Andina Bottling Co Inc 6-K, filed Nov 20, 2023
Andina Bottling Co Inc (AKO-A)
About this 6-K
Andina Bottling Co Inc filed this 6-K on November 20, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15b-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
September 2023
Date of Report (Date of Earliest Event Reported)
Embotelladora Andina S.A.
(Exact name of registrant as specified in its charter)
Andina Bottling Company, Inc.
(Translation of Registrant´s name into English)
Avda. Miraflores 9153
Renca
Santiago, Chile
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
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 x
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ¨ No x
Indicate by check mark whether the registrant by furnishing the information contained in this Form 6-K is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes ¨ No x
Consolidated Interim Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Santiago, Chile
September 30, 2023 and December 31, 2022
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Financial Statements
at September 30, 2023 and December 31, 2022
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Interim Consolidated Financial Statements
Consolidated Interim Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
September 30, 2023 (non-audited) and December 31, 2022
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Financial Position
as of September 30, 2023 (non-audited) and December 31, 2022
| ASSETS | NOTE | 09.30.2023 | 12.31.2022 | ||||||||
ThCh$ | ThCh$ | ||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | 4 | 224,775,962 | 291,681,987 | ||||||||
| Other financial assets | 5 | 67,595,214 | 263,044,869 | ||||||||
| Other non-financial assets | 6 | 25,203,312 | 26,957,000 | ||||||||
| Trade and other accounts receivable, net | 7 | 248,848,124 | 279,770,286 | ||||||||
| Accounts receivable from related companies | 12.1 | 9,023,472 | 15,062,167 | ||||||||
| Inventory | 8 | 262,641,980 | 245,886,656 | ||||||||
| Current tax assets | 9 | 54,394,281 | 39,326,427 | ||||||||
| Total Current Assets | 892,482,345 | 1,161,729,392 | |||||||||
| Non-Current Assets: | |||||||||||
| Other financial assets | 5 | 89,124,051 | 94,852,711 | ||||||||
| Other non-financial assets | 6 | 65,736,893 | 59,672,266 | ||||||||
| Trade and other receivables | 7 | 349,664 | 539,920 | ||||||||
| Accounts receivable from related parties | 12.1 | 109,318 | 109,318 | ||||||||
| Investments accounted for under the equity method | 14 | 92,094,233 | 92,344,598 | ||||||||
| Intangible assets other than goodwill | 15 | 698,476,463 | 671,778,888 | ||||||||
| Goodwill | 16 | 138,543,667 | 129,023,922 | ||||||||
| Property, plant and equipment | 11 | 886,021,289 | 798,221,259 | ||||||||
| Deferred tax assets | 10.2 | 2,657,328 | 2,428,333 | ||||||||
| Total Non-Current Assets | 1,973,112,906 | 1,848,971,215 | |||||||||
| Total Assets | 2,865,595,251 | 3,010,700,607 | |||||||||
The
accompanying notes 1 to 32 form an integral part of these Consolidated Interim Financial Statements
1
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Financial Position
as of September 30, 2023 (non-audited) and December 31, 2022
| LIABILITIES AND EQUITY | NOTE | 09.30.2023 | 12.31.2022 | ||||||||
| ThCh$ | ThCh$ | ||||||||||
| LIABILITIES | |||||||||||
| Current Liabilities | |||||||||||
| Other financial liabilities | 17 | 69,392,374 | 367,302,080 | ||||||||
| Trade and other accounts payable | 18 | 357,648,545 | 384,801,630 | ||||||||
| Accounts payable to related parties | 12.2 | 86,907,283 | 90,248,067 | ||||||||
| Other provisions | 19 | 1,408,413 | 1,591,644 | ||||||||
| Tax liabilities | 9 | 9,550,122 | 14,615,447 | ||||||||
| Employee benefits current provisions | 13 | 45,631,037 | 48,391,806 | ||||||||
| Other non-financial liabilities | 20 | 40,635,280 | 42,294,460 | ||||||||
| Total Current Liabilities | 611,173,054 | 949,245,134 | |||||||||
| Other financial liabilities | 17 | 1,013,208,065 | 904,802,058 | ||||||||
| Trade accounts and other accounts payable | 18 | 2,430,806 | 3,015,284 | ||||||||
| Accounts payable to related companies | 12.2 | 7,949,476 | 10,354,296 | ||||||||
| Other provisions | 19 | 52,917,417 | 47,103,783 | ||||||||
| Deferred tax liabilities | 10.2 | 191,877,244 | 165,778,556 | ||||||||
| Employee benefits non-current provisions | 13 | 20,657,395 | 17,409,793 | ||||||||
| Other non-financial liabilities | 20 | 2,564,032 | 29,589,051 | ||||||||
| Total Non-current liabilities | 1,291,604,435 | 1,178,052,821 | |||||||||
| EQUITY | 21 | ||||||||||
| Issued capital | 270,737,574 | 270,737,574 | |||||||||
| Retained earnings | 795,723,499 | 716,975,127 | |||||||||
| Other reserves | (137,230,770 | ) | (132,452,557 | ) | |||||||
| Equity attributable to owners of the parent | 929,230,303 | 855,260,144 | |||||||||
| Non-controlling interests | 33,587,459 | 28,142,508 | |||||||||
| Total Equity | 962,817,762 | 883,402,652 | |||||||||
| Total Liabilities and Equity | 2,865,595,251 | 3,010,700,607 | |||||||||
The
accompanying notes 1 to 32 form an integral part of these Consolidated Interim Financial Statements.
2
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Income by Function
For the periods ended September 30, 2023 and 2022 (non-audited)
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | ||||||||||||||||
09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | ||||||||||||||||
| (non-audited) | (non-audited) | (non-audited) | (non-audited) | ||||||||||||||||
| NOTE | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||
| Net sales | 2,021,001,963 | 1,932,680,900 | 670,332,847 | 653,498,496 | |||||||||||||||
| Cost of sales | 25 | (1,232,599,861 | ) | (1,182,137,727 | ) | (412,229,892 | ) | (407,137,751 | ) | ||||||||||
| Gross Profit | 788,402,102 | 750,543,173 | 258,102,955 | 246,360,745 | |||||||||||||||
| Other income | 26 | 1,071,874 | 3,843,617 | 335,798 | 3,332,494 | ||||||||||||||
| Distribution expenses | 25 | (187,212,810 | ) | (185,202,826 | ) | (59,773,091 | ) | (61,311,683 | ) | ||||||||||
| Administrative expenses | 25 | (349,214,815 | ) | (325,948,281 | ) | (120,190,039 | ) | (116,283,742 | ) | ||||||||||
| Other expenses | 27 | (17,698,003 | ) | 2,288,969 | (9,070,958 | ) | (1,720,180 | ) | |||||||||||
| Other (loss) gains | 29 | (25,659,888 | ) | (24,984,038 | ) | 103,542 | 737 | ||||||||||||
| Financial income | 28 | 27,043,900 | 31,773,860 | 5,942,204 | 6,147,281 | ||||||||||||||
| Financial expenses | 28 | (51,726,114 | ) | (44,214,010 | ) | (21,981,178 | ) | (16,082,122 | ) | ||||||||||
| Share of profit (loss) of investments in associates and joint ventures accounted for using the equity method | 14.3 | (5,301 | ) | 285,060 | (845,513 | ) | 251,667 | ||||||||||||
| Foreign exchange differences | (6,580,808 | ) | (1,797,463 | ) | 3,171,779 | (4,526,159 | ) | ||||||||||||
| Income by indexation units | (169,713 | ) | (48,999,899 | ) | 17,295,850 | (7,057,247 | ) | ||||||||||||
| Net income before income taxes | 178,250,424 | 157,588,162 | 73,091,349 | 49,111,791 | |||||||||||||||
| Income tax expense | 10.1 | (64,696,923 | ) | (66,039,468 | ) | (9,541,318 | ) | (14,576,748 | ) | ||||||||||
| Net income | 113,553,501 | 91,548,694 | 63,550,031 | 34,535,043 | |||||||||||||||
| Net income attributable to | |||||||||||||||||||
| Owners of the controller | 112,149,967 | 90,185,366 | 63,707,715 | 33,999,497 | |||||||||||||||
| Non-controlling interests | 1,403,534 | 1,363,328 | (157,684 | ) | 535,546 | ||||||||||||||
| Net income | 113,553,501 | 91,548,694 | 63,550,031 | 34,535,043 | |||||||||||||||
| Earnings per Share, basic and diluted in ongoing operations | |||||||||||||||||||
| Earnings per Series A Share | 21.5 | 112.84 | 90.74 | 64.10 | 34.21 | ||||||||||||||
| Earnings per Series B Share | 21.5 | 124.12 | 99.81 | 70.51 | 37.63 | ||||||||||||||
The accompanying notes 1 to 32 form an integral part of these Consolidated Interim Financial Statements
3
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Comprehensive Income
For the periods ended September 30, 2023 and 2022 (non-audited)
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | |||||||||||||
09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | |||||||||||||
| (non-audited) | (non-audited) | (non-audited) | (non-audited) | |||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Other Comprehensive Income | ||||||||||||||||
| Net income | 113,553,501 | 91,548,694 | 63,550,031 | 34,535,043 | ||||||||||||
| 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 | (824,406 | ) | (1,712,117 | ) | (670,595 | ) | (1,357,464 | ) | ||||||||
| Components of other comprehensive income that will be reclassified to net income for the period, before taxes | ||||||||||||||||
| Gain (losses) from exchange rate translation differences | (79,399,090 | ) | 61,379,791 | 46,784,406 | (27,147,245 | ) | ||||||||||
| Gain (losses) from cash flow hedges | 59,835,301 | (130,021,219 | ) | 7,701,104 | (63,229,973 | ) | ||||||||||
| 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 | 222,590 | 462,272 | 181,061 | 363,897 | ||||||||||||
| 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 | 32,124,179 | (12,049,932 | ) | (9,613,441 | ) | 8,895,501 | ||||||||||
| Income tax related to cash flow hedges | ||||||||||||||||
| Other comprehensive income, total | (16,489,375 | ) | 36,612,064 | (2,579,623 | ) | 16,701,513 | ||||||||||
| Total comprehensive income | (4,530,801 | ) | (45,329,141 | ) | 41,802,912 | (65,773,771 | ) | |||||||||
| Total comprehensive income attributable to: | 109,022,700 | 46,219,553 | 105,352,943 | (31,238,728 | ) | |||||||||||
| Equity holders of the controller | ||||||||||||||||
| Non-controlling interests | 107,371,754 | 44,095,467 | 105,007,544 | (31,820,080 | ) | |||||||||||
| Total comprehensive income | 1,650,946 | 2,124,086 | 345,399 | 581,352 | ||||||||||||
| Net income | 109,022,700 | 46,219,553 | 105,352,943 | (31,238,728 | ) | |||||||||||
The accompanying notes 1 to 32 form an integral part of these Consolidated Interim Financial Statements.
4
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Changes in Equity
For the periods ended September 30, 2023 and 2022 (non-audited)
| Other reserves | ||||||||||||||||||||||||||||||
Issued capital | Reserves for exchange rate differences | Cash Flow hedge reserve | Actuarial gains or losses in employee benefits | Other reserves | Total Other reserves | Retained earnings | Controlling equity | Non-controlling interests | Total equity | |||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||
| Opening balance 01.01.2023 | 270,737,574 | (495,483,366 | ) | (62,344,501 | ) | (7,776,316 | ) | 433,151,626 | (132,452,557 | ) | 716,975,127 | 855,260,144 | 28,142,508 | 883,402,652 | ||||||||||||||||
| Changes in equity | ||||||||||||||||||||||||||||||
| Comprehensive income | ||||||||||||||||||||||||||||||
| Earnings | - | - | - | - | - | - | 112,149,967 | 112,149,967 | 1,403,534 | 113.553.501 | ||||||||||||||||||||
| Other comprehensive income | - | (47,548,486 | ) | 43,328,736 | (558,463 | ) | - | (4,778,213 | ) | - | (4,778,213 | ) | 247,412 | (4.530.801 | ) | |||||||||||||||
| Comprehensive income | - | (47,548,486 | ) | 43,328,736 | (558,463 | ) | - | (4,778,213 | ) | 112,149,967 | 107,371,754 | 1,650,946 | 109.022.700 | |||||||||||||||||
| Dividends | - | - | - | - | - | - | (136,164,127 | ) | (136,164,127 | ) | (325,995 | ) | (136,490,122 | ) | ||||||||||||||||
| Increase (decrease) from other changes * | - | - | - | - | - | - | 102,762,532 | 102,762,532 | 4,120,000 | 106,882,532 | ||||||||||||||||||||
| Total changes in equity | - | (47,548,486 | ) | 43,328,736 | (558,463 | ) | - | (4,778,213 | ) | 78,748,372 | 73,970,159 | 5,444,951 | 79,415,110 | |||||||||||||||||
| Ending balance as of 09.30.2023 | 270,737,574 | (543,031,852 | ) | (19,015,765 | ) | (8,334,779 | ) | 433,151,626 | (137,230,770 | ) | 795,723,499 | 929,230,303 | 33,587,459 | 962,817,762 | ||||||||||||||||
| Other reserves | ||||||||||||||||||||||||||||||
Issued capital | Reserves for exchange rate differences | Cash Flow hedge reserve | Actuarial gains or losses in employee benefits | Other reserves | Total Other reserves | Retained earnings | Controlling equity | Non-controlling interests | Total equity | |||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||
| Opening balance 01.01.2022 | 270,737,574 | (441,580,088 | ) | 50,603,698 | (4,885,926 | ) | 433,151,626 | 37,289,310 | 768,116,920 | 1,076,143,804 | 25,269,755 | 1,101,413,559 | ||||||||||||||||||
| Changes in equity | ||||||||||||||||||||||||||||||
| Comprehensive income | ||||||||||||||||||||||||||||||
| Earnings | - | - | - | - | - | - | 90.185.366 | 90,185,366 | 1,363,328 | 91.548.694 | ||||||||||||||||||||
| Other comprehensive income | - | 48,659,405 | (93,496,128 | ) | (1,253,176 | ) | - | (46,089,899 | ) | - | (46,089,899 | ) | 760,758 | (45.329.141 | ) | |||||||||||||||
| Comprehensive income | - | 48,659,405 | (93,496,128 | ) | (1,253,176 | ) | - | (46,089,899 | ) | 90.185.366 | 44,095,467 | 2,124,086 | 46.219.553 | |||||||||||||||||
| Dividends | - | - | - | - | - | - | (245,492,986 | ) | (245,492,986 | ) | (421,363 | ) | (245,914,349 | ) | ||||||||||||||||
| Increase (decrease) from other changes * | - | - | - | - | - | - | 99,274,726 | 99,274,726 | 1,280,000 | 100,554,726 | ||||||||||||||||||||
| Total changes in equity | - | 48,659,405 | (93,496,128 | ) | (1,253,176 | ) | - | (46,089,899 | ) | (56,032,894 | ) | (102,122,793 | ) | 2,982,723 | (99,140,070 | ) | ||||||||||||||
| Ending balance as of 09.30.2022 | 270,737,574 | (392,920,683 | ) | (42,892,430 | ) | (6,139,102 | ) | 433,151,626 | (8,800,589 | ) | 712,084,026 | 974,021,011 | 28,252,478 | 1,002,273,489 | ||||||||||||||||
*Corresponds mainly to inflation effects on the equity of our Subsidiaries in Argentina (see Note 2.5.1)
The accompanying notes 1 to 32 form an integral part of these Consolidated Interim Financial Statements.
5
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Direct Cash Flows
For the periods ended September 30, 2023 and 2022
| 01.01.2023 | 01.01.2022 | ||||||||||
| Cash flows provided by (used in) Operating Activities | NOTE | 09.30.2023 | 09.30.2022 | ||||||||
| (non-audited) | (non-audited) | ||||||||||
| ThCh$ | ThCh$ | ||||||||||
| Cash flows provided by Operating Activities | |||||||||||
| Receipts from the sale of goods and the rendering of services (including taxes) | 2,996,456,702 | 2,839,783,452 | |||||||||
| Payments for Operating Activities | |||||||||||
| Payments to suppliers for goods and services (including taxes) | (2,162,680,482 | ) | (1,997,433,298 | ) | |||||||
| Payments to and on behalf of employees | (209,435,619 | ) | (192,163,178 | ) | |||||||
| Other payments for operating activities (value-added taxes on purchases, sales and others) | (311,478,143 | ) | (279,093,201 | ) | |||||||
| Interest payments | (60,683,064 | ) | (70,564,606 | ) | |||||||
| Interest received | 14,172,957 | 48,405,737 | |||||||||
| Income tax payments | (64,604,535 | ) | (97,896,836 | ) | |||||||
| Other cash movements (tax on bank debits Argentina and others) | (3,350,417 | ) | (7,762,707 | ) | |||||||
| Cash flows provided by (used in) Operating Activities | 198,397,399 | 243,275,363 | |||||||||
Cash flows provided by (used in) Investing Activities | |||||||||||
| Cash flows used in acquiring non-controlling interests | - | 1,280,000 | |||||||||
| Dividends received | 4,109,768 | 673,052 | |||||||||
| Proceeds from sale of Property, plant and equipment | 76,968 | 92,253 | |||||||||
| Purchase of Property, plant and equipment | (151,161,097 | ) | (135,387,520 | ) | |||||||
| Payment on forward, term option and financial exchange agreements | - | - | |||||||||
| Collection on forward, term, option and financial exchange agreements | 126,950 | 111,607 | |||||||||
| Other (payments) redemptions for (purchases) of financial instruments | 63,159,390 | 104,325,362 | |||||||||
| Other cash inflows (outflows) | 2,768,326 | (405,583 | ) | ||||||||
| Net cash flows used in Investing Activities | (80,919,695 | ) | (29,310,829 | ) | |||||||
| Cash Flows generated from (used in) Financing Activities | |||||||||||
| Proceeds (payments) from short term loans | 4,119,966 | - | |||||||||
| Loan payments | 48,837,032 | 25,603,218 | |||||||||
| Lease liability payments | (18,407,304 | ) | (11,195,854 | ) | |||||||
| Dividend payments by the reporting entity | (5,072,078 | ) | (4,084,049 | ) | |||||||
| Other cash inflows (outflows) (placement and payment of public debt) | (136,164,127 | ) | (245,492,988 | ) | |||||||
| Net cash flows (used in) generated by Financing Activities | (57,388,084 | ) | (13,289,752 | ) | |||||||
| Net increase in cash and cash equivalents before exchange differences | (164,074,595 | ) | (248,459,425 | ) | |||||||
| Cash Flows generated from (used in) Financing Activities | (46,596,891 | ) | (34,494,891 | ) | |||||||
| Effects of exchange differences on cash and cash equivalents | (3,860,405 | ) | (9,060,392 | ) | |||||||
| Effects of inflation in cash and cash equivalents in Argentina | (16,448,729 | ) | (17,119,488 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents | (66,906,025 | ) | (60,674,771 | ) | |||||||
| Cash and cash equivalents – beginning of period | 4 | 291,681,987 | 304,312,020 | ||||||||
| Cash and cash equivalents - end of period | 4 | 224,775,962 | 243,637,249 | ||||||||
The accompanying notes 1 to 32 form an integral part of these Consolidated Interim Financial Statements
6
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Notes to the Interim Consolidated Financial Statements
Embotelladora Andina S.A. RUT (Chilean Taxpayer 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 in the Securities Registry of the Chilean 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), as well as commercialize and distribute some brands of other companies such as Monster, AB InBev, Diageo and Capel, among others. 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 franchise 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 franchise covers much of the state of Rio de Janeiro, the entire state of Espirito Santo, and part of the states of São 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 Argentina expires in September 2027; for the territories in Brazil, it expires in October 2027; for the territories in Chile it expires in December 2023 and for the territory in Paraguay, it is under the normal process of renewal. Said agreements are renewable upon the request of Embotelladora Andina S.A. 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 52.465% 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 October 31, 2023.
7
2 – BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND APPLICATION OF ACCOUNTING CRITERIA
| 2.1 | Accounting principles and basis of preparation |
The Company’s Interim Consolidated Financial Statements for the period ended September 30, 2023 and fiscal year ended December 31, 2022, have been prepared in accordance with International Accounting Standard No. 34 (IAS 34) incorporated in the International Financial Reporting Standards (hereinafter “IFRS”) issued by the International Accounting Standards Board (hereinafter “IASB”).
These Interim 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 Interim Consolidated Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries as of September 30, 2023 and December 31, 2022 and the results of operations for the periods from January 1 to September 30, 2023 and 2022, and from April 1 to September 30, 2023 and 2022, together with the statements of changes in equity and cash flows for the periods from January 1 and September 30, 2023 and 2022.
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 | Subsidiaries and 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 statements of income by function 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.
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The interim 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 | ||||||||||||||||||||
| 09.30.2023 | 12.31.2022 | |||||||||||||||||||
| Taxpayer ID | Company Name | Direct | Indirect | Total | Direct | Indirect | Total | |||||||||||||
| 96.842.970-1 | Andina Bottling Investments S.A. | 99.9 | 0.09 | 99.99 | 99.9 | 0.09 | 99.99 | |||||||||||||
| 96.972.760-9 | Andina Bottling Investments Dos S.A. | 99.9 | 0.09 | 99.99 | 99.9 | 0.09 | 99.99 | |||||||||||||
| Foreign | Andina Empaques Argentina S.A. | - | 99.98 | 99.98 | - | 99.98 | 99.98 | |||||||||||||
| 96.836.750-1 | Andina Inversiones Societarias S.A. | 99.98 | 0.01 | 99.99 | 99.98 | 0.01 | 99.99 | |||||||||||||
| 76.070.406-7 | Embotelladora Andina Chile S.A. | 99.99 | - | 99.99 | 99.99 | - | 99.99 | |||||||||||||
| Foreign | Embotelladora del Atlántico S.A. | 0.92 | 99.07 | 99.99 | 0.92 | 99.07 | 99.99 | |||||||||||||
| 96.705.990-0 | Envases Central S.A. | 59.27 | - | 59.27 | 59.27 | - | 59.27 | |||||||||||||
| Foreign | Paraguay Refrescos S.A. | 0.08 | 97.75 | 97.83 | 0.08 | 97.75 | 97.83 | |||||||||||||
| 76.276.604-3 | Red de Transportes Comerciales Ltda. | 99.9 | 0.09 | 99.99 | 99.9 | 0.09 | 99.99 | |||||||||||||
| 77.427.659-9 | Re-Ciclar S.A. | 60.00 | - | 60.00 | 60.00 | - | 60.00 | |||||||||||||
| Foreign | Rio de Janeiro Refrescos Ltda. | - | 99.99 | 99.99 | - | 99.99 | 99.99 | |||||||||||||
| 78.536.950-5 | Servicios Multivending Ltda. | 99.9 | 0.09 | 99.99 | 99.9 | 0.09 | 99.99 | |||||||||||||
| 78.861.790-9 | Transportes 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 | VJ S.A. | 15.00 | 50.00 | 65.00 | 15.00 | 50.00 | 65.00 | |||||||||||||
| 2.3 | Investments in associates |
Ownership interest held by the Group in associates are recorded following the equity method. According to the equity method, the investment in an associate 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.”
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.
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For associates located in Brazil, the financial statements accounted for using the equity method have a one-month lag because their reporting dates are different from those of Embotelladora Andina.
| 2.4 | Financial reporting 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 in Chile | |
| · | Operation in Brazil | |
| · | Operation in Argentina | |
| · | Operation in Paraguay |
| 2.5 | Functional currency and presentation currency |
| 2.5.1 | Functional currency |
Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The functional currency of each of the Operations is the following:
| Company | Functional Currency | ||
| Embotelladora del Atlántico | Argentine Peso (ARS) | ||
| Embotelladora Andina | Chilean Peso (CLP) | ||
| Paraguay Refrescos | Paraguayan Guaraní (PYG) | ||
| Rio de Janeiro Refrescos | Brazil Real (BRL) |
Foreign currency-denominated monetary assets and liabilities are converted to the functional currency at the observed exchange rate of each central bank, 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).
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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.
For consolidation purposes in Embotelladora Andina S.A. and as a result of the adoption of IAS 29, the results and financial position of our Argentine subsidiaries were converted to the closing exchange rate (ARS/CLP) at the date of presentation of these financial statements , 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 Opening 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.
The adjustment factor is derived from the National Consumer Price Index (CPI), which is published by the National Institute of Statistics and Census of the Argentine Republic (INDEC). Inflation for the periods January to September 2023 and January to December 2022 amounted to 101.71% and 96.95%, respectively.
| 2.5.2 | Presentation currency |
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 of financial statements whose functional currency does not correspond to hyperinflationary economies (Brazil and Paraguay) |
Financial statements measured as indicated are translated to the presentation currency as follows:
| · | The statement of financial position is translated to the closing exchange rate at the financial statement date and the income statement is translated at the average monthly exchange rates, the differences that result are recognized in equity under other comprehensive income. |
| · | Cash flow income statement are also translated at average exchange rates for each transaction. |
| · | In the case of the disposal of an investment abroad, the component of other comprehensive income (OCI) relating to that investment is reclassified to the income statement. |
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| b. | Translation of financial statements whose functional currency corresponds to hyperinflationary economies (Argentina) |
Financial statements of economies with a hyperinflationary economic environment, are recognized according to IAS 29 Financial Information in Hyperinflationary Economies, and subsequently converted to Chilean pesos as follows:
| · | The statement of financial position sheet is translated at the closing exchange rate at the financial statements date. |
| · | The income statement is translated at the closing exchange rate at the financial statements date. |
| · | The statement of cash flows is converted to the closing exchange rate at the date of the financial statements. |
| · | For the disposal of an investment abroad, the component of other comprehensive income (OCI) relating to that investment is reclassified to the income statement. |
In accordance with IAS 21 “Effects of Changes in Foreign Exchange Rates,” we use the closing exchange rate to translate financial information into presentation currency. The official dollar whose value is determined by the Central Bank of Argentina (BCRA) is used to calculate the exchange rate for the presentation and preparation of the consolidated financial statements.
In the course of Argentine market transactions, there are a number of other types of U.S. dollar rates that may differ from the BCRA-calculated official rate. In the event that financial information is translated into the presentation currency using a non-official exchange rate, the consolidated figures of our Operation in Argentina may be affected.
| 2.5.3 | Exchange rates |
Exchange rates regarding the Chilean peso in effect at the end of each period are as follows:
| Date | USD | BRL | ARS | PYG | ||||||||||
| 09.30.2023 | 895.60 | 178.84 | 2.56 | 0.122 | ||||||||||
| 12.31.2022 | 855.86 | 164.03 | 4.83 | 0.116 | ||||||||||
| 09.30.2022 | 960.24 | 177.61 | 6.52 | 0.135 |
Exchange rates regarding the Chilean peso, calculated using average rates, used in the preparation of the Consolidated Financial Statements, are as follows:
| Date | USD | BRL | PYG | ||||||||
| 09.30.2023 | 821.36 | 164.15 | 0.113 | ||||||||
| 09.30.2022 | 859.53 | 167.55 | 0.124 |
For the translation of Argentine figures, closing rates (not average) are used, as described in Note 2.5.2 b.
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| 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. Repairs and maintenance are charged to expense 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 and equipment | 5-20 | ||
| Warehouse installations and accessories | 10-50 | ||
| Furniture and supplies | 4-5 | ||
| Motor vehicles | 4-10 | ||
| IT equipment | 3-5 | ||
| Other Property, plant and equipment | 3-10 | ||
| Bottles and containers | 1-8 |
The residual value and useful lives of Property, plant and equipment are reviewed and adjusted at the end of each fiscal year, if appropriate.
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.
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| 2.7 | Intangible assets and Goodwill |
| 2.7.1 | Goodwill |
Goodwill represents the excess of the consideration transferred over the Company’s interest in the net fair value of the net identifiable assets of the subsidiary and the fair value of the non-controlling interest in the subsidiary on the acquisition date. Since goodwill is an intangible asset with indefinite useful life, it is recognized separately and tested annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognized immediately as an expense and is not subsequently reversed.
Goodwill is carried at cost less accumulated impairment losses.
Gains and losses on the sale of an entity include the carrying amount of goodwill related to that entity.
Goodwill is assigned to each cash generating unit (CGU) or group of cash-generating units, from where it is expected to benefit from the synergies arising from the business combination. Such CGUs or groups of CGUs represent the lowest level in the organization at which goodwill is monitored for internal management purposes.
| 2.7.2 | Distribution rights |
Distribution rights are contractual rights to produce and/or distribute Coca-Cola brand products and other brands in certain territories in Argentina, Brazil, Chile and Paraguay. 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 historically 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 | Impairment of non-financial assets |
Assets that have an indefinite useful life, such as intangibles related to distribution rights and goodwill, are not amortized and are tested annually for impairment or more frequently if events or changes in circumstances indicate a potential impairment. Assets that are subject to amortization are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying value of the asset exceeds its recoverable amount. The recoverable amount is the greater of an asset’s fair value less costs to sell or its value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units - CGU). Cash-generating unit’s recoverable amount has been determined on the basis of its value in use.
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Regardless of what was stated in the previous paragraph, in the case of CGUs to which goodwill or intangible assets with an indefinite useful life have been assigned, 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 in Chile; |
| - | Operation in Argentina; |
| - | Operation in Brazil (State of Rio de Janeiro and Espirito Santo, Ipiranga territories, investment in the Sorocaba associate and investment in the Leão Alimentos S.A. associate); |
| - | Operation in Paraguay |
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 impairment test are:
| a) | Discount rate |
The discount rate applied in the annual impairment test carried out in 2022 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:
2022 Discount rates |
|
|||||
| Argentina | 33.1 | % | ||||
| Chile | 9.3 | % | ||||
| Brazil | 10.5 | % | ||||
| Paraguay | 11.3 | % | ||||
| b) | Other assumptions |
The financial projections to determine the net present value of future cash flows of the CGUs are modeled based on the main historical variables and the respective budgets approved by management. In this regard, a conservative growth rate is used, taking into account the differences that exist in categories with high growth such as carbonated beverages, categories with medium growth such as waters and juices, and less developed categories such as alcohols. Additionally, the valuation model considers projections over 5 years based on perpetuity growth rates by operation, which range from 0.3% to 0.9% 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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2In 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 Rate: Increase / Decrease of up to 200 bps as a value in the rate at which future cash flows are discounted to bring them to present value |
| - | Perpetuity: Increase / Decrease of up to 26 bps in the rate to calculate the perpetual growth of future cash flows |
| - | EBITDA margin: Increase / Decrease of 200 bps of EBITDA margin of operations, which is applied per year for the projected periods, that is, for the years 2023-2027 |
After modeling and valuing the different CGUs in the annual impairment process that the Company performs, as a result of the tests performed as of December 31, 2022, no impairment were identified in any of the CGUs listed above, assuming conservative EBITDA margin projections and in line with market history.
Thus, despite the deterioration in macroeconomic conditions experienced by the economic conditions of the countries in which operations are carried out, 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 for the 3 previously mentioned variables.
During the 2023 period, no impairment indicators have been identified.
| 2.9 | Financial instruments |
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 | Financial assets |
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 asset at amortized cost for financial instruments that are maintained within a business model with the objective of maintaining the financial assets to collect contractual cash flows that meet the SPPI criterion. This category includes the Group’s trade and other accounts receivable. |
| - | Financial assets measured at fair value with changes in other comprehensive income (FVOCI), with gains or losses recognized in P&L at the time of liquidation. Financial assets in this category correspond to the Group’s instruments that meet the SPPI criterion and 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 instruments at fair value with changes in other comprehensive income (FVOCI) without recognizing earnings or losses in P&L at the time of liquidation. This category only includes equity instruments that the Group intends to keep in the foreseeable future and that the Group has irrevocably chosen to classify in this category in the initial recognition or transition. |
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| - | Financial assets at fair value with changes in P&L (FVPL) include derivative instruments and equity instruments quoted that the Group had not irrevocably chosen to classify at FVOCI in the initial recognition or transition. This category also includes debt instruments whose cash flow characteristics do not comply with the SPPI criterion or are not kept within a business model whose objective is to recognize contractual cash flows or sale. |
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 rights to receive cash flows from the asset have expired, |
| - | The Group has transferred the rights to receive the cash flows of the asset or has assumed the obligation to pay all cash flows received without delay to a third party under a transfer agreement; and the Group (a) has substantially transferred all risks and benefits of the asset, or (b) has not substantially transferred or retained all risks and benefits of the asset but has transferred control of the asset. |
| 2.9.2 | Financial Liabilities |
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 value financial liabilities with changes in results include financial liabilities held for trading and financial liabilities designated in their initial recognition at fair value with changes in results. The losses or gains of liabilities held for trading are recognized in the income statement. |
| - | Loans and credits are valued at cost or amortized using the effective interest rate method. Gains and losses are recognized in the income statement when liabilities are disposed, as well as interest accrued in accordance with the effective interest rate method. |
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.
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| 2.9.3 | Offsetting financial 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 is currently a legally enforceable right to offset the amounts recognized, and |
| - | It is intended to liquidate them for the net amount or to realize the assets and liquidate the liabilities simultaneously. |
| 2.10 | Derivatives financial instruments and hedging activities |
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 | Derivative financial 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 | Derivative financial instruments not designated for hedging |
The fair value of derivative financial instruments that do not qualify for hedge accounting pursuant to IFRS are immediately recognized in the 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.
The Company also evaluates the existence of embedded derivatives 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. At the date of these financial statements, the Company had no embedded derivatives.
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| 2.10.3 | Fair value 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 the asset or liability main market, or |
| - | In the absence of a main market, in the most advantageous market for the transaction of those assets or liabilities. |
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.
| 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.
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| 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.
| 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.
| 2.16 | Provisions |
Provisions 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.
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| 2.17 | 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.
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, nor does it have variable payments as lessee.
| 2.18 | Deposits for 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.
21
| 2.19 | Revenue recognition |
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.
| 2.20 | Contributions from 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.
| 2.21 | Dividend distribution |
The minimum mandatory dividend established by the Chilean Corporations Law is 30% of net income for the year, which must be ratified unanimously by the General Shareholders’ Meeting. Net income is determined as of December 31 of each year, at which time the liability is recognized in the Company’s consolidated financial statements.
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 the General Shareholders’ Meeting.
| 2.22 | 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.
| 2.22.1 | Impairment of 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 determined based on value in use calculations. The significant judgments and assumptions used in the calculations include sales volumes and prices, discount rates, marketing expenses and other economic factors. 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 and 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. On an annual basis and close to each fiscal year end 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.
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| 2.22.2 | Fair Value of Assets and Liabilities |
IFRS require 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.
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.
| 2.22.3 | Allowances for 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.
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| 2.22.4 | Useful life, residual value and impairment of property, plant, and equipment |
Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of those assets. Changes in circumstances, such as technological advances, changes to the Company’s business model, or changes in its capital strategy might modify the effective useful lives as compared to our estimates. Whenever the Company determines that the useful life of Property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned usage of manufacturing equipment, dispensers, transportation equipment and computer software could make the useful lives of assets shorter. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of any of those assets may not be recovered. The estimate of future cash flows is based, among other factors, on certain assumptions about the expected operating profits in the future. The Company’s estimation of discounted cash flows may differ from actual cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in operating profit. If the sum of the projected discounted cash flows (excluding interest) is less than the carrying amount of the asset, the asset shall be written-off to its estimated recoverable value.
| 2.22.5 | Contingent liabilities |
Provisions for litigation and other contingencies are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the current obligation at the date of issuance of the financial statements, considering the risks and uncertainties surrounding the obligation. When a provision is measured using estimated cash flows to settle the current obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). The accrual of the discount is recognized as a finance cost. Incremental legal costs expected to be incurred in settling the legal claim are included in the measurement of the provision.
Provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic benefits will be required to settle the obligation, the provision is reversed.
A contingent liability does not imply the recognition of a provision. Legal costs expected to be incurred in defending the legal claim are recognized in profit or loss when incurred.
| 2.22.6. | 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”. At year-end there have been no modifications to the agreements.
Results from updated 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 the required years of service.
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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.
| 2.23 | New Standards, Interpretations and Amendments to IFRS |
| 2.23.1 | New Standards, Interpretations and Amendments for annual periods beginning on January 1, 2023 |
IFRS 17 “Insurance Contracts”. Issued in May 2017, it replaces the current IFRS 4. IFRS 17 will primarily change the accounting for all entities that issue insurance contracts and investment contracts with discretionary participation features. The standard applies to annual periods beginning on or after January 1, 2023.
Amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, issued in February 2021. The amendments are intended to improve disclosures of accounting policies and help users of financial statements to distinguish between changes in accounting estimates and changes in accounting policies. This standard should be applied to annual periods beginning on or after January 1, 2023.
Amendment to IAS 12 - Deferred Taxes Relating to Assets and Liabilities Arising from a Single Transaction. Issued in May 2021, this amendment requires companies to recognize deferred taxes on transactions that, on initial recognition, result in equal amounts of taxable and deductible temporary differences. This amendment should be applied to annual periods beginning on or after January 1, 2023.
Amendment to IAS 12 “Income taxes” on international tax reform - Pillar two model rules. Issued in May 2023, this amendment provides companies with a temporary exemption from accounting for deferred taxes arising from the international tax reform of the Organization for Economic Cooperation and Development (OECD). The amendments also introduce specific disclosure requirements for affected companies. This standard should be applied to annual periods beginning on or after January 1, 2023.
Amendment to IAS 1 “Presentation of Financial Statements” on classification of liabilities. This amendment clarifies that liabilities are classified as current or non-current depending on the rights that exist at the end of the reporting period. The classification is not affected by the entity’s expectations or events after the reporting date (e.g., receipt of a waiver or covenant breach). The amendment also clarifies what IAS 1 means when it refers to the “settlement” of a liability. The amendment should be applied retrospectively in accordance with IAS 8. Effective date of initial application January 1, 2023.
Amendment to IFRS 17 - Initial Application of IFRS 17 and IFRS 9 Comparative Information. This amendment is an amendment of limited scope to the transition requirements of IFRS 17, Insurance Contracts, which provides insurers with an option aimed at improving the usefulness of the information for investors on the initial application of the new Standard. The amendment relates only to the transition of insurers to the new Standard, it does not affect any other requirements of IFRS 17.
The adoption of the standards, amendments and interpretations described above do not have a significant impact on the consolidated financial statements of the Company.
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| 2.23.2 | New Standards, Interpretations and Amendments for annual periods beginning on or after January 1, 2024 |
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:
Amendment to IAS 1 “Non-current liabilities with covenants”. Issued in January 2022, the amendment aims to improve the information that an entity provides when the payment terms of its liabilities may be deferred depending on compliance with covenants within twelve months after the date of issuance of the financial statements.
Amendment to IFRS 16 “Leases” on sale and leaseback. Issued in September 2022, this amendment explains how an entity should recognize the rights to use the asset and how the gains or losses arising from the sale and leaseback should be recognized in the financial statements.
Amendments to IAS 7 “Statement of Cash Flows” and IFRS 7 “Financial Instruments: Disclosures” on supplier financing arrangements. Published in May 2023, these amendments require disclosures to improve the transparency of supplier financing arrangements and their effects on a company’s liabilities, cash flows and exposure to liquidity risk.
Amendments to IAS 21 - Non-convertibility. Issued in August 2023, this amendment affects an entity that has a transaction or operation in a foreign currency that is not convertible into another currency for a specific purpose at the measurement date. A currency is convertible into another currency when it is possible to obtain the other currency (with a normal administrative delay), and the transaction is carried out through a market or convertibility mechanism that creates enforceable rights and obligations. This amendment establishes the guidelines to be followed to determine the exchange rate to be used in situations of absence of convertibility as mentioned above. Early adoption is allowed.
The Company’s management is evaluating the contexts of the standards, interpretations and amendments described above in the period of their first application.
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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 in Chile | |
| · | Operation in Brazil | |
| · | Operation in Argentina | |
| · | Operation 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 operations by segment according to IFRS is as follows:
| For the period ended September 30, 2023 | Operation in Chile | Operation in Argentina | Operation in Brazil | Operation in Paraguay | Inter-country eliminations | Consolidated, total | ||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||
| Net sales | 859,500,160 | 507,795,693 | 501,778,512 | 154,610,186 | (2,682,588 | ) | 2,021,001,963 | |||||||||||||||||
| Cost of sales | (574,618,982 | ) | (263,635,726 | ) | (311,356,991 | ) | (85,918,250 | ) | 2,930,088 | (1,232,599,861 | ) | |||||||||||||
| Distribution expenses | (72,220,823 | ) | (68,713,132 | ) | (37,312,958 | ) | (8,965,897 | ) | - | (187,212,810 | ) | |||||||||||||
| Administrative expenses | (138,692,378 | ) | (104,390,817 | ) | (83,040,219 | ) | (23,091,401 | ) | - | (349,214,815 | ) | |||||||||||||
| Financial income | 9,089,511 | 9,897,052 | 7,443,760 | 613,577 | - | 27,043,900 | ||||||||||||||||||
| Financial costs | (23,302,595 | ) | (7,135,351 | ) | (21,288,168 | ) | - | - | (51,726,114 | ) | ||||||||||||||
| Share of entity in income of associates accounted for using the equity method, total | (1,378,531 | ) | - | 1,373,230 | - | - | (5,301 | ) | ||||||||||||||||
| Income tax expense | (21,029,489 | ) | (25,690,479 | ) | (13,573,954 | ) | (4,403,001 | ) | - | (64,696,923 | ) | |||||||||||||
| Oher income (expenses) | (27,053,298 | ) | (10,708,571 | ) | (8,195,070 | ) | (3,079,599 | ) | - | (49,036,538 | ) | |||||||||||||
| Net income of the segment reported | 10,293,575 | 37,418,669 | 35,828,142 | 29,765,615 | 247,500 | 113,553,501 | ||||||||||||||||||
| Depreciation and amortization | 32,773,124 | 26,976,123 | 23,805,966 | 9,936,829 | (247,500 | ) | 93,244,542 | |||||||||||||||||
| Current assets | 483,538,026 | 114,892,446 | 228,789,116 | 65,262,757 | - | 892,482,345 | ||||||||||||||||||
| Non-current assets | 783,625,576 | 273,937,666 | 637,347,449 | 278,202,215 | - | 1,973,112,906 | ||||||||||||||||||
| Segment assets, total | 1,267,163,602 | 388,830,112 | 866,136,565 | 343,464,972 | - | 2,865,595,251 | ||||||||||||||||||
| Carrying amount in associates and joint ventures accounted for using the equity method, total | 48,651,947 | - | 43,442,286 | - | - | 92,094,233 | ||||||||||||||||||
| Segment disbursements in non-monetary assets | 70,584,319 | 29,574,703 | 37,792,203 | 13,209,872 | - | 151,161,097 | ||||||||||||||||||
| Current liabilities | 244,354,183 | 125,127,306 | 199,400,691 | 42,290,874 | - | 611,073,054 | ||||||||||||||||||
| Non-current liabilities | 885,020,989 | 33,880,597 | 355,314,942 | 17,387,907 | - | 1,291,604,435 | ||||||||||||||||||
| Segment liabilities, total | 1,129,375,172 | 159,007,903 | 554,715,633 | 59,678,781 | - | 1,902,777,489 | ||||||||||||||||||
| Cash flows (used in) provided by in Operating Activities | 146,206,624 | (9,805,355 | ) | 54,681,265 | 7,314,864 | - | 198,397,398 | |||||||||||||||||
| Cash flows (used in) provided by Investing Activities | (160,004,879 | ) | (29,574,283 | ) | 122,759,570 | (14,100,104 | ) | - | (80,919,696 | ) | ||||||||||||||
| Cash flows (used in) provided by Financing Activities | 16,190,206 | 28,776,900 | (209,041,702 | ) | - | - | (164,074,596 | ) | ||||||||||||||||
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| For the period ended September 30, 2022 | Operation in Chile | Operation in Argentina | Operation in Brazil | Operation in Paraguay | Inter-country eliminations | Consolidated, total | ||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||
| Net sales | 790,999,293 | 552,478,836 | 444,024,072 | 148,921,386 | -3,742,687 | 1,932,680,900 | ||||||||||||||||||
| Cost of sales | (524,652,732 | ) | (295,768,295 | ) | (283,187,781 | ) | (82,271,606 | ) | 3,742,687 | (1,182,137,727 | ) | |||||||||||||
| Distribution expenses | (66,932,689 | ) | (75,110,260 | ) | (34,408,843 | ) | (8,751,034 | ) | - | (185,202,826 | ) | |||||||||||||
| Administrative expenses | (125,421,506 | ) | (104,051,203 | ) | (73,414,857 | ) | (23,060,715 | ) | - | (325,948,281 | ) | |||||||||||||
| Financial income | 14,549,929 | 9,183,354 | 7,440,740 | 599,837 | - | 31,773,860 | ||||||||||||||||||
| Financial costs | (20,637,600 | ) | (1,538,814 | ) | (22,037,596 | ) | - | - | (44,214,010 | ) | ||||||||||||||
| Share of entity in income of associates accounted for using the equity method, total | 1,396,163 | - | (1,111,103 | ) | - | - | 285,060 | |||||||||||||||||
| Income tax expense | (18,464,251 | ) | (29,225,175 | ) | (14,053,652 | ) | (4,296,390 | ) | - | (66,039,468 | ) | |||||||||||||
| Oher income (expenses) | (64,944,930 | ) | (17,717,441 | ) | 12,895,849 | 117,708 | - | (69,648,814 | ) | |||||||||||||||
| Net income of the segment reported | (14,108,323 | ) | 38,251,002 | 36,146,829 | 31,259,186 | - | 91,548,694 | |||||||||||||||||
| Depreciation and amortization | 29,188,697 | 27,858,623 | 22,793,858 | 9,647,132 | - | 89,488,310 | ||||||||||||||||||
| - | ||||||||||||||||||||||||
| Current assets | 490,229,082 | 124,301,921 | 218,998,887 | 79,037,406 | - | 912,567,296 | ||||||||||||||||||
| Non-current assets | 747,012,429 | 282,369,511 | 803,235,042 | 307,563,684 | - | 2,140,180,666 | ||||||||||||||||||
| Segment assets, total | 1,237,241,511 | 406,671,432 | 1,022,233,929 | 386,601,090 | - | 3,052,747,962 | ||||||||||||||||||
| Carrying amount in associates and joint ventures accounted for using the equity method, total | 54,413,194 | - | 44,405,795 | - | - | 98,818,989 | ||||||||||||||||||
| Segment disbursements of non-monetary assets | 60,136,944 | 33,102,127 | 27,882,446 | 14,266,003 | - | 135,387,520 | ||||||||||||||||||
| Current liabilities | 253,748,613 | 121,235,274 | 128,814,822 | 52,093,714 | - | 555,892,423 | ||||||||||||||||||
| Non-current liabilities | 851,910,999 | 27,826,962 | 595,722,736 | 19,121,353 | - | 1,494,582,050 | ||||||||||||||||||
| Segment liabilities, total | 1,105,659,612 | 149,062,236 | 724,537,558 | 71,215,067 | - | 2,050,474,473 | ||||||||||||||||||
| Cash flows (used in) provided by in Operating Activities | 155,603,586 | 26,849,958 | 39,524,024 | 21,297,795 | - | 243,275,363 | ||||||||||||||||||
| Cash flows (used in) provided by Investing Activities | 46,453,089 | (33,102,127 | ) | (27,882,446 | ) | (14,779,345 | ) | - | (29,310,829 | ) | ||||||||||||||
| Cash flows (used in) provided by Financing Activities | (250,753,870 | ) | 4,826,626 | (2,289,939 | ) | (242,242 | ) | - | (248,459,425 | ) | ||||||||||||||
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The composition of cash and cash equivalents is as follows:
| By item | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Cash | 487,726 | 203,931 | ||||||
| Bank balances | 111,389,701 | 108,486,568 | ||||||
| Other fixed rate instruments | 112,898,538 | 182,991,488 | ||||||
| Cash and cash equivalents | 224,775,965 | 291,681,987 | ||||||
Other fixed income instruments correspond primarily to investments in short-term instruments with good credit ratings, such as Time Deposits and Mutual Funds, which are highly liquid, with insignificant risk of change in value and easily converted into known amounts of cash.. There are no restrictions for significant amounts available to cash.
| By currency | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| USD | 32,524,503 | 14,266,343 | ||||||
| EUR | 469,857 | 870,613 | ||||||
| ARS | 4,180,022 | 29,215,288 | ||||||
| CLP | 112,420,036 | 138,205,025 | ||||||
| PYG | 30,395,844 | 39,201,097 | ||||||
| BRL | 44,785,700 | 69,923,621 | ||||||
| Cash and cash equivalents | 224,775,962 | 291,681,987 | ||||||
5 – OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS
The composition of other financial assets is as follows:
| Balance | ||||||||||||||||
| Current | Non-current | |||||||||||||||
| Other financial assets | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Financial assets measured at amortized cost (1) | 64,094,785 | 92,838,315 | 2,995,926 | 3,317,778 | ||||||||||||
| Financial assets at fair value (2) | 3,500,429 | 170,206,554 | 68,777,520 | 75,297,737 | ||||||||||||
| Other financial assets measured at amortized cost (3) | - | - | 17,350,605 | 16,237,196 | ||||||||||||
| Total | 67,595,214 | 263,044,869 | 89,124,051 | 94,852,711 | ||||||||||||
| (1) | Financial instrument that does not meet the definition of cash equivalents as defined in Note 2.13. |
| (2) | Market value of hedging instruments. See details in Note 22. |
| (3) | Correspond to the rights in the Argentinean company Alimentos de Soya S.A., manufacturing company of “AdeS” products, which are framed in the purchase of the “AdeS” brand managed by The Coca-Cola Company at the end of 2016. |
30
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 | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Prepaid expenses | 11,726,294 | 6,059,201 | 1,765,490 | 1,074,940 | ||||||||||||
| Tax credit remainder (1) | 1,355,443 | 905,826 | 44,974,853 | 40,922,425 | ||||||||||||
| Judicial deposits | - | - | 16,845,652 | 15,723,829 | ||||||||||||
| Others (2) | 12,121,575 | 19,991,973 | 2,150,898 | 1,951,072 | ||||||||||||
| Total | 25,203,312 | 26,957,000 | 65,736,893 | 59,672,266 | ||||||||||||
| (1) | In November 2006, Rio de Janeiro Refrescos Ltda. (“RJR”) filed a court order No. 0021799-23.2006.4.02.5101 seeking recognition of the right to exclude ICMS (Tax on Commerce and Services) from the PIS (Program of Social Integration) and COFINS (Contribution for the Financing of Social Security) calculation base, as well as recognition of the right to obtain reimbursement of amounts unduly collected since November 14, 2001, duly restated using the Selic interest rate. On May 20, 2019, the ruling favoring RJR became final, allowing the recovery of amounts overpaid from November 14, 2001 to August 2017. It is worth noting that in September 2017, RJR had already obtained a Security Mandate, which granted it the right to exclude, from that date, the ICMS from the PIS and COFINS calculation 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 approximately CLP 100,550 million (CLP 92,783 million at December 2021) (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.
Companhia de Bebidas Ipiranga, acquired in September 2013, also filed a court order n. 0005018-15.2002.4.03.6110 to recognize the same issue as the one previously descibed for RJR. On September 12, 2019, the ruling favoring Ipiranga became final, allowing the recovery of the amounts overpaid from September 12, 1990 to December 12, 2013 (date on which Ipiranga was acquired by RJR). The Ipiranga credit will be generated in the name of RJR, however pursuant to a contractual clause (“Subscription Agreement for Shares and Exhibits”), which requireds RJR to transfer any gain resulting from this action to the former shareholders of Ipiranga. The Company performed procedures to assess the total amount of the credit in question for the tax period expired, totaling BRL 162,588, of which BRL 80,177 correspond to principal and BRL 82,411 correspond to interest and monetary restatement. These amounts were recorded in the year ended December 31, 2020. The payment of income tax is made at the time of liquidation of the credit, with which the respective deferred tax liability of BRL 55,280 was recorded. The value of PIS and Cofins recorded was BRL 7,623 thousand. At the closing of these financial statements the value to be transferred to the former shareholders of Ipiranga is CLP 30,434,275 or BRL 170,176 (CLP 27,309,519 at December 31, 2022 or BRL 166,491). The liability is recorded in other non-financial liabilities (Note 20).
| (2) | Other non-financial assets are mainly composed of advances to suppliers. |
31
7 – TRADE ACCOUNTS AND OTHER ACCOUNTS RECEIVABLE
The composition of trade and other receivables is as follows:
| Current | Non-current | |||||||||||||||
| Trade debtors and other accounts receivable, Net | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Trade debtors | 214,729,809 | 238,146,331 | 74,819 | 56,781 | ||||||||||||
| Other debtors | 31,464,774 | 39,798,245 | 274,845 | 483,139 | ||||||||||||
| Other accounts receivable | 2,653,541 | 1,825,710 | - | - | ||||||||||||
| Total | 248,848,124 | 279,770,286 | 349,664 | 539,920 | ||||||||||||
| Current | Non-current | |||||||||||||||
| Trade debtors and other accounts receivable, Gross | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Trade debtors | 219,873,696 | 242,638,974 | 74,819 | 56,781 | ||||||||||||
| Other debtors | 31,610,951 | 40,206,431 | 274,845 | 483,139 | ||||||||||||
| Other accounts receivable | 2,747,970 | 1,921,211 | - | - | ||||||||||||
| Total | 254,232,617 | 284,766,616 | 349,664 | 539,920 | ||||||||||||
The stratification of the portfolio for current and non-current trade accounts receivable, without impairment impact, is as follows:
| 09.30.2023 | 12.31.2022 | |||||||
| ThCh$ | ThCh$ | |||||||
| Less than one month | 205,754,602 | 229,587,868 | ||||||
| Between one and three months | 5,659,734 | 4,577,833 | ||||||
| Between three and six months | 2,723,742 | 2,418,252 | ||||||
| Between six and eight months | 4,505,844 | 5,392,862 | ||||||
| Older than eight months | 1,304,593 | 718,940 | ||||||
| Total | 219,948,515 | 242,695,755 | ||||||
The Company has approximately 292,153 clients, which may have balances in the different sections of the stratification. The number of clients is distributed geographically with 70,000 in Chile, 84,153 in Brazil, 67,580 in Argentina and 70,420 in Paraguay.
32
The provision for expected credit losses associated with each tranche of the portfolio for current and non-current trade receivables is as follows:
| 09.30.2023 | ||||||||||||
| Credit amount | Impairment provision | Percentage % | ||||||||||
| ThCh$ | ThCh$ | |||||||||||
| Less than one month | 205,754,602 | (336,938 | ) | 0.16 | % | |||||||
| Between one and three months | 5,659,734 | (615,508 | ) | 10.88 | % | |||||||
| Between three and six months | 2,723,742 | (588,458 | ) | 21.60 | % | |||||||
| Between six and eight months | 4,505,844 | (3,068,173 | ) | 68.09 | % | |||||||
| Older than eight months | 1,304,593 | (534,810 | ) | 40.99 | % | |||||||
| Total | 219,948,515 | (5,143,887 | ) | |||||||||
| 12.31.2022 | ||||||||||||
| Credit amount | Impairment provision | Percentage % | ||||||||||
| ThCh$ | ThCh$ | |||||||||||
| Less than one month | 229,587,868 | (701,701 | ) | 0.31 | % | |||||||
| Between one and three months | 4,577,833 | (431,630 | ) | 9.43 | % | |||||||
| Between three and six months | 2,418,252 | (786,856 | ) | 32.54 | % | |||||||
| Between six and eight months | 5,392,862 | (2,402,146 | ) | 44.54 | % | |||||||
| Older than eight months | 718,940 | (170,310 | ) | 23.69 | % | |||||||
| Total | 242,695,755 | (4,492,643 | ) | |||||||||
The movement in the allowance for expected credit losses is presented below:
| 09.30.2023 | 12.31.2022 | |||||||
| ThCh$ | ThCh$ | |||||||
| Opening balance | 4,492,643 | 4,711,371 | ||||||
| Increase (decrease) | (317,713 | ) | (150,671 | ) | ||||
| Provision reversal | (794,332 | ) | (654,381 | ) | ||||
| Increase (decrease) for changes of foreign currency | 1,763,289 | 586,324 | ||||||
| Sub – total movements | 651,244 | (218,728 | ) | |||||
| Ending balance | 5,143,887 | 4,492,643 | ||||||
The provision for expected credit losses is recorded as an administrative expense in the statements of income by function.
33
The composition of inventories is detailed as follows:
| Details | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Raw materials (1) | 102,876,753 | 104,833,902 | ||||||
| Finished goods | 128,884,972 | 114,164,680 | ||||||
| Spare parts and supplies | 30,703,429 | 27,109,494 | ||||||
| Work in progress | 178,196 | 216,164 | ||||||
| Other inventories | 5,210,086 | 4,020,372 | ||||||
| Obsolescence provision (2) | (5,211,456 | ) | (4,457,956 | ) | ||||
| Total | 262,641,980 | 245,886,656 | ||||||
The cost of inventory recognized as cost of sales amounts to CLP 1,016,382,735 thousand and CLP 995,465,541 thousand as of September 30, 2023 and 2022, respectively.
| (1) | Approximately 80% is composed of concentrate and sweeteners used in the preparation of beverages, as well as caps and PET supplies used in the packaging of the product. |
| (2) | The obsolescence provision is related mainly with the obsolescence of spare parts classified as inventories and to a lesser extent to finished products and raw materials. The general standard is to provision all those multi-functional spare parts without utility in rotation in the last four years prior to the technical analysis technical to adjust the provision. In the case of raw materials and finished products, the obsolescence provision is determined according to maturity. |
34
9 – TAX ASSETS AND LIABILITIES
The composition of current tax accounts receivable is the following:
| Tax assets | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Monthly provisional payments | 17,462,770 | 25,428,344 | ||||||
| Tax credits | 30,611,302 | 6,640,888 | ||||||
| Recoverable taxes from prior years | 127,889 | 473,424 | ||||||
| Surplus Tax Credit | 6,192,320 | 6,387,530 | ||||||
| Other Recoverable Taxes | - | 396,241 | ||||||
| Total | 54,394,281 | 39,326,427 | ||||||
The composition of current tax accounts payable is the following:
| Current | ||||||||
| Tax liabilities | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Income tax expense | 9,538,136 | 14,615,447 | ||||||
| Tax credit | 6,733 | - | ||||||
| Others | 5,253 | - | ||||||
| Total | 9,550,122 | 14,615,447 | ||||||
10 – INCOME TAX EXPENSE AND DEFERRED TAXES
10.1 Income tax expense
The current and deferred income tax expenses are detailed as follows:
| Details | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Current income tax expense | (59,643,170 | ) | (42,814,303 | ) | ||||
| Current tax adjustment previous period | (126,754 | ) | 298,946 | |||||
| Foreign dividends tax withholding expense | (18,816,819 | ) | (11,606,992 | ) | ||||
| Other current tax expense (income) | - | - | ||||||
| Current income tax expense | (78,586,743 | ) | (54,122,349 | ) | ||||
| Expense (income) for the creation and reversal of temporary differences of deferred tax and others | 13,889,820 | (11,917,119 | ) | |||||
| Expense (income) for deferred taxes | 13,889,820 | (11,917,119 | ) | |||||
| Total income tax expense | (64,696,923 | ) | (66,039,468 | ) | ||||
35
The distribution of national and foreign tax expenditure is as follows:
| Income taxes | 30.09.2023 | 30.09.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Current taxes | ||||||||
| Foreign | (28,033,160 | ) | (41,052,395 | ) | ||||
| National | (50,553,582 | ) | (13,069,954 | ) | ||||
| Current tax expense | (78,586,742 | ) | (54,122,349 | ) | ||||
| Deferred taxes | ||||||||
| Foreign | (15,634,275 | ) | (6,522,822 | ) | ||||
| National | 29,524,094 | (5,394,297 | ) | |||||
| Deferred tax expense | 13,889,819 | (11,917,119 | ) | |||||
| Income tax expense | (64,696,923 | ) | (66,039,468 | ) | ||||
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 | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Net income before taxes | 178,250,424 | 157,588,162 | ||||||
| Tax expense at legal rate (27.0%) | (48,127,614 | ) | (42,548,804 | ) | ||||
| Effect of tax rate in other jurisdictions | (2,746,837 | ) | (3,080,852 | ) | ||||
| Permanent differences: | ||||||||
| Withholding and other non-taxable income | (18,791,367 | ) | 17,029,219 | |||||
| Non-deductible expenses | (1,918,167 | ) | (2,299,672 | ) | ||||
| Tax effect on excess tax provision in previous periods | (552,159 | ) | (91,171 | ) | ||||
| Tax effect of price-level restatement for Chilean companies | (5,616,083 | ) | (26,260,533 | ) | ||||
| Subsidiaries tax withholding expense and other legal tax debits and credits | 13,055,304 | 20,138,256 | ||||||
| Adjustments to tax expense | 13,822,472 | (20,409,813 | ) | |||||
| Tax expense at effective rate | (64,696,923 | ) | (66,039,469 | ) | ||||
| Effective rate | 36.3 | % | 41.9 | % | ||||
The applicable income tax rates in each of the jurisdictions where the Company operates are the following:
| Rate | |||||||||
| Country | 2023 | 2022 | |||||||
| Chile | 27.00 | % | 27.00 | % | |||||
| Brazil | 34.00 | % | 34.00 | % | |||||
| Argentina | 35.00 | % | 35.00 | % | |||||
| Paraguay | 10.00 | % | 10.00 | % | |||||
36
10.2 Deferred taxes
The net cumulative balances of temporary differences resulted in deferred tax assets and liabilities, which are detailed as follows:
| 09.30.2023 | 12.31.2022 | |||||||||||||||
| Temporary differences | Assets | Liabilities | Assets | Liabilities | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Property, plant and equipment | 5,395,917 | 57,308,185 | 5,351,293 | (58,230,728 | ) | |||||||||||
| Obsolescence provision | 1,995,997 | - | 1,871,168 | - | ||||||||||||
| ICMS exclusion credit | 5,022,228 | - | 2,686,693 | - | ||||||||||||
| Employee benefits | 4,929,052 | (231 | ) | 5,033,868 | (3,348 | ) | ||||||||||
| Provision for severance indemnity | 3,063,511 | (11,749 | ) | 2,789,893 | (42,264 | ) | ||||||||||
| Tax loss carry forwards (1) | 2,930,800 | - | 5,569,124 | - | ||||||||||||
| Tax goodwill Brazil | - | (14,551,452 | ) | - | (9,081,512 | ) | ||||||||||
| Contingency provision | 26,930,567 | - | 27,145,591 | - | ||||||||||||
| Foreign Exchange differences (2) | 2,872,129 | - | 11,478,538 | - | ||||||||||||
| Allowance for doubtful accounts | 849,166 | - | 803,608 | - | ||||||||||||
| Coca-Cola incentives (Argentina) | 106,581 | - | 633,919 | - | ||||||||||||
| Assets and liabilities for placement of bonds | - | (574,144 | ) | - | (610,594 | ) | ||||||||||
| Financial expense | - | (2,404,099 | ) | - | (1,894,010 | ) | ||||||||||
| Lease liabilities | 2,297,888 | - | 1,874,166 | - | ||||||||||||
| Inventories | 1,356,333 | - | 1,312,833 | - | ||||||||||||
| Distribution rights | - | (160,689,794 | ) | - | (154,669,995 | ) | ||||||||||
| Hedge derivatives | - | - | - | - | ||||||||||||
| Prepaid income | 4,915,397 | (109,228 | ) | 5,339,265 | (8,287 | ) | ||||||||||
| Spare parts | - | (6,635,667 | ) | - | (4,142,782 | ) | ||||||||||
| Intangibles | 79,002 | (8,311,336 | ) | 69,395 | (7,388,202 | ) | ||||||||||
| Others | 2,703,855 | (4,072,455 | ) | 5,282,818 | (4,520,673 | ) | ||||||||||
| Subtotal | 65,448,422 | (254,668,340 | ) | 77,242,172 | (240,592,395 | ) | ||||||||||
| Offsetting of deferred tax assets/(liabilities) | (62,791,096 | ) | 62,791,096 | (74,813,839 | ) | 74,813,839 | ||||||||||
| Total assets and liabilities net | 2,657,326 | (191,877,244 | ) | 2,428,333 | (165,778,556 | ) | ||||||||||
| (1) | Tax losses mainly associated with entities in Chile. Tax losses have no expiration date in Chile. |
| (2) | Corresponds to deferred taxes for exchange rate differences generated on the translation of debts expressed in foreign currency in the subsidiary Rio de Janeiro Refrescos Ltda., that for tax purposes are recognized when paid. |
Deferred tax account movements are as follows:
| Movement | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Opening balance | (163,350,223 | ) | (166,596,100 | ) | ||||
| Increase (decrease) in deferred tax | (16,844,941 | ) | 8,090,171 | |||||
| Increase (decrease) due to foreign currency translation(*) | (9,024,754 | ) | (4,844,294 | ) | ||||
| Total movements | (25,869,695 | ) | 3,245,877 | |||||
| Ending balance | (189,219,918 | ) | (163,350,223 | ) | ||||
(*) Includes IAS 29 effects due to inflation in Argentina
37
11 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at the close of each period is detailed as follows:
| Property, plant and equipment, gross | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Construction in progress | 78,094,276 | 49,169,567 | ||||||
| Land | 108,680,927 | 104,906,878 | ||||||
| Buildings | 377,572,233 | 337,689,681 | ||||||
| Plant and equipment | 769,311,954 | 693,153,093 | ||||||
| Information technology equipment | 38,980,678 | 34,992,575 | ||||||
| Fixed installations and accessories | 58,855,899 | 69,798,556 | ||||||
| Vehicles | 80,881,732 | 75,759,020 | ||||||
| Leasehold improvements | 391,412 | 362,243 | ||||||
| Rights of use | 89,251,580 | 73,946,435 | ||||||
| Other properties, plant and equipment (1) | 501,079,238 | 448,561,681 | ||||||
| Total Property, plant and equipment, gross | 2,103,099,929 | 1,888,339,729 | ||||||
Accumulated depreciation of Property, plant and equipment | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Buildings | (138,496,703 | ) | (117,237,092 | ) | ||||
| Plant and equipment | (546,901,803 | ) | (499,070,234 | ) | ||||
| Information technology equipment | (30,603,481 | ) | (27,257,028 | ) | ||||
| Fixed installations and accessories | (39,238,155 | ) | (44,057,493 | ) | ||||
| Vehicles | (51,042,322 | ) | (44,600,066 | ) | ||||
| Leasehold improvements | (335,059 | ) | (282,057 | ) | ||||
| Rights of use | (64,622,345 | ) | (53,350,442 | ) | ||||
| Other properties, plant and equipment (1) | (345,838,772 | ) | (304,264,058 | ) | ||||
| Total accumulated depreciation | (1,217,078,640 | ) | (1,090,118,470 | ) | ||||
| Total Property, plant and equipment, net | 886,021,289 | 798,221,259 | ||||||
(1) The net balance of each of these categories is presented below:
| Other Property, plant and equipment, net | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Bottles | 48,872,133 | 46,351,209 | ||||||
| Marketing and promotional assets (market assets) | 77,087,840 | 70,149,875 | ||||||
| Other Property, plant and equipment | 29,280,493 | 27,796,539 | ||||||
| Total | 155,240,466 | 144,297,623 | ||||||
38
11.1 Movements
Movements in Property, plant and equipment are detailed as follows:
| Construction in progress | Land | Buildings, net | Plant and equipment, net | IT equipment, net | Fixed facilities and accessories, net | Vehicles, net | Leasehold improvements, net | Others | Rights-of-use, net (1) | Property, plant and equipment, net | ||||||||||||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||||||||||||||||||||
| Opening balance at 01.01.2023 | 49,169,567 | 104,906,878 | 220,452,589 | 194,082,859 | 7,735,547 | 25,741,063 | 31,158,954 | 80,186 | 144,297,623 | 20,595,993 | 798,221,259 | |||||||||||||||||||||||||||||||||
| Additions | 67,843,511 | - | 65,139 | 24,237,865 | 1,084,280 | 6,248 | 130,803 | 6,248 | 36,450,769 | - | 129,824,863 | |||||||||||||||||||||||||||||||||
| Right-of use additions | - | - | - | - | - | - | - | - | - | 11,564,949 | 11,564,949 | |||||||||||||||||||||||||||||||||
| Disposals | - | - | (7,284 | ) | (286,736 | ) | (1,192 | ) | - | (17,241 | ) | - | (1,197,521 | ) | (411,490 | ) | (1,921,464 | ) | ||||||||||||||||||||||||||
| Transfers between items of Property, plant and equipment | (42,334,122 | ) | - | 6,754,468 | 14,508,057 | 1,533,558 | 2,660,149 | 2,273,789 | - | 13,563,835 | 1,040,266 | - | ||||||||||||||||||||||||||||||||
| Right-of-use transfers | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
| Depreciation expense | - | - | (7,252,316 | ) | (25,495,057 | ) | (2,447,533 | ) | (2,083,836 | ) | (4,784,266 | ) | (33,949 | ) | (38,668,213 | ) | - | (80,765,170 | ) | |||||||||||||||||||||||||
| Amortization | - | - | - | - | - | - | - | - | - | (8,180,012 | ) | (8,180,012 | ) | |||||||||||||||||||||||||||||||
| Increase (decrease) due to foreign currency translation differences | 2,631,678 | 3,774,049 | 11,519,562 | 10,200,760 | 480,776 | 735,854 | 1,460,003 | 3,868 | 6,941,330 | 1,065,420 | 38,813,300 | |||||||||||||||||||||||||||||||||
| Other increase (decrease) (2) | 783,642 | - | 7,543,372 | 5,162,403 | (8,239 | ) | (7,441,734 | ) | (382,632 | ) | - | (6,147,357 | ) | (1,045,891 | ) | (1,536,436 | ) | |||||||||||||||||||||||||||
| Total movements | 28,924,709 | 3,774,049 | 18,622,941 | 28,327,292 | 641,650 | (6,123,319 | ) | (1,319,544 | ) | (23,833 | ) | 10,942,843 | 4,033,242 | 87,800,030 | ||||||||||||||||||||||||||||||
| Ending balance al 09.30.2023 | 78,094,276 | 108,680,927 | 239,075,530 | 222,410,151 | 8,377,197 | 19,617,744 | 29,839,410 | 56,353 | 155,240,466 | 24,629,235 | 886,021,289 | |||||||||||||||||||||||||||||||||
Right of use assets is composed as follows:
| Right-of-use | Gross asset | Accumulated depreciation | Net asset | |||||||||
| ThCh$ | ThCh$ | ThCh$ | ||||||||||
| Constructions and buildings | 12,679,462 | (4,572,846 | ) | 8,106,616 | ||||||||
| Plant and Equipment | 47,176,523 | (34,220,927 | ) | 12,955,596 | ||||||||
| IT equipment | 1,278,055 | (1,247,292 | ) | 30,763 | ||||||||
| Motor vehicles | 10,304,082 | (9,978,819 | ) | 325,263 | ||||||||
| Others | 17,813,458 | (14,602,461 | ) | 3,210,997 | ||||||||
| Total | 89,251,580 | (64,622,345 | ) | 24,629,235 | ||||||||
Lease liabilities interest expenses at the closing of the period reached ThCh$ 1,917,444
| (1) | Corresponds mainly to the effect of adopting IAS 29 in Argentina. |
39
| Construction in progress | Land | Buildings, net | Plant and equipment, net | IT equipment, net | Fixed facilities and accessories, net | Vehicles, net | Leasehold improvements, net | Others | Rights-of-use, net (1) | Property, plant and equipment, net | ||||||||||||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||||||||||||||||||||
| Opening balance at 01.01.2022 | 56,280,594 | 101,286,107 | 203,343,125 | 169,651,555 | 5,613,217 | 23,099,121 | 19,184,600 | 113,289 | 114,153,544 | 23,653,975 | 716,379,127 | |||||||||||||||||||||||||||||||||
| Additions | 75,269,957 | - | 867,990 | 21,280,010 | 922,233 | 74,995 | 636,420 | 10,275 | 68,730,337 | - | 167,792,217 | |||||||||||||||||||||||||||||||||
| Right-of use additions | - | - | - | - | - | - | - | - | - | 5,883,061 | 5,883,061 | |||||||||||||||||||||||||||||||||
| Disposals | (32,456 | ) | - | (16,174 | ) | (538,429 | ) | (15,105 | ) | - | (4,522 | ) | - | (2,249,837 | ) | (67,398 | ) | (2,923,921 | ) | |||||||||||||||||||||||||
| Transfers between items of Property, plant and equipment | (84,598,804 | ) | 159,232 | 10,014,587 | 33,485,897 | 3,487,406 | 3,384,472 | 16,037,695 | 51,403 | 17,940,342 | 37,770 | - | ||||||||||||||||||||||||||||||||
| Right-of-use transfers | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
| Depreciation expense | - | - | (8,477,029 | ) | (35,372,214 | ) | (2,641,086 | ) | (3,365,827 | ) | (5,524,208 | ) | (68,741 | ) | (49,526,391 | ) | - | (104,975,496 | ) | |||||||||||||||||||||||||
| Amortization | - | - | - | - | - | - | - | - | - | (9,993,249 | ) | (9,993,249 | ) | |||||||||||||||||||||||||||||||
| Increase (decrease) due to foreign currency translation differences | 4,263,117 | 3,461,539 | 11,105,445 | 7,324,221 | 43,790 | 1,282,713 | 852,241 | 10,324 | 6,450,271 | 1,235,657 | 36,029,318 | |||||||||||||||||||||||||||||||||
| Other increase (decrease) (1) | (2,012,841 | ) | - | 3,614,645 | (1,748,181 | ) | 325,092 | 1,265,589 | (23,272 | ) | (36,364 | ) | (11,200,643 | ) | (153,823 | ) | (9,969,798 | ) | ||||||||||||||||||||||||||
| Total movements | (7,111,027 | ) | 3,620,771 | 17,109,464 | 24,431,304 | 2,122,330 | 2,641,942 | 11,974,354 | (33,103 | ) | 30,144,079 | (3,057,982 | ) | 81,842,132 | ||||||||||||||||||||||||||||||
| Ending balance al 12.31.2022 | 49,169,567 | 104,906,878 | 220,452,589 | 194,082,859 | 7,735,547 | 25,741,063 | 31,158,954 | 80,186 | 144,297,623 | 20,595,993 | 798,221,259 | |||||||||||||||||||||||||||||||||
Right of use assets is composed as follows:
| Right-of-use | Gross asset | Accumulated depreciation | Net asset | |||||||||
| ThCh$ | ThCh$ | ThCh$ | ||||||||||
| Constructions and buildings | 6,694,251 | (3,452,700 | ) | 3,241,551 | ||||||||
| Plant and Equipment | 47,377,683 | (33,624,676 | ) | 13,753,007 | ||||||||
| IT Equipment | 1,214,851 | (1,081,741 | ) | 133,110 | ||||||||
| Motor vehicles | 9,395,320 | (6,066,615 | ) | 3,328,705 | ||||||||
| Others | 9,264,330 | (9,124,710 | ) | 139,620 | ||||||||
| Total | 73,946,435 | (53,350,442 | ) | 20,595,993 | ||||||||
Lease liabilities interest expenses at the closing of the period reached ThCh$ 2,092,868.
| (1) | Corresponds mainly to the effect of adopting IAS 29 in Argentina. |
40
Balances and main transactions with related parties are detailed as follows:
12.1 Accounts receivable:
| 09.30.2023 | 12.31.2022 | |||||||||||||||||||||||||||
| Taxpayer ID | Company | Relationship | Country | Currency | Current | Non-current | Current | Non-current | ||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||
| 96.891.720-K | Embonor S.A. | Shareholder related | Chile | CLP | 5,248,722 | - | 10,852,709 | - | ||||||||||||||||||||
| 96.714.870-9 | Coca-Cola de Chile S.A. | Shareholder | Chile | CLP | - | 109,318 | 15,444 | 109,318 | ||||||||||||||||||||
| Foreign | Alimentos de Soja S.A.U. | Shareholder related | Argentina | ARS | - | - | 237,439 | - | ||||||||||||||||||||
| 96.517.210-2 | Embotelladora Iquique S.A. | Shareholder related | Chile | CLP | 719,240 | - | 745,048 | - | ||||||||||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | CLP | - | - | 925,189 | - | ||||||||||||||||||||
| 77.526.480-2 | Comercializadora Nova Verde | Common shareholder | Chile | CLP | 2,823,786 | - | 2,048,054 | - | ||||||||||||||||||||
| 76.572.588-7 | Coca-Cola del Valle New Ventures S.A. | Associate | Chile | CLP | 119,639 | - | 143,002 | - | ||||||||||||||||||||
| 76.140.057-6 | Monster | Associate | Chile | CLP | 112,085 | - | 86,492 | - | ||||||||||||||||||||
| 79.826.410-9 | Guallarauco | Associate | Chile | CLP | - | - | 8,790 | - | ||||||||||||||||||||
| Total | 9,023,472 | 109,318 | 15,062,167 | 109,318 | ||||||||||||||||||||||||
12.2 Accounts payable:
| 09.30.2023 | 12.31.2022 | |||||||||||||||||||||||||||
| Taxpayer ID | Company | Relationship | Country | Currency | Current | Non-current | Current | Non-current | ||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||
| 96.714.870-9 | Coca-Cola de Chile S.A. | Shareholder | Chile | CLP | 23,268,581 | - | 32,205,880 | - | ||||||||||||||||||||
| Foreign | Recofarma do Indústrias Amazonas Ltda. | Shareholder related | Brazil | BRL | 37,687,437 | 7,949,476 | 30,998,682 | 10,354,296 | ||||||||||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | CLP | 5,732,657 | - | 8,186,248 | - | ||||||||||||||||||||
| Foreign | Ser. y Prod. para Bebidas Refrescantes S.R.L. | Shareholder | Argentina | ARS | 11,759,842 | - | 8,587,487 | - | ||||||||||||||||||||
| Foreign | Leão Alimentos e Bebidas Ltda. | Associate | Brazil | BRL | 193,094 | - | 232,216 | - | ||||||||||||||||||||
| Foreign | Monster Energy Brasil Com de Bebidas Ltda. | Shareholder related | Brazil | BRL | 1,942,543 | - | 3,811,908 | - | ||||||||||||||||||||
| 76.572.588-7 | Coca Cola del Valle New Ventures S.A. | Associate | Chile | CLP | 602,113 | - | 1,089,592 | - | ||||||||||||||||||||
| 96.891.720-K | Embonor S.A. | Shareholder related | Chile | CLP | - | - | 589,127 | - | ||||||||||||||||||||
| Foreign | Alimentos de Soja S.A.U. | Shareholder related | Argentina | ARS | 136,520 | - | 628,842 | - | ||||||||||||||||||||
| 77.526.480-2 | Comercializadora Nova Verde | Common shareholder | Chile | CLP | 66,477 | - | 2,198,317 | - | ||||||||||||||||||||
| Foreign | Monster Energy Company – USA | Shareholder related | Argentina | PYG | 1,448,738 | - | 28,910 | - | ||||||||||||||||||||
| Foreign | Monster Energy Company – USA | Shareholder related | Argentina | PGY | 33,755 | - | ||||||||||||||||||||||
| Foreign | The Coca-Cola Company | Shareholder | Paraguay | PYG | 3,921,803 | - | 1,690,858 | - | ||||||||||||||||||||
| Total | 86,907,283 | 7,949,476 | 90,248,067 | 10,354,296 | ||||||||||||||||||||||||
41
12.3 Transactions:
| Taxpayer ID | Company | Relationship | Country | Transaction Description | Currency | Accumulated at 09.30.2023 | Accumulated at 12.31.2022 | |||||||||||||
| ThCh$ | ThCh$ | |||||||||||||||||||
| 96.714.870-9 | Coca-Cola de Chile S.A. | Shareholders | Chile | Purchase of concentrate | CLP | 158,936,353 | 198,045,624 | |||||||||||||
| 96.714.870-9 | Coca-Cola de Chile S.A. | Shareholders | Chile | Water source lease | CLP | 4,662,729 | 5,958,076 | |||||||||||||
| 96.714.870-9 | Coca-Cola de Chile S.A. | Shareholders | Chile | Sale of raw materials and others | CLP | 850,018 | 9,980,390 | |||||||||||||
| 96.714.870-9 | Coca-Cola de Chile S.A. | Shareholders | Chile | Minimum dividend | CLP | - | 47,262 | |||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | Purchase of containers | CLP | 15,478,790 | 24,441,192 | |||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | Purchase of raw materials | CLP | 23,893,192 | 33,637,921 | |||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | Purchase of services and others | CLP | 692,427 | 2,270,006 | |||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | Sales of services and others | CLP | - | 13,914 | |||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | Purchase of packaging | CLP | 8,283,781 | 9,391,000 | |||||||||||||
| 86.881.400-4 | Envases CMF S.A. | Associate | Chile | Sale of packaging / raw materials | CLP | 8,542,012 | 13,360,534 | |||||||||||||
| 93.281.000-K | Coca Cola Embonor S.A. | Common shareholder | Chile | Sales of finished products | CLP | 54,295,176 | 79,205,926 | |||||||||||||
| 93.281.000-K | Coca Cola Embonor S.A. | Common shareholder | Chile | Sales of services and others | CLP | 360,722 | 585,448 | |||||||||||||
| 93.281.000-K | Coca Cola Embonor S.A. | Common shareholder | Chile | Sale of inputs and materials | CLP | 257,235 | 956,036 | |||||||||||||
| 96.891.720-K | Embonor S.A. | Shareholder related | Chile | Minimum dividend | CLP | - | 589,127 | |||||||||||||
| 96.517.310-2 | Embotelladora Iquique S.A. | Shareholder related | Chile | Sales of finished products | CLP | 5,627,609 | 5,807,466 | |||||||||||||
| 89.996.200-1 | Envases del Pacífico S.A. | Director related | Chile | Purchase of inputs and materials | CLP | 358,586 | 204,933 | |||||||||||||
| 94.627.000-8 | Parque Arauco S.A | Director related | Chile | Leas of space | CLP | 143,308 | 101,981 | |||||||||||||
| Foreign | Recofarma do Indústrias Amazonas Ltda. | Shareholder related | Brazil | Purchase of concentrate | BRL | 82,950,595 | 100,199,500 | |||||||||||||
| Foreign | Serv. y Prod. para Bebidas Refrescantes S.R.L. | Shareholder related | Argentina | Purchase of concentrate | ARS | 119,205,606 | 159,807,006 | |||||||||||||
| Foreign | Serv. y Prod. para Bebidas Refrescantes S.R.L. | Shareholder related | Argentina | Advertising rights, prizes and others | ARS | 190,691 | 3,002,061 | |||||||||||||
| Foreign | KAIK Participações | Associate | Brazil | Reimbursement and other purchases | BRL | 85,463 | 96,511 | |||||||||||||
| Foreign | Leão Alimentos e Bebidas Ltda. | Associate | Brazil | Purchase of products | BRL | 5,779 | 636,938 | |||||||||||||
| Foreign | Sorocaba Refrescos S.A. | Associate | Brazil | Purchase of products | BRL | 1,471,029 | 419,515 | |||||||||||||
| 89.862.200-2 | Latam Airlines Group S.A. | Director related | Chile | Sale of products | CLP | - | 93,320 | |||||||||||||
| 76.572.588-7 | Coca Cola Del Valle New Ventures SA | Associate | Chile | Sales of services and others | CLP | - | 288,264 | |||||||||||||
| 76.572.588-7 | Coca Cola Del Valle New Ventures SA | Associate | Chile | Purchase of services and others | CLP | 3,222,736 | 4,306,419 | |||||||||||||
| Foreign | Alimentos de Soja S.A.U. | Shareholder related | Argentina | Payment of commissions and services | ARS | 845,331 | 4,128,865 | |||||||||||||
| Foreign | Alimentos de Soja S.A.U. | Shareholder related | Argentina | Purchase of products | ARS | 679,894 | 2,107,354 | |||||||||||||
| Foreign | Alimentos de Soja S.A.U. | Shareholder related | Argentina | Servicios de Marketing | ARS | 77,326 | 286,488 | |||||||||||||
| Foreign | Trop Frutas do Brasil Ltda. | Associate | Brazil | Purchase of products | BRL | 192,199 | 368,127 | |||||||||||||
| 77526480-2 | Comercializadora Novaverde S.A. | Common shareholder | Chile | Sale of raw materials | CLP | 49,380 | 781,901 | |||||||||||||
| 77526480-2 | Comercializadora Novaverde S.A. | Common shareholder | Chile | Sale of finished products | CLP | 9,575,426 | 12,867,822 | |||||||||||||
| 77526480-2 | Comercializadora Novaverde S.A. | Common shareholder | Chile | Sale of services and others | CLP | 395,713 | 4,512,714 | |||||||||||||
| 77526480-2 | Comercializadora Novaverde S.A. | Common shareholder | Chile | Purchase of finished products | CLP | 14,956,843 | 25,440,668 | |||||||||||||
| 77526480-2 | Comercializadora Novaverde S.A. | Common shareholder | Chile | Advertising | CLP | 1,491,434 | 2,367,626 | |||||||||||||
| 77526480-2 | Comercializadora Novaverde S.A. | Common shareholder | Chile | Cold equipment maintenance | CLP | - | 619,419 | |||||||||||||
| 77526480-2 | Comercializadora Novaverde S.A. | Common shareholder | Chile | Purchase of raw materials | CLP | 300,067 | 952,699 | |||||||||||||
| 97.036.000-K | Banco Santander Chile. | Director/Manager/Executive | Chile | Purchase of services | CLP | 4,396,965 | 6,776,225 | |||||||||||||
| Foreign | Monster Energy Brasil Comercio de Bebidas Ltda | Affiliate | Brazil | Purchase of products | BRL | 2,437,919 | 2,352,550 | |||||||||||||
| 33-0520613 | Monster Energy Company - USA | Affiliate | USA | Purchase of advertising materials | CLP | 116,139 | - | |||||||||||||
| 76140057-6 | Monster Energy Company - CHILE | Subsidiary | Chile | Sale of administrative services | CLP | 1,751,982 | - | |||||||||||||
| 76140057-6 | Monster Energy Company - CHILE | Subsidiary | Chile | Finished products | CLP | 28,070,610 | - | |||||||||||||
42
| 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 | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Executive wages, salaries and benefits | 7,685,973 | 6,566,135 | ||||||
| Director allowances | 1,251,500 | 1,170,000 | ||||||
| Total | 8,937,473 | 7,736,135 | ||||||
13 – CURRENT AND NON-CURRENT EMPLOYEE BENEFITS
Employee benefits are detailed as follows:
| Description | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Accrued vacation | 24,354,416 | 25,773,244 | ||||||
| Participation in profits and bonuses | 23,939,639 | 22,618,562 | ||||||
| Severance indemnity | 17,994,377 | 17,409,793 | ||||||
| Total | 66,288,432 | 65,801,599 | ||||||
| ThCh$ | ThCh$ | |||||||
| Current | 45,631,037 | 48,391,806 | ||||||
| Non-current | 20,657,395 | 17,409,793 | ||||||
| Total | 62,288,432 | 65,801,599 | ||||||
13.1 Severance indemnities
The movements of employee benefits, valued pursuant to Note 2 are detailed as follows:
| Movements | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Opening balance | 17,409,793 | 14,982,928 | ||||||
| Service costs | 1,029,304 | 1,018,080 | ||||||
| Interest costs | 764,808 | 737,566 | ||||||
| Actuarial variations | 304,784 | 2,905,020 | ||||||
| Benefits paid | (1,514,313 | ) | (2,233,801 | ) | ||||
| Total | 17,994,377 | 17,409,793 | ||||||
43
13.1.1 Assumptions
The actuarial assumptions used are detailed as follows:
| Assumptions | 09.30.2023 | 12.31.2022 | ||||||
| Discount rate | 1.71 | % | 1.71 | % | ||||
| Expected salary increase rate | 2.0 | % | 2.0 | % | ||||
| Turnover rate | 7.68 | % | 7.68 | % | ||||
| Mortality rate | RV-2014 | RV-2014 | ||||||
| Retirement age of women | 60 years | 60 years | ||||||
| Retirement age of men | 65 years | 65 years | ||||||
13.2 Personnel expenses
Personnel expenses included in the consolidated statement of income are as follows:
| Description | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Wages and salaries | 218,019,456 | 212,259,598 | ||||||
| Employee benefits | 58,242,068 | 49,376,292 | ||||||
| Severance benefits | 5,065,028 | 4,930,288 | ||||||
| Other personnel expenses | 15,068,053 | 14,919,293 | ||||||
| Total | 296,394,605 | 281,485,471 | ||||||
14 – INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
14.1 Description
Investments in associates are accounted for using the equity method. Investments in associates are detailed as follows:
| Functional | Investment value | Ownership interest | ||||||||||||||||||||||||
| TAXPAYER ID | Name | Country | currency | 09.30.2023 | 12.31.2022 | 09.30.2023 | 112.31.2022 | |||||||||||||||||||
| 86.881.400-4 | Envases CMF S.A. (1) | Chile | CLP | 19,534,970 | 23,519,277 | 50.00 | % | 50.00 | % | |||||||||||||||||
| Foreign | Leão Alimentos e Bebidas Ltda. (2) | Brazil | BRL | 13,438,538 | 8,460,307 | 10.26 | % | 10.26 | % | |||||||||||||||||
| Foreign | Kaik Participações Ltda. (2) | Brazil | BRL | 1,503,154 | 1,293,219 | 11.32 | % | 11.32 | % | |||||||||||||||||
| Foreign | SRSA Participações Ltda. | Brazil | BRL | 59,341 | 55,072 | 40.00 | % | 40.00 | % | |||||||||||||||||
| Foreign | Sorocaba Refrescos S.A. | Brazil | BRL | 27,132,070 | 26,694,836 | 40.00 | % | 40.00 | % | |||||||||||||||||
| Foreign | Trop Frutas do Brasil Ltda. (2) | Brazil | BRL | 1,309,025 | 1,971,055 | 7.52 | % | 7.52 | % | |||||||||||||||||
| 76.572.588.7 | Coca-Cola del Valle New Ventures S.A. | Chile | CLP | 29,117,135 | 30,350,832 | 35.00 | % | 35.00 | % | |||||||||||||||||
| Total | 92,094,233 | 92,344,598 | ||||||||||||||||||||||||
| (1) | In Envases CMF S.A., regardless of the percentage of ownership interest, it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions. |
| (2) | In these companies, regardless of the ownership interest, it has been defined that the Company has significant influence, given that it has the right to appoint directors. |
44
Envases CMF S.A.
Chilean entity whose corporate purpose is to manufacture and sell plastic material products and beverage bottling and packaging services. The business relationship is to supply plastic bottles, preforms and caps to Coca-Cola bottlers in Chile.
Leão Alimentos e Bebidas Ltda.
Brazilian entity whose corporate purpose is to manufacture and commercialize food, beverages in general and beverage concentrates. Invest in other companies. The business relationship is to produce non-carbonated products for Coca-Cola bottlers in Brazil.
Kaik Participações Ltda.
Brazilian entity whose corporate purpose is to invest in other companies with its own resources.
SRSA Participações Ltda.
Brazilian entity whose corporate purpose is the purchase and sale of real estate investments and property management, supporting the business of Rio De Janeiro Refrescos Ltda. (Andina Brazil).
Sorocaba Refrescos S.A.
Brazilian entity whose corporate purpose is to manufacture and commercialize food, beverages in general and beverage concentrates, in addition to investing in other companies. It has commercial relationship with Rio de Janeiro Refrescos Ltda. (Andina Brazil).
Trop Frutas do Brasil Ltda.
Brazilian entity whose corporate purpose is to manufacture, commercialize and export natural fruit pulp and coconut water. The business relationship is to produce products for Coca-Cola bottlers in Brazil.
Coca-Cola del Valle New Ventures S.A.
Chilean entity whose corporate purpose is to manufacture, distribute and commercialize all kinds of juices, waters and beverages in general. The business relationship is to produce waters and juices for Coca-Cola bottlers in Chile.
14.2 Movements
The movement of investments in other entities accounted for using the equity method is shown below:
| Description | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Opening balance | 92,344,598 | 91,489,194 | ||||||
| Dividends declared | (2,500,000 | ) | (4,383,645 | ) | ||||
| Share in operating income | 285,002 | 2,118,728 | ||||||
| Other increase (decrease) in investments in associates* | 1,964,633 | 3,120,321 | ||||||
| Ending balance | 92,094,233 | 92,344,598 | ||||||
*Mainly due to foreign exchange rates
The main movement is explained by dividends declared in 2023 and 2022 corresponding to Envases CMF S.A.
45
14.3 Reconciliation of share of profit in investments in associates:
| Description | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Share in operating income | 285,002 | 782,380 | ||||||
| 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) | (431,570 | ) | (439,837 | ) | ||||
| Goodwill amortization of CCDV S.A. preferred shares | 141,267 | (57,483 | ) | |||||
| Income statement balance | (5,301 | ) | 285,060 | |||||
46
14.4 Summary financial information of associates:
The tables below reflect the amounts presented in the financial statements of the relevant associates and not the Company’s share of those amounts.
At September 30, 2023
| Envases
CMF S.A. | Sorocaba
Refrescos S.A. | Kaik
Participações Ltda. | SRSA
Participações Ltda. | Leão
Alimentos e Bebidas Ltda. | Trop
Frutas do Brasil Ltda. | Coca-Cola
del Valle New Ventures S.A. | ||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||||||||
| Short term assets | 50,551,602 | 28,454,734 | - | 24,398 | 81,570,333 | 20,068,864 | 24,638,155 | |||||||||||||||||||||
| Long term assets | 54,288,380 | 100,171,432 | 13,279,130 | 344,045 | 60,922,355 | 28,559,880 | 71,010,309 | |||||||||||||||||||||
| Total assets | 104,839,982 | 128,626,166 | 13,279,130 | 368,443 | 142,672,688 | 46,628,744 | 95,648,465 | |||||||||||||||||||||
| Short term liabilities | 38,784,417 | 15,568,497 | - | 220,088 | 15,400,389 | 13,611,463 | 11,237,592 | |||||||||||||||||||||
| Long term liabilities | 26,985,626 | 45,998,072 | 33 | - | 14,060,365 | 13,128,640 | 1,219,480 | |||||||||||||||||||||
| Total liabilities | 65,770,043 | 61,566,569 | 33 | 220,088 | 29,460,754 | 26,740,103 | 12,457,072 | |||||||||||||||||||||
| Total Equity | 39,069,939 | 67,059,597 | 13,279,097 | 148,355 | 113,211,934 | 21,888,641 | 83,191,392 | |||||||||||||||||||||
| Total revenue from ordinary activities | 68,151,844 | (38,951,715 | ) | 721,872 | 144,777 | 62,310,001 | 38,829,066 | 20,597,215 | ||||||||||||||||||||
| Net income before taxes | 510,109 | (14,716,122 | ) | 721,872 | 144,777 | 3,802,456 | (2,640,134 | ) | (5,429,902 | ) | ||||||||||||||||||
| Net income after taxes | 376,266 | 3,432,816 | - | 144,777 | 1,280,751 | (2,393,570 | ) | (4,095,326 | ) | |||||||||||||||||||
| Other comprehensive income | - | 1,600,725 | - | - | (93,392,120 | ) | (47,075 | ) | - | |||||||||||||||||||
| Total comprehensive income | - | 4,943,341 | 721,872 | 144,777 | (91,111,359 | ) | (2,440,645 | ) | - | |||||||||||||||||||
Reporting date (See Note 2.3) | 09.30.2023 | 08.31.2023 | 08.31.2023 | 08.31.2023 | 08.31.2023 | 08.31.2023 | 08.31.2023 | |||||||||||||||||||||
47
At December 31, 2022
| Envases CMF S.A. | Sorocaba Refrescos S.A. | Kaik Participações Ltda. | SRSA Participações Ltda. | Leão Alimentos e Bebidas Ltda. | Trop Frutas do Brasil Ltda. | Coca-Cola del Valle New Ventures S,A, | ||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||||||||
| Short term assets | 63,615,517 | 41,997,646 | - | 22,376 | 77,547,906 | 22,235,713 | 26,927,496 | |||||||||||||||||||||
| Long term assets | 52,964,004 | 89,524,823 | 11,424,515 | 317,159 | 54,195,351 | 27,128,282 | 75,247,746 | |||||||||||||||||||||
| Total assets | 116,579,521 | 131,522,469 | 11,424,515 | 339,535 | 131,743,257 | 49,363,995 | 102,175,242 | |||||||||||||||||||||
| Short term liabilities | 45,222,022 | 21,366,336 | - | 201,853 | 16,269,385 | 14,693,964 | 9,038,769 | |||||||||||||||||||||
| Long term liabilities | 24,318,944 | 45,013,681 | 31 | - | 11,698,126 | 12,270,207 | 5,480,067 | |||||||||||||||||||||
| Total liabilities | 69,540,966 | 66,380,017 | 31 | 201,853 | 27,967,511 | 26,964,171 | 14,518,836 | |||||||||||||||||||||
| Total Equity | 47,038,555 | 65,142,452 | 11,424,484 | 137,682 | 103,775,746 | 22,630,444 | 87,656,406 | |||||||||||||||||||||
| Total revenue from ordinary activities | 97,834,148 | -741 | 782,772 | 134,401 | 65,797,238 | 45,104,125 | 25,249,336 | |||||||||||||||||||||
| Net income before taxes | 6,640,224 | 478,458 | 782,772 | 134,401 | 3,804,172 | (5,105,685 | ) | (896,914 | ) | |||||||||||||||||||
| Net income after taxes | 5,517,062 | 243,170 | 782,772 | 134,401 | 1,427,601 | (5,067,707 | ) | 163,561 | ||||||||||||||||||||
| Other comprehensive income | - | 9,680,320 | - | - | 1,522 | 275,534 | - | |||||||||||||||||||||
| Total comprehensive income | 5,517,062 | 9,923,490 | 782,772 | 134,401 | 1,429,123 | (4,792,173 | ) | 163,561 | ||||||||||||||||||||
Reporting date (See Note 2.3) | 12.31.2022 | 11.30.2022 | 11.30.2022 | 11.30.2022 | 11.30.2022 | 11.30.2022 | 12.31.2022 | |||||||||||||||||||||
48
15 – INTANGIBLE ASSETS OTHER THAN GOODWILL
Intangible assets other than goodwill are detailed as follows:
| September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||
| Description | Gross value | Accumulated | Net value | Gross value | Accumulated | Net value | ||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||
| Distribution rights (1) | 670,125,587 | (1,451,000 | ) | 668,674,587 | 645,684,416 | (1,451,000 | ) | 644,233,416 | ||||||||||||||||
| Software | 63,847,457 | (41,353,746 | ) | 22,493,711 | 56,968,738 | (36,205,387 | ) | 20,763,351 | ||||||||||||||||
| Water rights | 587,432 | - | 587,432 | 479,825 | (40,723 | ) | 439,102 | |||||||||||||||||
| Trademarks indefinite useful life (2) | 6,259,685 | - | 6,259,685 | 5,741,054 | - | 5,741,054 | ||||||||||||||||||
| Trademarks definite useful life (3) | 1,297,378 | (844,305 | ) | 453,073 | 1,297,378 | (703,388 | ) | 593,990 | ||||||||||||||||
| Others | 553,092 | (545,117 | ) | 7,975 | 507,928 | (499,953 | ) | 7,975 | ||||||||||||||||
| Total | 742,670,631 | (44,194,168 | ) | 698,476,463 | 710,679,339 | (38,900,451 | ) | 671,778,888 | ||||||||||||||||
| (1) | Correspond to brands, water rights and distribution rights. Distribution rights are contractual rights to produce and distribute Coca-Cola products in certain parts of Argentina, Brazil, Chile and Paraguay. Distribution rights result from the valuation process at fair value of the assets and liabilities of the companies acquired in business combinations. Production and distribution contracts are renewable for periods of 5 years with Coca-Cola. The nature of the business and renewals that Coca-Cola has permanently done on these rights, allow qualifying them as indefinite contracts. |
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, are not subject to amortization. Rights in Chile related to AdeS were provisioned for impairment pursuant to the annual tests performed.
| (2) | On September 21, 2021 Coca-Cola Andina together with Coca-Cola Femsa, acquired the Brazilian beer brand Therezópolis for BRL 70 million. Each bottler bought 50% of the brand. This transaction is part of the company’s long-term strategy to complement its beer portfolio in Brazil. The transaction was completed and approved by CADE (Brazilian Administrative Council of Economic Defense). In September, 2021 Andina recorded an intangible asset under the Therezópolis brand for BRL 35 million with an indefinite useful life. |
| Distribution rights | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Chile (excluding Metropolitan Region, Rancagua and San Antonio) | 302,814,149 | 302,814,149 | ||||||
| Brazil (Rio de Janeiro, Espirito Santo, Ribeirão Preto and Investments in Sorocaba and Leão Alimentos y Bebidas Ltda.) | 180,636,633 | 165,670,430 | ||||||
| Paraguay | 181,803,507 | 172,548,023 | ||||||
| Argentina (North and South) | 3,420,298 | 3,200,814 | ||||||
| Total | 668,674,587 | 644,233,416 | ||||||
The movement and balances of identifiable intangible assets are detailed as follows:
| September 30, 2023 | ||||||||||||||||||||||||||||
| Description | Distribution
rights | Software | Water rights | Trademarks
indefinite useful life | Trademarks
definite useful life | Others | Total | |||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||||||||
| Opening balance | 644,233,416 | 20,763,351 | 439,102 | 5,741,054 | 593,990 | 7,975 | 671,778,888 | |||||||||||||||||||||
| Additions | - | 4,965,246 | 148,330 | - | - | - | 5,113,576 | |||||||||||||||||||||
| Amortization /Impairment | - | (4,158,442 | ) | - | - | (140,918 | ) | - | (4,299,360 | ) | ||||||||||||||||||
| Other increases (decreases) (1) | 24,441,171 | 923,557 | - | 518,631 | - | - | 25,883,359 | |||||||||||||||||||||
| Ending balance | 668,674,587 | 22,493,711 | 587,432 | 6,259,685 | 453,072 | 7,975 | 698,476,463 | |||||||||||||||||||||
49
| December 31, 2022 | ||||||||||||||||||||||||||||
| Description | Distribution rights | Software | Water rights | Trademarks
indefinite useful life | Trademarks
definite useful life | Others | Total | |||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||||||||
| Opening balance | 640,056,747 | 13,064,962 | 422,221 | 5,297,760 | 781,878 | 7,975 | 659,631,543 | |||||||||||||||||||||
| Additions | - | 12,020,412 | 16,881 | - | - | 12,037,293 | ||||||||||||||||||||||
| Amortization /Impairment | - | (4,208,798 | ) | - | - | (187,888 | ) | - | (4,396,686 | ) | ||||||||||||||||||
| Other increases (decreases) (1) | 4,176,669 | (113,225 | ) | - | 443,294 | - | - | 4,506,738 | ||||||||||||||||||||
| Ending balance | 644,233,416 | 20,763,351 | 439,102 | 5,741,054 | 593,990 | 7,975 | 671,778,888 | |||||||||||||||||||||
| (1) | Mainly corresponds to restatement due to the effects of translation of distribution rights of foreign subsidiaries. |
Movement in Goodwill is detailed as follows:
Cash Generating Unit | 01.01.2023 | Foreign currency translation differences where functional currency is different from presentation currency | 09.30.2023 | |||||||||
| ThCh$ | ThCh$ | ThCh$ | ||||||||||
| Chilean operation | 8,503,023 | - | 8,503,023 | |||||||||
| Brazilian operation | 66,941,508 | 5,955,098 | 72,896,606 | |||||||||
| Argentine operation | 46,254,831 | 3,171,759 | 49,426,590 | |||||||||
| Paraguayan operation | 7,324,560 | 392,888 | 7,717,448 | |||||||||
| Total | 129,023,922 | 9,519,745 | 138,543,667 | |||||||||
Cash Generating Unit | 01.01.2022 | Foreign currency translation differences where functional currency is different from presentation currency | 12.31.2022 | |||||||||
| ThCh$ | ThCh$ | ThCh$ | ||||||||||
| Chilean operation | 8,503,023 | - | 8,503,023 | |||||||||
| Brazilian operation | 61,851,449 | 5,090,059 | 66,941,508 | |||||||||
| Argentine operation | 39,976,392 | 6,278,439 | 46,254,831 | |||||||||
| Paraguayan operation | 7,712,036 | (387,476 | ) | 7,324,560 | ||||||||
| Total | 118,042,900 | 10,981,022 | 129,023,922 | |||||||||
17 – OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
Liabilities are detailed as follows:
| Balance | ||||||||||||||||
| Current | Non-current | |||||||||||||||
| 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | |||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Bank loans (Note 17.1.1 - 3) | 26,253,647 | 688,800 | 13,324,805 | 13,366,211 | ||||||||||||
| Bonds payable, net (1) (Note 17.2) | 19,241,292 | 340,767,980 | 945,334,024 | 763,368,160 | ||||||||||||
| Bottle guaranty deposits | 15,609,815 | 16,427,144 | - | - | ||||||||||||
| Derivative contract liabilities (Note 17.3) | 301,475 | 2,317,577 | 37,830,966 | 112,175,058 | ||||||||||||
| Lease liabilities (Note 17.4.1 - 2) | 7,986,145 | 7,100,579 | 16,718,270 | 15,892,629 | ||||||||||||
| Total | 69,392,374 | 367,302,080 | 1,013,208,065 | 904,802,058 | ||||||||||||
(1) Amounts net of issuance expenses and discounts related to issuance.
50
The fair value of financial assets and liabilities is presented below:
| Book value | Fair value | Book value | Fair value | |||||||||||||
| Current | 09.30.2023 | 09.30.2023 | 12.31.2022 | 12.31.2022 | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Cash and cash equivalent (2) | 224,775,962 | 224,775,962 | 291,681,987 | 291,681,987 | ||||||||||||
| Financial assets at fair value (1) | 3,400,289 | 3,400,289 | 170,206,554 | 170,206,554 | ||||||||||||
| Trade debtors and other accounts receivable (2) | 248,848,124 | 248,848,124 | 279,770,286 | 279,770,286 | ||||||||||||
| Accounts receivable related companies (2) | 9,023,472 | 9,023,472 | 15,062,167 | 15,062,167 | ||||||||||||
| Bank liabilities (2) | 5,005,265 | 5,071,234 | 688,800 | 107,114 | ||||||||||||
| Bonds payable (2) | 19,241,292 | 18,860,301 | 340,767,980 | 339,666,507 | ||||||||||||
| Bottle guaranty deposits (2) | 15,648,777 | 15,648,777 | 16,427,144 | 16,427,144 | ||||||||||||
| Forward contracts liabilities (see Note 22) (1) | 301,475 | 301,475 | 2,317,577 | 2,317,577 | ||||||||||||
| Leasing agreements (2) | 7,986,145 | 7,986,145 | 7,100,579 | 7,100,579 | ||||||||||||
| Accounts payable (2) | 357,648,545 | 357,648,545 | 384,801,630 | 384,801,630 | ||||||||||||
| Accounts payable related companies (2) | 86,907,283 | 86,907,283 | 90,248,067 | 90,248,067 | ||||||||||||
| Non-current | 09.30.2023 | 09.30.2023 | 12.31.2022 | 12.31.2022 | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Financial assets at fair value (1) | 68,777,520 | 68,777,520 | 75,297,737 | 75,297,737 | ||||||||||||
| Non-current accounts receivable (2) | 349,664 | 349,664 | 539,920 | 539,920 | ||||||||||||
| Accounts receivable related companies (2) | 109,318 | 109,318 | 109,318 | 109,318 | ||||||||||||
| Bank liabilities (2) | 13,324,805 | 3,921,569 | 13,366,211 | 13,921,569 | ||||||||||||
| Bonds payable (2) | 945,334,024 | 846,912,477 | 763,368,160 | 729,602,210 | ||||||||||||
| Leasing agreements (2) | 16,718,270 | 16,718,270 | 15,892,629 | 15,892,629 | ||||||||||||
| Non-current accounts payable (2) | 2,430,806 | 2,430,806 | 3,015,284 | 3,015,284 | ||||||||||||
| Derivative contracts liabilities (see Note 22) (1) | 37,830,966 | 37,830,966 | 112,175,058 | 112,175,058 | ||||||||||||
| Accounts payable related companies (2) | 265,417,665 | 265,417,665 | 10,354,296 | 10,354,296 | ||||||||||||
| (1) | Fair values are based on discounted cash flows using market discount rates at the close of the six-month and one-year period and are classified as Level 2 of the fair value measurement hierarchies. |
| (2) | Financial instruments such as: Cash and Cash Equivalents, Trade debtors and Other Accounts Receivable, Accounts Receivable related companies, Bottle Guarantee Deposits Trade Accounts Payable, and Other Accounts Payable related companies present a fair value that approximates their carrying value, considering the nature and term of the obligation. The business model is to maintain the financial instrument in order to collect/pay contractual cash flows, in accordance with the terms of the contract, where cash flows are received/cancelled on specific dates that exclusively constitute payments of principal plus interest on that principal. These instruments are revalued at amortized cost. |
51
17.1 Bank liabilities
17.1.1 Bank 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 days | 1 year | 09.30.2023 | 12.31.2022 | |||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||||||||||||||||||||
| 96.705.990-0 | Envases Central S.A. | Chile | 97.006.000-6 | Banco Estado | Chile | CLP | Semiannually | 2.00 | % | 14,016 | - | 14,016 | 28,683 | ||||||||||||||||||||||||
| 77.427.659-9 | Re-Ciclar S.A. | Chile | 97.018.000-1 | Scotiabank Chile S.A. | Chile | CLP | Semiannually | 9.49 | % | - | 77,103 | 77,103 | 53,350 | ||||||||||||||||||||||||
| 77.427.659-9 | Re-Ciclar S.A. | Chile | 97.018.000-1 | Scotiabank Chile S.A. | Chile | UF | Semiannually | 3.32 | % | 14,683 | 14,683 | - | |||||||||||||||||||||||||
| 91.144.000-8 | Embotelladora Andina S.A. | Chile | 97.023.000-9 | Itaú Corpbanca | Chile | UF | At maturity | 0.18 | % | 15,493 | - | 15,493 | 21,207 | ||||||||||||||||||||||||
| 91.144.000-8 | Embotelladora Andina S.A. | Chile | 97.023.000-9 | Itaú Corpbanca | Chile | UF | At maturity | 0.18 | % | 630,973 | - | 630,973 | 585,560 | ||||||||||||||||||||||||
| 91.144.000-8 | Embotelladora Andina S.A. | Chile | 97.023.000-9 | Itaú Corpbanca | Chile | UF | At maturity | 0.18 | % | 31,347 | 31,347 | ||||||||||||||||||||||||||
| Foreign | Embotelladora del Atlántico SA | Argentina | Foreign | Banco Patagonia SA | Argentina | ARS | At maturity | 111.60 | % | 7,325,520 | - | 7,325,520 | - | ||||||||||||||||||||||||
| Foreign | Embotelladora del Atlántico SA | Argentina | Foreign | Nuevo Banco Santa Fe SA | Argentina | ARS | At maturity | 111.50 | % | 10,140,280 | - | 10,140,280 | - | ||||||||||||||||||||||||
| Foreign | Embotelladora del Atlántico SA | Argentina | Foreign | Banco Comafi SA | Argentina | ARS | At maturity | 103.5 | % | 8,004,232 | - | 8,004,232 | - | ||||||||||||||||||||||||
| Total | 26,253,647 | 688,800 | |||||||||||||||||||||||||||||||||||
17.1.2 Bank liabilities, non-current
| Maturity | ||||||||||||||||||||||||||||||||||||||||||||||
| More | More | More | ||||||||||||||||||||||||||||||||||||||||||||
| 1 year | than 2 | than 3 | than 4 | More | ||||||||||||||||||||||||||||||||||||||||||
| Indebted entity | Creditor entity | Type of | Nominal | up to | Up to 3 | Up to 4 | Up to 5 | than 5 | At | |||||||||||||||||||||||||||||||||||||
| Taxpayer ID | Name | Country | Taxpayer ID | Name | Country | Currency | Amortization | Rate | 2 years | years | years | years | years | 09.30.2023 | ||||||||||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||||||||||||||||||
| 96.705.990-0 | Envases Central S.A. | Chile | 97.006.000-6 | Banco Estado | Chile | CLP | Semiannually | 2.00 | % | - | - | 4,000,000 | - | - | 4,000,000 | |||||||||||||||||||||||||||||||
| 77.427.659-9 | Re-Ciclar S.A. | Chile | 97.018.000-1 | Scotiabank Chile S.A. | Chile | CLP | Semiannually | 9.49 | % | - | 4,500,000 | - | - | - | 4,500,000 | |||||||||||||||||||||||||||||||
| 77.427.659-9 | Re-Ciclar S.A. | Chile | 97.018.000-1 | Scotiabank Chile S.A. | Chile | UF | Semiannually | 3.32 | % | - | 4,824,805 | - | - | - | 4,824,805 | |||||||||||||||||||||||||||||||
| Total | 13.324.805 | |||||||||||||||||||||||||||||||||||||||||||||
17.1.3 Bank liabilities, non-current previous year
| Maturity | ||||||||||||||||||||||||||||||||||||||||||||||
| More | More | More | ||||||||||||||||||||||||||||||||||||||||||||
| 1 year | than 2 | than 3 | than 4 | More | ||||||||||||||||||||||||||||||||||||||||||
| Indebted entity | Creditor entity | Type of | Nominal | up to | Up to 3 | Up to 4 | Up to 5 | than 5 | At | |||||||||||||||||||||||||||||||||||||
| Taxpayer ID | Name | Country | Taxpayer ID | Name | Country | Currency | Amortization | Rate | 2 years | years | years | years | years | 12.31.2022 | ||||||||||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||||||||||||||||||
| 96.705.990-0 | Envases Central S.A. | Chile | 97.006.000-6 | Banco Estado | Chile | CLP | Semiannually | 2.00 | % | - | - | 4,000,000 | - | - | 4,000,000 | |||||||||||||||||||||||||||||||
| 77.427.659-9 | Re-Ciclar S.A. | Chile | 97.018.000-1 | Scotiabank Chile S.A. | Chile | CLP | Semiannually | 9.49 | % | - | 4,500,000 | - | - | - | 4,500,000 | |||||||||||||||||||||||||||||||
| 77.427.659-9 | Re-Ciclar S.A. | Chile | 97.018.000-1 | Scotiabank Chile S.A. | Chile | UF | Semiannually | 3.32 | % | - | 4,866,211 | - | - | - | 4,866,211 | |||||||||||||||||||||||||||||||
| Total | 13,366,211 | |||||||||||||||||||||||||||||||||||||||||||||
52
17.1.4 Current and non-current bank obligations “Restrictions”
Bank obligations are not subject to restrictions for the reported periods.
17.2 Bond obligations
On September 20, 2023, the Company issued corporate bonds in the Swiss public market for CHF 170 million. The operation consisted of a 5-year issue with bullet structure and an annual coupon of 2.7175%. Simultaneously, derivatives (Cross Currency Swaps) have been contracted through our subsidiary in Brazil (Rio de Janeiro Refrescos) to hedge 100% of the financial obligations of the bond that are denominated in Swiss francs by redenominating such liabilities to Brazilian reais.
At the end of September 2023, Andina made the principal payment of US$365 million of Senior Notes format 144A/RegS, corresponding to 100% of the debt originally placed on January 1, 2013.
| Current | Non-current | Total | ||||||||||||||||||||||
| Composition of bonds payable | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | ||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||
| Bonds face value 1 | 19,954,246 | 341,478,129 | 953,525,139 | 769,765,783 | 953,525,139 | 1,104,136,139 | ||||||||||||||||||
17.2.1 Current and non-current balances
Bonds payable correspond to bonds in UF issued by the parent company on the Chilean market, bonds in U.S. dollars issued by the Parent Company on the U.S. market and the Swiss public market . A detail of these instruments is presented below:
| Current | Non-current | ||||||||||||||||||||||||||||||||
| Series | Current nominal amount | Adjustment unit | Interest rate | Final maturity | Interest payment | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | ||||||||||||||||||||||||
| Bonds | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||||||
| CMF Registration 254 06.13.2001 | B | 969,219 | UF | 6.50 | % | 12.01.2026 | Semiannually | 11,708,218 | 10,513,470 | 24,177,134 | 28,795,438 | ||||||||||||||||||||||
| CMF Registration 641 08.23.2010 | C | 1,090,909 | UF | 4.00 | % | 08.15.2031 | Semiannually | 5,131,533 | 5,427,888 | 34,552,187 | 38,302,888 | ||||||||||||||||||||||
| CMF Registration 760 08.20.2013 | D | 4,000,000 | UF | 3.80 | % | 08.16.2034 | Semiannually | 666,205 | 1,967,995 | 144,790,120 | 140,443,920 | ||||||||||||||||||||||
| CMF Registration 760 04.02.2014 | E | 3,000,000 | UF | 3.75 | % | 03.01.2035 | Semiannually | 336,210 | 1,304,513 | 108,592,613 | 105,332,951 | ||||||||||||||||||||||
| CMF Registration 912 10.10.2018 | F | 5,700,000 | UF | 2.83 | % | 09.25.2039 | Semiannually | 77,950 | 1,491,144 | 206,325,921 | 200,132,586 | ||||||||||||||||||||||
| U.S. Bonds 2023 10.01.2013 | - | 365,000,000 | USD | 5.00 | % | 10.01.2023 | Semiannually | - | 316,293,761 | - | - | ||||||||||||||||||||||
| U.S. Bonds 2050 01.21.2020 | - | 300,000,000 | USD | 3.95 | % | 01.21.2050 | Semiannually | 2,034,130 | 4,479,358 | 268,680,000 | 256,758,000 | ||||||||||||||||||||||
| Swiss Bond 2023 09.20.2023 | - | 170,000,000 | CHF | 2.7175 | % | 09.20.2028 | Annual | - | - | 166,467,164 | - | ||||||||||||||||||||||
| Total | 19,954,246 | 341,478,129 | 953,525,139 | 769,765,783 | |||||||||||||||||||||||||||||
1 Gross amounts do not include issuance expenses and discounts related to issuance.
53
17.2.2 Non-current maturities
| Year of maturity | Total Non-current | ||||||||||||||||||||||
| Series | More than 1 up to 2 | More than 2 up to 3 | More than 3 up to 4 | More than 5 | 09.30.2023 | ||||||||||||||||||
ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||
| CMF Registration 254 06.13.2001 | B | 11,678,997 | 12,438,137 | - | - | 24,117,134 | |||||||||||||||||
| CMF Registration 641 08.23.2010 | C | 4,936,026 | 4,936,027 | 4,936,027 | 19,744,107 | 34,552,187 | |||||||||||||||||
| CMF Registration 760 08.20.2013 | D | - | - | - | 144,790,120 | 144,790,120 | |||||||||||||||||
| CMF Registration 760 04.02.2014 | E | - | - | - | 108,592,613 | 108,592,613 | |||||||||||||||||
| CMF Registration 912 10.10.2018 | F | - | - | - | 206,325,921 | 206,325,921 | |||||||||||||||||
| U.S. Bonds 2050 01.01.2020 | - | - | - | - | 268,680,000 | 268,680,000 | |||||||||||||||||
| Swiss Bond 2023 09.20.2023 | - | - | - | - | 166,467,164 | 166,467,164 | |||||||||||||||||
| Total | 16,615,023 | 17,374,164 | 4,936,027 | 914,599,925 | 953,525,139 | ||||||||||||||||||
17.2.3 Market rating
The bonds issued on the Chilean market had the following rating:
| AA+ | : | ICR Compañía Clasificadora de Riesgo Ltda. rating |
| AA+ | : | Fitch Chile Clasificadora de Riesgo Limitada rating |
The rating of bonds issued on the international market had the following rating:
| BBB | : | Standard&Poors Global Ratings |
| BBB+ | : | Fitch Ratings Inc. |
17.2.4 Restrictions
17.2.4.1 Restrictions regarding bonds placed abroad.
Obligations with bonds placed abroad are not affected by financial restrictions for the periods reported.
17.2.4.2 Restrictions regarding bonds placed in the local market.
The following financial information was used for calculating restrictions:
| 09.30.2023 | ||||
| ThCh$ | ||||
| Average net financial debt last 4 quarters | 670,217,097 | |||
| Net financial debt | 721,451,743 | |||
| Unencumbered assets | 2,766,826,980 | |||
| Total unsecured liabilities | 1,830,499,542 | |||
| EBITDA LTM | 459,974,953 | |||
| Net financial expenses LTM | 32,518,689 | |||
Restrictions on the issuance of bonds for a fixed amount registered under number 254, series B1 and B2.
| · | Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Income by Function”. |
54
“Consolidated Net Financial Liabilities” will be considered as the result of : /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);
“EBITDA” will be considered as the addition of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.
As of the date of these financial statements, this ratio was 1.46 times.
| · | Maintain, and in no manner lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” (Región Metropolitana) as a territory in Chile in which we have been authorized by The Coca-Cola Company for the development, production, sale and distribution of products and brands of the licensor, in accordance to the respective bottler or license agreement, renewable from time to time. |
| · | Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of this date is franchised by TCCC to the Company for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow. |
| · | Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s 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 the date of these financial statements, this ratio was 1.51 times.
Restrictions to bond lines registered in the Securities Registered under number 641, series C
| · | Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Income by Function”. |
“Consolidated Net Financial Liabilities” will be considered as the result of: /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);
55
“EBITDA” will be considered as the addition of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.
As of the date of these financial statements, this ratio was 1.46 times.
| · | Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s 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 the date of these financial statements, this ratio was 1.51 times.
| · | Maintain a level of “Net Financial Coverage” greater than 3 times in its quarterly financial statements. Net financial coverage means the ratio between the issuer’s EBITDA of the last 12 months and the issuer’s Net Financial Expenses in the last 12 months. Net Financial Expenses will be regarded as the difference between the absolute value of interest expense associated with the issuer’s financial debt account accounted for under “Financial Costs”; and interest income associated with the issuer’s cash accounted for under the Financial Income account. However, this restriction shall be deemed to have been breached where the mentioned level of net financial coverage is lower than the level previously indicated during two consecutive quarters. |
As of the date of these financial statements, Net Financial Coverage was 14.14 times.
Restrictions to bond lines registered in the Securities Registrar under number 760, series D and E.
| · | Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Results by Function”. |
“Consolidated Net Financial Liabilities” will be considered as the result of : /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);
56
“EBITDA” will be considered as the addition of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.
As of the date of these financial statements, this ratio was 1.46 times.
| · | Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s 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 the date of these financial statements, this ratio was 1.51 times.
| · | Maintain, and in no manner, lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” as a territory franchised to the Issuer in Chile by The Coca-Cola Company, hereinafter also referred to as “TCCC” or the “Licensor” for the development, production, sale and distribution of products and brands of said licensor, in accordance to the respective bottler or license agreement, renewable from time to time. Losing said territory means the non-renewal, early termination or cancellation of this license agreement by TCCC, for the geographical area today called “Metropolitan Region”. This reason shall not apply if, as a result of the loss, sale, transfer or disposition, of that licensed territory is purchased or acquired by a subsidiary or an entity that consolidates in terms of accounting with the Issuer. |
| · | Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of these instruments is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits (losses) of associates that are accounted for using the equity method”; plus (v) “Depreciation”; plus (vi) “Intangibles Amortization”. |
57
Restrictions to bond lines registered in the Securities Registrar under number 912, series F.
| · | Maintain an Indebtedness Level not greater than three point five times the EBITDA. For these purposes, “Indebtedness Level” will be considered as the ratio between /a/ the average over the last four Quarters of the Consolidated Net Financial Liabilities, and /b/ the accumulated EBITDA in the period of twelve consecutive months ending at the closing of the latest “Consolidated Financial Statements of Results by Function”. |
“Consolidated Net Financial Liabilities” will be considered as the result of : /i/ “Other Financial Liabilities, Current”, plus /ii/ “Other Financial Liabilities, Non-Current”, minus /iii/ the sum of “Cash and Cash Equivalents”; plus “Other Financial Assets, Current”; plus “Other Financial Assets, Non-Current” (to the extent that they correspond to the balances of assets for derivative financial instruments, taken to hedge exchange rate and/or interest rate risk of financial liabilities);
“EBITDA” will be considered as the sum of the following accounts of the “Consolidated Financial Statements of Income by Function” contained in the Issuer’s Consolidated Financial Statements: “Revenues from Ordinary Activities”, “Cost of Sales”, “Distribution Costs”, “Administrative Expenses” and “Other Expenses, by function”, discounting the value of “Depreciation” and “Amortization for the Year” presented in the Notes to the Issuer’s Consolidated Financial Statements.
As of the date of these financial statements, this ratio was 1.46 times.
| · | Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s 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 the date of these financial statements, this ratio was 1.51 times.
| · | Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of local bonds Series C, D and E is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits (losses) of associates that are accounted for using the equity method”; plus (v) “Depreciation”; plus (vi) “Intangibles Amortization”. |
As of the date of these financial statements, the Company complies with all financial covenants.
| 17.3 | Derivative contract obligations |
Please see details in Note 22.
58
| 17.4 | Liabilities for leasing agreements |
| 17.4.1 | Current liabilities for leasing agreements |
| Maturity | Total | |||||||||||||||||||||||||||||||||||
| Indebted entity | Creditor entity | Amortization | Nominal | Up to | 90 days up to | at | at | |||||||||||||||||||||||||||||
| Name | Country | Taxpayer ID | Name | Country | Currency | Type | Rate | 90 days | 1 year | 09.30.2023 | 12.31.2022 | |||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Cogeração - Light ESCO | Brazil | BRL | Monthly | 12.28 | % | 305,002 | 972,969 | 1,277,971 | 1,069,428 | ||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Tetra Pack | Brazil | BRL | Monthly | 7.39 | % | 35,436 | 110,312 | 145,748 | 121,291 | ||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Real estate | Brazil | BRL | Monthly | 8.10 | % | 156,071 | 420,115 | 576,186 | 155,613 | ||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Leão Alimentos e Bebidas Ltda. | Brazil | BRL | Monthly | 3.50 | % | 81,602 | 239,148 | 320,750 | 299,362 | ||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Tetra Pak SRL | Argentina | USD | Monthly | 12.00 | % | 90,793 | 272,379 | 363,172 | 497,308 | ||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Real estate | Argentina | USD | Monthly | 50.00 | % | 524,069 | 176,285 | 700,354 | 622,574 | ||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Systems | Argentina | ARS | Monthly | 12.00 | % | 28,099 | - | 28,099 | 123,253 | ||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Real estate | Argentina | ARS | Monthly | 12.00 | % | 246,137 | 408,095 | 654,232 | - | ||||||||||||||||||||||||
| VJ S.A. | Chile | 76.080.198-4 | De Lage Landen Chile S.A. | Chile | USD | Linear | 6.41 | % | 158,140 | 483,515 | 641,655 | 588,820 | ||||||||||||||||||||||||
| Vital Aguas S.A. | Chile | 76.572.588-7 | Coca-Cola del Valle New Ventures S.A. | Chile | CLP | Linear | 2.77 | % | 189,253 | - | 189,253 | 998,501 | ||||||||||||||||||||||||
| Envases Central S.A: | Chile | 76.572.588-7 | Coca-Cola del Valle New Ventures S.A. | Chile | CLP | Linear | 6.56 | % | 586,078 | 603,428 | 1,189,506 | 602,887 | ||||||||||||||||||||||||
| Transportes Polar S.A. | Chile | 96.928.520-7 | Cons. Inmob. e Inversiones Limitada | Chile | UF | Monthly | 2.89 | % | - | 94,272 | 94,272 | 118,883 | ||||||||||||||||||||||||
| Transportes Andina Refrescos Ltda | Chile | 78.861.790-9 | Comercializadora Novaverde Limitada | Chile | UF
| Monthly | 0.08 | % | - | - | - | 177,802 | ||||||||||||||||||||||||
| Transportes Andina Refrescos Ltda | Chile | 75.563.499-k | Jungheinrich Rentalift SPA | Chile | UF | Monthly | 0.24 | % | 243,043 | 739,704 | 982,747 | 932,903 | ||||||||||||||||||||||||
| Transportes Andina Refrescos Ltda | Chile | 82.275.700-0 | Arrendamiento de Maquinaria SpA | Chile | UF | Monthly | 1.00 | % | 79,105 | 236,320 | 315,425 | 309,440 | ||||||||||||||||||||||||
| Red de Transportes Comerciales S.A. | Chile | 76.930.501-7 | Inmobiliaria Ilog Avanza Park | Chile | UF | Monthly | 0.21 | % | 125,260 | 381,515 | 506,775 | 482,514 | ||||||||||||||||||||||||
| Total | 7,986,145 | 7,100,579 | ||||||||||||||||||||||||||||||||||
The Company maintains leases on forklifts, vehicles, real estate and machinery. These leases have an average lifespan of between one and eight years without including a renewal option in the contracts.
59
| 17.4.2 | Non-current liabilities for leasing agreements |
Maturity | ||||||||||||||||||||||||||||||||||||||||
Indebted entity | Creditor entity | Amortization | Nominal | 1 year up to | 2 years up to | 3 years up to | 4 years up to | More than | at | |||||||||||||||||||||||||||||||
| Name | Country | Taxpayer ID | Name | Country | Currency | Type | Rate | 2 years | 3 years | 4 years | 5 years | 5 years | 09.30.2023 | |||||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brasil | Foreign | Cogeração - Light ESCO | Brazil | BRL | Monthly | 12.28 | % | 1,444,108 | 1,631,842 | 1,843,981 | 2,083,699 | 1,141,330 | 8,144,960 | ||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brasil | Foreign | Tetra Pack | Brazil | BRL | Monthly | 7.39 | % | 156,898 | 168,901 | 181,821 | 195,731 | 318,288 | 1,021,639 | ||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brasil | Foreign | Real estate | Brazil | BRL | Monthly | 8.10 | % | 368,584 | 228,749 | 163,327 | - | - | 760,660 | ||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brasil | Foreign | Leao Alimentos e Bebidas Ltda. | Brazil | BRL | Monthly | 3.50 | % | 300,987 | 99,547 | 32,817 | 8,074 | - | 441,425 | ||||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Tetra Pak SRL | Argentina | USD | Monthly | 12.00 | % | - | 726,344 | - | 726,344 | 423,701 | 1,876,389 | ||||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Real estate | Argentina | ARS | Monthly | 50.00 | % | - | 26,928 | - | - | - | 26,928 | ||||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Real estate | Argentina | USD | Monthly | 12.00 | % | - | 618,234 | - | 505,777 | 1,095,852 | 2,219,863 | ||||||||||||||||||||||||||
| VJ S.A. | Chile | Foreign | De Lage Landen Chile S.A. | Chile | USD | Monthly | 6.41 | % | 330,043 | - | - | - | - | 330,043 | ||||||||||||||||||||||||||
| Transportes Andina Refrescos Ltda | Chile | 85.275.700-0 | Arrendamiento De Maquinaria SPA | Chile | UF | Monthly | 1.00 | % | 130,647 | - | - | - | - | 130,647 | ||||||||||||||||||||||||||
| Transportes Polar S.A. | Chile | 76.413.243-2 | Cons. Inmob. e Inversiones Limitada | Chile | UF | Monthly | 2.89 | % | - | 107,168 | - | - | - | 107,168 | ||||||||||||||||||||||||||
| Transportes Polar S.A. | Chile | 76.536.499-k | Cons. Inmob. e Inversiones Limitada | Chile | UF | Monthly | 2.24 | % | - | 1,182,845 | - | - | - | 1,182,845 | ||||||||||||||||||||||||||
| Transportes Andina Refrescos Ltda | Chile | 76.930.501-7 | Inmobiliaria Ilog Avanza Park | Chile | UF | Monthly | 0.21 | % | - | 475,703 | - | - | - | 475,703 | ||||||||||||||||||||||||||
| Total | 16,718,270 | |||||||||||||||||||||||||||||||||||||||
| 17.4.3 | Non-current liabilities for leasing agreements (previous year) |
Maturity | ||||||||||||||||||||||||||||||||||||||||
Indebted entity | Creditor entity | Type of | Nominal | 1 year up to | 2 years up to | 3 years up to | 4 years up to | More than | at | |||||||||||||||||||||||||||||||
| Name | Country | Taxpayer ID | Name | Country | Currency | Amortization | Rate | 2 years | 3 years | 4 years | 5 years | 5 years | 12.31.2022 | |||||||||||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Cogeração - Light ESCO | Brazil | BRL | Monthly | 12.28 | % | 1,208,453 | 1,365,552 | 1,543,074 | 1,743,674 | 2,501,730 | 8,362,483 | ||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Tetra Pack| | Brazil | BRL | Monthly | 7.39 | % | 130,569 | 140,558 | 151,311 | 162,886 | 409,959 | 995,283 | ||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Real estate | Brazil | BRL | Monthly | 8.10 | % | 57,105 | 8,702 | - | - | - | 65,807 | ||||||||||||||||||||||||||
| Rio de Janeiro Refrescos Ltda. | Brazil | Foreign | Leao Alimentos e Bebidas Ltda. | Brazil | BRL | Monthly | 3.50 | % | 292,445 | 270,586 | 31,538 | 29,618 | - | 624,187 | ||||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Tetra Pak SRL | Argentina | USD | Monthly | 12.00 | % | - | 842,297 | - | 513,737 | 335,293 | 1,691,327 | ||||||||||||||||||||||||||
| Embotelladora del Atlántico S.A. | Argentina | Foreign | Real estate | Argentina | ARS | Monthly | 50.00 | % | - | 136,139 | - | - | - | 136,139 | ||||||||||||||||||||||||||
| VJ S.A. | Chile | Foreign | De Lage Landen Chile S.A | Chile | USD | Monthly | 12.16 | % | 769,982 | - | - | - | 769,982 | |||||||||||||||||||||||||||
| Transportes Andina Refrescos Ltda | Chile | 85.275.700-0 | Arrendamiento De Maquinaria SPA | Chile | UF | Monthly | 1.00 | % | - | 355,952 | - | - | - | 355,952 | ||||||||||||||||||||||||||
| Transportes Polar S.A. | Chile | 76.413.243-2 | Cons. Inmob. e Inversiones Limitada | Chile | UF | Monthly | 2.89 | % | - | 195,393 | - | - | - | 195,393 | ||||||||||||||||||||||||||
| Red de Transportes Comerciales Ltda | Chile | 76.930.501-7 | Inmobiliaria Ilog Avanza Park | Chile | UF | Monthly | 0.21 | % | - | 831,235 | - | - | - | 831,235 | ||||||||||||||||||||||||||
| Transportes Andina Refrescos Ltda | Chile | 76.536.499-k | Jungheinrich Rentalift SPA | Chile | UF | Monthly | 0.24 | % | - | 1,864,841 | - | - | - | 1,864,841 | ||||||||||||||||||||||||||
| Total | 15,892,629 | |||||||||||||||||||||||||||||||||||||||
Leasing agreement obligations are not subject to financial restrictions for the reported periods.
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18 – TRADE AND OTHER ACCOUNTS PAYABLE
Trade and other accounts payable are detailed as follows:
| Classification | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Current | 357,648,545 | 384,801,630 | ||||||
| Non-current | 2,430,806 | 3,015,284 | ||||||
| Total | 369,079,351 | 387,816,914 | ||||||
| Item | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Trade accounts payable | 243,880,673 | 298,298,731 | ||||||
| Withholding tax | 57,199,017 | 60,738,656 | ||||||
| Others | 58,999,661 | (1) | 28,779,527 | |||||
| Total | 360,079,351 | 387,816,914 | ||||||
| (1) | Other current considers the account payable to former shareholders of Companhia de Bebidas Ipiranga (“CBI”). See Note 6 for further information. |
19 – OTHER PROVISIONS, CURRENT AND NON-CURRENT
| 19.1 | Balances |
The composition of provisions is as follows:
| Description | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Litigation (1) | 54,325,830 | 48,695,427 | ||||||
| Total | 54,325,830 | 48,695,427 | ||||||
| Current | 1,408,413 | 1,591,644 | ||||||
| Non-current | 52,917,417 | 47,103,783 | ||||||
| Total | 52,325,830 | 48,695,427 | ||||||
| (1) | Correspond to the provision made for the probable losses of tax, labor and commercial contingencies, according to the following detail: |
| Description (see note 23.1) | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Tax contingencies | 29,393,560 | 27,339,444 | ||||||
| Labor contingencies | 13,105,678 | 11,374,753 | ||||||
| Civil contingencies | 11,826,592 | 9,981,230 | ||||||
| Total | 54,325,830 | 48,695,427 | ||||||
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| 19.2 | Movements |
The movement of principal provisions over litigation is detailed as follows:
| Description | 09.30.2023 | 12.31.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Opening balance at January 1st | 48,695,427 | 57,412,406 | ||||||
| Additional provisions | 32,644 | 48,639 | ||||||
| Increase (decrease) in existing provisions | 5,136,074 | 6,359,467 | ||||||
| Used provision (payments made charged to the provision) | (2,976,284 | ) | (3,108,988 | ) | ||||
| Reversal of unused provision* | - | (15,654,522 | ) | |||||
| Increase (decrease) due to foreign exchange rate differences | 3,437,969 | 3,638,425 | ||||||
| Total | 54,325,830 | 48,695,427 | ||||||
| (*) | During 2022, the provision constituted by a defendant of the Government of the State of Rio de Janeiro related to the Advertising Contract was reversed. This is due to a review of the balances involved where the amounts claimed are reduced in favor of Rio de Janeiro Refrescos Ltda. |
20 – OTHER NON-FINANCIAL LIABILITIES
Other current and non-current non-financial liabilities at each reporting period end are detailed as follows:
| Current | Non-current | |||||||||||||||
| Description | 09.30.2023 | 12.31.2022 | 09.30.2023 | 12.31.2022 | ||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Dividends payable | 29,110,245 | 29,042,469 | - | - | ||||||||||||
| Other | 11,525,035 | (1) | 13,251,991 | 2,564,032 | 29,589,051 | |||||||||||
| Total | 40,635,280 | 42,294,460 | 2,564,032 | 29,589,051 | ||||||||||||
| (1) | Corresponds to an advance payment from Coca-Cola de Chile S.A. for a marketing co-participation plan for the penetration of market equipment, which will be developed between 2022 and until 2024. |
| 21.1 | Number of shares: |
| Number of subscribed, paid-in and voting shares | ||||||||
| Series | 2023 | 2022 | ||||||
| A | 473,289,301 | 473,289,301 | ||||||
| B | 473,281,303 | 473,281,303 | ||||||
| 21.1.1 | Capital: |
| Paid-in and subscribed capital | ||||||||
| Series | 2023 | 2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| 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 | Rights of each series: |
| · | Series A: Elects 12 of the 14 Directors. |
| · | Series B: Receives an additional 10% of dividends distributed to Series A and elects 2 of the 14 Directors. |
| 21.2 | Dividend policy |
Under Chilean law, we must distribute cash dividends equivalent to at least 30% of our annual net profit, barring a unanimous vote by shareholders to the contrary. If there is no net profit in a given year, the Company shall not be legally obligated to distribute dividends from accumulated earnings, unless approved by the General Shareholders Meeting. At the General Shareholders’ Meeting held in April 2023, shareholders agreed to pay out of the 2022 earnings a final dividend additional to the 30% required by Chile’s Law on Corporations and an eventual final dividend, which will be paid on May 9, 2023 and May 26, 2023, respectively.
The dividends declared and/or paid per share are presented below:
Approval-Payment Periods | Dividend type | Profits imputable to dividends | CLP Series A | CLP Series B | ||||||||||||
| 12.27.2022 | 01.27.2023 | Interim | 2022 Earnings | 29.00 | 31.90 | |||||||||||
| 04.20.2023 | 05.09.2023 | Final | 2022 Earnings | 29.00 | 31.90 | |||||||||||
| 04.20.2023 | 05.26.2023 | Final | Accumulated earnings | 50.00 | 55.00 | |||||||||||
| 07.25.2023 | 08.25.2023 | Interim | 2023 Earnings | 29.00 | 31.90 | |||||||||||
| 09.27.2023 | 10.26.2023 | Interim | 2023 Earnings | 29.00 | 31.90 | |||||||||||
| 21.3 | Other reserves |
The balance of other reserves includes the following:
| Concept | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Polar acquisition | 421,701,520 | 421,701,520 | ||||||
| Foreign currency translation reserves | (543,031,852 | ) | (392,920,683 | ) | ||||
| Cash flow hedge reserve | (19,015,764 | ) | (42,892,430 | ) | ||||
| Reserve for employee benefit actuarial gains or losses | (8,334,781 | ) | (6,139,103 | ) | ||||
| Legal and statutory reserves | 5,435,538 | 5,435,538 | ||||||
| Other | 6,014,569 | 6,014,569 | ||||||
| Total | (137,230,770 | ) | (8,800,589 | ) | ||||
| 21.3.1 | Polar acquisition |
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 | Cash flow hedge reserve |
They arise from the fair value of the existing derivative contracts that have been qualified for hedge accounting at the end of each financial period. When contracts are expired, these reserves are adjusted and recognized in the income statement in the corresponding period (see Note 22).
| 21.3.3 | Reserve for employee benefit actuarial gains or losses |
Corresponds to the restatement effect of employee benefits actuarial losses that according to IAS 19 amendments must be carried to other comprehensive income.
| 21.3.4 | Legal and 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 | Foreign currency translation reserves |
This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the Consolidated Financial Statements. Additionally, exchange differences between accounts receivable kept by the companies in Chile with foreign subsidiaries are presented in this account, which have been treated as investment accounted for using the equity method, Translation reserves are detailed as follows:
| Description | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Brazil | (110,411,979 | ) | (106,841,503 | ) | ||||
| Argentina | (451,973,994 | ) | (336,371,140 | ) | ||||
| Paraguay | 19,354,121 | 50,291,960 | ||||||
| Total | (543,031,852 | ) | (392,920,683 | ) | ||||
The movement of this reserve for the periods ended on the dates indicated below, is detailed as follows:
| Description | 09.30.2023 | 09.30.2022 | ||||||
| ThCh$ | ThCh$ | |||||||
| Brazil | 30,350,418 | 60,605,886 | ||||||
| Argentina | (90,985,145 | ) | (41,674,913 | ) | ||||
| Paraguay | 13,086,241 | 29,728,432 | ||||||
| Total | (47,548,486 | ) | 48,659,405 | |||||
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| 21.4 | Non-controlling interests |
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 % | Shareholders’ Equity | Income | ||||||||||||||||||||||
| September | September | September | September | |||||||||||||||||||||
| Description | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||||
| Embotelladora del Atlántico S.A. | 0.0171 | 0.0171 | 36,599 | 41,064 | 6,714 | 6,725 | ||||||||||||||||||
| Andina Empaques Argentina S.A. | 0.0209 | 0.0209 | 4,141 | 4,670 | (503 | ) | (274 | ) | ||||||||||||||||
| Paraguay Refrescos S.A. | 2.1697 | 2.1697 | 6,157,969 | 6,843,052 | 645,836 | 678,243 | ||||||||||||||||||
| Vital S.A. | 35.0000 | 35.0000 | 9,157,065 | 8,476,526 | 41,300 | 271,585 | ||||||||||||||||||
| Vital Aguas S.A. | 33.5000 | 33.5000 | 2,366,192 | 2,108,254 | 93,441 | 28,804 | ||||||||||||||||||
| Envases Central S.A. | 40.7300 | 40.7300 | 7,193,971 | 6,367,283 | 254,501 | 397,757 | ||||||||||||||||||
| Re-Ciclar S.A | 40.0000 | 40.0000 | 8,671,522 | 4,411,629 | 362,245 | (19,512 | ) | |||||||||||||||||
| Total | 33,587,459 | 28,252,478 | 1,403,534 | 1,363,328 | ||||||||||||||||||||
| 21.5 | Earnings per share |
The basic earnings per share presented in the statement of comprehensive income is calculated as the quotient between income for the period and the weighted 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 | 09.30.2023 | |||||||||||
| SERIES A | SERIES B | TOTAL | ||||||||||
| Earnings attributable to shareholders (CLP 000’s) | 53,405,198 | 58,744,769 | 112,149,967 | |||||||||
| Weighted average number of shares | 473,289,301 | 473,281,303 | 946,570,604 | |||||||||
| Earnings per basic and diluted share (CLP) | 112.84 | 124.12 | 118.48 | |||||||||
| Earnings per share | 09.30.2022 | |||||||||||
| SERIES A | SERIES B | TOTAL | ||||||||||
| Earnings attributable to shareholders (CLP 000’s) | 42,945,775 | 47,239,591 | 90,185,366 | |||||||||
| Weighted average number of shares | 473,289,301 | 473,281,303 | 946,570,604 | |||||||||
| Earnings per basic and diluted share (CLP) | 90.74 | 99.81 | 95.28 | |||||||||
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| 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 the date of this financial statement, the Company holds the following derivative instruments:
| 22.1 | Accounting recognition of cross currency and rate swaps |
Cross Currency Swaps, associated with local Bonds (Chile)
At the closing date of these financial statements, the Company maintains derivative contracts to secure some of its bond debt issued in Unidades de Fomento totaling UF 9,060,128 (UF 9,340,963 as of December 31, 2022), to convert those obligations to CLP.
These contracts were valued at fair value, yielding a net asset as of the closing date of these financial statements of CLP 64,108,873 thousand (CLP 75,297,737 thousand as of December 31, 2022) which is presented in Other non-current financial assets. Maturity dates of derivative contracts are distributed throughout 2026, 2031, 2034 and 2035.
Cross Currency Swaps, associated with international Bonds (U.S.A. and Switzerland)
At the closing date of these financial statements, the Company has derivative contracts to secure obligations with the public issued in U.S. dollars for USD 300 million, to convert these obligations into Chilean pesos indexed by the Consumer Price Index (UF) maturing in 2050. Additionally, there are derivative contracts to secure obligations with the public issued in Swiss francs for an amount of CHF 170 million to convert this obligation into Brazilian reais maturing in 2028.
The valuation of the first contract at fair value results in a non-current liability of ThCh$ 70,305,593, as of the closing date of the financial statements (non-current liability of ThCh$ 112,175,058 as of December 31, 2022), while the valuation of the second contract at fair value results in a non-current asset of ThCh$ 4,668,646, as of the closing date of the financial statements.
In September, given that the international bond for USD 365 million matured, the corresponding derivatives used to redenominate the conditions from dollars to reais also matured and the contract was extinguished.
The amount of exchange differences recognized in the statement of income related to financial liabilities in U.S. dollars and Swiss francs is absorbed by the amounts recognized under comprehensive income.
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| 22.2 | Forward currency transactions expected to be very likely |
During 2023 and 2022, Embotelladora Andina entered into forward contracts to ensure the exchange rate on future commodity purchasing needs for its 4 operations, i.e., closing forward instruments in USD/ARS, USD/BRL, USD/CLP, EUR/CLP and USD/GYP. At the closing date of these financial statements, outstanding contracts amount to USD 87.4 million (USD 80.2 million as of December 31, 2022).
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.
| 22.3 Fair value hierarchy |
At the closing date of these financial statements, the Company held current assets for derivative contracts for CLP 72,277,949 thousand (CLP 245,504,291 thousand as of December 31, 2022) – the diminution Is explained by the termination of the Cross Currency Swaps related to the US Bond USD$365 million that was paid in September 2023 – and held current liabilities for derivative contracts for CLP 38,132,441 thousand (CLP 114,492,635 thousand as of December 31, 2022). Those contracts covering existing items have been classified in the same category of hedged, the net amount of derivative contracts by concepts covering forecasted items have been classified in current and non-current financial assets and financial liabilities. All the derivative contracts are carried at fair value in the consolidated statement of financial position.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
| Level 1: | quoted (unadjusted) prices in active markets for identical assets or liabilities |
| Level 2: | Inputs other than quoted prices included in level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices) |
| Level 3: | Inputs for assets and liabilities that are not based on observable market data. |
During the reporting period, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.
| Fair Value Measurement at September 30, 2023 | ||||||||||||||||
Quoted prices in active markets for | ||||||||||||||||
| identical assets or liabilities | Observable market data | Unobservable market data | ||||||||||||||
| (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Assets | ||||||||||||||||
| Other current financial assets | - | 3,500,429 | - | 3,500,429 | ||||||||||||
| Other non-current financial assets | - | 68,777,520 | - | 68,777,520 | ||||||||||||
| Total assets | - | 72,277,949 | - | 72,277,949 | ||||||||||||
Liabilities | ||||||||||||||||
| Other current financial liabilities | - | 301,475 | - | 301,475 | ||||||||||||
| Other non-current financial liabilities | - | 37,830,966 | - | 37,830,966 | ||||||||||||
| Total Liabilities | - | 38,132,441 | - | 38,132,441 | ||||||||||||
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| Fair Value Measurement at December 31, 2022 | ||||||||||||||||
Quoted prices in active markets for | ||||||||||||||||
identical assets or liabilities | Observable market data | Unobservable market data | ||||||||||||||
| (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||
| Assets | ||||||||||||||||
| Other current financial assets | - | 170,206,554 | - | 170,206,554 | ||||||||||||
| Other non-current financial assets | - | 75,297,737 | - | 75,297,737 | ||||||||||||
| Total assets | - | 245,504,291 | - | 245,504,291 | ||||||||||||
Liabilities | ||||||||||||||||
| Other current financial liabilities | - | 2,317,577 | - | 2,317,577 | ||||||||||||
| Other non-current financial liabilities | - | 112,175,058 | - | 112,175,058 | ||||||||||||
| Total Liabilities | - | 114,492,635 | - | 114,492,635 | ||||||||||||
23 – LITIGATION AND CONTINGENCIES
| 23.1 | Lawsuits and 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 del Atlántico S.A. and Andina Empaques Argentina S.A. face labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 1,027,129 thousand (CLP 1,397,149 thousand as of December 31, 2022). Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. Additionally, Embotelladora del Atlántico S.A. maintains time deposits for an amount of CLP 148,501 thousand to guaranty judicial liabilities. |
| 2) | Rio de Janeiro Refrescos Ltda. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 51,890,288 thousand (CLP 45,706,634 thousand as of December 31, 2022). Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. As it is customary in Brazil, Rio de Janeiro Refrescos Ltda. maintains Deposit in courts and assets given in pledge to secure the compliance of certain processes, irrespective of whether these have been classified as a possible, probable or remote. The amounts deposited or pledged as legal guarantees amounted to CLP 25,549,375 thousand (CLP 23,260,412 thousand as of December 31, 2022). |
| Part of the assets held under warranty by Rio de Janeiro Refrescos Ltda. are in the process of being released and others have already been released in exchange for guarantee insurance and bond letters for BRL 2,149,682,791, with different Financial Institutions and Insurance Companies in Brazil, these entities receive an annual commission fee of 0.56%. 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 bond 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. |
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Main contingencies faced by Rio de Janeiro Refrescos are as follows:
| a) | Tax contingencies resulting from credits on tax on industrialized products (IPI). |
Rio de Janeiro Refrescos is a party to a series of proceedings under way, in which the Brazilian federal tax authorities demand payment of value-added tax on industrialized products (Imposto sobre Produtos Industrializados, or IPI) totaling BRL 3,305,780,388 at the date of these financial statements.
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.
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 572,473,620 (amount includes adjustments for current lawsuits) a start provision has been generated in the accounting of the business combination for BRL 123,931,972.
| b) | Other 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 532,810,170 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 945,031,306, as of the date of these financial statements.
| 3) | Embotelladora Andina S.A. and its Chilean subsidiaries face labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 1,367,014 thousand (CLP 1,552,353 thousand as of December 31, 2022). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors. |
| 4) | Paraguay Refrescos S.A. faces tax, trade, labor and other lawsuits. Accounting provisions have been made for the contingency of any loss because of these lawsuits amounting to CLP 41,399 thousand (CLP 39,291, thousand as of December 31, 2022). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors. |
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| 23.2 | Direct guarantees and restricted assets: |
Guarantees and restricted assets are detailed as follows:
Guarantees that commit assets recognized in the financial statements:
| Committed assets | Accounting value | ||||||||||||||
| Guaranty creditor | Debtor name | Relationship | Guaranty | Type | 09.30.2023 | 12.31.2022 | |||||||||
| ThCh$ | ThCh$ | ||||||||||||||
| Administradora Plaza Vespucio S.A. | Embotelladora Andina S.A. | Parent company | Cash | Trade accounts and other accounts receivable | 101,208 | 98,170 | |||||||||
| Cooperativa Agrícola Pisquera Elqui Limitada | Embotelladora Andina S.A. | Parent company | Cash | Other non-current financial assets | - | 1,056,320 | |||||||||
| Mall Plaza | Embotelladora Andina S.A. | Parent company | Cash | Trade accounts and other accounts receivable | 340,525 | 330,298 | |||||||||
| Metro S.A. | Embotelladora Andina S.A. | Parent company | Cash | Trade accounts and other accounts receivable | 21,863 | 21,207 | |||||||||
| Parque Arauco S.A. | Embotelladora Andina S.A. | Parent company | Cash | Trade accounts and other accounts receivable | 147,324 | 142,901 | |||||||||
| Lease agreement | Embotelladora Andina S.A. | Parent company | Cash | Trade accounts and other accounts receivable | 94,750 | 103,711 | |||||||||
| Others | Embotelladora Andina S.A. | Parent company | Cash | Trade accounts and other accounts receivable | 59,653 | 14,183 | |||||||||
| Several retail | Vending | Subsidiary | Cash | Trade accounts and other accounts receivable | - | 61,395 | |||||||||
| Several retail | Transportes Refrescos | Subsidiary | Cash | Trade accounts and other accounts receivable | - | 693 | |||||||||
| Several retail | Transportes Polar | Subsidiary | Cash | Trade accounts and other accounts receivable | 17,656 | 22,235 | |||||||||
| Workers’ claims | Rio de Janeiro Refrescos Ltda. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 7,136,151 | 6,605,781 | |||||||||
| Civil and tax claims | Rio de Janeiro Refrescos Ltda. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 7,298,307 | 6,457,702 | |||||||||
| Governmental entities | Rio de Janeiro Refrescos Ltda. | Subsidiary | Plant and equipment | Property, plant & equipment | 11,114,917 | 10,196,929 | |||||||||
| Distribuidora Baraldo S.H. | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 51 | 97 | |||||||||
| Acuña Gomez | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 77 | 145 | |||||||||
| Nicanor López | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 55 | 104 | |||||||||
| Municipalidad Bariloche | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 1,024 | 2,428 | |||||||||
| Municipalidad San Antonio Oeste | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 5,649 | 10,664 | |||||||||
| Municipalidad Carlos Casares | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 228 | 431 | |||||||||
| Municipalidad Chivilcoy | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 35,333 | 66,697 | |||||||||
| Granada Maximiliano | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 461 | 870 | |||||||||
| Municipalidad de Junin | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 221 | 139 | |||||||||
| Almada Jorge | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 625 | 1,180 | |||||||||
| Farias Matias Luis | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | - | 541 | |||||||||
| Temas Industriales SA - Embargo General de Fondos | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 32,090 | 60,575 | |||||||||
| DBC SA C CERVECERIA ARGENTINA SA ISEMBECK | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 5,758 | 10,870 | |||||||||
| Coto Cicsa | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 2,447 | 1,932 | |||||||||
| Cencosud | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 640 | 1,208 | |||||||||
| Jose Luis Kreitzer, Alexis Beade Y Cesar Bechetti | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 61,142 | 4,784 | |||||||||
| Vicentin | Embotelladora del Atlántico S.A. | Subsidiary | Judicial deposit | Other non-current non-financial assets | 2,534 | 125,683 | |||||||||
| Marcus A.Peña | Paraguay Refrescos | Subsidiary | Real estate | Property, plant & equipment | 5,424 | 4,965 | |||||||||
| Ana Maria Mazó | Paraguay Refrescos | Subsidiary | Real estate | Property, plant & equipment | 1,097 | 1,113 | |||||||||
| Stefano Szwao Giacomelli | Paraguay Refrescos | Subsidiary | Real estate | Property, plant & equipment | 2,946 | - | |||||||||
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Guarantees that do not commit assets recognized in the Financial Statements:
| Committed assets | Amounts involved | ||||||||||||||
| Guaranty creditor | Debtor name | Relationship | Guaranty | Type | 09.30.2023 | 12.31.2022 | |||||||||
| ThCh$ | ThCh$ | ||||||||||||||
| Labor procedures | Rio de Janeiro Refrescos Ltda. | Subsidiary | Guaranty receipt | Legal proceeding | 2,579,180 | 1,936,493 | |||||||||
| Administrative procedures | Rio de Janeiro Refrescos Ltda. | Subsidiary | Guaranty receipt | Legal proceeding | 11,136,553 | 7,616,498 | |||||||||
| Federal government | Rio de Janeiro Refrescos Ltda. | Subsidiary | Guaranty receipt | Legal proceeding | 214,877,080 | 186,607,491 | |||||||||
| State government | Rio de Janeiro Refrescos Ltda. | Subsidiary | Guaranty receipt | Legal proceeding | 150,957,798 | 117,027,313 | |||||||||
| Sorocaba Refrescos | Rio de Janeiro Refrescos Ltda. | Subsidiary | Guaranty receipt | Guarantor | 3,576,963 | 3,280,603 | |||||||||
| Others | Rio de Janeiro Refrescos Ltda. | Subsidiary | Guaranty receipt | Legal proceeding | 1,339,218 | 3,423,715 | |||||||||
| Aduana de EZEIZA | Embotelladora del Atlantico S.A. | Subsidiary | Surety insurance | Faithful compliance of contract | 658,369 | 3,791 | |||||||||
| Aduana de EZEIZA | Andina Empaques Argentina S.A. | Subsidiary | Surety insurance | Faithful compliance of contract | 3,968 | 880,984 | |||||||||
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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
At the closing date of these financial statements, the Company maintains all of its debt obligations denominated in fixed rates in order to avoid fluctuations in financial expenses resulting from an increase in interest rates.
The Company’s largest indebtedness corresponds to six bonds in the Chilean local market at fixed rates, which currently have an outstanding balance of UF14.76 million denominated in Unidades de Fomento (“UF”), a debt indexed to inflation in Chile (the Company’s sales are correlated to the variation of the UF). Of the total bonds, five are redenominated through derivatives to Chilean Pesos (CLP) in their rate and notional value, maintaining the structure of the bond.
On the other hand, the Company has indebtedness in the international market through a USD 300 million fixed-rate 144A/RegS bond issued in the US, which has been redenominated through derivatives to Unidades de Fomento (“UF”, Chilean pesos indexed to inflation) in its rate and nominal value, maintaining the structure of the bond. Additionally, in September a bond was issued in the Swiss market for an amount of CHF 170 million at a fixed rate [CHF], which has been redenominated, through derivatives, to Brazilian reais (BRL) in its rate and notional value, maintaining the structure of the bond.
Credit risk
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 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.
72
| 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 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 investment. |
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 deposits: only in banks or financial institutions that have a risk rating equal or higher than Level 1 (Fitch) or equivalent for deposits of less than 1 year and rated A or higher (S&P) or equivalent for deposits of more than 1 year. |
| ii. | Mutual funds: investments with immediate liquidity and no risk of capital (funds composed of investments at a fixed-term, current account, fixed rate Tit BCRA, negotiable obligations, Over Night, etc.,) in all those counter-parties that have a rating greater than or equal to AA-(S&P) or equivalent, Type 1 Pacts and Mutual Funds, with a rating greater than or equal to AA+ (S&P) or equivalent. |
| iii. | Other investment alternatives must be evaluated and authorized by the office of the Chief Financial Officer. |
73
Exchange Rate Risk
The Company is exposed to three types of risk caused by exchange rate volatility in the countries where it operates:
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.
The Company evaluates the fluctuations of the currencies used in the Operations (local currencies) with respect to the presentation currency of the financial statements through a sensitivity analysis on total assets, total liabilities and net equity in local currency.
| BRL/CLP | ARS/CLP | PGY/CLP | ||||||||||
| Exchange rate variation at the reporting date | 9.03 | % | -47.02 | % | 5.36 | % | ||||||
| Brazil | Argentina | Paraguay | ||||||||||
| Balance in Chilean pesos at the reporting date | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Total assets | 866,136,565 | 388,830,112 | 343,464,972 | |||||||||
| Total liabilities | 554,715,633 | 159,007,903 | 59,678,781 | |||||||||
| Net investment | 311,420,932 | 229,822,209 | 283,786,191 | |||||||||
| Share on income | 24.83 | % | 24.99 | % | 7.65 | % | ||||||
| BRL/CLP | ARS/CLP | PYG/CLP | ||||||||||
| -10% variation impact on currency translation | -0.47 | % | -51.84 | % | -4.98 | % | ||||||
| Impact on results for the period | (2,036,436 | ) | (2,787,657 | ) | (1,996,051 | ) | ||||||
| Impact on net investment at the reporting date | (27,150,357 | ) | (20,892,928 | ) | (27,870,677 | ) | ||||||
The above scenario represents the exchange rate sensitivity of minus 10% over the actual exchange rates at the reporting date, impacting the translation of local currencies to the presentation currency of the Group’s financial statements, and how it would impact the results and equity of the different Operations.
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.
74
b) 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 up to 12-month forward horizon.
Commodities risk
The Company is subject to the 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.
Liquidity risk
The products we sell are mainly paid for in cash and short-term credit; therefore, the Company´s main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where the Company operates; and (iii) public equity offerings.
The following table presents an analysis of the Company’s committed maturities for liability payments throughout the coming years:
| Payments on the year of maturity | ||||||||||||||||||||
| Item | 1 year | More than 1 up to 2 | More than 2 up to 3 | More than 3 up to 4 | More than 5 | |||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||||
| Bank debt | 26,253,647 | - | 13,406,138 | - | - | |||||||||||||||
| Bonds payable | 19,954,246 | 16,615,023 | 17,374,164 | 4,936,027 | 952,430,892 | |||||||||||||||
| Lease obligations | 7,986,149 | 2,731,267 | 5,359,168 | 2,129,039 | 6,498,795 | |||||||||||||||
| Contractual obligations (1) | 55,916,990 | 65,499,520 | 16,782,056 | 16,839,847 | 3,207,637 | |||||||||||||||
| Total | 110,111,032 | 84,845,810 | 52,921,526 | 23,904,913 | 962,137,324 | |||||||||||||||
| (1) | Agreements that the Andina Group has with collaborating entities for its operation, which are mainly related to contracts entered into to supply products and/or support services in information technology services, commitments of the company with its franchisor to make investments or expenses related to the development of the franchise, support services to personnel, security services, maintenance services of fixed assets, purchase of inputs for production, among others. |
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Other expenses by nature are:
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | |||||||||
| Description | 09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | ||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Direct production costs | (1,016,382,735 | ) | (995,465,541 | ) | (333,137,433 | ) | (336,931,020 | ) | ||||
| Payroll and employee benefits | (296,394,605 | ) | (281,485,471 | ) | (102,863,037 | ) | (104,305,683 | ) | ||||
| Transportation and distribution | (170,895,183 | ) | (164,552,347 | ) | (46,268,601 | ) | (53,780,334 | ) | ||||
| Advertisement | (28,992,874 | ) | (23,662,417 | ) | (10,289,659 | ) | (10,854,580 | ) | ||||
| Depreciation and amortization | (93,244,542 | ) | (89,488,310 | ) | (32,627,778 | ) | (30,525,111 | ) | ||||
| Repairs and maintenance | (38,040,597 | ) | (31,817,627 | ) | (19,903,601 | ) | (14,505,459 | ) | ||||
| Other expenses | (125,076,950 | ) | (106,817,121 | ) | (47,102,913 | ) | (33,830,989 | ) | ||||
| Total (1) | (1,769,027,486 | ) | (1,693,288,834 | ) | (592,193,022 | ) | (584,733,176 | ) |
| (1) | Corresponds to the addition of cost of sales, administrative expenses and distribution costs. |
Other income by function is detailed as follows:
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | |||||||||
| Description | 09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | ||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Gain due to disposal of Property, plant and equipment | 603,257 | 75,120 | 288,987 | 31,547 | ||||||||
| Credit recovery in Brazil | - | 3,176,482 | - | 3,176,482 | ||||||||
| Others | 468,617 | 592,015 | 46,811 | 124,465 | ||||||||
| Total | 1,071,874 | 3,843,617 | 335,798 | 3,332,494 |
27 – OTHER EXPENSES BY FUNCTION
Other expenses by function are detailed as follows:
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | |||||||||
| Description | 09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | ||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Contingencies and non-operating fees(1) | (8,198,960 | ) | 8,777,741 | (2,734,877 | ) | 889,978 | ||||||
| Tax on bank debits | (4,894,909 | ) | (6,014,814 | ) | (1,528,155 | ) | (1,686,588 | ) | ||||
| Write-offs, disposals and loss (gain) on sale of property, plant and equipment | (1,621,257 | ) | - | (3,142,036 | ) | - | ||||||
| Others(2) | (2,982,877 | ) | (473,958 | ) | (1,665,889 | ) | (923,570 | ) | ||||
| Total | (17,698,003 | ) | 2,288,969 | (9,070,958 | ) | (1,720,180 | ) |
(1) During 2022 the provision made by a claim of the Government of the State of Rio de Janeiro related to the Advertising Agreement was reversed. This is due to a review of the balances involved where the amounts claimed are reduced in favor of Rio de Janeiro Refrescos Ltda.
(2) During 2023, an unused corporate project provision of CLP 1,520,779 was reversed.
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28 – FINANCIAL INCOME AND EXPENSES
Financial income and costs are detailed as follows:
| a) | Financial income |
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | |||||||||
| Description | 09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | ||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Interest income | 23,071,923 | 25,866,531 | 5,106,255 | 4,509,387 | ||||||||
| Ipiranga purchase warranty restatement | 37,398 | 27,285 | 14,855 | 11,595 | ||||||||
| From PIS credit and COFINS (1) | 139,924 | 2,040,822 | - | 631,829 | ||||||||
| Other financial income | 3,794,655 | 3,839,222 | 821,094 | 994,470 | ||||||||
| Total | 27,043,900 | 31,773,860 | 5,942,204 | 6,147,281 |
| (1) | See Note 6 for more information on recovery. |
| b) | Financial expenses |
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | |||||||||
| Description | 09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | ||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Bond interest | (40,308,125 | ) | (38,660,130 | ) | (15,035,270 | ) | (13,120,533 | ) | ||||
| Bank loan interest | (5,518,089 | ) | (1,136,384 | ) | (4,705,447 | ) | (935,876 | ) | ||||
| Lease interest | (1,917,444 | ) | (1,573,703 | ) | (677,628 | ) | (540,339 | ) | ||||
| Other financial costs | (3,982,456 | ) | (2,843,793 | ) | (1,562,833 | ) | (1,485,374 | ) | ||||
| Total | (51,726,114 | ) | (44,214,010 | ) | (21,981,178 | ) | (16,082,122 | ) |
Other (losses) gains are detailed as follows:
| 01.01.2023 | 01.01.2022 | 07.01.2023 | 07.01.2022 | |||||||||
| Description | 09.30.2023 | 09.30.2022 | 09.30.2023 | 09.30.2022 | ||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Other gains and losses* | 25,659,888 | (1) | (24,984,651 | )(2) | 103,542 | 737 | ||||||
| Total | 25,659,888 | (24,984,651 | ) | 103,542 | 737 |
(1) At the closing of June 2023, losses of CLP 25,530,162 are recorded due to the assignment of a loan owned by Embotelladora Andina S.A. to a financial institution with a discount. The credit of Embotelladora Andina was originally generated as a result of dividends from subsidiaries declared in Argentine pesos.
(2)
At the closing of June 2022, losses of CLP 24,982,887 were recorded due to the assignment of a loan owned by Embotelladora Andina
S.A. to a financial institution with a discount. The credit of Embotelladora Andina was originally generated as a result of dividends
from subsidiaries declared in Argentine pesos.
77
30 – LOCAL AND FOREIGN CURRENCY
Local and foreign currency balances are the following:
| CURRENT ASSETS | 09.30.2023 | 12.31.2022 | ||||
| ThCh$ | ThCh$ | |||||
| Cash and cash equivalent | 224,775,962 | 291,681,987 | ||||
| USD | 32,524,503 | 14,266,343 | ||||
| EUR | 469,855 | 870,613 | ||||
| CLP | 112,420,038 | 138,205,025 | ||||
| BRL | 44,785,700 | 69,923,621 | ||||
| ARS | 4,180,022 | 29,215,288 | ||||
| PGY | 30,395,844 | 39,201,097 | ||||
| Other current financial assets | 67,595,214 | 263,044,869 | ||||
| CLP | 66,021,692 | 92,826,375 | ||||
| BRL | 589,622 | 170,154,995 | ||||
| ARS | 979,125 | - | ||||
| PGY | 4,775 | 63,499 | ||||
| Other non-current financial assets | 25,203,312 | 26,957,000 | ||||
| USD | 2,829,878 | 847,149 | ||||
| EUR | 615,636 | 329,535 | ||||
| UF | 758,072 | 517,748 | ||||
| CLP | 8,358,904 | 12,478,839 | ||||
| BRL | 3,769,946 | 2,382,575 | ||||
| ARS | 7,587,397 | 8,596,540 | ||||
| PGY | 1,283,479 | 1,804,614 | ||||
| Trade debtors and other accounts payable | 248,848,124 | 279,770,286 | ||||
| USD | 2,845,681 | 1,467,851 | ||||
| EUR | 125,925 | 6,770 | ||||
| UF | 837,129 | 49,469 | ||||
| CLP | 141,401,606 | 155,443,395 | ||||
| BRL | 63,920,957 | 74,851,690 | ||||
| ARS | 33,955,984 | 39,795,968 | ||||
| PGY | 5,760,842 | 8,155,143 | ||||
| Accounts receivable related entities | 9,023,472 | 15,062,167 | ||||
| CLP | 8,911,387 | 14,738,236 | ||||
| BRL | 112,085 | 86,492 | ||||
| ARS | 237,439 | |||||
| Inventory | 262,641,980 | 245,886,656 | ||||
| CLP | 103,719,797 | 103,719,764 | ||||
| BRL | 72,133,932 | 60,074,387 | ||||
| ARS | 66,651,358 | 62,655,300 | ||||
| PGY | 20,136,893 | 19,437,205 | ||||
| Current tax assets | 54,394,281 | 39,326,427 | ||||
| USD | 2,487,752 | |||||
| CLP | 8,317,569 | 33,296,214 | ||||
| BRL | 43,588,960 | 5,633,971 | ||||
| ARS | 396,242 | |||||
| Total current assets | 892,482,345 | 1,161,729,392 | ||||
| USD | 40,687,814 | 16,581,343 | ||||
| EUR | 1,211,416 | 1,206,918 | ||||
| UF | 1,595,201 | 567,217 | ||||
| CLP | 449,150,993 | 550,707,848 | ||||
| BRL | 228,901,202 | 383,107,731 | ||||
| ARS | 113,353,886 | 140,896,777 | ||||
| PGY | 57,581,833 | 68,661,558 |
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| NON-CURRENT ASSETS | 09.30.2023 | 12.31.2022 | ||||
| CLP (000’s) | ThCh$ | |||||
| Other non-current assets | 89,124,051 | 94,852,711 | ||||
| USD | 19,030,656 | - | ||||
| UF | 1,216,865 | 75,297,737 | ||||
| CLP | 46,857,279 | 3,317,778 | ||||
| BRL | 4,668,646 | |||||
| ARS | 17,350,605 | 16,237,196 | ||||
| Other non-current, non-financial assets | 65,736,894 | 59,672,266 | ||||
| USD | 577,723 | 91,220 | ||||
| UF | - | - | ||||
| CLP | 47,529 | 483,530 | ||||
| BRL | 61,174,801 | 55,060,849 | ||||
| ARS | 2,184,073 | 2,367,042 | ||||
| PGY | 1,752,768 | 1,669,625 | ||||
| Non-current accounts receivable | 349,664 | 539,920 | ||||
| UF | 123,936 | 249,366 | ||||
| CLP | 150,909 | 233,773 | ||||
| ARS | 74,819 | 56,781 | ||||
| PGY | - | |||||
| Non-current accounts receivable related entities | 109,318 | 109,318 | ||||
| CLP | 109,318 | 109,318 | ||||
| Investments accounted for using the equity method | 92,094,234 | 92,344,598 | ||||
| CLP | 48,652,106 | 53,869,966 | ||||
| BRL | 43,442,128 | 38,474,632 | ||||
| Intangible assets other than goodwill | 698,476,463 | 671,778,888 | ||||
| CLP | 3,959,421 | - | ||||
| BRL | 311,329,675 | 312,981,971 | ||||
| ARS | 192,892,334 | 177,173,694 | ||||
| PGY | 8,491,526 | 9,075,200 | ||||
| 181,803,507 | 172,548,023 | |||||
| Goodwill | ||||||
| CLP | 138,543,667 | 129,023,922 | ||||
| BRL | 9,523,767 | 9,523,768 | ||||
| ARS | 71,875,862 | 65,920,764 | ||||
| PGY | 49,426,590 | 46,254,831 | ||||
| 7,717,448 | 7,324,559 | |||||
| Property, plant and equipment | ||||||
| EUR | 886,021,290 | 798,221,259 | ||||
| CLP | - | 3,146 | ||||
| BRL | 339,509,295 | 303,797,013 | ||||
| ARS | 263,293,520 | 229,486,365 | ||||
| PGY | 196,364,803 | 177,219,624 | ||||
| 86,853,672 | 87,715,111 | |||||
| Deferred tax assets | ||||||
| CLP | 2,657,326 | 2,428,333 | ||||
| 2,657,326 | 2,428,333 | |||||
| Total non-current assets | ||||||
| USD | 1,973,112,907 | 1,848,971,215 | ||||
| EUR | 23,567,800 | 91,220 | ||||
| UF | - | 3,146 | ||||
| CLP | 1,340,801 | 75,547,103 | ||||
| BRL | 758,837,204 | 686,745,450 | ||||
| ARS | 637,347,291 | 566,116,304 | ||||
| PGY | 273,817,597 | 251,153,893 | ||||
| 278,202,214 | 269,314,099 |
79
| 09.30.2023 | 12.31.2022 | |||||||||||||||||||||||
| CURRENT LIABILITIES | Up to 90 days | 90 days to 1 year | Total | Up to 90 days | 90 days to 1 year | Total | ||||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||||
| Other current financial liabilities | 40,718.166 | 28.674.208 | 69.392.374 | 13,431,339 | 353,870,741 | 367,302,080 | ||||||||||||||||||
| USD | 523.168 | 2.569.079 | 3.092.247 | 249,660 | 321,143,849 | 321,393,509 | ||||||||||||||||||
| UF | 12.833.439 | 7.594.478 | 20.427.917 | 11,047,586 | 11,557,808 | 22,605,394 | ||||||||||||||||||
| CLP | 789.347 | 13.896.287 | 14.685.634 | 893,612 | 14,216,358 | 15,109,970 | ||||||||||||||||||
| BRL | 578.111 | 1.904.302 | 2.482.413 | 427,270 | 1,703,193 | 2,130,463 | ||||||||||||||||||
| ARS | 25.994.101 | 1.116.644 | 27.110.745 | 813,211 | 3,910,926 | 4,724,137 | ||||||||||||||||||
| PGY | - | 1.593.418 | 1.593.418 | - | 1,338,607 | 1,338,607 | ||||||||||||||||||
| Trade accounts payable and other accounts payable, current | 344.782.928 | 12.865.617 | 357.648.545 | 369,548,991 | 15,252,639 | 384,801,630 | ||||||||||||||||||
| USD | 35.791.299 | 37.525 | 35.828.824 | 34,223,389 | 33,046 | 34,256,435 | ||||||||||||||||||
| EUR | 6.497.760 | 87,627 | 6,585,387 | 3,148,088 | 899,198 | 4,047,286 | ||||||||||||||||||
| UF | 2,694,843 | - | 2,694,843 | 2,263,175 | - | 2,263,175 | ||||||||||||||||||
| CLP | 132,542,408 | 12,740,465 | 145,282,873 | 166,847,281 | 14,320,395 | 181,167,676 | ||||||||||||||||||
| BRL | 109,850,830 | - | 109,850,830 | 78,514,701 | - | 78,514,701 | ||||||||||||||||||
| ARS | 42,786,182 | - | 42,786,182 | 69,945,679 | - | 69,945,679 | ||||||||||||||||||
| PGY | 12,923,934 | - | 12,923,934 | 14,606,678 | - | 14,606,678 | ||||||||||||||||||
| Other currencies | 1,695,672 | - | 1,695,672 | - | - | - | ||||||||||||||||||
| Accounts payable to related companies, current | 86,907,283 | - | 86,907,283 | 90,248,067 | - | 90,248,067 | ||||||||||||||||||
| CLP | 29,669,828 | - | 29,669,828 | 44,298,074 | - | 44,298,074 | ||||||||||||||||||
| BRL | 40,073,317 | - | 40,073,317 | 35,671,648 | - | 35,671,648 | ||||||||||||||||||
| ARS | 11,759,842 | - | 11,759,842 | 8,587,487 | - | 8,587,487 | ||||||||||||||||||
| PGY | 5,404,296 | - | 5,404,296 | 1,690,858 | - | 1,690,858 | ||||||||||||||||||
| Other current provisions | 1,191,017 | 217,396 | 1,408,413 | 1,319,935 | 271,709 | 1,591,644 | ||||||||||||||||||
| CLP | 1,191,017 | 175,997 | 1,367,014 | 1,319,935 | 232,418 | 1,552,353 | ||||||||||||||||||
| PGY | 41,399 | 41,399 | - | 39,291 | 39,291 | |||||||||||||||||||
| Current tax liabilities | 7,992,600 | 1,557,523 | 9,550,122 | 627,257 | 13,988,190 | 14,615,447 | ||||||||||||||||||
| CLP | 1,902,178 | 46,878 | 1,949,056 | 627,257 | 7,301 | 634,558 | ||||||||||||||||||
| BRL | 6,090,421 | - | 6,090,421 | |||||||||||||||||||||
| ARS | - | 656,315 | 656,315 | - | 13,479,571 | 13,479,571 | ||||||||||||||||||
| PGY | - | 854,330 | 854,330 | - | 501,318 | 501,318 | ||||||||||||||||||
| Current employee Benefit provisions | 28,587,266 | 17,043,769 | 45,631,037 | 45,482,776 | 2,909,030 | 48,391,806 | ||||||||||||||||||
| CLP | 9,200,876 | 1,100,127 | 10,301,003 | 8,115,837 | 1,052,395 | 9,168,232 | ||||||||||||||||||
| BRL | 19,385,672 | - | 19,385,672 | 19,586,150 | - | 19,586,150 | ||||||||||||||||||
| ARS | 720 | 13,958,359 | 13,959,079 | 17,780,789 | - | 17,780,789 | ||||||||||||||||||
| PGY | 1,985,283 | 1,985,283 | - | 1,856,635 | 1,856,635 | |||||||||||||||||||
| Other current non-financial liabilities | 40,362,499 | 272,781 | 40,635,280 | 1,054,187 | 41,240,273 | 42,294,460 | ||||||||||||||||||
| CLP | 40,350,061 | 47,997 | 40,398,058 | 1,043,048 | 41,072,576 | 42,115,624 | ||||||||||||||||||
| ARS | 12,438 | - | 12,438 | 11,139 | - | 11,139 | ||||||||||||||||||
| PGY | - | 224,784 | 224,784 | - | 167,697 | 167,697 | ||||||||||||||||||
| Total current liabilities | 550,541,760 | 60,631,294 | 611,173,055 | 521,712,552 | 427,532,582 | 949,245,134 | ||||||||||||||||||
| USD | 36,314,467 | 2,606,604 | 38,921,071 | 34,473,049 | 321,176,895 | 355,649,944 | ||||||||||||||||||
| EUR | 6,497,760 | 87,627 | 6,585,387 | 3,148,088 | 899,198 | 4,047,286 | ||||||||||||||||||
| UF | 15,528,282 | 7,594,478 | 23,122,760 | 13,310,761 | 11,557,808 | 24,868,569 | ||||||||||||||||||
| CLP | 215,645,715 | 28,007,751 | 243,653,466 | 223,145,044 | 70,901,442 | 294,046,486 | ||||||||||||||||||
| BRL | 175,978,351 | 1,904,302 | 177,882,653 | 134,199,769 | 1,703,193 | 135,902,962 | ||||||||||||||||||
| ARS | 80,553,283 | 15,731,318 | 96,284,601 | 97,138,305 | 17,390,497 | 114,528,802 | ||||||||||||||||||
| PGY | 18,328,230 | 4,699,214 | 23,027,444 | 16,297,536 | 3,903,548 | 20,201,084 | ||||||||||||||||||
| Other currencies | 1,695,672 | - | 1,695,672 | - | - | - | ||||||||||||||||||
80
| 09.30.2023 | 12.31.2022 | |||||||||||||||||||||||
| NON CURRENT LIABILITIES | More than 1 year up to 3 | More
than 3 and up to 5 | More than 5 years | Total | More than 1 year up to 3 | More
than 3 and up to 5 | More than 5 years | Total | ||||||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | |||||||||||||||||
| Other non-current financial liabilities | 41,986,715 | 188,657,366 | 782,563,984 | 1,013,208,065 | 40,713,614 | 28,457,265 | 835,631,179 | 904,802,058 | ||||||||||||||||
| USD | 1,674,621 | 1,232,121 | 264,747,685 | 267,654,427 | 1,612,279 | 513,738 | 251,617,079 | 253,743,096 | ||||||||||||||||
| UF | 35,885,550 | 9,760,832 | 478,525,715 | 524,172,097 | 35,491,226 | 15,781,426 | 468,927,353 | 520,200,005 | ||||||||||||||||
| CLP | - | 8,500,000 | 37,830,966 | 46,330,966 | - | 8,500,000 | 112,175,058 | 120,675,058 | ||||||||||||||||
| BRL | 4,399,616 | 4,509,450 | 1,459,618 | 10,368,684 | 3,473,970 | 3,662,101 | 2,911,689 | 10,047,760 | ||||||||||||||||
| ARS | 26,928 | - | - | 26,928 | 136,139 | - | - | 136,139 | ||||||||||||||||
| CHF | - | 164,654,963 | - | 164,654,963 | - | - | - | - | ||||||||||||||||
| Accounts payable, non-current | 2,430,806 | - | - | 2,430,806 | 3,015,284 | - | - | 3,015,284 | ||||||||||||||||
| CLP | 2,430,806 | - | - | 2,430,806 | 3,015,284 | - | - | 3,015,284 | ||||||||||||||||
| Accounts payable related companies | - | - | 7,949,476 | 7,949,476 | 10,354,296 | - | - | 10,354,296 | ||||||||||||||||
| BRL | - | - | 7,949,476 | 7,949,476 | 10,354,296 | - | - | 10,354,296 | ||||||||||||||||
| Other provisions, non-current | 1,027,129 | 51,890,288 | - | 52,917,417 | 1,397,148 | 45,706,635 | - | 47,103,783 | ||||||||||||||||
| BRL | - | 51,890,288 | - | 51,890,288 | - | 45,706,635 | 45,706,635 | |||||||||||||||||
| ARS | 1,027,129 | - | - | 1,027,129 | 1,397,148 | - | - | 1,397,148 | ||||||||||||||||
| Deferred tax liabilities | 125.089.808 | 48.812.251 | 17.975.185 | 191.877.244 | 26,966,210 | 34,088,989 | 104,723,357 | 165,778,556 | ||||||||||||||||
| CLP | 96.370.542 | - | 1.200.199 | 97.570.741 | 5,617,287 | 38,945 | 88,895,598 | 94,551,830 | ||||||||||||||||
| BRL | - | 48.812.251 | - | 48.812.251 | - | 34,050,044 | - | 34,050,044 | ||||||||||||||||
| ARS | 28.719.266 | - | - | 28.719.266 | 21,348,923 | - | - | 21,348,923 | ||||||||||||||||
| PGY | - | - | 16.774.986 | 16.774.986 | - | - | 15,827,759 | 15,827,759 | ||||||||||||||||
| Non-current employee benefit provisions | 17.061.590 | 239,340 | 3,356,465 | 20,657,395 | 1,299,511 | 60,560 | 16,049,722 | 17,409,793 | ||||||||||||||||
| CLP | 16,437,647 | 239,340 | 3,356,465 | 20,033,452 | 665,274 | 60,560 | 16,049,722 | 16,775,556 | ||||||||||||||||
| ARS | 11,021 | - | - | 11,021 | 10,484 | - | - | 10,484 | ||||||||||||||||
| PGY | 612,922 | - | - | 612,922 | 623,753 | - | - | 623,753 | ||||||||||||||||
| Other non-financial liabilities | - | 2,564,032 | - | 2,564,032 | - | 29,589,051 | - | 29,589,051 | ||||||||||||||||
| BRL | - | 2,564,032 | - | 2,564,032 | - | 29,589,051 | - | 29,589,051 | ||||||||||||||||
| ARS | - | - | - | - | - | - | - | - | ||||||||||||||||
| Total non-current liabilities | 187,596,048 | 292,163,277 | 811,845,110 | 1,291,604,435 | 83,746,063 | 137,902,500 | 956,404,258 | 1,178,052,821 | ||||||||||||||||
| USD | 1,674,621 | 1,232,121 | 264,747,685 | 267,654,427 | 1,612,279 | 513,738 | 251,617,079 | 253,743,096 | ||||||||||||||||
| UF | 35,885,550 | 9,760,832 | 478,525,715 | 524,172,097 | 35,491,226 | 15,781,426 | 468,927,353 | 520,200,005 | ||||||||||||||||
| CLP | 115,238,995 | 8,739,340 | 42,387,630 | 166,365,965 | 9,297,845 | 8,599,505 | 217,120,378 | 235,017,728 | ||||||||||||||||
| BRL | 4,399,616 | 107,776,021 | 9,409,094 | 121,584,731 | 13,828,266 | 113,007,831 | 2,911,689 | 129,747,786 | ||||||||||||||||
| ARS | 29,784,344 | - | - | 29,784,344 | 22,892,694 | - | - | 22,892,694 | ||||||||||||||||
| PGY | 612,922 | - | 16,774,986 | 17,387,908 | 623,753 | - | 15,827,759 | 16,451,512 | ||||||||||||||||
| CHF | - | 164,654,963 | - | 164,654,963 | - | - | - | |||||||||||||||||
81
31 – ENVIRONMENT (Non-audited)
The Company has made disbursements for industrial process improvements, industrial waste flow measurement equipment, laboratory analysis, consulting on environmental impacts and other studies.
The detail of these disbursements by country is as follows:
| 2023 period | Future commitments | ||||||||||||||||
| Charged to | Charged to | To be charged to | To be charged to | ||||||||||||||
| Countries | expenses | fixed assets | expenses | fixed assets | |||||||||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ||||||||||||||
| Chile | 757,137 | – | – | – | |||||||||||||
| Argentina | 125,735 | – | – | – | |||||||||||||
| Brazil | 1,638,816 | 225,696 | 2,125,851 | 251,253 | |||||||||||||
| Paraguay | 113,315 | 24,015 | – | – | |||||||||||||
| Total | 2,635,003 | 249,711 | 2,125,851 | 251,253 | |||||||||||||
No events have occurred subsequent to September 30, 2023, that may significantly affect the Company’s consolidated interim financial position.
82
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Santiago, Chile.
| EMBOTELLADORA ANDINA S.A. | ||
| By: | /s/ Andrés Wainer | |
| Name: Andrés Wainer | ||
| Title: Chief Financial Officer | ||
Santiago, November 20, 2023