2) Corresponds to deferred tax exchange differences generated upon translation of debts in foreign currency in the Brazilian subsidiary, Rio de Janeiro Refrescos Ltda. that in terms of tax, are recognized in Brazil upon liquidation.
10.5 Deferred tax liability movement
The movement in deferred income tax accounts is as follows:
Item |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Opening Balance |
| 126,126,147 |
| 105,537,484 |
|
Increase due to merger |
|
|
|
|
|
Increase (decrease) in deferred tax |
| 3,583,664 |
| (4,931,757 | ) |
Increase resulting from Tax Reform rates |
| — |
| 23,334,999 |
|
Decrease due to foreign currency translation |
| (2,729,140 | ) | 2,185,421 |
|
Movements |
| 854,524 |
| 20,588,663 |
|
Ending balance |
| 126,980,671 |
| 126,126,147 |
|
10.6 Distribution of domestic and foreign tax expense
For the periods ended June 30, 2015 and 2014, domestic and foreign tax expense are detailed as follows:
Income tax |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Current income taxes |
|
|
|
|
|
Foreign |
| (17,892,246 | ) | (3,816,133 | ) |
Domestic |
| (4,551,788 | ) | (4,188,689 | ) |
Current income tax expense |
| (22,444,034 | ) | (8,004,822 | ) |
|
|
|
|
|
|
Deferred income taxes |
|
|
|
|
|
Foreign |
| 3,246,133 |
| (1,838,418 | ) |
Domestic |
| (1,850,094 | ) | 2,744,620 |
|
Deferred income tax expense |
| 1,396,039 |
| 906,202 |
|
Income tax expense |
| (21,047,995 | ) | (7,098,620 | ) |
10.7 Reconciliation of effective rate
Below is the reconciliation between the effective tax rate and the statutory rate:
Reconciliation of effective rate |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Net income before taxes |
| 65,893,123 |
| 35,494,934 |
|
Tax expense at legal rate ( 22,5%) |
| (14,825,953 | ) | — |
|
Tax expense at legal rate ( 20,0%) |
| — |
| (7,098,987 | ) |
Effect of a different tax rate in other jurisdictions |
| (4,188,467 | ) | (2,338,729 | ) |
|
|
|
|
|
|
Permanent differences: |
|
|
|
|
|
Non-taxable revenues |
| 5,204,088 |
| 7,106,602 |
|
Non-deductible expenses |
| (1,902,062 | ) | (887,492 | ) |
Tax effect of tax provided in excess of prior period |
| 129,752 |
| (1,457,089 | ) |
Foreign subsidiaries tax withholding expense and other legal tax debits and credits |
| (5,465,353 | ) | (2,422,925 | ) |
Adjustments to tax expense |
| (2,033,575 | ) | 2,339,096 |
|
|
|
|
|
|
|
Tax expense at effective rate |
| (21,047,995 | ) | (7,098,620 | ) |
Effective rate |
| 31.9 | % | 20.0 | % |
Below are the income tax rates applicable in each jurisdiction where the Company operates:
|
| Rate |
| ||
Country |
| 2015 |
| 2014 |
|
Chile |
| 22.5 | % | 20 | % |
Brazil |
| 34 | % | 34 | % |
Argentina |
| 35 | % | 35 | % |
Paraguay |
| 10 | % | 10 | % |
NOTE 11 — PROPERTY, PLANT AND EQUIPMENT
11.1 Balances
Property, plant and equipment are detailed below at the end of each period:
|
| Property, plant and equipment, |
| Cumulative depreciation and |
| Property, plant and equipment, |
| ||||||
Item |
| 06.30.2015 |
| 12.31.2014 |
| 06.30.2015 |
| 12.31.2014 |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Construction in progress |
| 29,914,278 |
| 25,522,059 |
| — |
| — |
| 29,914,278 |
| 25,522,059 |
|
Land |
| 73,364,641 |
| 76,957,848 |
| — |
| — |
| 73,364,641 |
| 76,957,848 |
|
Buildings |
| 217,462,410 |
| 223,273,615 |
| (51,474,355 | ) | (51,215,168 | ) | 165,988,055 |
| 172,058,447 |
|
Plant and equipment |
| 469,518,849 |
| 489,218,564 |
| (239,651,272 | ) | (235,979,731 | ) | 229,867,577 |
| 253,238,833 |
|
Information technology |
| 17,563,671 |
| 17,527,911 |
| (13,124,839 | ) | (12,706,055 | ) | 4,438,832 |
| 4,821,856 |
|
Fixed facilities and accessories |
| 34.731.773 |
| 34,015,967 |
| (10,274,919 | ) | (8,960,420 | ) | 24,456,854 |
| 25,055,547 |
|
Vehicles |
| 28,399,561 |
| 36,966,300 |
| (15,244,529 | ) | (20,796,517 | ) | 13,155,032 |
| 16,169,783 |
|
Leasehold improvements |
| 729,964 |
| 786,269 |
| (366,043 | ) | (340,149 | ) | 363,921 |
| 446,120 |
|
Other property, plant and equipment (1) |
| 396.133.265 |
| 404,317,216 |
| (272,279,009 | ) | (265,512,424 | ) | 123,854,256 |
| 138,804,792 |
|
Total |
| 1,267,818,412 |
| 1,308,585,749 |
| (602,414,966 | ) | (595,510,464 | ) | 665,403,446 |
| 713,075,285 |
|
(1) Other property, plant and equipment is composed of bottles, market assets, furniture and other minor assets.
The net balance of each of these categories at June 30, 2015 and December 31,2014 is detailed as follows:
Other property, plant and equipment |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Bottles |
| 69,669,241 |
| 62,769,011 |
|
Marketing and promotional assets |
| 45,201,318 |
| 66,444,241 |
|
Other property, plant and equipment |
| 8,983,697 |
| 9,591,540 |
|
Total |
| 123,854,256 |
| 138,804,792 |
|
The Company has insurance to protect its property, plant and equipment and its inventory from potential losses. The geographic distribution of those assets is detailed as follows:
Chile : Santiago, Puente Alto, Maipú, Renca, Rancagua y San Antonio, Antofagasta, Coquimbo and Punta Arenas.
Argentina : Buenos Aires, Mendoza, Córdoba y Rosario, Bahía Blanca, Chacabuco, La Pampa, Neuqén, Comodoro Rivadavia, Trelew, andTierra del Fuego
Brazil : Río de Janeiro, Niteroi, Campos, Cabo Frío, Nova Iguazú, Espirito Santo, Vitoria parts Sao Paulo and Minas Gerais.
Paraguay : Asunción, Coronel Oviedo, Ciudad del Este and Encarnación.
11.2 Movements
Movements in property, plant and equipment are detailed as follows between January 1 and June 30, 2015 and January 1 and December 31, 2014:
|
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, |
| Fixed facilities |
| Vehicles, net |
| Leasehold |
| Other |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance at January 1, 2015 |
| 25,522,059 |
| 76,957,848 |
| 172,058,447 |
| 253,238,833 |
| 4,821,856 |
| 25,055,547 |
| 16,169,783 |
| 446,120 |
| 138,804,792 |
| 713,075,285 |
|
Additions |
| 19,800,655 |
| — |
| 76,355 |
| 4,346,942 |
| 99,687 |
| 25,523 |
| 73,776 |
| — |
| 10,870,521 |
| 35,293,459 |
|
Disposals |
| (6,416 | ) | — |
| (16,277 | ) | (1,361,132 | ) | — |
| — |
| — |
| — |
| (699,885 | ) | (2,083,710 | ) |
Transfers between items of property, plant and equipment |
| (13,795,367 | ) | — |
| 3,224,295 |
| 2,475,584 |
| 662,132 |
| 798,781 |
| 617,258 |
| 688 |
| 6,016,629 |
| — |
|
Depreciation expense |
| — |
| — |
| (2,565,049 | ) | (17,854,522 | ) | (997,357 | ) | (1,352,475 | ) | (2,172,620 | ) | (39,619 | ) | (24,228,892 | ) | (49,210,534 | ) |
Impairment losses recognized in the income statement |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Increase (decrease) due to foreign currency translation differences |
| (1,043,094 | ) | (3,593,206 | ) | (6,733,178 | ) | (11,025,215 | ) | (174,708 | ) | (62,313 | ) | (1,360,716 | ) | (43,214 | ) | (6,562,937 | ) | (30,598,581 | ) |
Other increase (decrease) |
| (563,559 | ) | (1 | ) | (56,538 | ) | 47,087 |
| 27,222 |
| (8,209 | ) | (172,449 | ) | (54 | ) | (345,972 | ) | (1,072,473 | ) |
Total movements |
| 4,392,219 |
| (3,593,207 | ) | (6,070,392 | ) | (23,371,256 | ) | (383,024 | ) | (598,693 | ) | (3,014,751 | ) | (82,199 | ) | (14,950,536 | ) | (47,671,839 | ) |
Ending balance at June 30, 2015 |
| 29,914,278 |
| 73,364,641 |
| 165,988,055 |
| 229,867,577 |
| 4,438,832 |
| 24,456,854 |
| 13,155,032 |
| 363,921 |
| 123,854,256 |
| 665,403,446 |
|
|
| Construction in |
| Land |
| Buildings, net |
| Plant and |
| IT Equipment, |
| Fixed facilities |
| Vehicles, net |
| Leasehold |
| Other |
| Property, plant |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance at January 1, 2014 |
| 36,544,802 |
| 76,063,090 |
| 151,816,612 |
| 240,721,094 |
| 5,584,185 |
| 33,207,964 |
| 15,121,864 |
| 567,041 |
| 133,323,156 |
| 692,949,808 |
|
Additions |
| 61,749,644 |
| — |
| 2,689,039 |
| 46,090,966 |
| 403,941 |
| 196,726 |
| 921,557 |
| — |
| 13,661,737 |
| 125,713,610 |
|
Disposals |
| (16,668 | ) | (109,252 | ) | (22,864 | ) | (3,017,160 | ) | (1,296 | ) | (1,940 | ) | (51,126 | ) | — |
| (1,299,940 | ) | (4,520,246 | ) |
Transfers between items of property, plant and equipment |
| (71,807,784 | ) | — |
| 22,189,920 |
| 13,217,587 |
| 920,853 |
| (5,762,142 | ) | 4,710,288 |
| — |
| 36,531,278 |
| — |
|
Depreciation expense |
| — |
| — |
| (5,510,350 | ) | (37,943,247 | ) | (2,020,178 | ) | (1,818,210 | ) | (4,661,508 | ) | (132,184 | ) | (47,832,641 | ) | (99,918,318 | ) |
Increase (decrease) due to foreign currency translation differences |
| (912,128 | ) | 1,004,086 |
| 568,887 |
| (1,733,312 | ) | 54,839 |
| (766,851 | ) | 206,760 |
| 11,208 |
| 9,964,653 |
| 8,398,142 |
|
Other increase (decrease) |
| (35,807 | ) | (76 | ) | 327,203 |
| (4,097,095 | ) | (120,488 | ) | — |
| (78,052 | ) | 55 |
| (5,543,451 | ) | (9,547,711 | ) |
Total movements |
| (11,022,743 | ) | 894,758 |
| 20,241,835 |
| 12,517,739 |
| (762,329 | ) | (8,152,417 | ) | 1,047,919 |
| (120,921 | ) | 5,481,636 |
| 20,125,477 |
|
Ending balance at December 31, 2014 |
| 25,522,059 |
| 76,957,848 |
| 172,058,447 |
| 253,238,833 |
| 4,821,856 |
| 25,055,547 |
| 16,169,783 |
| 446,120 |
| 138,804,792 |
| 713,075,285 |
|
NOTE 12 — RELATED PARTY DISCLOSURES
Balances and transactions with related parties as of June 30, 2015 and December 31, 2014 are detailed as follows:
12.1 Accounts receivable:
12.1.1 Corrientes:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Chilean pesos |
| 3,221,609 |
| 5,629,383 |
|
96.517.210-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Chilean pesos |
| 407,837 |
| 359,933 |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Related to director |
| Chile |
| Dollars |
| 6,079 |
| 4,847 |
|
77.755.610-k |
| Comercial Patagona Ltda. |
| Related to director |
| Chile |
| Chilean pesos |
| 418 |
| 290 |
|
|
|
|
| Total |
|
|
|
|
| 3,635,943 |
| 5,994,453 |
|
12.1.2 Non current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 2,500 |
| 24,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 2,500 |
| 24,752 |
|
12.2 Accounts payable:
12.2.1 Current:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Chilean pesos |
| 14,553,151 |
| 14,076,916 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Pesos argentinos |
| 8,126,368 |
| 5,831,334 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Brazilian real |
| 10,448,580 |
| 13,482,012 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Chilean pesos |
| 3,459,450 |
| 6,281,874 |
|
Foreign |
| Coca-Cola Perú |
| Related to Shareholder |
| Perú |
| Dollars |
| 4,291,302 |
| 5,354,145 |
|
Foreign |
| Leao Alimentos e Bebidas Ltda. |
| Associate |
| Brazil |
| Brazilian real |
| 1,316,132 |
| 10,356,646 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Chilean pesos |
| 290,655 |
| 583,862 |
|
|
|
|
| Total |
|
|
|
|
| 42,485,638 |
| 55,966,789 |
|
12.3 Transactions:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of concentrates |
| Chilean pesos |
| 59,750,015 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean pesos |
| 4,464,294 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean pesos |
| 1,713,342 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of services and others |
| Chilean pesos |
| 1,285,825 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean pesos |
| 17,944,604 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean pesos |
| 2,018,839 |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 18,753,117 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 1,200,108 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Purchase of concentrates |
| Brazilian real |
| 46,282,614 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Advertising participation payment |
| Brazilian real |
| 8,080,264 |
|
Foreign |
| Leao Alimentos e Bebidas Ltda. |
| Associate |
| Brazil |
| Purchased of products |
| Brazilian real |
| 9,309,215 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Purchase of concentrates |
| Argentine peso |
| 67,250,277 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising participation payment |
| Argentine peso |
| 1,343,102 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Purchase of raw materials |
| Chilean pesos |
| 1,276,237 |
|
Foreign |
| Coca-Cola Perú |
| Related to Shareholder |
| Perú |
| Purchase of concentrates and advertising participation |
| Chilean pesos |
| 835,194 |
|
Foreign |
| Sorocaba Refrescos S. A. |
| Asociate |
| Brazil |
| Purchased of products |
| Brazilian real |
| 1,257,302 |
|
Taxpayer ID |
| Company |
| Relationship |
| Country of |
| Description of transaction |
| Currency |
| Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of concentrates |
| Chilean pesos |
| 132,201,085 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Purchase of advertising services |
| Chilean pesos |
| 4,112,331 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Lease of water fountain |
| Chilean pesos |
| 3,143,674 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| Sale of services and others |
| Chilean pesos |
| 5,494,143 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| Chilean pesos |
| 35,394,840 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of packaging materials |
| Chilean pesos |
| 2,210,686 |
|
96.891.720-K |
| Embonor S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 12,526,172 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Related to Shareholder |
| Chile |
| Sale of finished products |
| Chilean pesos |
| 2,369,911 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Purchase of concentrates |
| Brazilian real |
| 101,724,406 |
|
Foreign |
| Recofarma do Industrias Amazonas Ltda. |
| Related to Shareholder |
| Brazil |
| Advertising participation payment |
| Brazilian real |
| 19,598,422 |
|
Foreign |
| Leao Alimentos e Bebidas Ltda. |
| Associate |
| Brazil |
| Purchase of concentrates |
| Brazilian real |
| 35,118,038 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Purchase of concentrates |
| Argentine pesos |
| 112,809,593 |
|
Foreign |
| Servicio y Productos para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising participation payment |
| Argentine pesos |
| 15,624,972 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Related to director |
| Chile |
| Purchase of raw materials |
| Chilean pesos |
| 1,718,878 |
|
Foreign |
| Coca-Cola Perú |
| Related to Shareholder |
| Perú |
| Purchase of concentrates and advertising participation |
| Chilean pesos |
| 986,989 |
|
Foreign |
| Sorocaba Refrescos S. A. |
| Asociate |
| Brazil |
| Purchased of products |
| Brazilian real |
| 537,948 |
|
12.4 Key management compensation
Salaries and benefits paid to the Company’s key management personnel including directors and managers, are detailed as follows:
Description |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Executive wages, salaries and benefits |
| 2,485,804 |
| 2,885,638 |
|
Director allowances |
| 756,000 |
| 756,000 |
|
Contract termination benefits |
| 129,085 |
| — |
|
Total |
| 3,370,889 |
| 3,641,638 |
|
NOTE 13 — EMPLOYEE BENEFITS
As of June 30, 2015 and December 31, 2014, the Company had recorded reserves for profit sharing and for bonuses totaling ThCh$7,690,848 and ThCh$14,563,449, respectively.
This liability is included in other non-current non-financial liabilities in the statement of financial position.
Employee benefits expense is allocated between the cost of sales, cost of marketing, distribution costs and administrative expenses.
13.1 Personnel expenses
Personnel expenses included in the consolidated statement of income statement are as follows:
Description |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Wages and salaries |
| 108,072,132 |
| 93,384,429 |
|
Employee benefits |
| 22,797,768 |
| 23,440,789 |
|
Severance and post-employment benefits |
| 2,974,390 |
| 2,681,194 |
|
Other personnel expenses |
| 5,244,159 |
| 7,019,905 |
|
Total |
| 139,088,449 |
| 126,526,317 |
|
13.2 Number of Employees
|
| 06.30.2015 |
| 06.30.2014 |
|
|
|
|
|
|
|
Number of employees |
| 14,770 |
| 15,575 |
|
|
|
|
|
|
|
Number of average employees |
| 15,202 |
| 16,073 |
|
13.3 Post-employment benefits
This item represents post employment benefits which are determined as stated in Note 2.17.
Beneficios a los empleados |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Non-current provision |
| 8,609,445 |
| 8,125,107 |
|
Total |
| 8,609,445 |
| 8,125,107 |
|
13.4 Post-employment benefits movement
The movements of post-employment benefits for the periods ended June 30, 2015 and December 31, 2014 are detailed as follows:
Movements |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening balance |
| 8,125,107 |
| 8,758,111 |
|
Service costs |
| 1,809,673 |
| 1,385,620 |
|
Interest costs |
| 85,465 |
| 199,314 |
|
Net actuarial losses |
| 490,606 |
| 342,990 |
|
Benefits paid |
| (1,901,406 | ) | (2,560,928 | ) |
Total |
| 8,609,445 |
| 8,125,107 |
|
13.5 Assumptions
The actuarial assumptions used at June 30, 2015 and December 31, 2014 were:
Assumptions |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
Discount rate |
| 2.7% |
| 2.7% |
|
Expected salary increase rate |
| 2.0% |
| 2.0% |
|
Turnover rate |
| 5.4% |
| 5.4% |
|
Mortality rate (1) |
| RV-2009 |
| RV-2009 |
|
Retirement age of women |
| 60 años |
| 60 años |
|
Retirement age of men |
| 65 años |
| 65 años |
|
(1) Mortality assumption tables prescribed for use by the Chilean Superintendence of Securities and Insurance.
NOTE 14 — INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
14.1 Balances
Investments in associates using equity method of accounting are detailed as follows:
|
|
|
| Country of |
| Functional |
| Carrying Value |
| Percentage interest |
| ||||
Taxpayer ID |
| Name |
| Incorporation |
| Currency |
| 06.30.2015 |
| 12.31.2014 |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| % |
| % |
|
86.881.400-4 |
| Envases CMF S.A. (1) |
| Chile |
| Chilean pesos |
| 17,314,691 |
| 17,684,657 |
| 50.00 | % | 50.00 | % |
Foreign |
| Leao Alimentos e Bebidas Ltda. (2) |
| Brazil |
| Brazilean real |
| 13,845,024 |
| 14,910,530 |
| 8.82 | % | 8.82 | % |
Foreign |
| Kaik Participacoes Ltda. (2) |
| Brazil |
| Brazilean real |
| 1,197,739 |
| 1,276,042 |
| 11.32 | % | 11.32 | % |
Foreign |
| SRSA Participacoes Ltda. |
| Brazil |
| Brazilean real |
| 259,475 |
| 238,647 |
| 40.00 | % | 40.00 | % |
Foreign |
| Sorocaba Refrescos S.A. |
| Brazil |
| Brazilean real |
| 27,311,248 |
| 31,940,337 |
| 40.00 | % | 40.00 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
| 59,928,177 |
| 66,050,213 |
|
|
|
|
|
(1) In these company, regardless of the percentage of ownership interest, it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions.
(2) In these companies, regardless of the percentage of ownership interest held, the Company has significant influence, given that it has a representative on each entity’s Board of Directors.
14.2 Movement
The movement of investments in associates accounted for using, the equity method is shown below, for the period ended June 30, 2015 and December 31, 2014:
Details |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Opening Balance |
| 66,050,213 |
| 68,673,399 |
|
Dividends received |
| (1,238,257 | ) | (1,590,674 | ) |
Variation of minimum dividends from equity investees |
| — |
| 149,938 |
|
Share in operating income |
| (23,110 | ) | 2,169,272 |
|
Unrealized income |
| 42,634 |
| 85,266 |
|
Other decrease investment in associate (Sale participation in Leon Alimentos y Bebidas Ltda.). |
| — |
| (4,194,955 | ) |
Deferred tax effect resulting from change in related tax rate in associate |
| — |
| (438,347 | ) |
Decrease due to foreign currency translation differences |
| (4,903,303 | ) | 1,196,314 |
|
Ending Balance |
| 59,928,177 |
| 66,050,213 |
|
The main movements for the periods ended 2015 and 2014 are detailed as follows:
· During the period ended June 30, 2015, the Company received dividends from its equity investee, Envases CMF S.A. in the amount of ThCh$ 1,020,250 (ThCh$760,037 in 2014).
· During the period ended June 30, 2015, Sorocaba Refrescos S.A. has distributed dividends of ThCh$218,007 (ThCh$830,637 in 2014).
· In October 2014, Rio Janeiro Refrescos Ltda., sold the 2.05% stake in Leão Alimentos e Bebidas Ltda. according to volume quotas for ThCh$ 4,495,771 generating earnings amounting to ThCh$ 300,816, which were recognized as a credit to results.
14.3 Reconciliation of share of profit in investments in associates:
Details |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Share of profit of investment accounted for using the equity method |
| (23,110 | ) | 1,717,985 |
|
|
|
|
|
|
|
Unrealized 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) |
| (347,108 | ) | (251,472 | ) |
Amortization of Fair Value in Vital Jugos S. A |
| 42,633 |
| 42,633 |
|
Income Statement Balance |
| (327,585 | ) | 1,509,146 |
|
14.4 Summary financial information of associates:
The attached table presents summarized information regarding the Company´s equity investees as of June 30, 2015:
|
| Envases CMF |
| Sorocaba |
| Kaik |
| SRSA |
| Leao Alimentos |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Total assets |
| 57,600,393 |
| 118,764,017 |
| 10,581,056 |
| 1,948,895 |
| 343,248,508 |
|
Total liabilities |
| 21,947,813 |
| 50,485,960 |
| — |
| 1,300,207 |
| 186,341,302 |
|
Total revenue |
| 23,490,719 |
| 7,751,805 |
| 343,413 |
| — |
| 379,218,114 |
|
Net income of associate |
| 1,215,302 |
| 2,843,322 |
| 343,413 |
| 644,569 |
| 9,068,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting date |
| 06/30/2015 |
| 05/31/2015 |
| 05/31/2015 |
| 05/31/2015 |
| 05/31/2015 |
|
NOTE 15 — INTANGIBLE ASSETS AND GOODWILL
15.1 Intangible assets other than goodwill
Intangible assets other than goodwill as of the end of each reporting period are detailed as follows:
|
| June 30, 2015 |
| December 31, 2014 |
| ||||||||
|
| Gross |
| Cumulative |
| Net |
| Gross |
| Cumulative |
| Net |
|
Detail |
| Amount |
| Amortization |
| Amount |
| Amount |
| Amortization |
| Amount |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Distribution rights (1) |
| 686,246,230 |
| — |
| 686,246,230 |
| 719,385,108 |
| — |
| 719,385,108 |
|
Software |
| 22,373,066 |
| (15,189,592 | ) | 7,183,474 |
| 22,591,363 |
| (14,242,229 | ) | 8,349,134 |
|
Others |
| 556,447 |
| (75,690 | ) | 480,757 |
| 521,234 |
| (74,197 | ) | 447,037 |
|
Total |
| 709,175,743 |
| (15,265,282 | ) | 693,910,461 |
| 742,497,705 |
| (14,316,426 | ) | 728,181,279 |
|
(1) According to note 3 Business Combinations, these assets correspond to the rights to produce and distribute Coca-Cola products in the territories where Embotelladoras Coca-Cola Polar S.A., maintained franchises in Chile, Argentina and Paraguay and in the territories in parts of Sao Paulo and Minas Gerais maintained by Companhia de Bebidas Ipiranga. Such distribution rights are composed as follows and are not subject to amortization:
|
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Chile |
| 300,305,727 |
| 300,305,727 |
|
Brazil |
| 208,028,879 |
| 230,712,143 |
|
Paraguay |
| 176,196,770 |
| 186,636,782 |
|
Argentina |
| 1,714,854 |
| 1,730,456 |
|
Total |
| 686,246,230 |
| 719,385,108 |
|
The movement and balances of identifiable intangible assets are detailed as follows for the period January 1 to June 30, 2015 and January 1 to December 31, 2014:
|
| June 30, 2015 |
| December 31, 2014 |
| ||||||||||||
|
| Distribution |
|
|
|
|
|
|
| Distribution |
|
|
|
|
|
|
|
Details |
| Rights |
| Rights |
| Software |
| Total |
| Rights |
| Rights |
| Software |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 719,385,108 |
| 447,037 |
| 8,349,134 |
| 728,181,279 |
| 691,355,453 |
| 453,737 |
| 8,797,302 |
| 700,606,492 |
|
Additions |
| — |
| — |
| 487,755 |
| 487,755 |
| — |
| — |
| 3,191,059 |
| 3,191,059 |
|
Amortization |
| — |
| (2,280 | ) | (1,336,771 | ) | (1,339,051 | ) | — |
| (4,365 | ) | (3,048,607 | ) | (3,052,972 | ) |
Other increases (decreases)(1) |
| (33.138.878 | ) | 36,000 |
| (316,644 | ) | (33,419,522 | ) | 28,029,655 |
| (2,335 | ) | (590,620 | ) | 27,436,700 |
|
Ending balance |
| 686,246,230 |
| 480,757 |
| 7,183,474 |
| 693,910,461 |
| 719,385,108 |
| 447,037 |
| 8,349,134 |
| 728,181,279 |
|
(1) Mainly corresponds to the foreign currency effect of converting foreign subsidiaries’ distribution rights.
15.2 Goodwill
Movement in goodwill is detailed as follows:
Period ended June 30, 2015
|
|
|
|
|
|
|
| Foreign currency |
|
|
|
|
|
|
|
|
|
|
| translation differences |
|
|
|
|
|
|
|
|
|
|
| where functional |
|
|
|
|
|
|
|
|
| Disposals |
| currency is different |
|
|
|
Operating segment |
| 01.01.2015 |
| Additions |
| or impairments |
| from presentation currency |
| 06.30.2015 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Operación Chilena |
| 8,503,023 |
| — |
| — |
| — |
| 8,503,023 |
|
Operación Brazilera |
| 90,122,057 |
| — |
| — |
| (8,760,292 | ) | 81,361,765 |
|
Operación Argentina |
| 10,058,725 |
| — |
| — |
| (90,685 | ) | 9,968,040 |
|
Operación Paraguaya |
| 8,240,394 |
| — |
| — |
| (460,948 | ) | 7,779,446 |
|
Total |
| 116,924,199 |
| — |
| — |
| (9,311,925 | ) | 107,612,274 |
|
Period ended December 31, 2014
|
|
|
|
|
|
|
| Foreign currency |
|
|
|
|
|
|
|
|
|
|
| translation differences |
|
|
|
|
|
|
|
|
|
|
| where functional |
|
|
|
|
|
|
|
|
| Disposals |
| currency is different |
|
|
|
Operating segment |
| 01.01.2014 |
| Additions |
| or impairments |
| from presentation currency |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Operación Chilena |
| 8,522,488 |
| — |
| (19,465 | ) | — |
| 8,503,023 |
|
Operación Brazilera |
| 88,659,503 |
| — |
| (292,365 | )(1) | 1,754,919 |
| 90,122,057 |
|
Operación Argentina |
| 11,404,496 |
| — |
| — |
| (1,345,771 | ) | 10,058,725 |
|
Operación Paraguaya |
| 7,192,580 |
| — |
| — |
| 1,047,814 |
| 8,240,394 |
|
Total |
| 115,779,067 |
| — |
| (311,830 | ) | 1,456,962 |
| 116,924,199 |
|
(1) Corresponds to goodwill generated from the adcquisition of Compañía de Bebidas Ipiranga, refer to Note 3.
15.3 Impairment Test
Management reviews the business performance based on geography. Goodwill is monitored by management at the operating segment level which includes the Chilean, Brazilian, Argentinian and Paraguayan operations. Distribution rights are monitored for impairment geographically at the CGU or group of CGUs, which correspond to specific territories for which Coca Cola distribution rights have been acquired. These CGUs or group of CGUs consists of Chilean Regions, Argentina South, Brazil (Ipiranga territories) and Paraguay.
The recoverable amount of all CGUs and operating segments has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management. Cash flows beyond the budgeted period are extrapolated using the estimated average volume growth rates, which do not exceed the long term average growth rates. Management determined annual volume growth rates, discount rates and local inflation rates for each CGU to be key assumptions. The volume of sales in each period is the main driver for revenue and costs. Annual volume growth rates are based on past performance and management’s expectations of market development. The discount rates used are US Dollar pre-tax rates and reflect specific risks relating to each country of operations. Local inflation rates are based on available country data and information provided by financial institutions.
The main assumptions used in the calculations, performed at December 31, 2014 (the impairment tests are performed annually):
Country |
| Volume Growth |
| Discount |
| Local |
|
Argentina |
| 2.9 | % | 32.8 | % | 22.7 | % |
Brazil |
| 2.9 | % | 10.7 | % | 5.2 | % |
Chile |
| 3.7 | % | 8.7 | % | 3.1 | % |
Paraguay |
| 3.8 | % | 12.4 | % | 5.0 | % |
As a result of the annual test there were no impairments identified in any of the CGUs (distribution rights) or reporting segments (goodwill).
The fair value of Company’s Chilean Regions CGU is approximately equal to net book value. The distribution rights associated with this CGU were acquired in the Polar acquisition in October 2012. The Chilean Regions CGU is sensitive to expected future growth rates in sales volumes and sales prices, as well as changes in the discount rate, including market and risk premiums. The Chilean Regions CGU’s failure to meet management’s objectives or a future increase in the discount rate could result in future impairment of some or all of the Chilean Regions distribution rights, which were ThCh$ 300,305,727 at December 31, 2014.
NOTE 16 — OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
Liabilities are detailed as follows:
Current |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 41,882,748 |
| 41,675,933 |
|
Bonds payable |
| 18,361,720 |
| 17,623,883 |
|
Deposits in guarantee |
| 15,279,019 |
| 15,982,913 |
|
Derivative contract obligations (see note 21) |
| 3,377,775 |
| 4,431,484 |
|
Leasing agreements |
| 2,852,549 |
| 3,688,227 |
|
Total |
| 81,753,811 |
| 83,402,440 |
|
|
|
|
|
|
|
Non-current |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Bank loans |
| 32,912,869 |
| 46,414,771 |
|
Bonds payable |
| 674,774,289 |
| 657,220,248 |
|
Derivative contract obligations (see note 21) |
| 19,839,525 |
| 22,981,421 |
|
Total |
| 727,526,683 |
| 726,616,440 |
|
The fair value of the aforementioned financial liabilities is presented below:
Currrent |
| Book Value |
| Fair Value |
| Book Value |
| Fair Value |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank Loans (1) |
| 41,882,748 |
| 42,567,749 |
| 41,675,933 |
| 42,604,758 |
|
Bonds Payable (2) |
| 18,361,720 |
| 20,138,024 |
| 17,623,883 |
| 18,852,764 |
|
Deposits in guarantee (3) |
| 15,279,019 |
| 15,279,019 |
| 15,982,913 |
| 15,982,913 |
|
Derivative contract obligations (see note 21) |
| 3,377,775 |
| 3,377,775 |
| 4,431,484 |
| 4,431,484 |
|
Leasing agreements (3) |
| 2,852,549 |
| 2,852,549 |
| 3,688,227 |
| 3,688,227 |
|
Total |
| 81,753,811 |
| 84,215,116 |
| 83,402,440 |
| 85,560,146 |
|
|
|
|
|
|
|
|
|
|
|
Non-current |
| 06,30,2015 |
| 06,30,2015 |
| 12,31,2014 |
| 12,31,2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank loans (1) |
| 32,912,869 |
| 29,469,711 |
| 46,414,771 |
| 41,861,984 |
|
Bonds payable (2) |
| 674,774,289 |
| 726,032,993 |
| 657,220,248 |
| 701,322,386 |
|
Leasing agreements (3) |
| 19,839,525 |
| 19,839,525 |
| 22,981,421 |
| 22,981,421 |
|
Total |
| 727,526,683 |
| 775,342,229 |
| 726,616,440 |
| 766,165,791 |
|
(1) The fair values are based on discounted cash flows using market based discount rates as of year-end and are Level 2 fair value measurements.
(2) The fair value of coporate bonds are classified as a Level 1 fair value measurements based on quoted prices for the Company’s obligations.
(3) The fair value approximates book value considering the nature and term of the obligations
16.1.1 Bank obligations, current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Type |
| Effective |
| Nominal |
| Up to |
| 90 days |
| at |
| at |
| ||||||||
Tax ID, |
| Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Amortization |
| Rate |
| Rate |
| 90 days |
| To 1 year |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.036.000-K |
| Banco Santander |
| Chile |
| Chilean pesos |
| Monthly |
| 1.10 | % | 1.10 | % | — |
| — |
| — |
| 9,633 |
|
91.144.000-8 |
| Embotelladora Andina S.A. |
| Chile |
| 97.032.000-8 |
| BBVA |
| Chile |
| Chilean pesos |
| At maturity |
| 5.00 | % | 5.00 | % | 2,103,000 |
| — |
| 2,103,000 |
| 205,000 |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco BICE |
| Chile |
| Chilean pesos |
| Semiannually |
| 4.29 | % | 4.29 | % | — |
| 345,728 |
| 345,728 |
| 211,137 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Ciudad de Bs.As. |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 177,437 |
| 478,155 |
| 655,592 |
| 658,980 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina (1) |
| Argentina |
| Argentine pesos |
| Monthly |
| 14.80 | % | 9.90 | % | 171,893 |
| 585,974 |
| 757,867 |
| 748,896 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 9.90 | % | 9.90 | % | 50,297 |
| 149,072 |
| 199,369 |
| 201,332 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 23.06 | % | 23.06 | % | — |
| — |
| — |
| 853,102 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 23.38 | % | 23.38 | % | — |
| — |
| — |
| 4,587,880 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 24.63 | % | 24.63 | % | 10,923 |
| 8,438,028 |
| 8,448,951 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.00 | % | 15.00 | % | 20,134 |
| — |
| 20,134 |
| 60,977 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 365,267 |
| 987,953 |
| 1,353,220 |
| 1,390,819 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As. |
| Argentina |
| Argentine pesos |
| At maturity |
| 16.00 | % | 16.00 | % | 436,842 |
| — |
| 436,842 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Macro Bansud |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 53,346 |
| 157,336 |
| 210,682 |
| 198,950 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Santander Río |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 80,603 |
| 234,366 |
| 314,969 |
| 319,284 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| BBVA Banco Francés |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 49,658 |
| 148,400 |
| 198,058 |
| 186,837 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.00 | % | 15.00 | % | 69,581 |
| — |
| 69,581 |
| 210,727 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine pesos |
| Monthly |
| 18.00 | % | 18.00 | % | 5,427 |
| — |
| 5,427 |
| — |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine pesos |
| Trimestral |
| 15.25 | % | 15.25 | % | 140,016 |
| 305,439 |
| 445,455 |
| 545,149 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco Santa Fe |
| Argentina |
| Argentine pesos |
| At maturity |
| 28.00 | % | 28.00 | % | — |
| — |
| — |
| 5,080,638 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Comercial Bank of China |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 81,285 |
| 232,046 |
| 313,331 |
| 317,750 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Bank HSBC Argentina S.A |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 81,285 |
| 232,046 |
| 313,331 |
| 317,750 |
|
Foreign |
| Andina Empaques Argentina S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs.As. |
| Argentina |
| Argentine pesos |
| Monthly |
| 30.25 | % | 30.25 | % | — |
| — |
| — |
| 453,690 |
|
Foreign |
| Andina Empaques Argentina S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs.As. |
| Argentina |
| Argentine pesos |
| At maturity |
| 15.25 | % | 15.25 | % | 80,895 |
| 234,390 |
| 315,285 |
| 316,153 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| VOTORANTIM |
| Brazil |
| Brazilean real |
| Monthly |
| 9.40 | % | 9.40 | % | — |
| — |
| — |
| 65,788 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| ITAÚ - Finame |
| Brazil |
| Dollars |
| Monthly |
| 2.992 | % | 2.992 | % | — |
| 17,482,416 |
| 17,482,416 |
| 16,118,096 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilean real |
| Monthly |
| 7.15 | % | 7.15 | % | 113,920 |
| 315,792 |
| 429,712 |
| 440,866 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilean real |
| Monthly |
| 4.50 | % | 4.50 | % | 150,864 |
| 386,192 |
| 537,056 |
| 603,278 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 6.00 | % | 6.00 | % | 746,963 |
| 2,112,214 |
| 2,859,177 |
| 3,376,088 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 6.63 | % | 6.63 | % | 1,011,355 |
| 3,056,210 |
| 4,067,565 |
| 4,197,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 41,882,748 |
| 41,675,933 |
|
(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 financial expense is recognized pursuant to market rates and, the differential of financial expenses between the market and nominal rate was imputed as lower costs of property, plant, and equipment
16.1.2 Bank obligations, non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
|
|
| ||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Type |
| Effective |
| Nominal |
| 1 year up to |
| More 2 years |
| More 3 years |
| More 4 years |
| More 5 |
| at |
| ||||||||
Tax ID, |
| Name |
| Country |
| Tax ID, |
| Name |
| Country |
| Currency |
| Amortization |
| Rate |
| Rate |
| 2 years |
| Up to 3 years |
| Up to 4 years |
| Up to 5 years |
| Years |
| 06.30.2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 6.63 | % | 6.63 | % | 3,881,003 |
| 2,523,484 |
| 510,469 |
| 251,173 |
| — |
| 7,166,129 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilean real |
| Monthly |
| 7.15 | % | 7.15 | % | 415,098 |
| 151,922 |
| 142,976 |
| 11,883 |
| — |
| 721,879 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Dollars |
| Monthly |
| 2.992 | % | 2.992 | % | 7,466,385 |
| 3,733,192 |
| — |
| — |
| — |
| 11,199,577 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilean real |
| Monthly |
| 6.00 | % | 6.00 | % | 2,816,285 |
| 2,816,285 |
| 2,816,285 |
| 2,112,214 |
| — |
| 10,561,069 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilean real |
| Monthly |
| 4.50 | % | 4.50 | % | 128,731 |
| — |
| — |
| — |
| — |
| 128,731 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 14.80 | % | 9.90 | % | 193,966 |
| — |
| — |
| — |
| — |
| 193,966 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 9.90 | % | 9.90 | % | 49,691 |
| — |
| — |
| — |
| — |
| 49,691 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 323,458 |
| — |
| — |
| — |
| — |
| 323,458 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco HSBC Argentina S.A |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 161,729 |
| — |
| — |
| — |
| — |
| 161,729 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Comercial Bank of China |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 161,729 |
| — |
| — |
| — |
| — |
| 161,729 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco BBVA Francés |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 166,246 |
| — |
| — |
| — |
| — |
| 166,246 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Macro Bansud |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 181,136 |
| — |
| — |
| — |
| — |
| 181,136 |
|
Foreign |
| Andina Empaques Argentina S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs As. |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 156,260 |
| — |
| — |
| — |
| — |
| 156,260 |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco Bice |
| Chile |
| Chilean pesos |
| Semiannually |
| 3.43 | % | 3.43 | % | 868,847 |
| 872,422 |
| — |
| — |
| — |
| 1,741,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 32,912,869 |
|
(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 financial expense is recognized pursuant to market rates and, the differential of financial expenses between the market and nominal rate was imputed as lower costs of property, plant, and equipment.
16.1.2 Bank obligations, non-current December 31,2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
|
|
| ||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Type |
| Effective |
| Nominal |
| 1 year up to |
| More 2 years |
| More 3 years |
| More 4 years |
| More 5 |
| at |
| ||||||||
Tx ID |
| Name |
| Country |
| Tx ID |
| Name |
| Country |
| Currency |
| Amortization |
| Rate |
| Rate |
| 2 years |
| Up to 3 years |
| Up to 4 years |
| Up to 5 years |
| Years |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian real |
| Monthly |
| 6.63 | % | 6.63 | % | 4,169,265 |
| 3,582,205 |
| 1,133,230 |
| 65,787 |
| — |
| 8,950,487 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander Río |
| Brazil |
| Brazilian real |
| Monthly |
| 7.15 | % | 7.15 | % | 476,272 |
| 310,662 |
| 158,529 |
| 117,869 |
| — |
| 1,063,332 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Dólar USA |
| Monthly |
| 2.992 | % | 2.992 | % | 8,280,509 |
| 8,280,509 |
| — |
| — |
| — |
| 16,561,018 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilian real |
| Monthly |
| 4.50 | % | 4.50 | % | 428,302 |
| — |
| — |
| — |
| — |
| 428,302 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian real |
| Monthly |
| 7.00 | % | 7.00 | % | 3,327,965 |
| 3,157,786 |
| 3,131,517 |
| 3,131,517 |
| 820,546 |
| 13,569,331 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 14.80 | % | 9.90 | % | 581,022 |
| — |
| — |
| — |
| — |
| 581,022 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| Argentine pesos |
| Monthly |
| 9.90 | % | 9.90 | % | 150,428 |
| — |
| — |
| — |
| — |
| 150,428 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Nuevo Banco de Santa Fe |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 175,174 |
| — |
| — |
| — |
| — |
| 175,174 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs. As |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 988,071 |
| — |
| — |
| — |
| — |
| 988,071 |
|
Foreign |
| Embotelladora del Atántico S.A. |
| Argentina |
| Foreign |
| Banco Ciudad de Bs. As. |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 326,400 |
| — |
| — |
| — |
| — |
| 326,400 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco HSBC Argentina S.A |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 319,305 |
| — |
| — |
| — |
| — |
| 319,305 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Comercial Bank of China |
| Argentina |
| Argentine pesos |
| Quarterly |
| 15.25 | % | 15.25 | % | 319,305 |
| — |
| — |
| — |
| — |
| 319,305 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco BBVA Francés |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 269,432 |
| — |
| — |
| — |
| — |
| 269,432 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Santander Río |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 157,737 |
| — |
| — |
| — |
| — |
| 157,737 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Macro Bansud |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 290,509 |
| — |
| — |
| — |
| — |
| 290,509 |
|
Foreign |
| Andina Empaques Argentina S.A. |
| Argentina |
| Foreign |
| Banco Galicia y Bs As. |
| Argentina |
| Argentine pesos |
| Monthly |
| 15.25 | % | 15.25 | % | 315,363 |
| — |
| — |
| — |
| — |
| 315,363 |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.080.000-K |
| Banco Bice |
| Chile |
| Chilean pesos |
| At maturity |
| 4.29 | % | 4.29 | % | 1,949,555 |
| — |
| — |
| — |
| — |
| 1,949,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 46,414,771 |
|
(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 financial expense is recognized pursuant to market rates and, the differential of financial expenses between the market and nominal rate was imputed as lower costs of property, plant, and equipment.
16.2.1 Bonds payable
|
| Current |
| Non-Current |
| Total |
| ||||||
Composition of bonds payable |
| 06.30.2015 |
| 12.31.2014 |
| 06.30.2015 |
| 12.31.2014 |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bonds (face value) |
| 19,177,843 |
| 18,457,970 |
| 679,879,338 |
| 662,420,327 |
| 699,057,181 |
| 680,878,297 |
|
Expenses of bond issuance and discounts on placement |
| (816,123 | ) | (834,087 | ) | (5,105,049 | ) | (5,200,079 | ) | (5,921,172 | ) | (6,034,166 | ) |
Net balance presented in statement of financial position |
| 18,361,720 |
| 17,623,883 |
| 674,774,289 |
| 657,220,248 |
| 693,136,009 |
| 674,844,131 |
|
16.2.2 Current and non-current balances
Obligations with the public correspond to bonds in UF issued by the parent company on the Chilean market and bonds in US dollars issued by the parent company on the international market. Following is a detail of the these instruments:
|
|
|
| Face |
| Unit of |
| Interest |
| Final |
| Interest |
| Date Amortization of |
|
|
|
|
|
|
| Series |
| amount |
| Adjustment |
| rate |
| Maturity |
| Payment |
| capital |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Bonds, current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVS Registration N°640 SVS 08.23.2010 |
| A |
| 625.000 |
| Unidad de Fomento |
| 3.0 | % | 08-15-2017 |
| Semiannually |
| 08-15-2015 |
| 6,419,140 |
| 6,363,030 |
|
SVS Registration N°254 SVS 06.13.2001 |
| B |
| 2.813.831 |
| Unidad de Fomento |
| 6.5 | % | 06-01-2026 |
| Semiannually |
| 12-01-2015 |
| 4,948,018 |
| 4,749,263 |
|
SVS Registration N°641 08.23.2010 |
| C |
| 1.500.000 |
| Unidad de Fomento |
| 4.0 | % | 08-15-2031 |
| Semiannually |
| 02-15-2021 |
| 553,533 |
| 548,679 |
|
SVS Registration N°759 08.20.2013 |
| C |
| 1.000.000 |
| Unidad de Fomento |
| 3.5 | % | 08-16-2020 |
| Semiannually |
| 02-16-2017 |
| 325,072 |
| 284,837 |
|
SVS Registration N°760 08.20.2013 |
| D |
| 4.000.000 |
| Unidad de Fomento |
| 3.8 | % | 08-16-2034 |
| Semiannually |
| 02-16-2032 |
| 1,410,763 |
| 1,236,149 |
|
SVS Registration N°760 04.02.2014 |
| E |
| 3.000.000 |
| Unidad de Fomento |
| 3.75 | % | 03-01-2035 |
| Semiannually |
| 09-01-2032 |
| 928,217 |
| 914,996 |
|
Bond USA |
| — |
| 575.000.000 |
| Dollars |
| 5.0 | % | 10-01-2023 |
| Semiannually |
| 10-01-2023 |
| 4,593,100 |
| 4,361,016 |
|
Total current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,177,843 |
| 18,457,970 |
|
Bonds non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SVS Registration N°640 SVS 08.23.2010 |
| A |
| 625.000 |
| Unidad de Fomento |
| 3.0 | % | 08-15-2017 |
| Semiannually |
| 08-15-2016 |
| 9,368,610 |
| 12,313,550 |
|
SVS Registration N°254 SVS 06.13.2001 |
| B |
| 2.813.831 |
| Unidad de Fomento |
| 6.5 | % | 06-01-2026 |
| Semiannually |
| 12-01-2016 |
| 65,724,600 |
| 67,077,946 |
|
SVS Registration N°641 08.23.2010 |
| C |
| 1.500.000 |
| Unidad de Fomento |
| 4.0 | % | 08-15-2031 |
| Semiannually |
| 02-15-2021 |
| 37,474,440 |
| 36,940,650 |
|
SVS Registration N°759 08.20.2013 |
| C |
| 1.000.000 |
| Unidad de Fomento |
| 3.5 | % | 08-16-2020 |
| Semiannually |
| 02-16-2017 |
| 24,982,960 |
| 24,662,705 |
|
SVS Registration N°760 08.20.2013 |
| D |
| 4.000.000 |
| Unidad de Fomento |
| 3.8 | % | 08-16-2034 |
| Semiannually |
| 02-16-2032 |
| 99,931,840 |
| 98,662,919 |
|
SVS Registration N°760 04.02.2014 |
| E |
| 3.000.000 |
| Unidad de Fomento |
| 3.75 | % | 03-01-2035 |
| Semiannually |
| 09-01-2032 |
| 74,948,888 |
| 73,881,307 |
|
Bond USA |
| — |
| 575.000.000 |
| Dollars |
| 5.0 | % | 10-01-2023 |
| Semiannually |
| 10-01-2023 |
| 367,448,000 |
| 348,881,250 |
|
Total non-current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 679,879,338 |
| 662,420,327 |
|
Accrued interest included in the current portion of bonds totaled ThCh$ 8,358,870 and ThCh$ 8,122,961, at June 30, 2015 and December 31, 2014 , respectively.
16.2.3 Non-current maturities
|
|
|
| Year of maturity |
| Total non- |
| ||||||
|
| Series |
| 2016 |
| 2017 |
| 2018 |
| Después |
| 06-30-2015 |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
SVS Registration N°640 08.23.2010 |
| A |
| 3,122,870 |
| 6,245,740 |
| — |
| — |
| 9,368,610 |
|
SVS Registration N°254 06.13.2001 |
| B |
| 2,396,914 |
| 5,026,299 |
| 5,353,008 |
| 52,948,379 |
| 65,724,600 |
|
SVS Registration N°641 08.23.2010 |
| C |
| — |
| — |
| — |
| 37,474,440 |
| 37,474,440 |
|
SVS Registration N°759 08.20.2013 |
| C |
| — |
| 6,245,740 |
| 6,245,740 |
| 12,491,480 |
| 24,982,960 |
|
SVS Registration N°760 08.20.2013 |
| D |
| — |
| — |
| — |
| 99,931,840 |
| 99,931,840 |
|
SVS Registration N°760 04.02.2014 |
| E |
| — |
| — |
| — |
| 74,948,888 |
| 74,948,888 |
|
Bonod USA |
| — |
| — |
| — |
| — |
| 367,448,000 |
| 367,448,000 |
|
|
|
|
| 5,519,784 |
| 17,517,779 |
| 11,598,748 |
| 645,243,027 |
| 679,879,338 |
|
16.2.4 Market rating
The bonds issued on the Chilean market had the following rating at June 30, 2015:
AA | : | Clasificación correspondiente a ICR Compañía Clasificadora de Riesgo Ltda. |
AA | : | Clasificación correspondiente a Fitch Chile Clasificadora de Riesgo Limitada. |
The rating of bonds issued on the international market as of June 30, 2015 is the following:
BBB | : | Clasificación correspondiente a Standard&Poors. |
A- | : | Clasificación correspondiente a Fitch Chile Clasificadora de Riesgo Limitada. |
16.2.5 Restrictions
16.2.5.1 Restrictions regarding bonds placed abroad.
On September 26, 2013, Andina issued a bond in the U.S. Market (Yankee Bonds) for US$575 million at a coupon rate of 5.000% maturing on October 1, 2023. These bonds do not have financial restrictions
16.2.5.2 Restrictions regarding bonds placed in the local market.
Restrictions regarding the issuance of bonds for a fixed amount registered under number 254.
During 2001, Andina placed local bonds in the Chilean market. The issuance was structured into two series, one of which matured during 2008.
The outstanding series as of March 31, 2015 is Series B for a nominal amount of up to UF 4 million, of which amount UF 3.7 million in bonds were placed with final maturity in the year 2026 at a 6.50% annual interest rate. The balance of outstanding capital as of June 30, 2015 is UF2,814 million.
Series B was issued with charge to the Bonds Line registered with the Securities Registered under number 254 dated June 13, 2001.
Regarding Series B, the Issuer is subject to the following restrictions:
· Maintain an indebtedness level where Consolidated Financial Liabilities does not exceed Consolidated Equity by 1.20 times. For these purposes Consolidated Financial Liabilities shall be regarded as Liabilities Payable bearing interest, namely: (i) other current financial liabilities, plus (ii) other non-current financial liabilities. Consolidated Equity will be regarded as total equity including non-controlling interest.
As of June 30, 2015, Indebtedness Level is 0.92 times of Consolidated Equity.
The breakdown of accounts with the respective amounts used for the previous calculation is summarized as follows (in thousand Chilean pesos):
As of June 30, 2015, the values of items included in this indicator are the following: |
| ThCh$ |
|
Other current financial liabilities |
| 81,753,811 |
|
Other non-current financial liabilities |
| 727,076,683 |
|
Total Consolidated Equity |
| 876,325,309 |
|
· Maintain, and in no manner lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” (Región Metropolitana) as a territory in Chile in which we have been authorized by The Coca-Cola Company for the development, production, sale and distribution of products and brands of the licensor, in accordance to the respective bottler or license agreement, renewable from time to time.
· Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of this date is franchised by TCCC to the Company for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow.
· Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.30 times of the issuer’s unsecured consolidated liabilities.
As of June 30, 2015, this index is 1.61 times:
The breakdown of accounts with the respective amounts used for the previous calculation is summarized as follows
As of June 30, 2015, the values of items included in this restriction are the following: |
| ThCh$ |
|
Consolidated assets free of collateral, mortgages or other liens |
| 2,042,454,294 |
|
Unsecured consolidated liabilities payable |
| 1,268,947,282 |
|
Restrictions regarding bond lines registered in the Securities Registrered under numbers 640 and 641.
As a consequence of our merger with Coca-Cola Polar S.A., Andina became a debtor of the following two bonds placed in the Chilean market in 2010:
· UF 1.0 million of Series A bonds due 2017, bearing an annual interest of 3.00%. As of June 30, 2015, the balance of outstanding capital is UF 0.625 million
· UF 1.5 million of Series C bonds due 2031, bearing an annual interest rate of 4.00%. As of June 30, 2015, the balance of outstanding capital is UF 1.5 million.
Series A and Series C were issued with charge to the Bond Lines registered with the Securities Registrar, under numbers 640 and 641, respectively, both on August 23, 2010
Regarding Series A and Series C, the Issuer is subject to the following restrictions:
· Maintain a level of “Net Financial Debt” within its quarterly financial statements that may not exceed 1.5 times, measured over figures included in its consolidated statement of financial position. To this end, net financial debt shall be defined as the ratio between net financial debt and total equity of the issuer (equity attributable to controlling owners plus non-controlling interest). On its part, net financial debt will be the difference between the Issuer’s financial debt and cash.
As of June 30, 2015, Net Financial Debt was 0.59 times..
The breakdown of accounts with the respective amounts used for the previous calculation is summarized as follows:
As of June 30, 2015, the values of items included in this indicator are the following: |
| ThCh$ |
|
Cash and cash equivalent |
| 63,879,882 |
|
Other current financial assets |
| 118,357,660 |
|
Other non-current financial assets |
| 107,718,019 |
|
Other current financial liabilities |
| 81,753,811 |
|
Other non-current financial liabilities |
| 727,526,683 |
|
Total Consolidated Equity |
| 876,325,309 |
|
· Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.30 times of the issuer’s unsecured consolidated liabilities.
As of June 30, 2015, this index is 1.61 times:
The breakdown of accounts with the respective amounts used for the previous calculation is summarized as follows:
As of June 30, 2015, the values of items included in this restriction are the following: |
| ThCh$ |
|
Consolidated assets free of collateral, mortgages or other liens |
| 2,042,454,294 |
|
Unsecured consolidated liabilities payable |
| 1,268,947,282 |
|
· Not carry out investments in instruments issued by related parties, nor carry out with these parties any other operations not related to normal business, in conditions that may be more unfavorable to the Issuer regarding those prevailing in the market.
· Maintain a level of “Financial net coverage” in its quarterly financial statements of more than 3 times. Net financial coverage means the ratio between the Issuer’s Ebitda for the past 12 months and net financial expenses (financial income less financial expenses) of the issuer for the past 12 months. However, this restriction will be considered breached when the mentioned net financial coverage level is lower than the level previously indicated during two consecutive quarters
As of March 31, 2015 Net Financial Coverage level is 5.75 times.
The breakdown of accounts with the respective amounts used for the previous calculation is summarized as follows:
As of June 30, 2015, the values of items included in this indicator are the following: |
| ThCh$ |
|
(+) Consolidated Ebitda between January 1 and June 30, 2015 |
| 155.608.529 |
|
(+) Consolidated Ebitda between January 1 and December 31, 2014 |
| 289.739.619 |
|
(-) Consolidated Ebitda between January 1 and June 30, 2014 |
| 130.295.745 |
|
Consolidated Ebitda twelve months (between July 2014 and June 30, 2015) |
| 315.052.403 |
|
|
|
|
|
(+) Consolidated Financial income between January 1 and June 30, 2015 |
| 4,848,053 |
|
(+) Consolidated Financial income between January 1 and December 31, 2014 |
| 8,655,623 |
|
(-) Consolidated Financial income between January 1 and June 30, 2014 |
| 4,177,824 |
|
Consolidated Financial income twelve months (between July 2014 and June 30, 2015) |
| 9,325,852 |
|
|
|
|
|
(+) Consolidated Financial expenses between January 1 and June 30, 2015 |
| 30,368,316 |
|
(+) Consolidated Financial expenses between January 1 and December 31, 2014 |
| 65,081,431 |
|
(-) Consolidated Financial expenses between January 1 and June 30, 2014 |
| 31,362,712 |
|
Consolidated Financial expenses twelve months (between July 2014 and June 30, 2015) |
| 64,087,035 |
|
Restrictions regarding bond lines registered in the Securities Registrar under numbers 759 and 760.
During 2013 and 2014, Andina placed local bonds in the Chilean market. The issuance was structured into two series.
· Series C outstanding as of June 30, 2015, for a nominal value of up to UF 3 million, of which bonds were placed for a nominal amount of UF1.0 million with final maturity during year 2020 at an annual interest rate of 3.50% issued against line number 759. Outstanding capital as of June 30, 2015 is UF 1.0 million.
· Series D and E outstanding at June 30, 2015 for a total nominal value of UF 8 million, of which UF 4 million were placed in bonds during August, 2013 (series D) and UF 3 million during April, 2014 (series E), with final maturity in 2034 and 2035, respectively, issued with charge against line number 760. The anual interest rates are 3.8% for Series D and 3.75% for Series E. The oustanding capital balance at June 30, 2015 of both series amounts to UF 7.0 million.
Regarding Series C, D and E, the Issuer is subject to the following restrictions:
· Maintain an indebtedness level where Net Consolidated Financial Liabilities does not exceed Consolidated Equity by 1.20 times. For these purposes Consolidated Financial Liabilities shall be regarded as Liabilities Payable bearing interest, namely: (i) other current financial liabilities, plus (ii) other non-current financial liabilities, less (iii) cash and cash equivalent and (iv) other current financial assets. Consolidated Equity will be regarded as total equity including non-controlling interest.
As of June 30, 2015, Indebtedness Level is 0.72 times of Consolidated Equity.
The breakdown of accounts with the respective amounts used for the previous calculation is summarized:
As of June 30, 2015, the values of items included in this indicaror are the following: |
| ThCh$ |
|
Cash and cash equivalent |
| 63,879,882 |
|
Other current financial assets |
| 118,357,660 |
|
Other current financial liabilities |
| 81,753,811 |
|
Other non-current financial liabilities |
| 727,526,683 |
|
Total Consolidated Equity |
| 876,325,309 |
|
· Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.30 times of the issuer’s unsecured consolidated liabilities.
As of June 30, 2015, this index is 1.61 times:
The breakdown of accounts with the respective amounts used for the previous calculation is summarized as follows:
As of June 30, 2015, the values of items included in this restriction are the following: |
| ThCh$ |
|
Consolidated assets free of collateral, mortgages or other liens |
| 2,042,454,294 |
|
Unsecured consolidated liabilities payable |
| 1,268,947,282 |
|
· Maintain, and in no manner lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” as a territory franchised to the Issuer in Chile by The Coca-Cola Company, hereinafter also referred to as “TCCC” or the “Licensor” for the development, production, sale and distribution of products and brands of said licensor, in accordance to the respective bottler or license agreement, renewable from time to time. Losing said territory, means the non-renewal, early termination or cancellation of this license agreement by TCCC, for the geographical area today called “Metropolitan Region”. This reason shall not apply if, as a result of the loss, sale, transfer or disposition, of that licensed territory is purchased or acquired by a subsidiary or an entity that consolidates in terms of accounting with the Issuer.
· Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of these instruments is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits (losses) of associates and joint ventures that are accounted for using the equity method”; plus (v) “Depreciation”; plus (vi) “Intangibles Amortization”.
As of June 30, 2015 and December 31, 2014, the Company complies with all financial collaterals.
Repurchased bonds
In addition to UF bonds, the Company holds bonds that it has repurchased in full through companies that are included in the consolidation:
Through its subsidiaries, Abisa Corp S.A. (formerly Pacific Sterling), Embotelladora Andina S.A. repurchased its Bonds USA 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 at December 31, 2013. On December 15, 2014, Embotelladora Andina S.A. rescued US$200 million in outstanding bonds from its subsidiary Abisa Corp S.A., thus since legally debtor and creditor are joined in a single entity, the mentioned bond liability becomes extinguished.
The subsidiary Rio de Janeiro Refrescos Ltda. maintains a liability corresponding to a bond issuance for US $75 million due in December 2020 and semi-annual interest payments. On June 30, 2015 these issues belong to Andina, until December 31, 2012 belong to the subsidiary Abisa Corp S.A., (former Pacific Sterling). On January 1, 2013, Abisa Corp S.A. transferred the totality of this asset to Embotelladora Andina S.A., passing the latter to be the creditor of the above mentioned Brazilian subsidiary. As a result, in these consolidated financial statements the assets and liabilities related to the transaction have been eliminated. In addition, the transaction has been treated as a net investment of the group in the Brazilian subsidiary, consequently the effects of exchange rate differences between the dollar and the functional currency of each one have been recorded in other comprehensive incomes.
16.3.1 Derivative contract obligations.
Please see details in Note 21.
16.4.1 Current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| Up tp |
| 90 days to |
| at |
| at |
| ||||||
Name |
| Country |
| Tax,ID |
| Name |
| Name |
| Currency |
| type |
| rate |
| rate |
| 90 days |
| 1 year |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian real |
| Monthly |
| 10.21 | % | 10.22 | % | 50,892 |
| 164,607 |
| 215,499 |
| 369,895 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian real |
| Monthly |
| 9.65 | % | 9.47 | % | 331,095 |
| 872,382 |
| 1,203,477 |
| 1,736,508 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Cogeracao Ligth Esco |
| Brazil |
| Brazilian real |
| Monthly |
| 13.00 | % | 12.28 | % | 128,151 |
| 404,666 |
| 532,817 |
| 605,105 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilian real |
| Monthly |
| 9.39 | % | 9.38 | % | 56,830 |
| 114,782 |
| 171,612 |
| 247,844 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Citibank |
| Brazil |
| Brazilian real |
| Monthly |
| 8.54 | % | 8.52 | % | 158,942 |
| 487,755 |
| 646,697 |
| 655,131 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 19,698 |
| 62,749 |
| 82,447 |
| 73,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 2,852,549 |
| 3,688,227 |
|
16.4.2 Non-current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
|
|
| ||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 year to |
| 2 years to |
| 3 years to |
| 4 years to |
| more |
| at |
| ||||||
Name |
| Country |
| Tax,ID |
| Name |
| Country |
| Currency |
| type |
| rate |
| Rate |
| 2 years |
| 3 years |
| 4 years |
| 5 years |
| 5 years |
| 06.30.2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian real |
| Monthly |
| 10.21 | % | 10.22 | % | 402,699 |
| — |
| — |
| — |
| — |
| 402,699 |
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian real |
| Monthly |
| 9.65 | % | 9.47 | % | 739,097 |
| — |
| — |
| — |
| — |
| 739,097 |
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilian real |
| Monthly |
| 9.39 | % | 9.38 | % | 93,276 |
| — |
| — |
| — |
| — |
| 93,276 |
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Banco Citibank |
| Brazil |
| Brazilian real |
| Monthly |
| 8.54 | % | 8.52 | % | 614,478 |
| — |
| — |
| — |
| — |
| 614,478 |
|
Rio de Janeiro Refrescos Ltda. |
| Brasil |
| Foreign |
| Cogeracao Ligth Esco |
| Brazil |
| Brazilian real |
| Monthly |
| 13.00 | % | 12.28 | % | 2,067,187 |
| 2,067,187 |
| 2,067,187 |
| 2,067,187 |
| 9,236,965 |
| 17,505,713 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 197,589 |
| 286,673 |
| — |
| — |
| — |
| 484,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 19,839,525 |
|
16.4.2 Non-Current liabilities for leasing agreements December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
|
|
| ||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 year to |
| 2 years to |
| 3 years to |
| 4 years to |
| more |
| at |
| ||||||
Name |
| Country |
| Tax,ID |
| Name |
| Type |
| Currency |
| type |
| rate |
| rate |
| 2 years |
| 3 years |
| 4 years |
| 5 years |
| 5 years |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| Brazilian real |
| Monthly |
| 10.21 | % | 10.22 | % | 479,460 |
| — |
| — |
| — |
| — |
| 479,460 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian real |
| Monthly |
| 9.65 | % | 9.47 | % | 18,881 |
| — |
| — |
| — |
| — |
| 18,881 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Cogeracao Ligth Esco |
| Brazil |
| Brazilian real |
| Monthly |
| 13.00 | % | 13.00 | % | 1,945,291 |
| 1,945,291 |
| 1,945,291 |
| 1,945,291 |
| 11,939,924 |
| 19,721,088 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Alfa |
| Brazil |
| Brazilian real |
| Monthly |
| 13.00 | % | 13.00 | % | 43,401 |
| — |
| — |
| — |
| — |
| 43,401 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Bradesco |
| Brazil |
| Brazilian real |
| Monthly |
| 13.06 | % | 13.06 | % | 125,635 |
| — |
| — |
| — |
| — |
| 125,635 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Citibank |
| Brazil |
| Brazilian real |
| Monthly |
| 12.70 | % | 12.70 | % | 786,477 |
| — |
| — |
| — |
| — |
| 786,477 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| Brazilian real |
| Monthly |
| 12.68 | % | 12.68 | % | 1,306,378 |
| — |
| — |
| — |
| — |
| 1,306,378 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| Dollars |
| Monthly |
| 12.00 | % | 12.00 | % | 500,101 |
| — |
| — |
| — |
| — |
| 500,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 22,981,421 |
|
NOTE 17 — TRADE AND OTHER CURRENT ACCOUNTS PAYABLE
a) Trade and other current accounts payable are detailed as follows:
Item |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Trade accounts payable |
| 115,132,990 |
| 171,289,867 |
|
Withholdings tax |
| 24,510,653 |
| 47,459,313 |
|
Others |
| 13,964,720 |
| 9,429,932 |
|
Total |
| 153,608,363 |
| 228,179,112 |
|
b) The Company maintains operating lease agreements for forklifts, vehicles, properties and machinery. These lease agreements have an average duration of one to five years excluding renewal options. No restrictions exist with respect to the lessee by virtue of these lease agreements.
Future payments of the Company´s operating leases are as follows:
Item |
| 06.30.2015 |
|
|
| ThCh$ |
|
Maturity within one year |
| 3,563,504 |
|
Maturity long term |
| 3,437,714 |
|
Total |
| 7,001,218 |
|
Total expenses related to operating leases maintained by the Company as of June 30, 2015 and 2014 amounted to ThCh$2,805,970 and ThCh$1,836,168 respectively.
NOTE 18 — CURRENT AND NON-CURRENT PROVISIONS
18.1 Balances
The balances of provisions recorded by the Company at June 30, 2015 and December 31, 2014 are detailed as follows:
Description |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Litigation (1) |
| 70,114,175 |
| 77,812,345 |
|
Total |
| 70,114,175 |
| 77,812,345 |
|
|
|
|
|
|
|
Current |
| 419,276 |
| 365,832 |
|
Non-current |
| 69,694,899 |
| 77,446,513 |
|
Total |
| 70,114,175 |
| 77,812,345 |
|
(1) Corresponds to the provision for probable fiscal, labor and trade contingency losses based on the opinion of our legal advisors, according to the following breakdown:
Detail (see note 22.1) |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
|
|
|
|
|
|
Tax Contingencies |
| 62,941,738 |
| 68,750,633 |
|
Labor Contingencies |
| 3,865,740 |
| 4,671,795 |
|
Civil Contingencies |
| 3,306,697 |
| 4,389,917 |
|
Total |
| 70,114,175 |
| 77,812,345 |
|
18.2 Movements
Movement of provisions is detailed as follows:
|
| 06.30.2015 |
| 12.31.2014 |
| ||||||||
Details |
| Litigation |
| Others |
| Total |
| Litigation |
| Others |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Opening Balance at January |
| 77,812,345 |
| — |
| 77,812,345 |
| 77,812,294 |
| — |
| 77,812,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional provisions |
| 308,849 |
| — |
| 308,849 |
| — |
| — |
| — |
|
Increase (decrease) in existing provisions |
| 395,642 |
| — |
| 395,642 |
| 1,064,399 |
| — |
| 1,064,399 |
|
Payments |
| (778,999 | ) | — |
| (778,999 | ) | (2,403,975 | ) | — |
| (2,403,975 | ) |
Unrealized provision reversal |
| (128,823 | ) | — |
| (128,823 | ) | — |
| — |
| — |
|
Increase (decrease) due to foreign exchange differences |
| (7,494,839 | ) | — |
| (7,494,839 | ) | 1,339,627 |
| — |
| 1,339,627 |
|
Total |
| 70,114,175 |
| — |
| 70,114,175 |
| 77,812,345 |
| — |
| 77,812,345 |
|
NOTE 19 — OTHER CURRENT AND NON-CURRENT NON-FINANCIAL LIABILITIES
Other current and non-current liabilities at each reporting period end are detailed as follows:
Detalle |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Minimum Dividend |
| 13,425,773 |
| 695,729 |
|
Dividend payable |
| 15,215,481 |
| 9,164,842 |
|
Employee remuneration payable |
| 7,690,848 |
| 14,563,449 |
|
Accrued vacations |
| 16,210,016 |
| 13,183,296 |
|
Other |
| 489,173 |
| 2,192,222 |
|
Total |
| 53,031,291 |
| 39,799,538 |
|
|
|
|
|
|
|
Current |
| 53,031,291 |
| 39,367,048 |
|
Non-current |
| 332,332 |
| 432,490 |
|
Total |
| 53,363,623 |
| 39,799,538 |
|
NOTE 20 — EQUITY
20.1 Paid-in capital
On August 21, 2013 saw the decline of paid capital as of right for not having alienated third 67 shares of Series A and 8,065 Series B shares, which the Company acquired in 2012, to shareholders exercised their right to retire when it was merged with Embotelladoras Coca-Cola Polar S.A, thus passing the capital paid a total of ThCh $ 270,759,299 to a total of ThCh$ 270,737,574.
The paid-in capital of the Company totaled ThCh$270,737,574 as of June 30, 2015 and 2014. The distribution and classification is detailed as follows:
20.1.1 Number of shares:
|
| Number of shares subscribed |
| Number of shares paid in |
| Number of voting shares |
| ||||||
Series |
| 2015 |
| 2014 |
| 2015 |
| 2014 |
| 2015 |
| 2014 |
|
A |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
|
B |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
|
20.1.2 Equity:
|
| Subscribed Capital |
| Paid-in capital |
| ||||
Series |
| 2015 |
| 2014 |
| 2015 |
| 2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
A |
| 135,379,504 |
| 135,379,504 |
| 135,379,504 |
| 135,379,504 |
|
B |
| 135,358,070 |
| 135,358,070 |
| 135,358,070 |
| 135,358,070 |
|
Total |
| 270,737,574 |
| 270,737,574 |
| 270,737,574 |
| 270,737,574 |
|
20.1.3 Rights of each series:
· Series A : Elect 12 of the 14 Directors
· Series B : Receives an additonal 10% of dividends distributed to Series A and elects 2 of the 14 Directors.
20.2 Dividend policy
According to Chilean law, cash dividends must be paid equal to at least 30% of annual net profit, barring a unanimous vote by shareholders to the contrary. If there is no net profit in a given year, the Company will not be legally obligated to pay dividends from retained earnings. At the General Shareholders’ Meeting held in April 2015, the shareholders agreed to distribute a final dividend charged to 2014 earnings in order to complete the mandatory 30% required by Chilean corporate law and 1 additional dividend, which will be paid during August 2015.
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$ 8,848,431 have been realized at June 30, 2015 and are available for distribution as dividends in accordance with the following:
Description |
| Event when amount |
| Amount of |
| Realized at |
| Amount of |
|
|
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Revaluation of assets parent Company |
| Sale or impairment |
| 14,800,384 |
| (11,607,914 | ) | 3,192,470 |
|
Foreign currency translation differences of investments in related companies and subsidiaries |
| Sale or impairment |
| 4,653,301 |
| 2,281,817 |
| 6,935,118 |
|
Full absorption cost accounting parent Company |
| Sale of products |
| 305,175 |
| (305,175 | ) | — |
|
Post-employment benefits actuarial calculation parent Company |
| Termination of employees |
| 946,803 |
| (564,334 | ) | 382,469 |
|
Deferred taxes complementary accounts parent Company |
| Amortization |
| (1,444,960 | ) | 1,347,175 |
| (97,785 | ) |
Total |
|
|
| 19,260,703 |
| (8,848,431 | ) | 10,412,272 |
|
The dividends declared and paid during 2015 and 2014 are presented below:
Dividend payment date |
| Dividend type |
| Profits imputable |
| Ch$ per |
| Ch$ per |
| ||
2014 |
| May |
| Aditional |
| Retained Earnings |
| 12.37 |
| 13.61 |
|
2014 |
| May |
| Final |
| 2013 |
| 1.46 |
| 1.61 |
|
2014 |
| August |
| Interim |
| Retained Earnings |
| 12.37 |
| 13.61 |
|
2014 |
| October |
| Interim |
| 2014 |
| 13.10 |
| 14.41 |
|
2015 |
| January |
| Interim |
| 2014 |
| 9.00 |
| 9.90 |
|
2015 |
| May |
| Final |
| 2014 |
| 15.00 |
| 16.50 |
|
2015 |
| August (*) |
| Additional |
| Retained Earnings |
| 15.00 |
| 16.50 |
|
(*) As of June 30, 2015 payment of this dividend is pending, and pursuant to the agreement at the Shareholders’ Meeting held in April 2015, it will be available to shareholders beginning August 28, 2015.
20.3 Reserves
The balance of other reserves include the following:
Description |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Polar acquisition |
| 421,701,520 |
| 421,701,520 |
|
Foreign currency translation reserves |
| (102,056,143 | ) | (53,285,698 | ) |
Cash flow hedge reserve |
| 10,972,951 |
| 6,125,615 |
|
|
|
|
|
|
|
Reserve for employee benefit actuarial gains or losses |
| (1,504,303 | ) | (1,237,993 | ) |
Legal and statutory reserves |
| 5,435,538 |
| 5,435,538 |
|
Total |
| 334,549,563 |
| 378,738,982 |
|
20.3.1 Polar acquisition
This amount corresponds to the fair value of the issuance of shares of Embotelladora Andina S.A., used to acquire Embotelladoras Coca-Cola Polar S.A.
20.3.2 Cash flow hedge reserve
They arise from the fair value of the existing derivative contracts that have been qualified for hedge accounting at the end of each financial period. When contracts are expired, these reserves are adjusted and recognized in the income statement in the corresponding period (see Note 21).
20.3.3 Reserve for employee benefit actuarial gains or losses
Corresponds to the restatement effect of employee benefits actuarial losses, that according to IAS 19 amendments must be carried to other comprehensive income.
20.3.4 Legal and statutory reserves
In accordance with Official Circular No. 456 issued by the Chilean Superintendence of Securities and Insurance, the legally required price-level restatement of paid-in capital for 2009 is presented as part of other equity reserves and is accounted for as a capitalization from Other Reserves with no impact on net income or retained earnings under IFRS. This amount totaled ThCh$ 5,435,538 at December 31, 2009.
20.3.5 Foreign currency translation reserves
This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the consolidated financial statements. Additionally exchange differences between accounts receivable kept by the companies in Chile with foreign subsidiaries are presented in this account, which have been treated as investment equivalents accounted for using the equity method. A breakdown of translation reserves is presented below:
Details |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Brazil |
| (60,106,639 | ) | (30,861,504 | ) |
Argentina |
| (57,215,549 | ) | (56,273,418 | ) |
Paraguay |
| 25,905,370 |
| 41,657,749 |
|
Exchange rate differences in related companies |
| (10,639,325 | ) | (7,808,525 | ) |
Total |
| (102,056,143 | ) | (53,285,698 | ) |
The movement of this reserve for the fiscal periods ended June 30, 2015 and December 31, 2014 respectively is detailed as follows:
Details |
| 06.30.2015 |
| 12.31.2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Brazil |
| (29,245,135 | ) | 5,264,204 |
|
Argentina |
| (942,131 | ) | (10,185,483 | ) |
Paraguay |
| (15,752,379 | ) | 33,070,967 |
|
Exchange rate differences in related companies |
| (2,830,800 | ) | 92,325 |
|
Total |
| (48,770,445 | ) | 28,242,013 |
|
20.4 Non-controlling interests
This is the recognition of the portion of equity and income from subsidiaries that are owned by third parties, Details of this account at June 30, 2015 are as follow:
|
| Non-controlling Interests |
| ||||
|
| Percentage |
| Shareholders |
| Income |
|
Details |
| 2015 |
| 2015 |
| 2015 |
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Embotelladora del Atlántico S.A. |
| 0.0171 |
| 15,118 |
| 1,880 |
|
Andina Empaques Argentina S.A. |
| 0.0209 |
| 2,431 |
| 358 |
|
Paraguay Refrescos S.A. |
| 2.1697 |
| 5,402,776 |
| 193,554 |
|
Vital S.A. |
| 35.0000 |
| 8,949,872 |
| 39,582 |
|
Vital Aguas S.A. |
| 33.5000 |
| 2,002,739 |
| 47,649 |
|
Envases Central S.A. |
| 40.7300 |
| 4,641,727 |
| (190,470 | ) |
Total |
|
|
| 21,014,663 |
| 92,553 |
|
20.5 Earnings per share
The basic earnings per share presented in the statement of comprehensive income is 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:
|
| 06.30.2015 |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 21,310,930 |
| 23,441,645 |
| 44,752,575 |
|
Average weighted number of shares |
| 473,289,301 |
| 473,281,303 |
| 946,570,604 |
|
Earnings per basic and diluted share (in Chilean pesos) |
| 45.03 |
| 49.53 |
| 47.28 |
|
|
| 06.30.2014 |
| ||||
Earnings per share |
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (ThCh$) |
| 13,587,083 |
| 14,945,550 |
| 28,532,633 |
|
Average weighted number of shares |
| 473,289,301 |
| 473,281,303 |
| 946,570,604 |
|
Earnings per basic and diluted share (in Chilean pesos) |
| 28.71 |
| 31.58 |
| 30.14 |
|
NOTE 21 — DERIVATIVE ASSETS AND LIABILITIES
The company held the following derivative instruments at June 30, 2015 and December 31, 2014:
21.1 Derivatives accounted for as cash flow hedges:
a) Cross Currency Swap Itau Credit:
As of June 30, 2015, the Company maintained derivative contracts to ensure U.S. dollar denominated bank liabilities in Brazil amounting to ThUS$ 44,643, to convert them to liabilities in Brazilian Real. The valuation of these contracts was performed at their fair values, yielding a receivable value of ThCh$10,711,634 at June 30, 2015 which is presented in other financial assets non-current. These swap contracts have the same terms of the underlying bond obligation and expire in 2017. In addition, the excess value of the derivative above the hedged items of ThCh$ 604,409 (ThCh$ 639,447 in December 31, 2014) has been recognized within other equity reserves as of June 30, 2015 and December 31, 2014. The amount of income recognized in results for financial liabilities in US Dollars that were neutralized by the recycling of derivative contracts from equity amounted to ThCh$2,974,125 at June 30, 2015 (ThCh$1,632,629 at December 31, 2014).
b) Cross Currency Swaps associated with US Bonds
At June 30, 2015, the Company entered into cross currency swap derivative contracts to convert US Dollar public bond obligations of US$570 million into UF and Real liabilities to hedge the Company’s exposure to variations in foreign exchange rates. These swap contracts have the same terms of the underlying bond obligation and expire in 2023. The fair value of these derivatives resulted in an asset of ThCh$86,820,216 at June 30, 2015, which is presented as other financial assets non-current. In addition excess value of the derivative above the hedged items of ThCh$10,852,175 has been recognized within other equity reserves as of June 30, 2015. The income of the ineffective portion amount of ThCh$1,656,114 associated with this hedge was recorded in other gains and losses at June 30, 2015. (ThCh$5,995,530 at December 31, 2014).
The amount of net earnings recognized in income for financial liabilities in U.S. dollars and those declared as effective that were neutralized by the recycling of capital derivative contracts amounted to ThCh$24,625,350. (ThCh$16,427,083 at December 31, 2014).
21.2 Derivatives accounted for as financial assets and liabilities at fair value through profit and loss:
In 2013 and 2014, the Company entered into foreign currency forward contracts to hedge its exposure to expected future raw materials purchases in US Dollars during the years 2014 and 2015. The total amount of outstanding forward contracts were US$35.2 million at June 30, 2015 (US$125.1 million at December 31, 2014). These agreements were recorded at fair value, resulting in a net loss of ThCh$1,243,147 for the period ended June 30, 2015 (net gains of ThCh$ 1,325,260 at June 30, 2014). The fair value of these derivative contracts is an asset of ThCh$ 759,155 and liability of ThCh$ 3,377,775 at June 30, 2015 (assets of ThCh$2,871,333 and liabilities of ThCh$4,431,484 at December 31, 2014). The agreements that ensure future flows of foreign currency have been designated as hedge beginning August 1, 2014, following hedge accounting as of that date, at June 30, 2015, as a result of this methodology the Company registered a net balance of ThCh$483,633 as a capital decrease associated with the fair value of existing contracts. Futures contracts that ensure prices of future materials have not been designated as hedge agreements, whereby its effects on variations in fair value are accounted for directly under statements of income in the “other gains and losses” account.
These derivative contracts do not qualify for hedge accounting and are accounted for as investment contracts with the changes in fair value recorded directly in the income statement each reporting period.
Fair value hierarchy
The Company had total assets related to its foreign exchange derivative contracts of ThCh$98,291,005 and liabilities to ThCh$3,377,775 at June 30, 2015 (assets for ThCh$53,878,573 and liabilities for ThCh$4,431,484 at December 31, 2014). Those contracts covering existing items have been classified in the same category of hedged, the net amount of derivative contracts by concepts covering forecasted items have been classified in financial assets and financial liabilities, All the derivative contracts are carried at fair value in the consolidated statement of financial position, The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included in level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3: Inputs for assets and liabilities that are not based on observable market data.
During the period ended June 30, 2015, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.
|
| Fair Value Measurements at June 30, 2015 |
|
|
| ||||
|
| Quoted prices in active |
| Observable |
| Unobservable |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
| — |
| 759,155 |
| — |
| 759,155 |
|
Other non-current financial assets |
| — |
| 97,531,850 |
| — |
| 97,531,850 |
|
Total assets |
| — |
| 98,291,005 |
| — |
| 98,291,005 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Other current financial liabilities |
| — |
| 3,377,775 |
| — |
| 3,377,775 |
|
Total liabilities |
| — |
| 3,377,775 |
| — |
| 3,377,775 |
|
|
| Fair Value Measurements at December 31, 2014 |
|
|
| ||||
|
| Quoted prices in active |
| Observable |
| Unobservable |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
| — |
| 2,871,333 |
| — |
| 2,871,333 |
|
Other non-current financial assets |
| — |
| 51,007,240 |
| — |
| 51,007,240 |
|
Total assets |
| — |
| 53,878,573 |
| — |
| 53,878,573 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Other current financial liabilities |
| — |
| 4,431,484 |
| — |
| 4,431,484 |
|
Total liabilities |
| — |
| — |
| — |
| — |
|
Assets |
| — |
| 4,431,484 |
| — |
| 4,431,484 |
|
NOTE 22 — CONTINGENCIES AND COMMITMENTS
22.1 Lawsuits and other legal actions:
In the opinion of the Company’s legal counsel, the Parent Company and its subsidiaries do not face judicial or extra-judicial contingencies that might result in material or significant losses or gains, except for the following:
1) | Embotelladora del Atlántico S.A. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling ThCh$1,408,352. Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. Additionally Embotelladora del Atlántico S.A. maintains time deposits for an amount of ThCh$901,621 to guaranty judicial liabilities. |
|
|
2) | Rio de Janeiro Refrescos Ltda. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling ThCh$68,286,547. Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. As it is customary in Brazil, Rio de Janeiro Refrescos Ltda. maintains judicial deposits and assets given in pledge to secure the compliance of certain processes, irrespective of whether these have been classified as a possible, probable or remote. The amounts deposited or pledged as a legal guarantees as of June 30, 2015 and December 31,2014 amounted to ThCh$98,426,660 and ThCh$113,574,536 respectively |
|
|
| Part of the assets given as warranty by Rio de Janeiro Refrescos Ltda. as of December 31, 2014, are in the process of being released and others have been released with the exchange of Warranty Insurance and Bail Letters entered into amounting to R$492,278,723, with different financial institutions and insurance companies in Brazil, through which these entities after a 0.6% commission, become responsible of fulfilling obligations with the Brazilian tax authorities should any trial result against Rio de Janeiro Refrescos Ltda. Additionally, a counter-warranty agreement was executed with these same financial institutions and insurance companies, whereby Rio de Janeiro Refrescos Ltda. promises to pay back to them any amounts disbursed by the financial institutions and Insurance Companies to the government, should there be an unfavorable trial resolution. |
|
|
| Main contingencies faced by Rio de Janeiro Refrescos are as follows: |
|
|
| a) Tax contingencies resulting from credits on tax on industrialized products (IPI). |
|
|
| Rio de Janeiro Refrescos is a party to a series of proceedings under way, in which the Brazilian federal tax authorities demand payment of value-added tax on industrialized products (Imposto sobre Produtos Industrializados, or IPI) allegedly owed by ex-Companhia de Bebidas Ipiranga. The initial amount demanded reached R$1,330,473,161, corresponding to different trials related to the same cause. In June 2014, one of these trials for R$598,754,218, was resolved in favor of the Company, however, there are new law suits arising after the purchase of ex-Companhia de Bebidas Ipiranga (October 2013) that amount to R$99,776,134. These law suits include amounts originally demanded plus accrued adjustments to date. |
| The Company rejects the position of the Brazilian tax authority in these procedures, and considers that Companhia de Bebidas Ipiranga was entitled to claim IPI tax credits in connection with purchases of certain exempt raw materials from suppliers located in the Manaus free trade zone. |
|
|
| Based on the opinion of its advisers, and judicial outcomes to date, Management estimates that these procedures do not represent probable losses, and has net recorded a provision on these matters. |
|
|
| Notwithstanding the above, the accounting standards of financial information related to business combination in terms of distribution of the purchase price, establish that contingencies must be valued one by one according to their probability of occurrence and discounted to fair value from the date on which it is deemed the loss can be generated. Pursuant to this criteria and despite that contingencies exist that are catalogued as possible in the amount of R$900,129,544, a provision has been generated from accounting joint ventures in the amount of R$189,069,693 equivalent to ThCh$38,942,531. |
|
|
| b) Tax contingencies on ICMS and IPI causes. |
|
|
| They refer mainly to tax settlements issued by advance appropriation of ICMS credits on fixed assets, payment of the replacement of ICMS tax to the operations, untimely IPI credits calculated on bonuses, among other claims. |
|
|
| The Company does not consider that these judgments will result in significant losses, given that their loss is considered unlikely. However, the accounting standards of financial information related to business combination in terms of distribution of the purchase price, establish contingencies must be valued one by one according to their probability of occurrence and discounted to fair value from the date on which it is deemed that the loss can be generated. According to this criteria, an initial provision has been made in the business combination accounting for an amount of R$ 102.4 million equivalent to ThCh$ 21,096,329. |
|
|
3) | Embotelladora Andina S.A., faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling ThCh$400,714. Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors. |
22.2 Direct guarantees and restricted assets:
Guarantees and restricted June 30, 2015 and December 31, 2014 are detailed as follows:
Guarantees that compromise assets including in the financial statements:
|
| Provided by |
|
|
| Committed assets |
| Balance pending payment on the |
| ||||
Guarantee in favor of |
| Name |
| Relationship |
| Guarantee |
| Guarantee in favor of |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Bodega San Francisco |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash and cash equivalents |
| Trade and other receivables |
| 6,788 |
| 6,788 |
|
Gas licuado Lipigas S.A. |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash and cash equivalents |
| Trade and other receivables |
| 1,140 |
| 1,140 |
|
Nazira Tala |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash and cash equivalents |
| Trade and other receivables |
| 3,416 |
| 3,416 |
|
Nazira Tala |
| Embotelladora Andina S.A. |
| Parent Company |
| Cash and cash equivalents |
| Trade and other receivables |
| 3,508 |
| 3,508 |
|
Inmobiliaria Reconquista S.A. |
| Servicios Multivending S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Trade and other receivables |
| 13,929 |
| — |
|
Inmob. e Invers. Supetar Ltda. |
| Transportes Polar S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Trade and other receivables |
| 4,579 |
| 4,579 |
|
María Lobos Jamet |
| Transportes Polar S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Trade and other receivables |
| 2,565 |
| 2,565 |
|
Reclamantes ações trabalhistas |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-current, non-financial assets |
| 2,458,344 |
| 15,017,759 |
|
Reclamantes ações civiles y tributarias |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-current, non-financial assets |
| 13,196,826 |
| 15,817,942 |
|
Instituciones Gubernamentales |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Judicial deposit |
| Other non-current, non-financial assets |
| — |
| 6,944,052 |
|
Instituciones Gubernamentales |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Property, plant and equipment |
| Property, plant and equipment |
| 82,771,490 |
| 75,794,783 |
|
Distribuidora Baraldo S.H. |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 1,406 |
| 1,419 |
|
Acuña Gomez |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 2,110 |
| 2,129 |
|
Municipalidad Gral. Alvear |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| — |
| 9,170 |
|
Municipalidad San Martin Mza |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 25,314 |
| 25,544 |
|
Nicanor López |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 1,509 |
| 1,522 |
|
Municipalidad Bariloche |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 382,243 |
| 385,720 |
|
Municipalidad San Antonio Oeste |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 2,990 |
| 3,017 |
|
Municipalidad Chivilcoy |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 970,795 |
| 979,627 |
|
Municipalidad Carlos Casares |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 6,277 |
| 6,334 |
|
Granada Maximiliano |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 12,657 |
| 12,772 |
|
CICSA |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantees CICSA for packaging |
| Other current financial assets |
| 39,167 |
| 39,524 |
|
Locadores varios |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Guarantee deposit for rentals |
| Other current financial assets |
| 14,586 |
| 10,710 |
|
Aduana de Ezeiza |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Machinery import |
| Other current financial assets |
| 9,835 |
| 9,924 |
|
Municipalidad de Junin |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 12,277 |
| 8,300 |
|
Almada Jorge |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other non-current, non-financial assets |
| 17,176 |
| 17,332 |
|
Banco Santander Rio |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other current financial assets |
| 411,135 |
| 943,434 |
|
Banco Galicia |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other current financial assets |
| 170,933 |
| 1,036,261 |
|
Banco HSBC |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other current financial assets |
| — |
| 148,666 |
|
Banco Industrial |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other current financial assets |
| 681,464 |
| 813,969 |
|
Banco ICBC |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other current financial assets |
| — |
| 160,501 |
|
Rofex |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash and cash equivalents |
| Other current financial assets |
| 1,593,838 |
| 1,729,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 102,818,297 |
| 119,942,227 |
|
Guarantees provided without obligation of assets included in the financial statements:
|
| Provided by |
|
|
| Committed assets |
| Balance pending payment on the |
| ||||
Guarantee in favor of |
| Name |
| Relationship |
| Guarantee |
| Guarantee in favor of |
| 06.30.2015 |
| 12.31.2014 |
|
|
|
|
|
|
|
|
|
|
| ThCh$ |
| ThCh$ |
|
Linde Gas Chile |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| 575,136 |
| 546,075 |
|
Echeverría, Izquierdo Ingeniería y Construcción. |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| 522,794 |
| 515,348 |
|
Rabdstad Chile S.A. |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| 640,000 |
| 640,000 |
|
Transportes Vic-Ben S.A. |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Guarantee insurance |
| 101,000 |
| — |
|
Importadora Casa y Regalos |
| Embotelladora Andina S.A. |
| Parent Company |
| Guarantee insurance |
| Cash and cash equivalent |
| 1,800,000 |
| — |
|
Aduana de Ezeiza |
| Andina Empaques Argentina S.A. |
| Subsidiary |
| Fiel cumplimiento contrato |
| Surety insurance |
| 299,410 |
| — |
|
Processos trabalhistas |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 651,858 |
| 567,285 |
|
Processos administrativos |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 2,651,029 |
| 2,041,360 |
|
Governo Federal |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 80,455,961 |
| 86,750 |
|
Governo Estadual |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 9,852,815 |
| 9,632,911 |
|
HSBC |
| Sorocaba Refrescos |
| Associate |
| Loan |
| co-signers |
| 8,913,090 |
| 5,162,012 |
|
Others |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guarantee insurance |
| Guarantee insurance |
| 3,663,202 |
| 1,246,117 |
|
NOTE 23 — FINANCIAL RISK MANAGEMENT
The Company’s businesses are exposed to a variety of financial and market risks (including foreign exchange risk, 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, 2015, the Company carried all of its debt liabilities at a fixed rate, variability factors are given by the currencies in which they are set: UF and US$ (are variable). As a result, the risk of fluctuations in market interest rates on the Company’s cash flows is low.
The Company’s greatest indebtedness corresponds to bonds of own issuance; the portion of bonds issued in the local market are denominated in Unidades de Fomento, indexed to inflation in Chile (the Company’s sales are correlated with UF variations). If inflation in Chile would have generated a UF variation of 2.44% during the period between January 1 and June 30, 2015 (instead of 1,44%, excluding changes in the level of sales), the Company’s income would have been lower by ThCh$2,266,319.
There are also bonds of own issuance amounting to US$575 million, which are hedged against the fluctuation of the U.S. dollar with cross currency swap agreements.
Exchange Rate Risk
The company is exposed to three types of risk caused by exchange rate volatility:
a) Exposure of foreign investment: this risk originates from the translation of net investment from the functional currency of each country (Brazilian Real, Paraguayan Guaraní, Argentine Peso) to the Parent Company’s reporting currency (Chilean Peso). Appreciation or devaluation of the Chilean Peso with respect to each of the functional currencies of each country, originates decreases and increases in equity, respectively. The Company does not hedge this risk.
a.1 Investment in Argentina
As of June 30, 2015, the Company maintains a net investment of ThCh$98,687,600 in Argentina, composed by the recognition of assets amounting to ThCh$203,081,252 and liabilities amounting to ThCh$104,393,652. These investments reported 31.1% of the Company’s consolidated sales revenues
As of June 30, 2015, the Argentine peso appreciated 0,9% with respect to the Chilean peso.
There are currently exchange restrictions in Argentina and a parallel foreign exchange market with a higher exchange rate than the official exchange rate.
If the official exchange rate in Argentina devalued reaching the informal rate of $ 14.65 (36.0% devaluation), the Company would have lower income from the operations in Argentina of ThCh$3,386,446, and a decrease in equity of ThCh$22,057,425, originated by lower asset recognition of ThCh$58,391,113 and lower liabilities recognition of ThCh$36,333,688.
a.2 Investment in Brazil
As of June 30, 2015, the Company maintains a net investment of ThCh$252,919,882 in Brazil, composed by the recognition of assets amounting to ThCh$759,470,368 and liabilities amounting to ThCh$506,550,486. These investments reported 34.4% of the Company’s consolidated sales revenues
As of June 30, 2015, the Brazilian Real devaluated 9.8% with respect to the Chilean peso
If the exchange rate of the Brazilian Real devaluated an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operation in Brazil of ThCh$1,008,462, and decrease in equity of ThCh$11,949,091, originated by lower asset recognition of ThCh$35,629,373 and lower liabilities recognition of ThCh$23,680,282.
a.3 Investment in Paraguay
As of June 30, 2015, the Company maintains a net investment of ThCh$249,005,864 in Paraguay, composed by the recognition of assets amounting to ThCh$288,486,479 and liabilities amounting to ThCh$39,480,615. These investments reported 6.9% of the Company’s consolidated sales revenues.
As of June 30, 2015, the Paraguayan Guarani devaluated 5.6% with respect to the Chilean peso
If the exchange rate of the Paraguayan Guaraní devaluated an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operations in Paraguay of ThCh$424,783, and decrease in equity of ThCh$12,425,008, originated by lower asset recognition of ThCh$14,389,315 and lower liabilities recognition of ThCh$1,964,307.
b) Net exposure of assets and liabilities in foreign currency: the risk stems mostly from carrying liabilities in US dollar, so the volatility of the US dollar with respect to the functional currency of each country generates a variation in the valuation of these obligations, with consequent effect on results.
As of June 30, 2015, the Company maintains a net liability position totaling ThCh$393,695,490, basically composed of obligations with the public and bank liabilities for ThCh$400,723,093 offset partially by financial assets denominated in dollars for ThCh$7,027,673.
Of total financial liabilities denominated in US dollars, ThCh$28,681,993 come from debts taken by the Brazilian operation and are exposed to the volatility of the Brazilian Real against the US dollar. On the other and ThCh$372,041,100 of US dollar liabilities correspond to Chilean operations, which are exposed to the volatility of the Chilean Peso against the US dollar.
In order to protect the Company from the effects on income resulting from the volatility of the Brazilian Real and the Chilean Peso against the U.S. dollar, the Company maintains derivative contracts (cross currency swaps) to cover almost 100% of US dollar-denominated financial liabilities.
By designating such contracts as hedging derivatives, the effects on income for variations in the Chilean Peso and the Brazilian Real against the US dollar, are mitigated annulling its exposure to exchange rates.
The Company’s net exposure as of June 30, 2015 to foreign currency over existing assets and liabilities, discounting the derivatives contracts, is an asset position of ThCh$3,832,403.
c) Assets purchased or indexed to foreign currency exposure: this risk originates from purchases of raw materials and investments in property, plant and equipment, whose values are expressed in a currency other than the functional currency of the subsidiary. Changes in the value of costs or investments can be generated through time, depending on the volatility of the exchange rate.
Annual purchases of raw materials denominated or indexed in U.S. dollars, amounts to 19% of our cost of sales or approximately US$340 million.
In addition, and depending on market conditions, the Company enter into foreign currency derivatives contracts to lessen the effect of the exchange rate over cash expenditures expressed in US dollar, which mainly correspond to payment to suppliers of raw materials and fixed assets. US$35.2 million for future purchases have been hedged as of June 30, 2015.
According to the percentage of purchases of raw materials which are carried out or indexed to U.S. dollars, a possible change in the value of the US dollar by 5% in the four countries where the Company operates, and excluding derivatives contracts taken to mitigate the effect of currency volatility, keeping everything constant, would lead to a lower accumulated result amounting to ThCh$3,031,817 as of June 30, 2015. Currently, the Company has contracts to hedge this effect in Argentina, Brazil and Chile
d) Commodities risk
The Company is subject to a risk of price fluctuations in the international markets for sugar, aluminum and PET resin, which are inputs required to produce beverages and, as a whole, account for 35% to 40% of operating costs. Procurement and anticipated purchase contracts are made frequently to minimize and/or stabilize this risk. When allowed by market conditions commodity hedges have also been used in the past. The possible effects that exist in the present consolidated financial statements of a 5% eventual rise in prices of its main raw materials, would be a reduction in our accumulated results for the period ended June 30, 2015 of approximately ThCh$5,277,259.
e) Liquidity risk
The products we sell are mainly paid for in cash and short term credit, therefore the Company´s main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where the Company operates; and (iii) public equity offerings
The following table presents our contractual and commercial obligations as of June 30, 2015:
|
| Maturity |
| ||||||||
Item |
| 1 year |
| More 1 year |
| More 2 |
| More 3 years |
| More 4 years |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bank debt |
| 24,125,196 |
| 28,512,450 |
| 20,269,960 |
| 10,261,505 |
| — |
|
Bonds payable |
| 42,933,113 |
| 45,869,996 |
| 45,521,474 |
| 42,135,391 |
| 827,883,493 |
|
Operating lease obligations |
| 5,135,692 |
| 5,326,213 |
| 2,810,751 |
| 1,817,951 |
| 1,237,716 |
|
Purchase obligations |
| 121,467,035 |
| 64,294,120 |
| 10,451,817 |
| 102,126,307 |
| 156,858 |
|
Total |
| 193,661,036 |
| 144,002,779 |
| 79,054,002 |
| 156,341,154 |
| 829,278,067 |
|
NOTE 24 — EXPENSES BY NATURE
Other expenses by nature are:
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
Details |
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Direct production costs |
|
|
|
|
|
|
|
|
|
Payroll and employee benefits |
| 412,942,838 |
| 393,691,869 |
| 183,339,355 |
| 183,870,684 |
|
Transportation and distribution |
| 139,088,449 |
| 126,526,317 |
| 69,200,116 |
| 64,302,210 |
|
Marketing |
| 85,293,562 |
| 73,942,971 |
| 37,113,727 |
| 28,702,885 |
|
Depreciation and amortization |
| 22,138,334 |
| 25,309,555 |
| 8,692,492 |
| 12,382,191 |
|
Repairs and maintenance |
| 50,547,305 |
| 50,239,494 |
| 24,588,022 |
| 25,798,475 |
|
Other expenses |
| 16,098,614 |
| 14,563,401 |
| 8,934,825 |
| 8,873,379 |
|
Total |
| 82,310,656 |
| 70,013,250 |
| 38,774,514 |
| 34,104,369 |
|
Details |
| 808,419,758 |
| 754,286,857 |
| 370,643,051 |
| 358,034,193 |
|
NOTE 25 — OTHER INCOME
Other operating income is detailed as follows:
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
Details |
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Gain on disposal of property, plant and equipment |
| 147,783 |
| 90,292 |
| 57,294 |
| 20,385 |
|
Adjustment of judicial deposit (Brazil) |
| 765,150 |
| 678,631 |
| 397,469 |
| 487,561 |
|
Previous year provision reversals |
| 1,024,872 |
| 797,373 |
| 1,024,872 |
| 797,373 |
|
Perma accounts receivable updates |
| 422,843 |
| — |
| 422,843 |
| — |
|
Otros |
| 129,921 |
| 86,771 |
| 54,772 |
| 32,975 |
|
Total |
| 2,490,569 |
| 1,653,067 |
| 1,957,250 |
| 1,338,294 |
|
NOTE 26 — OTHER EXPENSES
Other expenses are detailed as follows:
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
Details |
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Disposal and write-off of property, plant and equipment |
| 473,168 |
| 2,673,844 |
| 346,211 |
| 1,788,558 |
|
Tax on bank debits |
| 3,918,381 |
| 2,871,066 |
| 1,714,142 |
| 1,232,818 |
|
Compensation for restructuring |
| 576,569 |
| — |
| 177,333 |
| — |
|
Donations flood repairs and northern Chile |
| 140,697 |
| — |
| 140,697 |
| — |
|
Contingencies and Non-operating fees |
| 2,476,376 |
| 3,788,955 |
| 947,912 |
| 2,605,738 |
|
Others |
| 460,642 |
| 130,767 |
| 369,071 |
| 95,612 |
|
Total |
| 8,045,833 |
| 9,464,632 |
| 3,695,366 |
| 5,722,726 |
|
NOTE 27 — FINANCIAL INCOME AND EXPENSES
Financial income and expenses are detailed as follows:
a) Finance income
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
Description |
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Interest income |
| 4,324,618 |
| 3,454,711 |
| 2,069,173 |
| 2,041,860 |
|
Other interest income |
| 523,435 |
| 723,113 |
| 239,047 |
| 338,127 |
|
Total |
| 4,848,053 |
| 4,177,824 |
| 2,308,220 |
| 2,379,987 |
|
a) Finance expenses
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
Description |
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Bond interest |
| 21,593,432 |
| 22,019,060 |
| 10,500,785 |
| 14,736,148 |
|
Bank loan interest |
| 4,960,694 |
| 7,660,923 |
| 2,034,803 |
| 1,460,351 |
|
Other interest costs |
| 3,814,190 |
| 1,682,729 |
| 2,433,212 |
| 1,538,183 |
|
Total |
| 30,368,316 |
| 31,362,712 |
| 14,968,800 |
| 17,734,682 |
|
NOTE 28 — OTHER GAIN AND (LOSSES)
Other gains and (losses) are detailed as follows:
|
| 01.01.2015 |
| 01.01.2014 |
| 04.01.2015 |
| 04.01.2014 |
|
Details |
| 06.30.2015 |
| 06.30.2014 |
| 06.30.2015 |
| 06.30.2014 |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Gains (loss) on derivative transactions raw materials |
| (1,243,147 | ) | 1,325,260 |
| 103,109 |
| (1,056,801 | ) |
Losses on ineffective portion of hedge derivatives (see note 21 (b)) |
| (1,656,114 | ) | (3,332,182 | ) | (1,676,430 | ) | (1,917,667 | ) |
Reverse provision prior year |
| — |
| 1,411,030 |
| — |
| 1,411,030 |
|
Other income and (expenses) |
| (40,358 | ) | (16,396 | ) | (19,556 | ) | 92,658 |
|
Total |
| (2,939,619 | ) | (612,288 | ) | (1,592,877 | ) | (1,470,780 | ) |
NOTE 29 — THE ENVIRONMENT
The Company has made disbursements totaling ThCh$1,627,195 for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analysis, consulting on environmental impacts and others
These disbursements by country are detailed as follows:
|
| Period ended 2015 |
| Future commitments |
| ||||
Country |
| Recorded as |
| Capitalized to |
| To be Recorded |
| To be |
|
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Chile |
| 459,965 |
| — |
| — |
| — |
|
Argentina |
| 714,590 |
| — |
| 992,406 |
| — |
|
Brazil |
| 299,088 |
| 58,701 |
| 101,640 |
| — |
|
Paraguay |
| 50,736 |
| 44,115 |
| — |
| — |
|
Total |
| 1,524,379 |
| 102,816 |
| 1,094,046 |
| — |
|
NOTE 30 - AUDITOR’S FEES
Details of the fees paid to the external auditors are as follows:
Description |
| 2015 |
| 2014 |
|
|
| ThCh$ |
| ThCh$ |
|
Remuneration of the Auditor for auditing services |
| 986,827 |
| 755,423 |
|
NOTE 31 — SUBSEQUENT EVENTS
There are no subsequent events that may significantly affect the Company’s consolidated financial position..
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in the city of Santiago, Chile.
| EMBOTELLADORA ANDINA S.A. | |
| By: | /s/ Andrés Wainer |
| Name: Andrés Wainer | |
| Title: Chief Financial Officer |
Santiago, September 2, 2015