Equibles

6-K

ANDINA BOTTLING CO INC (AKO-A)

6-K 2021-03-15 For: 2021-03-15
View Original
Added on April 04, 2026

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

WASHINGTON,D.C. 20549

FORM6-K

REPORTOF FOREIGN ISSUER

PURSUANTTO RULE 13a-16 OR 15b-16 OF

THESECURITIES EXCHANGE ACT OF 1934

December2020

Date of Report (Date of Earliest Event Reported)

EmbotelladoraAndina S.A.

(Exact name of registrant as specified in its charter)

AndinaBottling 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 ☒   Form 40-F ☐

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 ☐   No ☒

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 ☐   No ☒

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 ☐   No ☒

ConsolidatedFinancial Statements

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

Santiago,Chile

Asof Decemeber 31, 2020 and 2019

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedFinancial Statements

Asof December 31, 2020 and 2019

IndependentAuditor’s Report

(Translation of the report originally issued in Spanish)

To Shareholders and Directors

Embotelladora Andina S.A.

We have audited the accompanying consolidated financial statements of Embotelladora Andina S.A. and subsidiaries (“the Company”), which comprise the consolidated statement of financial position as of December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’sResponsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’sResponsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in Chile. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinionon the Regulatory Basis of Accounting

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Embotelladora Andina S.A. and subsidiaries as of December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended in accordance with International Financial Reporting Standards.

Tatiana Ramos S.

EY Audit SpA

Santiago February 23, 2021

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedFinancial Statements

I. Consolidated Statements of Financial Position as of December 31, 2020 and 2019 1
II. Consolidated Statements of Income by Function for the fiscal years ended December 31, 2020 and 2019 3
III. Consolidated Statements of Comprehensive Income for the fiscal years ended December 31, 2020 and 2019 4
IV. Consolidated Statements of Changes in Equity for the fiscal years ended December 31, 2020 and 2019 5
V. Consolidated Statements of Direct Cash Flows for the fiscal years ended December 31, 2020 and 2019 6
VI. Notes to the Consolidated Financial Statements 7
1. Corporate information 7
--- --- ---
2. Basis of preparation of Consolidated Financial Statements and application of accounting criteria 8
3. Financial reporting by segment 30
4. Cash and cash equivalents 33
5. Other financial assets, current and non-current 33
6. Other non-financial assets, current and non-current 34
7. Trade debtors 35
8. Inventory 36
9. Tax assets and liabilities 36
10. Income tax and deferred taxes 37
11. Property, plant and equipment 40
12. Related parties 43
13. Employee benefits, current and non-current 45
14. Investments accounted for using the equity method 46
15. Intangible assets other than goodwill 48
16. Goodwill 49
17. Other financial liabilities, current and non-current 50
18. Trade accounts payable and other accounts payable 59
19. Other provisions, current and non-current 59
20. Other non-financial liabilities 60
21. Equity 60
22. Assets and liabilities for derivative instruments 63
23. Litigations and contingencies 66
24. Financial risk management 70
25. Expenses by nature 75
26. Other income 75
27. Other expenses by function 76
28. Income and financial costs 76
29. Other (loss) gains 76
30. Local and foreign currency 77
31. Environment 81
32. Subsequent events 81

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedStatements of Financial Position

asof December 31, 2020 and 2019

ASSETS NOTE 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Current assets:
Cash and cash equivalents 4 309,530,699 157,567,986
Other financial assets 5 140,304,853 347,278
Other non-financial assets 6 13,374,381 16,188,965
Trade and other accounts receivable, net 7 194,021,253 191,077,588
Accounts receivable from related companies 12.1 11,875,408 10,835,768
Inventory 8 127,972,650 147,641,224
Current tax assets 9 218,472 9,815,294
Total Current Assets 797,297,716 533,474,103
Non-Current Assets:
Other financial assets 5 162,013,278 110,784,311
Other non-financial assets 6 90,242,672 125,636,150
Trade and other receivables 7 73,862 523,769
Accounts receivable from related parties 12.1 138,346 283,118
Investments accounted for under the equity method 14 87,956,354 99,866,733
Intangible assets other than goodwill 15 604,514,165 675,075,375
Goodwill 16 98,325,593 121,221,661
Property, plant and equipment 11 605,576,545 722,718,863
Deferred tax assets 10.2 1,925,869 1,364,340
Total Non-Current Assets 1,650,766,684 1,857,474,320
Total Assets 2,448,064,400 2,390,948,423

The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements

1

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedStatements of Financial Position

asof December 31, 2020 and 2019

LIABILITIES AND EQUITY NOTE 12.31.2020 12.31.2019
CLP (000’s) **** CLP (000’s)
LIABILITIES
Current Liabilities
Other financial liabilities 17 38,566,724 40,593,878
Trade and other accounts payable 18 230,445,809 243,700,553
Accounts payable to related parties 12.2 39,541,968 53,637,601
Other provisions 19 1,335,337 2,068,984
Tax liabilities 9 8,828,599 6,762,267
Employee benefits current provisions 13 31,071,019 38,392,854
Other non-financial liabilities 20 28,266,730 26,502,215
Total Current Liabilities 378,056,186 411,658,352
Other financial liabilities, non-current 17 989,829,569 743,327,057
Accounts payable, non-current 18 295,279 619,587
Accounts payable to related companies, non-current 12.2 10,790,089 19,777,812
Other provisions, non-current 19 48,734,936 67,038,566
Deferred tax liabilities 10.2 153,669,547 169,449,747
Employee benefits non-current provisions 13 13,635,558 10,173,354
Other non-financial liabilities, non-current 20 21,472,048 -
Tax liabilities, non-current 9 20,597 -
Total Non-current liabilities 1,238,447,623 1,010,386,123
EQUITY 21
Issued capital 270,737,574 270,737,574
Retained earnings 654,171,126 600,918,265
Other reserves (113,727,586 ) 76,993,851
Equity attributable to equity holders of the parent 811,181,114 948,649,690
Non-controlling interests 20,379,477 20,254,258
Total Equity 831,560,591 968,903,948
Total Liabilities and Equity 2,448,064,400 2,390,948,423

The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements

2

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedStatements of Income by Function

Forthe fiscal years ended December 31, 2020 and 2019

01.01.2020 01.01.2019
NOTE 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Net sales 1,698,281,237 1,779,025,115
Cost of sales 8 (1,022,498,659 ) (1,048,343,767 )
Gross Profit 675,782,578 730,681,348
Other income 26 8,356,298 40,947,158
Distribution expenses 25 (152,532,018 ) (166,996,289 )
Administrative expenses 25 (283,638,935 ) (325,903,809 )
Other expenses 27 (17,430,256 ) (26,182,847 )
Other (loss) gains 29 287 2,876
Financial income 28 14,945,879 45,155,791
Financial expenses 28 (54,772,837 ) (46,209,020 )
Share of profit (loss) of investments in associates and joint ventures accounted for using the equity method 14.3 2,228,763 (3,415,083 )
Foreign exchange differences (3,088,278 ) (4,130,543 )
Income by indexation units (11,828,762 ) (7,536,466 )
Net income before income taxes 178,022,719 236,413,116
Income tax expense 10.1 (54,905,399 ) (61,166,891 )
Net income 123,117,320 175,246,225
Net income attributable to
Owners of the controller 121,999,805 173,721,928
Non-controlling interests 1,117,515 1,524,297
Net income 123,117,320 175,246,225
Earnings per Share, basic and diluted CLP CLP
Earnings per Series A Share 21.5 122.75 174.79
Earnings per Series B Share 21.5 135.02 192.27

The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements

3

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedStatements of Comprehensive Income

Forthe fiscal years ended December 31, 2020 and 2019

01.01.2020 01.01.2019
12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Net income 123,117,320 175,246,225
Other Comprehensive Income:
Components of other comprehensive income that will not be reclassified to net income for the period, before taxes
Actuarial Gains (losses) from defined benefit plans (3,146,362 ) (379,007 )
Components of other comprehensive income that will be reclassified to net income for the period, before taxes
Gain (losses) from exchange rate translation differences (264,119,093 ) (41,844,584 )
Gain (losses) from cash flow hedges (12,203,755 ) (1,865,233 )
Income tax related to components of other comprehensive income that will not be reclassified to net income for the period
Income tax benefit related to defined benefit plans 849,518 102,332
Income tax related to components of other comprehensive income that will be reclassified to net income for the period
Income tax related to exchange rate translation differences 84,571,922 9,295,545
Income tax related to cash flow hedges 2,334,037 683,483
Other comprehensive income, total (191,713,733 ) (34,007,464 )
Total comprehensive income (68,596,413 ) 141,238,761
Total comprehensive income attributable to:
Owners of the controller (68,721,632 ) 139,861,690
Non-controlling interests 125,219 1,377,071
Total comprehensive income (68,596,413 ) 141,238,761

The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements

4

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedStatements of Changes in Equity

Forthe periods ended December 31, 2020 and 2019

Other reserves
Issued<br> <br><br> Capital Reserves<br> for <br><br> exchange rate<br><br>differences Cash flow <br><br> hedge <br><br> reserve Actuarial<br> gains or <br><br>losses in employee <br><br>benefits Other <br><br> reserves Total other <br><br> reserves Retained <br><br> earnings Controlling <br><br> equity Non-controlling<br><br> interests Total equity
CLP (000’s) CLP (000’s) **** CLP (000’s) **** CLP (000’s) **** CLP (000’s) CLP (000’s) **** CLP (000’s) **** CLP (000’s) **** CLP (000’s) **** CLP (000’s) ****
Opening<br> balance as of 01.01.2020 270,737,574 (339,076,340 ) (14,850,683 ) (2,230,752 ) 433,151,626 76,993,851 600,918,265 948,649,690 20,254,258 968,903,948
Changes<br> in equity
Comprehensive<br> income
Earnings - - - - - - 121,999,805 121,999,805 1,117,515 123.117.320
Other<br> Comprehensive income - (178,420,146 ) (9,868,850 ) (2,432,441 ) - (190,721,437 ) - (190,721,437 ) (992,296 ) (191.713.733 )
Comprehensive<br> income - (178,420,146 ) (9,868,850 ) (2,432,441 ) - (190,721,437 ) 121,999,805 (68,721,632 ) 125,219 (68.596.413 )
Dividends - - - - - - (103,365,468 ) (103,365,468 ) - (103,365,468 )
Increase<br> (decrease) from Other changes - - - - - - 34,618,524 34,618,524 - 34,618,524
Total<br> de Changes in equity - (178,420,146 ) (9,868,850 ) (2,432,441 ) - (190,721,437 ) 53,252,861 (137,468,576 ) 125,219 (137,343,357 )
Ending<br> balance as of 12.31.2020 270,737,574 (517,496,486 ) (24,719,533 ) (4,663,193 ) 433,151,626 (113,727,586 ) 654,171,126 811,181,114 20,379,477 831,560,591
Other reserves
Issued <br><br> Capital Reserves for exchange ratedifferences Cash flow <br><br> hedge <br><br> reserve Actuarial gains or losses in employee benefits Other <br><br> reserves Total other <br><br> reserves Retained <br><br> earnings Controlling <br><br> equity Non-controllinginterests Total equity
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Opening<br> balance as of 01.01.2019 270,737,574 (306,674,528 ) (13,668,932 ) (1,954,077 ) 433,151,626 110,854,089 462,221,463 843,813,126 19,901,617 863,714,743
Changes<br> in equity
Comprehensive<br> income
Earnings - - - - - 173,721,928 173,721,928 1,524,297 175.246.225
Other<br> Comprehensive income - (32,401,812 ) (1,181,751 ) (276,675 ) - (33,860,238 ) - (33,860,238 ) (147,226 ) (34.007.464 )
Comprehensive<br> income - (32,401,812 ) (1,181,751 ) (276,675 ) - (33,860,238 ) 173,721,928 139,861,690 1,377,071 141.238.761
Dividends - - - - - - (86,568,579 ) (86,568,579 ) (1,024,430 ) (87,593,009 )
Increase<br> (decrease) from Other changes - - - - - - 51,543,453 51,543,453 - 51,543,453
Total<br> de Changes in equity - (32,401,812 ) (1,181,751 ) (276,675 ) - (33,860,238 ) 138,696,802 104,836,564 352,641 105,189,205
Ending balance as<br> of 12.31.2019 270,737,574 (339,076,340 ) (14,850,683 ) (2,230,752 ) 433,151,626 76,993,851 600,918,265 948,649,690 20,254,258 968,903,948

The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements

5

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

ConsolidatedStatements of Direct Cash Flows

Forthe periods ended December 31, 2020 and 2019

01.01.2020 01.01.2019
Cash<br> flows provided by (used in) Operating Activities NOTE 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Cash flows provided by Operating Activities
Receipts<br> from the sale of goods and the rendering of services (including taxes) 2,321,999,131 2,626,374,510
Payments<br> for Operating Activities
Payments<br> to suppliers for goods and services (including taxes) (1,517,256,079 ) (1,802,751,639 )
Payments<br> to and on behalf of employees (189,758,823 ) (203,681,853 )
Other<br> payments for operating activities (value-added taxes on purchases, sales and others) (266,228,165 ) (292,958,045 )
Dividends<br> received 1,176,079 411,041
Interest<br> payments (44,299,001 ) (36,141,477 )
Interest<br> received 7,538,364 1,539,120
Income<br> tax payments (29,474,900 ) (34,198,767 )
Other<br> cash movements (tax on bank debits Argentina and others) (4,927,608 ) (3,444,416 )
Cash<br> flows provided by (used in) Operating Activities 278,768,998 255,148,474
Cash flows provided by (used in) Investing Activities
Proceeds<br> from sale of Property, plant and equipment 3,570 18,904
Purchase<br> of Property, plant and equipment (85,874,958 ) (110,683,258 )
Purchase<br> of intangible assets (207,889 ) (448,307 )
Proceeds<br> from other long term assets (withdrawal of time-deposits at 90 days or longer term) - -
Payments<br> on forward, term, option and financial exchange agreements (472,551 ) (70,373 )
Collection<br> on forward, term, option and financial exchange agreements 2,122,954 1,135,034
Other<br> payments on the purchase of financial instruments (139,449,884 ) -
Net<br> cash flows used in Investing Activities (223,878,758 ) (110,048,000 )
Cash<br> Flows generated from (used in) Financing Activities
Proceeds<br> from short term loans 27,633,156 50,297,337
Payments<br> of loans (25,197,737 ) (74,332,889 )
Lease<br> liability payments (3,974,086 ) (2,989,457 )
Dividend<br> payments by the reporting entity (99,985,500 ) (86,265,896 )
Other<br> inflows (outflows) of cash (Placement and payment of public obligations) 214,565,128 (13,821,732 )
Net<br> cash flows (used in) generated by Financing Activities 113,040,961 (127,112,637 )
Net<br> increase in cash and cash equivalents before exchange differences 167,931,201 17,987,837
Effects<br> of exchange differences on cash and cash equivalents (13,574,854 ) 4,048,168
Effects<br> of inflation in cash and cash equivalents in Argentina (2,393,634 ) (2,006,632 )
Net<br> increase (decrease) in cash and cash equivalents 151,962,713 20,029,373
Cash<br> and cash equivalents – beginning of period 4 157,567,986 137,538,613
Cash<br> and cash equivalents - end of period 4 309,530,699 157,567,986

The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements

6

EMBOTELLADORAANDINA S.A. AND SUBSIDIARIES

Notesto the Consolidated Financial Statements

1- CORPORATE INFORMATION

Embotelladora Andina S.A. RUT (Chilean Tax Id. N°) 91.144.000-8 (hereinafter “Andina,” and together with its subsidiaries, the “Company”) is an open stock corporation, whose corporate address and principal offices are located at Miraflores 9153, borough of Renca, Santiago, Chile. The Company is registered under No. 00124 of the Securities Registry and is regulated by Chile’s Financial Market Commission (hereinafter “CMF”) and pursuant to Chile’s Law 18,046 is subject to the supervision of this entity. It is also registered with the U.S. Securities and Exchange Commission (hereinafter “SEC”) and its stock is traded on the New York Stock Exchange since 1994.

The principal activity of Embotelladora Andina S.A. is to produce, bottle, commercialize and distribute the products under registered trademarks of The Coca-Cola Company (TCCC). The Company maintains operations and is licensed to produce, commercialize and distribute such products in certain territories in Chile, Brazil, Argentina and Paraguay.

In Chile, the territories in which it has such a license are the Metropolitan Region; the province of San Antonio, the V Region; the province of Cachapoal including the commune of San Vicente de Tagua-Tagua, the VI Region; the II Region of Antofagasta; the III Region of Atacama, the IV Region of Coquimbo XI Region de Aysén del General Carlos Ibáñez del Campo; XII Region of Magallanes and Chilean Antarctic. In Brazil, the aforementioned license covers much of the state of Rio de Janeiro, the entire state of Espirito Santo, and part of the states of Sao Paulo and Minas Gerais. In Argentina it includes the provinces of Córdoba, Mendoza, San Juan, San Luis, Entre Ríos, as well as part of the provinces of Santa Fe and Buenos Aires, Chubut, Santa Cruz, Neuquén, Río Negro, La Pampa, Tierra del Fuego, Antarctica and South Atlantic Islands. Finally, in Paraguay the territory comprises the whole country. The bottling agreement for the territories in Chile expires in October 2023; in Argentina it expires in 2022; in Brazil it expires in 2022, and in Paraguay it expires in 2021. Said agreements are renewable upon the request of the licensee and at the sole discretion of The Coca-Cola Company.

As of the date of these consolidated financial statements, regarding Andina’s principal shareholders, the Controlling Group holds 55.38% of the outstanding shares with voting rights, corresponding to the Series A shares. The Controlling Group is composed of the Chadwick Claro, Garcés Silva, Said Handal and Said Somavía families, who control the Company in equal parts.

These Consolidated Financial Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its subsidiaries, which were approved by the Board of Directors on February 23, 2021.

7

2- BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND APPLICATION OF ACCOUNTING CRITERIA

2.1 Accountingprinciples and basis of preparation

The Company’s Consolidated Financial Statements for the fiscal years ended December 31, 2020 and December 31, 2019, have been prepared in accordance with International Accounting Standard N° 34 (IAS 34) incorporated in the International Financial Reporting Standards (hereinafter “IFRS”) issued by the International Accounting Standards Board (hereinafter “IASB”).

These Consolidated Financial Statements have been prepared following the going concern principle by applying the historical cost method, with the exception, according to IFRS, of those assets and liabilities that are recorded at fair value.

These Consolidated Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries as of December 31, 2020 and December 31, 2019 and the results of operations for the periods between January 1 and December 31, 2020 and 2019, together with the statements of changes in equity and cash flows for the periods between January 1 and December 31, 2020 and 2019.

These Consolidated Financial Statements have been prepared based on the accounting records maintained by the Parent Company and by the other entities that are part of the Company and are presented in thousands of Chilean pesos (unless expressly stated) as this is the functional and presentation currency of the Company. Foreign operations are included in accordance with the accounting policies established in Notes 2.5.

2.2 Subsidiariesand consolidation

Subsidiary entities are those companies directly or indirectly controlled by Embotelladora Andina. 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, results of operations, and cash flows for the periods reported. Income or losses from subsidiaries acquired or sold are included in the Consolidated Financial Statements from the effective date of acquisition through the effective date of 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 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.

Intercompany transactions, balances and unrealized gains on transactions between Group entities are eliminated. Unrealized losses are also eliminated. When necessary, the accounting policies of the subsidiaries are modified to ensure uniformity with the policies adopted by the Group.

The interest of non-controlling shareholders is presented in the consolidated statement of changes in equity and the consolidated statement of income by function under “Non-Controlling Interest” and “Earnings attributable to non-controlling interests”, respectively.

8

The consolidated financial statements include all assets, liabilities, income, expenses, and cash flows of the Company and its subsidiaries after eliminating balances and transaction among the Group’s entities, the subsidiary companies included in the consolidation are the following:

Ownership interest
12.31.2020 12.31.2019
Taxpayer<br> ID Company<br> Name Direct Indirect Total Direct Indirect Total
59.144.140-K Abisa<br> Corp S.A. - 99.99 99.99 - 99.99 99.99
Foreign Aconcagua<br> Investing Ltda. 0.70 99.28 99.98 0.70 99.28 99.98
96.842.970-1 Andina<br> Bottling Investments S.A. 99.9 0.09 99.99 99.9 0.09 99.99
96.972.760-9 Andina<br> Bottling Investments Dos S.A. 99.9 0.09 99.99 99.9 0.09 99.99
Foreign Andina<br> Empaques Argentina S.A. - 99.98 99.98 - 99.98 99.98
96.836.750-1 Andina<br> Inversiones Societarias S.A. 99.98 0.01 99.99 99.98 0.01 99.99
76.070.406-7 Embotelladora<br> Andina Chile S.A. 99.99 - 99.99 99.99 - 99.99
Foreign Embotelladora<br> del Atlántico S.A. 0.92 99.07 99.99 0.92 99.07 99.99
96.705.990-0 Envases<br> Central S.A. 59.27 - 59.27 59.27 - 59.27
Foreign Paraguay<br> Refrescos S.A. 0.08 97.75 97.83 0.08 97.75 97.83
76.276.604-3 Red<br> de Transportes Comerciales Ltda. 99.9 0.09 99.99 99.9 0.09 99.99
Foreign Rio<br> de Janeiro Refrescos Ltda. - 99.99 99.99 - 99.99 99.99
78.536.950-5 Servicios<br> Multivending Ltda. 99.9 0.09 99.99 99.9 0.09 99.99
78.861.790-9 Transportes<br> Andina Refrescos Ltda. 99.9 0.09 99.99 99.9 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<br> Jugos S.A. 15.00 50.00 65.00 15.00 50.00 65.00
2.3 Investmentsin associates and joint ventures
--- ---

Ownership interest held by the Group in joint ventures and associates are recorded following the equity method. According to the equity method, the investment in an associate or joint venture is initially recorded at cost. As of the date of acquisition, the investment in the statement of financial position is recorded by the proportion of its total assets, which represents the Group’s participation in its capital, once adjusted, where appropriate, the effect of the transactions made with the Group, plus capital gains that have been generated in the acquisition of the company.

Dividends received from these companies are recorded by reducing the value of the investment and the results obtained by them, which correspond to the Group according to its ownership, are recorded under the item “Participation in profit (loss) of associates accounted for by the equity method.”

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2.3.1 Investmentsin Associates

Associates are all entities over which the Group exercises significant influence but does not have control. Significant influence is the power to intervene in the financial and operating policy decisions of the associate, without having control or joint control over it. The results of these associates are accounted for using the equity method. Accounting policies of the associates are changed, where necessary, to ensure conformity with the policies adopted by the Company and unrealized gains are eliminated.

2.3.2 Jointarrangements

Joint arrangements are those entities in which the Group exercises control through an agreement with other shareholders and jointly with them, that is, when decisions on their relevant activities require the unanimous consent of the parties that share control.

Depending on the rights and obligations of the parties, joint arrangements are classified as:

- Joint<br> venture: agreement whereby the parties exercising joint control are entitled to the net<br> assets of the entity. Joint ventures are integrated into the consolidated financial statements<br> by the equity method, as described above.
- Joint<br> operation: agreement whereby the parties exercising joint control are entitled to the<br> assets and obligations with respect to the liabilities related to the agreement. Joint<br> operations are consolidated by proportionally integrating the assets and liabilities<br> affected by said operation.
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To determine the type of joint agreement that derives from a contractual agreement, Group Management evaluates the structure and legal form of the agreement, the terms agreed by the parties, as well as other relevant factors and circumstances.

Embotelladora Andina does not have joint arrangements that qualify as a joint operation business.

2.4 Financialreporting by operating segment

“IFRS 8 Operating Segments” 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:

• Operation<br> in Chile
• Operation<br> in Brazil
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• Operation<br> in Argentina
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• Operation<br> in Paraguay
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2.5 Functionalcurrency and presentation currency
2.5.1 Functionalcurrency
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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 functional currency of each of the Operations is the following:

Company Functional<br> currency
Embotelladora<br> del Atlántico Argentine<br> Peso (ARS)
Embotelladora<br> Andina Chilean<br> Peso (CLP)
Paraguay<br> Refrescos Paraguayan<br> Guaraní (PYG)
Rio<br> de Janeiro Refrescos Brazil<br> Real (BRL)

Foreign currency-denominated monetary assets and liabilities are converted to the functional currency at the spot exchange rate in effect on the closing date.

All differences arising from the liquidation or conversion of monetary items are recorded in the income statement, with the exception of the monetary items designated as part of the hedging of the Group’s net investment in a business abroad. These differences are recorded under other comprehensive income until the disposal of the net investment, at which point they are reclassified to the income statement. Tax adjustments attributable to exchange differences in these monetary items are also recognized under other comprehensive income.

Non-monetary items that are valued at historical cost in a foreign currency are converted using the exchange rate in effect at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are converted using the exchange rate in effect at the date on which fair value is determined. Losses or gains arising from the conversion of non-monetary items measured at fair value are recorded in accordance with the recognition of losses or gains arising from the change in the fair value of the respective item (e.g., exchange differences arising from items whose fair value gains or losses are recognized in another overall result or in results are also recognized under comprehensive income ).

Functional currency in hyperinflationary economies

Beginning July 2018, Argentina’s economy is considered as hyperinflationary, according to the criteria established in the International Accounting Standard No. 29 “Financial information in hyperinflationary economies” (IAS 29). This determination was carried out based on a series of qualitative and quantitative criteria, including an accumulated inflation rate of more than 100% for three years. In accordance with IAS 29, the financial statements of companies in which Embotelladora Andina S.A. participates in Argentina have been retrospectively restated by applying a general price index to the historical cost, in order to reflect the changes in the purchasing power of the Argentine peso, as of the closing date of these financial statements.

Non-monetary assets and liabilities were restated since February 2003, the last date an inflation adjustment was applied for accounting purposes in Argentina. In this context, it should be mentioned that the Group made its transition to IFRS on January 1, 2004, applying the attributed cost exemption for Property, plant and equipment.

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For consolidation purposes in Embotelladora Andina S.A. and as a result of the adoption of IAS 29, the results and financial situation of our Argentine subsidiaries were converted to the closing exchange rate (ARS/CLP) as December 31, 2020, in accordance with IAS 21 “Effects of foreign currency exchange rate variations”, when dealing with a hyperinflationary economy.

The comparative amounts in the consolidated financial statements are those that were presented as current year amounts in the relevant financial statements of the previous year (i.e., not adjusted for subsequent changes in price level or exchange rates). This results in differences between the closing net equity of the previous year and the opening net equity of the current year and, as an accounting policy option, these changes are presented as follows: (a) the re-measurement of initial balances under IAS 29 as an adjustment to equity and (b) subsequent effects, including re-expression under IAS 21 , as “Exchange rate differences in the conversion of foreign operations” under other comprehensive income.

Inflation for the periods from January to December 20202 and 2019 amounted to 36.01% and 54.85%, respectively.

2.5.2 Presentationcurrency

The presentation currency is the Chilean peso, which is the functional currency of the parent company, for such purposes, the financial statements of subsidiaries are translated from the functional currency to the presentation currency as indicated below:

a. Translation<br> of financial statements whose functional currency does not correspond to hyperinflationary<br> economies (Brazil and Paraguay)

Financial statements measured as indicated are translated to the presentation currency as follows:

• The<br> statement of financial position is translated to the closing exchange rate at the financial<br> statement date and the income statement is translated at the average monthly exchange<br> rates, the differences that result are recognized in equity under other comprehensive<br> income.
• Cash<br> flow income statement are also translated at average exchange rates for each transaction.
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• In<br> the case of the disposal of an investment abroad, the component of other comprehensive<br> income (OCI) relating to that investment is reclassified to the income statement.
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b. Translation<br> of financial statements whose functional currency corresponds to hyperinflationary economies<br> (Argentina)
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Financial statements of economies with a hyperinflationary economic environment, are recognized according to IAS 29 Financial Informationin Hyperinflationary Economies, and subsequently converted to Chilean pesos as follows:

• The<br> statement of financial position sheet is translated at the closing exchange rate at the<br> financial statements date.
• The<br> income statement is translated at the closing exchange rate at the financial statements<br> date
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• The<br> statement of cash flows is converted to the closing exchange rate at the date of the<br> financial statements.
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• For<br> the disposal of an investment abroad, the component of other comprehensive income (OCI)<br> relating to that investment is reclassified to the income statement.
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2.5.3 Exchangerates

Exchange rates regarding the Chilean peso in effect at the end of each period are as follows:

Date USD BRL ARS PGY
12.31.2020 710.95 136.80 8.44 0.103
12.31.2019 748.74 185.76 12.50 0.116
2.6 Property,plant, and equipment

The elements of Property, plant and equipment, are valued for their acquisition cost, net of their corresponding accumulated depreciation, and of the impairment losses they have experienced.

The cost of the items of Property, plant and equipment include in addition to the price paid for the acquisition: i) the financial expenses accrued during the construction period that are directly attributable to the acquisition, construction or production of qualified assets, which are those that require a substantial period of time before being ready for use, such as production facilities. The Group defines a substantial period as one that exceeds twelve months. The interest rate used is that corresponding to specific financing or, if it does not exist, the weighted average financing rate of the Company making the investment; and ii) personnel expenses directly related to the construction in progress.

Construction in progress is transferred to operating assets after the end of the trial period when they are available for use, from which moment depreciation begins.

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 since it has an indefinite useful life. 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 15-80
Plant<br> and equipment 5-20
Warehouse<br> installations and accessories 10-50
Furniture<br> and supplies 4-5
Motor<br> vehicles 4-10
Other<br> Property, plant and equipment 3-10
Bottles<br> and containers 2-5

The residual value and useful lives of Property, plant and equipment are reviewed and adjusted at the end of each fiscal year, if appropriate.

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The Company assesses on each reporting date if there is evidence that an asset may be impaired. The Group estimates the recoverable amount of the asset, if there is evidence, or when an annual impairment test is required for an asset.

Gains and losses on disposals of property, plant, and equipment are calculated by comparing the proceeds to the carrying amount and are charged to other expenses by function or other gains, as appropriate in the statement of comprehensive income.

2.7 Intangibleassets 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. Since goodwill is an intangible asset with indefinite useful life, it is recognized separately and tested annually for impairment. Goodwill is carried at cost less accumulated impairment losses.

Gains and losses on the sale of an entity include the carrying amount of goodwill related to that entity.

Goodwill is assigned to each cash generating unit (CGU) or group of cash-generating units, from where it is expected to benefit from the synergies arising from the business combination. Such CGUs or groups of CGUs represent the lowest level in the organization at which goodwill is monitored for internal management purposes.

2.7.2 Distributionrights

Distribution rights are contractual rights to produce and/or distribute products under the Coca-Cola brand and other brands in certain territories in Argentina, Brazil, Chile and Paraguay that were acquired during Business Combination. Distribution rights are born from the process of valuation at fair value of the assets and liabilities of companies acquired in business combinations. Distribution rights have an indefinite useful life and are not amortized, (as they are permanently renewed by The Coca-Cola Company) and therefore 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. Their accounting recognition is initially realized for their acquisition or production cost and, subsequently, they are valued at their net cost of their corresponding accumulated amortization and of the impairment losses that, if applicable, they have experienced. The aforementioned software is amortized within four years.

2.8 Impairmentof 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.

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For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units - CGU).

Regardless of what was stated in the previous paragraph, in the case of CGUs to which capital gains or intangible assets have been assigned with an indefinite useful life, the analysis of their recoverability is carried out systematically at the end of each fiscal year. These indications may include new legal provisions, change in the economic environment that affects business performance indicators, competition movements, or the disposal of an important part of a CGU.

Management reviews business performance based on geographic segments. Goodwill is monitored at the operating segment level that includes the different cash generating units in operations in Chile, Brazil, Argentina and Paraguay. The impairment of distribution rights is monitored geographically in the CGU or group of cash generating units, which correspond to specific territories for which Coca-Cola distribution rights have been acquired. These cash generating units or groups of cash generating units are composed of the following segments:

- Operation<br> in Chile;
- Operation<br> in Argentina;
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- Operation<br> in Brazil (State of Rio de Janeiro and Espirito Santo, Ipiranga territories, investment<br> in the Sorocaba associate and investment in the Leão Alimentos S.A. associate);
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- Operation<br> in Paraguay
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To check if goodwill has suffered a loss due to impairment of value, the Company compares the book value thereof with its recoverable value, and recognizes an impairment loss, for the excess of the asset’s carrying amount over its recoverable amount. To determine the recoverable values ​​of the CGU, management considers the discounted cash flow method as the most appropriate.

The main assumptions used in the annual test are:

a) Discount<br> rate

The discount rate applied in the annual test carried out in December 2020 was estimated using the CAPM (Capital Asset Pricing Model) methodology, which allows estimating a discount rate according to the level of risk of the CGU in the country where it operates. A nominal discount rate in local currency before tax is used according to the following table:

Discount rates 2020 Discount rates 2019
Argentina 28.1 % 35.3 %
Chile 7.2 % 8.5 %
Brazil 9.9 % 11.4 %
Paraguay 9.3 % 11.5 %
b) Other<br> assumptions
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The financial projections to determine the net present value of the future cash flows of the CGUs are modeled based on the main historical variables and the respective budgets approved by the CGU. In this regard, a conservative growth rate is used, which reaches 5% for the carbonated beverage category and up to 7% for less developed categories such as juices and waters. Beyond the fifth year of projection, growth perpetuity rates are established per operation ranging from 1% to 2.5% depending on the degree of maturity of the consumption of the products in each operation. In this sense, the variables with greatest sensitivity in these projections are the discount rates applied in the determination of the net present value of projected cash flows, growth perpetuities and EBITDA margins considered in each CGU.

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In order to sensitize the impairment test, variations were made to the main variables used in the model. Ranges used for each of the modified variables are:

- Discount<br> Rate: Increase / Decrease of up to 100 bps as a value in the rate at which future<br> cash flows are discounted to bring them to present value
- Perpetuity:<br> Increase / Decrease of up to 75 bps in the rate to calculate the perpetual growth of<br> future cash flows
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- EBITDA<br> margin: Increase / Decrease of 100 bps of EBITDA margin of operations, which is applied<br> per year for the projected periods, that is, for the years 2021-2025
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In each sensitization scenario of the of the 3 variables mentioned above, no signs of impairment were observed for the Company’s CGUs.

The Company performs the impairment analysis on an annual basis. As a result of the tests conducted as of December 31, 2020 and 2019, no evidence of impairment was identified in any of the CGUs listed above, assuming conservative EBITDA margin projections and in line with market history.

Despite the deterioration in macroeconomic conditions experienced by the economies of the countries in which operations are carried out and as a result of the pandemic, the impairment test yielded recovery values higher than the book values of assets, including those for the sensitivity calculations in the stress test conducted on the model.

It should be noted that although no impairment evidence was identified for the CGUs described above, the annual review of other investments identified that for the AdeS brand in Chile’s operation the recoverable value would be CLP 1,451 million below the book value recorded in the financial statements, which were reduced from its book value as of December 2020. The main reasons are due to the lower expected flows for the seed-based non-carbonated beverage segment for the local market.

2.9 Financialinstruments

A financial instrument is any contract that results in the recognition of a financial asset in one entity and a financial liability or equity instrument in another entity.

2.9.1 Financialassets

Pursuant to IFRS 9 “Financial Instruments”, except for certain trade accounts receivable, the Group initially measures a financial asset at its fair value plus transaction costs, in the case of a financial asset that is not at fair value, reflecting changes in P&L.

The classification is based on two criteria: (a) the Group’s business model for the purpose of managing financial assets to obtain contractual cash flows; and (b) if the contractual cash flows of financial instruments represent “solely payments of principal and interest” on the outstanding principal amount (the “SPPI criterion”). According to IFRS 9, financial assets are subsequently measured at (i) fair value with changes in P&L (FVPL), (ii) amortized cost or (iii) fair value through other comprehensive income (FVOCI).

The subsequent classification and measurement of the Group’s financial assets are as follows:

- Financial<br> asset at amortized cost for financial instruments that are maintained within a business<br> model with the objective of maintaining the financial assets to collect contractual cash<br> flows that meet the SPPI criterion. This category includes the Group’s trade and<br> other accounts receivable. 
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- Financial<br> assets measured at fair value with changes in other comprehensive income (FVOCI), with<br> gains or losses recognized in P&L at the time of liquidation. Financial assets in<br> this category correspond to the Group’s instruments that meet the SPPI criterion and<br> are kept within a business model both to collect cash flows and to sell.

Other financial assets are classified and subsequently measures as follows:

- Equity<br> instruments at fair value with changes in other comprehensive income (FVOCI) without<br> recognizing earnings or losses in P&L at the time of liquidation. This category only<br> includes equity instruments that the Group intends to keep in the foreseeable future<br> and that the Group has irrevocably chosen to classify in this category in the initial<br> recognition or transition.
- Financial<br> assets at fair value with changes in P&L (FVPL) include derivative instruments and<br> equity instruments quoted that the Group had not irrevocably chosen to classify at FVOCI<br> in the initial recognition or transition. This category also includes debt instruments<br> whose cash flow characteristics do not comply with the SPPI criterion or are not kept<br> within a business model whose objective is to recognize contractual cash flows or sale.
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A financial asset (or, where applicable, a portion of a financial asset or a portion of a group of similar financial assets) is initially disposed (for example, canceled in the Group’s consolidated financial statements) when:

- The<br> rights to receive cash flows from the asset have expired,
- The<br> Group has transferred the rights to receive the cash flows of the asset or has assumed<br> the obligation to pay all cash flows received without delay to a third party under a<br> transfer agreement; and the Group (a) has substantially transferred all risks and benefits<br> of the asset, or (b) has not substantially transferred or retained all risks and benefits<br> of the asset but has transferred control of the asset.
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2.9.2 FinancialLiabilities
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Financial liabilities are classified as a fair value financial liability at the date of their initial recognition, as appropriate, with changes in results, loans and credits, accounts payable or derivatives designated as hedging instruments in an effective coverage.

All financial liabilities are initially recognized at fair value and transaction costs directly attributable are netted from loans and credits and accounts payable.

The Group’s financial liabilities include trade and other accounts payable, loans and credits, including those discovered in current accounts, and derivative financial instruments.

The classification and subsequent measurement of the Group’s financial liabilities are as follows:

- Fair<br> value financial liabilities with changes in results include financial liabilities held<br> for trading and financial liabilities designated in their initial recognition at fair<br> value with changes in results. The losses or gains of liabilities held for trading are<br> recognized in the income statement.
- Loans<br> and credits are valued at cost or amortized using the effective interest rate method.<br> Gains and losses are recognized in the income statement when liabilities are disposed,<br> as well as interest accrued in accordance with the effective interest rate method.
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A financial liability is disposed of when the obligation is extinguished, cancelled or expires. Where an existing financial liability is replaced by another of the same lender under substantially different conditions, or where the conditions of an existing liability are substantially modified, such exchange or modification is treated as a disposal of the original liability and the recognition of the new obligation. The difference in the values in the respective books is recognized in the statement of income.

2.9.3 Offsettingfinancial instruments

Financial assets and financial liabilities are offset with the corresponding net amount presenting the corresponding net amount in the statement of financial position, if:

- There<br> is currently a legally enforceable right to offset the amounts recognized, and
- It<br> is intended to liquidate them for the net amount or to realize the assets and liquidate<br> the liabilities simultaneously.
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2.10 Derivativesfinancial instruments and hedging activities
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The Company and its subsidiaries use derivative financial instruments to mitigate risks relating to changes in foreign currency and exchange rates associated with raw materials, 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 at each closing date. Derivatives are accounted as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. 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 Derivativefinancial instruments designated as cash flow hedges

At the inception of the transaction, the group documents 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 Derivativefinancial 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 income statement under “Other income and losses”. The fair value of these derivatives is 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.

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The Company also evaluates the existence of derivatives implicitly in contracts and financial instruments as stipulated by IFRS 9 and classifies them pursuant to their contractual terms and the business model of the group. As of December 31, 2020, the Company had no implicit derivatives,

2.10.3 Fairvalue hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the date of the transaction. Fair value is based on the presumption that the transaction to sell the asset or to transfer the liability takes place;

- In<br> the asset or liability main market, or
- In<br> the absence of a main market, in the most advantageous market for the transaction of<br> those assets or liabilities.
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The Company maintains assets related to foreign currency derivative contracts which were classified as Other current and non-current financial assets and Other current and non-current financial liabilities, respectively, and are accounted at fair value within the statement of financial position. The Company uses the following hierarchy to determine and disclose the fair value of financial instruments with assessment techniques:

Level 1: Quote values (unadjusted) in active markets for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level variable used, which is significant for the calculation, is directly or indirectly observable

Level 3: Valuation techniques for which the lowest level variable used, which is significant for the calculation, is not observable.

During the reporting periods there were no transfers of items between fair value measurement categories. All of which were valued during the periods 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. Spare parts and production materials are stated at the lower of cost or net realizable value.

The initial cost of inventories includes the transfer of losses and gains from cash flow hedges, related to the purchase of raw materials.

Estimates are also made for obsolescence of raw materials and finished products based on turnover and age of the related goods.

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2.12 Trade accounts receivable and other accounts receivable

Trade accounts receivable and other accounts receivable are measured and recognized at the transaction price at the time they are generated less the provision for expected credit losses, pursuant to the requirements of IFRS 15, since they do not have a significant financial component, less the provision of expected credit losses. The provision for expected credit losses is made applying a value impairment model based on expected credit losses for the following 12 months. The Group applies a simplified focus for trade receivables, thereby impairment is always recorded referring to expected losses during the whole life of the asset. The carrying amount of the asset is reduced by the provision of expected credit losses, and the loss is recognized in administrative expenses in the consolidated income statement by function.

2.13 Cash and cash equivalents

Cash and cash equivalents include cash on hand, bank balances, time deposits and other short-term highly liquid and low risk of change in value investments and mutual funds with original short-term maturities equal to or less than three months from the date of acquisition.

2.14 Other financial liabilities

Resources obtained from financial institutions as well as the issuance of debt securities are initially recognized at fair value, net of costs incurred during the transaction. Then, liabilities are valued by accruing interests in order to equal the current value with the future value of liabilities payable, using the effective interest rate method.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualified assets, considered as those that require a substantial period of time in order to get ready for their forecasted use or sale, are added to the cost of those assets until the period in which the assets are substantially ready to be used or sold.

2.15 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.

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 near future.

The Group offsets deferred tax assets and liabilities if and only if it has legally recognized a right to offset against the tax authority the amounts recognized in those items; and intends to settle the resulting net debts, or to realize the assets and simultaneously settle the debts that have been offset by them.

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2.16 Employee benefits

The Company records a liability regarding indemnities for years of service that will be paid to employees in accordance with individual and collective agreements subscribed with employees, which is recorded at actuarial value in accordance with IAS 19 “Employee Benefits”.

Results from updated of actuarial variables are recorded within other comprehensive income in accordance with IAS 19.

Additionally, the Company has retention plans for some officers, which have a provision pursuant to the guidelines of each plan. These plans grant the right to certain officers to receive a cash payment on a certain date once they have fulfilled with the required years of service.

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 current non-financial liabilities.

2.17 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 obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.

2.18 Leases

In accordance with IFRS 16 “Leases” Embotelladora Andina analyzes, at the beginning of the contract, the economic background of the agreement, to determine if the contract is, or contains, a lease, evaluating whether the agreement transfers the right to control the use of an identified asset for a period of time in exchange for a consideration. Control is considered to exist if the client has i) the right to obtain substantially all the economic benefits from the use of an identified asset; and ii) the right to direct the use of the asset.

The Company when operating as a lessee, at the beginning of the lease (on the date the underlying asset is available for use) records an asset for the right-of-use in the statement of financial position (under Property, plant and equipment) and a lease liability (under Other financial liabilities).

This asset is initially recognized at cost, which includes: i) value of the initial measurement of the lease liability; ii) lease payments made up to the start date less lease incentives received; iii) the initial direct costs incurred; and iv) the estimation of costs for dismantling or restoration. Subsequently, the right-of-use asset is measured at cost, adjusted by any new measurement of the lease liability, less accumulated depreciation and accumulated losses due to impairment of value. The right-of-use asset is depreciated in the same terms as the rest of similar depreciable assets, if there is reasonable certainty that the lessee will acquire ownership of the asset at the end of the lease. If such certainty does not exist, the asset depreciates at the shortest period between the useful life of the asset or the lease term.

On the other hand, the lease liability is initially measured at the present value of the lease payments, discounted at the incremental loan rate of the Company, if the interest rate implicit in the lease could not be easily determined. Lease payments included in the measurement of the liability include: i) fixed payments, less any lease incentive receivable; ii) variable lease payments; iii) residual value guarantees; iv) exercise price of a purchase option; and v) penalties for lease termination.

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The lease liability is increased to reflect the accumulation of interest and is reduced by the lease payments made. In addition, the carrying amount of the liability is measured again if there is a modification in the terms of the lease (changes in the term, in the amount of payments or in the evaluation of an option to buy or change in the amounts to be paid). Interest expense is recognized as an expense and is distributed among the periods that constitute the lease period, so that a constant interest rate is obtained in each year on the outstanding balance of the lease liability.

Short-term leases, equal to or less than one year, or lease of low-value assets are excepted from the application of the recognition criteria described above, recording the payments associated with the lease as an expense in a linear manner throughout the lease term. The Company does not act as lessor.

2.19 Depositsfor returnable containers

This liability comprises 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 would be reimbursed when the customer or distributor returns the bottles and containers in good condition, together with the original invoice.

This liability is presented under Other current financial liabilities since 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.

2.20 Revenuerecognition

The Company recognizes revenue when control over a good or service is transferred to the client. Control refers to the ability of the client to direct the use and obtain substantially all the benefits of the goods and services exchanged. Revenue is measured based on the consideration to which it is expected to be entitled for such transfer of control, excluding amounts collected on behalf of third parties.

Management has defined the following indicators for revenue recognition, applying the five-step model established by IFRS 15 “Revenue from contracts with customers”: 1) Identification of the contract with the customer; 2) Identification of performance obligations; 3) Determination of the transaction price; 4) Assignment of the transaction price; and 5) Recognition of revenue.

All the above conditions are met at the time the products are delivered to the customer. Net sales reflect the units delivered at list price, net of promotions, discounts and taxes.

The revenue recognition criteria of the good provided by Embotelladora Andina corresponds to a single performance obligation that transfers the product to be received to the customer.

2.21 Contributionsof The Coca-Cola Company

The Company receives certain discretionary contributions from The Coca-Cola Company (TCCC) mainly related to the financing of advertising and promotional programs for its products in the territories where the Company has distribution licenses. The contribution received from TCCC are recognized in net income after the conditions agreed with TCCC in order to become a creditor to such incentive have been fulfilled, they are recorded as a reduction in the marketing expenses included in the Administration Expenses account. Given its discretionary nature, the portion of contributions received in one period does not imply it will be repeated in the following period.

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2.22 Dividend payments

Dividend distribution to Company shareholders is recorded as a liability in the Company’s Consolidated Financial Statements, considering the 30% minimum dividend of the period’s earnings established by Chilean Corporate Law, unless otherwise agreed in the respective meeting, by the unanimity of the issued shares.

Interim and final dividends are recorded at the time of their approval by the competent body, which in the first case is normally the Board of Directors of the Company, while in the second case it is the responsibility of General Shareholders’ Meeting.

2.23 Critical accounting estimates and judgments

In preparing the consolidated financial statements, the Company has used certain judgments and estimates made to quantify some of the assets, liabilities, income, expenses and commitments. Following is an explanation of the estimates and judgments that might have a material impact on future financial statements.

2.23.1 Impairmentof goodwill and intangible assets with indefinite useful lives

The Company tests annually whether goodwill and intangible assets with indefinite useful life (such as distribution rights) have suffered any impairment. The recoverable amounts of cash generating units are 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 a 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 lowest discounted cash flows analysis. At December 31, 2020 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 of the Brazilian, Argentinian and Paraguayan subsidiaries.

2.23.2 FairValue of Assets and Liabilities

IFRS requires in certain cases that assets and liabilities be recorded at their fair value. Fair value is the price that would be received for selling an asset or paid to transfer a liability in a transaction ordered between market participants at the date of measurement.

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 that do not come from these, but from other assets. The Company also applies estimations over the period during which the intangible assets will generate cash flows, cash flows from other assets, and a discount rate.

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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.

2.23.3 Allowancesfor doubtful accounts

The Group uses a provision matrix to calculate expected credit losses for trade receivables. Provisions are based on due days for various groups of customer segments that have similar loss patterns (i.e. by geography region, product type, customer type and rating, and credit letter coverage and other forms of credit insurance).

The provision matrix is initially based on the historically observed non-compliance rates for the Group. The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For example, if expected economic conditions (i.e. gross domestic product) are expected to deteriorate over the next year, which can lead to more non-compliances in the industry, historical default rates are adjusted. At each closing date, the observed historical default rates are updated and changes in prospective estimates are analyzed. The assessment of the correlation between observed historical default rates, expected economic conditions and expected credit losses are significant estimates.

2.23.4 Usefullife, 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.

At the closing of December 2020, based on the best estimate according to the most recent reliable, reasonable and available information, management made a change in its useful life accounting estimates, for the Chilean Operation.

Changes in estimates are mainly recorded in fixed assets related to plant and equipment, which includes the following items:

Assets Previous<br> year range New<br> year range
Buildings 30-50 15-80
Plants<br> and equipment 10-20 5-20
Fixed<br> installations and accessories 10-30 10-50
Furniture<br> and materials 4-5 5
Vehicles 5-7 4-10
Other<br> property, plant and equipment 3-8 5-10
Containers<br> and cases 2-8 2-5 
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This change in estimated useful life resulted in greater depreciation for the period between January 1 to December 31, 2020 of approximately CLP 7,071,114 thousand, representing approximately 6% of total consolidated depreciation.

2.24.1 NewStandards, Interpretations and Amendments for annual periods beginning on or after January 1, 2020.

Standards and interpretations, as well as the improvements and amendments to IFRS, which have been issued, effective at the date of these financial statements, are detailed below:

Standards and Interpretations Mandatory application date
Conceptual Framework Revised Conceptual Framework January 1, 2020

RevisedConceptual Framework

The IASB issued a Revised Conceptual Framework in March 2018, incorporating some new concepts, providing updated definitions and recognition criterion for assets and liabilities and clarifying some important concepts. Changes in the Conceptual Framework may affect the application of IFRS when no standard applies to a given transaction or event. Application of the revised Conceptual Framework did not have significant impacts on the financial statements of the Company.

Amendments to IFRS which have been issued and are in effect beginning January 1, 2020 are detailed below:

Amendments Implementation date
IFRS 3 Definition of a business January 1,2020
IAS 1 and IAS 8 Definition of material January 1,2020
IFRS 9, IAS 39 and IFRS 7 Reference Interest Rate Reform January 1,2020
IFRS 16 COVID-19-Related Rent Concessions January 1,2020

IFRS3 Business Combinations - Definition of Business

The IASB issued amendments to the definition of business in IFRS 3 Business Combinations, to help entities determine whether an acquired set of activities and assets is a business or not. The IASB clarifies the minimum requirements for defining a business, eliminates the assessment of whether market participants are able to replace any missing elements, includes guidance to help entities assess whether a process acquired is substantial, reduces the definitions of a business and products and introduces an optional fair value concentration test.

Amendments have to be applied to business combinations or asset acquisitions that occur on or after the start of the first annual reporting period beginning on or after January 1, 2020. As a result, entities do not have to review transactions that occurred in previous periods. Early application is permitted and must be disclosed.

Because the amendments apply prospectively to transactions or other events that occur on or after the date of the first application, most entities will probably not be affected by these amendments in the transition. However, those entities that consider the acquisition of a set of activities and assets after implementing the amendments must first update their accounting policies in a timely manner.

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Amendments may also be relevant in other areas of IFRS (e.g. they may be relevant when a controller loses control of a subsidiary and has anticipated the sale or contribution of assets between an investor and its associate or joint venture) (Amendments to IFRS 10 and IAS 28).

Company management performs the impact assessment of the amendment once these types of transactions take place.

IAS1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors – Definitionof Material

In October 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies,changes in accounting estimates and errors, to align the definition of “material” in all standards and to clarify certain aspects of the definition. The new definition states that information is material if when omitted, misstated, or reasonably hidden could be expected to influence decisions that primary users of general-purpose of the financial statements make based on those financial statements, which provide financial information about a specific reporting entity.

Amendments should be applied prospectively. Early application is permitted and must be disclosed.

While amendments to the definition of material are not expected to have a significant impact on an entity’s financial statements, the introduction of the term “hide” in the definition could impact the way materiality judgments are made, increasing the importance of how information is communicated and organized in the financial statements.

Company management has assessed the amendment, which have not had any impact on these financial statements.

IFRS9, IAS 39 and IFRS 7 Reference Interest Rate Reform

In September 2019, the IASB issued amendments to IFRS 9, IAS 39 and IFRS 7, which concludes the first stage of its work to respond to the effects of the reform of interbank offer rate (IBOR) in financial information. The amendments provide temporary exceptions that allow hedge accounting to continue during the uncertain period, prior to replacing existing benchmark interest rates with near-risk free alternative interest rates.

Amendments should be applied retrospectively. However, any hedge relationship that has previously been discontinued cannot be reinstated with the application of these amendments, nor can a hedge relationship be designated using the retrospect reasoning benefit. Early application is permitted and must be disclosed.

Company management has assessed the amendment, which have not had significant impacts on these financial statements.

IFRS16 COVID-19-Related Rent Concessions

In May 2020, the IASB issued an amendment to IFRS 16 Leases to provide relief for lessees in the application of IFRS 16 guidance regarding lease modifications due to rent concessions occurring as a direct consequence of the Covid-19 pandemic. The amendment does not affect lessors.

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As a practical solution, a lessee may choose not to assess whether the Covid-19-related rent reduction granted by a lessor is a modification of the lease. A lessee making this choice will recognize changes in lease payments from Covid-19-related rent reductions in the same way as it would recognize the change under IFRS 16 as if such a change was not a modification of the lease.

A lessee shall apply this practical solution retroactively, recognizing the cumulative effect of the initial application of the amendment as an adjustment in the initial balance of accumulated results (or another component of equity, as appropriate) at the beginning of the annual reporting period in which the lessee first applies the amendment.

A lessee will apply this amendment for annual periods beginning on or after September 1, 2020. Early application is permitted, including in the financial statements not authorized for publication as of May 28, 2020.

Company management has not implemented this amendment because it has no Covid-19-related lease modifications.

2.24.2New Accounting Standards, Interpretations and Amendments with effective application for annual periods beginning on or after January1, 2020.

Standards and interpretations, as well as IFRS amendments, which have been issued, but have still not become effective as of the date of these financial statements are set forth below. The Company has not made an early adoption of these standards:

Standards and Interpretations Mandatory application date
IFRS 17 Insurance Contracts January 1, 2023

IFRS17 - Insurance Contracts

In May 2017, the IASB issued IFRS 17 Insurance Contracts, a new accounting standard for insurance contracts that covers recognition, measurement, presentation and disclosure. Once effective, it will replace IFRS 4 Insurance Contracts issued in 2005. The new rule applies to all types of insurance contracts, regardless of the type of entity issuing them, as well as certain guarantees and financial instruments with certain characteristics of discretionary participation. Some exceptions within the scope may be applied.

IFRS 17 will be effective for periods starting on or after January 1, 2023, with comparative figures required. Early application is permitted, provided that the entity applies IFRS 9 Financial Instruments, on or before the date on which IFRS 17 is first applied.

Amendments to IFRS that have been issued to become effective in the near future are detailed below.

Amendments Date of application
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform—Phase 2 January 1, 2023
IAS 1 Classification of liabilities as current or non-current January 1, 2023
IFRS 3 Reference to the Conceptual Framework January 1, 2022
IAS 16 Property, Plant and Equipment — Proceeds before Intended Use January 1, 2022
IAS 37 Onerous Contracts—Cost of Fulfilling a Contract January 1, 2022
IFRS 10 and IAS 28 Consolidated Financial Statements - sale or contribution of assets between an investor and its associate or joint venture To be determined 
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IFRS9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform—Phase 2

In August 2020, the IASB published the second phase of the Interest Rate Benchmark Reform containing amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16. With this publication, the IASB completes its work to respond to the effects of Interbank Offer Rate Reform (IBOR) on financial information.

The amendments provide temporary exceptions that address the effects on financial information when a benchmark interest rate (IBOR) is replaced by an almost risk-free alternative interest rate.

Amendments are required and early application is permitted. A hedging ratio must be resumed if the hedging ratio was discontinued solely due to the changes required by the reform of the benchmark interest rate and would therefore not have been discontinued if the second phase of amendments had been implemented at that time. While application is retrospective, an entity is not required to restate previous periods.

IAS1 Presentation of Financial Statements - Classification of liabilities as current or non-current

In June 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify requirements for the classification of liabilities as current or non-current.

The amendments are effective for periods beginning on or after January 1, 2022. Entities should carefully consider whether there are any aspects of the amendments suggesting that the terms of their existing loan agreements should be renegotiated. In this context, it is important to stress that amendments must be implemented retrospectively.

IFRS3 Reference to the Conceptual Framework

In May 2020, the IASB issued amendments to IFRS 3 Business Combinations – Reference to the Conceptual Framework. These amendments are intended to replace the reference to an earlier version of the IASB Conceptual Framework (1989 Framework) with a reference to the current version issued in March 2018 without significantly changing its requirements.

The amendments shall be effective for periods beginning on or after January 1, 2022 and should be applied retrospectively. Early application is permitted if, at the same time or before, an entity also applies all amendments contained in the amendments to the Conceptual Framework References of the IFRS Standards issued in March 2018.

The amendments will provide consistency in financial information and avoid potential confusion by having more than one version of the Conceptual Framework in use.

IAS16 Property, Plant and Equipment — Proceeds before Intended Use

The amendment prohibits deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss for the period, pursuant to applicable standards.

The amendment shall be effective for periods beginning on or after January 1, 2022. The amendment should be applied retrospectively only property, plant and equipment items available for use on or after the beginning of the first period presented in the financial statements in which the entity first applies the amendment.

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IAS37 Onerous Contracts—Cost of Fulfilling a Contract

In May 2020, the IASB issued amendments to IAS 37 Provisions, Contingent Liabilities, and Contingent Assets to specify the costs an entity needs to include when assessing whether a contract is onerous, or it generates losses.

The amendment shall be effective for periods beginning on or after January 1, 2022. The amendment should be applied retrospectively to existing contracts at the beginning of the annual reporting period in which the entity first applies the amendment (date of initial application). Early application is permitted and must be disclosed.

The amendments are intended to provide clarity and help ensure consistent implementation of the standard. Entities that previously applied the incremental cost approach will see an increase in provisions to reflect the inclusion of costs directly related to contract activities, while entities that previously recognized contractual loss provisions using the guidance to the previous standard, IAS 11 Construction Contracts, should exclude the allocation of indirect costs from their provisions.

IFRS10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures – sale or contribution of assetsbetween an investor and its associate or joint venture

Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures (2011) address a recognized inconsistency between IFRS 10 requirements and IAS 28 (2011) requirements in the treatment of the sale or contribution of assets between an investor and its associate or joint venture. The amendments, issued in September 2014, state that when the transaction involves a business (whether it is in a subsidiary or not) all gains, or losses generated are recognized. A partial gain or loss is recognized when the transaction involves assets that do not constitute a business, even when the assets are in a subsidiary. The mandatory implementation date of these amendments is yet to be determined because the IASB is awaiting the results of its research project on accounting according to the equity method of accounting. These amendments must be applied retrospectively, and early adoption is allowed, which must be disclosed.

Company management will perform an impact assessment of the above described amendments once they become effective.

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3 – FINANCIAL REPORTING BY SEGMENT

The Company provides financial 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 strategic 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:

• Operation<br> in Chile
• Operation<br> in Brazil
--- ---
• Operation<br> in Argentina
--- ---
• Operation<br> in Paraguay
--- ---

The four operating segments conduct their businesses through the production and sale of soft drinks and other beverages, as well as packaging materials.

Expenses and revenue associated with the Corporate Officer were assigned to the operation in Chile in the soft drinks segment because Chile is the country that manages and pays the corporate expenses, which would also be substantially incurred, regardless of the existence of subsidiaries abroad.

Total revenues by segment include sales to unrelated customers and inter-segments, as indicated in the consolidated statement of income of the Company.

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A summary of the Company’s operating segments in accordance to IFRS is as follows:

For the period year ended December<br> 31, 2020 Chile<br> <br>Operation Argentina<br> <br><br> Operation Brazil<br> <br>Operation Paraguay<br> <br><br> Operation Intercompany<br><br> Eliminations Consolidated<br><br> Total
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Net sales 644,761,885 318,827,620 580,063,307 157,152,584 (2,524,159 ) 1,698,281,237
Cost of sales (392,720,439 ) (172,065,726 ) (373,444,835 ) (86,791,818 ) 2,524,159 (1,022,498,659 )
Distribution expenses (59,897,972 ) (49,112,014 ) (34,784,528 ) (8,737,504 ) - (152,532,018 )
Administrative expenses (112,306,460 ) (69,668,104 ) (79,674,089 ) (21,990,282 ) - (283,638,935 )
Finance income 6,437,945 1,169,193 7,068,396 270,345 - 14,945,879
Financial<br> expense (23,938,992 ) (729,164 ) (30,104,681 ) - - (54,772,837 )
Financial<br> expenses, net (*) **** (17,501,047 ) **** 440,029 **** **** (23,036,285 ) **** 270,345 **** **** - **** **** (39,826,958 )
Share of entity in<br> income of associates accounted for using the equity method, total 1,248,478 - 980,285 - - 2,228,763
Income tax expense (23,057,195 ) (7,668,059 ) (20,536,914 ) (3,643,231 ) - (54,905,399 )
Other<br> income (loss) (21,231,223 ) (6,046,069 ) 3,064,104 222,477 - (23,990,711 )
Net<br> income of the segment reported **** 19,296,027 **** **** 14,707,677 **** **** 52,631,045 **** **** 36,482,571 **** **** - **** **** 123,117,320 ****
Depreciation and amortization 50,271,626 22,895,329 27,339,714 10,413,848 - 110,920,517
Current assets 532,713,969 70,215,594 149,709,603 44,658,550 - 797,297,716
Non-current<br> assets 636,275,547 144,802,176 643,447,811 226,241,150 - 1,650,766,684
Segment<br> assets, total **** 1,168,989,516 215,017,770 793,157,414 270,899,700 - 2,448,064,400
Carrying amount in<br> associates and joint ventures accounted for using the equity method, total 50,628,307 - 37,328,047 - - 87,956,354
Segment disbursements<br> of non-monetary assets 41,114,189 15,803,061 17,075,672 11,882,036 - 85,874,958
Current liabilities 198,669,957 58,904,281 96,144,933 24,337,015 - 378,056,186
Non-current<br> liabilities 748,105,248 10,717,606 465,225,175 14,399,594 - 1,238,447,623
Segment<br> liabilities, total **** 946,775,205 **** **** 69,621,887 **** **** 561,370,108 **** **** 38,736,609 **** **** - **** **** 1,616,503,809 ****
Cash flows (used in)<br> provided by in Operating Activities 191,911,595 24,603,123 36,409,227 25,845,053 - 278,768,998
Cash flows (used in)<br> provided by Investing Activities (178,910,100 ) (16,010,950 ) (17,075,672 ) (11,882,036 ) - (223,878,758 )
Cash flows (used in)<br> provided by Financing Activities 117,081,470 (167,606 ) (3,443,826 ) (429,077 ) - 113,040,961

(*) Financial expenses associated with external financing for the acquisition of companies, including capital contributions among others, are also presented in this item.

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For the period year ended December<br> 31, 2019 Chile<br> <br>Operation Argentina<br> <br><br> Operation Brazil<br> <br>Operation Paraguay<br> <br><br> Operation Intercompany<br><br> Eliminations Consolidated<br><br> Total
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Net sales 608,952,121 394,635,840 619,321,284 158,892,010 (2,776,140 ) 1,779,025,115
Cost of sales (359,465,664 ) (214,447,259 ) (384,838,875 ) (92,368,109 ) 2,776,140 (1,048,343,767 )
Distribution expenses (59,076,433 ) (56,421,024 ) (42,673,570 ) (8,825,262 ) (166,996,289 )
Administrative expenses (114,250,801 ) (89,276,114 ) (98,071,441 ) (24,305,453 ) (325,903,809 )
Finance income 1,286,021 1,346,501 42,327,682 195,587 - 45,155,791
Financial<br> expense (13,151,176 ) 999,370 (34,057,214 ) 0 - (46,209,020 )
Financial<br> expenses, net (*) (11,865,155 ) 2,345,871 8,270,468 195,587 - (1,053,229 )
Share of entity in<br> income of associates accounted for using the equity method, total 381,255 - (3,796,338 ) - - (3,415,083 )
Income tax expense (12,838,517 ) (6,902,265 ) (36,821,377 ) (4,604,732 ) - (61,166,891 )
Other<br> income (loss) (15,109,823 ) (3,235,926 ) 21,754,242 (308,315 ) - 3,100,178
Net<br> income of the segment reported 36,726,983 26,699,123 83,144,393 28,675,726 - 175,246,225
Depreciation and amortization 46,105,063 25,369,034 29,945,887 9,667,300 - 111,087,284
Current assets 244,504,165 76,354,086 171,349,293 41,266,559 - 533,474,103
Non-current<br> assets 657,069,423 165,116,212 786,979,234 248,309,451 - 1,857,474,320
Segment<br> assets, total 901,573,588 241,470,298 958,328,527 289,576,010 - 2,390,948,423
Carrying amount in<br> associates and joint ventures accounted for using the equity method, total 49,703,673 - 50,163,060 - - 99,866,733
Segment disbursements<br> of non-monetary assets 51,542,820 24,343,002 21,343,312 13,454,124 - 110,683,258
Current liabilities 193,298,799 68,120,885 124,248,587 25,990,081 - 411,658,352
Non-current<br> liabilities 474,576,722 13,350,651 506,297,573 16,161,177 - 1,010,386,123
Segment<br> liabilities, total 667,875,521 81,471,536 630,546,160 42,151,258 - 1,422,044,475
Cash flows (used in)<br> provided by in Operating Activities 145,551,360 30,440,761 63,145,540 16,010,813 - 255,148,474
Cash flows (used in)<br> provided by Investing Activities (50,706,748 ) (24,790,752 ) (21,096,376 ) (13,454,124 ) - (110,048,000 )
Cash flows (used in)<br> provided by Financing Activities (100,352,068 ) (616,475 ) (25,654,792 ) (489,302 ) - (127,112,637 )

(*) Financial expenses associated with external financing for the acquisition of companies, including capital contributions among others, are also presented in this item.

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4 – CASH AND CASH EQUIVALENTS

The composition of Cash and cash equivalents is as follows:

By item 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Cash 339,628 2,331,714
Bank balances 82,997,449 51,176,617
Other fixed rate instruments 226,193,622 104,059,655
Total cash and cash equivalents 309,530,699 157,567,986

Other fixed income instruments are mainly investments in short-term fixed income instruments with good credit rating. There are no restrictions for significant amounts available to cash.

By currency 12.31.2019
CLP (000’s)
21,332,268 16,733,249
223,449 9,722
ARS 14,821,502 3,830,199
CLP 201,936,140 78,420,966
PGY 21,688,915 12,383,873
BRL 49,528,425 46,189,977
Cash and cash equivalents 309,530,699 157,567,986

All values are in US Dollars.

5 – OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS

The composition of other financial assets is as follows:

Balance
Current Non-current
Other financial assets 12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Financial assets measured at amortized cost (1) 140,304,853 30,073 1,216,865 1,216,865
Financial assets at fair value (2) - 317,205 150,983,295 98,918,457
Other financial assets measured at amortized cost (3) - - 9,813,118 10,648,989
Total 140,304,853 347,278 162,013,278 110,784,311
(1) Financial<br>instrument that does not meet the definition of cash equivalents as defined in Note 2.13. CLP 139,449,883 of these financial assets<br>correspond to short-term realizable instruments, managed by third parties.
--- ---
(2) Market<br>value of hedging instruments. See details in Note 22.
--- ---
(3) Correspond<br>to the rights in the Argentinean company Alimentos de Soya S.A., manufacturing company of “AdeS” products and its<br>distribution rights, which are framed in the purchase of the “AdeS” brand managed by The Coca-Cola Company at the<br>end of 2016.
--- --- 
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6 – OTHER CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS

The composition of other non-financial assets is as follows:

Balance
Current Non-current
Other non-financial assets 12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Prepaid expenses 7,932,770 11,242,456 527,110 595,045
Tax credit remainder (1) 234,124 180,695 76,262,417 103,540,639
Guaranty deposit 286 422 -
Deposit in courts - - 11,492,642 19,226,030
Others (2) 5,207,201 4,765,392 1,960,503 2,274,436
Total 13,374,381 16,188,965 90,242,672 125,636,150
(1) In<br> November 2006, Rio de Janeiro Refrescos Ltda. (“RJR”) filed a court order No.<br> 0021799-23.2006.4.02.5101 seeking recognition of the right to exclude ICMS (Tax on Commerce<br> and Services) from the PIS (Program of Social Integration) and COFINS (Contribution for<br> the Financing of Social Security) calculation base, as well as recognition of the right<br> to obtain reimbursement of amounts unduly collected since November 14, 2001, duly restated<br> using the Selic interest rate. On May 20, 2019, the ruling favoring RJR became final,<br> allowing the recovery of amounts overpaid from November 14, 2001 to August 2017. It is<br> worth noting that in September 2017, RJR had already obtained a Security Mandate, which<br> granted it the right to exclude, from that date, the ICMS from the PIS and COFINS calculation<br> base.
--- ---

The company took steps to assess the total amount of the credit at issue for the period of unduly collection of taxes from November 2001 to August 2017, totaling CLP 103,540 million (BRL 613 million, of which BRL 370 million corresponds to capital and BRL 243 million to interest and monetary restatement. These amounts were recorded as of December 31, 2019. In addition, the company acknowledged the indirect costs (attorneys’ fees, consulting, auditing, indirect taxes and other obligations) resulting from the recognition of the right acquired in court, totaling BRL 175 million.

The payment of income tax occurs when liquidating the credit, therefore the respective deferred tax liability recorded was CLP 20,246 million (BRL 148 million). In 2020 already CLP 16,142 million (BRL 118 million) have been offset.

Compahia de Bebidas Ipiranga (“CBI”) acquired in September 2013, also filed a court order No. 0014022-71.2000.4.03.6102 in order to recognize the same issue as the one previously described for RJR. In September 2019, the ruling favoring CBI became final, allowing the recovery of the amounts overpaid from September 12, 1989 to December 1, 2013 (date when CBI was incorporated by RJR). CBI’s credit will be generated in the name of RJR, however, pursuant to the contractual clause (“Subscription Agreement for Shares and Exhibits”), as soon as collected by RJR, this payment should be immediately paid to former CBI shareholders (supervention favoring former CBI shareholders). Based on supporting documents found, for the August 1993-November 2013 period, the amount of credits related to this process have been calculated and totaled CLP 22,162 million (BRL 162 million, of which BRL 80 million corresponds to capital and BRL 82 million correspond to interest and monetary restatement), from this amount, CLP 958 million (BRL 7 million) must be deducted from indirect taxes, thus generating an account payable to former shareholders for CLP 21,204 million (BRL 155 billion) and a government receivables related to credits for that same amount. It is worth mentioning that for the September 1989-July 1993 period, the Company did not account the credit due to the lack of supporting documents.

In addition, RJR has an associate called Sorocaba Refrescos SA (“Sorocaba”), where it has a 40% shareholding in the capital, which also filed a court order seeking recognition of the right to the same issue as RJR’s action. On June 13, 2019, the ruling favoring Sorocaba became final, allowing the recovery of the amounts overpaid from July 5, 1992 until the date on which the decision became final. As of December 31, 2020, the impacts were recognized in RJR’s result from its ownership in Sorocaba, totaling CLP 6,703 million (BRL 49 million, of which BRL 28 million correspond to capital and BRL 21 million correspond to interest and monetary restatement). In addition, the company recognized indirect costs (attorneys’ fees, consulting, auditing, indirect taxes, and other obligations) resulting from the recognition of the right acquired in court, totaling CLP 1,368 million (BRL 10 million).

Income tax payment occurs upon credit settlement, with that the respective deferred tax liability recorded was CLP 1,778 million (BRL 13 million). In 2020, CLP 684 million (BRL 5 million) of the total credit obtained by Sorocaba have already been offset.

(2) Other<br> non-financial assets are mainly composed of advances to suppliers. 
34

7 – TRADE AND OTHER RECEIVABLES

The composition of trade and other receivables is as follows:

Balance
Current Non-current
Trade debtors and other accounts receivable, Net 12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s) CLP(000’s) CLP (000’s)
Trade debtors 151,017,754 150,509,528 40,432 -
Other debtors 41,688,151 39,620,246 32,219 466,007
Other accounts receivable 1,315,348 947,814 1,211 57,762
Total 194,021,253 191,077,588 73,862 523,769
Balance
--- --- --- --- --- --- --- --- ---
Current Non-current
Trade debtors and other accounts receivable, Gross 12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP(000’s) CLP(000’s) CLP(000’s) CLP (000’s)
Trade debtors 154,591,684 153,654,549 40,432 -
Other debtors 44,691,925 42,719,679 32,219 466,007
Other accounts receivable 1,533,307 1,196,347 1,211 57,762
Total 200,816,916 197,570,575 73,862 523,769

The stratification of the portfolio is as follows:

Balance
Current trade debtors without impairment impact 12.31.2020 <br> CLP (000’s) 12.31.2019<br> CLP (000’s)
Less than one month 147,177,119 148,150,717
Between one and three months 2,230,594 1,872,144
Between three and six months 1,708,015 838,277
Between six and eight months 509,855 482,596
Older than eight months 3,006,533 2,310,815
Total 154,632,116 153,654,549

The Company has approximately 283,500 clients, which may have balances in the different sections of the stratification. The number of clients is distributed geographically with 66,100 in Chile, 89,900 in Brazil, 69,600 in Argentina and 58,000 in Paraguay.

35

The movement in the allowance for expected credit losses is presented below:

12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Opening balance 6,492,987 6,298,208
Increase (decrease) 2,321,958 1,762,246
Provision reversal (1,595,521 ) (1,184,953 )
Increases (decrease) for changes of foreign currency (423,761 ) (382,514 )
Sub – total movements 302,676 194,779
Ending balance 6,795,663 6,492,987

8 – INVENTORIES

The composition of inventories is detailed as follows:

Details 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Raw materials (1) 80,902,721 93,524,911
Finished goods 27,556,884 32,337,670
Spare parts and supplies 19,592,377 20,769,626
Work in progress 76,577 567,973
Other inventories 3,101,016 3,625,488
Obsolescence provision (2) (3,256,925 ) (3,184,444 )
Total 127,972,650 147,641,224

The cost of inventory recognized as cost of sales amounts to CLP 1,022,498,659 thousand and CLP 1,048,343,767 thousand as of December 31, 2020 and 2019, respectively.

(1) Approximately<br> 80% is composed of concentrate and sweeteners used in the preparation of beverages, as<br> well as caps and PET supplies used in the packaging of the product.
(2) The<br> obsolescence provision is related mainly with the obsolescence of spare parts classified<br> as inventories and to a lesser extent to finished products and raw materials. The general<br> standard is to provision all those multi-functional spare parts without utility in rotation<br> in the last four years prior to the technical analysis technical to adjust the provision.<br> In the case of raw materials and finished products, the obsolescence provision is determined<br> according to maturity.
--- ---

9 – TAX ASSETS AND LIABILITIES

The composition of current tax accounts receivable is the following:

Tax assets 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Tax credits (1) 218,472 9,815,294
Total 218,472 9,815,294

(1) Tax credits correspond to income tax credits on training expenses, purchase of Property, plant and equipment, and donations.

36

The composition of current tax accounts payable is the following:

Current Non-Current
Tax liabilities 31.12.2020 31.12.2019 31.12.2020 31.12.2019
M M M M
Income tax expense
Total

All values are in US Dollars.

10 – INCOME TAX EXPENSE AND DEFERRED TAXES

10.1Income tax expense

The current and deferred income tax expenses are detailed as follows:

Details ****<br><br>12.31.2020 ****<br><br>12.31.2019
CLP (000’s) CLP (000’s)
Current income tax expense 55,522,189 35,439,707
Current tax adjustment previous period (735,907 ) 713,992
Foreign dividends tax withholding expense 6,987,142 4,534,145
Other current tax expense (income) (47,569 ) (425,958 )
Current income tax expense 61,725,855 40,261,886
Expense (income) for the creation and reversal of temporary differences of deferred tax and others (6,820,456 ) 20,905,005
Expense (income) for deferred taxes (6,820,456 ) 20,905,005
Total income tax expense 54,905,399 61,166,891

The distribution of national and foreign tax expenditure is as follows:

Income taxes 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Current taxes
Foreign (39,128,690 ) (24,315,576 )
National (22,597,165 ) (15,946,310 )
Current tax expense (61,725,855 ) (40,261,886 )
Deferred taxes
Foreign 7,280,487 (24,012,798 )
National (460,031 ) 3,107,793
Deferred tax expense 6,820,456 (20,905,005 )
Income tax expense (54,905,399 ) (61,166,891 ) 
37

The reconciliation of the tax expense using the statutory rate with the tax expense using the effective rate is as follows:

Reconciliation of effective rate 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Net income before taxes 178,022,719 236,413,116
Tax expense at legal rate (27.0%) (48,066,134 ) (63,831,541 )
Effect of a different tax rate in other jurisdictions 1,032,950 (3,471,705 )
Permanent differences:
Non-taxable revenues (2,417,582 ) 9,507,807
Non-deductible expenses (6,007,898 ) (4,664,045 )
Tax effect on excess tax provided for in previous periods 113,747 (3,316,278 )
Tax monetary restatement effect Chilean companies (5,936,464 ) 5,199,589
Foreign subsidiaries tax withholding expense and other legal tax debits and credits 6,375,982 (590,718 )
Adjustments to tax expense (7,872,215 ) 6,136,355
Tax expense at effective rate (54,905,399 ) (61,166,891 )
Effective rate 30.8 % 25.9 %

The applicable income tax rates in each of the jurisdictions where the Company operates are the following:

Rate
Country 2020 2019
Chile 27.0 % 27.0 %
Brazil 34.0 % 34.0 %
Argentina 30.0 % 30.0 %
Paraguay 10.0 % 10.0 % 
38

10.2       Deferredincome taxes

The net cumulative balances of temporary differences that give rise to deferred tax assets and liabilities are detailed as follows:

12.31.2020 12.31.2019
Temporary differences Assets Liabilities Assets Liabilities
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Property, plant and equipment 5,421,466 39,544,960 5,445,810 51,414,971
Obsolescence provision 1,340,235 - 1,588,563 -
ICMS exclusion credit - 17,679,221 - 25,651,794
Employee benefits 4,475,497 18,300 5,418,561 12,157
Post-employment benefits 150,027 101,339 148,853 787,576
Tax loss carry forwards (1) 6,423,820 - 7,607,813 -
Tax goodwill Brazil 2,080,987 - 10,341,033 -
Contingency provision 24,103,234 - 34,109,458 -
Foreign Exchange differences (2) 8,116,713 - 9,284,450 -
Allowance for doubtful accounts 915,562 - 756,895 -
Assets and liabilities for placement of bonds 378,901 2,377,870 390,163 1,187,649
Lease liabilities 1,528,990 - 2,242,439 -
Inventories 469,416 - 447,192 -
Distribution rights - 144,151,661 - 163,107,412
Hedging derivatives - - - -
Others 3,785,655 7,060,830 - 3,705,078
Subtotal 59,190,503 210,934,181 77,781,230 245,866,637
Total assets and liabilities net 1,925,869 153,669,547 1,364,340 169,449,747
(1) Tax<br> losses mainly associated with the subsidiary Embotelladora Andina Chile S.A. Tax losses<br> have no expiration date in Chile
--- ---
(2) Corresponds<br> to differed taxes for exchange rate differences generated on the translation of debt<br> expressed in foreign currency in the subsidiary Rio de Janeiro Refrescos Ltda. and which<br> for tax purposes are recognized in Brazil then incurred.
--- ---

The movement in deferred income tax accounts is as follows:

Movement 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Opening Balance 168,085,407 145,245,948
Increase (decrease) in deferred tax 4,411,619 20,905,005
Increase (decrease) due to foreign currency translation (*) (20,753,348 ) 1,934,454
Total movements (16,341,729 ) 22,839,459
Ending balance 151,743,678 168,085,407

(*) Includes IAS 29 effect, due to inflation in Argentina

39

11 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are detailed below at the end of each period:

Property, plant and equipment, gross 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Construction in progress 34,194,083 27,290,581
Land 94,321,726 104,196,754
Buildings 266,921,167 299,282,674
Plant and equipment 515,395,328 571,154,695
Information technology equipment 24,323,557 23,912,963
Fixed installations and accessories 45,558,495 46,062,659
Vehicles 45,808,748 55,128,493
Leasehold improvements 203,164 214,886
Rights of use (1) 56,726,206 40,498,400
Other properties, plant and equipment (2) 314,602,940 452,600,945
Total Property, plant and equipment, gross 1,398,055,414 1,620,343,050
Accumulated depreciation of Property, plant and equipment 12.31.2020 ****<br><br>12.31.2019
--- --- --- --- --- --- ---
CLP (000’s) CLP (000’s)
Buildings (86,004,289 ) (87,308,899 )
Plant and equipment (369,605,125 ) (385,801,471 )
Information technology equipment (19,445,250 ) (18,911,118 )
Fixed installations and accessories (27,910,603 ) (26,219,378 )
Vehicles (29,397,964 ) (33,167,346 )
Leasehold improvements (144,022 ) (144,865 )
Rights of use (1) (35,388,929 ) (8,254,568 )
Other properties, plant and equipment (2) (224,582,687 ) (337,816,542 )
Total accumulated depreciation (792,478,869 ) (897,624,187 )
Total Property, plant and equipment, net 605,576,545 722,718,863

(1) For adoption of IFRS 16. See details of underlying assets in Note 11.1

(2) The net balance of each of these categories is presented below:

Other Property, plant and equipment, net 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Bottles 30,275,255 44,071,742
Marketing and promotional assets (market assets) 44,106,959 57,442,154
Other Property, plant and equipment 15,638,039 13,270,507
Total 90,020,253 114,784,403 
40

11.1       Movements

Movements in Property, plant and equipment are detailed as follows:

Construction<br><br> in progress Land Buildings,<br> <br><br> net Plant<br> and <br><br> equipment, net IT<br> <br><br> equipment, net Fixed<br> <br><br> facilities <br><br> and <br><br> accessories,<br><br> net Vehicles,<br> net Leasehold<br> <br><br> improvements,<br><br> net Others Right-of-use,<br> net Property,<br><br> plant & <br><br> equipment, net
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Opening<br> balance at January 1, 2020 27,290,581 104,196,754 211,973,775 185,353,224 5,001,845 19,843,281 21,961,147 70,021 114,784,403 32,243,832 722,718,863
Additions 37,726,227 - 1,520,363 8,963,015 809,348 (1,313 ) 1,323,740 - 30,536,408 - 80,877,788
Additions right-of-use<br> (1) - - - - - - - - - 1,775,457 1,775,457
Divestitures - - (164,113 ) (2,485,145 ) (2,426 ) - (22,823 ) - (6,046,468 ) (87,043 ) (8,808,018 )
Transfers between<br> items of Property, plant and equipment (23,336,382 ) - 2,177,344 8,858,066 1,151,754 1,175,520 906,624 50,356 9,016,718 - -
Right-of-use transfers - - - - - - - - - - -
Depreciation expense - - (7,240,230 ) (33,465,104 ) (2,058,555 ) (2,803,621 ) (4,963,835 ) (44,630 ) (48,830,152 ) (99,406,127 )
Amortization (7,851,901 ) (7,851,901 )
Increase (decrease)<br> to due foreign currency translation differences (3,086,288 ) (9,936,257 ) (29,231,570 ) (19,859,576 ) (829,268 ) (628,317 ) (3,124,155 ) (16,605 ) (11,400,730 ) (4,728,542 ) (82,841,308 )
Other<br> increases (decreases) (2) (4,400,055 ) 61,229 1,881,309 (1,574,277 ) 805,609 62,342 330,086 - 1,960,074 (14,526 ) (888,209 )
Total<br> movements 6,903,502 (9,875,028 ) (31,056,897 ) (39,563,021 ) (123,538 ) (2,195,389 ) (5,550,363 ) (10,879 ) (24,764,150 ) (10,906,555 ) (117,142,318 )
Ending<br> balance al 12.31.2020 34,194,083 94,321,726 180,916,878 145,790,203 4,878,307 17,647,892 16,410,784 59,142 90,020,253 21,337,277 605,576,545
(1) Right<br> of use assets is composed as follows:
--- ---
Right-of-use Gross asset Accumulated<br><br>depreciation Net asset
--- --- --- --- --- --- --- ---
CLP (000’s) CLP (000’s) CLP (000’s)
Constructions and buildings 2,740,852 (1,326,250 ) 1,414,602
Plant and Equipment 37,671,980 (19,802,307 ) 17,869,673
IT Equipment 451,313 (449,249 ) 2,064
Motor vehicles 7,298,422 (5,966,204 ) 1,332,218
Others 8,563,639 (7,844,919 ) 718,720
Total 56,726,206 (35,388,929 ) 21,337,277

Lease liabilities interest expenses at the closing of the period reached CLP 2,047,387 thousand

41

(2) Corresponds<br> mainly to the effect of adopting IAS 29 in Argentina
Construction<br><br> in progress Land Buildings,<br> net Plant<br> and <br><br> equipment, net IT<br> <br><br> equipment, net Fixed<br> <br><br> facilities<br><br> and <br><br> accessories,<br><br> net Vehicles,<br> net Leasehold<br> <br><br> improvements,<br><br>net Others Right-of-use,<br> net Property,<br> <br><br>plant & <br><br>equipment, net
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Opening<br> balance at January 1, 2019 26,048,670 100,479,196 214,160,351 207,403,985 5,184,721 21,057,169 21,798,601 32,177 114,606,098 - 710,770,968
Additions 49,134,461 - 749,800 11,582,259 675,974 7,271 (342,001 ) 1,309 32,640,210 - 94,449,283
Additions<br> right-of-use (1) - - - - - - - - - 21,721,728 21,721,728
Divestitures (8,761 ) - (5,902 ) (352,204 ) (977 ) (8,911 ) (52,095 ) (155 ) (1,135,304 ) - (1,564,309 )
Transfers<br> between items of property, plant and equipment (48,358,902 ) 2,268,316 430,971 20,735,065 1,019,048 1,379,012 7,650,847 65,250 14,810,393 - -
Right-of-use<br> transfers (1) (25,991 ) - (266,007 ) (13,788,120 ) (23,712 ) - (1,181,465 ) - (2,520,405 ) 17,805,700 -
Depreciation<br> expense - - (7,681,481 ) (37,572,910 ) (1,949,851 ) (2,977,512 ) (6,267,039 ) (30,737 ) (42,410,016 ) (98,889,546 )
Amortization (2) - - - - - - - - - (8,254,568 ) (8,254,568 )
Increase<br> (decrease) to due foreign currency translation differences 688,063 1,529,526 4,685,319 3,228,519 83,757 386,253 464,563 2,177 2,216,555 1,024,539 14,309,271
Other<br> increase (decrease) (3) (186,959 ) (80,284 ) (99,276 ) (5,883,370 ) 12,885 (1 ) (110,264 ) - (3,423,128 ) (53,567 ) (9,823,964 )
Total<br> movements 1,241,911 3,717,558 (2,186,576 ) (22,050,761 ) (182,876 ) (1,213,888 ) 162,546 37,844 178,305 32,243,832 11,947,895
Ending<br> balance at 12.31.2019 27,290,581 104,196,754 211,973,775 185,353,224 5,001,845 19,843,281 21,961,147 70,021 114,784,403 32,243,832 722,718,863
(1) By<br> adoption of IFRS 16.
--- ---
(2) Of<br> the total of CLP 8,254,468 thousand recorded as amortization for the current period,<br> CLP 5,994,037 thousand correspond to right-of-use amortization arising from the adoption<br> of the IFRS, effective beginning on January 1, 2019. The remaining CLP 2,260,531 thousand<br> correspond to depreciation (today amortization) of goods acquired under the financial<br> lease method, which until December 31, 2018 were classified and valued pursuant to the<br> accounting criteria of Property, plant and equipment.
--- ---
(3) Mainly<br> correspond to the effects of adopting IAS 29 in Argentina.
--- --- 
42

12 – RELATED PARTIES

Balances and main transactions with related parties are detailed as follows:

12.1 Accountsreceivable:
12.31.2020 12.31.2019
Taxpayer<br> ID Company Relationship Country Currency Current Non-Current Current Non-Current
**** CLP (000’S) CLP (000’s) CLP (000’s) CLP (000’s)
96.891.720-K Embonor<br> S.A. Shareholder<br> related Chile CLP 3,643,603 - 6,589,539 -
96.714.870-9 Coca-Cola de Chile S.A. Shareholder Chile CLP 16,024 138,346 14,839 283,118
Foreign Coca Cola de Argentina Director related Argentina ARS 4,558,753 - 1,203,389 -
Foreign Alimentos de Soja S.A.U. Shareholder related Argentina ARS 308,882 - 428,802 -
96.517.210-2 Embotelladora Iquique<br> S.A. Shareholder related Chile CLP 292,801 - 278,176 -
86.881.400-4 Envases CMF S.A. Associate Chile CLP 773,732 - 217,510 -
96.919.980-7 Cervecería Austral<br> S.A. Director related Chile USD - - 45,644 -
77.755.610-K Comercial Patagona Ltda. Director related Chile CLP - - 3,872 -
77.526.480-2 Comercializadora Nova<br> Verde Common shareholder Chile CLP 837,837 - - -
76.572.588-7 Coca Cola del Valle<br> New Ventures S.A. Associate Chile CLP 1,401,898 - 2,003,203 -
76.140.057-6 Monster Associate Chile CLP 41,878 - 50,794 -
Total 11,875,408 138,346 10,835,768 283,118
12.2 Accountspayable:
12.31.2020 12.31.2019
Taxpayer<br> ID Company Relationship Country Currency Current Non-Current Current Non-Current
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
96.714.870-9 Coca-Cola de Chile S.A. Shareholder Chile CLP 18,897,093 - 20,555,135 -
Foreign Recofarma do Indústrias Amazonas Ltda. Shareholder related Brazil BRL 7,926,109 10,790,089 14,888,934 19,777,812
86.881.400-4 Envases CMF S.A. Associate Chile CLP 3,856,973 - 6,359,797 -
Foreign Ser. y Prod. para Bebidas Refrescantes S.R.L. Shareholder Argentina ARS 4,848,196 - 5,887,070 -
Foreign Leão Alimentos e Bebidas Ltda. Associate Brazil BRL 1,323,609 - 1,841,377 -
Foreign Monster Energy Brasil Com de Bebidas Ltda. Shareholder related Brazil BRL 1,156,786 - 827,300 -
76.572.588-7 Coca Cola del Valle New Ventures S.A. Associate Chile CLP 490,758 - 1,247,961 -
89.996.200-1 Envases del Pacífico S.A. Director related Chile CLP 3,414 - 25,202 -
96.891.720-K Embonor S.A. Shareholder related Chile CLP 118,314 - 275,565 -
Foreign Alimentos de Soja S.A.U. Shareholder related Argentina ARS 402,581 - 929,986 -
77.526.480-2 Comercializadora Nova Verde Common shareholder Chile CLP 518,135 - 765,521 -
Foreign Coca Cola Panamá Shareholder related Panamá USD - - 7,739 -
Foreign Sorocaba Refrescos S.A. Associate Brazil BRL - - 26,014 -
Total 39,541,968 10,790,089 53,637,601 19,777,812 
43

12.3 Transactions:
Taxpayer ID Company Relationship Country Transaction Description Currency Accumulated<br> <br><br> 12.31.2020 Accumulated<br> <br><br> 12.31.2019
CLP (000’s) CLP (000’s)
96.714.870-9 Coca-Cola de Chile S.A. Shareholder Chile Concentrate purchase CLP 139,193,479 150,548,253
96.714.870-9 Coca-Cola de Chile S.A. Shareholder Chile Advertising services purchase CLP 2,890,638 4,369,500
96.714.870-9 Coca-Cola de Chile S.A. Shareholder Chile Water source lease CLP 3,847,817 5,324,194
96.714.870-9 Coca-Cola de Chile S.A. Shareholder Chile Sale of raw materials and others CLP 1,169,944 1,196,793
86.881.400-4 Envases CMF S.A. Associate Chile Purchase of bottles CLP 12,210,449 19,422,280
86.881.400-4 Envases CMF S.A. Associate Chile Raw material purchase CLP 16,055,991 16,814,062
86.881.400-4 Envases CMF S.A. Associate Chile Purchase of caps CLP 91,778 281,174
86.881.400-4 Envases CMF S.A. Associate Chile Purchase of services and others CLP 520,221 6,425,579
86.881.400-4 Envases CMF S.A. Associate Chile Sale of services and others CLP 1,578 -
86.881.400-4 Envases CMF S.A. Associate Chile Purchase of packaging CLP 5,992,443 521,466
86.881.400-4 Envases CMF S.A. Associate Chile Sale of finished products CLP 2,380,574 -
86.881.400-4 Envases CMF S.A. Associate Chile Sale of packaging/raw materials CLP 6,344,834 6,132,091
96.891.720-K Embonor S.A. Shareholder related Chile Sale of finished products CLP 44,982,749 50,315,292
96.891.720-K Embonor S.A. Shareholder related Chile Sale of services and others CLP 447,092 268,526
96.891.720-K Embonor S.A. Shareholder related Chile Sale of raw material and material CLP 197,288 212,517
96.891.720-K Embonor S.A. Shareholder related Chile Minimum Dividend CLP 118,314 -
96.517.310-2 Embotelladora Iquique S.A. Shareholder related Chile Sale of finished products CLP 167,430 3,208,559
89.996.200-1 Envases del Pacífico S.A. Director related Chile Raw material and material purchase CLP 427 93,117
Foreign Recofarma do Indústrias Amazonas Ltda. Shareholder related Brazil Concentrate purchase BRL 71,959,416 91,426,935
Foreign Recofarma do Indústrias Amazonas Ltda. Shareholder related Brazil Reimbursements and other purchases BRL 220,708 5,977,419
Foreign Serv. y Prod. para Bebidas Refrescantes S.R.L. Shareholder related Argentina Concentrate purchase ARS 81,198,463 97,321,567
Foreign Serv. y Prod. para Bebidas Refrescantes S.R.L. Shareholder related Argentina Advertising participation ARS 6,395,881 4,111,764
Foreign KAIK Participações Associate Brazil Reimbursements and other purchases BRL 14,162 39,382
Foreign Sorocaba Refrescos S.A. Associate Brazil Product purchase BRL 3,671,472 1,049,709
89.862.200-2 Latam Airlines Group S.A. Director related Chile Product purchase CLP 85,140 -
76.572.588-7 Coca Cola Del Valle New Ventures S.A. Associate Chile Sale of services and others CLP 397,659 3,959,962
76.572.588-7 Coca Cola Del Valle New Ventures S.A. Associate Chile Purchase of services and others CLP 4,410,223 -
Foreign Alimentos de Soja S.A.U. Shareholder related Argentina Payment of fees and services ARS 1,373,594 802,563
Foreign Alimentos de Soja S.A.U. Shareholder related Argentina Product purchase ARS 80,761 4,274,236
77526480-2 Comercializadora Novaverde S.A. Common shareholder Chile Sale of raw materials CLP 10,914 -
77526480-2 Comercializadora Novaverde S.A. Common shareholder Chile Sale of finished products CLP 2,050,156 -
77526480-2 Comercializadora Novaverde S.A. Common shareholder Chile Sale of services and others CLP 459,707 -
77526480-2 Comercializadora Novaverde S.A. Common shareholder Chile Raw material purchase CLP 1,009,547 - 
44

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12.4 Salaries and benefits received by key management

Salaries and benefits paid to the Company’s key management personnel including directors and managers are detailed as follows:

Description 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Executive wages, salaries and benefits 7,464,071 6,267,936
Director allowances 1,479,420 1,512,000
Accrued benefits last five years and payments during the fiscal year 297,072 305,674
Benefit for contract termination 115,341 54,819
Total 9,355,904 8,140,429

13 – CURRENT AND NON-CURRENT EMPLOYEE BENEFITS

Employee benefits are detailed as follows:

Description 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Accrued vacation 14,650,267 17,584,587
Participation in profits and bonuses 15,969,735 20,896,357
Indemnities for years of service 14,086,575 10,085,264
Total 44,706,577 48,566,208
CLP (000’s) CLP (000’s)
--- --- --- --- ---
Current 31,071,019 38,392,854
Non-Current 13,635,558 10,173,354
Total 44,706,577 48,566,208
13.1 Indemnitiesfor years of service

The movements of employee benefits, valued pursuant to Note 2 are detailed as follows:

Movements 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Opening balance 10,085,264 9,415,541
Service costs 1,675,492 784,984
Interest costs 369,332 354,471
Actuarial variations 3,127,398 (210,956 )
Benefits paid (1,170,911 ) (258,776 )
Total 14,086,575 10,085,264 
45

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13.1.1 Assumptions

The actuarial assumptions used are detailed as follows:

Assumptions 12.31.2020 12.31.2019
Real discount rate -0.05% 2.7%
Expected salary increase rate 2.0% 2.0%
Turnover rate 7.68% 5.4%
Mortality rate RV-2014 RV-2014
Retirement age of women 60 years 60 years
Retirement age of men 65 years 65 years
13.2 Personnelexpenses
--- ---

Personnel expenses included in the consolidated statement of income are as follows:

Description 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Wages and salaries 187,600,163 194,740,646
Employee benefits 48,504,899 58,005,213
Severance benefits 3,238,966 6,987,184
Other personnel expenses 12,993,234 13,389,967
Total 252,337,262 273,123,010

14 – INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD

14.1 Description

Investments in associates using equity method of accounting are detailed as follows:

Functional Investment value Ownership interest
Taxpayer<br> ID Company Country currency 12.31.2020 12.31.2019 12.31.2020 12.31.2019
86.881.400-4 Envases CMF<br> S.A. (1) Chile CLP 20,185,148 18,561,835 50.00 % 50.00 %
Foreign Leão Alimentos<br> e Bebidas Ltda. (2) Brazil BRL 10,628,035 17,896,839 10.26 % 10.26 %
Foreign Kaik Participações<br> Ltda. (2) Brazil BRL 979,978 1,313,498 11.32 % 11.32 %
Foreign SRSA Participações<br> Ltda. Brazil BRL 48,032 65,301 40.00 % 40.00 %
Foreign Sorocaba Refrescos S.A. Brazil BRL 20,976,662 24,636,945 40.00 % 40.00 %
Foreign Trop Frutas do Brasil<br> Ltda. (2) Brazil BRL 4,695,228 6,250,481 7.52 % 7.52 %
76.572.588.7 Coca<br> Cola del Valle New Ventures S.A. Chile CLP 30,443,271 31,141,834 35.00 % 35.00 %
Total 87,956,354 99,866,733
(1) In<br> Envases CMF S.A., regardless of the percentage of ownership interest, it was determined<br> that no controlling interest was held, only a significant influence, given that there<br> was not a majority vote of the Board of Directors to make strategic business decisions.
--- ---
(2) In<br> these companies, regardless of the ownership interest, it has been defined that the Company<br> has significant influence, given that it has the right to appoint directors.
--- --- 
46

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14.2 Movement

The movement of investments in other entities accounted for using the equity method is shown below:

Description 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Opening balance 99,866,733 102,410,945
Dividends declared (1,215,126 ) (1,076,491 )
Share in operating income 3,248,680 (2,495,621 )
Amortization unrealized income in associates (566,422 ) (919,462 )
Increase (decrease) in foreign currency translation, investments in associates (13,377,511 ) 1,947,362
Ending balance 87,956,354 99,866,733

The main movements are explained below:

• In<br> 2020 Leão Alimentos e Bebidas Ltda. recognized the value of a plant at its value<br> of use less the costs of sale, reducing the value previously recognized. Andina recognized<br> as results for the 2020 period a proportional loss of CLP 2,931 million.
• In<br> the 2020 period Sorocaba Refrescos S.A., recognized a tax credit for excluding ICMS from<br> the PIS and COFINS calculation base. Andina recognized as results for the 2020 period<br> a proportional result of CLP 2,134 million.
--- ---
• Dividends<br> declared in 2020 correspond mainly to Envases CMF S.A.
--- ---
14.3 Reconciliationof share of profit in investments in associates:
--- ---
Description 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Equity value on income of associates 3,248,680 (2,495,621 )
Unrealized earnings from product inventory acquired from associates and not sold at the end of the period, which is presented as a discount in the respective asset account (containers and / or inventory) (528,122 ) (394,490 )
Amortization goodwill in the sale of fixed assets of Envases CMF S.A. 85,266 85,266
Amortization goodwill preferential shares CCDV S.A. (523,061 ) (610,238 )
Income statement balance 2,228,763 (3,415,083 )
14.4 Summaryfinancial information of associates:

At December 31, 2020:

Envases<br><br> <br><br>CMF S.A. Sorocaba<br> <br>Refrescos <br> S.A. Kaik<br>Participações <br>Ltda. SRSA<br>Participações<br>Ltda. LeãoAlimentos <br>e Bebidas<br> <br>Ltda. TropFrutas do<br>Brasil Ltda. Coca-Coladel<br>Valle New <br><br><br>Ventures S.A.
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Total assets 75,089,424 86,802,489 8,657,291 288,440 144,111,310 76,012,734 105,735,317
Total liabilities 34,633,862 41,781,275 26 168,354 37,634,466 21,236,127 20,000,197
Total revenue 40,455,562 45,021,214 8,657,265 120,086 144,111,310 54,776,607 85,735,120
Net income (loss) of associates 4,717,515 664,208 96,980 117,350 (39,244,393 ) (890,021 ) (475,467 )
Reporting date 12.31.2020 11.30.2020 11.30.2020 11.30.2020 11.30.2020 11.30.2020 12.31.2020 
47

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At December 31, 2019

Envases CMF S.A. Sorocaba<br> <br>Refrescos S.A. Kaik Participações Ltda. SRSA Participações Ltda. Leão Alimentose Bebidas<br> <br>Ltda. ****<br><br>Trop Frutas doBrasil Ltda. Coca-Cola del Valle New Ventures S.A.
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Total assets 77,994,582 116,551,131 11,661,828 393,856 248,493,994 104,778,397 107,388,847
Total liabilities 39,826,283 54,650,105 35 229,780 38,137,061 27,158,470 18,693,717
Total revenue 58,640,058 69,343,990 337,450 160,342 139,769,189 47,252,571 31,914,825
Net income (loss) of associates 1,449,997 3,948,798 337,450 160,342 2,320,841 (1,177,262 ) 4,297,003
77,994,582 116,551,131 11,661,828 393,856 248,493,994 104,778,397 107,388,847
Reporting date 12.31.2019 11.30.2019 11.30.2019 11.30.2019 11.30.2019 11.30.2019 11.30.2019

15- INTANGIBLE ASSETS OTHER THAN GOODWILL

Intangible assets other than goodwill are detailed as follows:

December 31, 2020 December 31, 2019
Gross Accumulated Net Gross Accumulated Net
Description Value Amortization Value Value Amortization Value
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Distribution rights (1) 598,371,081 (2,005,344 ) 596,365,737 667,148,383 (393,187 ) 666,755,196
Software 35,030,003 (26,882,550 ) 8,147,453 34,347,843 (26,484,427 ) 7,863,416
Others 417,957 (416,982 ) 975 750,309 (293,546 ) 456,763
Total 633,819,041 (29,304,876 ) 604,514,165 702,246,535 (27,171,160 ) 675,075,375
(1) Correspond<br> to the contractual rights to produce and distribute Coca-Cola products in certain parts<br> of Argentina, Brazil, Chile and Paraguay. Distribution rights result from the valuation<br> process at fair value of the assets and liabilities of the companies acquired in business<br> combinations. Production and distribution contracts are renewable for periods of 5 years<br> with Coca-Cola. The nature of the business and renewals that Coca-Cola has permanently<br> done on these rights, allow qualifying them as indefinite contracts.
--- ---

The distribution rights together with the assets that are part of the cash-generating units, are annually subjected to the impairment test. Such distribution rights have an indefinite useful life and are not subject to amortization: except for the Monster rights that are amortized in the term of the agreement which is 4 years.

Distribution rights 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Chile (excluding Metropolitan Region, Rancagua and San Antonio) 303,702,092 305,235,247
Brazil (Rio de Janeiro, Espirito Santo, Ribeirão Preto and investments in Sorocaba and Leão Alimentos e Bebidas Ltda.) 138,176,054 187,616,890
Paraguay 152,595,420 171,841,663
Argentina (North and South) 1,892,171 2,061,396
Total 596,365,737 666,755,196 
48

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The movement and balances of identifiable intangible assets are detailed as follows:

January<br> 1 to December 31, 2020 January 1 to December 31, 2019
Distribution Distribution
Description rights Others Software Total rights Others Software Total
CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s)
Opening<br> balance 666,755,196 456,763 7,863,416 675,075,375 661,026,400 430,196 7,365,957 668,822,553
Additions 94,661 - 2,575,125 2,669,786 - - 3,296,558 3,296,558
Amortization (1,573,878 ) - (2,088,612 ) (3,662,490 ) (133,753 ) - (2,324,225 ) (2,457,978 )
Other<br> increases (decreases) (1) (68,910,242 ) (455,786 ) (202,478 ) (69,568,506 ) 5,862,549 26,567 (474,874 ) 5,414,242
Ending<br> balance 596,365,737 977 8,147,451 604,514,165 666,755,196 456,763 7,863,416 675,075,375
(1) Mainly<br> corresponds to restatement due to the effects of translation of distribution rights of<br> foreign subsidiaries.
--- ---

16- GOODWILL

Movement in Goodwill is detailed as follows:

Operatingsegment 01.01.2020 Translationdifferences<br><br> <br>from functional<br><br> <br>currency 12.31.2020
CLP (000’s) CLP (000’s) CLP (000’s)
Chilean operation 8,503,023 - 8,503,023
Brazilian operation 75,674,072 (19,672,659 ) 56,001,413
Argentine operation 29,750,238 (2,406,596 ) 27,343,642
Paraguayan operation 7,294,328 (816,813 ) 6,477,515
Total 121,221,661 (22,896,068 ) 98,325,593
Operatingsegment 01.01.2019 Translation differences<br><br> <br>from functional<br><br> <br>currency ****<br><br><br><br>12.31.2019
--- --- --- --- --- --- --- ---
CLP (000’s) CLP (000’s) CLP (000’s)
Chilean operation 8,503,023 - 8,503,023
Brazilian operation 73,080,100 2,593,972 75,674,072
Argentine operation 28,318,129 1,432,109 29,750,238
Paraguayan operation 7,327,921 (33,593 ) 7,294,328
Total 117,229,173 3,992,488 121,221,661 
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17 – OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

Liabilities are detailed as follows:

Balance
Current Non-current
12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Bank loans (17.1.1 – 2) 799,072 1,438,161 4,000,000 909,486
Bonds payable, net (1)(Note 17.2) 18,705,015 21,604,601 918,921,342 718,962,871
Deposits in guarantee 12,126,831 11,163,005 - -
Derivative contract liabilities (Note 22) 1,217,322 374,576 51,568,854 -
Leasing agreements (Note 17.4.1 – 2) 5,718,484 6,013,535 15,339,373 23,454,700
Total 38,566,724 40,593,878 989,829,569 743,327,057
(1) Amounts<br> net of issuances expenses and discounts related to issuance.
--- ---

The fair value of financial assets and liabilities is presented below:

Current BookValue<br> <br>12.31.2020 Fair Value<br> <br>12.31.2020 BookValue<br> <br>12.31.2019 Fair Value<br> <br>12.31.2019
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Cash and cash equivalent (2) 309,530,699 309,530,699 157,567,986 157,567,986
Other financial assets (1) - - 317,205 317,205
Trade debtors and other accounts receivable (2) 194,664,683 194,664,683 191,077,588 191,077,588
Accounts receivable related companies (2) 11,875,408 11,875,408 10,835,768 10, 835,768
Bank loans (2) 799,072 896,307 1,438,161 1,434,255
Bonds payable (2) 18,705,015 22,471,852 21,604,601 24,188,060
Bottle guaranty deposits (2) 12,126,831 12,126,831 11,163,005 11,163,005
Derivative contracts liabilities (see note 20) (1) 1,217,322 1,217,322 374,576 374,576
Leasing agreements (2) 5,542,356 5,542,356 6,013,535 6,013,535
Accounts payable (2) 230,438,133 230,438,133 243,700,553 243,700,553
Accounts payable related companies (2) 39,541,968 39,541,968 53,637,601 53,637,601
Non-current 12.31.2020 12.31.2020 12.31.2019 12.31.2019
--- --- --- --- --- --- --- --- ---
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Other financial assets (1) 150,983,295 150,983,295 98,918,457 98,918,457
Accounts receivable, non-current (2) 73,862 73,862 523,769 523,769
Accounts receivable related companies (2) 138,346 138,346 283,118 283,118
Bank loans (2) 4,000,000 4,056,753 909,486 867,025
Bonds payable (2) 918,921,342 1,088,617,557 718,962,871 803,017,145
Forward agreements (see note 20) (1) 15,339,373 15,339,373 23,454,700 23,454,700
Leasing agreements (2) 295,279 295,279 619,587 619,587
Accounts payable, non-current (2) 150,983,295 150,983,295 98,918,457 98,918,457
(1) Fair<br> values are based on discounted cash flows using market discount rates at the close of<br> the six-month and one-year period and are classified as Level 2 of the fair value measurement<br> hierarchies.
--- ---
(2) Financial<br> instruments such as: Cash and Cash Equivalents, Trade and Other Accounts Receivable,<br> Accounts Receivable, Bottle Guarantee Deposits and Trade Accounts Payable, and Other<br> Accounts Payable present a fair value that approximates their carrying value, considering<br> the nature and term of the obligation. The business model is to maintain the financial<br> instrument in order to collect/pay contractual cash flows, in accordance with the terms<br> of the contract, where cash flows are received/cancelled on specific dates that exclusively<br> constitute payments of principal plus interest on that principal. These instruments are<br> revalued at amortized cost.
--- --- 
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17.1.1Bank liabilities, current

Maturity Total
Indebted entity Creditor Entity Type of Nominal Up to 90 days to At At
Taxpayer ID Name Country Taxpayer ID Name Country Currency Amortization Rate 90<br> days 1<br> year 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
96.705.990-0 Envases Central<br> S.A. Chile 97.006.000-6 Banco BCI Chile UF Semiannually 2.13 % - 760,667 760,667 748,838
96.705.990-0 Envases Central S.A. Chile 97.006.000-6 Banco BCI Chile UF Semiannually 2.00 % 33,111 - 33,111 -
Foreign Embotelladora del Atlántico<br> S.A. Argentina Foreign Banco Galicia y Buenos<br> Aires S.A. Argentina AR Upon maturity 82.00 % - - - 8,453
Foreign Embotelladora del Atlántico<br> S.A. Argentina Foreign Banco Galicia y Buenos<br> Aires S.A. Argentina AR Monthly 22.00 % 5,294 - 5,294
Foreign Rio de Janeiro Refrescos<br> Ltda. Brazil Foreign Banco Itaú Brasil BRL Monthly 6.63 % - - - 635,727
Foreign Rio<br> de Janeiro Refrescos Ltda. Brazil Foreign Banco<br> Itaú Brasil BRL Quarterly 4.50 % - - - 45,143
Total 799,072 1,438,161

17.1.2Bank liabilities, non-current

Maturity
Indebted entity Creditor Entity Type<br> of Nominal 1<br> year<br><br> up to More<br><br> <br>than<br><br> <br>2<br> years<br><br> Up to More<br><br> <br>than<br><br> <br>3<br> years<br><br> Up to More<br> <br><br> than 4<br><br> years<br><br> Up to More<br><br> than 5 at
Taxpayer ID Name Country Taxpayer<br> ID Name Country Currency Amortization Rate 2<br> years 3 years 4 years 5 years Years 12.31.2020
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
96.705.990-0 Envases<br> Central S.A. Chile 97.006.000-6 Banco<br> BCI Chile UF Semiannually 2.00 % - - 4,000,000 - - 4,000,000
Total 4,000,000

17.1.3Bank liabilities, non-current previous year

Maturity
Indebted Entity Creditor Entity Type Effective Nominal 1<br> year<br><br> up to More<br> <br><br> than<br><br> 2 years<br><br> Up to More<br> <br><br> than <br><br> 3 years<br><br> Up to More<br> <br><br> than<br><br> 4 years<br><br> Up to More<br><br> than 5 at
Tax<br> ID Name Country Tax<br> ID Name Country Currency Amortization Rate Rate 2<br> years 3<br> years 4<br> years 5<br> years Years 12.31.2019
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
96.705.990-0 Envases<br> Central S.A. Chile 97.006.000-6 Banco<br> BCI Chile UF Semiannually 2.13 % 2.13 % 736,033 - - - - 736,033
Foreign Rio<br> de Janeiro Refrescos Ltda. Brazil Foreign Banco<br> Itaú Brazil BRL Monthly 6.63 % 6.63 % 44,621 44,621 44,621 39,590 - 173,453
Total 909,486 
51

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17.1.4Current and non-current bank liabilities “Restrictions”

Bank obligations are not subject to restrictions for the reported periods.

17.2 Bondspayable

On January 21, 2020, the Company issued corporate bonds on the international market for USD 300 million with a 30-year maturity, with a bullet structure and an annual interest rate of 3.950%.

During 2018, Andina carried out a debt restructuring process that consisted of a partial repurchase in the amount of USD 210 million of the 144A/RegS Senior Notes and refinancing it with the placement of Series F bonds in the local market in the amount of UF 5.7 million due 2039 and accruing an annual interest rate of 2.83%. The costs corresponding to the repurchase of bonds, associated with premium payments, overpricing and proportional amortization of placement costs and discounts in bonds in original U.S. Dollars amounting to CLP 9,583,000 thousand, were recorded in results under the item financial costs.

Current Non-current Total
Composition of bonds payable 12.31.2020 12.31.2019 12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Bonds (face value) ^1^ 19,347,033 22,189,595 925,968,913 721,950,553 945,315,946 744,140,148

^1^Gross amounts, do not consider issuance expenses and discounts related to issuance.

17.2.1 Currentand non-current balances

Bonds payable correspond to bonds in UF issued by the parent company on the Chilean market and bonds in U.S. dollars issued by the Parent Company on the international market. A detail of these instruments is presented below:

**** **** Current <br><br> nominal Adjustment **** Final Interest Current Non-current
Bonds Series amount unit maturity payment 12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s)
CMF<br> Registration N° 254 06.13.2001 B 1,771,585 UF 6,5 % 12-01-2026 Semiannually 7,776,693 7,160,809 40,388,468 46,659,296
CMF<br> Registration N° 641 08.23.2010 C 1,500,000 UF 4,0 % 08-15-2031 Semiannually 647,672 630,731 43,605,495 42,464,910
CMF<br> Registration N° 759 08.20.2013 C 0 UF 3,5 % 08-16-2020 Semiannually - 7,168,907 - -
CMF<br> Registration N° 760 08.20.2013 D 4,000,000 UF 3,8 % 08-16-2034 Semiannually 1,629,677 1,587,051 116,281,320 113,239,760
CMF<br> Registration N° 760 04.02.2014 E 3,000,000 UF 3,75 % 03-01-2035 Semiannually 1,083,063 1,048,938 87,210,999 84,929,828
CMF<br> Registration N° 912 10.10.2018 F 5,700,000 UF 2,83 % 09-25-2039 Semiannually 1,234,601 1,195,700 165,700,881 161,366,658
Bonds<br> USA 2023 10.01.2013 - 365,000,000 US 5,0 % 10-01-2023 Semiannually 3,243,709 3,397,459 259,496,750 273,290,101
Bonds<br> USA 2050 01.21.2020 - 300,000,000 US 3,95 % 01-21-2050 Semiannually 3,731,618 - 213,285,000 -
Total 19,347,033 22,189,595 925,968,913 721,950,553

All values are in US Dollars.

52

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17.2.3 Non-currentmaturities
Year<br> of maturity Total<br> non-current
Series More<br> than 1 up to 2 More<br> than 2 up to 3 More<br> than 3 up to 4 More<br> than 5 12.31.2020
CLP (000’s) CLP (000’s) CLP (000’s) CLP<br> (000’s) CLP<br> (000’s)
CMF Registration<br> N° 254 06.13.2001 B 8,013,138 8,533,990 9,088,700 14,752,640 40,388,468
CMF Registration N°<br> 641 08.23.2010 C 3,964,136 3,964,136 3,964,136 31,713,087 43,605,495
CMF Registration N°<br> 760 08.20.2013 D - - - 116,281,320 116,281,320
CMF Registration N°<br> 760 04.02.2014 E - - - 87,210,999 87,210,999
CMF Registration N°<br> 912 10.10.2018 F - - - 165,700,881 165,700,881
USA Bonds - - 259,496,750 - - 259,496,750
USA<br> 2 Bonds - - - - 213,285,000 213,285,000
Total 11,977,274 271,994,876 13,052,836 628,943,927 925,968,913
17.2.4 Marketrating

The bonds issued on the Chilean market had the following rating:

AA : ICR Compañía Clasificadora de Riesgo Ltda.<br>rating
AA : Fitch Chile Clasificadora de Riesgo Limitada rating
--- --- ---

The rating of bonds issued on the international market had the following rating:

BBB : Standard&Poors Global Ratings
BBB+ : Fitch Ratings Inc.
--- --- ---
17.2.5 Restrictions
--- ---
17.2.5.1 Restrictionsregarding bonds placed abroad.
--- ---

Obligations with bonds placed abroad are not affected by financial restrictions for the periods reported.

17.2.5.2 Restrictionsregarding bonds placed in the local market.

Restrictionson the issuance of bonds for a fixed amount registered under number 254.

In October 2020, the Consolidated Financial Liabilities/Consolidated Equity no more than 1.20 times covenant was amended as follows:

• Maintain<br>an indebtedness level where Net Consolidated Financial Liabilities to Consolidated Equity does not exceed 1.20 times. For these<br>purposes Net Consolidated Financial Liabilities shall be regarded as (i) “Other Current Financial Liabilities,” plus<br>(ii) “Other Non-Current Financial Liabilities,” less (iii) the addition of “Cash and Cash Equivalents”<br>plus “Other Current Financial Assets;” plus “Other Non-Current Financial Assets) (to the extent they correspond<br>to asset balances of derivative financial instruments, taken to cover exchange rate and/or interest rate risks on financial liabilities).<br>Consolidated Equity will be regarded as total equity including non-controlling interest.

As of December 31, 2020, this ratio is 0.51 times.

• Maintain,<br>and in no manner lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan<br>Region” (Región Metropolitana) as a territory in Chile in which we have been authorized by The Coca-Cola Company<br>for the development, production, sale and distribution of products and brands of the licensor, in accordance to the respective<br>bottler or license agreement, renewable from time to time. 
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• Not<br>lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of this date is franchised<br>by TCCC to the Company for the development, production, sale and distribution of products and brands of such licensor, as long<br>as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow.
• Maintain<br>consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s<br>unsecured consolidated liabilities.
--- ---

Unsecured consolidated liabilities payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

Consolidated Assets free of any pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

As of December 31, 2020, this ratio is 1.55 times.

Restrictionsto bond lines registered in the Securities Registered under number 641, series C

• Maintain<br>a level of “Net Financial Debt” within its quarterly financial statements that may not exceed 1.5 times, measured over<br>figures included in its consolidated statement of financial position. To this end, net financial debt shall be defined as the<br>ratio between net financial debt and total equity of the issuer (equity attributable to controlling owners plus non-controlling<br>interest). On its part, net financial debt will be the difference between the Issuer’s financial debt and cash.

As of December 31, 2020, Net Financial Debt level was 0.51 times.

• Maintain<br>consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s<br>unsecured consolidated liabilities.

Unencumbered assets refer to the assets that are the property of the issuer; classified under Total Assets of the Issuer’s Financial Statements; and that are free of any pledge, mortgage or other liens constituted in favor of third parties, less “Other Current Financial Assets” and “Other Non-Current Financial Assets” of the Issuer’s Financial Statements (to the extent they correspond to asset balances of derivative financial instruments, taken to hedge exchange rate and interest rate risk of the financial liabilities).

Unsecured total liabilities correspond to: liabilities from Total Current Liabilities and Total Non-Current Liabilities of Issuer’s Financial Statement which do not benefit from preferences or privileges, less “Other Current Financial Assets” and “Other Non-Current Financial Assets” of the Issuer’s Financial Statements (to the extent they correspond to asset balances of derivative financial instruments, taken to hedge exchange rate and interest rate risk of the financial liabilities).

As of December 31, 2020, this ratio is 1.55 times.

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• Maintain<br> a level of “Net Financial Coverage” greater than 3 times in its quarterly financial<br> statements. Net financial coverage means the ratio between the issuer’s Ebitda of the<br> last 12 months and the issuer’s Net Financial Expenses in the last 12 months. Net Financial<br> Expenses will be regarded as the difference between the absolute value of interest expense<br> associated with the issuer’s financial debt account accounted for under “Financial<br> Costs”; and interest income associated with the issuer’s cash accounted for under<br> the Financial Income account. However, this restriction shall be deemed to have been<br> breached where the mentioned level of net financial coverage is lower than the level<br> previously indicated during two consecutive quarters.

As of December 31, 2020, Net Financial Coverage level is 8.50 times.

Restrictionsto bond lines registered in the Securities Registrar under number 760 D-E.

• Maintain<br>an indebtedness level where Net Consolidated Financial Liabilities to Consolidated Equity does not exceed 1.20 times. For these<br>purposes Net Consolidated Financial Liabilities shall be regarded as (i) “Other Current Financial Liabilities,” plus<br>(ii) “Other Non-Current Financial Liabilities,” less (iii) the addition of “Cash and Cash Equivalents”<br>plus “Other Current Financial Assets;” plus “Other Non-Current Financial Assets) (to the extent they correspond<br>to asset balances of derivative financial instruments, taken to cover exchange rate and/or interest rate risks on financial liabilities).<br>Consolidated Equity will be regarded as total equity including non-controlling interest.

As of December 31, 2020, Indebtedness Level is 0.51 times of Consolidated Equity.

• Maintain<br>consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s<br>unsecured consolidated liabilities payable.

Unsecured Consolidated Liabilities Payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

The following will be considered in determining Consolidated Assets: assets free of any pledge, mortgage or other lien, as well as those assets having a pledge, mortgage or real encumbrances that operate solely by law, less asset balances of derivative financial instruments, taken to hedge exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Financial Statements. Therefore, Consolidated Assets free of any pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.

As of December 31, 2020, this ratio is 1.55 times.

• Maintain,<br>and in no manner, lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan<br>Region” as a territory franchised to the Issuer in Chile by The Coca-Cola Company, hereinafter also referred to as “TCCC”<br>or the “Licensor” for the development, production, sale and distribution of products and brands of said licensor, in<br>accordance to the respective bottler or license agreement, renewable from time to time. Losing said territory, means the non-renewal,<br>early termination or cancellation of this license agreement by TCCC, for the geographical area today called “Metropolitan<br>Region”. This reason shall not apply if, as a result of the loss, sale, transfer or disposition, of that licensed territory<br>is purchased or acquired by a subsidiary or an entity that consolidates in terms of accounting with the Issuer. 
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• Not<br>lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of<br>these instruments is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands<br>of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating<br>Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term<br> “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s<br>Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales;<br>less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits<br>(losses) of associates and joint ventures that are accounted for using the equity method”; plus (v) “Depreciation”;<br>plus (vi) “Intangibles Amortization”.

Restrictionsto bond lines registered in the Securities Registrar under number 912.

• Maintain<br>an indebtedness level where Net Consolidated Financial Liabilities to Consolidated Equity does not exceed 1.20 times. For these<br>purposes Net Consolidated Financial Liabilities shall be regarded as (i) “Other Current Financial Liabilities,” plus<br>(ii) “Other Non-Current Financial Liabilities,” less (iii) the addition of “Cash and Cash Equivalents”<br>plus “Other Current Financial Assets;” plus “Other Non-Current Financial Assets) (to the extent they correspond<br>to asset balances of derivative financial instruments, taken to cover exchange rate and/or interest rate risks on financial liabilities).<br>Consolidated Equity will be regarded as total equity including non-controlling interest.

As of December 31, 2020, this ratio is 0.51 times.

• Maintain<br>consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s<br>unsecured consolidated liabilities payable. Unsecured Consolidated Liabilities Payable shall be regarded as the total liabilities,<br>obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and<br>conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange<br>rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current<br>Financial Assets” of the Issuer’s Consolidated Statement of Financial Position. The following will be considered in<br>determining Consolidated Assets: assets free of any pledge, mortgage or other lien, as well as those assets having a pledge, mortgage<br>or real encumbrances that operate solely by law, less asset balances of derivative financial instruments, taken to hedge exchange<br>rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current<br>Financial Assets” of the Issuer’s Consolidated Financial Statements. Therefore, Consolidated Assets free of any pledge,<br>mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally<br>constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate<br>risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets”<br>of the Issuer’s Consolidated Statement of Financial Position.

As of December 31, 2020, this ratio is 1.55 times.

• Not<br>lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of<br>local bonds Series C, D and E is franchised by TCCC to the Issuer for the development, production, sale and distribution of products<br>and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated<br>Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes,<br>the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of<br>the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and<br>cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation<br>in profits (losses) of associates and joint ventures that are accounted for using the equity method”; plus (v) “Depreciation”;<br>plus (vi) “Intangibles Amortization”.

As of December 31, 2020 and 2019, the Company complies with all financial collaterals.

17.3 Derivativecontract liabilities

Please see details in Note 22

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17.4.1 Currentliabilities for leasing agreements
Maturity Total
Debtor<br> Entity Creditor<br> Entity Type<br> of Nominal Up<br> to 90<br> days to At At
Name Country Taxpayer<br> ID Name Country Currency Amortization Rate 90<br> days 1<br> year 12.31.2020 12.31.2019
CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s)
Rio<br> de Janeiro Refrescos Ltda. Brazil Foreign Cogeração<br> - Light ESCO Brasil BRL Monthly 12.28 % 166,711 531,815 698,526 839,502
Rio<br> de Janeiro Refrescos Ltda. Brazil Foreign Tetra<br> Pack Brasil BRL Monthly 7.39 % 61,617 147,121 208,738 360,854
Rio<br> de Janeiro Refrescos Ltda. Brazil Foreign Real<br> estate Brasil BRL Monthly 8.20 % 66,160 117,534 183,694 300,338
Rio<br> de Janeiro Refrescos Ltda. Brazil Foreign Leão Brasil BRL Monthly 6.56 % 68,366 200,944 269,310 497,386
Embotelladora<br> del Atlántico S.A. Argentina Foreign Tetra<br> Pak SRL Argentina USD Monthly 12.00 % 20,867 62,602 83,469 132,815
Embotelladora<br> del Atlántico S.A. Argentina Foreign Banco<br> Comafi Argentina USD Monthly 12.00 % 31,232 93,695 124,927 88,739
Embotelladora<br> del Atlántico S.A. Argentina Foreign Real<br> estate Argentina ARS Monthly 50.00 % 65,656 148,249 213,905 189,320
Embotelladora<br> del Atlántico S.A. Argentina Foreign Systems Argentina USD Monthly 1.00 % 20,556 61,671 82,227 1,169,884
Vital<br> Aguas S.A. Chile 76.389.720-6 Coca<br> Cola del Valle New Ventures S.A Chile CLP Linear 7.50 % 289,312 882,152 1,171,464 2,198,998
Envases<br> Central S.A Chile 96.705.990-0 Coca<br> Cola del Valle New Ventures S.A Chile CLP Linear 8.40 % 565,631 1,724,833 2,290,464 235,699
Paraguay<br> Refrescos SA Paraguay 80.003.400-7 Tetra<br> Pack Ltda. Suc. Py Paraguay PGY Monthly 1.00 % 55,952 159,680 215,632 -
Transportes<br> Polar S.A. Chile 96.928.520-7 Cons.<br> Inmob. e Inversiones Limitada Chile UF Monthly 2.89 % 22,944 69,834 92,778 -
Embotelladora<br> Andina S.A Chile 91.144.000-8 Central<br> de Restaurante Aramark Ltda. Chile CLP Monthly 1.30 % 20,736 62,614 83,350 -
Total 5,718,484 6,013,535

The Company maintains lease agreements on forklifts, vehicles, real estate and machinery. These leases have an average life of between one and eight years without including a renewal option in the contracts.

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17.4.2        Non-current liabilities for leasing agreements, non-current

Maturity
DebtorEntity Creditor<br> Entity Amortization Nominal 1 year to 2 years to 3 years to 4 years to More<br> than At
Name Country Taxpayer<br> ID Name Country Currency Type Rate 2 years 3 years 4 years 5 years 5 years 12.31.2020
CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S)
Rio de Janeiro<br> Refrescos Ltda. Brazil Foreign Cogeração<br> - Light ESCO Brazil BRL Monthly 12.28 % 789,334 891,946 1,007,901 1,138,928 4,827,833 8,655,942
Rio de Janeiro Refrescos<br> Ltda. Brazil Foreign Tetra Pack Brazil BRL Monthly 7.39 % 95,856 - - - - 95,856
Rio de Janeiro Refrescos<br> Ltda. Brazil Foreign Real estate Brazil BRL Monthly 8.20 % 72,906 32,980 23,547 - - 129,433
Rio de Janeiro Refrescos<br> Ltda. Brazil Foreign Leão Alimentos<br> e Bebidas Ltda. Brazil BRL Monthly 6.56 % 261,577 249,681 243,911 225,680 51,007 1,031,856
Embotelladora del Atlántico<br> S.A. Argentina Foreign Banco Comafi Argentina USD Monthly 12.00 % - 20,867 - - - 20,867
Embotelladora del Atlántico<br> S.A. Argentina Foreign Tetra Pak SRL Argentina USD Monthly 12.00 % - 249,854 - 249,854 72,874 572,582
Embotelladora del Atlántico<br> S.A. Argentina Foreign Real estate Argentina ARS Monthly 50.00 % - 128,930 - - - 128,930
Embotelladora del Atlántico<br> S.A. Argentina Foreign Real estate Argentina ARS Monthly 50.00 % - 95,931 - - - 95,931
Vital Aguas S.A Chile 76.572.588-7 Coca Cola del Valle New<br> Ventures S.A Chile CLP Monthly 8.20 % 1,107,140 - - - - 1,107,140
Envases Central S.A Chile 76.572.588-7 Coca Cola del Valle New<br> Ventures S.A Chile CLP Monthly 9.00 % 2,967,864 - - - - 2,967,864
Paraguay Refrescos<br> SA Paraguay 80.003.400-7 Tetra Pack Ltda. Suc.<br> Py Paraguay PGY Monthly 1.00 % - 163,635 - - - 163,635
Transportes Polar S.A. Chile 76.413.243-2 Cons. Inmob. e Inversiones<br> Limitada Chile UF Monthly 2.89 % - 193,789 - 161,551 - 355,340
Embotelladora<br> Andina S.A Chile 76.178.360-2 Central<br> de Restaurante Aramark Ltda. Chile CLP Monthly 1.30 % - 13,997 - - - 13,997
Total 15,339,373

17.4.3Non-current liabilities for leasing agreements (previous year)

Maturity
DebtorEntity Creditor<br> Entity Amortization Nominal 1 year to 2 years to 3 years to 4 years to More<br> than At
Name Country Taxpayer<br> ID Name Country Currency Type Rate 2 years 3 years 4 years 5 years 5 years 12.31.2019
CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S) CLP<br> (000’S)
Rio de Janeiro<br> Refrescos Ltda. Brazil Foreign Cogeração<br> - Light ESCO Brazil BRL Monthly 12.28 % 948,466 1.071.766 1.211.096 1.368.538 8.101.730 12.701.596
Rio de Janeiro Refrescos<br> Ltda. Brazil Foreign Tetra Pack Brazil BRL Monthly 7.39 % 271,264 111.005 - - - 382.269
Rio de Janeiro Refrescos<br> Ltda. Brazil Foreign Real estate Brazil BRL Monthly 8.20 % 97,784 9.144 - - - 106.928
Rio de Janeiro Refrescos<br> Ltda. Brazil Foreign Leão Alimentos<br> e Bebidas Ltda. Brazil BRL Monthly 6.56 % 365,671 355.172 339.020 331.185 375.688 1.766.736
Embotelladora del Atlántico<br> S.A. Argentina Foreign Tetra Pak SRL Argentina USD Monthly 12.00 % - 398.442 - 343.104 - 741.546
Embotelladora del Atlántico<br> S.A. Argentina Foreign Banco Comafi Argentina USD Monthly 12.00 % - 110.924 - - - 110.924
Embotelladora del Atlántico<br> S.A. Argentina Foreign Real estate Argentina ARS Monthly 50.00 % - 55.222 - - - 55.222
Vital Aguas S.A Chile 76.572.588-7 Coca Cola del Valle New<br> Ventures S.A Chile CLP Monthly 8.20 % 2,242,278 - - - - 2.242.278
Envases Central S.A Chile 76.572.588-7 Coca Cola del Valle New<br> Ventures S.A Chile CLP Monthly 9.0 % 4,947,745 - - - - 4.947.745
Paraguay<br> Refrescos SA Paraguay 80.003.400-7 Tetra<br> Pack Ltda. Suc. Py Paraguay PGY Monthly 1.00 % 399,456 - - - - 399.456
Total 23.454.700

Leasing agreement liabilities not subject to financial restrictions for the reported periods.

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18 – TRADE ACCOUNTS PAYABLE AND OTHER ACCOUNTS PAYABLE

Trade and other current accounts payable are detailed as follows:

Classification 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S)
Current 230,445,809 243,700,553
Non-current 295,279 619,587
Total 230,741,088 244,320,140
Description 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S)
Trade accounts payable 163,361,078 172,142,472
Withholding tax 48,566,443 53,326,254
Others 18,813,567 18,851,414
Total 230,741,088 244,320,140

19 – OTHER PROVISIONS, CURRENT AND NON-CURRENT

19.1 Balances

The composition of provisions is as follows:

Description 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S)
Litigation (1) 50,070,273 69,107,550
Total 50,070,273 69,107,550
Current 1,335,337 2,068,984
Non-current 48,734,936 67,038,566
Total 50,070,273 69,107,550
(1) Correspond<br> to the provision made for the probable losses of fiscal, labor and commercial contingencies,<br> based on the opinion of our legal advisors, according to the following detail:
--- ---
Description (see note 23.1) 12.31.2020 12.31.2019
--- --- --- --- ---
CLP (000’s) CLP (000’s)
Tax contingencies 25,543,101 38,853,059
Labor contingencies 8,688,551 10,569,754
Civil contingencies 15,838,621 19,684,737
Total 50,070,273 69,107,550 
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19.2 Movements

The movement of principal provisions over litigation is detailed as follows:

Detail 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Opening balance as of January 1 69,107,550 62,452,526
Additional provisions 172,801 121,003
Increase (decrease) in existing provisions(*) 4,624,789 17,336,285
Payments (5,799,209 ) (14,977,996 )
Reversal for unused provision - 3,551,223
Increase (decrease) due to foreign exchange differences (18,035,657 ) 624,509
Total 50,070,274 69,107,550

(*) During 2019, reversal of provisions consisting of fines demanded by the Brazilian tax authority on the use of tax credits resulting from favorable sentencing to Rio de Janeiro Refrescos Ltda. which are not present in 2020.

20 – OTHER NON-FINANCIAL LIABILITIES

Other current and non-current liabilities at each reporting period end are detailed as follows:

Current Non-Current
Description 12.31.2020 12.31.2019 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Dividends payable 25,999,055 22,639,150 - -
Others (1) 2,267,675 3,863,065 21,472,048 -
Total 28,266,730 26,502,215 21,472,048 -
(1) Other<br> non-current corresponds mainly to accounts payable to former shareholders of Companhia<br> de Bebidas Ipiranga (“CBI”). See Note 6 for further information.

21 – EQUITY

21.1 Numberof shares:
Number of subscribed<br> <br>and paid in shares with voting rights
--- --- --- --- ---
Series 2020 2019
A 473,289,301 473,289,301
B 473,281,303 473,281,303
21.1.1 Equity:
Subscribed and Paid-in Capital
Series 2020 2019
CLP (000’s) CLP (000’s)
A 135,379,504 135,379,504
B 135,358,070 135,358,070
Total 270,737,574 270,737,574 
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21.1.2 Rightsof each series:
• Series<br> A: Elects 12 of the 14 Directors
--- ---
• Series<br> B: Receives an additional 10% of dividends distributed to Series A and elects 2 of the<br> 14 Directors.
--- ---
21.2 Dividendpolicy

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 ordinary Shareholders’ Meeting held in April 2020, the shareholders agreed to pay out of the 2019 earnings a final dividend and another additional dividend to the 30% required by Chile’s Law 18,046 which are paid in May 2020 and August 2020, respectively.

Pursuant to Circular Letter N° 1,945 of the Chilean Financial Market Commission (CMF) dated September 29, 2009, the Company’s Board of Directors decided to maintain the initial adjustments from adopting IFRS as accumulated earnings for future distribution.

The dividends declared and paid per share are presented below:

Periods<br> <br>approved - paid ****<br><br>Type of dividend Dividend allocation income CLP<br> <br>Series A CLP<br> <br>Series B
04.17.2019 05.30.2019 Final 2018 Results 21.50 23.65
04.17.2019 08.29.2019 Additional Accumulated Earnings 21.50 23.65
09.24.2019 10.24.2019 Interim 2019 Results 21.50 23.65
12.20.2019 01.23.2020 Interim 2019 Results 22.60 24.86
02.25.2020 05.29.2020 Final 2019 Results 26.00 28.60
02.25.2020 08.28.2020 Additional Accumulated Earnings 26.60 28.60
10.27.2020 11.24.2020 Interim 2020 Results 26.60 28.60
12.22.2020 01.29.2021 Interim 2020 Results 26.60 28.60
21.3 OtherReserves
--- ---

The balance of other reserves includes the following:

Description 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Goodwill in share exchange reserve 421,701,520 421,701,520
Translation differences reserves (517,496,486 ) (339,076,340 )
Cash flow hedge reserves (24,719,533 ) (14,850,683 )
Reserve for employee benefits actuarial gains or losses (4,663,193 ) (2,230,752 )
Legal and statutory reserves 5,435,538 5,435,538
Other 6,014,568 6,014,568
Total (113,727,586 ) 76,993,851
21.3.1 Goodwillin share exchange reserve

This amount corresponds to the difference between the valuation at fair value of the issuance of shares of Embotelladora Andina S.A. and the book value of the paid capital of Embotelladoras Coca-Cola Polar S.A., which was finally the value of the capital increase notarized in legal terms.

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21.3.2 Cashflow 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 22).

21.3.3 Reservefor 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.

21.3.4 Legaland statutory reserves

In accordance with Official Circular N° 456 issued by the Chilean Financial Market Commission (CMF), 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 CLP 5,435,538 thousand as of December 31, 2009.

21.3.5 Foreigncurrency 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. Translation reserves are detailed as follows:

Details 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Brazil (203,657,392 ) (98,794,118 )
Argentina (291,332,402 ) (246,415,922 )
Paraguay (22,506,692 ) 6,133,700
Total (517,496,486 ) (339,076,340 )

The movement of this reserve for the periods ended on the dates indicated below, is detailed as follows:

Details 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Brazil (104,863,274 ) 15,386,079
Argentina (44,916,480 ) (45,297,742 )
Paraguay (28,640,392 ) (2,490,149 )
Total (178,420,146 ) (32,401,812 ) 
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21.4 Non-controllinginterests

This is the recognition of the portion of equity and income from subsidiaries owned by third parties. This account is detailed as follows:

Non-controlling interests
Ownership<br> interest % Shareholders’<br> Equity Income
December December December December
Description 2020 2019 2020 2019 2020 2019
CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s) CLP<br> (000’s)
Embotelladora<br> del Atlántico S.A. 0.0171 0.0171 23,662 26,342 2,312 4,183
Andina<br> Empaques Argentina S.A. 0.0209 0.0209 2,349 2,290 244 409
Paraguay<br> Refrescos S.A. 2.1697 2.1697 5,037,332 5,368,470 791,576 622,188
Vital<br> S.A. 35.0000 35.0000 8,176,999 7,904,741 285,269 263,442
Vital<br> Aguas S.A. 33.5000 33.5000 1,912,023 1,803,884 109,110 105,870
Envases<br> Central S.A. 40.7300 40.7300 5,227,112 5,148,531 (70,996 ) 528,205
Total 20,379,477 20,254,258 1,117,515 1,524,297
21.5 Earningsper 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.

Earnings per share used to calculate basic and diluted earnings per share is detailed as follows:

Earnings per share 12.31.2020
SERIES A SERIES B TOTAL
Earnings attributable to shareholders (CLP 000’s) 58,095,636 63,904,169 121,999,805
Average weighted number of shares 473,289,301 473,281,303 946,570,604
Earnings per basic and diluted share (in CLP) 122.75 135.02 128.89
Earningsper share 12.31.2019
--- --- --- --- --- --- ---
SERIES A SERIES B TOTAL
Earnings attributable to shareholders (CLP 000’s) 82,725,427 90,996,501 173,721,928
Average weighted number of shares 473,289,301 473,281,303 946,570,604
Earnings per basic and diluted share (in CLP) 174.79 192.27 183.53

22 – DERIVATIVE ASSETS AND LIABILITIES

Embotelladora Andina currently maintains “Cross Currency Swaps” and “Currency Forward” agreements as derivative financial instruments.

Cross Currency Swaps (“CCS”), also known as interest rate and currency swaps are valued by the method of discounted future cash flows at a market rate corresponding to the currencies and rates of the transaction.

On the other hand, the fair value of forward currency contracts is calculated in reference to current forward exchange rates for contracts with similar maturity profiles.

As of December 31, 2020 and 2019, the Company held the following derivative instruments:

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22.1 Derivativesaccounted for as cash flow hedges

CrossCurrency Swaps associated with Local Bonds (Chile)

At the closing date of these financial statements, the Company maintains derivative contracts to secure part of its bond liabilities issued in Unidades de Fomento totaling UF 10,148,159, to convert these obligations to Chilean pesos.

These contracts were valued at their fair values, yielding a net asset of CLP 6,299,116 thousand at the closing date of the financial statements which is presented under other non-current financial assets. The expiration date of derivative contracts is distributed in the years 2026, 2031, 2034 and 2035.

CrossCurrency Swaps associated with International Bonds (US)

At the closing date of these financial statements, the Company maintains derivative contracts to secure US Dollar public bond obligations of USD 360 million due in 2023, to convert such obligations into Brazilian Real. In addition, derivative contracts amounting to USD 300 million are held to convert such obligation into Unidades de Fomento (UF - CLP re-adjustable by the Consumer Price Index) due in 2050. The valuation of the first contract at its fair values generates an asset of CLP 144,684,179 thousand as of December 31, 2020 (CLP 98,918,457 thousand as of December 31, 2019), while the valuation of the second contract at its fair values generates a liability of CLP 51,568,854 thousand at the closing date of these financial statements.

The amount of exchange differences recognized in the statement of income related to financial liabilities in U.S. dollars and are absorbed by the amounts recognized under comprehensive income.

22.2Forward currency transactions expected to be very likely

During 2020 and 2019, Embotelladora Andina entered into forward contracts to ensure the exchange rate on future commodity purchasing needs for its 4 operations, i.e. closing USD/ARS, USD/BRL, USD/CLP and USD/GYP forward instruments. As of December 31, 2020, outstanding contracts amount to USD 54.0 million (USD 46.9 million as of December 31, 2019).

Futures contracts that ensure prices of future raw materials have not been designated as hedge agreements, since they do not fulfill IFRS documentation requirements, whereby its effects on variations in fair value are accounted for directly under other comprehensive income.

Fairvalue hierarchy

At the closing date of these financial statements, the Company held assets for derivative contracts for CLP 150,983,295 thousand (CLP 99,235,662 thousand as of December 31, 2019) and held liabilities for derivative contracts for CLP 52,786,176 thousand (CLP 374,576 thousand as of December 31, 2019). 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.

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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 reporting period, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.

Fair Value Measurement at December 31, 2020
Quoted prices in active marketsfor identical assets or liabilities Observable<br> market data Unobservable<br><br><br><br>market data
(Level 1) (Level 2) (Level 3) Total
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Assets
Current assets
Other current financial assets - - - -
Other non-current financial assets - 150,983,295 - 150,983,295
Total assets - 150,983,295 - 150,983,295
Liabilities
Current liabilities
Other current financial liabilities - 1,217,322 - 1,217,322
Other non-current financial liabilities - 51,568,854 - 51,568,854
Total liabilities - 52,786,176 - 52,786,176
Fair Value Measurement at December 31, 2019
--- --- --- --- --- --- --- --- ---
Quoted prices in active markets<br><br><br><br>for identical assets or liabilities Observable<br><br><br><br>market data Unobservablemarket data
(Level 1) (Level 2) (Level 3) Total
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Assets
Current assets
Other<br>current financial assets - 317.205 317.205
Other non-current financial assets - 98.918.457 - 98.918.457
Total assets - 99.235.662 - 99.235.662
Liabilities
Current liabilities
Other current financial liabilities - 374.576 - 374.576
Total liabilities - 374.576 - 374.576 
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23 – LITIGATION AND CONTINGENCIES

23.1 Lawsuitsand other legal actions:

In the opinion of the Company’s legal counsel, the Parent Company and its subsidiaries do not face legal or extrajudicial contingencies that might result in material or significant losses or gains, except for the following:

1) Embotelladora<br> del Atlántico S.A. faces labor, tax, civil and trade lawsuits. Accounting provisions<br> have been made for the contingency of a probable loss because of these lawsuits, totaling<br> CLP 778,065 thousand (CLP 942,173 thousand in 2019). Management considers it unlikely<br> that non-provisioned contingencies will affect the Company’s income and equity, based<br> on the opinion of its legal counsel. Additionally, Embotelladora del Atlántico<br> S.A. maintains time deposits for an amount of CLP 295,856 thousand to guaranty judicial<br> liabilities.
2) Rio<br> de Janeiro Refrescos Ltda. faces labor, tax, civil and trade lawsuits. Accounting provisions<br> have been made for the contingency of a probable loss because of these lawsuits, totaling<br> CLP 47,945,921 thousand (CLP 66,070,162 thousand in 2019). Management considers it unlikely<br> that non-provisioned contingencies will affect the Company’s income and equity, based<br> on the opinion of its legal counsel. As it is customary in Brazil, Rio de Janeiro Refrescos<br> Ltda. maintains Deposit in courts and assets given in pledge to secure the compliance<br> of certain processes, irrespective of whether these have been classified as a possible,<br> probable or remote. The amounts deposited or pledged as legal guarantees As of December<br> 31, 2020 and 2019 , amounted to CLP 21,054,433 thousand and CLP 32,166,823 thousand,<br> respectively.
--- ---

Part of the assets held under warranty by Rio de Janeiro Refrescos Ltda. as of December 31, 2014, are in the process of being released and others have already been released in exchange for guarantee insurance and bond letters for BRL 1,525,587,904, with different Financial Institutions and Insurance Companies in Brazil, these entities receive an annual commission fee of 0.79%. and become responsible of fulfilling obligations with the Brazilian tax authorities should any trial result against Rio de Janeiro Refrescos Ltda. Additionally, if the warranty and bail letters are executed, Rio de Janeiro Refrescos Ltda. promises to reimburse to the financial institutions and Insurance Companies any amounts disbursed by them to the Brazilian government.

Main contingencies faced by Rio de Janeiro Refrescos are as follows:

a) Tax<br> 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) totaling BRL 2,471,137,390 at December 31, 2020.

The Company does not share the position of the Brazilian tax authority in these procedures and considers that it 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 legal outcomes to date, Management estimates that these procedures do not represent probable losses and has not recorded a provision on these matters.

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Notwithstanding the above, the IFRS related to business combination in terms of distribution of the purchase price establish that contingencies must be measured one by one according to their probability of occurrence and discounted at fair value from the date on which it is deemed the loss can be generated. As a result of the acquisition of Companhia de Bebidas Ipiranga in 2013 and pursuant to this criterion and although there are contingencies listed only as possible for BRL 701,660,858 (amount includes adjustments for current lawsuits) a start provision has been generated in the accounting of the business combination for BRL 139,596,221 equivalent to CLP 19,098,159 thousand.

b) Other<br>tax contingencies.

They refer to ICMS-SP tax administrative processes that challenge the credits derived from the acquisition of tax-exempt products acquired by the Company from a supplier located in the Manaus Free Zone. The total amount is BRL 409,075,280 being assessed by external attorneys as a remote loss, so it has no accounting provision.

The company was challenged by the federal tax authority for tax deductibility of a portion of goodwill in the 2014-2016 period arising from the acquisition of Companhia de Bebidas Ipiranga. The tax authority understands that the entity that acquired Companhia de Bebidas Ipiranga is Embotelladora Andina and not Rio de Janeiro Refrescos Ltda. In the view of external lawyers, such a statement is erroneous, classifying it as a possible loss. The value of this process is BRL 463,613,817, as of December 31, 2020.

3) Embotelladora<br> Andina S.A. and its Chilean subsidiaries face labor, tax, civil and trade lawsuits. Accounting<br> provisions have been made for the contingency of a probable loss because of these lawsuits,<br> totaling CLP 1,300,587 thousand (CLP 2,065,496 thousand in 2019). Management considers<br> it is unlikely that non-provisioned contingencies will affect income and equity of the<br> Company, in the opinion of its legal advisors.
4) Paraguay<br> Refrescos S.A. faces tax, trade, labor and other lawsuits. Accounting provisions have<br> been made for the contingency of any loss because of these lawsuits amounting to CLP<br> 34,747 thousand (CLP 3,488 thousand in 2019). Management considers it is unlikely that<br> non-provisioned contingencies will affect income and equity of the Company, in the opinion<br> of its legal advisors.
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23.2 Directguarantees and restricted assets:

Guarantees and restricted assets are detailed as follows:

Guarantees that commit assets included in the financial statements:

Committed assets Accounting<br> value
Guaranty<br> creditor Debtor<br> name Relationship Guaranty Type 12.31.2020 12.31.2019
CLP<br> (000’s) CLP<br> (000’s)
Transportes<br> San Martin Embotelladora<br> Andina S.A. Parent<br> Company Cash Trade<br> accounts and other account receivable 2,907 2,805
Cooperativa<br> Agricola Pisquera Elqui Limitada Embotelladora<br> Andina S.A. Parent<br> Company Cash Other<br> non-current financial assets 1,216,865 1,216,865
Inmob.<br> e invers. supetar Ltda. Transportes<br> Polar Subsidiary Cash Other<br> non-current non-financial assets 4,579 4,579
María<br> Lobos Jamet Transportes<br> Polar Subsidiary Cash Other<br> non-current non-financial assets 2,566 2,565
Bodega<br> San Francisco Transportes<br> Polar Subsidiary Cash Other<br> non-current non-financial assets 8,606 6,483
Workers<br> Claims Rio<br> de Janeiro Refrescos Ltda. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 5,329,947 6,600,863
Civil<br> and tax claims Rio<br> de Janeiro Refrescos Ltda. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 5,882,379 12,186,432
Governmental<br> institutions Rio<br> de Janeiro Refrescos Ltda. Subsidiary Plant<br> and Equipment Property,<br> plant & equipment 9,842,108 13,379,610
Distribuidora<br> Baraldo S.H. Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 169 250
Acuña<br> Gomez Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 253 375
Nicanor<br> López Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 181 268
Labarda Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 3 5
Municipalidad<br> Bariloche Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets - 36,313
Municipalidad<br> San Antonio Oeste Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 18,650 27,598
Municipalidad<br> Carlos Casares Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 754 1,116
Municipalidad<br> Chivilcoy Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 116,641 172,602
Others Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 36 53
Granada<br> Maximiliano Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 1,521 2,250
Cicsa Embotelladora<br> del Atlántico S.A. Subsidiary Cash<br> deposit Other<br> current non-financial assets 2,114 3,128
Several<br> lessors Embotelladora<br> del Atlántico S.A. Subsidiary Cash<br> deposit Other<br> current non-financial assets 13,140 15,289
Aduana<br> de EZEIZA Embotelladora<br> del Atlántico S.A. Subsidiary Cash<br> deposit Other<br> current non-financial assets 286 422
Municipalidad<br> de Junin Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 243 360
Almada<br> Jorge Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 2,064 3,054
Mirgoni<br> Marano Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 51 76
Farias<br> Matias Luis Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 947 1,401
Temas<br> Industriales SA - Embargo General de Fondos Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 156,759
DBC<br> SA C CERVECERIA ARGENTINA SA ISEMBECK Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 19,009 28,129
Coto<br> Cicsa Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 3,379 5,001
Cencosud Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 2,112 3,125
Mariano<br> Mirgoni Embotelladora<br> del Atlántico S.A. Subsidiary Judicial<br> deposit Other<br> non-current non-financial assets 105,936 -
Marcus<br> A.Peña Paraguay<br> Refrescos Subsidiary Property Property,<br> plant & equipment 4,011 3,955
Mauricio<br> J Cordero C Paraguay<br> Refrescos Subsidiary Property Property,<br> plant & equipment 814 917
José<br> Ruoti Maltese Paraguay<br> Refrescos Subsidiary Property Property,<br> plant & equipment 655 738
Alejandro<br> Galeano Paraguay<br> Refrescos Subsidiary Property Property,<br> plant & equipment 1,132 1,275
Ana<br> Maria Mazó Paraguay<br> Refrescos Subsidiary Property Property,<br> plant & equipment 1,077 1,213 
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Guarantees provided without obligation of assets included in the financial statements:

Committed assets Amounts involved
Guaranty<br> Creditor Debtor<br> name Relationship Guaranty Type 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Labor procedures Rio de Janeiro<br> Refrescos Ltda. Subsidiary Guaranty<br> receipt Legal proceeding 1,527,347 2,819,285
Administrative procedures Rio de Janeiro Refrescos<br> Ltda. Subsidiary Guaranty receipt Legal proceeding 8,860,598 10,432,633
Federal Government Rio de Janeiro Refrescos<br> Ltda. Subsidiary Guaranty receipt Legal proceeding 147,841,989 138,635,908
State Government Rio de Janeiro Refrescos<br> Ltda. Subsidiary Guaranty receipt Legal proceeding 46,031,398 54,803,911
Sorocaba Refrescos Rio de Janeiro Refrescos<br> Ltda. Subsidiary Guaranty receipt Guarantor 2,736,159 3,715,186
Others Rio de Janeiro Refrescos<br> Ltda. Subsidiary Guaranty receipt Legal proceeding 1,715,099 3,757,062
Aduana de EZEIZA Embotelladora del Atlántico<br> S.A. Subsidiary Surety insurance Faithful compliance<br> of contract 3,150 673,854
Aduana de EZEIZA Andina Empaques Argentina<br> S.A. Subsidiary Surety insurance Faithful compliance<br> of contract 143,615 506,623 
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24 – 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. A description of the primary policies established by the Company to manage financial risks are provided below:

Interest Rate Risk

As of the closing date of these financial statements, the Company maintains all its debt liabilities at a fixed rate as to avoid fluctuations in financial expenses resulting from tax rate increases.

The Company’s greatest indebtedness corresponds to six contracts for own issued Chilean local bonds at a fixed rate for UF 15.85 million denominated in UF (“UF”), debt indexed to inflation in Chile (Company sales are correlated with the UF variation), of which five of these Local Bonds have been redenominated through Cross Currency Swaps to Chilean Pesos (CLP).

On the other hand, there is also the Company’s indebtedness on the international market through two 144A/RegS Bonds at a fixed rate, one for USD 365 million, denominated in dollars, and practically 100% of which has been re-denominated to BRL through Cross Currency Swaps, and another one for USD 300 million denominated in USD, and practically 100% of which has been re-denominated to Unidades de Fomento (UF) through Cross Currency Swaps.

Creditrisk

The credit risk to which the Company is exposed comes mainly from trade accounts receivable maintained with retailers, wholesalers and supermarket chains in domestic markets; and the financial investments held with banks and financial institutions, such as time deposits, mutual funds and derivative financial instruments.

a)    Trade accounts receivable and other current accounts receivable

Credit risk related to trade accounts receivable is managed and monitored by the area of Finance and Administration of each business unit. The Company has a wide base of more than 283 thousand clients implying a high level of atomization of accounts receivable, which are subject to policies, procedures and controls established by the Company. In accordance with such policies, credits must be based objectively, non-discretionary and uniformly granted to all clients of a same segment and channel, provided these will allow generating economic benefits to the Company. The credit limit is checked periodically considering payment behavior. Trade accounts receivable pending of payment are monitored on a monthly basis.

i. Sale<br> Interruption

In accordance with Corporate Credit Policy, the interruption of sale must be within the following framework: when a customer has outstanding debts for an amount greater than USD 250,000, and over 60 days expired, sale is suspended. The General Manager in conjunction with the Finance and Administration Manager authorize exceptions to this rule, and if the outstanding debt should exceed USD 1,000,000, and in order to continue operating with that client, the authorization of the Chief Financial Officer is required. Notwithstanding the foregoing, each operation can define an amount lower than USD 250,000 according to the country’s reality.

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ii. Impairment

The impairment recognition policy establishes the following criteria for provisions: 30% is provisioned for 31 to 60 days overdue, 60% between 60 and 91 days, 90% between 91 and 120 days overdue and 100% for more than 120 days. Exemption of the calculation of global impairment is given to credits whose delays in the payment correspond to accounts disputed with the customer whose nature is known and where all necessary documentation for collection is available, therefore, there is no uncertainty on recovering them. However, these accounts also have an impairment provision as follows: 40% for 91 to 120 days overdue, 80% between 120 and 170, and 100% for more than 170 days.

iii. Prepayment<br> to suppliers

The Policy establishes that USD 25,000 prepayments can only be granted to suppliers if its value is properly and fully provisioned. The Treasurer of each subsidiary must approve supplier warranties that the Company receives for prepayments before signing the respective service contract. In the case of domestic suppliers, a warranty ballot (or the instrument existing in the country) shall be required, in favor of Andina executable in the respective country, non-endorsable, payable on demand or upon presentation and its validity will depend on the term of the contract. In the case of foreign suppliers, a stand-by credit letter will be required which shall be issued by a first line bank; in the event that this document is not issued in the country where the transaction is done, a direct bank warranty will be required. Subsidiaries can define the best way of safeguarding the Company’s assets for prepayments under USD 25,000.

iv. Guarantees

In Chile, we have insurance with Compañía de Seguros de Crédito Continental S.A. (AA rating –according to Fitch Chile and Humphreys rating agencies) covering the credit risk regarding trade debtors in Chile.

The rest of the operations do not have credit insurance, instead mortgage guarantees are required for volume operations of wholesalers and distributors in the case of trade accounts receivables. In the case of other debtors, different types of guarantees are required according to the nature of the credit granted.

Historically, uncollectible trade accounts have been lower than 0.5% of the Company’s total sales.

b)   Financial investments

The Company has a Policy that is applicable to all the companies of the group in order to cover credit risks for financial investments, restricting both the types of instruments as well as the institutions and degree of concentration. The companies of the group can invest in:

i. Time<br> deposits: only in banks or financial institutions that have a risk rating equal or higher<br> than Level 1 (Fitch) or equivalent for deposits of less than 1 year and rated A or higher<br> (S&P) or equivalent for deposits of more than 1 year.
ii. Mutual<br> funds: investments with immediate liquidity and no risk of capital (funds composed of<br> investments at a fixed-term, current account, fixed rate Tit BCRA, negotiable obligations,<br> Over Night, etc.) in all those counter-parties that have a rating greater than or equal<br> to AA-(S&P) or equivalent, Type 1 Pacts and Mutual Funds, with a rating greater than<br> or equal to AA+ (S&P) or equivalent.
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iii. Other<br> investment alternatives must be evaluated and authorized by the office of the Chief Financial<br> Officer.

ExchangeRate 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, and Argentine Peso) to the Parent Company’s reporting currency (Chilean Peso). Appreciation or devaluation of the Chilean Peso with respect to the functional currencies of each country, originates decreases and increases in equity, respectively. The Company does not hedge this risk.

a.1 Investmentin Argentina

As of the closing date of these financial statements, the Company maintains a net investment of CLP 145,395,883 thousand. in Argentina, composed by the recognition of assets amounting to CLP 215,017,770 thousand and liabilities amounting to CLP 69,621,887 thousand. These investments accounted for 19.9% of the Company’s consolidated sales revenues

As of December 31, 2020, the Argentine peso appreciated by 32.4% with respect to the Chilean peso.

If the exchange rate of the Argentine Peso devalued an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operation in Argentina of CLP 239,096 thousand and a decrease in equity of CLP 5,148,794 thousand.

a.2 Investment<br>in Brazil

As of the closing date of these financial statements, the Company maintains a net investment of CLP 231,787,304 thousand in Brazil, composed by the recognition of assets amounting to CLP 793,157,414 thousand and liabilities amounting to CLP 561,370,108 thousand. These investments accounted for 29.9% of the Company’s consolidated sales revenues.

As of December 31, 2020, the Brazilian Real appreciated by 26.4% with respect to the Chilean peso.

If the exchange rate of the Brazilian Real devalued an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operation in Brazil of CLP 2,506,240 thousand and a decrease in equity of CLP 11,495,651 thousand.

a.3 Investment<br>in Paraguay

As of the closing date of these financial statements, the Company maintains a net investment of CLP 232,163,091 thousand in Paraguay, composed by the recognition of assets amounting to CLP 270,899,700 thousand and liabilities amounting to CLP 38,736,609 thousand. These investments accounted for 7.9% of the Company’s consolidated sales revenues.

As of December 31, 2020, the Paraguayan Guarani appreciated by 11.2% with respect to the Chilean peso.

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If the exchange rate of the Paraguayan Guaraní devalued by 5% with respect to the Chilean Peso, the Company would have lower income from the operations in Paraguay of CLP 1,737,265 thousand and a decrease in equity of CLP 10,462,776.

b) Net exposure of assets and liabilities in foreign currency

This 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.

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.

c) Exposure of assets purchased or indexed to foreign currency

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.

In order to minimize this risk, the Company maintains a currency hedging policy stipulating that it is necessary to enter into foreign currency derivatives contracts to lessen the effect of the exchange rate over cash expenditures expressed in US dollars, corresponding mainly to payment to suppliers of raw materials in each of the operations. This policy stipulates a 12-month forward horizon.

Commoditiesrisk

The Company is subject to a risk of price fluctuations in the international markets mainly for sugar, PET resin and aluminum, which are inputs used to produce beverages and containers, which together, account for 35% to 40% of operating costs. Procurement and anticipated purchase contracts are made frequently to minimize and/or stabilize this risk. To minimize this risk or stabilize often supply contracts and anticipated purchases are made when market conditions warrant.

Liquidityrisk

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

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The following table presents an analysis of the Company’s committed maturities for liability payments throughout the coming years, with interest calculated for each period:

Payments on the year of maturity
Item 1 year More than<br><br> 1 up to 2 More than <br><br>2 up to 3 More than<br><br> 3 up to 4 More than <br><br>5
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Bank debt 775,684 849,879 81,111 81,111 4,081,333
Bonds payable (1) 72,133,209 11,977,274 12,498,126 272,549,586 628,943,928
Lease obligations 5,718,484 5,129,266 2,207,021 7,805,284 197,802
Contractual obligations 8,426,144 83,368,375 13,446,852 9,839,970 9,714,261
Total 87,053,521 101,324,794 28,233,110 290,275,951 642,937,324
(1) Includes<br> Mark-to-Market liability valuations for bond hedge derivatives
--- ---

COVID-19-RelatedRisk

As a result of the impact that COVID-19 is having in different countries around the world, including its more recent outbreak in the countries where we operate, Coca-Cola Andina has taken measures necessary to protect its employees and to ensure the continuity of the Company’s operations.

Among the measures it has adopted to protect its employees are the following:

• campaign<br>to educate our employees on actions to be taken to avoid the spread of COVID-19;
• sending<br>home any employee that has been exposed to the virus;
--- ---
• implementation<br>of additional cleaning protocols for our facilities;
--- ---
• modifying<br>certain work practices and activities, keeping customer service:
--- ---
- home<br> office has been implemented for those employees whose work can be performed remotely
--- ---
- domestic<br> and international traveling has been canceled
--- ---
• providing<br>personal protective equipment to all our employees who need to keep working at plants and distribution centers, as well as to<br>truck drivers and assistants, including face masks and sanitizers.
--- ---

Since mid-March, governments of the countries where the Company operates, have adopted several measures to reduce infection rates of COVID-19. Among these measures are, the closing of schools, universities, shopping centers, restaurants and bars, prohibiting social gathering events, issuing stay-at-home orders and establishing quarantine requirements, imposing additional sanitary requirements on exports and imports, and limiting international travel and closing borders. Governments in the countries where we operate have also announced economic stimulus programs for families and businesses, including in Argentina a temporary restriction on workforce reductions. To date, none of our plants has had to suspend their operations.

As a result of the COVID-19 pandemic and the restrictions imposed by the authorities in the four countries where we operate, we have seen high volatility in our sales across channels. During the fourth quarter, in consolidated terms, we continue to see a reduction in our sales volumes on the on-premise channel (albeit to a lesser extent than in previous quarters), consisting mainly of restaurants and bars, which are already able to operate, but with capacity restrictions. We have also observed that volume grows again in supermarkets, albeit slightly and that the traditional and wholesale channels are the ones that continue to drive volume growth. Because the pandemic and the actions taken by governments are changing very rapidly, we believe it is too early to draw conclusions about changes in the long-term consumption pattern, and how these may affect our results of operations and financial results in the future.

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Due to uncertainties regarding the COVID-19 pandemic and the above-mentioned government restrictions, including how long these conditions may persist, and the effects they will have on our sales volumes and our business in general, we cannot accurately predict the ultimate financial impact from these new trends. In any event, we estimate that we will not face liquidity constraints, or difficulties in complying with covenants under our debt instruments. We do not anticipate any significant provisions or impairments at this time. Finally, our investment plan for 2021 will return to precrisis levels, i.e. between approximately USD$ 160 – USD 180 million. Our investment plans are constantly monitored, and we cannot assure that we will completely fulfill it if there is a stronger flare-up of this health situation in the countries where we operate or for other unforeseen circumstance.

25 – EXPENSES BY NATURE

Other expenses by nature are:

01.01.2020 01.01.2019
Description 12.31.2020 12.31.2019
CLP (000’s) CLP (000’s)
Direct production costs 862,383,664 877,716,948
Employee expenses 252,337,262 273,123,010
Transportation and distribution 126,683,586 138,486,337
Advertising 6,917,300 27,113,322
Depreciation and amortization 110,920,517 111,087,284
Repairs and maintenance 25,971,485 30,528,180
Other expenses 73,455,798 83,188,784
Total (1) 1,458,669,612 1,541,243,865

(1) Corresponds to the addition of cost of sales, administration expenses and distribution cost.

26 – OTHER INCOME

Other income by function is detailed as follows:

01.01.2019 01.01.2019
Description 12.31.2019 12.31.2019
CLP (000’s) CLP (000’s)
Gain on disposal of Property, plant and equipment 16,005 265,514
Recovery of PIS and COFINS credit(1) 6,744,341 40,281,550
Others 1,595,952 400,094
Total 8,356,298 40,947,158

(1)   See Note 6 for further information on recovery.

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27 – OTHER EXPENSES BY FUNCTION

Other expenses by function are detailed as follows:

01.01.2020 01.01.2019
Description 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S)
Contingencies and non-operating fees 1,081,812 17,690,171
Tax on bank debits and other expenses 3,367,615 4,356,973
Write-offs, disposal and loss of Property, plant and equipment 7,972,976 2,978,194
Others 5,007,853 1,157,509
Total 17.430.256 26,182,847

28 – FINANCIAL INCOME AND EXPENSES

Financial income and expenses are detailed as follows:

a) Financial income
01.01.2020 01.01.2019
Description 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S)
Interest income 7,931,055 3,249,550
Guaranty restatement Ipiranga acquisition 7,674 27,219
Recovery of PIS and COFINS credit(1) 5,124,810 39,780,620
Other financial income 1,882,340 2,098,402
Total 14,945,879 45,155,791

(1)   See Note 6 for further information on recovery.

b) Financial costs
01.01.2020 01.01.2019
Description 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S)
Bond interest 45,927,500 38,153,036
Bank loan interest 1,186,731 1,337,670
Other financial costs 7,658,606 6,718,314
Total 54,772,837 46,209,020

29 – OTHER (LOSSES) GAINS

Other (losses) gains are detailed as follows:

01.01.2020 01.01.2019
Description 12.31.2020 12.31.2019
CLP (000’S) CLP (000’S)
Other (losses) gains 287 2,876
Total 287 2,876 
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30.LOCAL AND FOREIGN CURRENCY

Local and foreign currency balances are the following:

CURRENT ASSETS 12.31.2019
CLP (000’s) CLP (000’s)
Cash and cash equivalents 309,530,699 157,567,986
21,332,268 16,732,278
223,449 9,723
CLP 201,936,140 78,421,936
BRL 49,528,425 46,189,977
ARS 14,821,502 3,830,199
PGY 21,688,915 12,383,873
Other current financial assets 140,304,853 347,278
CLP 139,449,882 275,407
BRL 10,171 13,498
ARS 844,800 16,575
PGY - 41,798
Other current non-financial assets 13,374,381 16,188,965
1,723,989 893,571
621,516 615,636
UF 493,546 410,203
CLP 1,900,762 5,642,901
BRL 1,300,995 1,738,793
ARS 6,052,294 3,918,728
PGY 1,281,279 2,969,133
Trade accounts and other accounts receivable 194,021,253 191,077,588
901,930 1,431,079
-
UF 65,250 453,469
CLP 105,340,179 83,328,449
BRL 67,423,832 79,586,461
ARS 14,928,954 19,088,164
PGY 5,361,108 7,189,966
Accounts receivable related entities 11,875,408 10,835,768
45,644
CLP 6,965,894 9,157,922
BRL 41,878 -
ARS 4,867,636 1,632,202
Inventories 127,972,650 147,641,224
- 6,027,076
CLP 54,112,760 48,320,784
BRL 31,446,180 43,820,564
ARS 32,214,119 34,262,914
PGY 10,199,591 15,209,886
Current tax assets 218,473 9,815,294
CLP 218,473 9,815,294
BRL - -
ARS - -
Total current assets 797,297,717 533,474,103
23,958,187 25,129,648
844,965 625,359
UF 558,796 863,672
CLP 509,924,089 234,962,693
BRL 149,751,481 171,349,293
ARS 73,729,306 62,748,782
PGY 38,530,893 37,794,656

All values are in US Dollars.

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NON-CURRENT ASSETS 12.31.2019
CLP (000’s) CLP (000’s)
Other non-current financial assets. 162,013,278 110,784,311
UF 7,515,981 1,216,865
BRL 144,684,180 98,918,457
ARS 9,813,117 10,648,989
Other non-current non-financial assets 90,242,672 125,636,150
UF 338,014 318,533
CLP 47,530 47,531
BRL 88,001,852 122,922,979
ARS 1,825,631 2,223,600
PGY 29,645 123,507
Accounts receivable, non-current 73,862 523,769
UF 32,219 465,371
ARS 1,211 636
PGY 40,432 57,762
Accounts receivable related entities, non-current 138.346 283,118
CLP 138,346 283,118
Investments accounted for using the equity method 87.956.354 99,866,733
CLP 50,628,307 49,703,673
BRL 37,328,047 50,163,060
Intangible assets other than goodwill 604,514,165 675,075,375
3,959,421 3,959,421
CLP 306,202,181 307,324,953
BRL 139,166,117 189,240,893
ARS 2,591,026 2,708,445
PGY 152,595,420 171,841,663
Goodwill 98,325,593 121,221,661
CLP 9,523,767 9,523,767
BRL 54,980,669 74,653,328
ARS 27,343,642 29,750,238
PGY 6,477,515 7,294,328
Property, plant and equipment 605,576,545 722,718,863
CLP 255,963,912 282,861,852
BRL 179,286,945 251,080,517
ARS 103,227,548 119,784,304
PGY 67,098,140 68,992,190
Deferred tax assets 1,925,870 1,364,340
CLP 1,925,870 1,364,340
Total non-current assets 1,650,766,685 1,857,474,320
3,959,421 3,959,421
UF 7,886,214 2,000,769
CLP 624,429,913 651,109,234
BRL 643,447,810 786,979,234
ARS 144,802,175 165,116,212
PGY 226,241,152 248,309,450

All values are in US Dollars.

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12.31.2020 12.31.2019
CURRENT<br> LIABILITIES Up to 90 days 90 days to 1 year Total Up to 90 days 90 days to 1 year Total
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Other<br> financial liabilities, current 9,270,838 29,295,886 38,566,724 9,719,894 30,873,984 40,593,878
USD 72,655 6,704,245 6,776,900 55,388 3,147,441 3,202,829
UF 7,799,637 5,272,547 13,072,184 7,535,228 11,836,936 19,372,164
CLP 908,790 13,489,310 14,398,100 842,221 11,700,946 12,543,167
BRL 362,854 1,245,940 1,608,794 1,153,072 2,119,141 3,272,213
ARS 70,950 1,578,082 1,649,032 75,060 704,921 779,981
PGY 55,952 1,005,762 1,061,714 58,925 1,364,599 1,423,524
Trade<br> accounts and other accounts payable, current 227,503,270 2,942,539 230,445,809 228,259,216 15,441,337 243,700,553
USD 8,972,065 - 8,972,065 10,049,567 - 10,049,567
EUR 1,622,411 - 1,622,411 2,024,156 - 2,024,156
UF - - - 2,044,871 - 2,044,871
CLP 108,670,085 2,942,539 111,612,624 84,602,547 15,441,337 100,043,884
BRL 58,136,480 - 58,136,480 75,051,089 - 75,051,089
ARS 33,511,747 - 33,511,747 40,826,489 - 40,826,489
PGY 15,878,527 - 15,878,527 13,660,497 - 13,660,497
Other currencies 711,955 - 711,955 - - -
Accounts<br> payable related entities, current 39,541,968 - 39,541,968 53,637,601 - 53,637,601
CLP 23,884,687 - 23,884,687 28,471,399 - 28,471,399
BRL 10,809,085 - 10,809,085 19,279,132 - 19,279,132
ARS 4,848,196 - 4,848,196 5,887,070 - 5,887,070
Other<br> current provisions 805,842 529,495 1,335,337 1,637,799 431,185 2,068,984
CLP 805,842 494,748 1,300,590 1,637,799 427,697 2,065,496
PGY - 34,747 34,747 - 3,488 3,488
Tax<br> liabilities, current 4,590,876 4,237,723 8,828,599 3,097,223 3,665,044 6,762,267
CLP 173,771 3,414,859 3,588,630 896,975 - 896,975
BRL 4,249,909 - 4,249,909 2,107,381 - 2,107,381
ARS 167,196 439,641 606,837 92,867 3,446,054 3,538,921
PGY - 383,223 383,223 - 218,990 218,990
Employee<br> benefits current provisions 17,027,427 14,043,592 31,071,019 26,513,813 11,879,041 38,392,854
CLP 1,168,973 5,799,389 6,968,362 1,241,603 5,509,351 6,750,954
BRL 15,325,256 - 15,325,256 20,681,694 - 20,681,694
ARS 533,198 6,701,756 7,234,954 4,590,516 5,260,142 9,850,658
PGY - 1,542,447 1,542,447 - 1,109,548 1,109,548
Other<br> current non-financial liabilities 620,609 27,646,121 28,266,730 328,441 26,173,774 26,502,215
CLP 598,769 27,551,000 28,149,769 327,847 26,064,658 26,392,505
ARS 21,840 - 21,840 594 5,286 5,880
PGY - 95,121 95,121 - 103,830 103,830
Total<br> current liabilities 299,360,830 78,695,356 378,056,186 323,193,987 88,464,365 411,658,352
USD 9,044,720 6,704,245 15,748,965 10,104,955 3,147,441 13,252,396
EUR 1,622,411 - 1,622,411 2,024,156 - 2,024,156
UF 7,799,637 5,272,547 13,072,184 9,580,099 11,836,936 21,417,035
CLP 136,210,917 53,691,845 189,902,762 118,020,391 59,143,989 177,164,380
BRL 88,883,584 1,245,940 90,129,524 118,272,368 2,119,141 120,391,509
ARS 39,153,127 8,719,479 47,872,606 51,472,596 9,416,403 60,888,999
PGY 15,934,479 3,061,300 18,995,779 13,719,422 2,800,455 16,519,877
Other currencies 711,955 - 711,955 - - - 
79

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12.31.2020 12.31.2019
NON<br> CURRENT LIABILITIES More than 3 up to 5 years More than 5 years Total More than 1 up to 3 years More than 3 up to 5 years More than 5 years Total
CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S) CLP (000’S)
Other<br> non-current financial liabilities 31,811,687 279,600,958 678,416,924 989,829,569 34,794,568 299,661,490 408,870,999 743,327,057
366,652 259,746,604 207,280,189 467,393,445 509,366 271,700,335 - 272,209,701
UF 24,669,188 13,214,387 414,689,041 452,572,616 22,584,954 24,627,105 400,393,581 447,605,640
CLP 4,089,001 4,000,000 51,568,854 59,657,855 7,926,056 - - 7,926,056
BRL 2,394,281 2,639,967 4,878,840 9,913,088 3,319,514 3,334,050 8,477,418 15,130,982
ARS 128,930 - - 128,930 55,222 - - 55,222
PGY 163,635 - - 163,635 399,456 - - 399,456
Accounts<br> payable, non-current 295,279 - - 295,279 619,587 - - 619,587
CLP 293,176 - - 293,176 618,509 - - 618,509
ARS 2,103 - - 2,103 1,078 - - 1,078
Accounts<br> payable related companies 10,790,089 - - 10,790,089 19,777,812 - - 19,777,812
BRL 10,790,089 - - 10,790,089 19,777,812 - - 19,777,812
Other<br> non-current provisions 789,016 47,945,920 - 48,734,936 968,404 66,070,162 - 67,038,566
BRL - 47,945,920 - 47,945,920 - 66,070,162 - 66,070,162
ARS 789,016 - - 789,016 968,404 - - 968,404
Deferred<br> tax liabilities 10,677,151 38,508,424 104,483,972 153,669,547 12,834,788 49,848,536 106,766,423 169,449,747
UF - - - - - - 1,298,050 1,298,050
CLP 1,604,289 1,070,325 90,781,152 93,455,766 1,449,404 181,418 90,271,026 91,901,848
BRL - 37,438,099 - 37,438,099 - 49,667,118 - 49,667,118
ARS 9,072,862 - - 9,072,862 11,385,384 - - 11,385,384
PGY - - 13,702,820 13,702,820 - - 15,197,347 15,197,347
Employee<br> benefits non-current provisions 911.873 145,165 12,578,520 13,635,558 1,114,051 148,954 8,910,349 10,173,354
CLP 378,733 145,165 12,578,520 13,102,418 461,587 148,954 8,910,349 9,520,890
ARS - - - - 88,090 - - 88,090
PGY 533,140 - - 533,140 564,374 - - 564,374
Other<br> non-financial liabilities 35,315 21,436,733 - 21,472,048 - - - -
BRL - 21,436,733 - 21,436,733 - - - -
ARS 35,315 - - 35,315 - - - -
Other<br> non-financial liabilities 20,597 - - 20,597 - - - -
CLP 20,597 - - 20,597 - - - -
Total<br> non-current liabilities 55,331,007 387,637,200 795,479,416 1,238,447,623 70,109,210 415,729,142 524,547,771 1,010,386,123
366,652 259,746,604 207,280,189 467,393,445 509,366 271,700,335 - 272,209,701
UF 24,669,188 13,214,387 414,689,041 452,572,616 22,584,954 24,627,105 401,691,631 448,903,690
CLP 6,385,796 5,215,490 154,928,526 166,529,812 10,455,556 330,372 99,181,375 109,967,303
BRL 13,184,370 109,460,719 4,878,840 127,523,929 23,097,326 119,071,330 8,477,418 150,646,074
ARS 10,028,226 - - 10,028,226 12,498,178 - - 12,498,178
PGY 696,775 - 13,702,820 14,399,595 963,830 - 15,197,347 16,161,177

All values are in US Dollars.

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31 – THE ENVIRONMENT

The Company has made disbursements 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:

2020 period Future commitments
Country Recorded as <br><br>expenses Capitalized to<br><br> Property, plant <br><br>and equipment To be <br><br>recorded as<br> expenses To be <br><br>capitalized to<br><br> Property, plant <br><br>and equipment
CLP (000’s) CLP (000’s) CLP (000’s) CLP (000’s)
Chile 562,331 -
Argentina 312,936 8,758 94,226
Brazil 1,030,883 110,123 207,737 48,810
Paraguay 101,653 34,218 -
Total 2,007,803 153,099 301,963 48,810

32 – SUBSEQUENT EVENTS

On February 17, 2021, the subsidiary Paraguay Refrescos S.A. along with the companies INPET S.A.E.C.A and CORESA. executed the Bylaws and Shareholders’ Agreement for the incorporation of a company called “CIRCULAR- PET S.A.” Each of the companies will hold a 33.3% ownership interest in the company’s share capital.

The subscribed share capital of CIRCULAR- PET S.A. is CLP 4,326 million (PGY 42,000,000,000), where each shareholder at the incorporation act paid a share of CLP 1,030,000 (PGY 10,000,000), totaling a paid-up share capital of CLP 3,090,000 (PGY 30,000,000).

The principal activity of CIRCULAR-PET S.A. will be the manufacture and commercialization of recycled post-consumer PET resins, from the transformation of PET flakes. Participation in the company provides the Group with a fully integrated supply chain for its growing business of commercializing products in PET bottles and will ensure the supply of recycled resin under the best conditions for the coming years.

No other events have occurred after December 31, 2020 that may significantly affect the Company’s consolidated financial situation.

81

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<br> Wainer
Name: Andrés Wainer
Title: Chief Financial Officer

Santiago, March 15, 2021

82

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