Financial statements FECU 4Q2017 by aqua

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES Consolidated financial statements December 31, 2017 (A free translation of the original in Spanish)

CONTENTS Consolidated statements of financial position Consolidated income statements by function Consolidated statements of comprehensive income Consolidated statements of changes in equity Consolidated statements of cash flows, direct method Notes to the consolidated financial statements Ch$ US$ ThUS$ Thâ&#x201A;Ź UF CR JPY UTM

Chilean pesos United States dollars Thousands of United States dollars Thousands of euros Unidades de fomento (a Chilean peso unit based on inflation indexed currency unit) Costa Rican colones Japanese yen Monthy tax unit (an official inflation â&#x20AC;&#x201C; indexed monetary unit, established for tax matters.)

INDEPENDENT AUDITORS' REPORT Puerto Montt, February 22, 2018 Dear Shareholders and Directors of Empresas AquaChile S.A.

We have audited the accompanying consolidated financial statements of Empresas AquaChile S.A. and subsidiaries, which comprise the consolidated statements of financial position as of December 31, 2017 and 2016 and the corresponding consolidated income statements by function, comprehensive income, changes in equity and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management's responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). This responsibility includes the design, implementation and maintenance of relevant internal controls for the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditorâ&#x20AC;&#x2122;s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards in Chile. Those standards require that we plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditorsâ&#x20AC;&#x2122; judgment, including an assessment of the risks of material misstatement in the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal controls relevant for the preparation and fair presentation of the consolidated financial statements of the entity in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entityâ&#x20AC;&#x2122;s internal control.

Puerto Montt, February 22, 2018 Empresas AquaChile S.A. 2

Accordingly, we do not express such an opinion. An audit also includes evaluating the appropriateness of accounting policies and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Empresas AquaChile S.A. and subsidiaries as of December 31, 2017 and 2016, and the results of its operations and cash flows for the years then ended, in accordance with International Financial Reporting Standards.

Gonzalo Mercado T. Chilean Identification Number: 11.222.898-5

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS CONTENTS Notes

Page

Consolidated financial statements Consolidated statements of financial position

Consolidated income statements by function Consolidated statements of comprehensive income Consolidated statements of changes in equity Consolidated statements of cash flows, direct method 1 2

General information Summary of significant accounting principles 2.1. Basis of preparation 2.2. New standards and interpretations 2.3. Basis of consolidation 2.4. Segment reporting 2.5. Foreign currency transactions 2.6. Property, plant and equipment 2.7. Biological assets 2.8. Intangible assets other than goodwill 2.9. Goodwill 2.10. Interest costs 2.11. Impairment of non-financial assets 2.12. Financial assets 2.13. Inventories 2.14. Trade and other receivables 2.15. Cash and cash equivalents 2.16. Share capital 2.17. Trade and other payables 2.18. Other financial liabilities 2.19. Current and deferred income tax 2.20. Employee benefits 2.21. Provisions 2.22. Revenue recognition 2.23. Leases 2.24. Dividend policy 2.25. Environment

1 3 3 4 7 10 11 13 14 16 17 18 18 18 20 20 20 20 21 21 21 22 22 22 23 24 24

Notes

Page

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

25 28 30 40 42 45 45 49 51 58 58 58 60 69 70 73 78 88 91 93 94 94 95 95 97 99 100 105 109 112 120 120

Financial risk management Significant accounting estimates and assumptions Segment Reporting Cash and cash equivalents Financial instruments Other non-financial assets, current Trade and other receivables Inventories Biological assets Current tax assets and liabilities Other financial assets, non-current Equity method investments Intangible assets other than goodwill Goodwill Property, plant and equipment Current and deferred income taxes Other current and non-current financial liabilities Trade and other payables Share capital Retained earnings (accumulated losses) and revaluation surplus Non-controlling interests Earnings per share Operating revenue Other income and expenses by function Administration expenses and distribution costs Financial income and expenses Exchange differences on assets and liabilities in foreign currencies Contingencies Balances and transactions with related entities Environment Other information Subsequent events

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2017 AND 2016

Note

12/31/2017 ThUS$

12/31/2016 ThUS$

40,772 1,935 76,125 10,239 68,976 188,147 12,735

36,993 1,412 82,383 4,805 64,542 168,876 5,106

398,929

364,117

10 288 1,050 42,968 63,224 191,448 31,132 65,841

9 288 8,374 760 41,419 53,247 179,413 23,910 88,015

Total non-current assets

395,961

395,435

Total assets

794,890

759,552

Assets Current assets Cash and cash equivalents Other non-financial assets, current Trade and other receivables, current Related party receivables, current Inventories, current Biological assets, current Tax assets, current

6 8 9 31 10 11 12

Total current assets Non-current assets Other financial assets, non-current Trade and other receivables, non-current Related party receivables, non-current Equity method investments Intangible assets other than goodwill Goodwill Property, plant and equipment Biological assets, non-current Deferred tax assets

13 9 31 14 15 16 17 11 18

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2017 AND 2016

Note

12/31/2017 ThUS$

12/31/2016 ThUS$

25,348 124,136 18,139 11,349 133

33,826 114,163 18,049 8,142 586

179,105

174,766

193,383 7,868 19,044 3,738 227

240,822 10,216 1,225 3,943 -

Total non-current liabilities

224,260

256,206

Total liabilities

403,365

430,972

21 22 22 22

514,463 (142,860) (4,404) 17,933

514,463 (202,365) (6,344) 17,933

385,132 6,393

323,687 4,893

Total equity

391,525

328,580

Total equity and liabilities

794,890

759,552

Equity and Liabilities Liabilities Current liabilities Other financial liabilities, current Trade and other payables, current Related party payables, current Tax liabilities, current Employee benefit provisions, current

19 20 31 12

Total current liabilities Non-current liabilities Other financial liabilities, non-current Trade and other payables, non-current Related party payables, non-current Deferred tax liabilities Other non-financial liabilities, non-current

Equity Share capital Accumulated losses Other reserves Revaluation surplus Equity attributable to owners of the parent company Non-controlling interests

19 20 31 18

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

Note Operating revenue Cost of sales Gross margin before fair value adjustments Fair value of harvested and sold biological assets1 Fair value of biological assets for the year2 Gross margin Other income by function Distribution costs Administrative expenses Other expenses by function Financial income Financial costs Share of income (losses) of equity method associates and joint ventures Exchange differences Income (loss) before tax Income tax expense Income from continuing operations Income (loss) from discontinued operations Income for the year Income attributable to Income attributable to owners of the parent company Income (loss) attributable to non-controlling interests Income for the year Earnings per share Basic earnings per share Basic earnings per share from continuing operations Basic earnings (loss) per share from discontinued operations Basic earnings per share Diluted earnings per share Diluted earnings (loss) per share from continuing operations Diluted earnings (loss) per share from discontinued operations Diluted earnings (loss) per share

25 27

26 27 27 26 28 28 29 18

12/31/2017 ThUS$

12/31/2016 ThUS$

632,738 (496,406) 136,332 (81,662) 78,052 132,722 2,104 (15,213) (13,451) (4,109) 1,025 (18,215) 327 85,190 (26,278) 58,912 58,912

618,628 (568,142) 50,486 (16,847) 76,762 110,401 3,607 (15,694) (11,305) (49,224) 664 (18,957) (85) (778) 18,629 (11,733) 6,896 6,896

59,505 (593) 58,912

8,434 (1,538) 6,896

0.0509 0.0000 0.0509

0.0060 0.0000 0.0060

0.0000 0.0000 0.0000

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements.

The change in the value of inventories as a result of the fair value of the biomass harvested and subsequently sold as finished product. If applicable, any negative adjustment in the net realizable value of inventories for finished products is added to this value. (See Note 11 - Biological assets). 2 The change in the fair value of the biomass for the year, plus any biomass impairment valued at cost for the year. (See Note 11 - Biological assets).

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 12/31/2017 ThUS$

12/31/2016 ThUS$

58,912

6,896

Other comprehensive income and revaluation gains (losses), before tax Income tax related to investments in equity instruments of other comprehensive income

Other comprehensive income

Total comprehensive income

58,912

6,896

Comprehensive income attributable to Comprehensive income attributable to owners of the parent company Comprehensive income (loss) attributable to non-controlling interests

59,505 (593)

8,434 (1,538)

Total comprehensive income

58,912

6,896

Income for the year

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

Share capital ThUS$ Opening balance as of 01/01/2017 Increase (decrease) due to error correction Restated opening balance

Share premium ThUS$

Revaluation surplus ThUS$

Other miscellaneous reserves ThUS$

Accumulated losses ThUS$

Equity attributable to owners of the parent company ThUS$

Equity attributable to noncontrolling interests ThUS$

Total equity ThUS$

514,463 514,463

17,933 17,933

(6,344) (6,344)

(202,365) (202,365)

323,687 323,687

4,893 4,893

328,580 328,580

Changes in equity Comprehensive income Income for the year Other comprehensive income Comprehensive income Shares issued Dividends Increases (decreases) due to transfers and other changes Total changes in equity Closing balance as of 12/31/2017

59,505 59,505

(593) (593)

58,912 58,912

514,463

17,933

1,940 1,940 (4,404)

59,505 (142,860)

1,940 61,445 385,132

2,093 1,500 6,393

4,033 62,945 391,525

Opening balance as of 01/01/2016 Increase (decrease) due to error correction Restated opening balance

514,463 514,463

17,933 17,933

(6,344) (6,344)

(210,523) (210,523)

315,529 315,529

6,508 6,508

322,037 322,037

514,463

17,933

(6,344)

8,434 8,434 (276) 8,158 (202,365)

8,434 8,434 (276) 8,158 323,687

(1,538) (1,538) (77) (1,615) 4,893

6,896 6,896 (353) 6,543 328,580

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements.

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS, DIRECT METHOD FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

Note

12/31/2017

12/31/2016

ThUS$

630,526

630,446

Cash flows from (used in) operating activities Receipts from operating activities Receipts from sales of goods and services Receipts from other operating activities Payments to suppliers for goods and services Payments to and on behalf of employees Payments for premiums and claims, annuities and other policy obligations Dividends received Interest received Income taxes refunded (paid) Other cash receipts (payments)

6.b

Net cash flows from (used in) operating activities

3,432

8,935

(538,937)

(589,517)

(51,020)

(51,976)

(3,835)

(1,326)

544

664

156

(8,622)

1,587

67,105

59,673

99,313

58,522

Cash flows from (used in) investing activities Payments to obtain control of subsidiaries or other businesses

Receipts from the sale of equity or debt instruments of other entities

(3,599)

15,388

Receipts from the sale of property, plant and equipment

2,283

Purchases of property, plant and equipment

(14,798)

(6,944)

(16,114)

8,532

Net cash flows from (used in) investing activities Cash flows from (used in) financing activities Proceeds from short-term loans

7,371

8,914

Loans from related parties

220

1,290

Loan repayments

(72,180)

(32,778)

Loan repayments to related companies

Interest paid Other cash receipts (payments) Net cash flows from (used in) financing activities Net increase in cash & cash equivalents before effect of changes in exchange rates Effect of changes in exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the start of the year Cash and cash equivalents at the end of the year

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements.

(1,300)

(200)

(15,273)

(16,595)

293

(80,869)

(39,369)

2,330

27,685

1,449

(138)

3,779

27,547

36,993

9,446

40,772

36,993

EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 AND 2016 NOTE 1 - GENERAL INFORMATION Empresas AquaChile S.A. (hereinafter the “Parent Company” or the “Company”) and subsidiaries, make up the AquaChile Group (hereinafter “AquaChile” or the “Company” or the “Group”). Empresas AquaChile S.A., Chilean Tax ID Number 86.247.400-7, was originally established as a private held company under the name Fischer Hermanos Limitada, and registered in Coyhaique on July 20, 1979, through a public deed granted by the Notary Mr. Patricio Olate Melo. An extract of this public deed was recorded in the Commercial Registry of the Coyhaique Real Estate Registrar on page 38 number 34 and published in the Official Gazette on August 3, 1979. Empresas AquaChile S.A. is currently a publicly held corporation. It is subject to the rules governing publicly held corporations and is monitored by the Financial Market Commission (CMF = “Comisión para el Mercado Financiero”), formerly known as the “Superintendencia de Valores y Seguros (SVS)”, in accordance with the agreement reached at an Extraordinary Shareholders' Meeting held on December 17, 2010. Empresas AquaChile S.A. was registered on April 12, 2011 in the Securities Registry of the Financial Market Commission (CMF = “Comisión para el Mercado Financiero”) under N° 1,069. The registered address for Empresas AquaChile S.A. is Cardonal, Lot B, Puerto Montt, Los Lagos Region, without prejudice to the agencies, offices or branches established or to be established both in Chile and abroad. The Company is managed from Puerto Montt. The Company has an indefinite life in terms of duration. The Company’s subscribed and paid-up capital is five hundred and fourteen million four hundred and sixty-two thousand nine hundred and forty-nine point eighty-one US dollars (US$ 514,462,949.81), divided into one thousand one hundred and fifty-seven million shares (1,157,000,000). There is no controlling interest in the Company as of December 31, 2017, and there are no agreements between shareholders. Although shareholder relations are regulated by the Company’s bylaws, there are no agreements between shareholders. The Group’s business purpose is to import, export, produce, breed, fatten, process, transform, modify and market hydro-biological species in Chile and abroad, in particular salmon and tilapia. Empresas AquaChile S.A. is mainly dedicated to produce and market farmed salmon, participating in every step of the production cycle. Since 2005, the Group has participated in the tilapia farming and marketing business through its subsidiary, Grupo ACI S.A. in Costa Rica.

Since 2006, and through the acquisition of 50% of Alitec Pargua S.A., Empresas AquaChile S.A. has participated in the Salmon and Trout feed business. Furthermore, since 2011 the Company, through its subsidiary Grupo ACI S.A., holds a 50% interest in the Tilapia feed producer Biomar Aquacorporation Products. The Company was created during a consolidation period in the Chilean salmon industry, from the merger of two companies dedicated to complementary stages of salmon production: AquaChile S.A. that focused on the fresh water stage, and Salmones Pacífico Sur S.A. that focused on the marine stage. On December 1, 2016, the related entity Aquainnovo S.A. was divided into two privately held companies: Aquainnovo S.A., which is the legal successor, and Centro de Innovación Aquainnovo-Biomar S.A. On January 26, 2017, Biomar S.A. subscribed and paid for 5,431 shares of Centro de Innovación Aquainnovo-Biomar S.A., which represented a 30% interest. On February 14, 2017, the Group acquired 80.30% of Salmones Chaicas S.A. from Inversiones La Montaña S.A., Fondo de Inversión Privado Patagonia Dos and Holding Salmones S.A., bringing its total shareholding in that company to 100%. In 2004, whit the acquisition of Antarfish S.A., owner of Aguas Claras S.A., Empresas AquaChile S.A. became the main Chilean salmon producer. This condition was then strengthened by the acquisition of Salmones Australes S.A., Salmones Chiloé S.A. (now Aguas Claras S.A.) and Robinson Crusoe (now Salmones Maullín S.A.). The Group’s leadership is based on being a vertically integrated company that controls the entire production process, exploits the competitive advantages of Chile in the salmon farming industry, and focuses on achieving lower production costs. The Group is currently a major global salmon producer, an important producer of tilapia in America and a significant exporter of fresh tilapia to the USA. These consolidated financial statements of Empresas AquaChile S.A. and subsidiaries comprise the consolidated statements of financial position, consolidated income statements by function, consolidated statements of comprehensive income, consolidated statements of cash flow, direct method, consolidated statements of changes in equity, and the notes that contain the disclosures for these consolidated financial statements These consolidated financial statements show a true and fair view of the Group’s equity and financial position as of December 31, 2017 and 2016, and the results of its operations, changes in equity and cash flows for the years ended on those dates. For comparison purposes, the consolidated statement of financial position and the related explanatory notes are compared with the position as of December 31, 2016. The consolidated income statement by function, the consolidated statement of comprehensive income, the consolidated statements of cash flow, direct method and the consolidated statement of changes in equity are presented for the years ended December 31, 2017 and 2016.

The consolidated financial statements of Empresas AquaChile S.A. and subsidiaries have been prepared on a going concern basis. The consolidated financial statements of Empresas AquaChile S.A. and subsidiaries as of December 31, 2017 and 2016 have been presented in thousands of US dollars and have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (hereinafter “IASB”), and were approved at a Board meeting held on February 22, 2018. There have been some minor reclassifications in the previous year’s financial statements, in order to provide a better comparison. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following section describes the main accounting policies used to prepare these consolidated financial statements, which have been uniformly applied to all the periods presented in these consolidated financial statements. 2.1

Basis of preparation

These consolidated financial statements of Empresas AquaChile S.A. and subsidiaries as of December 31, 2017 have been prepared in accordance with International Financial Reporting Standards, issued by the International Accounting Standards Board (IASB). The preparation of these consolidated financial statements in accordance with IFRS requires the use of certain accounting estimates and assumptions. It also requires Management to exercise its judgment when implementing the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. There are no significant uncertainties regarding events or conditions as of the reporting date that may cast doubt on the Company’s ability to continue functioning normally as a going concern. The general Group accounting policy for valuing its assets and liabilities is cost, except for hedging financial instruments, certain financial assets and liabilities, land and biological assets recorded at fair value.

2.2

New standards and interpretations

a) Standards, interpretations and amendments that are mandatory for the first time for financial periods beginning on January 1, 2017.

Amendments and improvements Amendments to IAS 7 "Statement of Cash Flow" - issued in February 2016. The amendment introduces additional disclosure that enables users of financial statements to evaluate changes in obligations from financing activities. Amendment to IAS 12 "Income Tax" - issued in February 2016. The amendment clarifies how to account for deferred tax assets relating to debt instruments valued at fair value. Amendment to IFRS 12 “Disclosures of Interests in Other Entities” - issued in December 2016. The amendment clarifies the scope of this standard. These amendments must be applied retroactively to annual periods beginning on or after January 1, 2017. The adoption of the standards, amendments and interpretations described above, do not have a significant impact on the Group's consolidated financial statements. b) Standards, interpretations and amendments issued, but not yet mandatory and which have not been adopted early.

Standards and Interpretations

Mandatory for annual periods beginning

IFRS 9 "Financial Instruments” - issued in July 2014. The IASB has issued the full version of IFRS 9, which replaces the guidance in IAS 39. This final version includes the classification and valuation requirements of financial assets and liabilities and a model of expected credit losses that replaces the current impairment loss model. The part relating to hedge accounting within this final version of IFRS 9 had already been issued in November 2013. Early adoption is permitted.

01/01/2018

IFRS 15 "Revenue from Contracts with Customers" - issued in May 2014. It establishes the principles applicable to information disclosures in financial statements in relation to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The basic principle is that an entity recognizes revenue that represents the transfer of goods or services promised to customers for an amount that reflects the consideration, which the entity expects to receive in exchange for those goods or services. It replaces IAS 11 Construction Contracts; IAS 18 Revenue; IFRIC 13 Customer Loyalty Programs; IFRIC 15 Agreements for the Construction of Real Estate; IFRIC 18 Transfers of Assets from Customers, and SIC-31 Revenue – Barter Transactions Involving Advertising Services. Early adoption is permitted.

01/01/2018

IFRS 16 "Leases" - issued in January 2016. Establishes the standards to recognize, measure, present and disclose leases. IFRS 16 replaces IAS 17 and introduces a unique lessee accounting model that requires a lessee to recognize the assets and liabilities of all rental contracts with a term of over 12 months, unless the underlying asset is of low value. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, and early application is permitted for entities that apply IFRS 15 or before the date that IFRS 16 is initially applied.

01/01/2019

IFRS 17 â&#x20AC;&#x153;Insurance Contracts" -issued in May 2017, replaces the current IFRS 4. IFRS 17 will change the accounting for all entities that issue insurance contracts and investment contracts with discretionary participation features. The standard applies to annual periods beginning on or after 1 January 2021, and early application is permitted for entities that apply IFRS 15, "Revenue from contracts with customers" and IFRS 9, "Financial Instruments".

01/01/2021

IFRIC 22 "Transactions in Foreign Currency and Advance Payments" - issued in December 2016. This Interpretation applies to a foreign currency transaction (or part of it) when an entity recognizes a non-financial asset or liability that arises from the payment or collection of an advance payment before the entity recognizes the related asset, expense or income (or part of it). The interpretation provides a guide for a unique payment / receipt, and for situations involving multiple payments / receipts. Its purpose is to reduce practical diversity.

01/01/2018

IFRIC 23 "Uncertainty over Income Tax Treatments" - issued in June 2016. This interpretation clarifies how to apply the recognition and measurement requirements of IAS 12 when there is uncertainty regarding income tax treatment.

01/01/2019

Amendment to IFRS 2 "Share-based Payments" - issued in June 2016. The amendment clarifies the measurement of share-based payments settled in cash and the accounting of changes to such payments when they are settled with equity instruments. Additionally, it introduces an exception to the principles of IFRS 2 that will require accounting for these awards as if they were fully settled as equity instruments, when the employer is obliged to withhold tax related to share-based payments.

01/01/2018

Amendment to IFRS 15 "Revenue from Contracts with Customers" - issued in April 2016. The amendment introduces clarifications to the guide that identifies performance obligations in contracts with customers, accounting for intellectual property licenses and the evaluation of principal versus agent (gross versus income presentation). It includes new and amended illustrative examples as a guide, as well as practical examples related to the transition to the new revenue standard.

01/01/2018

Amendment to IFRS 4, “Insurance Contracts", with regard to applying IFRS 9 "Financial Instruments" - issued in September 2016. The amendment introduces two approaches: (1) Overlay approach, which gives all companies that emit insurance contracts the option to recognize in other comprehensive income, instead of gains and losses the volatility that could arise when IFRS 9 is applied under the new insurance contracts standard; and (2) Temporary waiver of IFRS 9, that enables companies whose business is predominantly related to insurance, to optionally waive IFRS 9 until 2021, and continue applying IAS 39 until then.

01/01/2018

Amendment to IAS 40 "Investment properties", relating to investment property transfers - issued in December 2016. The amendment clarifies that there must be a change in use to transfer to or from an investment property. To conclude, a change in use of a property must by supported by an evaluation and evidence to ensure that the property change complies with the definition.

01/01/2018

Amendment to IFRS 1 "First-time adoption of IFRS" regarding suspending shortterm exceptions for first time adopters with respect to the IFRS 7, IAS 19 and IFRS 10 - issued in December 2016.

01/01/2018

Amendment to IAS 28 “Investments in associates and joint ventures", relating to measuring the associate or joint venture at fair value - issued in December 2016.

01/01/2018

Amendment to IFRS 9 "Financial Instruments” - issued in October 2017. The amendment allows more assets to be valued at amortized cost than in the previous version of IFRS 9, in particular some prepaid financial assets with negative compensation. The qualifying assets include some loans and debt securities, which otherwise would have been measured at fair value through profit and loss (FVTPL). To qualify as amortized cost, this negative compensation should be "reasonable compensation for early contract termination".

01/01/2019

Amendment to IAS 28 “Investments in Associates and Joint Ventures” - issued in October 2017. This amendment clarifies that companies that account for longterm interests in an associate or joint venture, where the equity method is not applied, should use IFRS 9. The Council has published an example that illustrates how companies should apply the requirements of IFRS 9 and IAS 28 to longterm interests in an associate or joint venture.

01/01/2019

Amendment to IFRS 3 “Business Combinations” - issued in December 2017. The amendment clarifies that gaining control of a joint operation company is a business combination that is achieved in stages. The acquirer should revalue its previous interest in the joint operation at fair value on the acquisition date.

01/01/2019

Amendment to IFRS 11 “Joint Arrangements” - issued in December 2017. The amendment clarifies that the entity that gains joint control of a joint operation company must not revalue its previous interest in the joint operation.

01/01/2019

Amendment to IAS 12 “Income Taxes” - issued in December 2017. The amendment clarifies that the income tax consequences of dividends on financial instruments classified as equity must be recognized according to where the transactions or past events that generated those distributable profits were recognized.

01/01/2019

Amendment to IAS 23 “Borrowing Costs” - issued in December 2017. The amendment clarifies that if a specific loan remains outstanding after the qualifying asset is ready for its intended use or sale, that loan becomes part of general loans.

01/01/2019

Amendment to IFRS 10 "Consolidated Financial Statements" and IAS 28 "Investments in Associates and Joint Ventures" - issued in September 2014. This amendment addresses an inconsistency between the requirements of IFRS 10 and IAS 28 in the treatment of the sale or provision of goods between an investor and its associate or joint venture. The main consequence of these amendments is that they recognize a full gain or a loss when the transaction involves a business (whether or not in a subsidiary) and a partial gain or loss when the transaction involves assets that do not constitute a business, even if these assets are in a subsidiary.

Undetermined

Management believes that adopting these standards, amendments and interpretations will have no significant impact on the Group’s consolidated financial statements when they are first applied. However, it is particularly analyzing the effects of implementing IFRS 9, 15 and 16. The potential effects of these standards are being quantified and will be reported during the first quarter of 2018. 2.3

Basis of consolidation

a) Subsidiaries Subsidiaries are all entities (including special purpose entities) over which Empresas AquaChile S.A. and its subsidiaries has the authority to direct its financial and operating policies, which is generally the result of holding the majority of shares with voting rights. When evaluating whether the Group controls another entity, all its currently exercisable or convertible voting rights and their effects are considered. Subsidiaries are consolidated from the date on which control is transferred and are excluded from consolidation from the date that control ceases. The Company used to consolidate the subsidiary Alitec Pargua S.A. until 2011, as it exercised control by appointing the majority of the Board. Since 2011, the Company has held a 50% interest in the subsidiary Biomar Aquacorporation Products S.A., through its subsidiary Grupo ACI, which was recorded using the equity method.

As of December 2012, the Group modified its shareholders agreement with Biomar S.A. governing Alitec Pargua S.A. by matching the number of directors. This gave both shareholders equal control of this company, and generated a joint agreement, where the Group as a joint operator recognizes the proportionality of its assets and liabilities, including its interest in joint assets and liabilities, its income from the sale of its interest in the joint operation, its interest in the revenue on product sales by the joint operation and its expenses, including its interest of jointly incurred expenses. As of December 2013, the subsidiary Grupo ACI amended its shareholders agreement with Biomar Aquaculture Corporation governing Biomar Aquacorporation Products, by matching the number of directors. This gave both shareholders equal control of this company, and generated a joint agreement, where the company as a joint operator recognizes the proportionality of its assets and liabilities, including its interest in joint assets and liabilities, its income from the sale of its interest in the joint operation, its interest in the revenue on product sales by the joint operation and its expenses, including its interest of jointly incurred expenses. On February 14, 2017, Empresas AquaChile S.A. acquired 80.30% of Salmones Chaicas S.A. from Inversiones La Montaña S.A., Fondo de Inversión Privado Patagonia Dos and Holding Salmones S.A., bringing its total shareholding in that company to 100%. The purchase method is used to account for acquisitions of subsidiaries. Acquisition cost is the fair value of the company’s assets, equity instruments and liabilities at the date of exchange. Identifiable assets, liabilities and contingencies acquired in a business combination are initially valued at their fair value on the acquisition date, regardless of the extent of minority interests. The excess of acquisition cost over the book value of the Company’s share of identifiable net assets is recorded as purchased goodwill. If the acquisition cost is less than the book value of the net assets of the acquired subsidiary, the difference is recognized directly in income. Intercompany transactions, balances and unrealized gains on transactions between related entities are eliminated. Unrealized losses are also eliminated, unless that transaction provides evidence that the transferred asset is impaired. The accounting policies at subsidiaries are amended as necessary, to ensure that the policies of Empresas AquaChile S.A. and its subsidiaries have been consistently adopted.

The Company consolidates the following subsidiaries: % Ownership As of December 31, 2017

Company Aguas Claras S.A. Procesadora Hueñocoihue SpA. Aquainnovo S.A. Piscicultura Aquasan S.A. AquaChile S.A. AquaChile Inc. Antarfish S.A. Antarfood S.A. Procesadora Aguas Claras Ltda. Servicios Aguas Claras S.A. Salmones Australes S.A. Salmones Cailín S.A. Salmones Maullín S.A. Grupo ACI S.A. Alitec Pargua S.A. Cultivos Acuícolas El Volcán Ltda. Salmones Maullín Ltda. Inversiones Antarfish Ltda. Inversiones Salmones Australes Ltda. Laboratorio Antares S.A. Centro de Innovación AquainnovoBiomar S.A.ˡ Salmones Chaicas S.A.²

Chilean ID number

Country

96.509.550-0 78.512.930-K 76.794.910-3 99.595.500-8 79.800.600-2 Foreign 96.519.280-8 88.274.600-3 87.782.700-3 76.495.180-8 96.775.710-1 84.449.400-9 96.786.950-3 Foreign 76.591.150-8 84.925.700-5 79.728.530-7 76.127.952-1 76.127.961-0 76.300.265-9

Chile Chile Chile Chile Chile USA Chile Chile Chile Chile Chile Chile Chile Costa Rica Chile Chile Chile Chile Chile Chile

76.452.811-5 76.125.666-1

As of December 31, 2016

Functional currency

USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD

Direct % 0.0000 0.0000 0.0000 0.0000 0.0000 100.0000 0.0000 0.0000 0.0000 0.0000 0.0000 41.6179 0.0000 79.9586 50.0000 0.0700 0.0536 0.1249 99.9999 0.0000

Indirect % 100.0000 100.0000 100.0000 100.0000 99.9994 0.0000 100.0000 100.0000 100.0000 100.0000 100.0000 58.3821 100.0000 0.0000 0.0000 99.9300 99.9464 99.8751 0.0000 100.0000

Total % 100.0000 100.0000 100.0000 100.0000 99.9994 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 79.9586 50.0000 100.0000 100.0000 100.0000 99.9999 100.0000

Chile

USD

0.0000

70.0000

100.0000

Chile

USD

99.99999

0.00001

100.0000

19.7000

ˡ On December 1, 2016, the related company Aquainnovo S.A. was divided into two privately held companies: Aquainnovo S.A., which is the legal successor, and Centro de Innovación AquainnovoBiomar S.A. On January 26, 2017, Biomar S.A. subscribed for 5,431 shares of Centro de Innovación AquainnovoBiomar S.A., which represented a 30% interest. ² On February 14, 2017, Empresas AquaChile S.A. acquired 80.30% of Salmones Chaicas S.A. from Inversiones La Montaña S.A., Fondo de Inversión Privado Patagonia Dos and Holding Salmones S.A., bringing its total shareholding in that company to 100%. b) Transactions and non-controlling interests Any non-controlling interests are shown in equity in the consolidated statement of financial position. The net income attributable to non-controlling interests is presented in the consolidated income statement by function as a component of income (loss) for the year. Transactions between non-controlling shareholders and controlling shareholders of the companies where equity ownership is shared are recorded within equity and are therefore shown in the consolidated statement of changes in equity.

c) Associates Associates are all those companies over which Empresas AquaChile S.A. and its subsidiaries have significant influence, but do not control their financial and operational policies. Investments in associates are accounted when created or acquired at cost and are subsequently valued using the equity method. The investment of Empresas AquaChile S.A. and its subsidiaries in associates includes any goodwill identified on acquisition, net of any accumulated impairment losses. The interest of Empresas AquaChile S.A. and its subsidiaries in the income and losses of associates after acquisition is recognized in the income statement and its interest in subsequent equity movements is recognized in the corresponding reserve within equity. When the interest of Empresas AquaChile S.A. and its subsidiaries in the losses of an associate is equal to or higher than its investment in the associate, including any other unsecured receivable, Empresas AquaChile S.A. and its subsidiaries will not record additional losses, unless it has entered into obligations or made payments on behalf of the associate. d) Presentation adjustments If required, the Group makes minor presentation adjustments and reclassifications within the consolidated financial statements, in order to improve the presentation of its obligations and commitments. 2.4

Segment Reporting

IFRS 8 requires entities to adopt "Management's approach" when disclosing information about the outcome of their operating segments. In general, this is the information that Management uses internally to evaluate segment performance and to allocate resources to segments. Empresas AquaChile S.A. and its subsidiaries present segment information regarding its business divisions based on the financial information available to senior decision makers for assessing performance and allocating resources to its differentiated products, in accordance with IFRS 8, Segment Reporting. This information is presented in Note 5. The business segments used by Empresas AquaChile S.A. and its subsidiaries are: -

Salmon and trout farming Tilapia farming Fish feed production Others

2.5

Foreign currency transactions

a) Presentation currency. The items included in the financial statements for each Group entity are valued using the currency of the principal economic environment in which the entity operates (functional currency), which is also the presentation currency for the consolidated statements of financial position. b) Functional currency Based on the instructions and definitions provided in IAS 21, functional currency is “the currency of the primary economic environment in which the entity operates”. Therefore, Empresas AquaChile S.A. and its subsidiaries believe that the conditions that support its functional currency are as follows. Factors

Currency

The currency that primarily influences the selling prices of goods and services; normally the price used to describe and pay for them.

US dollar1

The currency that principally affects the costs of labor, materials and other costs to produce goods or provide services, normally the price used to describe and pay for such costs.

US dollar and Chilean peso2

The currency used to collect receipts for billed operational activities.

US dollar

The following aspects were also considered when selecting the Company’s functional currency.

1 2

The currency used by the Group’s financing activities, such as bank obligations and equity, is the US dollar.

The currency primarily used to invest the receipts from the Group’s billed operational activities is the US dollar.

US dollar Chilean peso

Therefore, under the current circumstances, the functional currency of each Group entity is as follows. Company Empresas AquaChile S.A. Procesadora Hueñocoihue SpA. Aquainnovo S.A. Piscicultura Aquasan S.A. AquaChile S.A. AquaChile Inc. Antarfish S.A. Aguas Claras S.A. Antarfood S.A. Procesadora Aguas Claras Ltda. Servicios Aguas Claras S.A. Salmones Australes S.A. Salmones Cailín S.A. Salmones Maullín S.A. Grupo ACI S.A. Alitec Pargua S.A. Cultivos Acuícolas El Volcán Ltda. Salmones Maullín Ltda. Inversiones Antarfish Ltda. Inversiones Salmones Australes Ltda. Laboratorio Antares S.A. Centro de Innovación Aquainnovo-Biomar S.A. Salmones Chaicas S.A.

Functional currency US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar

c) Transactions and balances Transactions in foreign currency are converted to the functional currency using the exchange rate in force as of the date of the transaction. Gains and losses on foreign currencies resulting from settling these transactions, and the conversion of monetary assets and liabilities denominated in foreign currencies at closing rates, are recognized in the income statement.

d) Exchange rates The exchange rates to the US dollar of the main currencies used in the accounting procedures of Empresas AquaChile S.A. and its subsidiaries as of December 31, 2017 and 2016 are as follows: 12/31/2017

12/31/2016

Accumulated Currency

Accumulated

Closing

average

Closing

average

Chilean peso

CLP

614.75

615.22

669.47

667.17

Euro

EUR

0.83

0.89

0.95

0.90

Yen

JPY

112.59

112.15

116.83

108.81

Costa Rican colon

566.42

565.64

553.65

542.45

2.6

Property, plant and equipment

The Groupâ&#x20AC;&#x2122;s property, plant and equipment is land, buildings, infrastructure, machinery, equipment and other fixed assets. Buildings, plant, equipment and machinery are recorded initially and subsequently at historical cost less their corresponding depreciation and any accumulated impairment. As permitted by IFRS 1, the Groupâ&#x20AC;&#x2122;s most significant land was revalued on January 1, 2010, for the transition to IFRS. The revaluations were based on market value. They were subsequently valued using the cost method, and where applicable the attributable cost, until 2012, in accordance with IAS 16. The Group changed its valuation policy for the land included in property, plant and equipment in 2013. It was changed from the cost model to the revaluation model, in accordance with IAS 16. External experts were used to perform these revaluations, who determined the fair value of this land, using level II input data, in accordance with the definitions in IFRS 13. The Board and Management believe that the change in this accounting policy appropriately measures the changes in the fair value of the Group's land, since the date that IFRS were adopted. They believe that, considering the characteristics of these assets, these changes will occur whit certain level of periodicity. Since 2013, there have been no revaluations of land, as Management believes that there has been no significant changes in the market values of these assets. Costs arising from daily maintenance and routine repairs are recorded in income for the year, as opposed to replaced important and strategic spare parts, which are capitalized and depreciated over the remaining useful life of the assets, based on these components.

Depreciation is calculated using the straight-line method, and systematically distributed throughout the useful life of the fixed asset. This useful life is based on natural expected deterioration and technical or commercial obsolescence, due to changes or improvements in production and changes in market demand for the products produced by these assets. Land is not depreciated. Estimated useful lives and residual values are as follows:

Buildings Plant and equipment Fixtures and fittings Motor vehicles Other property, plant and equipment IT equipment

Average useful life 12 years 10 years 10 years 7 years 7 years 5 years

Residual value No residual value No residual value No residual value No residual value No residual value No residual value

Facilities that are inactive continue to be depreciated using the straight-line method. Residual values and useful lives are reviewed and adjusted if necessary as of each reporting date, to ensure that remaining useful lives match the status of assets. When an asset's value is greater than its estimated recoverable amount, its value is reduced immediately to its recoverable amount by applying impairment testing. Losses and gains on the sale of property, plant and equipment are calculated by comparing proceeds obtained with the net book value and are included in the income statement. 2.7

Biological assets

Biological assets - salmon and trout Biological assets are salmon and trout, and cover spawning fish, eggs, fry, smolt and small growing-out fish. They are measured at their fair value less the estimated costs to sell them, except when the fair value cannot be measured reliably in accordance with the definitions in IAS 41. Therefore, in the first instance a market for these assets is sought. As there is no active market for live fish at these stages, they are valued at cumulative cost as of the reporting date. However, if conditions warrant, the Group performs impairment testing on its growing biomass, whose net cumulative effect is expensed against income for the year. Biological assets - heavier growing-out salmon and trout are measured at their fair value less estimated processing and selling costs.

Direct and indirect costs incurred in the productive process form part of the value of biological assets. Accumulated costs at each reporting date are compared and adjusted to the fair value of the biological asset. Changes in the fair value of these biological assets are recorded in the income statement for the year. The estimated fair value is based on market prices for harvested fish, and adjusted according to their distribution in size and quality or range of normal weights at harvest. This price is adjusted for expected harvesting, processing and freight costs to destination, to value its condition as fully grown bled fish (WFE 1 ). Thus, the biomass valuation considers the life cycle stage, its current weight and expected distribution by size at harvest. This estimate of fair value is recognized in the Group’s income statement. A summary of the valuation criteria is as follows: Stage Fresh water Fresh water Fresh water Marine

Asset Spawning fish Eggs Fry and smolts Fish in the sea

Valuation Direct and indirect cumulative cost Direct and indirect cumulative cost Direct and indirect cumulative cost Fair value, according to the following: · Atlantic salmon, above 4.0 kg WFE; · Pacific or Coho salmon, above 2.5 kg WFE; · Trout, above 2.5 kg WFE; and · Smaller fish are valued at cumulative cost as of the reporting date, net of impairment, if appropriate.

Valuation model The valuation is reviewed for each fish farm and is based on the fish biomass at the close of each month. The detail includes the total number of fish growing-out, their estimated average weight and the cost of fish biomass. The estimated value is based on the average weight of the biomass, which is multiplied by the value per kg reflected in the market price. The market price is obtained from an index of international prices or from sales as of the reporting date. These are level III input data, according to the definitions in IFRS 13. Assumptions used to calculate the fair value of fish at the marine grow out stage The estimated fair value of the fish biomass will be always based on assumptions, even if the Group has sufficient experience when considering these factors. These estimates take into account the following components: volume of fish biomass, average biomass weights, distribution of fish weights and market prices.

WFE (Whole Fish Equivalent): is a standard measure within the industry, which refers to the weight of whole bled salmon, also internationally known as round weight (RW).

Volume of fish biomass The volume of fish biomass is an estimate based on the number of smolts in the sea, an estimate of their growth, and an estimate of their mortality for the year, among other factors. Uncertainty with respect to the biomass volume is normally lower in the absence of mortality events or widespread illnesses during the cycle. Distribution of harvest weights Fish grow at various rates and even though average weights can be accurately estimated, there is always a wide variation in the quality and size of the fish. The distribution of fish quality and size is important, as these attract a variety of prices on the market. When estimating the value of the fish biomass, a normal distribution for quality is assumed, if not, the most recent quality distribution observed during processing at the Groupâ&#x20AC;&#x2122;s processing plants. Market prices Market price assumptions are important for valuations, particularly when minor changes in market prices can result in significant changes in valuations. Biological assets - spawning tilapia and growing-out tilapia Spawning tilapia are initially recorded at cost and are valued at cumulative cost as of the reporting date, net of impairment, if appropriate. Growing-out tilapia are recorded at cost, since market prices are not available in Costa Rica, and alternative fair value estimates are considered unreliable. Cost includes all raw materials, indirect and labor costs during the tilapia grow-out phase. The following method is used for tilapia. Stage Fresh water

2.8

Asset Tilapia

Valuation Direct and indirect cumulative cost, net of impairment, if appropriate.

Intangible assets other than goodwill

a) Aquaculture concessions Aquaculture concessions acquired from third parties are presented at historical cost. The useful life of concessions is indefinite, because they have no expiry date or a foreseeable lifetime, so they are not amortized. This status of indefinite useful life is reviewed at each reporting date, in order to assess whether events and circumstances continue to support an indefinite useful life for that asset. These assets undergo impairment testing on a yearly basis.

b) Software Licenses for purchased software are capitalized on the basis of the costs incurred to purchase and prepare them for use. These costs are amortized over estimated useful lives of 5 years, using the straight-line method. Any software maintenance costs are expensed when they are incurred. Costs directly related to creating unique, identifiable software controlled by Empresas AquaChile S.A. and its subsidiaries that is likely to generate financial benefits in excess of its costs for more than one year are recognized as intangible assets. Direct costs include expenses for personnel that develop the software and any expense incurred in its development and maintenance. Capitalized software development costs are amortized over estimated useful lives of 5 years. c) Research and development expenses Research expenditure is expensed as it arises. The costs incurred in development projects (related to the design and testing of new or improved products) are recognized as an intangible asset when the following requirements are met.

2.9

It is technically feasible to fully produce the intangible asset, to the point where it can be used or sold.

Management intends to complete the intangible asset, and to use or sell it.

The Company can use or sell it.

The Company can demonstrate how the intangible asset is likely to generate financial benefits in the future.

The Company has sufficient technical, financial or other resources, to complete development and to use or sell it.

The expenditure attributable to developing it can be reliably measured. Goodwill

Goodwill is the excess of the acquisition cost over the fair value of the Company's interest in the net identifiable assets of the acquired subsidiary on the acquisition date. Goodwill arising on acquiring subsidiaries is subject to annual impairment testing, and any accumulated impairment losses are recognized, if required. Gains and losses on the sale of an entity include the book value of goodwill related to the entity sold.

Goodwill is assigned to Cash Generating Units (CGUs) in order to test for impairment losses. Goodwill is allocated to those CGUs that are expected to benefit from the business combination in which the goodwill arose. Negative goodwill from the acquisition of an investment or business combination is credited directly to the income statement, in accordance with IFRS 3. 2.10 Interest costs Interest costs incurred during the construction of any qualified asset are capitalized over the period of time needed to complete and prepare the asset for its intended use. Other interest costs are expensed. 2.11 Impairment of non-financial assets Assets with indefinite useful lives are not amortized and are tested annually for impairment losses. Depreciated property, plant and equipment is tested for impairment whenever any event or change in circumstances indicates that the book value of these assets may not be recoverable. An impairment loss is recognized if the book value of an asset exceeds its recoverable amount. The recoverable amount of an asset is the greater of its value in use and its fair value less selling costs. Impairment is assessed by grouping assets at the lowest levels at which they generate separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that have been impaired are reviewed every year to identify whether any impairment reversals have occurred. Impairment losses can be reversed, but are limited to losses recognized in previous periods, in such a manner that the book value becomes the same as if these impairment adjustments had never been made. Any such reversal is recorded in “Other gains (losses)”. 2.12 Financial assets Empresas AquaChile S.A. and its subsidiaries classify its financial assets using the following categories: “Assets valued at fair value through profit and loss”, and “Loans and receivables”. The Group does not have any financial instruments held to maturity nor held for sale. The classification depends on why the financial assets were acquired. Management determines how financial assets are classified upon initial recognition.

Classification of financial assets a) Financial assets at fair value through profit and loss Financial assets at fair value through profit and loss are financial assets held for trading. A financial asset is classified in this category if acquired principally to sell in the short term. Assets in this category are classified as current assets. b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. Those assets that will mature in less than 12 months are classified as current assets. Those assets that will mature in greater than 12 months are classified as non-current assets. Loans and receivables are included in â&#x20AC;&#x153;Trade and other receivablesâ&#x20AC;?. They are initially recognized at fair value. The difference between their initial recognition value and any subsequent valuation is expensed. Trade and other receivables are valued at their nominal value, as the Group collects these over a short period of time. Empresas AquaChile S.A. and its subsidiaries evaluate whether there is objective evidence that a financial instrument or group of financial instruments may have been impaired as of each reporting date. c) Recognition and valuation of financial assets Purchases and sales of financial assets are recognized on the transaction date, i.e. the date when Empresas AquaChile S.A. and its subsidiaries commits to purchase or sell the asset. i)

Initial recognition

All financial assets not carried at fair value through profit and loss are initially recognized at fair value plus transaction costs. Financial assets at fair value through profit and loss are initially recorded at fair value, and the transaction costs are expensed. ii) Subsequent valuation Financial assets at fair value through profit and loss are subsequently recorded at fair value and any changes are recorded in the income statement. The fair value of loans and receivables are their nominal value. Financial assets are derecognized when the rights to receive cash flows from these investments have expired or have been transferred and Empresas AquaChile S.A. and its subsidiaries have transferred substantially all the risks and rewards inherent to ownership.

Empresas AquaChile S.A. and its subsidiaries evaluate whether there is objective evidence that a financial asset or group of financial assets may have been impaired as of each reporting date. 2.13 Inventories Inventories are valued at the lower value between acquisition cost and net realizable value. Cost is determined using the weighted average price method. The cost of finished products and work-in-process includes the costs of raw materials with the biomass fair value adjustment, direct labor, other direct costs and general manufacturing expenses, based on normal operating capacity, but excluding interest costs. Net realizable value is the estimated sales price during the normal course of business, less any selling costs. Obsolete or slow-moving products are recognized at their recoverable value. 2.14 Trade and other receivables Trade and other receivables are recorded at their nominal value, since their average payment terms do not exceed 90 days. Any income related to longer payment terms is recorded as deferred income in current liabilities and the accrued portion is recorded in operating revenue. In addition, impairment provisions are estimated based on an objective review of all amounts pending as of the reporting date. Impairment losses relating to doubtful receivables are recorded in the statement of comprehensive income for the year they arise. Trade receivables are included under current assets within trade and other receivables, provided that they expect to be collected within 12 months of the reporting date. 2.15 Cash and cash equivalents Empresas AquaChile S.A. and its subsidiaries classify as cash and cash equivalents its cash balances held on hand and in bank current accounts, time deposits and other low risk financial investments (marketable securities with quick settlement) that mature within 90 days of the investment date. They also include cash management investments, such as covenants with repurchase and resale agreements that mature before the same deadline, and whose funds are freely available. Any bank overdrafts are included in â&#x20AC;&#x153;Other financial liabilitiesâ&#x20AC;?. 2.16 Share capital Share capital consists of single class, ordinary shares. Legal minimum dividends on ordinary shares are recognized as a reduction in equity when they are accrued.

2.17 Trade and other payables Trade payables are recognized at nominal value, as the difference to their fair value is not significant. 2.18 Other financial liabilities Obligations to banks and financial institutions are initially recognized at fair value, net of transaction costs. Subsequently, they are valued at amortized cost and any difference between the funds received (net of transaction costs) and their repayment value is recognized in the income statement over the life of the loan using the effective interest rate method. The effective interest rate method applies the reference market rate for loans with similar characteristics to the loan value. However, Management believes that loans can be borrowed under terms and conditions similar to those that apply to the outstanding debt. Therefore, it believes that the fair value of outstanding debt is the same as the book value. 2.19 Current and deferred income tax The income tax expense for the year includes the taxes incurred by Empresas AquaChile S.A. and its subsidiaries, based on taxable income for the year, along with taxation adjustments for previous years and changes in deferred taxes. Deferred taxes are calculated using the liability method on temporary differences that arise between the tax value of assets and liabilities and their book values. However, if deferred taxes arise from the initial recognition of a liability or an asset in a transaction other than a business combination, which at the time of the transaction neither affected the accounting result nor the tax gain or loss, it is not accounted for. Deferred tax is calculated using current tax rates and laws, or those about to be approved in each country at the reporting date, and that are expected to apply when the corresponding deferred tax asset is collected or deferred tax liability is settled. Law 20,780 was published in the Official Gazette on September 29, 2014. This law introduced several amendments to the current income tax system and other taxes. The main amendments include a progressive increase in corporate income tax rates for fiscal years 2014, 2015, 2016, 2017 and from 2018 forward from 20% to 21%, 22.5%, 24%, 25.5% and 27%, respectively, Deferred tax assets are recorded when it is probable that Group entities will have sufficient future taxable income to absorb the accumulated tax losses and unused tax credits, or when there are sufficient deferred tax liabilities to absorb them. The Group does not recognize deferred taxes on temporary differences arising from investments in related companies, since it controls the date these will be reversed.

2.20 Employee benefits a) Staff vacations Empresas AquaChile S.A. and its subsidiaries recognizes an expense for employee vacations at its nominal value using the accrual method. The staff vacation benefit does not represent a significant amount in the statement of comprehensive income. b) Post-employment benefits Empresas AquaChile S.A. and its subsidiaries do not have any significant voluntary or contractual obligations on the severance of employment contracts. Such provisions only cover any legal obligations in this respect. There are no other post-employment benefits for employees at the Parent Company and its subsidiaries. 2.21 Provisions Empresas AquaChile S.A. and its subsidiaries recognize a provision when contractually obliged to, or when previous practice has generated an implied obligation. Liabilities for onerous contracts, litigation and general provisions are recognized when: (i)

Empresas AquaChile S.A. and its subsidiaries have a current legal or implicit obligation as a result of past events.

(ii) It is probably that a payment will be necessary to settle the obligation. (iii) The payment value can be reliably estimated. Provisions are valued at the best estimate by Empresas AquaChile S.A. and its subsidiaries of the present value of the payments required to settle the obligation. The discount rate used to calculate this present value reflects current market assessments of the time value of money at the reporting date, as well as any specific risks related to the particular liability. 2.22 Revenue recognition Operating revenue includes the fair value of considerations received or receivable for the sale of goods and services in the ordinary course of the Groupâ&#x20AC;&#x2122;s business. Revenue is presented net of any VAT, refunds, reductions and discounts, and after eliminating inter-company sales within the Group.

Empresas AquaChile S.A. and its subsidiaries recognize revenue when it can be reliably valued, it is probable that future financial benefits will flow to the entity, and the specific conditions for each Group business is met, as described below. a) Sale of goods Revenue from the sale of goods is recognized when the risks and benefits associated with the sale have been transferred to the buyer, and the entity has no right to dispose of them, nor to effectively control them, in accordance with the terms in its commercial agreements. b) Interest income Interest income is recognized at its nominal value. c) Sales of services Revenue from the sale of services is recorded when the service has been provided. A service is considered as provided when the customer confirms satisfactory completion. d) Dividend income Dividend income is recorded when the right to receive payment is established. 2.23 Leases a) When a Group entity is the lessee â&#x20AC;&#x201C; Operating lease Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments for operating leases, net of any incentive received from the lessor, are charged to the income statement on a straight-line basis over the lease term. b) When a Group entity is the lessor â&#x20AC;&#x201C; Operating lease Assets leased to third parties under operating lease contracts are included in property, plant and equipment or investment property, as appropriate. Income from operating leases is recognized in the statement of income on a straight-line basis over the lease term. c) When a Group entity is the lessee â&#x20AC;&#x201C; Finance lease When companies lease property, plant and equipment to the Group and it receives substantially all the risks and rewards of ownership, these are classified as finance leases. Finance leases are capitalized at the beginning of the lease, at the lower of fair value of the leased property and the present value of minimum lease payments.

Each lease payment is divided between financial liabilities and expenses to obtain a constant interest rate over the outstanding balance. The respective lease obligations, net of financial costs, are included in “Other financial liabilities”. The interest element of the finance cost is charged to the income statement over the lease term, to obtain a constant interest rate over the outstanding balance at each reporting date. Assets acquired under finance leases are depreciated over their useful life and are recorded in property, plant and equipment. 2.24 Dividend policy The Company is obliged to distribute a mandatory minimum dividend equivalent to 30% of net distributable income for the year, in accordance with Corporate Law, unless unanimously agreed otherwise by the shareholders. Under IFRS, this minimum dividend obligation to shareholders must be recognized before the closing date of the annual financial statements with the resulting decrease in equity. As instructed by the Financial Market Commission (CMF = “Comisión para el Mercado Financiero”) in Circular 1,945, the dividend calculation should be based on net distributable income for the Parent Company for the years ended December 31, 2017 and 2016, which excludes the following items from income for the year: i)

Unrealized income relating to recognizing increases in the fair value of biological assets regulated by the accounting standard “IAS 41”. This income will be recognized as net distributable income when such assets have been realized. For these purposes, realized means the portion of those increases in fair value corresponding to assets sold or disposed of by any other means.

ii) Unrealized income from the acquisition of other entities and unrealized income arising from applying paragraphs 24, 39, 42 and 58 of the revised IFRS 3, which refers to business combinations. This income will be included in net distributable income when realized. For these purposes, realized means when the acquired entities generate profits after their acquisition, or when those entities are sold. iii) The effects of deferred taxes associated with the items indicated in ii) will be recognized in the same manner as the item that originated them. However, the Company has accumulated losses, so must initially use its income to absorb such losses, in accordance with to Law 18,046. Therefore, it has not provisioned nor distributed dividends. 2.25 Environment Disbursements relating to improvements or investments in productive processes that improve environmental conditions are expensed in the year they are incurred. When these disbursements form part of investment projects, they are recognized as an increase in the value of property, plant and equipment.

The Group has established the following disbursements for environmental protection projects that have been expensed. a) Disbursements or expenses related to improving or investing in productive processes that result in decreased environmental impact or improvements to environmental conditions, such as monitoring effluents from hatcheries, marine crafts and processing plants; implementing silage systems for dead fish at marine fish farms and hatcheries; and environmental reports and studies of fish-farms; among others. b) Disbursements or expenses related to verifying and monitoring regulations and laws governing industrial processes and facilities, such as submitting environmental impact statements that evaluate mortality silage systems; handling and final disposal of hazardous and non-hazardous waste; monitoring phytoplankton; monitoring sediment and the water column at fish-farms; monitoring sludge from hatcheries; environmental consultancy; and sampling and laboratory analysis services; among others. NOTE 3 - FINANCIAL RISK MANAGEMENT The businesses of Empresas AquaChile S.A. and its subsidiaries are exposed to various financial risks: credit, liquidity and market. I

Credit risk

a) Surplus cash investment risk The quality of the financial institutions used by Empresas AquaChile S.A. and its subsidiaries and the financial investment products it selects reflect the low risk policy adopted by the Company. Cash surpluses are invested in first class national and foreign financial institutions. b) Sales risk Empresas AquaChile S.A. and its subsidiaries sell its products and services using letters of credit, advance payments, or to customers with excellent credit ratings. In some cases, insurance policies are used to cover the collection of sales, both in Chile and abroad (see Note 7 b). II Liquidity risk Liquidity risk arises if a mismatch is produced between financing needs (operating and financial expenses, investments, loan repayments and dividend commitments) and sources of finance (proceeds from redeeming marketable securities or financial placements, collecting customer receivables and finance from financial institutions). The Group has a prudent liquidity risk management policy. It always has sufficient cash and marketable securities, and aims to have sufficient financing available with banks.

The Group has signed credit contracts with its financial creditors, which establish repayment terms, interest rates, minimum financial ratios, and guarantees. They require that the Group complies with various other obligations. They also contain various mechanisms and quorums for the creditors to approve any exceptions to these conditions. Failure to pay any of the installments of capital and interest on the due date, or failure to comply with the Group’s obligations for more than 90 days, may result in the financial creditors immediately calling in all the capital and interest due on these loans. Any delay or failure by the banks to approve the sale or replacement of specific assets pledged in guarantee, may negatively affect the Group’s businesses and its development. The following table details the outstanding capital plus accrued interest as of December 31, 2017, segregated by due date.

Financial liabilities

Bank loans Trade and other payables Related party payables Total

Between 1 and 3 months ThUS$

Between 3 and 12 months ThUS$

Between 1 and 5 years ThUS$

Over 5 years ThUS$

ThUS$

8,358

16,990

186,185

7,198

218,731

114,387

9,749

7,868

132,004

Total

18,139

19,044

37,183

140,884

26,739

213,097

7,198

387,918

Cash flows on the dates that financing or commercial liabilities fall due, as presented below, were calculated including interest at the rates as of the reporting date.

Financial liabilities

Bank loans Trade and other payables Related party payables Total

III

Between 1 and 3 months ThUS$

Between 3 and 12 months ThUS$

Between 1 and 5 years ThUS$

Over 5 years

Total

ThUS$

8,650

18,004

227,799

8,400

262,853

114,387

9,749

7,868

132,004

18,139

19,044

37,183

141,176

27,753

254,711

8,400

432,040

Market risk

a) Exchange rate risk Empresas AquaChile S.A. is a global company, so fluctuations in exchange rates can affect its performance, since some of its costs such as direct labor and transportation services are indexed to the Chilean peso, while their sales are denominated in foreign currencies, such as the US dollar, the euro and the yen. The Group’s presentation currency is US dollars, so changes in the exchange rate between the US dollar and the other functional currencies used by the Group may negatively or positively affect its financial performance. In general, the policy is to keep financial liabilities matched to sales revenue in US dollars.

As of December 31, 2017, the Group's consolidated statement of financial position has a net liability in Chilean pesos of ThUS$ 19,963, a net liability in Costa Rican colons of ThUS$ 2,721, and a net asset in Euros of ThUS$ 651. Therefore, a 5% increase in the exchange rate for these currencies would result in an exchange differences gain (loss) in Chilean pesos of ThUS$ 951, in Costa Rican colons of ThUS$ 130, and in Euros of ThUS$ (31). Similarly, a 5% decrease in these exchange rates would result in the opposite effect of the same magnitude. The net exposure by currency is as follows. Net asset exposure by currency

As of 12/31/2017 ThUS$

US dollar (net assets)

413,557

Chilean pesos (net liabilities)

(19,963)

Costa Rican colons, (net liabilities)

(2,721)

Euros, (net assets)

651

If exchange rates increase by 5%, net assets will change as follows: Effect on net asset exposure by currency

As of 12/31/2017 ThUS$

Chilean pesos

951

Costa Rican colons

130

Euros

(31)

b) Interest rate risk Movements in interest rates modify the expected cash flows from assets and liabilities that are subject to variable interest rates. Empresas AquaChile S.A. and its subsidiaries are exposed to interest rate risk, since its main loan is at a rate that varies according to the LIBOR rate for 180 days. These loan conditions are regularly monitored, which includes evaluating insurance against movements in these interest rates. The Group has ThUS$ 218,731 in bank liabilities in US dollars as of December 31, 2017, which includes ThUS$ 41 for mark to market1 in an interest rate Swap contract, ThUS$ 297 for accrued and unpaid interest, and ThUS$ (2,491) in refinancing costs. If interest rates change by 10%, the annual interest on the current loans in US dollars will change by 0.48%, which will change financial expenses by ThUS$ 1,058.

Currency

USD

Rate

4,84%

Fair value of the interest rate swap contract.

Outstanding capital balance in original currency (thousands)

Interest in original currency

1% change in original currency rate

(thousands)

218,731

10,582

1,058

NOTE 4 - SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS Accounting estimates and assumptions are continually evaluated, and are based on historical experience and other factors, including expectations of future events that are considered reasonable in the circumstances. Empresas AquaChile S.A. and its subsidiaries prepare estimates and assumptions regarding the future. Estimates and assumptions with a significant risk of causing a material adjustment to assets and liabilities next year are as follows. a) Asset impairment The Group annually evaluates asset impairment based on each cash generating unit (CGU). In accordance with IAS 36 "Impairment of Assets", the Group should evaluate indications of impairment as of each reporting date, which imply that all or part of the book value of fixed assets, intangible assets, goodwill, among others, may not be recoverable. If any indication of impairment is found for assets with a finite useful life, an impairment calculation is required. This calculation must be performed at least once a year on assets with an infinite useful life, regardless of any impairment indications. The impairment calculation uses the concept of recoverable value, which is defined in IAS 36 as the greater of "value in use" and "fair value less selling costs”. If the recoverable value is less than the book value, then this difference must be expensed. The standard defines "value in use" as the present value of estimated future cash flows expected from an asset or cash-generating unit (CGU). It defines "fair value" as the price for selling an asset or to transfer a liability in an orderly transaction between market participants on the valuation date. According to IAS 36, Management is responsible for continually evaluating signs of impairment as of each reporting date, calculating any impairment losses, and preparing the respective documentation. CGUs are identified for impairment testing in IAS 36 as "the smallest identifiable group of assets that generates receipts for the Company, which are largely independent of the receipts generated by other assets or groups of assets." Therefore, given the Company as a whole, the characteristics of its assets and its productive and marketing processes, the Group has defined that the CGU value to compare with future cash flows generated by using its assets, shall be based on all the consolidated non-current assets at the reporting date in the consolidated financial statements reported to the Financial Market Commission (CMF = “Comisión para el Mercado Financiero”), less all those assets that are not property, plant and equipment; goodwill; intangible assets other than goodwill; and any investment properties valued at cost.

Therefore, as there is no active market to calculate the fair value of these assets, the Group uses the value in use method to evaluate evidence of impairment. Allocation of CGUs in order to calculate impairment losses. The Group has the following CGUs in accordance with the Group's business and cash flow. -

Salmon and Trout (Chile) Tilapia (Costa Rica and Panama)

The Group has used a cash flow forecasting model to calculate the value in use of its assets, based on the following assumptions. 1. Ten year evaluation horizon. Investments in the industry are long-term, as are the cycles and risks that affect the biomass. Therefore, a horizon of less than 10 years does not reflect the Companyâ&#x20AC;&#x2122;s long term situation. 2. Forecast cash flows. Cash flows are based on budget data, best estimates and reasonable and substantiated assumptions that represent Managementâ&#x20AC;&#x2122;s best forecasts regarding the prevailing economic conditions during the remaining useful life of the assets. The most important assumptions are: 2.1. Sales and production forecast for the next 10 years. 2.2. Forecast cash flows do not include any residual asset value at the end of the sixth year. 3. Cash flow forecasts are brought to present value using a discount rate that reflects the time value of money and the risks specific to the asset. The WACC rate is used. As a result of this evaluation, no evidence was found of impairment of the assets included in the CGU (property, plant and equipment, intangible assets and goodwill). b) Biological assets The accounting policies and valuation model applied to biological assets are as follows. The estimated fair value of the fish biomass will be always based on assumptions, even if the Group has sufficient experience when considering these factors. The estimates take into account the following components: volume of fish biomass, average biomass weights, distribution of fish weights and market prices. The estimated volume of fish biomass is based on the number of smolts in the sea, their estimated growth and their mortality during the year, etc. Uncertainty with respect to the volume of biomass is normally lower in the absence of mortality events or widespread illnesses.

Fish grow at various rates and even though average weights can be accurately estimated, there is always a wide variation in the quality and size of the fish. The distribution of fish quality and size is important, as these attract a variety of prices on the market. When estimating the value of the fish biomass, a normal distribution for quality is assumed, if not, the most recent quality distribution observed during processing at the Group’s processing plants. The assumptions regarding market prices are important for the valuation. Furthermore, minor changes in market prices can produce significant changes in the evaluation. If we assume that there were 10,725 tons WFE as of December 31, 2017, then an increase in the net price of US$ 1/kg would increase the fair value of biological assets by ThUS$ 7,957. Similarly, a decrease in the net price of US$ 1/kg would cause an equivalent loss. Minor changes in the biomass volume can result in significant changes in the evaluation. If we assume that there were 10,725 tons WFE as of December 31, 2017, then a 10% increase in the biomass volume at the evaluated fish farms would increase the fair value of biological assets by ThUS$ 4,458. Similarly, a 10% decrease in the biomass volume would cause an equivalent decrease. NOTE 5 – SEGMENT REPORTING The Group reports financial information by segments, in accordance with IFRS 8 "Operating Segments". It includes standards for reporting segment information in the financial statements and disclosure requirements for products and services, geographic areas and principal customers. An operating segment is defined as the component of an entity’s business that produces separate financial information, which is reviewed regularly by senior management and used to make decisions regarding the allocation of resources and performance evaluation. The Group segments its financial information by business unit, and has identified the following segments. a) Business unit - salmon and trout farming Empresas AquaChile S.A. and its subsidiaries has fully integrated the entire salmon production chain, from egg production to marketing and distributing salmon and trout in its various formats. This structure enhances control over strategic resources, particularly during the fresh water phase, and enables more value to be created at each stage of salmon production. a.1) Fresh water production a.1.1) Eggs Empresas AquaChile S.A. and its subsidiaries produce salmon and trout eggs, spawning fish, and develop the Group’s genetic program. The incubation facilities are located between the La Araucanía Region and the Aysen Region in Chile. These facilities produce eggs for Atlantic salmon, Pacific or Coho salmon, and trout.

The Group has launched a genetic development program through its subsidiaries AquaChile S.A. and Aquainnovo S.A. to improve the quality of its eggs for Atlantic salmon, Pacific or Coho salmon and trout. It selects spawning fish based on criteria such as growth rate, time to maturity, disease resistance, mortality, skin color and other factors. The hatcheries are used for spawning, fertilization and incubation. a.1.2) Smolts The Group produces salmon fry and smolts to supply other Group companies. The Group has hatcheries and freshwater and estuarine facilities in the La Araucanía Region, the Los Lagos Region and the Aysen Region in Chile. a.2) Salt water production The Group has marine concessions located in the Los Lagos Region and the Aysen Region in Chile. The Group uses its various companies to develop clustersˡ1, in order to achieve logistical efficiencies and diversify the health risks. The Group has implemented a low-density production policy, to reduce its exposure to disease risks, which reduces the total theoretical capacity of each site. The Group has sufficient aquaculture concessions to sustain its growth in the medium and long term. a.3) Processing plants Empresas AquaChile S.A. and its subsidiaries currently has four processing plants located in Puerto Montt, Calbuco and Chiloe Island. These plants have a specific salmon processing role, which include processing H/G products (Headed and Gutted fish), fresh fillets, frozen portions and high value-added products. These plants are equipped with advanced technology to process salmon. a.4) Sales Empresas AquaChile S.A. and its subsidiaries sells its production to various export markets. It’s most important markets are the USA, Japan, Russia and Brazil. It also exports to other countries in Europe, Asia, the Middle East and Latin America. Empresas AquaChile S.A. and its subsidiaries have operted their own distribution company for the North American market since 2003, called AquaChile Inc. The Group has used this subsidiary to supply its principal customers. It has worked closely with them to develop new products and introduce new species, such as tilapia. Salmon products are generally selected to meet market requirements. Exports to the North American market are dominated by Atlantic salmon. Exports to Japan are mainly whole salmon, H/G trout, and H/G Coho salmon, while exports to Europe are mainly frozen fillets of Atlantic salmon, and exports to Latin America are mainly fresh Atlantic salmon H/ON.

Clusters: A set of suppliers-customers in the same industry that are geographically located in the same area.

b) Business unit - tilapia farming and marketing At the end of 2005, Empresas AquaChile S.A. acquired a controlling interest in the Grupo AquaCorporación Internacional S.A. (“Grupo ACI S.A.”). It is operated from Costa Rica, and has participated in the tilapia industry for over 30 years. The Group’s commercial strategy is focused on supplying fresh tilapia to large supermarket chains, distributors, and restaurant chains in the United States. It had achieved a market share of over 20% by 2016. (Source: Urner Barry / Comtell). The Group operates in Cañas, Guanacaste, Costa Rica. This area has optimal conditions for growing-out, and has access to large volumes of water and a favorable climate for production. It also has a strategic logistical location for the distribution of fresh product to the USA. The Group is integrated into a substantial part of the value chain, as follows. b.1) Genetics and reproduction Grupo ACI S.A. has been running a genetic improvement program since 2006, which is managed by Aquainnovo, a subsidiary of Empresas AquaChile S.A. that specializes in biotechnology and molecular genetics. b.2) Hatchery, pre-growing-out and growing-out The entire tilapia production process uses over 360 hectares in Cañas, Costa Rica. Each cycle lasts for approximately 240 days, terminating with the fish reaching an ideal harvest weight of 950 grams. b.3) Processing plants AquaCorporación Internacional operates the Terrapez processing plant in Cañas. These facilities receive the live harvest from the farming ponds and produce fresh and frozen high value-added products, prepared using state of the art technology. b.4) Marketing The principal market for Grupo ACI is the USA, where it had achieved over a 20% share of the total fresh tilapia market by 2016. (Source: Urner Barry / Comtell). b.5) Management systems The "Terrapez" processing plant is located in a tax free zone, and together with the fish-farms, are operated in compliance with strict international standards covering quality, the environment and occupational health and safety. The companies have achieved certified compliance with ASC, BAP (3 Stars), FSSC22000, Marine Stewardship Council MSC, and BASC (Business Alliance for Secure Commerce). Therefore, Grupo ACI S.A. is assured of acceptance by its target market with a first class final product.

b.6) Business unit - tilapia feed production Grupo ACI S.A. signed a strategic alliance with Biomar Aquaculture Corporation in 2011. This is the Costa Rican subsidiary of the Biomar Group, which is a world leader in animal nutrition. This gave both parties equal shareholdings in Biomar AquaCorporation Products S.A., whose principal asset is a fish feed production plant located in CaĂąas, Guanacaste. b.6.1) Productive process The Biomar AquaCorporation Products S.A. processing plant can produce 50,000 tons/year of feed for freshwater fish in sizes between 4 to 10 millimeters. b.6.2) Productive plants Biomar AquaCorporation Products S.A. has a processing plant in CaĂąas, Guanacaste. This facility has a current production capacity of 50,000 tons/year of feed. b.6.3) Management system The company has achieved certified compliance with ISO 9001: 2008, Global Gap and is processing BAP. b.6.4) Sales and marketing The main purpose of the company is to produce and market tilapia feed for Grupo ACI and Biomar AquaCulture Corporation S.A., which is intended for the aquaculture industry in Central America. c) Business unit - fish feed production Empresas AquaChile S.A. signed a strategic alliance with Alitec S.A. in July 2006. This is a local subsidiary of Provimi, a world leader in animal nutrition, which has subsequently been acquired by Biomar. This gave both parties equal shareholdings in Alitec Pargua S.A., whose principal asset is a fish feed production plant located in Pargua, Los Lagos Region. c.1) Productive process The Alitec Pargua S.A. processing plant can produce 22 tons/hour of feed for marine fish in sizes between 4 to 17 millimeters. The fish feed industry in Chile is highly concentrated, with five producers controlling approximately 85% of total production by volume (Skretting, Ewos, Salmofood, Alitec and Biomar). The cost of this consumable depends on the cost of its main ingredients, which are fish meal, vegetable oils and fish oil. Peru, Chile, Argentina and the USA are the largest worldwide producers of these ingredients.

c.2) Productive plants Alitec Pargua S.A. has a processing plant in Pargua, Los Lagos Region in Chile. This facility has a current production capacity of 126,000 tons/year of feed for marine fish. c.3) Management system The company has achieved certified compliance with ISO 9001:2000, ISO 22,000, OHSAS 18,001, Global GAAP and BAP. c.4) Sales and marketing The main purpose of the company is to produce and market fish feed to the Empresas AquaChile S.A. and Biomar Chile S.A. groups, which is intended for the Chilean salmon industry, and to a lesser extent for the export market through Biomar Chile S.A.

Assets and liabilities by segment as of December 31, 2017 and 2016, are as follows.

Total Consolidated statements of financial position

ThUS$

Adjustments /eliminations ThUS$

12/31/2017 Salmon and Tilapia Trout ThUS$ ThUS$

Feed

Others

Total

ThUS$

Adjustments /eliminations ThUS$

12/31/2016 Salmon Tilapia and Trout ThUS$ ThUS$

Feed

Others

ThUS$

Assets Current assets Cash and cash equivalents

40,772

32,256

3,417

3,613

1,486

36,993

33,524

1,885

1,359

225

1,935

(201)

1,552

182

402

1,412

(303)

867

192

656

Trade and other receivables, current

76,125

69,326

5,033

164

1,602

82,383

77,001

4,425

944

Related party receivables, current

10,239

(300,376)

289,029

1,577

15,649

4,360

4,805

(337,545)

329,803

627

11,086

834

Inventories

68,976

(5,273)

67,091

3,444

3,538

176

64,542

(8,103)

64,083

5,630

2,808

124

188,147

180,058

8,089

168,876

160,596

8,280

12,735

12,468

173

5,106

(553)

5,460

111

398,929

(305,850)

651,780

21,742

23,058

8,199

364,117

(346,504)

671,334

21,039

15,354

2,894

Other non-financial assets, current

Biological assets, current Tax assets, current Total current assets

Non-current assets Other financial assets, non-current Trade and other receivables, non-current Related party receivables, non-current Equity method investments Intangible assets other than goodwill Goodwill

288

1,050

(13,850)

14,900

8,374

(6,779)

15,153

(218,589)

218,589

760

(225,925)

226,685

42,968

39,164

3,735

41,419

37,389

3,950

63,224

58,977

4,247

53,247

49,000

4,247

Property, plant and equipment

191,448

140,098

35,600

9,347

6,403

179,413

1,080

123,450

38,332

9,510

7,041

Biological assets, non-current

31,132

30,863

269

23,910

23,584

326

Deferred tax assets

65,841

(7,988)

72,389

1,440

88,015

(8,699)

95,596

1,118

Total non-current assets

395,961

(240,427)

575,278

43,851

9,347

7,912

395,435

(240,323)

571,154

46,855

9,510

8,239

Total assets

794,890

(546,277)

1,227,058

65,593

32,405

16,111

759,552

(586,827)

1,242,488

67,894

24,864

11,133

Assets and liabilities by segment as of December 31, 2017 and 2016, are as follows. 12/31/2017

Consolidated statements of financial position

Total ThUS$

Adjustments /eliminations ThUS$

12/31/2016

Salmon and Trout ThUS$

Tilapia ThUS$

Feed ThUS$

Others ThUS$

Total ThUS$

Adjustments /eliminations ThUS$

Salmon and Trout ThUS$

Tilapia ThUS$

Feed ThUS$

Others ThUS$

Liabilities and equity Liabilities Current liabilities Other financial liabilities, current

25,348

14,570

5,756

5,022

33,826

22,461

6,342

5,023

Trade and other payables, current

124,136

(5,569)

107,600

2,900

18,122

1,083

114,163

(8,501)

107,695

2,957

11,147

865

Related party payables, current

18,139

(300,355)

294,749

17,308

6,437

18,049

(337,525)

336,938

13,677

4,959

Tax liabilities, current

11,349

11,132

136

8,142

(553)

8,634

133

586

179,105

(305,924)

428,184

26,045

23,144

7,656

174,766

(346,579)

476,314

22,986

16,170

5,875

193,383

179,881

13,502

240,822

226,047

14,775

7,868

7,444

424

10,216

9,623

593

Related party payables, non-current

19,044

(13,850)

30,794

2,100

1,225

(6,779)

5,554

2,450

Deferred tax liabilities, non-current

3,738

(7,988)

7,892

3,060

678

3,943

(8,251)

7,924

3,622

648

227

224,260

(21,838)

226,238

18,662

678

520

256,206

(15,030)

249,148

20,847

648

514,463

(219,722)

707,686

10,964

4,968

10,567

514,463

(209,272)

700,586

10,964

4,968

7,217

(142,860)

51,231

(188,464)

(3,156)

161

(2,632)

(202,365)

28,997

(228,453)

(376)

(2,552)

Employee benefits provision Total current liabilities

Non-current liabilities Other financial liabilities, non-current Other payables, non-current

Other non-financial liabilities, non-current Total non-current liabilities

593

Equity Share capital Retained earnings (losses) Share premium

(332)

(3,029)

3,361

(332)

(3,029)

3,361

Other reserves

(4,404)

(35,473)

26,397

4,902

(230)

(6,344)

(28,892)

17,876

4,902

(230)

Revaluation surplus

17,933

(20,612)

30,046

8,176

323

17,933

(20,612)

30,046

8,176

323

385,132

(224,908)

572,636

20,886

8,583

7,935

323,687

(230,111)

517,026

24,061

8,046

4,665

Equity attributable to owners of the parent company Non-controlling interests

6,393

4,893

Total equity

391,525

(218,515)

572,636

20,886

8,583

7,935

328,580

(225,218)

517,026

24,061

8,046

4,665

Total liabilities

794,890

(546,277)

1,227,058

65,593

32,405

16,111

759,552

(586,827)

1,242,488

67,894

24,864

11,133

Non-current assets by geographic area other than financial instruments and deferred tax assets as of December 31, 2017 and 2016, are as follows. Description by geographic area Non-current assets in Chile Non-current assets in the USA Non-current assets in Costa Rica Total

12/31/2017 % 86.65%

12/31/2016

ThUS$

284,880

84.30%

ThUS$ 251,857

0.01%

13.34%

43,851

15.69%

46,855

100.00%

328,772

100.00%

298,749

Income statements for the years ended December 31, 2017 and 2016 are as follows. 12/31/2017

12/31/2016

Total

Adjustments /eliminations

Total

Adjustments /eliminations

Salmon and Trout

Tilapia

Feed

Others

Salmon and Trout

Tilapia

Feed

Others

ThUS$

632,738

(339,795)

853,447

56,634

55,410

7,042

618,628

(285,307)

792,858

51,253

56,312

3,512

Income for the year Operating revenue Cost of sales

(496,406)

334,574

(717,088)

(53,687)

(53,543)

(6,662)

(568,142)

290,804

(749,196)

(50,748)

(55,289)

(3,713)

Gross margin before fair value adjustments

136,332

(5,221)

136,359

2,947

1,867

380

50,486

5,497

43,662

505

1,023

(201)

Fair value of harvested and sold biological assets1

(81,662)

(16,847)

Fair value of biological assets for the year

Gross margin Other income, by function

78,052

76,762

(5,221)

132,749

2,947

1,867

380

110,401

5,497

103,577

505

1,023

(201)

2,104

1,901

147

3,607

3,419

178

Distribution costs

(15,213)

(597)

(12,107)

(2,439)

(70)

(15,694)

(424)

(12,934)

(2,311)

(25)

Administrative expenses

(13,451)

240

(9,896)

(2,243)

(1,030)

(522)

(11,305)

(7,272)

(2,830)

(840)

(431)

(4,109)

(4,002)

(82)

(3)

(22)

(49,224)

(47,431)

(1,758)

(1)

(34)

1,025

(1,218)

2,224

664

(835)

1,482

(18,215)

1,218

(17,078)

(2,157)

(196)

(2)

(18,957)

835

(17,537)

(1,878)

(190)

(187)

(47,577)

47,577

(85)

(97,242)

97,157

Other expenses, by function Financial income Financial costs Share of income (losses) of equity method associates and joint ventures Exchange differences Income (loss) before tax Income tax expense Income from continuing operations Income (loss) from discontinued operations Income for the year

78,052 132,722

327

224

172

(77)

(778)

(1,036)

347

(79)

(10)

85,190

(53,155)

141,592

(3,643)

567

(171)

18,629

(92,101)

119,425

(7,735)

(76)

(884)

(26,278)

(26,807)

469

(30)

(11,733)

(11,941)

(21)

176

58,912

(53,155)

114,785

(3,174)

537

(81)

6,896

(92,101)

107,484

(7,682)

(97)

(708)

58,912

(53,155)

114,785

(3,174)

537

(81)

6,896

(92,101)

107,484

(7,682)

(97)

(708)

Operating revenue for the years ended December 31, 2017 and 2016 is distributed across the following geographical areas. 12/31/2017

ThUS$

Adjustments /eliminations ThUS$

Salmon and trout ThUS$

Chile

65,497

(161,189)

Chilean operations

65,497

(161,189)

External customers

567,241

US market

Operating revenue by geographical area

European market Asian market Latin American market Eastern market Total

12/31/2016 Tilapia

Feed

Others

Total

ThUS$

Adjustments /eliminations ThUS$

164,352

55,410

6,924

61,343

(124,344)

164,352

55,410

6,924

61,343

(124,344)

(178,606)

689,095

56,634

118

557,285

241,155

(178,503)

380,709

38,949

73,875

73,479

396

163,676

163,499

177

83,582

(103)

66,455

17,112

Total

Salmon and trout ThUS$

Tilapia

Feed

Others

ThUS$

126,192

56,312

3,183

126,192

56,312

3,183

(160,963)

666,666

51,253

329

212,596

(160,831)

344,733

28,694

64,605

64,169

436

181,293

181,122

171

118

92,094

(132)

69,945

11,054

329

4,953

6,697

632,738

(339,795)

853,447

56,634

55,410

7,042

618,628

(285,307)

792,858

51,253

56,312

3,512

Cash flow by segment for the years ended December 31, 2017 and 2016, are as follows. 12/31/2017 Cash flow statement, direct method by segment

12/31/2016

Total

Adjustments /eliminations

Salmon and Trout

Tilapia

Feed

Others

Total

Adjustments /eliminations

Salmon and Trout

Tilapia

Feed

Others

ThUS$

99,313

2,180

92,511

3,329

2,912

(1,619)

58,522

4,360

58,320

(6,643)

2,239

246

(16,114)

(15,025)

(69)

(544)

(476)

8,532

7,118

2,275

(577)

(284)

(80,869)

(2,180)

(80,198)

(1,728)

(113)

3,350

(39,369)

(4,360)

(38,292)

4,968

(1,685)

2,330

(2,712)

1,532

2,255

1,255

27,685

27,146

600

(23)

(38)

1,449

1,444

(1)

(138)

(149)

(7)

3,779

(1,268)

1,532

2,254

1,261

27,547

26,997

600

(30)

(20)

Cash and cash equivalents at the start of the year

36,993

33,524

1,885

1,359

225

9,446

6,525

1,284

1,390

247

Cash and cash equivalents at the end of the year

40,772

32,256

3,417

3,613

1,486

36,993

33,522

1,884

1,360

227

Cash flows from (used in) operating activities Cash flows from (used in) investing activities Cash flows from (used in) financing activities Net increase in cash & cash equivalents before effect of changes in exchange rates Effect of changes in exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents

NOTE 6â&#x20AC;&#x201C; CASH AND CASH EQUIVALENTS a) Cash and cash equivalents Cash and cash equivalents includes balances held in bank checking accounts, time deposits and other low risk financial investments that mature in under 90 days. They also include cash management investments, such as overnight deposits and others that mature in under 90 days, in accordance with IAS 7. Cash and cash equivalents as of December 31, 2017 and 2016 are as follows. Cash & cash equivalents

12/31/2017

12/31/2016

ThUS$

Cash balances

226

170

Bank balances

12,389

7,132

Time deposits

16,702

Mutual and investment funds

11,455

29,691

Total

40,772

36,993

Balances by currency that make up cash and cash equivalents as of December 31, 2017 and 2016 are as follows. By currency

Currency

Cash and cash equivalents in

US dollars

Cash and cash equivalents in

Chilean pesos

Cash and cash equivalents in

Euros

Cash and cash equivalents in

Costa Rican colons

Total

12/31/2017

12/31/2016

ThUS$

30,018

34,193

6,686

471

651

444

3,417

1,885

40,772

36,993

12/31/2017

12/31/2016

Investments in time deposits as of December 31, 2017 and 2016 are as follows. Investments in time deposits

ThUS$

Banco Santander

5,001

Banco BBVA

3,200

8,501

16,702

Banco BCI Total

Investments in mutual funds as of December 31, 2017 and 2016 are as follows. Investments in mutual funds Banco Santander - Mutual Funds Management

12/31/2017 ThUS$ 2,768

12/31/2016 ThUS$ 8,896

5,939

20,104

BCI - Mutual Funds Management BBVA - Mutual Funds Management Banco Estado S.A. - Mutual Funds Management Total

691

2,748

11,455

29,691

These are liquid mutual funds that are recognized at unit market value as of the reporting date. Mutual funds are held by the Group until it has to meet its operating obligations. Cash and cash equivalents presented in the statement of cash flows are as follows. Assets

12/31/2017

12/31/2016

ThUS$

Cash and cash equivalents

40,772

36,993

Cash and cash equivalents presented in the statement of cash flows

40,772

36,993

12/31/2017

12/31/2016

b) Other cash receipts (payments) Other cash receipts (payments)

ThUS$

VAT refund for exporters

68,027

60,328

Refund of laborerâ&#x20AC;&#x2122;s bonus

143

240

Bank charges

(254)

(270)

Others

(811)

(625)

67,105

59,673

Total

NOTE 7 â&#x20AC;&#x201C; FINANCIAL INSTRUMENTS a) Financial instruments by category December 31, 2017 Assets

Cash and cash equivalents Trade and other receivables, current Related party receivables, current Trade and other receivables, non-current Related party receivables, non-current Total

December 31, 2017 Liabilities

Other financial liabilities, current Trade and other payables, current and non-current Related party payables, current and non-current Other payables, non-current Other financial liabilities, non-current Total

December 31, 2016 Assets

Cash and cash equivalents Trade and other receivables, current Related party receivables, current Trade and other receivables, non-current Related party receivables, non-current Total

December 31, 2016 Liabilities

Loans and receivables ThUS$ 76,125 10,239 288 1,050

Financial assets at fair value through profit and loss ThUS$ 28,157 -

Total assets ThUS$ 28,157 76,125 10,239 288 1,050

87,702

28,157

115,859

Liabilities at fair value through profit and loss ThUS$ 25,348 193,383

Other financial liabilities ThUS$ 132,004 37,183 7,868 -

Total liabilities ThUS$ 25,348 132,004 37,183 7,868 193,383

218,731

177,055

395,786

Loans and receivables ThUS$ 82,383 4,805 288 8,374

Financial assets at fair value through profit and loss ThUS$ 29,691 -

Total assets ThUS$ 29,691 82,383 4,805 288 8,374

95,850

29,691

125,541

Liabilities at fair value through profit and loss ThUS$

Other financial liabilities ThUS$

Total liabilities ThUS$

33,826

Trade and other payables, current and non-current

124,379

Related party payables, current

19,274

Other financial liabilities, non-current

240,822

Total

274,648

143,653

418,301

Other financial liabilities, current

b) Credit quality of financial assets The Companyâ&#x20AC;&#x2122;s financial assets can be classified into two parts: i) Trade receivables from customers. Their risk is evaluated using aged debt analysis and this information is used to record impairment provisions. ii) Financial investments in accordance with the assumptions disclosed in Note 2.12. Current assets

12/31/2017

12/31/2016

ThUS$

Mutual Funds (AA+fm/M1 or higher) and time deposits (AA or higher)

28,157

29,691

Subtotal

28,157

29,691

76,125

82,383

Cash and cash equivalents

Trade and other receivables Trade and other receivables, current Subtotal Total

76,125

82,383

104,282

112,074

The Group sells to customers using letters of credit, advance payments or by granting credit to customers with an excellent credit rating. None of these unexpired financial assets have been renegotiated during the period. c) Fair value estimates The Group held financial instruments as of December 31, 2017 that should be recorded at fair value. Investments in short-term mutual funds (cash equivalents). The Group has classified fair value measurement using a hierarchy that reflects the level of information used in this valuation. The hierarchy has 3 levels, (i) fair value based on quoted prices in active markets for similar assets or liabilities, (ii) fair value based on valuation techniques that use information about market prices or derived from market prices of similar financial instruments, and (iii) fair value based on valuation models that do not use market data. The fair value of financial instruments traded in active markets, such as investments acquired for trading, is based on quoted prices at the reporting date using the current bid price.

The classification of financial instruments at fair value according to the data used to value them as of December 31, 2017 and 2016 are as follows. Fair values using this hierarchy Assets As of 12/31/2017

Total

Level I

Level II

ThUS$

Level III ThUS$

Short-term mutual funds

11,455

Total

11,455

Fair values using this hierarchy Assets As of 12/31/2016

Total

Level I

Level II

Level III

ThUS$

Short-term mutual funds

29,691

Total

29,691

Aditionally, as of December 31, 2017 and 2016, the Group had financial instruments that donâ&#x20AC;&#x2122;t require to be recorded at fair value. The Group has valued these instruments as follows, in order to meet fair value disclosure requirements: 12/31/2017

12/31/2016

Book value

ThUS$

16,702

Trade and other receivables

76,413

82,671

Related party receivables

11,289

13,179

Other financial liabilities

218,731

274,648

Trade and other payables

124,136

114,163

37,183

19,274

7,868

10,216

Financial instruments that are not recorded at fair value Cash and cash equivalents Time deposits Other assets and liabilities

Related party payables Other payables

The book value of receivables and payables is assumed to be approximately their fair value, due to their short-term nature. The fair value of cash, bank balances, time deposits and other non-current payables is approximately their book value.

NOTE 8 - OTHER NON-FINANCIAL ASSETS, CURRENT Other non-financial assets, current are as follows. Other non-financial assets, current

12/31/2017

12/31/2016

ThUS$

639

129

299

204

975

1,061

1,935

1,412

Current guarantees Municipal business permits Insurance Others Total

NOTE 9 - TRADE AND OTHER RECEIVABLES Trade and other receivables are as follows. 12/31/2017 Trade and other receivables

12/31/2016

Current

Non-current

Current

Non-current

ThUS$

Trade receivables National

3,949

1,255

Foreign

59,408

66,551

(937)

(886)

62,420

66,920

Impairment provision Trade receivables, net Notes receivable, net Other receivables, net * Others Impairment provision Other receivables, net Total

231

*13,902

**288

*15,394

**288

142

(339)

(202)

13,705

288

15,463

288

76,125

288

82,383

288

* The current portion includes a net VAT receivable of ThUS$ 11,082 (ThUS$ 11,182 as of December 31, 2016). ** ThUS$ 288 are advances to suppliers on account for expenses related to processing new aquaculture concessions as of December 31, 2017. The fair values of trade and other receivables does not significantly differ from their book values.

The impairment of trade and other receivables is as follows. Impairment of trade and other receivables Trade receivables Miscellaneous receivables

12/31/2017 ThUS$ (937) (339)

12/31/2016 ThUS$ (886) (202)

(1,276)

(1,088)

Total

Trade and other receivables, current and non-current, by currency as of December 31, 2017 and 2016 are as follows.

Classification by currency US dollars Chilean pesos Total

12/31/2017 Current Non-current ThUS$ ThUS$ 62,298 288 13,827 76,125

288

12/31/2016 Current Non-current ThUS$ ThUS$ 66,874 288 15,509 82,383

288

Trade and other receivables, current, by product are as follows. Classified by product Salmon Tilapia Feed Others Total

12/31/2017 ThUS$ 68,720 5,033 164 2,208

12/31/2016 ThUS$ 76,548 4,425 13 1,397

76,125

82,383

12/31/2017 ThUS$

12/31/2016 ThUS$

(886) (51)

(603) (283)

(937)

(886)

(202) (137)

(31) (171)

(339) (1,276)

(202) (1,088)

Movements in impairment provisions for receivables are as follows. Impairment provisions for receivables Trade receivables Opening balance Provision adjustments Closing balance Other receivables Opening balance Provision adjustments Closing balance Total

After completing preliminary and judicial collection procedures, assets are written-off against this provision. The Empresas AquaChile S.A. Group only uses the provision method and not the direct writeoff method in order to better control these accounts.

Historical and current renegotiations are largely irrelevant and the policy is to analyze impairment on a case by case basis, classify each one by its risk, and evaluate whether it should be reclassified to preliminary collection. If reclassification is appropriate, a provision is recognized for all the customerâ&#x20AC;&#x2122;s overdue and not yet due receivables. The maximum exposure to credit risk as of the reporting date is the fair value of each category of receivables, as follows.

Gross exposure ThUS$

12/31/2017 Gross impaired exposure ThUS$

Net risk exposure ThUS$

Gross exposure ThUS$

12/31/2016 Gross impaired exposure ThUS$

Net risk exposure ThUS$

63,357

(937)

62,420

67,806

(886)

66,920

231

Other receivables

14,044

(339)

13,705

15,434

(202)

15,232

Total

77,401

(1,276)

76,125

83,471

(1,088)

82,383

Fair value Trade receivables Notes receivable

Trade and other receivables, current and non-current as of December 31, 2017 and 2016 are as follows. 12/31/2017

12/31/2016 Net total ThUS$

Assets before provisions ThUS$

Provisions ThUS$

Net total ThUS$

(910) (366)

13,827

16,159

(649)

15,510

62,298

67,312

(439)

66,873

77,401

(1,276)

76,125

83,471

(1,088)

82,383

Receivables

288

Total non-current

288

(1,276)

288

76,413

83,759

(1,088)

82,671

Detail

Trade and other receivables, national Trade and other receivables, foreign Total current

Total

Assets before provisions ThUS$

Provisions ThUS$

14,737 62,664

77,689

Stratified portfolios, provisions and write-offs a) The secured and unsecured portfolios are as follows. 12/31/2017 UNSECURED PORTFOLIO

SECURED PORTFOLIO

Number of customers in nonrenegotiated portfolio No.

Net value of nonrenegotiated portfolio ThUS$

Number of customers in renegotiated portfolio No.

Net value of renegotiated portfolio ThUS$

Not yet due * 1 to 30 days 31 to 60 days 61 to 90 days 91 to 120 days 121 to 150 days 151 to 180 days 181 to 210 days 211 to 250 days > 250 days

422 110 30 13 10 7 6 4 61

71,149 4,068 805 32 30 4 10 1 26

Total

663

76,125

Overdue ranges

Number of customers in nonrenegotiated portfolio No.

Net value of nonrenegotiated portfolio ThUS$

Number of customers in renegotiated portfolio No.

Net value of renegotiate d portfolio ThUS$

* Includes tax credits and other recoverable taxes. Note: The impairment provision for doubtful debts of ThUS$ 1,276, consists of receivables within various overdue ranges presented in this table. 12/31/2016 UNSECURED PORTFOLIO

SECURED PORTFOLIO

Overdue ranges

Number of customers in nonrenegotiated portfolio No.

Net value of nonrenegotiated portfolio ThUS$

Number of customers in renegotiated portfolio No.

Net value of renegotiated portfolio ThUS$

Not yet due * 1 to 30 days 31 to 60 days 61 to 90 days 91 to 120 days 121 to 150 days 151 to 180 days 181 to 210 days 211 to 250 days > 250 days

414 155 41 18 15 14 6 10 8 40

76,791 4,578 210 140 163 357 14 49 51 30

Total

721

82,383

Number of customers in nonrenegotiated portfolio No.

Net value of nonrenegotiated portfolio ThUS$

Number of customers in renegotiated portfolio No.

Net value of renegotiated portfolio ThUS$

* Includes tax credits and other recoverable taxes. Note: The impairment provision for doubtful debts of ThUS$ 1,088, consists of receivables within various overdue ranges presented in this table.

b) The Group has no protested receivables as of December 31, 2017 nor December 31, 2016. c) Provisions and write-offs as of December 31, 2017 and 2016. As of 12/31/2017 Non-renegotiated portfolio ThUS$ (1,276)

As of 12/31/2016

Write-offs ThUS$

Recoveries ThUS$

122

Non-renegotiated portfolio ThUS$ (1,088)

Write-offs ThUS$

Recoveries ThUS$

148

The Empresas AquaChile Group forms provisions when there is evidence of trade receivables being impaired. The criteria used to determine whether there is objective evidence of impairment are the portfolio age, specific impairment events (default) and specific market indications. Maturity

Impairment

Receivables overdue for more than 1 year

100%

d) The Group had not factored any receivables as of December 31, 2017 and 2016. NOTE 10 â&#x20AC;&#x201C; INVENTORIES Inventories as of each reporting date are as follows: Inventories

12/31/2017

12/31/2016

ThUS$

39,759

31,098

7,627

8,371

Consumables

15,159

20,696

Spare parts and supplies

11,613

6,733

Finished goods * Fair value of biological assets harvested, but not sold as finished goods *

Net realizable value provisions on finished products * Unrealized gains on finished goods * Decrease in provisions Others

(562)

(443)

(4,477)

(1,870)

(147)

(47)

Total

68,976

64,542

Total net finished product inventories *

42,347

37,156

* Total finished product inventories, net of provisions covering net realizable values, fair values and unrealized gains.

Movements in net finished product inventories Opening balance Increases for production costs Increases for biological asset harvests Decreases for sales Fair value of harvested biological assets Fair value of harvested and sold biological assets (inventory sales) Net realizable value provision

12/31/2017

12/31/2016

ThUS$

37,156

47,106

80,790

131,948

369,180

372,927

(449,680)

(527,361)

89,170

31,133

(81,100)

(22,761)

(562)

5,914

Unrealized gains (losses)

(2,607)

(1,750)

Closing balance

42,347

37,156

Inventories of finished products recognized in cost of sales for the year ended December 31, 2017 were ThUS$ 449,680 (ThUS$ 527,361 for the year ended December 31, 2016). 12/31/2017 Fresh Net finished product inventories Atlantic salmon

Net tons 64

ThUS$ 263

Trout

349

Pacific or Coho salmon

Tilapia

263

Total

12/31/2016

Frozen Net tons ThUS$ 3,814 26,626

Fresh Total ThUS$ 26,889

Net tons 71

2,874

1,842

11,858

270

726

6,275

42,084

42,347

ThUS$ 449

Frozen Net tons ThUS$ 2,247 20,308

Total ThUS$ 20,757

544

3,692

1,740

9,850

599

2,857

449

5,130

36,707

37,156

Inventory policy Group inventories are valued at the lower of cost and net realizable value. Inventory valuation policy The Group values its inventories as follows. a) The production cost of manufactured inventories comprises those that directly relate to the units produced, such as labor and fixed and variable costs incurred to transform raw materials into finished products. The production cost of fresh and frozen salmon is based on the last fair value of the biological asset when harvested, which represents the raw material cost for the processing plant, plus direct and indirect production costs. b) The acquisition cost of purchased inventory includes its purchase cost, customs fees, transport, storage and other costs attributable to its acquisition.

Inventory cost calculation formula Inventories of finished products are valued using the weighted average cost method, which is the cost of each product unit based on the weighted average cost at the beginning of the period and the cost of articles bought or produced during the period. Inventories of raw materials, packaging and materials are valued at weighted average cost. Information on finished products No inventories have been pledged in guarantee as of December 31, 2017 and 2016. Insurance The Group has insurance policies to cover the risks to work-in-process and finished products as of December 31, 2017, including business interruption and strike losses. Empresas AquaChile S.A. and its subsidiaries believes that these policies provide sufficient coverage of the risks inherent in its business. The insurance policies for work-in-process and finished products held by Empresas AquaChile S.A. and its subsidiaries are as follows. Goods

Risks covered

Fresh, frozen and smoked fish (salmon and trout).

Loss and/or damage during air, maritime and land transportation Loss and/or damage caused by natural disasters (floods, high tides, wind). Loss and/or damage caused by earthquakes, fires and/or tsunamis.

NOTE 11 - BIOLOGICAL ASSETS Biological assets are salmon and trout, and cover spawning fish, eggs, fry, smolt and growing-out fish. They are measured at their fair value less the estimated costs to sell them, except when the fair value cannot be measured reliably in accordance with the definitions in IAS 41 (see Note 2.7). The Group has not granted biological assets in guarantee in favor of financial institutions or other suppliers. The biological assets owned by Empresas AquaChile S.A. and its subsidiaries are salmonids and tilapia. The biological assets that Management deems will be harvested according to their productive cycle are classified as current biological assets.

Biological assets, current and non-current, are as follows. Current Detail Salmon and trout *

12/31/2017

12/31/2016

12/31/2017

12/31/2016

ThUS$

180,058

160,596

30,863

23,582

Tilapia Total

Non-current

8,089

8,280

269

328

188,147

168,876

31,132

23,910

* The salmon and trout biological assets had a negative net effect of ThUS$ 3,048 in the Groupâ&#x20AC;&#x2122;s income statement for 2017, due to biomass valuations at fair value. These valuations resulted in a credit to the income statement of ThUS$ 78,052, and a charge to the income statement of ThUS$ 81,100 for the fair value of harvested biomass that was subsequently sold as finished product, which increased the cost of sales for that year. They had a positive net effect of ThUS$ 50,323 in 2016, due to biomass valuations that resulted in a credit to the income statement of ThUS$ 73,084, and an increase to cost of sales for the fair value of harvested and sold biomass of ThUS$ 22,761 for that year. Movements in biological assets, current and non-current, as of December 31, 2017 and 2016 are as follows. Movements Opening biological assets Increases from acquired interests *

12/31/2017

12/31/2016

ThUS$

192,786

199,725

9,451

Increases from growing-out and production

403,097

358,141

Decreases from harvests (measured at cost)

(369,180)

(372,927)

Loss due to harmful algal blooms

(43,638)

(89,170)

(31,133)

78,052

73,084

3,678

Unrealized gains (losses)

(5,757)

5,856

Closing biological assets

219,279

192,786

Fair value of harvested biological assets, transferred to inventories Biomass adjustments for growing-out fish, measured at fair value Projected biomass impairment at harvest **

Biological assets include an increase of ThUS$ 15,160 as of December 31, 2017 in fair value adjustments for growing-out fish (an increase of ThUS$ 17,906 as of December 31, 2016) * Includes ThUS$ 9,451 of biological assets at fair value on the acquisition of Salmones Chaicas S.A. ** When comparing the projected cost at harvest of the growing-out fish biomass with an estimate of market prices.

Biological asset policies Biological assets are valued at fair value less the estimated costs to sell them, in accordance with the definitions in IAS 41 and as established in Note 2.7. The effect of natural fish growth is expressed as their fair value less the estimated costs to sell them, and this is recognized at market prices adjusted by their quality and size at the reporting date. The resulting change in value is recognized in the income statement under "Fair value of biological assets for the year". This was a gain of ThUS$ 78,052 for the year ended December 31, 2017 (a gain of ThUS$ 73,084 under "Fair value of biological assets for the yearâ&#x20AC;?, and ThUS$ 3,678 for a reversal of impairment on the growing-out fish biomass valued at cost as of December 31, 2016). The income statement by function contains the line "Fair value of biological assets harvested and sold." This is the release for the cost of inventories sold during the year, created by the positive fair value of biomass at harvest. This adjustment arose mainly in 2016 and affected the income statement for 2017 by ThUS$ (81,100) (the cost of positive fair value inventories affected the income statement for 2016 by ThUS$ 22,761). This line in the income statement also included the charge for provisions on the net realizable value of inventories of ThUS$ (562) (ThUS$ 5,914 credit as of December 31, 2016 for reversing a provision). The biomass as of December 31, 2017 and 2016 is as follows.

Detail

12/31/2017

12/31/2016

Biomass

Quantity

Tons (WFE) 1

ThUS$

Quantity

Tons (WFE)1

ThUS$

23,584,182

44,632

180,058

21,447,794

36,715

160,596

Marine (growing-out) Salmon and Trout Fresh Water

Salmon and Trout

57,569,225

1,333

30,863

38,665,519

1,442

23,582

Tilapia

14,134,069

4,888

8,358

16,509,198

5,019

8,608

Total

95,287,476

50,853

219,279

76,622,511

43,176

192,786

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

Risk management policy Operational business risks a) Environmental risks Empresas AquaChile S.A. and its subsidiaries have geographically diversified its production facilities in Chile. Nevertheless, the salmon industry is exposed to natural risks, such as variations in sea temperatures, climatological phenomena, seismic movements, harmful algal blooms², natural predators and other factors that may affect its production facilities. These circumstances can all affect the Group’s growth, negatively impact the quality of its products and even increase mortality rates, which would result in lower production volumes, sales and financial performance. b) Phytosanitary risks Diseases, parasites and pollutants are a recurring problem in the aquaculture industry, and may reduce the quality of its products, increase mortality and reduce production. Empresas AquaChile S.A. and its subsidiaries have invested significant resources in areas such as research, genetic improvements, mass vaccination programs, independent area management systems, fish health monitoring programs, reduced population densities in fish cages, and sanitary barriers that help to control and reduce these risks. However, new diseases or pests may emerge that affect salmon, trout and tilapia production. Product quality and traceability risks The products that Empresas AquaChile S.A. and its subsidiaries grow, produce and market are for human consumption, and a contamination risk arises from negligence during production or inadequate handling during the distribution process or delivery to the final consumer, by customers, consumers or third parties, which could affect the Group’s sales and financial performance. AquaChile has developed and implemented comprehensive controls to classify food quality and safety, in order to mitigate these risks. These are being constantly monitored internally and also externally by the sectoral authority. The Company has introduced complete fish traceability, to monitor food safety, and the law requires that fish are analyzed prior to harvest to rule out any trace of waste. The processing plants are also sampled to safeguard raw material and processing safety. Therefore, the authorities and customers can check product safety at Empresas AquaChile S.A. and its subsidiaries. As fish are growing in an open marine environment, they are exposed to diseases that can impact their health. Empresas AquaChile S.A. and its subsidiaries has a health department composed of veterinarians, to control these impacts. They have established a preventative policy and monitor the health of the fish population. If any diseases appear, they establish the appropriate treatment to combat them. Failure to do this would expose the fish population to risks that could impact the Group’s financial performance.

c) Consumable price risks A significant portion of the salmon production costs is linked to the supply of fishmeal and fish oil. Even though Empresas AquaChile S.A. and its subsidiaries have diversified their sources of fish feed to include new alternatives, and have invested in two feed plants to supply a proportion of its requirements, they may still be affected positively and negatively by changes in the prices of consumables, due to circumstances beyond their control. d) International price trends The supply of salmon and trout largely depends on the productive strategies of each company in the industry, as well as by unexpected biological or climatic events. Therefore, forecasting and estimating an equilibrium price for its products over the medium and long term is complex. Fortunately, the growth in demand for farmed salmon has been strong and sustained in recent years. Although, imbalances between supply and demand for salmon products could lead to price volatility, which could positively or negatively affect the Groupâ&#x20AC;&#x2122;s financial performance. However, the salmon industry has been subject to dynamic global and local consolidation and regulatory changes, which suggests that estimated future growth should tend to be more balanced. Also, species and target market diversification mitigates the negative effect of price changes. Changes in consumption within target markets Historical trends indicate that sustained increases in global fish consumption and of other aquatic products can be estimated over the next few years. However, the Group cannot assume that this trend and intensity will continue over time. A change or reversal of this trend could significantly affect the Groupâ&#x20AC;&#x2122;s operating performance. e) Economic changes in target markets Currently, the Group's exports are sold mainly into markets in the USA, Japan, Brazil and Russia. Nevertheless, an economic crisis, depression or stagnation or the emergence of trade barriers cannot be ruled out. Any of these would lead to a reduction in demand, which if verified could negatively affect the Groupâ&#x20AC;&#x2122;s business and operating performance. Then again, increases in personal income within emerging economies could open up new markets and increase the demand for salmon and Group sales.

Financial risks f) Concentration of financial liabilities The Group has signed credit contracts with its financial creditors, which establish repayment terms, interest rates, minimum financial ratios, and guarantees. They require that the Group complies with various other obligations. They also contain various mechanisms for the creditors to approve any exceptions to these obligations. Failure to pay any of the installments of capital and interest on the due dates, or failure to comply with the Group’s obligations for more than 90 days, may result in the financial creditors immediately calling in all the capital and interest due on these loans, which could negatively impact the Group’s financial position and performance. g) Foreign exchange risks As the Group is global, fluctuations in exchange rates can positively or negatively affect its performance, as some of its costs, such as labor and transportation services among others, are indexed to the Chilean peso. While its sales are affected by the relative value of the foreign currencies used by its target markets, such as the US dollar, the Euro, the Yen, the Rouble and the Real. The Group’s presentation currency is US dollars, so changes in the exchange rate between the US dollar and the other functional currencies used by the Group may negatively or positively affect its financial performance. Regulatory and environmental risks h) Changes in environmental and other legislation Caring for the environment is an essential component of Company business policy. However, productive processes that result in natural resources becoming contaminated have resulted in a growing awareness and concern among consumers, intermediary groups and authorities in the field, who require productive systems that care for the environment and guarantee that natural resources are protected over the long term. These requirements have resulted in rigorous standards and procedures to secure environmental sustainability, but that lead to increased production costs and introduce restrictions on the Group’s productive processes. i)

Changes in aquaculture and concession legislation

The Group has implemented processes and constant monitoring, in order to correctly manage its fish farms, and it has a technical and legal department that ensures that aquaculture concessions are properly used and managed. However, issues such as failure to comply with changes in aquaculture and concession legislation and standards, failure to adequately manage aquaculture concessions, failure to comply with relevant sustainability standards and carefully operate the system as a whole, and unjustifiable or unauthorized failure to use concessions, could lead to sanctions or restrictions that could negatively affect the Group’s business and operating performance. These measures could even include authorities revoking aquaculture concessions, where such legislation permits.

Other risks j)

Asset risks

Fixed assets such as buildings and facilities, finished products and civil liability risks are covered by insurance policies with terms and conditions that are usual for the market. The Group has an insurance policy that partially covers any damage to its biological assets caused by diseases, theft and natural risks, such as storms, hurricanes, storm surges, tsunamis, earthquakes, volcanic eruptions, floods, avalanches, landslides, underwater currents and harmful algal blooms. Consequently, significant damage or loss to such assets could still have an adverse effect on the Groupâ&#x20AC;&#x2122;s business and financial position. Nevertheless, the geographical diversity of its facilities on land and at sea at least mitigates the risk of such events, although it will not eliminate that risk. k) Subsidiaries and associates Empresas AquaChile S.A. is the parent company and associate of several companies. A significant proportion of the Groupâ&#x20AC;&#x2122;s business is performed by these companies and its operating performance and financial position substantially depends on them. Any significant deterioration in the business and performance of its subsidiaries and associated companies may have an adverse effect on its business and operational performance. Insurance The insurance policies held by Empresas AquaChile S.A. and its subsidiaries as of December 31, 2017 are as follows. Goods Eggs, live and harvested fish

Risks covered Damage as a consequence or directly caused by an external agent during loading/unloading and transport by sea, air or land.

Biomass growing-out

Damage as a result of disease, theft and natural risks such as storms, storm surges, tsunamis, earthquakes, volcanic eruptions, floods, avalanches, landslides, underwater currents and harmful algal blooms.

NOTE 12 – CURRENT TAX ASSETS AND LIABILITIES Current tax assets

12/31/2017

12/31/2016

ThUS$

Recoverable tax on profits absorbed by tax losses

8,176

3,131

Monthly provisional tax payments

3,596

882

Credits for training expenses

608

859

Other recoverable taxes

355

234

12,735

5,106

12/31/2017

12/31/2016

ThUS$

11,213

8,105

136

11,349

8,142

12/31/2017

12/31/2016

ThUS$

Sociedad Periodística El Líbero S.A.*

Total

Total Current tax liabilities Income taxes payable Unique tax at 35% Total

NOTE 13 - OTHER FINANCIAL ASSETS, NON-CURRENT Other financial assets, non-current are as follows. Other financial assets, non-current

* This is a 0.53% interest in Sociedad Periodística El Líbero S.A. acquired in August 2015 by the subsidiary Procesadora Hueñocoihue SpA. NOTE 14 – EQUITY METHOD INVESTMENTS Equity method investments are as follows. Name

12/31/2017

12/31/2016

ThUS$

Salmones Chaicas S.A.

760

Total

760

Since May 2011, the Group has held an 18.3% interest in Salmones Chaicas S.A. The remaining shareholders of this company were Inversiones La Montaña S.A. with 43.55%, CS Holding ApS and OSS Holding 2004 ApS jointly holding 7.04%, Fondo de Inversión Privado Patagonia with 15.55%, and Holding Salmones S.A. with 15.55%. This project is a technologically advanced recirculation hatchery to produce Atlantic salmon eggs and smolts.

On June 17, 2013, CS Holding ApS and OSS Holding 2004 ApS sold 49,234 shares each to Empresas AquaChile S.A., thus increasing its interest from 18.3% to 19.70%. and that of Inversiones La Montaña S.A. to 44.88%, Fondo de Inversión Privado Patagonia to 17.71%, and Holding Salmones S.A. to 17.71%. On October 20, 2014, Inversiones La Montaña sold 921,000 shares to each of Fondo de Inversión Privado Patagonia Dos and Holding Salmones S.A. This changed the interests of each shareholder as follows. Empresas Aqua Chile S.A. with 19.70 %, Inversiones La Montaña S.A. with 18.94%, Fondo de Inversión Privado Patagonia Dos with 30.68%, and Holding Salmones S.A. with 30.68%. On February 14, 2017, Empresas AquaChile S.A. acquired 80.30% of Salmones Chaicas S.A. from Inversiones La Montaña S.A., Fondo de Inversión Privado Patagonia Dos and Holding Salmones S.A. This brought its total shareholding in that company to 100%, so it began consolidating it into the Group financial statements from that date. As a result, goodwill of ThUS$ 9,977 has been recognized, which arose from the difference between the acquisition price and the fair value equity of Salmones Chaicas S.A., where this fair value was ThUS$ 2,865. The assets and liabilities of Salmones Chaicas S.A. as of December 31, 2016 and its financial performance for the year ended December 31, 2016 are presented below, in order to facilitate a comparative analysis. These should be added to the consolidated financial statements of Empresas AquaChile S.A. as of those dates (eliminating the investment and the proportional financial performance as of those dates). Consolidated statements of financial position Current assets

12/31/2016 ThUS$ 3,606

Non-current assets

27,002

Assets

30,608

Current liabilities Non-current liabilities Equity Liabilities and equity

Consolidated statements of financial position

6,932 19,816 3,860 30,608

12/31/2016 ThUS$

Operating revenue

9,712

Net loss for the year

(430)

NOTE 15 - INTANGIBLE ASSETS OTHER THAN GOODWILL Non-internally created intangible assets are as follows. Intangible assets other than goodwill

Useful Life

Aquaculture concessions

Finite

Aquaculture concessions

Indefinite

Water rights

Finite

Water rights

Indefinite

Trademark rights

Finite

393

251

Trademark rights

Indefinite

5,299

Property rights

Finite

1,070

1,175

Effluent disposal rights

Indefinite

406

Others

Finite

1,187

751

42,968

41,419

Total

12/31/2017

12/31/2016

ThUS$

243

31,936

32,176

110

2,434

1,251

a) Aquaculture concessions and water rights Aquaculture concessions acquired from third parties are presented at historical cost. The useful life of such concessions is indefinite, because they have no expiry date nor a foreseeable useful life, therefore, they are not amortized. This status of indefinite useful life is reviewed at each reporting date, in order to assess whether events and circumstances continue to support an indefinite useful life for that asset. b) Trademark rights Acquired trademarks are valued at historical cost less impairment. Trademarks with an indefinite useful life are not amortized, and those with a finite useful life are amortized over the term of the trademark agreement. c) Property rights Property rights arise from an intangible asset received as a shareholder contribution (El Pelรณn de la Bajura S.A.) to the subsidiary Grupo ACI S.A. in Costa Rica, and is amortized using the straight-line method over a 20 year term. d) Software licenses Intangible assets with a finite useful life are mainly software, which have all been acquired from third parties. The Group has defined that their useful life ranges from 3 to 5 years.

Movements in intangible assets as of December 31, 2017 are as follows:

Detail Opening balance as of 01/01/2017 Accumulated amortization and impairment

Aquaculture concessions ThUS$

Effluent Water Trademark Property disposal rights rights rights rights Others ThUS$ ThUS$ ThUS$ ThUS$ ThUS$

Total ThUS$

32,176

1,361

5,550

1,175

406

751

41,419

(1)

(111)

(8)

(105)

(169)

(394)

Increases from acquiring interests *

103

Additions during the year

1,085

150

605

1,840

32,179

2,434

5,692

1,070

406

1,187

42,968

Effluent Water Trademark Property disposal rights rights rights rights Others ThUS$ ThUS$ ThUS$ ThUS$ ThUS$

Total ThUS$

Closing balance as of 12/31/2017

* See Note 14. Movements in intangible assets as of December 31, 2016 are as follows:

Detail Opening balance as of 01/01/2016 Accumulated amortization and impairment Additions during the year Closing balance as of 12/31/2016

Aquaculture concessions ThUS$ 32,149

1,384

5,558

1,280

735

41,106

(30)

(8)

(105)

(132)

(275)

406

148

588

32,176

1,361

5,550

1,175

406

751

41,419

The aquaculture concessions and water rights are as follows. a) Owned water rights: The Company has 122 water rights with a total volume of 66,672.99 liters per second (l/s). Note: Five of these rights are for variable flows, depending on the dry season month, in which case the flow rates were calculated as the geometric mean. Water rights N째 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

N째 DGA 63 240 443 205 235 261 219 281 345 427 492 559 354 397 514 309 506 575 682 117 678 883 547 211 231 993 1152 121 426 532 5 6 129 195 242 16

Year 1988 1988 1988 1989 1989 1989 1990 1990 1990 1990 1990 1990 1991 1991 1991 1993 1995 1995 1995 1996 1996 1996 1997 1998 1998 1998 1998 1998 1999 1999 2000 2000 2000 2000 2000 2001

Region RM RM RM X X X X X X X X X IX IX IX X X RM X X X X IX XI XI X X IX IX IX XI XI X X X X

N째 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72

N째 DGA 26 188 292 323 443 1022 117 118 278 81 82 85 147 155 192 193 194 223 364 466 467 90 118 122 125 201 383 384 385 290 293 7 13 470 51 199

Year 2001 2001 2002 2002 2002 2002 2003 2003 2003 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2006 2006 2006 2007 2007

Region X X X X X IX X X IX X X X X IX X X X X X X X X XI XI XI XI X X X X X XI XI X IX XI

N째 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96

N째 DGA 232 10 11 12 26 32 62 168 223 479 67 72 73 91 116 117 147 217 279 81 82 98 107 149

Year 2007 2008 2008 2008 2008 2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010

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

N째 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122

N째 DGA 153 163 186 209 244 251 265 292 393 467 538 48 49 182 315 317 56 424 425 426 427 246 507 47 71 140

* Registration number at the General Water Department Summary of water rights Region

Quantity

XIV

Total

122

Year 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2012 2015 2015 2015 2015 2016 2016 2017 2017 2017

Region XI X XI X X X X X X X X XIV XIV X X X X X X X X X X XI XI XI

The Company has 167 aquaculture concessions, comprising 154 marine, 1 river and 12 lake concessions, covering a total area of 1,670.17 hectares, comprising 1,588.39 marine hectares, 22.33 river hectares and 59.45 lake hectares.

101941 104065 101272 101581 101768 102882 101295 101975 102039 101296 100123 100124 100974 101989 101498 101294 100219 100221 100220 100182 102049 101292 102255 101987 100411 100222 100223 102007 102008 102009 102010 100981 100208 100416 100674 100679 100245 100680 101604 102072

Morro Chilco Pocoihuén Pta. Serapio (Cochamó) Pta. Zenteno (Canutillar) Sotomó Caicura Capera Chaicas Ensenada Quetén Herradura Huelmo Huenquillahue Isla Guar Isla Queullín La Arena Puqueldón Chidhuapi Estero Machildad Quinched Abtao Huapi Paso Quenu Quilque Sur Chauques Quetalco Quiquel I Quiquel II Teguel, Sector I Teguel, Sector II Teguel, Sector III Teguel, Sector IV La Estancia Pangue Tauco Yutuy Detif Ichuac Liucura (Cahueldao) Paildad Lille 1

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-1 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-3 X-4 X-4

1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 3a 3a 3a 3b 3b 3b 3b 8 9a 9a 9a 9a 9a 9a 9a 10a 10a 10a 10a 10b 10b 10b 11 12a

Cochamo Cochamo Cochamo Cochamo Cochamo Hualaihue Pto Montt Pto Montt Hualaihue Pto Montt Pto Montt Pto Montt Calbuco Calbuco Pto Montt Pto Montt Calbuco Calbuco Calbuco Calbuco Calbuco Calbuco Calbuco Quemchi Dalcahue Dalcahue Dalcahue Dalcahue Dalcahue Dalcahue Dalcahue Castro Castro Chonchi Castro Puqueldón Puqueldón Puqueldón Queilen Quellón

Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine

4.29 0.24 24.57 6.81 8.92 3.95 18.00 4.29 62.50 22.50 62.51 61.58 40.00 58.25 1.00 18.00 5.84 2.78 2.47 10.15 5.00 12.65 9.00 65.96 21.16 6.42 4.20 3.24 3.24 3.24 3.24 10.12 9.00 7.95 5.21 16.80 17.43 27.63 7.14 12.00

Other **

Concession *

Sanitary fallow period

Municipality

Status as of 12/31/2017

Operating

Concession district

Surface area (ha)

Name

Macro zone

SIEP Code

Region

River and marine aquaculture concessions

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

102391 102064 102159 102071 102096 102073 102385 102085 102154 102063 102062 101045 103312 102906 102907 110190 110489 110405 110610 110191 110377 110580 110704 110189 110490 110263 110264 110502 110705 110710 110523 110447 110397 110252 110609 110491 110496 110539 110497 110498 110408 110465 110468 110467 110460

Mauchil Piedra Blanca Punta Lille 2 Punta Paula Punta Pelú Punta White Quellón Viejo Yaldad Yelcho Guamblad San Pedro Yatac Ayacara Buill Ica Betecoi Caleta Momia Cuervo Cuervo Norte El Pino Fresia Sur Fresia Weste Guaitecas II Lagreze Norte LagrezeWeste Laguna Cuervo Repollal Isla Chaffers Canal Avellano 1 Canal Avellano 2 Canal Pérez Norte Estero Fino, sector 2 Norte Isla Valverde Ab del Krim Albo Benjamin Brieva Caleta Madina Canal Temuan Carabelas Isla Sierra Jesús 1 Jesús 2 Jesús 3 Jesús Sur 1

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

X-4 X-4 X-4 X-4 X-4 X-4 X-4 X-4 X-4 X-4 X-4 X-4 X-5 X-5 X-5 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1

12a 12a 12a 12a 12a 12a 12a 12a 12a 12b 12b 12b 16 16 16 18a 18a 18a 18a 18a 18a 18a 18a 18a 18a 18a 18a 18c 18c 18c 18c 18c 18c 21b 21b 21b 21b 21b 21b 21b 21b 21b 21b 21b 21b

Quellón Quellón Quellón Quellón Quellón Quellón Quellón Quellón Quellón Quellón Quellón Quellón Chaitén Chaitén Chaitén Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Guaitecas Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes

10.00 18.00 7.42 12.00 8.26 10.00 3.48 7.15 7.03 7.21 8.03 8.44 3.47 2.36 0.67 9.99 3.04 6.08 3.03 6.00 7.28 2.02 5.00 9.91 6.08 4.35 10.09 4.00 3.00 6.00 10.00 4.00 56.00 6.00 4.00 4.55 3.75 4.00 4.50 4.12 4.50 4.50 4.50 4.50 4.50

Other **

Concession *

Sanitary fallow period

Municipality

Status as of 12/31/2017

Operating

Concession district

Surface area (ha)

Name

Macro zone

SIEP Code

Region

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

110536 110249 110406 110661 110540 110505 110503 110449 110538 110245 110247 110504 110537 110439 110435 110443 110433 110446 110445 110437 110434 110619 110005 110208 110242 110039 110138 110136 110149 110584 110126 110127 110209 110204 110205 110234 110916 110849 110206 110111 110110 110414 110221 110223 110243

Jesús Sur 2 Jesús Sur 3 Lalanca Mauricio Puerto Español Teresa 1 Teresa 2 Teresa 3 Teresa Norte Teresa Sur 1 Teresa Sur 2 Transito 1 Transito 2 James 1 James 2 James 3 Melchor 4 Kent 1 Kent 2 Melchor 5 Melchor 7 Isla Chaculay Chacabuco Ensenada Pérez Estero Frío Fontaine Luma Punta Yelcho - Caleta Bluff Canal Luchín Las Huichas Pangal 1 Pangal 2 Pangal 3 Pangal 4 Canalad 1 Canalad 2 Canalad 3 Canalad 4 E. Magdalena Punta Aguada Punta Bennett Ayacucho Demhart Gala medio / Estero del medio Gala Sur / Estero Sur

XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI

XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 XI-1 Broker Broker Broker XI-2 XI-2 XI-2 XI-2 XI-2 Broker Broker Broker Broker Broker Broker

21b 21b 21b 21b 21b 21b 21b 21b 21b 21b 21b 21b 21b 21c 21c 21c 21c 22a 22a 22b 22b 28a 28b 28b 28b 28b 28b

Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Aysen Aysen Aysen Aysen Aysen Aysen Aysen Aysen Aysen Aysen Aysen Aysen Aysen Aysen

Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine

4.50 6.00 6.00 4.50 4.50 3.82 4.50 4.47 4.50 6.00 6.00 4.50 4.50 6.77 9.50 2.37 6.77 6.74 4.04 13.55 13.75 5.25 1.34 10.00 3.22 3.04 1.00

Broker

28b

Aysen

Marine

2.00

XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI

XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3

30a 30b 31a 31a 31a 31a 31b 31b 31b 31b 31b 32 32 33 33

Aysen Aysen Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes

Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine

27.00 5.00 50.60 50.60 12.14 12.50 12.50 13.23 24.85 8.75 12.50 1.00 1.00 2.50 6.00

XI-3

Cisnes

Marine

8.00

XI-3

Cisnes

Marine

4.00

Other **

Concession *

Sanitary fallow period

Municipality

Status as of 12/31/2017

Operating

Concession district

Surface area (ha)

Name

Macro zone

SIEP Code

Region

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

110421 110423 110411 110273 110241 110422 110222 110271 110220 110270 110216 110217 110219 110218 110214 110213 110215 110402 110407 110412 120193 120180 120184 103426

Isla Chita Isla Gala Sur Isla Harry Isla Suarez Isla Warney Porvenir II Punta González Punta Porvenir Seno Gato Canal Refugio Cascada El Avellano Estero Mena Isla Ubaldo La Leona Laguna Pedregoso Marchant Coca 2 Coca 3 Punta Guala Ensenada Moreno Nororeste de Isla Torres Punta Oriental Halcones Chico

XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XI XII XII XII XIV

XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 XI-3 Undefined Undefined Undefined N/A

33 33 33 33 33 33 33 33 33 34 34 34 34 34 34 34 34 35 35 35 49a 50b 50b N/A

Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Cisnes Río Verde Río Verde Río Verde Corral

Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine Marine River

2.50 7.50 7.50 13.63 12.50 7.50 6.00 12.50 8.00 12.50 12.35 11.35 8.00 8.00 12.50 12.50 12.50 2.00 1.92 4.00 5.25 5.25 5.25 22.33

Other **

Concession *

Sanitary fallow period

Municipality

Status as of 12/31/2017

Operating

Concession district

Surface area (ha)

Name

Macro zone

SIEP Code

Region

X X X X X X X X X X X X X X X X X X X X X X X X

* According to the concession classification indicated in General Fisheries and Aquaculture Law 18,892 Article 67. ** The "Others" classification contains fish farms with no biomass as of December 31, 2017. Note: The farming standard commonly used by the Group in the salmon and trout harvest considers 2 modules with 10 growing-out cages in each. These 20 cages are typically 30m x 30m with a depth of 15m, which implies an approximate area of use of 1.8 hectares per concession.

Aquaculture concessions in lakes Aquaculture concessions in lakes total 59.45 hectares as of the reporting date, as follows.

100390 100394 101291 100678 100370 100369 100545 100522 110048 110037 110038 110075

Region

Bahía El Volcán Chapo Desagüe 1 Chapo Desagüe 2 Colulí Ensenada Bahía 1 Ensenada Bahía 2 Puerto Octay Rupanco Lago Riesco 1 Lago Riesco 2 Lago Riesco 3 Laguna Los Palos

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

Municipality

Puerto Varas Puerto Montt Puerto Montt Puerto Montt Puerto Octay Puerto Octay Puerto Octay Puerto Octay Aysen Aysen Aysen Aysen

TOTAL

Approved hectares

Aquaculture Concession *

1.70 0.07 5.99 2.90 0.38 0.94 1.00 12.50 3.21 10.00 19.76 1.00

Lake Lake Lake Lake Lake Lake Lake Lake Lake Lake Lake Lake

Others ***

Name

Sanitary fallow period

SIEP Code **

Operating

Status as of 12/31/2017

X X X X X X X X X X X

59.45

* According to the concession classification indicated in General Fisheries and Aquaculture Law 18,892 Article 67. ** SIEP: Sistema de Información de Estadísticas Pesqueras del Servicio Nacional de Pesca (Fisheries Statistical Information System from the National Fishing Service (Sernapesca)). *** The "Others" classification contains fish farms with no biomass as of December 31, 2017. Summary of aquaculture concessions

Region X

Marine and river Total surface Quantity area (hectares) 55 782.8

789.84

In use as of 12/31/2017 19

Lakes Total surface Quantity area (hectares) 8 25.48

In use as of 12/31/2017 3

33.97

XII

15.75

XIV

22.33

Total

154

1,610.72

59.45

The Group is using 37 marine and river aquaculture concessions, and 4 lake aquaculture concessions as of December 31, 2017

b) Leased assets The Group has not leased any water rights or marine concessions. The Group has leased two 7 ha lake concessions, as follows. Owner

Lessee

Location

Víctor Hugo Puchi Acuña

AquaChile S.A.

Puerto Fonck

Hectares 1.0

Australis Mar S.A.

Empresas AquaChile S.A.

Patranca

6.0

Total

7.0

NOTE 16 – GOODWILL Goodwill is the excess acquisition cost over the fair value of the Company's share of the net identifiable assets at the acquired company on the acquisition date. Acquired goodwill as of the reporting date is as follows. 12/31/2017

12/31/2016

ThUS$

1,981

Pesquera Antares S.A.*

985

Salmones Australes S.A.

122

1,471

445

Salmones Australes S.A.

1,282

Empresas AquaChile S.A.

Salmones Chiloé S.A. **

18,398

Empresas AquaChile S.A.

Salmones Maullín S.A.

18,686

Empresas AquaChile S.A.

Alitec Pargua S.A.

3,819

Empresas AquaChile S.A.

Salmones Maullín Ltda.

Empresas AquaChile S.A.

Salmones Chaicas S.A.***

9,977

Salmones Chiloé S.A.

Procesadora Hueñocoihue SpA

1,799

Grupo ACI

Aquacorporacion Internacional S.A.

4,247

63,224

53,247

Investor

Issuer

Antarfood S.A.

Aguas Claras S.A.

AquaChile S.A. AquaChile S.A. AquaChile S.A.

Salmones Cailín S.A.

AquaChile S.A.

Pesquera Palacios S.A.*

Aguas Claras S.A.

Total

* Merged with AquaChile S.A. ** Merged with Aguas Claras S.A. *** Goodwill arising on the acquisition of the remaining 80.30% interest in Salmones Chaicas S.A. Management has not observed any evidence of impairment with respect to goodwill.

Movements in acquired goodwill as of December 31, 2017 are as follows. 12/31/2017 Movements in goodwill

ThUS$

Opening balance as of 01/01/2017

53,247

Increases from acquiring interests *

9,977

Closing balance as of 12/31/2017

63,224

* Goodwill arising on the acquisition of the remaining 80.30% interest in Salmones Chaicas S.A. Movements in acquired goodwill as of December 31, 2016 are as follows. 12/31/2016 Movements in goodwill

ThUS$

Opening balance as of 01/01/2016

53,247

Decreases for disposals

Closing balance as of 12/31/2016

53,247

NOTE 17 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of December 31, 2017 is as follows.

Land Buildings and construction Plant and equipment IT equipment Fixtures and fittings Motor vehicles

ThUS$ 40,921 185,300 252,337 4,005 10,429 4,014

Accumulated depreciation ThUS$ (105,489) (191,361) (2,518) (2,857) (3,333)

Total

497,006

(305,558)

Property, plant and equipment

Gross value

Net value ThUS$ 40,921 79,811 60,976 1,487 7,572 681 191,448

Property, plant and equipment as of December 31, 2016 is as follows.

Land Buildings and construction Plant and equipment IT equipment Fixtures and fittings Motor vehicles

ThUS$ 41,008 167,655 238,513 3,561 5,825 4,224

Accumulated depreciation ThUS$ (91,895) (181,809) (2,289) (2,261) (3,119)

Total

460,786

(281,373)

Property, plant and equipment

Gross value

Net value ThUS$ 41,008 75,760 56,704 1,272 3,564 1,105 179,413

Movements in property, plant and equipment as of December 31, 2017 are as follows. Opening balance Increases from as of acquiring 01/01/2017 interests *

Closing balance as of 12/31/2017

Transfers

Other increases (decreases)

ThUS$

Land

41,008

660

114

(861)

40,921

Buildings and construction, net

75,760

15,654

1,582

(829)

(12,400)

79,811

Plant and equipment, net

Movements in property, plant and equipment, net

Additions **

Disposals Depreciation *** expense

56,704

3,021

13,893

(578)

(16,614)

4,550

60,976

IT equipment, net

1,272

584

(339)

(56)

1,487

Fixtures and fittings, net

3,564

9,258

(588)

(191)

(4,538)

7,572

1,105 179,413

7 19,435

4 25,435

(149) (3,005)

(286) (29,830)

681 191,448

Motor vehicles, net Total

* When Salmones Chaicas S.A. was acquired (see Note 14) ** Additions to property plant and equipment were ThUS$ 14,798 (ThUS$ 6,944 as of December 31, 2016). *** Includes positive cash flow of ThUS$ 2,283 on the sales of property, plant and equipment to third parties (ThUS$ 88 as of December 31, 2016). Movements in property, plant and equipment as of December 31, 2016 are as follows. Opening balance as of 01/01/2016

Increases from acquiring interests

ThUS$

Closing balance as of 12/31/2016

Additions

Disposals

Depreciation expense

Transfers

Other increases (decreases)

ThUS$

41,198

ThUS$ -

(190)

41,008

84,148

1,077

(1,220)

(10,818)

2,553

75,760

72,715

2,605

(979)

(19,724)

1,947

140

56,704

1,368

207

(11)

(319)

1,272

Fixtures and fittings

6,042

2,503

(281)

(177)

(4,524)

3,564

Motor vehicles

1,671

(199)

(398)

(3)

1,105

207,142

6,426

(2,880)

(31,436)

161

179,413

Movements in property, plant and equipment, net Land Buildings and construction Plant and equipment IT equipment

Total

Estimated useful lives or depreciation rates Estimated useful lives by asset are as follows.

Buildings Plant and equipment Fixtures and fittings Motor vehicles Other property, plant and equipment IT equipment

Minimum life or rate Years 10 3 3 7 3 3

Maximum life or rate Years 50 15 20 7 10 6

Residual values and useful lives are reviewed and adjusted at each reporting date, if necessary. a) Insurance The Company has insurance policies covering risks to movable property, vehicles, equipment, plant and machinery, including business interruption and strike losses. Empresas AquaChile S.A. and its subsidiaries believe that these policies provide sufficient coverage for the risks inherent in its business. The insurance policies held by Empresas AquaChile S.A. and its subsidiaries for property, plant and equipment are as follows. Goods Buildings, facilities, machinery and equipment

Risks covered Damage to property and earthquake/tsunami.

due

fire,

earthquake,

Damage to property caused by natural risks. Coverage for fire and property damage as a direct result of strikes, looting, riots and caused by its own or third party vehicles. Loss and/or damage caused by natural disasters (floods, high tides, wind). Platforms, cages, pontoons and maritime ships

Physical loss or damage attributable to: Fire or explosion. Ship that runs aground, is beached, sinks or turns over. Overland transport that overturns or derails Ship or any means of transport that has a collision Unloading in a forced port call, if this is legitimate. Insured property losses caused by general average sacrifice, or jettisoned cargo.

b) Finance leases Assets acquired under finance leases are classified as “Other property, plant and equipment”. c) Subsequent costs (replaced components, improvements, expansion, etc.) are included in the asset’s initial value or are recognized as separate assets only when it is probable that future financial benefits associated with the fixed asset will be received by the Group and the cost of the fixed asset can be reliably measured. The value of the component replaced is expensed. Any remaining repairs and maintenance are expensed in the year they are incurred. NOTE 18 - CURRENT AND DEFERRED INCOME TAXES Deferred taxes are the income taxes that Empresas AquaChile S.A. and its subsidiaries will have to pay (liabilities) or receive (assets) in future years, related to temporary differences between the tax value and the accounting value of certain assets and liabilities. The Group’s main deferred tax assets is the accumulated losses of some of its subsidiaries, which will be recoverable in future years. The main deferred tax liability payable in future years comes from temporary differences in manufacturing costs, revaluing biological assets and revaluing property, plant and equipment as of the transition date to IFRS, in 2013 for land, and the application of accelerated depreciation for tax purposes.

Deferred tax assets as of December 31, 2017 and 2016 are as follows. 12/31/2017

12/31/2016

Deferred tax assets

Deferred tax liabilities

Deferred tax assets

Deferred tax liabilities

ThUS$

Manufacturing costs

19,273

12,960

Accelerated depreciation

9,474

231

11,418

Fair value of biological assets

6,272

6,701

Description

Concessions

674

997

444

987

Tax losses

97,918

116,841

Provisions

2,270

2,286

100

8,313

139

8,164

Inventory revaluation

Intangible assets

755

Intangible assets

Property, plant and equipment

Others

874

1,133

5,397

189

5,246

521

885

Turnover costs

161

Bank charges

681

796

Prepaid income CIF sales adjustment

Capitalized CORFO costs

Net realizable value provisions on finished products

271

113

Tax goodwill

823

882

109,188

47,085

127,072

43,000

65,841

3,738

88,015

3,943

Unrealized gains on finished products Total Net Total

1,209

Deferred tax assets and liabilities are presented net for each company in the financial statements as of December 31, 2017 and 2016 as follows. 12/31/2017

Company

Aguas Claras S.A.

12/31/2016

Deferred tax assets

Deferred tax liabilities

ThUS$

287

Net value ThUS$

1,162

Deferred tax assets

Deferred tax Net value liabilities

ThUS$

(875)

(1,462)

ThUS$

3,871

(5,333)

140

139

3,022

3,021

Antarfood S.A.

2,912

234

2,678

2,571

238

2,333

Piscicultura Aquasan S.A.

3,545

1,664

1,881

3,091

1,021

2,070

Procesadora Aguas Claras Ltda.

1,064

1,461

(397)

2,111

1,567

544

Procesadora Hueñocoihue SpA.

2,850

2,587

Servicios Aguas Claras S.A.

7,424

6,238

AquaChile S.A.

3,423

1,530

1,893

3,356

1,432

1,924

Aquainnovo S.A.

1,419

1,354

1,161

1,096

(18)

Antarfish S.A.

Laboratorio Antares S.A.

Centro de Innovación Aquainnovo-Biomar S.A.ˡ

(4)

287

234

6,643

8,909

2,125

6,784

68,134

26,024

42,110

87,490

20,519

66,971

(327)

98,302

32,461

65,841

119,143

31,128

88,015

Alitec Pargua S.A.

678

(678)

321

(321)

Grupo ACI S.A.

3,060

(3,060)

3,622

(3,622)

Salmones Australes S.A. Salmones Cailín S.A. Salmones Maullín Ltda. Salmones Maullín S.A. Inversiones Salmones Australes Ltda. Empresas Aquachile S.A. Alitec Pargua S.A. Salmones Chaicas S.A.² Net asset value

Net liability value

(3,738)

(3,943)

Deferred tax assets from tax losses are ThUS$ 97,918 as of December 31, 2017 (ThUS$ 116,841 as of December 31, 2016). These losses can be offset against taxable income for the companies that meet this condition in the future, as follows. Deferred tax from tax losses in:

Deferred taxes for tax losses 12/31/2017 12/31/2016 Subsidiaries AquaChile S.A.

ThUS$

Change with effect on income 12/31/2017 ThUS$

Deferred taxes for tax losses 12/31/2016 12/31/2015 ThUS$

ThUS$

Change with effect on income and equity 12/31/2016 ThUS$

3,861

3,419

442

3,419

4,865

(1,446)

Empresas AquaChile S.A.

68,636

86,925

(18,289)

86,925

110,192

(23,267)

Antarfish S.A.

15,102

17,371

(2,269)

17,371

33,144

(15,773)

8,146

8,725

(579)

8,725

8,723

330

(330)

Salmones MaullĂn S.A. Grupo ACI Alitec Pargua S.A. Salmones Chaicas S.A. Total

257

401

(144)

401

407

(6)

1,916

97,918

116,841

(18,923)

116,841

157,661

(40,820)

There is no limitation period for tax losses to be offset against future earnings for companies incorporated in Chile. However, tax losses for companies incorporated in Costa Rica are subject to a limitation period of 3 years.

Movements on deferred tax assets and liabilities are as follows. 12/31/2017 Deferred tax movements

Opening balance

12/31/2016

Deferred tax assets

Deferred tax liabilities

Deferred tax assets

Deferred tax liabilities

ThUS$

127,072

43,000

169,907

79,792

Provisions

(42)

(9)

684

Prepaid income

210

189

4,270

Manufacturing costs

5,227

(41,744)

Accelerated depreciation

(2,000)

(1,951)

Fair value of biological assets

(429)

(5,771)

6,701

Biological asset impairment

(883)

(21,139)

(40,820)

(330)

Tax losses Increases from acquiring interests *

2,242

1,102

Property, plant and equipment

(39)

(83)

(39)

190

Net realizable value provisions on finished products

158

(1,413)

Insurance receivable

Others

CIF sales adjustment

(363)

1,146

Sales on consignment adjustment

Turnover costs

140

Bank charges

(124)

382

(61)

(43)

Capitalized CORFO costs Tax goodwill

(59)

(55)

1,209

109,188

47,085

127,072

43,000

65,841

3,738

88,015

3,943

Unrealized gains on finished products Closing balance

Net Total

* See Note 13. Income taxes are as follows. Income taxes for national and foreign companies are as follows: Deferred taxes Current tax expense Effect of absorbed profits provision

12/31/2017

12/31/2016

ThUS$

(11,762)

(11,945)

7,453

2,989

Effect of deferred taxes

(21,969)

(2,777)

Total current taxes

(26,278)

(11,733)

A reconciliation between the income tax expense using the statutory rate and the effective rate is as follows. Reconciliation of the income tax expense Income tax expense using the statutory rate Tax effect of rates in other jurisdictions Effect of change in rates Effect of permanent differences Effect of change in CIF sales treatment Other statutory tax expenses Total

12/31/2017

12/31/2016

ThUS$

(21,724)

(4,471)

281

(128)

(5,438)

(4,853)

(174)

(256)

(1,931)

777

(94)

(26,278)

(11,733)

NOTE 19 - OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES Empresas AquaChile S.A. and its subsidiaries had loans with financial institutions as of December 31, 2017 and 2016 as follows. 12/31/2017

12/31/2016

Interest bearing loans, current

Currency

ThUS$

Maturing in less than twelve months

US dollar

27,501

36,342

Bank interest payable

US dollar

297

340

Swap

US dollar

267

Refinancing costs

US dollar

(2,491)

(3,123)

25,348

33,826

Total

12/31/2017

12/31/2016

Interest bearing loans, non-current

Currency

ThUS$

Maturing in more than twelve months

US dollar

192,788

240,822

Leasing obligations

US dollar

Total

595

193,383

240,822

The Group recorded ThUS$ 72,180 in loan repayments as of December 31, 2017 (ThUS$ 32,778 as of December 31, 2016), ThUS$ 15,273 in interest payments (ThUS$ 16,595 as of December 31, 2016), and ThUS$ 7,371 for loans received (ThUS$ 8,914 as of December 31, 2016). On December 22, 2016, Empresas AquaChile S.A. signed an agreement with a group of creditor banks, comprising Rabobank, DNB, BBVA, BCI, Santander, Banco de Credito del PerĂş, Banco de Chile and Banco Estado. The terms and conditions contained rescheduled financing and liabilities with a final 5 year term.

A summary of the principal refinancing agreements are as follows. a.- The rescheduled loan is up to ThUS$ 251,000 and comprises two tranches: one repayable for ThUS$ 150,000 and a revolving line of credit for ThUS$ 101,000. Both tranches with a final 60 month term. The repayable tranche has minimum capital repayments over time, which could be increased if permitted by the Group’s cash flow. b.- The interest rate is 180-day LIBOR plus a variable margin, which will be defined for each period based on capital levels (measured using the Equity Ratio1) and debt coverage (measured as Adjusted NIBD / Adjusted EBITDA2) for the previous period. For the first period, the margin over LIBOR was 4.50%pa, while for the second six-month period, that began on June 22, 2017, the margin fell to 4.25%pa. The margin for the 6 month period beginning on December 22, 2017 will reduce to 3%pa, in accordance with the indicators as of June 22, 2017. c.- Additionally, specific financial ratios must be met. These obligations include compliance with specific financial ratios (covenants) calculated on the consolidated financial statements of Empresas AquaChile S.A. as of December 31, 2016, and March 31, June 30, September 30 and December 31, of successive years. These ratios are the Equity Ratio, Net Adjusted Financial Debt/Adjusted EBITDA, Current Liquidity, and Borrowing Limits. Financial Covenants * Equity Ratio1 Adjusted NIBD / Adjusted EBITDA2 Current Liquidity3 Borrowing Limit (US$ millions)4

≥ ≤ ≥ ≤

Dec 2016 40.00% 6.00x 1.20x 280

2017-2021 42.50% 4.50x 1.20x 280

(1) Equity Ratio: Ratio between "Total equity" and "Total assets” in the consolidated statements of financial position. (2) Adjusted NIBD / Adjusted EBITDA: The sum of the following accounts in the consolidated financial statements: /a/ Other financial liabilities, current; plus /b/ Other financial liabilities, non-current; plus /c/ Supplier’s liabilities payable in over one hundred and twenty days; less /d/ Cash and cash equivalents. Excluding any current and noncurrent financial liability, supplier’s liability payable in over one hundred and twenty days and cash and cash equivalents at Grupo ACI, Alitec Pargua S.A. and Salmones Chaicas S.A. Divided by the Adjusted EBITDA for the last twelve months defined as follows. /a/ Operating revenue; less /b/ Costs of sales; less /c/ Administrative expenses; less /d/ Distribution costs; plus /e/ Depreciation and amortization expenses, excluding these amounts under /a/, /b/, /c/, /d/ and /e/ for Grupo ACI S.A., Alitec Pargua S.A. and Salmones Chaicas S.A. (3) Current Liquidity: Total current assets divided by total current liabilities, though excluding from the latter all the restructured obligations, as the fish biomass excluded from harvesting plans for the next twelve months will be excluded from current assets. (4) Borrowing Limit: The sum of the following accounts in the consolidated financial statements: /a/ Other financial liabilities, current, and /b/ Other financial liabilities, non-current.

Financial indicators as of December 31, 2017 are as follows.

Equity Ratio: Total equity / Total assets > or equal 42.5% a) Total equity b) Total assets Equity Ratio ( a / b )

12/31/2017 ThUS$ 391,525 794,890 49.3%

The limit for this covenant is 42.5% and therefore it is fulfilled Net Adjusted Financial Debt / Adjusted EBITDA for the last twelve months < or equal to 4.5x i) Net Adjusted Financial Debt: a) Other financial liabilities, current b) Other financial liabilities, non-current c) Suppliers liabilities payable in over 120 days d) Less: Cash and cash equivalents Total Net Adjusted Financial Debt (a + b + c - d) ii) Adjusted EBITDA (for the last 12 months): a) Operating revenue b) Cost of sales Less: c) Administration expenses d) Distribution costs Plus: e) Depreciation and amortization expense Total EBITDA for the last twelve months (a - b - c - d + e) Net Adjusted Financial Debt / Adjusted EBITDA

12/31/2017 ThUS$

11,292 178,095 204 (33,740) 155,851

508,878 (378,669) (9,550) (12,774) 28,213 136,098 1.15

The limit for this covenant is 4.50x and therefore it is fulfilled Current Liquidity > or equal to 1.20x a) Total current assets i) Less: Biological assets harvested in over 12 months b) Current liabilities * ii) Less: Restructured obligations * Current Liquidity (a - i) / (b - ii)

12/31/2017 ThUS$ 398,929 (26,591) 179,105 (11,239) 2.22

The limit for this covenant is 1.20x and therefore it is fulfilled * These are the obligations restructured on December 22, 2016 and presented within current liabilities Borrowing Limit < or equal to US$ 280 million

12/31/2017 ThUS$

a) Other financial liabilities, current b) Other financial liabilities, non-current

25,348 193,383

Borrowings (a + b)

218,731

The limit for this covenant is US$ 280 million and therefore it is fulfilled

d.- The contract includes mandatory and early voluntary repayments, specific information obligations, and other restrictions that are standard for such agreements. e.- 151 maritime aquaculture concessions have been pledged with a book value of ThUS$ 21,640 as of December 31, 2017, which belong to Empresas Aqua Chile S.A., Aguas Claras S.A., Salmones Maullín Ltda., AquaChile S.A. and Salmones Cailin S.A.. These will be converted into mortgages. Also five facilities with a book value of ThUS$ 30,335 as of December 31, 2017 have been pledged in guarantee. The Group has established additional guarantees in favor of the creditor banks with a commercial value of ThUS$ 35,000. f.- Aguas Claras S.A., Salmones Maullín Ltda. and AquaChile S.A. are joint and several guarantors in favor of the Banks, to guarantee fulfilment of the obligations assumed by the borrowers, under the terms, conditions and limitations defined in the contract. g.- Shares in AquaChile S.A., Salmones Maullín S.A., Aguas Claras S.A., and Antarfish S.A. have been pledged in favor of the creditors, to guarantee compliance with all their obligations. h.- On December 29, 2011, a financing contract was signed between Salmones Chaicas S.A. and Rabobank Chile S.A. for ThUS$ 12,500, with repayments beginning on April 30, 2013 at six-monthly installments of ThUS$ 893. On October 27, 2016, the installment due on October 30, 2016 was divided into two equal installments of ThUS$446 each, one due on October 30, 2017 and the other on April 30, 2018. The interest payable on this contract is based on 6 Month Libor plus 5.09%pa, which includes an insurance premium for a policy with EKF. On February 10, 2015, a loan of ThUS$ 2,000 was agreed from Rabobank that matures on January 30, 2017 with six-monthly interest payments. It covers the renewal of ThUS$ 1,000 which matured in January 2016, plus an additional ThUS$ 1,000. On January 25, 2017, the payment date for the Promissory Note of ThUS$2,000 that was due on January 30, 2017, was extended and modified into four equal semi-annual installments of ThUS$ 500 plus interest, due on June 30, 2017, December 30, 2017, June 30, 2018 and December 30, 2018.

The financial covenants are measured on December 31 each year, and these are as follows. a) Maintain minimum solvency ratio of 45% or a minimum net tangible value of ThUS$ 10,500, whichever is higher. Minimum Solvency Ratio = Net Tangible Value / Total Assets (16,736,804/26,164,457) = 64%, therefore it is fulfilled. Net Tangible Value = Share capital + Undistributed earnings - Intangible assets + Shareholder loans. (4,274,831-102,877+5,600,000+6,964,850) = 16,736,804, therefore it is fulfilled.

b) Maintain the debt coverage ratio over 1.3 times. Gross Income / Financial Debt (11,816,202/4,563,233) = 2.6, therefore it is fulfilled. c) Maintain the financial debt over EBITDA ratio below 2.5 times. Financial Debt / EBITDA (Earnings before interest, taxes, depreciation and amortization) (4,563,233/4,406,499) = 1.04, therefore it is fulfilled.

The loans held by Empresas AquaChile S.A. and its subsidiaries as of December 31, 2017 and 2016 are as follows. a) Current loans 12/31/2017 Total current as of 12/31/2017 ThUS$

Current due date Country

Creditor Name

Holland

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.

Currency

Repayments

Effective Rate

Nominal Rate

Guarantees

Up to 1 month ThUS$

1 to 3 months ThUS$

3 to 12 months ThUS$

US$

Semi-annual

4.81%

Secured

3,672

2,652

Norway

DNB Bank ASA

US$

Semi-annual

4.81%

Secured

Chile

Banco BBVA

US$

Semi-annual

4.81%

Secured

2,040

Chile

Banco de Crédito e Inversiones

US$

Semi-annual

4.81%

Secured

1,570

816

Chile

Banco Santander

US$

Semi-annual

4.81%

Secured

Chile

Banco Chile

US$

Semi-annual

4.81%

Secured

265

224

Chile

Banco Estado

US$

Semi-annual

4.81%

Secured

Norway

DNB Bank ASA

US$

Three monthly

3.04%

Secured

5,022

Chile

RaboFinance Chile S.A.

US$

Semi-annual

6.00%

Secured

1,000

2,278

Chile

RaboFinance Chile S.A.

US$

Semi-annual

6.67%

Secured

Costa Rica

BCT (line of credit)

US$

Monthly

5.50%

Secured

1,029

1,471

2,500

137

615

817

674

1,997

Costa Rica

BCR$ (Circulating portion) BCR

US$

Monthly

4.75%

Secured

Costa Rica

BCR (line of credit)

US$

Monthly

4.75%

Secured

1,323

Costa Rica

BCT - leasing portion

US$

Monthly

9.00%

Unsecured

307

406

Costa Rica

BNCR$ (Circulating portion) BCT

US$

Monthly

5.31%

Secured

Chile

Forum Servicios Financieros S.A.

US$

Monthly

0.99%

Unsecured

N/A

1,424

6,934

16,990

25,348

Chile Total

IM TRUST

US$

Monthly

N/A

12/31/2016 Current due date

Currency

Repayments

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.

US$

Three monthly

5.50%

Secured

3,360

2,942

6,302

DNB

US$

Three monthly

3.07%

Secured

5,023

Chile

Banco BBVA

US$

Three monthly

5.50%

Secured

2,242

1,839

4,081

Chile

Banco de Crédito e Inversiones

US$

Three monthly

5.50%

Secured

1,727

1,416

3,143

Chile

Banco Santander

US$

Three monthly

5.50%

Secured

858

735

1,593

Peru

Banco de Crédito del Perú

US$

Three monthly

5.50%

Secured

448

368

816

Chile

Banco Chile

US$

Three monthly

5.50%

Secured

279

239

518

Chile

Banco Estado

US$

Three monthly

5.50%

Secured

236

202

438

Norway

DNB Bank ASA

US$

Three monthly

5.50%

Secured

2,914

2,390

5,304

Costa Rica

BCT (line of credit)

US$

Monthly

4.75%

Secured

1,658

1,007

2,665

Costa Rica

BCR$ (Circulating portion) BCR

US$

Monthly

4.75%

Secured

130

583

775

Costa Rica

BCR (line of credit)

US$

Monthly

5.50%

Secured

2,500

Costa Rica

BCT - leasing portion

US$

Monthly

9.00%

Secured

Costa Rica

BNCR$ (Circulating portion) BCT

US$

Monthly

5.31%

Secured

266

361

Chile

IM TRUST

US$

Monthly

N/A

267

21,713

12,015

33,826

Country

Netherlands Antilles Chile

Total

Creditor Name

Annual nominal rate

Guarantees

Total current as of 12/31/2016 ThUS$

Annual effective rate

Up to 1 month ThUS$

1 to 3 months ThUS$

3 to 12 months ThUS$

b) Non-current loans 12/31/2017 Non-current due date

1 to 2 years ThUS$

2 to 3 years ThUS$

3 to 4 years ThUS$

4 to 5 years ThUS$

Over 5 years ThUS$

Total noncurrent as of 12/31/2017 ThUS$

9,637

4,410

43,938

57,985

6,960

3,185

31,734

41,879

Secured

5,354

2,450

24,410

32,214

4.81%

Secured

4,122

1,887

18,797

24,806

4.81%

Secured

2,142

980

9,764

12,886

Semi-annual

4.81%

Secured

696

318

3,173

4,187

US$

Semi-annual

4.81%

Secured

589

270

2,684

3,543

Forum Servicios Financieros S.A.

US$

Monthly

0.99%

Unsecured

595

Chile

RaboFinance Chile S.A.

US$

Semi-annual

6.67%

Secured

1,786

Costa Rica

(Leasing)

US$

Monthly

9.00%

Secured

Costa Rica

BCR-BCT

US$

Monthly

5.25%

Secured

1,308

2,999

957

1,009

7,198

13,471

16,499 135,457

1,009

7,198

193,383

Creditor Name

Currency

Repayments

Effective Rate

Nominal Rate

Guarantees

Coöperatieve Centrale RaiffeisenBoerenleenbank B.A.

US$

Semi-annual

4.81%

Secured

DNB Bank ASA

US$

Semi-annual

4.81%

Secured

Chile

Banco BBVA

US$

Semi-annual

4.81%

Chile

Banco de Crédito e Inversiones

US$

Semi-annual

4.81%

Chile

Banco Santander

US$

Semi-annual

Chile

Banco Chile

US$

Chile

Banco Estado

Chile

Country

Holland Netherlands Antilles

Total

33,220

12/31/2016 Non-current due date

Country

Creditor Name

Currency

Repayments

Annual effective rate

Annual nominal rate

Guarantees

1 to 2 years ThUS$

2 to 3 3 to 4 years years ThUS$ ThUS$

4 to 5 years ThUS$

Over 5 years ThUS$

Total noncurrent as of 12/31/2016 ThUS$

Netherlands Antilles

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.

US$

Semi-annual

5.50%

Secured

3,920

8,566

3,920

19,891

36,297

Norway

DNB

US$

Semi-annual

5.50%

Secured

3,185

6,960

3,185

16,162

29,492

Chile

BBVA

US$

Semi-annual

5.50%

Secured

2,450

5,354

2,450

12,431

22,685

Chile

BCI

US$

Semi-annual

5.50%

Secured

1,887

4,122

1,887

9,572

17,468

Chile

Santander

US$

Semi-annual

5.50%

Secured

980

2,142

980

4,973

9,075

Peru

Banco de Crédito del Perú

US$

Semi-annual

5.50%

Secured

490

1,071

490

2,486

4,537

Chile

B. Chile

US$

Semi-annual

5.50%

Secured

318

696

318

1,616

2,948

Chile

B. Estado

US$

Semi-annual

5.50%

Secured

270

589

270

1,368

2,497

Netherlands Antilles

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.

US$

Semi-annual

5.82%

Secured

29,329

Norway

DNB

US$

Semi-annual

5.82%

Secured

23,830

Chile

BBVA

US$

Semi-annual

5.82%

Secured

18,330

Chile

BCI

US$

Semi-annual

5.82%

Secured

14,114

Chile

Santander

US$

Semi-annual

5.82%

Secured

7,332

Peru

Banco de Crédito del Perú

US$

Semi-annual

5.82%

Secured

3,666

Chile

B. Chile

US$

Semi-annual

5.82%

Secured

2,383

Chile

B. Estado

US$

Semi-annual

5.82%

Secured

2,016

Chile

Forum Servicios Financieros S.A.

US$

Monthly

0.99%

Unsecured

Costa Rica

(Leasing)

US$

Monthly

9.00%

Secured

Costa Rica

BCR

US$

Monthly

5.25%

Secured

1,243

1,327

2,975

957

8,207

14,709

14,824

30,860

16,475

170,456

8,207

240,822

Total

c) Bank reconciliation Opening balance as of 01/01/2017 ThUS$ Other financial liabilities Current Bank loans Interest on bank loans Swap obligations Leasing obligations payable Prepaid leasing interest Refinancing costs Total other financial liabilities, current Non-Current Bank loans Interest on bank loans Leasing obligations payable Prepaid leasing interest Total other financial liabilities, non-current Total other financial liabilities

Cash Flows Payments Capital Interest ThUS$ ThUS$

Acquisitions ThUS$

Accrued

Other changes

ThUS$

Closing balance as of 12/31/2017 ThUS$

36,236 339 267 107 (3,123) 33,826

3,232 113 (2) 3,343

(71,377) (34) (71,411)

(309) (14,065) (6) 2 (14,378)

7,371 7,371

345 13,908 (2,235) 6 25 633 12,682

51,925 2,009 (12) (7) 53,915

27,423 295 41 61 18 (2,490) 25,348

241,573 (798) 54 (7) 240,822 274,648

5,018 5,018 8,361

(769) (769) (72,180)

(3,953) (3,953) (18,331)

7,371

217 843 17 1,077 13,759

(48,500) (293) (19) (48,812) 5,103

193,586 (798) 604 (9) 193,383 218,731

Opening balance as of 01/01/2016 ThUS$ Other financial liabilities Current Bank loans Interest on bank loans Swap obligations Leasing obligations payable Prepaid leasing interest Refinancing costs Total other financial liabilities, current Non-Current Bank loans Interest on bank loans Leasing obligations payable Prepaid leasing interest Total other financial liabilities, non-current Total other financial liabilities

Incorporation of Salmones Chaicas ThUS$

Cash Flows Payments Capital Interest ThUS$ ThUS$

Acquisitions ThUS$

Accrued

Other changes

ThUS$

Closing balance as of 12/31/2016 ThUS$

290,741 289 310 163 (1,734) 289,769

(31,989) (56) (32,045)

(13,776) (13,776)

8,914 8,914

13,826 (4,527) (1,389) 7,910

(231,430) 4,484 (226,946)

36,236 339 267 107 (3,123) 33,826

12,806 12,806 302,575

(733) (733) (32,778)

(798) (798) (14,574)

3,500 54 (7) 3,547 12,461

7,910

226,000 226,000 (946)

241,573 (798) 54 (7) 240,822 274,648

NOTE 20 - TRADE AND OTHER PAYABLES Trade and other payables are as follows: Trade and other payables, current

12/31/2017

12/31/2016

ThUS$

102,975

93,274

Employee retentions

2,154

1,933

Vacation provisions

3,439

2,999

Employee remuneration

2,489

3,243

Miscellaneous payables

9,899

7,773

Others

3,180

4,941

124,136

114,163

12/31/2017

12/31/2016

ThUS$

Suppliers

Total

Other payables, non-current National Commission for Scientific and Technological Research (CONICYT)

424

534

Pesquera Pacific Star S.A.*

7,444

9,623

Total

7,868

10,216

Innova Chile

*Cash advances for future deliveries of organic waste.

Trade and other payables, current, as of December 31, 2017 and 2016 are as follows. -

Suppliers and other creditors with payments not overdue as of December 31, 2017. Up to 30 ThUS$ 42,955

31-60 ThUS$ 29,796

61-90 ThUS$ 15,148

91-120 ThUS$ 9,482

121-365 ThUS$ -

Over 365 ThUS$ -

Total ThUS$ 97,381

8,765

1,090

9,855

Other payables

11,262

Total not overdue

62,982

30,886

15,148

9,482

118,498

Classification / Days Trade payables Miscellaneous payables

Suppliers and other creditors with payments overdue as of December 31, 2017.

Classification / Days Trade payables Miscellaneous payables Total overdue

Total

Up to 30 ThUS$ 4,190

31-60 ThUS$ 733

61-90 ThUS$ 448

91-120 ThUS$ 62

121-180 ThUS$ 5

Over 180 ThUS$ 156

Total ThUS$ 5,594

4,190

733

448

200

5,638

124,136

Suppliers and other creditors with payments not overdue as of December 31, 2016 Up to 30 ThUS$ 41,936

31-60 ThUS$ 18,024

61-90 ThUS$ 11,047

91-120 ThUS$ 10,772

6,098

1,468

7,566

Other payables

13,082

13,116

Total not overdue

61,116

19,506

11,058

10,781

4,772

107,233

121-180 Over 180 ThUS$ ThUS$ 58 649

Value ThUS$ 6,723

Classification (audited) / Days Trade payables Miscellaneous payables

121-365 Over 365 ThUS$ ThUS$ 4,772 -

Value ThUS$ 86,551

Suppliers and other creditors with payments overdue as of December 31, 2016

Classification (audited) / Days Trade payables

Up to 30 ThUS$ 5,254

31-60 ThUS$ 420

61-90 ThUS$ 261

91-120 ThUS$ 81

146

207

5,265

433

267

795

6,930

Miscellaneous payables Total overdue

Total

114,163

Trade payables by type of supply as of December 31, 2017 and 2016 -

Trade payables (not overdue) *: December 31, 2017 Amounts by payment terms

Supply Products

Up to 30 ThUS$ 18,590

31-60 ThUS$ 19,395

Services

24,365

10,401

Total

42,955

29,796

Total ThUS$ 61,636

Average payment period (days) * 67

91-120 ThUS$ 9,481

121-365 ThUS$ -

Over 365 ThUS$ -

978

35,745

15,148

9,482

97,381

61-90 ThUS$ 14,170

Trade payables (overdue) **: December 31, 2017

Supply Products

Amounts by payment terms Up to 30 31-60 61-90 91-120 121-180 Over 180 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ 2,684 523 438 52 3 45

Total ThUS$ 3,745

Services

1,506

210

111

1,849

Total

4,190

733

448

156

5,594

Total trade payables

102,975

Trade payables (not overdue) *: December 31, 2016 Amounts by payment terms

Products

Up to 30 ThUS$ 15,056

31-60 ThUS$ 11,333

61-90 ThUS$ 10,709

91-120 ThUS$ 10,772

Services

26,880

6,691

338

Total

41,936

18,024

11,047

10,772

Supplier

121-365 Over 365 Total ThUS$ ThUS$ ThUS$ 4,772 - 52,642 - 33,909 4,772

86,551

Average payment period (days) * 97 37 74

Trade payables (overdue) **:

Supplier Products

December 31, 2016 Amounts by payment terms Up to 30 31-60 61-90 91-120 121-180 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ 3,290 199 153 3 -

Services

1,964

221

108

Total

5,254

420

261

Total trade payables

Over 180 Total ThUS$ ThUS$ 34 3,679 615 3,044 649

6,723 93,274

(*) The average payment period was calculated as follows. Âˇ

Items are classified in the ranges defined in the "suppliers not overdue" table, comprising the period from December 31, 2017, and December 31, 2016, to their due date.

Âˇ

The average payment period is calculated by multiplying the total by supplier by a weighted average of the payment period, considering the maximum period for each range, according to the ranges defined in the "suppliers not overdue" table.

(**) Overdue payables are calculated on the basis of the purchase order or service order and/or the trade agreement. Any confirming transactions are recorded under "Trade and other payables" in the statement of financial position, and in the statement of cash flows, direct method, they are recorded as "Payments to suppliers for goods and services". The Group had no confirming transactions as of December 31, 2017 and December 31, 2016.

NOTE 21 – SHARE CAPITAL The capital management objectives of Empresas AquaChile S.A. and its subsidiaries are to safeguard its ability to continue as a going concern, to generate returns for its shareholders, to generate benefits for other stakeholders, and to establish an optimal structure that reduces its cost of capital. Empresas AquaChile S.A. and its subsidiaries monitors its capital using its leverage ratio, which is consistent within the industry. This ratio is calculated by dividing net borrowing by total capital. Net borrowing is total current and non-current indebtedness, less cash and cash equivalents. Total capital is equity, as presented in the consolidated statement of financial position. Empresas AquaChile S.A. and its subsidiaries has combined various financing sources, such as operational surpluses and bank loans, among others. On February 26, 2013, an Extraordinary Shareholders' Meeting approved a share capital increase of US$ 286,481,801.81. Those were the proceeds from a share placement following a capital increase agreed at an Extraordinary Shareholders Meeting held on March 11, 2011, less the corresponding share placement and issue costs, in accordance with Circular 1370 issued by the Financial Market Commission (CMF = “Comisión para el Mercado Financiero”). The Company’s subscribed and paid share capital is five hundred and fourteen million four hundred and sixty-two thousand nine hundred and forty-nine US dollars and eighty-one cents (US$ 514,462,949.81), which is divided into one thousand one hundred and fifty-seven million shares (1,157,000,000). a) Share capital The Company’s issued, subscribed and paid share capital is as follows. Subscribed capital

Paid capital

ThUS$

Without a series

514,463

Capital increase

514,463

Series

Total

Movements Opening balance as of 01/01/2017 Capital increase Closing balance as of 12/31/2017

Number of Shares 1,157,000,000

Subscribed and paid ordinary shares 1,157,000,000

Total 1,157,000,000

1,157,000,000

b) Net distributable income The Companyâ&#x20AC;&#x2122;s net distributable income to be consider for the calculation of the dividends related to 2017 will exclude the following items: 1) Unrealized income related to recognizing increases in the fair value of biological assets regulated by the accounting standard IAS 41. This income will be recognized as net distributable income when such assets have been realized. For these purposes, realized means the portion of those increases in fair value corresponding to assets sold or disposed of by any other means. 2) Unrealized income from the acquisition of other entities and unrealized income arising from applying paragraphs 34, 42, 39 and 58 of the revised IFRS 3, which refers to business combinations. This income will be included in net distributable income when realized. For these purposes, realized means when the acquired entities generate profits after their acquisition, or when those entities are sold. 3) The effects of deferred taxes associated with income indicated in 1) and 2) will be treated in the same manner as the item generating them. 4) Dividend provision The Company has not provided for any interim dividends for the year ended December 31, 2017, as it has accumulated losses. The Company must allocate its income to absorbing such losses, in accordance with Law 18,046. c) Dividend policy The dividend policy for 2017 is to distribute a final dividend of 30% of income for the year ended December 31, 2017, which must be approved by the Annual Shareholderâ&#x20AC;&#x2122;s Meeting, and be paid on the date agreed at that meeting. The obligatory 30% minimum dividend established by Article 79 of Law 18,046 may be calculated on the basis of reclassified income following relevant adjustments in the fair value of unrealized assets and liabilities, as described in Circular 1945 issued by the SVS on September 29, 2009. These unrealized assets and liabilities will be included in the calculation of income for the year when they have been realized. Additional dividends will be based on these criteria, and approved by the respective Shareholderâ&#x20AC;&#x2122;s Meeting.

d) Shareholders The companies or individuals who own 1% or more of the share capital as of December 31, 2017 are as follows. These shareholdings total 92.94%.

Holding Salmones Ltda

Chilean ID number 76.474.078-5

Number of shares 382,115,000

Inversiones Patagonia Ltda.

76.070.159-9

382,115,000

33.03%

Inversiones Megeve Capital Ltda.

76.072.695-8

103,452,673

8.94%

Moneda S.A. AFI for Pionero Investment Fund

96.684.990-8

81,582,000

7.05%

BTG Pactual Chile S.A. Corredora de Bolsa

84.177.300-4

47,634,177

4.12%

Compass Small Cap Chile Investment Fund

96.804.330-7

26,697,788

2.31%

Banchile Corredora de Bolsa S.A.

96.571.220-8

18,671,215

1.61%

Siglo XXI Fondo de Inversiรณn

96.514.410-2

16,499,551

1.43%

Credicorp Capital S.A. Corredores de Bolsa

96.489.000-5

16,464,468

1.42%

1,075,231,872

92.94%

Personal/Company Name

Total

% interest 33.03%

NOTE 22 - RETAINED EARNINGS (ACCUMULATED LOSSES) AND REVALUATION SURPLUS a) Accumulated losses are as follows. Accumulated losses Opening balance Comprehensive income and expenses Other changes in equity Closing balance

12/31/2017

12/31/2016

ThUS$

(202,365)

(210,523)

59,505

8,434

(276)

(142,860)

(202,365)

The revaluation surplus is described as follows.

The revaluation surplus arose from the accounting policy adopted by the Group in 2013, where land included in property, plant and equipment was revalued in accordance with the revaluation model, using the standards contained in IAS 16 for this purpose. External experts conducted this revaluation, and they determined the fair value of the land included in this asset class. 12/31/2017

12/31/2016

ThUS$

Opening balance

17,933

Closing balance

17,933

Revaluation surplus (net of deferred taxes)

c) Other reserves are as follows. Other reserves

12/31/2017

12/31/2016

ThUS$

(6,344)

1,940

(4,404)

(6,344)

Opening balance Increased interests in other companies * Closing balance

* Corresponds to the difference between the fair value and the proceeds from selling a 30% interest in the subsidiary Centro de Innovaciรณn Aquainnovo - Biomar S.A. This transaction did not result in any loss of control over this subsidiary. Therefore, the difference between the fair value and the proceeds from selling this 30% interest have been recorded in equity. NOTE 23 - NON-CONTROLLING INTERESTS These represent the share of equity and income of subsidiaries that belongs to non-controlling investors. Non-controlling interests

12/31/2017

Interest in equity

12/31/2016

ThUS$

Grupo ACI S.A.

20.04%

4,256

20.04%

4,893

Centro de Innovaciรณn Aquainnovo-Biomar S.A.

30.00%

2,137

0.00%

Total

Non-controlling interests

12/31/2017

Interest in income

Grupo ACI S.A.

20.04%

Centro de Innovaciรณn Aquainnovo-Biomar S.A.

30.00%

Total

6,393

4,893

12/31/2016

ThUS$

(638)

20.04%

0.00%

(593)

(1,538) (1,538)

NOTE 24 - EARNINGS PER SHARE Earnings per share are as follows. Basic earnings per share

12/31/2017

12/31/2016

ThUS$

Income attributable to owners of the parent company

59,504

8,434

Income (loss) attributable to non-controlling interests

(592)

(1,538)

Income attributable to shareholders

58,912

6,896

Weighted average number of shares

1,157,000,000

0.0509

0.0060

Basic earnings per share (US$/share)

The basic earnings (loss) per share are obtained by dividing the income attributable to shareholders by the number of single series shares. The Company has not issued convertible debt or other equity securities. Consequently, there are no potentially diluting effects on earnings per share. NOTE 25 - OPERATING REVENUE Group revenue is as follows. Operating revenue Salmon and trout sales

12/31/2017

12/31/2016

ThUS$

540,470

532,365

Tilapia sales

56,634

51,253

Feed sales

30,883

32,683

Other sales Total

4,751

2,327

632,738

618,628

12/31/2017 ThUS$ 221

12/31/2016 ThUS$ 243

NOTE 26 - OTHER INCOME AND EXPENSES BY FUNCTION Other income by function Insurance claims Recoverable expenses

Asset sales

634

550

Asset leases

Dividends received

544

Provision reversals

1,136

Prior period depreciation adjustments

161

Sale of interest in related company

1,735

76 2,104

235 3,607

Others Total

Other expenses by function

12/31/2017

ThUS$

Taxes, penalties, and interest

(186)

(115)

Inventory impairment and write-off

(163)

(532)

Disposals of property, plant and equipment

(321)

(109)

Contributions and donations

(10)

(12)

Deductible income or expenses for income tax purposes

(19)

(192)

(572)

(692)

(90)

Sacrificed biomass Aquasea losses Tax inspection provision

(10)

Catastrophic mortality (HAB) **

(14)

(43,638)

Operational costs loss in Panama

(172)

Operational costs for Pacifica property

(163)

Loss on selling an interest in a related company

(987)

Wellboat compensation

(1,938)

(1,278)

(447)

Unrecoverable credits

(141)

(18)

Expenses for not using water

(216)

(111)

Provision reversals

(395)

(8)

Compensation provision

(57)

Losses due to fire at Aquasan fish farm

(70)

(533)

Condor project

(66)

Atlantium case

(58)

(4,109)

(49,224)

Others

Compensation for eliminating Coho smolts

Total

** Harmful algal blooms (HAB) that mainly affected specific areas within the Tenth Region in February and March 2016. The Group’s sea farms named Capera, Herradura, Isla Guar and Huenquillahue in the Reloncavì Sound (District 2) and Sotomo in the Reloncavi Estuary (District 1), suffered significant fish mortalities. The Group analyzed this event and calculated the loss at ThUS$ 43,700, equivalent to 9,398 tons of biomass. This includes the costs associated with managing mortality, transferring live fish to lower-risk fish farms and emergency harvesting at the affected fish farms. These fish farms didn’t carry any insurance against risks of this nature at that time. The figures reported in 2017 are the cost of preparing our defense before the Superintendent of the Environment (Superintendencia de Medioambiente).

NOTE 27 - ADMINISTRATION EXPENSES AND DISTRIBUTION COSTS 1) Administrative expenses 12/31/2017

12/31/2016

Description

ThUS$

Personnel expenses

(8,482)

(6,799)

Third-party services

(2,590)

(2,397)

General expenses

(2,008)

(1,756)

(371)

(353)

(13,451)

(11,305)

Depreciation and amortization Total

a) Personnel expenses Personnel expenses are as follows. 12/31/2017

12/31/2016

Description

ThUS$

Employee remuneration

(7,770)

(6,364)

Other personnel expenses

(712)

(435)

(8,482)

(6,799)

12/31/2017

12/31/2016

Description

ThUS$

Depreciation

(371)

(353)

Total

(371)

(353)

Total

b) Depreciation and amortization in administration expenses Depreciation and amortization are as follows.

2) Distribution costs Group distribution costs for each year. Distribution costs

12/31/2017

12/31/2016

ThUS$

Marketing and promotion expenses

(1,036)

(649)

Shipping expenses

(3,620)

(3,493)

Storage expenses

(3,624)

(4,346)

Marketing expenses

(5,129)

(4,949)

Other sales expenses Total

(1,804)

(2,257)

(15,213)

(15,694)

The major Groupâ&#x20AC;&#x2122;s costs, operating and administrative expenses for the years ended December 31, 2017 and 2016 are as follows.

Description Fish, feed, energy, processes and others Employee remuneration Other personnel expenses

12/31/2017

12/31/2016

ThUS$

(496,406)

(568,142)

(7,770)

(6,364)

(712)

(435)

Third-party services

(2,590)

(2,397)

General expenses

(2,008)

(1,756)

(13,080)

(10,952)

(371)

(353)

Employee remuneration and other expenses Depreciation expense Depreciation and amortization

(371)

(353)

Marketing and promotion expenses

(1,036)

(649)

Shipping expenses

(3,620)

(3,493)

Storage expenses

(3,624)

(4,346)

Marketing expenses

(5,129)

(4,949)

Other sales expenses Distribution costs Total

(1,804)

(2,257)

(15,213)

(15,694)

(525,070)

(595,141)

NOTE 28

FINANCIAL INCOME AND COSTS

Financial income is as follows. Financial income

12/31/2017

12/31/2016

ThUS$

Bank interest

1,025

664

Total

1,025

664

12/31/2017

12/31/2016

ThUS$

(15,833)

(15,302)

(1,898)

(3,074)

(484)

(581)

(18,215)

(18,957)

Financial costs are as follows. Financial costs Financial interest Bank charges Other expenses Total

100

NOTE 29 - EXCHANGE DIFFERENCES ON ASSETS AND LIABILITIES IN FOREIGN CURRENCIES a) Exchange differences recognized in income Exchange differences generated by assets and liabilities in foreign currencies, other than the functional currency, were credited (charged) to income for the years ended December 31, 2017 and 2016 as follows. 12/31/2017 12/31/2016 Classification Item Assets Current assets Cash and cash equivalents Other non-financial assets, current Trade and other receivables, current Related party receivables, current Inventories, current Tax assets, current

ThUS$

1,449 101 1,336 25 409 441

(138) 35 539 38 (2)

3,761

472

Non-current assets Other financial assets, non-current Deferred tax assets

1 6

1 -

Total non-current assets

3,768

473

(54) (2,962) (114) (3) (124)

(1,237) 11 8 19

(3,257)

(1,199)

Total non-current liabilities Other financial liabilities, non-current Trade and other payables, non-current

(20) (164)

(1) (51)

Total non-current liabilities

(184)

(52)

(3,441)

(1,251)

327

(778)

Total current assets

Total assets Liabilities Current liabilities Other financial liabilities, current Trade and other payables, current Related party payables, current Tax liabilities, current Employee benefit provisions, current Total current liabilities

Total liabilities Total exchange differences

101

Assets and liabilities in foreign currencies Current assets Cash and cash equivalents

Sub-total for cash and cash equivalents Other non-financial assets, current

Sub-total for other non-financial assets, current Trade and other receivables, current

Sub-total for trade and other receivables, current Related party receivables, current

Sub-total for related party receivables, current Inventories

Subtotal for inventories Biological assets, current

Sub-total for biological assets, current Tax assets, current

Sub-total for tax assets, current Total current assets

Currency Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros

12/31/2017 ThUS$ 6,686 3,417 30,018 651 40,772 1,713 182 40 1,935 13,827 62,298 76,125 10,239 10,239 68,976 68,976 188,147 188,147 4,560 8,175 12,735 398,929

12/31/2016 ThUS$ 471 1,885 34,193 444 36,993 238 192 982 1,412 15,509 66,874 82,383 4,805 4,805 64,542 64,542 168,876 168,876 1,975 3,131 5,106 364,117

102

Non-current assets Other financial assets, non-current

Sub-total for other financial assets, non-current Trade and other receivables, non-current

Sub-total for trade and other receivables, non-current Related party receivables, non-current

Sub-total for related party receivables, non-current Equity method investments

Sub-total for equity method investments Intangible assets other than goodwill

Sub-total for intangible assets other than goodwill Goodwill

Subtotal for goodwill Property, plant and equipment

Sub-total for property, plant and equipment Biological assets, non-current

Sub-total for biological assets, non-current Deferred tax assets

Sub-total for deferred tax assets Total non-current assets

Currency Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Euros Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Euros

12/31/2017 12/30/2016 ThUS$ ThUS$ 10 9 10 9 288 288 288 288 1,050 8,374 1,050 8,374 760 760 42,968 41,419 42,968 41,419 63,224 53,247 63,224 53,247 191,448 179,413 191,448 179,413 31,132 23,910 31,132 23,910 65,841 88,015 65,841 88,015 395,961 395,435

103

Current liabilities Other financial liabilities, current

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euros

Sub-total for other financial liabilities, current Trade and other payables, current

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

Sub-total for trade and other payables, current Related party payables, current

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

Sub-total for related party payables, current Tax liabilities, current

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

Sub-total for tax liabilities, current Employee benefit provisions, current

Sub-total for employee benefit provisions, current Total current liabilities

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

12/31/2017 ThUS$ 25,348 -

12/31/2016 ThUS$ 33,826 -

25,348

33,826

46,611 3,260 74,265 -

49,445 2,958 61,760 -

124,136

114,163

4 18,135 -

28 18,021 -

18,139

18,049

11,349 -

8,142 -

11,349

8,142

133 -

586 -

133

586

179,105

174,766

104

Non-current liabilities Other financial liabilities, non-current

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

Sub-total for other financial liabilities, non-current Trade and other payables, non-current

193,383

240,822

7,868 -

10,216 -

7,868

10,216

19,044 -

1,225 -

19,044

1,225

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

3,060 678 -

3,623 320 -

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

3,738 227 -

3,943 -

227 224,260

256,206

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

Sub-total for trade and other payables, non-current Related party payables, non-current

Inflation indexed Chilean pesos Chilean peso Costa Rican colons US dollars Yen Euro

Sub-total for related party payables, non-current Deferred tax liabilities

Sub-total for deferred tax liabilities Other non-financial liabilities, non-current

Sub-total for other non-financial liabilities, non-current Total non-current liabilities

12/31/2017 12/31/2016 ThUS$ ThUS$ 193,383 240,822 -

105

NOTE 30 - CONTINGENCIES a) Guarantees from third parties The Parent Company has not received any significant guarantees from third parties as of the reporting date. b) Lawsuits and other legal cases b.1)

The most significant cases involving the Group are described as follows, including all those that may possibly result in a liability and whose claims are in excess of ThUS$ 100. It also includes all indeterminate claims.

1. FISHING LAWSUITS Filed against the Parent Company EMPRESAS AQUACHILE S.A. 1) "Sernapesca vs Empresas AquaChile S.A." case 2917-2014, Second Civil Court of Puerto Montt. Subject: Infringement of LGPA and D.S. 319. Amount: 50 to 3,000 UTM. Current Status: Evidence period pending. Uncertain outcome. 2) "Sernapesca vs Empresas Aqua Chile S.A.” case 620-2014, First Civil Court of Puerto Montt. Subject: Infringement of LGPA and regulations. Amount: 50 to 3,000 UTM. Current Status: Evidence period pending. Uncertain outcome. 3) "Sernapesca vs Empresas Aqua Chile S.A." case 533-2016, Trial and Guarantee Court of Puerto Aysén. Subject: Infringement of D.S. 319/2001 and Resolution 1468. Amount: 50 to 3,000 UTM. Current Status: Pending judgment of the appeal against the judgment handed down by the court of first instance with a fine of 500 UTM (Case 177-2017, Appeals Court of Coyhaique). Uncertain outcome. 4) "Sernapesca vs Empresas AquaChile S.A." case 1306-2017, First Civil Court of Puerto Montt Subject: Infringement of D.S 319, Resolution 1577/2011, Resolution 1971/2014, D.S. 129, Information on aquaculture and provenance regulations, Articles 113 and 118 of LGPA. Amount: 3 to 300 UTM. Current Status: Pending judgment of the appeal against the judgment handed down by the court of first instance with a fine of 53 UTM (Case 1000-2017, Appeals Court of Puerto Montt). Uncertain outcome. Filed against subsidiaries: AQUACHILE S.A. 5) "Sernapesca vs Aquachile S.A." case 14-2015, Trial and Guarantee Court of Pucon. Subject: Infringement of RAMA and RESA. Amount: 50 to 3,000 UTM. Current Status: Evidence period pending. Uncertain outcome.

106

6) "Sernapesca vs Aquachile S.A." case 1005-2015, Trial Court of Puerto Varas. Subject: Infringement of RAMA Amount: 50 to 3,000 UTM. Current Status: Judgment handed down by the court of first instance ordered the company to pay a fine of 100 UTM and the facilities administrator to pay a fine of 10 UTM. An appeal was filed against this judgment before the Appeals Court of Puerto Montt (case 381-2017). The Court of Appeals annulled this judgement and sent it back to the court of first instance to receive further evidence, which is still pending. Uncertain outcome. SALMONES MAULLÍN LIMITADA 7) "Sernapesca vs Salmones Maullín Ltda.” case 3863-2011, First Civil Court of Puerto Montt. Subject: Infringement of RAMA and RESA. Amount: 50 to 3,000 UTM. Current status: The court annulled all the proceedings to date and will recommence with hearing charges, which is pending. Uncertain outcome. AGUAS CLARAS S.A. 8) "Sernapesca vs Aguas Claras S.A." case 253-2015, Trial and Guarantee Court of Puerto Aysén. Subject: Infringement of D.S. 345/2005, "Hydrobiological Pest Regulations" and Resolution 529/2013, "Surveillance, Detection and Control of the Pest Alexandrium Catanella Program". Amount: 50 to 3,000 UTM. Current Status: Pending judgement Uncertain outcome. 9) "Sernapesca vs Aguas Claras S.A.” case 6933-2010, First Civil Court of Puerto Montt Subject: Infringement of RAMA Amount: 3 to 300 UTM. Current Status: The proceedings will recommence with hearing charges, which is pending. Uncertain outcome. 10) "Sernapesca vs Aguas Claras S.A.” case 4908-2011, First Trial Court of Puerto Montt. Subject: Infringement of RESA Amount: 50 to 3,000 UTM. Current Status: Pending judgment of the appeal against the judgment handed down by the court of first instance with a fine of 50 UTM (Case 1176-2017, Appeals Court of Puerto Montt). Uncertain outcome. 11) "Sernapesca vs Aguas Claras S.A.” case 2152-2017, Trial Court of Castro, Subject: Infringement of RAMA. Amount: 50 to 3,000 UTM. Current Status: Evidence period pending. Uncertain outcome. PISCICULTURA AQUASAN S.A. 12) "Sernapesca vs Aquasan and Alvarez” case 130-2017, Trial and Guarantee of Panguipulli. Subject: Infringement of Article 86 of LGPA, D.S. 319-2001 of RESA (Articles 10, 11 paragraph 3, and 12), Resolution 1468-2012 Point IV and Resolution 1577-2011. Amount: 50 to 3,000 UTM. Current Status: Pending judgment of the appeal against the judgment handed down by the court of first instance with a fine of 100 UTM. Uncertain outcome.

107

2. CIVIL LAWSUITS Filed against subsidiaries: AQUACHILE S.A. 1) "Herrera vs Aquachile S.A.” case C-7414-2015 First Civil Court of Puerto Montt Subject: Compensation for damages. Amount: Ch$ 270,000,000 Compensation for damages claimed for an occupational accident that resulted in death. Judgment of the court of first instance sentenced the defendant to pay Ch$ 150,000.000. Judgment upheld by the Court of Appeals of Puerto Montt, case 1842017. Current Status: Pending judgment of the appeal against the judgment handed down by the Appeal Court. (Supreme Court case 44325-2017). Claim covered by public liability insurance, so this will not result in liabilities for the company. The Insurance Group is managing the judicial defense. 2) "Bello vs Garfias y Garfias Limitada and Aquachile S.A.” case C-2639-2015, Second Civil Court of Puerto Montt. Subject: Compensation for damages, Aquachile has been sued as legally responsible for the contractor Garfias y Garfias Limitada. Amount: Ch$ 600,000,000 Compensation for damages claimed for an occupational accident that resulted in death. Current Status: Evidence period pending. Claim covered by public liability insurance, so this will not result in liabilities for the company. The Insurance Group is managing the judicial defense. PROCESADORA HUEÑOCOIHUE SpA. 3) "Procesadora Hueñocoihue SpA vs RSA Seguros Chile S.A.”, Arbitration Proceedings. Subject: Claim for fire damage. Amount: Undetermined. The arbitration was requested to hear the claim regarding a fire at the processing plant. Current Status: The arbitration has been constituted and the process is pending. SALMONES CHAICAS S.A. 4) "Salmones Chaicas S.A. vs Atlantium Technologies Ltd.", Arbitration Proceedings, case CAM-27472016. Subject: Salmones Chaicas S.A. filed a lawsuit demanding compensation for breaches in obligations during the installation of water disinfection systems. Atlantium filed a counterclaim, with the amount to be determined when judgment is handed down. Amount: US$ 2,500,000. Current status: The arbitration has been constituted. The discussion stage in the case filed by Salmones Chaicas S.A. has been completed. The evidence stage is still in progress in the case filed by Atlantium. Based on the current status of the arbitration, the outcome is uncertain. 3. EMPLOYMENT LAWSUITS. Filed against the Parent Company EMPRESAS AQUACHILE S.A. 1) "Vines vs Subtek S.A. and Empresas AquaChile" case O-388-2017, the Labor Court of Puerto Montt. Subject: Former employees at Subtek S.A. have filed a demand for a single employer declaration, revoke dismissal, dismissal without legal cause, and payment of other employment benefits. Empresas AquaChile S.A. is involved in the case as joint defendant. Amount: Ch$ 12,942,966 Current Status: Pending judgment hearing. Uncertain outcome.

108

2) "Coñuecar vs Contreras and Empresas Aquachile” case M-51-2016, Trial Court of Ancud. Subject: Payment of employment benefits. Amount: Ch$ 1,439,241 Current status: The request was accepted, and the judgment appealed. Pending the single reconciliation hearing, defense and evidence. Uncertain outcome. 3) "Levin vs Servicios Marítimos Bless Limitada and others” case M-392-2017, the Labor Court of Puerto Montt. Subject: Dismissal without legal cause and payment of employment benefits. Empresas AquaChile S.A. is involved in the case as joint defendant. Amount: Ch$ 2,600,000 Current status: An appeal was filed against the judgment that accepted the demand to enforce a debt payment procedure. Pending notification to the plaintiff of the single reconciliation hearing, defense and evidence. Uncertain outcome. 4) "Sanchez vs Diver Chile Limitada and others” case O-529-2017, the Labor Court of Puerto Montt. Subject: Dismissal without legal cause, revoke dismissal and payment of employment benefits. Empresas AquaChile S.A. is involved in the case as joint defendant. Amount: Ch$ 8,000,000 Current Status: Pending reconciliation hearing. Uncertain outcome. 5) "Muñoz vs Empresas AquaChile S.A. and other” case O-529-2017, the Labor Court of Puerto Montt. Subject: Compensation for injuries caused by occupational accident at Servicios Marítimos Subtek SpA, which was also sued. Amount: Ch$ 696,000,000 Current Status: Pending reconciliation hearing. Uncertain outcome. Claim covered by public liability insurance, so this will not result in liabilities for the company. The Insurance Group is managing the judicial defense. 6) "Aguilar vs Servicios Acuícolas and others” case O-65-2017, the Labor Court of Ancud. Subject: Compensation for injury caused by occupational disease. Amount: Ch$ 124,000,000. Uncertain outcome. Filed against subsidiaries: SALMONES CHAICAS S.A. 7) "Lopez vs Servicios Integrales Atlantis and Salmones Chaicas S.A.” case O-161-2017, the Labor Court of Puerto Montt. Subject: Revoke dismissal and payment of employment benefits. Amount: Ch$ 1,875,677. Current Status: Pending hearing judgment. 4. TAXATION LAWSUITS Filed against subsidiaries: SALMONES MAULLÍN LIMITADA 1) "Salmones Maullín Limitada vs SII (Servicio de Impuestos Internos) - Puerto Montt Regional Direction” case GR-12-00044-2016, RUC 16-9-0001500-7. The Taxation and Customs Tribunal for the Los Lagos Region. Subject: Claim against IRS Resolution 612, which reduced the tax loss for 2013 originally declared by Salmones Maullín Limitada at US$ 33,903,286.15 to US$ 28,819,741.44. On December 20, 2016, the tax claim was filed with the Taxation and Customs Tribunal for the Los Lagos Region. Current Status: Pending final judgment by the Tribunal. Lawyers responsible for the case believe that the result will be favorable for the Company.

109

2) "Salmones Maullín Limitada vs SII (Servicio de Impuestos Internos) - Puerto Montt Regional Direction” case GR-12-00071-2017, RUC 17-9-0001478-3. The Taxation and Customs Tribunal for the Los Lagos Region. Subject: Claim against IRS Resolution 497, which reduced the tax loss for 2014 originally declared by Salmones Maullín Limitada at US$ 34,795,790.35 to US$ 26,176,496.26. On December 21, 2017, the tax claim was filed with the Taxation and Customs Tribunal for the Los Lagos Region. Current Status: Pending acceptance of the case by the Tribunal, depending on whether there is any controversy with regard to substantial and relevant facts. NOTE 31 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES Related parties comprise the following entities and individuals. a) Shareholders that can exercise control b) Subsidiaries and their members c) Parties with sufficient interest to give them significant influence d) Parties with joint control e) Associates f) Interests in joint ventures g) Senior management of the entity or its parent company h) Close relatives of individuals described under the previous points i)

An entity that controls, or jointly controls, and is significantly influenced by any of the individuals described in the two previous points.

Generally transactions with related companies are payable/receivable immediately and are not subject to special conditions. These transactions are in accordance with Articles 44 and 49 of Law 18,046 governing Corporations and with IAS 24. Transfers of short-term funds between related companies and the parent company, which do not relate to the collection or payment of services, are recorded using commercial current accounts. 1) Related party receivables Related party receivables, current and non-current, as of December 31, 2017 and 2016 are as follows. -

Related party receivables, current

Company Salmones Chaicas S.A. Biomar Group A/S Biomar Chile S.A. Roblencinas Servicios Ltda. Víctor Hugo Puchi Acuña Total

Chilean ID number

Country

Relationship

Currency

76,125,666-1 Foreign 96,512,650-3 77,645,140-1 6,680,823-8

Chile Denmark Chile Chile Chile

Associate ** Indirect Indirect Indirect Indirect

US dollar US dollar US dollar Chilean pesos US dollar

12/31/2017 12/31/2016 ThUS$ ThUS$

1,577 8,361 184 117 10,239

1,010 3,678 117 4,805

110

Related party receivables, non-current

Company

Chilean ID number

Country

Relationship

Currency

Foreign 76,125,666-1

Costa Rica Chile

Joint operation Associate **

US dollar US dollar

Biomar Aquacorporation Products S.A Salmones Chaicas S.A. * Total

12/31/2017 12/31/2016 ThUS$ ThUS$ 1,050 -

1,225 7,149

1,050

8,374

* Corresponds mostly to payment advances to Salmones Chaicas S.A. to provide disease-free Atlantic salmon eggs and smolts. This company was Associated until January 2017. ** Associated until December 31, 2016.

2) Related party payables Related party payables, current and non-current, as of December 31, 2017 and 2016 are as follows. -

Related party payables, current Chilean ID number

Country

Relationship

Currency

12/31/2017 ThUS$

12/31/2016 ThUS$

Centro Veterinario y Agrícola Ltda.

86.510.400-6

Chile

Common shareholder

US dollar

3,724

3,767

Inversiones Aéreas Patagonia Ltda.

Company

77.758.740-4

Chile

Common shareholder

Chilean pesos

El Pelón de la Bajura S.A.

Foreign

Costa Rica

Indirect

US dollar

2,210

1,862

Biomar Aquacorporation Products S.A.

Foreign

Costa Rica

Joint operation

US dollar

2,358

2,390

Biomar Aquaculture Corporation S.A.

Foreign

Costa Rica

Indirect

US dollar

1,081

1,153

96.512.650-3

Chile

Indirect

US dollar

833

Foreign

Costa Rica

Indirect

US dollar

198

Roblencinas Servicios Ltda.

77.645.140-1

Chile

Indirect

Chilean pesos

Alitec Pargua S.A.

76.591.150-8

Chile

Joint operation

US dollar

Costa Austral SpA.

76.353.413-8

Chile

Indirect

Chilean pesos

Biomar Chile S.A. Asociación de empleados de Aqua.

Total

7,405

8,035

381

491

18,139

18,049

Related party payables, non-current Company

Biomar Group A/S

Chilean ID number

Country

Relationship

Currency

12/31/2017 ThUS$

12/31/2016 ThUS$

Foreign

Denmark

Indirect

US dollar

1,050

1,225

76.126.929-1

Chile

Indirect

US dollar

662

Holding Salmones S.A.

96.789.670-5

Chile

Indirect

US dollar

8,666

Fondo de Inversión Privado Patagonia Dos

76.155.302-K

Chile

Indirect

US dollar

8,666

19,044

1,225

Inversiones La Montaña S.A

Total

111

3) Transactions with related parties and their effect on income. Transactions with related companies and their effects on income for the years ended December 31, 2017 and 2016 are as follows. Company

Chilean ID Number

Country

Relationship

Description

Currency

Ganadera Valle Grande Ltda. Ganadera Las Lagunas Ltda. Víctor Hugo Puchi Acuña Inversiones Patagonia Dos Ltda. Inmobiliaria Aleph Ltda. Centro Veterinario y Agrícola Ltda. Inversiones Aéreas Patagonia Ltda. Estacionamientos Subterráneos Puerto Montt S.A. Sociedad de Rentas Inmobiliaria Ltda. Roblencinas Servicios Ltda. Costa Austral SpA. Inversiones la Montaña S.A.

76.284.571-7 76.148.251-3 6.680.823-8 76.179.337-3 76.023.270-K 86.510.400-6 77.758.740-4 96.994.490-1 78.648.070-1 77.645.140-1 76.353.413-8 76.126.929-1

Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile

Common shareholder Common shareholder Chairman of the Board Common shareholder Common shareholder Common shareholder Common shareholder Common shareholder Common shareholder Indirect Indirect Indirect

Holding Salmones S.A.

96.789.670-5

Chile

Indirect

Fondo de Inversión Privado Patagonia Dos

76.155.302-K

Chile

Indirect

Salmones Chaicas S.A.

76.125.666-1

Chile

Associate *

Alitec Pargua S.A Biomar Aquacorporation Products S.A.

76.591.150-8 Foreign

Chile Costa Rica

Joint operation Joint operation

Biomar Aquaculture Corporation S.A. El Pelón de la Bajura S.A.

Foreign Foreign

Costa Rica Costa Rica

Indirect Indirect

Hacienda La Pacifica S.A.

Foreign

Costa Rica

Indirect

Asociación de empleados de Aqua

Foreign

Costa Rica

Indirect

Biomar Chile S.A.

96.512.650-3

Chile

Indirect

Leased hatchery Leased hatchery Leased concession Rental of facilities Rental of facilities Purchase of drugs Air services Parking lot services Office leases Purchase of consumables Harvesting services Purchase of shares Loan Purchase of shares Loan Purchase of shares Loan Purchase of fry and eggs Purchase of smolt Purchase of raw materials Outsourced services Purchase of consumables Diagnostic services Royalty on genetic improvement Purchase of feed Loan interest Sale of feed Purchase of feed Purchase of feed Purchase of consumables Loans received Sale of consumables Purchase of consumables Sale of consumables Purchase of consumables Sale of feed Sale of raw materials Sale of consumables Purchase of raw materials Purchase of feed Purchase of consumables

Chilean pesos Chilean pesos Chilean pesos Chilean pesos Chilean pesos US dollar Chilean pesos Chilean pesos Chilean pesos Chilean pesos Chilean pesos US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar US dollar

12/31/2017 Effect on Amount income ThUS$ ThUS$ 54 (54) 18 (18) 175 115 (115) 4 (4) 10,167 510 (510) 168 168 3,366 3,599 703 5,920 3,092 5,920 3,093 49,095 151 809 11,558 4,507 90 120 487 477 51,902 9,656 44 20,650 1,320 -

12/31/2016 Effect on Amount income ThUS$ ThUS$ 55 (55) 7 (7) 175 (58) 123 (123) 3 (3) 9,422 190 (190) 3 (3) 14 (14) 198 198 2,561 3,149 5,622 17 530 93 21 360 47,377 261 620 12,135 5,942 76 1,290 8 15 541 664 55,307 9,482 124 38,340 15 1,123 -

The policy at Empresas AquaChile S.A. and its subsidiaries is to disclose all transactions with related parties during the year, except for dividends paid and capital contributions received, which are not considered to be transactions with related parties. * Associated until January 2017.

112

4) Remuneration and fees for the Directors, Directorsâ&#x20AC;&#x2122; Committee members and senior management Remuneration and fees received by Directors for their financial, business and management advice during the year ended December 31, 2017 amounted to ThUS$ 620 (ThUS$ 597 for the year ended December 31, 2016). Empresas AquaChile S.A. and its subsidiaries have an incentive scheme based on the Group's operating performance, departmental productivity, and individual performance evaluation based on the achievement of objectives. It consists of bonuses payable to senior executives and other employees that the Group believe are eligible for inclusion in the scheme. This scheme aims to motivate, reward and improve executive and employee loyalty by rewarding good individual performance and team work. Total gross remuneration received by the executives of Empresas AquaChile S.A. and its subsidiaries, which includes these incentives, was ThUS$ 5,317 as of December 31, 2017 (ThUS$ 4,953 as of December 31, 2016). NOTE 32 â&#x20AC;&#x201C; ENVIRONMENT Care and respect for the environment have a high priority within management strategy at Empresas AquaChile S.A. and its subsidiaries. This has resulted in the Group adopting programs and best practices, with the aim of increasing its operational efficiency and reducing the environmental impact of its business in a sustainable and significant manner. These programs safeguard the environment, as they involve investing in production improvements and increasing control and monitoring of processes that impact the environment. Disbursements relating to the environment are as follows. a) Parent company

Empresas Aquachile S.A. (Individually)

Project 1

Waste management

Disbursement during the year:

ThUS$ 915 (ThUS$ 676 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 394 (ThUS$ 257 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 804 (ThUS$ 499 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Disbursement description for projects 1-2-3 Studies of currents, depth, oxygenation, and algae content of fish farms. Preparation of INFA (environmental reports) and related external certified compliance. Disposal, monitoring, analysis and treatment of waste at each production stage, which is also required by relevant legal organizations.

113

Project 4

Dead Fish Disposal and Silaging

Disbursement during the year:

ThUS$ 2,300 (ThUS$ 1,442 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future:

Estimated completion date:

Dec-31-17

Project 5

Silage Investment

Disbursement during the year:

ThUS$ 0 (ThUS$ 0 to December 2016)

Accounting recognition:

Property, Plant and Equipment

Amounts committed in the future:

ThUS$ 0

Estimated completion date:

Dec-31-17

Disbursement description for projects 4-5 Investments in facilities, mortality platforms and equipment to comply with Environmental Law governing the appropriate disposal of dead salmon from fish farms to treatment plants. b) Subsidiary Alitec S.A. Project 1

Environment

Disbursement during the year:

ThUS$ 250 (ThUS$ 67 to December 2016)

Accounting recognition:

Expense

Project 2

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 180 (ThUS$ 371 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2:

Estimated completion date for projects 1-2:

Dec-31-17

Disbursement description for projects 1-2 Certified compliance, disposal, monitoring, analysis and treatment of waste at each production stage, which is required by relevant legal organizations. c) Subsidiary Grupo ACI S.A. Project 1

Waste management

Disbursement during the year:

ThUS$ 6 (ThUS$ 10 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 4 (ThUS$ 11 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 12 (ThUS$ 9 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Disbursement description for projects 1-2-3 Certified compliance, disposal, monitoring, analysis and treatment of waste at each production stage, which is required by relevant legal organizations.

114

d) Subsidiary

Antarfood S.A.

Project 1

Waste management

Disbursement during the year:

ThUS$ 50 (ThUS$ 39 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 1 (ThUS$ 4 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 83 (ThUS$ 66 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Disbursement description for projects 1-2-3 External analysis and certified compliance, disposal, monitoring, analysis and treatment of waste at each production stage, which is also required by relevant legal organizations. e) Subsidiary Aguas Claras S.A. Project 1

Waste management

Disbursement during the year:

ThUS$ 10 (ThUS$ 52 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 38 (ThUS$ 91 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 25 (ThUS$ 180 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Dead Fish Disposal and Silaging

Disbursement during the year:

ThUS$ 345 (ThUS$ 380 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future:

Estimated completion date:

Dec-31-17

Project 5

Silage Investment

Disbursement during the year:

ThUS$ 0 (ThUS$ 4 to December 2016)

Accounting recognition:

Property, Plant and Equipment

Amounts committed in the future:

ThUS$ 0

Estimated completion date:

Dec-31-17

115

f) Subsidiary

Procesadora Aguas Claras Ltda.

Project 1

Waste management

Disbursement during the year:

ThUS$ 45 (ThUS$ 46 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 4 (ThUS$ 4 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 187 (ThUS$ 116 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Waste management

Disbursement during the year:

ThUS$ 439 (ThUS$ 250 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 275 (ThUS$ 93 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 350 (ThUS$ 260 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Disbursement description for projects 1-2-3 Studies of currents, depth, oxygenation, and algae content of fish farms. Preparation of INFA environmental reports and related external certified compliance. Disposal, monitoring, analysis and treatment of waste at each production stage, which is also required by relevant legal organizations. h) Subsidiary

Procesadora HueĂąocoihue SpA

Project 1

Waste management

Disbursement during the year:

ThUS$ 31 (ThUS$ 23 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 2 (ThUS$ 2 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 39 (ThUS$ 114 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Disbursement description for projects 1-2-3 External analysis and certified compliance, disposal, analysis and treatment of waste at each production stage, which is also required by relevant legal organizations.

116

i) Subsidiary

Salmones CailĂn S.A.

Project 1

Waste management

Disbursement during the year:

ThUS$ 50 (ThUS$ 32 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 2 (ThUS$ 17 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 66 (ThUS$ 59 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

Disbursement description for projects 1-2-3 Preparation of INFA (environmental reports) and external certified compliance. Disposal, monitoring, analysis and treatment of waste at each production stage, which is also required by relevant legal organizations. j) Subsidiary Project 1

Aquachile S.A. Waste management

Disbursement during the year:

ThUS$ 31 (ThUS$ 82 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 22 (ThUS$ 58 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 220 (ThUS$ 266 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

ThUS$ 81 (ThUS$ 104 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future:

Estimated completion date:

Dec-31-17

Project 5

Silage Investment

Disbursement during the year:

ThUS$ 0 (ThUS$ 0 to December 2016)

Accounting recognition:

Property, Plant and Equipment

Amounts committed in the future:

US$

Estimated completion date:

Dec-31-17

Disbursement description for projects 4-5 Silaging facilities and other equipment to comply with the Environmental Law governing the appropriate disposal of dead salmon from fish farms to treatment plants.

117

k) Subsidiary

Salmones Australes S.A.

Project 1

Environment

Disbursement during the year:

ThUS$ 7 (ThUS$ 2 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future:

Estimated completion date:

Dec-31-17

Disbursement description for project 1 External analysis and certified compliance, which is required by relevant legal organizations. l) Subsidiary

Laboratorio Antares S.A.

Project 1

Waste management

Disbursement during the year:

ThUS$ 2 (ThUS$ 1 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future:

Estimated completion date:

Dec-31-17

Project 2

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 43 (ThUS$ 43 to December 2016)

Accounting recognition:

Expense

Estimated completion date for projects 1-2:

Dec-31-17

Disbursement description for projects 1-2 Disposal and treatment of waste at each production stage, which is also required by relevant legal organizations. m) Subsidiary

Aquainnovo S.A.

Project 1

Waste management

Disbursement during the year:

ThUS$ 24 (ThUS$ 2 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 0 (ThUS$ 0 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 299 (ThUS$ 28 to December 2016)

Accounting recognition:

Expense

Estimated completion date:

Dec-31-17

Amounts committed in the future for projects 1-2-3:

Disbursement description for projects 1-2-3 External analysis and certified compliance, disposal, monitoring, analysis and treatment of waste at each production stage, which is required by relevant legal organizations. n) Subsidiary Salmones MaullĂn Ltda. Project 1

Waste management

Disbursement during the year:

ThUS$ 0 (ThUS$ 2 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 7 (ThUS$ 9 to December 2016)

Accounting recognition:

Expense

Estimated completion date:

Dec-31-17

Disbursement description for projects 1-2 Studies of currents, depth, oxygenation, and algae content of fish farms. Disposal, monitoring, analysis and treatment of waste at each production stage, which is also required by relevant legal organizations.

118

Project 4

Silage Investment

Disbursement during the year:

ThUS$ 0 (ThUS$ 0 to December 2016)

Accounting recognition:

Property, Plant and Equipment

Amounts committed in the future:

Estimated completion date:

Dec-31-17

Disbursement description for project 4 Investments in facilities, mortality platforms and equipment to comply with Environmental Law governing the appropriate disposal of dead salmon from fish farms to treatment plants. o) Subsidiary

Centro de InnovaciĂłn Aquainnovo â&#x20AC;&#x201C; Biomar S.A.

Project 1

Waste management

Disbursement during the year:

ThUS$ 2 (ThUS$ 5 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 10 (ThUS$ 2 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 0 (ThUS$ 87 to December 2016)

Accounting recognition:

Expense

Estimated completion date:

Dec-31-17

Disbursement description for projects 1-2-3 External analysis and certified compliance, disposal, monitoring, analysis and treatment of waste at each production stage, which is required by relevant legal organizations. Project 4 Silage Investment Disbursement during the year:

ThUS$ 2 (ThUS$ 0 to December 2016)

Accounting recognition:

Property, Plant and Equipment

Amounts committed in the future:

US$

Estimated completion date:

Dec-31-17

Disbursement description for project 4 Silaging facilities and other equipment to comply with the Environmental Law governing the appropriate disposal of dead salmon from fish farms to treatment plants. p) Subsidiary

Salmones Chaicas S.A.

Project 1

Waste management

Disbursement during the year:

ThUS$ 163 (ThUS$ 173 to December 2016)

Accounting recognition:

Expense

Project 2

Environment

Disbursement during the year:

ThUS$ 29 (ThUS$ 2 to December 2016)

Accounting recognition:

Expense

Project 3

Analysis and Certified Compliance

Disbursement during the year:

ThUS$ 519 (ThUS$ 323 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future for projects 1-2-3:

Estimated completion date for projects 1-2-3:

Dec-31-17

119

Project 4

Dead Fish Disposal and Silaging

Disbursement during the year:

ThUS$ 21 (ThUS$ 27 to December 2016)

Accounting recognition:

Expense

Amounts committed in the future:

Estimated completion date:

Dec-31-17

Project 5

Silage Investment

Disbursement during the year:

ThUS$ 1 (ThUS$ 0 to December 2016)

Accounting recognition:

Property, Plant and Equipment

Amounts committed in the future:

US$

Estimated completion date:

Dec-31-17

The main concepts relating to these environmental costs are described as follows. 1. Bathymetry: Measures the depth of a concession. 2. Correntometry: Measures the dynamics of marine currents around concessions. It identifies the prevailing currents, together with their frequency and speed. 3. INFA: An environmental report on marine and lake fish farms, which is reviewed by Sernapesca. This report covers facilities in operation, and must comply with the deadlines established by Resolution. 4. Pre-operation INFA: An environmental report on fish farms before they become operational, and have been fallow for over a year. 5. Oxygen profiles: Monitoring oxygen levels in the water column at marine and lake fish farms every 2 months. 6. Phytoplankton monitoring: Analyzing water samples from the marine fish farms, primarily to detect the presence of harmful algae that affect normal fish behavior. 7. Grey and black water sampling and analysis at the Pontoon treatment plants: Treated water from pontoon treatment plants must be monitored, in accordance with requirements issued by the Maritime Authority.

120

Waste Management Inorganic, organic and hazardous waste management at each productive unit. -

Effluent treatment 1. Sludge: Removal and final disposal of the sludge produced by hatcheries and processing plants. The company that removes and disposes these wastes must have all the health and environmental permits required by environmental legislation. 2. Effluent monitoring and analysis: The industrial liquid waste produced by hatcheries and processing plants is monitored and analyzed. The results are sent to the Superintendent of sanitary Services (SISS = Superintendencia de Servicios Sanitarios) and the Maritime Authority, as appropriate. This analysis conforms with D.S.90-2001.

Environmental Standards External Laboratory Analysis - Certified Compliance: The analyses provided by the laboratory are: - INFAs and pre-INFAs. - Effluent - Monitoring pontoon treatment plants - Drinking water NOTE 33 - OTHER INFORMATION The number of employees by category at Empresas AquaChile S.A. and its subsidiaries is as follows. Headcount Managers and executives Administrators and technicians

12/31/2017

12/31/2016

938

891

Laborers

3,873

3,935

Total

4,849

4,861

NOTE 34 - SUBSQUENT EVENTS a)

The Groupâ&#x20AC;&#x2122;s consolidated financial statements for the year ended December 31, 2017 were approved by the Board of Directors on February 22, 2018.

There were no subsequent events between December 31, 2017 and the date these consolidated financial statements were issued that could significantly affect their presentation.

***