UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15b-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

September 2011

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. El Golf 40, Piso 4

Las Condes

Santiago, Chile

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark if the Registrant is submitting this Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes o No x

Indicate by check mark if the Registrant is submitting this Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes o No x

Indicate by check mark whether the registrant by furnishing the information contained in this Form 6-K is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934

Yes o No x

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Santiago, Chile.

	EMBOTELLADORA ANDINA S.A.
	By:	/s/ Andrés Wainer
	Name: Andrés Wainer
	Title: Chief Financial Officer
Santiago, September 8th 2011

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Intermediate Consolidated Statements of Financial Position

at June 30, 2011 and December 31, 2010

1

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Intermediate Consolidated Statements of Financial Position

TABLE OF CONTENTS

Independent Auditors’ Report	3
Intermediate Consolidated Statements of Financial Position at June 30, 2011 and at December 31, 2010	4
Intermediate Consolidated Income Statements by Function for the periods ended at June 30, 2011 and 2010	6
Intermediate Consolidated Statements of Comprehensive Income for the periods ended at June 30, 2011 and 2010	7
Intermediate Consolidated Statements of Cash Flows for the periods ended at June 30, 2011 and 2010	8
Consolidated Statements of Changes in Equity at June 30, 2011 and 2010	9
Notes to the Consolidated Financial Statements	10

2

Independent Auditors’ Report

(Translation of Report originally issued in Spanish — See Note 2.3)

To the Chairman, Shareholdres and Directors

Embotelladora Andina S.A.:

1.We wave reviewed the interim consolidated statements of financial position of Embotelladora Andina S.A. and subsidiaries (the “Company”) as of June 30, 2011 and the related interim consolidated statements of comprehensive income for the six-month and three-month periods ended June 30, 2011 and 2010, as well as the corresponding statements of cash flows and og changes in shareholders´equity for the six-month periods then ended. The preparation and presentation of these interim financial statements and their accompanying notes in conformity with IAS 34 “Interim financial reporting” described in International Financial Reporting Standards are the responsibility of the management of Embotelladora Andina S.A..

2.We conducted our reviews in accordance with generally accepted auditing standards in Chile. Review of interim financial information includes applying analytical procedures and conducting inquires of the persons responsible for financial and accounting matters. The scope of these reviews is significantly less than the scope of an in accordance with generally accepted auditing standards in Chile, the purpose of which is to express an opinion on the financial statements as a whole. Therefore, we do not express such as opinion.

3.Based on our reviews, we are not aware of any significant modification that should be made to the financial statements mentioned in the first paragraph in order for them to be in conformity with IAS 34, as describe in International Financial Reporting Standards.

4.On January 25, 2011 we issued unquialified opinion to the consolidated financial statements at December 31, 2010 and 2009 of Embotelladora Andina S.A. which included the financial position at December 31, 2010 wihich is presented in the attached interim financial statements, along with its notes.

Rafael Contreras ERNST & YOUNG LTDA.

Santiago, July 26, 2011.

3

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Intermediate Consolidated Statements of Financial Position

at June 30, 2011 and at December 31, 2010

(Translation of Report originally issued in Spanish — See Note 2.3)

ASSETS	NOTE	06/30/2011	12/31/2010
		ThCh$	ThCh$
Current Assets:
Cash and cash equivalents	4	79,924,268	48,263,080
Other financial assets	5	9,077,145	48,914,734
Other non-financial assets	6.1	19,023,096	10,712,132
Trade and other accounts receivable, net	7	69,877,908	97,254,597
Accounts receivable from related companies	11.1	31,763	248,273
Inventory	8	46,137,259	49,939,194
Current tax assets / Tax accounts receivable	9.1	2,129,753	2,288,725
Total Current Assets		226,201,192	257,620,735
Non-Current Assets:
Other non-financial, non-current assets	6.2	27,303,923	21,507,754
Trade and other accounts receivable, net	7	7,431,667	7,804,481
Accounts receivable from related companies, net	11.1	29,187	8,847
Investments in equity investees accounted for using the equity method	13	63,979,731	50,754,168
Intangible assets, net	14.1	1,237,638	1,365,595
Goodwill	14.2	60,063,083	57,770,335
Property, plant and equipment, net	10	313,958,061	291,482,180
Deferred tax assets	9.4	6,871,937	6,891,609
Total Non-Current Assets		480,875,227	437,584,969
Total Assets		707,076,419	695,205,704

The accompanying notes 1 to 28 form an integral part of these financial statements

4

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Intermediate Consolidated Statements of Financial Position

at June 30, 2011 and at December 31, 2010

(Translation of Report originally issued in Spanish — See Note 2.3)

LIABILITIES AND NET EQUITY	NOTE	06/30/2011		12/31/2010
		ThCh$		ThCh$
Current Liabilities:
Other financial liabilities	15	28,210,315		11,996,399
Trade and other accounts payable	16	72,909,739		105,282,335
Accounts payable to related companies	11.2	8,567,527		14,323,473
Provisions	17	93,782		60,748
Income tax payable	9.2	1,549,737		4,009,389
Other non-financial liabilities	18	62,858,582		31,879,967
Total Current Liabilities		174,189,682		167,552,311
Non-Current Liabilities:
Other non-current financial liabilities	15	70,334,368		70,449,459
Provisions	17	4,233,755		4,267,619
Deferred tax liabilities	9.4	45,880,345		42,492,348
Post-employment benefit liabilities	12.2	7,439,412		7,256,590
Other non-current liabilities	18	8,717,462		8,322,781
Total Non-Current Liabilities		136,605,342		132,788,797
Equity:	19
Issued capital		230,892,178		230,892,178
Retained earnings		170,154,801		180,110,975
Accumulated Other Comprehensive Income and capital reserves		(4,774,708	)	(16,146,887	)
Equity attributable to equityholders of the parent		396,272,271		394,856,266
Non-controlling interests		9,124		8,330
Total Equity		396,281,395		394,864,596
Total Liabilities and Equity		707,076,419		695,205,704

The accompanying notes 1 to 28 form an integral part of these financial statements

5

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Intermediate Consolidated Income Statements by Function

for the periods ended at June 30, 2011 and 2010

(Translation of Report originally issued in Spanish — See Note 2.3)

CONSOLIDATED INCOME STATEMENTS BY		01/01/2011		01/01/2010		04/01/2011		04/01/2010
FUNCTION	NOTE	06/30/2011		06/30/2010		06/30/2011		06/30/2010
		ThCh$		ThCh$		ThCh$		ThCh$
Net sales		460,056,938		421,577,888		209,280,739		191,790,611
Cost of sales		(273,315,590	)	(241,230,756	)	(127,820,814	)	(113,714,168	)
Gross Profit		186,741,348		180,347,132		81,459,925		78,076,443
Other operating income	23	954,043		439,337		761,148		148,230
Distribution expenses		(45,636,603	)	(39,497,137	)	(21,743,081	)	(19,397,622	)
Administrative and sales expenses		(79,981,324	)	(71,892,288	)	(38,293,249	)	(33,917,687	)
Other expenses by function	24	(2,898,029	)	(3,008,359	)	(1,776,007	)	(1,410,438	)
Other income (expenses)	26	142,779		1,117,442		(448,510	)	(418,172	)
Finance income	25	1,631,178		1,935,179		971,155		1,100,176
Finance costs	25	(3,625,488	)	(3,543,517	)	(1,829,843	)	(1,968,074	)
Share in profit (loss) of equity investees accounted for using the equity method	13.2	1,301,574		453,626		1,089,022		(160,347	)
Foreign exchange difference		63,812		24,377		(98,830	)	24,694
Profit from units of adjustment		(343,348	)	4,136		(278,307	)	4,134
Net income before taxes		58,349,942		66,379,928		19,813,423		22,081,337
Income tax expense	9	(15,543,743	)	(17,661,679	)	(5,005,749	)	(6,142,146	)
Net income for the fiscal period		42,806,199		48,718,249		14,807,674		15,939,191
Net income attributable
Net income attributable to equity holders of the parent		42,805,093		48,717,166		14,807,341		15,938,908
Net income attributable to non-controlling interests		1,106		1,083		333		283
Net income for the fiscal period		42,806,199		48,718,249		14,807,674		15,939,191

	Ch$	Ch$	Ch$	Ch$
Earnings per Share
Earnings per Series A Share	53.62	61.03	18.55	19.97
Earnings per Series B Share	58.98	67.13	20.40	21.96

The accompanying notes 1 to 28 form an integral part of these financial statements

6

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Intermediate Consolidated Statements of Cash Flows

for the periods ended at June 30, 2011 and 2010

(Translation of Report originally issued in Spanish — See Note 2.3)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE		01/01/2011		01/01/2010		04/01/2011		04/01/2010
INCOME	NOTA	06/30/2011		30.06.2010		06/30/2011		30.06.2010
		ThCh$		ThCh$		ThCh$		ThCh$
Net income for the fiscal period		42,806,199		48,718,249		14,807,674		15,939,191
Foreign exchange translation adjustment, before taxes	19	12,174,276		10,043,760		2,527,062		7,168,400
Income tax effect related to losses from foreign exchange rate translation differences included within other comprehensive income		(802,409	)	415,777		(522,054	)	118,469
Comprehensive income for the fiscal year		54,178,066		59,177,786		16,812,682		23,226,060
Comprehensive income attributable to:
Controlling shareholders		54,177,272		59,178,900		16,812,688		23,228,099
Non-controlling interests		794		(1,114	)	(6	)	(2,039	)
Total comprehensive income		54,178,066		59,177,786		16,812,682		23,226,060

The accompanying notes 1 to 28 form an integral part of these financial statements

7

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Intermediate Consolidated Statements of Cash Flows

for the periods ended at June 30, 2011 and 2010

(Translation of Report originally issued in Spanish — See Note 2.3)

		01/01/2011		01/01/2010
	NOTE	06/30/2011		30/06/2010
		ThCh$		ThCh$
Cash flows provided by (used in) Operating Activities
Types of cash flows provided by Operating Activities
Receipts from customers		670,913,755		614,707,090
Proceeds from insurance policies		162,979		—
Types of cash flows used in Operating Activities
Supplier payments		(491,923,498	)	(435,708,088	)
Payroll		(44,297,494	)	(41,156,856	)
Other payments because of operating activities (value-added taxes on purchases and sales and others)		(78,057,684	)	(75,183,535	)
Dividends classified as from operations		1,461,957		1,379,837
Interest payments classified as from operations		(3,048,155	)	(2,559,893	)
Interest received classified as from operations		1,248,714		2,227,332
Income tax payments		(7,215,983	)	(6,371,225	)
Cash flows used in other operating activities		(1,614,108	)	(1,115,101	)
Net cash flows provided by Operating Activities		47,630,483		56,219,561
Cash flows provided by (used in) Investing Activities
Cash flows from the loss of control in subsidiaries and other companies (sale of Vital S.A., deducted from initial cash flow)		5,355,930		—
Cash flows used to obtain control of subsidiaries or other businesses (Capital contribution in Vital S.A. before proprtional sale)		(1,278,000	)	—
Cash flows used to purchase non-controlling interest (capital contribution to the affiliate Vital S.A. after proprtional sale)		(3,249,000	)	—
Proceeds from sale of property, plant and equipment		1,789,308		290,737
Purchase of property, plant and equipment		(59,594,379	)	(36,215,404	)
Importes procedentes de otros activos a largo plazo (Rescates depósitos a plazo superiores a 90 días)		66,042,480		50,013,742
Long-term purchases of other assets (Investment in time deposits of over 90 days).		(26,015,297	)	(35,443,718	)
Cash flows provided by (used in) other investing activities		781,618		(971,605	)
Net cash flows used in Investing Activities		(16,167,340	)	(22,326,248	)
Cash Flows provided by (used in) Financing Activities
Short term loans obtained		58,168,099		24,178,619
Total proceeds from loans		58,168,099		24,178,619
Loan payments		(40,869,400	)	(11,036,048	)
Dividend payments by the reporting entity		(17,370,456	)	(53,260,469	)
Cash flows used in other financing activities		(1,479,776	)	(1,345,375	)
Net cash flows used in Financing Activities		(1,551,533	)	(41,463,273	)
Decrease in Cash and cash equivalents, before effects of variations in Foreign Exchange Rates		29,911,610		(7,569,960	)
Effects of variations in foreign exchange rates on cash and cash equivalents		1,749,578		1,227,757
Net increase (decrease) in cash and cash equivalents		31,661,188		(6,342,203	)
Cash and cash equivalents — beginning of year	4	48,263,080		62,791,221
Cash and cash equivalents - end of year	4	79,924,268		56,449,018

The accompanying notes 1 to 28 form an integral part of these financial statements

8

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

at June 30, 2011 and 2010

(Translation of Report originally issued in Spanish — See Note 2.3)

		Other reserves
	Issued capital	Translation reserves		Other reserves(various)	Totalother  reserves		Retained earnings		Controlling Equity		Non-Controlling  interests		Total  Equity
	ThCh$	ThCh$		ThCh$	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Initial balance at 01/01/2011	230,892,178	(21,582,425	)	5,435,538	(16,146,887	)	180,110,975		394,856,266		8,330		394.864.596
Changes in Equity
Comprehensive Income
Net income	—	—		—	—		42,805,093		42,805,093		1.106		42.806.199
Other comprehensive income	—	11,372,179		—	11,372,179		—		11,372,179		(312	)	11.371.867
Comprehensive Income		11,372,179		—	11,372,179		42,805,093		54,177,272		794		54.178.066
Dividends	—	—		—	—		(52,761,267	)	(52,761,267	)	—		(52.761.267	)
Total changes in Equity	—	11,372,179		—	11,372,179		(9,956,174	)	1,416,005		794		1.416.799
Ending balance at 06/30/2011	230,892,178	(10,210,246	)	5,435,538	(4,774,708	)	170,154,801		396,272,271		9,124		396.281.395

		Other reserves
	Issued capital	Translation reserves		Other reserves(various)	Totalother  reserves		Retained earnings		Controlling Equity		Non-Controlling  interests		Total  Equity
	ThCh$	ThCh$		ThCh$	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Initial balance at 01/01/2010	230,892,178	(10,287,158	)	5,435,538	(4,851,620	)	147,508,036		373,548,594		9,141		373,557,735
Changes in Equity
Comprehensive Income
Net income	—	—		—	—		48,717,166		48,717,166		1,083		48.718.249
Other comprehensive income	—	10,461,734		—	10,461,734		—		10,461,734		(2,197	)	10.459.537
Comprehensive Income	—	10,461,734		—	10,461,734		48,717,166		59,178,900		(1,114	)	59.177.786
Dividends	—	—		—	—		(54,529,888	)	(54,529,888	)	—		(54.529.888	)
Total changes in Equity		10,461,734		—	10,461,734		(5,812,722	)	4,649,012		(1,114	)	4,647,898
Ending balance at 06/30/2010	230,892,178	174,576		5,435,538	5,610,114		141,695,314		378,197,606		8,027		378,205,633

The accompanying notes 1 to 28 form an integral part of these financial statements

9

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(Translation of Report originally issued in Spanish — See Note 2.3)

NOTE 1 - CORPORATE INFORMATION

Embotelladora Andina S.A. is registered under No. 00124 of the Securities Registry and is regulated by the Chilean Superintendency of Securities and Insurance (SVS) pursuant to Law 18,046.

Embotelladora Andina S.A. (hereafter “Andina,” and together with its subsidiaries, the “Company”) engages mainly in the production and sale of Coca-Cola products and other Coca-Cola beverages. The Company has operations in Chile, Brazil and Argentina. In Chile, the areas in which it has distribution franchises are the cities of Santiago, San Antonio and Rancagua. In Brazil, it has distribution franchises in the states of Rio de Janeiro, Espírito Santo, Niteroi, Vitoria, and Nova Iguaçu. In Argentina, it has distribution franchises in the provinces of Mendoza, Córdoba, San Luis, Entre Ríos, Santa Fe, and Rosario. The Company holds a license from The Coca-Cola Company in its territories, Chile, Brazil, and Argentina. The license for those territories expires in 2012. All these licenses are issued at the discretion of The Coca-Cola Company. It is expected that the licenses will be renewed upon expiration based on similar terms and conditions.

At December 31, 2010, the Freire Group and related companies controlled the company with 53.85% of the outstanding voting shares.

The main offices of Embotelladora Andina S.A. are located at Avenida El Golf 40, 4th floor, municipality of Las Condes, Santiago, Chile. Its taxpayer identification number is 91,144,000-8.

NOTE 2 -BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1Comparability of information

The Company adopted International Financial Reporting Standards as of December 31, 2010 with a transition date of January 1, 2009, which is the date of conversion to International Financial Reporting Standards.

10

2.2Periods covered

These Intermediate Consolidated Financial Statements encompass the following periods:

Consolidated statements of financial position: At June 30, 2011 and December 31, 2010.

Consolidated income statements by function: The periods from January 1 to June 30, 2011 and 2010, and the intermediate periods fron April 1 to June 30, 2011 and 2010.

Consolidated statements of comprehensive income: The periods from January 1 to June 30, 2011 and 2010, and the intermediate periods fron April 1 to June 30, 2011 and 2010.

Consolidated statements of cash flows: The periods from January 1 to June 30, 2011 and 2010.

Consolidated statements of changes in equity:  Balances and activity between January 1 and December 31, 2011 and 2010.

2.3Basis of preparation

The Company’s Consolidated Financial Statements for the period ended December 31, 2011 and 2010 were prepared according to International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (hereinafter “IASB”).

These financial statements comprise the consolidated financial position of Embotelladora Andina S.A. and its subsidiaries as of June 30, 2011 and 2010 along with consolidated income statement by function, consolidated statements of comprehensive income, consolidated statements of cash flows, and consolidated statement of changes in  equity for the periods ended June 30, 2011 and 2010 and  the interim periods between april 01 and june 30 of 2011 and 2010, which were approved by the Board of Directors during session held on July 26, 2011.

These Consolidated Financial Statements have been prepared based on accounting records kept by the Parent Company and by other entities forming part thereof. Each entity prepares its financial statements following the accounting principles and standards applicable in each country, adjustments and reclassifications have been made, as necessary, in the consolidation process to align such principles and standards and then adapt them to IFRS.

For the convenience of the reader, these consolidated financial statements have been translated from Spanish to English.

11

2.4Basis of consolidation

2.4.1Subsidiaries

The Consolidated Financial Statements include the Financial Statements of the Company and the companies it controls (its subsidiaries). The Company has control when it has the power to direct the financial and operating policies of a company so as to obtain benefits from its activities. They include assets and liabilities as of June 30, 2011 and 2010; and income and cash flows for the periods ended June 30, 2011 and 2010 and  the interim periods between april 01 and june 30 of 2011 and 2010. Income or losses from subsidiaries acquired or sold are included in the consolidated financial statements from the effective date of acquisition through the effective date of sale, as applicable.

The acquisition method is used to account for the acquisition of subsidiaries. The acquisition cost is the fair value of assets, of equity securities and of liabilities incurred or assumed on the date of exchange, plus the cost directly attributable to the acquisition. Identifiable assets acquired and identifiable liabilities and contingencies assumed in a business combination are accounted for initially at their fair value as of the acquisition date. The excess acquisition cost above the fair value of the Group’s share in identifiable net assets acquired is recognized as goodwill. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in income.

Intra-group transactions, balances and unrealized gains in intra-group transactions are eliminated. Unrealized losses are also eliminated. Whenever necessary, the accounting policies of subsidiaries are modified to assure uniformity with the policies adopted by the Group.

The value of non-controlling interest in equity and the results of the consolidated subsidiaries is presented in Equity; non-controlling interests, in the Consolidated Statement of Financial Position and in “net income attributable to non-controlling interests,” in the Consolidated Income Statements by Function.

The consolidated financial statements include all assets, liabilities, income, expenses, and cash flows of the company and its subsidiaries after eliminating intra-group balances and transactions.

12

The list of subsidiaries included in the consolidation is detailed as follows:

		Percentage Interest
		06/30/2011			06/30/2010
Taxpayer ID	Name of the Company	Direct	Indirect	Total	Direct	Indirect	Total
59,144,140-K	Abisa Corp S.A.	—	99.99	99.99	—	99.99	99.99
96,842,970-1	Andina Bottling Investments S.A.	99.90	0.09	99.99	99.90	0.09	99.99
96,836,750-1	Andina Inversiones Societarias S.A.	99.99	—	99,99	99.99	—	99.99
96,972,760-9	Andina Bottling Investments Dos S.A.	99.90	0.09	99.99	99.90	0.09	99.99
Extranjera	Embotelladora del Atlántico S.A.	—	99.98	99.98	—	99.98	99.98
Extranjera	Rio de Janeiro Refrescos Ltda.	—	99.99	99.99	—	99.99	99.99
78,536,950-5	Servicios Multivending Ltda.	99.90	0.09	99.99	99.90	0.09	99.99
78,861,790-9	Transportes Andina Refrescos Ltda.	99.90	0.09	99.99	99.90	0.09	99.99
76,070,406-7	Embotelladora Andina Chile S.A.	99.90	0.09	99.99	99.90	0.09	99.99
93,899,000-K	Vital S.A. (1)	—	—	—	—	99.99	99.99

(1)See Note 13.2

2.4.2Investments in associates accounted for using the equity method

Associates are all entities over which the Group exercises a material influence but does not have control. Investments in associates are accounted for using the equity method and are initially recognized at cost.

The Group’s share in income and losses subsequent to the acquisition of associates is recognized in income.

Unrealized gains in transactions between the Group and its associates are eliminated to the extent of the interest the Group holds in those associates. Unrealized losses are also eliminated unless there is evidence in the transaction of an impairment loss on the asset being transferred. Whenever necessary, the accounting policies of associates are adjusted to assure uniformity with the policies adopted by the Group.

13

2.5Financial reporting by operating segment

IFRS 8 requires that entities disclose information on the revenues of operating segments. In general, this is information that Management and Board of Directors use internally to evaluate the profitability of segments and decide how to allocate resources to them. Therefore, the following operating segments have been determined by geographic location:

·Chile operation

·Brazil operation

·Argentina operation

2.6Foreign currency translation

2.6.1Functional currency and currency of presentation

The items included in the financial statements of each of the entities in the Group are valued using the currency of the main economic environment in which the entity does business (“functional currency”). The consolidated financial statements are presented in Chilean pesos, which is the Company’s functional currency and presentation currency.

2.6.2Balances and transactions

Foreign currency transactions are converted to the functional currency using the foreign exchange rate prevailing on the date of each transaction. Translation losses and gains in the settlement of these transactions and in the conversion of the foreign currency—denominated assets and liabilities at the closing foreign exchange rates are recognized in the comprehensive income account.

The foreign exchange rates and values prevailing at the close of each fiscal period were:

	Exchange rate to the Chilean peso
Date	US$ dollar	BrazilianReal	Argentine  Peso	Unidad de  Fomento
06/30/2011	468.15	299.88	113.91	21,889.89
12/31/2010	468.01	280.89	117.71	21,455.55
06/30/2010	547.19	303.74	139.20	21,202.16

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2.6.3Companies in the group

The income statement and financial position of all companies in the Group (none of which uses the currency of a hyperinflationary economy) that use a functional currency other than the presentation currency are translated to the presentation currency in the following way:

(i)	Assets and liabilities in each statement of financial position are translated at the closing foreign exchange rate at the reporting date;
(ii)	Income and expenses of each income statement account are translated at the average foreign exchange rate; and
(iii)	All resulting translation differences are recognized as other comprehensive income.

The Companies that use a functional currency different from the presentation currency of the parent company are:

Company	Functional currency
Rio de Janeiro Refrescos Ltda. (Brazil segment)	Brazilian Real R$
Embotelladora del Atlántico S.A.(Argentina segment)	Argentine Peso A$

In the consolidation, the translation differences arising from the conversion of a net investment in foreign entities are recognized in other comprehensive income. On disposal of the investment, those translation differences are recognized in the income statement as part of the loss or gain on the disposal of the investment.

2.7Property, plant, and equipment

The assets included in property, plant and equipment are recognized at cost, less depreciation and cumulative impairment losses.

The cost of property, plant and equipment includes expenses directly attributable to the acquisition of items. The historical cost also includes revaluations and price-level restatement of opening balances at January 1, 2009, due to first-time exemptions in IFRS.

Subsequent costs are included in the value of the original asset or recognized as a separate asset only when it is likely that the future economic benefit associated with the elements of property, plant and equipment will flow to the Group and the cost of the element can be determined reliably. The value of the component that is substituted is derecognized. The remaining repairs and maintenance are charged to the income statement in the fiscal year in which they incurred.

Land is not depreciated. Other assets, net of residual value, are depreciated by distributing the cost of the different components on a straight line basis over the estimated useful life, which is the period during which the companies expect to use them.

15

The estimated years of useful life are:

Assets	Range in years
Buildings	30-50
Plant and Equipment	10-20
Warehouse installations and accessories	10-30
Other accessories	4-5
Motor vehicles	5-7
Other property, plant and equipment	3-8
Bottles and Containers	3-7

The residual value and useful lives of assets are revised and adjusted, if necessary, at each reporting date.

When the value of an asset is higher than its estimated recoverable amount, the value is reduced immediately to the recoverable amount.

Losses and gains on the disposal of property, plant, and equipment are calculated by comparing the disposal proceeds to the carrying amount, and are charged to the income statement.

2.8Intangible assets

2.8.1Goodwill

Goodwill represents the excess of the acquisition cost over the fair value of the Group’s share in identifiable net assets of the subsidiary on the acquisition date. The goodwill recognized separately is tested annually for impairment and is carried at cost, less accumulated impairment losses.

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

The goodwill is allocated to cash-generating units (CGU) in order to test for impairment losses. The allocation is made to CGUs that are expected to benefit from the business combination that generated the goodwill.

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2.8.2Water rights

Water rights that have been paid for are included in the group of intangible assets, carried at acquisition cost. They are not amortized since they have no expiration date, but are annually tested for impairment.

2.9Impairment losses

Assets that have an indefinite useful life, such as land, are not amortized and are tested annually for impairment. Amortizable assets are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount might not be recoverable. An excess carrying value of the asset above its recoverable amount is recognized as an impairment loss. The recoverable amount is the higher of an assets fair value less costs to sell and its value in use.

In order to evaluate impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash generating units). Non-financial assets other than goodwill that have suffered an impairment loss are reviewed at each reporting date to determine whether there were any reversals of the loss.

2.10Financial assets

The Company classifies its financial assets into the following categories:  financial assets at fair value through profit or loss, loans and accounts receivable, and assets hold until their maturity. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at the time of initial recognition.

2.10.1Financial assets at fair value through profit or loss.

Financial assets at fair value through profit or loss are financial assets available for sale. A financial asset is classified in this category if it is acquired mainly for the purpose of being sold in the short term. Assets in this category are classified as current assets.

Losses or gains from changes in fair value of financial assets at fair value through profit and loss are recognized in the income statement under finance income or expenses during the year in which they occur.

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2.10.2Loans and accounts receivable

Loans and accounts receivable are not quoted on an active market. They are recorded in current assets, unless they are due more than 12 months from the reporting date, in which case they are classified as non-current assets. Loans and accounts receivable are included in trade and other accounts receivable in the statement of financial position.

2.10.3Other financial assets hold until their maturity

Other Financial Assets corresponds to bank deposits that the Group’s management has the positive intention and ability to hold until their maturity. They are recorded in current assets because they mature in less than 12 months from the reporting date.

Accrued interests are recognized in the income statement under finance income during the year in which they occur.

2.11Derivatives and hedging

The derivatives held by the Company correspond to transactions hedged against foreign exchange rate risk and the price of raw materials and thus materially offset the risks that are hedged.

The derivatives are accounted for at fair value. If positive, they are recorded under “hedge assets”. If negative, they are recorded under “hedge liabilities.”

The Company’s derivatives agreements do not qualify as hedges pursuant to IFRS requirements.  Therefore, the changes in fair value are immediately recognized in the income statement under “Other income (expenses)”.

The Company does not use hedge accounting for its foreign investments.

The Company has also evaluated the derivatives implicit in financial contracts and instruments to determine whether their characteristics and risks are closely related to the master agreement, as stipulated by IAS 32 and 39.

Fair value hierarchy

At June 30, 2011, the Company did not have any open sugar sales contracts.  The Company had a total liability related to its foreign exchange derivatives contracts of ThCh$381,736, which are classified within the other current non-financial liabilities and are carried at fair value on the statement of financial position. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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Level 1:	quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2:	Assumptions different to quoted prices included in level 1 and that are applicable to assets and liabilities, be it directly (as Price) or indirectly (i.e. derived from a Price)
Level 3:	Assumptions for assets and liabilities that are not based on information observed directly in the market (In the case of the Company, corresponds to the quote at reasonable value at the end of period informed by the same institution where the financial instrument was taken).

During the reporting period ended June 30, 2011, there were no transfers of items between fair value measurements categories all of which were valued during the period using level 3.

2.12Inventory

Inventories are valued at the lower of cost and net realizable value. Cost is determined by using the weighted average cost method. The cost of finished products and of work in progress includes raw materials, direct labor, other direct costs and manufacturing overhead  to bring the goods to marketable condition, but it excludes interest expense. The net realizable value is the estimated selling price in the ordinary course of business, less any variable cost of sale.

Estimates are also made for obsolescence of raw materials and finished products based on turnover and ageing of the items involved.

2.13Trade receivable

Trade accounts receivable are recognized initially at their nominal value, given the short term in which they are recovered, less any impairment loss. A provision is made for impairment losses on trade accounts receivable when there is objective evidence that the Company will be incapable of collecting all sums owed according to the original terms of the receivable, based either on individual analyses or on global aging analyses. The carrying amount of the asset is reduced as the provision is used and the loss is recognized in administrative and sales expenses in the income statement.

2.14Cash and cash equivalents

Cash and cash equivalents include cash on hand, time deposits in banks and other short-term, highly liquid investments with purchased maturities of three months or less.

2.15Bank and debt security debt

The resources secured from banks and the issuance of debt securities are initially recognized at their fair value, net of the cost involved in the transaction.  The debt is subsequently appraised with the accrual of interest that matches the present value of the debt to the future amount payable, using the interest rate method.

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2.16Income tax

The Company and its subsidiaries in Chile account for income tax according to the net taxable income calculated by the rules in the Income Tax Law. Its subsidiaries abroad do so according to the rules of the respective countries.

Deferred taxes are calculated using the balance sheet - liability method on the temporary differences between the tax basis of assets and liabilities and their carrying amounts in the annual consolidated accounts.

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

Deferred taxes for temporary differences deriving from investments in subsidiaries and associates are recognized except when the Company can control the timing when the temporary differences will be reversed and it is likely that they will not be reversed in the foreseeable future.

2.17Employee benefits

The Company has established a provision to cover employee indemnities that will be paid to its employees according to the individual and collective contracts in place. This provision is accounted for at the actuarial value in accordance with IAS 19. The positive or negative effect on indemnities because of changes in estimates (turnover, mortality, retirement, and other rates) is recorded directly in income.

The Company also has an executive retention plan. It is accounted for as a liability according to the directives of this plan. This plan grants certain executives the right to receive a fixed cash payment on a pre-set date once they have completed the required years of employment.

The Company and its subsidiaries have made a provision for the cost of vacation and other employee benefits on an accrual basis. This liability is recorded under accrued liabilities.

2.18Allowances

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

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2.19Bottle deposits

This is a liability comprised of cash collateral received from customers for bottles made available to them.

This liability represents the value of the deposit maimed at client and distribute facilities that must be returned if the client or the distributor returns the bottles and cases to us in good condition, along with the original invoice. Estimation of this liability is based on an inventory of bottles given as a loan to clients and distributors, the estimated amount of bottles in circulation and a historical average weighted value per bottle or case.

2.20Revenue Recognition

Revenue is measured at fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s business. Revenue is presented net of value-added tax, returns, rebates, and discounts and net of sales between the companies that are consolidated.

The Company recognizes revenue when the amount of revenue can be reliably measured and it is probable that the future economic benefits will flow to the Company.

2.21Dividend payments

Dividend payments to the Company’s shareholders are recognized as a liability in the consolidated financial statements of the Company, based on the obligatory 30% minimum in accordance with the Corporations Law.

2.22Critical accounting estimates and judgments

The Company makes estimates and judgments about the future. Actual results may differ from previously estimated amounts... The estimates and judgments that might have a material impact on future financial statements are explained below:

2.22.1Estimated impairment loss on goodwill

The Group test annually whether goodwill has undergone any impairment. The recoverable amounts of cash generating units have been determined on the basis of value in use calculations. The key variables that management must calculate include the sales volume, prices, marketing expense, and other economic factors. Estimating these variables requires considerable judgment by the management, as those variables imply inherent uncertainties. However, the assumptions used are consistent with the Company’s internal planning. Therefore, the management evaluates and updates estimates from time to time according to the conditions affecting these variables. If these assets are deemed to have become impaired, the estimated fair value will be written off, as applicable. Should these assets deteriorate, they will be written off to the estimated fair value or future recoverable value, in accordance with discounted cash flows.  Estimated future free cash flows in Brazil and Argentina were discounted at a rate of 15% and generated a higher value than the respective assets, including the surplus value of the Brazilian and Argentine subsidiaries.

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2.22.2Provision for doubtful receivables

The Company evaluates the possibility of collecting trade accounts receivable using several factors. When the Company becomes aware of a specific inability of a customer to fulfill its financial commitments, a specific provision for doubtful accounts is estimated and recorded, which reduces the recognized receivable to the amount that the Company estimate will ultimately be collected. In addition to specifically identifying potential uncollectible customer accounts, debits for doubtful accounts are accounted for based on the recent history of prior losses and a general assessment of trade accounts receivable, both outstanding and past due, among other factors. The balance of the Company’s trade accounts receivable was ThCh$77,309,575 at June 30, 2011, net of an allowance for doubtful accounts provision of ThCh$1,639,221. Historically, doubtful accounts have represented an average of less than 1% of consolidated net sales.

2.22.3Property, 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 life as compared to our estimates. Whenever the Company determines that the useful life of property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned use of manufacturing equipment, dispensers, and transportation equipment or computer software could make the useful lives of assets shorter. The Company reviews the impairment of long-lived assets each time events or changes in circumstances indicate that the book value of any of those assets might not be recovered. The estimate of future cash flows is based, among other things, on certain assumptions about the expected operating profits in the future. Company estimates of non-discounted cash flows may differ from real cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in the operating profit. If the sum of non-discounted cash flows that have been projected (excluding interest) is less than the carrying value of the asset, the asset will be written down to its estimated fair value.

2.22.4Liabilities for bottle and case collateral

The Company records a liability represented by deposits received in exchange for bottles and cases provided to its customers and distributors. This liability represents the amount of the deposit that must be returned if the client or distributor returns the bottles and cases in good condition, together with the original invoice. This liability is estimated on the basis of an inventory of bottles given as a loan to customers and distributors, estimates of bottles in circulation and a weighted average historical cost per bottle or case. Management must make several assumptions in relation to this liability in order to estimate the number of bottles in circulation, the amount of the deposit that must be reimbursed and the synchronization of disbursements.

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2.23New IFRS and interpretations of the IFRS interpretation committee

New accounting pronouncements from the IAS and IFRIC interpretation have been published and / or reviewed. The management assessed the impact of these new pronouncements and interpretation and does not anticipate that its adoption will lead to a significant impact on the annual information of the company and its subsidiaries in the year of initial application.

New Standards	Mandatory effectiveDate
IFRS 7 Financial instruments: Disclosure and transfer of financial assets	July 1, 2011
IFRS 9 Financial instruments: Classification and measurement	January 1, 2013
IFRS 10 Consolidated Financial Statements	January 1, 2013
IFRS 11 Joint Arrangements	January 1, 2013
IFRS 12 Disclosure of Interests in Other Entities	January 1, 2013
IFRS 13 Fair Value Measurement	January 1, 2013

Improvements and amendments	Mandatory effective date
IFRIC 17 Distributions of Non-cash Assets to Owners	January 1, 2013
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments	January 1, 2013
IAS 12 Deferred taxes: Recovery of underlying assets	January 1, 2012
IAS 24 Related party disclosures	January 1, 2011
Amendment IFRIC 14 Minimum financing prepayment requirements	January 1, 2011
IFRS improvements May 2010: Series of Amendments to seven International Financial Reporting Standards	January 1, 2011

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NOTE 3 —  REPORTING BY SEGMENT

The Company provides information by segments according to IFRS 8 “Operating Segments”, that establishes standards for reporting by operating segment and related disclosures for products, services, and geographic areas.

The Company’s Board of Directors and Management measures and evaluates performance of segments according to the operating income of each of the countries where there are franchises.

The operating segments are disclosed coherently with the presentation of internal reports to the senior officer in charge of operating decisions. That officer has been identified as the Company Board of Directors, which makes strategic decisions.

The segments defined by the Company for strategic decision-making are geographic. Therefore, the reporting segments correspond to:

·Chilean operations

·Brazilian operations

·Argentine operations

The three operating segments conduct their business through the production and sale of soft drinks, other beverages, and packaging.

The expenses and income associated with corporate management were assigned to the Chilean operation in the operating segments soft drinks.

The total income by segment includes sales to unrelated customers, as indicated in the Company’s consolidated statement of income, as well as inter-segment sales.

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A summary of the operations by segment of the Company is detailed as follows, according to IFRS:

For the period ended June 30, 2011	Chile  Operation		Argentina  Operation		Brazil  Operation		Consolidated  Total
	ThCh$		ThCh$		ThCh$		ThCh$
Operating revenue from external customers, total	141,268,302		101,560,281		217,228,355		460,056,938
Interest income, total for segments	894,168		49,767		687,243		1,631,178
Interest expense, total for segments	(2,643,813	)	(516,426	)	(465,249	)	(3,625,488	)
Interest income, net, total for segments	(1.749.645	)	(466,659	)	221,994		(1,994,310	)
Depreciation and amortization, total for segments	(7.398.178)		(3,484,217	)	(7,588,231	)	(18,470,626	)
Sums of significant income items, total	2.055.984		500,104		345,841		2,901,929
Sums of significant expense items, total	(118,560,749	)	(92,820,420	)	(188,306,563	)	(399,687,732	)
Net income of the segment reported, total	15,615,714		5,289,089		21,901,396		42,806,199
Share of the entity in income of associates accounted for using the equity method, total	852,118		—		449,456		1,301,574
Income tax expense (income), total	(2,689,167	)	(2,818,702	)	(10,035,874	)	(15,543,743	)
Segment assets, total	324,885,971		85,816,527		296,373,921		707,076,419
Carrying amount in associates and joint ventures accounted for using the equity method, total	37,136,304		—		26,843,427		63,979,731
Capital expenditures and other	48,125,479		8,459,782		7,536,840		64,122,101
Liabilities of the segments, total	194,090,465		42,263,223		74,441,336		310,795,024

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For the period ended June 30, 2010	Chile  Operation		Argentina  Operation		Brazil  Operation		Consolidated  Total
	ThCh$		ThCh$		ThCh$		ThCh$
Operating revenue from external customers, total	138,272,604		85,999,292		197,305,992		421,577,888
Interest income, total for segments	655,700		194,361		1,085,118		1,935,179
Interest expense, total for segments	(2,606,352	)	(366,602	)	(570,563	)	(3,543,517	)
Interest income, net, total for segments	(1,950,652	)	(172,241	)	514,555		(1,608,338	)
Depreciation and amortization, total for segments	(8,045,284	)	(3,777,084	)	(6,782,825	)	(18,605,193	)
Sums of significant income items, total	985,306		26,497		370,354		1,382,157
Sums of significant expense items, total	(111,949,369	)	(76,889,400	)	(165,189,496	)	(354,028,265	)
Net income of the segment reported, total	17,312,605		5,187,064		26,218,580		48,718,249
Share of the entity in income of associates accounted for using the equity method, total	(273,859	)	—		727,485		453,626
Income tax expense (income), total	(3,315,431	)	(2,976,386	)	(11,369,862	)	(17,661,679	)
Segment assets, total	301,133,059		82,893,000		253,935,090		637,961,149
Carrying amount in associates and joint ventures accounted for using the equity method, total	24,807,873		—		9,716,916		34,524,789
Capital expenditures and other	18,358,546		4,597,953		13,258,905		36,215,404
Liabilities of the segments, total	149,579,708		44,578,601		65,597,207		259,755,516

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NOTE 4 —  CASH AND CASH EQUIVALENTS

Cash and cash equivalents are detailed as follows as of June 30, 2011 and December 31, 2010:

Description By item	06/30/2011	12/31/2010
	ThCh$	ThCh$
Deposits	202,265	1,039,952
Bank Balances	15,335,085	13,267,099
Money Market Funds	48,419,414	28,394,995
Cash	15,967,504	5,561,034
Cash and cash equivalents	79,924,268	48,263,080

By currency	ThCh$	ThCh$
Dollar	3,296,879	3,308,523
Argentine Peso	667,241	1,705,533
Chilean Peso	57,362,685	25,646,505
Real	18,597,463	17,602,519
Cash and cash equivalents	79,924,268	48,263,080

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4.1             Time deposits

Time deposits defined as Cash and cash equivalents are detailed as follows at June 30, 2011 and December 31, 2010:

				Annual		Balance at
Placement	Entity	Currency	Principal	Rate		06/30/2011
			ThCh$	%		ThCh$
05/09/2011	Banco Santander	Chilean peso	10,387,500	0.48	%	10,473,924
05/09/2011	Banco Itaú	Chilean peso	10,387,500	0.48	%	10,473,924
05/09/2011	Banco Security	Chilean peso	10,387,500	0.46	%	10,470,323
05/09/2011	Banco BCI	Chilean peso	10,387,500	0.50	%	10,477,525
05/30/2011	Banco BBVA	Chilean peso	2,000,000	0.49	%	2,010,127
05/30/2011	Banco HSBC	Chilean peso	4,000,000	0.49	%	4,020,253
04/22/2011	Banco BBVA	Euros	473,666	0.30	%	473,664
04/25/2011	Banco Votorantim	Real	19,241	8.82	%	19,674
		Total				48,419,414

Placement	Entity	Currency	Principal	AnnualRate		Balance at12/31/2010
			ThCh$	%		ThCh$
12/17/2010	Banco Santander	Chilean peso	7,000,000	3.720	%	7,004,005
01/13/2010	Banco de Chile	UF	4,410,633	1.700	%	4,602,188
01/13/2010	Banco Estado	UF	4,410,633	1.650	%	4,599,975
12/02/2010	Banco BBVA	Euros	354,271	0.210	%	345,623
12/13/2010	Banco BBVA	Argentine peso	14,392	10.000	%	14,192
03/29/2010	Banco Votorantim	Real	31,383	8.820	%	33,230
09/30/2010	Banco Itaú	Real	2,846,938	8.830	%	2,859,355
11/23/2010	Banco Itaú	Real	2,814,206	8.830	%	2,828,751
04/14/2010	Banco Itaú	Real	397,500	8.830	%	398,609
07/27/2010	Banco Itaú	Real	2,891,489	8.830	%	2,900,221
12/30/2010	Banco Itaú	Real	2,808,846	8.830	%	2,808,846
		Total				28,394,995

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4.2             Money Market and investment funds

Mutual and investment fund shares are valued at the share value at the close of each fiscal year. Variations in the value of shares during the respective fiscal periods are accounted for as a debit or credit to income. Below is a description for the end of each period:

Institution	06/30/2011	12/31/2010
	ThCh$	ThCh$
Money market fund BCI	—	163,000
Money market fund Itaú Corporate	38,001	37,384
Money market fund Banchile	—	3,943,475
Money market fund Western Assets Institutional Cash	2,844,578	—
Money market fund Banchile Liquidez Full	1,240,252	—
Citi Institutional Liquid Reserves Limited	—	1,417,175
Money market fund Itaú	11,844,673	—
Total investment and mutual funds	15,967,504	5,561,034

NOTE 5 — OTHER CURRENT FINANCIAL ASSETS

Below are the financial instruments held by the Company at June 30, 2011 and December 31, 2010, other than cash and cash equivalents. They correspond to time deposits for longer than 90 days:

Placement	Maturity				Annual	Balance at
Date	Date	Entity	Currency	Principal	Rate	06/30/2011
				ThCh$	%	ThCh$
04/04/2011	07/22/2011	Banco Chile	Chilean peso	5,491,440	0.42	5,575,910
05/16/2011	10/24/2011	Banco HSBC	Chilean peso	1,000,000	0.53	1,007,950
05/12/2010	09/30/2011	Banco BBVA	UF	228,383	1.37	241,269
05/12/2010	12/29/2011	Banco BBVA	UF	228,383	1.37	241,269
05/30/2011	09/28/2011	Banco BBVA	Chilean peso	2,000,000	0.52	2,010,747
				Total		9,077,145

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Pacement Date	Maturity Date	Entity	Currency	Principal	TasaAnnual	Baslance at 12/31/2010
				ThCh$	%	ThCh$
05/12/2010	04/29/2011	Banco BBVA	UF	456,766	0.57	467,322
05/12/2010	09/30/2011	Banco BBVA	UF	228,383	1.37	234,861
05/12/2010	12/29/2011	Banco BBVA	UF	228,383	1.37	256,423
04/23/2010	05/30/2011	Banco BBVA	UF	12,114,877	0.00	12,362,024
05/03/2010	05/09/2011	Banco BCI	UF	11,914,000	0.00	12,153,007
06/14/2010	05/09/2011	Banco Itaú	UF	4,770,768	0.40	4,848,825
07/01/2010	05/09/2011	Banco Itaú	UF	2,713,000	0.70	2,754,825
08/03/2010	08/09/2011	Banco Itaú	UF	1,000,000	0.52	1,012,928
10/28/2010	05/09/2011	Banco Itaú	UF	4,000,000	2.86	4,033,440
10/28/2010	05/09/2011	Banco de Chile	UF	4,000,000	2.45	4,030,516
04/12/2010	04/12/2011	Banco BBVA	Chilean peso	6,644,069	2.40	6,760,563
				Total		48,914,734

NOTE 6 —OTHER CURRENT AND NON-CURRENT NON FINANCIAL ASSETS

Note 6.1   Other current non-financial assets

Description	06/30/2011	12/31/2010
	ThCh$	ThCh$
Prepaid Insurance	461,871	288,588
Prepaid Expenses	4,287,980	1,897,584
Materials and supplies	4,757,603	3,776,315
Fiscal credit remaining	9,515,642	4,257,271
Other current assets	—	492,374
Total	19,023,096	10,712,132

Note 6.2   Other non-current, non-financial assets

Description	06/30/2011	12/31/2010
	ThCh$	ThCh$
Prepaid expenses	2,083,556	2,180,033
Fiscal credits	6,104,280	5,681,851
Judicial deposits	19,007,132	12,720,300
Others	108,955	925,570
Total	27,303,923	21,507,754

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NOTE 7 —  TRADE AND OTHER ACCOUNTS RECEIVABLE

The composition of trade and other accounts receivable is detailed as follows:

	06/30/2011			12/31/2010
Description	Current		Non- current	Current		Non- current
	ThCh$		ThCh$	ThCh$		ThCh$
Trade accounts receivable	44,571,914		—	64,317,502		—
Notes receivables	8,112,139		7,286,884	16,325,466		7,585,983
Other accounts receivable	18,833,076		144,783	17,837,185		218,498
Allowance for doubtful accounts	(1,639,221	)	—	(1,225,556	)	—
Total	69,877,908		7,431,667	97,254,597		7,804,481

The change in the allowance for doubtful accounts between January 1 and June 30, 2011 and at January 1 and December 31, 2010 is presented below:

Item	06/30/2011		12/31/2010
	ThCh$		ThCh$
Initial balance	1,225,556		1,688,988
Increase	1,159,408		629,409
Use of allowance	(822,550	)	(970,352	)
Increase (decrease) because of foreign exchange	76,807		(122,489	)
Movement	413,665		(463,432	)
Final balance	1,639,221		1,225,556

31

NOTE 8 —  INVENTORY

The composition of inventory balances is detailed as follows:

Description	06/30/2011		12/31/2010
	ThCh$		ThCh$
Raw materials	17,782,068		23,117,229
Merchandise	5,986,329		7,061,966
Production inputs	1,272,898		853,130
Products in progress	202,077		97,467
Finished goods	13,545,898		13,922,337
Spare parts	6,815,130		4,927,837
Other inventory	814,855		643,091
Obsolescence allowance	(281,996	)	(683,863	)
Balance	46,137,259		49,939,194

The cost of inventory recognized as a cost of sales totaled ThCh$273,315,590 at June 30, 2011 and ThCh$241,230,756 at June 30, 2010.

NOTE 9 —  INCOME TAX AND DEFERRED TAXES

At the end of the period 2011, the Company had a taxable profits fund for ThCh$58,192,423, comprised of profits with credits for first category income tax amounting to ThCh$57,769,817 and profits with no credit amounting to ThCh$422,606.

9.1          Current taxes receivable

The current taxes receivable consisted of the following items:

Description	06/30/2011	12/31/2010
	ThCh$	ThCh$
Monthly income tax installments	1,060,006	1,091,997
Tax credits (1)	1,069,747	1,196,728
Balance	2,129,753	2,288,725

(1)That item corresponds to tax income credit on account of training expenses, Purchase of property, plant and equipment and donations.

32

9.2          Current taxes payable

Current taxes payable are detailed as follows:

Description	06/30/2011	12/31/2010
	ThCh$	ThCh$
Income tax	1,334,303	3,877,563
Other	215,434	131,826
Balance	1,549,737	4,009,389

9.3          Tax expense

The income tax and deferred tax expenses for the periods ended June 30, 2011 and June 30, 2010 are detailed as follows:

Description	06/30/2011	06/30/2010
	ThCh$	ThCh$
Current tax expense	12,818,651	15,246,290
Adjustment to current tax from previous year	387,660	289,521
Other current tax expenses	529,908	442,518
Total net current tax expense	13,736,219	15,978,329
Deferred tax expenses	1,807,524	1,683,350
Total deferred tax expenses	1,807,524	1,683,350
Total income tax expense	15,543,743	17,661,679

33

9.4          Deferred taxes

The net cumulative balances of temporary differences originating in deferred tax assets and liabilities are detailed below:

	06/30/2011		12/31/2010
Temporary differences	Assets	Liabilities	Assets	Liabilities
	ThCh$	ThCh$	ThCh$	ThCh$
Property, plant and equipment	—	21,909,685	—	22,702,343
Impairment accrual	833,494	—	1,542,470	—
Employee benefits	891,909	—	2,386,307	—
Post-employment benefits	—	380,074	9,550	82,143
Tax losses	829,033	—	—	—
Contingency provision	2,723,870	—	1,638,483	—
Foreign exchange rate difference (debt Brazil)	—	15,081,531	—	13,506,899
Allowance for doubtful accounts	119,490	—	189,265	—
Inventory obsolescence allowance	809,989	—	663,663	—
Derivatives	76,347	—	183,444	—
Tax incentives	—	7,830,348	—	5,335,199
Other	587,805	678,707	278,427	865,764
Total	6,871,937	45,880,345	6,891,609	42,492,348

9.5          Deferred tax liability movement

Movement in deferred liability accounts is detailed as follows:

Item	06/30/2011		12/31/2010
	ThCh$		ThCh$
Initial Balance	42,492,348		39,435,167
Increase (decrease) in deferred tax liabilities	2,920,569		4,657,692
Divestiture by sale of business (Sale of ownership interest in Vital S.A.)	(1,075,367	)	—
Increase (decrease) due to foreign currency translation	1,542,795		(1,600,511	)
Movements	3,387,997		3,057,181
Final balance	45,880,345		42,492,348

34

9.6          Distribution of domestic and foreign tax expenses

As of June 30, 2011 and 2010, domestic and foreign tax expenses are detailed as follows:

	06/30/2011		06/30/2010
	ThCh$		ThCh$
Income tax
Current taxes
Foreign	10,387,544		13,149,386
Domestic	3,348,675		2,828,943
Current tax expense	13,736,219		15,978,329
Deferred taxes
Foreign	2,467,032		1,196,863
Domestic	(659,508	)	486,487
Deferred tax expense	1,807,524		1,683,350
Income tax expense	15,543,743		17,661,679

9.7             Reconciliation of effective rate

Below is the reconciliation of tax expenses at the legal rate and tax expenses at the effective rate:

Reconciliation of effective rate	06/30/2011		06/30/2010
	ThCh$		ThCh$
Income before taxes	58,349,942		66,379,928
Tax expense at legal rate (20%)	(11,669,989	)	—
Tax expense at legal rate (17%)	—		(11,284,588	)
Effect of tax rate in other jurisdictions	(5,402,399	)	(7,472,000	)
Permanent differences:
Investments in equity investees accounted for using the equity method and consolidation	2,490,559		2,032,388
Non-tax-deductible expenses	(394,580	)	(1,101,876	)
Other	(567,334	)	164,397
Tax expense adjustment	1,528,645		1,094,909
Tax expense at effective rate	(15,543,743	)	(17,661,679	)
Effective rate	26.6	%	26.6	%

35

The income tax rates applicable in each of the jurisdictions where the company does business are:

Country	Rate
Chile	20	%
Brazil	34	%
Argentina	35	%

36

NOTE 10 —  PROPERTY, PLANT, AND EQUIPMENT

10.1Balances

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

	Gross property, plant and equipment		Cumulative depreciation and impairment loss				Net property, plant and equipment
Item	06/30/2011	12/31/2010	06/30/2011		12/31/2010		06/30/2011	12/31/2010
	ThCh$	ThCh$	ThCh$		ThCh$		ThCh$	ThCh$
Construction in progress	41,363,249	23,506,510	—		—		41,363,249	23,506,510
Land	35,298,048	38,247,941	—		—		35,298,048	38,247,941
Buildings	90,981,112	92,227,198	(28,013,267	)	(29,245,272	)	62,967,845	62,981,926
Plant and equipment	243,077,425	232,604,986	(151,360,353	)	(154,729,140	)	91,717,072	77,875,846
Information technology equipment	15,432,148	10,825,556	(13,312,847	)	(8,756,221	)	2,119,301	2,069,335
Fixed installations and accessories	30.637.878	28,879,568	(14,787,735	)	(14,319,552	)	15,850,143	14,560,016
Motor vehicles	5,381,516	5,627,463	(3,593,572	)	(3,757,415	)	1,787,944	1,870,048
Improvements to leased property	166,291	155,755	(133,335	)	(110,832	)	32,956	44,923
Other property, plant and equipment (1)	241.419.426	286,065,161	(178,597,923	)	(215,739,526	)	62,821,503	70,325,635
Total	703,757,093	718,140,138	(389,799,032	)	(426,657,958	)	313,958,061	291,482,180

(1)Other property, plant and equipment is composed of bottles, market assets, furniture and other minor goods.  The net balance of each of these categories at June 30, 2011 and  at December 31, 2010 is detailed as follows:

Other property, plant and equipment	06/30/2011	12/31/2010
	ThCh$	ThCh$
Bottles	39,238,089	38,230,257
Marketing and promotional assets	19,375,318	18,153,012
Other property, plant and equipment	4,208,096	13,942,366
Total	62,821,503	70,325,635

37

The Company has an insurance to protect its property, plant and equipment and its inventory from potential losses, The geographic distribution of those assets is detailed as follows:

Chile: Santiago, Puente Alto, Maipú, Renca, Rancagua and San Antonio

Argentina:  Buenos Aires, Mendoza, Córdoba and Rosario

Brazil:  Río de Janeiro, Niteroi, Campos, Cabo Frío, Nova Iguaçu, Espírito Santo and Vitoria,

10.2Movements

Movements in property, plant and equipment are detailed as follows between January 1 and June 30, 2011 and between January 1 and December 31, 2010:

For the period ended 06/30/2011	Construction in progress		Land		Buildings, net		Plant and equipment, net		IT Equipment, net		Fixed installations and accessories, net		Motor vehicles, net		Improvements to leased property, net		Other property, plant and equipment, net		Property, plant and equipment, net
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Initial balance	23,506,510		38,247,941		62,981,926		77,875,846		2,069,335		14,560,016		1,870,048		44,923		70,325,635		291,482,180
Additions	26,920,325		—		112,068		14,126,352		195,713		28,442		46,755		—		12,065,519		53,495,174
Disposals	—		(113,891	)	(719,716	)	(16,881	)	—		—		—		—		(23,314	)	(873,802	)
Transfers between items of property, plant and equipment	(9,403,889	)	(1,724,138	)	5,638,147		11,621,896		241,895		1,852,718		12,483		—		(8,239,112	)	—
Depreciation expense	—		—		(876,728	)	(6,337,097	)	(474,538	)	(537,481	)	(182,570	)	(14,579	)	(9,725,291	)	(18,148,284	)
Increase (decrease) in foreign currency translation	340,303		667,595		1,697,659		1,575,964		86,896		(53,552	)	41,228		2,612		2,231,197		6,589,902
Other increases (decreases)	—		(1,779,459	)	(5,865,511	)	(7,129,008	)	—		—		—		—		(3,813,131	)	(18,587,109	)
Total movements	17,856,739		(2,949,893	)	(14,081	)	13,841,226		49,966		1,290,127		(82,104	)	(11,967	)	(7,504,132	)	22,475,881
Final balance	41,363,249		35,298,048		62,967,845		91,717,072		2,119,301		15,850,143		1,787,944		32,956		62,821,503		313,958,061

38

For the period ended 12/31/2010	Construction in progress		Land		Buildings, net		Plant and equipment, net		IT Equipment, net		Fixed installations and accessories, net		Motor vehicles, net		Improvements to leased property, net		Other property, plant and equipment, net		Property, plant and equipment, net
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Initial balance	5,487,011		38,770,284		61,570,532		72,648,457		2,139,891		14,940,429		1,416,740		79,336		50,816,411		247,869,091
Additions	32,097,391		501,788		1,834,762		21,923,605		669,553		60,376		895,781		—		32,592,914		90,576,170
Disposals	—		(10,039	)	(71,333	)	(225,383	)	(350	)	—		(4,342	)	—		(206,873	)	(518,320	)
Transfers between items of property, plant and equipment	(13,807,070	)	—		3,515,683		2,022,179		258,089		661,830		1,324		—		7,347,965		—
Depreciation expense	—		—		(1,829,939	)	(13,445,509	)	(938,545	)	(985,366	)	(355,283	)	(32,584	)	(18,519,806	)	(36,107,032	)
Increase (decrease) in foreign currency translation	(270,822	)	(1,014,092	)	(2,048,206	)	(4,838,392	)	(58,043	)	(119,494	)	(60,895	)	(1,829	)	(606,776	)	(9,018,549	)
Other increases (decreases)	—		—		10,427		(209,111	)	(1,260	)	2,241		(23,277	)	—		(1,098,200	)	(1,319,180	)
Total movements	18,019,499		(522,343	)	1,411,394		5,227,389		(70,556	)	(380,413	)	453,308		(34,413	)	19,509,224		43,613,089
Final balance	23,506,510		38,247,941		62,981,926		77,875,846		2,069,335		14,560,016		1,870,048		44,923		70,325,635		291,482,180

39

NOTE 11 —  RELATED PARTY DISCLOSURES

Balances and transactions with related parties as of June 30, 2011and December 31, 2010 are detailed as follows:

11.1Accounts receivable:

11.1.1Current:

Taxpayer ID	Company	Relationship	Country of origin	Currency	06/30/2011	12/31/2010
					ThCh$	ThCh$
93,473,000-3	Embotelladoras Coca Cola Polar S.A.	Related to shareholder	Chile	Chilean pesos	31,763	248,273
		Total			31,763	248,273

11.1.2Non-current:

Taxpayer ID	Company	Relationship	Country of origin	Currency	06/30/2011	12/31/2010
					ThCh$	ThCh$
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Chilean pesos	29,187	8,847
		Total			29,187	8,847

40

11.2Accounts Payable:

11.2.1Current:

Taxpayer ID	Company	Relationship	Country of origin	Currency	06/30/2011	12/31/2010
					ThCh$	ThCh$
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Chilean pesos	2,372,632	3,959,060
Foreign	Servicio y Productos para Bebidas Refrescantes S.R.L.	Related to shareholders	Argentina	Argentine pesos	2.793.477	2,725,508
Foreign	Recofarma do Industrias Amazonas Ltda.	Related to shareholders	Brazil	Real	296.019	3,834,762
96,705,990-0	Envases Central S.A.	Associate	Chile	Chilean pesos	726,405	1,005,828
86,881,400-4	Envases CMF S.A.	Associate	Chile	Chilean pesos	851,771	1,216,955
76,389,720-6	Vital Aguas S.A.	Associate	Chile	Chilean pesos	351,737	630,927
89,996,200-1	Envases del Pacífico S.A.	Common director	Chile	Chilean pesos	—	173,850
93,281,000-k	Coca Cola Embonor S.A.	Related to shareholders	Chile	Chilean pesos	—	776,583
96,648,500-0	Vital Jugos S.A.	Associate	Chile	Chilean pesos	1,175,486	—
		Total			8,567,527	14,323,473

41

11.3Transactions:

Taxpayer ID	Company	Relationship	Country of origin	Description of transaction	Currency	Cumulative 06/30/2011
						ThCh$
96,705,990-0	Envases Central S.A.	Associate	Chile	Purchase of finished products	Chilean pesos	9,175,670
96,705,990-0	Envases Central S. A.	Associate	Chile	Sale of raw materials	Chilean pesos	1,667,291
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Concentrate purchase	Chilean pesos	32,940,499
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Advertising payment	Chilean pesos	1,144,075
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Advertising collection	Chilean pesos	513,168
86,881,400-4	Envases CMF S.A.	Associate	Chile	Purchase of bottles	Chilean pesos	4,258,857
86,881,400-4	Envases CMF S.A.	Associate	Chile	Purchase of packaging materials	Chilean pesos	443,248
76,389,720-6	Vital Aguas S.A.	Associate	Chile	Purchase of finished products	Chilean pesos	2,957,729
Foreign	Recofarma do Industrias Amazonas Ltda	Related to shareholders	Brazil	Concentrate purchase	Real	36,898,521
Foreign	Recofarma do Industrias Amazonas Ltda.	Related to shareholders	Brazil	Reimbursement and other purchases	Real	808,818
Foreign	Recofarma do Industrias Amazonas Ltda.	Related to shareholders	Brazil	Advertising participation payment	Real	8,382,212
Foreign	Servicio y Productos para Bebidas Refrescantes S.R.L.	Related to shareholders	Argentina	Concentrate purchase	Argentine pesos	22,536,552
Foreign	Servicio y Productos para Bebidas Refrescantes S.R.L.	Related to shareholders	Argentina	Advertising rights, rewards and others	Argentine pesos	1,414,413
Foreign	Servicio y Productos para Bebidas Refrescantes S.R.L.	Related to shareholders	Argentina	Collection of advertising participation	Argentine pesos	1,803,814
97,032,000-8	BBVA Administradora General de Fondos	Related to director	Chile	Investment in mutual funds	Chilean pesos	11,481,000
97,032,000-8	BBVA Administradora General de Fondos	Related to director	Chile	Redemption of mutual funds	Chilean pesos	11,481,000
97,032,000-8	BBVA Administradora General de Fondos	Related to director	Chile	Investments in time deposits	Chilean pesos	473,667
97,032,000-8	BBVA Administradora General de Fondos	Related to director	Chile	Bank loans	Chilean pesos	3,498,249
84,505,800-8	Vendomática S.A.	Related to director	Chile	Sale of finished products	Chilean pesos	464,671

42

Taxpayer ID	Company	Relationship	Country of origin	Description of transaction	Currency	Cumulative 06/30/2010
						ThCh$
96,705,990-0	Envases Central	Associate	Chile	Purchase of finished products	Chilean pesos	8,066,373
96,705,990-0	Envases Central	Associate	Chile	Sale of raw materials	Chilean pesos	1,417,882
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Concentrate purchase	Chilean pesos	27,666,471
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Advertising payment	Chilean pesos	1,207,157
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Services rendered	Chilean pesos	981,785
96,714,870-9	Coca Cola de Chile S.A.	Shareholder	Chile	Advertising collection	Chilean pesos	822,622
Foreign	Recofarma do Industrias Amazonas Ltda.	Related to shareholders	Brazil	Concentrate purchase	Real	33,457,725
Foreign	Recofarma do Industrias Amazonas Ltda.	Related to shareholders	Brazil	Reimbursement and other purchases	Real	555,451
Foreign	Recofarma do Industrias Amazonas Ltda.	Related to shareholders	Brazil	Advertising participation payment	Real	7,494,848
86,881,400-4	Envases CMF S.A.	Related to shareholders	Chile	Purchase of bottles	Chilean pesos	3,411,258
86,881,400-4	Envases CMF S.A.	Related to shareholders	Chile	Purchase of packaging materials	Chilean pesos	353,069
84,505,800-8	Vendomática S.A	Related to director	Chile	Sale of finished products	Chilean pesos	526,235
84,505,800-8	Vendomática S.A	Related to director	Chile	Supply and advertising agreement	Chilean pesos	250,000
96,815,680-2	BBVA Administración General de Fondos	Related to director	Chile	Investment in mutual funds	Chilean pesos	9,119,000
96,815,680-2	BBVA Administración General de Fondos	Related to director	Chile	Redemption of mutual funds	Chilean pesos	10,327,000
76,389,720-6	Vital Aguas S.A.	Associate	Chile	Purchase of finished products	Chilean pesos	2,474,941
Foreign	Servicio y Productos para Bebidas Refrescantes S.R.L.	Related to shareholders	Argentina	Concentrate purchase	Argentine pesos	8,247,930
Foreign	Servicio y Productos para Bebidas Refrescantes S.R.L.	Related to shareholders	Argentina	Advertising rights, rewards and others	Argentine pesos	409,866
Foreign	Servicio y Productos para Bebidas Refrescantes S.R.L.	Related to shareholders	Argentina	Collection of advertising participation	Argentine pesos	1,652,128
93,281,000-K	Coca Cola Embonor S.A	Related to shareholders	Chile	Sale of finished products	Chilean pesos	225,410

43

11.4Payroll and benefits of the Company’s key employees

At the end of period June 30, 2011 and 2010, respectively, the salary and benefits paid to the Company’s key employees, corresponding to directors and managers, are detailed as follows:

Full description	06/30/2011	06/30/2010
	ThCh$	ThCh$
Executive wages, salaries and benefits	1,670,631	1,556,425
Director allowances	552,000	464,194
Termination benefits	—	1,643,749
Accrued benefits in the last five years and paid during the period (1)	—	981,635
Total	2,222,631	4,646,003

(1)The Company has an executive retention plan. This plan grants certain executives the right to receive a fixed cash payment on a pre-set date once they have completed the required years of employment.

NOTE 12 —  EMPLOYEE BENEFITS

As of June 30, 2011 and 2010, the Company had recorded reserves for profit share and for bonuses totaling ThCh$3,147,018 and ThCh$2,979,550 respectively.

This liability is shown in accrued other non-current non-financial liabilities in the statement of financial position.

The charge against income in the statement of comprehensive income is allocated between the cost of sales, the cost of marketing, distribution costs and administrative expenses.

12.1           Personnel expenses

At June 30, 2011 and 2010, personnel expenses included in the statement of consolidated comprehensive income were:

Description	06/30/2011	06/30/2010
	ThCh$	ThCh$
Wages and salaries	39,631,815	36,941,670
Employee benefits	9,143,150	9,204,375
Severance and post-employment benefits	1,214,268	695,781
Other personnel expenses	2,263,700	1,942,987
Total	52,252,933	48,784,813

44

12.2           Post-employment benefits

This item presents the employee severance indemnities valued pursuant to Note 2.17. The composition of current and non-current balances at June 30, 2011 and December 31, 2010 is detailed as follows:

Post-employment benefits	06/30/2011	12/31/2010
	ThCh$	ThCh$
Non-current provision	7,439,412	7,256,590
Total	7,439,412	7,256,590

12.3           Post-employment benefit movement

The movements of post-employment benefits are detailed as follows between January 1 and June 30, 2011 and between January 1 and December 31, 2010:

Movements	06/30/2011		12/31/2010
	ThCh$		ThCh$
Initial balance at 01/01/2011 and 01/01/2010	7,256,590		8,401,791
Service costs	145,790		359,798
Interest costs	108,908		213,927
Net actuarial losses	252,203		569,707
Benefits paid	(324,079	)	(2,288,633	)
Total	7,439,412		7,256,590

12.4           Assumptions

The actuarial assumptions used in the period ended June 30, 2011 were:

Assumption
Discount rate (1)	6,0%
Expected salary increase rate (1)	4,0%
Turnover rate	6,6%
Mortality rate (2)	RV-2004
Retirement age of women	60 años
Retirement age of men	65 años

(1) For the convenience of the reader discount rates and expected salary increase rates are calculated using real interest rates in UF that include the inflation adjustments.  Rates shown above are presented in nominal rate.

(2) Mortality assumption tables prescribed for use by the Chilean Superintendence of Securities and Insurance.

45

NOTE 13 —  INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD

13.1           Balances

Investments in associates recorded using the equity method are detailed as follows:

		Country of	Functional	Investment Cost		Percentage interest
Taxpayer ID	Name	Incorporation	Currency	06/30/2011	12/31/2010	06/30/2011		12/31/2010
				ThCh$	ThCh$	ThCh$		ThCh$
86,881,400-4	Envases CMF S,A,	Chile	Chilean Pesos	18,468,255	19,070,517	50.00	%	50.00	%
96,845,500-0	Vital Jugos S,A,	Chile	Chilean Pesos	11,764,544	—	57.00	%	—
76,389,720-6	Vital Aguas S,A,	Chile	Chilean Pesos	2,944,988	2,718,443	56.50	%	56.50	%
96,705,990-0	Envases Central S,A,	Chile	Chilean Pesos	3,958,518	3,983,711	49.91	%	49.91	%
Foreign	Mais Industria de Alimentos S,A,	Brazil	Reales	5,985,224	5,517,687	6.16	%	6.16	%
Foreign	Sucos Del Valle do Brasil Ltda,	Brazil	Reales	5,065,274	3,881,452	6.16	%	6.16	%
Foreign	Kaik Participacoes Ltda,	Brazil	Reales	1,356,970	1,223,538	11.31	%	11.31	%
Foreign	Holdfab2 Participacoes Societarias Ltda,	Brazil	Reales	14,435,958	14,358,820	36.40	%	36.40	%
	Total			63,979,731	50,754,168

46

13.2           Movement

The movement of investments in associates recorded using the equity method is shown below, for the period from January 1 to June 30, 2011 and January 1 to December 31, 2010:

Details	06/30/2011		12/31/2010
	ThCh$		ThCh$
Initial Balance	50,754,168		34,731,218
Incorporation of Vital Jugos S.A. to the beginning of the period	13,114,268		—
Increase (decrease) in foreign currency translation, investments in Equity Investees	1,412,472		(624,004	)
Capital increases in Equity Investees	4,527,000		15,229,291
Write-off from book value for the sale of the ownership interest in Vital S.A. (43%).	(6,188,675	)	—
Dividends received	(1,461,957	)	(1,379,837	)
Share in operating income	1,763,250		2,986,764
Unrealized profit	(461,676	)	(671,829	)
Others	520,881		482,565
Final balance	63,979,731		50,754,168

The main movements for the year are detailed as follows:

·A Special Shareholders Meeting of Vital S.A., our subsidiary, held January 5, 2011, approved an increase of ThCh$1,278,000 in the capital of the company, which was paid in full on January 7, 2011.  It also approved changing the name of the company to Vital Jugos S.A..

·On January 21, 2011, our subsidiaries Andina Bottling Investments S.A. and Andina Inversions Societarias S.A. together sold a 43% ownership interest in Vital Jugos S.A. to Embotelladoras Coca-Cola Polar S.A., (15%) and Coca-Cola Embonor S.A. (28%), for an amount of ThCh$6,188,675, obtaining from this sale earnings amounting to ThCh$653,214 which is presented as Other gains (losses) in the statement of income

As a result of the change of the business shceme, Andina group loses control of the company Vital Jugos S.A., given that despite maintaining a 57%, at least one vote is required from the rest of the bottlers of Coca-Cola system for decision-making of financial policies and operation of the business. Accordingly, from January 1, 2011, the financial statements of Vital juices S.A., are treated as investments accounted for using the equity method, excluding the financial statements of the consolidation

·During the months of March and April, 2011, we made a capital contribution to our associate, Vital Jugos S.A., for an aggregate of ThCh$3,249,000.

·Holdfab2 Participacoes Societarias Ltda. was established in Brazil on March 23, 2010, along with the Coca-Cola bottlers for the purpose of concentrating their investments in the company Leon Junior S.A., in which our subsidiary Rio de Janeiro Refrescos Ltda. has a 36.40% ownership interest, capital contributions amounted to ThCh$15,229,291 and were carried out on August 23, 2010. In turn, Holdfab 2 Participações Societárias Ltda. holds a 50% ownership interest in Leão Junior, hence the Company indirectly controls 18.2% of the latter.

·During the periods ended June 30, 2011 and 2010, the Company received dividends from its associate Envases CMF S.A. which amounted to ThCh$1,461,957 and ThCh$1,379,837 respectively.

47

NOTE 14 —  INTANGIBLE ASSETS AND GOODWILL

14.1           Intangible assets not considered as goodwill

Intangible assets not considered as goodwill as of the end of each period are detailed as follows:

	06/30/2011				12/31/2010
	Gross	Cumulative		Net	Gross	Cumulative		Net
Description	Amount	Amortization		Amount	Amount	Amortization		Amount
	ThCh$	ThCh$		ThCh$	ThCh$	ThCh$		ThCh$
Rights	518,075	(94,589	)	423,486	522,750	(94,124	)	428,626
Software	9,019,335	(8,205,183	)	814,152	8,718,483	(7,781,514	)	936,969
Total	9,537,410	(8,299,772	)	1,237,638	9,241,233	(7,875,638	)	1,365,595

The movement and balances of identifiable intangible assets are detailed as follows for the period January 1 to June 30, 2011 and January 1 to December 31, 2010:

	06/30/2011						12/31/2010
Item	Rights		Software		Total		Rights		Software		Total
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Initial balance	428,626		936,969		1,365,595		426,902		1,690,431		2,117,333
Additions	—		169,585		169,585		16,710		181,123		197,833
Amortization	(3,614	)	(322,342	)	(325,956	)	(8,024	)	(907,477	)	(915,501	)
Other increases (decreases)	(1,526	)	29,940		28,414		(6,962	)	(27,108	)	(34,070	)
Final balance	423,486		814,152		1,237,638		428,626		936,969		1,365,595

48

14.2Goodwill

Movement in goodwill during the periods 2011 and 2010 is detailed as follows:

Period January — June 2011

Cash generating unit	01.01.2011	Additions	Disposals or impairments	Foreign currency translation difference – functional currency different from currency of presentation		06/30/2011
	ThCh$	ThCh$	ThCh$	ThCh$		ThCh$
Brazilian operation	42,298,955	—	—	2,792,207		45,091,162
Argentine operation	15,471,380	—	—	(499,459	)	14,971,921
Total	57,770,335	—	—	2,292,748		60,063,083

Period January — December 2010

Cash generating unit	01.01.2010	Additions	Disposals or impairments	Foreign currency translation difference – functional currency different from currency of presentation		12/31/2010
	ThCh$	ThCh$	ThCh$	ThCh$		ThCh$
Brazilian operation	43,820,310	—	—	(1,521,355	)	42.298.955
Argentine operation	17,540,035	—	—	(2,068,655	)	15.471.380
Total	61,360,345	—	—	(3,590,010	)	57.770.335

NOTE 15 —  OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

	06/30/2011	12/31/2010
	ThCh$	ThCh$
Current
Bank loans	24,188,002	6,941,133
Bonds payable	3,272,716	3,120,737
CPMF (1)	749,597	1,934,529
Total	28,210,315	11,996,399
Non-current
Bank loans	516,746	593,726
Bonds payable	69,817,622	69,855,733
Total	70,334,368	70,449,459

(1)In 1999, the Company’s subsidiary Rio Janeiro Refrescos Ltda. brought a tax lawsuit against the Brazilian Treasury for alleged unconstitutionality in the collection of the tax called CPMF (Contribuição Provisória sobre Movimentação Financeira) on the debits and credits to bank current accounts. While the subsidiary obtained a provisional suspension of said payments from the Courts of Justice, the corresponding tax obligation was still provisioned. In November 2006, the Courts of Justice ruled the constitutionality of the referred tax and Refrescos came to an agreement with the Brazilian Treasury to divide payments in 60 installments.

49

15.1.1       Bank loans, current

												Maturity		Total
Indebted Entity			Creditor Entity				Amortization	Effective		Nominal		Up to	90 days	at	at
Tax ID,	Name	Country	Tax ID,	Name	Country	Currency	Year	Rate		Rate		90 days	up to 1 year	06-30-2011	12-31-2010
														ThCh$	ThCh$
Foreign	Embotelladora del Atlántico S.A.	Argentine	Foreign	Banco BBVA Francés	Argentine	Argentine pesos	At maturity	13.15	%	13.15	%	4,605,741	—	4,605,741	6,545,691
Foreign	Embotelladora del Atlántico S.A.	Argentine	Foreign	Banco BBVA Francés	Argentine	Argentine pesos	At maturity	13.25	%	13.25	%	—	1,663,825	1,663,825	—
Foreign	Embotelladora del Atlántico S.A.	Argentine	Foreign	Banco Nuevo Santa Fe	Argentine	Argentine pesos	At maturity	10.50	%	10.50	%	4,701,578	—	4,701,578	5,032
Foreign	Embotelladora del Atlántico S.A.	Argentine	Foreign	Banco de Galicia	Argentine	Argentine pesos	At maturity	12.50	%	12.50	%	1,308	—	1,308	9,220
Foreign	Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Banco Votorantim	Brazil	Real	Monthly	9.40	%	9.40	%	—	282,301	282,301	197,880
Foreign	Rio de Janeiro Refrescos Ltda.	Brazil	Foreign	Banco Alfa	Brazil	Real	Monthly	—		—		—	—	—	49,310
91,144,000-8	Embotelladora Andina S.A.	Chile	91,144,000-8	Banco de Chile	Chile	Chilean Pesos	At maturity	8.88	%	8.88	%	2,092,000	—	2,092,000	134,000
91,144,000-8	Embotelladora Andina S.A.	Chile	91,144,000-8	Banco BBVA	Chile	Chilean Pesos	At maturity	6.50	%	6.50	%	7,343,000	—	7,343,000	—
91,144,000-8	Embotelladora Andina S.A.	Chile	91,144,000-8	Banco BBVA	Chile	Chilean Pesos	At maturity	5.94	%	5.94	%	3,498,249	—	3,498,249	—
												Total		24,188,002	6,941,133

15.1.2       Bank loans, non current

Maturity

Total

Indebted Entity

Creditor Entity

Amortization

Effective

Nominal

1 year

3 years

More than

at

at

Tax ID,

Name

Country

Tax ID,

Name

Country

Currency

Year

Rate

Rate

up to 3 years

up to 5 years

5 years

06-30-2011

12-31-2010

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

Foreign

Rio de Janeiro Refrescos Ltda.

Brasil

Foreign

Banco Votorantim

Brazil

BR$

Monthly

9.40

%

9.40

%

344,519

172,227

—

516,746

593,726

Total

516,746

593,726

50

15.2.1Bonds payable

	Current				Non-Current				Total
Composition of bonds payable	06/30/2011		12/31/2010		06/30/2011		12/31/2010		06/30/2011		12/31/2010
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Bonds (face rate)	3,516,355		3,359,692		72,214,904		72,324,782		75,731,259		75,684,474
Expenses of bond issuance and discounts on placement	(243,639	)	(238,955	)	(2,397,282	)	(2,469,049	)	(2,640,921	)	(2,708,004	)
Net balance presented in statement of financial position	3,272,716		3,120,737		69,817,622		69,855,733		73,090,338		72,976,470

15.2.2Current and non-current balances

The bonds correspond to Series B UF bonds issued on the Chilean market. These instruments are further described below:

Bond registration or		Face	Unit of	Interest	Final	Interest	Next amortization	Par value
identification number	Serie	amount	adjustment	rate	maturity	payment	Of capital	06/30/2011	12/31/2010
								ThCh$	ThCh$
Bonds, current portion
SVS Registration No, 254, 6/13/2001	B	3,440,939	UF	6.5	06/01/2026	Semi-annual	12/01/2011	3,516,355	3,359,692
Total current portion								3,516,355	3,359,692
Bonds, non-current portion
SVS Registration No, 254, 6/13/2001	B	3,440,939	UF	6.5	06/01/2026	Semi-annual	12/01/2012	72,214,904	72,324,782
Total, non-current portion								72,214,904	72,324,782

Accrued interest included in the current portion of bonds totaled ThCh$ 401,570 at June 30, 2011 and ThCh$421,282 at December 31, 2010.

51

15.2.3Non-current maturities

		Year of maturity					Total non-current
	Series	2012	2013	2014	2015	Beyond	06/30/2011
		ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
SVS Registration 254, 6/13/2001	B	1,632,502	3,423,336	3,645,853	3,882,837	59,630,376	72,214,904

15.2.4Market rating

The bonds issued on the Chilean market had the following rating at June 30, 2011 :

AA +	:	Rating assigned by Fitch Chile
AA +	:	Rating assigned by Feller & Rate

15.2.5Restrictions

The following restrictions apply to the issuance and placement of the Company’s bonds on the Chilean market in 2001 for a total of UF 3,700,000. Of that amount, UF 3,440,938.75 is outstanding:

·Embotelladora Andina S.A. must maintain a debt level in which consolidated financial liabilities do not exceed 1.20 times the consolidated Equity. For these purposes, consolidated financial liabilities will be considered to be current interest-accruing liabilities, namely: (i) Other financial liabilities, plus (ii) Other non-current financial liabilities. Total Equity plus non-controlling interests will be considered consolidated Equity.

·Consolidated assets must be kept free of any pledge, mortgage or lien for an amount at least equal to 1.30 times the consolidated unsecured current liabilities of the issuer.

·The franchise of The Coca-Cola Company in Chile, called Metropolitan Region, must be maintained and in no way forfeited, sold, assigned or transferred to a third party. This franchise is for the elaboration, production, sale and distribution of Coca-Cola products and brands according to the bottlers’ agreement or periodically renewable licenses.

·The territory now under franchise to the Company by The Coca-Cola Company in Argentina or Brazil, which is used for the preparation, production, sale and distribution of Coca-Cola products and brands, must not be forfeited, sold, assigned or transferred to a third party, provided such territory represents more than 40% of the adjusted consolidated operating flow of the Company.

The Company was in compliance with all financial covenants at June 30, 2011 and at December 31, 2010.

52

15.2.6Repurchased bonds

In addition to UF bonds, the Company holds bonds issued by itself that it has repurchased in full through companies that are integrated in the consolidation:

Through its subsidiaries, Abisa Corp S.A. (formerly Pacific Sterling), Embotelladora Andina S.A. repurchased its Yankee Bonds issued on the U.S. Market during the years 2000, 2001, 2002, 2007 and 2008. The entire placement amounted to US$350 million, of which US$200 million are outstanding and are presented after deducting the long-term liability from the other financial liabilities item.

Rio de Janeiro Refrescos Ltda. holds a liability corresponding to a US$75 million bond issue expiring in December 2012, with semi-annual interest payments. At December 31, 2010 and 2009 and January 1, 2009, those bonds were held in full by Abisa Corp S.A., (formerly Pacific Sterling). Consequently, the assets and liabilities relating to that transaction have been eliminated from these consolidated financial statements. Furthermore, that transaction has been treated as an investment by the group in the Brazilian subsidiary, so the effects of foreign exchange differences between the dollar and the functional currency of each of the entities have been charged to other comprehensive income.

15.2.7Liability for Banking fees

These amounts are liabilities for banking fees on bonds owed by our subsidiary, Rio de Janeiro Refrescos Ltda.:

	06/30/2011	12/31/2010
	ThCh$	ThCh$
Current	749,597	1,934,529
Total	749,597	1,934,529

53

NOTE 16 —   TRADE AND OTHER CURRENT ACCOUNTS PAYABLE

Trade and other current accounts payable are detailed as follows:

Item	06/30/2011	12/31/2010
	ThCh$	ThCh$
Trade accounts payable	59,166,190	87,580,971
Withholdings	5,019,096	8,265,314
Others	8,724,453	9,436,050
Total	72,909,739	105,282,335

NOTE 17 —  PROVISIONS

17.1Balances

The balances of provisions recorded by the Company are shown below, as of June 30, 2011 and December 31, 2010:

Description	06/30/2011	12/31/2010
	ThCh$	ThCh$
Litigation (1)	4,327,537	4,328,367
Total	4,327,537	4,328,367
Current	93,782	60,748
Non-current	4,233,755	4,267,619
Total	4,327,537	4,328,367

(1)These provisions correspond mainly to provisions for probable losses due to fiscal, labor and trade contingencies based on the opinion of management after consultation with its legal counsel.

54

17.2Movements

Movement in the main items included under provisions is detailed as follows:

	06/30/2011					12/31/2010
Description	Litigation		Others	Total		Litigation		Others		Total
	ThCh$		ThCh$	ThCh$		ThCh$		ThCh$		ThCh$
Initial Balance at January 1	4,328,367		—	4,328,367		4,461,153		34,833		4,495,986
Additional provisions	4,550		—	4,550		875,703		—		875,703
Increase (decrease) in existingProvisions	337,567		—	337,567		381,875		—		381,875
Provision used (payment made) onaccount of the provision)	(387,676	)	—	(387,676	)	(1,146,574	)	(34,833	)	(1,181,407	)
Increase (decrease) foreignexchange rate difference	44,729		—	44,729		(243,790	)	—		(243,790	)
Final Balance	4,327,537		—	4,327,537		4,328,367		—		4,328,367

NOTE 18 —   OTHER CURRENT AND NON-CURRENT NON-FINANCIAL  LIABILITIES

Other current and non-current liabilities at the end of each year are detailed as follows:

Description	06/30/2011	12/31/2010
	ThCh$	ThCh$
Minimum dividend liability (30%)	6,056,936	10,723,669
Supplemental dividend payable	46,841,381	6,925,621
Deposits in guarantee	8,179,823	8,002,105
Employee remuneration payable	3,147,018	6,635,679
Accrued vacations	5,900,371	6,635,265
Hedge liabilities	381,736	917,219
Other	1,068,779	363,190
Total	71,576,044	40,202,748
Current	62,858,582	31,879,967
Non-current	8,717,462	8,322,781
Total	71,576,044	40,202,748

55

NOTE 19 —   EQUITY

19.1Paid-in Capital

The paid-in capital of the Company totaled ThCh$230,892,178 as of June 30, 2011, divided into 760,274,542 Series A and B shares, The distribution and differentiation of these is detailed as follows:

19.1.1Number of shares:

Series	Number of shares subscribed	Number of shares paid in	Number of voting shares
A	380,137,271	380,137,271	380,137,271
B	380,137,271	380,137,271	380,137,271

19.1.2Capital:

Series	Subscribed capital	Paid-inCapital
	ThCh$	ThCh$
A	115,446,089	115,446,089
B	115,446,089	115,446,089
Total	230,892,178	230,892,178

19.1.3Rights of each series:

·Series A:  Election of 6 of the 7 directors and their respective alternates.

·Series B:  Receipt of 10% more of dividends than what is received by holders of Series A shares, and election of 1 of 7 directors.

56

19.2Dividend policy

According to Chilean law, cash dividends must be paid equal to at least 30% of annual net profits, barring a unanimous vote by shareholders to the contrary. If there is no net profit in a given year, the company will not be legally obligated to pay dividends from retained earnings. At the april, 2011 annual shareholders meeting, the shareholders authorized the board to pay interim dividends during July and October 2011 and January 2012, at its discretion.

During 2011, the shareholders’ meeting approved an extraordinary dividend payment against the retained earnings fund in light of significant cash generation. We cannot guarantee that those payments will be repeated in the future.

Regarding Circular Letter N°1945 of the Chilean Superintendence of Securities and Insurance, the Company does not present any adjustments to be made in order to determine distributable net earnings to comply with minimum legal amounts.

Pursuant to Circular Letter N° 1,945 of the Chilean Superintendence of Securities and Insurance dated September 29, 2009, during the session held October 26, 2010, the Company’s Board of Directors decided to maintain the initial adjustments of adopting IFRS as retained earnings for future distribution.

Retained earnings at the date of IFRS adoption amounted to ThCh$19,260,703, of which ThCh$2,162,849 have been realized at June 30, 2011 and are available for distribution as dividends in accordance with the following:

Concept	Event realized	Amount of accumulated earnings at 01/01/2009		Realized at 06/30/2011		Amount of accumulated earnings at 06/30/2011
		ThCh$		ThCh$		ThCh$
Revaluation of non-depreciating assets	Sale or deterioration	10,958,958		(495,339	)	10,463,619
Foreign currency translation differences of investments in related companies	Sale or deterioration	6,393,518		—		6,393,518
Revaluation of depreciating assets	Depreciation	1,579,165		(1,063,713	)	515,452
Full absorption cost accounting	Sale of products	813,885		(813,885	)	—
Post-employment benefits actuarial calculation	Termination of employees	929,560		(266,291	)	663,269
Deferred taxes supplementary accounts	Depreciation	(1,414,383	)	476,379		(938,004	)
Total		19,260,703		(2,162,849	)	17,097,854

57

The dividends declared and paid during 2011 and 2010 are presented below:

Dividend payment date		Dividend type	Profits imputable to dividends	Ch$ per Series A Share	Ch$ per Series B Share
2011	July	Interim	2011	8,50	9,35
2011	July	Additional	Retained Earnings	50,00	55,00
2011	May	Final	2010	13,44	14,784
2011	January	Interim	2010	8,50	9,35
2010	January	Interim	2009	7,00	7,70
2010	April	Final	2009	11,70	12,87
2010	May	Additional	Retained Earnings	50,00	55,00
2010	July	Interim	2010	8,50	9,35
2010	October	Interim	2010	8,50	9,35

19.3Reserves

19.3.1Legal and statutory reserves

In accordance with Official Circular No. 456 issued by the Chilean Superintendence of Securities and Insurance, the legally required price-level restatement of paid-in capital for 2009 is presented as part of other Equity reserves and was accounted for as a capitalization from Other Reserves with no impact on net income or retained earnings under IFRS. This amount totaled ThCh$5,435,538 at December 31, 2009

19.3.2Foreign currency translation reserves

This corresponds to the translation of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the consolidated financial statements. Foreign currency translation differences between the receivable held by Abisa Corp S.A. and owed by Rio de Janeiro Refrescos Ltda. are also shown in this account, which has been treated as an investment in Equity Investees (associates and joint ventures). Foreign currency translation reserves are detailed below:

Description	06/30/2011		12/31/2010
	ThCh$		ThCh$
Rio de Janeiro Refrescos Ltda.	12,623,818		1,324,710
Embotelladora del Atlántico S.A.	(21,208,900	)	(19,706,911	)
Foreign currency translation differences Abisa Corp.- Rio de Janeiro Refrescos Ltda.	(1,625,164	)	(3,200,224	)
Total	(10,210,246	)	(21,582,425	)

58

The movement of this reserve for the fiscal periods ended June 30, 2011 and 2010 respectively is detailed as follows::

Description	06/30/2011		06/30/2010
	ThCh$		ThCh$
Rio de Janeiro Refrescos Ltda.	11,299,108		6,423,985
Embotelladora del Atlántico S.A.	(1,501,989	)	1,789,479
Foreign exchange Rate Differences Abisa Corp. - Rio de Janeiro Refrescos Ltda.	1,575,060		2,248,270
Total	11,372,179		10,461,734

19.4Non-controlling interests

This is the recognition of the portion of Equity and income from subsidiaries that are owned by third parties, The breakdown is as follows as of June 30, 2011:

	Non-controlling Interests
Description	Percentage %	Shareholders’ Equity	Income
		ThCh$	ThCh$
Embotelladora del Atlántico S.A.	0.0209	9,092	1,104
Andina Inversiones Societarias S.A.	0.0001	32	2
Total		9,124	1,106

19.5Earnings per share

The basic earnings per share presented in the statement of comprehensive income are calculated as the quotient between income for the year and the average number of shares outstanding during the same period.

The earnings per share used to calculate basic and diluted earnings per share at June 30, 2011 and 2010 respectively is detailed as follows:

	06/30/2011
Earnings per share	SERIES A	SERIES B	TOTAL
Earnings attributable to shareholders (ThCh$)	20,383,785	22,421,308	42,805,093
Average weighted number of shares	380,137,271	380,137,271	760,274,542
Earnings per basic and diluted share (in pesos)	53.62	58.98	56.30

	06/30/2010
Earnings per share	SERIES A	SERIES B	TOTAL
Earnings attributable to shareholders (ThCh$)	23,199,114	25,518,052	48,717,166
Average weighted number of shares	380,137,271	380,137,271	760,274,542
Earnings per basic and diluted share (in pesos)	61.03	67.13	64.08

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NOTE 20 —   DERIVATIVE ASSETS AND LIABILITIES

The company held the following derivative liabilities at June 30, 2011 and December 31, 2010.

20.1Currency forwards for highly probable expected transactions:

During 2010, the Company made contracts to derivative the exchange rate in purchases of property, plant and equipment in foreign currency to be made in 2011.  At June 30, 2011, outstanding contracts totaled Th€$472.  These contracts were appraised at their fair value, resulting in a net profit of ThCh$243,324 for 2011 and a derivative liability of ThCh$8,540 at June 30, 2011 (ThCh$431,236 at December 31, 2010).  Since those contracts do not meet the IFRS documentation requirements to be considered hedges, they have been treated as investment contracts and their effects carried directly to income.

During 2010, the Company made contracts to derivative the exchange rate in the purchase of raw materials to be made in 2011.  At June 30, 2011, outstanding contracts totaled ThUS$15,689.  Those contracts were appraised at their fair values, resulting in a net profit of ThCh$176,688 for 2011 and a hedge liability of ThCh$373,196 at June 30, 2011 (ThCh$485,983 at December 31, 2010).  Since those contracts do not meet the IFRS documentation requirements to be considered hedges, they have been treated as investment contracts and the effects carried directly to income.

20.2Foreign currency forward of items recognized in the accounting:

At December 31, 2010, the Company had sugar sales contracts with the London Exchange to hedge a variable price in the supply of sugar during 2010. These contracts expired during 2010, and were accounted for at fair value.  At June 30, 2010 these contracts generated net earnings amounting to ThCh$2,545,352.  Since these contracts do not meet the documentation requirements of IFRS to be treated as hedging, they have been treated as investment contracts and the effects have been charged directly to income.

Fair value hierarchy

At June 30, 2011, the Company did not have any open sugar sales contracts.  The Company had a total liability related to its foreign exchange forward contracts of ThCh$ 381,736, which are classified within the other current non-financial liabilities and are carried at fair value on the statement of financial position. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1:	quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2:	Assumptions different to quoted prices included in level 1 and that are applicable to assets and liabilities, be it directly (as Price) or indirectly (i.e. derived from a Price)
Level 3:	Assumptions for assets and liabilities that are not based on information observed directly in the market (In the case of the Company, corresponds to the quote at reasonable value at the end of period informed by the same institution where the financial instrument was taken).

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During the reporting period ended June 30, 2011, there were no transfers of items between fair value measurements categories all of which were valued during the period using level 3.

	Fair Value Measurements at June 30, 2011
	Quoted prices in	Significant
	actives markets	other	Significant
	for Identical	observable	unobservable
	Assets	inputs	Inputs
	(Level 1)	(Level 2)	(Level 3)	Total
	ThCh$	ThCh$	ThCh$	ThCh$
Liabilities:
Current Liabilities
Other non-financial liabilities	—	—	381,736	381,736
Total Liabilities	—	—	381,736	381,736

NOTE 21 —   COMMITMENTS AND CONTINGENCIES

21.1Lawsuits and other legal actions::

The Parent Company and its Subsidiaries face litigation or potential litigation, in and out of court, that might result in material or significant losses or gains, in the opinion of the Company’s legal counsel.

1) Embotelladora del Atlántico S.A. is a party to labor and other lawsuits:  Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling ThCh$906,958. Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and Equity, based on the opinion of its legal counsel.

2) Rio de Janeiro Refrescos Ltda. is involved in labor, tax and other lawsuits. The accounting provisions to cover contingencies of a probable loss in these lawsuits total ThCh$3,359,831. Management considers it unlikely that non-provisioned contingencies will affect income and Equity of the Company, based on the opinion of its legal counsel.

3) Embotelladora Andina S. A. is involved in tax, commercial, labor and other lawsuits. The accounting provisions to cover contingencies for probable losses because of these lawsuits total ThCh$60,748. Management considers it unlikely that non-provisioned contingencies will affect income and Equity of the company, in the opinion of its legal advisors.

On April 28, 2011the Company was legally informed of an anti-competition lawsuit filed by the Chilean Fiscalía Nacional Económica (“Chile’s National Economic Prosecutor”, the FNE) before the Tribunal de Defensa de la Libre Competencia (“Chile’s Court on Anti-Competition Cases”, the TDLC) against Embotelladora Andina S.A. and Coca-Cola Embonor S.A. This lawsuit indicates that said companies would have violated the regulation of free competition by establishing a system of granting incentives in the traditional distribution channel (“mom & pop’s”) with the purpose that these points of sale do not advertise, exhibit and/or commercialize, in any manner, the so called B-brands or alternative soft drink beverages.

Pursuant to the aforementioned, the FNE requires the TDLC to impose a fine to each of the companies amounting to 10,000 Unidades Tributarias Anuales yearly taxable units (currently USD9.6 million approximately); Andina is dedicating all necessary efforts to prove before the TDLC the lack of merits of this lawsuit

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Andina is dedicating all necessary efforts to prove before the TDLC the lack of merits of this lawsuit. Accordinlgy, no accounting provisons have been made regarding this lawsuit.

21.2Direct guarantees and restricted assets:

Guarantees and restricted assets as of June 30, 2011 and 2010 are detailed as follows:

Guarantee in	Provided by		Committed assets		Carrying	Balance pending payment on the closing date of the financial statements		Date of guarantee release
favor of	Name	Relationship	Guarantee	Type	amount	2011	2010	2011	2012
					ThCh$	ThCh$	ThCh$	ThCh$	ThCh$
Aduana de EZEIZA	Embotelladora del Atlántico S,A,	Subsidiary	Guarantee Insurance Policy	Export	12,417	—	—	—	—
Aduana de EZEIZA	Embotelladora del Atlántico S,A,	Subsidiary	Guarantee Insurance Policy	Import	10,816	—	—	—	—
Estado Rio de Janeiro	Rio de Janeiro Refrescos Ltda,	Subsidiary	Penora judial	Real estate	10,543,308	12,178,165	12,334,781	—	—
Poder Judiciario	Rio de Janeiro Refrescos Ltda,	Subsidiary	Judicial deposit	Long term asset	22,910,368	—	—	—	—
Aga	Embotelladora Andina S,A,	Parent Company	Guarantee receipt	Agreement	—	141,339	162,927	141,339	—
Serviu Región Metropolitana	Embotelladora Andina S,A,	Parent Company	Guarantee receipt	Guarantee receipt	—	2,850	2,761	2,850	—
Contenedores Patagonia	Embotelladora Andina S,A,	Parent Company	Guarantee receipt	Guarantee receipt	—	—	3,780	—	—

NOTE 22 —  FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s businesses are exposed to diverse financial risks: market risk (including foreign exchange rate risk, fair value interest rate risk and price risk). The Group’s global risk management program concentrates on the uncertainty of financial markets and tries to minimize potentially adverse effects on the financial returns of the Group. The Group uses derivatives to hedge certain risks. Below is a description of the primary policies established by the Group to manage financial risks.

Interest rate risk

As of June 30, 2011, the Company carried all of its debt at a fixed rate. Consequently, the risk of fluctuations in market interest rates as compared to the Company’s cash flows is low.

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Foreign currency risk

Sales revenues earned by the Company are linked to the local currencies of countries in which it does business. The composition for this year is provided below:

CHILEAN PESO		BRASILEAN REAL		ARGENTINE PESO
31	%	47	%	22	%

Since the Company’s income is not tied to the U.S. Dollar, the policy of managing that risk, meaning the gap between assets and liabilities denominated in that currency, has been to hold financial investments in dollar—denominated instruments for at least the equivalent of the liabilities denominated in that currency.

Additionally and depending on market conditions, the Company’s policy is also to make foreign currency hedge contracts to reduce the foreign exchange rate impact on cash outflows expressed in American dollars, corresponding mainly to payments made to raw material suppliers.  In accordance with the percentage of raw material purchases that are indexed to the US Dollar, if the currencies were to devalue by 5% in the three countries where the Company operates, it would generate a decrease cummulative at June 30, 2011 in income of ThCh$2,161,952.

The exposure to conversion differences of subsidiaries abroad (Brazil and Argentina), because of the difference between monetary assets and liabilities, i.e., those denominated in a local currency and consequently exposed to foreign currency translation risk from translation from their functional currency to the presentation currency of the consolidated statements, is only hedged when it is predicted that material adverse differences could occur and when the cost associated with such hedging is deemed reasonable by the management.

At June 30, 2011, the Brazilian real has presented an appreciation of 6.8% over the reporting currency at December 31, 2010, insofar as the Argentine peso recorded devaluation for currency reporting between December 31, 2010 and June 30, 2011. If these trends had been more marked in the same period for example reaching 8.7% appreciation of the Brazilian currency, in conjunction with a 4.7% devaluation of the Argentine peso maintain the behavior of the Chilean peso, at the level of results a higher earnings would have bee presented for the period amounting to ThCh$700, 076. On the other hand, at equity level, this same scenario would cause the rest of the conversion of assets and liabilities accounts to increase equity by ThCh$2,813,995

Commodities risk

The Company faces a risk of price fluctuations in the international markets for sugar, aluminum and PET resin, which are inputs required to produce beverages and, as a whole, account for 35% to 40% of operating costs. Procurement and anticipated purchase contracts are made frequently to minimize and/or stabilize this risk when market conditions warrant. Commodity hedges have also been used. The possible effects that exist in the present consolidated integral statements of a 5% eventual rise in prices of its main raw materials, would be an approcimate reduction in our accumulated results as of June 30, 2011 of around ThCh$2,820,998..  In order to minimize and/or stabilize this risk, we frequently enter into anticipated purchase and supply agreements when market conditions are favorable. We have also used commodity hedge agreements.

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NOTE 23 —  OTHER OPERATING INCOME

Other operating income is detailed as follows:

	01/01/2011	01/01/2010	04/01/2011	04/01/2010
Description	06/30/2011	06/30/2010	06/30/2011	06/30/2010
	ThCh$	ThCh$	ThCh$	ThCh$
Gain on disposal of property, plant and equipment	581,912	213,812	520,340	32,256
Adjustment judicial deposit (Brazil)	251,355	204,810	130,706	108,373
Other	120,776	20,715	110,102	7,601
Total	954,043	439,337	761,148	148,230

NOTE 24 —  OTHER MISCELLANEOUS OPERATING EXPENSES

Other miscellaneous operating expenses are detailed as follows:

	01/01/2011		01/01/2010		04/01/2011		04/01/2010
Description	06/30/2011		06/30/2010		06/30/2011		06/30/2010
	ThCh$		ThCh$		ThCh$		ThCh$
Tax on bank debits	(1,415,940	)	(1,468,414	)	(644,337	)	(732,442	)
Contingencies	(574,314	)	(685,035	)	(325,888	)	(380,832	)
Professional service fees	(50,045	)	(622,324	)	(38,381	)	(149,740	)
Loss on the sale of property, plant and equipment	(138,853	)	(161,274	)	(122,012	)	(140,774	)
Others	(718,877	)	(71,312	)	(645,389	)	(6,650	)
Total	(2,898,029	)	(3,008,359	)	(1,776,007	)	(1,410,438	)

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NOTE 25 —  FINANCE INCOME AND COSTS

Finance income and costs break down as follows :

a)Finance income

	01/01/2011	01/01/2010	04/01/2011	04/01/2010
Description	06/30/2011	06/30/2010	06/30/2011	06/30/2010
	ThCh$	ThCh$	ThCh $	ThCh $
Interest income	1,328,067	1,650,532	842,543	815,529
Other interest income	303,111	284,647	128,612	284,647
Total	1,631,178	1,935,179	971,155	1,100,176

b)Finance costs

	01/01/2011		01/01/2010		04/01/2011		04/01/2010
Description	06/30/2011		06/30/2010		06/30/2011		06/30/2010
	ThCh$		ThCh $		ThCh $		ThCh $
Bond interest	(2,552,413	)	(2,458,859	)	(1,284,318	)	(1,273,338	)
Bank loan interest	(552,852	)	(383,399	)	(250,735	)	(345,629	)
Other interest costs	(520,223	)	(701,259	)	(294,790	)	(349,107	)
Total	(3,625,488	)	(3,543,517	)	(1,829,843	)	(1,968,074	)

NOTE 26 —  OTHER INCOME/ EXPENSES AND ADJUSTMENTS

Other gains and losses are presented below:

	01/01/2011		01/01/2010		04/01/2011		04/01/2010
Description	06/30/2011		30,06,2010		06/30/2011		06/30/2010
	ThCh$		ThCh$		ThCh$		ThCh$
Derivative transactions	420,012		2,545,352		193,842		(34,146	)
Profit on the sale of shares in Vital S.A.	653,214		—		—		—
Insurance deductible and donations due to earthquake	—		(1,257,115	)	—		(257,115	)
Fiscal credit not applied waters Brazil	(673,570	)	—		(406,862	)	—
Other non-operating expense	(256,877	)	(170,795	)	(235,490	)	(126,911	)
Total	142,779		1,117,442		(448,510	)	(418,172	)

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NOTE 27 —  THE ENVIRONMENT

The Company has made disbursements totaling ThCh$1,498,852 for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analyses, consulting on environmental impacts and other studies.

These disbursements by country are detailed as follows:

	Period 2011		Future commitments
Country	Recorded as expenses	Capitalized to property, plant and equipment	Recorded as expenses	Capitalized to property, plant and equipment
	ThCh$	ThCh$	ThCh$	Thch$
Chile	77,353	77,958	68,610	764,947
Argentina	241,949	—	226,742	58,425
Brazil	1,056,529	45,063	706,858	442,319
Total	1,375,831	123,021	1,002,210	1,265,691

NOTE 28 —  SUBSEQUENT EVENTS

No financial or other matters have occurred between the end of the year and the date of preparation of these financial statements that could significantly affect the assets, liabilities, and/or results of the Company.

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