Annual report 2011 by AquaChile

ANNUAL REPORT 2011

TABLE OF CONTENTS

02 04 07 10 12 14 21

GENERAL INFORMATION ABOUT THE COMPANY

EMPRESAS AQUACHILE: FROM THE SOUTH OF CHILE TO THE WORLD

LETTER FROM THE CHAIRMAN

AQUACHILE AT A GLANCE

OUTSTANDING EVENTS IN 2011

OUR COMPANY

OWNERSHIP AND CONTROL

25 31 45 53 61 71 75 91

CORPORATE GOVERNANCE

THE COMPANY’S ACTIVITIES

GENERAL INFORMATION ABOUT THE COMPANY

CORPORATE SOCIAL RESPONSIBILITY

Subsidiaries and affiliates

Essential events

Financial information

Financial Statements

GENERAL INFORMATION Firm Name:

Empresas AquaChile S.A.

Taxpayer Number (ID):

86.247.400-7

Type of Entity:

Open Stock Corporation

Registration in the Securities Register:

No. 1,069 of April 12 , 2011

Legal Domicile:

Cardonal s/n Lote B, Puerto Montt, X Region, the Lake Region Telephone: (56 65) 433600 Fax: (56 65) 433606 Casilla 30 D, Puerto Montt

Organization:

The company’s domicile is in Puerto Montt, without detriment to its being able to set up branches, agencies and offices in Chile or abroad. The structure of Empresas AquaChile S.A. considers only General Management headquartered in Puerto Montt.

Corporate Purpose:

The company’s purpose is to import, export, develop, produce, breed, grow, process, transform, modify and sell hydro-biologically grown species, especially salmonids.

Documents of Incorporation:

Deed of Incorporation Fischer Hermanos Limitada. Coyhaique, August 3, 1979, Santiago Notary Public’s Office of Patricio Olate Melo. Business Register Registration: Coyhaique, page 38 No. 34 of 1979 Deed of Incorporation Salmones Pacífico Sur S.A. Puerto Montt, July 19, 1996, Santiago Notary Public’s Office of Félix Jara Cadot. Business Register Registration: Coyhaique, page 364 No. 228 of 1996

Address Head Office Management and Administration:

Cardonal s/n Lote B, Puerto Montt Telephone: (5665) 433600 Fax: (5665) 433606 Casilla 30 D, Puerto Montt e-mail: contactenos@aquachile.com

Internet page:

www.aquachile.com

External Auditors:

PwC (PricewaterhouseCoopers Consultores Auditores y Compañía Limitada)

Name on the Chilean Stock Exchange:

AQUACHILE

Shareholder Information

DCV Registros S.A. Mail: atencionaccionistas@dcv.cl Address: Huérfanos 770, floor 22, Santiago, Telephone: (56 2) 393 9003 Fax: (56 2) 393 9101 Web page: : www.dcv.cl

Relationship with investors:

Mail: investor.relations@aquachile.com Address: Cardonal s/n Lote B, Puerto Montt Telephone: (5665) 433603 / 550 Web page: : www.aquachile.com

Note: The company’s web site (www.aquachile.com) has the 2011 Annual Report available to shareholders, investors and the general public in a digital format

EMPRESAS AQUACHILE: FROM THE SOUTH OF CHILE TO THE WORLD We farm Salmon and Tilapia to

Several changes have been made

healthily feed this and future

to the regulations governing the

generations.

salmon growing industry in Chile, aimed at a more sustainable development. AquaChile has the financial strength and assets to make it competitive in this new regulatory framework, so we expect to continue to consolidate and open up new roads in the aquacultural industry.

We have more than 25 yearsâ&#x20AC;&#x2122; experience in the aquacultural industry company

with along

integrated the

entire

value chain from genetics and the production of fish feed to commercialize the fish in the various

markets

around

the

world. We have been, and will continue to be very active in biotechnical innovation applied

to the aquacultural industry.

Every day more than 1 million people consume our products around the world.

We provide more than 4,800 people with work in the various countries

where

We have more than 400 clients in 50 countries on the 5 continents.

operate,

prioritizing the employment of the people who live in the zones where we carry out our activities. Our recovery after the sanitary crisis that affected the industry in Chile has enabled us to rehire in 2011 about 20% of the workers who had to leave the company in 2009 and 2010 as a result of the ISA (Infectious Salmon Anemia Virus) crisis.

LETTER FROM

THE CHAIRMAN

Dear Shareholders: 2011 marked a milestone in the history

subsidiaries and they have extensive

to build a fish feed plant for Tilapia in

of Empresas AquaChile and also in the

know-how

are

Costa Rica in association with Biomar. This

salmon industry in Chile. We moved

committed to the company’s growth

is combined with a plant for processing

from being a closely-held corporation to

and development. Our recovery after the

and using organic disposals from Tilapia

a corporation whose shares are traded

sanitary crisis that affected the industry

that transforms this residue into a product

on the stock market, from having six

in Chile has enabled us to rehire in 2011

used by pet food producer companies. The

partners to having more than 10 thousand

about 20% of the workers who were laid

latter has been implemented within the

shareholders,

off in 2009 and 2010.

framework of our association with Diana,

thereby

strengthening

and

skill

sets

and

our role as a referent when it comes to

a French company that is the world leader

laying the groundwork for a sustainable

The company was strengthened financially

industry over the long term. This change

in 2011, which enabled us to be more flexible

in ownership and our initial public

in our growth and to take advantage of

As a result of the above, we are confident

offering up to the market occurred at a

multiple business opportunities.

in the sustainable, competitive growth

moment of inflection for AquaChile and

of AquaChile, complying at all times

the aquacultural industry and it enabled

In 2011, we kicked off key projects for the

with the new sanitary and production

us to corroborate the existing confidence

future of the company. Together with

standards. Hence, we expect to achieve

in the new circumstances of the salmon-

the multinational company DuPont, we

sustainable production of 170,000 tons of

growing industry and, especially, in the

started to produce “Verlasso” salmon,

Salmon and Sea Trout and 40,000 tons of

competitive strengths of our company.

which is farmed in a more environmentally

Tilapia by 2016.

harmonious, balanced way.

We also

We are a company from the South of

started to build the Chaicas hatchery,

Progress

Chile, committed to its environment, to

which enables us to manage our stock of

substantially

our workers and to the communities

Atlantic Salmon broodstock safely from a

regulatory framework governing the

where we carry out our activities. We

sanitary point of view. During the same

aquacultural

are concerned and interested in what

period we strengthened our agreement

includes a series of aspects, such as

happens in the South of Chile, especially

with Novofish, thereby ensuring that we

rotating the fish farms, mandatory

in its progress and what is happening to

would have bio-safe production of Atlantic

fallowing periods, a production model

its people. Our sustainable development

Salmon smolt over the long-term.

by geographical area, limitation of the

and our continued growth are based

in this line of business.

was

made improving

industry

2011 the

sector.

in new

This

farming density, among others. However,

on three key features – diversification,

We also continued with the construction

work still needs to be done on important

integration and innovation.

Research

matters that are still pending, such

and Transfer Center, which will enable

as the standard governing smolting

We also have a team of people with

AquaInnovo, a subsidiary of Empresas

in brackish water, rivers and lakes, the

technical skills and vast accumulated

AquaChile S.A., to maintain its worldwide

structure of the macrozones, which are

experience. More than 4,800 people

leadership in genetics and technological

areas that will group together sanitary

work in Empresas AquaChile and its

development. Internationally, we started

areas, which, in turn, will be autonomous

Lenca, an

Aquacultural

VÍCTOR HUGO PUCHI ACUÑA Chairman

from each other enabling them to be

We showed a profit again after recovering from

greater transparency, more respect for

protected from the propagation of any

the sanitary crisis caused by the ISA virus.

the environment, strengthening of the

disease, together with the indicators or

In 2011, Empresas AquaChile had sales of

relationship with our workers and with

“natural thermometers” which will be

US$ 501 million, which meant a growth of

the community.

used to measure the production and

29% in relation to the previous year, and

sanitary efficiency of the sea licenses

it recorded an EBITDA of US$ 95 million,

Through AquaChile, Chile’s southern zone

and sanitary areas.

which is 65% higher than in 2010. These

has gained 10 thousand partners willing

results serve to further strengthen the

to empower it and take the healthy, high-

company.

value food that is our salmon to the most

Our company has been actively involved in the debate on the industry’s long-term

demanding markets in the world.

sustainability, which is a policy very much

We are optimistic about the future of the

in line with the company’s own interests.

industry. We have the trust of 10 thousand

Víctor Hugo Puchi Acuña

After all, greater protection and value

new shareholders, who make us feel proud

Chairman

over the long-term will be provided by

and also set us a new challenge, which is

Empresas AquaChile

sanitary and environmental safety.

in line with the company’s requirements:

AQUACHILE AT A GLANCE

OWNERSHIP STRUCTURE PUCHI FAMILY 33.03%

FISCHER FAMILY 33.03%

SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS

PENSION FUNDS 5.96%

OTHERS 33.92%

OTHERS 27.99% SOURCE: AQUACHILE

SUMMARIZED BALANCE SHEET SUMMARIZED BALANCE SHEET FIGURES IN US$ THOUSANDS Current assets

AQUACHILE SHARE PRICE (CH$) VS. IPSA (POINTS) 2011

AQUACHILE

2010

437,132

266,315

AQUACHILE

Non current assets

389,373

305,061

500

TOTAL ASSETS

826,505

571,376

Current liabilities

130,969

92,552

Non current liabilities

244,439

446,852

TOTAL LIABILITIES

375,408

539,404

EQUITY

429,713

12,161

Minority interest TOTAL EQUITY AND LIABILITIES

21,384

19,811

826,505

571,376

IPSA

IPSA 5,100 4,900

450

4,700

400

4,500 4,300

350

4,100

300

3,900

250

3,700

Sales

EBIT pre FV adj.(1)

EBITDA pre FV Adj. Margin(2)

95,356

57,724

Net Income

54,876

58,093

2011

2010

196,656

417,598

113,897

28,416

FIGURES IN US$ THOUSANDS Interest bearing debt Cash Net interest bearing debt / EBITDA (3)

0.87

6.74

Financial Leverage (4)

0.58

15.98

Net financial expenses coverage (5)

7.73

5.30

SOURCE: AQUACHILE

dec-11 SOURCE: AQUACHILE

CONSOLIDATED SALES 2011 TOTAL: US$ 501 MILLION

OTHERS 6.9%

FISH FEED 19.6%

(1)

EBIT PRE FV ADJ (HEREINAFTER EBIT): INCOME FROM ORDINARY ACTIVITIES LESS COSTS TO SELL (I.E. GROSS PROFIT PRE FAIR VALUE), LESS ADMINISTRATIVE EXPENSES, LESS DISTRIBUTION COSTS. ALL OF THESE FIGURES ARE OBTAINED DIRECTLY FROM THE COMPANY’S STATEMENT OF INCOME AND STATEMENT OF CASH FLOWS. (2) EBITDA PRE FV ADJ. (HEREINAFTER EBITDA): INCOME FROM ORDINARY ACTIVITIES LESS COSTS TO SELL (I.E. GROSS PROFIT PRE FAIR VALUE), LESS ADMINISTRATIVE EXPENSES, LESS DISTRIBUTION COSTS, PLUS ADJUSTMENT FOR DEPRECIATION AND AMORTIZATION EXPENSES. ALL OF THESE FIGURES ARE OBTAINED DIRECTLY FROM THE COMPANY’S STATEMENT OF INCOME AND STATEMENT OF CASH FLOWS. (3) (OTHER CURRENT FINANCIAL LIABILITIES + OTHER NON-CURRENT FINANCIAL LIABILITIES LESS CASH AND CASH EQUIVALENT) / EBITDA. (4) (TOTAL CURRENT FINANCIAL LIABILITIES PLUS TOTAL NON-CURRENT FINANCIAL LIABILITIES LESS CASH AND CASH EQUIVALENT) / (TOTAL EQUITY) (5) EBITDA / (FINANCIAL COSTS LESS FINANCIAL INCOME)

nov-11

41,137

oct-11

387,841

76,081

sep-11

501,151

aug-11

2010

jul-11

2011

3,500 jun-11

SUMMARIZED INCOME STATEMENT FIGURES IN US$ THOUSANDS

may-11

200

ATLANTIC SALMON 15.4%

SEA TROUT 27.2%

TILAPIA 9.5% PACIFIC SALMON 21.5% SOURCE: AQUACHILE

CONSOLIDATED SALES (US$ MILLIONS) 501

484

CONSOLIDATED NET INCOME (US$ MILLIONS)

553

501

84 58

2010

2011

440 388

2006

2007

2008

2009

2010

2011

2006

2007

-75

-142

2008

2009

SOURCE: AQUACHILE

CONSOLIDATED EBITDA 2011 TOTAL: US$ 95 MILLION

SOURCE: AQUACHILE

CONSOLIDATED INVESTMENT (US$ MILLIONS) 51 42

30 COSTA RICA & PANAMA

CHILE 94%

2006

2007

2009

2008

2010

SOURCE: AQUACHILE

CONSOLIDATED STAFF EVOLUTION (Nยบ OF EMPLOYEES)

CONSOLIDATED EBITDA (US$ MILLIONS) 136

6,547

6,483

2007

4,659

4,525

2009

2010

4,813

2006

2011

-16

-40

2008

2009

2010

2011

SOURCE: AQUACHILE

2007

2008

2011

SOURCE: AQUACHILE

OUTSTANDING EVENTS IN 2011 Going Public

Recognition

In May 2011, AquaChile offered 32.3% of its ownership interest

Pablo Aguilera MarĂn, founding partner of AquaChile, received

10 thousand new shareholders were incorporated through this

Japanese government. This is one of the highest distinctions

Pension Fund Administrators (AFPs) and individuals. This Public

to developing projects of technical cooperation between the two

strengthen its financial position, have available new resources to

the food supply to Japan.

position in the aquacultural industry locally and internationally.

Verlasso ÂŽ

Diana Group

AquaChile sealed an alliance with DuPont (multinational leader

In 2011, AquaChile entered into an association with the Diana

harmonious, balanced way, thereby making a real contribution to

this project, AquaChile also entered into an association with Agro

is the brand name of this Salmon sold in USA. It represents a new

industry in the aquacultural sector. Thanks to this association, the

since it maintains the nutritional qualities with high levels of

Tilapia that are not for human consumption, optimizing the use

of the required amounts of fishmeal and fish oil in their feed and

on the stock exchange, collecting US$ 373 million. More than

the Order of the Rising Sun, Golden Rays and Rosette from the

operation, including local and foreign institutional investors,

awarded by Japan and it was awarded to him for his contribution

Offering marks a milestone for AquaChile and enables it to

countries in the Salmon farming sector, as well as also stabilizing

support its plans for global expansion and thereby strengthen its

in the biotechnology industry) to produce salmon in a more

Group, the main worldwide company of flavorings for pets. In

preservation of marine resources and the environment. Verlasso

Comercial Terramar, a company providing supplies for the food

production model for the standards of traditional aquaculture,

company will be able to take advantage of the organic disposal of

Omega 3, but with a change of diet that includes replacing 75%

of this resource.

development.

Financial strengthening In June 2011, the company entered into an agreement with its creditors and successfully restructured its financing, which will enable it to enjoy a more flexible growth and take advantage of the various business opportunities. The agreement with the creditors consisted of a prepayment of US$ 163 million and renegotiating the terms for the remaining debt of US$ 243 million, making an additional prepayment of US$ 70 million, and obtaining a line of credit for an equivalent amount. The agreement also meant lifting a series of financial and operating restrictions stipulated in the previous contract and stemming from the negotiation in 2009.

in its first stage. The plant will be sited 30 kilometers from Puerto Montt, on the Carretera Austral (Southern Highway) and it considers an investment of US$ 20 million.

Lenca Hatchery

The Aquaculture Research and Transfer Center is in the final construction stage. This research center, which is unique in South

America, contains a state-of-the-art central molecular genetics laboratory, challenge centers, experimental growing centers and biotechnological services, as well as a research and training

center for PhD students. This project considers an investment of

US$ 7 million and it is expected to start operating in the first half of 2012.

In 2011 the company continued to develop important projects Salmones Chaicas Hatchery

With technologically advanced recirculation for producing Atlantic Salmon broodstock, eggs and smolts. It will have a production capacity of 120 million eggs and 4.2 million smolts,

Biomar Aqua Corporation Products S.A.

An agreement was set up with Biomar to build and operate a

Tilapia feed plant in Costa Rica. This new plant is expected to

start operating in 2012, to provide this supply to the growing production of Tilapia in Central and South America. The projected investment is US$ 12 million.

OUR

COMPANY

PROFILE OF AQUACHILE Empresas AquaChile S.A. is a Chilean company dedicated to producing and selling Salmon, Sea Trout and Tilapia. Through

our

subsidiaries

carry

out genetic research activities for the aquacultural

industry,

produce

Salmon and Sea Trout, eggs and smolts and also fish feed for the salmon industryâ&#x20AC;&#x2122;s fish. In 2011, we recorded consolidated sales of US$ 501 million. We have operations in Chile, Costa Rica and Panama, as well as commercial offices in the United States. We are the biggest salmon company in Chile, the largest worldwide producer of Pacific Salmon and one of the main Sea Trout producers. Our products are sent to more than 50 countries on the 5 continents and to more than 400 clients, providing employment for more than 4,800 workers in Chile, USA and Costa Rica. In 2011, a key milestone was reached in the history of AquaChile: we went public selling 32.3% of the ownership of the company on the Stock Market, collecting US$ 373 million. This resulted in more than 10 thousand new shareholders for the company. The resources obtained from this operation will be allocated to strengthening our financial position and expansion plan, which considers investments of about US$ 470 million over the next 5 years, thereby consolidating our position in the aquacultural industry, both in Chile and worldwide.

OUR MISSION, VALUES AND PRINCIPLES Mission:

Objectives:

Supply the world with a healthy protein,

· Add value at every stage of the process,

prepared from efficient, sustainable and responsible growing of Salmon, Sea Trout

considering the safety and health

of our workers and concern for the

and Tilapia.

environment; in order to deliver the

Corporate values:

external customers, with the best

best product to our internal and service and at a suitable price.

· Act with respect towards people, work and the environment.

· Be

passionate

performed.

about

the

work

- Throughout every stage of the process, guarantee the safety, quality and competitiveness in the production and sale of Salmon, Sea Trout and Tilapia.

· Be creative and show initiative every day.

· Achieve

international

recognition

for the quality and consistency of the

· Be preventive and act safely.

product and service, which should

· Understand new challenges and be open to change.

result in being preferred by our customers and increased sustainability of the business.

· Be austere in our actions.

· Permanently improve our way of doing things, taking interest in the quality

Principles of Corporate Responsibility to Society: · Produce quality, healthy, safe food. · Be proactive and respectful with the environment.

· Develop

environment.

processes, technological innovation and

minimizing

labor

risks

and

impacts on the environment. · Drive the professional and personal

development of everybody making up the value chain, contributing to

safe,

healthy

work

· Benefit the communities and suppliers

in the places where the company operates.

of the product, the efficiency of the

improve their skill sets and consolidate their commitment to the well-being of the community and preservation of the environment. · Foster associativity and integration with other companies.

OUR HISTORY Empresas AquaChile S.A. was born in 1998 after the merger of Salmones Pacífico Sur S.A. (incorporated in 1979) and AquaChile S.A. (incorporated in 1988). Initially, these companies were geared towards the various stages of the Salmon farming process. Salmones Pacífico Sur was focused on the on-growing stage in the sea, while AquaChile concentrated on processing and the fresh water stage, producing Eggs, fries and smolts. The following have been the main milestones since the merger of the two companies:

Acquisition of Aucar (hatchery).

The first sea facility starts operating in the Aysen Region.

Acquisition of Cherquenco (hatchery).

1999

2000

2001

Opening of the office of AquaChile Inc. in USA to market Salmon in that country.

Acquisition of the assets of Pesquera BestSalmon S.A.

80.85% of Antarfish S.A., the parent of Aguas Claras S.A., was acquired in two stages, making AquaChile the country’s leading company in Salmon and Sea Trout sales. The name of the company was changed to Empresas AquaChile S.A.

2002

2003

2004

Purchase of 19.09% of Antarfish S.A, achieving an interest of 99.94%.

Sudmaris Chile S.A. was created to produce, process and export baby mussels. Salmones Chiloé, a subsidiary of Empresas AquaChile, has a 50% interest in the company.

Creation of AquaInnovo S.A, a company born of the alliance with Universidad de Chile, AquaticHealth Chile and the contribution by the Subcommittee for Business Innovation of Innova Chile - CORFO. AquaInnovo’s purpose will be to genetically improve salmon and other aquatic species around the world, using state-of-the-art technology.

Acquisition of 60% of Salmones Chiloé S.A. (Salmosan),100% of Pesquera Palacios S.A. and 100% of Salmones Australes S.A., 60% of the salmon business of Robinson Crusoe S.A. (Salmones Maullín S.A.) and 60% of Grupo ACI S.A. a firm headquartered in Costa Rica.

2005

The strategic alliance with AlitecProvimi, the local subsidiary of Provimi, world leader in animal nutrition, was brought to fruition.

2006

Acquisition of the remaining 40% of the interest in Salmones Maullín not in the hands of Empresas AquaChile. Increase in the percentage of ownership of the Grupo ACI to a 72.86% interest in the company.

Extraordinary Shareholders’ Meeting approved the submission of Empresas AquaChile to the regulations governing corporations. Registration of the Company in the Securities Register of the Superintendency of Securities and Insurance (SVS).

2007 Application to the SVS to cancel the Company’s registration in the Securities Register. Extraordinary Shareholders’ Meeting agreed to reduce the capital by US$ 5.9 million and agreed to increase the capital by US$ 100 million. It agreed that the Company would no longer be governed by the regulations governing Corporations.

Merger of Grupo ACI with the El Pelón Group, a large Costa Rican agroindustrial conglomerate devoted to, among other activities, the production of Tilapia. After the merger, Empresas AquaChile continued to hold a 72.86% interest in the company.

2008 Administrative integration with its subsidiary Antarfish S.A., centralizing management of the entire group in the head offices. Renegotiation and restructuring of the short and long term bank liabilities of Empresas AquaChile S.A. and its subsidiaries.

2009

Extraordinary Shareholders’ Meeting agreed to submit the company to the regulations governing Corporations, to amend the by-laws and register the company Empresas AquaChile S.A. and its shares with the SVS.

The company sold all of its shares in Sudmaris S.A.

Administrative integration of Salmones Chiloé S.A., centralizing its management in Puerto Montt. Increase in the interest in ACI S.A. from 72.86% to 79.95%.

2010 Initial Public Offering on the stock exchange of 32.3% of the ownership of Empresas AquaChile, thereby incorporating more than 10 thousand new shareholders. Alliance with Biomar to build a Tilapia feed plant in Costa Rica.

2011

Alliance with DuPont Verlasso Salmon.

to launch

Alliance with Spécialités Pet Food S.A.S. and Inversiones Industriales Bauprés Ltd. to build a value added plant in the province of Guanacaste, Costa Rica, to take advantage of the Tilapia organic disposal generated in the Tilapia production process.

OWNERSHIP

AND CONTROL

Capital Stock

As of December 31, 2011, the company’s subscribed and paid in capital is two hundred and twenty seven million nine hundred and eighty one thousand one hundred and forty eight US dollars (US$ 227,981,148) divided into one thousand one hundred and fifty seven million shares (1,157,000,000) of the same single series. Table A shows the list of the 12 major shareholders of Empresas AquaChile, indicating the number of shares and percentage of ownership interest of each as of December 31, 2011. Table B also shows details of the companies owned by the majority shareholders that hold directly, or through some kind of relationship between them, 67.12% of the voting stock of Empresas AquaChile S.A.

TABLE A Shareholders

Fondo de Inversión Privado Patagonia Fondo de Inversión Privado Aqua Inversiones Acuícolas S.A.

N° of Shares

Participation

382,115,000

33.03%

210,000,000

18.15%

172,115,000

14.88%

Inversiones Megeve Capital Ltda.

65,583,783

5.67%

IM Trust S.A. Corredores de Bolsa

48,639,748

4.20%

21,619,782

1.87%

Inversiones Megeve Dos Ltda.

19,375,939

1.67%

Banchile Corredores de Bolsa S.A.

17,808,368

1.54%

Celfin Capital S.A. Corredores de Bolsa

Larrain Vial S.A. Corredora de Bolsa Moneda S.A. AFI para Pionero Fondo de Inversión AFP Provida S.A. Fondo Tipo B Santander S.A. Corredores de Bolsa

15,215,128

1.32%

11,596,000

1.00%

9,584,312

0.83%

8,665,850

0.75%

The company does not have a controller and the majority shareholders do not have any formal agreement to act together.

TABLE B Individuals or Legal Entities directly or indirectly owning shares that represent 10 per cent or more of the company’s capital:

B.1

Individuals or Legal Entities related to the Puchi Acuña and Aguilera Marín families, consisting of the brothers Mr. Víctor Hugo Puchi Acuña, ID 6.680.823-8, Mr. Mario Puchi Acuña, ID 6.270.533-7; Mr. Juan Carlos Puchi Acuña, ID 7.961.289-8 and Mr. Pablo Aguilera Marín, ID 4.808.232-7. The members of the Puchi Acuña family, including Mr. Pablo Aguilera Marín, exercise their rights as individuals or through investment companies wholly owned by the same family. Shareholders

Fondo de Inversión Privado Patagonia

Participation

382,115,000

33.03%

Inversiones VHP Limitada

4,186,073

0.36%

Inversiones Santa Cecilia Limitada

4,100,893

0.35%

Inversiones MPA Limitada

1,889,485

0.16%

Inversiones JCP Limitada

333,310

0.03%

Puchi Acuña Juan Carlos

200,000

0.02%

392,824,761

33.95%

TOTAL

Nº of Shares

Fondo de Inversión Privado Patagonia is controlled directly or indirectly by Mr. Víctor Hugo Puchi Acuña, ID 6.680.823-8, Mr. Mario Puchi Acuña, ID 6.270.533-7; Mr. Juan Carlos Puchi Acuña, ID 7.961.289-8 and Mr. Pablo Aguilera Marín, ID 4.808.232-7. The members of the Puchi Acuña family and Mr. Pablo Aguilera Marín exercise their rights as individuals or through investment companies wholly owned by the same family. In turn, the company Inversiones VHP Limitada is wholly owned by Mr. Víctor Hugo Puchi Acuña, ID 6.680.823-8, and the Puchi Acuña family, made up of his wife Myriam Cecilia Reyes Abarca, ID 7.162.539-7, and the brothers Rodrigo Alejandro Puchi Reyes, ID 9.586.465-1; Paulina Puchi Reyes, ID 9.587.753-2; Verónica Puchi Reyes, ID 15.325.760-4; and Cecilia Puchi Reyes, ID 16.207.367-2. For its part, the company Inversiones Santa Cecilia Limitada is wholly owned by Mr. Víctor Hugo Puchi Acuña, ID 6.680.823-8, and the Puchi Acuña family, made up of his wife Myriam Cecilia Reyes Abarca, ID 7.162.539-7, and Rodrigo Alejandro Puchi Reyes, ID 9.586.465-1. The company Inversiones MPA Limitada is wholly owned by Mr. Mario Puchi Acuña, ID 6.270.533-7, and the Puchi Germani family, made up of his wife Loreto Germani Díaz, ID 7.153.034, and the brothers Claudio Puchi Germani, ID 10.308.367-2; Carlos Puchi Germani, ID 10.308.374-5; Gabriel Puchi Germani, ID 15.302.702-1. The company Inversiones JCP Limitada is wholly owned by Mr. Juan Carlos Puchi Acuña, ID 7.961.289-8, and the brothers Juan Carlos Puchi Ramírez, ID 16.358.648-7; Francesca Puchi Ramírez, ID 17.271.200-2. In turn, the company Inversiones Altair Ltda., ID 76.901.610-4, is wholly owned by Mr. Pablo Aguilera Marín, ID 4.808.232-7, and the Aguilera Soto family, made up of his wife Lesdi Soto Sad, ID 4.719.370-2, and the brothers Pablo Aguilera Soto, ID 10.987.616-k, and Fernando Aguilera Soto, ID 10.987.906-1. .

B.2

Individuals or Legal Entities related to the Fischer Llop family, made up of the brothers Humberto José Fischer Llop, ID 6.687.633-0, and Mr. Claudio Félix Fischer Llop, ID 7.378.806-4. The members of the Fischer Llop family exercise their rights as individuals or through investment companies wholly owned by the same family. Shareholders

Nº of Shares

Fondo de Inversión Privado Aqua Inversiones Acuícolas SA Inversiones FK Ltda. TOTAL

Participation

210,000,000

18.15%

172,115,000

14.88%

1,271,602

0.11%

383,386,602

33.14%

Fondo de Inversión Privado Aqua is wholly controlled directly or indirectly by the Fischer Llop family, made up of the brothers Humberto José Fischer Llop, ID 6.687.633-0, and Mr. Claudio Félix Fischer Llop, ID 7.378.806-4. The members of the Fischer Llop family exercise their rights as individuals or through investment companies wholly owned by the same family. The company Inversiones Acuícolas S.A. is wholly controlled directly or indirectly by the Fischer Llop family, made up of the brothers Humberto José Fischer Llop, ID 6.687.633-0, and Mr. Claudio Félix Fischer Llop, ID 7.378.806-4. The members of the Fischer Llop family exercise their rights as individuals or through investment companies wholly owned by the same family.

CORPORATE

GOVERNANCE

CORPORATE GOVERNANCE The company is headed by a Board of Directors made up of seven members elected by the Shareholdersâ&#x20AC;&#x2122; Meeting. The position is held for three years. Its main function is regulated by Law 18,046 on Corporations and consists of managing the company. The Board of Directors also represents the company in and out of court in everything necessary to fulfill the corporate purpose, and, in order to achieve this end, it is empowered with all of the powers of administration and disposal stipulated as vested solely in the Shareholdersâ&#x20AC;&#x2122; Meeting by the Law or the by-laws. The Board of Directors meets monthly to evaluate and guide the development of the company in economic, environmental and social aspects. The members of the Board of Directors earn a fixed fee keyed to their attendance at the meetings. The Directors do not earn any variable compensation for accomplishing goals in the economic, social or environmental spheres. The Chairman and other directors do not hold executive positions in the organization.

BOARD OF DIRECTORS

Víctor Hugo Puchi Acuña ID: 6.680.823-8 Chairman of the Board

Humberto Fischer Llop ID: 6.687.633-0 Director

Mario Puchi Acuña ID: 6.270.533-7 Director

Claudio Fischer Llop ID: 7.378.806-4 Director

Alejandro Pérez Rodríguez ID: 5.169.389-2 Director

Vicente Pérez Fuentes ID: 7.300.137-4 Director

Piero Solari Donaggio ID: 9.585.725-6 Director

Degree in business management from the Catholic University of Chile and MBA from the University of Chicago. After graduating, his career developed in the financial area of such companies as Iansa, BHC Group and Quiñenco. He is a director of Centrovet and Empresas Hidronor. He carries out business activities in the real estate, tourism and livestock farming sectors in the Los Lagos and Aysen Region.

Veterinarian who graduated from the Austral University of Chile. He was one of the pioneers in the Salmon industry, founding Salmones Pacífico Sur S.A. in 1985. This company initially focused its efforts on the seawater growth stage and the commercialization of the product. He has investments in the tourism, agricultural, livestock farming and real estate areas. He is also a director of the Dreams chain of hotels and casinos, which are installed throughout the country.

University Certified Technician in Fishing from the Technical State University. He started his professional career in the Servicio Agrícola y Ganadero, SAG (Agricultural and Livestock Bureau), in Aysen and then in the Servicio Nacional de Pesca, Sernapesca (National Fishing Bureau), in the same region. This activity enabled him to specialize and participate in the project to introduce Pacific Salmon into Chile. He carries out business activities in livestock farming in the Los Lagos and Aysen Region.

Airline Transport Pilot; founding partner of Salmones Pacífico Sur S.A., created in 1985. He currently has investments in tourism, real estate, agriculture and livestock faming, among others, and is a director of several companies in those areas. He is also the executive president of the Dreams S.A. chain of hotels and casinos and the Punta Arenas Duty Free Zone.

Industrial Civil Engineer from the University of Chile and MA in Economics from the University of Chicago. Chairman of the Board of Directors of the San Sebastián University. He is Vice-chairman of the Board of Directors of the Clínica Indisa, a director of Entel and of Inversiones Angelini Ltda. He was general manager of Celulosa Arauco, Soprole S.A. and Watt´s Alimentos S.A.

Degree in business management from the University of Tarapacá with more than 20 years’ experience in the fishing and salmon industry. He is a director of Equitas Capital and Empresas Hidronor, among other companies. He was the representative of the Irish Bank, Glitnir, general manager of Congelados Pacífico (1993-2008), general manager of Pacific Fisheries S.A.; assistant general manager of Pacific Protein (1989-1992), director of Inversiones Ewos Ltda (1990-1992). He has also participated in various companies involved in the fishing industry and in marketing fishing products in USA and Europe. Industrial Civil Engineer from the Catholic University, MBA from the Sloan School of Management, MIT. Executive director of Family Office Megeve Investments, director of Haldeman Mining Company and Parque del Recuerdo. He is also Vice-chairman of Aptus Chile, a non-profit educational corporation. He was chairman of the sanitary company Aguas Nuevas S.A. from 2004 to 2009.

MANAGEMENT

The main managers and executives of Empresas AquaChile S.A. and subsidiaries at December 31, 2011:

Alfonso Márquez de la Plata Cortés General Manager ID: 6.379.894-0

Degree in Business Management Pontifical Catholic University of Chile MBA The J.L. Kellogg Graduate School of Management

Franco Adam Raffo Chief Commercial Officer ID: 8.530.950-1 Aquacultural Engineer Andrés Bello University

Juan Carlos Puchi Acuña XI Region Fresh Water Manager ID: 7.961.289-8

Mechanical Engineer National Training Institute (INACAP)

Ignacio Sandoval Gallardo Processing Plant Manager ID: 7.555.354-4

Civil Engineer Pontifical Catholic University of Chile

Alejandra Cid Peña Human Resources ID: 10.493.106-5

Degree in Business Management – Accountant Auditor University of Santiago - Austral University of Chile

José Luis Vial Van Wersch Chief Financial Officer ID: 12.583.805-7

Degree in Business Management Pontifical Catholic University of Chile

Francisco Javier Serra Freire Technical Manager ID: 8.538.843-6

Aquacultural Engineer Andrés Bello University MBA Loyola College in Maryland, USA

Juan Miguel Urdangarín Fresh Water Atlantic Salmon Manager ID: 6.578.038-0 Marine Technician Pontifical Catholic University of Chile

Roberto Berndt Schumacher Sea Water and Operations Manager ID: 7.009.806-7 Agriculturist Austral University of Chile

Jorge Manuel Riquelme Riquelme Risk Prevention ID: 13.859.196-4

Risk Prevention Engineer National Training Institute (INACAP). MA in Environmental Management and Order. University of Santiago de Chile

Agustín Ugalde Preuss Chief Operational Officer ID: 8.209.622-1

Agriculturist Pontifical Catholic University of Chile

Felipe Sandoval Precht Institutional Affairs Manager ID: 7.673.035-0 Civil Engineer University of Chile

Juan Carlos López Sebastián Fresh Water Sea Trout Manager ID: 11.592.385-4

Veterinarian Austral University of Chile Mag. Cs Veterinarians MBA Adolfo Ibáñez University

Ulises Jara Gallegos Health ID: 11.590.987-8

Veterinarian Austral University of Chile

Management of subsidiaries

Jorge Montero General Manager Grupo ACI S.A. ID: 1-695-904 of Costa Rica Chemical Engineer University of Costa Rica

Gastón Dupré Huidobro

Rodger Miranda Stevenson

General Manager AquaChile Inc. ID: 7.254.010-7

General Manager AquaInnovo S.A. ID: 9.805.970-9

Degree in Business Management University of Santiago

Aquacultural Technician University of los Lagos MA in the Environment from University of Santiago

C) Organizational CHART

CEO Alfonso Márquez de la Plata

CFO José Luis Vial

XI Region Fresh Water Manager Juan Carlos Puchi

COO Agustín Ugalde

Fresh Water Atlantic Salmon Manager Juan Miguel Urdangarín

CCM Franco Adam

Fresh Water Sea Trout Manager Juan Carlos López

TECHNICAL MANAGER Francisco Serra

Processing Plant Manager Ignacio Sandoval

Institutional Affairs ManageR Felipe Sandoval

Sea water and Operations Manager Roberto Berndt

CEO GRUPO ACI Jorge Montero

Health Ulises Jara

CEO AquaChile Inc Gastón Dupré

Human Resources Alejandra Cid

CEO AquaInnovo Rodger Miranda

Risk Prevention Jorge Riquelme

THE

COMPANY’S ACTIVITIES

THE INDUSTRY Growing demand, limited supply: • Trend towards quality food:

The growth in per capita income and the development of large emerging economies have contributed to the increase in the demand for animal proteins. The population’s eating habits have also evolved towards healthy, nutritional food, such as sea products.

• Massification of the demand for sea products:

Today, sea products form part of the normal diet of families in both developed and emerging countries, such as Brazil, China and Russia. The convenience of these products and their attractive price in relation to other proteins have influenced this fact.

• Aquaculture, the only way to meet the demand:

The overexploitation of species in the wild has limited captures, so the heavy demand for sea products must be met by aquaculture.

EVOLUTION OF AQUACULTURE AND FISH CAPTURES OF SALMON IN THE WORLD (THOUSANDS OF TONS WFE )1 AQUACULTURE

WILD 3,500 3,000 2,500 2,000 1,500 1,000 500 0

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E SOURCE: KONTALI ANALYSE AS

• Salmon and Tilapia are efficient convertors:

These species stand out for their efficiency in feed conversion (indicator measuring how many kilos of feed is required to produce a kilo of live animal) compared to other animal proteins. FEED CONVERSION RATES TUNA

BOVINE

PIG POULTRY

TILAPIA

1.8

SALMON

(1)

1.3

WFE or Whole Fish Equivalent refers to the weight of the dead, bled Salmon, Trout or Tilapia.

SOURCE: KONTALI ANALYSE AS / AQUACHILE

• Growing demand for Salmon: The global demand for Salmon has grown at about 6% per year over the last 10 years2. The traditional Salmon markets, such as the USA, Europe and Japan, are expected to continue to increase their consumption, while Russia, China and Brazil, among others, are expected to continue to grow at two digit rates in the future. EVOLUTION OF CONSUMPTION OF SALMON AND SEA TROUT (THOUSANDS OF TONS WFE) TRADICIONAL MARKETS

NEW MARKETS

TOTAL

2,000

CAGR 00-10: 4.6%

1,600 1,200 600

: 6.4%

CAGR

00-08

CAGR

02-10

: 11.2%

400 0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010 E SOURCE: KONTALI ANALYSE AS

• Tilapia, an emerging species: Over the last few years, the Tilapia has been consolidated as the fastest growing species. USA is the main importer of this species and AquaChile, through Grupo ACI, is one of the main exporters of fresh Tilapia to this market, with approximately a 27% market share in 2011 (Source: US Department of Agriculture/ AquaChile). WORLD PRODUCTION OF TILAPIA (MILLION TONS PER YEAR) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0

1980

2008

2000

1990

2010 SOURCE: GOAL KUALA LUMPUR 2010

• Price perspectives:

As of 2004, the prices of Salmon have evidenced an upward trend, reaching their highest level for 10 years in 2011. The production potential of the Salmon industry worldwide is estimated at 2.5 million tons WFE. The estimate of the analysts indicates that this ceiling would be reached approximately between 2014 and 2017, assuming a continued growth in demand of 10% and 5%, respectively. ATLANTIC SALMON PRICE EVOLUTION (US$ / LBS) TRIM C 2-3 UB

6.00 5.00 4.00 3.00 2.00 1.00 0.00

2006

2007

2008

2009

2010

2011 SOURCE: URNER BARRY

(2)

Excluding 2009 and 2010, which were affected by the limitations of supply due to the sanitary crisis in Chile.

SEA TROUT AND PACIFIC SALMON PRICE EVOLUTION (YEN$ / KG) SEA TROUT HG 4-6 LBS FIS

PACIFIC SALMON HG 4-6 LBS FIS

800 700 600 500 400 300 200 100 0

2006

2007

2008

2009

2010

2011 SOURCE: FIS

Chile: an aquacultural power The Chilean salmon industry has become one of Chile’s main exporters, climbing to third place behind Copper and Cellulose.

PRODUCT EXPORTS 2011 OTHERS 32.52%

GRAPES 1.89%

WINE 2.22%

SALMON AND SEA TROUT 3.74%

CELLULOSE 3.79% COOPER 55.83%

SOURCE: CHILE’S CENTRAL BANK

• World leader: Chile and Norway are the main producers of grown Salmon and Sea Trout worldwide. Together, they represent about 75% of world production of Atlantic Salmon.

WORLD PRODUCTION OF ATLANTIC SALMON (THOUSANDS OF TONS WFE) NORWAY

CHILE

CANADA

OTHERS

GROWTH (%)

20%

2,000

15%

1,500

10% 1,000

500 0

0% 1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012E

2013E

-5%

SOURCE: ABG SUNDAL COLLIER NORGE ASA

• Only producer country with a significant capacity for growth: Considering that Norway is close to its maximum production capacity, Chile will be the only country capable of absorbing the future requirements of the world demand. PRODUCTION OF SALMON AND SEA TROUT BY COUNTRY (THOUSANDS OF TONS WFE) POTENTIAL GROWTH

2010 PRODUCTION

1,100

1,000

500

NORWAY

CHILE

OTHERS SOURCE: KONTALI ANALYSE AS / AQUACHILE

• Chile’s competitive, productive and commercial advantages: The main ones are: · Weather conditions: The stability of Chile’s seawater temperatures enable it to have a 15% shorter growth cycle that in Norway, with a less seasonal production profile. · Geographical conditions: Chile has fjords, deep rivers, islands and bays with some of the purest waters in the world. · Harmonious growing: Chile does not have wild Salmon, which means that Chilean salmon farming is a more sustainable activity than that of the northern hemisphere producers. · Lower production costs: Close to the sources of the main raw material for Salmon ad Sea Trout fish feed (fishmeal and fish oil) and access to more qualified labor at relatively lower costs. · Free trade agreements: Chile is a country open to trade.

Structural change in the industry The sanitary crisis produced by the ISA virus caused a big change in the Chilean salmon industry. This meant a series of measures aimed at protecting the industry, but it also forced it to rethink the production processes to thereby generate a structural change that would enable progress towards more sustainable conditions of development. • New, more effective regulations: The new regulatory framework in Chile will strengthen the salmon industry, since it creates conditions for sustainable, less risky, responsible and profitable conditions in the long-term. • Improved auditing and more empowered authorities: The new regulations have strengthened the auditing functions and attributes of the National Fishing Bureau (Sernapesca), which also significantly increased its capacity by increasing the number of inspectors.

• Continuous improvement enabling long-term sustainability: The new industry structure has been reflected in a drop in the mortality indices and an increase in the harvest weight, among other things.

MONTHLY MORTALITY INDEX EVOLUTION PACIFIC SALMON

ATLANTIC SALMON

SEA TROUT

16% 12% 8% 4% 0% mar-08

jul-08

nov-08

mar-09

jul-09

nov-09

mar-10

jul-10

nov-10

mar-11

jul-11

nov-11 SOURCE: AQUABENCH

HARVEST WEIGHT EVOLUTION · (GR WFE) PACIFIC SALMON

ATLANTIC SALMON

SEA TROUT

6,000 5,000 4,000 3,000 2,000 1,000 mar-08

jul-08

nov-08

mar-09

jul-09

nov-09

mar-10

jul-10

nov-10

mar-11

jul-11

nov-11 SURCE: AQUABENCH

AQUACHILE Empresas AquaChile S.A. is a Chilean company devoted to the production and sale of farmed Salmon, participating along the entire production chain.

We are a vertically integrated company that controls all stages of the production process; we are focused on exploiting Chile’s competitive advantages and achieving the lowest production costs.

Since 2005, we have also participated in the on-growing and commercialization of Tilapia for the North American market, through our Costa Rican subsidiary Grupo ACI S.A.

Since 2008, we have also participated in the fish feed industry, after acquiring 50% of Alitec Pargua S.A. In 2011 AquaChile was Chile’s main exporter of Salmon and Sea Trout, with an 11.5% share of the market measured in terms of net exported volume. (Source: Infotrade)

EVOLUTION OF PHYSICAL SALES OF SALMON AND SEA TROUT, AND MARKET SHARE OF AQUACHILE IN TERMS OF VOLUME PHYSICAL SALES (TONS WFE)

SHARE IN EXPORT MARKET (NET TONS)

1ST PLACE

2ND PLACE

1ST PLACE

14.2%

14.1%

14.6%

97,763

2006

1ST PLACE

11.5%

12.9%

106,221

90,607

73,721

2009

2008

2007

65,089

53,604 53.604 2010

2011 SOURCE: AQUACHILE / INFOTRADE

RANKING SALMON AND SEA TROUT EXPORTS IN 2011 COMPANY

US$ Thousands

Net Tons

295,696

44,386

10.1%

11.5%

247,137

37,155

8.4%

9.6%

Salmones Multiexport S.A.

219,995

22,859

7.5%

5.9%

Los Fiordos Limitada

194,461

30,139

6.6%

7.8%

Salmones Antártica S.A.

156,353

18,974

5.3%

4.9%

Trusal S.A.

148,737

17,463

5.1%

4.5%

Australis Mar S.A.

147,247

18,883

5.0%

4.9%

Empresas AquaChile S.A. Mainstream Chile S.A.

Market Share Value

Market Share Volume

SOURCE: INFOTRADE

We are the largest producer in the world of Pacific Salmon and one of the main producers of Sea Trout. We are also one of the most efficient

in both species, achieving sales of US$ 244 million in 2011. We are also one of the largest producers of Tilapia in Central America, the largest in Costa Rica and one of the main suppliers of fresh Tilapia to USA with a market share of nearly 27% (Source: United States Department of Agriculture/ AquaChile)

Thus, AquaChile currently has more than 400 clients in 50 countries on the 5 continents.

MAIN SOURCES OF SALES OF AQUACHILE’S SALMON, SEA TROUT AND TILAPIA IN 2011

315 32 234

4,947

42 85 143 42

5,596

848

1,113

145

3,266

3,690 810 2,018

1,859

803

793 78

127

23,276

611

1,681

OPERATIONS SALES OF SALMON AND SEA TROUT IN 2011 (NET TONS) SALES OF TILAPIA IN 2011 (NET TONS)

SOURCE: AQUACHILE

We commercialize our products through recognized brands that enjoy high prestige in the various markets where we distribute them:

AquaChile has a huge potential for growth, due to, among other factors: • A unique, non replicable sea license base in Chile

We have 149 sea licences in Chile and we are present in 50% of the Chilean industry’s sanitary areas. We estimate that these sea licenses

will allow us to more than triple organically the production of salmonids obtained in 2010.

.• Potential for growth in Tilapia:

We have three fish farms in Costa Rica with a maximum production capacity of 21,000 tons WFE. We also have three licenses on Lake

Bayano in Panama, which will allow us to more than double our current production. The theoretical maximum capacity of the licenses in Panama is more than 100,000 tons WFE.

• 15 years of successful, proven genetic development:

We have developed a successful generic program to improve the productive performance and quality of the Atlantic Salmon, Pacific Salmon and Sea Trout. In 2007, we created AquaInnovo, a company devoted to genetics and molecular biology for aquaculture.

• Capacity and flexibility of supply of eggs and smolts:

We produce Atlantic Salmon, Pacific Salmon and Sea Trout eggs, keeping a stock of broodstock on land. This allows us to be one of the main producers of disease free eggs in Chile. Currently, we are also investing in fresh water to have the flexibility and capacity to fulfill our current and future production plan.

• Our own processing plants capable of absorbing growth:

We have 5 plants in Chile capable of processing more than 170,000 tons WFE of Salmon, and one in Costa Rica to process more than 21,000 tons WFE of Tilapia.

• Geographical diversification:

We have one of the largest aquacultural licenses bases of the industry in Chile; it is distributed in the Los Lagos Region (38%) and the Aysen Region (62%), and we are present in 29 sanitary areas (50% of the total).

• Diversification of products:

We farm three different kinds of species of salmonids in Chile (Atlantic Salmon, Pacific Salmon and Sea Trout), as well as Tilapia in Costa Rica and Panama.

This diversification enabled us to better cope with the recent sanitary crisis of the Atlantic Salmon in Chile, by increasing our production of the other species. As of 2010, we started to release Atlantic Salmon smolts again, starting to harvest this species again as of April, 2011 with good results in terms of production.

We also participated in producing fish feed for Salmonids in association with Biomar, one of the main worldwide producers of fish feed. This alliance is being replicated in Costa Rica for producing fish feed for Tilapia.

• Integration along the entire value chain:

We are a fully integrated company that adds value in all stages of the Salmon, Sea Trout and Tilapia production chain.

AquaChile value chain in the production of Salmon, Sea Trout and Tilapia Salmon and Sea Trout

FRESH Sea Water WATER On-Growing eggS & smolts

Genetics

Fish Feed

Fries Production

On-Growing

Genetics

Fish feed

Processing

Commercialization

Processing

Commercialization

Tilapia

* Fish feed plant will be built in 2012

Source: AquaChile

The Salmon Business:

• Genetics:

Grupo ACI S.A. and Terramar, the latter

relocated outside the Fjord. All of these

Since 1993, through our subsidiary

a Tilapia producer in Ecuador.

changes would provide sanitary and

Pesquera

Antares,

have

production improvements for the sea

implemented a genetic development

licenses that applied for relocation,

program to improve the productivity

• Fresh Water Production:

division and/or merger. The process

and quality of Atlantic Salmon, Pacific

-Eggs:

started on August 23, 2010 and we filed

Salmon

The subsidiaries of AquaChile produce

a total of 62 applications for relocation,

selecting

and

Sea Trout, through

broodstock

based

Salmon and Sea Trout eggs, keeping

such criteria as rate of growth, feed

a stock of broodstock and developing

conversion, resistance to disease, color

the

of skin, among others.

The incubation facilities are located

• Fish Feed Production:

in the Araucanía and Aysen Regions.

AquaChile,

In 2007 we created a company devoted to

the

state-of-the-art

genetics

company’s

genetics

division and/or merger.

program. in

association

with

Currently, we are one of the largest

Biomar (one of the main suppliers

producers of eggs in Chile.

of high performance fish feed for

and molecular biology market -

the aquacultural industry in the

AquaInnovo. Outstanding geneticists

-Smolt:

world), control equally the fish feed

at worldwide level collaborate in

We produce Salmon and Sea Trout

production plant of Alitec Pargua. This

this company. As a result of its

fries and smolts. We have sufficient

plant produces about 126,000 tons of

potential, AquaInnovo received US$

capacity and flexibility to supply all

fish feed per year.

5 million from the CORFO Innova

of the requirements of the group’s

Fund in order to develop its project.

companies and provide third parties

Although AquaInnovo was born in

with production services. We have

• Processing Plants:

the salmon farming sector, it covers

hatcheries, fresh water and brackish

We have 5 processing plants in Chile in

all aquaculture as a potential for

water facilities in the Araucanía

Puerto Montt, Calbuco and the Island

development.

and Aysen Regions, as well as also a

of Chiloé. The plants are equipped

hatchery in the Metropolitan Region.

with state-of-the-art technology for

The deadline for developing the

processing salmonids.

project financed by CORFO Innova is 5 years and it considers the construction

• Sea Water Production:

and outfitting of an Aquacultural

We have sea licenses in the Los Lagos

Research and Transfer Center (CITA),

and Aysen Regions and we are present

a state-of-the-art central molecular

in 29 sanitary areas (50% of the total).

genetics

We have applied for 55 new sea licenses

globally. Our main markets are USA

in the Magallanes Region.

and Japan. We also export to Europe,

lab,

challenge

centers,

experimental farming centers and biotechnological services, as well as a PhD student research and training

• Commercialization: Empresas

AquaChile

commercialize

its

S.A.

focuses

production

Asia, the Middle East and Latin The amendment to the Fishing and

America. Since 2002, we have had our

Aquaculture Law allowed sea licences

own distribution company for the

to be relocated in the Los Lagos and

North American market, AquaChile

As far as its genetic improvement

Aysen Region, the area of one sea

Inc. AquaChile has more than 400

programs are concerned, AquaInnovo

license to be divided and merged

geographically

has performed works in Empresas

with another and the sea licenses in

in more than 50 countries on the 5

AquaChile S.A., Aguas Claras S.A.,

the Aysen Fjord to be partitioned and

continents.

center.

diversified

clients

The Tilapia Business: In 2005, Empresas AquaChile S.A. acquired

• Genetics and Breeding:

• Fries, Pre on-growing and on-growing:

Grupo ACI S.A., a company headquartered

Grupo ACI S.A. has had a genetic

All the Tilapia production process is

in Costa Rica, which has participated

improvement program since 2006. It is

carried out in more than 360 hectares of

in the Tilapia industry for more than 25

currently managed by AquaInnovo S.A.

farming surface area in Cañas, Costa Rica.

years. Our business strategy is focused on

Each cycle takes 290 days in which the

supplying the large supermarket chains,

fish reach an ideal harvesting weight of

distributors and restaurant chains in USA

900 grams.

with fresh Tilapia, and we have achieved a market share of nearly 27%.

• Proccesing Plant:

• Commercialization:

• AcuaPanama:

Grupo ACI S.A. has the Terrapez processing

Grupo ACI harvests and processes Tilapia

Grupo

plant in Cañas, which has the capacity to

6 days a week, sending its fresh produce

AcuaPanamá, owns

process 21,000 tons WFE. These facilities

to Miami, from where it is distributed to

licenses awarded in Lake Bayano for

receive recently extracted live harvest

its clients under the Rain Forest brand.

Tilapia farming, totaling 516 hectares.

from the on-growing tanks and, as a

The company has been consolidated as

result, they obtain fresh and frozen, high

one of the main exporters of this product

value-added products prepared using

to USA.

ACI,

through

its the

subsidiary only

three

state-of-the-art technology.

GENERAL

INFORMATION ABOUT

THE COMPANY

CAPITAL STOCK As of December 31, 2011, the subscribed and paid-in capital of Empresas AquaChile S.A. was represented by 1,157,000,000 shares, of the same, single series.

DISTRIBUTABLE PROFITS AND DIVIDEND POLICY:

As of December 31, 2011 the company does not have any accumulated net profits susceptible to being distributed as dividends. According to the by-laws, the company must pay annually as a cash dividend to its shareholders on a pro rata basis to their shares at least 30% of the net profits for each year, unless the respective Shareholdersâ&#x20AC;&#x2122; Meeting unanimously agrees otherwise to distribute a lower percentage. During the past 4 years, the company has not paid any dividends.

SHARE TRADING The graph below shows the evolution in the price of AquaChile’s shares compared to the evolution of the IPSA index3 , since the company’s shares started to be traded:

SHARE PRICE EVOLUTION AQUACHILE VS IPSA AQUACHILE

IPSA INDEX

SHARE PRICE AQUACHILE [CH$/SHARE.]

IPSA INDEX

5,100

500

4,900

450

4,700

400

4,500 4,300

350

4,100

300

3,900

250

3,700

200

may-11

jun-11

jul-11

ago-11

sep-11

oct-11

nov-11

dec-11

3,500

SOURCE:THE SANTIAGO STOCK EXCHANGE

Quarterly trading on the Stock Exchanges since AquaChile’s shares have been publicly traded in Chile, through the Santiago Stock Exchange, the Chilean Electronic Stock Exchange and the Valparaiso Stock Exchange, is as follows:

2011

Number of Shares Traded

Amount Traded (Ch$)

Average Price (Ch$)

I Quarter

N.A.

II Quarter

702,231,126

320,401,741,250

456

III Quarter

88,767,933

31,870,924,996

359

IV Quarter

61,733,810

21,776,152,280

352

SOURCE: The Santiago Stock Exchange, the Chilean Electronic Stock Exchange and the Valparaiso Stock Exchange

(3)

IPSA: Selective Chilean Share Price index, as determined by the Santiago Stock Exchange, including the 40 shares most traded in the country.

In 2011, the related shareholders traded the company’s shares as specified below in the accompanying table: Shareholder

Relationship

Type of Operation

Purchase

Sale

Average unit price Purchase Sale Ch$/ Ch$/ Share Share

Total Amount Traded Purchase ThCh$

José Luis Vial van Wersch

Executive -CFO

Financial Investment

22,075

453

10,000

Nordicmar Spa

Company of Director

Financial Investment

824,733

453

373,604

Asesorías e Inversiones Tebas Ltda.

Company of General Manager

Financial Investment

46,645

453

21,130

Juan Carlos López Sebastián

Executive - Fresh Water Manager

Financial Investment

2,649

453

1,200

Inversiones Manqui Ltda.

Company of Director

Financial Investment

3,855,181

453

1,746,397

Agrícola y Comercial Santa Inés Ltda. Company of Director

Financial Investment

11,554,156

453

5,234,033

Inversiones FK Ltda.

Company of Director

Financial Investment

1,271,602

453

576,036

Inversiones Santa Cecilia Ltda.

Company of Chairman of the Board

Financial Investment

4,100,893

453

1,857,705

Inversiones VHP Ltda.

Company of Chairman of the Board

Financial Investment

4,186,073

453

1,896,291

Inversiones MPA Ltda.

Company of Director

Financial Investment

1,889,485

453

855,937

Inversiones JCP Ltda.

Company of Executive

Financial Investment

333,310

453

150,989

Sale ThCh$

Jorge Allende / Director

Company of Director

Financial Investment

824,733

453

373,604

Ulises Jara Gallegos

Executive - Head of Health

Financial Investment *

60,000

5.5

330

Juan Carlos López Sebastián

Executive- Fresh Water Sea Trout Manager

Financial Investment *

200,000

5.5

1,100

Franco Adam Raffo

Executive - CCM

Financial Investment *

200,000

5.5

1,100

Alfonso Marquez de la Plata Cortés

Executive - General Manager

Financial Investment *

2,800,000

5.5

15,400

Juan Carlos Puchi Acuña

Executive -XI Region Fresh Water Manager

Financial Investment *

200,000

5.5

1,100

Agustín Ugalde Preuss

Executive - COO

Financial Investment *

950,000

5.5

5,225

Juan Miguel Urdangarín Chávez

Executive -Fresh Water Atlantic Salmon Manager Financial Investment *

200,000

5.5

1,100

José Luis Vial van Wersch

Executive - CFO

Financial Investment *

350,000

5.5

1,925

Roberto Berndt Schumacher

Executive - Sea Water and Operations Manager

Financial Investment *

200,000

5.5

1,100

Ignacio Sandoval Gallardo

Executive - Processing Plant Manager

Financial Investment *

200,000

5.5

1,100

Felipe Sandoval Precht

Executive - Institutional Affairs Manager

Financial Investment *

60,000

Fondo de Inversión Patagonia

Majority Shareholder

Financial Investment *

2,885,000

5.5

15,868

Inversiones Acuícolas S.A.

Majority Shareholder

Financial Investment *

2,885,000

5.5

15,868

5.5

330

This transaction and its price correspond to exercising a stock option granted on February 2, 2010 and May 2, 2010 by the main shareholders to certain of the issuing company’s workers, when it presented a negative equity and significant losses for the immediately prior year.

DIRECTORS’ FEES AND EMPLOYEE SALARIES The directors earned the following fees in 2011 for their participation on the board of directors of Empresas AquaChile S.A.: DIRECTORS’ FEES (US$) Attendance Fee

Name of Director

Víctor Hugo Puchi Acuña

Presidente

Humberto Fischer Llop

Director

2010

46,995 41,951

Legal, Financial, Business and Management Advisories

2010

19,984

96,244

120,046

143,239

140,030

17,997

96,090

120,003

138,041

138,000

96,244

120,046

Mario Humberto Puchi Acuña

Director

41,568

19,984

Director

39,482

15,997

Vicente Pérez Fuentes

Director

Alejandro Pérez Rodríguez Piero Solari Donaggio

2011

2010

TOTAL

2011

Claudio Fischer Llop

2011

2010

137,812

140,030

39,482

15,997

41,026

Director

41,346

Director

14,726

Pablo Aguilera Marín (4)

Former Director

6,000

16,002

Jorge Allende Zañartu (5)

Former Director

26,228

Álvaro Varela Walker (6)

Former Director

Mauricio Cárdenas García (7)

Former Director

Total

2011

Executive Committee

(4)

Until aPril 2011 ·

69,648 299,322

(5)

Until octubER 2011 ·

(6)

Until aPril 2011 ·

16,002

(7)

89,964

Until aPril 2011

288,578

360,094

120,489

26,228

69,648

120,489

58,837

118,985

58,837

118,985

128,485

239,474

716,385

689,533

The attendance fees, remunerations and financial, business and management advisory fees received by the members of the Board of Directors for the period ended December 31, 2011 are ThUS$ 716.4 (ThUS$ 689.5 for the period ended December 31, 2010).

Empresas AquaChile and subsidiaries have a system of incentives based on the company’s operating results, consisting of an annual bonus for its top executives and positions, which, in the company’s opinion, are eligible to participate in it. The incentives system seeks to

motivate, acknowledge and loyalize the executive through a formal system that rewards good individual performance and also teamwork. The total gross remuneration earned by the executives of Empresas AquaChile, including these incentives, was ThUS$ 1,664 as of December 31, 2011 (ThUS$ 1,279 for the same period ended December 31, 2010).

Furthermore, no severance indemnities were paid to managers and top executives in 2011 (in 2010 ThUS$ 67.3 was paid).

STAFF As of December 31, 2011, the staff of Empresas AquaChile S.A. and its subsidiaries consisted of 4,813 workers distributed as follows: STAFF 2011

Managers and Top Executive

Administrative and Technical Staff

Workers

TOTAL

Empresas AquaChile S.A.

208

150

371

Subsidiaries

559

3,848

4,442

Total

767

3,998

4,813

2010

Managers and Top Executive

Empresas AquaChile S.A.

Administrative and Technical Staff

Workers

TOTAL

126

276

483

3,734

4,249

622

3,860

4,525

139

Subsidiaries

Total

INVESTING AND FINANCING POLICIES As stipulated in its by-laws, the company will make whatever investments may be necessary to fulfill its corporate purpose. To that end, the company’s Management will have sufficient powers to make investments in the business, based on expansion plans approved by the Board of Directors and profitable projects according to technical and financial criteria.

The sources of financing are managed in accordance with the company’s financing plan. Financial resources are obtained from the company’s own sources, traditional loans, public and privately placed instruments and capital contributions, if the financial and strategic conditions so advise and allow.

INSURANCE The company and its subsidiaries have taken out insurance policies to cover the main risks to which its physical assets, offices, processing

plants and facilities are exposed, third party liability and other minor risks affecting its equity. Thus, a significant part of the risks are

reasonably covered by their transfer to local insurance companies, which, in turn, take out reinsurance for part of their risks with international reinsurance companies. The business’ operational risks are constantly reassessed to optimize the covers, according to competitive market offers. These insurance covers taken out include the following:

TYPE OF ASSET

RISKS COVERED

Live, harvested fish

Damages resulting from or directly caused by an external agent during their sea, air and/or land transportation.

Buildings, facilities, machinery and finished products

Impairment suffered by assets caused by fire, including earthquakes. Impairment suffered by assets due to damages caused by risks of nature Coverage of fire and material damages as a direct result of strikes, looting or riots.

Fresh, frozen, smoked fish (Salmon and Sea Trout)

Losses and/or damages in sea, air and/or land transportation.

Life insurance Public liability insurance

Accidental or natural death General as per the product. Covers material damages and physical injuries to third parties.

TRADEMARKS AND DOMAINS The company has current registrations and ongoing applications for its trademarks and those of its subsidiaries in the respective public registers, in accordance with the laws and regulations in force. The respective firm names are included in these registrations. The company has also registered the Internet domains linked to its trademarks, safeguarding its interests and intangible assets.

RESEARCH AND DEVELOPMENT We have a team of engineers, biologists and veterinarians who are constantly studying and evaluating the alternatives for improving the genetic heritage of the stock of the company and its subsidiaries, in order to have planting stock adapted in the best possible way to the conditions of the company’s fish farms, in order to maximize productivity. We also have our subsidiary, AquaInnovo S.A – born of the alliance with the University of Chile, Aquatic Health Chile and the contribution from the Subcommittee for Business Innovation of Innova Chile –CORFO -, whose purpose is the genetic improvement of Salmon and other aquatic species.

MAIN ASSETS The main assets of Empresas AquaChile S.A., which are essential for carrying out its activities, are specified in detail in the Financial Statements of the company and its subsidiaries. (See Note 9: Accounts Receivable; Notes 10 and 11: Inventory and Biological Assets; Note 13: Intangibles; Note 14: Goodwill and Note 15: Property, Plant and Equipment). The main assets are buildings, infrastructure works and machinery, mainly 6 processing plants with their respective equipment, the company’s offices, the fresh water and sea water facilities, and the nets, cages, protection and safety gear, tanks, containers, vehicles and vessels.

PROPERTY AND EQUIPMENT Most of the fresh water and seawater fish farms have neighboring properties, where residences have been built for the operating unit’s upper level technicians, canteens for the personnel and storerooms for minor implements. The company and its subsidiaries also have floating cage rafts in each of the fish farms, both fresh water and sea water, in order to carry out the aquatic production process The harvested fish is sent to the company’s processing plants. These plants are sited on land owned by the company and are as follows:

i) The Cardonal processing plant in Puerto Montt, which is devoted mainly to producing value added Atlantic Salmon and Sea Trout products.

ii) The Calbuco processing plant in Calbuco, which is devoted mainly to producing value added Atlantic Salmon and Sea Trout products. iii) The Antarfood processing plant in Chonchi, which is devoted to processing HG (Headed and Gutted) products and value-added Atlantic Salmon, Pacific Salmon and Sea Trout products. iv) The HueĂąocoihue processing plant in Dalcahue, which is devoted to processing Pacific Salmon HG products. v) The Cailin processing plant in Quellon, which is devoted to processing Pacific Salmon HG products.

CONTRACTS At this date, there are no significant commercial contracts in force.

MOST IMPORTANT SUPPLIERS Empresas AquaChile has established relationships with its suppliers, and some of them have a long standing relationship with the company. As of December 31, 2011, the companyâ&#x20AC;&#x2122;s main suppliers are Alitec Pargua S.A., Biomar S.A., Salmofood S.A., Ewos Chile S.A., among others.

FINANCIAL ACTIVITIES The company uses the internal credit mechanism to finance its exports, in accordance with the Compendium of Foreign Exchange Regulations. These credits are repaid using the respective foreign exchange from export earnings. The company carries out the typical financial activities of its line of business and its main source of financing is through the Loans for Exporters (PAE). Cash surpluses are invested in fixed income short-term instruments in the local financial market.

CORPORATE SOCIAL

RESPONSIBILITY

People Well-being

Risk Prevention and Training

Samplers, Certificates and Safety for

The workers are a foundational pillar

others.

for AquaChile, so, in addition to the

AquaChile and its subsidiaries devoted

benefits required by law, we have other

28,093 man hours to training and skills

additional, voluntary benefits that seek

development

to improve the work, food, transportation,

areas. This means that, on average, each

health, training and occupational safety

employee of AquaChile had nearly 6

conditions of our collaborators.

hours of training in areas related to his

2011, the

workers

programs

Empresas

various

or her work area, thereby improving their

2 workshops were also held, aimed at making known new people management strategies,

focusing

personal

effectiveness for heads, technicians and professionals in the support areas of the fish farms. 157 people took part in this

skill sets and abilities.

activity. Along the same lines, we also

and we travel more than 880 thousand

The courses and seminars were focused

interacting with ones peers, the common

kilometers to get our workers from their

on such issues as Hygiene and Food

homes to their places of work. Also, more

Handling for the processing plants,

than 625 workers use the day nursery

and for the sea growing area Maritime

benefit for their children under 2 years

Security

Guards,

of age. Likewise, with a view to taking

Captains

Thus, each year we provide our people

held a seminar aimed at recognizing, by

with more than 750 thousand lunches,

care of our workersâ&#x20AC;&#x2122; skin and protect their skin from UV rays, every year we distribute more than 425 liters of high protection sun block. And we also provide training courses, work clothes, among others. We understand that health is a key for our collaborators, so we contribute to financing their health expenses by providing our people with Health Insurance,

Personnel

Welfare

Fund, alliances with Pharmaceutical Establishments, alliances with Clinics and Hospitals, as well as also Life Insurance, allowing our workers to enjoy better financing if any high financial impact events occur. In AquaChile, we also support the social and recreational activities of our workers and their families.

Center Heads and Assistants, among

Small

Radio

Operators,

Vessels,

Caligus

strengths and challenges starting with personal effectiveness. 93 workers with administrative and professional positions working in Puerto Montt and Calbuco participated.

Towards the end of 2011, knowledge of the salmon farming activity was reinforced by internal training provided for 138 professionals and heads from all areas of the company on the Sanitary Regulation (RESA). The company will continue with this initiative in 2012. For AquaChile, the skills, integrity and values of our people are a priority. Hence, during 2011 the Code of Conduct (published in December, 2010) was disseminated widely among the workers in all of Chile, Costa Rica and Panama. This ethical map guides the behavior of those who work in AquaChile, and, together with a series of other internal tools, serves a guideline for acting properly and efficiently.

Relationship with the community in matters of training:

occupational health and safety program in each of the company’s production areas, reinforcing its application by

AquaChile endorsed SENCE’s request (National Training and Employment Bureau) to go beyond our workers and expand our efforts and train the inhabitants of the Los Lagos region. Thus, in 2011, 16 scholarships in the trade of Salmon Skin Crafts were awarded, aimed at the female working heads of homes in Ancud, and 35 scholarships for the course on Hygiene and Food Handling for people in positions of social vulnerability in Llanquihue. In

2011,

hiring new risk prevention experts in

the

Aysen

and

Melinka

areas.

This program focuses on knowing how to recognize, assess and control operational risks during start-up of the company’s processing plants and fish farms, together with continuous training for new hires. The man hours of training provided for the induction of new hires, internal training and mutual benefit fund training were 7,815 hours. As a company, we continue to implement

implemented

the

policies

for

improving

the

work

performed by contractors. These are very strict policies that seek to comply with the Occupational Health and Safety standards imposed by the company. The general parameters of the Company Standard program are as follows: • Identifying and analyzing dangers • Induction of new hires • On-site talks • Assessment of physical agents • Contingency plan • Occupational health • Driver occupational exams • Upper extremity ailment control program • Early detection of symptomatic pathologies • Correct posture at work • Function rotation program

Environment In AquaChile, we are firmly committed to the environment. Hence, in addition to being constantly concerned that our activity is in harmony and balance with its environment, we have incorporated the environment into our corporate mission. AquaChileâ&#x20AC;&#x2122;s environmental management is coordinated through the Department of the Environment, which supervises the entire production chain. We are constantly concerned with controlling final disposal of organic and inorganic waste, so we treat the liquid industrial waste, control solid and dangerous waste, have converted to environmentally friendly technologies, installed underwater viewing chambers in the fish farms to observe the behavior of the fish and minimize the loss of fish feed and deposits on the sea or lake beds. We also participate actively in the clean beach campaign of the Maritime Authorities and the reforestation programs coordinated by CONAF (Chilean National Forestry Corporation). All of the above allows us to ensure clean, responsible production and integrate the environmental variable into everything we do. As part of our commitment towards the environment, AquaChile implements effluent monitoring programs in the hatcheries, in the naval artifacts of the fish farms and in the processing plants, thereby complying with the environmental regulations. We also have specific programs for monitoring sediments, water column and phytoplankton.

88.89% of the industrial organic waste generated in the processing plants and of the mortality in the Salmon and Sea Trout fish farms and hatcheries were sent to reducer plants, with a view to using this waste as raw material for producing fishmeal and fish oil. TOTAL WASTE GENERATED IN 2011 (% WASTE) 88.89%

9.98% TOTAL ORGANIC WASTE (FISH)

TOTAL OTHER RECYCLABLE WASTE

1.14%

0.00%

PARTIALLY RECYCLABLE WASTE

NON-RECYCLABLE WASTE SOURCE: AQUACHILE

Water is our main on-growing medium

eggs and smolts on land. In addition to

the work that AquaChile has been doing

and

contributing to efficient use of water,

constantly in matters of the environment,

maintain this resource in the best

the design of these facilities is focused

food safety, good production, labor, social

possible environmental conditions and

on maximizing bio-safety and ensuring

and business practices. In 2011, we also

use it efficiently.

disease-free handling of eggs and smolt.

decided to embrace the principles of

are

always

concerned

the Global Pact of the United Nations In 2011, we started construction of a big

Another important point in matters of

(which

project for the company - Salmones Chaicas.

the environment is that we started the

labor regulations, human rights and

This project consists of a technologically

process of registration for certifying the

anticorruption) as of 2012. All of this

advanced

for

Atlantic Salmon growing processes under

ratifies our commitment to manage the

producing Atlantic Salmon broodstock,

the Global GAP standard, which reaffirms

companyâ&#x20AC;&#x2122;s growth responsibly.

recirculation

hatchery

involve

the

environment,

Community AquaChile was born and has grown in the South of Chile. We are a company that is committed to the communities in which we operate. In this context, we carry out a series of activities in various spheres aimed at enforcing our links with them. In 2011, we set the challenge of bringing the Salmon we produce and Chileans closer together. Hence, we opened our first sales point in Puerto Montt, where we offer our best Salmon, Sea Trout and Tilapia products. We also continued with the “Help us be better” program, a tollfree telephone line, 800 100 700, open to our employees, suppliers and the community as a whole to answer their concerns. Furthermore, within the framework of the hatchery Environmental Impact Statement processes, we promised the community of La Araucanía that we would expedite access to information on the environmental performance of the company.

As part of the measures to bring us closer to the community, in AquaChile we drive actions that benefit people in the zones where we operate. For example, we gave glasses to 65 children, young people and adults in Guaitecas district of Melinka. The donation was promised by the company during the Navy’s mission on board the Medical-Dental Patrol Boat “Cirujano Videla”. Other actions of this kind performed in 2011 include, for example, participating in the Clean Beaches operation in Puerto Montt and Quellón, organized by the Maritime Authorities and Sernapesca (National Fishing Bureau); the donation – together with other producing companies – of life jackets to the community of Melinka; the donation of school book bags for a social program implemented by the Regional Government of the Los Lagos Region; and support for the K Kids Race in Puerto Varas within the framework of the Choose Healthy Living program, in which 1,200 children of 6 to 14 years of age participated. AquaChile also donated walkways, rails, floats and metal rings no longer in

use to the Municipality of Puerto Montt for reconditioning and

subsequent use in the construction of the new pedestrian jetty for the Puerto Montt – Isla Tenglo – Puerto Montt crossing. We also consider it essential to develop close ties with the authorities. Hence, in 2011 we held meetings with the Intendants of Los Lagos and Aysen and the Regional Secretary for the Economy of the La Araucania region. We also organized a program of visits for the mayors of Pucón, Vilcun, Puerto Varas, Puerto Montt, Calbuco, Cochamo, Hualaihué, Quemchi, Castro, Dalcahue, Queilen, Chonchi, Quellon, Puerto Cisnes, Puerto Aysen and Guaitecas. In these meetings, we addressed the work being performed by AquaChile, its going public, the company’s growth plan and its possible contributions to the communities. In AquaChile, we value our relationship with the local communities, so we prioritize hiring people from the places where the company operates. With regard to our workers, in 2011 we held 17 focus groups, with 100 people participating in them. The objective was to have a survey available that would show us what our workers

thought of the company and, on that basis, determine the most important areas that needed to be addressed. Workers living and working in the same zone: REGION

Percentage

Metropolitan

88%

La Araucania

87%

Los Lagos

98%

Aysen

49%

TOTAL

93% SOURCE: AQUACHILE

SUBSIDIARIES

AND AFFILIATES

SUBSIDIARIES AND AFFILIATES STRUCTURE OF THE ORGANIZATION AS OF December 31, 2011 EMPRESAS AQUACHILE S.A.

0.1249%

99.9999%

Inversiones Antarfish Ltda.

Inversiones Salmones Australes Ltda.

99.8751%

99.9980%

99.999989%

Aguas Claras S.A.

Antarfish S.A

0.0020%

99.9816%

Antarfood S.A.

0.0184%

100%

99.99938%

AquaChile Inc. 0.000011%

99.9727%

0.0273% 99.00%

Servicios Aguas Claras S.A.

99.9908%

0.0001%

Procesadora Aguas Claras Ltda.

50.9999%

Salmones Australes S.A.

82.77%

Antares S.A.

0.0092% 49.0000%

83.00%

AquaInnovo S.A.

58.382%

AquaChile S.A.

17.23%

99.999998%

79.95857%

Grupo ACI S.A.

41.618%

93.00%

Salmones Cailín S.A.

Salmones Chiloé S.A.

99.9998%

50.00%

Alitec Pargua S.A.

100.00%

Salmones Maullín S.A.

Aquacorporacion Int´l S.A.

0.00002%

1.00%

64.51%

Piscicultura Aquasan S.A.

Palacios II Ltda.

0.000002%

Entre Ríos S.A.

99.93%

60.00%

Procesadora Hueñocoihue Ltda.

0.07%

100.00%

Cultivos Acuícolas El Volcán Ltda.

99.946%

0.054%

Salmones Maullín Ltda.

Terrapez S.A.

100.00%

Aquacultura del Pacífico S.A.

100.00%

RFA Inc.

Empresas AquaChile S.A., is the parent that consolidates the participation of various companies making up the group. Operationally, it

is devoted to growing in the on-growing stage, processing and commercialization Salmon and Sea Trout. The latter stage is carried out

directly in such markets as Asia, Europe, Latin America and USA, with the latter market being targeted through the subsidiary AquaChile

Inc. located in Miami. The company produces Atlantic Salmon, Pacific Salmon and Sea Trout, having specialized mostly in the production of

the first two species. To that end, it has sufficient fish farm licenses and marine facilities to meet its current and future volumes of harvest, distributed in the Los Lagos region and the Aysen Region. The raw material is processed mainly in the Puerto Montt plant and its additional production in any of the other of the group’s processing plants.

Company

Description

Corporate purpose

I. Production of Salmonids Inv. Salmones Australes ltda.

Its main purpose is a) Participating in all kinds of Chilean or foreign, civil or commercial companies, partnerships, limited partnerships, corporations or limited liability companies, whose purpose is extracting, fishing or hunting, raising, growing or capturing, freezing, refrigerating, preserving, preparing, reducing, transforming, exploiting, selling, industrializing and distributing, in any way, all kinds of beings and organisms whose normal living medium is water; preparing and processing fishmeal and fish oil and their by-products; exploitation of the fishing industry as a whole and its byproducts; manufacturing preserves and other products for consumption or industrial application; and, in general, exploitation, industrialization and use of all kinds of products and by-products of the marine resources and all lines of business related indirectly or directly to the above purposes, in order to develop the businesses to which these companies are devoted or in which they participate. b) The provision of services involving technical business, economic, administrative and financial advisories in activities related directly or indirectly to the purpose of the company, including, among others, those related to fishing and aquaculture, whether directly through this company, or indirectly through other companies. Also undertake all of the operations and businesses agreed to by the partners or related to its purpose.

AquaChile S.A.

Devoted to the fresh water production of fries and smolts, mainly for Empresas AquaChile S.A., although a percentage is destined for sale to third parties. This company has facilities on land, lakes and brackish water distributed in the Metropolitan Region and the Regions of Araucanía and Aysén. Production of fries includes the three species sold by the parent, and its supply of eggs for this process is guaranteed by the production of its subsidiary Pesquera Antares S.A..

Exploitation in the widest possible sense of all kinds of hydro-biological resources, whether by growing, producing, distributing, marketing, industrializing, extracting, importing and exporting, being able to do so on its own account or on behalf of third parties; provide training and advisory services along those lines, do research and develop technologies.

Salmones Chiloé S.A.

This company produces and processes Pacific Salmon. It currently represents 50% of annual gross or WFE sales of this species of all the Pacific Salmon producing companies of the Empresas AquaChile S.A. Group. Its on-growing operations are located mainly on the Island of Chiloé and the processing is performed mainly through its subsidiary Procesadora Hueñocoihue Limitada, located in Dalcahue, Chiloé. The company has expanded its production vertically towards the fresh water stages, so it is able to supply itself via its subsidiary Aquasan S.A.

Grow, reduce, develop, capture and market all kinds of live beings or organisms whose normal living medium is water, whether sea, lake or river; industrialization, preparation, processing, conservation, dehydration, packing and marketing of these products in any form and their use: development, research and implanting of artificial breeding and growing procedures and techniques for any and all salmonid species, study of their behavior and the undertaking of studies and surveys and the creation and exploitation of fish farming establishments; provide marketing services for third parties; develop the production of supplies for the production of salmon, especially food and packaging; provide technical assistance services, construction of elements related to aquaculture and provide transportation and refrigeration services for the production of third parties.

Salmones Maullín S.A.

This company produces and processes Atlantic Salmon and Pacific Salmon through its subsidiary Salmones Maullín Ltda. The company is vertically integrated and is equipped from the production of eggs to selling its finished products. Logistically, this entire operation is concentrated in the area around Puerto Montt.

(i) Extraction, fishing, hunting or growing of beings or organisms whose normal living medium is water, including sea and fresh water aquacultural farms; (ii) Freezing, preserving, preparing and transforming these or other beings or organisms; (iii) Construction or repair of vessels suitable for commercial or industrial fishing; (iv) manufacture, processing or preparing of all kinds of food or other products; (v) Provision of all kinds of services; (vi) Selling all kinds of products or goods, including acting as local or foreign agents; (vii) Participation in other companies, legal entities and associations of any kind and for any purpose; (viii) Carrying out any related, accompanying or supplementary activities agreed to by the shareholders’ meeting. In all of the above, the company may act on its own behalf or on behalf of others and in the country or abroad

the Los Lagos region and the Aysen Region. The raw material is processed mainly in the Puerto Montt plant and its additional production in any of the other of the group’s processing plants.

The main subsidiaries of Empresas AquaChile S.A., which are devoted to producing Salmon and Sea Trout in their various stages, as well as also producing and processing Tilapia and producing fish food, are described below.

Main contracts with the parent

Direct and indirect interests

Subscribed and Paid-in Capital (US$ thousands)

Net Equity (US$ thousands)

Profits (US$ thousands)

Proportion of total assets of the Parent that it represents

Legal Representative / Administrator

Board of Directors / Management

99.9999%

38,088

118,656

26,455

41.6%

Alfonso Márquez de la Plata Cortés

Supplies of smolts and aquaculture sea licenses processing services

99.9994%

52,069

29,593

2,626

11.5%

Alfonso Márquez de la Plata Cortés

· Víctor Hugo Puchi Acuña · Humberto Fischer Llop · Claudio Fischer Llop · Pablo Aguilera Marín

Supplies of smolts and processing plant processing services

93.0000%

11,238

29,945

10,032

8.4%

Agustín Ugalde Preuss

· Víctor Hugo Puchi Acuña · Jorge Allende Zañartu · Humberto Fischer Llop · Alberto Claro Vial · Alfonso Márquez de la Plata Cortés

Supplies of smolts and processing plant processing services

100.0000%

27,632

-1,159

-2,450

4.7%

Alfonso Márquez de la Plata Cortés

· Víctor Hugo Puchi Acuña · Mario Puchi Acuña · Humberto Fischer Llop · Claudio Fischer Llop · Alfonso Márquez de la Plata Cortés

Company

Description

Corporate purpose

I. Production of Salmonids Antarfish S.A.

This company provides administrative services and its subsidiaries are i) Servicios Aguas Claras S.A., ii) Procesadora Aguas Claras Ltda., which has a processing plant in Calbuco; and iii) Inversiones Antarfish Ltda, parent, in turn, of Aguas Claras S.A. and Antarfood S.A. The latter is a processing plant in Chonchi on the Island of Chiloé.

Extracting, fishing or hunting, raising, growing, capturing, freezing, refrigerating, preserving, preparing, reducing, transforming, exploiting, selling and distributing in any way all kinds of beings and organisms whose normal living medium is water; preparing and processing fishmeal and fish oil and their by-products; exploitation of the fishing industry as a whole and its by-products; manufacturing preserves and other products for consumption or industrial application; and, in general, exploitation, industrialization and use of all kinds of products and by-products of the marine resources and all lines of business related indirectly or directly to the above purposes.

AquaChile Inc.

Subsidiary incorporated in Miami, USA, and devoted to marketing and selling the products of Empresas AquaChile S.A. and its subsidiaries in the USA.

Selling and distributing products

This company is headquartered in Costa Rica, and, through its subsidiaries, it has participated in the Tilapia industry for more than 25 years. This company’s business strategy is focused on supplying fresh Tilapia to the large supermarket chains, distributors and restaurant chains in the USA. The activities carried out through the companies are complementary: Aquacorporación Internacional S.A. produces Tilapia on its own farms in Cañas. The Tilapia is processed by Terrapez S.A. in its own facilities also located in Cañas. Most of the production is sold to RFA, Inc, a marketing company, which sells the products throughout the USA and Canada. Administración de Acuicultura S.A. provides administrative services for the various companies of Grupo ACI S.A. and Acuapanamá S.A. The latter was incorporated in 2009 to grow and export Tilapia in that country

Trade, tourism, agriculture, aquaculture, forestry and any other profitable activity, without any limitations other than those stipulated in the law, being authorized as a result to purchase, sell, mortgage, pledge and own and dispose of in any other way all kinds of movable and immovable property, rights in rem and personal rights

II. Production of Tilapia Grupo ACI S.A.

III. Production of Fish Feed for Salmon Alitec Pargua S.A.

This is the company through which AquaChile, in partnership with Biomar, the leading company in the world in animal nutrition, produces fish feed in Pargua, Los Lagos Region, Chile. The plant has the capacity to produce 126,000 tons of fish feed per year

Preparation, production, development and processing of all kind of fish feed in the in the company’s plant in Pargua, community of Calbuco, Los Lagos Region, for subsequent sale, distribution and marketing of such products to its shareholders and related companies; and perform and enter into all kinds of acts and contracts designed to fulfill the corporate purpose.

Main contracts with the parent

Direct and indirect interests

Subscribed and Paid-in Capital (US$ thousands)

Net Equity (US$ thousands)

Profits (US$ thousands)

Proportion of total assets of the Parent that it represents

Legal Representative / Administrator

Board of Directors / Management

Provider of administrative services

100.0000%

925

26,117

16,276

14.1%

Agustín Ugalde Preuss

· Humberto Fischer Llop · Mario Puchi Acuña · Víctor Hugo Puchi Acuña · Claudio Fischer Llop · Alfonso Márquez de la Plata Cortés

Sale and marketing of finished products

100.0000%

200

1,820

0.6%

Gastón Dupré Huidobro

· Víctor Hugo Puchi Acuña · Humberto Fischer Llop · Alfonso Márquez de la Plata Cortés

79.95857%

6,169

46,773

2,907

7.6%

Jorge Montero

· Humberto Fischer Llop · Alfonso Márquez de la Plata Cortés · Gastón Dupré Pinto · Ricardo Castro Pinto · Carlos Enrique González Pinto

50.0000%

9,936

16,077

381

8.3%

María Cecilia Martínez Bayer

· Humberto Fischer Llop · Víctor Hugo Puchi Acuña · Felipe Ureta Vicuña · Carlos Díaz Verdugo · Alfonso Márquez de la Plata Cortés

Supply of fish feed

Figures in thousands of US$

Empresas AquaChile S.A. (Individual) 2011

InversiOnES Salmones Australes Ltda. 2011

Summarized Consolidated Statement of Financial Position Total current assets

380,938

133,854

Total noncurrent assets

289,461

210,302

Total Assets

670,399

344,156

37,980

186,831

Total noncurrent liabilities

202,706

32,549

Total Liabilities

240,686

219,380

429,713

118,656

6,120

429,713

124,776

670,399

344,156

189,851

244,305

-144,878

-203,201

44,973

41,103

-44,264

-21,105

Fair value of annual biological assets

42,848

27,413

Gross Earnings

43,557

47,412

Administration expenses and distribution costs

-7,364

-7,455

1,328

392

-10,013

-3,754

31,554

-1,033

Income tax expense

-5,915

-8,228

Profit (loss)

53,147

27,333

Profit (loss) attributable to majority interests

53,147

26,455

Profit (loss) attributable to minority interests

878

Total current liabilities

Shareholders’ Equity Minority interests Total Shareholders’ Equity Total liabilities and shareholders’ equity

Consolidated Comprehesive Income Statement by Function Income from regular activities Cost of Sales Gross Earnings pre fair value Fair value of harvested and sold biological assets

Financial income Financial cost Otros income / expenses

(1)

“ Other income, by function” plus “Other expenses, by function” plus “Exchange differences” plus “Results by adjustment units”

Statement fo Indirect Cash Flow

Cash flow from (Funds used in) operational activities

-93,080

33,056

Cash flow from (Funds used in) investment activities

-82,033

-25,019

Cash flow from (Funds used in) financing activities

252,047

-2,400

Net increase (decrease) in cash and cash equivalents

76,934

5,637

Year-end cash and cash equivalents

82,748

19,942

Grupo ACI S.A. 2011

Alitec Pargua S.A. 2011

AquaChile Inc. 2011

26,347

53,267

5,076

33,465

16,372

59,811

69,639

5,081

13,024

52,246

3,261

5,653

1,316

18,678

53,562

3,261

41,134

16,077

1,820

41,134

16,077

1,820

59,811

69,639

5,081

63,665

175,264

49,726

-55,969

-172,073

-48,901

7,696

3,191

825

7,696

3,191

825

-4,710

-2,477

-761

-104

-156

-3

-140

-101

-9

2,863

381

2,863

381

980

6,194

1,239

-8,089

-328

4,056

-1,085

-3,053

4,727

1,245

4,105

5,856

1,247

ESSENTIAL

OR RELEVANT

FACTS FROM THE

YEAR

ESSENTIAL OR RELEVANT FACTS FROM THE YEAR On March 11, 2011, the Extraordinary

On May 6 , 2011, the subsidiary Grupo

The debtor companies decided – on

the capital increase agreed to in the

signed a preliminary agreement with

Tranche B of the new renegotiated debt

of December 17, 2010 null and void and

Industriales Bauprés Limitada to build

Tranche B then became a line of credit

capital of ThUS$ 236,581, divided into

Guanacaste, Costa Rica, in order to take

it appropriate to use it, which use may

par-value shares.

generated by the production process

all of the banks or one or some of them,

The Company Board Meeting held on

On May 19 , 2011, AquaChile reported as an

company used part of the line of credit

shareholders to a General Ordinary

million from its Initial Public Offering. The

million.

BanChile Inversiones, as the IPO agents; it

On July 21, 2011, the company reported

was registered in the Securities Register

share for the 387 million shares offered.

it to develop an innovative nutritional

Insurance under No. 1.069, together with

On May 24, 2011, AquaChile reported

need for fish meal and fish oil in the

shares. It was also registered voluntarily

the process of offering the cash shares

the markets for emerging companies

company having received the respective

incorporation into the diet of a new,

Exchanges. On that same date, the issue

the Santiago Stock Exchange, by means

developed by DuPont, which, because

of the same, single series was registered

Auction Sale”. 387,000,000 cash shares of

used in the feed for other species. It is

per share of Ch$ 453.

while it is fermenting. Omega 3 is a fatty

Meeting was held and it agreed to renew

On June 24, 2011, AquaChile reported

Salmon and for the human heart. The

company and elect the members for a

of the renegotiation of its liabilities

by more than 55 patents, since it is highly

Directors being made up of the following

million of the total debt from the loan

new diet, created by AquaChile and

(Chairman);

Llop;

into on September 9, 2007 between

to produce one kilo of Salmon, which is

Jorge Allende Zañartu; Alejandro Pérez

subsidiaries and the respective Creditor

the diet, while maintaining the same high

Shareholders’ Meeting agreed to declare

ACI S.A. of Empresas AquaChile S.A.

the same date – to repay and credit to

Extraordinary

Meeting

Spécialités Pet Food S.A.S. and Inversiones

the sum of US$ 70.2 million, so that

agreed to an increase in the company’s

a value-added plant in the province of

available whenever the Debtors deemed

1,200,000,000 ordinary, registered, no-

advantage of the Tilapia organic disposal

be distributed on a pro rata basis among

Shareholders’

March 30, 2011 agreed to summon the

essential fact that it had collected US$ 373

Shareholders’ Meeting on April 29 , 2011.

operation was headed by IM Trust and

On April 12, 2011, Empresas AquaChile S.A.

was undertaken at a price of Ch$ 453 per

of the Superintendency of Securities and

available, so the debt increased by US$ 10

its alliance with DuPont, which enabled

strategy that dramatically reduces the

770,000,000 fully subscribed and paid-in

as an essential fact the termination of

Salmon diet.

so that its shares could be traded in

of Empresas Aquachile S.A., with the

This change was possible due to the

regulated

Stock

payment for the offering made through

revolutionary,

of 430,000,000 no-par-value cash shares

of a mechanism known as “Order Book

of its beneficial features, could also be

in the Securities Register.

the company were placed at a single price

a type of yeast that generates Omega 3

the

country’s

On April 29, the Ordinary Shareholders’

as appropriate. On August 24, 2011, the

transforming

product

acid that is necessary for the health of

the entire Board of Directors of the

as an essential fact the termination

DuPont Omega 3 technology is covered

new statutory period, with the Board of

and

innovative metabolic engineering. The

members: Víctor Hugo Puchi Acuña

reprogramming

entered

DuPont, requires one kilo of wild fish

Mario Puchi Acuña; Claudio Fischer Llop;

Empresas AquaChile S.A. and its debtor

equivalent to 75 per cent less fish oil in

Rodríguez and Vicente Pérez Fuentes.

Banks.

levels of Omega 3 as the Salmon. This new

Humberto

Fischer

the prepayment

of US$ 163

agreement

generation of Salmon is also produced in

contents of the Information Management

contribute to the corporate interest, with

Salmon per ton of water), while taking care

issued

line with those prevailing in the market.

environment and its relationship with the

General Regulation 30. An updated

text of the approved policy was attached

that we refer to as harmonious. This new

website www.aquachile.com and the

shareholders and general public on the

implemented successfully in AquaChile’s

Puerto Montt.

Initially, this Salmon, whose commercial

On September 1, 2011, the Board Meeting

Jorge Allende Zañartu submitted his

towns of USA, with the first harvest having

with the provisions of letter b) of the final

Empresas AquaChile S.A., in addition to

Corporations, approved the Habitualness

contribution

General Regulation 270 of December 31,

with related companies are considered

performed since he joined AquaChile. On

211, the Board Meeting of Empresas

of business of Empresas AquaChile S.A.

designated Mr. Piero Solari Donaggio as

very low density growing cages, (12 kilos of

Manual, according to the regulations

their price, terms and conditions being in

of details that minimize the effects on the

Securities and Insurance, pursuant to

It was also reported that the complete

surrounding environment, in a concept

version of this Manual is available in our

and also that it was available for the

approach to Salmon aquaculture has been

company’s offices at Cardonal s/n Lot B,

company’s website, www.aquachile.com.

fish farms, in the seas of Chilean Patagonia.

the

Superintendency

On September 29, 2011, the Director

of Empresas AquaChile S.A., in accordance

resignation. The Board of Directors of

paragraph of Art. 147 of Law 8.046 on

thanking Mr. Allende for his personal

On June 23, 2011, in accordance with

Policy,

operations

especially acknowledged the work he had

2009, which repealed General Regulation

ordinary in relation to the corporate line

that same occasion, the Board of Directors

AquaChile S.A. agreed to and approved the

and their purpose is considered to be to

his replacement.

brand is Verlasso, has been introduced in 3 taken place in September, 2011.

whereby

certain

and

commitment, also

FINANCIAL

INFORMATION

FINANCIAL INFORMATION Reasoned Analysis of the Financial Statements as of December 31, 2011 OUTSTANDING EVENTS FOR THE PERIOD Empresas

AquaChile

S.A.

and

its

subsidiaries grow, process and sell Salmon, Sea Trout and Tilapia to various markets. Through its subsidiaries, it

also (i) carries out genetic research for

the aquacultural industry; (ii) produces

Salmon and Sea Trout eggs and smolts; and (iii) produces fish feed for the salmon industry.

Income from the consolidated sales

of Empresas AquaChile was US$ 501.2 million in 2011, showing an increase of 29% in relation to the prior year.

At an operational level the EBITDA pre fair

value adjustment was US$ 95.4 million, 65% more than the amount recorded in 2010.

The profits of Empresas AquaChile in 2011 were US$ 54.9 million, which represents

a 6% decrease in relation to the US$ 58.1 million recorded in 2010.

The Salmon and Sea Trout business performed well in 2011, which is explained

the

higher

margins

a lower EBIT result of US$ 2.9 million – an 18% decrease in relation to 2010.

recorded as a result of the favorable

The company’s financial debt was US$

the first half of the year, the increase

compared to US$ 417.6 million as of

price scenario for all of the species in

in the volume of harvests of Atlantic Salmon and Pacific Salmon, and the

good production results achieved in all of the company’s species. All of

the above contributed to obtaining a significantly higher EBIT pre fair value

adjustment compared to the prior

year, with the Salmon segment’s being

US$ 73.2 million, which means a 95% increase in relation to 2010.

196.7 million as of December 31, 2011, December 31, 2010. This decrease is due basically to the prepayment of credits

of US$ 163 million from the liability reprogramming agreement of September 7, 2009 and the additional payment of US$ 70 million of the new credit contract

signed on June 24, 2011. On August 24, 2011, the company used part of the line of credit available, so the debt increased by US$ 10 million.

The Tilapia business earned less income,

Cash and cash equivalent at 2011 year-

the end of 2010, as a result of the lower

financial debt (financial debt less cash

mainly due to sowing less fish towards

number of fries available specifically in

the first stages of production. The above caused a drop of 8% in the volume of

sales compared to 2010, which produced

end was US$ 113.9 million. AquaChile’s net

and cash equivalent) as of December 31, 2011 was US$ 82.8 million, which is US$ 306.4 million less compared to its net financial debt as of December 31, 2010.

EBITDA Pre FV Adj. (hereinafter EBITDA): Income from ordinary activities less Costs to sell (i.e. Gross pre fair value Earnings), less administrative expenses, less Distribution costs, plus adjustment for depreciation and amortization expenses. All of these figures are obtained directly from the Company’s Statement of Income and the Statement of Cash Flows. EBIT Pre FV Adj. (hereinafter EBIT): Income from ordinary activities less Costs to sell (i.e. Gross pre fair value Earnings), less administrative expenses, less Distribution costs. All of these figures are obtained directly from the Company’s Statement of Income and the Statement of Cash Flows

(7)

(8)

ANALYSIS OF RESULTS Table 1 shows the main components of the consolidated Statement of Income of Empresas AquaChile S.A. Table 1 • Consolidated Income Statement FIGURES IN THOUSANDS OF US$

2010

∆QoQ

∆YoY

165,740

131,294

501,151

387,841

26%

29%

-126,364

-90,671

-384,854

-309,524

39%

24%

Operational margin

39,376

40,623

116,298

78,317

-3%

48%

Other cost and operating expenses (2)

-6,421

-11,326

-20,944

-20,593

-43%

2% 65%

Sales Operational cost (1)

4Q11

4Q10

2011

EBITDA pre FV adj.

32,955

29,297

95,355

57,724

12%

Depreciation & Amortization

-4,824

-7,939

-19,273

-16,587

-39%

16%

EBIT pre FV adj.

28,131

21,358

76,081

41,137

32%

85%

Net revenues from biological assets (3) EBIT post FV adj. Financial expenses

18,278

15,239

4,893

9,290

20%

-47%

46,409

36,597

80,974

50,427

27%

61%

-1,047

-1,532

-13,972

-11,521

-32%

21%

Financial income

333

1,632

630

800%

159%

-243

1,931

450

2,201

-113%

-80%

Income taxes

-8,313

16,679

-14,209

16,356

-150%

-187%

Net income

37,137

53,713

54,876

58,093

-31%

-6%

Other non operating items (4)

“Costs to sell” deducting “Adjustment for depreciation and amortization expenses” “Distribution costs” plus “Administrative expenses” (3) “Fair Value biological assets harvested and sold” plus “Fair Value biological assets for the year” (See Note 11 Financial Statements. Biological Assets) (4) “Other income, by function” plus “Other expenses, by function” plus “Exchange differences” plus “Profit and loss from adjustment units” (1)

SOURCE: AquaChile

(2)

Empresas AquaChile S.A is the largest

volumes of sales of Atlantic Salmon and

is valued at fair value under IFRS, and, to

the company is also a large producer of

It must be pointed out that in 2010 the

price, which is obtained from the most

Salmon and Sea Trout producer in Chile; Tilapia in Costa Rica and Panama. It is

vertically integrated from the genetic development of the fish and production of the fish feed to commercialize the production, in other words, from

producing the eggs to commercializing and distributing the fish. This structure

favors control over the strategic resources,

the higher prices in all of the species. lower sales are the result of the ISA virus, which generated smaller harvests of

Atlantic Salmon during that year. As a

result, the EBITDA margin (EBITDA over ordinary income) recorded is 19.0% as of December 31, 2011, compared to 14.9% recorded in 2010.

especially in the fresh water stage, and it

(*): In

each of the Salmon production stages.

uses the EBIT pre fair value adjustments

also allows greater value to be creased in

As of December 31, 2011, AquaChile’s sales grew 29% compared to 2010, while its operating costs increased by 24%. As a

result, the EBIT pre fair value adjustments increased by 85% to US$ 76.1 million.

The consolidated EBITDA pre fair value adjustments was US$95.4 million as of December 2011, 65% more than the

US$57.7 million in 2010. This result is explained mainly by an increase in income from sales, especially the greater

order

performance

measure

under

IFRS,

financial

AquaChile

parameter. The fair value adjustments

of the fish biomass stem from the IFRS standard to value the biomass at

fair value. Changes in prices and the

that end, AquaChile considers a market

recent sales made by the company in the

previous month, and/or conservatively using the spot prices observed in the

market that are susceptible to being applied to future sales. Similarly, in these estimates AquaChile considers -conservatively- the most basic product

obtained from the processing plants, in other words, gutted HON (Head ON) fish for Atlantic Salmon and Headed and Gutted (HG) for Sea Trout and Pacific

Salmon, without considering the prices of a mix of products with greater value added.

composition of the biomass during the

It is important to point out that, among

AquaChile reported its EBIT prior to

the company includes Pacific or Coho

period may have an impact on its value. the fair value adjustments to show the

performance of its operations during the period.

It is important to stress that the fish biomass that is at marketable weights

the species of fish that it grows and sells, Salmon, which is extremely seasonal, because it is released in the sea normally from November to March of each year

and harvested from October to February, when it achieves its optimum selling

weights. However, towards the end of

December or the fourth quarter of each

US$4.9 million in 2011, compared to the

average weights of more than 2.5 Kg

values are the net gain in the valuation

year, on-growing fish very often achieve WFE, which, according to the company’s

policies, classify to be valued at fair value,

gain of US$ 9.3 million in 2010. These

million, which represents a 6% decrease in relation to the same period in 2010.

due to the natural growth of the fish biomass. (See Note 11 to the Consolidated

SALES ANALYSIS

the biomass.

Other income and expenses presents a

AquaChile

The above means that fish biomass

which is explained mainly by the higher

Ordinary income accumulated as of

thereby generating an effect on results solely as a result of the natural growth of

are valued at market prices and, when

they are sold in the following periods, they reflect a revalued sales cost with a subsequent effect on the operating margin.

The net effect of the fair value adjustment

of the biomass resulted in a gain of

Financial Statements: Biological Assets)

characterized

its

higher loss in relation to the prior period,

diversification of products and markets.

financial expense, associated with the

December 31, 2011 was US$ 501.2 million,

greater accrual of interest on the debt

under IFRS when applying the effective rate and the increase in the balance of

the “Income tax expense” account, as a

29%

than

the

accumulated

ordinary income for the same period in 2010. This increase is due mainly to a

result of the increase in profits.

36% growth in valued sales of Salmon

The company’s profits were US$ 54.9

valued sales of fish feed.

and Sea Trout and a 44% growth in

FIGURE 1 DISTRIBUTION OF CONSOLIDATED SALES BY BUSINESS AREA ATLANTIC SALMON

FIGURES IN MILLONES OF US$

SEA TROUT

501

PACIFIC SALMON TILAPIA FISH FEED OTHERS

388

15%

36% 137

140

27% 24%

108

93 52 68 30

FIGURES IN %

2010

21%

14%

18%

20%

2011

2010

2011 SOURCE: AQUACHILE

Figure 1 shows that, comparing the

since they show a growth in sales lower

In 2011, the Salmon and Sea Trout

accumulated period as of December

than the growth in the sales of Atlantic

businesses contributed together 64% of

31, 2011 with the same period in 2010,

Salmon and fish feed.

the total income from finished products

the relative contribution of the sales of

sold to third parties.

Atlantic Salmon increased from 1% to 15%,

In 2011, the businesses increased their

due mainly to the recovery of the volumes

valued sales, except for Sea Trout and

Figure 2 shows an analysis of the

of production of this species after the ISA

Tilapia. The valued increase in sales of

variations in the consolidated sale,

virus. However, there was a drop in the

Atlantic Salmon, Pacific Salmon and Fish

showing the effects of the price and

relative contribution of the other species,

Feed stand out.

volume of each business unit (species).

Figure 2 Analysis of the variation in consolidated sales (price and volume effect) Figures in millions of US$ FIGURE 2 • ANALYSIS OF THE VARIATION IN CONSOLIDATED SALES (PRICE AND VOLUME EFFECT) ∆ PRICE

∆ VOLUME

SALES 2010

ATLANTIC SALMON

SEA TROUT 21

72 388

PACIFIC SALMON 4

TILAPIA 0

-23

FISH FEED 30

SALES 2011 501

OTHER INCOMES 4

-4

SOURCE: AQUACHILE

SEGMENT ANALYSIS The Atlantic Salmon business increased

the price of sale of the mix. The EBIT Pre FV

its income by 1,624% (US$ 72.5 million)

The Sea Trout business decreased its

Adj. showed an increase of 60% compared

compared

the

income by 2% (US$ 3.0 million) compared

to 2010, which is explained by the high

recovery in the volumes of production

to 2010, as a result of a 15% decrease (4,360

margins recorded as a result of the

of this species after the ISA virus, which

tons WFE) in the volumes of sales of this

increase in the average price of the mix,

considers an increase of 1452% (13,333

species. This smaller volume of sales

the increase in the volumes of sales, and

tons WFE) in the volumes of sale. The

was offset by an increase in the average

also the specie’s good production results.

average price of the mix in 2011 increased

price of the mix, which increased by 15%

At unit level, the EBIT Pre FV Adj. / Kg WFE

by 11% compared to the previous year,

compared to the previous year. For its

was US$ 1.13 / Kg WFE, which represented

due to the small volumes of sales and the

part, the EBIT Pre FV Adj. increased by 47%,

an increase of 44% compared to 2010.

harvests under the optimum commercial

which is explained by the high margins

weight and size (caliber) experienced

recorded as a result of the increase in the

The Tilapia business decreased its income

by the company in 2010. For its part, the

average price of the mix, as well as the

by 9% (US$ 4.9 million) compared to 2010,

EBIT Pre FV Adj increased by US$ 15.4

specie’s good production results. At unit

driven by a decrease of 8% (1,601 tons WFE)

million, which is explained basically by

level, the EBIT Pre FV Adj. / Kg WFE was

in its volumes of sales. This decrease is due

the increase in the volume of sales, the

US$ 1.18 / Kg WFE, which represents an

to the smaller sowing of fish due to the

high margins recorded as a result of the

increase of 72% compared to 2010.

smaller availability of fries specifically in

2010, driven

increase in the average price of the mix,

the prior stages of production. For its part,

as well as the specie’s good production

The Pacific or Coho Salmon business

the EBIT Pre FV Adj. WFE decreased 18%

results. At unit level, the EBIT Pre FV Adj.

increased its income by 16% (US$ 14.7

compared to 2010, reaching US$2.9 million.

/ Kg WFE was US$ 1.03 / Kg WFE, which

million) compared to 2010, driven by

At unit level, he EBIT Pre FV Adj. WFE was

compares positively to the US$ -0.83 / Kg

an increase of 11% (2,513 tons WFE) in its

US$ 0.17 / Kg WFE, which represented a

WFE reached in 2010.

volumes of sales and an increase of 4% in

decrease of 11% compared to 2010.

TABLE 2 · STATEMENT OF FINANCIAL SITUATION of Statement of Financial Situation 4Q11

Atlantic Salmon Sales volume

WFE Tons

Sales

Average price

5,434

US$ Th

25,594

US$ Th

3,684

US$ / Kg WFE

EBIT

EBIT / Kg WFE

US$ / Kg WFE

Sales volume

WFE Tons

Average price

US$ / Kg WFE

EBIT / Kg WFE

US$ / Kg WFE

Sales volume

WFE Tons

Average price

US$ / Kg WFE

Sea Trout Sales

EBIT

Pacific Salmon Sales EBIT

EBIT / Kg WFE

11095%

14,619

-766

15140%

2.67

0.68

0.28

6,437

5.40 1.03

25,366

4.86

-0.83

29,726

76%

5,251

29,816

20,346

54%

25,473

22,960

-1%

1.20

13,943

0.82

14,074

1.18

US$ Th

60,049

57,669

107,525

US$ Th

16,229

16,523

28,755

4.31

US$ / Kg WFE

1.16

3,697

US$ / Kg WFE

1.17

3,722

4.22

1.13

17,240

0.68

92,845

18,841

-1%

2.78

0.78

-441

2,892

3,542

0.17

11%

60%

115

-0.12

72%

-2%

4.04

52,432

0.03

47%

18,015

47,548 2.76

15%

47%

16%

9,700 2.61

-2%

12%

9,778 2.64

US$ Th

4.10

4.69

-15%

8,102

5.38

11%

US$ Th

4.80

1452%

1624%

18%

5.38

∆ YoY

140%

139,512

Average price EBIT / Kg WFE

4,464

136,549

US$ Th

Total

6257%

76,944

30,911

WFE Tons

EBIT

918

∆ QoQ

229

4.71

6,754

14,251

2010

36,356

Sales volume Sales

2011

US$ Th

US$ / Kg WFE

Tilapia

4Q10

0.19

-1%

44% -8%

-9%

-18%

-1%

-11%

Sales volume

WFE Tons

29,829

24,319

82,329

72,445

23%

14%

Sales

US$ Th

131,778

98,508

368,565

289,254

34%

27%

Average price

US$ / Kg WFE

EBIT

US$ Th

EBIT / Kg WFE

US$ / Kg WFE

4.42

4.05

4.48

3.99

12%

28,131

21,358

76,081

41,137

32%

85%

0.94

0.88

0.92

0.57

63% SOURCE: AquaChile

STATEMENT OF FINANCIAL SITUATION Table 3 • Summary of Statement of Financial Situation Figures in thousands of US$

2011

Current assets

2010

437,132

266,315

Non current assets

389,373

305,061

Total assets

826,505

571,376

Current liabilities

130,969

92,552

Non current liabilities

244,439

446,852

Total liabilities

375,408

539,404

Equity

429,713

12,161

21,384

19,811

826,505

571,376

Minority interest Total Equity and Liabilities

SOURCE: AquaChile

The main variations noted in the

US$ 255 million, 45% more in relation

assets in relation to December 31, 2010

situation as of December 31, 2011,

increase of US$ 170.8 in Current assets

increased by US$ 85.5 million, explained

consolidated

statement

financial

compared to December 31, 2010, are summarized below:

The total assets show an increase of

to December 31, 2010, explained by an

and an increase of US$ 84.3 million in non-current assets.

The main variation in the Current

is in “Cash and cash equivalent”, which mainly by the collection associated with

the process of going public and offering shares on the Santiago Stock Exchange in

May, 2011, which collected US$ 373 million.

This increase is also explained by i) the

2011, Empresas AquaChile S.A. and its

- Sub Tranche C-Two: US$ 22.6 million

increase of US$ 62.4 in Biological assets

debtor subsidiaries proceeded to pre-pay

maturing at 4 years bullet with

and Inventories due to the higher level

US$ 163 million of their debt with their

payment of six-monthly interest.

of production; and ii) the increase of US$

participating Creditor Banks according to

13.6 million in Trade and other receivables

the Liability Reprogramming agreement

due to the company’s higher levels of

of September 7 , 2009.

b. The interest rate applied to Tranche A is the rate set every six months based

sales. The debtor companies decided – on

on the average cost of the funds of the

The increase in Non-current assets is

the same date – to repay and credit

creditor banks, plus an annual spread

explained mainly by i) the increase of

US$ 70 million to Tranche B of the new

of 1.2%.

US$10.7 million in Other non-current

renegotiated debt, so that Tranche B

financial

the

then became a line of credit available for

The interest rate applied to the Tranche

investment in Sociedad Fiordo Austral

when the Debtors deemed it appropriate

can be calculated in two ways: The rate

S.A. by the subsidiary AquaChile S.A.,

to use it. This use could be on a pro rata

offered by whoever has been awarded

equivalent to a 6.12% ownership interest;

basis to each of the banks or to one or

the requested loan, or the average cost

ii) the increase of US$26.2 million in

some of them, as appropriate. On August

of the funds plus an annual spread

Biological assets due to the increased level

24 , 2011, the company used part of the

of 1.45% if the disbursement of this

of production; iii) the increase of US$ 27.5

line of credit available, whereby the debt

tranche is made on a pro rata basis

million in Property, plant and equipment

increased by US$ 10 million.

among the participating creditors.

assets,

arising

from

due to the higher level of investments needed to sustain the company’s growth

In the same agreement, the debtor

The interest rate of Sub Tranche C-One

plan; iv) the increase of US$ 13.2 million in

companies made a novation of the

is a fixed rate of 3.2% per annum

Deferred tax assets as a result of the tax

credits, concentrating all of the debts of

through to January 25, 2013 and from

effect of the revaluation of the fair value

this contract in Empresas AquaChile S.A.

then on Libor plus a spread of 2.5% per

of the biomass subject to revaluation

and Salmones Chiloé S.A., which became

year.

during the period; and v) the increase

the new Debtors. The interest rate of the Sub Tranche

of US$4.2 million in equity accounted investments due to the investment made

In sum, the main refinancing agreements

C-Two is a fixed rate of 3.2% per annum

by Grupo ACI together with Biomar (US$3

are as follows:

through to January 25, 2013; and from

million) for the construction of fish feed

then on Libor plus an annual spread of

plant for Tilapia in Costa Rica and the

2.5%.

investment made by Empresas AquaChile S.A. in Salmones Chaicas S.A. (US$ 1.2

a. The novated, reprogrammed debt is divided into 3 tranches: A-B and C: c. Certain financial covenants have also

million), equivalent to an ownership interest of 18.31% in that company.

· Tranche A: US$ 118 million with a

been established.

maturity at 7 years with six-monthly The variation in Total liabilities is explained mainly by an increase of

payment of interest and six-monthly amortization as of December, 2013.

These loans consider the fulfillment of some financial covenants calculated

US$38.4 million in Current liabilities and

· Tranche B: A financing commitment

the decrease of US$202.4 million in Non-

(line of credit) available for US$ 70

Statements of Empresas AquaChile

current liabilities.

million, which matures at 4 years,

S.A. as of December 31, 2011 and at

which may be extended. To date, US$ 10

March thirty first, June thirtieth,

million have been used.

September thirtieth and December

The increase in Current liabilities is explained mainly by the increase of US$ 31 million in Trade and other payables, due

· Tranche C: This tranche is divided into two sub-tranches:

the

Consolidated

Financial

thirty first of the following years. They involve maintaining a minimum net

- Sub Tranche C-One: US$ 31.7 million

financial leverage, a minimum net

maturing at 7 years with six-monthly

financial expenses coverage and a net

Non-current liabilities have decreased

payment of interest and six-monthly

financial debt to maximum EBITDA

by US$ 202.4 million. In fact, on June 24,

amortization as of December, 2013.

ratio.

to the increase in productive operations.

Table 4 • Financial Covenants Covenants

2011**

2012

2013

2014

2015

Financial Leverage

1.25x

1.20x

1.10x

1.0x

Interest Expenses Coverage2

4.5x

Net Financial Debt / EBITDA3

2.5x

2.2x

2.0x

2016 AL 2018

1.75x SOURCE: AquaChile

(Total Current Liabilities plus Total Non-current Liabilities less Cash and Cash Equivalent) / (Total Equity) EBITDA / (Financial Costs less Financial Income) (Other Current Financial Liabilities + Other Non-current Financial Liabilities less Cash and Cash Equivalent) / EBITDA. * Figures measured on a quarterly basis over the last twelve months. ** Measured at December 31, 2011.

(1)

(2)

(3)

d. The contract stipulates the possibilities

h. - With this new credit agreement,

as well as also certain obligations to

Empresas AquaChile S.A., which the

of voluntary advanced amortizations, report, to do and not to do, typical of this kind of agreement favoring the participating banks.

e. Likewise, 99 aquacultural licenses of Empresas AquaChile S.A.; Aguas Claras S.A.; Salmones Maullín Ltda.; AquaChile

S.A.; and Salmones Chiloé S.A. were furnished

pledges,

becoming

mortgages and releasing all of the

other pledges made on sea licenses in the previous liability reprogramming agreement of September 7 , 2009. f. Aguas

Claras

S.A. and

Salmones

Maullín Ltda. became reciprocal cosureties and joint and several debtors of the Banks, to guarantee fulfillment

of the obligations assumed by the Debtors under the terms, conditions and with the limitations stipulated in

the Agreement. (It must be clarified that Salmones Chiloé S.A. did not

become a surety and joint and several

debtor of the other related companies, rather the purpose of the guarantees

it furnished to the Creditors is to guarantee its own obligations, not those of all of the Debtors).

g. A pledge was furnished on the shares

shareholders had pledged previously,

the shares can be traded in markets for

vessels and naval artifacts and on the trademarks that they owned, all made out to the creditors, which had been

furnished to guarantee fulfillment of

all of the obligations assumed by the

debtors in the liability reprogramming agreement of September 7 , 2009.

As of December 31, 2011, the company

and the debtor companies have fully

fulfilled the obligations stipulated

and have maintained all of their substantial aspects of the declarations and sureties stipulated in the Liability Reprogramming Agreement. The

company’s

increased

total

US$

equity

417.6

has

million

obligations assumed by them.

shares in the securities register, so that emerging companies.

· Reduction in the number of shares

into which the capital is divided, i.e.

12,700,000,000

registered,

no-

par-value shares of a single series, to 1,270,000,000 registered, no-parvalue shares of which 770,000,000

shares are subscribed and paid in by

the shareholders. Likewise, it agreed that this new number of shares

into which the company is divided

will be distributed among the same shareholders at a ratio of one for every

10 shares they hold. The same holds

true for those shares whose issue, subscription and payment are pending.

compared to its total equity as of

· Declare the increase in capital agreed

basically by the increase in capital

Meeting of January 19, 2009 null and

December 31, 2010, which is explained associated with the company’s IPO process on May 19, 2011, from which

the company collected US$ 373 million, with 32.2% of the ownership of the company going public.

Extraordinary Shareholders’ Meeting

to guarantee fulfillment of all of the

its by-laws.

water use rights, the pledge on the

93% of the shares of Salmones Chiloé Aquasan S.A., all to the Creditor Banks

of Securities and Insurance, amending

· Registration of the company and its

mortgages on all of the real estate and

It is important in that regard to point

S.A.; 60% of the shares of Piscicultura

to inspection by the Superintendency

were lifted, together with lifting the

of AquaChile S.A.; Salmones Maullín

S.A.; Aguas Claras S.A.; Antarfish S.A.;

the pledges on the shares issued by

out that, on December 17, 2010, the agreed to the following:

· That the company will be subject to the

standards governing corporations and

to in the Extraordinary Shareholders’ void and agree to a new capital increase of US$ 124,997,583 distributed into

202,635,470 ordinary, registered, no-parvalue cash shares.

· Increase the capital stock and the issue of cash shares to go public on

the stock exchanges, agreeing to

an amendment to the by-laws. The agreed capital increase is for the issue of US$ 11,000,000 distributed into

110,000,000 ordinary, registered, nopar-value cash shares.

On March 11, 2011, the Extraordinary

it was registered voluntarily to be

On May 24, 2011, AquaChile reported

the capital increase agreed to in the

for emerging markets regulated by

of the process of offering the cash

Shareholders’ Meeting agreed to declare Extraordinary

Shareholders’

Meeting

of December 17, 2010 null and void and agreed to increase the stock capital of the company to ThUS$ 236,581, divided into

1,200,000,000 ordinary, registered, nopar-value shares.

On April 12, 2011, Empresas AquaChile S.A. was registered in the Securities

Securities and Insurance under No. 1.069, together with 770,000,000 fully

subscribed and paid-in shares. Likewise,

able to trade its shares in the markets

Chile’s stock exchanges. On that same date, it registered a capital increase of

430,000.000

no-par-value

cash

shares of the same, single series un the Securities Register under No. 920.

On May 19, 2011, AquaChile reported the collection of US$ 373 million as an

essential fact after going public. The

operation was headed by IM Trust and

as an essential fact the termination

shares of Empresas Aquachile S.A., with the company having received the

respective payment for the offering made through the Santiago Stock

Exchange, by means of a mechanism

known as “Order Book Auction Sale”. 387,000,000

cash

the

company were placed at a single price per share of Ch$ 453.

Banchile Inversiones, as the IPO agents,

The main financial indicators of the

the US$ 387 million shares offered.

situation are presented below:

and the price was Ch$453 per share for

consolidated

statement

financial

Table N°5 • Financial indicators of the statement of financial situation 2011

2010

LIQUIDITY INDEX Current liquidity

(times)

3.3

2.9

(times)

1.7

1.2

(times)

0.8

16.9

(times)

0.3

2.9

(times)

0.5

14.0

34.9%

17.2%

65.1%

82.8%

(times)

5.9

4.6

Total assets

ThUS$

826,505

571,376

Investments

ThUS$

55,505

11,162

Disposals

ThUS$

789

2,763

Inventory turnover

Times

2.0

2.3

(days)

180

156

(Current assets/Current liabilities) Acid Ratio (Available funds/Current liabilities) DEBT INDEX Debt ratio (Current liabilities + Non-current liabilities / Net equity) Short-term debt ratio (Current liabilities / Net equity) Long-term debt ratio (Non-current liabilities / net equity) Short-term debt portion (Current liabilities / Current liabilities + Non-current liabilities) Long-term debt portion (Non-current liabilities / Current liabilities + Non-current liabilities) Financial expense coverage (Results before interest and taxes) / Financial expenses ACTIVITY INDEX

(Annualized cost to sell / (Inventory + Average biological assets)) Permanence of inventories (Average inventory / Cost to sell *360) SOURCE: AquaChile

The Acid Ratio indicator reflects the

the company’s level of indebtedness to

Grupo ACI in Costa Rica, through a Joint

company’s

improve substantially. Furthermore, the

Venture with the Biomar Group, the

December 31, 2011, due to the share

distribution of the debt was changed,

investment of US$ 10.7 million made

offering of May 19 , 2011, which collected

reducing the long-term portion and

by AquaChile S.A. in Fiordo Austral S.A.,

US$ 373 million, making this indicator

increasing the short-term portion in

which is equivalent to a 6.12% interest

increase from 1.2 to 1.7 times.

relative terms.

in the latter company. The investment

greater

liquidity

in Salmones Chaicas S.A. does not As a result of the collection, a prepayment

The increase of US$ 44.3 million in

form part of this cash flow, since that

of US$ 163 million was made of the debt

investments stands out in the activity

investment

plus an additional payment of US$ 70

indicator. This includes the increase

contribution of assets for an equivalent

million of the restructured debt, as is

of US$ 13.7 million in non-controlling

value of a US$ 1.2 million, which, in turn,

explained in greater detail in Note 19 to

interests, which correspond to the

is equivalent to an 18.31% interest in

the Financial Statements. This enabled

investments of US$ 3 million made by

that company.

was

made

through

DESCRIPTION OF CASH FLOWS Table 6 • Net cash flows USD (000’s) Currency

2011

Cash flow from operations

2010

Variation

3,271

11,396

-8,125

Cash flow from investments

-61,319

-8,399

-52,920

Cash flow from financing

142,875

-3,285

146,160

Change in cash and cash equivalents in the period

85,481

-53

85,534

Final Cash and cash equivalents

113,897

28,416

85,481 SOURCE: AquaChile

The behavior of the main components

The

of the consolidated cash flows as of

negative cash flow of US$ 61.3 million

December 31, 2011, compared to December

as of December, 2011, explained by the

31, 2010, is as follows:

incorporation of investments of US$ 13.7

investing

million

activity

generated

non-controlling

interests,

As of December 31, 2011 the company

the net incorporation of US$ 41 million

presents a total positive net cash flow

in fixed assets and the loan of US$ 6.6

for the period of US$ 85.5 million. In the

million to related companies.

same period of the prior year, it recorded a negative cash flow of US$-0.05 million.

Financing activities generated a positive cash flow of US$ 142.9 million in 2011,

The operating activities as of December

which originate in the net collection of

31, 2011 generated a positive cash flow

US$ 363.8 million from the company’s

of US$ 3.3 million, less than the amount

Initial Public Offering on the stock

recorded in 2010, which was US$ 11.4

exchange, in the prepayment of loans

million.

worth US$ 237.4 million and the obtaining of loans worth US$ 16.4 million.

ANALYSIS OF THE PROFITS As of December 31, 2011, the company presents retained earnings of US$ 54.9 million, which is less than the figure recorded for the same period in 2010 (US$ 58.1 million). The company has not paid dividends over the last 4 years. Currently, the company records accumulated losses in its financial statements. The main profitability indicators are presented in Table 7.

Table 7 • Profitability indicators 2011

Profitability of equity

2010

5.7%

1.147.30%

7.9%

10.9%

0.047

0.075

n.a.

(Net profit / Average equity) Profitability of assets (Net profit / Average total assets) Earnings per share

US$ / Acción

Net profit / Number of subscribed and paid-in shares) Return on dividends

Dividends per share / Market price SOURCE: AquaChile

PRODUCTION INDICATORS The company presents a Salmonid harvest / Fish Farm in use ratio in 2011 of 1,818 tons WFE. The growing densities as of December 31 per species are as follows: i) Atlantic Salmon: 2.8 Kg / m3; ii) Pacific Salmon: 9.6 Kg / m3; and iii) Sea Trout: 5.1 Kg / m3. Furthermore, the observed survival rates in the closed groups in 2011 were as follows: i) Atlantic Salmon: 88%; ii) Pacific Salmon: 90%, and iii) Sea Trout: 81%. Table 8 • Production Indicators LIQUIDITY INDEX

2011

Salmonid harvests*

Tons WFE

67,260

Used fish farms

Nº

37.0

Salmonid harvests / Used fish farms

Tons WFE

1,818

Farming Density** Atlantic Salmon

Kg / m3

2.80

Pacific Salmon

Kg / m3

9.60

Sea trout

Kg / m3

5.10

Survival closed groups*** Atlantic Salmon

88%

Pacific Salmon

90%

Sea trout

81%

(*)

These are fish farms harvested in 2011 or in the process of being harvested in the year in question. The harvest of broodstock in the period is included. Density at December 31, 2011 Survival rate of closed groups of fish grown in 2011

(**) (***)

SOURCE: AquaChile

RISK FACTORS The

company,

its

assets

and

the

Although

Empresas

and

health department made up of veterinary

significant

doctors who implement the preventive

genetic

policy and monitor the sanitary aspects

of risks and contingencies that might

improvement studies, mass vaccination

of the fish populations and, in case of

possibly cause a negative effect on the

programs,

independent

zone

any disease, provide the appropriate

solvency of the company, its position in

management

systems,

health

treatment against it. To not do so would

the market or its financial position, and

monitoring, policies of low-density in the

constitute a risk to the population of fish

which must be considered when it comes

use of cages, and sanitary barriers that

and a risk to the Companyâ&#x20AC;&#x2122;s earnings.

to making investment decisions. The

help control and reduce these risks, it is

most relevant risks and contingencies are

not possible to rule out the appearance of

described below, without detriment to

new diseases or plagues that might affect

consumables

the possibility of there being additional

Salmon and/or Sea Trout production.

aquacultural industry where it carries

subsidiaries

have

out is business are exposed to a series

investments

AquaChile made

research,

fish

risks and contingencies that could just

Some of the most significant costs in

as equally have a negative effect on

III

the companyâ&#x20AC;&#x2122;s business and operating

traceability risks

Product

quality

and

salmon production lie in supplies of fish meal and fish oil. Although sources of fish

results.

feed have been diversified, including new The products grown, produced and

plant alternatives, and investments have

marketed by the Company are for

been made in two proprietary fish feed

human consumption, and there is a

plants to supply part of the consumable

and

risk of contamination by negligence in

requirements,

I Environmental risk Although

Risks of price variations in

Empresas

subsidiaries

have

AquaChile

Empresas

AquaChile

geographically

the production or inadequate handling

and subsidiaries may be affected by

diversified their production facilities in

during the process of distribution and/or

variations in the prices that are due to

Chile, the salmon industry is exposed

delivery to the end consumer, by clients,

circumstances beyond their control, since

to risks of nature, such as temperature

consumers or third parties. To avoid this,

the fish feed industry is concentrated in

variability

weather

Empresas AquaChile has developed the

a handful of global producers and there

phenomena, seismicity, algae bloom , the

sea

water,

most stringent quality classification

is no extensive market of futures or other

existence of natural predators and other

controls and food safety control, with

derivatives to purchase several of these

factors that may affect the place where

constant

raw materials, which make up the diet for

their production facilities are situated.

externally by the sectorial authorities.

Salmon, Sea Trout and Tilapia.

the growth of Empresas AquaChile and

For control of food innocuity, the Company

V International pricing trends

subsidiaries, having a negative impact

has full traceability of the fish and, before

on their quality and even increasing

harvesting, the authorities order the

The Salmon and Sea Trout supply depends

mortality rates, which would lead to a

fish to be analyzed to rule out any traces

on the production strategies of each of

reduction in production quantities and

of residues. The processing plants are

the companies involved in the industry.

consequently in their sales and earnings.

also sampled to ensure innocuity in the

For this reason, projecting and estimating

processing and the raw materials. In

an equilibrium price for the products is

this way, the authorities and the clients

complex. Moreover, demand for farmed

can be assured of the innocuity of the

Salmon has grown significantly over

Companyâ&#x20AC;&#x2122;s products.

recent years. Accordingly, it is possible

monitoring

internally

and

All of these circumstances can affect

Phytosanitary risks

Diseases, parasites and pollutants are a recurring problem in the aquaculture

that a difference may arise between the

industry, which can lead to reduced

As animals raised in an open environment,

supply and demand for salmon products,

quality of the products, increases in

i.e., the sea, the fish are exposed to

bringing with it price volatility. However,

mortality and reduced production.

diseases that can lead to health issues. To

the

control these impacts, the Company has a

locally has been undergoing a dynamic

salmon

industry

globally

and

Natural events also known as Harmful Algae Blooms, which occur in aquatic ecosystems and are caused by phytoplanktonic organisms that, in environmental conditions favorable to their development, multiply explosively and concentrate, causing alterations to the marine life and causing mortality among the fish.

(11)

consolidation

therefore

series of positive and negative covenants

resources will be protected in the long

allows us to forecast that future periods

on the part of the Company were also

term beforehand. These exigencies have

of growth will tend to present a more

stipulated. This agreement also stipulates

resulted in the establishment of more

balanced behavior. On the other hand,

various mechanisms and quorum for

stringent standards and procedures with

diversification into other species, such as

the approval of any exceptions to these

a view to environmental sustainability,

Tilapia, and international diversification

by the creditors. In addition to the

which might lead to significant increases

itself, could minimize the effect and

nonpayment of any of the capital and

in production costs and/or restrictions on

complement the portfolio which the

interest owed on the agreed dates, if the

the Company’s production activity.

Company offers to the markets.

Company fails to perform its positive or

process.

Consumer variations in the

destination markets

negative covenants stipulated therein,

and maintains such nonperformance for

sea licenses legislation

Changes in aquacultural and

more than 90 days, the financial creditors can demand the expiration of the terms

The Company has developed processes

Although the global trend suggests it is

agreed and demand early payment of the

and constant monitoring for the proper

possible to estimate a sustained rise in

whole of the debt and interest.

management of fish farm sites and

the consumption of farmed fish and other aquacultural products over the next few

has a technical department and legal IX Exchange-rate risk.

advisory

years, the Company cannot guarantee

services

that

oversee

the

proper use and handling of aquacultural

that trend will maintain itself or last over

time. In the event this changes or goes

rate fluctuations can also affect the

handling of aquacultural licenses and/

into reverse, it could cause a negative

performance of Empresas AquaChile,

or noncompliance with the relevant

effect on the business and its operating

since part of its costs (labor and services

standards for sustainability and proper

results.

such as overland transport, etc.) are

operation of the whole of the system;

global

company,

exchange-

licenses.

However,

the

inadequate

indexed to the peso, and its sales are

inactivity

VII Changes in the economy of

denominated in foreign currencies, such

due cause or authorization from the

destination countries.

as the American dollar, the euro and

authorities, could lead to the application

the yen. In addition, since the Company

of penalties, and even imposed forfeiture

Currently, the Company’s exports are

reports its balance sheets in dollars,

of any of the aquacultural licenses by the

sold primarily in the markets of USA,

changes in the strength of the dollar with

authorities, in cases where such measure

the European Union and Japan, and

respect to the rest of the currencies in

is contemplated in the applicable law.

possible economic stagnation, crises or

which the Company does business can

depressions leading to a reduced demand

negatively affect its financial results.

cannot be ruled out. If such events were

the

licenses

without

XII Risks of the assets The fixed assets, such as facilities and

to take place this could lead to negative

X Changes in environmental and

buildings, and the risks of civil liability,

effects on the Company’s operation and

other legislation

are covered through insurance policies

operating results. VIII Concentration

under standard market of

financial

liabilities.

terms and

Caring for the environment forms an

conditions. However, given the lack of

essential part of the Company’s business

effective insurance, the high costs now

policy. Notwithstanding, the pollution

prevalent in the market for insuring the

of natural resources due to external

living assets or biomass, and the disputes

On June 24, 2011, the Company signed a

issues caused by production processes

over responding for those losses which

Debt Rescheduling Agreement with its

has generated on-growing concern and

the insurers put forward, the Company

financial creditors whereby, in addition

awareness on the part of consumers,

currently has no insurance for its biomass

to renegotiating with all its financial

intermediary groups and the pertinent

against risks of diseases, theft or natural

creditors the maturity terms and interest

authorities, who demand production

risks such as storms, tempests, sea swells,

rates of the loans, the enforceable financial

systems

tsunamis,

indexes and the collateral furnished, a

friendly and guarantee that natural

that

are

environmentally

volcanic

seaquakes, eruptions,

earthquakes,

currents,

floods,

avalanches and/or alluvions, underwater

company’s main assets. Investments

the productive process are part of the

currents, algal

bloom. Consequently,

in related companies acquired before

value of the biological asset when they

any relevant damage or loss in these

January, 2003 are equity accounted,

are activated. The accumulation of these

assets may lead to an adverse effect on

while new investments are recognized

costs at each year-end is compared to the

the Company’s businesses and financial

at fair value, according to the standards

fair value of the biological asset.

position. Notwithstanding the above, the

stipulated in circular

geographical dispersion of the on-land

Superintendency

and

The changes in the fair value of these

facilities and fish farm at sea, allow it to,

Insurance and Technical Bulletin 72 of the

biological assets are reflected in the

if not avoid, then at least diversify the risk

Chilean Association of Accountants.

statement of income for the year.

The Salmon and Sea Trout biological

The biological assets, whose projected

XIII Subsidiaries and affiliates

assets, such as broodstock, fries, smolts

harvest is within less than 12 months, are

Empresas AquaChile S.A. is the parent

and small fish in the on-growing process,

classified as current assets.

company

several

are measured at fair value less estimated

companies, through which a significant

costs to sell, except when the fair value

The calculation of the fair value estimate

part of the Company’s operation is

cannot be determined reliably as defined

is based on market prices for harvested

developed, and on whose operating

in IAS 41; for the above, the search for an

fish

results and financial condition it has

active market for such assets must be

differences in the harvest’s normal

considerable dependence. Any significant

considered in the first instance.

distribution of caliber and quality or

1,697 of the Securities

of these events.

and

affiliate

impairment in the business and profit or

adjusted

the

typical

ranges of weights. The price is adjusted

loss of its subsidiaries and affiliates may

Considering that there is no active market

by the cost of the harvest, the costs of the

have an adverse effect on the operation

for the stocks of live fish in these stages of

freight to destination and the processing

and operating results.

their development, valuing them at their

costs to transform the fish into a bled

accumulated cost at year-end has been

product. Thus, the evaluation considers

considered.

the life cycle stage, its current weight and

Difference between financial and carrying values of the assets As of December 31, 2011, there are no significant

differences

between

the expected distribution by caliber of Salmon and Sea Trout biological assets

the fish harvest. This fair value estimate

in the on-growing stage and of a heavier

is recognized in the company’s statement

weight are measured at their fair value

of income.

less estimated costs to transform and sell.

the

financial and carrying values of the

and

A summary of the valuation criteria is The direct and indirect costs incurred in

presented below:

Stage

Asset

Valuation

Fresh water

Broodstock

Direct and indirect accumulated cost in the various stages.

Fresh water

Eggs

Direct and indirect accumulated cost in the various stages.

Fresh water

Smolts and fries

Direct and indirect accumulated cost in the various stages.

Sea water

Fish in the sea

Fair value according to the following:

• Atlantic Salmon starting from 4.0 Kilos WFE;

• Pacific Salmon starting from 2.5 Kilos WFE; and • Sea Trout, starting from 2.5 Kilos WFE

For lower weights, the accumulated cost at year-end is considered.

Tilapia biological assets in the breeding stage and in the ON-GROWING stage Tilapia for broodstock are initially recorded at cost and valuated at accumulated cost, taking into consideration impairment losses, at each balance sheet date. Tilapia in the on-growing stage are recorded at cost, since by nature the prices or values determined by the market are not available in Costa Rica and the alternative estimates of fair value are considered unreliable. The cost includes all raw materials, indirect costs and labor during the Tilapia on-growing phase. The method applied for Tilapia is as follows: Stage

Fresh water

Asset

Tilapia

Valuation

Direct and indirect accumulated cost in the various stages.

EXCHANGE RATE EXPOSURE Note 30 shows Assets and Liabilities according to their currency of origin.

ANALYSIS OF MARKET RISK AND TRENDS It is not AquaChile’s policy to make projections of its results or of variables that may have a significant influence on them. The consensus of the industry’s analysts is that, given the growth in income of the population, the changes towards healthier eating habits and if the conditions of growth of developing countries continue, then the prospects for the demand for sea products, specifically proteins and healthy food, are good. Likewise, the demand for fresh fillet of Tilapia has continued to increase, with the current price levels being maintained.

CONSOLIDATED FINANCIAL

STATEMENTS

Report of THE Independent Auditors

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2011, DECEMBER 31, 2010 AND JANUARY 1, 2010 Statement of Financial Position

Note

12/31/2011 ThUS$

113,897

28,416

2,693

2,204

1,346 52,632

Assets

12/31/2010 ThUS$

01/01/2010 ThUS$

Current assets Cash and cash equivalents Other financial assets, current Other non-financial assets, current Trade debtors and other accounts receivable, current

28,469

96,444

82,883

Accounts receivable from related entities, current

6,603

Inventories

45,052

21,829

28,789

Biological assets, current

168,100

128,894

87,773

Tax assets, current

4,244

2,088

3,501

437,132

266,315

202,534

Total current assets Non-current assets Other financial assets, non-current

Other non-financial assets, non-current Fees receivable, non-current

10,694

1,329

755

665

150

1,150

Accounts receivable from related entities, non-current

1,580

500

Investments recorded using the equity method

4,198

Intangible assets other than goodwill

37,326

35,416

34,830

Goodwill

51,448

50,277

Property, plant and equipment

166,287

138,793

152,524

Biological assets, non-current

33,145

6,947

8,706

Deferred tax assets

83,216

70,052

46,753

Total non-current assets

389,373

305,061

294,255

Total assets

826,505

571,376

496,789

The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2011, DECEMBER 31, 2010 AND JANUARY 1, 2010 12/31/2011 ThUS$

Statement of Financial Position

Liabilities and equity

12/31/2010 ThUS$

01/01/2010 ThUS$

Liabilities Current liabilities Other financial liabilities, current

12,009

7,765

11,722

Trade accounts payable and other accounts payable, current

111,018

80,385

65,143

Accounts payable to related entities, current

2,203

1,059

381

Tax liabilities, current

3,372

2,368

2,351

975

795

130,969

92,552

78,046

411,753

Current provisions for employee benefits, current Other non-financial liabilities, current Total current liabilities Non-current liabilities Other financial liabilities, non-current

184,648

409,834

Other accounts payable, non-current

2,735

3,963

1,762

Deferred tax liability

57,056

33,055

27,073

Total non-current liabilities

244,439

446,852

440,588

Total liabilities

375,408

539,404

518,634

Equity Issued capital

227,981

150,581

Accumulated gains (losses)

(84,750)

(137,898)

(194,511)

Issuance premiums

286,482

(522)

429,713

12,161

(43,930)

21,384

19,811

22,085

Total Equity

451,097

31,972

(21,845)

Total equity and liabilities

826,505

571,376

496,789

Other reserves

Equity attributable to proprietors of the holding company Non-controlling interests

The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME BY FUNCTION AS OF DECEMBER 31, 2011 AND 2010 Income statement by function

Note

Revenues from ordinary activities

Cost of sales

Gross earnings pre-fair value Fair value biological assets harvested and sold 1 Fair value biological assets of the period 2 Gross earnings Other revenues, by function

Distribution costs

12/31/2011 ThUS$

501,151

(404,126)

12/31/2010 ThUS$

387,841

(326,339)

97,025

61,502

(65,368)

(33,575)

70,261

43,092

101,918

71,019

2,204

8,035

(3,082)

(2,693)

Administrative expense

(17,861)

(17,900)

Other expenses, by function

(3,096)

(6,425)

Financial revenues

1,632

630

Financial costs

(13,972)

(11,521)

Exchange-rate differences

1,320

592

Result from realignment units Gain (loss), before taxes Expense for income taxes

Gain (loss) from continued operations Gain (loss) from discontinued operations Gain (loss) Gain (loss), attributable to Gain (loss), attributable to proprietors of the holding company Gain (loss), attributable to non-controlling interests

Gain (loss) Per-share gains

69,085

41,737

(14,209)

16,356

54,876

58,093

54,876

58,093

53,148

56,372

1,728

1,721

54,876

58,093

Per-share gain, basic and diluted Gain (loss) per share, basic, in continued operations Gain (losses) per share, basic, in discontinued operations Gain (loss) per share, basic and diluted

0.0570

0.0754

0.0000

0.0570

0.0754

Per-share gains, diluted Gains (loss) per share, diluted, from continued operations

0.0000

Gains (loss) per share, diluted, from discontinued operations

0.0000

Gains (loss) diluted per share

0.0000

The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements. Hightest cost of the biomass of fish harvested and sold, derived from the revaluation for their natural growth. (See Note 11 Biological assets). Gain from the natural growth of the fish biomass (includes biomass sold and in growth). (See Note 11 Biological assets).

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME BY FUNCTION AS OF DECEMBER 31, 2011 AND 2010 Comprehensive income statement

Note

Gain (loss)

12/31/2011 ThUS$

54,876

12/31/2010 ThUS$

58,093

Components of other comprehensive income, before taxes

Exchange-rate differences from conversion

Sum of income taxes related with components of other comprehensive income

Other comprehensive income

54,876

58,093

53,148

56,372

Total comprehensive income Comprehensive income attributable to Comprehensive income attributable to proprietors of the holding company Comprehensive income attributable to non-controlling interests Total comprehensive income

1,728

1,721

54,876

58,093

The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF DECEMBER 31, 2011 AND 2010

Statement of change in net equity

Initial balance, current period 01/01/2011

Issued capital

Issuance premiums

Other reserves (reserve for conversion exchange-rate differences)

Accumulated gains (losses)

Equity attributable to proprietors of the holding company

Non-controlling interests

Total Equity

ThUS$

150,581

(522)

(137,898)

12,161

19,811

Changes in Equity

31,972 -

Comprehensive income

54,876

Gain (loss)

53,148

1,728

Other comprehensive income

Comprehensive income

53,148

1,728

54,876 77,400

77,400

Dividends

Equity issuance

(155)

Increase (decrease) from transfers and other changes

286,482

522

287,004

Total change in equity

77,400

286,482

522

53,148

417,552

1,573

419,125

Final balance, current period 12/31/2011

227,981

286,482

(84,750)

429,713

21,384

451,097

Initial balance, previous period 01/01/2010

150,581

(194,511)

(43,930)

22,085

(21,845)

Changes in equity Comprehensive income

Gain (loss)

56,372

1,721

58,093

Other comprehensive income

Comprehensive income

56,372

1,721

58,093

Issuance of equity

Dividends

(4,276)

Increase (decrease) from transfers and other changes

(522)

241

(281)

(3,995)

Total change in equity

(522)

56,613

56,091

(2,274)

53,817

150,581

(522)

(137,898)

12,161

19,811

31,972

Final balance, previous period 12/31/2010

The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENT â&#x20AC;&#x201C; INDIRECT METHOD AS OF December 31, 2011 AND 2010 Indirect cash flow statement

Gain (loss)

12/31/2011 ThUS$

12/31/2010 ThUS$

14,209

(16,356)

54,876

58,093

Adjustments for reconciliation of gains (loss) Adjustments for expense for income taxes Adjustments for decreases (increases) in inventories

(89,883)

(19,171)

Adjustments for decreases (increases) in accounts receivable of trade origin

(14,956)

(30,778)

Adjustments for decreases (increases) in other accounts receivable derived from operating activities

1,640

1,291

Adjustments for increases (decreases) in accounts payable of trade origin

22,351

16,958

Adjustments for increase (decreases) in other accounts payable derived from operating activities Adjustments for depreciation and amortization expenses Adjustments for value impairment (reversals of losses for value impairment) recognized in the income of the period

7,361

783

19,273

16,587

2,543

1,266

Adjustments for provisions

Adjustments for foreign currency losses (gains), unrealized

(1,320)

(592)

Adjustments for fair value losses (gains)

(4,893)

(9,517)

Other adjustments for items other than cash

(166)

(408)

(2,052)

(43,841)

(41,989)

Adjustments for losses (gains) from disposal of non-current assets Total adjustments for reconciliation of gains (loss) Dividends paid

(155)

Interest paid

(5,453)

(6,121)

Income taxes reimbursed (paid)

(2,156)

1,413

3,271

11,396

Cash flows used in purchasing non-controlling interests

(13,693)

(2,377)

Loans to related entities

(6,603)

789

2,763

Net cash flows from (used in) operating activities Cash flows used in investment activities

Proceeds from the sale of property, plant and equipment Purchases of property, plant and equipment

(41,812)

(8,785)

Net cash flows proceeding from (used in) investment activities

(61,319)

(8,399)

363,822

Cash flows from (used in) financing activities Amounts from the issuance of shares Amounts from long-term loans Payments of loans

16,430 (237,377)

Other cash inflows (outflows)

(2,655)

(630)

Net cash flows from (used in) financing activities

142,875

(3,285)

Net increase (decrease) in cash and cash equivalents, before the effect of changes in the exchange rate

84,827

(288)

Effects of the variation in the exchange rate on cash and cash equivalents Effects of the variations in exchange rates on cash and cash equivalents

654

235

Net increase (decrease) of cash and cash equivalents

85,481

(53)

Cash and cash equivalents at the start of the period

28,416

28,469

Cash and cash equivalents at the end of the period

113,897

28,416

The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2011 NOTE 1 - GENERAL INFORMATION Empresas AquaChile S.A. (hereinafter the “Parent Company” or the “Company”) and its affiliate companies, are part of the AquaChile Group (hereinafter, “AquaChile” or “the Group”). Empresas AquaChile S.A. RUT 86.247.400-7, is a Company formed as a closed stock corporation under the registered name of Fischer Hermanos Limitada by a public instrument dated July 20, 1979, granted at the Notary Public’s Office of Coyhaique of Mr. Patricio Olate Melo. An extract of this instrument was listed in the Commerce Registry of the Real Estate Registrar of Coyhaique, on page 38, no. 34 and published in the Official Gazette on August 3, 1979. Empresas AquaChile is an Open Corporation which, according to the Extraordinary Shareholders’ Meeting of December 17, 2010, agreed to abide by the rules governing open corporations and by the auditing of the Securities and Insurance Supervisor. On April 12, 2011, Empresas AquaChile S.A. was listed in the Securities Registry of the Securities and Insurance Supervisor under the number 1,069. The Company’s principal place of business is at Cardonal s/n Lote B, Puerto Montt, Región de los Lagos, irrespective of any agencies, offices or branches that may be established in the country or abroad. The structure of the Empresas AquaChile S.A. considers a General Management only, headquartered in Puerto Montt. The duration of the Company is indefinite. The Company’s purpose is: to import, export, prepare, produce, grow, farm, process, transform, modify and commercialize, both in Chile and abroad, hydrobiological farmed species, particularly salmonids. To date, the Company’s subscribed and paid-in capital is two hundred twenty-seven million nine hundred eighty-one thousand one hundred forty-eight dollars (ThUS$227,981) which is divided into one billion one hundred fifty-seven million shares (1,157,000,000). As of December 31, 2011, the Company has no holding company and the shareholders have made no resolution for joint action. The relations of the shareholders of Empresas AquaChile and subsidiaries are governed by their corporate by laws, with no joint-action agreement in place. Empresas AquaChile is a Chilean company engaged in the production and commercialization of farmed salmon, involved in the entire chain of production. Since 2005, the Company has also been involved in the business of farming and commercializing Tilapia for the North American market, through its subsidiary Grupo ACI S.A. located in Costa Rica. Additionally, since 2006, Empresas AquaChile and subsidiaries has been involved in the fish feed industry, through the acquisition of a 50% interest in Alitec Pargua S.A. The Company was born out of the industry’s consolidation process, from the merger of two companies engaged in complementary stages of the salmon production process: AquaChile S.A., focused on the freshwater stage, and Salmones Pacífico Sur S.A., focused on the seawater stage of the process. In 2004, with the acquisition of Antarfish S.A., proprietor of Aguas Claras S.A., Empresas AquaChile S.A. became the first Chilean salmon company, a position that has been strengthened with the acquisitions of Salmones Australes S.A., Salmones Chiloé S.A. and Robinson Crusoe (now Salmones Maullín S.A). The Company’s leadership is founded on its vertical formation, controlling all the stages of the production process, on the exploitation of Chile’s competitive advantages in salmon farming and on focusing on achieving the lowest production costs. Empresas AquaChile and subsidiaries is currently one of the world’s leading salmon producers and also one of the biggest producers of Tilapia in America and one of the leading exporters of fresh Tilapia to the United States.

100

These financial statements of Empresas AquaChile and subsidiaries consist of the classified consolidated statement of financial position, the consolidated income statement by function, the consolidated statement of indirect cash flows, the consolidated statement of changes in net equity and the supplementary notes with disclosures to these consolidated financial statements. The financial statements present an accurate image of the equity and of the financial position as of December 31, 2011, and of the income from operation, changes in the equity and of the cash flows that have taken place in the Company up to the period ending on December 31, 2011. For purposes of comparison, the classified statement of financial position and the associated explanatory notes are presented in comparative form with the balances as of December 31, 2010 and January 1, 2010. The consolidated statement of comprehensive income by function, the consolidated statement of indirect cash flows and the consolidated statement of changes in the net equity are presented for the period ending on December 31, 2011 and 2010. The consolidated financial statements of Empresas AquaChile were prepared on the basis of the continuity principle. The consolidated financial statements as of December 31, 2011 and December 31, 2010, of Empresas AquaChile and subsidiaries are presented in thousands of dollars and have been prepared according to International Financial Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”) and these were approved by the Board in a meeting held on March 13, 2012.

NOTE 2 - SUMMARY OF THE MAIN ACCOUNTING POLICIES Described below are the main accounting policies adopted for the preparation of the consolidated financial statements, which have been applied uniformly to all periods presented in these financial statements.

2.1 Preparation criteria

These financial statements of Empresas AquaChile as of December 31, 2011, have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements as of December 31, 2011, have been prepared to comply with the requirements of the Securities and Insurance Supervisor. According to the provisions of IFRS 1, the transition date of Empresas AquaChile and subsidiaries is January 1, 2010. Under IFRS, the preparation of consolidated financial statements requires the use of certain accounting estimates and criteria. The management is also required to exercise its judgment in the process of applying the Company’s accounting policies. Note 5 discloses the areas that imply a greater level of judgment and complexity or the areas where the assumptions and estimates are significant to the consolidated financial statements. As of the date of these financial statements, there are no major uncertainties regarding events or conditions that may give rise to significant questions about the possibility of the entity continuing to operate normally as an ongoing business.

2.2. Newly-issued standards and interpretations a)

The following standards, interpretations and amendments are compulsory for the first time for financial periods beginning on January 1, 2011: Standards and interpretations

Compulsory for periods starting on

IAS 24 (revised) “Related Party Disclosures” Issued in November 2009, replaces IAS 24 (2003), this removes the requirement, for related entities of the government, to disclose all transactions with the government and its related entities.

01/01/2011

IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments” Issued in November 2009, this clarifies the accounting treatment when a company renegotiates the terms of the liability by issuing equity instruments; it requires a result to be recorded calculated as the difference between the liability’s fair value and the fair value of the equity instrument issued.

07/01/2010

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Amendments and improvements

Compulsory for periods starting on

IAS 32 “Financial Instruments: Presentation” Issued in October 2009, this modifies the treatment of issuance rights denominated in foreign currency, requiring their classification as equity.

01/02/2010

IFRS 1 “First-time Adoption of International Financial Reporting Standards” Issued in January 2010, clarifying the date of the exemption for presenting the comparative information of the disclosure requirements of IFRS 7.

07/01/2010

IFRS IC 14 “IAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction” Issued in November 2009, it removes an involuntary consequence of the drafting of the standards which prevented recognizing the asset for prepayments recovered over time through lesser recognitions of funding of defined benefit asset plans.

01/01/2011

Improvements to International Standards IFRS 1 “First-time Adoption of International Financial Reporting Standards” IFRS 3 (revised) “Business combinations” IFRS 7 “Financial Instruments: Disclosures” IAS 1 “Presentation of Financial Statements” IAS 27 “Consolidated and Separate Financial Statements” IAS 34 “Interim Financial Reporting” IFRIC 13 “Customer Loyalty Programmes”

01/01/2011 07/01/2010 01/01/2010 01/01/2011 07/01/2010 01/01/2011 01/01/2011

The adoption of the aforementioned standards, amendments and interpretations has no significant impact on the Company’s consolidated financial statements. b)

The following new standards, interpretations and amendments issued are not in effect for the 2011 fiscal year, and their early adoption has not taken place: Standards and interpretations

IAS 27 “Separate Financial Statements” Issued in May 2011, replaces IAS 27 (2008). The scope of this standard includes separate financial statements only. Additionally, it specifies that investments in subsidiaries, joint ventures and associates must be measured in accordance with IFRS 9 “Financial Instruments.” Standards and interpretations

01/01/2013

Compulsory for periods starting on

IFRS 9 “Financial Instruments” Issued in December 2009, modifies the classification and measurement of financial assets. Modified in November 2010 to include the treatment and classification of financial liabilities.

01/01/2013

IFRS 10 “Consolidated Financial Statements” Issued in May 2011, replaces IAS 27 (2008). Provides the principles for the preparation and presentation of financial statements. Also introduces new parameters for the definition of control.

01/01/2013

IFRS 11 “Joint Arrangements” Issued in May 2011, replaces IAS 31 “Joint Ventures” and SIC 13 “Jointly Controlled Entities – Non-Monetary Contributions by Venturers.” Its modifications include the removal of the concept of “Jointly Controlled Assets” and the possibility of consolidating proportionally.

01/01/2013

IFRS 12 “Disclosure of Interests in Other Entities” Issued in May 2011, applies to those entities with investments in subsidiaries, joint ventures, and associates.

01/01/2013

IFRS 13 “Fair Value Measurement” Issued in May 2011, combines how fair value is measured and the requisite disclosures about this into a single standard.

01/01/2013

Amendments and improvements

102

Compulsory for periods starting on

IAS 12 “Income Taxes” Issued in December 2010, includes the presumption that investment properties valued at fair value are realized through the sale, wherefore it requires applying a tax rate for sale transactions to the temporary difference.

01/01/2012

IFRS 1 “First-time Adoption of International Financial Reporting Standards” Issued in December 2009, treating the following issues: Exemption for severe hyperinflation: allows companies whose transition date is after the standardization of their functional currency to value assets and liabilities at fair value as attributed cost. Removal of fixed date requirements: adjusts the fixed date to the transition date, for those transactions involving “derecognition” and assets or liabilities at fair value for profit or loss in their initial recognition.

07/01/2011

Amendments and improvements

Compulsory for periods starting on

IFRS 7 “Financial Instruments: Disclosures“ Issued in October 2010, includes disclosures about transfers of financial assets.

07/01/2011

IAS 28 “Investments in Associates and Joint Ventures” Issued in May 2011, regulates the accounting treatment of these investments by the application of the equity method.

07/01/2011

Standards and interpretations

Compulsory for periods starting on

FRS 19 Revised “Employee Benefits” Issued in June 2011, replaces IAS 19 (1998). This revised standard modifies the recognition and measurement of expenses for defined benefit plans and termination benefits. It also includes modifications to disclosures of all employee benefits.

01/01/2013

IAS 1 “Presentation of Financial Statements” Issued in June 2011. The main modification of this amendment requires that items of Other Comprehensive Income must be classified and grouped to evaluate whether they will potentially be reclassified to income in subsequent periods. Early adoption of this is permitted.

07/01/2012

The Company’s management estimates that the adoption of the aforementioned standards, amendments and interpretations will have no significant impact on the Company’s consolidated financial statements in the period of their first application.

2.3 Consolidation criteria a) Subsidiaries Subsidiaries are all the entities (including possible special-purpose entities) over which Empresas AquaChile and subsidiaries have the power to direct the financial and working policies, which is usually associated with an interest of more than one half of the voting rights. To evaluate whether the group controls another entity requires consideration of the existence and the effect of the potential voting rights that are currently possible to exercise or convert. Subsidiaries are consolidated from the date on which the control is transferred, and they are excluded from the consolidation on the date this control ceases. The Company consolidates the subsidiary AlitecPargua S.A. because it possesses control through its majority on the board. The acquisition method is used to record the acquisition of subsidiaries in the accounts. The acquisition cost is the fair value of the assets delivered, the equity instruments issued and the liabilities incurred or assumed on the exchange date. The identifiable assets acquired and the identifiable liabilities and contingencies assumed in a business combination are valued initially at their fair value on the acquisition date, irrespective of the scope of the non-controlling interests. The excess of the acquisition cost over the fair value of the Company’s equity in the identifiable net assets acquired is recognized as purchased goodwill. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement. Intercompany settlements, balances and unrealized gains for transactions between related entities are eliminated. Unrealized losses are also removed, unless the transaction provides evidence of a loss owing to impairment of the transferred asset. The subsidiaries’ accounting polices are modified when necessary to ensure their uniformity with the policies adopted by Empresas AquaChile and subsidiaries.

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The table below shows the breakdown of the companies included in these consolidated financial statements:

Percentage of Equity

Tax ID

Country of origin

Functional currency

As of December 31, 2011 direct %

indirect %

total %

As of December 31, 2010 total %

As of January 1, 2010 total %

AquaChile S.A.

79.800.600-2

Chile

US$

0.0000

99.9994

AquaChile Inc.

Foreign

USA

US$

100.0000

0.0000

100.0000

Antarfish S.A.

96.519.280-8

Chile

US$

0.0000

100.0000

Pesquera Antares S.A.

76.674.170-8

Chile

US$

0.0000

100.0000

Entre Ríos S.A.

96.623.570-5

Chile

US$

0.0000

100.0000

Aguas Claras S.A.

96.509.550-0

Chile

US$

0.0000

100.0000

Antarfood S.A.

88.274.600-3

Chile

US$

0.0000

100.0000

Proc. Agric. Aguas Claras Ltda.

87.782.700-3

Chile

US$

0.0000

100.0000

Servicios Aguas Claras S.A.

76.495.180-8

Chile

US$

0.0000

100.0000

Salmones Australes S.A.

96.775.710-1

Chile

US$

0.0000

100.0000

Salmones Cailín S.A.

84.449.400-9

Chile

US$

41.6179

58.3821

100.0000

Salmones Chiloé S.A.

96.535.920-6

Chile

US$

0.0000

93.0000

Pesquera Palacios II Ltda.

76.348.510-2

Chile

US$

1.0000

99.0000

100.0000

Proc. Hueñocoihue Ltda.

78.512.930-k

Chile

US$

0.0000

60.0000

Pisicultura Aquasan S.A.

99.595.500-8

Chile

US$

0.0000

64.5160

Salmones Maullín S.A.

96.786.950-3

Chile

US$

0.0000

100.0000

Grupo ACI S.A.

Foreign

Costa Rica

US$

79.95857

0.0000

79.95857

72.8622

Alitec Pargua S.A.

76.591.150-8

Chile

US$

50.0000

0.0000

50.0000

Cult. Acuícolas El Volcán Ltda.

84.925.700-5

Chile

US$

0.0700

99.9300

100.0000

Salmones Maullín Ltda.

79.728.530-7

Chile

US$

0.0536

99.9464

100.0000

Aquainnovo S.A.

76.794.910-3

Chile

US$

0.0000

83.0000

Inversiones Antarfish Ltda.

76.127.952-1

Chile

US$

0.1249

99.8751

100.0000

0.0000

Inversiones Salmones Australes Ltda.

76.127.961-0

Chile

US$

99.9999

0.0000

99.9999

0.0000

In April 2010, the Company acquired 85,499 shares in Grupo ACI S.A., reaching a total of 963,356 shares equivalent to 79.95857% of the company’s capital stock. b) Transactions and non-controlling interests Non-controlling interests are presented under the heading Net Equity of the classified consolidated statement of financial position. The gain or loss attributable to the non-controlling interest is presented in the consolidated statement of comprehensive income by function, forming the fiscal year gain (loss). The results of transactions between the non-controlling shareholders and the controlling shareholders of the companies where ownership is shared are recorded in the equity and, therefore, shown in the consolidated statement of changes in net equity. c) Associates Associates are all those entities over which Empresas AquaChile and subsidiaries exert significant influence but have no control over the financial and operating policies. Investments in associates are recorded in books upon their formation or purchase at their cost and are subsequently adjusted using the equity method. The investment of Empresas AquaChile and subsidiaries in associates includes the goodwill identified in the acquisition, net of any loss from cumulative impairment. The equity of Empresas AquaChile and subsidiaries in the losses or gains subsequent to the acquisition of their associates is recognized in profit or loss, and their equity in movements of equity subsequent to the acquisition is recognized in the respective reserve under net equity. When the equity of Empresas AquaChile and subsidiaries in the losses of an associate is equal to or more than their investment therein, including any other uninsured account receivable, Empresas AquaChile and subsidiaries will not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate.

2.4 Financial reporting by operating segments

IFRS 8 requires entities to adopt “the management approach” when disclosing information about the result of their operating segments. Generally, this is the information the Management uses internally to evaluate the performance of the segments and to decide how to allocate resources to them. Empresas AquaChile and subsidiaries presents the information by segments (relating to the business areas) based on the financial information made available to the decision makers, in connection with matters such as the measurement of profitability and allocation of

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investments and based on the differentiation of products, in accordance with the indications of IFRS 8 – Financial Reporting by Segments. This information is detailed in Note 6. The segments to be disclosed by Empresas AquaChile and subsidiaries are: • Salmon and Sea Trout Farming • Tilapia Farming • Fish Feed Production • Others

2.5 Transactions in foreign currency a) Presentation currency and functional currency The items included in the financial statements of each of the entities of Empresas AquaChile and subsidiaries are valued using the currency of the primary economic environment in which the entity operates (functional currency). The functional currency of Empresas AquaChile and subsidiaries is the United States dollar, which is also the presentation currency of the consolidated statements of financial position. b) Transactions and balances Transactions in foreign currency are converted into the functional currency using the exchange rates current on the dates of the transactions. Losses and gains in foreign currency resulting from the settlement of these transactions and from the conversion to the end exchange rates of monetary assets and liabilities denominated in foreign currency are recognized in the income statement. c) Exchange rate of foreign currency The exchange rates of the main currencies used in the accounting processes of Empresas AquaChile and subsidiaries, with respect to the United States dollar, as of December 31, 2011, December 31, 2010 and January 1, 2010 are as follows: 12/31/2011

Currency

End

12/31/2010

Accumulated monthly average

End

01/01/2010

Accumulated monthly average

End

Accumulated monthly average

Chilean peso

Ch$

519.20

517.17

468.01

510.25

507.10

Euro

EUR

0.77

0.72

0.75

0.76

0.70

559.61 0.72

Yen

JPN

77.02

79.74

81.72

87.79

92.46

93.55

Costa Rican colon

505.35

500.76

506.89

520.76

557.44

568.47

2.6 Property, plant and equipment

The fixed company’s fixed assets consist of lands, constructions, infrastructure, machinery, equipment and other fixed assets. The main fixed assets of Empresas AquaChile and subsidiaries relate to lands, equipment and machinery of processing and maritime plants and fish farms. The constructions, plants, equipment and machinery are recognized at the initial moment and subsequently at their historic cost minus the respective depreciation and accumulated wear, if any. For purposes of transition to IFRS, according to what IFRS 1 allows, the Company’s most relevant lands are revalued as of January 1, 2010. The appraisals were carried out on the basis of market value. The subsequent measurement of these is done according to IAS 16 using the cost method. The subsequent costs (replacement of components, improvements and expansions) are included in the initial value of the asset or are recognized as a separate asset, only when it is likely that the future economic benefits associated with the elements of the fixed asset are going to flow into the Group and the cost of the element is able to be determined reliably. The value of the substituted component is removed from the books. The rest of the repairs and maintenance are charged in the income (loss) for the fiscal year or period in which they are incurred. The costs derived from daily maintenance and common repairs are recognized in the income (loss) for the fiscal year. This is not the case with replacements of major parts or items and strategic replacements, which are capitalized and depreciate over the rest of the useful life of the assets, on the basis of the components approach.

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Depreciation of the assets is calculated using the straight-line method, systematically distributing this throughout their useful life. This useful life has been determined on the basis of expected natural impairment, technical or commercial obsolescence derived from changes and/or improvement in the production and changes in the market demand for the products obtained in the operation with those assets. Lands are not depreciated. The estimated technical useful lives and their salvage values are as follows: Average useful life

Salvage value

Buildings

12 years

No salvage value

Plant and equipment

10 years

No salvage value

5 years

No salvage value

10 years

No salvage value

Motor vehicles

7 years

No salvage value

Other property, plant and equipment

7 years

No salvage value

Information technology equipment Fixed facilities and accessories

Those facilities which the Company maintains inactive continue to depreciate by the straight-line method. The salvage value and the useful life of the assets are revised, and if necessary adjusted, at each close of the statements of financial position so as to obtain a remaining useful life in accord with the value of the assets. When the value of an asset is higher than its estimated recoverable value, its value is reduced immediately to its recoverable amount, by the application of impairment tests. The losses or gains from the sale of property, plant and equipment are calculated by comparing the revenues obtained from the sale, with the book value of the asset (net of depreciation) and are included in the income statement.

2.7 Biological assets Biological assets Salmon and Sea Trout Biological assets Salmon and Sea Trout, such as broodstock, alevins, smolts and on-growing fish, are measured at their fair value minus the estimated costs at the point of sale, except when the fair value cannot be reliably determined according to the definitions contained in IAS 41. In this case, the search for an active market for these assets must first be considered. Given that there is no active market for stocks of live fish in these stages, consideration has been given to valuing them at their accumulated cost on the closing date. Biological assets Salmon and Sea Trout in on-growing and of greater weight are measured at their fair value minus the estimated transformation and sale costs. The direct and indirect costs incurred in the productive process form part of the biological asset’s value through its activation. The accumulation of these costs at the end of each fiscal year is compared with the biological asset’s fair value. The changes in the fair value of these biological assets are reflected in the fiscal year’s income statement. The calculation of the fair value estimate is based on the market price for harvested fish and adjusted by their own distribution differences of caliber (size) and quality or normal weight ranges at harvest. This price is adjusted by the harvest cost, destination shipping costs and processing costs, to bring it to its whole fish equivalent (WFE 3) value and condition. Thus, the evaluation considers the stage in the lifecycle, their current weight and the expected distribution by caliber upon actual harvest of the fish. This fair value estimate is recognized in the Company’s income statement.

WFE (Whole Fish Equivalent): is a standard industry measure that refers to the weight of the bled salmon, also known internationally as the metric ton of round weight.

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Below is a summary of the valuation criteria: Stage

Assets

Valorización

Freshwater

Broodstock

Direct and indirect accumulated cost in their various stages.

Freshwater

Eggs

Direct and indirect accumulated cost in their various stages.

Freshwater

Smolts and alevins

Direct and indirect accumulated cost in their various stages.

Seawater

Fish in the sea

Fair value, according to the following: • Atlantic Salmon starting at 4.0 kilos WFE • Pacific or Coho Salmon, starting at 2.5 kilos WFE, and • Sea Trout, starting at 2.5 kilos WFE • For lesser weights, their accumulated cost at the end date is considered

Valuation model The evaluation is revised for each fish farm and is based on the existing biomass of fish at the close of each month. Its breakdown includes the total number of on-growing fish, their average estimated weight and the cost of the biomass of fish. In its calculation, the value is estimated considering the average weight of that biomass at the time, which is in turn multiplied by the value per kilo reflected by the market price. The market price is obtained from a range of prices, usually from the sales made during the previous month. Premises used to determine the fair value of on-growing fish Estimating the fair value of the biomass of fish will always be based on uncertain assumptions, even if the Company has sufficient experience in considering those factors. The estimates are applied considering the following items: volume of fish biomass, average weights of the biomass, distribution of weights at harvest and market price. Volume of fish biomass The volume of fish biomass is, as such, an estimate based on the number of smolts released in the seawater, an estimate of growth at a given moment, an estimate of the mortality observed in the period, etc. Uncertainty with respect to the biomass volume is normally lower in the absence of events of mass mortality during the cycle or if the fish have for some reason presented diseases. Distribution of weight at harvest Fish in the water grow at different rates and even in the presence of good estimates for the average weight there may be a certain dispersion in the quality and caliber of the fish. It is relevant to consider the distribution of the caliber and the quality inasmuch as different prices exist in the market. When the value of the fish biomass is estimated, a regular distribution of calibers is considered or, failing this, the most recent caliber distribution obtained in the processing by the Company’s processing plants. Market Price The assumptions of market prices are important to the evaluation. Moreover, minor changes in the market prices can lead to significant changes in the evaluation. If we assume that as of December 31, 2011, there was a volume of 10,560 metric tons WFE of fish subject to valuation, a change in the price of US$1/kg WFE would have an impact of thUS$12,302 on the fair value of the biological assets. Biological assets: Tilapia broodstock and Tilapia in on-growing phase Tilapia broodstock is initially recorded at cost and at each balance sheet date it is valued at its accumulated cost considering impairment losses. Tilapia in an on-growing phase is recorded at cost because, by nature, the prices or values determined by the market are unavailable in Costa Rica and the alternative estimates of fair value are considered to be unreliable. The cost includes all raw materials, indirect costs and labor during the on-growing phase of the Tilapia. In the case of Tilapia, the method applied is as follows: Stage

Freshwater

Assets

Tilapia

Valuation

Direct and indirect accumulated cost in their various stages.

107

2.8 Intangible assets other than goodwill a) Aquaculture Sea Licenses The aquaculture sea licenses acquired from third parties are presented at historic cost. The useful life of the sea licences is indefinite, since they have no expiration date, nor any foreseeable useful life, therefore they are not amortized. The indefinite useful life is subject to review during each period/fiscal year for which information is presented, in order to determine whether the events and the circumstances are able to continue to support the evaluation of the indefinite useful life for this asset. These assets are subjected to annual value impairment tests. b) Computer softwares Licenses purchased for computer programs are capitalized on the basis of the costs incurred in purchasing them and preparing them to use the specific program. These costs are amortized during their estimated 4-year useful lives, by the straight-line method. The expenses related with the development or maintenance of computer programs are recognized as expenses when they are incurred. Costs directly related with the production of unique and identifiable computer programs controlled by Empresas AquaChile and subsidiaries, which are likely to generate higher economic benefits than the costs for more than one year are recognized as intangible assets. The direct costs include the expenses of the personnel to develop the computer programs and any kind of expense incurred in their development or maintenance. The costs of developing computer programs recognized as assets are amortized during their estimated 4-year useful lives. c) Research and development expenses Research expenses are recognized as an expense when they are incurred. The costs incurred in development projects (related with the design and testing of new or improved products) are recognized as intangible assets when the following requirements are met: • technically, it is possible to complete the production of the intangible asset so that it could be available to be used or sold; • the management has the intention of completing the intangible asset in question, to use it or sell it; • the capacity exists to use or sell the intangible asset; • it is possible to demonstrate how the intangible asset is going to generate likely economic benefits in the future; • there is availability of the appropriate technical, financial or other kinds of resources, to complete the development and to use or sell the intangible asset; • it is possible to value, reliably, the disbursement attributable to the intangible asset during its development.

2.9 Goodwill

Goodwill represents the excess of the acquisition cost over the fair value of the interest of Empresas AquaChile and subsidiaries in the identifiable net assets of the subsidiary on the acquisition date. The goodwill related with acquisitions of subsidiaries is annually subjected to value impairment tests, recognizing the accumulated losses from impairment. The gains and losses for the sale of an entity include the amount in books of the goodwill related with the entity sold. This goodwill is allocated to cash-generating units (CGU) for the purpose of testing the impairment losses. The allocation is made in those CGUs expected to benefit from the business combinations from which that purchased goodwill emerged. According to International Financial Reporting Standard No. 3 (IFRS 3), the negative goodwill stemming from the acquisition of an investment or business combination is transferred directly to the income statement. The negative goodwill balances existing at the start of the fiscal year are transferred to accumulated profit or loss as a consequence of the adoption of IFRS 3.

2.10 Interest Costs

The interest costs incurred for the construction of any qualified asset are capitalized during the period of time necessary to complete and prepare the asset for the intended use. Other interest costs are recorded in profit and loss.

2.11 Impairment of non-financial assets

Assets with an indefinite useful life are not subject to amortization and are submitted to annual value impairment loss tests.

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The assets subject to depreciation are submitted to impairment loss tests whenever any event or change in the circumstances of the business indicates that the assets’ book value may not be recoverable. An impairment loss is recognized when the book value is greater than its recoverable value.

The recoverable value of an asset is the higher of its fair value less the costs to sell and its value in use. For purposes of evaluating value impairment losses, assets are grouped at the lowest level for identifiable cash flows to exist separately (CGU). Non-financial assets other than purchased goodwill that have undergone an impairment loss are submitted to review on each closing date of the statement of financial position to check whether reversals of the losses have taken place. Value impairment losses can be reversed in books only up to the amount of the losses recognized in previous periods, so that the book value of these assets will not exceed the value they would have had if these adjustments had not been made. This reversal is recorded in the account other gains (losses).

2.12 Financial assets

Empresas AquaChile and subsidiaries classifies its financial assets in the following categories: at fair value with changes in profit or loss and loans and accounts receivable. The Group does not keep financial instruments kept to maturity and available for sale. The classification depends on the purpose for which the financial assets were acquired. The management determines the classification of its financial assets at the time of the initial recognition. Classification of financial assets a)

Financial assets at fair value with changes in profit or loss Financial assets at fair value with changes in profit or loss are financial assets kept for negotiating. A financial asset is classified in this category if it is acquired primarily for the purpose of being sold in the short term. The assets in this category are classified as current assets.

Loans and accounts receivable Loans and accounts receivable are non-derivative financial assets with fixed or determinable payments, which are not traded in an active market. Those items with maturity of less than 12 months are classified as current assets. Items with a maturity greater than 12 months are classified as non-current assets.â&#x20AC;&#x192; Loans and accounts receivable are included in trade debtors and other accounts receivable. They should initially be carried at their fair value, recognizing a financial result for the intervening period between their recognition and the subsequent valuation. In the specific case of trade debtors, other debtors and other accounts receivable, it was opted to use the face value, bearing in mind the short collection terms used by the Group. Empresas AquaChile and subsidiaries evaluates on the date of each financial statement whether there is objective evidence that a financial instrument or a group of financial instruments may have sustained impairment losses.

Recognition and measurement of financial assets Acquisitions and sales of financial assets are recognized on the date of the trade, i.e., the date on which Empresas AquaChile and subsidiaries promise to acquire or sell the asset. i)

Initial recognition Financial assets are initially recognized by the fair value plus the costs of the transaction, for all financial assets not carried at fair value with changes in profit or loss. Financial assets at fair value with changes in profit or loss are initially recognized by their fair value, and the costs of the transaction are carried to profit or loss.

ii)

Subsequent valuation Financial assets at fair value with changes in profit or loss are subsequently recorded by their fair value with a cancelling entry in profit or loss. For loans and accounts receivable, the face value is considered as the fair value. Financial assets are cancelled in books when the rights to receive cash flows from the investments have matured or have been transferred and Empresas AquaChile and subsidiaries have substantially transferred all risks and advantages derived from their ownership.

109

Empresas AquaChile and subsidiaries evaluates on the date of each statement of financial position whether there is objective evidence that a financial asset or a group of financial assets may have sustained impairment losses.

2.13 Inventories

Inventory stocks are valued at their acquisition cost or their net realizable value, whichever is the lesser. The cost is determined by the weighted average price (WAP) method. The cost of finished products and of products in process includes the costs of raw materials, direct labor, other direct costs and general manufacturing expenses (based on normal operating capacity), but does not include interest costs. The net realizable value is the estimated sale price in the normal course of the transaction, less the applicable variable costs of sale. Obsolete or slow-moving products are recognized at their realizable value.

2.14 Trade debtors and other accounts receivable

Trade accounts receivable are recognized at their face value, since the average terms to maturity are not more than 90 days. The revenue associated with the longest payment term is recorded as deferred income in current liabilities and the accrued portion is recorded in revenues from ordinary activities. Additionally, estimates are made on any doubtful accounts receivable based on an objective review of all the amounts pending at the end of each period. Impairment losses related to bad debts are recorded in the statement of comprehensive income in the period they occur. Trade loans are included in the current assets in trade debtors and other accounts receivable, as long as their estimated time to collection does not exceed one year from the date of the financial statement.

2.15 Cash and cash equivalents

Empresas AquaChile and subsidiaries consider as cash and cash equivalents the balances of cash kept in cash and current bank accounts, term deposits and other financial investments (very liquid marketable securities) with less than 90 days to maturity from the date of investment. Also included within this item are those investments inherent to the administration of cash, such as buy-back and sell-back agreements whose maturity is in line with the preceding definition and whose funds are freely available. Used bank overdrafts are included in other financial liabilities.

2.16 Capital stock

Capital stock is represented by common shares of a single class. The statutory minimum dividends on common shares are recognized as goodwill in equity when they are accrued.

2.17 Trade accounts payable and other accounts payable

Trade accounts payable are initially recognized at their fair value and are subsequently valued by their amortized cost using the effective interest rate method when their payment term is more than 90 days. For lesser terms, they are recorded at face value as they present no significant differences to their fair value.

2.18 Other financial liabilities

Obligations with banks and financial institutions are initially recognized by their fair value, net of any costs incurred by the transaction. Subsequently, unrelated resources are valued by their amortized cost and any difference between the funds obtained (net of the necessary costs for their obtainment) and the reimbursement value, is recognized in the income statement during the life of the debt according to the effective interest rate method. The effective interest method consists in applying the reference market rate for debts with similar characteristics to the value of the debt. However, the management estimates that debt can be taken on in similar price and term conditions to those of the current debt, hence it considers the book value of the debt as the fair value. It should be mentioned that the difference between the face value and the fair value is not significant

2.19 Income tax and deferred tax items

110

The expense for income tax of the period includes the taxes of Empresas AquaChile and its subsidiaries, based on the taxable income of the period, together with the fiscal adjustments of previous periods and the change in deferred tax items.

Deferred taxes are calculated, according to the liability method, based on the temporary differences emerging between the fiscal bases of the assets and liabilities and their amounts in books. However, if the deferred tax item emerges from the initial recognition of a liability or an asset in a transaction other than a business combination which, at the time of the transaction, does not affect either the book gain or loss or the tax gain or loss, it is not carried. The deferred tax is determined using the tax rates (and laws) approved or about to be approved and highly likely to be enacted, in each transaction country, on the date of the statement of financial position, which is expected to be applied when the respective deferred tax asset is realized or the tax liability is settled. Deferred tax assets are recorded when it is deemed likely that the entities of the group are going to have, in the future, sufficient tax benefits against which other differences can be offset. The Company does not record deferred taxes on the temporary differences arising in Investments in related companies, since it controls the date on which these will be reversed.

2.20 Employee benefits a) Personnel vacations Empresas AquaChile and subsidiaries recognize the expense for personnel vacations by the accrual method, which is recorded at its face value. The item pertaining to vacation benefits does not represent a significant amount in the statement of comprehensive income. b) Post-employment benefits Empresas AquaChile and subsidiaries have no obligations for indemnifications arising from personnel severance, as there is no associated legal obligation or non-formalized practice that would give rise to such and obligation. They are recorded in profit or loss (expense) at the time they are paid to the employees, as a consequence of the Company’s decision to rescind their employment contract, before normal retirement age.

2.21 Provisions

Empresas AquaChile and subsidiaries recognizes a provision when contractually obliged to do so and whenever there is a past practice that has created an assumed obligation. Provisions for onerous contracts, litigation and other contingencies are recognized when: (i) Empresas AquaChile and subsidiaries has a present obligation, be it legal or implicit, as a result of past events; (ii) An outflow of funds is likely to be necessary to settle the obligation; and (iii) The value has been reliably estimated. The provisions are valued by the current value of the disbursements that are expected to be necessary to settle the obligation, using the best estimate of Empresas AquaChile and subsidiaries. The discount rate used to determine the current value reflects the current market evaluations, on the date of the statements of financial position, of the temporary value of the money, and the specific risk related with the particular liability.

2.22 Recognition of revenues

Ordinary revenues includes the fair value of considerations received or to be received for the sale of goods and services over the ordinary course of the Company’s activities. Ordinary revenues are presented net of sales tax, refunds, price cuts and discounts (if any) and after removing the sales within the Group. Empresas AquaChile and subsidiaries recognizes the revenues when their value can reliably be set, it is likely that the future economic benefits are going to flow into the entity and the specific conditions for each of the Group’s activities are met, as described below. a) Sales of goods Revenues for sales of goods are recognized when one of the Group’s entities has transferred to the buyer the risks and benefits of the products of those goods and does not maintain the right to dispose of them, or to maintain effective control. This generally means that sales are recorded at the time of the transfer of risks and benefits to the customers in accordance with the terms struck in the business agreements.

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b) Interest revenues Interest revenues are recognized at face value. c) Sale of services Ordinary revenues that are proceeds from sales of services are recorded when such a service has been rendered. A service is considered rendered at the time of satisfactory receipt thereof by the client. d) Revenues from dividends Revenues from dividends are recognized when the right to receive payment is established.

2.23 Leases

When an entity of the group is the lessee - Operating leases. Leases where the lessor preserves a significant part of the risks and advantages derived from the ownership of the asset are classified as operating leases. Payments by way of operating leases (net of any incentive received from the lessor) are charged in the income statement on a straight-line basis during the period of lease. When an entity of the group is the lessor. Assets leased to third parties under operating lease contracts are included under the heading of property, plant and equipment or in investment properties, as applicable. Revenues derived from operating leases are given straight-line recognition during the term of the lease.

2.24 Dividends policy

Under the provisions of the Corporations Act [Ley de Sociedades Anónimas], unless otherwise agreed by unanimous vote of the shareholders, the Company is bound to distribute a compulsory minimum dividend equivalent to 30% of the profits. Under IFRS, the obligation of minimum dividends to the shareholders should be recognized before the closing date of the annual statements of financial position with the consequent reduction of net equity. According to what has been reported to the Securities and Insurance Supervisor, in connection with Directive No. 1945, for purposes of determining the distributable liquid profit of the parent Company to be considered for the calculation of dividends with regard to the December 2011 fiscal year, the following shall be excluded from the fiscal year profit or loss: i)

Unrealized profits or losses, tied to the recording at fair value of biological assets regulated by the accounting standard “IAS 41,” reincorporating them into the liquid profit at the time of their realization. For these purposes, the portion of such fair value relating to the assets sold or disposed of by any other means shall be considered realized.

ii)

Unrealized profits or losses generated during the acquisition of other entities and, in general, those unrealized profits or losses that stem from the application of paragraphs 24, 39, 42 and 58 of the accounting standard “International Financial Reporting Standard No. 3,” revised, regarding business combination operations. These profits or losses will also be reincorporated with the liquid profit at the time of their realization. For these purposes, profits or losses will be deemed realized as the entities acquired generate profits after their acquisition, or whenever these entities are sold.

iii)

The effects of deferred taxes associated with the items mentioned in ii) will follow the same fate as the entry that originated them.

Notwithstanding the above provisions and, pursuant to Law 18,046, when the Company has accumulated losses it must allocate its fiscal year profits to absorbing such losses.

2.25 Environment

Disbursements related with the improvement of and/or investment in production processes that improve environmental conditions are carried as an expense in the fiscal year they are incurred. When these disbursements form part of investment projects they are recorded as negative goodwill in the heading property, plant and equipment.

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The Group has established the following types of disbursements for environmental protection projects: a)

Disbursements or expenses related with the improvement of and/or investment in production processes that lead to a reduced impact of the activity on the environment and/or improve environmental conditions, such as: monitoring of effluents from hatcheries, naval artifacts and processing plants; implementations of ensilage systems of the mortality of the fish at the seawater fish farm and hatcheries; environmental reports and initial characterizations of fish farm; etc.

Disbursements or expenses related with verification and tracking of ordinances and laws concerned with industrial processes and facilities such as: presentation of environmental impact statements for evaluation of mortality ensilages; handling and disposal of hazardous and non-hazardous waste, monitoring of phytoplankton; monitoring of sediments and water column in fish farm; monitoring of sludges from hatcheries; environmental advisory; contracting of sampling and laboratory analysis services; etc.

NOTE 3 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS 3.1

Criteria for transition to IFRS

3.1.1. Application of IFRS 1 The transition date of Empresas AquaChile and subsidiaries is January 1, 2010. Empresas AquaChile and subsidiaries have prepared their opening statement of financial position under IFRS as of that date. The IFRS adoption date of Empresas AquaChile and subsidiaries is January 1, 2011. According to IFRS 1, to prepare the aforementioned consolidated financial statements, the Company has applied all compulsory exceptions and certain optional exemptions to the retroactive application of IFRS, which are detailed below. 3.1.2 Exemptions to the retroactive applications chosen by Empresas AquaChile and subsidiaries Empresas AquaChile and subsidiaries have opted to apply the exemptions to the retroactive application of IFRS that are detailed below: a)

Business combinations The exemption allows business combinations prior to the transition date not to be reissued. IFRS 3 may or may not be applied to business combinations before the transition date. Empresas AquaChile and subsidiaries have applied the exemption taken from IFRS 1 for business combinations. Therefore, it has not restated the business combinations that took place before the January 1, 2010 transition date.

Fair value or revaluation as acquired cost The entity may opt, on the date of transition to the IFRS, for the measurement of a fixed asset entry at its fair value and use this fair value as the cost attributed on such date. Empresas AquaChile and subsidiaries in some cases opted for the measurement of their fixed assets at their fair value, and using this value as the initial historic cost, in accordance with IFRS 1 (first-adoption standards). The fair value of the fixed assets was measured using an appraisal of independent, external experts, for certain assets, and in other cases using the historic acquisition cost.

Assets and liabilities of subsidiary companies, associates and joint ventures If an entity adopts IFRS for the first time after its subsidiary (or associate or joint venture) it will measure, in its consolidated statements of financial position, the assets and liabilities of the subsidiary (or associate or joint venture) by the same book values as the subsidiary (or associate or joint venture), after making the appropriate adjustments upon consolidating or applying the equity method, as well as those concerning the effects of the business combinations in which such entity acquired the subsidiary. Similarly, if a holding company adopts IFRS for the first time in its separate financial statements, before or after it does so in its consolidated financial statements, it shall measure its assets and liabilities by the same values in both financial statements, except for the consolidation adjustments. In the case of the subsidiary Grupo ACI S.A., the latter had already adopted the IFRS and criteria prior to this date, so it has been decided to apply this exemption.

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3.1.3 Retroactive application exceptions chosen by the Group Empresas AquaChile and subsidiaries have not had to apply the compulsory exceptions to the retroactive application of IFRS because the entries defined therein are not presented.

3.2 Reconciliation between IFRS and generally accepted accounting principles in Chile (GAAP)

The reconciliations presented below show the quantification of the impact of the transition to IFRS of Empresas AquaChile and subsidiaries. The reconciliation provides the impact of the transition with the following details: • Reconciliation of the net equity to the transition date (January 1, 2010) and to the date of the last annual financial statements (December 31, 2010). • Reconciliation of the Comprehensive statements of income for the fiscal year ended on December 31, 2011 (December 31, 2010). 3.2.1 Summary of adjustments to net equity and profit or loss a) Reconciliation of the equity under GAAP and under IFRS as of January 1, and December 31, 2010. 12/31/2010 ThUS$

01/01/2010 ThUS$

Total net equity according to GAAP

(5,644)

(48,794)

Negative goodwill

4,634

4,783

Goodwill

2,859

(326)

Intangibles

5,557

4,885

Biological assets

19,394

9,312

Property, plant and equipment

(2,168)

1,706

Liabilities with banks

4,144

1,192

Deferred taxes

(4,729)

(2,906)

Other adjustments

7,925

8,303

IFRS convergence adjustments

37,616

26,949

Net equity according to IFRS

31,972

(21,845)

3.2.2 Explanation of the effect of the transition to IFRS Below is an explanation of the most significant adjustments incorporated into the statement of financial position. 1)

Negative goodwill Under the provisions of Technical Bulletin No. 72 issued by the Colegio de Contadores de Chile, the excess of net assets with respect to the price paid in a business combination is transferred to the liability account, which is carried to profit or loss in the estimated recovery period of the investment. Under IFRS 3, this item is transferred directly to directly to profit or loss, hence the balances of negative goodwill were attributed to accumulated profit or loss on the transition date.

2) Goodwill Balances of goodwill, originated prior to January 1, 2004, were determined in accordance with the stipulations of Directive No. 368 and Official Directive No. 150 of January 31, 2003, by the Securities and Insurance Supervisor, which were amortized in a straight line considering, among other aspects, the nature and characteristic of each investment, foreseeable life of the business and return on the investment, which was not more than 20 years. Balances of goodwill originated after January 1, 2004, were determined in accordance with Technical Bulletin No. 72 issued by the Colegio de Contadores de Chile A.G. and were amortized in the same way as those above. Under IFRS 3, purchased goodwill is valued initially at cost, this being the excess of the cost of the business combinations over the interest of the acquiring party in the net fair value of the assets, liabilities and contingent liabilities. The goodwill is not amortized; instead it should be submitted to a value impairment test at least once a year. Under IFRS 1, the amortization of these accounts at the transition date has been suspended, consequently reversing the effects on accumulated profit or loss. 3) Intangibles Under GAAP, intangible assets expected to generate benefits in future fiscal years are recognized at their cost, adjusted for the effect of amortization calculated in a straight line during the period in which these benefits are expected to be generated.

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In the case of aquacultural licenses, under IFRS they present indefinite useful lives, hence they are subjected to value impairment testing annually. Their amortization has been reversed and their effects recognized in accumulated profit or loss. 4)

Biological assets Under GAAP, the fish are classified under inventories, and are recorded at cost or the market value, if this is less. Under IAS 41, the fish are to be classified as biological assets and valued at fair value.

Property, plant and equipment For the application of IFRS, it has been defined that the initial balances as of January 1, 2010, are to be recorded at their fair value and for this reason an appraisal of the Company’s relevant lands was performed. This procedure, carried out by experts, generated a greater value in the lands recorded against the reserve of accumulated profit or loss in the net equity. As of December 31, 2010, the Company maintained plants and production centers at a standstill. Under GAAP, depreciation of these items was suspended given that they will be at a standstill for an indefinite period of time. Under IAS 16, depreciation will not cease when the asset is unused or has been withdrawn from active use, hence this has been restored against the account retained earnings in the net equity.

Balance according to GAAP Land appraisal

As of December 31, 2010 ThUS$

As of January 1, 2010 ThUS$

140,961

150,818

3,826

Depreciation plants at standstill

(5,994)

(2,120)

Balance according to IFRS

138,793

152,524

Liabilities with banks This relates to the valuation of liabilities kept with banks and financial institutions, which are recorded in accordance with the conditions of the debt in effect, hence it considers the debt’s book value as reasonable.

Deferred taxes As described in Note No. 2.19, under IFRS the effects of deferred taxes must be recorded for all temporary differences existing between the tax and financial balance sheet, based on the liability method. Although the method established in IAS 12 is similar to that of GAAP CL, the following adjustments to IFRS need to be made: i) The removal of “complementary deferred tax accounts” in which the effects on the net equity of the initial application of Technical Bulletin No. 60 issued by the Colegio de Contadores de Chile A.G. (BT 60) were deferred, through amortization by debit/credit to profit or loss, over the prescribed term for reversal of the difference (or use of the related tax loss); ii) The determination of the deferred tax on items not pledged to the calculation under BT 60 (permanent differences), but which qualify as temporary differences under IFRS; and iii) The calculation of the tax effect of the IFRS transition adjustments have been recognized in Retained Profit or Loss at the transition date.

Other adjustments This is the effect generated in the process of consolidation of the financial statements of the subsidiary Grupo ACI S.A. under IFRS.

115

Reconciliation of income statement under GAAP and under International Financial Reporting Standards (IFRS): 01/01/2010 ThUS$

Result according to Chilean GAAP

47,048

Replacement amortization negative goodwill

(149)

Replacement amortization goodwill

3,185

Replacement amortization sea licenses

672

Valuation biological assets

10,082

Liabilities with banks

2,952

Depreciation plants at standstill

(3,874)

Deferred taxes

(1,823)

IFRS convergence adjustments Result according to IFRS

11,045 58,093

Replacement amortization negative goodwill This relates to the effects on profit or loss, generated by the elimination of negative goodwill against accumulated profit or loss at the transition date and therefore of its amortization according to IFRS.

Replacement amortization goodwill This relates to the effects on profit or loss, generated by halting the amortization of Goodwill at the transition date in accordance with IFRS and therefore the reversal of the amortization of the 2010 fiscal year.

Replacement amortization sea licenses The replacement of the amortization of sea licenses is generated by defining, in accordance with IAS 38, that such intangibles possess an indefinite useful life, hence the effects of amortization are replaced.

Valuation biological assets This effect is caused as a consequence of the valuation at fair value of the fish with an effect on profit or loss and the highest cost component at the time of their sale.

Liabilities with banks This mainly relates to the effect on profit or loss of the change in the rate used to calculate the financial liabilities in consideration to the application of the effective rate for this kind of instrument under IFRS.

Depreciation plants at standstill This relates to the recognition of the periodâ&#x20AC;&#x2122;s depreciation of plants and production centers kept by the Company at a standstill.

Deferred taxes As described in Note No. 3.2.2.7, under IFRS the effects of deferred taxes must be recorded for all temporary differences existing between the tax and financial balance sheet, based on the liability method. Although the method established in IAS 12 is similar to that of GAAP, the following adjustments need to be made to IFRS: The removal of complementary deferred tax accounts in which the effects on the net worth of the initial application of Technical i) Bulletin No. 60 issued by the Colegio de Contadores de Chile A.G. were deferred, through amortization by debit/credit to profit or loss, over the prescribed term for reversal of the difference (or use of the related tax loss); ii) The determination of the deferred tax on items not pledged to the calculation under Technical Bulletin No. 60 (permanent differences), but which qualify as temporary differences under IFRS; and iii) The calculation of the tax effect of the IFRS transition adjustments.

116

Below is a table of deferred taxes receivable and payable as of December 31, 2010: a) Receivable Deferred taxes GAAP ThUS$

Adjustments ThUS$

Deferred taxes IFRS ThUS$

Bad debts provision

Anticipated revenues

111

429

Provision, vacations

Other provisions

131

Provision, obsolescence

Provision, personnel

152

1,019

1,171

68,040

69,033

1,019

70,052

Deferred taxes GAAP ThUS$

Adjustments ThUS$

Deferred taxes IFRS ThUS$

Fixed assets Tax loss Others Total deferred taxes receivable

b) Payable

Other provisions Manufacturing expenses

2,333

13,357

Depreciation of fixed assets

6,772

651

7,423

Reappraisal of assets

3,366

Valuation of inventories

1,439

3,448

Others Adjustment for biological assets Replacement adjustment amortization sea licenses at historic value

945

Adjustment effective rate OBIF

704

27,307

5,748

33,055

Total deferred taxes payable

2,333 13,357

Minority interests Generally accepted accounting principles in Chile applied during the preparation of the previous financial statements (hereinafter â&#x20AC;&#x153;GAAP CLâ&#x20AC;?), recognized the interest of minority shareholders in the consolidated income statement of the fiscal year through a specific line. Under IFRS, the minority shareholders constitute part of the economic conglomerate or Group and, therefore, their interests are considered forming part of the statement of comprehensive income.

Reconciliation of Cash flow statement under GAAP and under International Financial Reporting Standards (IFRS) as of December 31 and January 1, 2010. For the fiscal year ended as of December 31, 2010 ThUS$

Final balance of cash and cash equivalents according to Chilean GAAP Effect of the transition to IFRS at the date of the last annual financial statements Final balance, cash and cash equivalents, according to IFRS

28,416

For the period ended as of January 1, 2010 ThUS$

28,469

28,416

28,469

NOTE 4 - FINANCIAL RISK MANAGEMENT The activities of Empresas AquaChile and subsidiaries are exposed to various financial risks: credit risk, liquidity risk and market risk.

Credit risk

a) Risk of investments of the cash surpluses: The quality of the financial institutions with which Empresas AquaChile and subsidiaries operates and the type of financial products in which these investments are carried out defines a low-risk policy for the Company. Investments of cash surpluses are made in leading domestic and foreign financial entities.

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b) Risk stemming from sale transactions: Empresas AquaChile and subsidiaries do transactions with clients by making sales with letters of credit, through prepaid expenses or else with clients with an excellent credit history. In certain cases, insurance policies are taken out to insure the collection of sales of products both in Chile and abroad (see note 8 b).

Liquidity risk

Liquidity risk arises from the possibility of a mismatch between financing needs (for operating and financial expenses, investments in assets, maturing debts and dividend commitments) and financing sources (revenues from surrenders of marketable securities or financial placements, collection of client accounts and financing with financial entities). The Company maintains a policy of prudent management of liquidity risk by keeping enough cash and marketable securities and endeavoring to maintain due financing availability in the Banks. On June 24, 2011, the Company signed a Debt Rescheduling Agreement with its financial creditors whereby, in addition to renegotiating with all its financial creditors the maturity terms and interest rates of the loans, the enforceable financial indexes and the collateral furnished, a series of positive and negative covenants on the part of the Company and its shareholders were also stipulated. This agreement also stipulates various mechanisms and quorum for the approval of any exceptions to these by the creditors. In addition to the nonpayment of any of the capital and interest owed on the agreed dates, if the Company fails to perform its positive or negative covenants stipulated therein, and maintains such nonperformance for more than 90 days, the financial creditors can demand the expiration of the terms agreed and demand early payment of the whole of the debt and interest. Furthermore, any possible delay or failure to grant the approvals by the banks to dispose of or replace certain assets delivered as collateral may generate negative operating effects and delay the Companyâ&#x20AC;&#x2122;s development. The following table details the committed capital of the liabilities, grouped according to commitments: Financial liabilities

Between 1 and 3 months ThUS$

Between 3 and 12 months ThUS$

Between 1 and 5 years ThUS$

More than 5 years ThUS$

Total ThUS$

Bank loans

4,048

7,961

98,637

86,011

196,657

Trade accounts and other accounts payable

111,018

Accounts payable to related entities

2,203

Tax accounts payable, current

3,372

115,066

13,536

98,637

86,011

313,250

Total

III

Market risk

a) Exchange-rate risk As a global company, exchange-rate fluctuations can also affect the performance of Empresas AquaChile and subsidiaries, since part of its costs (labor and services such as overland transport) are indexed to the peso, and its sales are denominated in foreign currencies, such as the American dollar, the euro and the yen. In addition, since the Company reports its balance sheets in dollars, changes in the strength of the dollar with respect to the rest of the currencies in which the Company does business can negatively or positively affect its financial results. In general, the policy concerning financial liabilities is to keep them geared to revenues from sales in American dollars. As of December 31, 2011, the Companyâ&#x20AC;&#x2122;s consolidated balance sheet has a net liability in pesos of ThUS$13,946 and a net liability in Costa Rican colons of ThUS$6,601, therefore a variance of a 5% increase in the exchange rate in both currencies generates an exchange-rate gain of ThUS$665 by effect in pesos and ThUS$314 by effect in Costa Rican colons. In turn, a 5% drop in the exchange rates generates an equivalent loss. The table below shows the net balance sheet exposure by currency: Exposure of Net Assets by Currency

Dollar Costa Rican colon Chilean pesos

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As of 12/31/11 ThUS$

458,245 (6,601) (13,962)

For variations of a 5% increase in exchange rates, the net assets change by the following amounts: Effect on the Exposure by Currency of Net Assets

Costa Rican colon Chilean pesos

As of 12/31/11 ThUS$

314 665

b) Interest rate risk Interest rate variations change future flows of the assets and liabilities referenced to a variable interest rate. Empresas AquaChile and subsidiaries have exposure to interest rate risk, since their long-term financing has a fixed rate plus banks’ costs of funds, which as of 2013 varies based on the 180-day LIBOR. Normally, monitoring of the conditions of these loans is performed and the suitability of taking out interest rate insurance is assessed, which, depending on market conditions, can be done whenever it is deemed appropriate. As of December 31, 2011, the Group has a total of ThUS$196,657 relating to banking liabilities in dollars. For a 1% variation in the rate, the annual interest generated by long-term loans vary for loans in dollars by 0.033%, resulting in an annual effect on financial expenses of ThUS$65. Currency

USD

Rate

Capital Balance Origin Currency (thousands)

Interest Origin Currency (thousands)

1% Rate Var. Origin Currency (thousands)

3.30%

US$ 196,657

US$ 6,483

US$ 65

NOTE 5 - ESTIMATES AND SIGNIFICANT ACCOUNTING CRITERIA The estimates and criteria used are continuously evaluated and are based on the historic experience and other factors, including expectations of future events that are considered reasonable according to the circumstances. Empresas AquaChile and subsidiaries makes estimates and assumptions in relation to the future. The estimates and assumptions that have a significant risk of causing an actual adjustment in the balances of the assets and liabilities in the next period are presented below: a) Useful life of plant and equipment The management of Empresas AquaChile and subsidiaries determines the estimated useful lives and the respective charges for depreciation for their plant and equipment. Changes in the estimates could take place as a consequence of technical innovations and actions by the competition in response to severe cycles in the sector. The management will increase the depreciation charge when the useful lives are less than the lives estimated previously or will amortize or eliminate technically-obsolete or non-strategic assets that they have abandoned or sold. b) Biological assets The accounting principles and the valuation model applied to measure the biological assets are detailed in Note 2.7.

NOTE 6 - FINANCIAL REPORTING BY SEGMENTS The Company does financial reporting by segments in accordance with the provisions of IFRS 8 “Operating Segments.” This standard sets standards for reporting information by segments in the financial statements as well as disclosures about products and services, geographical areas and primary clients. An operating segment is defined as a component of an entity about which there is separate financial information that is evaluated regularly by the top-level management for the decision making with respect to the allocation of resources and the evaluation of profit or loss. The Group segments financial information by business unit, identifying the following lines:

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a) Line of Business Salmon and Sea Trout Farming Empresas AquaChile and subsidiaries have completely integrated the entire salmon chain of production, from the production of eggs to their marketing and distribution. This structure helps the control of strategic resources, particularly in the freshwater stage, and also allows more value to be created at each stage of the salmon production. (a)

Fresh water Production i) Eggs The companies that make up Empresas AquaChile and subsidiaries produce Salmon and Sea Trout eggs, keeping a stock of broodstock and developing the Company’s genetic program. The incubation facilities are located between the La Araucanía Region and the Aysén Region in Chile. Eggs of Atlantic Salmon, Pacific or Coho Salmon and Sea Trout are produced at these facilities. Through the subsidiaries Pesquera Antares S.A. and Aquainnovo S.A. they have set up a genetic development program to improve the egg quality of Atlantic Salmon, Pacific or Coho Salmon and Sea Trout, by selecting broodstocks based on criteria such as growth rate, maturation and others. The hatcheries are used for spawning, fertilization and incubation. ii) Smolt The Company produces salmon smolts and alevins to supply the requirements of the companies within the Group. The Company has hatcheries and freshwater and brackish water facilities, between the La Araucanía Region and the Aysén Region in Chile, as well as a hatchery in the Metropolitan Region.

(b) Sea water production The Company has sea licenses located in the Los Lagos Region and the Aysén Region. Through each of its companies, it has developed sectors or clusters4 to achieve logistical efficiency and also diversify the risk of diseases. To reduce the risk of diseases, the Company has implemented a low-density usage policy, which reduces the total theoretical capacity of each site. The Company has aquacultural licenses available to support its medium and long-term growth. (c) Processing plants To date, AquaChile has five processing plants located in the area of Puerto Montt, Calbuco and Isla de Chiloé. These plants play a specific role in the salmon processing stage, where the processing plants include H/G (headed and gutted) products, fresh fillets, frozen portions and high added-value products. The plants are equipped with the latest technology in salmon processing. (d) Sale Empresas AquaChile and subsidiaries focus on selling their production to key export markets. Their biggest markets are the USA and Japan. Currently, they are also exporting to the European, Asian, Middle Eastern and Latin American markets. Since 2003, the Company has had its own distribution company for the North American market, called AquaChile Inc. Through this company, Empresas AquaChile and subsidiaries have kept their primary clients, working closely with them in the development of new products and the introduction of new species, such as Tilapia. In general, the variety of salmon exported is tailored to the market’s requirements. Exports to the North American market are predominantly Atlantic Salmon. Exports to Japan are mainly whole and H/G Sea Trout products and H/G Coho products, whereas exports to Europe are mainly fillets and frozen portions of Atlantic Salmon. b) Line of Business of Tilapia Farming and Marketing At the end of 2005, Empresas AquaChile and subsidiaries acquired Grupo ACI S.A., a company headquartered in Costa Rica, with more than 25 years’ experience in the Tilapia industry. The Company’s business strategy is focused on supplying fresh Tilapia to the big supermarket chains, distributors and restaurant chains in the United States, with a 27% market share (Source: United States Department of Agriculture (USDA). The Company operates in the Cañas District, in the Guanacaste Region, Costa Rica, an area with optimal conditions for the production which allows it access to large volumes of water and a production-friendly climate. Moreover, it is strategically located, in logistical terms, for distributing fresh products to USA. 4

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Clusters: set of suppliers-clients in the same industry who are geographically located in the same area.

The Company is for the most part integrated with a value chain as described below: i)

Genetics and Reproduction Grupo ACI S.A. has had a genetic improvement program since 2006. This is run by the company Aquainnovo, a subsidiary of Empresas AquaChile S.A., specializing in biotechnology and molecular genetics.

ii)

Hatching, Pre on-growing and On-growing The entire Tilapia production process is carried out in over 390 hectares of growing area, in Cañas, Costa Rica. Each cycle lasts 290 days, during which the fish reach an ideal harvest weight of 900 grams.

iii)

Processing Plant AquaCorporación Internacional has the Terrapez processing plant, located in Cañas. These facilities receive the live harvest, fresh from the growing tanks, and as a result they obtain high value-added, fresh and frozen, products prepared with cutting-edge technology.

iv)

Marketing Grupo ACI’s markets are key, mainly in USA, where it has achieved a service level of roughly 27% of the demand.

Management Systems The farming areas (farm) and the “Terrapez” processing plant, whose jurisdiction is under a duty-free regime, operate under strict international standards regarding quality, the environment and occupational health and safety. Similarly, Grupo ACI is a member of the Business Alliance for Secure Commerce (BASC), guaranteeing a top-quality end product at the destination market.

c) Line of Business of Fish Feed Production In July 2006, Empresas AquaChile and subsidiaries formed a strategic alliance with Alitec S.A., a local subsidiary of Provimi, a leading world company in animal nutrition (subsequently acquired by Biomar), through which both parties have equal shareholdings in the company AlitecPargua S.A., whose primary asset is a fish feed production plant located in Pargua. i)

Production Process With an available capacity of 22 metric tons/hour, the AlitecPargua S.A. processing plant produces seawater fish feed in calibers of 4 to 17 millimeters. The fish feed industry is highly concentrated, with a few producers controlling roughly 88%5 of the total volume produced (Skretting, Ewos, AlitecPargua S.A., Salmofood S.A. and Biomar). The cost of the product varies depending on the main raw materials used to manufacture them: fish meal and fish oil. Chile and Peru are the biggest producers of these consumables in the world, so there is a major local supply source that ensures availability.

ii)

Production Plants AlitecPargua S.A. has a processing plant located in Pargua, in the region of Los Lagos, Chile. These facilities currently have a capacity to produce 126,000 metric tons of fish feed per year for fish during their seawater phase.

iii)

Management System The company has ISO 9001; 2000 certification and is currently in the process of certification for the standard ISO 22,000 and OHSAS 18,000.

iv)

Sale or Marketing The company’s main purpose is the production and marketing of fish feed for the group of Empresas AquaChile and Biomar Chile S.A., which is earmarked for the Chilean Salmon industry and to some extent the export market through Biomar Chile S.A.

Company source. Based on annual production 2010.

121

The assets and liabilities by segments as of December 31, 2011, December 31, 2010 and January 1, 2010, are as follows: Dec-11 Salmon and Sea Trout

Tilapia

ThUS$

437,132

354,783

Non-current assets

389,373

Assets

826,505

Classified Statement of Financial Position

Total

Current assets

Jan-10

Â Dec-10 Salmon and Sea Trout

Fish Feed

Others

Total

ThUS$

26,211

53,267

2,871

266,315

193,881

323,660

41,453

16,372

7,888

305,061

251,614

678,443

67,664

69,639

10,759

571,376

445,495

Tilapia

Total

Salmon and Sea Trout

Tilapia

Fish Feed

Others

ThUS$

26,415

42,882

3,137

202,534

149,214

34,703

16,321

2,423

294,255

61,118

59,203

5,560

496,789

Fish Feed

Others

ThUS$

24,133

28,249

938

242,177

34,618

17,636

(176)

391,391

58,751

45,885

762

Current liabilities

130,969

56,815

13,024

52,246

8,884

92,552

41,011

5,753

42,776

3,012

78,046

42,440

6,255

29,053

298

Non-current liabilities

244,439

233,032

7,867

1,316

2,224

446,852

432,296

10,538

730

3,288

440,588

428,752

9,232

1,320

1,284

Total Net Equity

451,097

388,596

46,773

16,077

(349)

31,972

(27,812)

44,827

15,697

(740)

(21,845)

(79,801)

43,264

15,512

(820)

Liabilities and Equity

826,505

678,443

67,664

69,639

10,759

571,376

445,495

61,118

59,203

5,560

496,789

391,391

58,751

45,885

762

The income by segments for the years ended as of December 31, 2011 and 2010, are as follows: Dec-11 Income Statement by segments

Dec-10

Total

Salmon and Sea Trout

Tilapia

Fish Feed

Others

ThUS$

Total

Salmon and Sea Trout

Tilapia

Fish Feed

Others

ThUS$

Gain (loss) Revenues from ordinary activities Cost of sales

501,151

338,540

63,665

98,130

816

387,841

255,353

63,679

68,338

471

(404,126)

(251,871)

(56,109)

(94,940)

(1,206)

(326,339)

(205,094)

(55,102)

(65,460)

(683) (212)

97,025

86,669

7,556

3,190

(390)

61,502

50,259

8,577

2,878

(65,368)

(33,575)

70,261

43,092

101,918

91,562

7,556

3,190

(390)

71,019

59,776

8,577

2,878

(212)

2,204

1,522

679

8,035

7,879

104

Distribution costs

(3,082)

(1,712)

(1,370)

(2,693)

(1,042)

(1,651)

Administrative expense

(17,861)

(11,901)

(3,294)

(2,477)

(189)

(17,900)

(12,543)

(5,035)

(112)

(210)

Other expenses, by function

(3,096)

(3,068)

(28)

(6,425)

(6,268)

(157)

1,632

1,701

(104)

630

623

(13,972)

(13,768)

(46)

(156)

(2)

(11,521)

(11,142)

(93)

(285)

(1)

1,342

995

293

592

706

(69)

(45)

69,085

65,331

2,863

482

409

41,737

37,989

3,449

813

(514)

(14,209)

(14,135)

(101)

(17)

16,356

17,416

(1,024)

(123)

54,876

51,196

2,907

381

392

58,093

55,405

2,425

690

(427)

Gross earnings pre-fair value Fair value biological assets harvested and sold1 Fair value biological assets of the period2 Gross earnings Other revenues, by function

Financial revenues Financial costs Exchange-rate differences Result from realignment units Gain (loss), before taxes Expense for income taxes Gain (loss) from continued operations

54,876

51,196

2,907

381

392

58,093

55,405

2,425

690

(427)

Gain (loss) from discontinued operations Gain (loss)

NOTE 7 - CASH AND CASH EQUIVALENTS The item Cash and cash equivalents relates the balances of money kept in Current bank accounts, Term deposits and Other financial investments with less than 90 days to maturity. Also included within this item are those investments inherent to the administration of cash, such as overnights whose maturity is in line with the preceding definition, in the terms described in IAS 7. The composition of Cash and cash equivalents as of December 31, 2011, December 31, 2010 and January 1, 2010, is as follows: Types of Cash and Cash Equivalents

Cash holdings Bank Balances Term deposits Mutual Funds and Investments Total

122

12/31/2011 ThUS$

448 8,502 79,105 25,842 113,897

12/31/2010 ThUS$

11,010 2,803 14,603 28,416

01/01/2010 ThUS$

7,439 18,956 2,074 28,469

The balances by type of currency comprising Cash and cash equivalents as of December 31, 2011, December 31, 2010 and January 1, 2010, are as follows: By type of currency

Amount of the cash and cash equivalent in Amount of the cash and cash equivalent in Amount of the cash and cash equivalent in Amount of the cash and cash equivalent in Amount of the cash and cash equivalent in Total

12/31/2011 ThUS$

Currency

United States dollar Chilean pesos Yen Euro Costa Rican colon

111,503 671 399 16 1,308 113,897

12/31/2010 ThUS$

24,178 3,561 99 578 28,416

01/01/2010 ThUS$

24,290 777 119 204 3,079 28,469

The breakdown of term deposits as of December 31, 2011, December 31, 2010 and January 1, 2010, is as follows: 12/31/2011 ThUS$

Investments in term deposits

Banco Citibank Banco BBVA Banco Security Banco BCI Banco Corpbanca Total

20,033 59,072 79,105

12/31/2010 ThUS$

303 2,500 2,803

01/01/2010 ThUS$

2,000 1,656 15,300 18,956

The breakdown of the investments in mutual funds as of December 31, 2011, December 31, 2010 and January 1, 2010, is as follows: 12/31/2011 ThUS$

Investments in mutual funds

Fondos mutuos BBVA CorpBanca – Mutual Funds Citibank N.A. BCI – Mutual Funds BCI Administradora de Fondos Mutuos BBVA Administradora General de Fondos CorpCapital – Mutual Funds Larraín Vial – Mutual Funds Larraín Vial - Cash Demand investments Total

1,158 5,000 425 173 13,590 5,496 25,842

12/31/2010 ThUS$

2,187 428 42 10,646 1,300 14,603

01/01/2010 ThUS$

134 1,940 2,074

The mutual fund quotas are fixed income and are carried at the market value through the quota value at the close of each period. The mutual funds are kept by the Group until it fulfills its operating obligations. Cash and cash equivalents presented in the Cash flow statement is as follows: Type of asset

Cash and Cash equivalent Cash and Cash equivalents presented in the Cash Flow Statement

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Loans and accounts receivable ThUS$

Assets at fair value through profit or loss ThUS$

Total ThUS$

113,897 113,897

28,416 28,416

28,469 28,469

NOTE 8 - FINANCIAL INSTRUMENTS 8.a) Financial instruments by category December 31, 2011

Assets Cash and cash equivalent Trade debtors and accounts receivable, current Accounts Receivable from Related Entities, Current Fees receivable, non-current Accounts receivable from related entities, non-current Total

8,950

104,947

113,897

96,444

6,603

150

1,580

113,727

104,947

218,674

123

December 31, 2011

Liabilities at fair value with changes in profit or loss ThUS$

Other financial liabilities ThUS$

Total ThUS$

Liabilities 12,009

12,009

Trade accounts payable and other accounts payable

Other financial liabilities, current

111,018

Accounts payable to related entities, current

2,203

Other non-financial liabilities, current

2,351

Other accounts payable, non-current

2,735

Other financial liabilities, non-current

184,648

Total

196,657

118,307

314,964

December 31, 2010

Loans and accounts receivable ThUS$

Assets at fair value through profit or loss ThUS$

Total ThUS$

December 31, 2010

11,010

17,406

28,416

82,883

1,150

1 1,150

500

95,544

17,406

112,950

Liabilities at fair value with changes in profit or loss ThUS$

Other financial liabilities ThUS$

Total ThUS$

Liabilities Other financial liabilities, current Trade accounts payable and other accounts payable

7,765

80,385

80,385 1,059

Accounts payable to related entities, current

1,059

Other non-financial liabilities, current

975

Other accounts payable, non-current

3,963

409,834

417,599

86,382

503,981

Other financial liabilities, non-current Total

January 1, 2010

Loans and accounts receivable ThUS$

Assets at fair value through profit or loss ThUS$

Total ThUS$

Assets Cash and cash equivalent Trade debtors and accounts receivable, current Accounts receivable from related entities, non-current Total

January 1, 2010

Other financial liabilities, current Trade accounts payable and other accounts payable Accounts payable to related entities, current Other financial liabilities, non-current Total

124

7,439

21,030

28,469

52,632

500

60,571

21,030

81,601

Liabilities at fair value with changes in profit or loss ThUS$

Other financial liabilities ThUS$

Total ThUS$

11,722

65,143

381

411,753

423,475

65,524

488,999

8.b) Credit quality of financial assets

The Company’s financial assets can mainly be classified in two large groups: i) Trade loans with clients, which, in order to measure their level of risk, are classified by age of the debt and also provisions are made for their uncollectibility, and ii) the financial investments made by the Company in accordance with the criteria mentioned in Note 2.12: Current assets

Cash and cash equivalent

Mutual funds and term deposits, classification AA+fm/M1 AAA Banking Current Accounts Cash holdings Subtotal Trade debtors and other accounts receivable

Trade debtors and other accounts receivable, current Subtotal Total

31-12-2011 ThUS$

31-12-2010 ThUS$

01-01-2010 ThUS$

104,947 8,502 448 113,897

17,406 11,010 28,416

21,030 7,439 28,469

96,444 96,444 210,341

82,883 82,883 111,299

52,632 52,632 81,101

None of the financial assets pending maturity have been subject to renegotiation during the period.

8.c) Estimation of the fair value

As of December 31, 2011, the Company maintained financial instruments that have to be recorded at their fair value. These include: •

Investments in short-term Mutual Funds (cash equivalent).

The Company has classified the measurement of the fair value using a hierarchy that reflects the level of information used in the valuation. This hierarchy comprises three levels: (I) fair value based on the trading price in active markets for a similar type of asset or liability, (II) fair value based on valuation techniques that use pricing information of markets or derivatives of the market price of similar financial instruments and (III) fair value based on valuation models that do not use market information. The fair values of financial instruments that are traded in active markets, such as investments acquired for trading, are based on market trading prices at the close of the period using the current buyer price. The following table shows the classification of financial instruments at fair value as of December 31, 2011, according to the level of information used in the valuation: Assets As of 31-12-2011

Mutual funds, short-term Total

Measurements of fair value using values considered as Fair value ThUS$

Level I ThUS$

25,842 25,842

Level II ThUS$

25,842 25,842

Level III ThUS$

In addition, as of December 31, 2011, the Company has financial instruments that are not recorded at their fair value. In order to comply with the disclosure requirements of fair values, the Company has valued these instruments as shown in the table below: Financial instrument not recorded at its

Cash and cash equivalent

Cash holdings Bank balances Term deposits Other assets and liabilities

Trade debtors and other accounts receivable Accounts receivable from related entities Other financial liabilities Trade accounts and other accounts payable Accounts payable to related entities Other accounts payable

12/31/2011

12/31/2010

01/01/2010

Book value ThUS$

Fair value ThUS$

Book value ThUS$

Fair value ThUS$

Book value ThUS$

Fair value ThUS$

448 8,502 79,105

11,010 2,803

7,439 18,956

96,594 8,183 196,657 111,018 2,203 2,735

84,033 501 422,648 80,385 1,059 3,963

84,033 501 417,599 80,385 1,059 3,963

52,632 524 425,492 65,143 381 1,762

52,632 524 423,475 65,143 381 1,762

The carrying amount of the accounts receivable and payable is assumed to be close to their fair values, owing to their short-term nature. In the case of cash holdings, bank balances, term deposits and other non-current accounts payable, the fair value is close to their book value.

125

NOTE 9 - TRADE DEBTORS AND OTHER ACCOUNTS RECEIVABLE The breakdown of Trade debtors and other accounts receivable is as follows:

Trade debtors and other accounts receivable

Trade debtors Domestic Foreign Uncollectible provision Trade debtors (net)

12/31/2011 Current ThUS$

Others Uncollectible provision Other accounts receivable (net) Total

Current ThUS$

01/01/2010

Non-current ThUS$

Current ThUS$

Non-current ThUS$

3,677

30,139

17,824

75,048

37,266

25,365

(396)

(664)

(1,531)

78,329

66,741

41,658

496

15,947

150

14,604

1,150

7,546

2,213

1,641

2,932

(45)

(103)

18,115

150

16,142

1,150

10,974

96,444

150

82,883

1,150

52,632

Notes receivable, net Other accounts receivable, net*

12/31/2010 Non-current ThUS$

The fair value of trade payables and other accounts receivable does not differ, significantly, from their book value. *

Includes ThUS$15,850 corresponding to net tax credit for Value-Added Tax (net VAT Credit) (ThUS$13,031 December 2010).

There are accounts receivable that are overdue but not impaired. The age of these accounts is as follows:

Classification of debtors according to maturity

From 0 to 90 days From 91 to 180 days From 181 to 360 days 360 days and over Total

12/31/2011 Current ThUS$

12/31/2010 Non-current ThUS$

93,486

Current ThUS$

82,255

01/01/2010

Non-current ThUS$

Current ThUS$

52,224

Non-current ThUS$

731

199

102

1,927

300

150

429

1,150

254

96,444

150

82,883

1,150

52,632

The amounts relating to trade debtors and other accounts receivable individually impaired are as follows: Impairment of trade debtors and other accounts receivable

Trade debtors Sundry debtors Total

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

(396)

(664)

(1,531)

(45)

(103)

(441)

(767)

(1,531)

The balances for currencies that comprise Trade debtors and other accounts receivable, non-current, as of December 31, 2011, December 31, 2010 and January 1, 2010, are as follows:

Classification by type of currency

United States dollars Chilean pesos

126

12/31/2011 Current ThUS$

76,926

12/31/2010 Non-current ThUS$

150

Current ThUS$

64,153

01/01/2010

Non-current ThUS$

1,150

Current ThUS$

Non-current ThUS$

31,306

19,518

17,583

20,123

Costa Rican colons

1,145

1,200

Euro

Total

96,444

150

82,883

1,150

52,632

The balance of Trade debtors classified by product type is as follows: Classified by product type

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

32,774

Salmon

58,214

50,880

Tilapia

6,044

4,497

3,125

Fish Feed

30,014

24,270

12,468

Others Total

2,172

3,236

4,265

96,444

82,883

52,632

The Company establishes provisions based on evidence of impairment of trade payables. The criteria used to determine whether there is objective evidence of impairment losses are the maturity of the portfolio, specific impairment events (default) and specific market signs. Maturity Impairment 100% Domestic Debtors â&#x20AC;&#x201C; more than 1 year The breakdown of the movement of the impairment provision for accounts receivable is as follows: 12/31/2011 ThUS$

Movement of impairment provision for accounts receivable

12/31/2010 ThUS$

Trade debtors Initial balance Estimate, uncollectibles

(664)

(1,531)

523

867

Adjustment of estimate for provision

(255)

Balance

(396)

(664)

(103)

Other accounts receivable Initial balance Estimate, uncollectibles Adjustment of estimate for provision Balance Total

(103)

(45)

(103)

(441)

(767)

Once pre-legal and legal collection procedures have been exhausted, the assets are then cancelled against the provision so formed. For purposes of better control, the Company only uses the provision method, not the direct write-off method. Historical renegotiations and those currently in effect have little relevance and the policy is to analyze them on a case-by-case basis to classify them according to the existence of risk, after determining whether they should be reclassified to pre-legal collection accounts. If the reclassification is warranted, a provision for matured and about to mature is formed. The maximum credit risk exposure on the presentation date of the information is the fair value of each of the aforementioned categories of accounts receivable. 12/31/2011 Fair value

Trade debtors Notes receivable Other accounts receivable Total

Gross exposure according to balance sheet ThUS$

78,725 18,160 96,885

12/31/2010

Gross exposure impaired ThUS$

Net risk exposure ThUS$

(396) (45) (441)

78,329 18,115 96,444

Gross exposure according to balance sheet ThUS$

80,469 76 3,105 83,650

01/01/2010

Gross exposure impaired ThUS$

Net risk exposure ThUS$

(664) (76) (27) (767)

79,805 3,078 82,883

Gross exposure according to balance sheet ThUS$

48,657 496 5,010 54,163

Gross exposure impaired ThUS$

Net risk exposure ThUS$

(1,531) (1,531)

47,126 496 5,010 52,632

127

NOTE 10 - INVENTORIES The composition of the inventories at the close of each period is as follows: Breakdown of inventories

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Finished products

12,374

4,684

Fair value biological assets harvested and not sold

3,000

737

Consumables

30,877

9,476

4,825

Raw material

3,865

2,460

Raw material in transit

4,835

646

1,403

2,563

2,420 (710)

Spare parts and supplies Provision, market cost Unrealized profit Others Total

17,128

(2,602)

(5,304)

855

973

1,165

45,052

21,829

28,789

Inventory policies The inventories of the Group are measured at cost or net cash value, whichever is less. Inventories measurement policy The Group values its inventories as follows: a) The production cost of the inventories manufactured comprises those costs directly related with the units produced, such as labor, variable and fixed costs that have been included to transform the raw material into finished products.

The production cost of fresh and frozen Salmon is determined using the last fair value of the biological asset at the point of harvest, plus the direct and indirect production expenses.

In the case of the cost of acquired inventory, the acquisition cost will comprise the purchase price, customs duty, transportation, storage and other costs attributable to the acquisition of the merchandise and materials.

Formula for calculating the cost of inventories Inventories of finished products are valued using the weighted average cost method, i.e., the cost of each product unit is determined using the weighted average of the cost recorded at the beginning of the fiscal year, and of the cost of the articles purchased or produced during the fiscal year. The inventories of raw materials, containers and materials are valued at the weighted average cost. Information on finished products The Company has not made any write-offs of finished products at the close of the respective fiscal years. During the period ended on December 31, 2011, the fiscal year ended on December 31, 2010 and as of January 1, 2010, no inventories have been delivered on pledge as collateral. Insurance The Group has taken out insurance policies to cover the risks to which the products in processing and the finished products are subject, including also loss of profits and/or business interruption loss. Empresas AquaChile and subsidiaries consider that the coverage of these policies is adequate for the risks inherent to their activity. The insurance policies kept by Empresas AquaChile and subsidiaries are detailed below: Fresh Fish, Frozen Smoked (Salmon and Sea Trout)

128

Losses and/or damages during transport by sea, air and/or land.

The inventories recognized in cost of sales at the close of each period are summarized below: Cost of sales

31-12-2011 ThUS$

31-12-2010 ThUS$

Sales Cost

(404,126)

(326,339)

Fair value biological assets harvested and sold * Final balance

(65,368)

(33,575)

(469,494)

(359,914)

* Relates to the higher cost of the biomass of fish harvested and soled derived from revaluation for their natural growth.

NOTE 11 - BIOLOGICAL ASSETS Biological assets Salmon and Sea Trout, such as broodstock, alevins, smolts and on-growing fish, are measured at their fair value less the estimated costs at the point of sale, except when the fair value cannot be reliably determined according to the definitions contained in IAS 41 (see Note 2.7). The Company does not maintain biological assets as collateral for financial institutions or other suppliers. The biological assets of Empresas AquaChile and subsidiaries consist of Salmon, Sea Trout and Tilapia. The biological assets which the management deems will be harvested in accordance with their production cycle are classified as current biological assets: Breakdown

Salmon and Sea Trout*

Current 12/31/2011 ThUS$

Tilapia Total

155,219

12/31/2010 ThUS$

119,630

Non-current 01/01/2010 ThUS$

12/31/2011 ThUS$

12/31/2010 ThUS$

76,481

31,517

5,862

01/01/2010 ThUS$

7,435

12,881

9,264

11,292

1,628

1,085

1,271

168,100

128,894

87,773

33,145

6,947

8,706

* The biological assets of Salmon and Sea Trout include a net valuation effect of the biomass being raised by natural growth of ThUS$4,893 as of December 31, 2011 (ThUS$9,517 as of December 31, 2010). Movements

12/31/2011 ThUS$

12/31/2010 ThUS$

Biological assets, Initial

135,841

96,479

Increases from on-growing and production

321,030

236,042

(259,298)

(201,690)

Decreases from sales and harvests Adjustment to fair value in the fiscal year, fair value decrease *

4,893

9,517

Extraordinary Mortality

(1,221)

(4,507)

201,245

135,841

Fiscal Year Balance

The balance in the heading of biological assets includes ThUS$19,936 for an adjustment of fair-value valuation, which is explained in the following table: * Breakdown of fair value adjustment for growth of the biomass

31-12-2011 ThUS$

31-12-2010 ThUS$

Higher cost for revaluation of biomass harvested and sold

(65,368)

(33,575)

Revenue for revaluation of biomass harvested and sold

50,325

26,122

Adjustment for valuation of, on-growing Biomass

19,936

16,970

4,893

9,517

Net Effect of fair value adjustment, biomass

Policies of biological assets Biological assets are valued at their fair value less the estimated costs at the point of sale according to the definitions contained in IAS 41 and in accordance with the provisions of Note 2.7. At the close of each period, the effect of natural growth of the fish in the water, expressed in fair value less the estimated costs at the point of sale is recognized according to a measurement made based on market prices adjusted for quality and caliber. The resulting negative or positive equity is recorded in the income statement, under the item “Fair value biological assets in the fiscal year” which in the period ended at December 31, 2011, amounted to ThUS$70,261 (ThUS$43,092 of December 31, 2010). The higher cost of the part exploited and sold derived from this revaluation is recorded in the income statement under the item “Fair value biological assets harvested and sold” and amounts to ThUS$65,368 as of December 31, 2011 (ThUS$33,575 of December 31, 2010).

129

Total biological assets in units and metric tons

Breakdown

Seawater (On-Growing)

12/31/2011 Biomass Units

12/31/2010 Biomass Metric tons

Units

Metric tons

Atlantic Salmon

11,496,052

8,959

4,470,968

6,088

Sea Trout

13,347,520

17,193

8,230,975

11,805

4,398,119

11,982

2,954,839

9,085

33,311,103

617

32,171,859

210

Sea Trout

22,076,051

662

21,935,420

860

Pacific Salmon

12,379,262

777

14,111,483

816

Tilapia

52,247,264

7,024

31,295,649

5,045

Pacific Salmon Freshwater Atlantic Salmon

Tilapia (Broodstock) Total

429,480

123

286,000

150

149,684,851

47,337

115,457,193

34,059

Risk management policies a) Environmental risk Although Empresas AquaChile and subsidiaries have geographically diversified their production facilities in Chile, the salmon industry is exposed to risks of nature, such as temperature variability in seawater, weather phenomena, seismicity, algae bloom6, the existence of natural predators and other factors that may affect the place where their production facilities are situated. All of these circumstances can affect the growth of Empresas AquaChile and subsidiaries, having a negative impact on their quality and even increasing mortality rates, which would lead to a reduction in production quantities and consequently in their sales and earnings. b) Phytosanitary risks Diseases, parasites and pollutants are a recurring problem in the aquaculture industry, which can lead to reduced quality of the products, increases in mortality and reduced production. Although Empresas AquaChile and subsidiaries have made significant investments in research, genetic improvement studies, mass vaccination programs, independent zone management systems, fish health monitoring, policies of low-density in the use of cages, and sanitary barriers that help control and reduce these risks, it is not possible to rule out the appearance of new diseases or plagues that might affect Salmon and/or Sea Trout production. c) Product quality and traceability risks The products grown, produced and marketed by the Company are for human consumption, and there is a risk of contamination by negligence in the production or inadequate handling during the process of distribution and/or delivery to the end consumer, by clients, consumers or third parties. To avoid this, Empresas AquaChile has developed the most stringent quality classification controls and food safety control, with constant monitoring internally and externally by the sectorial authorities. For control of food innocuity, the Company has full traceability of the fish and, before harvesting, the authorities order the fish to be analyzed to rule out any traces of residues. The processing plants are also sampled to ensure innocuity in the processing and the raw materials. In this way, the authorities and the clients can be assured of the innocuity of the Company’s products. As animals raised in an open environment, i.e., the sea, the fish are exposed to diseases that can lead to health issues. To control these impacts, the Company has a health department made up of veterinary doctors who implement the preventive policy and monitor the sanitary aspects of the fish populations and, in case of any disease, provide the appropriate treatment against it. To not do so would constitute a risk to the population of fish and a risk to the Company’s earnings. d) Risks of price variations in consumables Some of the most significant costs in salmon production lie in supplies of fish meal and fish oil. Although sources of fish feed have been diversified, including new plant alternatives, and investments have been made in two proprietary fish feed plants to supply part of the consumable requirements, Empresas AquaChile and subsidiaries may be affected by variations in the prices that are due to circumstances beyond their control, since the fish feed industry is concentrated in a handful of global producers and there is no extensive market of futures or other derivatives to purchase several of these raw materials, which make up the diet for Salmon, Sea Trout and Tilapia.

130

Natural phenomena known as Harmful Algae Bloom (HAB) occurring in aquatic ecosystems that are caused by phytoplanktonic organisms which, in favorable environmental conditions for their development, multiply explosively and concentrate, causing disturbances to marine life and mortality among fish.

e) International pricing trends The Salmon and Sea Trout supply depends on the production strategies of each of the companies involved in the industry. For this reason, projecting and estimating an equilibrium price for the products is complex. Moreover, demand for farmed Salmon has grown significantly over recent years. Accordingly, it is possible that a difference may arise between the supply and demand for salmon products, bringing with it price volatility. However, the salmon industry globally and locally has been undergoing a dynamic consolidation process. It therefore allows us to forecast that future periods of growth will tend to present a more balanced behavior. On the other hand, diversification into other species, such as Tilapia, and international diversification itself, could minimize the effect and complement the portfolio which the Company offers to the markets. f) Consumer variations in the destination markets Although the global trend suggests it is possible to estimate a sustained rise in the consumption of farmed fish and other aquacultural products over the next few years, the Company cannot guarantee that trend will maintain itself or last over time. In the event this changes or goes into reverse, it could cause a negative effect on the business and its operating results. g) Changes in the economy of destination countries. Currently, the Company’s exports are sold primarily in the markets of USA, the European Union and Japan, and possible economic stagnation, crises or depressions leading to a reduced demand cannot be ruled out. If such events were to take place this could lead to negative effects on the Company’s operation and operating results. h) Concentration of financial liabilities. On June 24, 2011, the Company signed a Debt Rescheduling Agreement with its financial creditors whereby, in addition to renegotiating with all its financial creditors the maturity terms and interest rates of the loans, the enforceable financial indexes and the collateral furnished, a series of positive and negative covenants on the part of the Company were also stipulated. This agreement also stipulates various mechanisms and quorum for the approval of any exceptions to these by the creditors. In addition to the nonpayment of any of the capital and interest owed on the agreed dates, if the Company fails to perform its positive or negative covenants stipulated therein, and maintains such nonperformance for more than 90 days, the financial creditors can demand the expiration of the terms agreed and demand early payment of the whole of the debt and interest. Exchange-rate risk. i) As a global company, exchange-rate fluctuations can also affect the performance of Empresas AquaChile, since part of its costs (labor and services such as overland transport, etc.) are indexed to the peso, and its sales are denominated in foreign currencies, such as the American dollar, the euro and the yen. In addition, since the Company reports its balance sheets in dollars, changes in the strength of the dollar with respect to the rest of the currencies in which the Company does business can negatively affect its financial results. Changes in environmental and other legislation j) Caring for the environment forms an essential part of the Company’s business policy. Notwithstanding, the pollution of natural resources due to external issues caused by production processes has generated growing concern and awareness on the part of consumers, intermediary groups and the pertinent authorities, who demand production systems that are environmentally friendly and guarantee that natural resources will be protected in the long term beforehand. These exigencies have resulted in the establishment of more stringent standards and procedures with a view to environmental sustainability, which might lead to significant increases in production costs and/ or restrictions on the Company’s production activity. k) Changes in aquacultural and sea licenses legislation The Company has developed processes and constant monitoring for the proper management of fish farm sites and has a technical department and legal advisory services that oversee the proper use and handling of aquacultural licenses. However, the inadequate handling of aquacultural licenses and/or noncompliance with the relevant standards for sustainability and proper operation of the whole of the system; inactivity of the licenses without due cause or authorization from the authorities, could lead to the application of penalties, and even imposed forfeiture of any of the aquacultural licenses by the authorities, in cases where such measure is contemplated in the applicable law. Risks of the assets l) The fixed assets, such as facilities and buildings, and the risks of civil liability, are covered through insurance policies under standard market terms and conditions. However, given the lack of effective insurance, the high costs now prevalent in the market for insuring the living assets or biomass, and the disputes over responding for those losses which the insurers put forward, the Company currently has no insurance for its biomass against risks of diseases, theft or natural risks such as storms, tempests, sea swells, tsunamis, seaquakes, earthquakes, volcanic eruptions, currents, floods, avalanches and/or alluvions, underwater currents, algal bloom. Consequently, any relevant

131

damage or loss in these assets may lead to an adverse effect on the Company’s businesses and financial position. Notwithstanding the above, the geographical dispersion of the on-land facilities and fish farm at sea, allow it to, if not avoid, then at least diversify the risk of these events. m) Subsidiaries and affiliates Empresas AquaChile S.A. is the parent company and affiliate of several companies, through which a significant part of the Company’s operation is developed, and on whose operating results and financial condition it has considerable dependence. Any significant impairment in the business and profit or loss of its subsidiaries and affiliates may have an adverse effect on the operation and operating results. n) Insurance As of December 31, 2011, the Group had taken out insurance policies to cover the risks to which the biological assets, are subject, including also loss of profits and/or business interruption loss. Empresas AquaChile and subsidiaries consider the coverage of these policies to be adequate for the risks inherent to their activity. The insurance policies kept by Empresas AquaChile and subsidiaries are detailed below: Asset type Live Fish, Harvested

Risks covered Damage as a direct consequence or cause brought about by an external agent, except during their transport by sea, air and/or land.

NOTE 12 – TAX ASSETS AND LIABILITIES The tax assets - current, are detailed below: Tax Accounts Receivable

Credit, fixed asset Art. 33 bis

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

141

1,176

524

2,459

1,588

2,489

Credit for training

531

345

162

Other taxes recoverable

4,244

2,088

3,501

12/31/2011 ThUS$

12/31/2010 ThUS$

Monthly estimated tax payment for absorbed profits Monthly estimated tax payments

Total Tax Accounts Payable

244

01/01/2010 ThUS$

Income Tax

3,372

2,368

Total

3,372

2,368

NOTE 13 – OTHER FINANCIAL ASSETS, NON-CURRENT The breakdown of other financial assets, non-current, is as follows: Name

12/31/2011 ThUS$

12/31/2010 ThUS$

Investment in FiordoAustral S.A.

10,694

Total

10,694

This relates to a 6.12% interest in the company Fiordo Austral S.A., acquired in May 2011 by the affiliate AquaChile S.A.

132

01/01/2010 ThUS$

NOTE 14 – INVESTMENTS RECORDED USING THE EQUITY METHOD The breakdown of other financial assets, non-current, is as follows: 12/31/2011 ThUS$

Name

Investment affiliate Grupo ACI Costa Rica (1)

12/31/2010 ThUS$

01/01/2010 ThUS$

3,000

Salmones Chaicas S.A. (2)

1,198

Total

4,198

(1)

This relates to joint ventures between the affiliate ACI of Costa Rica and Biomar S.A., for the construction of a fish feed plant.

(2) Since May 2011, the Company has had an 18.3% holding in the company Salmones Chaicas S.A., a company in which Inversiones La Montaña S.A. holds 43.55%; CS Holding ApS and OSS Holding 2004 ApS jointly hold 7.04%, Fondo de Inversión Privado Patagonia have 15.55% and Holding Salmones S.A. have 15.55%. This project consists in a technologically advanced recycling hatchery for the production of Atlantic Salmon eggs and smolts. The hatchery will have a production capacity of 120 million eggs and 4.2 million smolts in its first stage to reach a total of 12.6 million smolts at full capacity. Empresas AquaChile’s investment in this company amounts to ThUS$1,300. Empresas AquaChile has a call option for the remaining 81.7% of the shareholding of Salmones Chaicas S.A., beginning in April 2017. In addition, the rest of the shareholders of Salmones Chaicas S.A. have put options to sell all their shares to Empresas AquaChile, beginning in 2018. Summarized information of the financial statements of Biomar AquaCorporation Products and Salmones Chaicas S.A., as of December 31, 2011. Biomar AquaCorporation Products ThUS$

Classified statement of financial position

Salmones Chaicas S.A. ThUS$

Current assets

2,456

5,211

Non-current assets

10,351

11,230

Assets

12,807

16,441

Current liabilities

6,807

9,899

Non-current liabilities

Total net Equity

6,000

6,542

Liabilities and Equity

12,807

16,441

Biomar AquaCorporation Products ThUS$

Income Statement

Salmones Chaicas S.A. ThUS$

Gain (loss) Revenues from ordinary activities Gain (loss) in the period

(641)

(155)

NOTE 15 - INTANGIBLE ASSETS OTHER THAN GOODWILL The breakdown of the main types of intangible assets that were not generated internally are shown below: Intangible assets other than goodwill

Useful Life

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

23,877

Aquacultural Licenses

Indefinite

28,859

24,154

Water rights

Indefinite

4,059

6,478

6,105

Trademark rights

Finite

2,365

2,642

2,564

Farm usage rights

Finite

2,029

2,096

2,213

Others

Finite

37,326

35,416

34,830

Total

133

a) Aquacultural licenses and water rights The aquacultural licenses acquired from third parties are presented at historic cost. The useful life of these licenses is indefinite, since they have no expiration date, nor any foreseeable useful life, therefore they are not amortized. The indefinite useful life is subject to review during each fiscal year for which information is presented, in order to determine whether the events and the circumstances are able to continue to support the evaluation of the indefinite useful life for this asset. b) Trademark rights The trademarks acquired are shown at the historic cost less impairment. The trademarks have a finite useful life. c) Farm usage rights The usage right of the farm relates to an intangible asset received as a contribution from a shareholder (El PelĂłn de la Bajura S.A.), by the subsidiary Grupo ACI S.A. located in Costa Rica, and it is amortized by the straight-line method over a term of 20 years. d) Computer softwares The intangible assets with a defined useful life are formed primarily be computer software which have all been acquired from third parties, for which the Company has defined a useful life of between 3 and 5 years. â&#x20AC;&#x192; The movement of intangible assets as of December 31, 2011, is as follows: Breakdown

Balance as of 01/01/2011 Accumulated amortization Other increases or decreases Balance as of 12/31/2011

Aquacultural Licenses ThUS$

Water rights ThUS$

Trademark rights ThUS$

Farm usage rights ThUS$

Others ThUS$

Totals ThUS$

24,154

6,478

2,642

2,096

35,416

(1,774)

(277)

(67)

(30)

(2,148)

4,705

(645)

(2)

4,058

28,859

4,059

2,365

2,029

37,326

Trademark rights ThUS$

Farm usage rights ThUS$

The movement of intangible assets as of December 31, 2010, is as follows: Breakdown

Balance as of 01/01/2010 Accumulated amortization Sales of sea licenses Additions in the fiscal year Balance as of 12/31/2010

Aquacultural Licenses ThUS$

Water rights ThUS$

134

Totals ThUS$

34,830

23,877

6,105

2,564

2,213

(36)

(48)

(25)

563

(1,574)

1,851

373

114

(69)

1,597

24,154

6,478

2,642

2,096

35,416

The breakdown of aquacultural licenses and water rights is as follows: a)

Others ThUS$

Proprietary assets: The company has 67 Water Rights with a total volume of 39,765.16 liters per second (L/s).

Breakdown of water rights: N°

DGA N°*

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Region

426 51 121 - 66 547 532 479 397 397 682 205 205 195 199 16 192 193 194 385 290 384 383 235

IX IX IX IX IX IX IX IX X X X X XI X X X X X X X X X

N°

23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44

DGA N°*

492 559 309 117 1152 323 292 443 118 117 81 82 85 223 223 364 467 466 125 118 122 293

Region

X X X X X X X X X X X X X X X X X X XI XI XI X

N°

45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67

DGA N°*

470 10 11 12 223 261 345 81 82 98 292 1043 993 278 278 155 279 72 73 98 292 163 307

Region

X XI XI XI X X X X X X X X X IX IX IX X XI XI X X X XIV

*DGA No.: Registration Number at the Water Bureau: Summary of Water Rights Region

Quantity

XIV

Total

The company has 162 Aquacultural Licenses (149 marine and 12 lake licenses) with a total area of 1,507.41 marine hectares and 78.3 hectares in lake. Breakdown of aquacultural licenses in rivers and sea: Region

Hectares Approved

No.

110.502

Isla Chaffers

3.91

Portion of Water and Seabed

Sea

100.182

Abtao

10.15

Portion of Water and Seabed

Sea

3.45

SIEP code

110.252

110.609

110.414

5 7

103.312

110.491

110.190

110.496

102.906

110.539

102.882

110.489

110.710

110.705

110.149

110.270

110.523

110.497

110.234

20 22 23

110.205

101.295

110.498

110.216

License Name

Abd el Krim Albo

Ayacara

Ayacucho

Benjamín Betecoi Brieva Buill

Caicura

Caleta Madina Caleta Momia

Canal Avellano 1

Canal Avellano 2 Canal Luchín

Canal Pérez Norte Canal Refugio

Canal Temuan Canalad 1

Canalad 2 Capera

Carabelas Cascada

XI XI

5.98

3.97

2.44

9.99

2.37

XI X

4.55

3.74

3.95

3.98

3.04

5.86

2.93

27.01

12.81

9.64

4.48

13.60

12.21

18.00

12.35

4.06

Aquacultural License Type*

Portion of Water and Seabed

Sea

135

No.

SIEP code

110.402

Coca 2

2.00

Portion of Water and Seabed

Sea

110.405

Cuervo

6.08

Portion of Water and Seabed

Sea

110.005

1.34

101.987

26 28

110.610

101.975

100.219

100.679

110.217

110.221

110.206 110.191

110.208

102.039

110.242

110.447

100.221

110.039

110.580

110.243

45 47

110.219

110.377

110.223

110.704

Coca 3

Cuervo Norte Chacabuco Chaicas

Chauques

Chidhuapi Demhart Detif

E.Magdalena El Avellano El Pino

Ensenada Pérez

Ensenada Quetén

Estero Fino, sector 2 Estero Frío

Estero Machildad Estero Mena Fontaine

Fresia Sur

Fresia Weste

Gala medio / Estero del medio Gala Sur / Estero Sur Guaitecas II

102.063

101.296

Herradura

100.123

Huelmo

103.426

102.049

100.124

54 56

102.907

110.619

100.245 110.421

110.423

100.974

101.989

110.273

62 64 66 67

110.411

110.408

110.218

110.241

110.439

110.443

69 71

110.435

110.249

110.536

110.446

101.498

110.214

110.445

100.981 110.189

110.490

110.213

84 86 87

Huenquillahue Ica

Ichuac

Isla Chaculay Isla Chita

Isla Gala Sur Isla Guar

Isla Harry

Isla Queullín Isla Sierra

Isla Suarez

Isla Ubaldo

Isla Warney James 1

James 2 James 3

Jesús 3

110.460

Huapi

110.467

Halcones chicos

Jesús 1

110.468

Guamblad

110.465

72 73

136

110.407

License Name

110.263

110.406

110.584

Jesús 2 Jesús Sur 1

Jesús Sur 2 Jesús Sur 3 Kent 1

Kent 2

La Arena

La Estancia

Region

XI X

Hectares Approved

1.92

3.03

4.29

55.53

5.94

5.84

16.80

11.35

12.24 5.98

10.30

62.50

3.22

3.91

2.49

3.04

2.02

4.00

7.21

XI XIV X X

7.97

7.28

7.92

5.00

29.56

0.67

5.25

2.44

40.00

58.25

13.63

12.40

9.50

4.48

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

7.87

Portion of Water and Seabed

62.51

5.00

Portion of Water and Seabed

61.58

Portion of Water and Seabed

22.50

Aquacultural License Type*

7.32

4.48

9.28

6.77

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

2.37

Portion of Water and Seabed

4.49

Portion of Water and Seabed

4.48

5.97

6.74

3.96

10.12

1.00

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

Sea

Sea Sea Sea Sea

Sea

Sea Sea

Sea

Sea Sea

Sea

Sea Sea

Sea Sea Sea

Sea

Sea Sea

Sea

La Leona

13.60

Portion of Water and Seabed

Sea

LagrezeWeste

6.08

Portion of Water and Seabed

Sea

Lagreze Norte Laguna Cuervo

Laguna Pedregoso (Canal Pedregoso)

Lalanca

Las Huichas

9.91

4.40

5.96

XI XI

11.03

4.95

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

Sea Sea

Sea

No.

SIEP code

102.072

Lille 1

12.00

Portion of Water and Seabed

Sea

110.138

Luma

1.04

Portion of Water and Seabed

Sea

100.680

110.215

90 92

102.391

110.433

110.434

110.397

95 97

110.661

110.437

License Name

Liucura (Cahueldao) Marchant Mauchil

Mauricio

Melchor 4 Melchor 5 Melchor 7

101.941

Morro Chilco

101.604

Paildad

101

110.127

Pangal 2

100

110.126

102

110.209

104

100.208

106

102.064

103

105

110.204

101.292

107

104.065

109

101.272

108 110

110.422

101.581

111

110.540

113

110.110

112

110.111

114

110.222

116

102.159

115 117

110.412

102.071

118

102.096

120

102.073

122

101.294

119 121

110.271

110.136

123

102.385

125

102.255

124

100.411

126

100.220

128

100.223

127

129

100.222

110.264

130

102.062

132

101.768

131

133

134

110.220

100.416

Norte Isla Valverde

Pangal 1

Pangal 3

Pangal 4 Pangue

Paso Quenu

Piedra Blanca Pocoihuen Porvenir II

Pta. Serapio (Cochamo)

Pta. Zenteno (Canutillar) Puerto Español Punta Aguada

Punta Bennett

Punta González Punta Guala Punta lille 2

Punta Paula Punta Pelú

Punta Porvenir Punta White

Punta Yelcho - Caleta Bluff Puqueldón

Quellón Viejo Quetalco

Quilque Sur Quinched Quiquel I

Quiquel II Repollal

San Pedro

Seno Gato Sotomó Tauco

102.007

Teguel, Sector I

136

102.009

Teguel, Sector III

138

110.505

135 137

139

102.008 102.010 110.503

Teguel, Sector II

Region

Hectares Approved

27.63

6.91

10.00

6.77

4.47

13.55

13.48

55.27

50.37

12.14

XI X X

4.29

7.14

50.81

12.21

9.00

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

7.32

4.17

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

3.00

Portion of Water and Seabed

1.24

Portion of Water and Seabed

4.47

1.09

Portion of Water and Seabed

4.90

7.42

Portion of Water and Seabed

8.29

Portion of Water and Seabed

9.97

Portion of Water and Seabed

4.01

12.00

12.65

2.00

18.00

21.16

3.48

9.00

6.42

2.49

4.20

10.09

7.92

8.03

Portion of Water and Seabed Portion of Water and Seabed Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed

Portion of Water and Seabed

2.86

3.24

Portion of Water and Seabed

3.24

Portion of Water and Seabed

X X

7.95

3.24

Teresa 2

4.48

5.96

Portion of Water and Seabed

Portion of Water and Seabed Portion of Water and Seabed

3.74

Portion of Water and Seabed

4.47

Portion of Water and Seabed

Sea

Sea Sea Sea

Sea

Sea Sea

Sea

Sea Sea

Sea

Sea Sea

Sea

Sea Sea Sea Sea Sea Sea Sea

Sea

110.449

142

110.245

144

110.504

Transito 1

4.48

Portion of Water and Seabed

Sea

146

102.085

Yaldad

7.15

Portion of Water and Seabed

Sea

148

102.154

143

145 147

149

110.538

110.247 110.537

101.045

100.674

Teresa Norte Teresa Sur 1

Teresa Sur 2

Transito 2 Yatac

Yelcho Yutuy

TOTAL

3.24

Portion of Water and Seabed

Sea

140 141

Teresa 3

Portion of Water and Seabed

0.24

Teguel, Sector IV Teresa 1

Portion of Water and Seabed

18.00

Portion of Water and Seabed

10.73

Aquacultural License Type*

5.96

4.48

8.44

5.00

7.13

1,507.41

Portion of Water and Seabed

Sea

Sea Sea

Sea

137

Summary of Aquacultural Licenses Seawater and River

Region

Lakes

Total Surface (hectares)

Quantity

In use as of 12/31/11

Quantity

747.6

29.6

149

1,507.4

78.3

Total

78.3

In use as of 12/31/11

X XIV

730.2

Total Surface (hectares)

Also, as of December 31, 2011, the company maintains in use 42 aquacultural licenses in river and sea and 6 aquacultural licenses in lakes. *Pursuant to the classification of license type set forth in the General Law on Fisheries and Aquaculture [Ley General de Pesca y Acuicultura] No. 18,892, Art. 67. Breakdown of Aquacultural license in Lakes: Aquacultural licenses in Lakes amount to 78.30 hectares at the close of the period. The breakdown is as follows: No.

SIEP code**

License Name

Region

Hectares Approved

Aquacultural License Type*

100545

Puerto Octay

10.00

Portion of Water and Bed

Lake

110048

Lago Riesco 1

3.21

Portion of Water and Bed

Lake

110037

Lago Riesco 2

10.00

Portion of Water and Bed

Lake

110038

Lago Riesco 3

19.76

Portion of Water and Bed

Lake

110075

Laguna Los Palos

10.00

Portion of Water and Bed

Lake

100370

Ensenada Bahía 1

3.75

Portion of Water and Bed

Lake

100369

Ensenada Bahía 2

9.38

Portion of Water and Bed

Lake

100522

Rupanco

1.25

Portion of Water and Bed

Lake

100394

Chapo Desagüe 1

0.07

Portion of Water and Bed

Lake

101291

Chapo Desagüe 2

5.99

Portion of Water and Bed

Lake

100678

Colulí

2.90

Portion of Water and Bed

Lake

100390

Bahía El Volcán

2.00

Portion of Water and Bed

Lake

TOTAL

78.31

* Pursuant to the classification of licenses type set forth in the General Law on Fisheries and Aquaculture [Ley General de Pesca y Acuicultura] No. 18.892, Art. 67. ** SIEP: Fishing Statistics Information System [Sistema de Información de Estadísticas Pesqueras] of the National Fisheries Service (Sernapesca) b)

Leased assets: The Company has no Water Rights or seawater licenses on lease. The Company leases three lake licenses totaling 12.19 hectares and leases out a 2-hectare license. The breakdown is as follows: Owner

Center

No. of hectares

Hatchery Puerto Octay

Aguas Claras S.A.

Rincón del Sur

Hatchery Puerto Octay

Aguas Claras S.A.

Pitote

Salmones Tecmar

Aguas Claras S.A.

Río del Este

4.99

Cultivos Acuícolas El Volcán

Yadrán

Bahía el Volcán

2.00

TOTAL

138

Licenses

6 1.2

14.19

NOTE 16 - GOODWILL Goodwill represents the excess of the acquisition cost over the fair value of the Company’s interest in the identifiable net assets of the subsidiary or affiliate on the acquisition date. The balance of the purchased goodwill at the close of each period is comprised as follows: Investor

Issuer

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Antarfood S.A.

Aguas Claras S.A.

1,981

AquaChile S.A.

Pesquera Antares S.A.

985

AquaChile S.A.

Salmones Australes S.A.

122

233

AquaChile S.A.

Salmones Cailín S.A.

1,471

1,471 445

AquaChile S.A.

Pesquera Palacios S.A.

Aguas Claras S.A.

Salmones Australes S.A.

445

1,282

Empresas AquaChile S.A.

Salmones Chiloé S.A.

18,398

Empresas AquaChile S.A.

Salmones Maullín S.A.

18,686

Empresas AquaChile S.A.

Alitec Pargua S.A.

3,819

Empresas AquaChile S.A.

Salmones Maullín Ltda.

Grupo ACI

Aquacorporación Internacional S.A.

4,247

51,448

50,277

Total

The Management has not observed any signs of impairment with respect to goodwill. The movement of the Purchased goodwill as of December 31, 2011, is as follows: Movement of the goodwill

Initial balance as of 01.01.2011 Decreases from sales of interests Increases from acquisitions of interests Balance as of 31.12.2011

12/31/2011 ThUS$

51,448 51,448

The movement of the Purchased goodwill as of December 31, 2010, is as follows: Movement of the goodwill

Initial balance as of 01.01.2010 Decreases from sales of interests Increases from acquisitions of interests Balance as of 31.12.2010

12/31/2010 ThUS$

50,277 (111) 1,282 51,448

139

NOTE 17 - PROPERTY, PLANT AND EQUIPMENT The breakdown of the different categories of Property, Plant and Equipment and their movements as of December 31, 2011, is as follows: Property, plant and equipment, net As of 12/31/2011

Gross value ThUS$

Accumulated depreciation ThUS$

Net value ThUS$

Lands

13,643

Buildings and constructions, net

187,139

(106,220)

80,919 27,741

Plant and Equipment, net

47,302

(19,561)

Information technology equipment, net

4,482

(2,597)

1,885

Fixed facilities and accessories, net

77,778

(37,313)

40,465

Motor vehicles, net Totals

2,899

(1,265)

1,634

333,243

(166,956)

166,287

The breakdown of the different categories of Property, Plant and Equipment and their movements as of December 31, 2010, is as follows: Property, plant and equipment, gross As of 12/31/2010

Gross value ThUS$

Lands

Accumulated depreciation ThUS$

Net value ThUS$

9,029

Buildings and constructions, net

195,301

(111,400)

83,901

Plant and Equipment, net

62,447

(32,311)

30,136

4,776

(2,939)

1,837

42,810

(30,528)

12,282

Information technology equipment, net Fixed facilities and accessories, net Motor vehicles, net Totals

4,567

(2,959)

1,608

318,930

(180,137)

138,793

The breakdown of the different categories of Property, Plant and Equipment and their movements as of January 1, 2010, is as follows: Depreciation, Property, plant and equipment As of 01/01/2010

Gross value ThUS$

Lands Buildings and constructions, net

8,985

(101,065)

95,494

58,895

(26,355)

32,540

4,774

(2,773)

2,001

39,665

(27,447)

12,218

Plant and Equipment, net

Motor vehicles, net Totals

Net value ThUS$

196,559

Information technology equipment, net Fixed facilities and accessories, net

Accumulated depreciation ThUS$

4,036

(2,750)

1,286

312,914

(160,390)

152,524

The movement of Property, Plant and Equipment as of December 31, 2011, is as follows: Movements, Property, plant and equipment, net

Lands

Additions ThUS$

Divestments ThUS$

Depreciation expenses ThUS$

Other increases (reduc.) ThUS$

Final balance 12/31/2010 ThUS$

9,029

495

(44)

4,163

13,643

Buildings and constructions, net

83,901

14,516

(2,844)

(12,174)

(2,480)

80,919

Plant and Equipment, net

30,136

617

(561)

(2,473)

27,741

1,837

305

(41)

(225)

1,885

12,282

33,121

(1,079)

(4,821)

962

40,465

Information technology equipment, net Fixed facilities and accessories, net Motor vehicles, net Totals

140

Initial balance as of 01/01/2010 ThUS$

1,608

208

(39)

(143)

1,634

138,793

49,262

(4,608)

(19,836)

2,676

166,287

The movement of Property, Plant and Equipment as of December 31, 2010, is as follows: Initial balance as of 01/01/2010 ThUS$

Movements, Property, plant and equipment, net

Lands

Additions ThUS$

Divestments ThUS$

Other increases (reduc.) ThUS$

Depreciation expenses ThUS$

Final balance 12/31/2010 ThUS$

8,985

(6)

9,029

Buildings and constructions, net

95,494

2,704

(10,335)

(3,962)

83,901

Plant and Equipment, net

30,136

32,540

4,604

(5,956)

(1,052)

Information technology equipment, net

2,001

(166)

(53)

1,837

Fixed facilities and accessories, net

12,218

3,620

(3,080)

(476)

12,282

1,286

593

(33)

(209)

(29)

1,608

152,524

11,626

(33)

(19,746)

(5,578)

138,793

Motor vehicles, net Totals

Estimated Useful Lives or Rates of Depreciation

The estimated useful lives by types of asset are as follows:

Buildings

Minimum Life or Rate Years

Maximum Life or Rate Years

Plant and equipment

Information technology equipment

Fixed facilities and accessories

Motor vehicles

Other property, plant and equipment

The salvage value and the useful life of the assets are revised, and if necessary adjusted, at each close of the Statements of financial position. a) Insurance The Group has taken out insurance policies to cover the risks to which the movable property, vehicles, equipment, plant and machinery are subject, including also loss of profits and/or business interruption loss. Empresas AquaChile and subsidiaries consider the coverage of these policies to be adequate for the risks inherent to their activity. The insurance policies kept by Empresas AquaChile and subsidiaries are detailed below: Asset type Building, Facilities, Machinery and Equipment

Risks covered Deterioration sustained by the assets as a result of fire and earthquake. Deterioration sustained by the assets from damages caused by natural risks. Fire coverage and material damages as a direct consequence of striking, looting or popular disturbances.

b) Financial leasing The assets acquired under the modality of financial leasing are classified in the heading Other property, plant and equipment.

141

NOTE 18 - CURRENT INCOME TAX AND DEFERRED TAX ITEMS Deferred taxes relate to the amount of tax on earnings which Empresas AquaChile and subsidiaries will have to pay (liabilities) or recover (assets) in future periods, related with temporary differences between the fiscal or taxable base and the carrying amount in books of certain assets and liabilities. The main deferred tax asset relates to tax losses of subsidiaries recoverable in future fiscal years. The main deferred tax liability payable in future fiscal years relates to temporary differences arising from manufacturing expenses, revaluation of biological assets and the revaluation of Property, plant and equipment on the date of transition to IFRS and by the application, for tax purposes, of accelerated depreciation. The deferred tax assets as of December 31, 2011, December 31, 2010 and January 1, 2010, relate to the following items: The breakdown of the deferred tax assets and liabilities is as follows: 12/31/2011 Classification Deferred Taxes

Manufacturing expenses Accelerated depreciation Fair value, biological assets Licenses Tax loss Provisions Property, plant and equipment Valuation of inventories Others Total

Deferred tax assets ThUS$

16 13,541 67,385 1,131 147 996 83,216

12/31/2010 Deferred tax liabilities ThUS$

22,231 6,899 17,529 4,082 2,944 3,371 57,056

Deferred tax assets ThUS$

68,040 1,380 632 70,052

01/01/2010

Deferred tax liabilities ThUS$

13,357 6,772 1,865 944 1,546 3,352 1,439 3,780 33,055

Deferred tax assets ThUS$

44,824 1,460 469 46,753

Deferred tax liabilities ThUS$

11,286 7,629 1,583 830 3,539 2,206 27,073

Deferred taxes for temporary differences between the tax value and the book value generated by Investments in related companies have not been recognized. As of December 31, 2011, the deferred tax asset resulting from tax losses amounts to ThUS$67,385 (ThUS$68,040 as of December 31, 2010 and ThUS$44,824 as of January 1, 2010). These losses are attributable to profits that may be generated in the future in the companies presenting this condition, according to the following breakdown: Deferred taxes resulting from tax losses in:

Subsidiaries

AquaChile S.A. Empresas Aquachile S.A. Antarfish S.A. Salmones Chiloé S.A. Salmones Maullín S.A. Alitec Pargua S.A. Total

Deferred Tax from Tax Loss 12/31/2011 ThUS$

6,313 41,935 11,922 200 6,425 590 67,385

12/31/2010 ThUS$

5,679 42,736 13,260 133 5,651 581 68,040

Variation with result effect 12/31/2011 ThUS$

634 (801) (1,338) 67 774 9 (655)

Deferred Tax from Tax Loss 12/31/2010 ThUS$

5,679 42,736 13,260 133 5,651 581 68,040

01/01/2010 ThUS$

6,247 16,675 14,410 1,604 5,257 631 44,824

Variation with result effect 12/31/2010 ThUS$

(568) 26,061 (1,150) (1,471) 394 (50) 23,216

With respect to the terms of the statute of limitations on tax losses that can be attributed to future profits, in the case of those generated in companies established in Chile they are not subject to the statute of limitations, unlike tax losses of companies established in Costa Rica, where the statute of limitation is 3 years.

142

The movement of deferred tax assets and liabilities is as follows:

Movements, Deferred taxes

Initial balance Provision Anticipated revenues Vacations provision Manufacturing expenses Accelerated depreciation Fair value, biological assets Provision Valuation of inventories Tax loss Sea licenses Property, plant and equipment Others Total

12/31/2011 Deferred tax assets ThUS$

70,052 372 213 21 47 2 12,263 4 (497) 94 645 83,216

12/31/2010

Deferred tax liabilities ThUS$

33,055 (57) 10,980 784 9,726 9 2,559 57,056

Deferred tax assets ThUS$

46,753 (80) 23,216 163 70,052

Deferred tax liabilities ThUS$

27,073 1,284 (857) 282 2,333 1,439 114 (187) 1,574 33,055

To reflect the effect of the statutory modification of income tax, which raises the income tax rate in Chile from 17% to 20% for the year 2011 and to 18.5% for 2012, and going back to 17% in 2013, all credits (debits) to the result for deferred tax items from a difference in the tax versus financial valuation have been recorded, in connection with that proportion of the difference that is reversed in the aforementioned years. This effect is recorded in the consolidated statement of comprehensive income. The expense for income tax has the following composition: 12/31/2011 ThUS$

12/31/2010 ThUS$

Tax expense, current

(3,372)

(2,368)

Effect of deferred tax

(10,837)

18,724

Total Tax, Current

(14,209)

16,356

Expense for Income Tax by Foreign and Domestic Companies

Deferred Taxes

The following is a conciliation breakdown of the expense for income tax, using the statutory Rate with the expense for tax using the effective Rate. 12/31/2011 ThUS$

12/31/2010 ThUS$

Expenses for taxes using the Statutory Rate

(13,232)

(6,509)

Taxation effect of other jurisdictionsâ&#x20AC;&#x2122; ratess

(877)

(1,024)

Other charges for statutory taxes

(100)

23,889

(14,209)

16,356

Conciliation of the expense for Income Tax

143

NOTE 19 - OTHER FINANCIAL LIABILITIES, CURRENT AND NON-CURRENT As of December 31, 2011, Empresas AquaChile maintains a financial loan which is split into three long-term tranches. Loans earning interest

Currency

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Less than 12 months to maturity

Dollar

11,841

6,157

4,321

Interest payable, Banks

Dollar

168

1,608

7,401

12,009

7,765

11,722

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Total Loans earning interest

More than 12 months to maturity

Currency

Dollar

Total

184,648

409,834

411,753

184,648

409,834

411,753

Additional information about the financial liabilities On June 24, 2011, Empresas AquaChile S.A. and its debtor subsidiaries proceeded to prepay US$163.2 million dollars of the debt held with their Participant Creditor Banks in accordance with the Liabilities Rescheduling Agreement dated September 7, 2009. Furthermore, and on the same date, accrued interest was paid in the amount of US$5.4 million dollars for the period between January 25, 2011 and June 24, 2011. The prepayment of capital and interest amounted to US$168.6 million dollars. Simultaneously, on the same date, June 24, 2011, the conditions of the remaining debt of US$242.5 million dollars were renegotiated. The debtor companies decided—on the same date—to pay and credit to Tranche B the sum of USS70.2 million dollars so that Tranche B would then be a line of credit available for when the Debtors see fit to use it. This use could be prorated to each of the banks, or one or some of them, depending on what is most suitable. At the same time, the debtor companies made a novation of their loans by then pooling the debts of this agreement with Empresas AquaChile S.A. and Salmones Chiloé S.A., who took them on as the new Debtors. To summarize, the main refinancing arrangements are as follows: a.

The novated and rescheduled debt is divided into 3 tranches: A, B and C: • Tranche A: for US$ 118 million dollars, with a term of 7 years, half-yearly interest payments and half-yearly amortization starting in December 2013. • Tranche B: is financing commitment (line of credit) available for 70 million dollars, with a term of 4 years that can be extended. To date, US$10 million have been used. • Tranche C: This tranche is subdivided into two sub-tranches: • -Sub-tranche C-One: for US$ 31.7 million dollars, with a term of 7 years, half-yearly interest payments and half-yearly amortization starting in December 2013. • -Sub-tranche C-Two: for US$ 22.6 million dollars, with a 4-year bullet term and half-yearly interest payments.

The interest rate applied to Tranche A relates to the rate fixed half-yearly based on the average cost of funds of the creditor banks plus a spread of 1.2% per annum.

The interest rate applied to Tranche B can be determined in two ways: using the rate that is offered by whoever has been awarded the requested loan, or else, the average cost of funds plus a spread of 1.45% per annum if the disbursement of this tranche has been made pro rata among the creditors involved.

The interest rate of Sub-tranche C one relates to a fixed rate of 3.2% per annum until January 23, 2013, and thereafter a rate based on the LIBOR plus a spread of 2.5% per annum.

The interest rate of Sub-tranche C two relates to a fixed rate of 3.2% per annum until January 23, 2013, and thereafter a rate based on the LIBOR plus a spread of 2.5% per annum.

144

In addition, certain financial covenants are established.

These obligations contemplate the fulfillment of certain financial covenants calculated using the Consolidated Financial Statements of Empresas AquaChile S.A. as of December 31, 2011 and as of March thirty-one, June thirty, September thirty and December thirty-first of the following years and they relate to maintaining a financial leverage ceiling, a minimum coverage of financial expenses and a ratio of net financial debt to maximum EBITDA. Covenants*

2011**

2012

2013

2014

2015

2016 through 2018

Financial Leverage (1)

1.25x

1.20x

1.10x

1.0x

Interest expenses coverage (2)

4.5x

Net Fin. Debt / EBITDA (3)

2.5x

2.2x

2.0x

1.75x

(1) (2) (3)

(Total Current Liability plus Total Non-current Liability less Cash and Cash Equivalents) / (Total Equity) EBITDA / (Financial Costs less Financial Revenues) (Other Financial Liabilities, Current + Other Financial Liabilities, Non-current, less Cash and Cash Equivalents) / EBITDA. EBITDA: Revenues from ordinary activities less Costs of sales (i.e., Gross Earnings, pre-Fair value), less Management expenses, less Distribution costs, plus Adjustment for depreciation and amortization. All these figures are obtained directly from the Income Statement and the Cash Flows Statement of the Company

* **

Figures measured quarterly based on the last twelve months. Measured as of December 31, 2011.

Breakdown of Debt Rescheduling Covenants Calculation June 2011 Financial Leverage < or equal to 1.25

31-12-2011 ThUS$

Net Debt: Total liabilities, current

130,969

Total liabilities, non-current

244,439

Less: Cash and Cash Equivalents

(113,897)

Total Net Debt

261,511

ii) Total Equity: Total Equity Net Debt / Total Equity

451,097 0.58

The limit of this covenant is 1.25 and therefore it is compliant

Net Financial Debt / EBITDA last twelve months < or equal to 2.5

31-12-2011 ThUS$

i) Net Financial Debt: Other financial liabilities, current

12,009

Other financial liabilities, non-current

184,648

Less: Cash and Cash Equivalents

(113,897)

Total Net Financial Debt

82,760

ii) EBITDA (last twelve months): Revenues from ordinary activities Sales Costs

501,151 (404,126)

Plus:

Cost of depreciation and amortization

Less:

Administrative Expenses

(17,861)

Distribution Costs

(3,082)

Total EBITDA last twelve months Net Financial Debt / EBITDA

19,273

95,355 0.87

The limit of this covenant is 2.5 and therefore it is compliant

145

31-12-2011 ThUS$

Interest Expenses Coverage last twelve months > or equal to 4.5

i) EBITDA (last twelve months): Revenues from ordinary activities

501,151

Sales Costs

(404,126)

Plus:

Cost of depreciation and amortization

Less:

Administrative Expenses

(17,861)

19,273

Distribution Costs

(3,082)

Total EBITDA last twelve months

95,355

ii) Financial Costs: Financial Costs iii) Financial Revenues Financial Revenues Financial Expenses Coverage last twelve months (i ÷ (ii-iii))

13,972

1,632 7.73

The limit of this covenant is 4.5 and therefore it is compliant

146

The agreement provides for the possibility of voluntary early amortizations, as well as certain information covenants, positive and negative, inherent to these kinds of arrangements, in favor of the banks involved.

In addition, 99 sea aquacultural licenses (book value ThUS$ 17,135 as of December 31, 2011) of Empresas AquaChile S.A., Aguas Claras S.A., Salmones Maullín Ltda., AquaChile S.A. and Salmones Chiloé S.A. were pledged as collateral, which were transformed into mortgages, and the remaining pledges on licenses established in the previous liabilities rescheduling agreement dated September 7, 2009, were released.

Aguas Claras S.A. and Salmones Maullín Ltda. are established as reciprocal sureties and joint and several obligors in favor of the Banks, to guarantee the fulfillment of the obligations assumed by the Debtors in the terms, conditions and with the limitations established in the Agreement.

It should be noted that Salmones Chiloé S.A. was not established as surety and joint and several obligor of the other related companies and the purpose of the guarantees which the latter established in favor of the Creditors was to guarantee its own obligations and not those of all the Debtors.

The shares of AquaChile S.A., Salmones Maullín S.A., Aguas Claras S.A., Antarfish S.A., 93% of the shares of Salmones Chiloé S.A., and 60% of the shares of Piscicultura Aquasan S.A., were all pledged as collateral in favor of the Creditors to ensure the fulfillment of all obligations assumed by them.

With this new credit agreement, the pledges on the shares issued by Empresas AquaChile S.A. which the shareholders had established previously were lifted, as were the mortgages on the real estate and the water exploitation rights, the pledges on ships and naval artifacts and on the trademarks they owned, all in favor of the creditors, which had been established as collateral for the fulfillment of all obligations assumed by the debtors in the liabilities rescheduling agreement dated September 7, 2009.

The breakdown of loans maintained by Empresas AquaChile and subsidiaries as of December 31, 2010 and January 1, 2010, is as follows: a)

Current loans

12/31/2011 Country

Chile Chile Chile Chile Dutch Antilles Chile Chile Chile Chile Chile Chile Chile Chile Costa Rica Costa Rica Costa Rica Chile Chile

Creditor’s name

Currency

BBVA BCI BCI BCI Rabobank B.Chile Santander B.Itau Corpbanca Corpbanca Corpbanca Corpbanca B.Estado BNCR CitiGroup BCT Llanos y Wames (Leasing) IM Trust Forward

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

Creditor’s name

Currency

Amortization type

Actual rate

Nominal rate

Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Monthly Monthly Monthly Monthly Totals

3.21% 3.21% 2.30% 5.90% 3.20% 3.21% 3.21% 3.21% 2.20% 4.65% 6.98% 1.76% 3.21% 5.47% 4.43% 6.50% -

Amortization type

Actual rate

Nominal rate

Securities

Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Monthly Totals

3.04% 4.31% 3.04% 3.04% 5.42% 3.04% 3.04% 3.04% 1.75% 3.04% 3.04% 4.31% 3.04% 3.93%

3.20% 4.80% 3.20% 3.20% 5.42% 3.20% 3.20% 3.20% 1.75% 3.20% 3.20% 4.31% 3.20% 3.93%

Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured

Amortization type

Actual rate

Nominal rate

Securities

Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Monthly Totals

3.04% 4.41% 3.04% 3.04% 3.04% 3.04% 3.04% 1.43% 3.04% 3.04% 4.41% 3.04% 3.90%

3.20% 4.41% 3.20% 3.20% 3.20% 3.20% 3.20% 1.43% 3.20% 3.20% 4.41% 3.20% 3.90%

Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured

Securities

3.21% Secured 3.21% Secured 2.30% Secured 5.39% Secured 3.20% Secured 3.21% Secured 3.21% Secured 3.21% Secured 2.20% Secured 4.65% Secured 6.98% Secured 1.76% Secured 3.21% Secured 5.47% Secured 4.43% Secured 6.50% Unsecured - Secured - -

Maturity up to 1 month ThUS$

Current 1 to 3 months ThUS$

3 to 12 months ThUS$

Current total as of 12/31/2011 ThUS$

Indeterminate ThUS$

Maturity up to 1 month ThUS$

Current 1 to 3 months ThUS$

3 to 12 months ThUS$

570 309 211 99 117 101 4 70 76 35 16 1,608

2,770 50 1,002 1,091 1,244 6,157

Total current As of 12/31/2010 ThUS$

Indeterminate ThUS$

Maturity up to 1 month ThUS$

Current 1 to 3 months ThUS$

3 to 12 months ThUS$

1,713 1,011 769 401 385 332 228 250 114 5,203

2,769 1,002 1,552 1,196 6,519

Indeterminate ThUS$

97 42 3 142

2,776 712 292 126 3,906

39 20 5 38 7 8 7 5 302 1,000 5 1,500 901 3,943 181 7,961

39 20 5 2,776 38 7 8 7 5 712 302 1,000 5 1,500 1,290 4,111 181 3 12,009

12/31/2010 Country

Chile Chile Chile Dutch Antilles Chile Chile Chile Chile Chile Chile Chile Chile Chile Costa Rica

BBVA BCI BCI Rabobank B.Chile B.Chile Santander B.Itau Corpbanca Corpbanca B.Estado BICE BICE CitiGroup

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

570 2,770 309 211 50 99 117 101 1,006 70 76 1,091 35 1,260 7,765

01/01/2010 Country

Chile Chile Chile Dutch Antilles Chile Chile Chile Chile Chile Chile Chile Chile Costa Rica

Creditor’s name

BBVA BCI BCI Rabobank B.Chile Santander B.Itau Corpbanca Corpbanca B.Estado Bice Bice CitiGroup

Currency

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

Total current As of 12/31/2010 ThUS$

1,713 2,769 1,011 769 401 385 332 1,002 228 250 1,552 114 1,196 11,722

147

Non-current loans

12/31/2011 Country

Chile Chile Chile Dutch Antilles Chile Chile Chile Chile Chile Costa Rica Costa Rica

Creditor’s name

BBVA BCI BCI Rabobank B.Chile Santander B.Itau Corpbanca B.Estado CitiGroup BCT

Currency

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

Maturity

Amortization type

Actual rate

Nominal rate

Securities

Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Half-yearly Monthly Monthly Subtotals Totals

3.21% 3.21% 2.30% 3.20% 3.21% 3.21% 3.21% 3.21% 3.21% 4.43% 8.00%

Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Unsecured

Amortization type

Actual rate

Nominal rate

Securities

1 to 2 years ThUS$

3.20% 3.20% 3.20% 3.20% 3.20% 3.20% 1.75% 3.20% 3.20% 3.20% 3.93%

Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured

1,000 3,987 4,987 4,987

Nominal rate

Securities

1 to 2 years ThUS$

3.20% 3.20% 3.20% 5.42% 3.20% 3.20% 3.20% 1.43% 3.20% 3.20% 3.20% 3.90%

Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured Secured

1 to 2 years ThUS$

2,513 1,360 1,584 434 518 447 307 336 7,499 7,499

2 to 3 years ThUS$

3 to 4 years ThUS$

6,282 3,400 3,964 1,085 1,294 1,117 768 840 146 18,896 18,896

8,795 4,760 10,000 27,810 1,520 1,811 1,564 1,075 1,176 1,245 28 59,784 59,784

2 to 3 years ThUS$

3 to 4 years ThUS$

4 to 5 years ThUS$

11,308 6,120 7,135 1,953 2,329 2,011 1,382 1,512 969 34,719 34,719

5 years or more ThUS$

Total non-current as of 12/31/2011 ThUS$

5 years or more ThUS$

Total non-current as of 12/31/2011 ThUS$

5 years or more ThUS$

Total non-current as of 12/31/2011 ThUS$

21,360 11,559 13,477 3,691 4,399 3,798 2,610 2,856 63,750 63,750

50,258 27,199 10,000 53,970 8,683 10,351 8,937 6,142 6,720 2,214 174 184,648 184,648

12/31/2010 Country

Chile Chile Dutch Antilles Chile Chile Chile Chile Chile Chile Chile Costa Rica

Creditor’s name

BBVA BCI Rabobank B.Chile Santander B.Itau Corpbanca Corpbanca B.Estado BICE CitiGroup

Currency

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 1.75% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Monthly 3.93% Subtotals Refinancing expenses Totals

Maturity

722 463 317 148 176 152 105 115 53 2,251 2,251

3,608 2,316 1,586 739 881 761 523 573 264 11,251 11,251

4 to 5 years ThUS$

7,215 4,632 3,171 1,479 1,762 1,522 1,046 1,145 528 22,500 22,500

134,124 71,421 48,897 22,805 27,181 23,465 16,126 17,648 8,135 369,802 (957) 368,845

145,669 78,832 53,971 25,171 30,000 25,900 1,000 17,800 19,481 8,980 3,987 410,791 (957) 409,834

01/01/2010 Country

Chile Chile Dutch Antilles Chile Chile Chile Chile Chile Chile Chile Chile Costa Rica

148

Creditor’s name

BBVA BCI Rabobank B.Chile B.Chile Santander B.Itau Corpbanca Corpbanca B.Estado BICE CitiGroup

Currency

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

Amortization type

Actual rate

Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 5.42% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 1.43% Half-yearly 3.04% Half-yearly 3.04% Half-yearly 3.04% Monthly 3.90% Subtotals Refinancing expenses Totals

Maturity

100 2,000 4,806 6,906 6,906

2 to 3 years ThUS$

3 to 4 years ThUS$

651 463 353 183 176 152 105 115 52 2,250 2,250

4 to 5 years ThUS$

3,253 2,316 1,763 917 881 761 523 573 264 11,251 11,251

129,707 76,053 57,885 30,100 28,943 24,987 17,172 18,793 8,663 392,303 (957) 391,346

133,611 78,832 60,001 100 31,200 30,000 25,900 2,000 17,800 19,481 8,979 4,806 412,710 (957) 411,753

NOTE 20 - TRADE ACCOUNTS AND OTHER ACCOUNTS PAYABLE The items contained in this heading are as follows: Trade accounts payable and other accounts payable, current

Suppliers

12/31/2011 ThUS$

12/31/2010 ThUS$

95,608

73,564

01/01/2010 ThUS$

56,909

Withholdings from personnel

1,336

1,921

Vacations provision

2,621

1,361

1,282

Personnel remunerations

3,549

1,933

2,653

Sundry creditors

7,478

1,576

680

426

295

111,018

80,385

65,143

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

2,735

3,963

1,762

Others Total Other accounts payable, non-current

Accounts payable Total

2,735

3,963

3,324

1,762

NOTE 21 - ISSUED CAPITAL The objectives of Empresas AquaChile and subsidiaries when managing the capital are to safeguard the ability to continue as a going concern, for the purpose of generating returns for their shareholders and benefits for other stakeholders, and maintaining an optimal structure to reduce the cost of the capital. Consistent with the industry, Empresas AquaChile and subsidiaries monitor their capital on the basis of the leverage ratio. This ratio is calculated by dividing the net debt by the total capital. The net debt relates to the total indebtedness (including current and non-current indebtedness) less cash and cash equivalents. The total capital relates to the net equity, as shown in the consolidated position statement. In this respect, Empresas AquaChile and subsidiaries have combined different financing sources, such as: flows of the operation, bank loans, etc. To date, the Company’s subscribed and paid-in capital is two hundred twenty-seven million nine hundred eighty-one thousand one hundred forty-eight dollars (ThUS$227,981) which is divided into one billion one hundred fifty-seven million shares (1,157,000,000). a) Capital The Company’s issued, subscribed and paid-in capital is composed as follows: Series

Subscribed Capita

Paid-in Capital

No Series

150,581

Capital Expansion

77,400

Total

227,981

Movements

No. of Shares

Initial balance as of 01/01/2010

770,000,000

Capital increase Balance as of 12/31/2011

150,581

Common shares

770,000,000

Total

770,000,000

387,000,000

1,157,000,000

b) Dividends policy For purposes of determining the Company’s distributable liquid profit to be considered for the calculation of dividends with regard to the 2011 fiscal year, the following shall be excluded from the fiscal year profit or loss: 1)

Unrealized profits or losses, tied to the recording at fair value of biological assets regulated by the accounting standard “IAS 41,” reincorporating them into the liquid profit at the time of their realization. For these purposes, the portion of such increases in fair value relating to the assets sold or disposed of by any other means shall be considered realized.

149

No. 3,” revised, regarding business combination operations. These profits or losses will also be reincorporated with the liquid profit at the time of their realization. For these purposes, profits or losses will be deemed realized as the entities acquired generate profits after their acquisition, or whenever these entities are sold. 3)

The effects of deferred taxes associated with the items mentioned in 1) and 2) will follow the same fate as the entry that originated them.

Dividend Provision

For the 2011 period, the Company is presenting no provisional dividends as mentioned in Note 2.24. c) Distribution of Shareholders As of December 31, 2011, the companies or natural persons holding 1% or more of the capital stock are detailed below. The actual concentration of these amounts to 83.3% Name or Business Name

Tax ID

N° of Shares

% Equity

Fondo de Inversión Privado Patagonia

76.004.326-5

382,115,000

33.03%

Fondo de Inversión Privado Aqua

53.306.900-2

210,000,000

18.15%

Inversiones Acuícolas S.A.

76.932.880-7

172,115,000

14.88%

Inversiones Megeve Capital Ltda.

76.072.695-8

65,583,783

5.67%

IM Trust S.A. Corredores de Bolsa

96.489.000-5

48,639,748

4.20%

Celfin Capital S.A. Corredores de Bolsa Inversiones Megeve Dos Ltda. Banchile Corredores de Bolsa S.A. Larraín Vial S.A. Corredores de Bolsa Moneda S.A. AFI Para Pionero Fondo de Inversión

84.177.300-4

21,619,782

1.87%

76.436.000-1

19,375,939

1.67% 1.54%

96.571.220-8

17,808,368

80.537.000-9

15,215,128

1.32%

96.684.990-8

11,596,000

1.00%

NOTE 22 - ACCUMULATED GAINS (LOSSES) The composition of the accumulated Profit or Loss account is as follows: Accumulated profit or loss

Initial balance

12/31/2011 ThUS$

12/31/2010 ThUS$

53,148

56,372

(137,898)

Comprehensive result of revenues and expenses Other equity variations Total accumulated profit or loss

(194,511)

241

(84,750)

(137,898)

Breakdown of the IFRS first-adoption adjustments recorded in the heading of accumulated gains (losses), as required by Directive No. 1,945 of the Chilean Securities and Insurance Supervisor dated September 29, 2009. Item

Negative goodwill

4,783

Goodwill

(326)

Intangibles

4,885

Biological assets

9,312

Property, plant and equipment

1,706

Liabilities with banks Deferred taxes Other adjustments Total

150

01/01/2010 Balance to be Realized ThUS$

12/31/2010 Amount Realized ThUS$

(4,783)

Balance to be Realized ThUS$

(326)

4,885 -

1,706

1,192

(1,192)

2,396

(510)

203

(307)

8,303

(378)

7,925

(11,699)

15,250

(1,367)

13,883

8,303 26,949

Amount Realized ThUS$

4,885 (9,312)

1,192 (2,906)

12/31/2011

Amount Realized ThUS$

NOTE 23 - OTHER RESERVES The composition of the Other reserves account is as follows: 12/31/2011 ThUS$

Other reserves

Initial balance

12/31/2010 ThUS$

(522)

522

(522)

Registration expenses for securities registry Total Minority Equity

NOTE 24 – NON-CONTROLLING INTERESTS This relates to the recognition of the equity value and profit or loss of subsidiaries belonging to Minority investors. Non-controlling interests Equity interest

Aquainnovo S.A. Salmones Chiloe S.A.

12/31/2011

12/31/2010

ThUS$

01/01/2010

ThUS$

17.00

(59)

17.00

(126)

17.00

(56)

7.00

1,967

7.00

1,167

7.00

1,386

Procesadora Hueñocoihue Ltda.

40.00

(100)

40.00

Piscicultura Aquasan S.A.

35.48

1,972

35.48

2,042

35.48

1,553

Grupo ACI S.A.

20.04

9,465

20.04

8,749

27.14

11,638

Alitec Pargua S.A.

50.00

8,039

50.00

8,079

50.00

7,504

21,384

19,811

22,085

Total non-controlling interests Non-controlling interests Interest in profit or loss

Aquainnovo S.A. Salmones Chiloé S.A.

12/31/2011 %

12/31/2010 ThUS$

ThUS$

17.00

(73)

7.00

706

7.00

799

Procesadora Hueñocoihue Ltda.

40.00

(160)

Piscicultura Aquasan S.A.

35.48

182

35.48

505

Grupo ACI S.A.

20.04

583

27.14

579

Alitec Pargua S.A.

50.00

190

50.00

1,728

1,721

Total gain attributable to non-controlling interests

151

NOTE 25 – GAIN PER-SHARE AND DISTRIBUTABLE LIQUID PROFIT 25.1. Gain per-share

The breakdown of per-share gains is as follows: Basic per-share gains

Gain (loss), attributable to proprietors of the holding company Gain (loss), attributable to non-controlling interests Result available to shareholders Weighted average of number of shares Gains (losses), basic per-share (US$/Share)

12/31/2011 ThUS$

53,148

12/31/2010 ThUS$

56,372

1,728

1,721

54,876

58,093

963,500,000

770,000,000

0.0570

0.0754

The calculation of the basic per-share gains (losses) has been made by dividing the amounts of the profit attributable to the shareholders by the number of shares of the single series. The Company has not issued convertible debt or other equity securities. Consequently there are no potentially diluting effects on the per-share revenues of the Company.

25.2. Distributable liquid profit

The dividends policy for the 2011 period consists in distributing as a dividend 30% of the liquid profit of the fiscal year ended on December 31, 2011, by sharing a final dividend, to be decided by the Ordinary Shareholders’ Meeting, payable on the date specified at such meeting. Under the provisions of Directive No. 1945 of the SVS, dated September 29, 2009, as a general policy it is considered that the liquid profit for purposes of the payment of the 30% compulsory minimum dividend, established by Article 79 of Law 18,046, will be determined on the basis of the profit stripped of those relevant variations of the fair value of the assets and liabilities that are not realized, which must be reincorporated into the calculation of the liquid profit of the fiscal year in which such variations are realized. The additional dividends will be determined based on the aforementioned criteria, in accordance with the resolution adopted in that respect by the Shareholders’ Meeting. Consequently, for the purposes of determining the Company’s distributable liquid profit, i.e. the liquid profit to be considered for the calculation of the compulsory minimum dividend with respect to the 2011 period, the following aspects will be excluded from the fiscal year’s profit or loss: i) Unrealized profits or losses, tied to the recording at fair value of biological assets regulated by the accounting standard “IAS 41,” reincorporating them into the liquid profit at the time of their realization. For these purposes, the portion of such increases in fair value relating to the assets sold or disposed of by any other means shall be considered realized. ii) Unrealized profits or losses generated during the acquisition of other entities and, in general, those unrealized profits or losses that stem from the application of business combination operations. These profits or losses will also be reincorporated with the liquid profit at the time of their realization. For these purposes, profits or losses will be deemed realized as the amounts acquired generate profits after their acquisition, or whenever these entities are sold. iii)

The effects of deferred taxes associated with the items mentioned in ii) will follow the same fate as the entry that originated them.

For the 2011 period, the Company is presenting no provisional dividends as mentioned in Note 2.24.

NOTE 26 - ORDINARY REVENUES The composition of the Group’s revenues is as follows: 12/31/2011 ThUS$

12/31/2010 ThUS$

Sales, Tilapia

63,665

63,679

Sales, Fish feed

98,130

68,338

Ordinary revenues

Sales, Salmon and Sea Trout

Sales, Other Total

152

338,540

255,353

816

471

501,151

387,841

NOTE 27 - OTHER REVENUES AND OTHER EXPENSES BY FUNCTION The composition of the Group’s revenues is as follows: Other revenues by function

Reverse, provisions of assets

12/31/2011 ThUS$

691

Recovery of expenses

Sales of fixed assets

765

Sales of sea licenses Sundry sales Leases earned Company contribution, Law 19728 CORFO (Production Development Corporation) Subsidies Others Total

1,287

306

2,521

185

100

693

103

893

2,568

2,204

8,035

Other Expenses by function

12/31/2011 ThUS$

Taxes, fines and interest

(189)

(173)

Others

(617)

(378)

Restructuring Expenses

12/31/2010 ThUS$

(3,650)

(2,202)

(1,266)

Sundry amortizations

(53)

(288)

Loss, minor sales

(14)

(515)

Contributions and donations

(21)

(155)

(3,096)

(6,425)

12/31/2011 ThUS$

12/31/2010 ThUS$

Write-offs and cancellations of fixed assets

Total

NOTE 28 – ADMINISTRATIVE AND DISTRIBUTION EXPENSES 1)

Administrative Expenses

Administrative expenses

Personnel expenses

(8,933)

(7,888)

Services of third parties

(3,293)

(2,969)

General expenses

(5,126)

(3,649)

Depreciation and amortization Total

(509)

(3,394)

(17,861)

(17,900)

12/31/2011 ThUS$

12/31/2010 ThUS$

(8,053)

(7,041)

a) Personnel Expenses The personnel expenses are detailed below: Personnel expense

Personnel remunerations Personnel provision

(880)

(847)

(8,933)

(7,888)

12/31/2011 ThUS$

12/31/2010 ThUS$

Depreciation

(507)

(3,106)

Amortization

(2)

(288)

(509)

(3,394)

Total

b) Depreciation and Amortization Depreciation and amortization are detailed below: Depreciation and Amortization

Total

153

2) Distribution Cost Below are the main distribution expenses of the Company at the close of the fiscal year: Distribution costs

Promotion and marketing

12/31/2011 ThUS$

12/31/2010 ThUS$

(1,401)

(1,024)

Shipping expenses

(629)

(239)

Storage expenses

(494)

(268)

Other sales expenses Total

(558)

(1,162)

(3,082)

(2,693)

12/31/2011 ThUS$

12/31/2010 ThUS$

(12,810)

(10,696)

NOTE 29 - FINANCIAL COSTS The breakdown of the financial costs is as follows: Financial Costs

Financial interest Other expenses Total

(1,162)

(825)

(13,972)

(11,521)

NOTE 30 - EXCHANGE-RATE DIFFERENCES OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY a) Exchange-rate difference recognized in profit or loss The exchange-rate differences generated as of December 31, 2011 and 2010 for balances of assets and liabilities in foreign currencies, other than the functional currency, were transferred (charged) to profit or loss according to the following breakdown: Exchange-rate difference

154

12/31/2011 ThUS$

12/31/2010 ThUS$

Assets in foreign currency

(782)

1,956

Liabilities in foreign currency

2,102

(1,364)

Total

1,320

592

b) Assets and liabilities in foreign currency Below are the assets and liabilities summarized by currency: Types of current assets

Currency

Cash and cash equivalents

Pesos, non-realignable

Cash and cash equivalents

Costa Rican colons

Cash and cash equivalents

Dollars

Cash and cash equivalents

Yens

Cash and cash equivalents

Euros

Subtotal, Cash and cash equivalents Other financial assets, current

Dollars

Other financial assets, current

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

671

3,561

777

1,308

578

3,079

111,503

24,178

24,290

399

119

204

113,897

28,416

28,469

-Â

-Â 324

Other non-financial assets, current

Costa Rican colons

295

Other non-financial assets, current

Pesos, non-realignable

622

100

137

Other non-financial assets, current

Dollars

1,776

2,104

885

Subtotal, Other non-financial assets, current

2,693

2,204

1,346

19,518

4,546

20,120

76,926

64,153

31,306

13,037

Euros

Costa Rican colons

1,145

1,200

Trade debtors and other accounts receivable, current

Pesos, non-realignable

Trade debtors and other accounts receivable, current

Dollars

Trade debtors and other accounts receivable, current

Pesos, realignable

Trade debtors and other accounts receivable, current Trade debtors and other accounts receivable, current Subtotal, Trade debtors and other accounts receivable, current

96,444

82,883

52,632

Accounts Receivable from Related Entities, current

Dollars

4,396

Accounts Receivable from Related Entities, current

Pesos, non-realignable

2,207

6,603

45,052

21,829

28,789

45,052

21,829

28,789

168,100

128,894

87,773

168,100

128,894

87,773

858

963

3,443

2,403

983

1,125

4,244

2,088

3,501

Subtotal, Accounts Receivable from Related Entities, current Inventories

Dollars

Inventories

Pesos, non-realignable

Subtotal, Inventories Biological assets, current

Dollars

Biological assets, current Tax assets, current

Pesos, realignable

Tax assets, current

Pesos, non-realignable

Tax assets, current

Dollars

Subtotal, Tax assets, current Types of non-current assets

Other financial assets, non-current

Currency

Dollars

Subtotal, Other financial assets, non-current Fees receivable, non-current

Dollars

Subtotal, Fees receivable, non-current Other non-financial assets, non-current

Dollars

Other non-financial assets, non-current

Pesos, non-realignable

Subtotal, Other non-financial assets, non-current Accounts Receivable from Related Entities, non-current

Dollars

Subtotal, Accounts Receivable from Related Entities, non-current Investments in associates carried by the equity method

Dollars

Subtotal, Investments in associates carried by the equity method Intangible assets other than goodwill

Dollars

Subtotal, Intangible assets other than goodwill Goodwill

Dollars

Subtotal, Goodwill Property, Plant and Equipment

Dollars

Subtotal, Property, Plant and Equipment Biological assets, non-current

Dollars

Subtotal, Biological assets, non-current Deferred tax assets Subtotal, Deferred tax assets

Dollars

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

10,694

150

1,150

150

1,150

1,329

755

623

1,329

755

665

1,580

500

1,580

500

4,198

37,326

35,416

34,830

37,326

35,416

34,830

51,448

50,277

51,448

50,277

166,287

138,793

152,524

166,287

138,793

152,524

33,145

6,947

8,706

33,145

6,947

8,706

83,216

70,052

46,753

83,216

70,052

46,753

155

Types of current liabilities

Other financial liabilities, current

ThUS$

Dollars

Subtotal, Other financial liabilities, current Trade accounts and other accounts payable, current

Dollars

Trade accounts and other accounts payable, current

Costa Rican colons

Trade accounts and other accounts payable, current

Pesos, non-realignable

Trade accounts and other accounts payable, current Trade accounts and other accounts payable, current

11,722 11,722

68,105

55,904

38,515 2,873

Euro

Pesos, realignable

393

111,018

80,385

65,143

2,203

1,058

381

2,203

1,059

381

3,372

2,368

3,372

2,368

2,351

438

746

537

2,351

975

795

Subtotal, Accounts Payable to Related Entities, current Dollars

Subtotal, Tax Liabilities, current Pesos, realignable

Subtotal, Current provisions for employee benefits Other non-financial liabilities, current

Dollars

Other non-financial liabilities, current

Pesos, realignable

Subtotal, Other non-financial liabilities, current Dollars

Subtotal, Other financial liabilities, non-current Dollars

Subtotal, Other accounts payable, non-current

156

7,765

23,290

Pesos, realignable

Deferred tax liability

Dollars

Deferred tax liability

Costa Rican colons

Subtotal, Deferred tax liability

7,765

12,009

3,798

Accounts Payable to Related Entities, current

Other accounts payable, non-current

12,009

20,683

Dollars

Other financial liabilities, non-current

01/01/2010 ThUS$

4,895

Accounts Payable to Related Entities, current

Current provisions for employee benefits

12/31/2010 ThUS$

38,018

Subtotal, Trade accounts and other accounts payable, current

Tax Liabilities, current

12/31/2011 ThUS$

184,648

409,834

411,753

184,648

409,834

411,753

2,735

3,963

1,762

2,735

3,963

1,762

53,747

33,055

27,073

3,309

57,056

33,055

27,073

NOTE 31 - CONTINGENCIES a)

Bonds obtained from third parties

Court cases or other legal actions.

At the close of this balance sheet, the Company has not received relevant bonds from third parties.

b.1) Mentioned below are the most significant suits against the Empresas AquaChile group, including all those with a minimal possibility of the occurrence of liabilities, whose claimed amounts are above ThUS$100. This list also considers those in which the claimed amounts are undefined. 1.

Fishing Suits. Empresas AquaChile S.A. (parent) 1) “Sernapesca versus Empresas AquaChile S.A.,” case no. 635-2011. Court of First Instance and Criminal Proceedings of Castro. Matter: Infringement of RAMA7, RESA8 y and sanitary programs. Value: 50 to 3,000 UTM9. Pending summons to hear judgment. Outcome uncertain. 2) “Sernapesca versus Empresas AquaChile S.A.,” case no. 421-2011, Court of First Instance of Aysén. Matter: Infringement of RAMA and RESA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 3) “Sernapesca versus Empresas AquaChile S.A.,” case no. 38.561-2009, Court of First Instance of Castro. Matter: Infringement of LGPA and RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 4) “Sernapesca versus Empresas AquaChile S.A.,” case no. 5.967-2009, 1 Court of First Instance of Puerto Montt. Matter: Infringement of LGPA10. Cuantía: 50 a 3.000 UTM. Value: 50 to 3,000 UTM. Pending evidentiary procedural measures. Outcome uncertain. Of the affiliates: Aquachile S.A. 5) “Sernapesca versus AquaChile S.A.,” case no. 566-2011, Court of First Instance and Criminal Proceedings of Puerto Aysén. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending the trial period, which is suspended by agreement of the parties. Outcome uncertain. 6) “Sernapesca versus AquaChile S.A.,” case no. 5.983-2009, 2nd Civil Court of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Current status: Pending evidentiary hearing. Outcome uncertain. 7) “Sernapesca versus AquaChile S.A.,” case no. 6.751-2011, 2nd Civil Court of Temuco. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending the trial period. Outcome uncertain. 8) “Sernapesca versus AquaChile S.A.,” case no. 1.083-2011, 1st Civil Court of Puerto Montt. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending judgment. Outcome uncertain. 9) “Sernapesca versus AquaChile S.A.,” case no. 2.069-2011, Court of First Instance of Castro. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending defense hearing. Outcome uncertain. 10) “Sernapesca versus AquaChile S.A.,” case no. 3.718-2008, 1st Civil Court of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Current status: pending judgment. Outcome uncertain. Salmones Maullín Limitada 11) “Sernapesca versus Acuimag and Salmones Maullín Ltda.,” case no. 1.295-2011, 3rd Civil Court of Punta Arenas. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Licenses in which the infringement occurred was transferred by Salmones Maullín Limitada to Acuimag S.A., before the event which gave rise to it took place, hence for the Company it cannot represent an unfavorable contingency. 12) “Sernapesca versus Salmones Maullín Ltda.,” case no. 3.863-2011, 1st Civil Court of Puerto Montt. Matter: Infringement of RAMA and RESA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 13) “Sernapesca versus Salmones Maullín S.A.,” case no. 4.907-2011, 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA, RESA and RAMA. Value: 50 to 3,000 UTM. Pending trial period. Outcome uncertain.

9 10 7

RAMA: Reglamento Ambiental de la Acuicultura (Environmental Regulations on Aquaculture) RESA: Reglamento Sanitario de la Acuicultura (Sanitary Regulations on Aquaculture) Minimum to maximum range of the penalty contemplated in the legislation LGPA: Ley General de Pesca y Acuicultura (General Law on Fisheries and Aquaculture)

157

Aguas Claras S.A. 14) “Sernapesca versus Aguas Claras S.A.,” case no. 1.089-2011, 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending trial period. Outcome uncertain. 15) “Sernapesca versus Aguas Claras S.A.,” case no. 1.090-2011, 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. By a decision of the court, the proceedings were set back to the state where service of process is to be made again. Outcome uncertain. 16) “Sernapesca versus Aguas Claras S.A.,” case no. 657-2011, Court of First Instance of Castro. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 17) “Sernapesca versus Aguas Claras S.A.,” case no. 1.388-2011, Court of First Instance of Castro. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 18) “Sernapesca versus Aguas Claras S.A.,” case no. 3.932-2011, 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending defense hearing. Outcome uncertain. 19) “Sernapesca versus Aguas Claras S.A.,” case no. 6.933-2010, 1st Court of First Instance of Puerto Montt. Matter: Infringement of RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. Salmones Cailín S.A. 20) “Sernapesca versus Pesquera Palacios S.A.” (now Salmones Cailín S.A.), case no. 13-2011, Court of First Instance of Castro. Matter: Infringement of LGPA, RESA and RAMA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 21) “Sernapesca versus Salmones Cailín S.A.,” case no. 6.025-2010, Court of First Instance of Quellón. Matter: Infringement of LGPA, RESA and RAMA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. Pesquera Antares S.A. 22) “Sernapesca versus Pesquera Antares S.A.,” case no. 939-2011, 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. Salmones Chiloé S.A. 23) “Sernapesca versus Salmones Chiloé S.A.,” case no. 942-2011, 1st Court of First Instance of Puerto Montt. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 24) “Sernapesca versus Salmones Chiloé S.A.,” case no. 1.664-2011, Court of First Instance of Castro. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 25) “Sernapesca versus Salmones Chiloé S.A.,” case no. 1.718-2011, Court of First Instance of Castro. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 26) “Sernapesca versus Salmones Chiloé S.A.,” case no. 11-2011, Court of First Instance of Chaitén. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending measures to secure additional facts. Outcome uncertain. 27) “Sernapesca versus Salmones Chiloé S.A.,” case no. 1.815-2011, Court of First Instance of Castro. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. Piscicultura Aquasan S.A. 28) “Hinrichsen versus Piscicultura Aquasan S.A. and Andrés Moya,” Case No.: C-2370-2010. 2nd Civil Court of Valdivia. Matter: Infringement of RAMA. Value: 50 to 3,000. Favorable judgment, notification pending. 2.

Civil Actions Of the parent company: 1) “Empresas AquaChile S.A. versus Chile Sur S.A.,” case no. 10.681-2009, 22nd Civil Court in Santiago. Matter: Payment by Tender of Delivery of the total balance of price of purchase and sale of aquacultural licenses Repollal and Laguna Cuervo, as a consequence of the failure of the creditor’s representative’s to appear at the respective domicile for payment and then being unable to locate the representative and the company at the designated domiciles. Payment procedure was begun on February 24, 2009, with an offer of payment by Notary Public, which was unable to take place because the representative and the company could not be located at the designated domiciles. Accordingly, tender of payment was made at the Treasury General of the Republic on March 18, 2009, by a demand promissory note issued on March 10, 2009. A request was made for service of process of the tender of delivery on May 6, 2009. Value: $8,135,530. In this action, the Company is the plaintiff; therefore, there can be no possible liabilities from this. 2)

158

“Chile Sur S.A. versus Empresas AquaChile S.A.,” case no. 39.632-2009, 28th Civil Court in Santiago, begun on December 23, 2009. Matter: termination of contracts with indemnification for losses owing to nonpayment of the balance of the purchase and

sale prices of two aquacultural licenses.. Value: US$176,666, for the following items: contractual penalty, US$13,333 per license; losses estimated by the defendant, US$150,000. The case to be tried was received and the motions for reconsideration filed are pending. Given the impossibility of making payment of the balance of the purchase and sale price of two aquacultural licenses acquired by Empresas AquaChile S.A. (amounting to US$5,000 in each case), as neither the creditor nor its representatives are locatable, on February 24, 2009, Empresas AquaChile S.A. began a proceeding for payment by tender of delivery, making an offer of payment by means of a notary public. This could not be done as the neither the representative nor the company could be located at the designated domiciles, so delivery of the full amount of the balance of the price of both purchases was tendered with the Treasury General of the Republic on March 18, 2009, and the service of process of this was applied for in the suit styled as “Empresas AquaChile S.A. versus Chile Sur S.A.,” case no. 10.681-2009, of the 22nd Civil Court in Santiago. All of this was done long before the action for termination of contract, as explained in a previous note relating to this suit. As the price balances claimed have been paid, this action should not constitute a potential liability for the Company. 3)

Empresas AquaChile S.A. has sued for fulfillment of an insurance contract with a loss indemnity against RSA Seguros Chile S.A., for the sum of US$2,999,746 (two million nine hundred ninety-nine thousand seven hundred forty-six United States dollars), or any higher or lower sum deemed admissible under the law by the arbitration judge hearing the case, plus current interest and the adjustments and costs of the trial.

The action is being processed before Arbitration Judge Andrés Cuneo Macchiavello, who has ordered RSA Seguros Chile S.A. to answer the complaint. The complaint is claiming the payment of indemnification for the losses sustained since November 8, 2008, at the Aquacultural Centers owned by Empresas AquaChile S.A., named “Avellano” and “Mena,” both located in the Melinka Sector of the Tenth Region, in which the phenomenon known as “algal bloom” occurred. These losses were insured by RSA Seguros Chile S.A.

Of the affiliates AquaChile S.A. “Barría versus AquaChile S.A.,” case no. 256-2011, Court of First Instance of Puerto Aysén. Matter: Civil action for indemnification 4) of losses for death of a contractor company’s worker, resulting from the Aysén tsunami in the year 2007. Notice was served on the defendant through an attorney-in-fact who does not bear the representation of the company. It was therefore annulled by the court, and to date, the defendant has not been served through a qualified attorney-in-fact. Defense was assumed by the insurance company, after consideration that this is an event covered under civil liability insurance. Value: $1,400,000,000. A favorable outcome for the Company is expected. 5) “González versus AquaChile S.A.,” case no. 269-2011, Court of First Instance of Puerto Aysén. Matter: Civil action for indemnification of losses for death of a contractor company’s worker, resulting from the Aysén tsunami in the year 2007. Notice was served on the defendant through an attorney-in-fact who does not bear the representation of the company. It was therefore annulled by the court, and to date, the defendant has not been served through a qualified attorney-in-fact. Defense was assumed by the insurance company, after consideration that this is an event covered under civil liability insurance. Value: $1,400,000,000. A favorable outcome for the Company is expected. Aguas Claras S.A. 6) “Oliva versus Aguas Claras S.A.,” case no. 2.139-2007, 2nd Civil Court of Puerto Montt. Matter: Ordinary civil action for indemnification of losses. Value: $140,500,000. Plaintiff’s are seeking indemnification for losses resulting from damages caused to their mytilidae center’s facilities. Pending trial period. Attorneys in charge of the case expect a favorable outcome for the Company. 7)

“Navarro versus Aguas Claras S.A.,” case no. 34.862-2008, Court of First Instance of Castro. Matter: Ordinary civil action for indemnification of losses from diving accident. Value: $240,000,000. Pending pronouncement of judgment. Outcome uncertain.

b.2) Mentioned below are the most significant suits against AquaChile, including all those with a minimal possibility of the occurrence of liabilities, whose claimed amounts are less than ThUS$100.

159

Labor Suits Of the affiliates: AquaChile S.A. 1) “Renin versus Comercial Aquatek Chile Limitada et al.” Case no.: 314-2009. 1st Civil Court of Puerto Montt. Matter: Unfair Dismissal, annulment of subcontractor dismissal. Value: indeterminate; if the Company loses the case, it would have to pay the remunerations up to the full payment of social security dues. Employee’s wages $347,443, loss-of-income compensation and proportional vacation pay. Pending notice to the other co-defendants, Comercial Aquatek Chile Ltda., Pesquera Camanchaca S.A. and Marine Harvest Chile S.A. Aguas Claras S.A. 2) “Sindicato de Trabajadores Empresa Aguas Claras S.A. versus Servicios de Aguas Claras S.A.” Case no.: 2392-2009. 1st Civil Court of Puerto Montt. Matter: Suit for collection of labor benefits. Value: 136 UF (Unidad de Fomento, literally ‘development unit,’ a Chilean unit of account). Pending pronouncement of judgment. 3) “Sindicato de Trabajadores Empresa Aguas Claras S.A. versus Servicios de Aguas Claras S.A.” Case no.: 1955-2009. 2nd Civil Court of Puerto Montt. Matter: Suit for collection of labor benefits. Value: $10,000,000. Pending pronouncement of judgment.

Labor Claims. Of the affiliates: AquaChile S.A. 1) “Aquachile versus Labor Bureau.” Case no.: 342-2008. 2nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 3 UTM. A finding was handed down maintaining the fine of 3 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 25, 2012. Consequently, this action ended after December 31, 2011. “Aquachile versus Labor Bureau.” Case no.: 861-2008. 2nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 2) 100 UTM. Pending pronouncement of judgment. “Aquachile versus Labor Bureau.” Case no.: 362-2008. 2nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 3) 40 UTM. A finding was handed down maintaining the fine of 40 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 31, 2012. Consequently, this action ended after December 31, 2011. 4) “Aquachile versus Labor Bureau.” Case no.: 888-2008. 2nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 40 UTM. Pending pronouncement of judgment. “Aquachile versus Labor Bureau.” Case no.: 1.006-2008. 2nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 5) 4 IMM. Pending pronouncement of judgment. 6) “Aquachile versus Labor Inspection.” Case no.: 1.577-2006. 2nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 40 UTM. A finding was delivered maintaining the fine of 40 UTM, which was appealed and is now pending in the Puerto Montt Court of Appeals. 7) “Aquachile versus Labor Inspection.” Case no.: 477-2007.- 2nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 60 UTM. A finding was delivered lowering the fine from 60 UTM to 20 UTM, which was appealed at the Puerto Montt Court of Appeals. This appeal is pending. Antarfish S.A. 8) “Antarfish versus Labor Inspection,” case no. 360-2008, 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 3.5 UTM. Pending pronouncement of judgment. Outcome uncertain.

160

Aguas Claras S.A. 9) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 1.068-2009. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. Pending pronouncement of judgment. 10) “Aguas Claras S.A., versus Regional Labor Bureau” Case no.: 1.067-2009. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. Pending pronouncement of judgment. 11) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 1.913-2009. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 140 UTM. A finding was handed down lowering the fine from 140 UTM to 53 UTM, which was upheld by the Court of Appeals of Puerto Montt on February 25, 2012. Consequently, as of December 31, 2011, this action is now ended. 12) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 2.010-2007. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. A finding was handed down lowering the fine from 100 UTM to 40 UTM, which was upheld by the Court of Appeals of Puerto Montt on January 17, 2012. 13) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 2.186-2007. 2nd Civil Court of Puerto Montt. Matter: Fine claim.

Value: 10 UTM. A finding was handed down maintaining the fine of 10 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 31, 2012. Consequently, this action ended after December 31, 2011. 14) “Aguas Claras S.A., versus Regional Labor Bureau” Case no.: 277-2008. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 120 UTM. A finding was handed down maintaining the fine of 120 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 17, 2012. Consequently, this action ended after December 31, 2011. 15) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 1.005-2008. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. First-instance finding upheld fine. Pending decision from the Court of Appeals of Puerto Montt. 16) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 1.007-2008. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 60 UTM. A finding was delivered upholding the claim. Motion pending in Puerto Montt Court of Appeals. 17) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 1.285-2008. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. A finding was delivered maintaining the fine of 100 UTM, which was appealed and is now pending in the Puerto Montt Court of Appeals. 18) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 1.291-2008. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 40 UTM. A finding was handed down maintaining the fine of 40 UTM, which was upheld by the Court of Appeals of Puerto Montt on February 15, 2012. Consequently, this action ended after December 31, 2011. 19) “Aguas Claras S.A., versus Regional Labor Bureau.” Case no.: 1.084-2009. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 180 UTM. A finding was handed down maintaining the fine of 180 UTM, which was overturned by the Court of Appeals of Puerto Montt, lowering its amount to 10 UTM on January 24, 2012. Consequently, this action ended after December 31, 2011. Servicios Aguas Claras S.A. 20) “Servicio Aguas Claras S.A., versus Regional Labor Bureau,” Case No.: 2.369–2009. 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 1,125 IMM (the minimum monthly wage). First-instance finding upheld fine. Pending decision from the Court of Appeals of Puerto Montt. 3.

Civil Actions 1) “Procesadora Hueñocoihue Limitada, versus Conservas Dalcahue.” Case no.: 38.354-2010. 2nd Civil Court of Puerto Montt. Matter: Summary action. Value: $8,000,000. Pending ruling on exceptions filed by the opponent.

NOTE 32 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES The related parties consist of the following entities and individuals: a) Shareholders able to exert control b) Subsidiaries and members of subsidiaries c) Parties with an interest in the entity affording them significant influence over said entity d) Parties with joint control over the entity e) Associates f) Interests in joint ventures g) Key management personnel, of the entity or its parent h) Close relatives of the individuals described above An entity that is controlled, or jointly controlled, or over which any of the individuals described above has a significant influence. i)

32.1 Accounts receivable from related entities

In general, transactions with related companies are concerned with immediate payment or collection and are not subject to special conditions. These transactions conform to the provisions of Articles 44 and 49 of Law No. 18,046, regarding Corporations. Short-term fund transfers from and to the parent or between related companies, which do not relate to collection or payment for services, are structured under the commercial checking account modality, and an interest rate in line with market conditions is established for the monthly balance. Accounts receivable from and accounts payable to related entities as of December 31, 2011, December 31, 2010, and January 1, 2010, respectively, are detailed below:

161

Company

Tax ID

Country of origin

Type of relationship

Currency

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Plaza Casino S.A.

96.904.770-5

Chile

Common shareholders

Pesos

Inmobiliaria Aleph Ltda.

76.023.270-k

Chile

Common shareholders

Pesos

Salmones Chaicas S.A.(*)

76.125.666-1

Chile

Common shareholders

Pesos

6,305

Administradora de Acuicultura

Foreign

Costa Rica

Common shareholders

Colons

173

Aquasea de Costa Rica S.A.

Foreign

Costa Rica

Common shareholders

Colons

Biomar Aquacorporation Products

Foreign

Costa Rica

Common shareholders

Dollars

6,603

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Total

(*) Relates to advance payments for the supply of disease-free Atlantic salmon eggs Notes and accounts receivable with Related Entities, non-current Company

Tax ID

Country of origin

Type of relationship

Currency

Víctor Hugo Puchi Acuña

6.680.823-8

Chile

Shareholder

Dollars

500

Aquasea de Costa Rica S.A

Foreign

Costa Rica

Common shareholders

Dollars

1,080

1,580

500

Total

32.2 Accounts payable to related entities

Accounts payable to related entities as of December 31, 2011, December 31, 2010, and January 1, 2010, respectively, are detailed below: Notes and accounts payable with Related Entities, current Company

Country of origin

Type of relationship

Currency

12/31/2011 ThUS$

12/31/2010 ThUS$

01/01/2010 ThUS$

Aquamet S.A.

96.949.330-6

Chile

Common shareholders

Pesos

Forestal Patagonia S.A.

96.637.860-3

Chile

Common shareholders

Pesos

Mario Puchi Acuña

6.270.533-7

Chile

Shareholder

Pesos

Centro Veterinario y Agric. Ltda

86.510.400-6

Chile

Common members

Dollars

1,658

1,058

359

Ganadera Río Cochrane Ltda.

77.029.880-6

Chile

Common members

Pesos

Inversiones Aéreas Patagonia

77.758.740-4

Chile

Common members

Pesos

Inmobiliaria e Inv. Aleph

76.023.270-K

Chile

Common members

Pesos

Inversiones Trancura Ltda.

76.333.430-9

Chile

Common members

Dollars

135

Inversiones Doña Paula Ltda.

76.334.330-8

Chile

Common members

Dollars

134

Administradora de Acuicultura

foreign

Costa Rica

Common members

Colons

El Pelón de la Bajura

foreign

Costa Rica

Common shareholders

Colons

Hacienda la Pacifica S.A.

foreign

Costa Rica

Common shareholders

Colons

Biomar Aquacorporation Products

foreign

Costa Rica

Common shareholders

Dollars

126

2,203

1,059

381

Total

162

Tax ID

32.3. Transactions with related parties and their effects on profit or loss

Below are the transactions and their effects on profit or loss for the periods ended on December 31, 2011 and 2010:

Company

Tax ID

Country of origin

Nature of the relationship

Description of the relationship

Type of Currency

12/31/2011 Amount ThUS$

12/31/2010

Effect on Profit or Loss ThUS$

Amount ThUS$

Effect on Profit or Loss ThUS$

Ganadera Río Cochrane Ltda.

77.029.880-6

Chile

Common members

Hatchery Lease

Pesos

(70)

Mario Puchi Acuña

6.270.533-7

Chile

Shareholder

Lease of facilities

Pesos

(21)

(44) (9)

Juan Carlos Puchi Acuña

7.961.289-8

Chile

Shareholder

Remunerations

Pesos

125

(125)

(58)

Inversiones Patagonia Ltda.

76.070.159-9

Chile

Common members

Warehouse lease

Pesos

(56)

(15)

Inmob. Aleph Ltda.

76.023.270-k

Chile

Common members

Lease of facilities

Pesos

(5)

(33) (46)

Claudio Puchi Germani

10.308.367-2

Chile

Shareholder

Remunerations

Pesos

Centro Veter. y Agric. Ltda.

86.510.400-6

Chile

Common members

Purchase of medications

Dollars

Inv. Áreas Patagonia

77.758.740-4

Chile

Air Services

Estacionamientos SBT.

96.994.490-1

Chile

Common members Common shareholders Common members

Parking lot service

Sociedad de Rentas Inmobiliaria Ltda.

78.648.070-1

Chile

Puchi Arquitectos asociados

76.119.664-2

Chile

Plaza Casino S.A.

96.904.660-5

Chile

Patricio Quezada y Cía. Ltda.

78.019.320-4

Chile

Common members Common shareholders Common members

(59)

9,834

1,758

Pesos

395

(395)

(37)

Pesos

(3)

Office leasing

Pesos

(34)

(47)

Architecture service

Pesos

134

Housing service

Pesos

Overland transportation

Pesos

Empresas AquaChile and subsidiaries have a policy of reporting all transactions done with related parties during the period, with the exception of dividends paid and capital contributions received, which are not considered as transactions.

32.4. Remunerations and Fees of the Senior Management and Board of Directors and Remunerations of Key Executives

Per diem allowances, remunerations and financial, commercial and managerial advisory services received by the members of the Senior Management up to the period ended on December 31, 2011, amount to ThUS$716 (ThUS$689 to period ended on December 31, 2010). Empresas AquaChile and subsidiaries have a systems of incentives linked to the Company’s operating profit or loss, consisting of a bond applicable to their main executives and positions which, at the discretion of the Company, are eligible to take part. The compensations system endeavors to motivate, recognize and achieve the loyalty of the executive through a formal scheme that rewards improved individual performances as well as teamwork. The total gross remuneration earned by the executives of Empresas AquaChile and subsidiaries that includes these incentives, as of December 31, 2011, reached ThUS$5,184 (ThUS$4,433 as of December 31, 2010).

163

NOTE 33 - ENVIRONMENT For Empresas AquaChile and its subsidiaries, caring for and respecting the environment holds a priority position in their management strategy. This has led to a series of actions and best practices adopted for purposes of increasing the efficiency of their operations and reducing the environmental impact of these in a significant and sustainable manner. These pro-environmental actions involve investment in improving the production processes and increased monitoring and control of aspects related with the environmental impact. The following is a breakdown of the information concerning environmentally-related disbursements: a) Parent: Project 1: Amount disbursed during the period: Recognition in books: Project 2: Amount disbursed during the period: Recognition in books: Project 3: Amount disbursed during the period: Recognition in books: Amounts committed in the future, projects 1-2-3: Estimated completion date, Projects 1-2-3:

Empresas AquaChile S.A. (Individually) Waste management ThUS$73 (ThUS$42 to December 2010) Expense Environmental ThUS$542 (ThUS$125 to December 2010) Expense Analyses and Certifications ThUS$140 (ThUS$184 to December 2010) Expense Dec-31-11

Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. Project 4: Ensilage, Mortality Removal Amount disbursed during the period: ThUS$268 (ThUS$103 to December 2010) Recognition in books: Expense Amounts committed in the future: Estimated completion date: Dec-31-11 Project 5: Ensilage Investment Amount disbursed during the period: ThUS$1,415 (ThUS$101 to December 2010) Recognition in books: Property, Plant and Equipment Amounts committed in the future: ThUS$812 Estimated completion date: Jun-30-12 Disbursement item, projects 4 and 5: Investment in facilities, mortality platforms and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of salmon mortality from the fish farm to the treatment plants, and use of third parties as an expense at the centers where there is no investment yet. b)

164

Subsidiary: Alitec S.A. Project 1: Environmental Amount disbursed during the period ThUS$29 (ThUS$25 at December 2010) Recognition in books: Expense Project 2: Analyses and Certifications Amount disbursed during the period: ThUS$1,280 (ThUS$434 at December 2010) Recognition in books: Expense Amounts committed in the future, Projects 1 and 2: Estimated completion date, Projects 1 and 2: Dec-31-11 Disbursement item, projects 1 and 2: Certifications, removal, monitoring, analyses and treatments of waste in each production stage, relating to requirements from relevant legal bodies.

Subsidiary: ACI S.A. Project 1: Waste management Amount disbursed during the period: ThUS$5 (ThUS$39 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$20 (ThUS$17 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$25 (ThUS$25 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Certifications, removal, monitoring, analyses and treatments of waste in each production stage, relating to requirements from relevant legal bodies.

d) Subsidiary: Antarfood S.A. Project 1: Waste management Amount disbursed during the period: ThUS$83 (ThUS$57 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$5 (ThUS$0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$44 (ThUS$39 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. e)

Aguas Claras S.A. Subsidiary: Project 1: Waste management Amount disbursed during the period: ThUS$44 (ThUS$32 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$231 (ThUS$70 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$280 (ThUS$360 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. Project 4: Amount disbursed during the period: Recognition in books: Amounts committed in the future: Estimated completion date:

Ensilage, Mortality Removal ThUS$192 (ThUS$89 at December 2010) Expense Dec-31-11

165

Suscription the annual report The undersigned declare that they are responsible for the truth of the information included in this annual report of Empresas AquaChile S.A. at December 31, 2011.

Víctor Hugo Puchi Acuña

Humberto Fischer Llop

ID: 6.680.823-8

ID: 6.687.633-0

Mario Humberto Puchi Acuña

Claudio Fischer Llop

ID: 6.270.533-7

ID: 7.378.806-4

Vicente Pérez Fuentes

Alejandro Pérez Rodríguez

ID: 7.300.137-4

ID: 5.169.389-2

Piero Solari Donaggio

Alfonso Márquez de la Plata Cortés

ID: 9.585.725-6

ID: 6.379.894-0

Chairman

Director

General Manager

173

Project 4: Ensilage, Mortality Removal Amount disbursed during the period: ThUS$62 (ThUS$201 at December 2010) Recognition in books: Expense Amounts committed in the future: Estimated completion date: Dec-31-11 Project 5: Ensilage Investment Amount disbursed during the period: ThUS$120 (ThUS$73 at December 2010) Recognition in books: Property, Plant and Equipment Amounts committed in the future: Estimated completion date: Dec-31-11 Disbursement item, projects 4 and 5: Investment in facilities, mortality platforms and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of salmon mortality from the fish farm to the treatment plants, and use of third parties as an expense at the centers where there is no investment yet. h)

Subsidiary: Piscicultura Aquasan S.A. Project 1: Waste management Amount disbursed during the period: ThUS$180 (ThUS$0 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$9 (ThUS$0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$137 (ThUS$0 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies.

Subsidiary: Procesadora Hue単ocoihue Ltda. Project 1: Waste management Amount disbursed during the period: ThUS$8 (ThUS$0 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$4 (ThUS$0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$4 (ThUS$0 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies.

167

Subsidiary: Pesquera Antares S.A. Project 1: Waste management Amount disbursed during the period: ThUS$22 (ThUS$1 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$4 (ThUS$5 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$48 (ThUS$64 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies.

Salmones CailĂn S.A. Subsidiary: Project 1: Waste management Amount disbursed during the period: ThUS$13 (ThUS$7 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$1 (ThUS$0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$34 (ThUS$24 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: 0 Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies.

Aquachile S.A. Subsidiary: Project 1: Waste management Amount disbursed during the period: ThUS$189 (ThUS$56 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: ThUS$175 (ThUS$80 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: ThUS$148 (ThUS$120 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: Estimated completion date, Projects 1-2-3: Dec-31-11 Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies.

168

Project 4: Ensilage, Mortality Removal Amount disbursed during the period: ThUS$35 (ThUS$37 at December 2010) Recognition in books: Expense Amounts committed in the future: 0 Estimated completion date: Dec-31-11 Project 5: Ensilage Investment Amount disbursed during the period: ThUS$36 (ThUS$31 at December 2010) Recognition in books: Property, Plant and Equipment Amounts committed in the future: Estimated completion date: Dec-31-11 Disbursement item, projects 4 and 5: Investment in facilities, mortality platforms and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of salmon mortality from the fish farm to the treatment plants, and use of third parties as an expense at the centers where there is no investment yet. m) Subsidiary: Salmones Australes S.A. Project 1: Environmental Amount disbursed during the period: ThUS$72 (ThUS$0 at December 2010) Recognition in books: Expense Amounts committed in the future: Estimated completion date: Dec-31-11 Disbursement item: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports). These are also required by the relevant legal bodies. n)

Aquainnovo S.A. Subsidiary: Project 1: Ensilage Investment Amount disbursed during the period: ThUS$10 (ThUS$0 at December 2010) Recognition in books: Property, Plant and Equipment Amounts committed in the future: ThUS$10 Estimated completion date: Jun-30-12 Disbursement item: Investment in facilities, and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of waste to the treatment plants.

Subsidiary: Salmones MaullĂn Ltda. Project 1: Ensilage, Mortality Removal Amount disbursed during the period: ThUS$29 (ThUS$2 at December 2010) Recognition in books: Expense Amounts committed in the future: Estimated completion date: Dec-31-11 Disbursement item: Disbursements for the adequate removal of salmon mortality from the fish farm to the treatment plants.

169

Below is a more detailed breakdown of the disbursement items of the projects: Environmental: this is related with the following studies 1. Bathymetry: to determine the depths of a sea license. Current profiling: to determine the dynamics of the currents in the sector under sea license. With this it is possible to find out the 2. predominant direction or directions of the current, as well as their frequency and speeds. 3. INFAs: Environmental Reports that are made at the sea and lake centers, and are reviewed by Sernapesca. This report is made on those operating in the locations established under a ruling. Pre-operating INFAs: Environmental Reports that are made before a center goes operational after a break of more than one year. 4. Oxygen Profiles: monitoring done to determine the quantity of oxygen in the column of water at the sea and lake fish farm. These are 5. done every two months. 6. Phytoplankton Monitoring: analyses that are performed on the samples of water from the sea fish farm, primarily to determine whether there is a presence of harmful algae that might affect the normal behavior of the fish. Sampling and analyses of grey and black water from the floating treatment plants: monitoring must be done of the water flowing 7. out of the floating treatment plants. This is a requirement of the Maritime Authority. Waste Management Managing the treatment of inorganic, organic and hazardous waste in each of the Companyâ&#x20AC;&#x2122;s productive units. LIW treatment: 1. Sludges: management of removal and disposal of sludges that are generated in the hatchery and processing plants. The company carrying out the removal and disposal must have the proper sanitary and environmental permits under the environmental legislation. 2. LIW monitoring and analysis: liquid industrial waste discharged by the hatchery and plants undergo monitoring and analyses. The results are sent to the Sanitary Services Supervisor (SISS) and Maritime Authority, as appropriate. These analyses are done in accordance with the provisions of D.S. 90/2001. Environmental certifications External laboratory analyses â&#x20AC;&#x201C; certif.: The analyses we ask the laboratory to perform are: - - INFAs and pre-INFAs - LIW Monitoring of Floating Treatment Plants - Potable Water -

170

NOTE 34 - OTHER INFORMATION The number of employees of Empresas AquaChile and subsidiaries, by category, is as follows: Staff

12/31/2011

Managers and executives

12/31/2010

767

623

Workers

3,998

3,859

Total

4,813

4,525

Administrative and technical staff

NOTE 35 - EVENTS AFTER THE DATE OF THE BALANCE SHEET a)

The Companyâ&#x20AC;&#x2122;s consolidated financial statements relating to the period ended on December 31, 2011, were approved by the Senior Management in a meeting dated March 13, 2012.

Between January 1, 2012, and the issue date of these financial statements (March 13, 2012) no other events of a financial nature or of any other kind have taken place that might significantly affect their interpretation.

171

Suscription the annual report The undersigned declare that they are responsible for the truth of the information included in this annual report of Empresas AquaChile S.A. at December 31, 2011.

Víctor Hugo Puchi Acuña

Humberto Fischer Llop

ID: 6.680.823-8

ID: 6.687.633-0

Mario Humberto Puchi Acuña

Claudio Fischer Llop

ID: 6.270.533-7

ID: 7.378.806-4

Vicente Pérez Fuentes

Alejandro Pérez Rodríguez

ID: 7.300.137-4

ID: 5.169.389-2

Piero Solari Donaggio

Alfonso Márquez de la Plata Cortés

ID: 9.585.725-6

ID: 6.379.894-0

Chairman

Director

General Manager

173

EMPRESAS AQUACHILE Cardonal s/n Lote B, Puerto Montt X Region de los Lagos Phone: (56-65)433 600 Fax: (56-65)433 606 e-mail: contactenos@aquachile.com www.aquachile.com

DESIGN AND PRODUCTION Interfaz Dise単o PHOTO AquaChile archives Degree Juan Ernesto Jaegger Thomas Wedderwille PRINTING QuadGraphics

PEFC CERTIFICATE This paper comes from sustainably managed forests and controlled sources www.pefc.org