MANAGEMENT
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Content Pág.
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Welcome to the 2017 Report.
Coffee is in Style!
03
La Meseta. An Agro-Industrial Business
05
The 2017 Coffee Grower's Context
06
Developing the Business
11
Agricultural Consolida on
11
Purchasing
14
Opera ons
15
Commercial Management
17
Sustainability
20
Logis cs and Exports
22
Systems and Networks
24
Human Resources
26
Financial Results and Indicators Financial Sector Frequently Asked Ques ons Fiscal Auditor's Report
29 53 57
2
¡Welcome!
is in
At La Meseta we have a close relationship with coffee, we are fortunate to be able to participate in the value chain going through production, wet milling, threshing, commercialization of a sublime product, the commercialization of added coproducts, the transportation and generation of added value. We work lines of differentiated, certified and specialized coffee. We respect our product and are grateful for the good fortune of being part of this important sector of our country. We admire coffee as a historic Colombian product, and economic and social development engine. We work day-to-day and shoulder-to-shoulder with the self-sacrificing and hardworking Colombian coffeegrower. We are coffee people. We are united with millions of farmers and other workers of the field commercializers and employees in the sector that live the daily necessity of the business in its distinct facets. We are thankful for the work of the coffee roasters baristas and impresarios that bring the product to the end consumer, making that person feel their wishes are limitless, allowing this to expand more forcefully to all the corners of the planet in its diverse and varied forms. At La Meseta we are loyal administrators of coffee as a paradoxical beverage, which from its most simple form has confronted and imposed itself on the widest and most varied competition, aspiring to feats like confronting the millennial old tea culture of China. A product of contrasts with bittersweet sensations, multiple units of measure, unpredictable prices and multiple flavors.
2017 Management Report
We share the pleasure and passion for this multi-color gold that has deserved the effort and labor of millions of farmers all around the world, and which has given Colombia the luxury of being rebellious and respond to alternative technologies for its harvest, and continue depending on the hands of workers to pick its ripe fruit one by one. Only a very powerful product can afford this luxury, a product ever-present for so many, but which time and again knows how to win the hearts of youth with diverse and attractive forms of consumption like the expansion of coffee stores all over the world, the barista culture and the permanent experimentation with coffees of different preparations and specialties. We have the good fortune of knowing a star product, a product that continues being young, even though it has a long history, a characteristic that only someone who intends to live a long life can enjoy. For all these reasons we feel that coffee is in style. We're confident that this will continue and will allow us to continue to enjoy its production, processing and commercialization in order to share with you from La Meseta for many years to come.
Coffee is in Style
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4
La Meseta. An agro-industrial company
committed to the sustainability of growing Colombian coffee.
765 Hectares
Agrícultural Unit
765 Hectares for the production of coffee. Generating 1,000 direct and indirect jobs. Projection for 2019: 20.000 bags of sublime coffee. 2% of the total exports of The Plateau.
Central Processing Separation and Meseta
Humus or organic fertilizer
Collection Separation, Santa Rosa, Meseta and Threshing
Industrial Management. Coffee processing & threshing
Wet Processing Unit Coffee husks
Producers' collection points Threshed unit separated: differentiated and specialty:
Threshing and selection
Coproducers threshing Threshed principal unit
Environmental responsibility
Commercial Management
Commercialization and exportation of sublime coffee Exports to
36 countries
Commercialization of coproducts
Commercialization and exportation of differentiated and specialty and certified
10%
10% market
Sales objectives added value
share
Future price assurances We rely on a base of 197 large collectors around the country, 165 large and mid-sized producers and 2.000 small producers.
Unit Transportation
A fleet of 9 vehicles
2017 Management Report
2017 Exportation of nearly
3.000 containers
We are a major generator of cargo in the
Coffee is in Style
Eje Cafetero
5
2017 Coffeegrowers Context The international context. Supply Vs Consumption Production Vs World Consumption (Thousand of bags x 60 kg.)
152.108
151.725
149.077
2014
155.756
157.694
2015
158.930
157.382
2016
Robust Arabica world production
158.953
2017
World Consumption
World production by type of coffee (Bags x 60 kg.)
86.281
102.174
88.433
60.087
55.520
2015
World production After various years of
98.843
63.675
62.796
2014
158.930
157.694
152.108
149.077
2016
Arabica
increased world consumption
2017
Robust with respect to supply,
2016 and 2017 have been years with tighter balances that have allowed global inventories to maintain their levels and have provided investors or speculators with arguments to
maintain lower price levels. The supply of arabica coffee that
Colombia produces has increased as the supply of robust coffee decreased.
6
International Price of Coffee International Price of Coffee, NY (USD x pound)
1,65 1,38
1,24
2014
2015
1,26
2016
2017
NY Stock Exchange Price
Colombian Coffee Production Produc on Level. Production in the country was maintained at important levels for 2017 thanks especially to the ďŹ rst semester's harvest in the south of the country.
Colombian Coffee Production (Millions of bags 60 kg)
14,2
14,5
2015
2016
14,2
12,1
2014
2017
Colombian Coffee Production
2017 Management Report
Coffee is in Style
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Premium Colombian Coffee The strength of our product Premium Colombian Coffee (USD x pound)
0,03
0,09
2014
0,09
2015
0,13
2016
2017
Price Differential Increment consistent with the premium for Colombian coffee. The strength of our product despite sustained production levels.
Price of the dollar (31-Dec) 2.390
3.149
3.000
2.984
2014
2015
2016
2017
Internal Colombian Coffee Price Coffee prices (31-Dec)
77.000
2014
80.000
2015
85.500
81.000
2016
2017
Market Price, December 31
8
Relevant Indicators
1 Sales, increases in sales. La Meseta continues its solid double-digit sales growth.
Sales Growth (Colombian Peso)
2017 Growth:
16,45% 585.647.816.541 352.805.401.524
502.900.817.506
2015
2016
258.136.126.163
2014
2017
Average Price
Projected Agricultural Production (Kg. of dry parchment coffee)
1.875.000 1.250.000 499.375
516.492
562.500
2015
2016
2017
2017 Management Report
2018
Coffee is in Style
2019
9
2 Produc
on Level Increments La Meseta threshing plant. Threshing Production VS production and purchases
800.000
752.200
700.000 600.000 500.000
377.000
430.684
400.000
170.000
300.000
214.025 19.727
200.000 100.000 0
2015
2016
Production
3
Prd/ Purchases
La Meseta's Par cipa on in the Export Market 2014
2015 398.503
496.101
4%
5%
8.993.211
10.401.613
96%
95%
2016
2017 609.749
743.295
6%
7%
10.400.251
10.384.991
94% 10
2017
93% Other exporters
La Meseta
Business Development 1Agricultural Consolida
HECTÁRES 765 For the production of coffee
TOTAL
PRODUCTION
2 0 1 7
45.000
PRODUCTION
1000
GENERATED JOBS
HARVEST
2 0 1 7
400
indirect jobs
2 0 1 7
1.500.000
EXPECTED
PRODUCTION
2 0 1 8
100.000
Coffee arrobas dry parchment 1.250.000 kg
Trees
EXPECTED
HARVEST
2 0 1 8
direct indirect
Coffee arrobas dry parchment
NEW PLANTS
EXPECTED EMPLOYEES
on.
2 0 1 9
150.000 Arrobas
1.875.000 kg
2017 Management Report
PROJECTED AMOUNT 2 0 1 8 OF NEW PLANTS
977.750
Trees
Coffee is in Style
11
649.4
es fT re #o
Co in ea
Ar
14.7
P in erce Co n ffe tag e e
ffe
ds oa (R rs he
14.7
Ot
86.8
e
)
e ur ct
Ar on
In Ar fra ea str u
765.6
ati
Total
Co n Ha serv
T Haotal A
re
a
ea
Farms Related to La Meseta
4.719.750
85%
Agricultural Border Expansion (# of Productive Hectares) 738.63 552.59 319.11 204.71
193.91
2015
2016
2017
2018
2019
Area planted
Area of
Physical infrastructure (Ha);
14,7
with coffee
765.6 Area
preserved (Ha);
86,8
12
2 Purchasing We buy coffee from all over the country. Purchasing by Department TOLIMA 14% VALLE DEL CAUCA 6%
ANTIOQUIA 11%
CALDAS
RISARALDA 6%
31%
NARIÑO 11% CAUCA
HUILA 15%
6%
Total Raw Material Purchasing (Colombian Pesos) 530.923.560.403 449.682.316.704 236.903.287.971
317.441.941.965
2014
2015
2016
2017
Total Raw Material Purchasing (Colombian Pesos) 86.831 84.406
81.112 88.180
86.000 91.436 89.627 88.447 85.198 82.536
01-Jan JAN.
14
FEB.
MAR.
APR. MAY.
82.395
JUN.
84.356
JUL.
AUG.
SEP.
80.186
OCT.
80.000
NOV. DEC. Dec 31
3
Opera ons
2017 Resulting Operactons broadening and optimizing the threshing productive unit has just ended, consolidating La Meseta's threshing A successful period of important investments in
operations as one of the highest
capacity operations in the country.
La Meseta Threshing Capacity Installed (70 Kg. bags daily) 3500
3.000
3000
2.500
2500 2000 1500
1.000
1.600
2014
2015
1000 500 -
2016
2017
-Increase
-Increase
Precleaned capacity
-Capacity of mechanical selection -Substation electrical capacity
-Threashing Capacity
-Capacity
of electronic
selection
630KVA
Relies on RETIE certiďŹ cation in transformation as distribution, assuring conďŹ dence in the electrical network within the company as much as personnel safety.
2017 Management Report
Coffee is in Style
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Production in Figures
Bag Production By Month (70KG)
90.000 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
SEPTEMBER
2016
JANUARY 30.480
25.592
28.690
30.287
34.173
32.632
18.645
33.304
25.703
57.070
62.522
51.586
2017
45.246
52.864
51.095
57.824
70.607
62.900
72.708
57.849
56.226
68.263
83.694
72.929
78%
91%
107%
93%
290%
74%
119%
20%
34%
41%
GROWTH
48%
107%
2016
OCTOBER
NOVEMBER DECEMBER
2017
Energetic EfямБciency Kw x BAG 5.05 3.86 3.90
4.01 3.51
3.29
3.92
3.74
3.59 3.32
3.32
3.44
3.76
3.55 3.31
3.05
JUL.
16
AUG.
SEP.
OCT.
NOV.
DEC.
JAN.
FEB.
MAR.
APR.
MAY.
JUN.
JUL.
AUG.
SEP.
OCT.
3.06
NOV.
3.16
DEC.
4 Commercial Management > We c o n t i n u e t h e D i z z y i n g R h y t h m o f e x p o r t g r o w t h .
> L a M e s e t a p r o j e c t s reaching its ďŹ rst m i l l io n b a g s. exported in
2020. Grouth in Exports (70kg Bags) 1.000.000
892.000 743.000 610.000 496.000 398.000 301.684 165.125 136.000 108.000 24.000 42.000 188.175 60.500 35.000 162.815 10.000
2.002
2.004
2.006
2.008
2.010
2.012
2.014
2.016
2.018
2.020
“Obtained a growth of 22% in 2017"
Commercialized Volume 743.295 609.749 496.101 398.942
95.675
210.180
119.795
165.670
4.106
18.418
22.153
13.497
2014
2015
2016
2017
Exports (70kg Bags)
Sublime National Sales (70kg Bags)
2017 Management Report
Lower Sales (62.5kg Bags)
Coffee is in Style
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Growth in Supreme, differentiated and specialty Lkes Summary 2016 Vs 2017 Sublime Bags x 70 kg
Sublime
Supreme
UTZ
RFA
Differentiated and specialty
398.332
374.587
260.888 188.718
32.190 3.050
52.335
6%
63% 38%
15.495 15.950
11.455
2016
408% 39%
Aumento
2017
La Meseta, a local company next to strong multinationals
Export Volume 2.034.261 2.498.613
888.027 488.380 312.661 557.258 730.181 485.263 271.889 631.000 535.134 985.197 909.213 918.340 608.946 446.096 174.825 475.449 743.295 627.738 528.744 326.892
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2017
S CO DR M EY PA FU NY S EN ... GE (C LH O A LO RT M C BI TP A) ... CO C LO OM M PA BI AN ÑÍA A. .. CO O LO LA M M BI AG A SK S.A RO N .S CA RI BE CA FE CO O CA PER FI AT CU IV LT A D O RE E A S LA CO UM M AY PA ER ÑI Y A. ..
FE
M
A ES FET ET E A RA S.A LO . UI
DE DE RAC CA IÓ EX PO FE N TE NA RT RO L. AD S O SO RA C DE IED CA AD FÉ CA RC AF EL TD RA A FA HE EL CO RM ESP M AN IN PA O OSA S& ÑI A ... LA C
770.116 1.170.379
2016
Distribution of Sales by country Sales to 36 countries
Participation of sales by country UNITED STATES SPAIN 1%
UNITED STATES 55%
OTHERS 7%
JAPAN GERMANY
ISRAEL 3% SOUTH KOREA BELGIUM 3%
CANADA BELGIUM
CANADA 4%
ISRAEL SOUTH KOREA 8%
SPAIN OTHERS GERMANY 9% JAPAN 10%
Value added Generated
SPECIALITY
COFFEES
1100 BAGS
During 2017, a second lot of specialty coffee was delivered to Europe with the objective of selling directly to roasters.
The first operation of purchasing 1,100 bags of coffee from Guatemala destined for the Middle East.
2017 Management Report
The sale of the first container sent in 2016 was sold successfully to 14 clients, of which 13 were roasters and 1 an importer.
14 CLIENTS
14
DESTINATION
During 2017 sales were made to 62 clients from origin and 14 in different destinations in Europe from Europe.
Coffee is in Style
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Sustaninability La Meseta performed activities focused on education and environmental sensitivity, primarily with children and youth from rural schools neighboring the Company's coffee farms.
PLANTING TREES IN THE
FORESTS
SAFE MANAGEMENT OF
AGRO-CHEMICALS TRAININGS WITH THE
UTZ COFFEEGROWERS FIRST
AID Product stabilization through different pruning methods. Management of subproducts and waste
generated on the coffee farm.
The delivery of trees to UTZ coffeegrowers who wanted to Plant those on their farms. The coffee farm La Estrella will enter the Rainforest Alliance Certified group in 2018 with
202 hectares of coffee, consolidating La Meseta as one of the largest groups with certified sustainable specialty coffee in the region.
20
La Meseta Certified Volume for RFA Coffee Company (Thousands of kg of green coffee)
408
190
213
2015
2016
2017
Volume certified in Current Certification Year
La Meseta Certified Volume for UTZ Coffee Company (Thousands of kg of green coffee)
2.599
2.809 2.375
2.386
2.320
1.576 1.000
362 0
0 2010
0 2011
2012
0
0 2013
2014
248
5
0 2015
2016
2017
Physical stock from the previous certification year Total certified volume for the current certification year
2017 Management Report
Coffee is in Style
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5 Logis
cs and Exporta on Participation By Shippers (70kg Bags) 160.555
68.278
30.015
HAPAG LLOYD 22%
OTHERS 9%
EVERGREEN 4%
HAPAG LLOYD
146.730
MSC
MSC 20% MAERSK 5%
SEALAND
39.345 HAMBURG SUD NYK 6%
NYK
48.285
MAERSK EVERGREEN OTHERS HAMBURG SUD 16%
117.875
SEALAND 18%
133.750 The volume of exports was increased to 22% from 2016.
Allocated for exportation BAGS 100%
180.000 155.240
160.000 140.000
80%
131.117
120.000
60%
93.399
100.000 80.000
59.100 52.707 38.450 44.970 18.955 15.165 11.275 10.455 43.000 22.315 15.400 12.650 10.460 10.175
60.000 40.000 20.000
20%
LO
CH
NG
D AN KL
OA
BE A
US A
A ON
S
EL RC BA
S
ÁN
GE
LE
US TO N LO
US
IS HO
IFA
A
EL RA
TO ON HA
TO R
BR
EM
EN
P
S
TW ER
AN
AN
LE
OR
LE
IL
NE
W
SO NV
CK JA
HA
M
BU
HA
M
RG
A
A YO
KO
RE
A BU
SA
N
KO
US
S
RK
ER YO
W
O TH NE
O LK
,U
SA
0%
RF NO
22
40%
Participation by continent (70kg Bags) OCEANA
EUROPE
1.970
128.728
NORTH AMERICA
445.539
In 2017 La
Meseta had sales to 5 continents. AFRICA
TOTAL
743.295
SOUTH AMERICA
825
ASIA
166.122
1.649
Agility and compliance, Our Virtues AVERAGE OF VARIOUS ITEMS
2017 AVERAGES
AVERAGE DAYS OF COFFEE IN PORTS
8.80
AVERAGE DAYS TO OBTAIN ICO
7.61
AVERAGE DAYS TO OBTAIN DEX
13.53
AVERAGE DAYS FROM THRESHING TO DCTOS SHPMENT
14.53
AVERAGE DAYS FROM DEPARTURE OF BOAT TO DELIVERY OF DCTOS TO CLIENTS
2017 Management Report
4.72
Coffee is in Style
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6Systems and Network Management reengineering process was conducted that allowed for the integration of new functionalities to our systems. These developments
In 2017 a
manufacturing Logistics and Exportations. were primarily concentrated in the areas of
FINANCIAL
MANAGEMENT
PURCHASING
MANAGEMENT
RISK
MANAGEMENT ADMINISTRATIVE
PRODUCTION
MANAGEMENT
MANAGEMENT
LOGISTIC
& OPERATIONS
A shipping
module
to centralize the
management of all
collaborators in the area and have all the required information on hand for the management of the Company's the
shipments
24
Information Security
A stable information security system
Guaranties in security for performing the Company's operations Firewall
Modem
Network Switch
Wan
Guests
Modem Modem
Access Point Users
Systematization of sales In 2017 we reached a milestone for Colombian coffee production, “La Meseta Coffee APP ” was successfully adoptedBy the Company's coffee suppliers.
APP sales by month (Km) 600.000
592.213
500.000
434.965
400.000
366.570
379.858
394.626
300.000
145.505
200.000 100.000
12.000
19.000
February
May
June
Software Licensing The passing of Article 47 of Law 222 in 1995, modified with Law 603 from July 27, 2000, allows/requires us to inform the state of compliance with regulations regarding intellectual property and author's rights.
July
August
September
October
November
In Compliance with Article 1 of Law 603 from July 27, 2000, we guarantee our associates and the authorities that the products protected by intellectual property rights are utilized in a legal manner, that is in compliance with the respective regulations and the necessary authorizations, as is also the specific case of Software in accordance with the use license of each program. Moreover, the acquisition of equipment is controlled in such a way that our suppliers satisfy the company with all the guarantees that it has been legally imported.
2017 Management Report
Coffee is in Style
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7 Management of Human Talent La Meseta S.A industrial, commercial y administrative personnel Increase in personnel 2016 VS 2017 (No. of people) 12%
Increase in personnel
196 YEAR 2017 172
YEAR 2016
0
50
100
2016 172
No. of people
150
2017 196
200 Increase in personnel 12%
Distribution by area AgrĂculture
2% 4
General Mgmt
2% 3
Commercial
5% 9
Aprovisionamiento
14%
Administrative & ďŹ nancial
16%
Operations
61%
27 31 118
%
26
Quantity
250
Supporting Local Talent Geographic Distribution 91% 175 6% 11
Chinchinรก
1%
2%
1%
2
3
1 Buenaventura
Santa Rosa
Pereira
Manizales
A young Company Distribution by age and area 45
44
26 20 14
17 11
9 2
18-28 years
Operations Administrative %
3
1
29-38 years 39-48 years 49-58 years 59-69 years more than 69
44
45
26
17
2
1
20
14
11
9
3
0
31%
19%
14%
3%
1%
33%
0
2017 Management Report
Coffee is in Style
27
Supporting talent Detail
Quantity
Value
2
3.320.000
Undergraduate
5
9.760.000
Specializations
4
20.172.000
Technology
2017
In
11auxiliary degrees,
were awarded for a value of
$33.252.000 In compliance with Decree 1406 of 1999, articles 11 and 12, we announce that the company complied during the timeframe with its auto-liquidation obligations for payments into the Social Security System. The data incorporated into the declarations of auto-liquidation are correct and, as such, have determined the basis for making payments. The data regarding those affiliated with the system are exact. The Company is in good standing with the payments at the close of the exercise in accordance with the fixed positions. No accounting irregularities exist in relation to the payments into the system especially related to the basis for making general payments, labor payments and patron
payments.
28
Results of financial
indicators
Growth in net Utilities Net Utilities (Colombian Pesos) 1.718.513.820 1.353.543.390 859.312.613
2014
624.473.626
2015
2016
2017
Growth margin Evolution of margin (Colombian Pesos) 11.131.110.092 9.622.481.494 4.919.511.553
5.713.324.752
2014
2015
2016
2017
Margin
2017 Management Report
Coffee is in Style
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Growth in Sales Growth in Sales (Millions of Pesos)
64.705 13.334 424.856
37.551 8.554 307.376
27.805 1.178 229.953
2014
2015
60.476 9.138 511.489
2016
Excelso Exported
2017
Excelso Commercialized
Inferiors
Structural costs 2017
2016
COST
COST
OF THE MERCHANDISE
OF THE MERCHANDISE
(93,94%)
(93,81%)
SOLD
5,13%
1,05%
1,22%
Admin costs and sales
Int y fact
Coverage
Other Income 0,33%
Tx
O, 33%
SOLD
4,79% Admin costs and sales
1,06%
1,92%
Int y fact
Coverage
Other Income 0,75%
0,29%
Net margin
2015
2014
COST
COST
OF THE MERCHANDISE
OF THE MERCHANDISE
SOLD
SOLD
(91,79%) 5,57%
0,89%
1,59%
Int y fact
Coverage
Other Income 0,37%
Tx
0,18%
0,18%
Net Margin
30
O, 30%
0,26%
Net margin
Admin costs and sales
Tx
(92,48%) 4,78% Admin costs and sales
0,97%
1,62%
Int y fact
Coverage
Other Income 0,51%
Tx
0,32%
0,33%
Net Margin
Wealth Evolution
25.002.683.425
9.488.059.220
16.333.067.349
2015
2016
7.334.006.599
2014
2017
Main facts about wealth
1. 2. 3.
Growth of net utility. Non distribution of utilities Evaluation process and rise of ďŹ xed assets.
Financial structure of La Meseta S.A. The ďŹ nancial structure of the Company at the end of 2017 had the following distribution
Structure of liabilities and wealth 2017
Structure of Assets 2017 47.422.099.496;
48.904.657.872;
23.570.721.052;
49%
51%
25%
46.531.576.103;
48%
26.224.460.212;
27% Current Assets
Non Current Assets
2017 Management Report
Wealth
Short term liabilities Non Current liabilities
Coffee is in Style
31
Investment Structure
Fixed Assets 2017 Vs 2016
47.283.813.659
25.683.535.796
2017
2016
21.600.277.863
Variation
Change in Fixed Assets 2017
17.807.846.361
6.319.319.951
Acquired
32
Values and Properties
(2.526.888.432)
Sales
Labor Capital We maintain an excellent pace in the use of labor capital an average of a 6.89% rise was required of labor capital for sales growth of 16.45%
Average work capital 2016 vs 2017 (Colombian Pesos) 45.173.562.769 42.284.875.213
2.113.988.769
15.714.719.414
2.593.503.240
12.935.470.304
19.359.611.135 13.947.522.300 6.046.568.045 11.014.999.131 1.938.675.407 1.793.380.238
Cash
Accounts Receivable
National Accounts Receivable
Coffee in port
Total
Inventary
2.017
2.016
We rotated the capital 2.6 days faster than in 2016 Labor Capital 2016 vs 2017 (Days) 30.7 28.1 35,0 30,0 25,0
10.1
12
20,0
8.0 9.4
15,0 10,0
1.9
3.8
9.8 1.3
13
1.2
5,0 0,0
Cash
Accounts Receivable
National Accounts Receivable
Coffee in port
2.016
2017 Management Report
Inventary
Total
2.017
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33
Debt The debt growth was principally due to leverage in the ďŹ nancial sector regards the purchasing of new land for coffee production. despite this, the company has maintained a level of healthy debt which is competitive for the sector.
End 81.78%
77%
2014
2015
73.78%
75.53%
2016
2017
Administrative and sales costs An increase of 22.5% was seen in administration costs it is notable that a major part of this increase (20.19% corresponded to an increase in the coffee contribution, which is a cost that depends on the volume exported, which grew 22%.
Administrative and sales costs 2017 vs 2016 30.028.474.085 24.506.498.029
20.428.910.572 16.997.669.909 5.173.729.649
1.761.924.198 2.522.557.343
573.174.273
6.371.879.207
705.126.963 (-) Admin and sales costs (nota 4)
Administration costs
Sales costs
Coffee contribution
2.017
34
Distribution costs (others)
2.016
Forward and exchange difference expenses are operational in the coffee marketing business In accordance with paragraph 18 of IAS 18 and after consultation with the technical council of public accounting, under international ďŹ nancial reporting standards, the net balance of the exchange differences as well as the compensation of forward operations has been classiďŹ ed as ordinary income / expense, given that the foreign exchange risk management constitutes the activity of marketing coffee abroad as an ordinary operation. DECEMBER 2017
DECEMBER 2016
DECEMBER 2015
4.436.489.562
+$13.307.619.281
+$10.683.533.419
11.571.960.295
+$9.317.041.340
+$3.081.462.167
-$5.371.187.309
-$7.602.619.735
-$9.036.445.494
-$3.466.703.627
-$5.189.171.974
-$10.342.950.892
7.170.558.921
$9.832.868.912
-$(5.614.400.800)
Exchange Difference Income Forward Income Exchange Rate Differences Forward Expenses Total
KT Proyection 2018 La Meseta has an ambitious growth plan for 2018 and projects the following needs according to a 30-day cash cycle.
working capital
La Meseta KT Needs 2018 30 day cash cycle 90.000.000.000 80.000.000.000 70.000.000.000 60.000.000.000 50.000.000.000 40.000.000.000 30.000.000.000 20.000.000.000 10.000.000.000 K de T
Jan.
Feb.
Mar.
Apr. May. Jun.
2017 Management Report
Jul.
Aug.
Sep.
Oct.
Coffee is in Style
Nov.
Dec.
35
FINANCIAL STATEMENTS ENDING
FINANCIAL STATEMENTS DECEMBER 2017 DECEMBER 2016
DECEMBER 2017 DECEMBER 2016
ACTIVE
PASIVE
CURRENT LIABILITIES
CURRENT ASSETS
Cash and equivalents to cash
Nota 1
Trade accounts receivable and other current accounts receivable
Nota 2
28.916.525.051 21.782.849.533
CURRENT INVENTORIES
Nota 3
15.529.714.907
6.787.332.767
ASSETS FOR CURRENT TAXES AND OTHER CURRENT FINANCIAL ASSETS
Nota 4
2.695.193
-
Nota 5
213.714.587
784.181.457
Nota 5
1.234.912
4.025.071
Other No financial current assets TOTAL CURRENT ASSETS DIFFERENT FROM THE NON-CURRENT ASSETS OR GROUP OF ASSETS FOR ITS DISPOSITION CLASSIFIED AS HELD FOR SALE OR HELD TO DISTRIBUTE TO THE OWNERS
4.240.773.221
7.393.357.152
CURRENT PROVISIONS FOR EMPLOYEES BENEFITS
396.297.477
301.044.653
-
-
Nota 10
13.576.154.222
6.826.958.364
PASIVOS POR IMPUESTOS CORRIENTES
Nota 11
243.994.481
277.690.077
OTHER FINANCIAL CURRENT LIABILITIES
Nota 12
32.315.129.923
26.173.316.546
46.531.576.103
33.579.009.640
46.531.576.103
33.579.009.640
Nota 9
OTHER CURRENT PROVISIONS
TRADE ACCOUNTS PAYABLE AND OTHER ACCOUNTS PAYABLE
TOTAL CURRENT LIABILITIES DIFFERENT FROM THE LIABILITIES INCLUDED IN GROUP OF ASSETS FOR ITS DISPOSITION CLASSIFIED AS HELD FOR SALE
48.904.657.871 36.751.745.980
TOTAL CURRENT ASSETS
48.904.657.871 36.751.745.980
NON-CURRENT ASSETS
SALES
TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES
TAX ASSETS DEFFERED NET
Nota 6
70.665.075
-
INVESTMENT PROPERTY RURAL TERRAINS
Nota 7
22.835.149.838
9.964.502.128
PLANT AND EQUIPMENT PROPERTY TERRAINS ONGOING BUILDINGS BUILDINGS MACHINERY TO BE ASSEMBLED
1.885.417.318 766.067.841 5.855.950.250 958.544.506
1.872.764.832 108.056.967 3.103.836.765 432.530.540
MACHINERY AND EQUIPMENT OFFICE EQUIPMENT COMPUTER EQUIPMENT
4.861.459.783 100.353.190 277.684.141
5.277.341.292 104.092.772 241.577.569
FLEET AND TRANSPORT EQUIPMENT AQUEDUCT, PLANTS AND NETWORKS SUB-TOTAL
Nota 7
ACCUMULATED DEPRECIATION INTANGIBLES - RIGHTS AMORTIZATION- RIGHTS
Nota 8
NET TOTAL
1.083.302.416 57.178.800 105.281.281 105.281.281 15.894.060.726 11.302.660.818 2.935.139.432 1.944.012.681 12.384.734.812 8.033.880.100 894.992.285 1.673.494.769
TAX LIABILITIES DEFERRED NET
Nota 13
901.559.153
TRADE ACCOUNTS PAYABLE AND OTHER NON-CURRENT ACCOUNTS PAYABLE. Nota 12 OTHER NON.CURRENT FINANCIAL LIABILITIES
25.322.901.059
12.597.575.376
NON-CURRENT LIABILITIES TOTAL
26.224.460.212
12.597.575.376
LIABILITIES TOTAL
72.756.036.315
46.176.585.016
7.000.000.000 -
7.000.000.000 -
7.000.000.000
7.000.000.000
NON-CURRENT PROVISIONS
EQUITY CAPITAL
Nota 14
47.283.813.659 25.683.535.596
AUTORIZED CAPITAL SHARES TO BE SUBSCRIBED INSUED CAPITAL INTANGIBLE ASSETS DIFFERENT FROM THE CAPITAL GAINS
LICENSES
Nota 8
(-)AMORIZATION-LICENSES
TOTAL NON-CURRENT ASSETS TOTAL DEL ASSETS:
85.859.514
40.027.717
18.238.752
5.472.669
67.620.762
34.555.048
ACCUMULATED PROFITS (NORMALIZATION- REVALUATION ACCUMULATED PROFITS)
Nota 15
14.374.310.357
7.669.791.846
OTHERS RESERVES
Nota 15
477.401.311
269.916.372
1.719.009.384
1.353.543.390
NET PROFIT OF THE EXERCISE
47.422.099.496 25.718.090.644
TOTAL EQUITY
23.570.721.052
16.293.251.608
96.326.757.367 62.469.836.624
LIABILITY + EQUITY
96.326.757.367
62.469.836.624
THE LEGAL REPRESENTATIVE AND THE STATUTORY AUDITOR PUT ON RECORD WITH THEIR SIGNATURE THAT THEY HAVE PREVIOUSLY VERIFIED EVERYTHING CONTAINED WITHIN THE FINANCIAL STATEMENTS.
36
JORGE HERNAN MUÑOZ CASTAÑO C.C. 10.249.718 from Manizales LEGAL REPRESENTATIVE
OSCAR HERNANDO PINEDA URIBE C.C. 75.076.206 from Manizales PUBLIC ACCOUNTANT P.C 87680-T
MARIO GIRALDO GALLEGO C.C. 4.479.757 from Palestina STATUTORY AUDITOR P.C 67332 - T
STATEMENT OF INCOME – ENDING 31 DECEMBER 2017
DECEMBER 2016
INCOME SACKS
Export excelso coffee sales National excelso sales
Pasilla sales Cisco sales
511.488.660.788
743.295
87,3%
9.137.711.439
13.497
1,6%
60.475.688.960
165.670
10,3%
289.781.050
Discounts and returns in sales
SACKS
0,0%
424.857.130.413 608.798
13.334.405.612
83,1%
22.153
2,6%
64.333.001.180 209.064
12,6%
365.860.350
0,1%
(2.914.584.617)
-0,5%
(1.635.031.804)
-0,3%
7.170.558.920
1,2%
9.832.868.912
1,9%
Ordinary activities coverage (Expenses) Difference in exchange and forward PARRAFO 7 NIC 18 - CTCP-10-01177-2016
Income from Ordinary activities
Nota 16
585.647.816.540
100,0%
511.088.234.663
100,0%
Production cost
Nota 17
547.691.059.604
93,5%
479.449.036.788
93,8%
547.691.059.604
93,5%
479.449.036.788
93,8%
2.522.557.343 704.882.237 26.800.789.779
0,4% 0,1% 4,6%
1.761.924.198 573.174.273 22.171.399.558
0,3% 0,1% 4,3%
7.928.527.577
1,4%
7.132.699.846
1,4%
Nota 20
4.411.372.127
0,8%
1.703.496.361
0,3%
Nota 20
6.163.585.358
1,1%
5.437.552.904
1,1%
Nota 20
2.511.804.860
0,4%
510.882.603
0,1%
Gain (loss) before taxes
3.664.509.486
0,6%
2.887.760.700
0,6%
(-) INCOME EXPENSE TAXES (RENTA-CREE)
1.946.675.800
0,3%
1.534.217.310
0,3%
Production cost total
Management expenses Sales expenses Distribution expenses
Nota 18 Nota 19 Nota 19
GAIN (LOSS) FOR OPERATION ACTIVITIES (+) Gain (loss) for operation activities (-) Financial expenses (-) Other incomes
(-) INCOME (EXPENSE) DEFERRED TAX
Net Gain (or loss) of the exercise
(1.175.698)
1.719.009.384
-
0,3%
1.353.543.390
0,3%
THE LEGAL REPRESENTATIVE AND THE STATUTORY AUDITOR PUT ON RECORD WITH THEIR SIGNATURE THAT THEY HAVE PREVIOUSLY VERIFIED EVERYTHING CONTAINED WITHIN THE FINANCIAL STATEMENTS.
JORGE HERNAN MUÑOZ CASTAÑO C.C. 10.249.718 from Manizales LEGAL REPRESENTATIVE
OSCAR HERNANDO PINEDA URIBE C.C. 75.076.206 from Manizales PUBLIC ACCOUNTANT P.C 87680-T
MARIO GIRALDO GALLEGO C.C. 4.479.757 from Palestina STATUTORY AUDITOR P.C 67332 - T
37
INDIVIDUAL INTEGRAL RESULTS STATES For the years ended on December 31st 2016 and 2015, and January 1st 2014 (figures in colombian pesos - COP) Notes Net Earning of the exercise Another integral result of the exercise Components of another result which will not be reclassified as part of this period result, net income Changes in the surplus for properties, plant and equipment revaluation. - NIC 16
2017 1.719.009.384
5.567.542.063
ANOTHER INTEGRAL RESULT (TAX NORMALIZATION)
2016 1.353.543.390
2015 624.473.626
0
-
- 2.500.000.000 1.500.000.000
Loss of investments in equity instruments Earnings for new measurements regarding plans of defined benefits Another integral result which will not be reclassified in the period result, net of incomes.
5.567.542.063
Components of another integral result which will be reclassified in the period result, net of incomes (Loss) Earning for translation exchange rate differences Earnings for covers of investments in businesses abroad Participation of another integral result of associates and joint businesses counted
2.500.000.000 1.500.000.000
0
0
0
0 0 0
0 0 0
0 0 0
0
0
0
using the participation method which will be reclassified in the period result. Another integral result which will be reclassified in the period result, net of incomes total Total of another integral result Total Integral result
5.567.542.063 7.286.551.447
2.500.000.000 1.500.000.000 3.853.543.390 2.124.473.626
Earnings per share (*) Basic earnings per share (*) Basic earnings per share in continued operations Diluted earnings per share (*) Diluted earnings per share resulting from continued operations (*) Figures in Colombian pesos. The notes that are attached are an integral part of the separated financial statements.
JORGE HERNAN MUÑOZ CASTAÑO C.C. 10.249.718 from Manizales LEGAL REPRESENTATIVE
38
OSCAR HERNANDO PINEDA URIBE C.C. 75.076.206 from Manizales PUBLIC ACCOUNTANT P.C 87680-T
MARIO GIRALDO GALLEGO C.C. 4.479.757 from Palestina STATUTORY AUDITOR P.C 67332 - T
CASH FLOW STATEMENTS FOR THE YEAR ENDED IN 2017 2017
2016
1.719.009.384
1.353.543.390
991.126.751 -765.736.401 0 0 0 1.944.399.734
542.329.157 456.868.704 0 0 0 2.352.741.251
-7.207.035.786 -8.742.382.140 573.257.029 -1.110.482.896 7.252.296.273 6.715.500.262 0 69.489.377 95.252.824
-10.300.856.702 16.015.548.726 -3.045.958 -75.720.487 4.242.733.474 290.904.139 563.323.375 1.232.969.393 91.610.506
-409.705.323
14.410.207.717
-1.146.058.451 -1.146.058.451
-572.908.848 -572.908.848
Net movement of property, plant and equipment Deferred assets - Rights
-11.062.435.779 -4.396.686.509
-6.790.748.880 -4.117.117.145
NET CASH FINANCING ACTIVITIES
-15.459.122.288
-10.907.866.025
Net increase of cash Normalization Growth Financial Obligations Growth in accumulated utilities
0 0 12.725.325.683 1.136.976.448
3.000.000.000 2.500.000.000 -2.357.419.754 524.557.846
EFECT. NET FINANCIAL ACTIVITIES
13.862.302.131
3.667.138.092
Increase of investments easily turned into cash Net increase of cash INITIAL CASH
0 -3.152.583.931 7.393.357.152
46.308.000 6.596.570.936 750.478.216
4.240.773.221
7.393.357.152
Cash flows resulting from operational activities Exercise utility or loss PARTIES WHICH DO NOT AFFECT THE CASH Net depreciation Amortizations Others Net result of inflation adjustments CASH FLOW RESULTING FROM OPERATIONAL ACTIVITIES Net movement of the working capital Accounts receivable Inventories Deferred charges and prepaid expenses Bank overdraft Short-term Financial obligations Accounts payable Accumulated liabilities Deferred liabilities Social benefits NET CASH OPERATIONAL ACTIVITIES Cash flow in investment activities Net variation in reverses and capitalization
Increase of investments easily turned into cash
TOTAL CASH
THE LEGAL REPRESENTATIVE AND THE STATUTORY AUDITOR PUT ON RECORD WITH THEIR SIGNATURE THAT THEY HAVE PREVIOUSLY VERIFIED EVERYTHING CONTAINED WITHIN THE FINANCIAL STATEMENTS.
JORGE HERNAN MUÑOZ CASTAÑO C.C. 10.249.718 from Manizales LEGAL REPRESENTATIVE
OSCAR HERNANDO PINEDA URIBE C.C. 75.076.206 from Manizales PUBLIC ACCOUNTANT P.C 87680-T
MARIO GIRALDO GALLEGO C.C. 4.479.757 from Palestina STATUTORY AUDITOR P.C 67332 - T
39
STATEMENT OF CHANGES IN EQUITY AS OF DECEMBER 31, 2017 2.017
2.016
VARIATION
EQUITY
AUTHORIZED CAPITAL (.) SUBSCRIBED ACTIONS ISSUED CAPITAL (subscribed and paid) OTHER RESERVES (LEGAL RESERVE (Art 452 C.Co.) OTHER RESERVES (WEALTH TAX) ACCUMULATED INCOME OTHER INTEGRAL RESULTS (TAX STANDARDIZATION) NET INCOME FROM THE EXERCISE SUPERAVIT OR REEVALUATION PPEQ (NIC 16)
7.000.000.000 0 0 7.000.000.000
7.000.000.000 0 0 7.000.000.000
400.829.341 76.571.970 1.661.534.294 4.000.000.000 1.719.009.384 0 8.712.776.063 23.570.721.052
265.475.002 4.441.370 524.557.846 4.000.000.000 1.353.543.390 0 3.145.234.000 16.293.251.608
0 0 0 0 135.354.339 72.130.600 1.136.976.448 0 365.465.994 0 5.567.542.063 7.277.469.444
TOTAL EQUITY INCREASE JANUARY TO DECEMBER 2016-2017 TOTAL INCREASE IN VALORIZATIONS JANUARY TO DECEMBER 2016-2017
1.709.927.381 5.567.542.063
TOTAL INCREASE (DECREASE) TO DECEMBER 31, 2017 7.277.469.444
7.277.469.444
THE LEGAL REPRESENTATIVE AND THE STATUTORY AUDITOR PUT ON RECORD WITH THEIR SIGNATURE THAT THEY HAVE PREVIOUSLY VERIFIED THE AFFIRMATIONS CONTAINED IN THE FINANCIAL STATEMENTS.
JORGE HERNAN MUÑOZ CASTAÑO C.C. 10.249.718 from Manizales LEGAL REPRESENTATIVE
40
OSCAR HERNANDO PINEDA URIBE C.C. 75.076.206 from Manizales PUBLIC ACCOUNTANT P.C 87680-T
MARIO GIRALDO GALLEGO C.C. 4.479.757 from Palestina STATUTORY AUDITOR P.C 67332 - T
NOTES FOR THE 2017 SEPARATE FINANCIAL STATEMENTS The coffee company La Meseta S.A. T.I.N: 900.298.861-9, has its principal residence in the city of Chinchiná, Department of Caldas, Colombia, South America, with social residence in Carrera 5 N.6-30, and is constituted by means of Public Document number 482 of the Second Notary of Chinchiná dated June 17 2009, registered in the Chamber and Commerce of Chinchiná on the 6th of July 2009 under the registration number 00001897, Book IX and Commercial Registration number 17440. It is valid until December 31st 2040. Its principal social objective is: 1) the purchase, sale, import, export, commercialization, distribution, representation and agency of all types of national and foreign merchandise. 2) the organization, exploitation, management and operation of commercial establishments meant for the commercialization of all kinds of merchandise and, especially, the production of coffee, threshing, and the purchase,sale and export of coffee in all its presentations. Account System: The accounting and the Financial Statements of the Coffee Company La Meseta S.A., meet the international rules of financial information -NIIF, dispositions of the Business Superintendency and expressed legal norms in Colombia; Decree 2784/2012, modified by decree number 3024/2013 and decree 2548/2014, and compiled by the Unique Regulatory Decree 2420/2015, article 1.1.1.1. Functional currency: In accordance with legal dispositions, the currency unit used by the company for the accounting of the Financial Situation State, the Comprehensive income statement, Statement of changes in equity, and Cash Flow is the Colombian peso, COP. Difference in exchange: The accounts receivable and the accounts payable in foreign currency are converted to Colombian pesos at the market representative rate at the year-end. For December 31st 2017 the MRR certified for the Financial Superintendency was $2,984. The Difference in exchange generated was registered in the accounts.
GENERAL NOTES: Trade accounts receivable and other accounts receivable: The portfolio for customers has an 8-day turnover, no impairments were noted because there were no overdue portfolios. Regarding other types of debtors, depending on their origin, they must disclose their respective financial statements. Current Inventories: are counted at the acquisition cost for the Permanent Inventory system and its valuation method is weighted average. Property, plant and equipment: Are recorded for its acquisition cost at the beginning, its depreciation is done based on the straight-line method. In periods following its initial recognition, a reevaluation model will be made for the properties and other fixed assets at the depreciated cost.
41
The reparation and maintenance expenses are charged to the results of the exercise as they are incurred. For the assets that require repair or maintenance to increase their service life, their depreciation has to be re-calculated in the same proportion. The company uses techniques and procedures for depreciation that, in statutory, accounting and tax terms are applied in Colombia as it follows:
• • • •
For buildings 5%- 20 years For movable assets and fixtures 10% - 10 years For computer equipment 20% - 5 years For vehicles 20% - 5 years
Other non-financial assets: these are made up of prepaid expenses, in which the insurance paid for by the company in order to cover its assets from different daily operations risks is recorded.
NOTE 1.
Financial Obliga ons: Concerning financial obliga ons and the other creditors, they must likewise disclose their respective financial statements, depending on their origin. Income tax: the income tax corresponds to the respective taxable year, to the highest determined value resulting from the calculations done by the taxable income method and the presumptive income method, applying to this value the current tax rate of 25% for income tax, 9% for income tax for the CREE equity and 6% for the CREE surcharge for the taxable year 2016. Current provisions for Employees benefits: 95% of the personnel have a long-term contract and this is why funds for layoffs are deposited in a special fund. Income and Expenses Recognition: The income, costs and expenses are counted using the causation system.
Cash and Cash equivalents DECEMBER 2017
Register Banks Investments
DECEMBER 2016
68.726.047
140.011.804
3.984.380.174
7.156.037.348
187.667.000
97.308.000
4.240.773.221
7.393.357.152
Cash and cash equivalents are differentiated as follows: register, banks, savings accounts and funds, under the new reference framework and the company additionally recognizes CDT, Capitalization and tax refund titles (TIDIS) that meet the concept of cash equivalents because they can be liquidated immediately. They include cash, banks and highly liquid investments. To be classified as cash equivalents, the investments must meet the following criteria: • Short-term investments, this is equal or less than three months after the acquisition date; Highly liquid investments. • Easily converted into cash. • Subject to very low risk regards changes in value.
42
Trade accounts receivable and other accounts receivable
NOTE 2.
Na onal customers Foreign customers Advances given to suppliers
DECEMBER DE 2017
DECEMBER DE 2016
1.914.731.998 25.981.362.538 852.418.257
1.241.342.143 18.745.298.657 109.807.892
69.385.435
45.124.763
98.626.823 28.916.525.051
1.641.276.078 21.782.849.533
Accounts receivable given to workers Various debtors DEBTORS TOTAL
The list of trade accounts receivable and other accounts receivable include national and foreign customers, not subject to deterioration due to their high turnover which does not surpass 8 days, other debtors, workers. The advances given to suppliers correspond to contractors and the purchase of other materials for the production plant.
NOTE 3.
Current inventories DECEMBER DE 2017 DECEMBER DE 2016
Raw materials Spare parts and accesories Containers and packagings
13.862.389.448 108.046.767 1.559.278.692 15.529.714.907
6.630.635.689 61.143.520 95.553.558 6.787.332.767
The current inventories are composed of coffee merchandise, pasilla, excelso, packagings and spare parts used in the production consumption; the balance of advances of raw materials to suppliers was reclassiďŹ ed and is registered as coffee in the warehouse and part of the current inventory.
NOTE 4.
Assets for current taxes DECEMBER DE 2017 DECEMBER DE 2016
Income withholdings and complementaries CREE self withholdings Income tax advance and complementaries CREE Surcharge advance VAT credit balance Retention of Industry and commerce (Buenaventura) Compensation with Liabilities for current taxes
1.218.905.986 199.365.333 178.146.000 279.065.000 2.695.193
909.066.274 164.463.959 27.016.000 109.166.000 153.760.000 -
1.875.482.319 2.695.193
1.363.472.233 0
This is the result of the balance of accounts payable to the DIAN for taxes, and the accounts receivable for withholdings, tax self-withholdings and CREE, VAT credit balance, tax advances.
43
NOTE 5.
Other financial- current assets DECEMBER 2017
Deposits for Forward Cover Contracts Other non-financial-current assets
DECEMBER 2016
213.714.587 1.234.912 214.949.499
784.181.457 4.025.071 788.206.528
Other financial assets correspond to the deposits for contracts regarding Forward Cover in dollars and insurance policies.
NOTE 6.
Net deferred tax asset
Net deferred tax asset
DECEMBER DE 2017
DECEMBER DE 2016
70.665.075
-
70.665.075
-
It corresponds to active deferred tax, result of the differences in the financial obligations in dollars, result of the adjustment to the TRM 31 of December 2017.
NOTE 7.
Plant and equipment properties DECEMBER DE 2017 DECEMBER DE 2016
Lands
Subtotal
1.885.417.318 766.067.841 5.855.950.250 958.544.506 4.861.459.783 100.353.190 277.684.141 1.083.302.416 105.281.281 15.894.060.726
1.872.764.832 108.056.967 3.103.836.765 432.530.540 5.277.341.292 104.092.772 241.577.569 57.178.800 105.281.281 11.302.660.818
Investment proper es Land investment proper es Building investment proper es Track investment properites
13.866.263.885 4.872.514.497 4.096.371.456
9.964.502.128
22.835.149.838
9.964.502.128
Ongoing buildings Buildings and construc ons Machinery and Moun ng kit Machinery and equipment Office equipment Communica on and computer equipment Fleet and transport equipment Aquaducts, plants and networks
Making use of the exemptions once the assets were classified by type, for the immovable properties in the initial recognition the attributed cost was used and in its subsequent valuation the re-evaluation model will be used, the rest of the assets will be recognized for their cost and in the subsequent valuation the cost model will be used.
44
In the case of the ongoing construction work, as they qualify, the interest associated with their direct financing will be capitalized at the time of the operational start-up and for the investment amounts involved, as qualified assets. The fixed assets acquired by leasing are included. The investment properties (coffee farms), are leased to the shareholders, and the production of specialty coffees in these farms are commercialized by the company.
NOTE 8.
Properties, plant and equipment LEASING INITIAL CONTRACT 12.384.734.812 174.140.000 167.092.992 550.000.000 238.000.000
AMORTIZATION 894.992.285 153.823.649 142.029.033 80.850.000 158.666.667
(Bancolombia Lasing)
663.751.628
160.406.644
Interna onal dump tractor Contract 1394 La Juana Farm (Leasing Bancoldex) Contract 1404700 4x4 Suzuki Grand Vitara (BBVA Leasing) La Francia Farm leasing Bancoldex Contract Number 1412300 Flexi Hiload forkli contract
184.632.000
89.238.800
Leasing Financial
Dump trucks (Occidente Leasing) Selected Machinery (Occidente Leasing) Warehouse located street 6 # 6-60 Dump truck kenworth Sor ng and densimetric machinery
Storehouse Italia Santa Rosa Sector (Leasing Bancolombia)
Renault Duster SUV (Leasing BBVA) Truck Dump trailer Kenworth leasing Occident Bank Truck Dump trailer Kenworth leasing Occident Bank Leasing Machinery and threshing equipment coffee BBVA Bank
425.556.552
-
70.790.000
28.316.000
5.524.149.208 291.731.190
38.897.492
500.000.000
5.777.778
61.440.000
2.560.000
540.715.414
18.023.847
491.071.254
16.402.375
2.501.664.574
-
When the company acts as a tenant for the financial leasing of a property, the leased property is presented in the financial situation state as an asset, according to the nature of the asset referred to in the contract, and a liability is simultaneously recorded in the financial situation state for the same amount, which will be the lowest one among the reasonable prices of the leased asset or the current amount of the minimum payments that the tenant has to pay, plus the price of the purchase option if that is the case. These assets are depreciated or amortised with the same criteria applied to the items of property, plant and equipment or intangible assets for own use, regards service life, provided that the asset or property is transferred to the Company at the end of the contract, for the option of purchase or anything else. Otherwise, the term of contract duration will be used as the service life of the item of property, plant and equipment; whichever is the lowest. The leasing payments are divided by the interest and the decrease of debt. The financial expenses are recognized in the income statement for the period.
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Assets other than goodwill Licences
85.859.514 85.859.514
Computer Programs
NOTE 9.
18.238.752 18.238.752
Current provisions for employees' benefits DECEMBER 2017
Current provisions for employees benefits
DECEMBER 2016
396.297.477 396.297.477
301.044.653 301.044.653
These include consolidated layoffs, interest accumulated for layoffs and established vacations, all of which are short-term benefits.
NOTE 10.
Trade accounts payable and other accounts payable. DECEMBER 2017
DECEMBER 2016
Suppliers (CP)
3.844.333.923
919.684.267
Costs and expenses to be paid (CP)
1.196.627.647
1.617.241.769
Withholdings and payroll contribu ons (CP)
36.058.959
31.444.909
Creditors (CP)
53.189.512
39.014.552
Received advances (CP)
98.534.499
1.828.608.803
Uniden fied consignments Received incomes for third par es (CP)
293.000 8.347.116.682
2.390.964.064
13.576.154.222
6.826.958.364
The trade accounts payable is made up of obligations with suppliers and expenses creditors, also advances received from customers which are short-term and for that reason, financed at cost.
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NOTE 11.
Liabilities for current expenses DECEMBER 2017
Industry and commerce tax withheld (CP) Withholding tax and reteiva Income tax provision and CREE Income tax payable Sales tax payable Tax on wealth and tax on normaliza on Advance payment of taxes and contribu ons (Income withholdings and complementaries, Cree) VAT receivable
DECEMBER 2016
32.650.000 140.151.000 nota 4. 71.193.481 nota 4. 0
24.575.000 82.370.000 nota 4. 170.745.077 nota 4. 0
nota 4.
nota 4.
nota 4. 243.994.481
nota 4. 277.690.077
This is the result of the final balances of the accounts payable to the DIAN for taxes, the accounts receivable for withholdings, income and CREE self-withholdings, VAT credit balances, and income advances. It includes the Industry and commerce tax withholdings for the Chinchiná municipality.
NOTE 12.
Other current financial liabilities DECEMBER 2017
Bank overdra Financial obliga ons Coffee ID Financial Obliga ons
DECEMBER 2016
245.649.159 31.751.831.339 317.649.425 32.315.129.923
1.356.132.055 24.514.842.860 302.341.631 26.173.316.546
Other current financial liabilities are the financial instruments represented in short-term bank obligations.
Other non-current financial liabilities DECEMBER 2017
Financial obliga ons
25.322.901.059
DECEMBER 2016
12.597.575.376
Other non-current financial liabilities are financial instruments represented in long-term bank obligations.
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FINANCIAL OBLIGATIONS DIFFERENTIATION DECEMBER 2017
Short-term financial obliga ons Banco Agrario de Colombia Banco Popular Davivienda Banco Agrario de Colombia Coltefinanciera Banco Pichincha Bancolombia
$4.587.738.230
4.572.750.000 14.988.230
Long-term financial obliga ons Banco de Bogota Banco Agrario de Colombia Banco Caja Social Bancolombia Bancoomeva Davivienda
$16.962.987.741 12.528.598 778.051.355 1.898.437.444 2.379.166.660 1.450.803.684
Exports pre financing
$27.164.093.109
Banco de Bogota USD$ 448.000 Banco BBVA USD$500.000 Banco Davivienda USD$3.500.000 Bancolombia USD$1.624.000 Colpatria USD$1.500.000 GNB Sudameris USD$1.000.000 Oikocredit,Ecumenical Development USD2.000.000 Fairtrade Access Fund S.A. USD$ 2.000.000 Financial Leasing OBLIGATIONS TOTAL
NOTE 13.
1.336.832.000 1.509.296.440 10.444.000.000 4.846.016.000 4.507.050.078 2.992.498.433 5.990.391.936 5.982.008.222 $8.359.913.318 $57.074.732.398
Not current, Deferred passive tax DECEMBER 2017
Deferred passive tax (banks and clients from abroad) Deferred passive tax (surplus for revalua on) Deferred tax liability net
DECEMBER 2016
69.489.377 832.069.776 901.559.153
-
The deferred tax payable corresponds to the differences in the adjustment of the bank accounts abroad, and the balance of the accounts receivable from clients abroad to the TMR 31 of December 2017 and to the deferred tax in the effect of the property surplus for revaluation.
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NOTE 14.
Issued capital
The social contribu ons were established as follows: DECEMBER 2017
Total issued capital
DECEMBER 2016
7.000.000.000
7.000.000.000
It includes the share capital and the paid-up capital issued by the shareholders.
NOTE 15.
Retained earnings DECEMBER 2017
ORI - Normalizaciรณn Tributaria Acumulates Gains Retained Gains (Superรกvit de revaluaciรณn***) Deferred Taxes (Superavit por revalucion)
DECEMBER 2016
4.000.000.000 1.661.534.294 9.544.845.839 -832.069.776
4.000.000.000 524.557.846 3.145.234.000
14.374.310.357
7.669.791.846
Constitutes the highest value of the properties, plant and equipment, product of the cost attributed according to the value realized in the month of december 2017 where we posted a surplus of $6.399.611.839, minus the value of the anticipated costs paid and the utilities and the losses accumilated in prior exercises.
Other Reserves DECEMBER 2017
Legal Reserve Reserve for taxes
DECEMBER 2016
400.829.341 76.571.970 477.401.311
265.475.002 4.441.370 269.916.372
Includes the legal reserves for prior appropriate exercises.
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NOTE 16.
Income from ordinary activities
Operational income breakdown: DECEMBER 2017
Opera ng ac vi es abroad- Excelso coffee Na onal opera ng ac vi es Na onal opera ng ac vi es- pasilla Na onal opera ng ac vi es- CISCO sale Minus: Refunds ORDINARY
ACTIVITIES
COVERS
(EXPENSES) Difference in exchange AND FORWARD- PARAGRAPH 7NIC18 - CTCP-10001177-2016
Net incomes December Market representa ve rate Quan ty in dollars of opera ons abroad
COVERAGE OF NORMAL ACTIVITIES Income Exchange Income Forward Costs Exchange Costs Forward Total
NOTE No. 17
$
DECEMBER 2016
511.488.660.788 9.137.711.439 60.475.688.960 289.781.050 (2.914.584.617) 7.170.558.920 -
424.857.130.413 13.334.405.612 64.333.001.180 365.860.350 (1.635.031.804) 9.832.868.912
585.647.816.540 2.984,00 $ 171.410.409,11
511.088.234.663 3.000,71 141.585.534,89
DECEMBER 2017 4.436.489.562 11.571.960.295 5.371.187.309 3.466.703.628 7.170.558.920
DECEMBER 2016 13307619281 9317041340 7602619735 5189171974 9.832.868.912
Costs of Sales
The costs of sales breakdown: DECEMBER 2017 Sales of Excelso coffee Exportation National Coffee Sales National Coffee Pasilla Sales
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DECEMBER 2016
485.914.227.749 8.680.825.867 53.096.005.988
403.614.273.892 12.667.685.331 63.167.077.564
547.691.059.604
479.449.036.788
NOTE 18.
Management Expenses
The management expenses are separated as follows: ADMINISTRATION COSTS
DECEMBER 2017
Employees' benefits expenses Fees Taxes Leases Contribu ons and affilia ons Insurances Services Legal expenses Maintenance and repairs Installa on and condi oning Travel expenses Deprecia ons Amor za ons Various
NOTE 19.
1.650.771.104 36.003.851 200.540.274 8.068.124 9.602.000 1.538.441 171.932.047 16.436.168 48.596.284 16.172.626 28.468.667 104.967.591 33.799.658 195.660.508 2.522.557.343
DECEMBER 2016 1.033.804.507 28.491.073 137.347.580 9.196.084 7.988.000 6.681.814 104.139.986 143.249.499 43.892.217 30.077.808 9.636.213 110.939.447 31.810.306 64.669.664 1.761.924.198
Sales expenses
The sales expenses are separated as follows: SALES EXPENSES
Employees' benefits expenses Fees Taxes Contribu ons and affilia ons Insurances Public services, cleaning and security staff Transport services, fleets, acarreo land sales Adver sing and publicity Load installa on - Export expenses Fondo Nacional del Café contribu on Other export/storing/documenta on/ coffee selec on expenses Legal expenses Maintenance and repairs Installa on and condi oning Travel expenses Various (representa on abroad expenses) Deprecia ons Amor za ons
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DECEMBER 2017
DECEMBER 2016
479.359.388 67.320.064 7.871.189 25.000.000 36.811 3.794.549.428 900.000 20.428.910.572 2.193.006.337
374.618.624 31.994.356 13.068.022 24.400.000 820.397 3.058.106.203 27.290.747 94.946.997 16.997.669.909 1.599.729.480
117.905 1.240.420 5.125.278 34.484.662 348.938.780 8.510.551 110.300.631 27.505.672.016
1.381.146 1.765.514 1.298.617 6.115.956 387.540.266 11.564.999 112.262.598 22.744.573.831
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NOTE 20.
Other incomes and non-operational expenses
OTHER INCOMES Non-opera onal incomes Interests and/or prompt payment Other sales Commissions Leasing Por olio Recovery Compensa on - accidents - inabili es to work Incomes of previous exercises Dividends or shares U lity in the property, plant and equipment Various Non-opera onal incomes total
MISCELLANEOUS EXPENSES
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DECEMBER 2017
639.297.451 890.477.194 765.570 128.852.597 80.071.136 160.991.259 2.510.914.574 2.346 4.411.372.127
DECEMBER 2017
DECEMBER DE 2016
495.479.828 910.035.866 4.310.345 77.300.000 130.875.363 49.685.061 35.805.000 4.898 1.703.496.361
DECEMBER 2016
Bank expenses Commissions Interests Por olio sale (factoring discount) Levy on 4 x mil ( Colombian tax) ďŹ nancial movements Costs and expenses of previous exercises Loss on sale and dele on of proper es (Por olio punishment) Incurred taxes Various Wealth tax and tax normaliza on
7.934.599 260.021.675 3.072.116.036 413.341.348 2.410.171.700 1.209.537 2.447.881.135
22.277.647 444.933.555 2.840.014.285 241.247.815 1.889.079.602 10.168.380 199.935.292
839.864 61.874.324 -
Misc Expense total
8.675.390.218
450.848 1.591.188 298.736.895 5.948.435.507
Frequent questions for the
financial sector
In order to support the financial sector in its decision-making processes, we will answer some of the most frequent questions that we receive.
1. ¿What is the reason for the latest growth in Company sales? The Company has maintained a significant rate of investment and adaptation of its installed capacity that has enabled it, in 2017, to not be dependent on third party machinery and to increase its production of excelso coffee. This increase in capacity has allowed us to reduce production costs (labor and CIF) per sack for the production of excelso coffee. Under the premise of a high use of installed capacity, efforts have been made to guarantee the coffee supply for the new plant capacity, which has been achieved by increasing production and exports.
2. ¿Why was there such an important growth in investment properties (farms) and how was it financed? Coffee producers gave life to La Meseta, coffee production is in the DNA of the company, this being the principle and original activity of its members. Since its beginnings in the 90s, an important number of properties have been acquired for the now well-known La Meseta company. Thanks to the export activity growth and knowledge acquired in marketing activities and coffee coverage, the process of expanding high quality farms has continued in the agricultural frontier in La Floresta de Chinchiná, Caldas. We have also taken advantage of the wave of land selling that has occurred in the area due to lack of generational change in the farms. Agricultural activity is an activity of great strategic value for La Meseta due to the coverage of future sales and the sale of certified and special coffees; Additionally, the Company wants to give a message to the sector that it is possible to develop sustainable agricultural activity and be profitable. The purchase of land has been made with the support of banks, 80% has been leveraged from the financial sector with leasing and credit using property mortgages as collateral. Another 20% has been made with our own resources.
3. ¿Why was there an increase in inventory and accounts receivable when compared to 2016? The year 2016 was a year of particularly low production in the month of December, the harvest was concentrated in the months of October and November, which meant that in December there were low levels of inventory. In the year 2017 there was higher production in the month of December which resulted in higher inventory levels. Added to this was the growth in the installed capacity and operation of La Meseta that has generated a constant increase in the levels of inventories and accounts receivable.
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4. ¿What is the reason for the increase in short and long term financial obligations in 2017? La Meseta challenges itself to grow. The 20% growth of installed capacity, the 16% growth of in sales, the 22% increase in the quantities exported and the process of expansion of the agricultural frontier are thanks to the support and trust the banks have placed in La Meseta, a trust that La Meseta has given back. In short, the growth of short-term financial obligations has been caused by the growth of sales and, therefore, by the greater needs for working capital. The growth of long-term obligations is due to the financing of installed capacity and the purchase of haciendas for the production of coffee.
5. ¿Why did debt increase in 2017? The level of our debt increased mainly due to the acquisition of farms in 2017 and the investment in the plant and equipment with a significant leverage from the financial sector.
6. Why are the exchange difference and forward expenses values counted as operational? The coffee business is one of high volumes and low profitability margins. La Meseta S.A. La Meseta is a company that expects to have a sustained growth and long-term permanence and this is why we have a strict policy of price change risk administration. Due to the constant change of the dollar and coffee prices, the price risk management team uses covering and hedging tools as day-to-day operational activities as part of the business operation. These operations are speculative and their result depends on price movements, they are hedging operations that compensate any price changes guaranteeing the stability of the operating margin.
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7. ¿How is the exchange type risk managed and why was there such a positive balance in forward incomes and exchange difference incomes in the last year? 100% of La Meseta incomes are covered from the exchange risk in two ways: 1) Via exports pre-finance or debt in dollars which is constituted in natural cover. 2) the financing in pesos, whether it is our own resources or finance capital they are covered through the forward operations of sales in dollars. The important positive balance in forward expenses is due to the company's intensive cover policy, accompanied by the 2016 tendency of the devaluation of exchange type, which generated an important and positive compensation in favor of La Meseta with the financial sector at the end of the year, and which allowed the company to maintain an important operating margin even in cases of a fall in dollar price.
8. ¿What amount regards the difference in exchange corresponds to the revaluation of assets / liabilities, and what amount corresponds to the income or expenses that affect cash? The main item that causes the difference in exchange for La Meseta is the difference between the exchange rate on the date of the BL against the exchange rate at the time of monetization, in this order of ideas this difference corresponds to income or expenses that directly affect cash and therefore are taken into account in the calculation of Ebitda. As a result of the revaluation of liabilities and assets in dollars a favourable difference of $ 280,139,527 was obtained, as well as a difference against - $ 283,702,248, for a net difference of - $ 3,562,721, this net amount of difference is negligible.
9. ¿What is the reason for the increase in administrative and sales expenses? The main cause of the increase in administration and sales expenses corresponds to the coffee contribution expense that is accounted for as a distribution expense but is an expense that is not manageable since it is taxed and collected by the national federation of coffee growers. This tax is rated in dollars for each pound exported so that higher exports and a higher dollar price causes increases. Second, the increases in the other items are due to the growth in exports of more than 21% in exported units, as well as the natural growth resulting from inflation.
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10. ¿Why is there a low net margin? The coffee commercialization business is characterized by high sales volumes and low profitability margins. In addition to that, the Company's zero-risk strategy guarantees not to have large fluctuations in the operation, which prevents from having important losses and not allowing us to have exaggerated utilities product of the price changes. La Meseta expects to be a long-term sustainable company with a consistent profitability based on the knowledge of the suppliers, an efficient industrial activity and the knowledge of the customers. Despite this fact, the net margin increased from 0.26% to 0.29% in 2017.
11. ¿Who are the main markets and customers? The coffee is exported to The United States, Japan and Germany. 97% of the exports are to foreign traders, and 3% is left to roasters. The payments of this 97% are paid as cash against documents, which implies an average of 8 days for the payment from the moment of the ship's departure. At a national level, the main customers are Nestlé, Colcafé, and the Federación de Cafeteros with a payment period of a maximum 8 days.
12. ¿Who are the main suppliers? What are the deadlines? Our raw material suppliers are divided into two important categories: a) Coffee producers. b) Independent middlemen. C) coffee grower cooperatives. The coffee payment to both suppliers is done through a strict cash payment for the merchandise in La Meseta threshing plant facilities or any of its points of collection. Occasionally, advances of 80% of the value of the cargo is delivered.
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JUDGEMENT OF THE FINANCIAL AUDITOR GROUP 1 Chinchiná, February 28, 2018 Sirs General Shareholders' Meeting COMPAÑÍA CAFETERA LA MESETA S.A. City REPORT ON THE INDIVIDUAL FINANCIAL STATEMENTS: I have audited the accompanying financial statements of COMPAÑÍA CAFETERA LA MESETA SA, which include the statement of the financial situation as of December 31, 2017 and 2016, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows, corresponding to the years ended on these dates, as well as a summary of the significant accounting policies and other explanatory information. MANAGEMENT RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTS: The management is responsible for the preparation and presentation of the financial statements attached in accordance with Decree 2784 of 2012, modified by Decree No. 3024 of 2013 and Decree No. 2548 of 2014 and compiled within Sole Regulatory Decree 2420 of 2015 Article 1.1.1.1., which incorporates the International Financial Reporting Standards for GRUPO 1 NIIF PLENAS, and of the internal control that the Management considers necessary to allow for the preparation of financial statements free of misstatements due to fraud or error. RESPONSIBILITY OF THE FISCAL AUDITOR IN RELATION TO THE FINANCIAL STATEMENTS: My responsibility is to express an opinion on the attached financial statements based on my audit. I have carried out the audit in accordance with Title 1 - Annex 4 of Sole Regulatory Decree 2420 of 2015, which incorporates International Standards on Auditing - NIA. These standards require compliance with ethical requirements, as well as planning and executing the audit in order to obtain reasonable assurances about whether the financial statements are free from misstatements. An audit involves the application of procedures to obtain audit evidence about the amounts and information disclosed in the financial statements. The procedures selected depend on the judgment of the auditor, including the assessment of the risks of misstatements in the financial statements due to fraud or error. When making these risk assessments, the auditor takes into account the internal control relevant to the preparation and presentation by the Company of the financial statements, in order to design the audit procedures that are appropriate depending on the circumstances, and with the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes the evaluation of the adequacy of the accounting policies applied and the reasonableness of the accounting estimates made by the management, as well as the evaluation of the complete presentation of the financial statements. I believe that the audit evidence I have obtained provides a sufficient and adequate basis for my opinion.
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OPINION WITHOUT RESERVATIONS: In my opinion, the individual financial statements present firmly, in all material aspects, the financial situation of Compañía Cafetera la Meseta SA as of December 31, 2017 and 2016, as well as its corresponding results and cash flows to the years ended in these dates. This is in accordance with Decree 2784 of 2012, modified by Decree No. 3024 of 2013 and Decree No. 2548 of 2014 and compiled in Sole Regulatory Decree 2420 of 2015, article 1.1.1.1. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS: In addition, I inform that during the years 2017 and 2016, the Company has kept its accounting in accordance with the legal norms and accounting techniques; the operations recorded in the accounting books and the acts of the directors are in accordance with the bylaws and the decisions of the General Assembly of Shareholders and the Board of Directors; the correspondence, the vouchers of the accounts and the books of minutes and of registry of actions are observed and they are conserved duly; The management report of the Administration complies the with the individual financial statements, and the Company has made timely payments to the Integral Social Security System. OPINION ON INTERNAL CONTROL AND LEGAL AND NORMATIVE COMPLIANCE: In addition, the Commercial Code establishes in article 209 the obligation to comply with legal and internal regulations and on the adequacy of internal control. My work was carried out through the application of tests to evaluate the degree of compliance with the legal and regulatory provisions by the administration of the entity, as well as the operation of the internal control process, which is also the responsibility of the administration. For the purpose of evaluating legal and regulatory compliance, I used the following criteria: • • • •
Legal regulations that affect the activity of the entity; Statutes of the entity; Assembly and Board of Directors Minutes; Other relevant documentation.
The internal control of an entity is a process carried out by those in charge of the administration and other personnel. It is designed to provide a reasonable level of security in relation to the preparation of reliable financial information, compliance with legal and internal regulations and the achievement of a high level of effectiveness and operational efficiency. The internal control of an entity includes those policies and procedures that (1) allow the maintenance of the records that, in a reasonable detail, reflect in a faithfully the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that the transactions are recorded as necessary to allow the preparation of the financial statements in accordance with the regulatory technical framework applicable to Group 1, which corresponds to the IFRS PLENAS, and that the income and disbursements of the entity are being made in accordance with the authorization of the administration and those charged with corporate governance; and (3) provide reasonable assurance regarding the prevention, detection and timely correction of unauthorized acquisitions, and the use or disposal of the entity's assets that may have a material effect on the financial statements.
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It also includes procedures to ensure compliance with the legal regulations that affect the entity, as well as the provisions of the statutes and the administrative bodies, and the achievement of objectives proposed by the administration in terms of efficiency and organizational effectiveness. Due to inherent limitations, internal control may not prevent, or detect and correct major errors. Also, the projections of any evaluation or effectiveness of the controls of future periods are subject to the risk that controls become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This conclusion has been formed based on tests carried out to establish whether the entity has complied with legal and statutory provisions, and the decisions of the assembly and board of directors, and maintains an internal control system that guarantees the effectiveness and efficiency of operations, the reliability of financial information and compliance with applicable laws and regulations. The tests carried out, especially of a qualitative nature, but also including calculations when deemed necessary according to the circumstances, were developed by me during the course of my administration as a statutory auditor and in the development of my tax audit strategy for the period. I believe that the procedures followed in my evaluation are of a sufficient basis to reach my conclusion. OPINION ON THE LEGAL AND NORMATIVE COMPLIANCE: In my opinion, in all aspects the entity has complied with the applicable laws and regulations, as well as the statutory provisions, the shareholders' meeting and the board of directors. OPINION ON THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEM: In my opinion, in all important aspects internal control is effective, based on models of business risk management systems. EMPHASIS PARAGRAPH: According to Article 3 of Decree 2784 of 2012 in the application schedule, it was established that the year 2014 would be a transition period; Therefore, the financial information for the period ending in 2013 was prepared under the rules established in Decree 2649 of 1993 and that served as the basis for preparing the State of the Opening Financial Position on January 1, 2014. The application was made in the period between January 1 and December 31, 2015; After this period, the existing accounting standards (Decree 2649 and 2650 of 1993 and other regulations that complement it) became obsolete and the application of the new regulatory technical framework, established in Decree 2784 of 2012, began. On December 31, 2015, it was the date of the report and for this reason, comparative Financial Statements prepared according to the new standards were presented for the first time. Management report 2017
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Application schedule and presentation bases IFRS - IFRS Pleas - Transition Date of Transi on
Financial Information
December 31, 2013
December 31, 2014
Transi on period
Initial balance according to IFRS
Date of Presentation of Information December 31, 2015
Presenta onof Informa on Period
Financial Statements according to IFRS (Without comparative information in results)
First Financial Statements according to IFRS for the public
In my opinion, the Financial Statements mentioned, based on the duly licensed accounting program, reasonably present the financial situation of the company COMPAÑÍA CAFETERA LA MESETA S.A. as of December 31, 2017 and 2016, including the results of its operations and cash flows for the years ending on these dates, and are in accordance with the concepts and accounting principles regulated in Decree 2784 of 2012, as amended by the decree N. 3024 of 2013 and decree N. 2548 of 2014 and compiled in the Sole Regulatory Decree 2420 of 2015 article 1.1.1.1., applied according to the way they governed in each of such years; and the comparative Financial Statements prepared according to the new standards that were presented for the first time. We also certify that the software used by the company is licensed and therefore complies with the rules related to copyright as stated in documents received from the company. In this aspect, as already mentioned, the Legal Representative also made a statement in his management report. In addition, the preservation and custody of the assets of the entity or of third parties that eventually will be in its possession is adequate. The company is up to date with all its national, departmental and municipal tax obligations, in particular with the payment of withholdings at the source and therefore is not involved in criminal offenses. I inform that the mechanisms for the prevention and control of Money Laundering and Financing of Terrorism have been implemented, in accordance with the External Circular N. 100-00005 of 2014 of the Superintendence of Companies, and that the application of the controls and policies were initiated as of 2014, and a permanent monitoring and follow-up is carried out, implementing any adjustments that may take place. Sincerely,
MARIO GIRALDO GALLEGO C.C. 4.479.757 from Palestina STATUTORY AUDITOR P.C 67332 - T
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Address Statutory Auditor: Calle 11 N. 8-46, Chinchiná, Caldas. Cel. 313 767 3589
DiseĂąo. www.agenciafractal.com