Memoria aquachile 2013 ingles completa by AquaChile

annual report empresas aquachile

2013

annual report empresas aquachile

2013

memoria empresas aquachile

I ANNUAL REPORT 1.

EMPRESAS AQUACHILE

1.1 Company information

1.2 From the south of Chile to the world

1.3 Message from the Chairman

1.4 AquaChile at a glance

1.5 Milestones 2013

OUR COMPANY

2.1 Profile of AquaChile

2.2 Mission, vision and values

2.3 History of the Company

COMPANY ACTIVITIES

3.1 Industrial sector

3.2 Activities and businesses

3.3 Properties and installations

3.4 Insurance policies

3.5 Risk factors

3.6 Investment plans

3.7 Financial activities

OWNERSHIP AND SHARES

4.1 Ownership

4.2 Shares, their characteristics and rights

CORPORATE GOVERNANCE

5.1 Board of Directors

5.2 Director´s Committe

100

5.3 Management

102

106

CORPORATE SOCIAL RESPONSIBILITY

6.1 Our people

109

6.2 The environment

112

6.3 Communities

115

INFORMATION ABOUT SUBSIDIARIES, AFFILIATED

COMPANIES AND INVESTMENTS IN THE OTHER COMPANIES

120

MATERIAL NEWS

126

SUMMARY OF COMMENTS AND PROPOSALS PUT

FORWARD BY SHAREHOLDERS AND THE DIRECTOR´S

COMMITEE

132

II FINANCIAL INFORMATION 1.

MANAGEMENT DISCUSSION AND ANALYSIS

138

annual report empresas aquachile

memoria empresas aquachile

EMPRESAS AQUACHILE

Annual report AquaChile 2013

1.1 Company information

1.2 From the south of Chile to the world

1.3 Message from the Chairman

1.4 AquaChile at a glance 1.5 Milestones 2013

14 19

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empresas aquachile cap.01

COMPANY INFORMATION Chapter 1.1

NAME

- Empresas AquaChile S.A.

Chilean Tax N° (RUT)

- 86.247.400-7

Type of company

- Public company

Inscription on Securities Register

- N° 1.069, 12 April 2011

Legal address

- Cardonal s/n Lote B, Puerto Montt - Región de Los Lagos - Telephone: (+56-65) 2433600 - Fax: (+56 65) 2433606 - PO Box: Casilla 30 D, Puerto Montt

Organization

- The Company has its headquarters in the city of Puerto Montt but may establish branches, agencies or offices in Chile and overseas. - The structure of Empresas AquaChile S.A. envisages exclusively a CEO's office in Puerto Montt.

Purpose

- The Company's purpose is to import, export, produce, breed, grow, process, transform, modify and market, in Chile and overseas, farmed hydrobiological species and, particularly, salmonids. The Company is the result of the merger of the following two original companies:

Founding documents

- A. “Fischer Hermanos Limitada”, founded by public deed of 20 July 1979 extended in Coyhaique by Public Notary Patricio Olate Melo, domiciled in the city of Coyhaique. Inscribed on the Business Register of the Coyhaique Real Estate Registry Office at Folio 38, N° 34 of 1979. The company, Fischer Hermanos Limitada, moved its domicile to Puerto Montt under public deed of 18 October 1991, extended in Puerto Montt by Public Notary Heriberto Barrientos Bahamondes.

Inscribed on the Business Register of the Puerto Montt Real Estate Registry Office at Folio 325 overleaf, N° 208 of 1991.

DOCUMENTOS CONSTITUTIVOS

The company, Fischer Hermanos Limitada, became a public company named Salmones Pacífico Sur S.A. by public deed extended by Public Notary Félix Jara Cadot in Santiago on 29 May 1996. Inscribed on the Business Register of the Puerto Montt Real Estate Registry Office at Folio 364, N°228 of 1996. - B.- Aquachile S.A., founded by public deed of 26 April 1988 extended by Public Notary Ricardo San Martín Urrejola in Santiago. Inscribed on the Business Register of the Santiago Real Estate Registry Office at Folio 9196, N° 4888 of 1988. - C.- Merger: By public deed of 30 June 1999 extended by Public Notary Félix Jara Cadot in Santiago between Salmones Pacífico Sur S.A. and Inmobiliaria Los Robles S.A. absorbed by Salmones Pacífico Sur S.A. Inscribed on the Business Register of the Puerto Montt Real Estate Registry Office at Folio 396 overleaf, N° 264 of 1999. Salmones Pacífico Sur S.A. changed its name to EMPRESAS AQUACHILE S.A. by public deed of 30 December 2004 extended by Public Notary Humberto Santelices Narducci in Santiago.

Address of main management and administrative office

Website: External auditors

Ticker symbol in Chile

Shareholder information

Investor relations:

- Cardonal s/n Lote B, Puerto Montt - Telephone: (+56-65) 2433600 - Fax: (+56-65) 2433606 - PO Box: Casilla 30 D, Puerto Montt - e-mail: contactenos@aquachile.com - www.aquachile.com - PwC (PricewaterhouseCoopers Consultores Auditores y Compañía Limitada) - AQUACHILE DCV Registros S.A. - e-mail: atencionaccionistas@dcv.cl - Address: Huérfanos 770, piso 22, Santiago - Telephone: (+56-2) 2393 9003 - Fax: (+56-2) 2393 9101 - Website: www.dcv.cl - e-mail: investor.relations@aquachile.com - Address: Cardonal s/n Lote B, Puerto Montt - Telephone: (+56-65) 2433603 / 550 - Website: www.aquachile.com

Note: A digital version of this Annual Report is available to shareholders, investors and the general public on the Company's website (www.aquachile.com).

empresas aquachile

FROM THE SOUTH OF CHILE TO THE WORLD Chapter 1.2

From the south of Chile, our Company reaches the world's most demanding markets with high-value foods produced from our own salmon and trout farms.

In Costa Rica and Panama, we farm tilapia principally for the North American market.

Each day, close to two million people around the world consume some AquaChile product.

AquaChile is a company born in the south of Chile that today has over 300 clients in 30 countries across five continents.

We have over 25 years' experience in the food industry and are present in its different stages from genetics through to the food on tables in the most demanding international markets.

We appreciate and value our people, our surroundings and our community. With a strong local commitment, we give preference to hiring people who live in the areas where we have our operations and to using the services of local companies. We currently provide work for over 5,900 people in Chile, the United States, Costa Rica and Panama.

We are committed to the development of an industry that is sustainable in the long term. To this end, we have participated actively in discussions about the sector's new sanitary regulation.

At AquaChile, innovation and the incorporation of new technologies are a key tool for ensuring our competitiveness in international markets.

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MESSAGE FROM THE CHAIRMAN Chapter 1.3

Dear shareholders: In 2013, we saw solid growth of international demand for food and, particularly, for salmon whose characteristics as a healthy food give it an excellent position and have allowed it to penetrate the world's most demanding markets. Our country has recently begun to show important improvements in its level of costs and competitive position. There is room for further progress if we focus on those aspects that have affected the competitiveness of the salmon farming industry and persist in the quest for efficient regulation and better coordination between the sector's producers, effectively addressing the issue of sanitary management. It is important that the production model take into account factors that include biological stocking limits in areas suitable for aquaculture since this will make for a safer and more stable industry. Having a safer industry has two key implications. Firstly, it guarantees highquality employment in the southernmost parts of Chile where this industry has emerged as an important driver of job creation and has, in addition, meant important new employment opportunities for women, with a very positive impact on family income. The connectivity that the industry has brought to remote areas also has an important effect on the development of these regions of the country since salmon farming, with its logistics and operations, has emerged as an industry that connects the people of the south. The recovery of our sector has also been reflected in employment and quality of life in this area. At AquaChile, we are proud of our origin and roots in southern Chile and are, as a result, convinced that ours is an activity we must develop, based on the fundamental principle of sustainability and respect for the environment.

In its second positive effect, a safer industry means a better reputation in international markets, with the gain to Chile's credibility opening up new commercial opportunities and, in our marketing, allowing us to highlight the healthy nature of our products. Increasing awareness of the industry's values and its concern for sustainability is one of the tasks that, if undertaken by the industry as a whole, can be addressed more successfully. This is the reason for AquaChile's participation in the Global Salmon Initiative (GSI) , an organization created in 2013 bringing together 15 salmon producers from different countries that together account for 70% of world output of Atlantic salmon. It seeks to foster the salmon industry's development and sustainable growth. Within Chile, coordination between neighborhoods, the sharing of information among producers and learning from mistakes are the keys to increasing the industry's competitiveness. In this context, AquaChile rejoined SalmonChile, the industry association, in 2013 so as to work together to improve the regulatory framework on which the activity depends in the long term. We are fortunate to live in a country with natural advantages for the development of salmon farming, offering clean waters with the right temperature that allow us to produce a high-value food that is in increasing demand in the world. If, in addition, we consider that internationally the production of wild fish is ever more limited, seawater farming continues to be the great source for feeding the world healthily with salmon. That is why, as a company and a country, we must measure up to this challenge and continue to strive for an industry that is competitive and sustainable in the long term and that helps to feed the world healthily. I would like to highlight the efforts made by our people and to thank them, particularly so in the case of all our workers. During this time of important changes in the way we do things, they have made a great contribution that has allowed us to be more efficient, to recognize with modesty our mistakes and limitations and to learn from them and to identify new opportunities. We want to continue along these same lines and improve together day by day.

vĂctor hugo puchi acuĂąa Chairman of the Board

GSI is an initiative launched by the world's leading salmon producers that seeks to achieve significant progress in the industry's sustainability. It constitutes an undertaking to provide a highly sustainable source of healthy food for the world's growing population, contributing to minimize the sector's environmental impact and 1

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empresas aquachile cap.01

AQUACHILE AT A GLANCE Chapter 1.4

PRINCIPAL FIGURES

ThUS$

current assets non-current assets total assets current liabilities non-current liabilities total liabilities equity non-controlling interest total liabilities and equity

ThUS$

total revenues ebit pre fair value adj.(1) ebitda pre fair value adj.(2) earnings

ThUS$

financial debt cash financial leverage (3)

2013 2012

475,711 434,232 423,345 397,594 899,056 831,826 227,429 176,554 268,149 258,739 495,578 435,293 394,173 387,654 9,305 8,879 899,056 831,826 2013 2012

737,875 409,541 -42,974 -20,687 -15,501 -4,287 -9,454 -43,156 2013 2012

294,473 260,816 17,935 12,922 1.18 1.07

Source: AquaChile. 1 EBIT pre FV adj. (henceforward EBIT): Revenues from ordinary activities less sales costs (in other words, gross earnings pre fair value adjustment), less administrative costs, less distribution costs. All these figures are obtained directly from the Company's Income and Cash Flow Statements. 2 EBITDA pre FV adj. (henceforward EBITDA): Revenues from ordinary activities less sales costs (in other words, gross earnings pre fair value adjustment), less administrative costs, less distribution costs, plus adjustment for depreciation and amortization expenses. All these figures are obtained directly from the Company's Income and Cash Flow Statements. 3 (Total current liabilities plus total non-current liabilities less cash and cash equivalents) / total equity. Fuente: AquaChile

OWNERSHIP STRUCTURE 33.03%

fig. 01

PUCHI FAMILY

3.76% AFPs 30.18% otros

33.94% 33.03%

OTHERS

FISCHER FAMILY

Source: AquaChile

AQUACHILE SHARE PRICE (CLP) VS IPSA, 2013 (POINTS) AQUACHILE

fig. 02

IPSA

4,700

450

4,500

400

4,300 350 4,100 300 3,900 250

3,700

200

3,500 jan

feb

mar

abr

may

jun

jul

aug

sep

oct

nov

de0c

Source: Bolsa de Comercio

CONSOLIDATED SALES, 2013 / TOTAL = US$738 MILLION

fig. 03

39% ATLANTIC SALMON

9% TILAPIA

19% TROUT

6% FEED 9% OTHERS

18% PACIFIC SALMON Source: AquaChile 15

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CONSOLIDATED SALES, 2006-2013 (US$ MILLION)

fig. 04

2013

738

2012

410

2011

501

2010

388

2009

440

2008

553

2007

484

2006

501

Source: AquaChile

CONSOLIDATED EBITDA, 2006-2013 (US$ MILLION)

fig. 05

2013

-16

2012

-4

2011

2010

2009

-40

2008

-16

2007

2006

136

Source: AquaChile

CONSOLIDATED EARNINGS, 2006-2013 (US$ MILLION) 2013

-9

2012

-43

2011

2010

2009

-142

2008

-75

2007

2006

Source: AquaChile.

fig. 06

CONSOLIDATED INVESTMENT, 2006-2013 (US$ MILLION)

fig. 07

2013

2012

2011

2010

2009

2008

2007

2006

Source: AquaChile.

CONSOLIDATED WORKFORCE, 2007-2013 (N째 OF EMPLOYEES)

fig. 08

2013

5,996

2012

5,592

2011

4,813

2010

4,525

2009

4,659

2008

6,483

2007

6,547

Source: AquaChile.

Verlasso速 - salmon produced in a more environmentally friendly way - was endorsed as a "good alternative" by the Monterey Bay Aquarium's Seafood Watch program.

empresas aquachile

MILESTONES 2013 Chapter 1.5

Launch of the Global Salmon Initiative (GSI) > AquaChile is one of the 15 salmon companies from different countries, representing some 70% of world Atlantic salmon output, which form part of this initiative. Launched in 2013, its objective is to improve the industry's performance across three pillars of sustainability, reducing its environmental impact, enhancing its social contribution and maintaining economic growth.

/ Alliance between AquaChile and Friosur > The two companies signed an agreement for the joint marketing of their products in the US and Canadian markets. It covers fresh and frozen Atlantic salmon, which accounts for the majority of the two companies' exports. /

Monterey Bay Aquarium endorsement of Verlasso > After a rigorous evaluation process that lasted 16 months, the Monterey Bay Aquarium's Seafood Watch program, which helps consumers to choose seafood products with lesser impacts on oceans and, thereby contribute to protection of the environment, endorsed Verlasso速. As a result, Verlasso速 - salmon produced in a more environmentally friendly way developed through an alliance between AquaChile and DuPont - was classed as a "good alternative", becoming the first and only farmed salmon in the world to obtain this classification.

Return of AquaChile to SalmonChile > At the end of July, the Company rejoined this business association, which represents the Chilean salmon farming sector, and took a seat on its board of directors. AquaChile takes the view that the Chilean industry must work unitedly to improve the regulatory model on which its activity in the long term depends so as to ensure greater long-term competitiveness and sustainability.

Start of operation of pet food flavoring plant in Costa Rica > In August 2013, the AquaSea plant in Costa Rica's Guanacaste Province started operation. This initiative, which forms part of AquaChile's association with Grupo Diana, seeks to take advantage of the parts of tilapia not used for human consumption to produce flavorings for pet food. The plant has an annual production capacity of 1,600 tonnes of meal, employs 24 people and its products are for export. 19

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Marketing of Verlasso速 in the United States > This brand of salmon, with its high quality and taste standards, had a good year in 2013. As well as strengthening its relations with different distributors, it was launched in important supermarket chains such as Central Market in Texas and Heinens in Ohio. For 2014, its launch is planned in 152 Fresh Market stores across the United States.

Increase in sales > In 2013, AquaChile achieved record sales, recovering levels of output of all the species farmed.

Recovery of output of Atlantic salmon > Output returned to its level prior to the ISA virus crisis. Production of salmon and trout reached 102,000 gross tonnes harvested, with an important increase in Atlantic salmon which reached 53,000 gross tonnes, up from 17,000 gross tonnes in 2012.

Record tilapia harvest > At a record 23,800 gross tonnes, the Company's tilapia harvest was up by 7.68% on the previous year, due principally to higher output in Panama.

RECOGNITIONS /

Empresas AquaChile S.A. received the Trayectoria Exportadora 2013 (Export Track Record 2013) Prize awarded by the government's ProChile export promotion agency and the Capital business magazine. For the fifth consecutive year, Capital and ProChile together organized southern Chile's largest meeting of exporters, held in Puerto Varas in the Los Lagos Region. In 2013, the Trayectoria Exportadora prize was awarded to Empresas AquaChile S.A. for its sustained success and the constant growth it has experienced since its foundation in the 1980s through to the present day when it is one of the world's leading salmon producers.

Alitec Pargua S.A., a subsidiary of Empresas AquaChile S.A., received the Rosalino Fuentes Silva 2012 Prize. In May, in the 51st Annual National Safety Competition organized by Chile's National Safety Council (CNS)2, Alitec Pargua S.A. received the Rosalino Fuentes Silva 2012 prize for the lowest accident frequency rate in the C Category (production of foodstuffs)

The CNS is a private non-profit organization created by government decision in 1953 with the basic objective of promoting risk prevention and increasing awareness of the need to prevent accidents and workplace illnesses in the different sectors of the Chilean economy. 2

our company

Annual report AquaChile 2013

2.1 Profile of AquaChile

2.2 Mission, vision and values

2.3 History of the Company

AquaChile is active in all the industry's production chain, from fish genetics through to the marketing of its products, directly serving more than 300 clients in over 30 countries and creating jobs for over 5,900 people in the countries where it has its operations.

Our company

PROFILE OF AQUACHILE Chapter 2.1

Empresas AquaChile S.A. is a Chilean company that produces foods and proteins with an emphasis on the production and marketing of salmon, trout and tilapia. It comprises a group of companies with strategic synergies that farm and market Atlantic and Pacific salmon, trout and tilapia for human consumption, maintaining vertical control and adding value throughout the production chain from genetics through to the marketing of products. AquaChile is Chile's largest salmon company, the world's principal producer of Pacific salmon or coho, one of the world's largest producers of trout and one of the most important suppliers of fresh tilapia to the United States. The Company has operations in Chile, Costa Rica and Panama as well as commercial offices in the United States. Its products reach over 300 clients in more than 30 countries and it employs over 5,900 people in the different countries in which it is present. Through its subsidiaries, the Company is also active in genetic research for the aquaculture industry and the production of salmon and trout eggs and smolts as well as the production of feed for the salmon and tilapia industries.

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Our company cap.02

MISSION, VISION AND VALUES Chapter 2.2

Mission

- To produce healthy aquaculture foods for this and future generations, respecting and valuing the environment and our people.

VISION

- We seek to be recognized internationally for the quality of our products, the sustainability of our processes and our respect for employees.

Corporate Values

- To act with respect for people, work and the environment - To feel passion for the work we do - To be creative and show initiative in our daily tasks - To act preventively and safely - To behave austerely.

Principles of Corporate Social Responsibility

- To produce high-quality, healthy and safe food - To be proactive and respectful as regards the environment - To develop a safe and healthy work environment - To benefit communities and suppliers in the places where the Company has its operations.

Objectives

- To add value at each stage of the process, taking into account the safety and health of our employees and care for the environment, and to provide each internal and external client with the best product and best service at a convenient price. - To guarantee through all stages of the process, safety, quality and competitiveness in the production and marketing of salmon, trout and tilapia. - To achieve international recognition for the quality and consistency of our products and services which should be reflected in greater preference from clients and greater sustainability of the business. - To constantly improve the way we do things, taking into account the quality of the product and the efficiency of processes, innovating technologically and minimizing workplace risks and environmental impacts. - To foster the professional and personal development of all the people who form part of the value chain, contributing to improve their skills and consolidating their commitment to the welfare of the community and conservation of the environment. - To promote partnerships and integration with other companies.

Our History 1998-2013

Empresas AquaChile S.A. was born in 1998 as a result of the merger of Salmones Pacífico Sur S.A. (founded in the city of Coyhaique in 1979) and AquaChile S.A. (founded in the city of Santiago in 1988). Initially, each of these companies was geared to different stages of the salmon farming process, with Salmones Pacífico Sur S.A. focusing on the seawater stage while AquaChile S.A. focused on the freshwater stage, with the production of eggs, juveniles and smolts2. The two companies were fully complementary, with strong strategic positions in their respective lines of business, a quite well developed organizational structure, extensive knowledge of the business and shareholders aware of the unique opportunity to jointly achieve more profitable and solid growth. The principal milestones since the merger have been:

1999-2000 Acquisition of Aucar (a freshwater farming facility).

Start of operation of the first seawater facility in the Aysén Region.

2001-2002 Acquisition of Cherquenco (a freshwater farming center).

Opening of the office of AquaChile Inc. in the United States for the marketing of salmon in that country.

2003 2006 Acquisition of the assets of Pesquera BestSalmon S.A.

2004 Acquisition in two stages of 80.85% of Antarfish S.A., the parent company of Aguas Claras S.A., making AquaChile the country's leading company in sales of salmon and trout.

Change of name of the company to Empresas AquaChile S.A.

2005 Acquisition of a further 19.09% of Antarfish S.A, taking the Company's stake to 99.94%.

Acquisition of 60% of Salmones Chiloé S.A. (Salmosan), 100% of Pesquera Palacios S.A. and 100% of Salmones Australes S.A.

Acquisition of 60% of the salmon business of Robinson Crusoe S.A. (Salmones Maullín S.A.).

Acquisition of 60% of Costa Rica-based Grupo ACI S.A.

3Smolt: the physiological stage in which the fish can be transferred from freshwater to seawater.

Foundation of Sudmaris Chile S.A. to produce, process and export mussels. Salmones Chiloé, a subsidiary of Empresas AquaChile, has a 50% stake in this company.

Implementation of a strategic alliance with Alitec-Provimi, a local subsidiary of Provimi, a leading international animal nutrition company, giving rise to the subsidiary Alitec Pargua S.A. for the production of fish feed.

Creation of AquaInnovo S.A., a company formed as a result of an alliance with the University of Chile and AquaticHealth Chile and the contribution of the Business Innovation Subcommittee of InnovaChile-CORFO. AquaInnovo's objective is the genetic improvement of salmon and other aquaculture species around the world, using latest-generation technology.

2007 Acquisition of the 40% of Salmones Maullín S.A. not held by Empresas AquaChile.

Increase of stake in Grupo ACI S.A. to 72.86%.

Approval by Extraordinary Shareholders' Meeting of subjection of Empresas AquaChile S.A. to norms governing public companies.

Inscription of the Company on the Securities Register of the Superintendency of Securities and Insurance (SVS).

2010 Administrative integration of Salmones Chiloé S.A., centralizing its management in Puerto Montt.

Increase of stake in Grupo ACI S.A. from 72.86% to 79.95%.

2008 2011 Sale of all the Company's stake in Sudmaris S.A.

Merger of Grupo ACI S.A. with the El Pelón group, an important Costa Rican agribusiness conglomerate with activities including tilapia production. Following the merger, Empresas AquaChile continues to hold a 72.86% stake in the company.

2009 Request to the SVS for the Company's elimination from the Securities Register.

Agreement that the Company will cease to be governed by the norms applying to public companies.

Administrative integration with the Antarfish S.A. subsidiary, centralizing management of all the group at its headquarters.

Cancellation of capital increase approved in December 2010 and approval of a new capital increase in order to carry out a public offering.

Placement of 33.45% of Empresas AquaChile S.A. on the stock market.

Alliance with Biomar for the construction of a tilapia feed plant in Costa Rica.

Alliance with Spécialités Pet Food S.A.S. and Inversiones Industriales Bauprés Ltd. (Grupo Diana) for the construction of a value-added plant in Costa Rica's Guanacaste Province to take advantage of tilapia waste from the production process.

2012 Inauguration of fish feed plant in Costa Rica by Grupo ACI and Biomar.

Reopening of processing plant in Puerto Montt.

Start of operation of AquaInnovo's Lenca Experimental Center.

Start of operation of Salmones Chaicas S.A. recirculation hatchery.

Acquisition of remaining 7% of Salmones Chiloé S.A. from minority shareholders and remaining 40% of Procesadora Hueñocoihue Ltda. (now SpA).

2013 Acquisition of remaining 35.48% of Piscicultura Aquasan S.A. from minority shareholders.

Alliance between AquaChile and Friosur for joint marketing of their products in the US and Canadian markets.

Reincorporation of AquaChile into SalmonChile, the business association bringing together most of Chile's salmon producers.

Start of operation of the AquaSea plant for the production of pet food flavorings in Costa Rica.

Incorporation of AquaChile into the Global Salmon Initiative (GSI) as one of the 15 companies that form part of this initiative launched in August 2013.

COMPANY ACTIVITIES

Annual report AquaChile 2013

3.1 Industrial sector

3.2 Activities and businesses

3.3 Properties and installations

3.4 Insurance policies

3.5 Risk factors

3.6 Investments plans

3.7 Financial activities

memoria empresas aquachile

company activities cap.03

INDUSTRIAL SECTOR Chapter 3.1

THE SALMON INDUSTRY The world's food consumption has increased over time due to the rise in the population and, particularly, higher consumption in emerging economies where, as income has increased, the quality of people's diets has also improved, with fig. 09 / fig. 10 / fig. 11 a shift to healthier proteins. In recent years, demand for salmonids has grown at rates close to two digits and the long-term outlook is positive with the potential for ongoing growth. The drivers of this demand are: - - - - -

Growth of the middle class in emerging markets; Improvements in retail infrastructure in emerging markets; Growth of the world's population; Shift in eating habits towards healthier foods; Contraction of supply of seafood in general. fig. 12 / fig.13 / fig. 14

Opportunity for aquaculture > Over-exploitation has limited the availability of wild fish around the world. In this context, aquaculture has emerged as an alternative with great growth potential for satisfying demand for seafood. fig. 15

EMERGING MARKETS DRIVE INCREASE IN FOOD CONSUMPTION (MILLIONS OF TONNES)

fig. 09

1,400 GLOBAL CONSUMPTION

1,200 1,000

CONSUMPTION IN DEVELOPING COUNTRIES

800 600 400

CONSUMPTION IN DEVELOPED COUNTRIES

200 0 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 Sources: Kontali Analyse and ABG Sundal Collier

GDP GROWTH BY TYPE OF ECONOMY (US$ BILLION)

fig. 10

2000 2010 2020 40 35 30 25 20 15 10 5 0 G7

BRIC

N-11

OTHER DEVELOPED MARKETS

OTHER EMERGING MARKETS

G7: Canada, France, Germany, Italy, Japan, United Kingdom and United States. BRIC: Brazil, China, India and Russia. N-11: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam. Source: Carnegie.

GROWTH OF EMERGING MARKET DEMAND FOR SALMONIDS, 2004-2012 (THOUSANDS OF TONNES WFE4) ktonnes (wfe)

cagr 35%

160 143

140

142

30%

120

25%

100

18%

20%

16%

20% 18%

15% 54

10%

40 20

0% THE BALTICS AND POLAND

RUSSIA AND UKRAINE

Source: ABG Sundal Collier. 4

fig. 11

Whole Fish Equivalent (WFE) is the weight of dead and bled salmon, trout or tilapia.

ASIA, FAR EAST

BRAZIL AND ARGENTINA 33

memoria empresas aquachile

GROWTH OF WORLD POPULATION (BILLIONS)

fig. 12

9 TOTAL WORLD POPULATION cap.03

6 DEVELOPING COUNTRIES 3

DEVELOPED COUNTRIES 0 1750

1800

1850

1900

1950

2000

2050

Source: FAO

POPULATION JOINING THE MIDDLE CLASS (MILLIONS)

fig. 13

millions of people

2000 2010 2020 1800 1600 1400 1200 1000 800 600 400 200 0

BRAZIL Source: Carnegie.

RUSSIA

INDIA

CHINA

BRIC`s

DEMAND FOR SALMON BY TYPE OF MARKET

fig. 14

100%

EMERGING MARKETS

90% 80% 70% 60% 50% 40% 30% 20% DEVELOPED MARKETS

10% 0% 2004

2005

2006

2007

2008

2009

2010

2011

2012

Source: ABG Sundal Collier.

WORLD OUTPUT OF SALMON AND TROUT (FARMED AND WILD)(THOUSANDS OF TONNES WFE)

fig. 15

4,000 3,500 3,000

FARMED

2,500 2,000 1,500 1,000 WILD

500 0 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Source: Kontali Analyse.

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CONVERSION FACTORS (KGS)

TUNA

BEEF

PORK

POULTRY

TILAPIA

1.8

SALMON

1.3

Source: Kontali Analyse AS.

Efficient in terms of conversion and percentage of usable meat > Salmon and tilapia convert feed more efficiently than other sources of animal protein (the Feed Conversion Rate or FCR is the indicator which measures how many kilos of feed are required to produce one kilo of live animal). This is due to the fact that, because they are cold-blooded, fish spend less energy on maintaining a proper body temperature. fig. 16 At around 60%, the percentage of salmon meat that can be used for human consumption is higher than for other animal proteins in which the percentage of waste is larger. In the case of tilapia, the percentage that is usable for human consumption reaches 33%. fig. 13 / fig. 14 / fig. 15 / fig. 16 Chile offers favorable conditions for aquaculture, particularly as regards the cleanliness and temperature of its waters. Salmon farming is one of the country's main non-copper export industries, accounting for 4.56% of total exports in second place after copper. fig. 22

fig. 16

PERCENTAGE OF USABLE MEAT BY TYPE OF PROTEIN

EDIBLE FISH MEAT (%)

fig. 18

EDIBLE PORK MEAT (%)

68%

50%

USABLE

Sources: Bjørkl, J., Norwegian University and Life Sciences, Norway (2002).

EDIBLE CHICKEN MEAT (%)

43% USABLE

Sources: Bjørkl, J., Norwegian University and Life Sciences, Norway (2002).

fig. 20

Sources: Bjørkl, J., Norwegian University and Life Sciences, Norway (2002).

fig. 19

EDIBLE LAMB MEAT (%)

fig. 21

38% USABLE

Sources: Bjørkl, J., Norwegian University and Life Sciences, Norway (2002).

CHILEAN EXPORTS BY VALUE, 2013

fig. 22

52.36% COPPER 2.21% GRAPES 2.45% WINE 4.56% SALMON &TROUT 3.62% CELLULOSE

34.80% OTHERS

Source: Central Bank of Chile

COMPETITION The leading producers of Atlantic salmon in 2013 continued to be Chile and Norway, which together accounted for approximately 80% of world output. fig. 23

The leading producers of Atlantic salmon in 2013 continued to be Chile and Norway, which together accounted for approximately 80% of world output. The salmon industry has historically comprised many small producers. This was the case in Norway and, to a lesser extent, Scotland and Chile. In around 1997, these three countries had 117 salmon companies which accounted for 80% of the total volume of famed salmon produced. Out of these 117 companies, 70% were in Norway. fig. 24 Over the past decade, however, the industry has experienced a period of consolidation and, as of 2012, only 38 companies, down by 68%, accounted for 80% of Atlantic salmon output. Further consolidation is anticipated as small producers find themselves unable to achieve an efficient cost structure. The creation of large companies is expected to be positive for the industry, since, in general, size and integration are more conducive to research and product development. Moreover, large companies will be on a stronger footing to compete on equal terms with the principal players of the food and distribution industries.

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ATLANTIC SALMON OUTPUT BY COUNTRY (THOUSANDS OF TONNES WFE)

fig. 23

growth (y-on-y)

2,500

25%

22%

20%

others canada

19%

cap.03

2,000

20% United Kingdom 15%

18%

chile

15%

13%

1,500

10% 11%

11%

10% 8%

1,000

Norway

500

4% 2%

-1%

0 1994

-5% 1996

1998

2000

2002

2004

2006

2008

2010

2012

2014E

2015E

Source: ABG Sundal Collier

INDUSTRY CONSOLIDATION: NUMBER OF SALMON FARMING COMPANIES BY REGION

fig. 24

canada Scotland chile Norway

80 70 60 50 40 30 20 10 0

Source: Kontali Analyse

2012

2009

2006

2003

2000

1997

MARKET SHARE In 2013, Norwegian-owned companies predominated in world salmon output, led by Marine Harvest, Leroy Seafood Group and Cermaq. Empresas AquaChile S.A. is currently the world's fifth largest producer and has, moreover, consolidated its position as the largest exporter of Chilean salmon, accounting for fig. 25 12.2% of total net exports.

PRINCIPAL EXPORT MARKETS In 2013, the exports of the Chilean salmon industry reached 527,700 net tonnes of which 58% corresponded to Atlantic salmon, 21% to trout and 21% to Pacific salmon. As compared to 2012, the industry's exports fig. 26 / fig. 27 / fig. 28 were up by 7%.

CHILEAN SALMON AND TROUT EXPORTS, 2013

company

ThUS$

fig. 25

net. tonners

price us$/kg

ThUS$ (%)

net.tonnes (%)

12.2%

Empresas AquaChile

446,369

64,182

6.95

12.7%

Mainstream (1)

299,989

48,164

6.23

8.5%

9.1%

Pesquera Los Fiordos

258,156

41,206

6.27

7.3%

7.8%

Multiexport Foods

255,718

31,286

8.17

7.3%

5.9%

Salmones Camanchaca

191,278

24,216

7.90

5.4%

4.6%

Blumar

171,768

23,169

7.41

4.9%

4.4%

Ventisqueros

159,476

24,088

6.62

4.5%

4.6%

Marine Harvest Chile (2)

147,414

19,511

7.56

4.2%

3.7%

Granja Marina Tornagaleones

142,421

23,643

6.02

4.0%

4.5%

Acuinova Chile

133,491

26,070

5.12

3.8%

4.9%

Salmones Antártica

129,924

16,565

7.84

3.7%

3.1%

Australis Mar

120,955

20,250

5.97

3.4%

3.8%

Invertec Pesq. Mar de Chiloé

115,984

14,747

7.86

3.3%

2.8%

Others Total 1 2

944,460

150,673

6.27

26.9%

28.5%

3.517,403

527,770

6.66

100.0%

Includes Mainstream Chile S.A. and Cultivos Marinos Chiloé S.A. Includes Marine Harvest Chile S.A. and Delifish Ltda.

Source: SalmonChile.

CHILEAN EXPORTS BY SPECIES NET TONNES

Atlantic salmon

fig. 26

2013

2012

Var. 2013/2012 (%)

305,119

228,646

25%

Pacific salmon

111,914

117,140

-5%

Trout

110,737

141,781

-28%

553

348

527,770

488,468

Chinook Others Total Source: SalmonChile.

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PRINCIPAL CHILEAN SALMON AND TROUT EXPORT MARKETS

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thus$ fob

fig. 27

2013

2012

839,376

1,140,061

-36%

1,144,246

809,182

29%

223,710

112,279

50%

Latin America

657,918

450,494

32%

Others

378,402

133,015

65%

Japan United States European Union

Asia less Japan

Var. 2013/2012 (%)

273,750

249,467

3,517,403

2,894,498

18%

2013

2012

Japan

147,215

196,259

United States

124,410

105,929

15%

European Union

33,899

18,579

45%

Latin America

101,240

86,548

15%

Others

69,574

28,342

59%

51,435

52,811

-3%

527,772

488,468

Total

net tonnes

Asia less Japan Total

Var. 2013/2012 (%)

-33%

Source: SalmonChile

CHILEAN SALMON AND TROUT EXPORTS BY MARKET, 2013

527,772 net tonnes

US$ 3,517 million 28% JAPAN

10% ASIA LESS JAPAN 13% OTHERS 19% LATIN AMERICA

Source: SalmonChile

42 42

fig. 28

24% UNITED STATES 6% EUROPEAN UNION

24% JAPAN

32% UNITED STATES

8% ASIA LESS JAPAN 11% OTHERS

6% EUROPEAN UNION 19% LATIN AMERICA

memoria empresas aquachile

cap.03

SALMON PRICES In 2013, the lower growth of world salmon supply was reflected in an increase in international export prices which, in the case of Chilean Atlantic salmon5, rose by 38% from US$3.21/lb to US$4.43/lb. fig. 29 In the case of Pacific salmon, the international price increased by 83% from JPY345/kg to JPY630/kg while, in the case of trout, there was an increase fig. 30 of 86% from JPY430/kg to JPY800/kg. Despite the increases seen in the prices of the different species, the consensus view among industry analysts is that demand will remain firm and in line with its historic rate of growth, led by the recent development of demand for salmon in emerging markets which has shown important potential.

SALMON FEED INDUSTRY Feed is an important component of salmon production costs. The FCR6 is, therefore, key since consumption of feed varies with this conversion factor and efficient management of the biomass7 can result in FCRs that are less even than 1.3 times. In Chile, the fish feed industry is highly concentrated, with four producers accounting for approximately 85% of total output (Skretting, Ewos, Alitec and Biomar). The cost of this input varies depending on the price of the main raw materials - fish meal, vegetable oils and fish oil - used in its production. Peru, Chile, Argentina and the United States are the main world producers of these inputs. fig. 31 / fig. 32 The salmon industry has sought to optimize use of natural resources and, after years of research, the amount of fish meal used to produce salmon feed has been dropping significantly. Indeed, over the past 15 years, the average percentage of fish meal in the diet has been reduced from 50% to less than 30% whilst maintaining the characteristics required to obtain a high-quality product. fig. 33

5 6 7

Trim D 2-3 FOB Miami. Feed Conversion Rate (FCR) measures the number of kilos of feed required to produce one kilo of meat. Kilos of fish at the growth stage.

PRICE OF CHILEAN AND NORWEGIAN ATLANTIC SALMON (DEC 2006 = 100) CHILEAN SALMON (TRIM D 2-3 LB FOB MIAMI)

fig. 29

NORWEGIAN SALMON (HON 3-6 KG FCA OSLO)

1.60

1.30

1.00

0.70 dec 06 jun 07 dec 07 jun 08 dec 08 jun 09 dec 09 jun 10 dec 10 jun 11 dec 11 jun 12 dec 12 jun 13 dec 13 Source: Urner Barry, Fishpool.

PRICE OF PACIFIC SALMON AND TROUT (JPY/KG) TROUT (4-6 KG FOB JAPAN)

fig. 30

PACIFIC SALMON (4-6 KG FOB JAPAN)

900 800 700 600 500 400 300 200 100 0

dec06 jun 07 dec 07 jun 08 dec 08 jun 09 dec 09 jun 10 dec 10 jun 11 dec 11 jun 12 dec 12 jun 13 dec 13

Source: FIS

memoria empresas aquachile

WORLD FISH MEAL OUTPUT (THOUSANDS OF TONNES)

fig. 31

peru chile thailand us japan scandinavia others 6.274

6.202

5.997

6.023

5.402

cap.03

5.230

5.053

5.007

5.207

4.775 4.306

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: IFFO

WORLD FISH OIL PRODUCTION (THOUSANDS OF TONNES)

fig. 32

peru chile scandinavia united states japan others 1.159

1.120 959

1.006

955

994

1.081

1.052

1.072

1.041 888

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: IFFO

USE OF FISH MEAL AND OIL IN SALMON DIET

fig. 33

fish alternative fish vegetable meal proteins oil oil 100 90 80 70 60 50 40 30 20 10 0 1995 46

Source: Biomar, 2012

2000

2005

2007

2009

2011

2013

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THE TILAPIA INDUSTRY IN THE WORLD Tilapia comes from tropical Africa and was originally farmed in Kenya in the 1920s. Farming in Asia and the Americas did not begin until after World War II. There are currently some 70 types of tilapia and around 100 hybrids in existence, divided into four groups according to their reproductive habits - Smith tilapia, sarotherodon, danakilia and oreochromis niloticus (or Nile tilapia) of which the latter is the most widely farmed internationally. Tilapia is farmed in most of the world's tropical regions since they offer favorable conditions for its reproduction and growth. Optimum development of this fish occurs at water temperatures of more than 24째C. The principal characteristics of tilapia which make its production and marketing attractive are: - - - - - - - - -

Great physical resistance Rapid growth High productivity Adaptation to captivity Acceptance of a wide range of feeds Existence in both fresh and salty water Tolerance of low oxygen levels Possibility of genetic improvement Excellent-quality meat.

WORLD OUTPUT At the beginning of the 1970s, 80% of tilapia was produced in Africa where this fish has its origins. However, most tilapia production now takes place in Asia with China as the largest producer, accounting for some 37% of world output. Production of tilapia in the Americas has also experienced important growth, led by Costa Rica, Ecuador and Honduras. Nile tilapia has its origins in the Nile River in Egypt and this country has emerged as the second largest producer after China. Annual international output of tilapia reaches 2.8 million tonnes, equivalent to 2% of total aquaculture and fishing output. Between 2001 and 2011, tilapia output rose at a compound annual growth rate (CAGR) of 10.4%. Supply of tilapia will maintain its expansion in the coming years, reflecting principally strong import demand in Latin America which is heavily influenced by the US market.

WORLD OUTPUT OF TILAPIA BY CONTINENT, 2011 (WILD AND FARMED)

fig. 34

34% ASIA LESS CHINA

37% CHINA

11% AMERICA

18% AFRICA

Source: FAO.

WORLD OUTPUT OF WILD AND FARMED TILAPIA (MILLIONS OF TONNES)

fig. 35

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0. 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: FAO

WORLD OUTPUT OF NILE TILAPIA (THOUSANDS OF TONNES)

fig. 36

CAGR: 10,4%

3,000 2,500 2,000 1,500

1,034

1,116

1,272

1,458

1,659

1,891

1,863

2006

2007

2,062

2,241

2,538

2,790

1,000 500 0 2001

2002

2003

2004

2005

2008

2009

2010

2011

Source: FAO.

UNITED STATES > PRINCIPAL IMPORTER The world's largest tilapia importer is the United States where per capita tilapia consumption rose at a compound annual rate of 14% between 2001 and 2012, positioning this species in fourth place in consumer preferences after prawns, tuna and salmon. Great potential also exists in the European market. Over the past eight years, tilapia has risen from 10th to 4th place in consumption of seafood in the United States. kg. per capita

1- prawns 2- tuna 3- salmon 4- tilapia 5- pollock 6- pangasius

1.72 1.09 0.92 0.67 0.53 0.33

Source: National Fisheries Institute 2012.

The United States imports fresh tilapia mainly from Costa Rica, Ecuador and Honduras while much of its frozen tilapia comes from China and other Asian countries such as Taiwan and Indonesia. Development of new markets and growth of demand: - Restaurant chains in the US are incorporating tilapia into their menus. - Europeans are discovering tilapia with the resulting potential for expansion of the consumer market.

COMPETITION> Through its subsidiary, Grupo ACI, AquaChile is one of Central America's largest tilapia producers, the largest producer in Costa Rica and one of the leading suppliers of fresh tilapia to the United States with a market share of around 26%. In 2013, Grupo ACI's harvest of tilapia in Costa Rica and Panama reached 23,800 tonnes WFE.

PER CAPITA CONSUMPTION OF TILAPIA IN US (KG)

fig. 37

CAGR: 14% 0.66

0.39

0.32 0.16

0.18

2001

2002

0.52

0.54

0.55

2007

2008

2009

0.67 0.58

0.45

0.24

2003

2004

2005

2006

2010

2011

2012

Source: National Fisheries Institute (Latest information available, April 2013).

US IMPORTS OF FRESH TILAPIA BY COUNTRY OF ORIGIN, 2013 (THOUSANDS OF POUNDS)

fig. 38

18,033 14,387 10,604

8,444 3,254

HONDURAS

ECUADOR

COSTA RICA*

* Grupo ACI is Costa Rica's only tilapia exporter. ** Includes imports of Grupo ACI from Panama. Source: Urner Barry, Monthly Aquaculture Insider's Report, February 2014.

COLOMBIA

MEXICO

1,818

1,653

OTHERS** CHINA

776

EL SALVADOR

149

BRASIL

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LEGAL OR REGULATORY FRAMEWORK

Salmon farming is governed principally by the General Fishing and Aquaculture Law of 1989 (Law N° 18.892) and its modifications and associated regulation, including in particular Supreme Decree (DS) N° 319 (Sanitary Regulation) and DS N° 320 (Environmental Regulation), both issued by the Economy Ministry. The rewritten text of the Law was established by DS N° 430, issued by the Economy Ministry and published in the Diario Oficial (Official Gazette) of 21 January 1992. The industry is also subject to the legal provisions governing productive activities in general of which the most relevant are those that refer to protection of the environment.

The new provisions seek to boost the development of the salmon industry through different mechanisms designed to regulate all its production stages. At the same time, they draw on the experience acquired during the sanitary crisis which began in 2008 seeking to prevent a recurrence of events of this nature. In addition, the new legislation introduced stricter regulation of the processing stage, strengthening biocontainment and bioexclusion measures from the phase of slaughtering through to the packaging of products.

The principal modifications introduced in the General Fishing and Aquaculture Law as regards aquaculture are contained in Laws N° 20.091 (2006), N° 20.434 (2010) and N° 20.597 (2012). In their main points, these laws established the extension of the rights of availability of aquaculture concessions, permitting their relocation, merger and division; the duration of the new concessions awarded; the regularization of concessions that may have incurred in certain grounds for their termination; new grounds for the termination of a concession; modification of the operating regime of farms with the organization of Groups of Concessions, macrozones, compulsory fallow periods and the setting of densities; an increase in the inspection powers of the National Fishing Service (SERNAPESCA) and the sanctions that can be imposed; an increase in the value of the Patente Única de Acuicultura (Single Aquaculture License); the suspension of submission of new applications for aquaculture concessions; a new regime for the preparation of environmental and sanitary reports and certifications; a new legal regime for fish hatcheries; the creation of the National Aquaculture Commission; and, modifications to the principal government services for the sector the Undersecretariat for Fishing, which became the Undersecretariat for Fishing and Aquaculture, and the National Fishing Service, which became the National Fishing and Aquaculture Service - thereby putting the country's aquaculture industry on a higher legal-institutional level.

In Chile, aquaculture concessions are granted through two different permits or administrative decisions. In the first, the Undersecretariat for Fishing and Aquaculture of the Economy, Development and Tourism Ministry authorizes the development of the aquaculture activity subject to certain technical requirements while, in the second, the Undersecretariat for the Armed Forces of the Defense Ministry authorizes the use of the specific geographic area (or part of state-owned waters) for aquaculture in accordance with the first permit. The award and use of a concession is limited to a specific geographic area, duly indicated in the document by which it is established, and it must be used to farm specific salmonid species, subject to specific production and stocking density limits. Production and harvest density are stipulated in the Environmental Regulation and Sanitary Regulation issued by the authorities and must be respected by concession holders. Concessions awarded through to 8 April 2010 have an indefinite duration, although subject to grounds for their termination, while those awarded after this date and those which are relocated geographically have a duration of 25 years, which may be renewed, and are also subject to grounds for their termination. All types of transactions are permitted with aquaculture concessions, including their use as collateral.

CONCESSIONS

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REGULATORY CHANGES IN 2013 > In 2013, a number of important modifications were made to the regulatory framework for aquaculture. On February 2013, Law Nº 20.657 was published in the Official Gazette, introducing far-reaching modifications to regulation of artisan and industrial fishing as well as changes to the regulation of aquaculture. In the case of aquaculture, the principal modifications introduced by this law were: (i) the creation of a Register of Aquaculture Concessions held by the Undersecretariat for Fishing and Aquaculture, establishing that only those parties accrediting ownership or rights to exercise aquaculture can request the stamping of documents or the movement of fish; (ii) the elimination of differentiated systems of aquaculture concessions (Articles 80 bis and 80 ter); (iii) an increase in sanctions for the provision of false and/or incomplete information, under-reporting or late reporting on issues relevant to the activity; (iv) the empowerment of the National Fishing and Aquaculture Service to determine minor non-compliances that give rise to objections, providing they do not pose a threat to the environmental and sanitary situation; (v) an increase in the powers of the National Fishing and Aquaculture Service to enforce compliance with regulation; and (vi) the creation of Scientific Technical Aquaculture Committees to advise the authorities on environmental, sanitary and territorial planning matters. In 2013, the National Aquaculture Commission, created under Law Nº 20.597 published in the Official Gazette of 3 August 2012, was formally established. This is a consultative body on matters such as sanitary and environmental regulation, modification of the General Fishing and Aquaculture Law and of use of the coastline and other aspects of aquaculture regulation. In 2013, this Commission heard a presentation by the Undersecretariat for Fishing and Aquaculture on new territorial planning regulation for aquaculture concessions.

Supreme Decree (SD) Nº 3 of 2013, issued by the Economy, Development and Tourism Ministry and published in the Official Gazette of 24 May 2013,

modified Regulation of Live Fish Holding Centers (or stockpiling centers) and Slaughtering Centers (contained in SD Nº 49 of 2006) or, in other words, places in the sea to which live fish are transferred before being taken to processing plants. The modifications introduced new conditions for the operation of such centers, for the transport of live fish, the submission of information to the authorities and the registry of operations. These new norms seek to ensure the sanitary protection of the areas where such centers are located by guarding against their contagion and that of navigation routes by the fish that are transferred. Supreme Decree Nº 4, issued by the Economy, Development and Tourism Ministry and published in the Official Gazette of 22 May 2013, modified Regulation of Measures of Protection, Control and Eradication of Diseases of High Risk to Hydrobiological Species, known as Sanitary Regulation (contained in DS Nº 319 of 2001). This modification resolved issues left pending or inadequately worded in the modification introduced in 2012. It gave new powers to the Undersecretariat and the National Fishing and Aquaculture Service and introduced new norms on matters relating to HighRisk Diseases, Sanitary Programs, zoning, egg incubation, transport, groupings of concessions and macrozones and, in particular, the establishment of farming densities for Groups of Concessions for salmonids, with density defined as the biomass of fish per area used per farming structure at the end of the growth phase of the production cycle. The procedure for determining the farming density for a Group of Concessions comprises two stages. In the first, the Group of Concessions is classified and a common density is determined and, in the second, the maximum number of fish permitted in the farming structures of each center is set. In the first stage of the procedure, the factors taken into account are environmental behavior (Aquaculture Sanitary and Environmental Reports, INFAs), sanitary behavior (losses at the Group of Concessions) and production behavior (comparison of the Group of Concession's projected stocking for the following period with its sanitary limit). This sanitary limit, or the

maximum number of fish to be stocked in the following period, is calculated as a percentage increase or decrease on the number of fish stocked in the previous production period depending on the range of losses observed in the Group of Concessions during this previous period. Each of these factors is weighted separately and a formula incorporating each weighted factor is then used to calculate whether the farming density should decrease, increase or remain the same in the following period. In the second stage of the procedure, the factors considered are the useful volume of the center's structures, the farming density of the Group of Concessions, the harvest weight of fish and the percentage of survival during the growth phase. These factors are used to calculate the number of fish to be stocked per farming structure in each concession. Article 86 bis of the General Fishing and Aquaculture Law stipulates that the Undersecretariat will determine farming densities for each species or group of species in the Groups of Concessions, doing so by issuing a resolution and in accordance with a procedure. Given the importance of protection of the industry's sanitary situation and the effects this has on its activities, it is relevant to refer to the regulatory framework for the diseases that were most prevalent in 2013. These were caligidosis, a disease caused by caligus rogercresseyi (more commonly known as sea lice), and SRS or piscirickettsiosis, both of which are classified as High-Risk Diseases. The tools that the authorities can use to implement sanitary measures for the monitoring, control and eradication of each of these high-risk diseases are established in Supreme Decree Nยบ 319 (Sanitary Regulation) and consist in Specific Sanitary Programs.

In the case of caligidosis, the National Fishing and Aquaculture Service issued Resolution Nยบ 1141 on 18 May 2012, establishing a Specific Sanitary Program for the Monitoring and Control of Caligidosis. This established integrated management of the disease in a bid to ensure its early detection, reduce loads of the parasite and control its spread. This Program is applied in all farming centers with species susceptible to the parasite. Under this norm, the authority can classify centers as High-Monitoring, Low-Monitoring, High-Spread or At-Risk and is empowered to adopt measures in accordance with the situation. For the purposes of controlling the disease, the Program considers the implementation of opportune and coordinated measures in the case of the detection of high-spread centers, including zoning, intensive monitoring, coordinated treatment, control of spread of the disease and early harvesting of the infected biomass. In the case of SRS, the National Fishing and Aquaculture Service issued Resolution Nยบ 3174 on 28 December 2012, establishing a Specific Sanitary Program for the Monitoring and Control of Piscirickettsiosis in a bid to reduce the disease's impact in the country. It is applied in all farming centers with species susceptible to the disease, with the specific objectives of ensuring early detection and monitoring cases of SRS and the implementation of opportune and gradual measures of control of early and advanced cases. The Program stipulates the classification of all centers with species susceptible to the disease as Monitoring, Alert or High-Spread and the implementation of measures for each category. Groups of Concessions may adopt agreements on measures for the purposes of this control program in areas that include the quality of smolts, the use of vaccines, functional and immunostimulating feeds, transport conditions, farming densities, management and biosecurity. Infringement of measures established by these Programs is subject to sanctions in accordance with the terms of the General Fishing and Aquaculture Law. 55

memoria empresas aquachile

company activities cap.03

ACTIVITIES AND BUSINESSES Chapter 3.2

Empresas AquaChile S.A. is a Chilean company that produces foods and proteins with an emphasis on the production and marketing of salmon, trout and tilapia. It comprises a group of companies with strategic synergies that farm and market Atlantic and Pacific salmon, trout and tilapia for human consumption, maintaining vertical control and adding value throughout the production chain from genetics through to the marketing of products. AquaChile S.A. is currently the world's fifth largest salmon and trout producer, with a harvest that fig. 39 reached 102,252 tonnes WFE in 2013. In addition, Empresas AquaChile is the world's largest producer of Pacific salmon and one of its largest producers of trout, with harvests of 20,994 tonnes WFE of Pacific salmon and 28,139 tonnes WFE of trout in 2013, accounting for 13.9% and 9.4% of international output of these species, respectively. fig. 40

/ fig. 41

In 2013 AquaChile was Chile's leading exporter of salmon and trout, with a market share of 12.2% measured in terms of net volume of exports. fig. 42 / fig 42

Through its Costa Rican subsidiary, Grupo ACI S.A., the Company has also farmed and marketed tilapia since 2005, focusing on the North American market. It has established a consolidated position as one of the principal exporters of this product to the United States where it had a market share of 26% in 2013. AquaChile's most important markets are Japan and the United States. In the latter, it has had its own distribution company, AquaChile Inc., since 2002. It also exports to Europe, Asia, the Middle East and Latin America. AquaChile has over 300 geographically diversified clients in more than 30 countries across five continents.

PRINCIPAL WORLD SALMON AND TROUT PRODUCERS, 2013 (THOUSANDS OF TONNES WFE)

fig. 39

450

198

MARINE HARVEST GROUP

169

LEROY SEAFOOD GROUP

162

CERMAQ

102

SALMAR

EMPRESAS AQUACHILE

GRIEG SEAFOOD

BAKKAFROST

Sources: Reports of listed companies, AquaChile

PACIFIC SALMON PRODUCER COUNTRIES, 2013 (THOUSANDS OF TONNES )

TROUT PRODUCER COUNTRIES, 2013 (THOUSANDS OF TONNES)

fig. 40

300

151

139

159

CHILE

NORWAY

OTHERS

TOTAL

CHILE

TOTAL

Sources: Salmon World 2014, Kontali Analyse.

CHILEAN PACIFIC SALMON EXPORTERS, 2013 (THOUSANDS OF NET TONNES8)

CHILEAN TROUT EXPORTERS, 2013 (THOUSANDS OF NET TONNES)

17.3

18.8

fig. 41

16.6

15.3

AQUACHILE

MAINSTREAM

10.2

10.0

ACUINOVA

SALMONES AYSÉN

7.3

AQUACHILE

ANTÁRTICA

VENTISQUEROS

7.0

BLUMAR

Source: SalmonChile. Information as of December 2013. 8 Net tonne refers to the weight of the salmon, trout or tilapia end product, whether with head on or off and gutted, fillets, portions, byproducts, etc. 57

VOLUME OF SALES OF SALMON AND TROUT AND MARKET SHARE OF AQUACHILE (BY VOLUME)

1ST

2ND

1ST

14.2%

14.1%

14.6%

12.9%

fig. 42

1ST

11.5%

10.4%

12.2%

97,763

90,607

106,221

73,721

53,604

65,089

64,934

116,180

2006

2007

2008

2009

2010

2011

2012

2013

market share exports (net tonnes) volume of sales (tonnes WFE)

Sources: AquaChile, Infotrade, SalmonChile

MARKET SHARE OF PRINCIPAL CHILEAN SALMON AND TROUT EXPORTERS BY VOLUME

empresa

Empresas AquaChile Mainstream

fig. 43

2006

2007

2008

2009

2010

2011

2012

2013

14.2%

14.6%

12.9%

11.5%

10.4%

12.2%

8.9%

7.8%

6.9%

9.2%

7.9%

9.6%

9.5%

9.1%

Multiexport

5.8%

6.5%

6.0%

6.3%

7.1%

5.9%

5.5%

5.9%

Marine Harvest

13.2%

13.7%

11.1%

6.4%

4.3%

5.3%

6.2%

3.7%

Los Fiordos

5.2%

5.1%

5.8%

7.4%

5.5%

7.8%

6.4%

7.8%

Acuinova

2.9%

3.5%

2.8%

3.6%

4.1%

5.3%

6.6%

4.9%

3.2%

5.0%

4.4%

Camanchaca

5.6%

5.4%

6.0%

4.2%

3.3%

1.8%

3.9%

4.6%

Antรกrtica

6.1%

4.7%

4.1%

4.0%

4.7%

4.9%

3.7%

3.1%

Blumar

Invertec

3.2%

2.3%

2.8%

2.2%

1.5%

2.9%

3.9%

2.8%

Otros

34.9%

36.8%

40.0%

43.7%

50.1%

41.7%

38.8%

41.4%

Total

100.0%

Sources: Infotrade, SalmonChile.

AquaChile's principal export markets

canada

180 canada

224

15,885

7,256

union europea

1,705

mexico

2,520

costa rica

335 panama

brazil

4,560 chile

6,224

argentina

664

eastern europe

13,324

jap贸n

25,305

china

2,720

south korea

379

Taiwan

528 hong kong

210 middle east

1,487

southeast asia

1,764

Sale of tilapia end products, 2013 (net tonnes) Sale of salmon and trout end products, 2013 (net tonnes) AquaChile operations

We have a team of engineers, biologists and veterinary physicians who are constantly researching and evaluating alternatives for the genetic improvement of the Company's stock and that of its subsidiaries.

aquachile is a company with great growth potential because: It has a unique and non-replicable base of concessions in chile, with a presence in 50% of neighborhoods. It has important potential for growth in tilapia. It has proven and successful experience in genetic development through aquainnovo, a subsidiary for genetic aquaculture research and development. Through its subsidiaries, it is self-sufficient in atlantic and pacific salmon and trout eggs and smolts and tilapia juveniles. It has its own processing plants capable of absorbing the growth of output. Its concessions are geographically diversified across the los lagos region (37%) and the aysĂŠn region (63%). By farming three different salmonid species in chile (atlantic salmon, pacific salmon and trout) and tilapia in costa rica and panama, it has a diversified range of products. It is an integrated company that adds value to the salmon, trout and tilapia production chain.

FROM EGG TO PLATE SALMON AND TROUT > Each activity undertaken by AquaChile's employees is a vital part of the production chain that allows the Company to take healthy foods to the world's most demanding markets. Through its subsidiaries, AquaChile produces its own Pacific salmon (coho) and rainbow trout eggs, supplying 100% of its needs and even producing a surplus for sale to third parties. In addition, 100% of its Atlantic salmon eggs are supplied by Salmones Chaicas S.A., a subsidiary in which it has a 19.7% stake and with which it has a long-term supply contract. These eggs are part of a long process of research and development, carried out through its AquaInnovo S.A. subsidiary, which seeks to produce fish of better quality, with a better growth rate, a color in line with market demand and greater resistance to disease.

When the fish reach their commercial size or weight, they are harvested and transported live to holding centers before being taken to the processing plants. AquaChile's five modern processing plants in Chile allow it to process all its output. At the processing plants, the different products offered by AquaChile are prepared and are, finally, marketed around the world, reaching over 300 large clients. We produce fresh and frozen products in different formats including whole fish, head on and off, filleted with and without skin, portions and loins.

71 million eggs produced in 2013 Following the fertilization and incubation of eggs, a new process begins which, depending on the species and the temperature of the eggs, takes between 50 and 80 days. The result of this process is juveniles (fish with a weight of between 0.3 grams and approximately 6 grams) which, after eight to ten months, become smolts (the physiological stage in which the fish is able to live and grow in saltwater) and start their life in the sea. In the case of Atlantic salmon, this process takes place in freshwater tanks and, in the case of trout, in a lake and, for Pacific salmon, in a lake, estuary or freshwater tanks.

SALMON SALES BY COUNTRY, 2013 (NET VOLUME) 20%

united states

15% russia

During this process, the fish are subject to a rigorous program of control and vaccination.

8% chile

After reaching the smolt stage, the fish move to the ongrowing phase in seawater centers where they remain for 18 to19 months in the case of Atlantic salmon and between ten and 12 months in the case of Pacific salmon and trout.

6% brazil 4% china 3% mexico 2% thailand 1% germany

For the growth phase, AquaChile has 150 seawater concessions located in the Los Lagos and AysĂŠn Regions, where it is present in 29 neighborhoods (50% of the total).

1% israel 1% ukraine 6% cyprus

AquaChile had 40 seawater centers in operation as of 31 December 2013. In addition, part of its feed requirements are supplied by Alitec Pargua S.A., a company in which AquaChile owns a 50% stake and is partnered by Biomar, one of the world's leading producers of high-yield feed for the aquaculture industry.

fig. 44

33% japan

Source: AquaChile.

memoria empresas aquachile

cap.03

TILAPIA > Grupo ACI produces its own tilapia eggs and has the backing of Empresas AquaChile's AquaInnovo subsidiary which manages a genetic improvement program for this species. Tilapia is a freshwater fish. In Costa Rica, it is farmed in tanks on land, which cover a total area of 362 hectares, while, in Panama, it is farmed in cages - of the same type used in salmon farming - in three aquaculture concession on Lake Bayano, which have a total area of 520 hectares. The farming process begins with the reproduction phase before moving on to the production of juveniles and, subsequently, the pre-growth and growth stages. In total, the cycle has a duration of approximately 270 days before the fish reach a weight of 950 grams and are ready for harvesting. During this period, they receive a balanced soya-based diet and their state of health and growth are subject to constant monitoring.

plant (located in CaĂąas, Costa Rica). In the case of fish from Costa Rica, it receives the live harvest recently extracted from the farming tanks while, in the case of Panama, the fish are transported in gutted form with strict temperature and innocuity controls. Terrapez has a capacity to process 21,000 gross or WFE tonnes. It prepares different products such as fillets and whole tilapia as well as byproducts such as pieces, loins and bellies for the local market. Products are sold fresh or frozen depending on clients' needs. In partnership with Grupo Diana, the Company also owns the AquaSea plant in Costa Rica, which produces pet food flavorings. In this way, advantage is taken of the tilapia parts not used in the production process.

Grupo ACI and Biomar each hold a 50% stake in the Biomar Aquacorporation Products feed plant, which supplies part of Grupo ACI's requirements.

The Company distributes its products in the United States, Costa Rica and Canada. However, its principal market is the United States where it distributes under the Rain Forest brand. In the case of Costa Rica, products fig. 45 are distributed under the St Peterâ&#x20AC;&#x2122;s brand.

On reaching the harvesting stage, fish from both Costa Rica and Panama are transported in trucks with freshwater tanks to the Terrapez processing

"Aquachile farms tilapia in Costa Rica and Panama, principally for export to the United States."

TILAPIA SALES BY COUNTRY, 2013 (NET VOLUME)

fig. 45

4% costa rica 2% canada 94% United States

Source: AquaChile.

memoria empresas aquachile

cap.03

1 / genetics

8 / marketing

2 / reproduction

TILAPIA 3 / smolt production

7 / end product

EDI

N G

production value chain

4 / pre-growth

6 / processing

5 / harvesting

1 / genetics, reproduction and incubation

7 / marketing

SALMON AND TROUT 6 / end product PRODUCTION VALUE CHAIN

FEEDING

2 / hatching and juvenile production

3 / smolt production

5 / processing 4 / growth stage and harvesting

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cap.03

PRINCIPAL CONTRACTS There are currently no significant commercial contracts in force.

PRINCIPAL CLIENTS The Company has more than 300 diversified clients in over 30 countries across five continents. In the salmon segment, the Company has no clients who individually accounted for at least 10% of the segment's revenues in 2013. In the tilapia segment, the Company has two clients who accounted for more than 10% of the fig. 46 segment's revenues.

PRINCIPAL SUPPLIERS Empresas AquaChile maintains relations with its suppliers and, with some of them, has established a long-term tie. The Company has three suppliers who individually represented at least 10% of total procurement of fig. 47 goods and services for the salmon segment in 2013. In the tilapia segment, it has one supplier who individually accounted for at least 10% of total procurement.

BRANDS AND DOMAINS The Company has registrations in force and applications underway for its commercial brands and those of its subsidiaries in the corresponding public registers in accordance with the legislation in force. These registers also include the companies' respective legal names. The Company has also registered the internet domains related to its brands in order to safeguard its interests and intangible assets. Products are marketed under the following brands:

Source: AquaChile.

DISTRIBUTION OF SALMON CLIENTS, 2013

DISTRIBUTION OF SALMON SUPPLIERS, 2013

fig. 46

49% others 9% client 1

15% supplier 1

6% client 2 5% client 3 4% client 4

15% supplier 2

4% client 5 4% client 6 68% others

12% supplier 3 4% supplier 4 3% supplier 5 2% supplier 6

Source: AquaChile

DISTRIBUTION OF TILAPIA CLIENTS, 2013

DISTRIBUTION OF TILAPIA SUPPLIERS, 2013

fig. 47

10% client 1 42% others

8% client 2 7% client 3 25% client 1

5% client 4 5% client 5

17% client 2

2% client 6 63% others

5% client 3 4% client 4 4% client 5 3% client 6 Source: AquaChile

memoria empresas aquachile

R&D cap.03

AquaChile has a team of engineers, biologists and veterinary physicians whose task is to improve the genetics of the salmonid species and tilapia which it farms. Their objective is to obtain strains that have the best possible adaptation to the Company's centers, thereby maximizing productivity. In addition, AquaChile has a subsidiary, AquaInnovo S.A., in which its partner is the University of Chile, whose objective is the genetic improvement of salmon and other aquaculture species.

PRINCIPAL ASSETS The principal assets of Empresas AquaChile S.A., which are essential for the development of its activities, are listed 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). Fixed assets corresponding to constructions, infrastructure and machinery consist principally in six processing plants with their respective equipment - five in Chile and one in Costa Rica - along with the Company's offices, its freshwater and seawater installations, growth cages, protection equipment, tanks, containers, vehicles and boats. In the case of intangible assets, the Company has water rights and aquaculture concessions. It has 106 water rights for a total volume of 63,800.98 liters per second (l/s).

SUMMARY OF WATER RIGHTS region

Santiago Metropolitan

fig. 48

Number of rights

Araucanía

Los Lagos

Aysén

Los Ríos Total

1 106

The Company has 163 Aquaculture Concessions of its own (150 in the sea, one in a river and 12 in lakes) with a total area of 1,653.93 hectares (of which 1,594.48 hectares correspond to the sea and 59.45 hectares to lakes). All these concessions have an indefinite duration. fig. 49 As of 31 December 2013, the Company had 44 river and marine aquaculture concessions and five lake aquaculture concessions in use. fig. 50

A summary of the principal characteristics of aquaculture concessions and their regulatory treatment can be found in the Regulatory Framework section of this Report.

SUMMARY OF AQUACULTURE CONCESSIONS

regi0n

Number of marine and river concessions (Own)

Total Area (hectares)

fig. 49

In use as of 31/12/13

Number of lake concessions (Own)

Total Area (hectares)

In use as of 31/12/13

Los Lagos

782.31

25.48

Aysén

782.61

23 *

33.97

Los Ríos Total

29.56

151

1,594.48

59.45

GEOGRAPHIC LOCATION OF THE COMPANY'S MARINE CONCESSIONS

fig. 50

LOS LAGOS REGION

2 3A

INDUSTRY Total of 24 neighborhoods AQUACHILE 56 concessions in 12 neighborhoods

6 17B 7 17A

8 9A

10A

9C 15 10B 14

12A

12B 12C

AYSÉN REGION 35

18A 34 18B

INDUSTRY Total of 34 neighborhoods

18C

19C

19A 18B

18D

21A

31B

21B 21C

30A 30B

22A

22B

22C

28A

29 22D

28B

26B

23A 23C

AQUACHILE 93 concessions in 17 neighborhoods

31A

23B 24 26A 25

memoria empresas aquachile

company activities cap.03

PROPERTIES AND INSTALLATIONS Chapter 3.3

Most of the Company's freshwater and seawater farming centers have adjacent premises with housing for the operational unit's senior technical personnel, canteens for personnel and warehouses for smaller implements. In addition, the Company has floating raft cages in each of its freshwater and seawater farming centers for implementation of the aquaculture production process. Harvested fish are sent to the Company's processing plants which are located on its own land:

Cardonal processing plant (Puerto Montt), geared principally to the production of addedvalue Atlantic salmon and trout products.

Calbuco processing plant (Calbuco), used principally to produce added-value Atlantic salmon and trout products.

Antarfood processing plant (Chonchi), used to process HG (headed and gutted) products and added-value Atlantic salmon, Pacific salmon and trout products.

Hueñocoihue processing plant (Dalcahue), used to process HG Pacific salmon products.

Cailín processing plant (Quellón), used to process HG Pacific salmon products.

Terrapez processing plant (Costa Rica), used to process added-value tilapia products.

company activities

INSURANCE POLICIES Chapter 3.4

Empresas AquaChile and its subsidiaries have taken out insurance against the principal risks to their physical goods, offices, processing plants and installations as well as for civil liability and other lesser risks to its assets. An important part of the risks have, in other words, been transferred to local insurance companies which have, in turn, reinsured part of these risks on the international market. The operational risks of the Company's businesses are constantly reassessed in order to optimize coverage in line with the competitive offers available in the market. The coverage taken out includes:

TYPE OF GOOD

live, harvested fish

RISKS COVERED

Damage as a result of or directly caused by an external agent during transport by sea, air and/ or land. Deterioration of the goods as a result of fire, including earthquake.

buildings, installations, machinery and end products

Deterioration of the goods as a result of damage caused by natural hazards. Coverage against fire and material damage as a direct result of strikes, pillage or public disturbances.

fresh, frozen and smoked fish (salmon and trout)

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

life insurance

Accidental or natural death.

civil liability insurance

General insurance of this type, covering material damage and injury to third parties.

memoria empresas aquachile

company activities cap.03

RISK FACTORS Chapter 3.5

The Company, its assets and the aquaculture industry in which it develops its activities are exposed to a series or risks and contingencies that may eventually have a negative impact on the Company's solvency, its market position or financial situation and must be taken into account when taking an investment decision. If any of these risks or uncertainties were to materialize, the Company's business, operating results and/or financial situation could be materially and adversely affected. The most important risks and contingencies are set out below, notwithstanding the possible existence of other risks and contingencies that could also negatively affect the Company's business and its operating results. OPERATIONAL RISKS Environmental risks > Notwithstanding the geographic diversification of the production facilities of Empresas AquaChile and its subsidiaries in Chile, the salmon industry is exposed to natural hazards such as variations in sea temperature, climatic phenomena, seismic events, algal bloom9, the existence of natural predators and other factors that can affect the places where its production facilities are located. All these factors can affect the growth of Empresas AquaChile and its subsidiaries, have a negative impact on the quality of its products and even increase mortality rates which would lead to a drop in output and, therefore, the Company's sales and results. Phytosanitary risks > Diseases, parasites and pollutants are a recurrent problem in the aquaculture industry and can result in reduced product quality, increases in mortality and reductions in output. Although Empresas AquaChile and its subsidiaries have invested significant resources in research, genetic improvement studies, mass vaccination programs, systems of administration of independent zones, fish health monitoring, low density cage-use policies and sanitary barriers that help to control and reduce these risks, the appearance of new diseases or pests that affect the production of salmon, trout and/or tilapia cannot be ruled out.

Natural phenomena, also known as Harmful Algal Bloom (HAB), that occur in aquatic ecosystems and are caused by phytoplankton that, in environmental conditions favorable to their development, multiply explosively and concentrate, causing alterations in marine life and fish mortality. 9

Product quality risks and traceability > The products that the Company farms, produces and markets are for human consumption and there is a risk of contamination due to negligence during production process or improper management during the process of distribution and/or delivery to the end consumer by clients, consumers or third parties, which could affect the Company's sales and results. To guard against this, AquaChile has developed exhaustive quality classification and food safety controls and is constantly monitored internally and externally by the sector authorities. In order to control food innocuity, the Company provides complete fish traceability and, before harvesting, the authorities ensure that fish are analyzed to rule out any trace residues. Processing plants are also subject to sample checks in order to safeguard the innocuity of the process and raw materials. In this way, both the authorities and clients can verify the innocuity of AquaChile's products. Because they are farmed in an open environment like the sea, the fish are exposed to contracting diseases that can have an impact on their health. In order to control these impacts, AquaChile has a health department comprising veterinary physicians responsible for establishing a prevention policy and monitoring sanitary aspects of the fish population and, if a disease is detected, defining the proper treatment for its combat. Not to do this would constitute a risk to the fish population and to the Company's results. Risks of variations in input prices > Inputs of fish meal and fish oil are among the most important costs of salmon production. Sources of fish feed have diversified, now including new vegetable alternatives, and the Company has invested in two feed plants of its own to supply part of its input requirements. However, AquaChile and its subsidiaries can be affected by variations in prices due to circumstances beyond their control since the feed industry is concentrated in the hands of a few international producers and there is not a deep market for futures or other derivatives for the purchase of a number of the inputs that make up the diet of salmon, trout and tilapia. This could negatively affect the Company's results. International price trends > Supply of salmon and trout is determined by the production strategies of each of the industry players and it is, therefore, difficult to forecast and estimate

products' equilibrium price. In addition, demand for farmed salmon has shown strong growth in recent years and a difference between supply and demand for salmon products could, therefore, occur, leading to price volatility which could negatively affect the Company's results. However, a dynamic process of consolidation in the salmon industry, both internationally and in Chile, suggests more balanced future growth. Moreover, diversification into other species such as tilapia and the Company's geographic diversification could minimize the negative impact of high volatility, complementing the portfolio it offers the market. Variations in consumption in export markets > Although the international trend suggests a sustained increase in consumption of farmed fish and other aquaculture products over the coming years, the Company cannot assure that this trend will continue or persist over time and a change or reversal could have negative effects for its business and operating results. Changes in the economic performance of export markets > At present, the Company exports principally to the United States, the European Union and Japan and it is not possible to rule out stagnation, crises or economic depressions in these countries, with the consequent drop in demand, which could have negative effects on the Company's business and operating results. FINANCIAL RISKS Concentration of financial liabilities > The Company has signed loan contracts with its financial creditors that, as well as stipulating maturities, interest rates, the financial indicators required and the collateral provided, also contain a series of obligations as to what the Company may and may not do. These contracts also include different mechanisms for the approval of any exception to the obligations stipulated in them by its creditors. In addition, if the Company fails to pay any of the installments of capital and interest at the agreed dates, if it does not comply with the agreed terms as to what it may or may not do and if it maintains this lack of compliance for more than 90 days, its financial creditors may require the forfeiture of the agreed deadlines and advance payment of the total debt and interest, which could negatively affect the Company's financial situation and its results.

memoria empresas aquachile

cap.03

Exchange-rate risk > The performance of AquaChile, as a global company, can be negatively affected by fluctuations in exchange rates since part of its cost (labor and services such as land transport, etc.) are indexed to the Chilean peso while its sales are denominated in foreign currencies such as the US dollar, euro and yen. In addition, since the Company reports its results in US dollars, changes in this currency's value against the other currencies in which the Company operates can negatively affect its financial results. REGULATORY AND ENVIRONMENTAL RISKS Changes in environmental legislation and others > Care for the environment is core to the Company's business policy. However, contamination of natural resources as a result of the externalities of production processes is a matter of increasing concern and awareness among consumers, intermediate groups and the relevant authorities who demand production systems that respect the environment and previously guarantee long-term protection of natural resources. These demands have led to the introduction of more rigorous norms and procedures which seek to ensure environmental sustainability and can mean important increases in production costs and/or restrictions on the Company's productive activities. Changes in aquaculture legislation and concessions > The Company has in place processes and constant monitoring to ensure good management of its farming sites as well as a technical department and legal advice to supervise the good use and management of its aquaculture concessions. However, changes in aquaculture legislation and concessions, improper management of aquaculture concessions and/or failure to comply with the corresponding norms on sustainability and proper operation of the system as a whole and the inactivity of concessions without justified cause or

authorization from the authorities could result in sanctions or restrictions that could negatively affect the Company's business and operating results and, where envisaged by the applicable legislation, even lead to the termination of some of its aquaculture concessions by the authorities. OTHER RISKS Risks to assets > Fixed assets such as installations and buildings and civil liability risks are covered by insurance policies on commonly-applied market terms and conditions. However, given the lack of effective insurance options, the high costs prevailing in the market for insuring living assets or biomass and disputes with insurers as regards response to such losses, the Company's biomass is not currently insured against the risks of disease, theft or natural hazards such as storms, high tides, tsunamis, earthquakes, volcanic eruptions, currents, floods, avalanches and/or landslides, submarine currents and/or algal blooms. As a result, any significant damage or loss to these assets can have an adverse effect on the Company's business and financial situation. However, the geographic diversification of the Company's installations on land and of its farms in the sea enables it to at least diversify, if not eliminate, the risk of such events. Subsidiaries and affiliated companies > Empresas AquaChile S.A. is the parent and holding company of a number of companies through which it develops a significant part of its business and on whose operating results and financial situation it depends to a considerable extent. Any significant deterioration in the business and results of its subsidiaries and affiliated companies can, therefore, have an adverse effect on its own business and operating results.

company activities

INVESTMENT PLANS Chapter 3.6

The Company will implement the investments that are necessary to fulfill its purpose as established in its by-laws. To this end, its management will have the powers to make investments in the business on the basis of expansion plans approved by the Board of Directors and in projects that are profitable according to technical and economic criteria. The sources of financing for investment plans are managed in accordance with the Company's financial plan. Financial resources are obtained from the Company's own sources, traditional borrowing, publicly-traded instruments and equity contributions if financial and strategic conditions so advise and permit.

memoria empresas aquachile

company activities cap.03

FINANCIAL ACTIVITIES Chapter 3.7

The Company uses credit to finance its exports in accordance with the Chilean Central Bank's Compendium of Foreign Exchange Regulations. These credits are paid with currency corresponding to export returns. The Company undertakes the financial activities corresponding to its area of business and export credits are its principal source of financing. Cash surpluses are invested in the local financial market in short-term fixedincome instruments.

OWNERSHIP AND SHARES

Annual report AquaChile 2013

4.1 Ownership

4.2 Shares, their characteristics and rights

memoria empresas aquachile

ownership and shares cap.04

OWNERSHIP Chapter 4.1

As of 31 December 2013, the Company's subscribed and paid-in capital amounted to five hundred and fourteen million four hundred and sixty two thousand nine hundred and fifty dollars (US$ 514,462,950), divided into one thousand one hundred and fifty seven million shares (1.157,000,000), all of the same series.

CONTROL OF THE COMPANY As of 31 December 2013, the Company did not have a controller and no agreement existed among shareholders to act jointly.

MAJORITY SHAREHOLDERS As of 31 December 2013, the Company had three shareholders who could on their own appoint at least one member of its Board of Directors and, at the same time, held a stake of a more than 10% stake in the Company.

table a name

Fondo de Inversión Privado Patagonia Holding Salmones S.A. Inversiones Acuícolas S.A.

fig. 51

N° of shares

Stake

382,115,000

33.03%

210,000,000

18.15%

172,215,000

14.88%

The individuals or legal entities that directly or indirectly hold at least a 10% stake in the Company are: A.1 Individuals or legal entities related to the Puchi Acuña and Aguilera Marín families, comprising the brothers Víctor Hugo Puchi Acuña, Chilean Tax N° (RUT) 6.680.823-8; Mario Puchi Acuña, RUT 6.270.533-7; Juan Carlos Puchi Acuña, RUT 7.961.289-8; and Pablo Aguilera Marín, RUT 4.808.232-7. The members of the Puchi Acuña family, including Pablo Aguilera Marín, exercise their rights as individuals or through investment companies that are wholly owned by the same family. 86

Stake Fondo de Inversión Privado Patagonia, Chile - Chilean Tax N° (RUT) 76.004.326-5

33.03%

Inversiones VHP Ltda., Chilean Tax N° (RUT) 76.899.680-6

12.42%

Inversiones MPA Ltda., Chilean Tax N° (RUT) 76.897.150-1

8.62%

Inversiones Altair Ltda., Chilean Tax N° (RUT) 76.901.610-4

8.62%

Inversiones JCP SpA, Chilean Tax N° (RUT) 76.898.370-4

1.38%

Inversiones Santa Cecilia Ltda., Chilean Tax N° (RUT) 96.529.050-8

0.24%

Pablo Aguilera Marín, Chilean Tax N° (RUT) 4.808.232-7

0.55%

Mario Puchi Acuña, Chilean Tax N° (RUT) 6.270.533-7

0.55%

Víctor Hugo Puchi Acuña, Chilean Tax N° (RUT) 6.680.823-8

0.55%

Juan Carlos Puchi Acuña, Chilean Tax N° (RUT) 7.961.289-8

0.09%

Fondo de Inversión Privado Patagonia, RUT 76.004.326-5, is directly or indirectly controlled by Víctor Hugo Puchi Acuña, RUT 6.680.823-8; Mario Puchi Acuña, RUT 6.270.533-7; Juan Carlos Puchi Acuña, RUT 7.961.289-8; and Pablo Aguilera Marín, RUT 4.808.232-7. The members of the Puchi Acuña family and Pablo Aguilera Marín exercise their rights as individuals or through investment companies that are wholly owned by the same family. Inversiones VHP Limitada, RUT 76.899.680-6, is wholly owned by Víctor Hugo Puchi Acuña, RUT 6.680.823-8, and the Puchi Reyes family, comprising his wife Myriam Cecilia Reyes Abarca, RUT 7.162.539-7, and the siblings Rodrigo Alejandro Puchi Reyes, RUT 9.586.465-1; Paulina Andrea Puchi Reyes, RUT 9.587.753-2; Verónica Puchi Reyes, RUT 15.325.760-4; and Cecilia Puchi Reyes, RUT 16.207.367-2. Inversiones Santa Cecilia Limitada, RUT 96.529.050-8, is wholly owned by Víctor Hugo Puchi Acuña, RUT 6.680.823-8, and the Puchi Reyes family, comprising his wife Myriam Cecilia Reyes Abarca, RUT 7.162.539-7, and Rodrigo Alejandro Puchi Reyes, RUT 9.586.465-1. Inversiones MPA Limitada, RUT 76.897.150-1, is wholly owned by Mario Puchi Acuña, RUT 6.270.533-7, and the Puchi Germani family, comprising his wife Loreto Esmirna Germani Díaz, RUT 7.153.034-5, and the brothers Claudio Humberto Puchi Germani, RUT 10.308.367-2; Carlos Mauricio Puchi Germani, RUT 10.308.374-5; and Gabriel Alejandro Puchi Germani, RUT 15.302.702-1. Inversiones JCP SpA, RUT 76.898.370-4, is wholly owned by Juan Carlos Puchi Acuña, RUT 7.961.289-8, and the siblings Juan Carlos Puchi Ramírez, RUT 16.358.648-7; Francesca Paz Puchi Ramírez, RUT 17.271.200-2; Isidora Fernanda Puchi Rojas, RUT 22.701.540-3; and Josefa Catalina Puchi Rojas, RUT 24.322.430-6. Inversiones Altair Ltda., RUT 76.901.610-4, is wholly owned by Pablo Enrique Aguilera Marín, RUT 4.808.232-7, and the Aguilera Soto family, comprising his wife Lesdi Margarita Soto Sad, RUT 4.719.370-2, and the brothers Pablo Alberto Aguilera Soto, RUT 10.987.616-K; Enrique Ignacio Aguilera Soto, RUT 10.987.907-K; and Fernando Antonio Aguilera Soto, RUT 10.987.906-1. 87

memoria empresas aquachile

cap.04

A.2 Individuals or legal entities related to the Fischer Llop family, comprising the brothers Humberto José Fischer Llop, RUT 6.687.633-0, and Claudio Félix Fischer Llop, RUT 7.378.806-4. The members of the Fischer Llop family exercise their rights as individuals or through investment companies that are wholly owned by the same family. Holding Salmones S.A., RUT 96.789.670-5, is wholly controlled directly or indirectly by the Fischer Llop family, comprising the brothers Humberto José Fischer Llop, RUT 6.687.633-0, and Claudio Félix Fischer Llop, RUT 7.378.8064. The members of the Fischer Llop family exercise their rights as individuals or through investment companies that are wholly owned by the same family. Inversiones Acuícolas S.A., RUT 76.932.880-7, is wholly controlled directly or indirectly by the Fischer Llop family, comprising the brothers Humberto José Fischer Llop, RUT 6.687.633-0, and Claudio Félix Fischer Llop, RUT 7.378.8064. The members of the Fischer Llop family exercise their rights as individuals or through investment companies that are wholly owned by the same family.

Stake Holding Salmones S.A. – Rut # 96.789.670-5 Inversiones Salmones Ltda., Chile Rut# 76.238.778-6

18.15% 0.00%

Claudio Félix Fischer Llop Rut # 7.378.806-4

0.00%

Humberto José Fischer Llop Rut # 6.687.633-0

14.88%

Inversiones Acuícolas S.A., Chile – Rut #76.932.880-7

14.74%

Holding Salmones S.A., Rut # 96.789.670-5

0.15%

Sociedad de Inversiones Inmobiliarias Ltda. RUT # 78.648.080-9

0,15%

IDENTIFICATION OF TWELVE PRINCIPAL SHAREHOLDERS Table B shows the 12 principal shareholders of Empresas AquaChile, indicating the number of shares and stake held by each as of 31 December 2013. fig. 52

SHAREHOLDERS As of 31 December 2013, the Company had a total of 153 registered shareholders.

SIGNIFICANT OWNERSHIP CHANGES IN 2013 In 2013, Fondo de Inversiones Privado Aqua, RUT 53.306.900-2, related directly or indirectly to the Fischer Llop family as one of the majority shareholders, sold all its stake (210,000,000 shares) to Holding Salmones S.A., RUT 96.789.670-5, also owned by the same shareholders. As of 31 December 2013, these shares were held in custody by Corredora de Bolsa Larraín Vial S.A.

table B name

fig. 52

n° of shares

Fondo de Inversión Privado Patagonia

382,115,000

Larraín Vial S.A. Corredores de Bolsa*

stake

33.03%

222,691,096

19.25%

Inversiones Acuícolas S.A.

172,115,000

14.88%

Inversiones Megeve Capital Ltda.

80,776,734

6.98%

IM Trust S.A. Corredores de Bolsa

35,374,875

3.06%

Moneda S.A. AFI para Pionero Fondo de Inversión

21,401,000

1.85%

Fondo de Inversión Privado Aurora I

20,723,463

1.79%

Inversiones Megeve Dos Ltda.

19,375,939

1.67%

Compass Small Cap Chile Fondo de Inversión

17,757,785

1.53%

Banchile Corredores de Bolsa S.A.

15,849,237

1.37%

BTG Pactual Chile S.A. Corredores de Bolsa

15,126,931

1.31%

AFP Hábitat S.A. Fondo Tipo A

7,058,494

0.61%

*Includes Holding Salmones S.A. with 210,000,000 shares that represent 18.5% of the Company.

memoria empresas aquachile

ownership and shares cap.04

SHARES, THEIR CHARACTERISTICS AND RIGHTS Chapter 4.2

DESCRIPTION OF SHARE SERIES > As of 31 December 2013, the subscribed and paid-in capital of Empresas AquaChile S.A. was represented by 1,157,000,000 shares, all of the same series. DIVIDEND POLICY > As of 31 December 2013, the Company did not possess accumulated liquid profits suitable for distribution as dividends. Under its by-laws, the Company must pay at least 30% of each year's liquid profits to its shareholders as dividends pro rata to their stake, unless the respective Shareholders' Meeting decides by the unanimity of the shares issued to distribute a smaller percentage.

STATISTICAL INFORMATION > Dividends For the past six years, AquaChile has not distributed dividends to its shareholders. Stock market trading Quarterly trading in the shares of Empresas AquaChile on the Santiago Stock Exchange, the Chilean Electronic Stock Exchange and the ValparaĂso Stock Exchange is shown in the table below. fig. 53 The graph below shows AquaChile's share price compared to the IPSA index10 in 2013.

fig. 54

Trading in the Company's shares by related shareholders during 2013 is shown in the table below. fig. 55

IPSA: Selective Share Price Index of the 40 most heavily traded shares, calculated by the Santiago Stock Exchange

SHARE TRADING

fig. 53

summary 2013

N° of shares traded

Amount traded (CLP)

32,135,756

12,063,924,786

Average price (CLP)

Market presence **

375.41

82.22%

QII

27,775,853

9,886,640,725

355.94

85.00%

QIII

14,355,665

4,010,838,730

279.39

70.56%

QIV

236,405,577

62,221,200,672

263.20

60.00%

Annual

310,672,851

88,182,604,913

283.84

60.00%

Sources: Bolsa de Comercio de Santiago, Bolsa Electrónica de Chile, Bolsa de Valores de Valparaíso. ** On the Santiago Stock Exchange at the end of each quarter.

AQUACHILE SHARE PRICE AND IPSA (BASE = 100) AQUACHILE

fig. 54

IPSA

130 120 110 100 90 80 70 60 50 40 jan 13

feb 13

mar 13

apr 13

may 13

jun 13

jul 13

aug 13

sep 13

oct 13

nov 13

dec 13

Source: Bloomberg

SHARE TRADING BY RELATED SHAREHOLDERS

fig. 55

average unit price purchase

sale

purchase $/share

sale $/share

total amount

shareholder

relation

type of operation

Inversiones Megeve Capital Limitada

Company of director

Financial investment

7,750,000

380.0

2,945,000

Inversiones Kandel Ltda.

Company of director

Financial investment

29,045

340.0

9,875

Inversiones Acuícolas S.A.

Majority shareholder

Financial investment

100,000

265.0

26,500

José Luis Vial van Wersch

ExecutiveCFO

Financial investment

60,000

250.0

14,999

Alfonso Márquez de la Plata Cortés

ExecutiveCEO

Financial investment

41,402

239.9

9,932

Fondo de Inversión Privado Aqua

Majority shareholder

Financial investment*

Holding Salmones S.A.

Majority shareholder

Financial 210,000,000 investment*

265.0

210,000,000 265.0

purchase th$

sale th$

55,650,000

55,650,000 91

CORPORATE GOVERNANCE

Annual report Memoria AquaChile 2013

5.1 Board of Directors

5.2 DirectorÂ´s Committe

100

5.3 Management

102

corporate governance

BOARD OF DIRECTORS Chapter 5.1

BOARD OF DIRECTORS

AquaChile's Board of Directors has seven members elected by the Shareholders' Meeting who, under the Company's by-laws, hold office for three years. The Company does not have deputy directors. The Board's principal functions, which are regulated by Chile's Law N째 18.046 on public companies, consist in the Company's administration. In addition, it represents the Company judicially and extra-judicially in all the acts required for the fulfillment of its purpose and, to this end, has all the powers of administration and decision that the law or the Company's by-laws establish as corresponding to the General Shareholders' Meeting. The Board meets monthly to evaluate and guide the Company's economic, environmental and social development. Directors receive a set fee for attendance at board meetings and are not entitled to variable remuneration depending on the Company's achievement of economic, social or environmental objectives. The Chairman and other directors do not hold executive posts in the Company.

memoria empresas aquachile

Víctor Hugo Puchi Acuña

cap.05

humberto fischer llop

mario puchi acuña

- - - -

Chairman of the Board RUT: 6.680.823-8 Date appointed: 17 April 2012 Puchi holds an undergraduate degree in economics and business administration from the Universidad Católica de Chile and an MBA from the University of Chicago. After completing his studies, he worked in the finance area of companies that included Iansa, Grupo BHC and Quiñenco. He is a director of Centrovet and Empresas Hidronor and has business activities in the real estate, tourism and cattle farming sectors in the Los Lagos and Aysén Regions.

- Director - RUT: 6.687.633-0 - Date appointed: 17 April 2012 - Fischer is a veterinary physician from the Universidad Austral de Chile. He was one of the pioneers of the salmon industry and, in 1985, founded Salmones Pacífico Sur S.A, a company that initially focused on the seawater growth stage and marketing of the product. He has investments in the tourism, agriculture, cattle farming and real estate sectors and is also a director of the Dreams hotel and casino chain which has operations throughout Chile. - Director - RUT: 6.270.533-7 - Date appointed: 17 April 2012 - Puchi holds a technical university degree in fishing from the Universidad Técnica del Estado. He began his professional career in the Aysén Region, working first for the Agricultural Inspection Service (SAG) and then for the National Fishing Service (SERNAPESCA), a post that allowed him to specialize and participate in the project for the introduction of Pacific salmon in Chile. He currently has cattle farming business activities in the Los Lagos and Aysén Regions.

claudio fischer llop

- Director - RUT: 7.378.806-4 - Date appointed: 17 April 2012 - Fischer is a cargo pilot and was a founding partner of Salmones Pacífico Sur S.A., established in 1985. He currently has investments in sectors that include transport, tourism, real estate, agriculture and cattle farming and is a director of different companies in these sectors. He is also executive president of the Dreams S.A. hotel and casino chain and of the Zona Franca de Punta Arenas.

alejandro pérez rodríguez

- Director - RUT: 5.169.389-2 - Date appointed: 17 April 2012 - Pérez holds an undergraduate degree in civil industrial engineering from the Universidad de Chile and a master's degree in economics from the

University of Chicago. He is chairman of the board of the Universidad San Sebastián, vice-chairman of the board of Clínica Indisa and a director of Entel and Inversiones Angelini Ltda. He previously served as general manager of Celulosa Arauco S.A., Soprole S.A. and Watt´s Alimentos S.A. piero solari donaggio

- Director - RUT: 9.585.725-6 - Date appointed: 17 April 2012 - Solari holds an undergraduate degree in civil industrial engineering from the Universidad Católica de Chile and an MBA from the Sloan School of Management, MIT. He is executive director of Family Office Megeve Investments and a director of Haldeman Mining Company and Parque del Recuerdo as well as vicechairman of Aptus Chile, a non-profit educational organization. From 2004 to 2009, he was chairman of the Aguas Nuevas S.A. water company.

pilar lamana gaete

- Director - RUT: 8.538.550-K - Date appointed: 17 April 2012 - Lamana holds an undergraduate degree in economics and business administration from the Universidad de Chile and is a company consultant, a professor at the Universidad Adolfo Ibáñez and director of its Retail Center. She is also a director of Empresas Flores and Empresas Artel and owner of Gelatería Biancolatte. She previously held a number of posts, including senior vice-president for customer management, at Unilever Chile.

The Company's directors over the past two years also included Vicente Pérez Fuentes. He was appointed by the General Shareholders' Meeting of 29 April 2011 and ceased to be a director on 17 April 2012 when the General Shareholders' Meeting elected a new Board of which he is not a member.

vicente pérez fuentes

- RUT: 7.300.137-4 - Director - Date appointed: 29 April 2011 - Date ceased to be a director: 17 April 2012 - Pérez holds an undergraduate degree in economics and business administration from the Universidad de Tarapacá and has over 20 years' experience in the fishing and salmon industry. He is a director of companies that include Equitas Capital and Empresas Hidronor. He has served as representative of Iceland's Glitnir Bank, general manager of Congelados Pacífico (1993-2008), general manager of Pacific Fisheries S.A., assistant general manager of Pacific Protein (1989-1992) and director of Inversiones Ewos Ltda (1990-1992). In addition, he has participated in various companies related to industrial fishing and the marketing of fish products in both the United States and Europe.

The Board meets monthly to evaluate and guide the Company's economic, environmental and social development.

BOARD EXPENDITURES In 2013, expenditures by the Board of Directors reached US$216,000 and consisted principally of travel and accommodation expenses in Chile and abroad for US$120,000 and miscellaneous general expenses for US$96,000.

EXPENDITURE ON ADVISORY SERVICES In 2013, the Board of Directors did not hire advisory services. However, the Company's auditors, PwC, were commissioned to carry out a study of transfer prices for the purposes of the new sworn statements required by Chile's National Tax Service (SII). The fee for this study was not significant with respect to the Board's annual budget.

REMUNERATIONS OF MEMBERS OF THE BOARD OF DIRECTORS AND THE DIRECTORS' COMMITTEE In 2013, directors and members of the Directors' Committee received remunerations for their fig. 56 participation in the Board of Empresas AquaChile S.A. as shown in the table below. The fees, remunerations and financial, commercial and management advisory services received by members of the Board of Directors for the year ended on 31 December 2013 amounted to US$708,000 (as compared to US$697,000 for the year ended on 31 December 2012).

REMUNERATIONS OF BOARD OF DIRECTORS (US$) Name of director

Víctor Hugo Puchi Acuña

Board (Fee for attendance) 2013 2012

fig. 56

Executive Committee (Fixed fee) 2013 2012

Directors' Committee (Fee for attendance) 2013 2012

total 2013

2012

Chairman

99,877

102,881

84,000

183,877

186,881

Humberto Fischer Llop

DIRECTOR

55,284

56,360

84,000

10,098

10,154

149,383

150,513

Mario Humberto Puchi Acuña

DIRECTOR

55,217

56,641

84,000

77.000

139,217

133,641

Claudio Fischer Llop

DIRECTOR

50,370

45,970

50,370

45,970

Alejandro Pérez Rodriguez

DIRECTOR

55,280

51,527

10,081

10,191

65,361

61,718

Piero Solari Donaggio

DIRECTOR

49,998

51,279

49,998

51,279

DIRECTOR

59,998

46,249

10,005

10,220

70,003

56,470

EX-DIRECTOR

10,277

426,025

421,184

252,000

245,000

30,184

30,565

708,209

696,749

María del Pilar Lamana Gaete Vicente Pérez Fuentes (1) Total

(1) Until April 2012

memoria empresas aquachile

corporate governance cap.05

ANNUAL REPORT OF THE DIRECTORS' COMMITTEE Chapter 5.2

Under Chilean law, public companies must appoint at least one independent director and a Directors' Committee when they have a market capitalization of at least 1,500,000 unidades de fomento (an inflation-indexed currency unit) and at least 12.5% of the voting shares are held by shareholders who individually control or possess less than 10% of these shares. Empresas AquaChile has established a Directors' Committee in accordance with Article 50 bis of Law N° 18.046 on Public Companies. Three of the seven members of the Board of Directors form the Directors' Committee, which fulfils the role envisaged in the Law 18.046. The Directors' and Audit Committee has the functions required under Article 50 bis of Law No. 18.046 and other applicable regulation. These functions include:

controlling shareholders. A director is considered independent when he or she does not, in general, have ties, interests or economic, professional, credit or commercial dependence of a significant nature or size with or on the company, the other companies in the group of which it forms part, its controller or principal executives or a family relationship with the latter or any of the other types of ties specified in Law Nº 18.046. As of 31 December 2013, the Directors' Committee was formed by Mrs. Pilar Lamana Gaete (independent director) and by Messrs. Humberto Fischer Llop (director) and Alejandro Pérez Rodríguez (director and chairman of the Directors' Committee).

ESTABLISHMENT OF THE DIRECTORS' COMMITTEE The Directors' Committee of Empresas AquaChile S.A. was established, in accordance with the provisions of the Law on Public Companies which governs this matter and, particularly, Article 50 bis of this Law, by a decision of the Board of Directors at its meeting of 3 May 2012. As the Company had only one independent director, it fell to this director to appoint the Committee's other members from among non-independent directors who could not include the Chairman of the Board of Directors. The independent director, Mrs. Pilar Lamana Gaete, selected Messrs. Humberto Fischer Llop and Alejandro Pérez Rodríguez as the other two members of the Directors' Committee.

To examine the reports of the Company's external auditors, its statement of financial position and other financial statements that its administrators provide to shareholders and to express an opinion on these reports prior to their presentation for approval by shareholders;

To put to the Board proposals as to the external auditors for presentation to the corresponding Shareholders' Meeting;

To examine and report on all matters regarding related-party transactions;

The Committee appointed Mr. Alejandro Pérez Rodríguez as its chairman, Mr. Humberto Fischer Llop as its vice-chairman and Mr. Álvaro Varela Walker as its secretary.

To report to the Board on the convenience or otherwise of hiring the external auditing company for services that do not form part of the external auditing service, when these are not forbidden.

The Committee agreed to hold ordinary meetings at least once every three months and extraordinary meetings whenever necessary and as stipulated in the Regulation of the Committee's Operation.

The requirements for directors’ independence are set out in Chile’s Law on Public Companies (Nº 18.046) and its subsequent modifications under Law Nº 19.705 on the relationship between directors and a company’s

In compliance with its functions as established by Law Nº 18.046, the Directors' Committee met regularly in 2013 in accordance with its powers and duties.

MEETINGS OF THE DIRECTORS' COMMITTEE

During the year, the Committee held four ordinary and two extraordinary sessions.

100

1.- Extraordinary Session N°4 31/1/13 > Review of the remunerations systems and compensation plans for the Company's managers and principal executives; Review of the powers of attorney and mandates issued by the Company; Review of information on payment of travel allowances and expenses; Review of procedures for the acquisition of equipment and materials and for tenders for construction work and services. 2.- Ordinary Session N°4 8/3/13 > Preliminary review of Norm of a General Character (NCG) N° 341 on SelfEvaluation of Corporate Governance; Annual report on activities of the Directors' Committee; Review of audited Annual Financial Statements as of 31 December 2012; Review of bids and proposals for external auditing in 2013. 3.- Ordinary Session N°5 27/5/13 > Review of Intermediate Consolidated Financial Statements as of 31 March 2013; Review of loans to related company. 4.- Ordinary Session N°6 29/8/13 > Hiring of advisory services on transfer prices; Reorganization of the company structure of certain subsidiaries and hiring of external auditing services for the reorganization; Review of transactions with related companies. 5.-Extraordinary Session N°5 5/9/13 > Review of Intermediate Consolidated Financial Statements as of 30 June 2013. 6.- Ordinary Session N°7 20/11/13 > Review and analysis of Auditors' Internal Control Letter; Review of Intermediate Consolidated Financial Statements as of 30 September 2013; Review of transactions with related companies.

All the members of the Directors' Committee attended each of its meetings in 2013. In addition, on the Committee's invitation, they were attended by the Company's CEO and CFO. The minutes of the Committee's meetings in 2013 were signed by all the directors who form this Committee. In 2013, the Directors' Committee did not make use of the annual budget allocated for its expenses by the General Shareholders' Meeting.

OTHERS Under Chile’s Law on Public Companies, a listed company's operations with a "related" party must take place in market conditions and comply with certain authorization and disclosure requirements that are different from those applying to a non-listed company. This applies to listed companies and all their subsidiaries. AquaChile has carried out different transactions with its subsidiaries. In the normal course of the Company’s business, different types of services have been provided to or received from related companies, including the rental of installations, the sale or purchase of inputs and/or medicines for fish and cargo and passenger transport services. AquaChile's policy is not to carry out transactions with or for the benefit of any shareholder or Board member or with any entity controlled by these persons or in which they have a significant economic interest, except when the transaction is related to the Company and the price and other terms are at least as favorable for the Company as those which could be obtained from a third party on equal conditions. These transactions are summarized in the audited consolidated financial statements for the year ended on 31 December 2013.

EXPENDITURES BY THE DIRECTORS' COMMITTEE In 2013, the Directors' Committee did not incur any expenses.

At each meeting, the Committee approved the Annual and Intermediate Financial Statements presented by the Company's management and agreed to recommend their approval by the next meeting of the Board of Directors at which they were on the agenda.

EXPENDITURE ON ADVISORY SERVICES In 2013, the Directors' Committee did not hire advisory services.

101

memoria empresas aquachile

corporate governance cap.05

MANAGEMENT Chapter 5.3

víctor hugo puchi acuña Chairman of the Board humberto fischer llop Director mario puchi acuña Director claudio fischer llop Director

alejandro pérez rodriguez Committee Chairman

alejandro pérez rodriguez Director piero solari donaggio Director pilar lamana gaete Independent Director

alfonso márquez de la plata CEO

francisco serra Technical Manager

agustín ugalde COO humberto fischer llop Director

josé luis vial CFO

pilar lamana gaete Independent Director

franco adam CCO

franz schwerter Comptroller

felipe sandoval Manager for Institutional Affairs

ignacio sandoval Manager for Processing Plants anton felmer Manager for Development and New Businesses alejandra cid Human Resources gastón dupré CEO, AquaChile Inc.

rodger miranda CEO, AquaInnovo S.A.

102

víctor manuel jiménez CEO, Grupo ACI S.A.

juan carlos lópez Manager for Freshwater Production juan carlos puchi Manager for Freshwater Production Aysén Region

paulino morales Manager for Seawater Production Los Lagos Region manuel muñoz Manager for Seawater Production Aysén Region

juan miguel urdangarín Manager for Freshwater Production Los Lagos Region

sergio vargas Manager for Infrastructure

claudio valenzuela Health jorge manuel riquelme Risk Prevention

PRINCIPAL EXECUTIVES As of 31 December 2013, the principal managers and executives of Empresas AquaChile S.A. and its subsidiaries were:

Sergio Vargas

- Manager for Infrastructure - Rut: 13.120.805-7 - Aquaculture engineer - Universidad de Los Lagos

Alfonso Márquez - CEO de la Plata Cortés - Rut: 6.379.894-0

Paulino Morales

- Manager for Seawater Production Los Lagos Region

- Economist and business administrator

- Rut: 10.488.194-7

- Universidad Católica de Chile

- Technical engineer in fishing with specialization in aquaculture

- MBA, J.L. Kellogg Graduate School of Management

- Universidad Arturo Prat (Iquique Campus)

- Date of appointment: August 2005

Agustín Ugalde Preuss

Manuel Muñoz

- GERENTE PRODUCCIÓN AGUA MAR XI REGIÓN

- COO

- Rut: 10.329.842-3

- Rut: 8.209.622-1

- Aquaculture engineer

- Agronomist

- Universidad de Los Lagos (Osorno)

- Universidad Católica de Chile - Date of appointment: June 2009

Franco Adam Raffo

Juan Miguel Urdangarín

- Manager for Freshwater Production Los Lagos Region - Rut: 6.578.038-0

- CCO

- Marine technician

- Rut: 8.530.950-1

- Universidad Católica de Chile

- Aquaculture engineer - Universidad Andrés Bello - Date of appointment: April 2009

Claudio Valenzuela

- Health - Rut: 12.202.584-5 - Veterinary physician

José Luis Vial van Wersch

- CFO

- Universidad Austral de Chile

- Rut: 12.583.805-7 - Economist and business administrator - Universidad Católica de Chile

Juan Carlos Puchi Acuña

- Date of appointment: December 2008

- Manager for Freshwater Production Aysén Region - Rut: 7.961.289-8 - Mechanical engineer - Instituto Nacional de Capacitación

Álvaro Varela Walker

- Lawyer - Rut: 6.017.650-7 - Universidad de Chile; Universidad de Barcelona, Spain

Jorge Manuel Riquelme

- Date of appointment: October 1995

- Risk Prevention - Rut: 13.859.196-4 - Engineer in risk prevention - Instituto Nacional de Capacitación

The Company's management also comprises managers and executives who fulfill important functions within it: Franz Schwerter - Comptroller Irribarra - Rut: 14.226.025-5

Felipe Sandoval Precht

- Master in Environmental Management and Zoning - Universidad de Santiago de Chile

Juan Carlos López Sebastián

- Manager for Freshwater Production - Rut: 11.592.385-4

- Economist and business administrator

- Veterinary physician

- Universidad de Concepción

- Master in Veterinary Sciences, Universidad Austral de Chile

- MBA, Universidad Católica de Chile

- MBA, Instituto Directivo de Empresas de Madrid

- Manager for Institutional Affairs - Rut: 7.673.035-0

Anton Felmer Valdivieso

- Manager for Development and New Businesses - Rut: 8.675.123-2

- Civil engineer

- Agronomist

- Universidad de Chile

- Universidad Católica de Chile - MBA, Instituto Directivo de Empresas de Madrid

Francisco Javier Serra Freire

- Technical Manager - Rut: 8.538.843-6

MANAGEMENT OF SUBSIDIARIES

- Aquaculture engineer - Universidad Andrés Bello - MBA, Loyola College in Maryland, USA

Víctor Manuel Jiménez Ocampo

- CEO, Grupo ACI S.A. - ID: 1-971-649 - Engineer in industrial production

Alejandra Cid Peña

- Human Resources

- Instituto Tecnológico de Costa Rica

- Rut: 10.493.106-5 - Economist and business administrator - accountant - Universidad de Santiago - Universidad Austral de Chile

Gastón Dupré Huidobro

- CEO, AquaChile Inc. - Rut: 7.254.010-7 - Economist and business administrator

Ignacio Sandoval - Manager for Processing Plants Gallardo - Rut: 7.555.354-4 - Civil engineer - Universidad Católica de Chile

- Universidad de Santiago

Rodger Miranda Stevenson

- CEO, AquaInnovo S.A. - Rut: 9.805.970-9 - Technical engineer in aquaculture - Universidad de Los Lagos - Master in Environment, Universidad de Santiago

103

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cap.05

REMUNERATIONS OF MANAGERS AND EXECUTIVES The total gross remunerations received by Empresas AquaChile's managers and executives, including bonuses, amounted to US$1,863,000 at 31 December 2013 (as compared to US$2,656,000 in the year ended on 31 December 2012). In 2013, no redundancy payments for years of service were paid to the Company's managers and principal executives (and, similarly, no such payments were made in 2012). Incentives plan > Empresas AquaChile and its subsidiaries have a system of incentives tied to the Company's operating results. This consists in an annual bonus payable to its principal executives and other employees who, in the Company's view, are eligible to participate. This system seeks to motivate and recognize its executives and employees and gain their loyalty through a formal plan that rewards both individual performance and teamwork. As part of the capital increase approved on 11 March 2011, the Company issued 43,000,000 shares (out of a total of 1,200,000,000 shares) for an incentive plan for its employees and those of its subsidiaries. At the date of preparing this Report, this plan was still being designed and no options had so far been allocated and the definitive rules for their allocation had not been established. This compensation plan has not been implemented. WORKFORCE As of 31 December 2013, Empresas AquaChile S.A. and its subsidiaries had a total of 5,996 employees distributed as shown in the table opposite. fig. 57 / fig.58

SHARES HELD BY EXECUTIVES AND DIRECTORS As of 31 December 2013, the Company's principal executives and directors fig. 59 directly or indirectly held shares as shown in the table opposite.

104

Workforce - Parent Company and Subsidiaries Managers and principal executives

2013

fig. 57

Administrative and technical personnel

Workers

total

Empresas AquaChile S.A. (parent company)

393

998

1,409

Subsidiaries

672

3,880

4,587

Total

1,065

4,878

5,996

Workforce - Chile and Overseas

2013

fig. 58

Managers and principal executives

Administrative and technical personnel

Workers

total

Parent company and Chilean subsidiaries

393

998

1,409

Overseas subsidiaries

672

3,880

4,587

Total

1,065

4,878

5,996

SHARES HELD BY EXECUTIVES AND DIRECTORS

1. principal executives

fig. 59

participación accionaria

Alfonso Márquez de la Plata Cortés

Executive - ceoi

0.25%

Agustín Ugalde Preuss

Executive - coo

0.08%

José Luis Vial Van Wersch

Executive - cfo

0.04%

Franco Adam Raffo

Executive - cco

0.02%

Álvaro Varela Walker

Lawyer

0.01%

1. directors

VÍctor Hugo Puchi Acuña

Chairman

Majority shareholder

33.74%

Mario Puchi Acuña

Director

Majority shareholder

33.19%

Humberto Fischer Llop

Director

Majority shareholder

33.03%

Claudio Fischer Llop

Director

Majority shareholder

33.14%

Alejandro Pérez Rodríguez

Director

1.33%

Piero Solari Donaggio

Director

8.79%

María del Pilar Lamana Gaete

Director

0.00%

105

CORPORATE SOCIAL RESPONSIBILITY

Annual report AquaChile 2013

6.1 Our people

109

6.2 The environment

112

6.3 Management

115

corporate social responsibility

OUR PEOPLE Chapter 6.1

AquaChile's employees are a crucial part of the organization and it, therefore, strives to improve their working conditions and, for example, provides benefits related to health. Employees with an indefinite contract have complementary health insurance and the Company has also established agreements with opticians in Puerto Montt and Castro and dental clinics in Puerto Montt, Calbuco, Castro, Puerto Varas and Chonchi which, in the latter case, is extensive to all its employees. In May, it also offered free vaccination against influenza in Puerto Montt and ChiloĂŠ for all employees who wished to take advantage of it. In order to help the families of its collaborators, the Company has an agreement with a shop in Puerto Montt under which they can acquire school materials at preferential prices. It also gives Christmas presents to employees' children up to the age of 12 as well as a Christmas hamper to all those employees with a contract in force as of 30 November. The economic support provided also included Independence Day and Christmas bonuses. In 2013, as part of its Trabajar con Calidad de Vida (Work with Quality of Life) program, the Company again implemented the Mis Hijos Conocen la Empresa (My Children know the Company) program under which children were able to visit their parents' workplace during the winter holidays. As a result of this initiative, one hundred children visited AquaChile's installations in Puerto Montt where they toured the processing plant and offices. This activity was also replicated at the Antarfood Plant (Chonchi) with the participation of some 80 children. AquaChile takes the view that it is important for its employees to know and understand the different processes that take place in the Company. To this end, it continued to implement the Conoce tu Empresa (Know your Company) program in 2013 under which employees from different centers and hatcheries specifically, the Serapio, Abtao, Quilque, Chidhuapi and Punta Zenteno-Canutillar centers - were able to visit the Company's processing plants. The social and recreational activities implemented by the Company in 2013 included celebrations to mark Independence Day and Christmas as well as other special dates such as Mother's Day, Father's Day and Women's Day.

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As part of its commitment to the south of Chile, AquaChile gives priority to hiring people from the areas where it has its activities and, in 2013, 91% of its employees worked in the area where they lived. The majority of AquaChile's personnel live in the Los Lagos Region, followed by the Aysén and Araucanía Regions. In the case of contractors, the Company also seeks to maintain ties with the areas where it operates, preferring that people work in their place of origin. One of the most successful examples of these efforts is the Araucanía Region, with almost all contractors from this Region working there. This is also the case in the Aysén Region. In the Los Lagos Region, however, the situation is somewhat different since, although almost 90% of contractors live and work in the Region, a little over 10% have to travel to the Aysén Region to provide services there.

TRAINING At AquaChile, training for employees seeks to promote, facilitate, foster and develop skills and knowledge so as to provide them with better opportunities and quality of life and work whilst also contributing to higher productivity and equipping the workforce with the tools needed to adapt to technological processes and their modifications. To this end, training focuses on three key pillars. The first seeks to ensure compliance with sector regulation and includes courses for small boat owners, on sea lice monitoring and the handling of hazardous substances, training and retraining for marine security guards, basic onboard safety courses and courses on fish biosecurity. In the second pillar, the aim is to achieve integral improvements in employees' quality of life through courses that address social, physical and psychological issues, adapted to the situation in the Company. Some courses relate to defensive driving, self-care and health and also include a workshop on excessive borrowing. The third pillar consists in tools to improve employees' performance such as courses on English, accounting, hazard analysis and critical control points (HACCP) and point of sale (POS), customer service techniques and teamwork and diploma courses. In addition, the Company seeks to ensure employees' knowledge and understanding of its Code of Conduct which, together with other internal tools, provides the guidelines for proper and effective conduct. As of 31 December 2013, over 1,084 copies of the Code had been provided to new employees in the Seawater, Freshwater, Administration and Processing Plants areas. In 2013, 5,500 employees received a total of some 68,000 hours of training in different formats that included classroom training and e-learning. In addition to the training provided for its employees, AquaChile also provides financial support for training in different trades in the places where it has its operations. In this way, it seeks to promote entrepreneurship and increase employability. These activities take place in the framework of the Social Scholarships Program of the National Training and Employment Service (SENCE) and seek to increase the employability of young people entering the labor market, housewives and heads of households interested in creating a new enterprise and craftspeople and low-qualified workers who require training in order to improve their labor skills. In 2013, courses were offered on household electricity in Dalcahue and Los Pellines, on plumbing in Chonchi, on basic diving in the Alerces district of Puerto Montt and on the preparation of food and desserts using local ingredients in Quetroleufu. In total, this program benefited 75 people.

110

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corporate social responsibility cap.06

THE ENVIRONMENT Chapter 6.2

One of AquaChile's fundamental commitments is to respect and care for the environment and it is constantly implementing initiatives in this area. Environmental management extends to all the Company's activities through initiatives that include monitoring programs, control of organic and inorganic waste, the treatment of liquid industrial waste and the control of hazardous waste. The activities undertaken by AquaChile in 2013 included its participation in the process of review of sector regulation during which it expressed its views and contributed its experience on the issues debated. In this context, AquaChile participated in review of the draft of Regulation 609/1998, which establishes emissions norms for pollutants related to the discharge of liquid industrial waste into the sewage system. In addition, it participated in review of draft regulation for the handling of sludges generated by hatcheries' effluent treatment systems as well as in presentation of a proposal for modification of Resolution 3612/2009 establishing the methodologies to be used for preliminary site characterization and Aquaculture Sanitary and Environmental Reports (INFAs). Finally, it participated in implementation of the modification of Regulation of the Environmental Evaluation System through Resolution N째40/2012. In 2013, the Company submitted 41 Declarations of Environmental Impact (DIAs) for seawater centers and hatcheries, obtained 28 Environmental Approval Resolutions (RCAs) and prepared 120 Aquaculture Sanitary and Environmental Reports (INFAs).

112

WASTE CONTROL Out of the total waste generated by the Company in 2013, 98.3% corresponded to industrial organic waste with its origin in processing plants and fish mortality at salmon and trout farming centers and hatcheries. All this waste was sent to plants for its transformation into raw material for the production of fish meal and fish oil. The other 1.7% of the waste generated corresponded to inorganic waste generated at farming centers, hatcheries and processing plants. This is collected regularly and 0.65% is recycled and 0.4% reused. Waste that can neither be recycled nor reused (0.63%) is sent to industrial landfills with the corresponding sanitary and environmental permits.

98,3% ORGANIC WASTE

from production of salmon, trout and tilapia is recycled.

ENERGY SAVING Energy efficiency is an important issue for AquaChile. At end-2013, 41 pontoons had been equipped with technology that allows them to store surplus energy from their diesel generators. While the generator is in operation, this technology stores energy in batteries which supply electricity for basic lighting, plug, computer and internet functions through to the next day.

CARE FOR THE ENVIRONMENT In 2013, AquaChile participated in activities to mark International Beach Cleaning Day, with employees removing trash and solid waste from beaches, rivers and lakes in areas such as Quellón, Castro, Isla Lemuy, Puerto Aguirre, Cherquenco, the Valdivia River, Villarrica and Pucón.

PONTOONS

CERTIFICATION Through different types of certification, AquaChile seeks to ensure the compliance of all its production process with the highest food management and innocuity, environmental, biosecurity, labor and ethical standards.

technology to store surplus energy from diesel generators

CERTIFICATIONS IN FORCE, 201311 Processing Plant

haccp

fda

ifs

bap

globalg.a.p

sqf 2000

Cardonal (Puerto Montt)

YES

Aguas Claras (Calbuco)

YES

Antarfood (Chonchi)

YES

Salmones Cailín (Quellón)

YES

Hueñocoihue (Dalcahue)

YES

Growth Centers >

Freshwater Centers >

Atlantic salmon: GMP (SERNAPESCA) + GLOBALG.A.P. Trout: GMP (SERNAPESCA) Pacific salmon: GMP (SERNAPESCA)

In 2014, the Company has undertaken to start audits to obtain GlobalG.A.P. certification of its Atlantic salmon hatcheries such as Novofish12, Río Maullín, Aquasan and Salmones Chaicas13.

HACCP: Hazard Analysis and Critical Control Points FDA: Food and Drug Administration IFS: International Food Standard BAP: Best Aquaculture Practices GLOBALG.A.P: Good Agricultural Practices SQF 2000: Safe Quality Food GMP: Good Manufacturing Practices. 11

GLOBALG.A.P. certification implies that AquaChile complies with good environmental, labor, social, food safety, animal welfare and commercial practices. Recirculation hatchery with long-term rental contract. Recirculation hatchery with long-term rental contract in which the Company also holds a 19.7% stake.

12 13

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responsabilidad social empresarial

COMMUNITIES Chapter 6.3

Throughout its history, AquaChile has maintained strong roots in the south of Chile, creating high-quality jobs, giving priority to hiring people from the area, implementing initiatives that contribute to the development of the places where it has its operations and improving the quality of life of their inhabitants. In the case of education, AquaChile signed an agreement in 2013 with the Centro de Formación de la Industria Chileno Francés (CFI) which offers training to low-income young people. Under the agreement, it provided the places necessary for the internships of students of administration, electricity and logistics operations. During the year, groups of students from technical schools and universities also visited different processing plants. These visits sought to develop ties between the industry and young people and future professionals by allowing them to become familiar with operations at these plants. In addition, AquaChile's professionals supervised the internships of pupils at technical schools in the communities where the Company has its operations. In the Aysén Region, it also installed a library in the Mañihuales School. AquaChile is also aware of the important role that connectivity plays in quality of life, particularly for those people who live in the remote areas of southern Chile where the Company has its operations. In certain cases, the Company puts the internal logistics systems used normally for its own operations at the disposal of the community, providing people from these places with the access to more heavily populated urban areas that, without this support, would be difficult or take a long time. This support is very much appreciated, especially in the case of medical emergencies. In the Aysén Region, for example, the Company transports the personnel of public and private organizations as well as local inhabitants who need to make the Puerto Cisnes-Isla Gala and Seno Gala sea crossing. It has also provided support for medical visits and the transport of emergency materials to the Toto and Melimoyu areas and has cooperated in the transport of social assistants and authorities who provide services to the community.

115

A key part of AquaChile's commitment to local communities is the priority it gives to hiring people from the areas where it has its operations and, whenever possible, acquiring the services they can provide.

In 2013, in another example of the use of the Company's logistics for the service of the community, its Skyring II boat supported the transport of materials and machinery for the reconstruction of community infrastructure such as the Melimoyu Medical Center, after it suffered a serious fire, and the repair of the landing strip in the same area and of the household water storage pools on the Toto island. The Company has, in addition, implemented floating docks for general use in the Gala Medio sector and Melimoyu, increasing the safety of loading operations and protecting vessels from storms. The Company has also contributed to the maintenance and repair of roads in the Puerto Octay and Peñaflor areas while, in Quellón, it allows the Folil-Trincao community to use the López dock and makes special flights to assist in the transport of the inhabitants of Melinka and Repollal. AquaChile has constantly sought to build bridges of communication, strengthen ties and learn at first hand about the principal needs of Mapuche communities in the areas where it has operations. In 2013, AquaChile met regularly with the Cumirray Ñanco viuda de Ñanculef and Mariano Millahual indigenous communities. As well as meetings, visits were organized to the Caburga 1 and Codinhue hatcheries, support was provided for the preparation of socio-historical studies and reports and work with the Pucón municipal government is underway on preparation of the project for the construction of the Quetroleufu cultural and community center. In addition, the Company financed preparation of a book on the history of the Mariano Millahual community which will be published in 2014. RELATIONS WITH AUTHORITIES As in previous years, AquaChile continued to work in 2013 to strengthen ties with the authorities related to its activities. A meeting took place with then Economy Minister Pablo Longueira and this was followed by another meeting with his successor, Minister Félix de Vicente. In late March, then Labor Minister Evelyn Matthei visited AquaChile's installations in Puerto Montt, touring the Cardonal plant, greeting workers and meeting with the Joint Worker-Management Safety and Health Committee. Meetings also took place with Undersecretary for Fishing Pablo Galilea, Undersecretary for the Armed Forces Alfonso Vargas and the National Director of SERNAPESCA, Juan Luis Ansoleaga. At the local level, meetings were held with regional governors, mayors, the regional directors of Fishing and SERNAPESCA and the regional representatives of the Economy and Labor Ministries.

117

INFORMATION ABOUT SUBSIDIARIES, AFFILIATED COMPANIES AND INVESTMENTS IN OTHER COMPANIES Annual report AquaChile 2013

7.1 Subsidiaries and affiliated

120

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information about subsidiaries, affiliated companies and investments in other companies cap.07

SUBSIDIARIES AND AFFILIATED COMPANIES Chapter 7.1

Empresas AquaChile S.A. is the parent company for the group's different companies. Operationally, it is dedicated to the growth, processing and marketing stages of salmon and trout production. In addition, it produces tilapia through its Grupo ACI subsidiary in Costa Rica and Panama, produces fish feed through its Alitec Pargua S.A. affiliate in Chile and the Biomar Aquacorporartion Products subsidiary of Grupo ACI in Costa Rica and works in genetics applied to aquaculture through its AquaInnovo subsidiary.

ORGANIZATIONAL STRUCTURE at 31 December 2013 Empresas AquaChile S.A. develops its businesses both directly and through related companies that belong to the group as shown below:

OPERATIONAL STRUCTURE OF EMPRESAS AQUACHILE S.A. AND ITS SUBSIDIARIES

fig. 60

empresas aquachile s.a 99.88%

100.00%

Aquainnovo

empresas

inversiones

antarfish

s.a.

aquachile s.a.

salmones

antarfish ltda

s.a.

australes ltda.

(2)

(3)

79.95%

50.00%

100.00%

grupo aci s.a alitec pargua aquachile (4)

s.a.

inc.

production of tilapia

feed

sales

(1)

genetics

production of salmonids

Genetics Freshwater production Seawater production Processing Marketing Feed

120

(1): Includes: AquaChile S.A.; Salmones Cailín S.A.; Salmones Australes S.A.; Salmones Maullín S.A.; Salmones Maullín LTDA; A cuícola el Volcán LTDA.; Salmones Chiloé S.A.; Piscicultura Aquasan S.A.; Procesadora Hueñocoihue Spa and AquaInnovo S.A. (2): Includes: Aguas Claras S.A. and Antarfood S.A. (3) Includes: Servicios Aguas Claras S.A. and Procesadora Aguas Claras Ltda, (4) Includes: Aquacorporación Internacional S.A.; S.A. Terrapez S.A.; Aquacultura del Pacífico and RFA Inc.

memoria empresas aquachile

cap.07

EMPRESAS AQUACHILE S.A. Parent company of the different companies that make up the group. Operationally, it is dedicated to the growth, processing and marketing stages of salmon and trout production. It carries out the latter stage directly in markets in Asia, Europe, Latin America and the United States. In this last country, it operates through its Miami-based AquaChile Inc. subsidiary. For the growth phase, its AquaChile S.A. subsidiary has the capacity to supply all the Company's smolt requirements. The Company produces Atlantic salmon, Pacific salmon and trout and, for this purpose, has sufficient marine installations and concessions in the Los Lagos and Aysén Regions to cover current and future harvest volumes. Processing of the raw material takes place principally in the Puerto Montt plant and other processing plants belonging to the group.

I.- GENETICS AquaInnovo S.A. > Company dedicated to genetic and biotechnological research and development, based on AquaChile's genetic improvement project and carried out jointly with Empresas AquaChile S.A. and the University of Chile, using grants obtained in competitive bids from the Chilean government's Economic Development Agency (CORFO) through the Business Innovation Subcommittee of InnovaChile. AquaInnovo S.A. is a company with an investment project for US$10,000,000 that has its origins in salmon farming but targets all the aquaculture industry as development potential. The project aims to become a reference in genetics for the salmon industry in Chile and internationally. Empresas AquaChile currently owns 99.88% of the company.

II.- PRODUCTION OF SALMONIDS As well as through Empresas AquaChile S.A., described above, production of salmonids takes place through a number of its subsidiaries: Inversiones Salmones Australes Ltda. > A subsidiary of Empresas AquaChile S.A. which in turn, controls the following companies: AquaChile S.A. > Company dedicated to the freshwater production of juveniles and smolts, principally for Empresas AquaChile S.A. It has installations on land and in lakes and estuaries in the Santiago Metropolitan Region and the Araucanía and Aysén Regions. Production of juveniles includes the three species marketed by the parent company and its supply of eggs for this process is guaranteed by its own output and that of Salmones Chaicas S.A. Salmones Australes S.A. > Company with installed capacity for the growth phase and production of salmon. Its growth centers are located in the Chacabuco area of the Aysén Region. It participates only in the growth stage and related companies are hired to supply smolts and for the subsequent processing of its salmon. Salmones Cailín S.A. > Processing plant located in Quellón on Isla de Chiloé. This plant was designed to provide services to third parties but most of its processing capacity is currently being used for Empresas AquaChile S.A. for the processing of its Pacific salmon harvest. Salmones Maullín S.A > Company that produces Atlantic salmon through its subsidiary, Salmones Maullín Ltda.

122

Salmones Chiloé S.A. > Company that produces and processes Pacific salmon. Its growth stage operations take place principally on Isla de Chiloé and its processing principally through its Procesadora Hueñocoihue SpA subsidiary, located in Dalcahue, Chiloé. The company has expanded vertically into the freshwater stages and is, therefore, able to supply its own requirements through its subsidiary, Piscicultura Aquasan S.A. Antarfish S.A. > Company that provides administrative services. Its subsidiaries are Servicios Aguas Claras S.A. and Procesadora Aguas Claras Ltda, the latter with a processing plant in Calbuco. Its processing capacity is hired principally by subsidiaries of Empresas AquaChile S.A. for the processing of trout. Empresas AquaChile S.A. also develops its activities through its Inversiones Antarfish Limitada subsidiary which, in turn, controls the following companies that are an integral part of the salmon and trout farming process. Aguas Claras S.A. > Company with sufficient seawater resources to sustain its current output and future growth. In the case of freshwater, it also has the necessary resources to supply its requirements, either from its own resources or by subcontracting capacity from AquaChile S.A. and Aquasan S.A. for some of the freshwater production stages. Its processing plant is located in Calbuco area and has sufficient capacity to process is own harvests. Antarfood S.A. > Processing plant in Chonchi on Isla de Chiloé. This plant was designed to provide services to third parties but most of its processing capacity is currently being used by related companies such as Aguas Claras S.A. and Empresas AquaChile S.A.

III.- MARKETING AND SALEs IN THE UNITED STATES AquaChile Inc. > Subsidiary established in Miami, United States, and dedicated to the marketing and sale of the products of Empresas AquaChile S.A. and its subsidiaries in the United States.

IV.-PRODUCTION OF TILAPIA Grupo ACI S.A. (AquaCorporación Internacional) > Costa Rica-based company that has participated in the tilapia industry for over 20 years. Its commercial strategy focuses on the supply of fresh tilapia to large supermarket chains, distributors and restaurant chains in the United States. The principal activity of Grupo ACI S.A. is the production and sale of tilapia, a farmed freshwater fish. Its installations (tilapia nursery and processing plant) are located in Cañas in Costa Rica's Guanacaste Province. Grupo ACI S.A.,

in turn, controls the following companies: RFA Inc., a distribution company that operates in Florida, United States; Terrapez S.A., a tilapia processing company; Administración de Acuicultura S.A; and Aquapanamá S.A. These companies' activities are complementary since AquaCorporación Internacional S.A. produces tilapia at its own farms in Cañas while processing is carried out by Terrapez S.A. at its own installations which are also located in Cañas. Most output is sold to RFA Inc. for its marketing throughout the United States and in Canada. Administración de Acuicultura S.A. provides administrative services to the different companies of Grupo ACI S.A.

Aquapanamá > Subsidiary of Grupo ACI established in Panama in 2009 to farm and export tilapia. It holds the only three concessions for tilapia farming on Lake Bayano, which have a total area of 516 hectares.

V.- FISH FEED PRODUCTION Alitec Pargua S.A. > Company through which AquaChile in partnership with Biomar, a leading international animal nutrition company, produces fish feed in Pargua in Chile's Los Lagos Region. The plant has an annual production capacity of 126,000 tonnes. Biomar Aquacorporation Products > Company through which Grupo ACI, in partnership with Biomar, produces fish feed in Cañas in Costa Rica's Guanacaste Province. The plant has an annual production capacity of 50,000 tonnes.

VI.- AFFILIATED COMPANIES Salmones Chaicas S.A. > Advanced-technology recirculation hatchery, located 30 km from Puerto Montt on the Carretera Austral, for the production of Atlantic salmon broodfish, eggs and smolts. It has an initial capacity to produce 120 million eggs and 4.2 million smolts, rising to 12.6 million smolts at full capacity. Empresas AquaChile has invested US$1,300,000 in this company and has an option to purchase the remaining 80.3% of Salmones Chaicas S.A. as from April 2017. In addition the other shareholders in Salmones Chaicas S.A. have options to sell all their shares to Empresas AquaChile as from 2018. Fiordo Austral S.A. > Fishing company with five facilities, located between the Biobío and Aysén Regions, for processing hydrobiological resources from the salmon and fishing industries. It produces principally salmon meal and oil and meal and oil from pelagic fish. In addition, it has a line of value-added products such as meals and oils with specific treatments, soluble fertilizers and blocks of frozen salmon for human and animal consumption. AquaChile holds a 6.12% stake in this company.

123

memoria empresas aquachile

ORGANIZATIONAL STRUCTURE AT 31 DECEMBER 2013

33.04%

fondo de inversi贸n privado patagonia

holding salmones s.a.

18.15%

cap.07

99.9999%

empresas aquachile s.a.

aquachile s.a.

0.0273%

99.9727% 99.9980%

aguas claras s.a.

8.6%

49.0000%

salmones australes s.a.

99.50%

servicios aguas claras s.a.

99.8751%

aquachile inc.

0.000011% 0.0001%

inversiones antarfish ltda.

99.99938%

antarfish s.a.

100%

0.1249%

99.999989%

inversiones salmones australes ltda.

50.9999%

58.382% (*)

6.12% 99.99%

0.0020% 0.0001% 99.9908%

99.9816%

antarfood s.a.

0.0184%

procesadora aguas claras s.a.

0.0092% 0.126% 0.126%

124

aquainnovo s.a.

0.126%

(*) 0.00002%

alitec pargua s.a.

fiordo austral s.a.

91.40%

piscicultura aquasan s.a.

99.93%

cultivos acuícolas el volcán ltda.

0.07%

laboratorio antares s.a. empresas aquachile

100.00%

procesadora hueñocoihue spa.

99.946%

salmones maullín ltda.

0.054%

salmones chaicas s.a.

100.00%

aquacorporación intl s.a.

100.00%

terrapez s.a.

100.00%

aquacultura del pacífico s.a.

7.00%

salmones cailín s.a.

grupo aci s.a.

19.7%

salmones maullín s.a.

50.00%

salmones chiloé s.a.

79.95857%

33.92%

99.99998%

14.89% 93.00%

otros inversionistas

41.618%

inversiones acuícolas s.a.

100.00%

RFA Inc.

100.00%

aquapanama s.a.

50.00%

biomar aquacorporation products s.a.

22.50%

aquasea de costa rica s.a.

125

MATERIAL NEWS

Annual report AquaChile 2013

8.1 Material news

144

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material news cap.08

MATERIAL NEWS Chapter 8.1

On 12 April 2011, Empresas AquaChile S.A. was included on the Securities Register of Chile's Superintendency of Securities and Insurance (SVS) under N째 1.069.

On 19 May 2011, Empresas AquaChile S.A. raised US$374 million in its initial public offering. The operation was led by IM Trust and Banchile Inversiones as underwriters.

On 24 June 2011, Empresas AquaChile S.A. and some of its subsidiaries prepaid US$163.2 million to their Creditor Banks as stipulated in the Liability Reprogramming Contract of 7 September 2009. At the same time, they renegotiated the conditions of the outstanding debt of US$242.5 million. Certain financial covenants were established. These refer to the maintenance of a maximum level of financial leverage, a minimum level of coverage of financial costs and a maximum ratio of net financial debt to EBITDA14, calculated on the basis of the Consolidated Financial Statements of Empresas AquaChile S.A. at 31 December 2011 and 31 March, 30 June, 30 September and 31 December of the following years.

covenants

2011*

2012

2013

2014

Financial leverage

2015

2016 2018

1.25x

1.20x

1.10x

1.0x

Coverage of interest

4.5x

Net fin. debt/EBITDA

2.5x

2.2x

2.0x

1.75x

* Measured at 31 December 2011.

128

19 EBITDApre FV adj. (henceforward EBITDA): Revenues from ordinary activities less sales costs (in other words, gross earnings pre fair value adjustment), less administrative costs, less distribution costs, plus adjustment for depreciation and amortization. All these figures are obtained directly from the company's Consolidated Financial Statements and Management Discussion and Analysis.

memoria empresas aquachile

cap.08

On 26 February 2013, an Extraordinary Shareholders' Meeting recognized an increase of US$286,481,801.81 in the Company's equity corresponding to the greater value obtained in the share placement, in accordance with Article 26 of Law N째 18.046. Among other decisions, the Meeting also agreed to: 1.- Increase the Company's equity by US$120,000,000 from US$523,062,949.81, divided into 1,200,000,000 ordinary, nominative shares without nominal value, to US$643,062,949.81, divided into 1,350,000,000 ordinary, nominative shares without nominal value, through the issue of 150,000,000 ordinary, nominative shares without nominal value to be totally subscribed and paid in cash within three years as from the date of the Meeting; 2.- Empower the Company's Board of Directors to issue all the 150,000,000 shares corresponding to the said capital increase and to agree the terms of the issue and proceed to their placement on one or more occasions within a period of 180 days as from 26 February 2013, freely setting the final placement price, whether higher or lower than the reference price of 363 Chilean pesos reported to the Meeting and using for this purpose the Order Book Auction mechanism in accordance with Section 2.4. of the Santiago Stock Exchange's Manual of Share Operations; 3.-Offer the new shares preferentially to each of the Company's shareholders during a period of 30 days for the subscription of the corresponding new shares, pro rata to their stake on the fifth working day prior to the start of the right of preferential option to subscribe the shares; 4.- Modify the Company's by-laws to reflect the changes in the articles on equity as a result of the said capital increase; 5.- Empower the Board of Directors, with the possibility of delegating to the CEO or his agents, to materially issue the shares of the new issue and request their inscription in the Securities Register of Chile's Superintendency of Securities and Insurance (SVS), among the other powers required to implement the issue and placement of the shares. In addition, the Meeting approved the modifications to AquaChile's by-laws required as a result of the said capital increase. On 8 March 2013, Empresas AquaChile S.A. obtained a US$30 million line of credit for export financing from Banco DnB Group, Agencia en Chile for an initial period of 60 days, pending the establishment of collateral, and extendable to 360 days at an annual interest rate of 2.74% for the first 60 days and, for its long-term renewal, at 180-day Libor plus a spread.

130

The contract permits early voluntary repayments and establishes certain obligations as regards the provision of information and actions and prohibitions that are usual under agreements of this type in favor of creditor banks. In addition, guarantees were established on ten aquaculture concessions held by AquaChile S.A., Salmones Chiloé S.A. and Salmones Cailín S.A. These refer to the maintenance of a maximum level of financial leverage, a minimum level of coverage of financial costs and a maximum ratio of net financial debt to EBITDA, calculated on the basis of the Consolidated Financial Statements of Empresas AquaChile S.A. at 31 December 2011 and 31 March, 30 June, 30 September and 31 December of the following years. covenants

2013

2014

2015

2016 2018

Financial leverage

1.20x

1.10x

1.0x

Interest coverage

4.5x

Net fin. debt / EBITDA

2.2x

2.0x

1.75x

* Measured at 31 December 2011.

Notwithstanding this, the Company has, in view of the low prices faced by the Chilean salmon industry, reached agreement with its creditor banks to suspend measurement of the interest coverage and net financial debt/ EBITDA covenants through to December 2013, inclusive, and in the case of the financial leverage covenant, its suspension in June and September 2013. On 21 March 2013, a meeting of the Board of Directors took place at which it was agreed to call a General Shareholders' Meeting for 18 April 2013. On 18 April 2013, a General Shareholders' Meeting took place at which the following agreements were adopted: approval of the Annual Report, Statement of Financial Position, Income Statements and Report of the External Auditors, all for the year ended on 31 December 2012; the setting of fees of members of the Board of Directors for 2013; approval of the expense statement of the Board for 2012; the setting of fees of members

of the Directors' Committee and the budget of the Directors' Committee for 2013; appointment of PricewaterhouseCoopers as external auditors for the 2013 financial statements; and use of the El Mostrador newspaper for Company notices. On 25 July 2013, an extraordinary meeting of the Board of Directors took place at which the following agreements were adopted: i) to request the inscription on the Securities Register of the SVS of the 150,000,000 ordinary, nominative shares without nominal value in Empresas AquaChile S.A. corresponding to all the shares which the Extraordinary Shareholders' Meeting agreed to issue to be paid in cash, and to take all the steps required for this purpose; and, ii) to offer all the shares issued preferentially to the shareholders in Empresas AquaChile S.A. who were inscribed on its Shareholder Register as of the fifth working day prior to the publication of the notice marking the start of the preferential option, for a period of 30 days as from the said date of the start of the preferential option, pro rata to their stake in the Company. The shares offered during the 30-day preferential option period will have the same price (henceforward, the Placement Price). The Placement Price will be freely determined by the Board of Directors, which may use the Order Book Auction mechanism as established in Section 2.4.A of the Santiago Stock Exchange's Operations Manual or the “Manual” in which case it will consider the demand shown by investors. On 10 September 2013, Official Memo N° 20366/2013 was received from the SVS. In brief, this indicated that: 1-. Given that more than 180 days had passed since the Shareholders' Meeting which empowered the Board of Directors to set the placement price, inscription of the shares requested by the Company could not take place until a new Shareholders' Meeting had set the placement price or empowered the Board of Directors to do so; 2-. In the case that the "Order Book Auction" mechanism were used to set the placement price, "documentation must be attached showing the express and concrete renouncement of one or more shareholders in order to effectively reconcile stock market requirements with those referring to the price for the exercise of the preferential option".

131

SUMMARY OF COMMENTS ANd PROPOSALS PUT FORWARD BY SHAREHOLDERS AND THE DIRECTORS' COMMITTEE Annual report AquaChile 2013

9.1 Comments and proposals

151

Summary of comments and proposals put forward by shareholders and the directors' committee

COMMENTS AND PROPOSALS Chapter 9.1

At the General Shareholders' Meeting held on 18 April 2013, AFP Habitat indicated its vote opposing the appointment of PricewaterhouseCoopers as the Company's auditors, arguing that: "In view of the importance of the audit function and because public trust is involved, this company has been sanctioned by the Santiago Appeals Court and the Superintendency of Securities and Insurance (SVS) for infringements of regulation and its duty to exercise care in auditing Empresas La Polar, with the consequences known to all".

135

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136

financial information

MANAGEMENT DISCUSSION AND ANALYSIS

Annual report AquaChile 2013

memoria empresas aquachile

Management discussion and analysis of the consolidated financial statements as of 31 december 2013 (Figures in ThUS$) cap.01

The Consolidated Financial Statements of Empresas AquaChile S.A. for the year ended on 31 December, 2013, prepared in accordance with International Financial Reporting Standards (IFRS), are analyzed below. All figures are in thousands of US dollars. Empresas AquaChile S.A. and its subsidiaries farm and process salmon, trout and tilapia which they sell in different markets. Through its subsidiaries, Empresas AquaChile also undertakes the following activities: (i) genetic research and consultancy for the aquaculture industry; (ii) production of salmon and trout eggs and smolts; and (iii) production of fish feed for the salmon and tilapia industries.

HIGHLIGHTS OF THE PERIOD

In 2013, AquaChile's volume of sales of Atlantic and Pacific salmon showed important growth while the volume of tilapia sales showed a smaller expansion and, in the case of trout, a small decrease. As a result, the value of the Company's consolidated sales was up by 80% on 2012. The export prices of Atlantic salmon and trout performed positively in 2013, rising by 30% and 18%, respectively, as compared to 2012. This benefited the species in which AquaChile's output showed the strongest recovery in 2013. In the first half of the year, part of the Atlantic salmon and trout biomass was affected by an increase in the presence of caligus1 in the industry and, particularly, certain production neighborhoods where AquaChile had its biomass. This resulted in increased costs for treatment of the parasite, a higher feed conversion factor and lower growth in those centers that were most heavily affected, with a decline in harvest weights and in the dilution of fixed costs and a commercially suboptimum product mix.

in the value of sales of Atlantic salmon (US$217 million) and Pacific salmon (US$67 million). At the operational level, accumulated EBITDA pre fair value adjustment2 was -US$15.5 million as compared to -US$4.3 million in 2012. Higher revenues in the salmon and trout business reflected increased volumes of sales of Atlantic and Pacific salmon and higher market prices for Atlantic salmon and trout, factors which were partly offset by a drop in the average market price for Pacific salmon and in the volume of trout sales as compared to 2012. As a result, accumulated operating income (EBIT pre fair value adjustment3) in the salmon segment was -US$38.7 million as compared to -US$19.3 million in 2012. Revenues in the tilapia business increased in 2013 due to higher sales volumes in Costa Rica and Panama which were offset by a small drop in market price and an increase in raw material costs in Costa Rica. Operating income (EBIT pre fair value adjustment) reached -US$4.3 million as compared to -US$1.4 million in 2012. As of 31 December 2013, the Company's net financial debt reached US$276.5 million, up from US$247.9 million at 31 December 2012. This increase was principally the result of an increase in financial liabilities which, in 2013, strengthened administration of the Company's working capital and allowed it to postpone sale of stock of end products in order to optimize export returns, taking advantage of inventory and/or end products to better time their marketing.

ANALYSIS OF RESULTS

Table N째1 shows the main components of the Consolidated Income Statement of Empresas AquaChile S.A.

In the second half of the year, output increased, raw material costs dropped and both biomass growth and feed conversion factor improved, gradually returning to historic levels.

As of 31 December 2013, AquaChile's sales were up by 80% on 2012 while operating costs showed an increase of 86%. This gave a pre fair value adjustment operating loss (EBIT pre FV adj.*) at 31 December 2013 of US$43.0 million as compared to a loss of US$20.7 million in 2012.

As from the last quarter, EBITDA gradually showed a significant improvement, reflecting the increase in output as well as in prices. In the last quarter, EBITDA reached US$19.2 million as compared to -US$1.6 million in the previous quarter and -US$17.8 million in the last quarter of 2012.

Consolidated EBITDA pre fair value adjustment at 31 December 2013 was -US$15.5 million as compared to -US$4.3 million in 2012. This was principally the result of lower margins on trout, Pacific salmon and tilapia as compared to the previous year. In the case of Atlantic

1.1.

ANALYSIS OF THE PERIOD

As of 31 December 2013, Empresas AquaChile showed a loss of US$9.5 million as compared to a loss of US$43.2 million in 2012. This positive change was largely the result of higher sale prices for Atlantic salmon and trout, which were partly offset by higher production costs for Atlantic salmon and trout and, to a lesser extent, Pacific salmon. Empresas AquaChile's consolidated sales revenues as of 31 December 2013 totaled US$737.9 million, up by 80% on 2012 (US$328.3 million), due principally to an increase

1 Caligus is a crustacean parasite which exists naturally in marine environments and attacks salmon and other marine species where it completes its life cycle. Higher densities of this parasite can reduce the growth of salmon and their resistance to diseases. Treatments exist through which a farm's level of infection can be controlled. 2 EBITDA pre FV adj. (henceforward EBITDA): Revenues from ordinary activities less sales costs (in other words, gross earnings pre fair value adjustment), less administrative costs, less distribution costs, plus adjustment for depreciation and amortization expenses. All these figures are obtained directly from the Company's Income Statement and Note 16 (Property, Plant and Equipment) of its Financial Statements.

EBIT pre FV adj. (henceforward EBIT): Revenues from ordinary activities less sales costs (in other words, gross earnings pre fair value adjustment), less administrative costs, less distribution costs. All these figures are obtained directly from the Company's Income Statement.

140

Table N°1

Consolidated Income Statement ThUS$ Revenues from ordinary activities Operating costs (1) Operating margin

4Q13

4Q12

2013

2012

∆AoA

202,387

56,101

∆QoQ 261%

737,875

409,541

80%

-175,286

-67,443

160%

-720,853

-388,094

86%

27,102

-11,342

17,022

21,447

-21%

-32,523

-25,734

26%

-15,501

-4,287

-262%

Other operating costs and expenses (2)

-7,912

-6,415

EBITDA pre FV adj.

19,190

-17,757

23%

Adjustment for depreciation and amortization expenses

-7,287

-4,066

-27,473

-16,401

68%

EBIT pre FV adj.

11,902

-21,823

-42,974

-20,687

-108%

79%

Net effect of fair value adjustment of biomass (3)

24,716

-3,774

47,693

-44,292

EBIT post FV adj.

36,619

-25,597

4,718

-64,980

Financial costs

-2,679

-2,243

19%

-9,269

-8,488

162

1,568

-90%

589

2,548

-77%

Financial income Other non-operating income/expenses (4) Income tax expenses Net income

-1,151

2,756

-5,998

2,916

-7,241

6,091

505

24,848

-98%

25,709

-17,424

-9,454

-43,156

78%

(1) “Sales costs" less “Adjustment for depreciation and amortization expenses”. (2) “Distribution costs” plus “Administrative expenses”. (3) “Fair value biological assets harvested and sold” plus “Fair value biological assets of the period". (See Note 10 of Financial Statements, Biological Assets.) (4) “Other revenues by function” plus “Other expenses by function” plus “Exchange-rate differences” plus "Result from realignment units”. Note: All these figures are obtained directly from the Company's Income Statement and Note 16 (Property, Plant and Equipment) of its Financial Statements. Source: AquaChile

Consolidated EBITDA pre fair value adjustment4 at 31 December 2013 was -US$15.5 million as compared to -US$4.3 million in 2012. This was principally the result of lower margins on trout, Pacific salmon and tilapia as compared to the previous year. In the case of Atlantic salmon, volumes increased but with a negative contribution, although the margin on this species did show an improvement on 2012. It is important to note that, in the last quarter of 2013, EBITDA reached US$19.2 million. This compared positively with -US$1.6 million in the previous quarter and (*): To measure its financial performance under IFRS, AquaChile uses the EBIT pre fair value adjustment parameter (before fair value adjustments to fish biomass). Fair value biomass adjustments have their origin in the IFRS norm on fair value valuation of biomass. Changes in prices and biomass composition during the period may affect its value. AquaChile reports its EBIT pre fair value adjustment in order to reflect the performance of its operations during the period.

It is important to note that the biomass of fish under production and which has reached marketable weights is valued at fair value in accordance with IFRS and, for this purpose, AquaChile uses a market price obtained from the Company's most recent sales in the previous month and/or the prices observed in the market that are suitable for application to future sales. In valuing the biomass, AquaChile also considers products of different types, focusing on those products which it mainly sells and where, to the best of its knowledge, there is not a niche that would allow it to obtain higher returns. In the case of Atlantic salmon, the Company uses Trim D fillet and, for trout and Pacific salmon or coho, headed and gutted (HG) fish. It is also important to note that the species farmed and marketed by the Company include Pacific salmon or coho, which has a marked seasonal behavior as a result of which farm stocking normally takes place between November and March of each year and harvesting between October and February when the fish reach commercially optimum weight. However, towards the end of December or in the fourth quarter of each year, the fish under production normally reach average weights in excess of 2.5 kg WFE at which it is the Company's policy to classify them for fair value valuation, implying an impact on its results due simply to the natural growth of the biomass.

reflected factors that included higher market prices as well as a reduction in raw material costs for some species. As of 31 December 2013, the Company showed a profit due to the net effect of fair value biomass valuation of US$47.7 million as compared -US$44.3 million in 2012. This reflected principally: i) recognition of an adjustment for valuation of the fish biomass under production of US$34.9 million, up from -US$0.09 million at December 2012, related principally to higher market prices for Atlantic salmon and trout as compared to 2012; ii) a net reversal for US$4.6 million of the provision for lower sale price of the end product established in December 2012; iii) reversal for US$15.8 million of the deterioration test5 applied in December 2012 to the biomass not subject to fair value; and iv) recognition due to fair value adjustment of a higher cost of harvested biomass for US$7.6 million as compared to US$23.8 million in 2012, due principally to the difference between the prices at which Pacific salmon biological assets were valued in December 2011 and 2012. (See Note 10, Biological Assets) In the case of possible adverse situations that could affect the salmon market and/or the sanitary condition of the fish, the Company carries out a test of deterioration of the biomass under production projected through to its harvest, whose net accumulated effect is presented in its results.

For fish with a lower weight than that established for the application of fair value, their accumulated cost at the closing date is used. Nonetheless, in the case of possible adverse situations that could affect the salmon market and/or the sanitary condition of the fish, the Company carries out a test of deterioration of the biomass under production projected through to its harvest, whose net accumulated effect is presented in its results.

141

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Management discussion and analysis of the consolidated financial statements as of 31 december 2013 (Figures in ThUS$) cap.01

Table N째2

Fair value analysis Atlantic salmon 2013 2012

(ThUS$) Fair value of the period

18,003

Pacific salmon 2013 2012

Trout

Total

2013

2012

2013

-820

20,867

-17,969

55,271

2012

-1,699

16,400

16,613

-309

15,052

528

3,202

-304

34,867

-85

1,390

-1,390

1,348

-1,348

1,831

-1,831

4,570

-4,570

15,834

-15,834

15,834

-15,834

Fair value of fish harvested and sold

-3,925

1,224

-4,141

-18,349

488

-6,679

-7,578

-23,804

Net fair value

14,078

-475

12,259

-19,169

21,355

-24,648

47,693

-44,292

Adjustment for valuation of fish biomass under production Net sale value of end product Deterioration test of biomass not subject to fair value

-20,488

Source: AquaChile

Operating Costs and Expenses showed an increase of 26% over the previous year. Administrative expenses were up by 6% while distribution costs rose by 54%, due to the increase in the Company's marketing and sales activity and increased expenditure on warehousing as a result of the storage and postponed sale of end products, a strategy implemented in order to increase margins. Non-operating income reached -US$14.7 million as compared to -US$3.0 million in 2012. This was explained principally by an extraordinary loss of US$6.0 million related to damage to an Atlantic salmon farming center caused by high tides in May 2013. In addition, financial costs were up by US$0.8 million due to the increase in financial liabilities. A provision of US$0.5 million was made for income tax expenses as compared to a provision of US$24.8 million in 2012. The higher figure for 2012 was explained principally by an increase in the corporate income tax rate from 17% to 20%, which implied recognition in September 2012 of a larger gain for deferred taxes. In 2013, the Company reported a loss of US$9.5 million as compared to a loss of US$43.2 million in 2012. 2.1.

Analysis of sales

by 80% on 2012. This increase was explained principally by a higher value of sales for all the species produced by the Company which was partly offset by a drop in sales of fish feed at its Alitec Pargua S.A. subsidiary. Table N째3 compares the period accumulated to 31 December 2013 with the same period in 2012, showing an increase in the relative contribution of Atlantic and Pacific salmon to the Company's sales mix and a drop in the relative share of trout, tilapia and fish feed. This was explained by the increase in the volume and export price of Atlantic salmon and in the volume of sales of Pacific salmon, reflecting the Company's strategy of postponing sale of the 2012/2013 season in order to obtain higher margins in 2013. In 2013, the salmon and trout businesses together accounted for 77% of total revenues from the sale of end products to third parties. This compared to 65% in 2012. In 2013, volume of sales of Atlantic and Pacific salmon showed an important increase, rising by 215% and 102%, respectively, while the volume of tilapia sales was up by 12% and trout sales were down by 5%. In addition, the average sale prices of Atlantic salmon and trout increased by 30% and 18%, respectively, as compared to the same period in the previous year while, in the cases of both Pacific salmon and tilapia, there was a drop of 1%.

AquaChile is characterized by the diversification of its products and markets. Accumulated ordinary revenues at 31 December 2013 reached US$737.9 million, up Table N째3

Consolidated sales by business area

2012 atlantic salmon trout pacific salmon tilapia feed others

142

Source: AquaChile

(US$ million) 70 128 68 62 48 34

2013

(US$ million) 288 143 134 69 42 62

2012

% 17 31 16 15 12 8

2013

% 39 19 18 9 6 8

Table N°4 shows variations in consolidated sales, indicating price and volume effects for each business unit or segment.

endorsement awarded by the Seafood Watch program of the Monterey Bay Aquarium, which helps consumers choose seafood products that have lesser impacts on oceans, thereby contributing to care for the environment.

Table N°4

Analysis of variations in consolidated sales (price and volume effect) (US$ million) ∆ volume price sales 2013 738

sales 2012 21

197

68 -7

-1

-6

other revenues

feed

tilapia

pacific salmon

trout

atlantic salmon

410

Source: AquaChile

Table N°5 sets out the distribution of the Company's sales by segment and market, showing the increase in the value of sales of all the species produced by the Company. 2.2.

Analysis of segments

In the Atlantic salmon business, revenues increased by 308% (US$217 million) in 2013 as compared to 2012, reflecting a 215% increase in volume of sales (equivalent to an additional 35,026 tonnes WFE) and a 30% increase in sale price. The higher sale price was offset by an increase in volume of lesser quality and weight as compared to 2012 due to a greater presence of caligus in the first half of 2013. Accumulated EBIT pre FV adj. was -US$18.1 million, reflecting an increase in raw material costs due to the greater presence of caligus in the first half of the year and higher mortality from SRS6 during the summer. Accumulated EBIT pre FV adj./ kg WFE was -US$0.35/kg WFE (as compared to -US$0.71/kg WFE at the same date in the previous year). EBIT/kg WFE for Atlantic salmon was also affected by implementation of the Verlasso® salmon project developed jointly by AquaChile and the DuPont® multinational company. This project is still at the market test stage, implying higher production costs as well as the branding and marketing expenditures required to introduce this new product category and affecting the segment's average EBIT/kg WFE. It is important to note that, in 2013, Verlasso® became the world's first and only farmed salmon to receive the Good Alternative

In the trout business, revenues were up by 12% (US$15.1 million) as compared to 2012, reflecting an 18% increase in sale price that was partly offset by a 5% drop in sales volume (equivalent to a reduction of 1,533 tonnes WFE). The price increase was also offset by an increase in volume of lesser quality and weight as compared to 2012 due to a greater presence of caligus and SRS in the first half of 2013. Accumulated EBIT pre FV adj. was -US$28.8 million, due principally to higher raw material costs as a result of increased mortality in some centers that were affected by SRS, the impact of the increase in caligus and higher harvesting costs. Accumulated EBIT pre FV adj./kg WFE was -US$0.97/kg WFE (as compared to -US$0.54/kg WFE at the same date in the previous year). In the Pacific salmon or coho business, revenues rose by 99% (US$66.8 million) as compared to 2012, reflecting a 102% increase in sales volume (equivalent to an additional 17,753 tonnes WFE) which was partly offset by a 1% drop in sale price. Accumulated EBIT pre FV adj. reached US$8.3 million while accumulated EBIT pre FV adj./kg WFE reached US$0.23/kg WFE (as compared to US$0.52/kg WFE at the same date in the previous year). This lower margin was explained principally by an increase in raw material costs as a result of a temporary increase in mortality from SRS in some centers during the 2013/2014 season. In the Tilapia business, revenues were up by 10% (US$6.3 million) as compared to 2012, reflecting a 12% increase in sales volume (equivalent to an additional 2,464 tonnes WFE) which was offset by a 1% drop in sale price. Accumulated EBIT pre FV adj. was -US$4.3 million, due principally to a weaker performance by Aquapanamá where costs increased in 2013, although improved fish genetics were reflected in a better performance as regards output and production costs. In Costa Rica, the raw material costs of tilapia production increased, due principally to higher feed prices and a higher conversion factor related to rains that temporarily increased water turbidity. Accumulated EBIT pre FV adj./kg WFE was -US$0.18/kg WFE (in comparison to -US$0.06/kg WFE at the same date in the previous year).

STATEMENT OF FINANCIAL POSITION

The principal variations in the Consolidated Statement of Financial Position as of 31 December 2013 as compared to 31 December 2012 are summarized below: Total assets show an increase of US$67.2 million, up by 8.1% on 31 December 2012. This is explained by an increase of US$41.5 million in current assets and of US$25.8 million in non-current assets. The increase in current assets is explained principally by an increase of US$24.1 million in Commercial Debtors and Other Current Receivables related to higher sales in the salmon and trout segment; an increase of US$18.0 million in Current Biological Assets and Inventories related principally to the fair value revaluation of the fish biomass; and an increase of US$5.0 million in Cash and Cash Equivalents.

6 Salmon Rickettsial Septicaemia (SRS) is a disease caused by an intracellular bacteria, Piscirickettsia salmonis, which results in septicemia and has been an important cause of mortality in the Chilean salmon industry.

143

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Management discussion and analysis of the consolidated financial statements as of 31 december 2013 (Figures in ThUS$) cap.01

Table N째5

Sales by segment and market 2013 Atlantic salmon (1)

US market (US$ million)

EU market (US$ million)

Asian market (US$ million)

Chilean market (US$ million)

Others (US$ million)

Total (US$ million)

141

288

143

Pacific salmon (1)

134

Other salmon (2)

Tilapia (1)

Other tilapia (3)

Feed

Trout (1)

Others Total value of sales

1264

194

738

2012 Atlantic salmon (1)

Trout (1)

128 68

Pacific salmon (1)

Other salmon (2)

Other tilapia (3)

Feed

Tilapia (1)

Others Total value of sales

129

136

410

218

VARIATION 2013 / 2012 Atlantic salmon (1)

106

Trout (1)

-1

Pacific salmon (1)

Other salmon (2)

-4

-6

Tilapia (1) Other tilapia (3) Feed Others Total value of sales

-1

135

328

Source: AquaChile (1)

Sales of the Company's own end product. Considers a mix with the respective sales clauses and includes fillets, portions, HG (headed and gutted) and gutted head included (HON) in fresh and frozen formats of the different calibers sold.

(2)

Other sales by the Company such as organic waste, eggs, smolts, third-party raw materials, etc.

(3)

Other sales by the Company such as skin, scales, breaded products, tilapia meal and oil, third-party raw materials, tilapia feed, etc.

The increase in non-current assets is explained principally by an increase of US$33.8 million in Property, Plant and Equipment related to the investments implemented during the period; the effect of the proportional consolidation of Biomar Aquacorporation Products7; and the change of criterion for valuation of the Company's land from the cost to the revaluation model, applying for this purpose International Accounting Standard (IAS) 16. External experts were hired to carry out the revaluations and established reasonable values for the different properties. This accounting change had an effect that totaled US$23.7 million (US$8.2 million for Grupo ACI and US$15.5 million for the parent company and its subsidiaries in Chile), which is included in Property, Plant and Equipment. The increase in this item is partly offset by a reduction in Deferred Tax Assets as a result of the tax loss Until December 2013, the equity method was used for Biomar Aquacorporation Products, a subsidiary for the production of tilapia feed in which Grupo ACI, with a 50% stake, is partnered by Biomar Aquaculture Corporation. As from December 2013, however, Grupo ACI modified its shareholders' agreement with Biomar Aquaculture Corporation in Biomar Aquacorporation Products, giving the partners an equal number of directors. As a result, the two partners are on an equal footing as regards the Company's administration, generating a joint agreement.

144

reduction seen in 2013 and the absence of deterioration of the fish biomass as of 31 December 2013. Total liabilities are up by US$60.3 million which represents an increase of 14% on their level at 31 December 2012. This is explained by an increase of US$50.9 million in current liabilities and of US$9.4 million in non-current liabilities. The increase in current liabilities is explained by i) an increase of US$22.5 million in Other Current Financial Liabilities, due principally to the reclassification of debt repayments over the next 12 months from long to short-term; and ii) an increase of US$13.1 million in Commercial and Other Accounts Payable and an increase in Accounts Payable to Related Companies, which include the effect of the proportional consolidation of Biomar Aquacorporation Products.

Table N°6

Analysis of sales volume, sales value and margin by segment 4Q13

4Q12

∆ QoQ

2013

2012

∆ AoA

Atlantic salmon Sales volume Sales Average price EBIT EBIT/kg WFE

Tonnes WFE

14,350

5,292

171%

51,293

16,267

215%

ThUS$

87,690

21,555

307%

287,838

70,464

308%

US$/kg WFE

6.11

4.07

50%

5.61

4.33

30%

ThUS$

8,056

-4,859

-18,108

-11,512

-57%

US$/kg WFE

0.56

-0.92

-0.35

-0.71

50% -5%

Trout Sales volume Sales Average price EBIT EBIT/kg WFE

Tonnes WFE

5,580

7,916

-30%

29,716

31,249

ThUS$

33,474

26,583

26%

142,970

127,863

12%

US$/kg WFE

6.00

3.36

79%

4.81

4.09

18%

ThUS$

1,068

-13,392

-28,838

-16,932

-70%

US$/kg WFE

0.19

-1.69

-0.97

-0.54

-79%

Tonnes WFE

8,298

2,685

209%

35.171

17,418

102%

ThUS$

38,425

8,215

368%

134,294

67,506

99%

US$/kg WFE

4.63

3.06

51%

3.82

3.88

-1%

ThUS$

5,601

-1,593

8,259

9,117

-9%

US$/kg WFE

0.68

-0.59

0.23

0.52

-55%

PACIFIC SALMON Sales volume Sales Average price EBIT EBIT/kg WFE Tilapia Sales volume Sales Average price EBIT EBIT/kg WFE

Tonnes WFE

4,620

5,007

-8%

23,806

21,342

12%

ThUS$

12,936

14,214

-9%

68,508

62,172

10%

US$/kg WFE

2.80

2.84

-1%

2.88

2.91

-1%

ThUS$

-2,823

-1,979

-43%

-4,288

-1,360

-215%

US$/kg WFE

-0.61

-0.40

-55%

-0.18

-0.06

-183%

Tonnes WFE

32,848

20,900

57%

139,986

86,276

62%

ThUS$

172,525

70,567

144%

633,610

328,006

93%

5.25

3.38

56%

4.53

3.80

19%

11,902

-21,823

-42,974

-20,687

-108%

0.36

-1.04

-0.31

-0.24

-28%

Total Sales volume Sales Average price EBIT EBIT/kg WFE

US$/kg WFE ThUS$ US$/kg WFE

Fuente: AquaChile

Table N°7

Summary of Statement of Financial Position (ThUS$) Current assets Non-current assets Total assets

2013

2012

475,711

434,232

423,345

397,594

899,056

831,826

Current liabilities

227,429

176,554

Non-current liabilities

268,149

258,739

Total liabilities

495,578

435,293

Equity

394,173

387,654

Non-controlling interest Total liabilities and equity

Fuente: AquaChile

9,305

8,879

899,056

831,826

The increase in non-current liabilities is explained principally by an increase of US$11.2 million in Other Non-Current Financial Liabilities, which includes the effect of the proportional consolidation of Biomar Aquacorporation Products. The Company's financial liabilities include covenants calculated with respect to the Consolidated Financial Statements of Empresas AquaChile S.A. at 31 December 2011 and 31 March, 30 June, 30 September and 31 December of subsequent years. These refer to the maintenance of a maximum level of net financial leverage, a minimum level of coverage of net financial expenses and a maximum ratio of net financial debt to EBITDA. Nonetheless, in view of the low prices faced by the salmon industry in 2012 and early 2013, the Company reached an agreement with its creditor banks to suspend measurement of those covenants that include EBITDA in their calculation until December 2013 inclusive.

145

memoria empresas aquachile

Management discussion and analysis of the consolidated financial statements as of 31 december 2013 (Figures in ThUS$) cap.01

Table 8.

Financial covenants Covenants

2013

2014

2015

Financial leverage1

1.20x

1.10x

1.00x

2016 - 2018 1.00x

AS OF 31 DECEMBER

2012

2013

Financial leverage1

1.18

1.07

It, therefore, complies. (1)

("Total current liabilities" plus "Total non-current liabilities" less "Cash and cash equivalents")/("Total equity").

As of 31 December 2012, Empresas AquaChile S.A. and the debtor companies had complied fully with the obligations established and had maintained all

significant aspects of the declarations and undertakings established in the Liability Reprogramming Contract. It should be noted that, on 23 December 2013, the Company made a capital repayment of US$7.5 million on its syndicated loan, equivalent to 5% of Tranches A and C1. The Company's total equity shows an increase of US$6.9 million on December 2012. This is explained principally by the inclusion of US$19.0 million related to revaluation of its land following the change of criterion from the cost model to the revaluation model. This is reported net of the effects of deferred tax. This was offset by the loss of US$9.5 million reported for 2013 and the difference of US$4.3 million between the amount paid for minority stakes in Piscicultura Aquasan S.A. and Salmones ChiloĂŠ S.A. and their book value. The main financial indicators of the Consolidated Statement of Financial Position are presented below:

Table NÂ°9

Financial indicators of the Statement of Financial Position 2013

2012

LIQUIDITY INDICATORS Current liquidity

(times)

2.09

2.46

(times)

0.63

0.68

(Veces)

1.23

1.10

(Current assets/Current liabilities) Acid ratio (Available funds/Current liabilities) BORROWING INDICATORS Debt ratio (Current liabilities + Non-current liabilities/Total equity) Short-term debt ratio

(times)

0.45

(Current liabilities/Total equity) Long-term debt ratio

(times)

0.66

0.65

45.9%

40.6%

54.1%

59.4%

(Veces)

-0.07

-7.01

Total assets

ThUS$

899,056

831,826

Investments in fixed assets

ThUS$

38,695

76,092

Inventory turnover

(times)

2.14

1.37

(days)

169

262

(Non-current liabilities/Total 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 hedge (RAII of last 12 months)/Financial costs of last 12 months) ACTIVITY INDICATORS

(Cost to sale of last 12 months/(Inventory + Average biological assets)) Permanence of inventories (Average inventory/Cost to sale of past 12 months * 360) Note: Available funds: "Total current assets" less "Inventories" less "Current biological assets". RAII of the last 12 months: "Net pre-tax income of last 12 months" less "Financial costs of last 12 months". All these figures are obtained from the Consolidated Income Statement and the Consolidated Statement of Financial Position.

146

Source: AquaChile

The acid ratio shows a small reduction as compared to December 2012 related principally to the reclassification of debt repayments over the next 12 months from long to short-term and the increases in Commercial and Other Accounts Payable and in Accounts Payable to Related Companies. In the case of the Company's borrowing level, this shows an increase in the proportion of short-term debt. This is related to the reclassification of debt repayments over the next 12 months from long to short-term and the increases in Commercial and Other Accounts Payable and in Accounts Payable to Related Companies Indicators of activity include investment of US$38.7 million as of December 2013.

PROFIT ANALYSIS

As of 31 December 2013, the Company showed a loss of US$9.5 million as compared to a loss of US$43.2 million in 2012. This improved performance was explained principally by the higher sale prices of Atlantic salmon and trout which, together with increased output of these species, resulted in a net fair value biomass adjustment for US$47.6 million as compared to -US$44.3 million in 2012. This positive effect was, however, partly offset by an extraordinary loss of US$6.0 million recognized in May after high tides caused the loss of a large part of the biomass at an Atlantic salmon center. The Company has not distributed dividends in the past five years. At present, its financial statements show accumulated losses. The Company's principal profitability indicators are shown in the table below:

DESCRIPTION OF FLOWS Table N째11

Table N째10

Profitability indicators

Net cash flow (ThUS$) Net cash flows from (used in) operating activities Net cash flows from (used in) investment activities Net cash flows from (used in) financing activities Net increase (decrease) in cash and cash equivalents

2013

2012

24,241

-74,001

-38,264

-76,472

19,895

50,145

Profitability of equity Profitability of assets

5,013

-100,975 113,897

(Net profit/N째 of subscribed and paid-in shares)

Cash and cash equivalents at end of period

17,935

12,922

Dividend return

As of 31 December 2013, the Company showed a total net cash flow for the period of US$5.0 million as compared to -US$101.0 million for the same period in 2012. Operating activities accounted for cash flow of US$24.2 million as of 31 December 2013, up from -US$74.0 million in the same period in 2012. Investment activities implied an outlay of US$38.3 million as of December 2013 as compared to US$76.5 million in the same period of the previous year. As of December 2013, financing activities generated a cash flow of US$19.9 million, down from US$50.1 million in the same period in 2012.

-10.3%

-0.1%

-5.2%

US$/share

-0.008

-0.037

n.a

(Net annualized profit/Average total assets)

12,922

The behavior of the principal components of Consolidated Cash Flow as of 31 December 2013 as compared to 31 December 2012 is as follows:

2012

-0.3%

(Net annualized profit/Average equity)

Cash and cash equivalents at start of period

Source: AquaChile

2013 %

Earnings per share

Dividends per share/Market price

6 . PRODUCTION INDICATORS The Company's salmon and trout harvest ratio (in tonnes WFE)/centers harvested or being harvested at 31 December 2013 was 2,435 tonnes WFE. As of 31 December 2013, stocking densities of concessions for the seawater growth stage were as follows: i) Atlantic salmon: 8.4 kg/m3; ii) Pacific salmon: 9.7 kg/m3; and iii) trout: 5.9 kg/m3. The survival rates observed in closed groups as of 31 December 2013 were: i) Atlantic salmon: 83%; ii) Pacific salmon: 86%; and iii) trout: 76%. It is important to note that these rates were affected by eliminations which took place during the life of the fish and, in the case of Atlantic salmon, also by mortality due to drops in oxygen levels in 2013. If these effects are excluded, the rates are: i) Atlantic salmon: 85%; ii) Pacific salmon: 94%; and iii) trout: 81%.

147

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Management discussion and analysis of the consolidated financial statements as of 31 december 2013 (Figures in ThUS$) cap.01

Table N°12

Production indicators 4T13

4T12

2013

2012 84,810

PRODUCTION INDICATORS Salmon and trout harvest

Tonnes WFE

30,574

32,735

102,252

19.0

21.0

42.0

39.0

Tonnes WFE

1,609

1,559

2,435

2,175

Centers harvested or being harvested during the period Salmon and trout harvest/Centers harvested or being harvested during the period Centers in use* Salmon and trout harvest /Centers in use*

Tonnes WFE

764

696

2,556

1,804

Farming density** Atlantic salmon

Kg / m3

8.4

5.1

8.4

5.1

Pacific salmon

Kg / m3

9.7

11.1

9.7

11.1

Trout

Kg / m3

5.9

5.0

5.9

5.0 86%

Survival closed groups*** Atlantic salmon

85%

91%

83%

Pacific salmon

89%

91%

86%

93%

Trout

82%

81%

76%

80%

* Centers in use at the end of the period of analysis. ** Density of aquaculture concessions for seawater growth stage. *** Survival rate of groups of fish (farms) under closed production during the period. Source: AquaChile

DIFFERENCE BETWEEN ECONOMIC AND BOOK VALUE OF ASSETS

As of 31 December 2013, there were no significant differences between the economic and book values of the Company's main assets. For investments in related companies acquired prior to January 2003, the proportional equity value is used and, for more recent investments, fair value as defined under the norms established in Circular Nº 1.697 of Chile's Superintendency of Securities and Insurance (SVS) and Technical Bulletin Nº 72 of Chile's Association of Accountants (Colegio de Contadores de Chile A.G.). Salmon and trout biological assets such as broodfish, juveniles, smolts and small fish at the growth stage are measured at fair value less estimated costs to sale, except when fair value cannot be reliably measured in accordance with IAS 41 under which the search for an active market for these assets must first be considered. Since there is not an active market for stocks of live fish at these stages of development, they have been valued at their accumulated cost as of the end of the period. Salmon and trout biological assets under production and of greater weight are measured at fair value less estimated transformation and sale costs. The direct and indirect costs incurred during the production process form part of the value of the biological asset through their activation. The accumulation of these costs at the end of each period is compared with the reasonable value of the biological asset. Changes in the fair value of these biological assets are reflected in the income statement for the period. Biological assets whose projected harvest date is within 12 months are classified as current assets.

148

Fair value is estimated on the basis of market prices for harvested fish adjusted for differences in the distribution of caliber and quality or ranges of normal harvest weights. This price is adjusted for harvest costs, costs of transport to destination and processing costs in order to obtain the value and condition of the fish in a state of debled production. In this way, the evaluation takes into account the life cycle stage of the fish, current weight and expected distribution by caliber at harvesting. This estimate of fair value is reflected in the Company's income statement. For fish of a lower weight, the accumulated cost as of the end of the period is used. However, in the case of possible adverse situations that could affect the salmon market, the Company carries out a test of deterioration of its biomass under production projected to its harvest and the net accumulated effect is presented in its results. A summary of valuation criteria is shown below: stage

Asset

Valuation

Freshwater

Broodfish

Accumulated direct and indirect costs at different stages.

Freshwater

Eggs

Accumulated direct and indirect costs at different stages

Freshwater

Smolts and juveniles

Accumulated direct and indirect costs at different stages.

Seawater

Fish in seawater

· Fair value according to: · Atlantic salmon as from 4.0 kg WFE · Pacific salmon as from 2.5 kg WFE · Trout as from 2.5 kg WFE. For lower weights, accumulated cost at the end of the period is used. However, in the case of adverse situations that could affect the salmon market, the Company carries out a deterioration test of biomass under production projected to harvest and the net accumulated effect is presented in its results.

Tilapia biological assets in reproduction and tilapia at growth stage Tilapia for reproduction are initially recorded at cost and, at each date of statements of financial position, are valued at their accumulated cost considering losses for deterioration. Tilapia at the growth stage are recorded at cost since, by their nature, marketdetermined prices or values are not available in Costa Rica and alternative estimates of reasonable value are not considered reliable. Cost includes all inputs, indirect costs and labor during the growth stage of tilapia. For tilapia, the method applied is as follows: Stage

Asset

Freshwater Tilapia

EXCHANGE-RATE EXPOSURE

Assets and liabilities are shown in local currency in Note 28.

TRENDS

It is not AquaChile's policy to forecast its results or variables that may significantly affect them. The consensus view among industry analysts is that growth of per capita incomes and a shift in eating habits towards healthier foods suggest that, assuming maintenance of economic growth in developing countries, the outlook for demand for seafood products and, specifically, for healthy proteins and foods is good. In addition, demand for fresh filleted tilapia has continued to increase, maintaining current price levels.

Valuation Accumulated direct and indirect costs at different stages.

***

149

SIGNING OF THE ANNUAL REPORT The signatories below declare themselves responsible for the veracity of the information contained in this Annual Report of Empresas AquaChile S.A. for the year ended on 31 December 2013.

name

post rut

Víctor Hugo Puchi Acuña

Chairman 6.680.823-8

Humberto Fischer Llop

Director 6.687.633-0

Mario Humberto Puchi Acuña

Director 6.270.533-7

Claudio Fischer Llop

Director 7.378.806-4

Piero Solari Donaggio

Director 9.585.725-6

Alejandro Pérez Rodríguez

Director 5.169.389-2

Pilar Lamana Gaete

Director 8.538.550-k

Alfonso Márquez de la Plata Cortés

CEO 6.379.894-0