6-K 1 tm245696d1_6k.htm FORM 6-K

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER

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

THE SECURITIES EXCHANGE ACT OF 1934

 

December 2023

Date of Report (Date of Earliest Event Reported)

 

Embotelladora Andina S.A.

(Exact name of registrant as specified in its charter)

 

Andina Bottling Company, Inc.

(Translation of Registrant´s name into English)

 

Avda. Miraflores 9153

Renca

Santiago, Chile

(Address of principal executive office)

 

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

 

Form 20-F    x    Form 40-F   ¨

 

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

 

Yes ¨   No   x

 

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

 

Yes ¨   No   x

 

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

 

Yes ¨   No   x

 

 

 

 

 

 

 

 

  Consolidated Financial Statements  
     
  EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES  
     
  Santiago, Chile  
  December 31, 2023 and 2022  

 

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Financial Statements

at December 31, 2023 and 2022

 

 

 

 

 

INDEPENDENT AUDITOR’S REPORT

 

Santiago, January 30, 2024

 

To the Shareholders and Directors

Embotelladora Andina S.A.

 

Opinion

 

We have audited the consolidated financial statements of Embotelladora Andina S.A. and Subsidiaries, which comprise the consolidated statements of financial position as of December 31, 2023 and 2022, and the consolidated statements of income by function, comprehensive income, changes in equity and direct cash flows for the years then ended and the related notes thereto.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Embotelladora Andina S.A. and Subsidiaries as of December 31, 2023 and 2022, the results of its operations and its cash flows for the years then ended, in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.

 

Basis for an opinion

 

We conducted our audit in accordance with Chilean Generally Accepted Auditing Standards. Our responsibilities under those standards are described in the paragraphs under the section "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements" in this report. According to the ethical requirements relevant to our audits of the consolidated financial statements, we are required to be independent of Embotelladora Andina S.A and Subsidiaries and to comply with the other ethical responsibilities in accordance with such requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

 

Management’s responsibility for the consolidated financial statements

 

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

 

In preparing and presenting the consolidated financial statements, Management is required to evaluate whether there are facts or circumstances that, taken as a whole, raise substantial doubt about the ability of Embotelladora Andina S.A. and Subsidiaries to continue as a going concern for the foreseeable future.

 

 

 

 

Auditor’s responsibility for the audit of the consolidated financial statements

 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high, but not absolute, level of assurance and, therefore, does not guarantee that an audit performed in accordance with Generally Accepted Auditing Standards in Chile will always detect a material misstatement when it exists. The risk of not detecting a material misstatement due to fraud is greater than the risk of not detecting a material misstatement due to error, as fraud may involve collusion, forgery, intentional omissions, concealment, misrepresentations or disregard of controls by Management. A misstatement is considered material if, individually or in the aggregate, it would influence the judgment of a reasonable user based on these consolidated financial statements.

 

As part of an audit conducted in accordance with Generally Accepted Auditing Standards in Chile, we:

 

Exercise our professional judgment and maintain our professional skepticism throughout the audit.

 

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, we design and perform audit procedures in response to those risks. Such procedures include examining evidence, on a test basis, regarding the amounts and disclosures in the consolidated financial statements.

 

Obtain an understanding of internal control relevant to an audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Embotelladora Andina S.A and Subsidiaries's internal control. Consequently, we do not express such an opinion.

 

We assess the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by Management, as well as assessing the appropriateness of the overall presentation of the consolidated financial statements.

 

We conclude whether in our judgment there are facts or circumstances that, taken as a whole, cast substantial doubt about the ability of Embotelladora Andina S.A and Subsidiaries to continue as a going concern for a reasonable period of time.

 

We are required to communicate to those charged with governance, among other matters, the planned timing and scope of the audit and significant audit findings, including any significant deficiencies and material weaknesses in internal control that we identify during our audit.

 

Sergio Tubío L.

RUT: 21.175.581-4

 

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Financial Statements

 

I.Consolidated Statements of Financial Position 1
    
II.Consolidated Statements of Income by Function 3
    
III.Consolidated Statements of Comprehensive (Loss) Income 4
    
IV.Consolidated Statements of Changes in Equity 5
    
V.Consolidated Statements of Direct Cash Flows 6
    
VI.Notes to the Consolidated Financial Statements  

 

1 – Corporate Information 7
2 – Basis Of Preparation Of Consolidated Financial Statements And Application Of Accounting Criteria 8
3 – Financial Reporting By Segment 27
4 – Cash And Cash Equivalents 30
5 – Other Current And Non-Current Financial Assets 30
6 – Other Current And Non-Current Non-Financial Assets 31
7 – Trade Accounts And Other Accounts Receivable 32
8 – Inventories 33
9 – Tax Assets And Liabilities 34
10 – Income Tax Expense And Deferred Taxes 34
11 – Property, Plant And Equipment 37
12 – Related Parties 40
13 – Current And Non-Current Employee Benefits 42
14 – Investments In Associates Accounted For Using The Equity Method 44
15 – Intangible Assets Other Than Goodwill 46
16 – Goodwill 48
17 – Other Current And Non-Current Financial Liabilities 48
18 – Trade And Other Accounts Payable 59
19 – Other Provisions, Current And Non-Current 59
20 – Other Non-Financial Liabilities 60
21 – Equity 60
22 – Derivative Assets And Liabilities 64
23 – Litigation And Contingencies 66
24 – Financial Risk Management 70
25 – Expenses By Nature 74
26 – Other Income 74
27 – Other Expenses By Function 74
28 – Financial Income And Expenses 75
29 – Other (Losses) Gains 75
31 - Local And Foreign Currency 76
32 – Environment (Non-Audited) 80
33 – Subsequent Events 80

 

 

 

 

 

 

Consolidated Financial Statements

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

December 31, 2023 and 2022

 

 

 

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Statements of Financial Position

as of December 31, 2023 and 2022

 

ASSETS  NOTE  12.31.2023   12.31.2022 
       ThCh$   ThCh$ 
Current assets:             
              
Cash and cash equivalents  4   303,683,683    291,681,987 
Other financial assets  5   67,285,793    263,044,869 
Other non-financial assets  6   19,311,851    26,957,000 
Trade and other accounts receivable, net  7   298,892,164    279,770,286 
Accounts receivable from related companies  12.1   16,161,318    15,062,167 
Inventory  8   233,053,160    245,886,656 
Current tax assets  9   43,383,058    39,326,427 
Total Current Assets      981,771,027    1,161,729,392 
              
Non-Current Assets:             
Other financial assets  5   93,316,339    94,852,711 
Other non-financial assets  6   59,412,482    59,672,266 
Trade and other receivables  7   371,401    539,920 
Accounts receivable from related parties  12.1   108,021    109,318 
Investments accounted for under the equity method  14   91,799,267    92,344,598 
Intangible assets other than goodwill  15   695,926,565    671,778,888 
Goodwill  16   122,103,802    129,023,922 
Property, plant and equipment  11   872,388,811    798,221,259 
Deferred tax assets  10.2   4,323,174    2,428,333 
Total Non-Current Assets      1,939,749,862    1,848,971,215 
              
Total Assets      2,921,520,889    3,010,700,607 

 

The accompanying notes 1 to 33 form an integral part of these Consolidated Financial Statements

 

1

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Statements of Financial Position

as of December 31, 2023 and 2022

 

LIABILITIES AND EQUITY  NOTE  12.31.2023   12.31.2022 
      ThCh$   ThCh$ 
LIABILITIES           
Current Liabilities             
Other financial liabilities  17   52,997,001    367,302,080 
Trade and other accounts payable  18   428,911,984    384,801,630 
Accounts payable to related parties  12.2   96,045,624    90,248,067 
Other provisions  19   1,314,106    1,591,644 
Tax liabilities  9   13,411,621    14,615,447 
Employee benefits current provisions  13   57,817,800    48,391,806 
Other non-financial liabilities  20   42,373,160    42,294,460 
Total Current Liabilities      692,871,296    949,245,134 
              
Other financial liabilities  17   1,044,325,833    904,802,058 
Trade accounts and other accounts payable  18   2,392,555    3,015,284 
Accounts payable to related companies  12.2   6,007,041    10,354,296 
Other provisions  19   53,487,790    47,103,783 
Deferred tax liabilities  10.2   180,470,219    165,778,556 
Employee benefits non-current provisions  13   18,473,946    17,409,793 
Other non-financial liabilities  20   2,506,795    29,589,051 
Total Non-current liabilities      1,307,664,179    1,178,052,821 
              
EQUITY  21          
Issued capital      270,737,574    270,737,574 
Retained earnings      769,311,795    716,975,127 
Other reserves      (153,758,842)   (132,452,557)
Equity attributable to owners of the parent      886,290,527    855,260,144 
Non-controlling interests      34,694,887    28,142,508 
Total Equity      920,985,414    883,402,652 
Total Liabilities and Equity      2,921,520,889    3,010,700,607 

 

The accompanying notes 1 to 33 form an integral part of these Consolidated Financial Statements.

 

2

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Statements of Income by Function

For the periods ended December 31, 2023 and 2022

 

      01.01.2023   01.01.2022 
   NOTE  12.31.2023   12.31.2022 
      ThCh$   ThCh$ 
Net sales      2,618,437,052    2,656,878,395 
Cost of sales  8 - 25   (1,601,997,255)   (1,628,701,823)
Gross Profit      1,016,439,797    1,028,176,572 
Other income  26   1,310,489    2,497,520 
Distribution expenses  25   (227,807,179)   (253,514,676)
Administrative expenses  25   (431,295,515)   (429,517,716)
Other expenses  27   (26,441,583)   (886,331)
Other (loss) gains  29   (15,909,117)   (24,983,899)
Financial income  28   31,396,167    39,722,410 
Financial expenses  28   (65,288,352)   (59,547,953)
Share of profit (loss) of investments in associates and joint ventures accounted for using the equity method  14.3   2,716,169    1,409,069 
Foreign exchange differences  30   (17,216,130)   (11,607,728)
Income by indexation units      (7,398,952)   (58,943,643)
Net income before income taxes      260,505,794    232,803,625 
Income tax expense  10.1   (85,994,307)   (104,344,638)
Net income      174,511,487    128,458,987 
              
Net income attributable to             
Owners of the controller      171,441,410    125,497,642 
Non-controlling interests      3,070,077    2,961,345 
Net income      174,511,487    128,458,987 
              
Earnings per Share, basic and diluted in ongoing operations     $   $ 
Earnings per Series A Share  21.5   172.49    126.27 
Earnings per Series B Share  21.5   189.74    138.89 

 

The accompanying notes 1 to 33 form an integral part of these Consolidated Financial Statements

 

3

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

  

Consolidated Statements of Comprehensive Income

For the periods ended December 31, 2023 and 2022

 

   01.01.2023   01.01.2022 
   12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Other Comprehensive Income          
Net income   174,511,487    128,458,987 
Components of other comprehensive income that will not be reclassified to net income for the period, before taxes          
Actuarial Gains (losses) from defined benefit plans   2,381,650    (3,960,084)
Components of other comprehensive income that will be reclassified to net income for the period, before taxes          
Gain (losses) from exchange rate translation differences   (98,844,581)   (78,009,918)
Gain (losses) from cash flow hedges   52,472,352    (155,206,655)
Income tax related to components of other comprehensive income that will not be reclassified to net income for the period          
Income tax benefit related to defined benefit plans   (643,045)   1,069,223 
           
Income tax related to components of other comprehensive income that will be reclassified to net income for the period          
Income tax related to exchange rate translation differences   37,650,601    23,777,899 
Income tax related to cash flow hedges   (14,183,004)   42,276,806 
Other comprehensive income, total   (21,166,027)   (170,052,729)
Total comprehensive income   153,345,460    (41,593,742)
Total comprehensive income attributable to:          
Equity holders of the controller   150,135,125    (44,244,225)
Non-controlling interests   3,210,335    2,650,483 
Total comprehensive income   153,345,460    (41,593,742)

 

The accompanying notes 1 to 33 form an integral part of these Consolidated Financial Statements.

  

4

 

 

 

 

EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Statements of Changes in Equity 

For the periods ended December 31, 2023 and 2022

 

       Other reserves                 
   Issued capital   Reserves for
exchange rate
differences
   Cashflow hedge
reserve
   Actuarial gains or
losses in
employee benefits
   Other
reserves
   Total Other
reserves
   Retained
earnings
   Controlling
equity
   Non-controlling
interests
   Total equity 
   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$ 
Opening balance 01.01.2023   270,737,574    (495,483,366)   (62,344,501)   (7,776,316)   433,151,626    (132,452,557)   716,975,127    855,260,144    28,142,508    883,402,652 
Changes in equity                                                  
Comprehensive income                                                  
Earnings   -    -    -    -    -    -    171,441,410    171,441,410    3,070,077    174.511.487 
Other comprehensive income   -    (61,349,533)   38,280,115    1,763,133    -    (21,306,285)   -    (21,306,285)   140,258    (21.166.027)
Comprehensive income   -    (61,349,533)   38,280,115    1,763,133    -    (21,306,285)   171,441,410    150,135,125    3,210,335    153.345.460 
Dividends   -    -    -    -    -    -    (167,968,886)   (167,968,886)   (777,956)   (168,746,842)
Increase (decrease) from other changes *   -    -    -    -    -    -    48,864,144    48,864,144    4,120,000    52,984,144 
Total changes in equity   -    (61,349,533)   38,280,115    1,763,133    -    (21,306,285)   52,336,668    31,030,383    6,552,379    37,582,762 
Ending balance as of 12.31.2023   270,737,574    (556,832,899)   (24,064,386)   (6,013,183)   433,151,626    (153,758,842)   769,311,795    886,290,527    34,694,887    920,985,414 

 

       Other reserves                 
   Issued capital   Reserves for
exchange rate
differences
   Cashflow hedge
reserve
   Actuarial gains or
losses in
employee benefits
 
  Other
reserves
   Total Other
reserves
   Retained
earnings
   Controlling
equity
   Non-controlling
interests
   Total equity 
   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$ 
Opening balance 01.01.2022   270,737,574    (441,580,088)   50,603,698    (4,885,926)   433,151,626    37,289,310    768,116,920    1,076,143,804    25,269,755    1,101,413,559 
Changes in equity                                                  
Comprehensive income                                                  
Earnings   -    -    -    -    -    -    125,497,642    125,497,642    2,961,345    128.458.987 
Other comprehensive income   -    (53,903,278)   (112,948,199)   (2,890,390)   -    (169,741,867)   -    (169,741,867)   (310,862)   (170.052.729)
Comprehensive income   -    (53,903,278)   (112,948,199)   (2,890,390)   -    (169,741,867)   125,497,642    (44,244,225)   2,650,483    (41.593.742)
Dividends   -    -    -    -    -    -    (274,316,049)   (274,316,049)   (1,057,730)   (275,373,779)
Increase (decrease) from other changes *   -    -    -    -    -    -    97,676,614    97,676,614    1,280,000    98,956,614 
Total changes in equity   -    (53,903,278)   (112,948,199)   (2,890,390)   -    (169,741,867)   (51,141,793)   (220,883,660)   2,872,753    (218,010,907)
Ending balance as of 12.31.2022   270,737,574    (495,483,366)   (62,344,501)   (7,776,316)   433,151,626    (132,452,557)   716,975,127    855,260,144    28,142,508    883,402,652 

 

*Corresponds mainly to inflation effects on the equity of our Subsidiaries in Argentina (see Note 2.5.1)

 

The accompanying notes 1 to 33 form an integral part of these Consolidated Financial Statements.

 

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EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Consolidated Statements of Direct Cash Flows

For the periods ended December 31, 2023 and 2022

 

       01.01.2023   01.01.2022 
Cash flows provided by (used in) Operating Activities  NOTE   12.31.2023   12.31.2022 
       ThCh$   ThCh$ 
Cash flows provided by Operating Activities               
Receipts from the sale of goods and the rendering of services (including taxes)        3,716,722,747    3,682,470,527 
Payments for Operating Activities               
Payments to suppliers for goods and services (including taxes)        (2,577,032,215)   (2,551,652,407)
Payments to and on behalf of employees        (260,336,901)   (258,202,599)
Other payments for operating activities (value-added taxes on purchases, sales and others)        (394,507,399)   (363,740,268)
Dividends received        8,013,426    4,079,309 
Interest payments        (67,010,058)   (44,822,402)
Interest received        14,354,013    24,649,593 
Income tax payments        (71,269,988)   (87,757,706)
Other cash movements (tax on bank debits Argentina and others)        (2,103,389)   (7,571,623)
Cash flows provided by (used in) Operating Activities        366,830,236    397,452,424 
                

Cash flows provided by (used in) Investing Activities

               
Proceeds from sale of Property, plant and equipment        142,208    92,253 
Purchase of Property, plant and equipment        (192,707,498)   (186,702,179)
Purchase of intangible assets        -    - 
Payment on forward, term option and financial exchange agreements        -    - 
Collection on forward, term, option and financial exchange agreements        156,738    146,070 
Purchase of other current financial assets        32,000,000    101,191,506 
Other cash inflows (outflows)        2,119,674    103,879 
Net cash flows used in Investing Activities        (158,288,878)   (85,168,471)
                
Cash Flows generated from (used in) Financing Activities               
Proceeds from changes in ownership interest in subsidiaries        4,119,966    - 
Proceeds (payments) from short term loans        31,850,233    23,625,853 
Loan payments        (26,378,491)   (13,934,477)
Lease liability payments        (6,299,217)   (5,385,167)
Dividend payments by the reporting entity        (165,877,422)   (274,316,050)
Other cash inflows (outflows) (placement and payment of public debt)        (24,541,867)   (16,953,541)
Net cash flows (used in) generated by Financing Activities        (187,126,798)   (286,963,382)
Net increase in cash and cash equivalents before exchange differences        21,414,560    25,320,571 
Effects of exchange differences on cash and cash equivalents        4,547,790    (21,352,255)
Effects of inflation in cash and cash equivalents in Argentina        (13,960,654)   (16,598,349)
Net increase (decrease) in cash and cash equivalents        12,001,696    (12,630,033)
Cash and cash equivalents – beginning of period   4    291,681,987    304,312,020 
Cash and cash equivalents - end of period   4    303,683,683    291,681,987 

 

The accompanying notes 1 to 33 form an integral part of these Consolidated Financial Statements

 

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EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES

 

Notes to the Consolidated Financial Statements

 

1 – CORPORATE INFORMATION

 

Embotelladora Andina S.A. RUT (Chilean Taxpayer Id. N°) 91.144.000-8 (hereinafter “Andina,” and together with its subsidiaries, the “Company”) is an open stock corporation, whose corporate address and principal offices are located at Miraflores 9153, borough of Renca, Santiago, Chile. The Company is registered in the Securities Registry of the Chilean Financial Market Commission (hereinafter "CMF"), and pursuant to Chile’s Law 18,046 is subject to the supervision of this entity. It is also registered with the U.S. Securities and Exchange Commission (hereinafter “SEC”) and its stock is traded on the New York Stock Exchange since 1994.

 

The principal activity of Embotelladora Andina S.A. is to produce, bottle, commercialize and distribute the products under registered trademarks of The Coca-Cola Company (TCCC), as well as commercialize and distribute some brands of other companies such as Monster, AB InBev, Diageo and Capel, among others. The Company maintains operations and is licensed to produce, commercialize and distribute such products in certain territories in Chile, Brazil, Argentina and Paraguay

 

In Chile, the territories in which it has such a franchise are the Metropolitan Region; the province of San Antonio, the V Region; the province of Cachapoal including the commune of San Vicente de Tagua-Tagua, the VI Region; the II Region of Antofagasta; the III Region of Atacama, the IV Region of Coquimbo XI Region de Aysén del General Carlos Ibáñez del Campo; XII Region of Magallanes and Chilean Antarctic. In Brazil, the aforementioned franchise covers much of the state of Rio de Janeiro, the entire state of Espirito Santo, and part of the states of São Paulo and Minas Gerais. In Argentina it includes the provinces of Córdoba, Mendoza, San Juan, San Luis, Entre Ríos, as well as part of the provinces of Santa Fe and Buenos Aires, Chubut, Santa Cruz, Neuquén, Río Negro, La Pampa, Tierra del Fuego, Antarctica and South Atlantic Islands. Finally, in Paraguay the territory comprises the whole country. The bottling agreement for the territories in Argentina expires in September 2027; for the territories in Brazil, it expires in October 2027; for the territories in Chile it expires in December 2023 and is currently under the process of renewal, and for the territory in Paraguay it expires on March 1, 2028. Said agreements are renewable upon the request of Embotelladora Andina S.A. and at the sole discretion of The Coca-Cola Company.

 

As of the date of these consolidated financial statements, regarding Andina’s principal shareholders, the Controlling Group holds 53.58% of the outstanding shares with voting rights, corresponding to the Series A shares. The Controlling Group is composed of the Chadwick Claro, Garcés Silva, Said Handal and Said Somavía families, who control the Company in equal parts.

 

These Consolidated Financial Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries, which were approved by the Board of Directors on January 30, 2024.

 

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

  

2.1Accounting principles and basis of preparation

 

The Company’s Consolidated Financial Statements for the period ended December 31, 2023fiscal year ended December 31, 2023 and 2022, have been prepared in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (hereinafter "IFRS") and the Interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under IFRS.

 

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

 

These Consolidated Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries as of December 31, 2023 and 2022 and the results of operations for the periods from January 1 to December 31, 2023 and 2022, December 31, 2023together with the statements of changes in equity and cash flows for the periods from January 1 and December 31, 2023 and 2022.

 

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

 

2.2Subsidiaries and consolidation

 

Subsidiary entities are those companies directly or indirectly controlled by Embotelladora Andina. Control is obtained when the Company has power over the investee, when it has exposure or is entitled to variable returns from its involvement in the investee and when it has the ability to use its power to influence the amount of investor returns. They include assets and liabilities, results of operations, and cash flows for the periods reported. Income or losses from subsidiaries acquired or sold are included in the consolidated statements of income by function from the effective date of acquisition through the effective date of disposal, as applicable.

 

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

 

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

 

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

 

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

 

      Ownership interest 
       12.31.2023    12.31.2022 
Taxpayer ID  Company Name   Direct    Indirect    Total    Direct    Indirect    Total 
96.842.970-1  Andina Bottling Investments S.A.   99.94    0.06    100.0    99.9    0.09    99.99 
96.972.760-9  Andina Bottling Investments Dos S.A.   64.42    35.58    100.0    99.9    0.09    99.99 
Foreign  Andina Empaques Argentina S.A.   -    99.98    99.98    -    99.98    99.98 
96.836.750-1  Andina Inversiones Societarias SpA.   100.0    -    100.0    99.98    0.01    99.99 
76.070.406-7  Embotelladora Andina Chile S.A.   99.99    0.01    100.0    99.99    -    99.99 
Foreign  Embotelladora del Atlántico S.A.   0.92    99.07    99.99    0.92    99.07    99.99 
96.705.990-0  Envases Central S.A.   59.27    -    59.27    59.27    -    59.27 
Foreign  Paraguay Refrescos S.A.   0.08    97.75    97.83    0.08    97.75    97.83 
76.276.604-3  Red de Transportes Comerciales Ltda.   99.85    0.15    100.0    99.9    0.09    99.99 
77.427.659-9  Re-Ciclar S.A.   60.00    -    60.00    60.00    -    60.00 
Foreign  Rio de Janeiro Refrescos Ltda.   -    99.99    99.99    -    99.99    99.99 
78.536.950-5  Servicios Multivending Ltda.   99.9    0.10    100.0    99.9    0.09    99.99 
78.861.790-9  Transportes Andina Refrescos Ltda.   99.9    0.01    100.0    99.9    0.09    99.99 
96.928.520-7  Transportes Polar S.A.   99.9    0.01    100.0    99.99    -    99.99 
76.389.720-6  Vital Aguas S.A.   66.5    -    66.5    66.50    -    66.50 
93.899.000-k  VJ S.A.   15.0    50.00    65.0    15.00    50.00    65.00 

 

2.3Investments in associates

 

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

 

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

 

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

 

For associates located in Brazil, the financial statements accounted for using the equity method have a one-month lag because their reporting dates are different from those of Embotelladora Andina.

 

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2.4Financial reporting by operating segment

 

“IFRS 8 Operating Segments” requires that entities disclose information on the results of operating segments. In general, this is information that Management and the Board of Directors use internally to assess performance of segments and allocate resources to them. Therefore, the following operating segments have been determined based on geographic location:

 

·Operation in Chile
·Operation in Brazil
·Operation in Argentina
·Operation in Paraguay

 

2.5Functional currency and presentation currency

 

2.5.1Functional currency

 

Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The functional currency of each of the Operations is the following:

 

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

 

Foreign currency-denominated monetary assets and liabilities are converted to the functional currency at the observed exchange rate of each central bank, in effect on the closing date.

 

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

 

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

 

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Functional currency in hyperinflationary economies

  

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

 

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

 

For consolidation purposes in Embotelladora Andina S.A. and as a result of the adoption of IAS 29, the results and financial position of our Argentine subsidiaries were converted to the closing exchange rate (ARS/CLP) at the date of presentation of these financial statements , in accordance with IAS 21 "Effects of foreign currency exchange rate variations", when dealing with a hyperinflationary economy.

 

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

 

The adjustment factor is derived from the National Consumer Price Index (CPI), which is published by the National Institute of Statistics and Census of the Argentine Republic (INDEC). Inflation for the periods January to December 2023 and 2022 amounted to 209.91% and 96.95%, respectively.

 

2.5.2Presentation currency

 

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

 

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

 

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

 

·The statement of financial position is translated to the closing exchange rate at the financial statement date and the income statement is translated at the average monthly exchange rates, the differences that result are recognized in equity under other comprehensive income.
·Cash flow income statement are also translated at average exchange rates for each transaction.
·In the case of the disposal of an investment abroad, the component of other comprehensive income (OCI) relating to that investment is reclassified to the income statement.

 

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b.Translation of financial statements whose functional currency corresponds to hyperinflationary economies (Argentina)

 

Financial statements of economies with a hyperinflationary economic environment, are recognized according to IAS 29 Financial Information in Hyperinflationary Economies, and subsequently converted to Chilean pesos as follows:

 

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

 

In accordance with IAS 21 "Effects of Changes in Foreign Exchange Rates," we use the closing exchange rate to translate financial information into presentation currency. The official dollar whose value is determined by the Central Bank of Argentina (BCRA) is used to calculate the exchange rate for the presentation and preparation of the consolidated financial statements.

 

In the course of Argentine market transactions, there are a number of other types of U.S. dollar rates that may differ from the BCRA-calculated official rate. In the event that financial information is translated into the presentation currency using a non-official exchange rate, the consolidated figures of our Operation in Argentina may be affected.

 

2.5.3Exchange rates

 

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

 

Date   USD   BRL   ARS   PYG 
12.31.2023    877.12    181.17    1.08    0.120 
12.31.2022    855.86    164.03    4.83    0.116 

 

Exchange rates regarding the Chilean peso, calculated using average rates, used in the preparation of the Consolidated Financial Statements, are as follows:

 

Date   USD   BRL   PYG         
12.31.2023    839.92    168.31    0.115         
12.31.2022    873.28    169.16    0.125         

 

For the translation of Argentine figures, closing rates (not average) are used, as described in Note 2.5.2 b.

 

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2.6Property, plant, and equipment

  

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

 

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

 

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

 

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

 

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

 

The estimated useful lives by asset category are:

 

Assets  Range in years
Buildings  15-80
Plant and equipment  5-20
Warehouse installations and accessories  10-50
Furniture and supplies  4-5
Motor vehicles  4-10
IT equipment  3-5
Other Property, plant and equipment  3-10
Bottles and containers  1-8

 

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

 

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

 

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

 

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2.7Intangible assets and Goodwill

 

2.7.1Goodwill

 

Goodwill represents the excess of the consideration transferred over the Company’s interest in the net fair value of the net identifiable assets of the subsidiary and the fair value of the non-controlling interest in the subsidiary on the acquisition date. Since goodwill is an intangible asset with indefinite useful life, it is recognized separately and tested annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognized immediately as an expense and is not subsequently reversed.

 

Goodwill is carried at cost less accumulated impairment losses.

 

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

 

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

 

2.7.2Distribution rights

 

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

 

2.7.3Software

 

Carrying amounts correspond to internal and external software development costs, which are capitalized once the recognition criteria in IAS 38, Intangible Assets, have been met. Their accounting recognition is initially realized for their acquisition or production cost and, subsequently, they are valued at their net cost of their corresponding accumulated amortization and of the impairment losses that, if applicable, they have experienced. The aforementioned software is amortized within four years.

 

2.8Impairment of non-financial assets

 

Assets that have an indefinite useful life, such as intangibles related to distribution rights and goodwill, are not amortized and are tested annually for impairment or more frequently if events or changes in circumstances indicate a potential impairment. Assets that are subject to amortization are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying value of the asset exceeds its recoverable amount. The recoverable amount is the greater of an asset’s fair value less costs to sell or its value in use.

 

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units - CGU). Cash-generating unit's recoverable amount has been determined on the basis of its value in use.

 

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

 

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

 

-Operation in Chile; (North Zone Antofagasta, Atacama and Coquimbo, Metropolitan Area
-, Central Zone San Antonio and Cachapoal and Extreme South Zone of Aysen and Magallanes);
-Operation in Argentina; (San Juan, Mendoza, San Luis, Córdoba, Santa Fé, Entre Ríos, La Pampa, Neuquén, Rio Negro, Chubut, Santa Cruz, Tierra del Fuego and western area of the Province of Buenos Aires);
-Operation in Brazil (State of Rio de Janeiro and Espirito Santo, Ipiranga territories, investment in the Sorocaba associate and investment in the Leão Alimentos e Bebidas Ltda. associate);
-Operation in Paraguay

 

To check if goodwill has suffered a loss due to impairment of value, the Company compares the book value thereof with its recoverable value, and recognizes an impairment loss, for the excess of the asset's carrying amount over its recoverable amount. To determine the recoverable values of the CGU, management considers the discounted cash flow method as the most appropriate.

 

The main assumptions used in the annual impairment test are:

 

a)Discount rate

 

The discount rate applied in the annual impairment test carried out in 2023 was estimated using the CAPM (Capital Asset Pricing Model) methodology, which allows estimating a discount rate according to the level of risk of the CGU in the country where it operates. A nominal discount rate in local currency before tax is used according to the following table:

 

    2023 Discount
rates
    2022 Discount
rates
 
Argentina     38.7 %     33.1 %
Chile     10.3 %     9.3 %
Brazil     11.2 %     10.5 %
Paraguay     12.0 %     11.3 %

 

b)Other assumptions

 

The financial projections to determine the net present value of future cash flows of the CGUs are modeled based on the main historical variables and the respective approved budgets for each CGU.. In this regard, a conservative growth rate is used, taking into account the differences that exist in categories with high growth such as carbonated beverages, categories with medium growth such as waters and juices, and categories that are less developed and have lower margins such as alcohols. Additionally, the valuation model considers projections over 5 years based on perpetuity growth rates per operation, which follow a real growth according to long-term population growth expectations. In this sense, the variables with greatest sensitivity in these projections are the discount rates applied in the determination of the net present value of projected cash flows, growth perpetuities and EBITDA margins considered in each CGU.

 

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

 

-Discount Rate: Increase / Decrease of up to 200 bps as a value in the rate at which future cash flows are discounted to bring them to present value
-Perpetuity: Increase / Decrease of up to 25 bps in the rate to calculate the perpetual growth of future cash flows
-EBITDA margin: Increase / Decrease of 150 bps of EBITDA margin of operations, which is applied per year for the projected periods, that is, for the years 2024-2028

 

After modeling and valuing the different CGUs as a result of the tests performed as of December 31, 2023, no impairment were identified in any of the CGUs listed above, assuming conservative projections aligned with the history of the current markets. Thus, despite the deterioration of the macroeconomic conditions experienced by the economic conditions of the countries in which we operate, the impairment test yielded recovery values higher than the book values of assets, including those for the sensitivity calculations in the stress test conducted on the model for the 3 previously mentioned variables.

 

The yearly review of other investments revealed that, for the AdeS brand, specifically in the Chilean operation, the recoverable value was CLP 1,627 million less than the book value recorded in the Financial Statements, which were reduced from their book value as of December 2023. This is noteworthy even though no impairment indicators were found for the CGUs mentioned above. The negative trend in the seeds segment's sales and the brand's overall decline in relevance in the local vegetable market are the primary causes of the lower valuation of AdeS in Chile.

 

2.9Financial instruments

 

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

 

2.9.1Financial assets

 

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

 

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

 

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

 

-Financial asset at amortized cost for financial instruments that are maintained within a business model with the objective of maintaining the financial assets to collect contractual cash flows that meet the SPPI criterion. This category includes the Group’s trade and other accounts receivable.

 

-Financial assets measured at fair value with changes in other comprehensive income (FVOCI), with gains or losses recognized in P&L at the time of liquidation. Financial assets in this category correspond to the Group's instruments that meet the SPPI criterion and are kept within a business model both to collect cash flows and to sell.

 

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Other financial assets are classified and subsequently measures as follows:

 

-Equity instruments at fair value with changes in other comprehensive income (FVOCI) without recognizing earnings or losses in P&L at the time of liquidation. This category only includes equity instruments that the Group intends to keep in the foreseeable future and that the Group has irrevocably chosen to classify in this category in the initial recognition or transition.

 

-Financial assets at fair value with changes in P&L (FVPL) include derivative instruments and equity instruments quoted that the Group had not irrevocably chosen to classify at FVOCI in the initial recognition or transition. This category also includes debt instruments whose cash flow characteristics do not comply with the SPPI criterion or are not kept within a business model whose objective is to recognize contractual cash flows or sale.

 

A financial asset (or, where applicable, a portion of a financial asset or a portion of a group of similar financial assets) is initially disposed (for example, canceled in the Group's consolidated financial statements) when:

 

-The rights to receive cash flows from the asset have expired,

 

-The Group has transferred the rights to receive the cash flows of the asset or has assumed the obligation to pay all cash flows received without delay to a third party under a transfer agreement; and the Group (a) has substantially transferred all risks and benefits of the asset, or (b) has not substantially transferred or retained all risks and benefits of the asset but has transferred control of the asset.

 

2.9.2Financial Liabilities

 

Financial liabilities are classified as a fair value financial liability at the date of their initial recognition, as appropriate, with changes in results, loans and credits, accounts payable or derivatives designated as hedging instruments in an effective coverage.

 

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

 

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

 

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

 

-Fair value financial liabilities with changes in results include financial liabilities held for trading and financial liabilities designated in their initial recognition at fair value with changes in results. The losses or gains of liabilities held for trading are recognized in the income statement.

 

-Loans and credits are valued at cost or amortized using the effective interest rate method. Gains and losses are recognized in the income statement when liabilities are disposed, as well as interest accrued in accordance with the effective interest rate method.

 

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

 

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2.9.3Offsetting financial instruments

 

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

 

-There is currently a legally enforceable right to offset the amounts recognized, and
-It is intended to liquidate them for the net amount or to realize the assets and liquidate the liabilities simultaneously.

 

2.10Derivatives financial instruments and hedging activities

 

The Company and its subsidiaries use derivative financial instruments to mitigate risks relating to changes in foreign currency and exchange rates associated with raw materials, and loan obligations. Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at each closing date. Derivatives are accounted as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

 

2.10.1Derivative financial instruments designated as cash flow hedges

 

At the inception of the transaction, the group documents the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated income statement within "other gains (losses).”

 

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when foreign currency denominated financial liabilities are translated into their functional currencies). The gain or loss relating to the effective portion of cross currency swaps hedging the effects of changes in foreign exchange rates are recognized in the consolidated income statement within "foreign exchange differences.” When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the consolidated income statement.

 

2.10.2Derivative financial instruments not designated for hedging

 

The fair value of derivative financial instruments that do not qualify for hedge accounting pursuant to IFRS are immediately recognized in the income statement under "Other income and losses". The fair value of these derivatives is recorded under "other current financial assets" or "other current financial liabilities" in the statement of financial position.”

 

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

 

The Company also evaluates the existence of embedded derivatives in contracts and financial instruments as stipulated by IFRS 9 and classifies them pursuant to their contractual terms and the business model of the group. At the date of these financial statements, the Company had no embedded derivatives.

 

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2.10.3Fair value hierarchy

 

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

 

-In the asset or liability main market, or
-In the absence of a main market, in the most advantageous market for the transaction of those assets or liabilities.

 

The Company maintains assets related to foreign currency derivative contracts which were classified as Other current and non-current financial assets and Other current and non-current financial liabilities, respectively, and are accounted at fair value within the statement of financial position.

 

The Company uses the following hierarchy to determine and disclose the fair value of financial instruments with assessment techniques:

 

Level 1: Quote values (unadjusted) in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level variable used, which is significant for the calculation, is directly or indirectly observable
Level 3: Valuation techniques for which the lowest level variable used, which is significant for the calculation, is not observable.

 

During the reporting periods there were no transfers of items between fair value measurement categories. All of which were valued during the periods using Level 2.

 

2.11Inventories

 

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method. The cost of finished goods and work in progress includes raw materials, direct labor, other direct costs and manufacturing overhead (based on operating capacity) to bring the goods to marketable condition, but it excludes interest expense. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Spare parts and production materials are stated at the lower of cost or net realizable value.

 

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

 

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

 

2.12Trade accounts receivable and other accounts receivable

 

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

 

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2.13Cash and cash equivalents

 

Cash and cash equivalents include cash on hand, bank balances, time deposits and other short-term highly liquid and low risk of change in value investments.

 

2.14Other financial liabilities

 

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

 

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

 

2.15Income tax

 

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

 

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

 

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

 

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

 

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

 

2.16Provisions

 

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

 

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

 

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2.17Leases

 

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

 

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

 

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

 

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

 

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

 

Short-term leases, equal to or less than one year, or lease of low-value assets are excepted from the application of the recognition criteria described above, recording the payments associated with the lease as an expense in a linear manner throughout the lease term. The Company does not act as lessor, nor does it have variable payments as lessee.

 

2.18Deposits for returnable containers

 

This liability comprises cash collateral, or deposit, received from customers for bottles and other returnable containers made available to them.

 

This liability pertains to the deposit amount that will be reimbursed when the customer or distributor returns the bottles and containers in good condition, together with the original invoice.

 

This liability is presented under Other current financial liabilities since the Company does not have legal rights to defer settlement for a period in excess of one year. However, the Company does not anticipate any material cash settlements for such amounts during the upcoming year.

 

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2.19Revenue recognition

 

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

 

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

 

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

 

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

 

2.20Contributions from The Coca-Cola Company

 

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

 

2.21Dividend distribution

 

The minimum mandatory dividend established by the Chilean Corporations Law is 30% of net income for the year, which must be ratified unanimously by the General Shareholders' Meeting. Net income is determined as of December 31 of each year, at which time the liability is recognized in the Company's consolidated financial statements.

 

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

 

2.22Critical accounting estimates and judgments

 

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

 

2.22.1Impairment of goodwill and intangible assets with indefinite useful lives

 

The Company tests annually whether goodwill and intangible assets with indefinite useful life (such as distribution rights) have suffered any impairment. The recoverable amounts of cash generating units are determined based on value in use calculations. The significant judgments and assumptions used in the calculations include sales volumes and prices, discount rates, marketing expenses and other economic factors. The estimation of these variables requires a use of estimates and judgments as they are subject to inherent uncertainties; however, the assumptions are consistent with the Company’s internal planning and past results. Therefore, management evaluates, and updates estimates according to the conditions affecting the variables. If these assets are considered to have been impaired, they will be written off at their estimated fair value or future recovery value according to the lowest discounted cash flows analysis. On an annual basis and close to each fiscal year end discounted cash flows in the Company's cash generating units in Chile, Brazil, Argentina and Paraguay generated a higher value than the carrying values of the respective net assets, including goodwill of the Brazilian, Argentinian and Paraguayan subsidiaries.

 

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2.22.2Fair Value of Assets and Liabilities

 

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

 

The basis for measuring assets and liabilities at fair value are their current prices in an active market. For those that are not traded in an active market, the Company determines fair value based on the best information available by using valuation techniques.

 

In the case of the valuation of intangibles recognized as a result of acquisitions from business combinations, the Company estimates the fair value based on the "multi-period excess earning method", which involves the estimation of future cash flows generated by the intangible assets, adjusted by cash flows that do not come from these, but from other assets. The Company also applies estimations over the period during which the intangible assets will generate cash flows, cash flows from other assets, and a discount rate.

 

Other assets acquired, and liabilities assumed in a business combination are carried at fair value using valuation methods that are considered appropriate under the circumstances. Assumptions include the depreciated cost of recovery and recent transaction values for comparable assets, among others. These valuation techniques require certain inputs to be estimated, including the estimation of future cash flows.

 

2.22.3Allowances for doubtful accounts

 

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

 

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

 

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2.22.4Useful life, residual value and impairment of property, plant, and equipment

 

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

 

2.22.5Contingent liabilities

 

Provisions for litigation and other contingencies are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

 

The amount recognized as a provision is the best estimate of the consideration required to settle the current obligation at the date of issuance of the financial statements, considering the risks and uncertainties surrounding the obligation. When a provision is measured using estimated cash flows to settle the current obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). The accrual of the discount is recognized as a finance cost. Incremental legal costs expected to be incurred in settling the legal claim are included in the measurement of the provision.

 

Provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic benefits will be required to settle the obligation, the provision is reversed.

 

A contingent liability does not imply the recognition of a provision. Legal costs expected to be incurred in defending the legal claim are recognized in profit or loss when incurred.

 

2.22.6.Employee benefits

 

The Company records a liability regarding indemnities for years of service that will be paid to employees in accordance with individual and collective agreements subscribed with employees, which is recorded at actuarial value in accordance with IAS 19 “Employee Benefits”. At year-end there were no modifications to the agreements.

 

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

 

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

 

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

 

2.23New Standards, Interpretations and Amendments to IFRS

 

2.23.1New Standards, Interpretations and Amendments for annual periods beginning on January 1, 2023

 

IFRS 17 "Insurance Contracts". Issued in May 2017, it replaces the current IFRS 4. IFRS 17 will primarily change the accounting for all entities that issue insurance contracts and investment contracts with discretionary participation features. The standard applies to annual periods beginning on or after January 1, 2023.

 

Amendments to IAS 1 "Presentation of Financial Statements" and IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", issued in February 2021. The amendments are intended to improve disclosures of accounting policies and help users of financial statements to distinguish between changes in accounting estimates and changes in accounting policies. This standard should be applied to annual periods beginning on or after January 1, 2023.

 

Amendment to IAS 12 - Deferred Taxes Relating to Assets and Liabilities Arising from a Single Transaction. Issued in May 2021, this amendment requires companies to recognize deferred taxes on transactions that, on initial recognition, result in equal amounts of taxable and deductible temporary differences. This amendment should be applied to annual periods beginning on or after January 1, 2023.

 

Amendment to IAS 12 "Income taxes" on international tax reform - Pillar two model rules. Issued in May 2023, this amendment provides companies with a temporary exemption from accounting for deferred taxes arising from the international tax reform of the Organization for Economic Cooperation and Development (OECD). The amendments also introduce specific disclosure requirements for affected companies. This standard should be applied to annual periods beginning on or after January 1, 2023.

 

Amendment to IAS 1 "Presentation of Financial Statements" on classification of liabilities. This amendment clarifies that liabilities are classified as current or non-current depending on the rights that exist at the end of the reporting period. The classification is not affected by the entity's expectations or events after the reporting date (e.g., receipt of a waiver or covenant breach). The amendment also clarifies what IAS 1 means when it refers to the "settlement" of a liability. The amendment should be applied retrospectively in accordance with IAS 8. Effective date of initial application January 1, 2023.

 

Amendment to IFRS 17 - Initial Application of IFRS 17 and IFRS 9 Comparative Information. This amendment is an amendment of limited scope to the transition requirements of IFRS 17, Insurance Contracts, which provides insurers with an option aimed at improving the usefulness of the information for investors on the initial application of the new Standard. The amendment relates only to the transition of insurers to the new Standard, it does not affect any other requirements of IFRS 17.

 

The adoption of the standards, amendments and interpretations described above do not have a significant impact on the consolidated financial statements of the Company.

 

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2.23.2New Standards, Interpretations and Amendments for annual periods beginning on or after January 1, 2024

 

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

 

Amendment to IAS 1 "Non-current liabilities with covenants". Issued in January 2022, the amendment aims to improve the information that an entity provides when the payment terms of its liabilities may be deferred depending on compliance with covenants within twelve months after the date of issuance of the financial statements.

 

Amendment to IFRS 16 "Leases" on sale and leaseback. Issued in September 2022, this amendment explains how an entity should recognize the rights to use the asset and how the gains or losses arising from the sale and leaseback should be recognized in the financial statements.

 

Amendments to IAS 7 "Statement of Cash Flows" and IFRS 7 "Financial Instruments: Disclosures" on supplier financing arrangements. Published in May 2023, these amendments require disclosures to improve the transparency of supplier financing arrangements and their effects on a company's liabilities, cash flows and exposure to liquidity risk.

 

Amendments to IAS 21 - Non-convertibility. Issued in August 2023, this amendment affects an entity that has a transaction or operation in a foreign currency that is not convertible into another currency for a specific purpose at the measurement date. A currency is convertible into another currency when it is possible to obtain the other currency (with a normal administrative delay), and the transaction is carried out through a market or convertibility mechanism that creates enforceable rights and obligations. This amendment establishes the guidelines to be followed to determine the exchange rate to be used in situations of absence of convertibility as mentioned above. Early adoption is allowed.

 

Management estimates that the amendments to IAS 1, IFRS 16, and IAS 7 will have no significant impact on the Group. Management has decided to apply the amendment to IAS 21 as of the date specified in the amendment, which is January 1, 2025. Given the volatility of Argentina's exchange markets and the announcements of amendments, it is currently impossible to estimate the impact of this amendment.

 

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3 – FINANCIAL REPORTING BY SEGMENT

 

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

 

The Company’s Board of Directors and Management measures and assesses performance of operating segments based on the operating income of each of the countries where there are Coca-Cola franchises.

 

The operating segments are determined based on the presentation of internal reports to the Company´s chief strategic decision-maker. The chief operating decision-maker has been identified as the Company´s Board of Directors who makes the Company’s strategic decisions.

 

The following operating segments have been determined for strategic decision making based on geographic location:

 

·Operation in Chile

·Operation in Brazil

·Operation in Argentina

·Operation in Paraguay

 

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

 

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

 

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

 

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

 

   Operation in
Chile
   Operation in
Argentina
   Operation in
Brazil
   Operation in
Paraguay
   Inter-country
eliminations
   Consolidated,
total
 
    ThCh$    ThCh$    ThCh$    ThCh$    ThCh$    ThCh$ 
Net sales   1,191,974,011    460,337,955    745,382,614    223,840,649    (3,098,177)   2,618,437,052 
Cost of sales   (785,163,742)   (234,814,106)   (460,648,667)   (124,798,917)   3,428,177    (1,601,997,255)
Distribution expenses   (98,940,612)   (60,925,828)   (55,074,448)   (12,866,291)   -    (227,807,179)
Administrative expenses   (185,062,364)   (98,996,057)   (116,836,812)   (30,400,282)   -    (431,295,515)
Financial income   12,892,543    8,497,135    9,251,681    754,808    -    31,396,167 
Financial costs   (31,413,255)   (6,174,445)   (27,700,652)   -    -    (65,288,352)
Share of entity in income of associates accounted for using the equity method, total   320,225    -    2,395,944    -    -    2,716,169 
Income tax expense   (27,867,269)   (25,000,923)   (27,122,886)   (6,003,229)   -    (85,994,307)
Oher income (expenses)   (40,422,909)   (20,238,217)   (1,651,128)   (3,343,039)   -    (65,655,293)
Net income of the segment reported   36,316,628    22,685,514    67,995,646    47,183,699    330,000    174,511,487 
                               
Depreciation and amortization   44,930,478    23,055,893    31,384,619    13,730,334    (330,000)   112,771,324 
                               
Current assets   537,875,315    86,006,922    276,111,516    81,777,273    -    981,771,026 
Non-current assets   818,222,778    192,749,170    651,665,020    277,112,895    -    1,939,749,863 
Segment assets, total   1,356,098,093    278,756,092    927,776,536    358,890,168    -    2,921,520,889 
                               
Carrying amount in associates and joint ventures accounted for using the equity method, total   49,790,788    -    42,008,479    -    -    91,799,267 
                               
Segment disbursements in non-monetary assets   98,330,718    24,421,786    50,018,391    19,936,603    -    192,707,498 
                               
Current liabilities   256,032,001    107,654,447    284,887,152    44,297,696         692,871,296 
Non-current liabilities   965,276,582    23,188,614    300,646,803    18,552,180         1,307,664,179 
Segment liabilities, total   1,221,308,583    130,843,061    585,533,955    62,849,876    -    2,000,535,475 
                               
Cash flows (used in) provided by in Operating Activities   196,897,114    32,330,115    118,389,616    19,213,391    -    366,830,236 
Cash flows (used in) provided by Investing Activities   (224,464,143)   (24,421,513)   110,533,381    (19,936,603)   -    (158,288,878)
Cash flows (used in) provided by Financing Activities   19,739,413    3,911,735    (209,887,714)   (890,232)   -    (187,126,798)

 

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For the period ended December 31,
2022
  Operation in
Chile
    Operation in
Argentina
    Operation in
Brazil
    Operation in
Paraguay
    Inter-country
eliminations
    Consolidated,
total
 
      ThCh$       ThCh$       ThCh$       ThCh$       ThCh$       ThCh$  
Net sales     1,123,665,196       688,704,911       636,859,882       212,339,131       (4,690,725 )     2,656,878,395  
Cost of sales     (743,226,587 )     (367,879,756 )     (403,695,516 )     (118,590,689 )     4,690,725       (1,628,701,823 )
Distribution expenses     (94,155,809 )     (98,238,512 )     (48,572,718 )     (12,547,637 )     -       (253,514,676 )
Administrative expenses     (165,139,607 )     (133,696,312 )     (100,060,355 )     (30,621,442 )     -       (429,517,716 )
Financial income     18,783,930       9,853,565       10,307,344       777,571       -       39,722,410  
Financial costs     (28,065,600 )     (1,628,221 )     (29,854,132 )     -       -       (59,547,953 )
Share of entity in income of associates accounted for using the equity method, total     1,743,656       -       (334,587 )     -       -       1,409,069  
Income tax expense     (38,497,541 )     (38,651,371 )     (21,342,331 )     (5,853,395 )     -       (104,344,638 )
Oher income (expenses)     (83,536,145 )     (20,652,710 )     10,213,711       51,063       -       (93,924,081 )
Net income of the segment reported     (8,428,507 )     37,811,594       53,521,298       45,554,602       -       128,458,987  
                                                 
Depreciation and amortization     40,714,017       33,442,921       31,888,435       13,320,058       -       119,365,431  
                                      -          
Current assets     564,695,230       141,715,280       383,021,238       72,297,644       -       1,161,729,392  
Non-current assets     762,292,569       251,248,261       566,116,288       269,314,097       -       1,848,971,215  
Segment assets, total     1,326,987,799       392,963,541       949,137,526       341,611,741       -       3,010,700,607  
                                                 
Carrying amount in associates and joint ventures accounted for using the equity method, total     53,869,983       -       38,474,615       -       -       92,344,598  
                                                 
Segment disbursements of non-monetary assets     85,998,605       40,479,269       42,173,211       18,051,094       -       186,702,179  
                                                 
Current liabilities     629,575,497       138,572,190       140,642,493       40,454,954               949,245,134  
Non-current liabilities     600,735,999       24,584,021       536,281,288       16,451,513               1,178,052,821  
Segment liabilities, total     1,230,311,496       163,156,211       676,923,781       56,906,467               2,127,297,955  
                                                 
Cash flows (used in) provided by in Operating Activities     255,357,664       59,379,474       58,391,224       24,324,062       -       397,452,424  
Cash flows (used in) provided by Investing Activities     15,619,565       (40,479,269 )     (42,173,211 )     (18,135,556 )     -       (85,168,471 )
Cash flows (used in) provided by Financing Activities     (283,394,600 )     (41,768 )     (3,064,412 )     (462,602 )     -       (286,963,382 )

 

29

 

 

 

 

4 – CASH AND CASH EQUIVALENTS

 

The composition of cash and cash equivalents is as follows:

 

By item  12.31.2023   12.31.2022 
    ThCh$    ThCh$ 
Cash   552,062    203,931 
Bank balances   119,335,228    108,486,568 
Other fixed rate instruments   183,796,393    182,991,488 
Cash and cash equivalents   303,683,683    291,681,987 

 

Other fixed income instruments correspond primarily to investments in short-term instruments with good credit ratings, such as Time Deposits and Mutual Funds, which are highly liquid, with insignificant risk of change in value and easily converted into known amounts of cash. There are no restrictions for significant amounts available to cash.

 

By currency  12.31.2023   12.31.2022 
    ThCh$    ThCh$ 
USD   9,462,829    14,266,343 
EUR   437,604    870,613 
ARS   18,340,987    29,215,288 
CLP   140,758,085    138,205,025 
PYG   38,469,449    39,201,097 
BRL   96,214,729    69,923,621 
Cash and cash equivalents   303,683,683    291,681,987 

 

5 – OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS

 

The composition of other financial assets is as follows:

 

   Balance 
   Current   Non-current 
Other financial assets  12.31.2023    12.31.2022   12.31.2023   12.31.2022 
    ThCh$    ThCh$    ThCh$    ThCh$ 
Financial assets measured at amortized cost (1)   66,190,949    92,838,315    3,027,052    3,317,778 
Financial assets at fair value (2)   1,094,844    170,206,554    78,988,715    75,297,737 
Other financial assets (3)   -    -    11,300,572    16,237,196 
Total   67,285,793    263,044,869    93,316,339    94,852,711 

 

(1)Financial instrument that does not meet the definition of cash equivalents pursuant to Note 2.13.

 

(2)Market value of hedging instruments. See details in Note 22.

 

(3)Correspond to the rights in the Argentinean company Alimentos de Soya S.A., manufacturing company of “AdeS” products, which are framed in the purchase of the "AdeS" brand managed by The Coca-Cola Company at the end of 2016.

 

30

 

 

 

 

6 – OTHER CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS

 

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

 

   Balance 
   Current   Non-current 
Other non-financial assets  12.31.2023    12.31.2022   12.31.2023   12.31.2022 
   ThCh$   ThCh$   ThCh$   ThCh$ 
Prepaid expenses   11,435,334    6,059,201    1,700,462    1,074,940 
Tax credit remainder (1)   933,282    905,826    39,373,807    40,922,425 
Judicial deposits   -    -    14,649,339    15,723,829 
Others (2)   6,943,235    19,991,973    3,688,874    1,951,072 
Total   19,311,851    26,957,000    59,412,482    59,672,266 

 

(1)In November 2006, Rio de Janeiro Refrescos Ltda. ("RJR") filed a court order No. 0021799-23.2006.4.02.5101 seeking recognition of the right to exclude ICMS (Tax on Commerce and Services) from the PIS (Program of Social Integration) and COFINS (Contribution for the Financing of Social Security) calculation base, as well as recognition of the right to obtain reimbursement of amounts unduly collected since November 14, 2001, duly restated using the Selic interest rate. On May 20, 2019, the ruling favoring RJR became final, allowing the recovery of amounts overpaid from November 14, 2001 to August 2017. It is worth noting that in September 2017, RJR had already obtained a Security Mandate, which granted it the right to exclude, from that date, the ICMS from the PIS and COFINS calculation base.

 

The company took steps to assess the total amount of the credit at issue for the period of unduly collection of taxes from November 2001 to August 2017, totaling approximately CLP 100,550 million (CLP 92,783 million at December 2021) (BRL 613 million, of which BRL 370 million corresponds to capital and BRL 243 million to interest and monetary restatement. These amounts were recorded as of December 31, 2019 and recovered as of December 31, 2023.

 

Companhia de Bebidas Ipiranga, acquired in September 2013, also filed a court order n. 0005018-15.2002.4.03.6110 to recognize the same issue as the one previously descibed for RJR. On September 12, 2019, the ruling favoring Ipiranga became final, allowing the recovery of the amounts overpaid from September 12, 1990 to December 12, 2013 (date on which Ipiranga was acquired by RJR). The Ipiranga credit will be generated in the name of RJR, however pursuant to a contractual clause ("Subscription Agreement for Shares and Exhibits"), which requireds RJR to transfer any gain resulting from this action to the former shareholders of Ipiranga. The Company performed procedures to assess the total amount of the credit in question for the tax period expired, totaling BRL 162,588, of which BRL 80,177 correspond to principal and BRL 82,411 correspond to interest and monetary restatement. These amounts were recorded in the year ended December 31, 2020. The payment of income tax is made at the time of liquidation of the credit, with which the respective deferred tax liability of BRL 55,280 was recorded. The value of PIS and Cofins recorded was BRL 7,623 thousand. At the closing of these financial statements the value to be transferred to the former shareholders of Ipiranga is CLP 30,830,785 or BRL 170,176 (CLP 27,309,519 at December 31, 2022 or BRL 166,491). The liability is recorded in other non-financial liabilities (Note 18).

 

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

 

31

 

 

 

 

7 – TRADE ACCOUNTS AND OTHER ACCOUNTS RECEIVABLE

 

The composition of trade and other receivables is as follows:

 

   Current   Non-current 
Trade debtors and other accounts
receivable, Net
   12.31.2023    12.31.2022    12.31.2023    12.31.2022 
    ThCh$     ThCh$     ThCh$    ThCh$ 
Trade debtors   251,169,538    238,146,331    94,190    56,781 
Other debtors   41,973,516    39,798,245    277,077    483,139 
Other accounts receivable   5,749,110    1,825,710    134    - 
Total   298,892,164    279,770,286    371,401    539,920 

 

   Current   Non-current 
Trade debtors and other accounts
receivable, Gross
   12.31.2023    12.31.2022    12.31.2023    12.31.2022 
    ThCh$     ThCh$     ThCh$    ThCh$ 
Trade debtors   255,616,735    242,638,974    94,190    56,781 
Other debtors   42,135,933    40,206,431    277,077    483,139 
Other accounts receivable   5,834,787    1,921,211    134    - 
Total   303,587,455    284,766,616    371,401    539,920 

 

The stratification of the portfolio for current and non-current trade accounts receivable, without impairment impact, is as follows:

 

   12.31.2023   12.31.2022 
    ThCh$    ThCh$ 
Less than one month   239,907,074    229,587,868 
Between one and three months   7,467,587    4,577,833 
Between three and six months   1,276,211    2,418,252 
Between six and eight months   5,142,341    5,392,862 
Older than eight months   1,917,712    718,940 
Total   255,710,925    242,695,755 

 

The Company has approximately 292,153 clients, which may have balances in the different sections of the stratification. The number of clients is distributed geographically with 70,000 in Chile, 84,153 in Brazil, 67,580 in Argentina and 70,420 in Paraguay.

 

The provision for expected credit losses associated with each tranche of the portfolio for current and non-current trade receivables is as follows:

 

    12.31.2023  
    Credit amount     Impairment
provision
    Percentage
%
 
       ThCh$       ThCh$         
Less than one month     239,907,074       (700,137 )     0.16 %
Between one and three months     7,467,587       (294,510 )     10.88 %
Between three and six months     1,276,211       (138,648 )     21.60 %
Between six and eight months     5,142,341       (2,397,365 )     68.09 %
Older than eight months     1,917,712       (916,537 )     40.99 %
Total     255,710,925       (4,447,197 )        

32

 

 

 

 

    12.31.2022  
    Credit amount     Impairment
provision
    Percentage
%
 
      ThCh$       ThCh$        
Less than one month     229,587,868       (701,701 )     0.31 %
Between one and three months     4,577,833       (431,630 )     9.43 %
Between three and six months     2,418,252       (786,856 )     32.54 %
Between six and eight months     5,392,862       (2,402,146 )     44.54 %
Older than eight months     718,940       (170,310 )     23.69 %
Total     242,695,755       (4,492,643 )        

 

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

 

   12.31.2023   12.31.2022 
    ThCh$    ThCh$ 
Opening balance   4,492,643    4,711,371 
Increase (decrease)   1,319,216    (150,671)
Provision reversal   (1,110,743)   (654,381)
Increase (decrease) for changes of foreign currency   (253,919)   586,324 
Sub – total movements   (45,446)   (218,728)
Ending balance   4,447,197    4,492,643 

 

The provision for expected credit losses is recorded as an administrative expense in the statements of income by function.

 

8 – INVENTORIES

 

The composition of inventories is detailed as follows:

 

Details  12.31.2023   12.31.2022 
    ThCh$    ThCh$ 
Raw materials (1)   90,992,931    104,833,902 
Finished goods   115,591,443    114,164,680 
Spare parts and supplies   26,527,656    27,109,494 
Work in progress   194,686    216,164 
Other inventories   6,012,077    4,020,372 
Obsolescence provision (2)   (6,265,633)   (4,457,956)
Total   233,053,160    245,886,656 

 

The cost of inventory recognized as cost of sales amounts to CLP 1,346,516,486 thousand and CLP 1,388,536,599 thousand as of December 31, 2023 and 2022, respectively.

 

(1)Approximately 80% is composed of concentrate and sweeteners used in the preparation of beverages, as well as caps and PET supplies used in the packaging of the product.

 

(2)The obsolescence provision is related mainly with the obsolescence of spare parts classified as inventories and to a lesser extent to finished products and raw materials. The general standard is to provision all those multi-functional spare parts without utility in rotation in the last four years prior to the technical analysis technical to adjust the provision. In the case of raw materials and finished products, the obsolescence provision is determined according to maturity.

 

33

 

 

 

 

9 – TAX ASSETS AND LIABILITIES

 

The composition of current tax accounts receivable is the following:

 

Tax assets  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Monthly provisional payments   4,691,320    25,428,344 
Tax credits   32,125,597    6,640,888 
Recoverable taxes from prior years   27,247    473,424 
Surplus Tax Credit   6,265,971    6,387,530 
Other Recoverable Taxes   272,923    396,241 
Total   43,383,058    39,326,427 

 

The composition of current tax accounts payable is the following:

 

   Current 
Tax liabilities  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Income tax expense   13,411,621    14,615,447 
Tax credit   -    - 
Others   -    - 
Total   13,411,621    14,615,447 

 

10 – INCOME TAX EXPENSE AND DEFERRED TAXES

 

10.1Income tax expense

 

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

 

Details  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Current income tax expense   (58,334,583)   (63,245,293)
Current tax adjustment previous period   (152,481)   311,931 
Foreign dividends tax withholding expense   (11,803,842)   (11,129,734)
Other current tax expense (income)   (688,765)   - 
Current income tax expense   (70,979,671)   (74,063,096)
Expense (income) for the creation and reversal of temporary differences of deferred tax and others   (15,014,636)   (30,281,542)
Expense (income) for deferred taxes   (15,014,636)   (30,281,542)
Total income tax expense   (85,994,307)   (104,344,638)

 

34

 

 

 

 

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

 

Income taxes  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Current taxes          
Foreign   (44,507,433)   (61,250,403)
National   (26,472,238)   (12,812,693)
Current tax expense   (70,979,671)   (74,063,096)
Deferred taxes          
Foreign   (13,619,606)   (4,596,695)
National   (1,395,030)   (25,684,847)
Deferred tax expense   (15,014,636)   (30,281,542)
Income tax expense   (85,994,307)   (104,344,638)

 

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

 

Reconciliation of effective rate  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Net income before taxes   260,505,794    232,803,625 
Tax expense at legal rate (27.0%)   (70,336,564)   (62,856,979)
Effect of tax rate in other jurisdictions   (854,686)   (2,820,546)
Permanent differences:          
Withholding and other non-taxable income   (15,253,682)   (11,536,654)
Non-deductible expenses   (2,585,111)   (3,622,958)
Tax effect on excess tax provision in previous periods   (188,988)   (81,258)
Tax effect of price-level restatement for Chilean companies   (9,929,818)   (33,196,408)
Subsidiaries tax withholding expense and other legal tax debits and credits   13,154,542    9,770,165 
Adjustments to tax expense   (14,803,057)   (38,667,113)
Tax expense at effective rate   (85,994,307)   (104,344,638)
Effective rate   33.0%   44.8%

 

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

 

    Rates 
Country   2023   2022 
Chile    27.00%   27.00%
Brazil    34.00%   34.00%
Argentina    35.00%   35.00%
Paraguay    10.00%   10.00%

 

35

 

 

 

 

10.2Deferred taxes

 

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

 

   12.31.2023   12.31.2022 
Temporary differences  Assets   Liabilities   Assets   Liabilities 
   ThCh$   ThCh$   ThCh$   ThCh$ 
Property, plant and equipment   5,970,424    (54,058,525)   5,351,293    (58,230,728)
Obsolescence provision   2,231,501    -    1,871,168    - 
ICMS exclusion credit   3,241,530    -    2,686,693    - 
Employee benefits   8,212,311    (14,382)   5,033,868    (3,348)
Provision for severance indemnity   2,546,033    (94,659)   2,789,893    (42,264)
Tax loss carry forwards (1)   2,142,747    -    5,569,124    - 
Tax goodwill Brazil (2)   -    (15,782,005)   -    (9,081,512)
Contingency provision   27,144,927    -    27,145,591    - 
Foreign Exchange differences (3)   4,640,723    -    11,478,538    - 
Allowance for doubtful accounts   799,274    -    803,608    - 
Coca-Cola incentives (Argentina)   -    -    633,919    - 
Assets and liabilities for placement of bonds   -    (561,994)   -    (610,594)
Financial expense   -    (2,363,384)   -    (1,894,010)
Lease liabilities   3,665,695    -    1,874,166    - 
Inventories   1,706,518    -    1,312,833    - 
Distribution rights (4)   -    (161,155,669)   -    (154,669,995)
Prepaid income   4,481,352    -    5,339,265    (8,287)
Spare parts   -    (4,816,189)   -    (4,142,782)
Intangibles   77,752    (5,497,812)   69,395    (7,388,202)
Others   4,301,875    (2,965,088)   5,282,818    (4,520,673)
Subtotal   71,162,662    (247,309,707)   77,242,172    (240,592,395)
Offsetting of deferred tax assets/(liabilities)   (66,839,488)   66,839,488    (74,813,839)   74,813,839 
Total assets and liabilities net   4,323,174    (180,470,219)   2,428,333    (165,778,556)

 

(1)Tax losses mainly associated with entities in Chile. Tax losses have no expiration date in Chile.

 

(2)Difference for tax amortization of Goodwill in Brazil.

 

(3)Corresponds to deferred taxes for exchange rate differences generated on the translation of debts expressed in foreign currency in the subsidiary Rio de Janeiro Refrescos Ltda., that for tax purposes are recognized when paid.

 

(4)Distribution rights arising from business combinations. See Note 15.

 

Deferred tax account movements are as follows:

 

Movement  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Opening balance   (163,350,223)   (166,596,100)
Increase (decrease) in deferred tax   (31,400,047)   8,090,171 
Increase (decrease) due to foreign currency translation(*)   18,603,225    (4,844,294)
Total movements   (12,796,822)   3,245,877 
Ending balance   (176,147,045)   (163,350,223)

 

(*) Includes IAS 29 effects due to inflation in Argentina

 

36

 

 

 

 

11 – PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment at the close of each period is detailed as follows:

 

Property, plant and equipment, gross  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Construction in progress   96,126,388    49,169,567 
Land   115,737,432    104,906,878 
Buildings   356,340,587    337,689,681 
Plant and equipment   709,047,901    693,153,093 
Information technology equipment   35,069,078    34,992,575 
Fixed installations and accessories   43,914,423    69,798,556 
Vehicles   81,294,395    75,759,020 
Leasehold improvements   420,586    362,243 
Rights of use   100,265,151    73,946,435 
Other properties, plant and equipment (1)   425,204,655    448,561,681 
Total Property, plant and equipment, gross   1,963,420,596    1,888,339,729 

 

Accumulated depreciation of

Property, plant and equipment

  12.31.2023  

 

12.31.2022

 
   ThCh$   ThCh$ 
Buildings   (130,708,389)   (117,237,092)
Plant and equipment   (494,072,229)   (499,070,234)
Information technology equipment   (25,646,570)   (27,257,028)
Fixed installations and accessories   (28,383,356)   (44,057,493)
Vehicles   (48,042,781)   (44,600,066)
Leasehold improvements   (351,552)   (282,057)
Rights of use   (66,973,796)   (53,350,442)
Other properties, plant and equipment (1)   (296,853,112)   (304,264,058)
Total accumulated depreciation   (1,091,031,785)   (1,090,118,470 
Total Property, plant and equipment, net   872,388,811    798,221,259 

 

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

 

Other Property, plant and equipment, net  12.31.2023   12.31.2022 
   ThCh$   ThCh$ 
Bottles   43,683,655    46,351,209 
Marketing and promotional assets (market assets)   72,164,433    70,149,875 
Other Property, plant and equipment   12,503,455    27,796,539 
Total   128,351,543    144,297,623 

 

37

 

 

 

 

11.1Movements

 

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

 

   Construction
in progress
   Land   Buildings, net   Plant and
equipment,
net
   IT
equipment,
net
   Fixed
facilities and
accessories,
net
   Vehicles, net   Leasehold
improvements,
net
   Others   Rights-of-use,
net (1)
   Property, plant
and equipment,
net
 
   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$ 
Opening balance at 01.01.2023  49,169,567   104,906,878   220,452,589   194,082,859   7,735,547   25,741,063   31,158,954   80,186   144,297,623   20,595,993   798,221,259 
Additions  100,905,107   11,316,009   1,266,472   37,341,985   1,081,074   6,248   3,804,000   22,935   41,756,709   -   197,500,539 
Right-of use additions  -   -   -   -   -   -   -   -   -   25,119,021   25,119,021 
Disposals  -   -   (6,707)  (292,766)  (1,365)  -   (42,333)  -   (1,431,798)  (174,444)  (1,949,413)
Transfers between items of Property, plant and equipment  (57,285,699)  -   9,985,619   21,285,201   2,279,728   2,148,709   2,511,373   -   18,399,131   675,938   - 
Right-of-use transfers  -   -   -   -   -   -   -   -   -   -   - 
Depreciation expense  -   -   (9,175,999)  (29,999,476)  (3,048,237)  (1,903,192)  (5,692,021)  (46,176)  (46,855,960)  -   (96,721,061)
Amortization  -                               -   (11,005,033)  (11,005,033)
Increase (decrease) due to foreign currency translation differences  95,202   (485,959)  (4,295,531)  (2,173,388)  311,883   (3,243,921)  898,032   4,474   (16,326,501)  56,926   (25,158,783)
Other increase (decrease) (2)  3,242,211   504   7,405,755   (5,268,743)  1,063,878   (7,217,840)  613,609   7,615   (11,487,661)  (1,977,046)  (13,617,718)
Total movements  46,956,821   10,830,554   5,179,609   20,892,813   1,686,961   (10,209,996)  2,092,660   (11,152)  (15,946,080)  12,695,362   74,167,552 
Ending balance al 12.31.2023   96,126,388   115,737,432   225,632,198   214,975,672   9,422,508   15,531,067   33,251,614   69,034   128,351,543   33,291,355   872,388,811 

 

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

 

Right-of-use  Gross asset   Accumulated
depreciation
   Net asset 
   ThCh$   ThCh$   ThCh$ 
Constructions and buildings   16,246,384    (6,883,481)   9,362,903 
Plant and Equipment   52,431,352    (35,679,624)   16,751,728 
IT equipment   1,155,261    (1,030,250)   125,011 
Motor vehicles   22,051,973    (15,132,557)   6,919,416 
Others   8,380,181    (8,247,884)   132,297 
Total   100,265,151    (66,973,796)   33,291,355 

 

Lease liabilities interest expenses at the closing of the period reached ThCh$ 2,616,945      

 

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

 

38

 

 

 

 

   Construction
in progress
   Land   Buildings, net   Plant and
equipment,
net
   IT
equipment,
net
   Fixed
facilities and
accessories,
net
   Vehicles, net   Leasehold
improvements,
net
   Others   Rights-of-use,
net (1)
   Property, plant
and equipment,
net
 
   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$   ThCh$ 
Opening balance at 01.01.2022  56,280,594   101,286,107   203,343,125   169,651,555   5,613,217   23,099,121   19,184,600   113,289   114,153,544   23,653,975   716,379,127 
Additions  75,269,957   -   867,990   21,280,010   922,233   74,995   636,420   10,275   68,730,337   -   167,792,217 
Right-of use additions  -   -   -   -   -   -   -   -   -   5,883,061   5,883,061 
Disposals  (32,456)  -   (16,174)  (538,429)  (15,105)  -   (4,522)  -   (2,249,837)  (67,398)  (2,923,921)
Transfers between items of Property, plant and equipment  (84,598,804)  159,232   10,014,587   33,485,897   3,487,406   3,384,472   16,037,695   51,403   17,940,342   37,770   - 
Right-of-use transfers  -   -   -   -   -   -   -   -   -   -   - 
Depreciation expense  -   -   (8,477,029)  (35,372,214)  (2,641,086)  (3,365,827)  (5,524,208)  (68,741)  (49,526,391)      (104,975,496)
Amortization                                      (9,993,249)  (9,993,249)
Increase (decrease) due to foreign currency translation differences  4,263,117   3,461,539   11,105,445   7,324,221   43,790   1,282,713   852,241   10,324