6-K 1 tm2116278d1_6k.htm FORM 6-K

 

 

 

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

 

March 2021

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  
  March 31, 2021 and as of December 31, 2020  

 

 

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Interim Financial Statements

as of March 31, 2021 (unaudited) and December 31, 2020

 

 

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Interim Consolidated Financial Statements

 

I.Interim Consolidated Statements of Financial Position as of March 31, 2021 (unaudited) and December 31, 2020 1
     
II.Interim Consolidated Statements of Income by Function (unaudited) 3
     
III.Interim Consolidated Statements of Comprehensive Income (unaudited) 4
     
IV.Interim Consolidated Statements of Changes in Equity (unaudited) 5
     
V.Interim Consolidated Statements of Direct Cash Flows (unaudited) 6
     
VI.Notes to the Interim Consolidated Financial Statements (unaudited)  
     

1 CORPORATE INFORMATION 7
2 BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND APPLICATION OF ACCOUNTING CRITERIA 8
3 FINANCIAL REPORTING BY SEGMENT 28
4 CASH AND CASH EQUIVALENTS 31
5 OTHER FINANCIAL ASSETS, CURRENT AND NON-CURRENT 31
6 OTHER NON-FINANCIAL ASSETS, CURRENT AND NON-CURRENT 32
7 TRADE DEBTORS AND OTHER ACCOUNTS RECIEVABLE 33
8 INVENTORY 34
9 TAX ASSETS AND LIABILITIES 34
10 INCOME TAX AND DEFERRED TAXES 35
11 PROPERTY, PLANT AND EQUIPMENT 38
12 RELATED PARTIES 41
13 EMPLOYEE BENEFITS, CURRENT AND NON-CURRENT 43
14 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 44
15 INTANGIBLE ASSETS OTHER THAN GOODWILL 46
16 GOODWILL 47
17 OTHER FINANCIAL LIABILITIES, CURRENT AND NON-CURRENT 48
18 TRADE ACCOUNTS PAYABLE AND OTHER ACCOUNTS PAYABLE 57
19 OTHER PROVISIONS, CURRENT AND NON-CURRENT 57
20 OTHER NON-FINANCIAL LIABILITIES 58
21 EQUITY 58
22 ASSETS AND LIABILITIES FOR DERIVATIVE INSTRUMENTS 61
23 LITIGATIONS AND CONTINGENCIES 64
24 FINANCIAL RISK MANAGEMENT 68
25 EXPENSES BY NATURE 73
26 OTHER INCOME 73
27 OTHER EXPENSES BY FUNCTION 74
28 INCOME AND FINANCIAL COSTS 74
29 OTHER (LOSS) GAINS 74
30 LOCAL AND FOREIGN CURRENCY 75
31 ENVIRONMENT 79
32 SUBSEQUENT EVENTS 79

 

 

 

Interim Consolidated Financial Statements

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

as of March 31, 2021 and December 31, 2020

 

 

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Interim Consolidated Statements of Financial Position

as of March 31, 2021 (unaudited) and December 31, 2020

 

  NOTE  03.31.2021  12.31.2020 
ASSETS     CLP (000’s)  CLP (000’s) 
Current assets:             
              
Cash and cash equivalents   4   208,294,736   309,530,699 
Other financial assets   5   221,858,127   140,304,853 
Other non-financial assets   6   14,189,580   13,374,381 
Trade and other accounts receivable, net   7   177,000,344   194,021,253 
Accounts receivable from related companies   12.1   12,890,237   11,875,408 
Inventory   8   137,599,780   127,972,650 
Current tax assets   9   1,120,999   218,472 
Total Current Assets       772,953,803   797,297,716 
              
Non-Current Assets:             
Other financial assets   5   187,809,389   162,013,278 
Other non-financial assets   6   77,219,385   90,242,672 
Trade and other receivables   7   79,694   73,862 
Accounts receivable from related parties   12.1   138,375   138,346 
Investments accounted for under the equity method   14   86,057,949   87,956,354 
Intangible assets other than goodwill   15   611,119,834   604,514,165 
Goodwill   16   96,002,213   98,325,593 
Property, plant and equipment   11   596,843,055   605,576,545 
Deferred tax assets   10.2   1,872,571   1,925,869 
Total Non-Current Assets       1,657,142,465   1,650,766,684 
              
Total Assets       2,430,096,268   2,448,064,400 

 

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

 

1

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Interim Consolidated Statements of Financial Position

as of March 31, 2021 (unaudited) and December 31, 2020

 

  NOTE   03.31.2021   12.31.2020 
LIABILITIES AND EQUITY      CLP (000’s)   CLP (000’s) 
LIABILITIES               
Current Liabilities               
Other financial liabilities   17    34,915,138    38,566,724 
Trade and other accounts payable   18    206,054,007    230,445,809 
Accounts payable to related parties   12.2    24,478,246    39,541,968 
Other provisions   19    1,569,097    1,335,337 
Tax liabilities   9    15,062,153    8,828,599 
Employee benefits current provisions   13    18,159,825    31,071,019 
Other non-financial liabilities   20    2,673,230    28,266,730 
Total Current Liabilities        302,911,696    378,056,186 
                
Other financial liabilities, non-current   17    995,942,662    989,829,569 
Accounts payable, non-current   18    307,271    295,279 
Accounts payable to related companies, non-current   12.2    9,992,480    10,790,089 
Other provisions, non-current   19    46,397,550    48,734,936 
Deferred tax liabilities   10.2    149,798,423    153,669,547 
Employee benefits non-current provisions   13    14,424,295    13,635,558 
Other non-financial liabilities, non-current   20    19,843,056    21,472,048 
Tax liabilities, non-current   9    -    20,597 
Total Non-current liabilities        1,236,705,737    1,238,447,623 
                
EQUITY   21           
Issued capital        270,737,574    270,737,574 
Retained earnings        712,643,006    654,171,126 
Other reserves        (115,068,163)   (113,727,586)
Equity attributable to equity holders of the parent        868,312,417    811,181,114 
Non-controlling interests        22,166,418    20,379,477 
Total Equity        890,478,835    831,560,591 
Total Liabilities and Equity        2,430,096,268    2,448,064,400 

 

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

 

2

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Interim Consolidated Statements of Income by Function

For the periods ended March 31, 2021 and 2020 (unaudited)

 

       01.01.2021   01.01.2020 
   NOTE   03.31.2021   03.31.2020 
      CLP (000’s)   CLP (000’s) 
Net sales        509,007,243    504,614,612 
Cost of sales   8 - 25    (308,951,272)   (292,631,142)
Gross Profit        200,055,971    211,983,470 
Other income   26    229,643    597,542 
Distribution expenses   25    (43,052,817)   (45,964,550)
Administrative expenses   25    (77,897,343)   (90,062,360)
Other expenses   27    (3,471,138)   (3,518,974)
Other (loss) gains   29    -    855 
Financial income   28    3,814,467    2,111,748 
Financial expenses   28    (12,887,291)   (12,394,064)
Share of profit (loss) of investments in associates and joint ventures accounted for using the equity method   14.3    668,107    1,035,394 
Foreign exchange differences        121,659    (799,501)
Income by indexation units        (4,860,353)   (6,378,331)
Net income before income taxes        62,720,905    56,611,229 
Income tax expense   10.1    (19,382,007)   (7,622,492)
Net income        43,338,898    48,988,737 
                
                
Net income attributable to               
Owners of the controller        42,119,137    47,990,518 
Non-controlling interests        1,219,761    998,219 
Net income        43,338,898    48,988,737 
                
Earnings per Share, basic and diluted in ongoing operations        CLP    CLP 
Earnings per Series A Share   21.5    42.38    48.29 
Earnings per Series B Share   21.5    46.62    53.11 

 

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

 

3

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Statements of Comprehensive Income

For the periods ended March 31, 2021 and 2020 (unaudited)

 

   01.01.2021   01.01.2020 
   03.31.2021   03.31.2020 
   CLP (000’s)   CLP (000’s) 
Net income   43,338,898    48,988,737 
Other Comprehensive Income:          
Components of other comprehensive income that will not be reclassified to net income for the period, before taxes          
Actuarial Gains (losses) from defined benefit plans   (986,805)   - 
Components of other comprehensive income that will be reclassified to net income for the period, before taxes          
Gain (losses) from exchange rate translation differences   (18,076,260)   (7,732,833)
Gain (losses) from cash flow hedges   8,085,108    (12,369,873)
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   266,437    - 
           
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   12,520,201    5,030,139 
Income tax related to cash flow hedges   (2,582,078)   1,904,174 
Other comprehensive income, total   (773,397)   (13,168,393)
Total comprehensive income   42,565,501    35,820,344 
Total comprehensive income attributable to:          
Equity holders of the controller   40,778,560    34,168,981 
Non-controlling interests   1,786,941    1,651,363 
Total comprehensive income   42,565,501    35,820,344 

 

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

 

4

 

 

  

 

 

EMBOTELLADORA  ANDINA S.A. AND SUBSIDIARIES

 

Interim Consolidated Statements of Changes in Equity

For the periods ended March 31, 2021 and 2020 (unaudited)

  

       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 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Opening balance as of 01.01.2021   270,737,574    (517,496,486)   (24,719,533)   (4,663,193)   433,151,626    (113,727,586)   654,171,126    811,181,114    20,379,477    831,560,591 
Changes in equity                                                  
Comprehensive income                                                  
Earnings   -    -    -    -    -    -    42,119,137    42,119,137    1,219,761    43.338.898 
Other comprehensive income   -    (6,122,645)   5,505,199    (723,131)   -    (1,340,577)   -    (1,340,577)   567,180    (773.397)
Comprehensive income   -    (6,122,645)   5,505,199    (723,131)   -    (1,340,577)        40,778,560    1,786,941    42.565.501 
Dividends   -    -    -    -    -    -              -      
Increase (decrease) from other changes   -    -    -    -    -    -    16,352,743    16,352,743    -    16,352,743 
Total Changes in equity   -    (6,122,645)   5,505,199    (723,131)   -    (1,340,577)   58,471,880    57,131,303    1,786,941    58,918,244 
                                                   
Ending balance as of 03.31.2021   270,737,574    (523,619,131)   (19,214,334)   (5,386,324)   433,151,626    (115,068,163)   712,643,006    868,312,417    22,166,418    890,478,835 

 

       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 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Opening balance as of 01.01.2020   270,737,574    (339,076,340)   (14,850,683)   (2,230,752)   433,151,626    76,993,851    600,918,265    948,649,690    20,254,258    968,903,948 
Changes in equity                                                  
Comprehensive income                                                  
Earnings   -    -         -    -    -    47,990,518    47,990,518    998,219    48.988.737 
Other comprehensive income   -    (3,355,585)   (10,465,952)   -    -    (13,821,537)   -    (13,821,537)   653,144    (13.168.393)
Comprehensive income   -    (3,355,585)   (10,465,952)   -    -    (13,821,537)   47,990,518    34,168,981    1,651,363    35.820.344 
Dividends   -    -    -    -    -    -    -    -    -    - 
Increase (decrease) from Other changes   -    -    -    -    -    -    12,328,194    12,328,194    -    12,328,194 
Total Changes in equity   -    (3,355,585)   (10,465,952)   -    -    (13,821,537)   60,318,712    46,497,175    1,651,363    48,148,538 
                                                   
Ending balance as of 03.31.2020   270,737,574    (342,431,925)   (25,316,635)   (2,230,752)   433,151,626    63,172,314    661,236,977    995,146,865    21,905,621    1,017,052,486 

 

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

 

5

 

  

 

  

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Interim Consolidated Statements of Direct Cash Flows

For the periods ended March 31, 2021 and 2020 (unaudited)

 

       01.01.2021   01.01.2020 
Cash flows provided by (used in) Operating Activities  NOTE   03.31.2021   03.31.2020 
Cash flows provided by Operating Activities        CLP (000’s)    CLP (000’s) 
Receipts from the sale of goods and the rendering of services (including taxes)        707,559,116    744,324,530 
Payments for Operating Activities               
Payments to suppliers for goods and services (including taxes)        (519,235,812)   (500,259,388)
Payments to and on behalf of employees        (58,079,733)   (64,198,477)
Other payments for operating activities (value-added taxes on purchases, sales and others)        (75,964,831)   (98,933,698)
Dividends received               
Interest payments        (20,520,161)   (18,203,609)
Interest received        3,011,614    1,646,393 
Income tax payments        (11,075,920)   (14,579,451)
Other cash movements (tax on bank debits Argentina and others)        (1,370,361)   (1,270,447)
Cash flows provided by (used in) Operating Activities        24,323,912    48,525,853 
                
Cash flows provided by (used in) Investing Activities               
Proceeds from sale of Property, plant and equipment        3,089    - 
Purchase of Property, plant and equipment        (13,367,344)   (30,212,523)
Purchase of intangible assets        -    - 
Proceeds from other long term assets (withdrawal of time-deposits at 90 days or longer term)        -    - 
Payments on forward, term, option and financial exchange agreements        18,956    - 
Collection on forward, term, option and financial exchange agreements        100,937    3,493,069 
Other payments on the purchase of financial instruments        (80,463,998)   (30,747)
Net cash flows used in Investing Activities        (93,708,360)   (26,750,201)
                
Cash Flows generated from (used in) Financing Activities               
Proceeds from short term loans               
Payments of loans        (5,280)   (1,306,019)
Lease liability payments        (827,263)   (988,415)
Dividend payments by the reporting entity        (25,841,367)   (22,471,139)
Other inflows (outflows) of cash (Placement and payment of public obligations)        (4,308,860)   225,028,027 
Net cash flows (used in) generated by Financing Activities        (30,982,770)   200,262,454 
Net increase in cash and cash equivalents before exchange differences        (100,367,218)   222,038,106 
Effects of exchange differences on cash and cash equivalents        (66,167)   1,294,477 
Effects of inflation in cash and cash equivalents in Argentina        (802,578)   1,244,270 
Net increase (decrease) in cash and cash equivalents        (101,235,963)   224,576,853 
Cash and cash equivalents – beginning of period   4    309,530,699    157,567,986 
Cash and cash equivalents - end of period   4    208,294,736    382,144,839 

       

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

 

6

 

   

 

  

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Notes to the Consolidated Financial Statements

 

1 – CORPORATE INFORMATION

 

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 under No. 00124 of the Securities Registry and is regulated by Chile’s Financial Market Commission (hereinafter “CMF”) and pursuant to Chile’s Law 18,046 is subject to the supervision of this entity. It is also registered with the U.S. Securities and Exchange Commission (hereinafter “SEC”) and its stock is traded on the New York Stock Exchange since 1994.

 

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

 

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

 

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

 

These Consolidated Financial Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries, which were approved by the Board of Directors on April 27, 2021.

 

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 March 31, 2021 and the fiscal year ended December 31, 2020, have been prepared in accordance with International Accounting Standard N° 34 (IAS 34) incorporated in the International Financial Reporting Standards (hereinafter "IFRS") issued by the International Accounting Standards Board (hereinafter "IASB").

 

These 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 March 31, 2021 and December 31, 2020 and the results of operations for the periods between January 1 and March 31, 2021 and 2020, together with the statements of changes in equity and cash flows for the same periods.

 

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 Financial Statements from the effective date of acquisition through the effective date of disposal, as applicable.

 

The acquisition method is used to account for the acquisition of subsidiaries. The consideration transferred for the acquisition of the subsidiary is the fair value of assets transferred, equity securities issued, liabilities incurred or assumed on the date that control is obtained. Identifiable assets acquired, and identifiable liabilities and contingencies assumed in a business combination are accounted for initially at their fair values at the acquisition date. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the consideration is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.

 

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

 

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

 

8

 

    

 

   

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

 

      Ownership interest
      03.31.2021  12.31.2020 
Taxpayer ID  Company Name  Direct  Indirect   Total   Direct   Indirect   Total 
59.144.140-K  Abisa Corp S.A.  -   99.99    99.99    -    99.99    99.99 
Foreign  Aconcagua Investing Ltda.  0.70   99.28    99.98    0.70    99.28    99.98 
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 
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  Vital Jugos S.A.  15.00   50.00    65.00    15.00    50.00    65.00 

 

2.3       Investments in associates and joint ventures

 

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

 

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

 

9

 

    

 

  

2.3.1       Investments in Associates

 

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

 

2.3.2       Joint arrangements

 

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

 

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

 

-Joint venture: agreement whereby the parties exercising joint control are entitled to the net assets of the entity. Joint ventures are integrated into the consolidated financial statements by the equity method, as described above.

 

-Joint operation: agreement whereby the parties exercising joint control are entitled to the assets and obligations with respect to the liabilities related to the agreement. Joint operations are consolidated by proportionally integrating the assets and liabilities affected by said operation.

 

To determine the type of joint agreement that derives from a contractual agreement, Group Management evaluates the structure and legal form of the agreement, the terms agreed by the parties, as well as other relevant factors and circumstances.

 

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

 

2.4       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

 

10

 

    

 

  

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 spot exchange rate in effect on the closing date.

 

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

 

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

 

Functional currency in hyperinflationary economies

 

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

 

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

 

11

 

    

 

   

For consolidation purposes in Embotelladora Andina S.A. and as a result of the adoption of IAS 29, the results and financial situation of our Argentine subsidiaries were converted to the closing exchange rate, 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.

 

Inflation for the periods from January to March 2021 and from January to December 2020 was 11.73% and 36.01%, 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.

 

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.

 

12

 

 

 

 

 

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 
03.31.2021   721.82    126.69    7.85    0.114 
12.31.2020   710.95    136.80    8.44    0.103 
03.31.2020   852.03    163.85    13.22    0.129 

 

2.6 Property, plant, and equipment

 

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

 

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

 

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

 

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset only when it is probable that future economic benefits associated with the items of Property, plant and equipment will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. Repairs and maintenance are charged to the income statement in the reporting period in which they are incurred.

 

Land is not depreciated since it has an indefinite useful life. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives.

 

The estimated useful lives by asset category are:

 

Assets   Range in years 
Buildings   15-80 
Plant and equipment   5-20 
Warehouse installations and accessories   10-50 
Furniture and supplies   4-5 
Motor vehicles   4-10 
Other Property, plant and equipment   3-10 
Bottles and containers   2-5 

 

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

 

13

 

 

 

 

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

 

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

 

2.7 Intangible assets and Goodwill

 

2.7.1Goodwill

 

Goodwill represents the excess of the consideration transferred over the Company’s interest in the net fair value of the net identifiable assets of the subsidiary and the fair value of the non-controlling interest in the subsidiary on the acquisition date. Since goodwill is an intangible asset with indefinite useful life, it is recognized separately and tested annually for impairment. Goodwill is carried at cost less accumulated impairment losses.

 

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

 

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

 

2.7.2 Distribution rights

 

Distribution rights are contractual rights to produce and/or distribute products under the Coca-Cola brand and other brands in certain territories in Argentina, Brazil, Chile and Paraguay that were acquired during Business Combination. Distribution rights are born from the process of valuation at fair value of the assets and liabilities of companies acquired in business combinations. Distribution rights have an indefinite useful life and are not amortized, (as they are permanently renewed by The Coca-Cola Company) and therefore are subject to impairment tests on an annual basis.

 

2.7.3Software

 

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.

 

14

 

 

 

 

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

 

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

 

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

 

-Operation 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 test are:

 

a)    Discount rate

 

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

 

   Discount rates 
Argentina   28.1%
Chile   7.2%
Brazil   9.9%
Paraguay   9.3%

 

b)Other assumptions

 

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

 

15

 

 

 

 

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

 

-Discount Rate: Increase / Decrease of up to 100 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 75 bps in the rate to calculate the perpetual growth of future cash flows
   
-EBITDA margin: Increase / Decrease of 100 bps of EBITDA margin of operations, which is applied per year for the projected periods, that is, for the years 2021-2025

 

In each sensitization scenario of the of the 3 variables mentioned above, no signs of impairment were observed for the Company's CGUs.

 

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

 

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

 

No impairment indicators have been identified during the 2021 period.

 

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.

 

16

 

 

 

 

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.

 

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.

 

17

 

 

 

 

A financial liability is disposed of when the obligation is extinguished, cancelled or expires. Where an existing financial liability is replaced by another of the same lender under substantially different conditions, or where the conditions of an existing liability are substantially modified, such exchange or modification is treated as a disposal of the original liability and the recognition of the new obligation. The difference in the values in the respective books is recognized in the statement of income.

 

2.9.3 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.

 

18

 

 

 

 

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

 

2.10.3 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.

 

19

 

 

 

 

2.13 Cash and cash equivalents

 

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

 

2.14 Other financial liabilities

 

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

 

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

 

2.15 Income tax

 

The Company and its subsidiaries in Chile account for income tax according to the net taxable income calculated based on the rules in the Income Tax Law. Subsidiaries in other countries account for income taxes according to the tax regulations of the country in which they operate.

 

Deferred income taxes are calculated using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements, using the tax rates that have been enacted or substantively enacted on the balance sheet date and are expected to apply when the deferred income tax asset is realized, or the deferred income tax liability is settled.

 

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

 

The Company does not recognize deferred income taxes for temporary differences from investments in subsidiaries in which the Company can control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in the near future.

 

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

 

2.16 Employee benefits

 

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

 

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

 

20

 

 

 

 

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

 

The Company and its subsidiaries have recorded a provision to account for the cost of vacations and other employee benefits on an accrual basis. These liabilities are recorded under current non-financial liabilities.

 

2.17 Provisions

 

Provisions for litigation and other contingencies are recognized when the Company has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.

 

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.

 

2.18 Leases

 

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

 

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

 

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

 

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

 

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.

 

21

 

 

 

 

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

 

2.19 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.

 

2.20 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.

 

2.21 Contributions of 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.

 

2.22 Dividend distribution

 

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

 

22

 

 

 

 

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

 

2.23        Critical accounting estimates and judgments

 

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

 

2.23.1     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 generating units are determined based on value in use calculations. The key variables used in the calculations include sales volumes and prices, discount rates, marketing expenses and other economic factors including inflation. The estimation of these variables requires a use of estimates and judgments as they are subject to inherent uncertainties; however, the assumptions are consistent with the Company’s internal planning end past results. Therefore, management evaluates, and updates estimates according to the conditions affecting the variables. If these assets are considered to have been impaired, they will be written off at their estimated fair value or future recovery value according to the lowest discounted cash flows analysis. At December 31, 2020 discounted cash flows in the Company's cash generating units in Chile, Brazil, Argentina and Paraguay generated a higher value than the carrying values of the respective net assets, including goodwill of the Brazilian, Argentinian and Paraguayan subsidiaries.

 

2.23.2     Fair Value of Assets and Liabilities

 

IFRS requires in certain cases that assets and liabilities be recorded at their fair value. Fair value is the 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.

 

2.23.3     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).

 

23 

 

 

 

 

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

 

2.23.4     Useful life, residual value and impairment of property, plant, and equipment

 

Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of those assets. Changes in circumstances, such as technological advances, changes to the Company’s business model, or changes in its capital strategy might modify the effective useful lives as compared to our estimates. Whenever the Company determines that the useful life of Property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned usage of manufacturing equipment, dispensers, transportation equipment and computer software could make the useful lives of assets shorter. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of any of those assets may not be recovered. The estimate of future cash flows is based, among other factors, on certain assumptions about the expected operating profits in the future. The Company’s estimation of discounted cash flows may differ from actual cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in operating profit. If the sum of the projected discounted cash flows (excluding interest) is less than the carrying amount of the asset, the asset shall be written-off to its estimated recoverable value.

 

2.24.1New Standards, Interpretations and Amendments for annual periods beginning on or after January 1, 2021.

 

Amendments to IFRS which have been issued and are effective from January 1, 2021 are detailed below.

 

    Amendments   Application date
IFRS 16   COVID-19-Related Rent Concessions   January 1, 2021

 

IFRS 16 COVID-19-Related Rent Concessions

 

In May 2020, the IASB issued an amendment to IFRS 16 Leases to provide relief for lessees in the application of IFRS 16 guidance regarding lease modifications due to rent concessions occurring as a direct consequence of the Covid-19 pandemic. The amendment does not affect lessors. On March 31, the IASB extended this amendment for one year 

 

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

 

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

 

24 

 

 

 

 

A lessee will apply this amendment for annual periods beginning on April 1, 2021.

 

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

 

2.24.2    New Accounting Standards, Interpretations and Amendments with effective application for annual periods beginning on or after January 1, 2020.

 

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

 

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

 

IFRS 17 - Insurance Contracts

 

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

 

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

 

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

 

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

 

25 

 

 

 

 

IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform—Phase 2

 

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

 

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

 

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

 

IAS 1 Presentation of Financial Statements - Classification of liabilities as current or non-current

 

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

 

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

 

IFRS 3 Reference to the Conceptual Framework

 

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

 

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

 

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

 

IAS 16 Property, Plant and Equipment — Proceeds before Intended Use

 

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

 

The amendment shall be effective for periods beginning on or after January 1, 2022.

 

26 

 

 

 

 

IAS 37 Onerous Contracts—Cost of Fulfilling a Contract

 

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

 

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

 

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

 

IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures – sale or contribution of assets between an investor and its associate or joint venture

 

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

 

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

 

27 

 

 

 

 

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.

 

28 

 

 

 

 

A summary of the Company's operations by segment according to IFRS is as follows:

 

For the period ended March 31, 2021 

Operation in

Chile

   Operation in Argentina  

Operation in

Brazil

   Operation in Paraguay   Inter-country eliminations   Consolidated, total 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Net sales   229,439,220    102,591,906    136,815,401    40,725,014    (564,298)   509,007,243 
Cost of sales   (144,529,047)   (51,638,750)   (92,071,911)   (21,275,862)   564,298    (308,951,272)
Distribution expenses   (18,634,220)   (14,492,976)   (7,659,689)   (2,265,932)   -    (43,052,817)
Administrative expenses   (34,299,012)   (19,568,144)   (18,101,911)   (5,928,276)   -    (77,897,343)
Financial income   1,876,543    1,085,816    758,306    93,802    -    3,814,467 
Financial costs   (7,005,052)   (96,245)   (5,785,994)   -    -    (12,887,291)
Net financial costs (*)   (5,128,509)   989,571    (5,027,688)   93,802    -    (9,072,824)
Share of entity in income of associates accounted for using the equity method, total   517,693    -    150,414    -    -    668,107 
Income tax expense   (8,107,062)   (6,033,479)   (4,046,039)   (1,195,427)   -    (19,382,007)
Oher income (expenses)   (4,310,671)   (2,116,539)   (2,288,231)   735,252    -    (7,980,189)
Net income of the segment reported   14,948,392    9,731,589    7,770,346    10,888,571    -    43,338,898 
                               
Depreciation and amortization   9,605,166    5,462,853    5,370,630    2,380,083    -    22,818,732 
                               
Current assets   505,959,382    71,656,841    133,476,775    61,860,805    -    772,953,803 
Non-current assets   642,148,490    150,696,315    614,854,255    249,443,405         1,657,142,465 
Segment assets, total   1,148,107,872    222,353,156    748,331,030    311,304,210    -    2,430,096,268 
                               
Carrying amount in associates and joint ventures accounted for using the equity method, total   51,339,445    -    34,718,504    -    -    86,057,949 
                               
Segment disbursements of non-monetary assets   1,716,644    5,693,472    3,445,796    2,511,432    -    13,367,344 
                               
Current liabilities   159,781,068    50,481,727    66,241,192    26,407,709    -    302,911,696 
Non-current liabilities   746,861,687    11,502,025    462,419,332    15,922,693    -    1,236,705,737 
Segment liabilities, total   906,642,755    61,983,752    528,660,524    42,330,402    -    1,539,617,433 
                               
Cash flows (used in) provided by in Operating Activities   2,426,113    8,085,253    (2,188,711)   16,001,257    -    24,323,912 
Cash flows (used in) provided by Investing Activities   (82,057,660)   (5,693,472)   (3,445,796)   (2,511,432)   -    (93,708,360)
Cash flows (used in) provided by Financing Activities   (30,102,749)   (170,994)   (602,792)   (106,235)   -    (30,982,770)

 

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

 

29 

 

 

 

 

 

For the period ended March 31, 2020 

Operation in

Chile

   Operation in Argentina  

Operation in

Brazil

   Operation in Paraguay   Inter-country eliminations   Consolidated, total 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Net sales   174,452,377    114,674,675    170,270,414    46,086,003    (868,857)   504,614,612 
Cost of sales   (101,040,630)   (57,873,361)   (109,992,850)   (24,593,158)   868,857    (292,631,142)
Distribution expenses   (16,698,548)   (15,539,806)   (11,229,206)   (2,496,990)   -    (45,964,550)
Administrative expenses   (32,109,430)   (23,382,672)   (27,512,844)   (7,057,414)   -    (90,062,360)
Financial income   1,150,486    491,193    441,509    28,560    -    2,111,748 
Financial costs   (4,592,045)   (103,002)   (7,699,017)   -    -    (12,394,064)
Net financial costs (*)   (3,441,559)   388,191    (7,257,508)   28,560    -    (10,282,316)
Share of entity in income of associates accounted for using the equity method, total   852,986    -    182,408    -    -    1,035,394 
Income tax expense   2,402,183    (5,880,796)   (3,088,297)   (1,055,582)   -    (7,622,492)
Oher income (expenses)   (2,791,636)   (4,978,611)   (2,209,420)   (118,742)   -    (10,098,409)
Net income of the segment reported   21,625,743    7,407,620    9,162,697    10,792,677    -    48,988,737 
                               
Depreciation and amortization   10,816,949    6,940,502    7,723,520    2,521,870    -    28,002,841 
                               
Current assets   475,399,900    65,905,710    135,272,684    53,103,021    -    729,681,315 
Non-current assets   657,908,435    185,391,958    780,662,815    277,002,870    -    1,900,966,078 
Segment assets, total   1,133,308,335    251,297,668    915,935,499    330,105,891    -    2,630,647,393 
                               
Carrying amount in associates and joint ventures accounted for using the equity method, total   51,190,176    -    44,413,060    -    -    95,603,236 
                               
Segment disbursements of non-monetary assets   16,638,455    5,316,975    3,804,654    4,452,439    -    30,212,523 
                               
Current liabilities   156,312,550    62,001,521    80,855,485    23,883,749    -    323,053,305 
Non-current liabilities   716,976,449    15,367,073    540,246,957    17,951,123    -    1,290,541,602 
Segment liabilities, total   873,288,999    77,368,594    621,102,442    41,834,872    -    1,613,594,907 
                               
Cash flows (used in) provided by in Operating Activities   32,124,708    3,898,816    (1,052,707)   13,555,036    -    48,525,853 
Cash flows (used in) provided by Investing Activities   (13,176,133)   (5,316,975)   (3,804,654)   (4,452,439)   -    (26,750,201)
Cash flows (used in) provided by Financing Activities   202,337,658    (242,375)   (1,719,113)   (113,716)   -    200,262,454 

 

(*)Financial expenses associated with external financing for the purchase of companies, including capital contributions are presented in this item

 

30 

 

 

 

 

4 – CASH AND CASH EQUIVALENTS

 

The composition of cash and cash equivalents is as follows:

 

By item  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Cash   308,570    339,628 
Bank balances   78,469,851    82,997,449 
Othe fixed rate instruments   129,516,315    226,193,622 
Cash and cash equivalents   208,294,736    309,530,699 

 

Other fixed income instruments mainly correspond to mutual funds. There are no restrictions for significant amounts available to cash.

 

By currency  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
USD   10,663,983    21,332,268 
EUR   496,957    223,449 
ARS   16,250,172    14,821,502 
CLP   102,403,973    201,936,140 
PYG   38,574,100    21,688,915 
BRL   39,905,551    49,528,425 
Cash and cash equivalents   208,294,736    309,530,699 

 

5 – OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS

 

The composition of other financial assets is as follows:

 

   Balance 
  Current   Non-current 
Other financial assets  03.31.2021   12.31.2020   03.31.2021   12.31.2020 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Financial assets measured at amortized cost (1)   221,124,268    140,304,853    1,216,864    1,216,865 
Financial assets at fair value (2)   733,859    -    176,458,121    150,983,295 
Other financial assets measured at amortized cost (3)   -    -    10,134,404    9,813,118 
Total   221,858,127    140,304,853    187,809,389    162,013,278 

 

(1) Financial instrument that does not meet the definition of cash equivalents as defined in Note 2.13. CLP 219,913,881 of these financial assets correspond to short-term realizable instruments, managed by third parties.

 

(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 and its distribution rights, which are framed in the purchase of the "AdeS" brand managed by The Coca-Cola Company at the end of 2016.

 

31 

 

 

 

 

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  03.31.2021   12.31.2020   03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Prepaid expenses   7,351,669    7,932,770    1,268,028    527,110 
Tax credit remainder (1)   61,723    234,124    63,293,469    76,262,417 
Guaranty deposit   265    286    -    - 
Judicial deposits   -    -    10,587,770    11,492,642 
Others (2)   6,775,923    5,207,201    2,070,118    1,960,503 
Total   14,189,580    13,374,381    77,219,385    90,242,672 


 

(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 CLP 103,540 million (BRL 613 million, of which BRL 370 million corresponds to capital and BRL 243 million to interest and monetary restatement. These amounts were recorded as of December 31, 2019. In addition, the company acknowledged the indirect costs (attorneys' fees, consulting, auditing, indirect taxes and other obligations) resulting from the recognition of the right acquired in court, totaling BRL 175 million.

 

The payment of income tax occurs when liquidating the credit, therefore the respective deferred tax liability recorded was CLP 20,246 million (BRL 148 million). In 2020 BRL 166 million had already been offset.

 

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

 

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

 

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

 

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

 

32 

 

 

 

 

7 – TRADE ACCOUNTS AND OTHER ACCOUNTS RECEIVABLE

 

The composition of trade and other receivables is as follows:

 

   Balance 
   Current   Non-current 
Trade debtors and other accounts receivable, Net  03.31.2021   12.31.2020   03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Trade debtors   132,103,837    151,017,754    45,636    40,432 
Other debtors   43,576,624    41,688,151    33,365    32,219 
Other accounts receivable   1,319,883    1,315,348    693    1,211 
Total   177,000,344    194,021,253    79,694    73,862 

 

   Balance 
   Current   Non-current 
Trade debtors and other accounts receivable, Gross  03.31.2021   12.31.2020   03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Trade debtors   135,667,643    154,591,684    45,636    40,432 
Other debtors   46,580,398    44,691,925    33,365    32,219 
Other accounts receivable   1,666,345    1,533,307    693    1,211 
Total   183,914,386    200,816,916    79,694    73,862 

 

The stratification of the portfolio is as follows:

 

   Balance 
Current trade debtors without impairment impact  03.31.2021    12.31.2020 
  CLP (000’s)   CLP (000’s) 
Less than one month   126,101,492    147,177,119 
Between one and three months   4,709,017    2,230,594 
Between three and six months   2,094,675    1,708,015 
Between six and eight months   263,411    509,855 
Older than eight months   2,544,684    3,006,533 
Total   135,713,279    154,632,116 

 

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

 

33 

 

 

 

 

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

 

   03.31.2021   12.31.2020 
    CLP (000’s)    CLP (000’s) 
Opening balance   6,795,663    6,492,987 
Increase (decrease)   393,138    2,321,958 
Provision reversal   (206,021)   (1,595,521)
Increase (decrease) for changes of foreign currency   (68,738)   (423,761)
Sub – total movements   118,379    302,676 
Ending balance   6,914,042    6,795,663 

 

8 – INVENTORIES

 

The composition of inventories is detailed as follows:

 

Details  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Raw materials (1)   90,628,620    80,902,721 
Finished goods   28,410,163    27,556,884 
Spare parts and supplies   18,097,429    19,592,377 
Work in progress   105,440    76,577 
Other inventories   3,238,206    3,101,016 
Obsolescence provision (2)   (2,880,078)   (3,256,925)
 Total   137,599,780    127,972,650 

 

The cost of inventory recognized as cost of sales amounts to CLP 275,069,875 thousand and CLP 255,758,386 thousand as of March 31, 2021 and 2020, 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.

 

9 – TAX ASSETS AND LIABILITIES

 

The composition of current tax accounts receivable is the following:

 

Tax assets  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Tax credits (1)   1,120,999    218,472 
Total   1,120,999    218,472 

 

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

 

34 

 

 

 

 

The composition of current tax accounts payable is the following:

 

   Current   Non-current 
Tax liabilities  03.31.2021   12.31.2020   03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Income tax expense   15,062,153    8,828,599    -    20,957 
Total   15,062,153    8,828,599    -    20,957 

 

 

10 – INCOME TAX EXPENSE AND DEFERRED TAXES

 

10.1       Income tax expense

 

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

 

Details  03.31.2021   03.31.2020 
  CLP (000’s)   CLP (000’s) 
Current income tax expense   (17,863,246)   (15,726,757)
Current tax adjustment previous period   -    220,137 
Foreign dividends tax withholding expense   (2,087,885)   (1,786,688)
Other current tax expense (income)   -    52,797 
Current income tax expense   (19,951,131)   (17,240,511)
Expense (income) for the creation and reversal of temporary differences of deferred tax and others   569,124    9,618,019 
Expense (income) for deferred taxes   569,124    9,618,019 
Total income tax expense   (19,382,007)   (7,622,492)

 

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

 

Income taxes  03.31.2021   03.31.2020 
  CLP (000’s)   CLP (000’s) 
Current taxes          
Foreign   (11,946,550)   (14,302,003)
National   (8,004,581)   (2,938,508)
Current tax expense   (19,951,131)   (17,240,511)
Deferred taxes          
Foreign   671,606    4,277,328 
National   (102,482)   5,340,691 
Deferred tax expense   569,124    9,618,019 
Income tax expense   (19,382,007)   (7,622,492)

 

35 

 

 

 

 

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  03.31.2021   03.31.2020 
  CLP (000’s)   CLP (000’s) 
Net income before taxes   62,720,905    56,611,229 
Tax expense at legal rate (27.0%)   (16,934,644)   (15,285,032)
Effect of tax rate in other jurisdictions   747,006    753,388 
Permanent differences:          
Non-taxable revenues   7,107,504    4,992,486 
Non-deductible expenses   (699,910)   512,065 
Tax effect on excess tax provision in previous periods   (2,042)   199,870 
Effect of monetary tax restatement Chilean companies   (2,642,576)   (2,491,749)
Subsidiaries tax withholding expense and other legal tax debits and credits   (6,957,345)   3,696,480 
Adjustments to tax expense   (3,194,369)   6,909,152 
Tax expense at effective rate   (19,382,007)   (7,622,492)
Effective rate   30.9%   13.5%

 

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

 

   Rate 
Country  2021   2020 
Chile   27.0%   27.0%
Brazil   34.0%   34.0%
Argentina   30.0%   30.0%
Paraguay   10.0%   10.0%

 

36 

 

 

 

 

10.2        Deferred taxes

 

The net cumulative balances of temporary differences resulted in deferred tax assets and liabilities, which are detailed as follows:

 

   03.31.2021   12.31.2020 
Temporary differences  Assets   Liabilities   Assets   Liabilities 
   CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s) 
Property, plant and equipment   5,530,320    39,180,897    5,421,466    39,544,960 
Obsolescence provision   1,254,997    -    1,340,235    - 
ICMS exclusion credit   -    14,598,043    -    17,679,221 
Employee benefits   1,570,418    -    4,475,497    18,300 
Post-employment benefits   197,312    -    150,027    101,339 
Tax loss carry forwards (1)   4,904,155    -    6,423,820    - 
Tax goodwill Brazil   809,458    -    2,080,987    - 
Contingency provision   23,134,324    -    24,103,234    - 
Foreign Exchange differences (2)   8,031,050    -    8,116,713    - 
Allowance for doubtful accounts   918,918    -    915,562    - 
Assets and liabilities for placement of bonds   370,184    2,326,102    378,901    2,377,870 
Lease liabilities   1,336,269    -    1,528,990    - 
Inventories   515,643    -    469,416    - 
Distribution rights   -    142,403,278    -    144,151,661 
Hedging derivatives   -    -    -    - 
Others   8,182,874    6,173,454    3,785,655    7,060,830 
Subtotal   56,755,922    204,681,774    59,190,503    210,934,181 
Total assets and liabilities net   1,872,571    149,798,423    1,925,869    153,669,547 

 

(1)Tax losses mainly associated with the subsidiary Embotelladora Andina Chile S.A. 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 that for tax purposes are recognized when incurred.

 

Deferred tax account movements are as follows:

 

Movement  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Opening balance   151,743,678    168,085,407 
Increase (decrease) in deferred tax   (1,809,325)   4,411,619 
Increase (decrease) due to foreign currency translation   (2,008,502)   (20,753,348)
Total movements   (3,817,826)   (16,341,729)
Ending balance   147,925,852    151,743,678 

 

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  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Construction in progress   32,314,893    34,194,083 
Land   93,504,811    94,321,726 
Buildings   264,051,825    266,921,167 
Plant and equipment   513,311,769    515,395,328 
Information technology equipment   24,660,919    24,323,557 
Fixed installations and accessories   51,666,258    45,558,495 
Vehicles   45,147,627    45,808,748 
Leasehold improvements   243,301    203,164 
Rights of use (1)   55,054,473    56,726,206 
Other properties, plant and equipment (2)   324,392,222    314,602,940 
Total Property, plant and equipment, gross   1,404,348,098    1,398,055,414 

 

Accumulated depreciation of Property, plant and equipment  03.31.2021  

 

12.31.2020

 
  CLP (000’s)   CLP (000’s) 
Buildings   (86,375,145)   (86,004,289)
Plant and equipment   (372,269,040)   (369,605,125)
Information technology equipment   (20,150,077)   (19,445,250)
Fixed installations and accessories   (29,396,186)   (27,910,603)
Vehicles   (29,269,442)   (29,397,964)
Leasehold improvements   (137,793)   (144,022)
Rights of use (1)   (35,096,440)   (35,388,929)
Other properties, plant and equipment (2)   (234,810,920)   (224,582,687)
Total accumulated depreciation   (807,505,043)   (792,478,869)
Total Property, plant and equipment, net   596,843,055    605,576,545 

 

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

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

 

Other Property, plant and equipment, net  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Bottles   29,762,840    30,275,255 
Marketing and promotional assets (market assets)   43,623,350    44,106,959 
Other Property, plant and equipment   16,195,112    15,638,039 
Total   89,581,302    90,020,253 

 

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 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Opening balance at 01.01.2021   34,194,083    94,321,726    180,916,878    145,790,203    4,878,307    17,647,892    16,410,784    59,142    90,020,253    21,337,277    605,576,545 
Additions   6,819,106    -    (748)   1,574,526    12,554    -    6,217    8,738    7,370,391    -    15,790,784 
Right-of use additions (1)   -    -    -    -    -    -    -    -    -    1,077,932    1,077,932 
Disposals   -    -    (11,741)   (199,836)   -         -    -    (728,642)   -    (940,219)
Transfers between items of Property, plant and equipment   (4,219,397)   -    863,898    256,356    53,619    76,079    1,061,016    53,037    1,855,392    -    - 
Right-of-use transfers   -    -    -    -    -    -    -    -    -    -    - 
Depreciation expense   -    -    (1,338,720)   (7,005,251)   (527,485)   (951,031)   (1,230,582)   (9,566)   (9,439,054)        (20,572,292)
Amortization                                                (1,741,759)   (1,741,759)
Increase (decrease) due to foreign currency translation differences   795,692    (816,915)   (2,776,191)   (107,356)   93,987    250,640    (311,584)   (5,708)   1,336,588    (714,089)   (2,184,333)
Other increase (decrease) (2)   (5,274,591)   -    23,304    734,087    (140)   5,246,492    (57,666)   (135)   (833,626)   (1,328)   (163,603)
Total movements   (1,879,190)   (816,915)   (3,240,198)   (4,747,474)   (367,465)   4,622,180    (532,599)   46,366    (438,951)   (1,379,244)   (8,733,490)
 Ending balance al 03.31.2021    32,314,893    93,504,811    177,676,680    141,042,729    4,510,842    22,270,072    15,878,185    105,508    89,581,302    19,958,033    596,843,055 

 

(1)Right of use assets is composed as follows:

 

Right-of-use 

  Gross asset   Accumulated depreciation   Net asset 
  CLP (000’s)   CLP (000’s)   CLP (000’s) 
Constructions and buildings   2,663,300    (1,443,439)   1,219,861 
Plant and Equipment   36,194,905    (20,248,080)   15,946,825 
IT Equipment   417,952    (416,242)   1,710 
Motor vehicles   7,873,964    (5,689,085)   2,184,879 
Others   7,904,352    (7,299,594)   604,758 
Total   55,054,473    (35,096,440)   19,958,033 

 

Lease liabilities interest expenses at the closing of the period reached CLP 405,408 thousand.

 

(2)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 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Opening balance at 01.01.2020   27,290,581    104,196,754    211,973,775    185,353,224    5,001,845    19,843,281    21,961,147    70,021    114,784,403    32,243,832    722,718,863 
Additions   37,726,227    -    1,520,363    8,963,015    809,348    (1,313)   1,323,740    -    30,536,408    -    80,877,788 
Right-of use additions (1)   -    -    -    -    -    -    -    -    -    1,775,457    1,775,457 
Disposals   -    -    (164,113)   (2,485,145)   (2,426)   -    (22,823)   -    (6,046,468)   (87,043)   (8,808,018)
Transfers between items of Property, plant and equipment   (23,336,382)   -    2,177,344    8,858,066    1,151,754    1,175,520    906,624    50,356    9,016,718    -    - 
Right-of-use transfers   -    -    -    -    -    -    -    -    -    -    - 
Depreciation expense   -    -    (7,240,230)   (33,465,104)   (2,058,555)   (2,803,621)   (4,963,835)   (44,630)   (48,830,152)        (99,406,127)
Amortization                                                (7,851,901)   (7,851,901)
Increase (decrease) due to foreign currency translation differences   (3,086,288)   (9,936,257)   (29,231,570)   (19,859,576)   (829,268)   (628,317)   (3,124,155)   (16,605)   (11,400,730)   (4,728,542)   (82,841,308)
Other increase (decrease) (2)   (4,400,055)   61,229    1,881,309    (1,574,277)   805,609    62,342    330,086    -    1,960,074    (14,526)   (888,209)
Total movements   6,903,502    (9,875,028)   (31,056,897)   (39,563,021)   (123,538)   (2,195,389)   (5,550,363)   (10,879)   (24,764,150)   (10,906,555)   (117,142,318)
 Ending balance al 12.31.2020    34,194,083    94,321,726    180,916,878    145,790,203    4,878,307    17,647,892    16,410,784    59,142    90,020,253    21,337,277    605,576,545 

 

(1)Right of use assets is composed as follows:

 

Right-of-use  Gross asset   Accumulated depreciation   Net asset 
  CLP (000’s)   CLP (000’s)   CLP (000’s) 
Constructions and buildings   2,740,852    (1,326,250)   1,414,602 
Plant and Equipment   37,671,980    (19,802,307)   17,869,673 
IT Equipment   451,313    (449,249)   2,064 
Motor vehicles   7,298,422    (5,966,204)   1,332,218 
Others   8,563,639    (7,844,919)   718,720 
Total   56,726,206    (35,388,929)   21,337,277 

 

(2)Corresponds mainly to the effect of adopting IAS 29 in Argentina

 

40

 

 

 

 

12 – RELATED PARTIES

 

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

 

12.1       Accounts receivable: 

 

               03.31.2021  12.31.2020 
          Current  Non-current  Current  Non-current 
Taxpayer ID  Company  Relationship  Country  Currency  CLP (000’s)  CLP (000’s)  CLP (000’s)  CLP (000’s) 
96.891.720-K  Embonor S.A.  Shareholder related  Chile  CLP  5,709,685  -  3,643,603  - 
96.714.870-9  Coca-Cola de Chile S.A.  Shareholder  Chile  CLP  14,834  138,375  16,024  138,346 
Foreign  Coca Cola de Argentina  Director related  Argentina  ARS  4,196,238  -  4,558,753  - 
Foreign  Alimentos de Soja S.A.U.  Shareholder related  Argentina  ARS  188,663  -  308,882  - 
96.517.210-2  Embotelladora Iquique S.A.  Shareholder related  Chile  CLP  297,165  -  292,801  - 
86.881.400-4  Envases CMF S.A.  Associate  Chile  CLP  751,461  -  773,732  - 
77.526.480-2  Comercializadora Nova Verde  Common shareholder  Chile  CLP  533,427  -  837,837  - 
76.572.588-7  Coca Cola del Valle New Ventures S.A.  Associate  Chile  CLP  1,126,613  -  1,401,898  - 
76.140.057-6  Monster  Shareholder related  Chile  CLP  43,124  -  41,878  - 
79.826.410-9  Guallarauco  Shareholder related  Chile  CLP  29,027  -  -  - 
Total              12,890,237  138,375  11,875,408  138,346 

 

12.2       Accounts payable:

 

               03.31.2021  12.31.2020 
          Current  Non-current  Current  Non-current 
Taxpayer ID  Company   Relationship   Country  Currency  CLP (000’s)  CLP (000’s)  CLP (000’s)  CLP (000’s) 
96.714.870-9  Coca-Cola de Chile S.A.  Shareholder  Chile  CLP  7,878,644  -  18,897,093  - 
Foreign  Recofarma do Indústrias Amazonas Ltda.  Shareholder related  Brazil  BRL  8,079,725  9,992,480  7,926,109  10,790,089 
86.881.400-4  Envases CMF S.A.  Associate  Chile  CLP  2,578,718  -  3,856,973  - 
Foreign  Ser. y Prod. para Bebidas Refrescantes S.R.L.  Shareholder  Argentina  ARS  2,939,795  -  4,848,196  - 
Foreign  Leão Alimentos e Bebidas Ltda.  Associate  Brazil  BRL  623,479  -  1,323,609  - 
Foreign  Monster Energy Brasil Com de Bebidas Ltda.  Shareholder related  Brazil  BRL  1,064,973  -  1,156,786  - 
76.572.588-7  Coca Cola del Valle New Ventures S.A.  Associate  Chile  CLP  367,186  -  490,758  - 
89.996.200-1  Envases del Pacífico S.A.  Director related  Chile  CLP  1,563  -  3,414  - 
96.891.720-K  Embonor S.A.  Shareholder related  Chile  CLP  118,314  -  118,314  - 
Foreign  Alimentos de Soja S.A.U.  Shareholder related  Argentina  ARS  393,425  -  402,581  - 
77.526.480-2  Comercializadora Nova Verde  Common shareholder  Chile  CLP  432,424  -  518,135  - 
Total              24,478,246  9,992,480  39,541,968  10,790,089 
                          

41

 

 

 

 

12.3       Transactions:

 

            03.31.2021  12.31.2020 
Taxpayer ID  Company  Relationship  Country  Transaction Description  Currency  CLP (000’s)  CLP (000’s) 
96.714.870-9  Coca-Cola de Chile S.A.  Shareholders  Chile  Concentrate purchase  CLP  49,380,243  139,193,479 
96.714.870-9  Coca-Cola de Chile S.A.  Shareholders  Chile  Advertising services purchase  CLP  1,224,301  2,890,638 
96.714.870-9  Coca-Cola de Chile S.A.  Shareholders  Chile  Water source lease  CLP  1,571,073  3,847,817 
96.714.870-9  Coca-Cola de Chile S.A.  Shareholders  Chile  Sale of raw materials and others  CLP  130,111  1,169,944 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Purchase of bottles  CLP  3,726,500  12,210,449 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Raw material purchase  CLP  5,371,698  16,055,991 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Purchase of caps  CLP  39,914  91,778 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Purchase of services and others  CLP  167,760  520,221 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Sale of services and others  CLP  19,744  1,578 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Purchase of packaging  CLP  1,858,230  5,992,443 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Sale of finished products  CLP  2,116,740  2,380,574 
86.881.400-4  Envases CMF S.A.  Associate  Chile  Sale of packaging/raw materials  CLP  2,113,628  6,344,834 
96.891.720-K  Embonor S.A.  Shareholder related  Chile  Sale of finished products  CLP  15,729,288  44,982,749 
96.891.720-K  Embonor S.A.  Shareholder related  Chile  Sale of services and others  CLP  331,923  447,092 
96.891.720-K  Embonor S.A.  Shareholder related  Chile  Sale of raw material and material  CLP  69,261  197,288 
96.891.720-K  Embonor S.A.  Shareholder related  Chile  Minimum Dividend  CLP  85,581  118,314 
96.517.310-2  Embotelladora Iquique S.A.  Shareholder related  Chile  Sale of finished products  CLP  297,367  167,430 
89.996.200-1  Envases del Pacífico S.A.  Director related  Chile  Raw material and material purchase  CLP  70,318  427 
Foreign  Recofarma do Indústrias Amazonas Ltda.  Shareholder related  Brazil  Concentrate purchase  BRL  15,172,321  71,959,416 
Foreign  Recofarma do Indústrias Amazonas Ltda.  Shareholder related  Brazil  Reimbursements and other purchases  BRL  69,562  220,708 
Foreign  Serv. y Prod. para Bebidas Refrescantes S.R.L.  Shareholder related  Argentina  Concentrate purchase  ARS  25,485,404  81,198,463 
Foreign  Serv. y Prod. para Bebidas Refrescantes S.R.L.  Shareholder related  Argentina  Advertising participation  ARS  425,136  6,395,881 
Foreign  KAIK Participações  Associate  Brazil  Reimbursements and other purchases  BRL  890  14,162 
Foreign  Leão Alimentos e Bebidas Ltda.  Associate  Brazil  Product purchase  BRL  91,717  - 
Foreign  Sorocaba Refrescos S.A.  Associate  Brazil  Product purchase  BRL  381,412  3,671,472 
89.862.200-2  Latam Airlines Group S.A.  Director related  Chile  Product sales  CLP  93,661  - 
89.862.200-2  Latam Airlines Group S.A.  Director related  Chile  Product purchase  CLP  18,695  85,140 
76.572.588-7  Coca Cola Del Valle New Ventures SA  Associate  Chile  Sale of services and others  CLP  108,097  397,659 
76.572.588-7  Coca Cola Del Valle New Ventures SA  Associate  Chile  Purchase of services and others  CLP  1,102,555  4,410,223 
Foreign  Alimentos de Soja S.A.U.  Shareholder related  Argentina  Payment of fees and services  ARS  705,965  1,373,594 
Foreign  Alimentos de Soja S.A.U.  Shareholder related  Argentina  Product purchase  ARS  1,076,840  80,761 
Foreign  Trop Frutas do Brasil Ltda.  Associate  Brazil  Product purchase  BRL  133,249    
77526480-2  Comercializadora Novaverde S.A.  Common shareholder  Chile  Sale of raw materials  CLP  850  10,914 
77526480-2  Comercializadora Novaverde S.A.  Common shareholder  Chile  Sale of finished products  CLP  1,387,662  2,050,156 
77526480-2  Comercializadora Novaverde S.A.  Common shareholder  Chile  Sale of services and others  CLP  12,778  459,707 
77526480-2  Comercializadora Novaverde S.A.  Common shareholder  Chile  Raw material purchase  CLP  816,597  1,009,547 

 

42

 

 

 

 

12.4Salaries 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  03.31.2021   03.31.2020 
   CLP (000’s)    CLP (000’s) 
Executive wages, salaries and benefits   3,332,065    3,051,748 
Director allowances   348,000    378,000 
Total   3,680,065    3,429,748 

 

13 –CURRENT AND NON-CURRENT EMPLOYEE BENEFITS

 

Employee benefits are detailed as follows:

 

Description  03.31.2021   12.31.2020 
   CLP (000’s)    CLP (000’s) 
Accrued vacation   12,480,418    14,650,267 
Participation in profits and bonuses   5,221,043    15,969,735 
Indemnities for years of service   14,882,659    14,086,575 
Total   32,584,120    44,706,577 
           
    CLP (000’s)    CLP (000’s) 
Current   18,159,825    31,071,019 
Non-current   14,424,295    13,635,558 
Total   32,584,120    44,706,577 

 

13.1       Indemnities for years of service

 

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

 

Movements  03.31.2021   12.31.2020 
   CLP (000’s)    CLP (000’s) 
Opening balance   14,086,575    10,085,264 
Service costs   453,047    1,675,492 
Interest costs   71,762    369,332 
Actuarial variations   1,449,577    3,127,398 
Benefits paid   (1,178,302)   (1,170,911)
Total   14,882,659    14,086,575 

 

43

 

 

 

 

13.1.1       Assumptions

 

The actuarial assumptions used are detailed as follows:

 

Assumptions  03.31.2021   12.31.2020 
Discount rate   -0.05%   -0.05%
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  03.31.2021   03.31.2020 
    CLP (000’s)    CLP (000’s) 
Wages and salaries   46,884,676    52,552,478 
Employee benefits   11,336,211    12,992,353 
Severance benefits   926,265    1,127,469 
Other personnel expenses   4,199,596    4,373,279 
Total   63,346,748    71,045,579 

 

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  03.31.2021   12.31.2020   03.31.2021   12.31.2020 
86.881.400-4  Envases CMF S.A. (1)  Chile  CLP   20,985,559    20,185,148    50.00%   50.00%
Foreign  Leão Alimentos e Bebidas Ltda. (2)  Brazil  BRL   9,711,895    10,628,035    10.26%   10.26%
Foreign  Kaik Participações Ltda. (2)  Brazil  BRL   908,389    979,978    11.32%   11.32%
Foreign  SRSA Participações Ltda.  Brazil  BRL   43,703    48,032    40.00%   40.00%
Foreign  Sorocaba Refrescos S.A.  Brazil  BRL   19,790,998    20,976,662    40.00%   40.00%
Foreign  Trop Frutas do Brazil Ltda. (2)  Brazil  BRL   4,263,422    4,695,228    7.52%   7.52%
76.572.588.7  Coca Cola del Valle New Ventures S.A.  Chile  CLP   30,353,983    30,443,271    35.00%   35.00%
Total            86,057,949    87,956,354           

 

(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

 

 

 

 

14.2 Movements

 

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

 

Description  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Opening balance   87,956,354    99,866,733 
Dividends received   -    (1,215,126)
Share in operating income   970,999    3,248,680 
Amortization unrealized income in associates   (109,449)   (566,422)
Increase (decrease) in foreign currency translation, investments in associates   (2,759,955)   (13,377,511)
Ending balance   86,057,949    87,956,354 

 

The main movements are explained below:

 

·In 2020 Leão Alimentos e Bebidas Ltda. recognized the value of a plant at its value of use less the costs of sale, reducing the value previously recognized. Andina recognized as results for the 2020 period a proportional loss of CLP 2,931 million.
·In the 2020 period Sorocaba Refrescos S.A., recognized a tax credit for excluding ICMS from the PIS and COFINS calculation base. Andina recognized as results for the 2020 period a proportional result of CLP 2,134 million
·Dividends received in 2020 mainly correspond to Envases CMF S.A.

 

14.3 Reconciliation of share of profit in investments in associates:

 

Description  03.31.2021   03.31.2020 
  CLP (000’s)   CLP (000’s) 
Equity value on income of associates   970,999    1,405,251 
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)   (193,443)   (239,091)
Amortization goodwill in the sale of fixed assets of Envases CMF S.A.   21,317    - 
Amortization goodwill preferred rights CCDV S.A.   (130,765)   (130,766)
Income statement balance   668,107    1,035,394 

 

14.4 Summary financial information of associates:

 

At March 31, 2021:

 

  

Envases CMF S.A.

  

Sorocaba

Refrescos S.A.

  

Kaik Participações Ltda.

  

SRSA Participações Ltda.

  

Leão Alimentos e Bebidas

Ltda.

  

Trop Frutas do Brazil Ltda.

   Coca Cola del Valle New Ventures S.A. 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Total assets   75,633,108    96,659,609    8,024,861    265,172    114,194,837    69,758,074    105,060,217 
Total liabilities   33,619,356    51,087,479    24    155,909    26,484,731    5,209,799    19,206,561 
Total revenue   17,123,279    10,326,116    10,515    106,729    14,126,376    4,881,975    6,545,389 
Net income (loss) of associates   1,558,189    727,217    10,515    106,729    (588,793)   (191,154)   274,231 
                                    
Reporting date   03-31-2021    02-28-2021    02-28-2021    02-28-2021    02-28-2021    02-28-2021    02-28-2021 

 

45

 

 

 

 

At March 31, 2020:

 

   Envases CMF S.A.  

Sorocaba

Refrescos S.A.

  

Kaik Participações Ltda.

  

SRSA Participações Ltda.

  

Leao Alimentos e Bebidas

Ltda.

   Trop Frutas do Brazil Ltda.   Coca Cola del Valle New Ventures S.A. 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Total assets   77,090,713    101,553,228    10,289,002    345,094    208,866,113    90,476,960    103,231,049 
Total liabilities   37,004,809    46,778,039    31    201,631    35,259,759    24,036,999    16,366,864 
Total revenue   18,339,647    11,147,624    36,625    140,186    19,625,995    6,842,271    6,880,728 
Net income (loss) of associates   1,917,605    812,216    36,625    140,186    (1,008,797)   (229,961)   627,315 
                                    
Reporting date   03-31-2020    02-29-2020    02-29-2020    02-29-2020    02-29-2020    02-29-2020    02-29-2020 

 

15 – INTANGIBLE ASSETS OTHER THAN GOODWILL

 

Intangible assets other than goodwill are detailed as follows:

 

   March 31, 2021   December 31, 2020 
      Accumulated         Accumulated    
Description  Gross
Value
   Amortization (a)   Net
Value
   Gross
Value
   Amortization (a)   Net
Value
 
  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Distribution rights (1)   604,725,000    (1,780,522)   602,944,478    598,371,081    (2,005,344)   596,365,737 
Software   35,290,361    (27,167,257)   8,123,104    35,030,003    (26,882,550)   8,147,453 
Others   509,957    (457,705)   52,252    417,957    (416,982)   975 
Total   640,525,318    (28,055,478)   611,119,834    633,819,041    (29,304,876)   604,514,165 

 

(1)Correspond to the 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.

 

  (a) Includes impairment of Ades investment in Chile for CLP 1,534 million recorded in 2020.

 

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

 

Distribution rights  03.31.2021   12.31.2020 
  CLP (000’s)   CLP (000’s) 
Chile (excluding Metropolitan Region, Rancagua and San Antonio)   303,630,236    303,702,092 
Brazil (Rio de Janeiro, Espirito Santo, Ribeirão Preto and investments in Sorocaba and Leão Alimentos e Bebidas Ltda.)   127,962,052    138,176,054 
Paraguay   169,388,885    152,595,420 
Argentina (North and South)   1,963,305    1,892,171 
Total   602,944,478    596,365,737 

 

46

 

 

 

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

 

                                 
   January 1 to March 31, 2021   January 1 to December 31, 2020 
   Distribution               Distribution             
Description  Rights   Others   Software   Total   Rights   Others   Software   Total 
  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Opening balance   596.365.737    977    8.147.451    604.514.164    666.755.196    456.763    7.863.416    675.075.375 
Additions             579.448    579.448    94.661    -    2.575.125    2.669.786 
Amortization   (20.539)        (554.744)   (575.283)   (1.573.878)   -    (2.088.612)   (3.662.490)
Other increases (decreases) (1)   6.599.279    51.277    (49.052)   6.601.505    (68.910.242)   (455.786)   (202.478)   (69.568.506)
Ending balance   602.944.478    51.277    8.123.104    611.119.834    596.365.737    977    8.147.451    604.514.165 

 

(1)Mainly corresponds to restatement due to the effects of translation of distribution rights of foreign subsidiaries.

 

16 – GOODWILL

 

Movement in Goodwill is detailed as follows:

 

Cash Generating Unit  01.01.2021   Foreign currency
translation
differences where
functional currency
is different from
presentation
currency
   03.31.2021 
  CLP (000’s)   CLP (000’s)   CLP (000’s) 
Chilean operation   8,503,023    -    8,503,023 
Brazilian operation   56,001,413    (4,064,182)   51,937,231 
Argentine operation   27,343,642    1,027,993    28,371,635 
Paraguayan operation   6,477,515    712,809    7,190,324 
Total   98,325,593    (2,323,380)   96,002,213 

 

Cash Generating Unit  01.01.2020  

Foreign currency
translation
differences where
functional currency
is different from
presentation
currency

   12.31.2020 
  CLP (000’s)   CLP (000’s)   CLP (000’s) 
Chilean operation   8,503,023    -    8,503,023 
Brazilian operation   75,674,072    (19,672,659)   56,001,413 
Argentine operation   29,750,238    (2,406,596)   27,343,642 
Paraguayan operation   7,294,328    (816,813)   6,477,515 
Total   121,221,661    (22,896,068)   98,325,593 
                

 

47

 

 

 

 

17 – OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

 

Liabilities are detailed as follows:

 

   Balance 
   Current   Non-current 
   03.31.2021   12.31.2020   03.31.2021   12.31.2020 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Bank loans (Note 17.1.1 - 2)   781,362    799,072    4,000,000    4,000,000 
Bonds payable, net1  (Note 17.2)   14,517,467    18,705,015    925,525,687    918,921,342 
Deposits in guaranty   12,616,095    12,126,831    -    - 
Derivative contract liabilities (Note 22)   1,141,656    1,217,322    52,416,969    51,568,854 
Lease liabilities (Note 17.4.1 - 2)   5,858,558    5,718,484    14,000,006    15,339,373 
Total   34,915,138    38,566,724    995,942,662    989,829,569 

 

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

 

 

Book value

03.31.2021

  

Fair value

03.31.2021

  

Book value

12.31.2020

  

Fair value

12.31.2020

 
Current  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Cash and cash equivalent (2)   208,294,736    208,294,736    309,530,699    309,530,699 
Derivative contract assets (see Note 5 - 20) (1)   733,859    733,859    -    - 
Trade debtors and other accounts receivable (2)   177,000,344    177,000,344    194,664,683    194,664,683 
Accounts receivable related companies (2)   12,890,237    12,890,237    11,875,408    11,875,408 
Bank loans (2)   781,362    879,962    799,072    896,307 
Bonds payable (2)   14,517,467    17,583,097    18,705,015    22,471,852 
Bottle guaranty deposits (2)   12,616,095    12,616,095    12,126,831    12,126,831 
Derivative contracts liabilities (see Note 20) (1)   1,141,656    1,141,656    1,217,322    1,217,322 
Leasing agreements (2)   5,858,558    5,858,558    5,718,484    5,718,484 
Accounts payable (2)   206,054,007    206,054,007    230,445,809    230,445,809 
Accounts payable related companies (2)   24,478,246    24,478,246    39,541,968    39,541,968 

 

  03.31.2021     03.31.2021     12.31.2020     12.31.2020  
Non-current   CLP (000’s)     CLP (000’s)     CLP (000’s)     CLP (000’s)  
Derivative contract assets (see Note 5 - 20) (1)     176,458,121       176,458,121       150,983,295       150,983,295  
Non-current accounts receivable (2)     79,694       79,694       73,862       73,862  
Accounts receivable related companies (2)     138,375       138,375       138,346       138,346  
Bank loans (2)     4,000,000       4,056,753       4,000,000       4,056,753  
Bonds payable (2)     925,525,687       1,038,678,773       918,921,342       1,088,617,557  
Leasing agreements (2)     14,000,006       14,000,006       15,339,373       15,339,373  
Non-current accounts payable (2)     307,271       307,271       295,279       295,279  
Derivative contracts liabilities (see Note 20) (1)     52,416,969       52,416,969       51,568,854       51,568,854  

 

(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 and Other Accounts Receivable, Accounts Receivable, Bottle Guarantee Deposits and Trade Accounts Payable, and Other Accounts Payable 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.

 

 

1 Amounts net of issuance expenses and discounts related to issuance.

 

48

 

 

 

 

17.1.1 Bank loans, current

 

                            Maturity   Total 
   Indebted entity        Creditor entity        Tipo de  Nominal   Up to 90 days   90 days to 1 year   At 03.31.2021   At 12.31.2020 
Taxpayer ID  Name  Country  Taxpayer ID  Name  Country  Currency  Amortization  Rate   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
96.705.990-0  Envases Central S.A.  Chile  97.006.000-6  Banco BCI  Chile  UF  Semiannually   2.13%   8,473    760,683    769,156    760,667 
96.705.990-0  Envases Central S.A.  Chile  96.836.390-5  Banco Estado  Chile  CLP  Semiannually   2.00%   -    12,206    12,206    33,111 
Foreign  Embotelladora del Atlántico S.A.  Argentina  Foreign  Banco Galicia y Buenos Aires S.A.  Argentina  AR  Monthly   22.00%   -    -    -    5,294 
 Total                                       781,362    799,072 

 

17.1.2 Bank loans, non-current

 

                     

Maturity 

       
                                           
Indebted entity       Creditor entity       Type of   Nominal     1 year up to 2 years     More than 2 Up to 3 years     More than 3 Up to 4 years     More than 4 Up to 5 years     More than 5 years     At
03.31.2021
 
Taxpayer ID   Name   Country   Taxpayer ID   Name   Country    Currency   Amortization   Rate     CLP (000’s)     CLP (000’s)     CLP (000’s)     CLP (000’s)     CLP (000’s)     CLP (000’s)  
96.705.990-0   Envases Central S.A.   Chile   97.006.000-6   Banco BCI   Chile   CLP   Semiannually     2.00 %     -       -       4,000,000       -       -      

 

4.000.000

 
 Total      

4.000.000

 

 

 

17.1.3 Bank loans, non-current previous year

 

                               Maturity        
  Indebted entity      Creditor entity      Type of   Nominal  1 year up to 2 years   more than 2 up to 3 years   more than 3 up to 4 years   more than 4 up to 5 years   more than 5 years   al 12.31.2020
Taxpayer ID  Name  Country  Taxpayer ID  Name  Country  Currency  Amortization 
Rate
 

CLP (000’s) 

  

CLP (000’s) 

  

CLP (000’s) 

  

CLP (000’s)

  

CLP (000’s) 

  

 CLP (000’s) 

96.705.990-0  Envases Central S.A.  Chile  97.006.000-6  Banco BCI  Chile  CLP  Semiannually  2.00%   -    -    4,000,000    -    -    4.000.000
 Total    4.000.000 

 

49

 

 

 

 

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 January 21, 2020, the Company issued corporate bonds on the international market for USD 300 million with a 30-year maturity, with a bullet structure and an annual interest rate of 3.950%. In parallel, derivatives (Cross Currency Swaps) covering 100% of the financial obligations of the bond that are denominated in US dollars have been contracted re-denominating that liability to UF.

 

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

 

   Current   Non-current   Total 
  03.31.2021   12.31.2020   03.31.2021   12.31.2020   03.31.2021   12.31.2020 
Composition of bonds payable  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Bonds face value 1   15,340,036    19,347,033    932,242,700    925,968,913    947,582,736    945,315,946 

 

17.2.1 Current and non-current balances

 

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

 

                                      
       Current                Current   Non-current 
      nominal            03.31.2021   12.31.2020   03.31.2021   12.31.2020 
Bonds  Series     amount   Adjustment unit   Interest rate    Final maturity  Interest payment  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
CMF Registration 254 06.13.2001   B    1,648,160   UF   6.5%  12-01-2026  Semiannually   8,593,852    7,776,693    40,839,224    40,388,468 
CMF Registration 641 08.23.2010   C    1,431,818   UF   4.0%  08-15-2031  Semiannually   4,216,755    647,672    38,079,588    43,605,495 
CMF Registration 760 08.20.2013   D    4,000,000   UF   3.8%  08-16-2034  Semiannually   541,002    1,629,677    117,579,080    116,281,320 
CMF Registration 760 04.02.2014   E    3,000,000   UF   3.75%  03-01-2035  Semiannually   273,033    1,083,063    88,184,319    87,210,999 
CMF Registration 912 10.10.2018   F    5,700,000   UF   2.83%  09-25-2039  Semiannually   75,960    1,234,601    167,550,189    165,700,881 
Bonds USA 2023   10.01.2013   -    365,000,000   US$   5.0%  10-01-2023  Semiannually   -    3,243,709    263,464,300    259,496,750 
Bonds USA 2050   01.01.2020   -    300,000,000   US$   3.95%  01-21-2050  Semiannually   1,639,434    3,731,618    216,546,000    213,285,000 
                        Total   15,340,036    19,347,033    932,242,700    925,968,913 

 

 

1 Gross amounts do not consider discounts related to issuance. 

 

50

 

 

 

 

 

17.2.3 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   03.31.2021 
         

CLP (000’s)

    

CLP (000’s)

    

CLP (000’s)

    

CLP (000’s)

    

CLP (000’s)

 
CMF Registration 254 06.13.2001   B    8,102,568    8,629,234    9,190,134    14,917,288    40,839,224 
CMF Registration 641 08.23.2010   C    4,008,377    4,008,378    4,008,378    26,054,455    38,079,588 
CMF Registration 760 08.20.2013   D    -    -    -    117,579,080    117,579,080 
CMF Registration 760 04.02.2014   E    -    -    -    88,184,319    88,184,319 
CMF Registration 912 10.10.2018   F    -    -    -    167,550,189    167,550,189 
Bonds USA   -    -    -    263,464,300    -    263,464,300 
Bonds USA 2   -    -    -    -    216,546,000    216,546,000 
Total        12,110,945    12,637,612    276,662,812    630,831,331    932,242,700 

 

17.2.4 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.

 

17.2.5        Restrictions

 

17.2.5.1       Restrictions regarding bonds placed abroad.

 

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

 

17.2.5.2 Restrictions regarding bonds placed in the local market.

 

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

 

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

 

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

 

As of the date of these financial statements, this ratio is 0.48 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.

 

51

 

 

 

 

·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 is 1.64 times.

 

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

 

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

 

As of the date of these financial statements, net financial debt level was 0.48 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).

 

52

 

 

 

 

As of the date of these financial statements, this ratio was 1.64 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 8.52 times.

 

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

 

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

 

As of the date of these financial statements, Indebtedness Level is 0.48 times of Consolidated Equity.

 

·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 1.64 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.

 

53

 

 

 

 

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

 

Restrictions to bond lines registered in the Securities Registrar under number 912.

 

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

 

As of the date of these financial statements, this ratio was 0.48 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 1.64 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 and joint ventures that are accounted for using the equity method"; plus (v) "Depreciation"; plus (vi) "Intangibles Amortization".

 

As of March 31, 2021 and December 31, 2020, the Company complies with all financial collaterals.

 

17.3 Derivative contract obligations

 

Please see details in Note 22.

 

54

 

 

 

 

17.3.1 Current liabilities for leasing agreements

 

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.

 

                            Maturity   Total 
Indebted entity   Creditor entity       Type of  Nominal   Up to   90 days up to   At   at 
Name  Country   Taxpayer ID  Name  Country   Currency   Amortization  Rate   90 days   1 year   03.31.2021   12.31.2020 
                                 CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s) 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Cogeração - Light ESCO   Brazil    BRL   Monthly   12.28%   159,178    508,670    667,848    698,526 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Tetra Pack   Brazil    BRL   Monthly   7.39%   58,124    101,740    159,864    208,738 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Real estate   Brazil    BRL   Monthly   8.20%   37,474    102,841    140,315    183,694 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Leão   Brazil    BRL   Monthly   6.56%   63,111    183,616    246,727    269,310 
Embotelladora del Atlántico S.A.   Argentina   Foreign  Tetra Pak SRL   Argentina    USD   Monthly   12.00%   21,387    64,162    85,549    83,469 
Embotelladora del Atlántico S.A.   Argentina   Foreign  Banco Comafi   Argentina    USD   Monthly   12.00%   32,010    96,029    128,039    124,927 
Embotelladora del Atlántico S.A.   Argentina   Foreign  Real estate   Argentina    ARS   Monthly   50.00%   62,600    121,132    183,732    213,905 
Embotelladora del Atlántico S.A.   Argentina   Foreign  Systems   Argentina    USD   Monthly   1.00%   21,068    63,205    84,273    82,227 
Vital Aguas S.A   Chile   76.389.720-6  Coca Cola del Valle New Ventures S.A   Chile    CLP   Linear   7.50%   291,681    889,258    1,180,939    1,171,464 
Envases Central S.A   Chile   96.705.990-0  Coca Cola del Valle New Ventures S.A   Chile    CLP   Linear   8.40%   570,288    1,738,805    2,309,093    2,290,464 
Paraguay Refrescos SA   Paraguay   80.003.400-7  Tetra Pack Ltda. Suc. Py   Paraguay    PYG   Monthly   1.00%   55,402    183,957    239,359    215,632 
Transportes Polar S.A.   Chile   96.928.520-7  Cons. Inmob. e Inversiones Limitada   Chile    UF   Monthly   2.89%   23,401    71,225    94,626    92,778 
Embotelladora Andina S.A   Chile   91.144.000-8  Central de Restaurante Aramark Ltda.   Chile    CLP   Monthly   1.30%   20,803    55,807    76,610    83,350 
Transporte Andina Refrescos Ltda   Chile   85.275.700-0  Arrendamiento de Maquinaria SPA   Chile    UF   Monthly   0.84%   65,602    195,982    261,584    - 
                                      Total    5,858,558    5,718,484 

 

55

 

 

 

 

17.3.2 Non-current liabilities for leasing agreements

 

           

 

         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

  

03.31.2021

 
                              CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s) 
Rio de Janeiro Refrescos Ltda.  Brazil   Foreign  Cogeração - Light ESCO  Brazil   BRL   Monthly   12.28%   753,666    851,642    962,356    1,087,462    4,186,636    7,841,762 
Rio de Janeiro Refrescos Ltda.  Brazil   Foreign  Tetra Pack|  Brazil   BRL   Monthly   7.39%   65,152    -    -    -    -    65,152 
Rio de Janeiro Refrescos Ltda.  Brazil   Foreign  Real estate  Brazil   BRL   Monthly   8.20%   43,449    31,178    13,770              88,397 
Rio de Janeiro Refrescos Ltda.  Brazil   Foreign  Leao Alimentos e Bebidas Ltda.  Brazil   BRL   Monthly   6.56%   242,034    227,221    225,881    159,098    40,656    894,890 
Embotelladora del Atlántico S.A.  Argentina   Foreign  Banco Comafi  Argentina   USD   Monthly   12.00%   -    -    -    -    -    - 
Embotelladora del Atlántico S.A.  Argentina   Foreign  Tetra Pak SRL  Argentina   USD   Monthly   12.00%   -    250,011    -    250,011    54,816    554,838 
Embotelladora del Atlántico S.A.  Argentina   Foreign  Real estate  Argentina   ARS   Monthly   50.00%   -    119,744    -    -    -    119,744 
Embotelladora del Atlántico S.A.  Argentina   Foreign  Systems  Argentina   USD   Monthly   12.00%   -    77,253    -    -    -    77,253 
Vital Aguas S.A  Chile   76.572.588-7  Coca Cola del Valle New Ventures S.A  Chile   CLP   Monthly   6.82%   808,351    -    -    -    -    808,351 
Envases Central S.A  Chile   76.572.588-7  Coca Cola del Valle New Ventures S.A  Chile   CLP   Monthly   7.68%   2,383,606    -    -    -    -    2,383,606 
Paraguay Refrescos SA  Paraguay   80.003.400-7  Tetra Pack Ltda. Suc. Py  Paraguay   PYG   Monthly   1.00%   -    79,600    -    -    -    79,600 
Transportes Polar S.A.  Chile   76.413.243-2  Cons. Inmob. e Inversiones Limitada  Chile   UF   Monthly   2.89%   -    197,647    -    138,248    -    335,895 
Transporte Andina Refrescos Ltda  Chile   85.275.700-0  ARRENDAMIENTO DE  MAQUINARIA SPA  Chile   CLP   Monthly   0.84%   -    516,619    -    233,899    -    750,518 
                                                  Total    14,000,006 

 

17.3.3 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

  

12.31.2020

 
                             CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)  

CLP

(000’s)

 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Cogeração - Light ESCO  Brazil   BRL    Monthly    12.28%   789,334    891,946    1,007,901    1,138,928    4,827,833    8,655,942 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Tetra Pack|  Brazil   BRL    Monthly    7.39%   95,856    -    -    -    -    95,856 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Real estate  Brazil   BRL    Monthly    8.20%   72,906    32,980    23,547    -    -    129,433 
Rio de Janeiro Refrescos Ltda.   Brazil   Foreign  Leao Alimentos e Bebidas Ltda.  Brazil   BRL    Monthly    6.56%   261,577    249,681    243,911    225,680    51,007    1,031,856 
Embotelladora del Atlántico S.A.   Argentina   O-E  Banco Comafi  Argentina   USD    Monthly    12.00%   -    20,867    -    -    -    20,867 
Embotelladora del Atlántico S.A.   Argentina   O-E  Tetra Pak SRL  Argentina   USD    Monthly    12.00%   -    249,854    -    249,854    72,874    572,582 
Embotelladora del Atlántico S.A.   Argentina   O-E  Real estate  Argentina   ARS    Monthly    50.00%   -    128,930    -    -    -    128,930 
Embotelladora del Atlántico S.A.   Argentina   O-E  Real estate  Argentina   ARS     Monthly    50.00%   -    95,931    -    -    -    95,931 
Vital Aguas S.A   Chile   76.572.588-7  Coca Cola del Valle New Ventures S.A  Chile   CLP    Monthly    8.20%   1,107,140    -    -    -    -    1,107,140 
Envases Central S.A   Chile   76.572.588-7  Coca Cola del Valle New Ventures S.A  Chile   CLP    Monthly    9.00%   2,967,864    -    -    -    -    2,967,864 
Paraguay Refrescos SA   Paraguay   80.003.400-7  Tetra Pack Ltda. Suc. Py  Paraguay   PYG    Monthly    1.00%   -    163,635    -    -    -    163,635 
Transportes Polar S.A.   Chile   76.413.243-2  Cons. Inmob. e Inversiones Limitada  Chile   UF    Monthly    2.89%   -    193,789    -    161,551    -    355,340 
Embotelladora Andina S.A   Chile   76.178.360-2  Central de Restaurante Aramark Ltda.  Chile   CLP    Monthly    1.30%   -    13,997    -    -    -    13,997 
                                                     Total    15,339,373 

 

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

 

56

 

 

 

 

 

18 – TRADE AND OTHER ACCOUNTS PAYABLE

 

Trade and other current accounts payable are detailed as follows:

 

   03.31.2021   12.31.2020 
Classification    CLP (000’s)    CLP (000’s) 
Current    206,054,007    230,445,809 
Non-current    307,271    295,279 
Total    206,361,278    230,741,088 

 

Item        
    CLP (000’s)    CLP (000’s) 
Trade accounts payable Comerciales   138,935,278    163,361,078 
Withholding tax   46,815,230    48,566,443 
Others   20,610,770    18,813,567 
Total   206,361,278    230,741,088 

 

19 – OTHER PROVISIONS, CURRENT AND NON-CURRENT

 

19.1       Balances

 

The composition of provisions is as follows:

 

   03.31.2021   12.31.2020 
Description    CLP (000’s)    CLP (000’s) 
Litigation (1)    47,966,647    50,070,273 
Total    47,966,647    50,070,273 
            
Current    1,569,097    1,335,337 
Non-current    46,397,550    48,734,936 
Total    47,966,647    50,070,273 

 

(1)Correspond to the provision made for the probable losses of fiscal, labor and commercial contingencies, based on the opinion of our legal advisors, according to the following detail:

 

  03.31.2021   12.31.2020 
Description (see note 23.1)   CLP (000’s)    CLP (000’s) 
Tax contingencies   24,176,650    25,543,101 
Labor contingencies   8,354,382    8,688,551 
Civil contingencies   15,435,615    15,838,621 
Total   47,966,647    50,070,273 

 

57

 

 

 

 

19.2       Movements

 

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

 

   03.31.2021   12.31.2020 
Description   CLP (000’s)    CLP (000’s) 
Opening balance at January 1st   50,070,274    69,107,550 
Additional provisions   -    172,801 
Increase (decrease) in existing provisions   1,777,768    4,624,789 
Used provision (payments made charged to the provision)   (282,894)   (5,799,209)
Reversal of unused provision   (1,443)   - 
Increase (decrease) due to foreign exchange rate differences   (3,597,058)   (18,035,657)
Total   47,966,647    50,070,274 

 

20 – OTHER NON-FINANCIAL LIABILITIES

 

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

 

   Current   Non-current 
Description   03.31.2021    12.31.2020    03.31.2021    12.31.2020 
    CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s) 
Dividends payable   167,382    25,999,055         - 
Others (1)   2,505,848    2,267,675    19,843,056    21,472,048 
Total   2,673,230    28,266,730    19,843,056    21,472,048 

 

(1)Other non-current corresponds mainly to accounts payable to former shareholders of Companhia de Bebidas Ipiranga (“CBI”). See Note 6 for further information.

 

21 – EQUITY

 

21.1Number of shares:

 

    Number of subscribed, paid-in and voting shares 
Series   2021   2020 
A    473,289,301    473,289,301 
B    473,281,303    473,281,303 

 

21.1.1Capital:

 

    Paid-in and subscribed capital 
Series   2021   2020 
     CLP (000’s)    CLP (000’s) 
A    135,379,504    135,379,504 
B    135,358,070    135,358,070 
Total    270,737,574    270,737,574 

 

58

 

 

 

 

21.1.2Rights 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.

 

21.2Dividend 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 2021, shareholders agreed to pay out of the 2020 earnings a final dividend and an additional dividend to the 30% required by Chille’s Law on Corporations, which will be paid in May 2021 and August 2021, respectively.

 

In accordance with the provisions of Circular No. 1.945 of the Commission for the Financial Market (CMF) dated September 29, 2009, the Company’s Board of Directors decided to maintain the initial adjustments of adopting IFRS as cumulative gains whose distribution is conditional on their future realization.

 

The dividends declared and/or paid per share are presented below:

 

Periods
approved - paid
 
  Dividend type   Profits imputable to
dividends
  CLP
Series A
    CLP
Series B
 
12-22-2020     01-29-2021      Interim   2020 Earnings     26.60       28.60  

 

21.3Other reserves

 

The balance of other reserves includes the following:

 

  03.31.2021   03.31.2020 
Concept   CLP (000’s)    CLP (000’s) 
Polar acquisition   421,701,520    421,701,520 
Foreign currency translation reserves   (523,619,131)   (342,431,925)
Cash flow hedge reserve   (19,214,334)   (25,316,635)
Reserve for employee benefit actuarial gains or losses   (5,386,324)   (2,230,752)
Legal and statutory reserves   5,435,538    5,435,538 
Other   6,014,568    6,014,568 
Total   (115,068,163)   63,172,314 

 

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.

 

59

 

 

 

 

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 equivalents accounted for using the equity method, Translation reserves are detailed as follows:

 

   03.31.2021   03.31.2020 
Description    CLP (000’s)    CLP (000’s) 
Brazil    (224,701,112)   (141,039,321)
Argentina    (302,041,641)   (236,938,720)
Paraguay    3,123,622    35,546,116 
Total    (523,619,131)   (342,431,925)

 

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

 

   03.31.2021   03.31.2020 
Description    CLP (000’s)    CLP (000’s) 
Brazil    (21,043,720)   (42,245,203)
Argentina    (10,709,239)   9,477,202 
Paraguay    25,630,314    29,412,416 
Total    (6,122,645)   (3,355,585)

 

60

 

 

 

 

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 
      Equity   Income 
   Ownership %   March   March   March   March 
 Description  2021   2020   2021   2020   2021   2020 
              CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s) 
Embotelladora del Atlántico S.A.   0.0171    0.0171    26,121    28,310    1,637    1,218 
Andina Empaques Argentina S.A.   0.0209    0.0209    2,540    2,705    102    106 
Paraguay Refrescos S.A.   2.1697    2.1697    5,836,028    6,254,727    236,254    234,173 
Vital S.A.   35.0000    35.0000    8,408,686    8,190,841    232,646    286,101 
Vital Aguas S.A.   33.5000    33.5000    2,065,535    1,854,443    149,192    50,559 
Envases Central S.A.   40.7300    40.7300    5,827,508    5,574,595    599,930    426,062 
Total             22,166,418    21,905,621    1,219,761    998,219 

 

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 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  03.31.2021 
    SERIE A    SERIE B    TOTAL 
Earnings attributable to shareholders (CLP 000’s)   20,056,901    22,062,235    42,119,136 
Average weighted number of shares   473,289,301    473,281,303    946,570,604 
Earnings per basic and diluted share (CLP)   42.38    46.62    44.50 

 

Earnings per share  03.31.2020 
    SERIE A    SERIE B    TOTAL 
Earnings attributable to shareholders (CLP 000’s)   22,852,821    25,137,697    47,990,518 
Average weighted number of shares   473,289,301    473,281,303    946,570,604 
Earnings per basic and diluted share (CLP)   48.29    53.11    50.70 

 

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 March 31, 2021, the Company held the following derivative instruments:

 

61

 

 

 

 

22.1       Accounting recognition of cross currency 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 10,079,978, to convert those obligations to CLP.

 

These contracts were valued at fair value, yielding a net asset at the closing date of the financial statements of CLP 14,622,279 thousand 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.)

 

At the closing date of these financial statements, the Company maintains derivative contracts to secure US Dollar public bond obligations of USD 360 million due in 2023, to convert such obligations into Brazilian Real. In addition, derivative contracts amounting to USD 300 million are held to convert such obligation into Unidades de Fomento (UF - CLP re-adjustable by the Consumer Price Index) due in 2050. The valuation of the first contract at its fair values generates an asset of CLP 161,835,842 thousand as of March 31, 2021 (CLP 144,684,179 thousand as of December 31, 2020), while the valuation of the second contract at its fair values generates a liability of CLP 52,416,969 thousand at the closing date of these financial statements.

 

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

 

22.2       Forward currency transactions expected to be very likely

 

During 2021 and 2020, 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 and USD/GYP. As of March 31, 2021, outstanding contracts amount to USD 51.1 million (USD 54.0 million as of December 31, 2020).

 

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.

 

Fair value hierarchy

 

At the closing date of these financial statements, the Company held assets for derivative contracts for CLP 177,191,980 thousand (CLP 150,983,295 thousand as of December 31, 2020) and held liabilities for derivative contracts for CLP 53.558.625 thousand (CLP 52.786.176 thousand as of December 31, 2020). 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.

 

62

 

 

 

 

 

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 March 31, 2021     
   Quoted prices in active markets for identical assets or liabilities   Observable
market data
   Unobservable market data     
   (Level 1)   (Level 2)   (Level 3)   Total 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Assets                    
Current assets                    
Other current financial assets   -    733,859    -    733,859 
Other non-current financial assets   -    176,458,121    -    176,458,121 
Total assets   -    177,191,980    -    177,191,980 
Liabilities                    
Current liabilities                    
Other current financial liabilities   -    1,141,656    -    1,141,656 
Other non-current financial liabilities   -    52,416,969    -    52,416,969 
Total liabilities   -    53,558,625    -    53,558,625 

 

   Fair Value Measurement at December 31, 2020     
   Quoted prices in active markets for identical assets or liabilities   Observable
market data
   Unobservable market data     
   (Level 1)   (Level 2)   (Level 3)   Total 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Assets                    
Current assets                    
Other current financial assets   -    -    -    - 
Other non-current financial assets   -    150,983,295    -    150,983,295 
Total assets   -    150,983,295    -    150,983,295 
Liabilities                    
Current liabilities                    
Other current financial liabilities   -    1,217,322    -    1,217,322 
Other non-current financial liabilities   -    51,568,854    -    51,568,854 
Total liabilities   -    52,786,176    -    52,786,176 

 

63

 

 

 

 

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. 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 766,423 thousand (CLP 778,065 thousand in 2020). 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 275,589 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 45,615,794 thousand (CLP 47,945,921 thousand in 2020). 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 As of March 31, 2021, amounted to CLP 19,492,018 thousand and as of December 31, 2020 amounted to CLP 21,054,433 thousand.

 

Part of the assets held under warranty by Rio de Janeiro Refrescos Ltda. as of December 31, 2014, are in the process of being released and others have already been released in exchange for guarantee insurance and bond letters for BRL 1,557,647,123, with different Financial Institutions and Insurance Companies in Brazil, these entities receive an annual commission fee of 0.62%. and become responsible of fulfilling obligations with the Brazilian tax authorities should any trial result against Rio de Janeiro Refrescos Ltda. Additionally, if the warranty and bail letters are executed, Rio de Janeiro Refrescos Ltda. promises to reimburse to the financial institutions and Insurance Companies any amounts disbursed by them to the Brazilian government.

 

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

 

a)Tax contingencies resulting from credits on tax on industrialized products (IPI).

 

Rio de Janeiro Refrescos is a party to a series of proceedings under way, in which the Brazilian federal tax authorities demand payment of value-added tax on industrialized products (Imposto sobre Produtos Industrializados, or IPI) totaling BRL 2,490,949,270 at March 31, 2021.

 

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.

 

64

 

 

 

 

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 702,798,526 (amount includes adjustments for current lawsuits) a start provision has been generated in the accounting of the business combination for BRL 139,606,600.

 

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 411,050,876 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 469,548,074, as of March 31, 2021.

 

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 1,530,095 thousand (CLP 1,300,587 thousand as of December 31, 2020). 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 38,571 thousand (CLP 34,747 thousand as of December 31, 2020). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.

 

65

 

 

 

 

23.2       Direct guarantees and restricted assets:

 

Guarantees and restricted assets are detailed as follows:

 

Guarantees that commit assets included in the financial statements:

 

              Accounting value 
      Committed assets    03.31.2021  12.31.2020 
Guaranty creditor  Debtor name  Relationship  Guaranty  Type   CLP (000’s)   CLP (000’s) 
Transportes San Martin  Embotelladora Andina S.A.  Parent company  Cash  Trade accounts and other accounts receivable   2,939   2,907 
Cooperativa Agricola Pisquera Elqui Limitada  Embotelladora Andina S.A.  Parent company  Cash  Other non-current financial assets   1,216,865   1,216,865 
Metro S.A.  Embotelladora Andina S.A.  Parent company  Cash  Other non-current non-financial assets   40,750   40,300 
Serv.Nacional Aduanas  Embotelladora Andina S.A.  Parent company  Cash  Other non-current non-financial assets   15,880   15,641 
Inmob. e invers. supetar Ltda.  Transportes Polar  Subsidiary  Cash  Other non-current non-financial assets   4,579   4,579 
María Lobos Jamet  Transportes Polar  Subsidiary  Cash  Other non-current non-financial assets   11,172   2,566 
Bodega San Francisco  Transportes Polar  Subsidiary  Cash  Other non-current non-financial assets   6,484   8,606 
Workers claims  Rio de Janeiro Refrescos Ltda.  Subsidiary  Judicial deposit  Other non-current non-financial assets   4,883,448   5,329,947 
Civil and tax claims  Rio de Janeiro Refrescos Ltda.  Subsidiary  Judicial deposit  Other non-current non-financial assets   5,444,004   5,882,379 
Government institutions  Rio de Janeiro Refrescos Ltda.  Subsidiary  Plant and equipment  Property, plant and equipment   9,164,565   9,842,108 
Distribuidora Baraldo S.H.  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   157   169 
Acuña Gomez  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   235   253 
Nicanor López  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   168   181 
Labarda  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   3   3 
Municipalidad Bariloche  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   17,320   - 
Municipalidad San Antonio Oeste  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   700   18,650 
Municipalidad Carlos Casares  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   108,320   754 
Municipalidad Chivilcoy  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   33   116,641 
Others  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   1,412   36 
Granada Maximiliano  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   1,963   1,521 
Cicsa  Embotelladora del Atlántico S.A.  Subsidiary  Cash deposit  Other current non-financial assets   13,042   2,114 
Several stores  Embotelladora del Atlántico S.A.  Subsidiary  Cash deposit  Other current non-financial assets   265   13,140 
Aduana de EZEIZA  Embotelladora del Atlántico S.A.  Subsidiary  Cash deposit  Other current non-financial assets   226   286 
Municipalidad de Junin  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   1,916   243 
Almada Jorge  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   48   2,064 
Mirgoni Marano  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   879   51 
Farias Matias Luis  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   98,378   947 
Temas Industriales SA - Embargo General de Fondos  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   17,653   - 
DBC SA C CERVECERIA ARGENTINA SA ISEMBECK  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   3,138   19,009 
Coto Cicsa  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   1,961   3,379 
Cencosud  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   7,769   2,112 
Mariano Mirgoni  Embotelladora del Atlántico S.A.  Subsidiary  Judicial deposit  Other non-current non-financial assets   4,224   105,936 
Marcus A.Peña  Paraguay Refrescos  Subsidiary  Real estate  Property, plant and equipment   916   4,011 
Mauricio J Cordero C  Paraguay Refrescos  Subsidiary  Real estate  Property, plant and equipment   743   814 
José Ruoti Maltese  Paraguay Refrescos  Subsidiary  Real estate  Property, plant and equipment   1,267   655 
Alejandro Galeano  Paraguay Refrescos  Subsidiary  Real estate  Property, plant and equipment   1,207   1,132 
Ana Maria Mazó  Paraguay Refrescos  Subsidiary  Real estate  Property, plant and equipment   4,579   1,077 

 

66

 

 

 

 

Guarantees provided without obligation of assets included in the Financial Statements:

 

              Amounts involved 
      Committed assets    03.31.2021   12.31.2020 
Guaranty creditor  Debtor name  Relationship  Guaranty  Type   CLP (000’s)    CLP (000’s) 
Labor procedures  Rio de Janeiro Refrescos Ltda.  Subsidiary  Guaranty receipt  Legal proceeding   1,223,179    1,527,347 
Administrative procedures  Rio de Janeiro Refrescos Ltda.  Subsidiary  Guaranty receipt  Legal proceeding   8,481,074    8,860,598 
Federal Government  Rio de Janeiro Refrescos Ltda.  Subsidiary  Guaranty receipt  Legal proceeding   137,086,272    147,841,989 
State Government  Rio de Janeiro Refrescos Ltda.  Subsidiary  Guaranty receipt  Legal proceeding   44,663,643    46,031,398 
Sorocaba Refrescos  Rio de Janeiro Refrescos Ltda.  Subsidiary  Guaranty receipt  Guarantor   2,533,902    2,736,159 
Others  Rio de Janeiro Refrescos Ltda.  Subsidiary  Guaranty receipt  Legal proceeding   3,358,190    1,715,099 
Aduana de EZEIZA  Embotelladora del Atlántico S.A.  Subsidiary  Surety insurance  Faithful compliance of contract   3,198    3,150 
Aduana de EZEIZA  Andina Empaques Argentina S.A.  Subsidiary  Surety insurance  Faithful compliance of contract   269,414    143,615 

 

67

 

 

 

 

24 – FINANCIAL RISK MANAGEMENT

 

The Company’s businesses are exposed to a variety of financial and market risks (including foreign exchange risk, interest rate risk and price risk). The Company’s global risk management program focuses on the uncertainty of financial markets and seeks to minimize potential adverse effects on the performance of the Company. The Company uses derivatives to hedge certain risks. A description of the primary policies established by the Company to manage financial risks are provided below:

 

Interest Rate Risk

 

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

 

The Company’s greatest indebtedness corresponds to six contracts for own issued Chilean local bonds at a fixed rate for UF 15.78 million denominated in UF (“UF”), debt indexed to inflation in Chile (Company sales are correlated with the UF variation), of which five of these Local Bonds have been redenominated through Cross Currency Swaps to Chilean Pesos (CLP).

 

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

 

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.

 

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.

 

68

 

 

 

 

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 investments

 

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

 

  i.  Time 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.

 

69

 

 

 

 

Exchange Rate Risk

 

The company is exposed to three types of risk caused by exchange rate volatility:

 

a)   Exposure of foreign investment

 

This risk originates from the translation of net investment from the functional currency of each country (Brazilian Real, Paraguayan Guaraní, and Argentine Peso) to the Parent Company’s reporting currency (Chilean Peso). Appreciation or devaluation of the Chilean Peso with respect to the functional currencies of each country, originates decreases and increases in equity, respectively. The Company does not hedge this risk.

 

a.1    Investment in Argentina

 

As of the closing date of these financial statements, the Company maintains a net investment of CLP 160,369,404 thousand in Argentina, composed by the recognition of assets amounting to CLP 222,353,156 thousand and liabilities amounting to CLP 61.983.752 thousand. These investments accounted for 19.6% of the Company’s consolidated sales revenues

 

As of March 31, 2021, the Argentine peso devalued by 7.1% with respect to the Chilean peso.

 

If the exchange rate of the Argentine Peso devalued an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operation in Argentina of CLP 881,509 thousand and a decrease in equity of CLP 6,429,674 thousand.

 

a.2   Investment in Brazil

 

As of the closing date of these financial statements, the Company maintains a net investment of CLP 219,670,507 thousand in Brazil, composed by the recognition of assets amounting to CLP 748,331,030 thousand and liabilities amounting to CLP 528,660,524 thousand. These investments accounted for 26.0% of the Company's consolidated sales revenues.

 

As of March 31, 2021, the Brazilian Real devalued by 7.4% with respect to the Chilean peso.

 

If the exchange rate of the Brazilian Real devalued an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operation in Brazil of CLP 370,016 thousand and a decrease in equity of CLP 10,530,185 thousand.

 

a.3   Investment in Paraguay

 

As of the closing date of these financial statements, the Company maintains a net investment of CLP 268,973,809 thousand in Paraguay, composed by the recognition of assets amounting to CLP 311,304,210 thousand and liabilities amounting to CLP 42,330,402 thousand. These investments accounted for 8.5% of the Company's consolidated sales revenues.

 

As of March 31, 2021, the Paraguayan Guarani appreciated by 11.0% with respect to the Chilean peso.

 

If the exchange rate of the Paraguayan Guaraní devalued by 5% with respect to the Chilean Peso, the Company would have lower income from the operations in Paraguay of CLP 518,503 thousand and a decrease in equity of CLP 12,271,962.

 

70

 

 

 

 

Net exposure of assets and liabilities in foreign currency

 

This risk stems mostly from carrying liabilities in US dollar, so the volatility of the US dollar with respect to the functional currency of each country generates a variation in the valuation of these obligations, with consequent effect on results.

 

In order to protect the Company from the effects on income resulting from the volatility of the Brazilian Real and the Chilean Peso against the U.S. dollar, the Company maintains derivative contracts (cross currency swaps) to cover almost 100% of US dollar-denominated financial liabilities.

 

By designating such contracts as hedging derivatives, the effects on income for variations in the Chilean Peso and the Brazilian Real against the US dollar, are mitigated annulling its exposure to exchange rates.

 

c) Exposure of assets purchased or indexed to foreign currency

 

This risk originates from purchases of raw materials and investments in Property, plant and equipment, whose values are expressed in a currency other than the functional currency of the subsidiary. Changes in the value of costs or investments can be generated through time, depending on the volatility of the exchange rate.

 

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

 

Commodities risk

 

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

 

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

 

71

 

 

 

 

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

 

   Payments on the year of maturity 
  1 year   More than 1 up to 2   More than 2 up to 3   More than 3 up to 4   More than 5 
Item   CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s)    CLP (000’s) 
Bank debt   781,362              4,000,000    - 
Bonds payable (1)   14,517,467    12,110,943    12,637,612    276,662,812    624,114,318 
Lease obligations   5,858,558    1,904,631    4,701,571    1,536,219    5,857,583 
Contractual obligations   66,015,691    15,617,675    7,884,545    11,051,457    6,395,298 
Total   87,173,078    29,633,249    25,223,728    293,250,488    636,367,199 

 

(1)Includes Mark-to-Market liability valuations for bond hedge derivatives

 

COVID-19-Related Risk

 

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

 

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

 

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

 

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

 

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

 

72

 

 

 

 

Due to uncertainties regarding the COVID-19 pandemic and the above-mentioned government restrictions, including how long these conditions may persist, and the effects they will have on our sales volumes and our business in general, we cannot accurately predict the ultimate financial impact from these new trends. In any event, we estimate that the company will not face liquidity constraints, or difficulties in complying with covenants under our debt instruments. We do not anticipate any significant provisions or impairments at this time.

 

Finally, we reiterate our investment plan for 2021 that will return to precrisis levels, i.e. between approximately USD$ 160 – USD 180 million. Our investment plans are constantly monitored, and we cannot assure that we will completely fulfill it if there is a stronger flare-up of this health situation in the countries where we operate or for other unforeseen circumstance.

 

25 – EXPENSES BY NATURE

 

Other expenses by nature are:

 

   01.01.2021   01.01.2020 
  03.31.2021   03.31.2020 
Description  CLP (000’s)   CLP (000’s) 
Direct production costs   275,069,875    255,758,386 
Payroll and employee benefits   63,346,748    71,045,579 
Transportation and distribution   41,690,572    38,427,409 
Depreciation y amortization   22,818,732    28,002,841 
Repairs and maintenance   6,139,454    6,122,473 
Other expenses   20,836,052    29,301,364 
Total (1)   429,901,433    428,658,052 

 

(1)    Corresponds to the addition of cost of sales, administrative expenses and distribution costs

 

26 – OTHER INCOME

 

Other income by functio is detailed as follows:

 

   01.01.2021   01.01.2020 
  03.31.2021   03.31.2020 
Description  CLP (000’s)   CLP (000’s) 
Gain on disposal of Property, plant and equipment   57,669    546 
Others   171,974    596,996 
Total   229,643    597,942 

 

73

 

 

 

 

 

27 – OTHER EXPENSES BY FUNCTION

 

Other expenses by function are detailed as follows:

 

   01.01.2021   01.01.2020 
  03.31.2021   03.31.2020 
Description  CLP (000’s)   CLP (000’s) 
Contingencies and non-operating fees   2,353,825    2,124,629 
Tax on bank debts and other bank expenses   1,044,784    1,267,000 
Write-offs, disposal and loss of Property, plant and equipment   (70,040)   (119,761)
Others   142,569    247,106 
Total   3,471,138    3,518,974 

 

28 – FINANCIAL INCOME AND COSTS

 

Financial income and costs are detailed as follows:

 

a)Financial income

 

   01.01.2021   01.01.2020 
  03.31.2021   03.31.2020 
Description  CLP (000’s)   CLP (000’s) 
Interest income   2,820,106    1,599,965 
Guaranty restatement Ipiranga acquisition   1,158    - 
Recovery PIS and COFINS credits (1)   -    - 
Other financial income   993,203    511,783 
Total   3,814,467    2,111,748 

 

(1)See Note 6 for more information regarding recovery

 

b)Financial costs

 

   01.01.2021   01.01.2020 
  03.31.2021   03.31.2020 
Description  CLP (000’s)   CLP (000’s) 
Bond interest   11,820,190    10,592,142 
Bank loan interest   141,517    379,332 
Other financial costs   925,584    1,422,590 
Total   12,887,291    12,394,064 

 

29 – OTHER (LOSSES) GAINS

 

Other (losses) gains are detailed as follows:

 

   01.01.2021   01.01.2020 
  03.31.2021   03.31.2020 
Description  CLP (000’s)   CLP (000’s) 
Other income   -    855 
Total   -    855 

 

74

 

 

 

 

30 – LOCAL AND FOREIGN CURRENCY

 

Local and foreign currency balances are the following:

 

  03.31.2021   12.31.2020 
CURRENT ASSETS  CLP (000’s)   CLP (000’s) 
Cash and cash equivalent   208,294,736    309,530,699 
USD   10,663,983    21,332,268 
EUR   496,957    223,449 
CLP   16,250,172    201,936,140 
BRL   102,403,973    49,528,425 
AR   38,574,100    14,821,502 
PYG   39,905,551    21,688,915 
           
Other current financial assets   221,858,127    140,304,853 
CLP   219,913,881    139,449,882 
BRL   741,991    10,171 
AR   1,202,255    844,800 
           
Other current non-financial assets   14,189,580    13,374,381 
USD   469,545    1,723,989 
EUR   18,918    621,516 
UF   217,807    493,546 
CLP   4,700,652    1,900,762 
BRL   1,708,657    1,300,995 
AR   5,482,773    6,052,294 
PYG   1,591,228    1,281,279 
           
Trade accounts and other accounts receivable   177,000,344    194,021,253 
USD   607,622    901,930 
EUR   3,369    - 
UF   48,332    65,250 
CLP   104,502,640    105,340,179 
BRL   55,310,004    67,423,832 
AR   11,634,512    14,928,954 
PYG   4,893,865    5,361,108 
           
Accounts receivable related companies   12,890,237    11,875,408 
CLP   8,462,212    6,965,894 
BRL   43,124    41,878 
AR   4,384,901    4,867,636 
           
Inventory   137,599,780    127,972,650 
CLP   55,200,763    54,112,760 
BRL   35,070,431    31,446,180 
AR   36,094,929    32,214,119 
PYG   11,233,657    10,199,591 
           
Current tax assets   1,120,999    218,473 
CLP   380,857    218,473 
BRL   740,142    - 
AR   -    - 
           
Total current assets   772,953,804    797,297,717 
USD   11,741,150    23,958,187 
EUR   519,244    844,965 
UF   266,139    558,796 
CLP   409,411,177    509,924,089 
BRL   196,018,322    149,751,481 
AR   97,373,471    73,729,306 
PYG   57,624,301    38,530,893 

 

75

 

 

 

 

  03.31.2021   12.31.2020 
NON-CURRENT ASSETS  CLP (000’s)   CLP (000’s) 
Other non-current financial assets   187,809,389    162,013,278 
UF   15,839,144    7,515,981 
BRL   161,835,842    144,684,180 
AR   10,134,403    9,813,117 
           
Other non-current non-financial assets   77,219,385    90,242,672 
UF   342,262    338,014 
CLP   47,531    47,530 
BRL   74,888,949    88,001,852 
AR   1,846,512    1,825,631 
PYG   94,131    29,645 
           
Non-current accounts receivable   79,694    73,862 
UF   33,365    32,219 
AR   693    1,211 
PYG   45,636    40,432 
           
Non-current accounts receivable related companies   138,375    138,346 
CLP   138,375    138,346 
           
Investments accounted for using the equity method   86,057,949    87,956,354 
CLP   51,339,440    50,628,307 
BRL   34,718,509    37,328,047 
           
Intangible assets other than goodwill   611,119,834    604,514,165 
USD   3,959,421    3,959,421 
CLP   306,319,483    306,202,181 
BRL   128,794,248    139,166,117 
AR   2,657,797    2,591,026 
PYG   169,388,885    152,595,420 
           
Goodwill   96,002,213    98,325,593 
CLP   9,523,767    9,523,767 
BRL   50,916,487    54,980,669 
AR   28,371,635    27,343,642 
PYG   7,190,324    6,477,515 
           
Property, plant and equipment   596,843,055    605,576,545 
CLP   252,733,127    255,963,912 
BRL   163,700,225    179,286,945 
AR   107,685,274    103,227,548 
PYG   72,724,429    67,098,140 
           
Deferred tax assets   1,872,572    1,925,870 
CLP   1,872,572    1,925,870 
           
Total non-current assets   1,657,142,466    1,650,766,685 
USD   3,959,421    3,959,421 
UF   16,214,771    7,886,214 
CLP   621,974,295    624,429,913 
BRL   614,854,260    643,447,810 
AR   150,696,314    144,802,175 
PYG   249,443,405    226,241,152 

 

76

 

 

 

 

   03.31.2021   12.31.2020 
  Up to 90 days   90 days
up to 1 year
   Total   Up to 90 days   90 days
up to 1 year
   Total 
CURRENT LIABILITIES  CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Other current financial liabilities   10,120,447    24,794,691    34,915,138    9,270,838    29,295,886    38,566,724 
USD   74,465    1,134,721    1,209,186    72,655    6,704,245    6,776,900 
UF   8,682,522    5,864,012    14,546,534    7,799,637    5,272,547    13,072,184 
CLP   927,571    13,340,689    14,268,260    908,790    13,489,310    14,398,100 
BRL   317,887    1,050,845    1,368,732    362,854    1,245,940    1,608,794 
AR   62,600    1,899,958    1,962,558    70,950    1,578,082    1,649,032 
PYG   55,402    1,504,466    1,559,868    55,952    1,005,762    1,061,714 
                               
Current trade accounts payable and other accounts payable   198,901,557    7,152,450    206,054,007    227,503,270    2,942,539    230,445,809 
USD   12,685,579    -    12,685,579    8,972,065    -    8,972,065 
EUR   6,184,104    -    6,184,104    1,622,411    -    1,622,411 
CLP   97,582,953    7,152,450    104,735,403    108,670,085    2,942,539    111,612,624 
BRL   47,227,377    -    47,227,377    58,136,480    -    58,136,480 
AR   25,409,329    -    25,409,329    33,511,747    -    33,511,747 
PYG   9,137,820    -    9,137,820    15,878,527    -    15,878,527 
Other currencies   674,395    -    674,395    711,955    -    711,955 
                               
Current accounts payable to related companies   24,478,246    -    24,478,246    39,541,968    -    39,541,968 
CLP   11,376,849    -    11,376,849    23,884,687    -    23,884,687 
BRL   10,161,602    -    10,161,602    10,809,085    -    10,809,085 
AR   2,939,795    -    2,939,795    4,848,196    -    4,848,196 
                               
Other current liabilities   1,039,928    529,169    1,569,097    805,842    529,495    1,335,337 
CLP   1,039,928    490,598    1,530,526    805,842    494,748    1,300,590 
PYG   -    38,571    38,571    -    34,747    34,747 
                               
Current tax liabilities   785,179    14,276,974    15,062,153    4,590,876    4,237,723    8,828,599 
CLP   367,144    9,113,235    9,480,379    173,771    3,414,859    3,588,630 
BRL   -    -    -    4,249,909    -    4,249,909 
AR   418,035    3,575,357    3,993,392    167,196    439,641    606,837 
PYG   -    1,588,382    1,588,382    -    383,223    383,223 
                               
Current employee Benefit provisions   8,152,705    10,007,120    18,159,825    17,027,427    14,043,592    31,071,019 
CLP   729,866    3,503,042    4,232,908    1,168,973    5,799,389    6,968,362 
BRL   7,269,388    -    7,269,388    15,325,256    -    15,325,256 
AR   153,451    4,993,473    5,146,924    533,198    6,701,756    7,234,954 
PYG   -    1,510,605    1,510,605    -    1,542,447    1,542,447 
                               
Other current non-financial liabilities   722,760    1,950,470    2,673,230    620,609    27,646,121    28,266,730 
CLP   722,760    1,828,191    2,550,951    598,769    27,551,000    28,149,769 
AR   -    16,691    16,691    21,840    -    21,840 
PYG   -    105,588    105,588    -    95,121    95,121 
                               
Total current liabilities   244,200,822    58,710,874    302,911,696    299,360,830    78,695,356    378,056,186 
USD   12,760,044    1,134,721    13,894,765    9,044,720    6,704,245    15,748,965 
EUR   6,184,104    -    6,184,104    1,622,411    -    1,622,411 
UF   8,682,522    5,864,012    14,546,534    7,799,637    5,272,547    13,072,184 
CLP   112,747,071    35,428,205    148,175,276    136,210,917    53,691,845    189,902,762 
BRL   64,976,254    1,050,845    66,027,099    88,883,584    1,245,940    90,129,524 
AR   28,983,210    10,485,479    39,468,689    39,153,127    8,719,479    47,872,606 
PYG   9,193,222    4,747,612    13,940,834    15,934,479    3,061,300    18,995,779 
Other currencies   674,395    -    674,395    711,955    -    711,955 

 

77

 

 

 

 

   03.31.2021   12.31.2020 
  More than 1 year up to 3   More than 3 y up to 5   More than 5 years   Total   More than 1 year up to 3   More than 3 y
up to 5
   More than 5
years
   Total 
NON-CURRENT LIABILITIES   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Other non-current financial liabilities   31,395,728    283,733,536    680,813,398    995,942,662    31,811,687    279,600,958    678,416,924    989,829,569 
USD   327,264    263,714,311    210,818,219    474,859,794    366,652    259,746,604    207,280,189    467,393,445 
UF   25,462,821    13,570,658    413,350,917    452,384,396    24,669,188    13,214,387    414,689,041    452,572,616 
CLP   3,191,957    4,000,000    52,416,969    59,608,926    4,089,001    4,000,000    51,568,854    59,657,855 
BRL   2,214,342    2,448,567    4,227,293    8,890,202    2,394,281    2,639,967    4,878,840    9,913,088 
AR   119,744    -    -    119,744    128,930    -    -    128,930 
PYG   79,600    -    -    79,600    163,635    -    -    163,635 
                                         
Non-current accounts payable   307,271    -    -    307,271    295,279    -    -    295,279 
CLP   307,271    -    -    307,271    293,176    -    -    293,176 
AR   -    -    -    -    2,103    -    -    2,103 
                                         
Accounts payable related companies   9,992,480    -    -    9,992,480    10,790,089    -    -    10,790,089 
BRL   9,992,480    -    -    9,992,480    10,790,089    -    -    10,790,089 
                                         
Other non-current provisions   781,756    45,615,794    -    46,397,550    789,016    47,945,920    -    48,734,936 
BRL   -    45,615,794    -    45,615,794    -    47,945,920    -    47,945,920 
AR   781,756    -    -    781,756    789,016    -    -    789,016 
                                         
Deferred tax liabilities   11,877,672    36,277,842    101,642,909    149,798,423    10,677,151    38,508,424    104,483,972    153,669,547 
CLP   1,937,589    1,036,191    86,378,686    89,352,466    1,604,289    1,070,325    90,781,152    93,455,766 
BRL   -    35,241,651    -    35,241,651    -    37,438,099    -    37,438,099 
AR   9,940,083    -    -    9,940,083    9,072,862    -    -    9,072,862 
PYG   -    -    15,264,223    15,264,223    -    -    13,702,820    13,702,820 
                                         
Non-current employee benefit provisions   1.014.420    163,113    13,246,762    14,424,295    911,873    145,165    12,578,520    13,635,558 
CLP   435,550    163,113    13,246,762    13,845,425    378,733    145,165    12,578,520    13,102,418 
PYG   578,870    -    -    578,870    533,140    -    -    533,140 
                                         
Other non-financial liabilities   28,353    19,814,703    -    19,843,056    35,315    21,436,733    -    21,472,048 
BRL   -    19,814,703    -    19,814,703    -    21,436,733    -    21,436,733 
AR   28,353    -    -    28,353    35,315    -    -    35,315 
                                         
Other non-financial liabilities   -    -    -    -    20,597    -    -    20,597 
CLP   -    -    -    -    20,597    -    -    20,597 
                                         
Total non-current liabilities   55,397,680    385,604,988    795,703,069    1,236,705,737    55,331,007    387,637,200    795,479,416    1,238,447,623 
USD   327,264    263,714,311    210,818,219    474,859,794    366,652    259,746,604    207,280,189    467,393,445 
UF   25,462,821    13,570,658    413,350,917    452,384,396    24,669,188    13,214,387    414,689,041    452,572,616 
CLP   5,872,367    5,199,304    152,042,417    163,114,088    6,385,796    5,215,490    154,928,526    166,529,812 
BRL   12,206,822    103,120,715    4,227,293    119,554,830    13,184,370    109,460,719    4,878,840    127,523,929 
AR   10,869,936    -    -    10,869,936    10,028,226    -    -    10,028,226 
PYG   658,470    -    15,264,223    15,922,693    696,775    -    13,702,820    14,399,595 

 

78

 

 

 

 

31 – ENVIRONMENT

 

The Company has made disbursements for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analysis, consulting on environmental impacts and others.

 

These disbursements by country are detailed as follows:

 

   2021 period   Future commitments 
       Capitalized to      To be
Capitalized to
 
Country  Recorded as
Expenses
   Property,
plant and
equipment
   To be
Recorded as
Expenses
   Property,
plant and
equipment
 
   CLP (000’s)   CLP (000’s)   CLP (000’s)   CLP (000’s) 
Chile   324,057    -    -    - 
Argentina   113,423    -    13,336    - 
Brazil   256,784    18,576    238,616    1,758,275 
Paraguay   16,629    -    -    - 
Total   710,893    18,576    251,952    1,758,275 

 

32 – SUBSEQUENT EVENTS

 

No other events have occurred after March 31, 2021 that may significantly affect the Company's consolidated financial situation.

 

79

 

 

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, May 14, 2021