Report Annual - Walmart Chile

Transcription

Annual
Report
2012
Corporate Name Walmart Chile S.A.
Address Avenida Presidente Eduardo Frei Montalva
8301, Quilicura, Santiago, Chile.
Type of Company Public Corporation
Taxpayer ID No. 96.439.000-2
Website www.walmartchile.cl
E-mail info@walmartchile.cl
Telephone +56 (2) 2200 - 5000
Fax +56 (2) 2200 - 5100
Incorporation Walmart Chile was founded through public
deed dated September 17, 1985, executed
before notary public of Santiago, Enrique
Morgan Torres. An extract of the public deed
of incorporation was registered in the with
the Santiago Real Estate Registrar’s
Commerce Registry in 1985, on page 14,695
under number 7,603. Said extract was also
published in the Official Gazette (Diario
Oficial) on September 21, 1985.
Public Offering Walmart Chile has carried out its initial
public offering of ordinary shares and
registered with the Securities and Insurance
Supervisor, under number 0593. The initial
public offering in Chile took place in
December 1996. Shares were registered
with the Santiago Stock Exchange, the
Valparaiso Stock Exchange and Chile’s
Electronic Stock Exchange.
Bylaws Walmart Chile’s updated bylaws are available to shareholders on the company’s
website.
Memoria
Anual
2012
Index
Mission and Values
6
1
Our Business
10 The Company
12 Our History
14 Our Collaborators
16 Suppliers
18 The Industry
Letter from the Chairman
of the Board of Directors
4
2
Corporate Government
3
Management Report
24 Board of Directors and Corporate Government Practices
26 Administration
28 Ownership and Control
32 Structure of the Walmart Chile Company Group
33 Company Ownership Chart
38 Our Strategic Pillars
42 Achievements in 2012
46 Financial Risk Administration
4
Management by
Business Segment
5
52 Supermarkets
56 The Real Estate Business Unit
58 Financial Services
60 Distribution and Logistics
62 Other Businesses
Social Commitment
6
Disclaimer
76
66 Commitment with Our Collaborators
70 Our Commitment to the Community
73 Our Sustainability Commitment
7
Financial Statements
78
Letter from the Chairman of the Board of Directors
I am pleased to present the Annual Report corresponding to the 2012 fiscal year. In 2012 the company strengthened its leadership position in the supermarket industry with total revenue up 8.8% in real terms and with
significant improvements for its operating processes and
internal productivity.
Chile is currently operating in a prosperous local scenario, with the country’s gross domestic production up
5.6%. Over 138,000 new jobs have been created and
consumption is increasing steadily. In addition, annual
inflation amounts to 1.5%, although food price inflation
is up by nearly 5%. The retail industry has been growing
dynamically, with new stores opening throughout the
country and competition becoming more and more intense.
In this scenario, the company opened 28 new stores, including 13 Super Bodega Acuenta, 7 Express de Lider, 3
Lider and 5 Ekono stores. Total investment came to US$
337 million in 2012, including the purchase of land, construction of stores and an intensive remodeling program.
Walmart Chile’s total sales revenue came to US$ 6.03 billion this year. One-third of this year’s increase compared to last year comes from sales reported by new stores
and two-thirds comes from increased same store sales.
A considerable increase in the sale of non-edible products, innovative commercial proposals and increased
emphasis for our everyday low prices (EDLP) policy have
all added to this healthy performance.
Overall selling and administrative expenses increased by
7.2% in real terms, while total sales were up by 8.8%. This
means increased productivity for the company. We wish
to highlight that the number of employees at supermarkets increased by only 2.9% in December, while sales per
square meter was up 5.9%. The company generated
EBITDA amounting to US$ 511 million and net earnings
of US$ 241 million, surpassing last year’s figures, especially if we subtract income from extraordinary operations
corresponding to 2011.
Throughout 2012, we
focused and worked
consistently on several levels
of our mission to
“save money for people
so they can live better”.
5
Throughout 2012, we focused and worked consistently
on several levels of our mission to “save money for people so they can live better”. In fact, we improved the price
difference with our competitors and developed powerful commercial campaigns, including the March start of
the school year, Easter, Spring, Independence Day and
Christmas campaigns. We wish to highlight the incorporation of new lines of imported products from the global Walmart supply network and the strengthening of
our own store brand sales program, which was up 15%
compared to last year. Lastly, we strengthened the Walmart own brands proposal that included the Great Value,
Parent’s Choice and Equate brands.
In addition, we made substantial headway on Walmart
system integration in the commercial, logistics, accounting and financial areas, while starting to implement
other store management systems, which should be
completed during 2013. We also made substantial headway on strengthening the logistics network through
total commissioning of the new Lo Aguirre distribution
center featuring world-class technology. In turn, a strategy was developed and construction started for the first
Wholesale Center stores started. This new format will be
inaugurated during the first months of 2013. We believe
that this format will pave the way to active participation
in the wholesale distribution industry with a new and attractive proposal for our potential clients with a focus on
everyday low prices.
In keeping with Walmart tradition, we are developing
a proactive human resources policy, providing several
training opportunities for our associates, encouraging
talent development and internal promotion, while fostering a pleasant and efficient working environment. One
milestone was the completion of collective bargaining
with a large number of unionized associates in an atmosphere of respect, commitment and collaboration. I wish
to send each of our 45,150 associates a special greeting
and my thanks for a job well done throughout the year.
I wish to highlight that several Walmart Chile executives were chosen to fill even more important positions
in Walmart’s worldwide organization, recognition for the
professional capacity and local talent we are so proud of.
These executives include Mr. Enrique Ostalé Cambiaso,
General Manager of Walmart Chile, who has had a longstanding and successful track record with our company.
He has been promoted to the position of President
and Chief Executive Officer of Walmart Latin America,
one of the most important positions in the company’s
international organization. We wish to extend our congratulations and wish him success, together with our
sincere thanks for his invaluable contribution to the development of our company. In addition, as of 1 March
2013, Mr. Ostalé has been replaced in this position by
Mr. Gian Carlo Nucci, former COO of Walmex, who has
extensive experience and a long-standing track record
in this company’s retail operations. We pledge our wholehearted collaboration and wish him success in his new
position.
Felipe Ibáñez S.
Chairman of the Board of Directors
Our Mission
We save people
money so they
can live better.
This was Sam Walton’s mission when he opened the first Walmart store in the United States. This focus drives everything
we do at Walmart Chile. To the millions of customers that visit
our stores throughout Chile every week, it is reassurance that
we have low prices every day.
Our Values
Integrity guides our conduct and relationships with clients,
suppliers and the community. We practice integrity every
day through our three basic principles.
Respect for the individual
Striving for excellence
Service to our customers
7
The Company
1
Our Business
Our History
Our Collaborators
Suppliers
The Industry
1 The Company
Our Business
Walmart Chile S.A. is a Chilean company whose main line
of business is supermarket sales. The company’s Lider, Express de Lider, Ekono and SuperBodega aCuenta supermarket formats are found throughout the entire country,
ranging from Arica to Punta Arenas
Supermarkets
The company has developed different supermarket formats in order to meet the needs of all the people in Chile
from a wide range of income brackets.
In addition, Walmart Chile develops financial business
through its subsidiary company Walmart Chile Servicios
Financieros and real estate projects through its subsidiary Walmart Chile Inmobiliaria. These subsidiaries
enable the development of integral value proposals for
its customers in all of the company’s business segments.
Walmart is known throughout the world for its “everyday
low prices” slogan and Walmart Chile consequently
works hard every day in keeping with its mission of helping customers save money and live better. The company thus focuses its strategy on delivering high quality
products at the lowest prices in the market.
The fundamental pillar of Walmart Chile’s growth is its
everyday low price strategy, which is accompanied by
an integral services offer for its customers. In addition,
the company is constantly expanding its stores based on
a multiformat approach and each of these stores is opened in strategic locations throughout Chile.
The company had 327 stores at the end of 2012. Seventytwo of these were Lider, 64 Express de Lider, 127 Ekono
and 64 Super Bodega aCuenta stores: the largest supermarket sales chain in the country, with sales amounting
to a total CLP 2,725,725 million.
With over 50 years experience operating in the Chilean
market, 327 supermarket stores, 12 shopping centers
and over 1.45 million active Presto credit cards, Walmart
Chile is the leading player in the national supermarket
industry.
Financial Services
This business segment provides credit to our customers
by means of the Presto card, offering different products
and services that add value to our commercial proposal. The Financial Services segment operates throughout
Chile, from Arica to Punta Arenas, with over 180 points of
Selling Area
472,519 m2
ACUENTA 125,179 m2
EXPRESS 101,426 m2
EKONO 49,776 m2
LIDER
The fundamental pillar of
Walmart Chile’s growth is
its everyday low price strategy,
which is accompanied by an
integral services offer for its
customers
748,900 m2
Selling Area
11
service (branches, assisted and self-service modules), as
well as an automatic teller machine network.
The Presto card has 1.45 million customers and is accepted by over 56,000 associated stores throughout Chile,
providing cash advances, purchases with or without
monthly installments, consumer credit and the hiring of
different services by all companies belonging to Walmart
Chile (Supermarkets, Presto Travel, Lider.cl, Presto Insurance and Presto Collection).
In addition, the company has a wide range of complementary products and services that include life insurance, health, vehicle and home insurance, insurance
with savings, bill payment services and others.
The Real Estate Business
Walmart Chile Inmobiliaria develops real estate projects
in accordance with the company’s growth plans and
multiformat strategy. This business segment consequently searches for locations in order to build supermarkets and shopping centers, taking responsibility for
their development and subsequent administration.
Stores and Points of Contact
LIDER
72
EXPRESS DE LIDER
64
SUPER BODEGA ACUENTA
64
EKONO
127
PRESTO BRANCHES AND ASSISTED MODULES
180
SHOPING CENTERS
12
Walmart Chile Inmobiliaria manages 327 supermarkets,
12 shopping centers and 1,771 stores throughout Chile.
The company owns and manages total leasable surface
amounting to over 1.3 million m2, making it one of the
largest real estate operators for the retail business in
Chile, working hard every day to improve quality of life
for the people of Chile.
1 Our History
Our Business
1893 The imports and wholesale distribution company Gratenau y Cía was founded.
1992 The Saitec Real Estate Division was
founded and the Company’s first shopping
center was opened: La Dehesa Shopping.
1993
The start of international expansion, inauguration of the first supermarket
in Argentina to use the Ekono brand.
However, this international venture came
to an end in 1999 when D&S sold its shares
to the subsidiary Supermercados Ekono
S.A. (Argentina). 1930
Development of Depósitos Tres
Montes started with retail food sales.
1996
1954
The first self-service stores were
opened, featuring a wide range of products.
1957 The first supermarket in Chile and
Latin America was opened under the
brand Almac. This format including parking
spaces, a wide selection of merchandise
and cash registers at the exit allowed the
company to grow in terms of customer
service and quality.
1984
The first Ekono supermarket was
opened in Santiago, an economic format
that consolidated operations in Chile.
1985
D&S, Distribución y Servicio S.A.,
started operating as a distribution and
services company for supermarkets owned
by the Company.
1987
The first Ekono Hypermarket
opened. This concept was inspired by the
idea of an economic supermarket with
larger surface areas, incorporating a selection of non-edible products.
1990 The Company’s expansion strategy
throughout Chile started after the first
Ekono Hypermarket was opened in Viña
del Mar, the first store in one of Chile’s
regions outside of Santiago.
D&S introduced the concept of
an economic megamarket under the
Lider brand with the opening of the Lider
Pajaritos Hypermarket in Santiago.
In addition, the first public offering of
the company’s shares was made on the
Santiago Stock Exchange, making the
company an open stock corporation. The
Presto card was also launched.
1997 The Service School, a unit designed
to train the Company’s internal workers
and suppliers, was opened. It started
operating a distribution center in Santiago
that was also known as LTS. The first ADR
was listed on the New York Stock Exchange
(NYSE: D&S).
2000 The Lider Vecino compact hypermarket format was launched.
13
2011
2001
The FarmaLider format was
launched. Direct drugstore operation
concluded in 2006 after signing an agreement with Farmacias Ahumada S.A.
2006
2002
The Company listed its stock on
the Madrid Stock Exchange in the Latibex
market.
The first two shopping centers
to use the brand Espacio Urbano were
opened, together with the southernmost
shopping center in the world in the city of
Punta Arenas.
2003
Supermarkets and hypermarkets
were joined under the Lider brand, using
the Lider Express brand for compact hypermarkets or supermarkets. The company
reached an agreement with the French
supermarket chain Carrefour at the end of
the year for purchase of its operations in
Chile, which consisted of 7 hypermarkets.
2007
2005 Presto became the first open non-
2008
bank credit card in Chile. The Presto insurance company was founded.
Lider hypermarkets were grouped
together under the Hiper Lider name and
Lider Express supermarkets were renamed
Express de Lider. The Company concurrently launched a new discount format in
Santiago under the Ekono brand, followed
by an additional discount store format
under the SuperBodega aCuenta brand.
Walmart Stores Inc. reached an
agreement with D&S in December to
purchase a majority stake in the company,
thus starting incorporation of the largest
retail sales company in the world into the
national chain and taking on the mission
to help people save money and live better.
2009 The integration of D&S and Walmart
started. This process was designed to
create increasing value by implementing
good practices that have already been
established in other countries where the
transnational operates. Sustainability
was integrated as the new focus for the
company’s business strategy, in line with
Walmart’s global development work.
2010 D&S S.A. changed its firm name to
Walmart Chile S.A. The company launched
its new e-commerce platform Mundolider.
com, which subsequently became Lider.cl.
In keeping with its consolidation
process, Walmart Chile brought the use of
multiple firm names to an end and structured each of its supermarket formats
under a single corporation. Divisions operating in other industries were renamed
Walmart Chile Servicios Financieros S.A.
and Walmart Chile Inmobiliaria S.A. All
Hiper Lider stores changed their name and
logo to Lider, providing additional strength,
proximity, innovation and modernity to the
brand. In addition, the company purchased
a 100% stake in Aliserv, Aquapuro and
Aquanatura, businesses that were subsequently renamed Walmart Chile Alimentos
y Servicios, strengthening the company’s
proposal in terms of the prepared dishes,
bakeries, confectionery, fish and sea food,
as well as flowers and plants.
2012
The company was recognized to
be the best evaluated retailer between its
national competitors by industry suppliers.
Integral operation of the Lo Aguirre distribution center started, becoming one of the
most modern distribution centers in South
America. In addition, Walmart Chile took
another step regarding its commitment
with the environment in April with the
creation of a Consortium for Sustainability
in Chile. This global organization promotes
improved sustainability performance for its
products, services and consumption habits
by means of joint efforts with suppliers,
NGOs and governmental agencies. In addition, Walmart Chile innovated by launching
the first digital platform in South America
for making payment using mobile phones.
The platform is available at all Lider and
Express de Lider supermarkets in Chile. In
turn, Lider.cl was the first store in the world
to make general merchandise products
available in Antarctica, Juan Fernández
Island and Easter Island.
1 Our Collaborators
Our Business
People are a fundamental pillar for Walmart Chile and
we consequently have a solid Human Resources policy
that always aims to benefit and strengthen the skills
of our collaborators. Training programs and practices
have been developed in this area and these ensure an
excellent work climate with increasingly more qualified
personnel. The company finished off 2012 with a staff of
45,150 workers, with 55% women.
Human Capital Indicators
2012
Total number of workers
45,150
% of young people between the ages of 18 and 24
28%
% of women
55%
Total training hours
507,260
Number of promotions
3,176
The company has taken special care to contribute to
the growth and development of young people in our
country, providing employment opportunities for young
people between the ages of 18 and 24. This is evidenced
by the fact that 28% of the workers at Walmart Chile belonged to this segment at the end of 2012.
Managers andProfessionals
2012 StaffExecutives
and Technicians
Walmart Chile S.A
Walmart Chile Comercial S.A.
Retail Business
CollaboratorsTotal
7
0
1
8
87
446
745
1,278
210
2,574
36,977
39,761
Real Estate Business
29
158
356
543
Financial Business
22
162
1,714
1,898
Food and Services
12
56
1594
1662
Total
367 3,396 41,38745,150
45
As of December 2012
of
thousand
150 employees
15
55
%
are women
1 Suppliers
Our Business
2012 became a cornerstone for the Company’s integration processes as a huge step toward the complete implementation of systems, processes and practices that
have made Walmart the company it is today on a global
scale. As we have done in previous years, once again we
wish to highlight the outstanding collaboration, support
and perseverance of our suppliers while incorporating
the changes we are going through, highlighting support for our mission to save money for our customers
so they can live better. We base all our efforts, priorities
and actions on the EDLP/EDLC (everyday low price and
everyday low cost) model.
Priorities
We had four supplier priorities in 2012: Integration, MultiFormats, EDLP/EDLC (everyday low price and everyday
low cost) in order to achieve profitable growth in an
ethics and compliance framework.
Integration was the undisputed protagonist in 2012.
Conversion to Walmart systems have been highlighted:
SMART implementation at 127 Ekono stores, 2 Lider
stores and 4 Distribution Centers; registration of over
230 suppliers in Retail Link, our Walmart management
platform; implementation of the Global Shared Services
(GSS) division in Costa Rica (GSS); and implementation of
all Walmart financial platforms in Chile. These initiatives
required important training efforts for our own staff and
suppliers, and the design of many of our management
practices, which required structural adaptation to the
new processes and systems. As a result, we can proudly
say that we have taken a giant leap toward implementing fluent and efficient processes, which we expect to
mature in 2013. We wish to thank all of our suppliers for
their support and for the role they played in change management.
As for logistics, we made substantial headway with GRS,
a resupply system developed for Walmart and scheduled
for implementation in 2013. The most important innovations and benefits are related to increased purchasing
process automation, future demand forecasting up to
17 weeks ahead based on sales over the last two mobile months, which will enable more efficient supply and
more specialized resupply equipment.
In addition, our efforts are still focused on providing a
distinctive Multi-Format proposal in accordance with our
customers’ specific needs. We are consequently working
together with our suppliers on a unique value proposal
that will become the hallmark for each of the Company’s
formats. Moreover, the upcoming launch of our Wholesale format has already attracted keen interest among
our suppliers.
Walmart Chile has actively participated in the Ethical
Sourcing program, which features audit processes for
the factories that make our products, which consider the
quality of working conditions for workers at these facilities.
We wish to highlight that 100% of our products were
backed by a formal agreement in 2012 (APC). This is in
line with our compliance policies that we aim to further
improve. A clear operating framework ensures fluent business relations with our suppliers, facilitate our operation and bring us closer to our mission. We will continue
to prioritize everything related to building a sustainable,
and responsible business that complies with the highest
management standards.
Growth is one of our main priorities and we constantly
invite our suppliers to grow with us. This produces a
virtuous management circle in which Walmart Chile
suppliers are an integral part of our business model. If
the Company is able to operate with low costs, these
savings are transferred to its customers. If these customers choose us, sales go up and the Company and its
17
suppliers grow.
Support for Women’s Economic Development
In order to promote supplier development and diversification, Walmart Chile and Women Entrepreneurs hosted a convention with companies managed by women.
These companies were invited to offer their products
and/or services to the Company.
This initiative was part of the Company’s commitment to
women’s economic development, diversity and fair and
inclusive trade.
The meeting was attended by over 80 women, who had
the chance to get to know cases of successful endeavors with women leaders that have become important
Walmart suppliers and to talk with executives about the
requirements and standards to be met by products and
services that qualify for our selling areas. Nineteen of the
total number of women in attendance joined a training
plan with Walmart Chile purchasers in order to learn
more about how their businesses could be developed.
At the same time, supplier companies led by women
were invited to be trained in several key courses to ensure successful management of their businesses, such as
market segmentation, marketing and sales.
The Best Retailer
Walmart Chile was recognized as the best evaluated
retailer among its main national competitors in 2012,
according to the third version of “The Advantage Mirror
Report” study conducted by The Advantage Group international consultants for 60 retail industry suppliers. This
study aims to identify the best supermarkets operator
from among a group of 4 industry leaders, evaluating
different areas of performance.
* Performance AreasRanking (4 retailers)
General Performance
Business Relations
1
Personnel/Organization
1
Business Categories/Development
2
Store performance
1
Supply Chain Processes and Personnel
1
Main suppliers in 2012
Nestle Chile S.A.
Unilever Chile S.A.
Agrosuper Comercializadora de Alimentos Ltda.
CMPC Tissue S.A.
Comercial Santa Elena S.A.
Empresas Carozzi S.A.
Procter & Gamble Chile Ltda.
We are proud of this recognition and this encourages us
to continue further developing the work we are doing
together with our suppliers, whom we thank for their
trust and commitment.
1
Watt´s S.A.
Coop Agrícola y Lechera de la Unión Ltda.
Embotelladora Andina S.A.
1 The Industry
Our Business
Economic Scenario
Retail Sales
At an international level, 2012 generally evidenced reduced economic activity. This was mainly due to limited growth of developed economies and better relative
results reported by some emerging economies. There
were persistent risks of a fiscal and financial crisis in the
Eurozone throughout 2012.
At a domestic level, internal demand and activity indicators were up compared to the year before. Employment
climbed 1.8%, together with actual salary growth up by
4.7%. Chile’s GDP increased by 5.6% and the average
unemployment rate came to 6.5%.
According to a report issued by the National Chamber of
Commerce, retail sales in the Metropolitan Region climbed 6% in 2012.
This same report attributes these results to steadily
growing internal demand buoyed up by both increasing
employment and actual salaries, as well as favorable credit conditions and improved consumer expectations.
The following graph indicates actual annual sales performance in the Metropolitan Region (MR) over the last 10
years.
Total inflation accumulated up to December amounted
to 1.5% and the monetary policy interest rate (MPIR) held
steady at 5% throughout the year.
20
Retail Real Term Sales in the Metropolitan Region
% YoY
15
17.6
Greater YoY variation
10
5
8.1
3.6
4.7
5.1
6.0
4.9
3.3
1.8
0
-1.9
-5
2003
2004
2005
Source: National Chamber of Commerce, 2013.
2006
2007
2008
2009
2010
2011
2012
19
22
,1 %
The Supermarkets Sector
Greater real term sale variation in MR
Sales reported by the traditional supermarket line (groceries and perishables) dropped 2.9% in 2012. Walmart
Chile participates in this industry by means of its traditional supermarket line (groceries and perishables), as
well as lines that were normally covered by department
stores, such as clothing, footwear, electrical appliances,
household items and furniture.
Financial Services
This industry has made an important contribution to diversifying and developing sources of credit in financial
markets, playing an important role in economic activity
and improving quality of life for a large percentage of the
population by facilitating access to goods and services
that would be otherwise difficult.
Financial service industry competitiveness is characterized by the participation of different companies related
to banking, trade, cooperatives, family allowance compensation funds and insurance companies. The industry
has diversified its supply of products, including consumer credit, insurance intermediation, financing and the
sale of tour packages, among others. This has facilitated
credit access for income brackets that often do not qualify for bank financing.
Real term sales variation in MR
January - December 2012
0%
-5.0 %
PERISHABLES
-0.5 %
GROCERIES
FURNITURE
0.9 %
HOME
10.9 %
ELECTRONICS
10.2 %
FOOTWEAR
22.1 %
CLOTHING
Source: National Chamber of Commerce, 2013.
9.7 %
1 The Industry
Our Business
Shopping Centers
This industry started in 1982 and has grown progressively, bringing an attractive and highly valued supply of
products, services and entertainment together in a single physical location.
Income growth has reduced the number of households
required in order to sustain a shopping center and the
current trend has evolved from large malls built in the
outlying areas of cities to smaller urban centers in consolidated areas in cities, adding new services such as
medical centers and offices, among others. The Urban
Space known as “Your neighborhood shopping center”
was created and developed based on this concept. This
is a neighborhood shopping center format whose value proposal is to provide an easy, fast and comfortable
shopping experience for customers.
Regulatory Scenario
Walmart Chile mainly operates in economic and corporate sectors that are considered to be unregulated.
Notwithstanding, these businesses are subject to different generally applicable bodies of law and these especially affect how these businesses are to be conducted,
highlighting free competition protection legislation,
labor legislation and consumer protection standards.
In addition, financial activity that is developed through
Presto credit card operation is regulated, mainly by
means of Chilean Central Bank, Chilean Superintendence
of Banks and Financial Institutions and Superintendence
of Securities and Insurance standards.
Chile has laws that protect free competition and seek to
prevent monopolistic activities or practices, as well as the
abuse of a dominant position in any market or industry.
There has been growing concern in recent years about
the size and power of the relative market controlled by
large supermarket operators. In this sense, the National
Economic Prosecutor’s Office and the Chilean Antitrust
Court have actively sought to prevent eventual abuse by
these operators in their relations with suppliers and their
relations with the competition and consumers. With this
aim in mind, the Company presently complies with the
General Terms and Conditions for the Procurement of
21
Merchandise (TCGA) that came into force in May 2007.
The full text of this document is available at the Walmart
Chile website (www.walmartchile.cl).
Among other provisions, TCGAs established a Public Defense Office for Suppliers, which is responsible for preventing, hearing, addressing and impartially settling any
difficulty or controversy between the company and any
supplier providing merchandise for its supermarkets. In
addition, Walmart Chile has Internal Compliance Guidelines for Free Competition Regulations.
In terms of labor legislation, Walmart Chile complies with
the obligations and responsibilities required of employers by law.
With regard to consumer protection, the company has
implemented a total public transparency policy. A wide
range of legal information and information of interest to
consumers is published at its websites www.walmartchile.cl and www.presto.cl. Walmart Chile also has sufficient human and technological resources to provide
timely solutions for all of its customers’ requirements.
In accordance with the provisions of Law N°20,393 on
the Criminal Liability of Legal Persons, Walmart Chile is
presently implementing a crime prevention model for
the Company and its subsidiaries.
Regarding issuing and operation of the Presto credit
card, Law N° 20,555 that grants financial powers to the
National Consumer Service was passed in December
2011 and came into force in 2012. In this regard we wish
to report that the company has taken all necessary legal
and operational measures to comply with the provisions
of these regulations and to fully comply with all relevant
legal provisions.
2
Board of Directors and
Corporate Government Practices
Administration
Ownership and Control
Structure of the
Walmart Chile
Company Group
2 Board of Directors and Corporate Government Practices
Board Member Salaries
The following table lists salaries paid for stipends and
other fees to company directors for their services in 2012:
STIPEND AS OFSTIPEND AS OF
NAME
12/31/2011 CLP 12/31/2012 CLP
Mr. Felipe Ibáñez Scott
Directors belonging to Walmart administration are not
paid for the participation on the Walmart Chile S.A. Board
of Directors.
La siguiente tabla contiene las remuneraciones pagadas
durante 2012 por filiales por concepto de dietas, a los
directores de Walmart Chile que a su vez son directores
de las filiales de la compañía:
141,494
175,885
Mr. Eduardo Solórzano
-
-
Mr. Nicolás Ibáñez Scott
75,339
72,066
-
-
Mr. Alberto Eguiguren Correa
48,581
54,336
Mr. Jorge Gutiérrez Pubill
52,518
54,283
Mr. Wyman Atwell (*)
Mr. Christian-Phillipe Schrader
-
-
Mr. José Luis Rodríguez Macedo(*)
-
-
69,310
71,658
149,387
167,084
66,324
71,669
Mr. José María Urquiza
-
-
Mrs. Claire Babineuax Fontanet
-
-
Mr. José María Eyzaguirre Baeza
NAMESTIPEND AS OFSTIPEND AS OF
12/31/2011 CLP th 12/31/2012 CLP th
(*) Served as directors for part of the 2011 fiscal year.
Board Composition
The Board of Directors was composed of the following persons as of 31 December 2012:
Felipe
Ibáñez Scott
Chairman
Commercial Engineer
RUT: 5.638.122-8
“Our actions are guided by
respect for people, customer
service and the pursuit of
excellence”.
Eduardo
Solórzano
Vice Chairman
Economist
ID: GO.250.799-7
Board
2012
25
The company’s Board of Directors is a corporation administration agency composed of nine members with
no alternates. Without prejudice of their duties and legal powers, the Board of Directors’ mission is to ensure
the existence of a strategic planning process so that the
company is managed in its best interests, safeguarding
the rights of its investors and shareholders. The Board is
consequently also responsible for appointing the most
highly qualified executive team. In addition, it is responsible for implementing suitable information, control and
auditing mecahnisms while establishing standards of
conduct in accordance with the company’s principles.
Walmart Chile S.A. has a Commission of Directors composed of three members of the Board of Directors. This
Commission meets on a monthly basis and performs duties similar to those of the Committee of Directors required by the Chilean Corporations Law. However, the company is not legally required to have this Committee. The
Commission’s main powers include: examining financial
statements before these are presented to the Board of
Directors for approval, proposing names of external auditors and risk raters to the Board of Directors, examining
Nicolás
Ibáñez Scott
Director
Commercial Engineer
RUT: 5.638.106-6
Claire
Babineuax Fontanet
Director
Attorney
ID: 476077868
José María
Urquiza
Director
Economist
ID: 08380025071
José María
Eyzaguirre Baeza
Director
Attorney
RUT: 7.011.679-0
Jorge
Gutiérrez Pubill
Director
Business administrator
RUT: 5.907.040-1
Christian-Phillipe
Schrader
Director
Commercial Engineer
ID: C5PHN9N7X
Alberto
Eguiguren Correa
Director
Attorney
RUT: 9.979.068-7
background information related to operations with related parties and generally all issues commissioned by the
Board of Directors.
We wish to highlight that Walmart Chile S.A. and its subsidiaries apply the Walmart Stores Inc. Global Anti-Corruption Policy, which aims to uphold the highest ethical
standards and to comply with applicable legislation. This
policy prohibits corrupt payment under any circumstances, either during negotiation with public oficials or with
individuals from the private sector. Walmart’s policiy is to
comply with all applicable anti-corruption laws, including but not limited to the United States of America´s
Foreign Corrupt Practices Act or FCPA) and the UK Bribery Act.
Without limiting the foregoing, Walmart Chile S.A also
has an Ethics and Compliance Office and a Code of
Ethics, which clearly establish corporate values and the
principles and actions that should determine conduct,
which is delivered to each worker as guidelines for professional action at an internal level and with customers.
The main duties of the Ethics and Compliance Office
include the following: guaranteeing dissemination and
compliance of the Code of Ethics; determining measures in the event of situations that go against the Code
of Ethics; ensuring that executives and all parties executing administrative actions and those who report to
these parties do not incur in actions that go against the
aforementioned Code. Considering this ongoing commitment to ethics and transparency, each year workers
are required to complete a form stating that they are not
subject to any commercial or contractual relation, or any
other relations that could produce a conflict of interest
with the company.
Lastly, Walmart Chile S.A. has an Manual for the Management of Information of Interest to the Market, which
contains Walmart Chile S.A. policies and internal standards referring to the type of information that will be
made available to shareholders and systems required
so that this information can be communicated in a timely manner, in order to regulate the management of
confidential information, share transactions and related
issues. The Manual is compulsorily applicable to persons
subject to the Manual, which include directors, executives and managers. The General Manager is personally
responsible, or by means of a third party, for the proper
implementation and execution of this Manual.
2 Administration
Internal Organizational Chart
The company’s internal administration is organized as
follows:
Board
Corporate
Affairs Manager
General Manager
Legal
Affairs Manager
Internal Audit
Manager
Human
Resources
Manager
Finance
Manager
Systems and
Integration
Manager
Operations
Manager
Financial
Services
Manager
Real Estate
Manager
Commercial
Manager
Main Executives
NAMETAX ID NUMBERPOSITIONPROFESSION
Enrique Ostalé Cambiaso
8.681.278-9Walmart Chile General Manager
Commercial engineer
Olga Gonzalez Aponte
23.766.227-kFinance Manager
Carmen Román Arancibia
10.335.491-9Legal Affairs ManagerAttorney
Eduardo Herrera Barros
Gonzalo Valenzuela Medina
8.455.707-2Systems and Integration Manager
12.651.463-8
Rubén Camarena
Manuel López Barranco
Michel Awad Bahna
José Antonio Fernández
Jesica Duarte Barriga
Corporate Affairs Manager
Commercial engineer
Civil engineer
Journalist
0-EHuman Resources ManagerDiseñador Industrial
7.014.100-0Real Estate Manager
Commercial engineer
5.864.156-1Financial Services Manager
Commercial engineer
23.746.280-7Operations ManagerBiomedical engineer
9.618.426-3
Commercial Manager
Commercial engineer
Salaries for Managers and Main Executives
Monthly salaries and other benefits paid to the
corporation’s managers and main executives during the
fiscal year are indicated in the following table:
Managers and Main Executives Walmart Chile
Monthly salaries and other benefits paid (bonds)
Payment based on shares owned
Total
12-31-2012 CLP th
12-31-2011 CLP th
29,989,973
26,783,863
0
0
29,989,973
26,783,863
27
Shareholders
In accordance with its bylaws, the company’s capital is
represented by 6,520 fully subscribed and paid-in shares,
all from one same single series with no nominal value. As
of 31 December 2012, said number of shares was distributed between a total 317 shareholders.
Walmart Stores Inc. indirectly controls Walmart Chile
through a series of corporations that finally make up
the shareholder Inversiones Australes Tres Ltda. In turn,
Walmart Stores Inc. is a public corporation formed and
existing according to the laws in force in the State of Delaware, United States of America as of 31 October 1969,
with domicile in said state. Control of Walmart Stores Inc.
corresponds to Alice L. Walton, Jim C. Walton, S. Robson
Walton, the successors of Helen R. Walton (for whom the
former three act) and the successors of John T. Walton
(for whom the former three act) share the ownership, directly or through Walton Enterprises, LLC (for whom the
former three act) of over 40% of the shares in Walmart
Stores, Inc. With the exception of the aforementioned
persons and successors, no person, either individual or
legal entity, holds shares in Walmart Stores, Inc. representing a higher percentage than 5%.
Therefore, as of 31 December 2012, Walmart Stores Inc.
directly or indirectly holds 4,867,474,634 shares issued by
Walmart Chile, which is equivalent to 74.65% of its total
capital rights.
Investor Relations
Walmart Chile understands its investor relations as an
ongoing communication process focused on individual
and institutional investors, as well as financial analysts
and regulatory entities that aim to provide timely and
sufficient dissemination of information about the company.
Investor relations at Walmart Chile aim to comply with
company information obligations and are based on the
principles of information transparency, sufficiency, opportunity, coherence and reliability.
Main Shareholders
The company’s largest shareholders as of 31 December
2012 are listed as follows:
NUMBER OF
NAME OR FIRM NAMESHARES
Inversiones Australes Tres Limitada
“Walmart Chile understands
its investor relations as
an ongoing communication
process focused on individual and
institutional investors, as well as
financial analysts and regulatory
entities that aim to provide timely
and sufficient dissemination of
information about the company. “
%
4,867,474,634
74.65%
Fondo Inversion Privado Aurora Iii
722,962,068
11.09%
Rentas Fis Y Compania
Sociedad Colectiva Civil
686,572,844
10.53%
Serv Profesionales Y De
Comercializacion Cuatro Ltda
107,423,598
1.65%
Serv Profesionales Y De
Comercializacion Dos Ltda
107,303,248
1.65%
Schouten N V Agency In Chile
9,503,838
0.15%
Larrain Vial S A. Corredora De Bolsa
6,350,415
0.10%
Banchile C De B S A
3,187,985
0.05%
Santander S A C De B
1,144,123
0.02%
Banco De Chile Representing
Non-Resident Third Parties
1,135,193
0.02%
Findel Westermeier Alicia
826,992
0.01%
Consorcio C De B S A
294,858
0.01%
29
Share Performance
Walmart Chile shares are traded on the Santiago Stock
Exchange and on the Santiago Electronic Stock Exchange under the ticker WMTCL.
The closing share price for Walmart Chile on the Santiago
Stock Exchange came to CLP 260 per share as of 31 December 2012.
The following graph at the bottom of the page shows
historical share price performance over the last 11 years.
Quarterly Statistics
Quarterly statistics for Walmart Chile stock transactions
over the last three years, including transactions made on
the Santiago Stock Exchange, Valparaíso Stock Exchange
and Santiago Electronic Stock Exchange are listed as follows:
N° of Shares AverageTotal
TradedPriceAmount
(thousands)
(CLP)
(CLP mn)
2010
First Quarter
1,682
201
339
Second Quarter
1,220
198
241
Third Quarter
3,001
200
600
12,903
298
3,607
First Quarter
2,549
318
810
Fourth Quarter
2011
Second Quarter
1,096
316
346
Third Quarter
5,260
260
1,369
Fourth Quarter
4,655
253
1,176
5,277
233 1,232
364
233 85
2,766
243 671
928
253 234
2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Share Performance
Price per share CLP
350
300
250
200
150
100
50
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Share Transactions Between Related Persons
Walmart Chile share transactions by related persons are
listed as follows:
Related PersonPurchase or Sale
QuantityPrice (CLP)
Control Obtained
Inversiones Australes Tres LimitadaPurchase
7500
269 No
6400
269 No
6996
269 No
2966
260No
7900 260No
5702
260 No
8400
261No
30%
of the profits from each fiscal year
are to be shared as dividends
Profit Sharing Policy
According to Walmart Chile bylaws and applicable legislation and unless otherwise unanimously agreed at a
special shareholders meeting, at least 30% of the profits
from each fiscal year are to be shared as dividends.
31
Profits shared as indicated by the company’s bylaws are
presented in the following table:
Year
Historical Historical CLPCLP/share
2000
11,037
8
2001
8,280
6
2002
13,800
10
2003
13,800
10
2004
17,250
12.5
2005
13,040
2
2006
26,080
4
2007
25,878
4
2008
38,772
6
2009
13,040
2
2010
32,600
5
2011
32,955
5,054
Profits (losses)
2012
34,305
5,261
Highest investment value amortization -
Accumulated losses -
Accumulated deficit for the subsidiary development period -
Distributable Profit
Reconciliation between fiscal year profit and distributable profit is listed as follows:
Distributable income CLP th
115,638,167
115,638,167
2 Structure of the Walmart Chile Company Group
The following diagram schematically illustrates confirmation and Walmart Chile S.A. stake ownership in its
subsidiaries.
We wish to highlight that all capital interest in the
company’s parent companies directly or indirectly belongs to Walmart Chile, except for those where the interest of minority shareholders is indicated (Walmart Chile
Inmodiliaria S.A. and Supermercados Almac S.A.
Walmart Chile S.A. equity in its subsidiaries
DIRECT
SUBSIDIARY
LEGAL STATUS
DIRECT STAKE
CAPITAL
SUBSCRIBED
AND PAID IN
CLP
Inversiones
Walmart Chile
Limitada
Limited Liability
Company
99.99%
491,854,585
Walmart Chile
Inmobiliaria S.A.
Closely-held
corporation
subject to standards applying
to open stock
corporations
99.99%
432,778,108
Walmart Chile
Comercial Ltda.
Limited Liability
Company
99.99%
90,363,559
Walmart Chile
Servicios Financieros Ltda.
Limited Liability
Company
99.99%
31,527,281
33
SUMMARIZED CORPORATE PURPOSE
BOARD OF DIRECTORS
Investment in movable and immovable property, tangible and intangile
assets, such as shares, action pledges, bonds, quotas or rights to all type
of corporations, either commercial or civil, communities or associations
and in all types of securities and real estate, being entitled to purchase,
sell, contribute to ownership or keep these investments, take interest in
or participate as a partner or shareholders in companies or corporations
of any kind.
ADMINISTRATION:
MANAGERS AND
EXECUTIVES
PROPORTION
INVESTMENT MADE
IN THE SUBSIDIARY
REPRESENTS IN TERMS
OF THE PARENT
COMPANY’S ASSETS
General Manager
39.4%
Real estate investment, signing all types of deeds and contracts
associated to these, build and transform goods purchased, as well as all
operations deemed necessary. Executing all types of civil or commercial
operations, manage and exploit these investments and execute similar
or complementary transactions agreed to by the corporation.
(Chairman),
Alberto Eguiguren Correa,
Sebastián Rozas Heusser,
Jorge Gutiérrez Pubill
and Gastón Weinstein.
General Manager
33.5%
a) Operation of supermarkets, shopping centers, restaurants, industrial
ovens and stores for retail or wholesale trade; b) The purchasing, packaging, transformation, production, sale, import and export, consignment
and retail or wholesale distribution of all types of merchandise, articles,
products, food and other consumer goods related to the operation
of supermarkets, shopping centers, restaurants, industrial ovens and
commercial stores; representation of national or foreign companies and
the granting or acceptance of commercial concessions in the aforementioned lines of business, among others.
(Chairman),
Olga Gonzalez Aponte,
and Jorge Gutiérrez Pubill.
General Manager
José Antonio Fernández
8.1%
The granting and administration of mutuums and credits. Financing consumption or expenses of any kind. Issuing and operation of credit cards.
Insurance, consulting and financial service intermediation. Investment in
tangible and intangible assets, movable and immovable goods.
Juan Carlos Pedró (Chairman),
Trudy Fahie,
and Enrique Ostalé Cambiaso.
General Manager
Michel Awad Bahna
0.2%
Proportion of the investment in the subsidiary on the parent asset
WALMART CHILE SERVICIOS FINANCIEROS LTDA
WALMART CHILE COMERCIAL LTDA
0,2 %
8,1 %
INVERSIONES WALMART CHILE LTDA
39,4 %
WALMART CHILE INMOBILIARIA S.A.
33,5 %
2 Company Ownership Chart
Walmart Chile S.A.
Inversiones Pacífico LLC
100 %
Walmart Chile Servicios
Financieros Ltda.
99.992919 %
100 %
99.9999 %
1%
0.0001 %
100 %
Inversiones Walmart Chile Ltda.
0.000003 %
Inversiones Cordillera LLC
99 %
100 %
100 %
0.007081 %
99.999996 %
100 %
Walmart Chile Comercial Ltda.
100 %
100 %
100 %
Inversiones y Rentas
Presto Ltda.
Comercial Walmart Chile LLC
100 %
1%
99 %
Presto Corredores de Seguro
y Gestión Financiera S.A
100 %
0.01 %
99.99 %
Soc de Servicios de
Marketing MDC Ltda
100 %
0.000183 %
99.999820 %
Ekono S.A.
100 %
0.000021%
99.999978 %
Administradora de Créditos
Comerciales PRESTO Ltda
100 %
0.0163 %
99.9838 %
100 %
1%
99 %
Abarrotes Económicos S.A.
Servicios y Administración de
Créditos Comerciales PRESTO S.A
100 %
0.10 %
99.99 %
Soc. de Servicios de Comerc. y
Apoyo y Gestión PRESTO Ltda.
0.01 %
99.99 %
Lider Domicilio Ventas
y Distribución Ltda.
99.95 %
Escuela de Capacitación
Técnica Escatec Ltda.
100 %
1%
99 %
PRESTO Telecomunicaciones S.A
70 %
30 %
0.05 %
100 %
Astro S.A
0.0001 %
0.1 %
Servicios de Viajes y
Turismo PRESTO Ltda.
Maquinsa Equipamento S.A
100 %
0.6017790 %
99.398221 %
Inversiones Hipermercados Ltda.
100 %
1%
99 %
100 %
Servicios de Recaudación
PRESTO Ltda.
99.99 %
Supermercados Almac S.A.
100 %
1%
99 %
Servicios y Cobranza Ltda.
100 %
100 %
99.9990 %
100 %
99.9 %
100 %
0.7088760 %
99.291124 %
Inversiones
Supermercados Ltda.
100 %
100 %
1%
0.111111 %
99 %
99.888889 %
Distribuidora y Comercializadora
Emporium Ltda.
Grupo de Restaurantes
Chile Ltda.
100 %
0.01 %
35
99.9 %
0.00373343 %
Minority shareholders
0.001 %
3.2671686 %
96.728268 %
0.000830 %
100 %
8%
92 %
Walmart Chile Mayorista Ltda.
0.0625 %
10 %
90 %
Logistica, Transporte y
Servicios LTS Ltda.
100 %
100 %
Walmart Chile Inmobiliaria S.A
99.9375 %
100 %
Inversiones Internacionales
D&S Ltda
100 %
99.99 %
0.1 %
Comercial D&S Perú S.A
0.068322 %
100 %
Estilos y Diseños S.A.C.
Sermob S.A
0.1 %
99.99 %
99.9993168 %
0.000018 %
Walmart Chile Alimentos
y Servicios Ltda.
Ekono Logística Ltda.
0.01 %
1%
99 %
O' Clock S.A.
100 %
Adm. De Supermercados
Hiper Ltda.
Minority shareholders
100 %
98.65943789 %
1.3405621 %
South Pacific Trade Limited
100 %
South Pacific Trade
Limited Shangai Office
100 %
99.99 %
100 %
100 %
100 %
1%
Adm. de Supermercados
Express Ltda.
100 %
Inmobiliaria D&S Perú SAC
100 %
0.998604 %
100 %
3
Management Report
Our Strategic
Pillars
Financial Risk Administration
Achievements in 2012
Management Report
Sustained and Profitable Growth
The Company has achieved a leadership position with
international standards and is becoming one of the
most reliable, efficient and profitable mass consumer
product distribution networks in the industry. Its three
divisions (retail, real estate and financial services) have
been strengthened in a highly competitive environment
over recent years, ensuring financing for the Company’s
upcoming projects.
In order to meet its objectives, Walmart Chile has formulated a business strategy mainly based on achieving
high competitiveness levels and a steady growth rate.
We have a diversified portfolio of business formats, with
different store prototypes in each format. This provides
flexibility in order to harness and better adapt to growth
opportunities available in the market, while optimizing
capital invested and returns.
Exceptional Value at Low Prices
Our value proposal is based on a combination of different factors, which as a whole enable our customers to
purchase household consumption baskets at lower prices. Each of our formats has a differentiated value proposal that aims to satisfy consumption needs for the customer segment it serves.
This differentiated proposal is supported by a culture
of continuous improvement and low cost operations,
which allows us to offer our customers everyday low
prices.
Quality Management
In 2012 the company continued its Food Safety audits
according to the new Walmat format (High Five Audit)
conducted by third parties, specifically for companies
that supply products with a hygiene program (Ecolab
and Diversey).
In addition, HACCP (Hazard Analysis and Critical Control
Points) implementation was strengthened at our stores
in order to guarantee safe food product manufacturing
and handling.
39
Procedural and technical standardization continued in
the following areas:
ʭʭ
Supplier evaluation using technical standards provided by Walmart.
ʭʭ
Nutrition labeling, considerably improving information provided to consumers.
ʭʭ
Signage for all formats, approaching the five basic rules of food safety.
ʭʭ
Specific operating procedures, standardizing the
company’s current procedures with Walmart’s best
practices.
The company has continued to implement Pest Control Audits in accordance with Walmart standards and
has increased monitoring through the application of
internal controls conducted by each supermarket. The
Perishables Supplier Development (PSD) program has
continued for a second year. This project is financed by
CORFO and Walmart Chile, and is designed to develop
SME suppliers in order to reach GFSI (Global Food Safety
Initiative) standards within three years. The Food Safety
Audit program is being continued for Distribution Centers on a monthly basis, applied to the company’s 7 distribution centers.
The Health Safety Campaign “My family’s health is in my
hands” was launched in November 2012. This campaign
aims to reinforce concepts, habits and operating practices to ensure the safety of products we offer to our customers, bringing these concepts closer to our collaborators through a friendly and practical approach.
Important investments were also made for the purchasing and/or renovation of refrigerated counters, which
has improved our operating standards by ensuring that
all of the company’s formats comply with sanitary regulations.
We have participated in working groups together with
the Ministry of Health and all supermarkets in Chile as
a representative before the Chilean Supermarkets Association, ASACH A.G. Working under supervision by the
enforcement agency has helped us to get to know and
apply improvement processes and best practices focused on strengthening the operating model used by supermarkets in Chile.
Productivity and Operational Excellence
The Company focused on implementing initiatives that
are part of a Walmart project at a regional level. These are
executed by multidisciplinary teams, which are guided
by process improvement methodologies and worldclass best practices, seeking to generate improvements
in the store operation model and to help our customers
save money and live better. These initiatives focus on
personnel alignment processes and in-store merchandise management.
Our Store Brands
“Adding value to the perception of everyday low
prices”
We continued to develop our own store brands in 2012
so that our customers can gain access to a wide variety
of quality products that will help them save money and
live better.
Our Líder brand offers quality comparable to renowned
brands at a lower price. Parent´s Choice and Equate perform similarly in the hygiene, beauty and baby products
categories.
The Selección brand, developed in order to offer products with excellent quality at affordable prices, was relaunched.
We also wish to highlight products launched at the end
of the year, including fresh pasta, tomato sauce, chocolate and mustard. All of these products were imported
Management Report
from the countries where the original recipes were developed.
The Great Value brand has been imported from Walmart
United States in order to offer our customers imported
products with superior quality at lower prices.
The Great Value brand continued to grow and consolidate, with better presence at stores and a product range
that has been defined as iconic in our customers’ purchases. Some examples of this are frozen pizzas, ice cream
and cookies, among others.
The Acuenta brand, offers customers who need to save
money a reliable alternative with suitable quality at the
best price in the market.
We are certain that this portfolio of our own store brands
provides our customers quality products with a wide
price range so they can save money and live better.
Presto
Customers can use the Presto credit card to make credit
purchases at all Lider, Express de Lider, Ekono, SuperBodega aCuenta and Lider.cl, and at over 56,000 associated
stores. Services and benefits provided by Presto continue
to be consolidated from year to year as another outstanding element of our value proposal. This helps millions of
customers to make important savings in their purchases
through different initiatives.
We started to renew our image in 2012 and one of the
major objectives has been to establish emotional ties
with our customers, becoming one of the top three
credit card alternatives for women in Chile. We consequently incorporated a new image for our products
and a new communications style by incorporating Karla
Constant as our new face and by empowering the Mi
Club benefits club.
In addition, we started changing to the “New Service Model” for Presto customers. This new format replaces old
closed branches featuring supermarket aisles with an
open space and especially designed and integrated cash
registers. This new model is designed to bring us closer
to our customers and also allow us to operate the bu-
41
Own Store Brands
Food
Health and Wellness
Sports
Home
Electronics
Hardlines
siness more efficiently and productively by centralizing
our back-office operations.
Seven branches were migrated into the new model
in late December 2012 and the conversion plan will
be completed for the rest of the branches lined up for
change in 2013.
At same time, incorporation of Presto customer service
started in order to improve customer service (CS) at Express de Lider stores.
Mi Club
This program was implemented in 2006 and has become
one of the pillars of Walmart Chile’s customer loyalty
strategy. The program offers important benefits to customers who choose to buy at the company’s supermarkets
or who make purchases using their Presto card at different associated stores that accept the card.
Program benefits were relaunched in September, incorporating new important categories for our customers.
Our customers can now use their Presto card every day
of the week, from Monday to Sunday, and accumulate
additional Mi Club Pesos in new categories such as
apparel, diapers, wine and detergent, in addition to the
already existing meat, fruit and vegetables categories.
Mi Club has become an essential tool for the value proposal we offer by rewarding customer loyalty and thus
increasing their purchasing frequency. It has also improved the segmentation and effectiveness of commercial
efforts.
Sustainability
Walmart Chile incorporates sustainability as a fundamental pillar in its day-to-day dealings, recognizing that a business can be efficient and profitable while also being
responsible with regard to people and the environment.
Its commitment is to management that harmoniously
integrates economic, social and environmental aspects.
Management Report
Revenue up 11.1%
Revenue from ordinary activities climbed to CLP
2,892,802 million, up 11.1% compared to CLP 2,604,483
million reported in 2011.
28 New Supermarkets
Five new Ekono, 13 SuperBodega aCuenta, 7 Lider and 3
Express de Lider stores were opened, amounting to 28
new stores for supermarkets in 2012.
Walmart Chile was recognized by industry suppliers as
the Best Retailer among its national competitors, according to “The Advantage Mirror Report” report published
by international consultants The Advantage Group.
Walmart Systems Integration
Progress was made on the implementation of systems
and procedures Walmart uses at a global level in all
of the company’s areas in 2012. We wish to highlight
SMART implementation at 127 Ekono and 2 Lider stores, as well as at 4 distribution centers. In addition, over
230 suppliers were registered in Walmart’s management
platform Retail Link.
new supermarkets
In order to strengthen commercial relations with
suppliers with merchandise in order to facilitate the operation and thus ensure that the company’s mission is
achieved, 100% of our products were backed by a formal
agreement (APC).
The Great Value Brand is Consolidated
Growth and consolidation of the US brand Great Value
were strengthened, becoming a customer favorite, especially for frozen pizzas, ice cream and cookies.
The Best Retailer
28
100% Of All Products Backed by a Formal
Agreement
Commitment with Women
In keeping with its commitment to women’s economic
development, diversity and fair and inclusive trade, the
company and Women Entrepreneurs hosted a meeting
with companies managed by women, inviting them to
offer their products and/or services.
Presto, the Card used the Most
The Presto card continued to be the credit card most
used at the company’s different supermarket formats in
2012, with annual sales amounting to over CLP 340,000
million.
100
%
of our products were
backed by a formal agreement (APC)
43
11
Revenue up
.1%
Management Report
Image Change
In order to create emotional ties and consolidate its position as one of the three most important credit card
payment alternatives preferred by women in Chile, the
Presto image was renewed by incorporating Karla Constant as the new face for the brand.
New Service Model for Presto Customers
In pursuit of continuous improvement, implementation
of a “New Service Model” was started for Presto customers. This new model was designed to bring the company closer to customers and also to operate the business more productively and efficiently by centralizing
back-office operations.
Innovation in Purchase Payment
The first application in South America for payment using
smart phones was launched so that customers could use
this system for their purchases at Lider and Express de Lider stores. In addition, the application allows customers
to make money transfers, consult product prices and
identify locations of the closest stores.
The growth of each of our
employees depends on their
effort and all the information we
can give them.
Servifácil is Consolidated
The Servifácil bill payment service continued to grow.
Over 3 million payment transactions were completed (up 45% compared to 2011), with total collection
amounting to over CLP 70 billion.
The New Mi Club Benefits Program
A new Mi Club benefits program was launched in September. With new peso accumulation categories, Mi Club
provides access to benefits every day of the week.
Integral Operation of the Lo Aguirre Distribution
Center
The Lo Aguirre distribution center started integral operation and became one of the most modern distribution
centers in South America. Surface area at the center
amounts to 58,000 m2 and it has an automatic sorter that
produces up to 250 thousand boxes per day, which can
be expanded to 320 thousand over the medium term.
This will increase inventory management efficiency.
45
3
more than
Implementation Of The Walmart Gls System
Former warehouse management systems (WMS) were
migrated into the Walmart GLS system at the Lo Aguirre,
Temuco, Chillán, Antofagasta and Quilicura Apparel and
Materials.
thousands
collaborator promotions
Lider.cl Growth
Lider.cl reported 13.7 million visits per year (up 95% compared to 2011), together with three-digit sales volume
growth. The number of products available went from
10,000 up to 15,000, becoming a real complement to the
company’s direct supply.
Over 507,000 Training Hours for over 23,000
Collaborators
340,012 training hours were completed, together with
167,248 hours of e-learning training. 23,645 collaborators participated in these training sessions from Arica to
Punta Arenas.
Financing
In November the company registered a new bond line
for a maximum amount of UF 12.5 million at the Superintendence of Securities and Insurance.
Over 3,000 Promotions
As one way of promoting commitment, the company’s
policy of filling vacancies by favoring internal candidates
led to 3,176 collaborator promotions in 2012.
Global Shared Services Project
As part of Walmart’s global initiative, transactional finance processes were migrated into the Global Shared
Services (GSS) center for LATAM in Costa Rica.
Sustainable Energy Supply
The company started tenders for approximately onethird of its power supply demand to companies providing non-conventional renewable energies.
Management Report
The company’s activities are exposed to different financial risks:
ʭʭ
a) Market risk
ʭʭ
b) Liquidity risk
ʭʭ
c)Credit risk
The company’s global risk management program focuses on the uncertainty of financial markets and attempts
to minimize potential adverse effects on the company’s
financial profitability. The company uses swaps to cover
some of the aforementioned risks.
Market Risk
Considering the nature of its operations, the company is
exposed to the following market risks:
Exchange rate risk
Exchange rate risk is the risk of changes in market prices
because of changing foreign currency exchange rates
affecting the Group’s income or the value of its financial
instruments. Exchange rate risk management aims to
control the aforementioned exposure due to changes
in the market for this reason at reasonable parameters
while optimizing profitability.
The functional currency used by the Group is Chilean
pesos for setting prices for its services, establishing its
balance sheet and determining effects on operating income.
The company did not have accounts receivable in foreign currency as of 31 December 2012.
Sixty-two percent of the company’s financial debt is expressed in Unidades de Fomento, 29% in Chilean pesos
and 9% in US dollars. The company had a financial debt
balance of US$ 122 million in foreign currency as of 31
December 2012.
The observed US dollar value came to CLP 479.96 as of
31 December 2012, down 8% compared to the closing
value of US$ 519.20 as of 31 December 2011.
Sensitivity analysis was executed considering the aforementioned values in order to determine how the
company’s income was affected by exchange rate variation, considering the portion not covered by the natural
hedge between assets and liabilities in foreign currency.
This was sensitized considering ±10% variations in the
observed US dollar value as of 31 December 2012.
47
The corporation had financial assets in foreign currency
amounting to US$ 40.4 million as of 31 December 2012.
Al 31 de Diciembre de 2012, la sociedad mantiene activos financieros en moneda extranjera por MMUS$40,4.
2012 Scenarios
US$-10%US$ closureUS$+10%
DatesUS$ th
CLP th
CLP th
CLP th
As of 12-31-2011 80,434
18,528,578
20,587,309
22,646,040
As of 12-31-2012 3,466
268,643
298,492
328,342
US dollar/Chilean peso Effect on exchange
rate adjustments December 2012
upon closure
income CLP th
+10%
(29,849)
-10%
29,849
According to the above table, this sensitization meant
that the effect on the company’s profits could have increased (decreased) by CLP 29,849 thousand throughout
the period, in the event of ± 10% variations in the US
dollar value observed as of 31 December 2012.
Cash flow interest rate risk
The company’s interest rate risk stems from the debt it
maintains with third parties. Variable rate debt exposes
the company to the risk of cash flow interest rates. Debt
with fixed interest rates exposes the company to the risk
of interest rates with reasonable value.
In this sense, the company has low exposure to risk associated to interest rate fluctuations in the market, since
an important percentage of its debt is structured at fixed
rates, either directly or through derivative contracts.
After conducting a sensitivity analysis of the debt portion with variable rates, net of hedging, the effect on
the company’s income under a scenario in which rates
would have been 5% higher than current rates, with all
other variables remaining constant, would be losses before tax interest up by CLP 696,450.
The company has hired a Cross Currency Swap, which is
used to transform the debt in Chilean pesos to unidades
de fomento and to trasform the variable rate to a fixed
rate.
Inflation variation risk
Inflation variation risk is the risk that market price changes due to internal inflation in Chile could affect Group
revenue or the value of its current financial instruments.
Inflation risk variation management aims to control exposure to changes in the market for this reason at reasonable parameters and to optimize profitability at the
same time.
As of 31 December 2012, the company kept 62% of its
financial debt expressed in Unidades de Fomento (UF),
which produces a valuation effect compared to Chilean
pesos. In order to scope this effect with regard to income
before tax, this readjustment unit was sensitized by +/5% for next year, with all other variables remaining constant.
If the UF had increased by 5%, the effect on income before tax would have been losses amounting to CLP th
20,741,407.
Liquidity Risk
Liquidity risk is defined as the probability of monetary
loss for a corporation because of difficulties in meeting
its short-term obligations and/or difficulties when it comes to getting funding in order to continue normal operations. This means that the company may eventually be
unable to meet the contractual commitments taken on
with its creditors on time and as required, and may be
unable to execute its business plans because of the average time difference between cash in and cash out.
Management Report
Reasonable liquidity risk management means that the
company keep have enough cash and ensure that financing is available by means of enough committed credit
facilities and the capacity to liquidate market positions.
The Administration monitors the company’s cash position on a daily basis and constantly makes cash position
estimates in order to pay, prepay, refinance and/or take
out new loans in accordance with the company’s cash
flow generation capacity.
Moreover, as of 31 December 2012, the company had
duly approved and renewable short-term credit lines,
which reasonably reduced liquidity risk.
Credit Risk
Credit risk is managed by groups of customers and the
objective is to keep all loan portfolios evaluated on an
ongoing basis in order to constitute sufficient provisions
required by the eventual non-recovery of loans granted
in a timely manner.
The company evaluated the Presto portfolio as a group,
mainly due to three considerations:
ʭʭ
Loans are granted to natural persons.
ʭʭ
There is a high volume of completed transactions.
ʭʭ
The amount of credit given to each customer is low.
In order to evaluate and constitute provisions, the portfolio is broken down by types of debtors and credit
down to the levels considered to be appropriate. The
Presto portfolio currently shows only operations that can
be classified as consumption.
Losses are measured under the following accounts:
effective portfolio Provisions, Sanctions and Recoveries.
The loss ratio to be considered is determined by the quotient between the indicated accounts and the amount
loaned or sold on each occasion.
The following information is considered for this model:
ʭʭ
Normal portfolio: this is broken down into Cash Installments, Credit Installments, Revolving Debt and
Cash Advances.
ʭʭ
Renegotiated portfolio: the number of renegotiations and credit history are managed.
Investment and Financing Policies and Restriction
Associated to Third Parties
The company invested US$ 337 million in new projects,
expansion and remodeling of supermarkets and shopping centers in 2012.
As of 31 December 2012, the company’s issued E series
remained in force for bond line N° 492 registered in 2007
and series A for bond line N° 162 registered in 1992 and
series B for bond line N° 463 registered in 2006 through
its real estate subsidiary.
In addition, the company registered a new bond line
for a maximum amount of UF12.5 million in November
2012, which was registered as number 739 at the Superintendence of Securities and Insurance.
49
According with bond issuing contracts for bond lines N°
162 and N° 463, the company is required to comply with
the following financial indicators:
ʭʭ
Maintain a level of indebtedness less than 1.3 times,
calculated as the quotient between total liabilities
and total equity.
ʭʭ
Maintain real estate assets for an amount equivalent
to or greater than UF12 million, considering total property, plant, equipment and investment properties
corresponding to lots were facilities could potentially
be commercially exploited or leased. In turn, these
assets must be leased to Walmart Chile S.A. or to any
other related corporation, maintaining contracts that
will remain in force until at least 31 October 2025.
ʭʭ
Maintain consolidated net worth amounting to a minimum UF 12 million.
Each of the aforementioned conditions were amply met
by 31 December 2012.
Feller-Rate kept its risk rating the same, highlighting
the company’s leadership, multiformat operations with
widespread market coverage and strong financial and
operational backing by Walmart Stores Inc. as positive
underlying factors for this rating. With regard to risks, the
agency mentioned industry competitiveness and concentration, the sensitivity of economic cycles and tighter
regulatory restrictions for the financial business.
In turn, Fitch Ratings kept its rating the same, indicating
the company’s multiformat strategy, its market leadership position and steady growth rates for the retail business as some of the relevant factors behind the rating. It
also highlighted financial support by Walmart Stores Inc.
and moderate risk attributed to the company’s financial
services subsidiary Presto.
Feller RateFitch Ratings
SolvencyAAAA- (cl)
PerspectiveStableStable
Shares
Risk Rating
Risk ratings assigned to the company by Feller-Rate and
Fitch Ratings are a reflection of our leading position in
the supermarket industry, explicit backing by our controlling shareholder, establishment of and compliance with
more conservative business and financial policies, as well
as steady and ongoing improvements in operating performance.
1st Class Level 4Level 4
Bond Line N° 492, Series EAAAAAA (cl)
Bond Line N° 162, Series AAAAA- (cl)
Bond Line N° 463, Series BAAAA- (cl)
Bond Line N° 739AAAA- (cl)
Supermarkets
4
Management by
Business Segment
The Real Estate
Business Unit
Other Businesses
Distribution and Logistics
Financial Services
4 Supermarkets
Management by Business Segment
The parent company leading the retail division is Walmart Chile Comercial S.A., which has subscribed and
paid-in capital amounting to CLP th 90,363,559 as of 31
December 2012. Walmart Chile directly and indirectly
controls all of the corporation’s capital rights without
reporting variations in this ownership or how control is
maintained. Besides the supermarket business, the retail
division incorporates other business segments such as
the LTS logistics division, the e-commerce division, the
Restaurants Group division, the Food and Services industrial division and recently incorporates the wholesale
format, which will start operations in the first quarter of
2013.
At the end of the fiscal year, the company had a total 72
Líder stores and 64 Express de Lider stores, 64 SuperBodega aCuenta and 127 Ekono stores, coming to a total
748,900 m² of selling area.
CLP
The Supermarkets division is the company’s main business and growth engine. This division operates using a
multi-format strategy, where each format has different
value proposals for each group of target customers. The
Lider, Express de Lider, Ekono and SuperBodega aCuenta
formats evidence healthy performance in this strategy.
Overall 2012 supermarket format sales came to CLP mn
2,725,725. The relative participation of the Lider format
amounted to 67.4%. In turn, Express de Líder accounted
for 18.2%, while the SuperBodega aCuenta format and
the Ekono format amounted to a respective 10.6% and
3.8%.
2,725,725
million in 2012 Supermarket sales
748,900 m
2
of selling area
4 formats
Lider, Express de Lider, Ekono and SuperBodega aCuenta
Performance at Our Stores
(Number of stores)
277
250
314
327
51
64
137
127
38
194
26
11
110
118
71
45
47
53
57
64
67
67
68
69
72
2008
2009
2010
2011
2012
53
28
news
stores in 2012
We wish to highlight the focus for the Ekono format in
2012 was to profitize the operation, which led to the decision to close 15 stores in order to constitute a solid business foundation to ensure organic growth in the future.
Selling Area Performance
(m2)
800
125,179
700
600
73,162
70,304
500
67,961
43,856
44,210
19,707
28,812
95,973
46,817
54,079
82,832
89,961
49,776
101,426
xx
400
300
451,797
445,597
429,038
454,015
472,519
xx
200
100
0
2008
2009
2010
2011
2012
4 Supermarkets
Every day
low prices
Easier
and faster!
An economic hypermarket espousing the “one-stop
shopping” concept. It typically has a wide variety of products, with non-edible household products, household
appliances, electronics, textiles, hardware and toys, as
well as traditional lines of edible products. This format
features an average 6,600 square meters of selling space.
CLP
1,838,656
CLP
472,519 m
101,426 m
million in 2012 sales
2
total selling area
67.4 %
of total sales in the retail division
72
stores throughout the country
3
new stores opened in 2012
Breakdown of supermarket total sale
EKONO 3.8 %
ACUENTA 10.6 %
EXPRESS DE LIDER 18.2 %
LIDER 67.4 %
A traditional supermarket corresponding to the “easy
shopping” concept. This supermarket offers fast service
and a good variety of food products. The sales focus is
on perishable food such as fruit, vegetables, fresh meat
and prepared dishes. This format features an average
1,600 square meters of selling space.
495,406
2
total selling area
18.2 %
of total sales in the supermarkets division
64
7
55
Proximity and
low prices!
Always
cheaper!
A supermarket that meets the purchasing needs of lowincome segments, developing a value proposal based
on offering customers the lowest prices in Chile. It focuses on selling plain and simple food products with a
large percentage of store brands. Selling space in this
format amounts to an average 2,000 m2.
CLP
287,823
125,179 m
2
de superficie total de venta
10.6 %
64
13
This format corresponds to the corner supermarket concept. These typically focus on food, are located in densely populated areas and offer fast service, easy access
and low prices. This format features an average selling
surface of 400 square meters.
CLP
103,840
49,776 m
2
total selling surface
3.8 %
127
5
4 The Real Estate Business Unit
The parent company leading real estate division development is Walmart Chile Comercial S.A., which has
subscribed and paid-in capital amounting to CLP th
432,778,108 as of 31 December 2012.
Walmart Chile directly and indirectly controls all of the
corporation’s capital rights. As part of the company’s integration process, the corporation Saitec S.A. changed its
firm name to Walmart Chile Inmobiliaria in 2011.
Planning and Finance
The Planning and Finance department, through its planning and studies department, is responsible for determining the company’s strategic route by means of market
understanding, evaluating potential expansion zones,
planning new locations and analyzing sector variables
that affect growth performance at a national level.
With over 25 years of experience in the development
and management of supermarkets and shopping centers throughout Chile, Walmart Chile Inmobiliaria provides national real estate coverage from Arica to Punta
The different processes executed by the area are handled together with the Shopping Centers, Lider, Express
de Lider, SuperBodega aCuenta and Ekono divisions in
order to make growth decisions in accordance with each
of the markets the company operates in.
2
shopping
centers
In order to meet its objectives, Walmart Chile Inmobiliaria
divides its operations into four business areas: Planning
and Finance, Development, Projects and Commercial.
This division is responsible for executing real estate development required by Walmart Chile and for profitizing
real estate assets required by the company and its subsidiaries. This is done by developing and using profitable
and efficient business models, making good use of existing locations and developing strategic alliances with
other operators in the commercial sector.
624,142 m
built at
Arenas and is one of the main shopping center operators
in Chile in the neighborhood store format segment.
57
In order to achieve this objective, a series of regular studies and analysis are conducted in order to enable a better demographic understanding of the country, expense
distribution, consumer behavior and retail sector performance.
In turn, the Procurement Division is responsible for purchasing all equipment required for the different projects
developed by the real estate business unit, which include new supermarkets and shopping centers, remodeling, expansion and new distribution centers.
Development
Once the company’s potential growth zones have been
determined, the Development department is responsible for surveying suitable locations in accordance with
market conditions required by each of the company’s
formats and for managing negotiations in order to consolidate growth in Chile, in line with Walmart’s expectations.
The process features a detailed analysis of each site, taking into consideration factors such as pedestrian access, potential store visibility, nearby housing, security
in the area and commercial development. Each of these
factors is weighted according to Walmart Chile’s own
knowledge of its operation and the value proposal for
each of its different commercial formats.
Projects
Once locations and project types have been decided, a
team of architects works with the company in order to
complete the process. In order to ensure a higher degree
of efficiency and specialization, the area divides its actions into supermarket and shopping center projects.
In 2012 the real estate division opened 28 new stores for
supermarkets (5 Ekono, 13 SuperBodega aCuenta, 3 Lider and 7 Express de Lider) and completed 419 remodeling projects. Surface area at new supermarkets opened
came to 79,807 m², of which 57,149 m² corresponds to
selling space, without including expansion.
Overall investment in new supermarket and shopping
center projects, expansion and remodeling amounted
to approximately US$ 337 million in 2012.
The Commercial Department
The Walmart Chile Inmobiliaria S.A. commercial department mostly focuses on leasing and managing
shopping centers. Consequently, once real estate development and construction has been completed, this
department places and manages stores and spaces available for lease.
The division reported over 58 million visitors at its shopping centers, highlighting Espacio Urbano 15 Norte in
Viña del Mar with nearly 16 million visitors per year.
Walmart Chile Inmobiliaria is currently one of the leading
operators in the shopping center industry, with 12 locations between Antofagasta and Punta Arenas, 543 stores
for lease and over 624,142 m² built.
12
shopping centers
28
new stores for supermarkets in 2012
543
stores for lease at shopping centers
4 Financial Services
This division provides financing for its customersby
means of the Presto credit card for purchases at different
Walmart Chile supermarket formats and at over 56,000
associated stores throughout Chile. The card can also be
used for cash advances, consumer credit and to hire different products and services, including insurance, travel
and bill payment, among others.
The Presto Card
The Presto Card was created in May 1996 and was designed to become the most economic, convenient and
easily accessed payment alternative for the company’s
customers. The card was became the first “oapen” nonbank credit card in 2005. The Presto Card is currently
accepted from Arica to Punta Arenas in Chile, with 180
branches and service modules, as well as widespread
ATM coverage. The Presto Card portfolio consists of 1.45
million customers who prefer this card as their payment
option.
At the end of 2012, Presto is still the leading credit card
used for payment at Walmart Chile stores, reporting annual sales amounting to over CLP 340 billion between its
different formats.
Family Insurance
We continued the stategy of empowering and complementing coverage of our card outside of our stores in
2012 by means of campaigns with associated business
and large-scale alliances with drugstores and gas stations. Crosswise actions were empowered between Walmart customers, providing benefits at associated stores.
Sales at these stores accounted for 19% of overall Presto
Card sales. In addition, substantial progress in Presto
Card account collection was made in coordination with
Servifácil, with transactions up 45% compared to 2011.
Insurance
Important changes took place in the industry throughout 2012. Voluntary insurance policies were first offered
in January of this year, which was an important commercial challenge. Most of the products we offer were
renewed and the focus was always on providing greater
transparency with our customers, simplifying products
with straightforward but top-value alternatives. These
strategies allowed us to recover our sales volume.
Throughout this period, the insurance division reported
volume amounting to over CLP 36 billion in intermediate
59
premiums and revenue from commissions, which account for 10% of total income for the Financial Services
subsidiary.
Savings
The mutual funds business also went through important
regulatory changes, paving the way for the creation of
new savings products and thus continuing a distinctive
supply of goods for sale.
Consequently, new insurance products with savings
components were launched in the middle of the year,
which allow our customers to keep saving and completing these savings with the benefits of life insurance in
the event of accident or death.
Revenue Collection
In 2012 the revenue collection business segment continued to improve its services and market share, incorporating new companies where Walmart Chile customers
can pay their bills. In addition, new self service points
were replaced using state-of-the-art equipment in order to improve the customer experience. Growth held
steady in 2012, collecting of 3 million payments with
amounts comuing to over CLP 70 billion, up 45% compared to transactions and commissions reported in 2011.
145
.
Travel
Presto Viajes is the Presto travel agency. The agency was
created in order to offer all of its customers the best travel deals and the lowest prices. The Presto Viajes team of
specialized travel consultants is available to answer any
questions and to provide top-notch service.
Credit
By means of its avances and súper avances programs,
the Financial Services division offers consumer credit to
its Presto card customers.
million
active accounts
CLP
103,592 mn
CLP
281,000 mn
in credit sales
in placement stock
1,900,107
active insurance policies
11,500
insurance policies with savings
56,000
associated stores throughout Chile
4 Distribution and Logistics
The LTS distribution and logistics
center is the unit in charge of reception, storage, distribution and transport for 71% of the products commercialized in all of the
company’s stores and formats.
LTS currently has nine distribution centers throughout
Chile. The following table describes each of these:
Distribution CenterRegionSurface Area (m2)
Dry merchandise,
QuilicuraMetropolitan Region
54,607
Perishable merchandise, QuilicuraMetropolitan Region
25,082
Dry merchandise with automatic
sorter, Lo Aguirre.Metropolitan Region
58,000
Store brand warehouse,
La Farfana, Pudahuel.Metropolitan Region
12,663
General merchandise, Pudahuel.Metropolitan Region
89,236
Ekono distribution centerMetropolitan Region
15,830
AntofagastaAntofagasta Region
3,000
ChillánBio Bio Region
7,840
TemucoAraucanía Region
6,591
Walmart Chile works with over 1,380 national suppliers in
a centralized manner and has important overseas supply
sources by means of different trade agreements. Merchandise is mostly purchased immediately or by means
of short-term operations within a context of long-term
relations with suppliers.
Our main achievements in 2012 include starting integral
operations at the Lo Aguirre distribution center, which
aims to become one of the most modern distribution
centers in South America. Located in the district of Pudahuel, the surface area of this distribution center comes
to 58,000 m² and it features an automatic sorter with
maximum independent production capacity of 250,000
boxes per day, which can be increased to 320,000 over
the medium term.
This major technological advance enables the redistribution of circulation flows by modifying cost structures and
cash register replacement at our facilities, thus reducing
the company’s inventory days. In addition, productivity
is expected to increase by 30%, with less merchandise
being sent to the wrong stores.
In addition, the company continues to invest in technological developments to increase distribution center
productivity.
Walmart Chile purchasing is mainly handled by the LTS
supply area, which allows the company to make orders
required for stores considering different factors, such
as delay time for the reception of merchandise sent by
suppliers, peak demand during certain seasons of the
year, product condition, and the bridging of operating
gaps, among others.
Another important milestone in 2012 was conversion of
warehouse systems (WMS) to Wal-Mart GLS systems. The
following distribution centers successfully implemented
the new systems: Lo Aguirre, Temuco, Chillan, Antofagasta and Quilicura Apparel and Materials.
80%
7.91%
was the
average fill rate in 2012
272,849 m2
in distribution centers
93.01%
in stock for 2012
growth in boxes
transferred from
the distribution center
to stores compared to 2011
61
1575
.
%
increase in transfers compared to 2011
4 Other Businesses
Lider.cl
During its second year of operation, Lider.cl increased its
annual visits from 7.03 million to 13.71 million, reporting
triple digit growth in sales volume compared to the year
before.
For this same line the range of good and general merchandise products went from 10,000 up to 15,000 products, a real complement to the traditional retail busi-
ness proposal. Finally, in 2012 Lider.cl became the first
retail store in the world to make general merchandise
products available in Antarctica, Juan Fernández Island
and Easter Island, as well as another 180 branches and
Chile’s National Postal Service’s Citibox mailboxes distributed throughout the country.
The Walmart Chile Restaurants Group
The Walmart Chile Restaurants Group develops and operates restaurants, self service restaurants and cafeterias
designed for specific customer needs and occasions.
With 50 points of sale (2 grills, 11 buffets, 33 Revive Lunch,
1 Pio, 3 Revive restaurants) in supermarkets and shopping centers, these spaces are an interesting alternative
for lunch, dining, sharing a coffee or ice cream cone and
having a good time with friends and family.
In addition, the Restaurants Group has two production
plants, one for Buffet brand homemade ice cream and
another plant that makes sandwiches and salads.
63
5
million
active members of Mi Club
Alimentos y Servicios Ltda.
Alimentos y Servicios
Walmart purchased a 100% stake in Food and Services
in 2011. This business segment thus contributed steady
and profitable growth to the Perishables value proposal with a constant focus on adapting EDLC by means
of efficiency and innovation for over 200 products from
the following categories: fish, flowers, prepared dishes,
confectionery and baking. In addition, funding was provided for construction of a new bakery line, substantially
increasing installed capacity at Walmart’s current facilities in Quilicura.
Mi Club Lider
Mi Club is a customer loyalty program that rewards Walmart Chile customers by accumulating and returning
money (Mi Club pesos, not points) every three months
in the form of a Savings Check. All purchases accumulate
Mi Club pesos and our customers can accumulate more
Mi Club pesos when using their Presto card at Lider and
Express de Lider. The program also rewards customers by
providing discount coupons and exclusive offers.
There were over 5 million active members of Mi Club
at the end of 2012 and over 4.8 million savings checks
were issued for customers, amounting a grand total of
approximately CLP 23.5 billion.
5
Social Commitment
Commitment with
Our Collaborators
Our Commitment
to the Community
Our Sustainability
Commitment
Social Commitment
Walmart Chile employs over 45,000 people from different origins, of different ages and with different socioeconomic conditions. The company provides tools so
that its collaborators can further their personal development in a healthy manner, encouraging teamwork and
participation areas in order to grow both personally and
professionally.
Our Commitment
Encouraging and maintaining strong commitment levels is the hallmark of Walmart Chile. Commitment is the
foundation of our culture and plays an essential role in
the company’s success. High commitment levels help
collaborators feel respected, provide quality customer
service and seek levels of excellence.
Walmart Chile conducted a Collaborators Opinion Survey (COS) in 2012 for the third year in a row. This commitment assessment instrument is used in all countries
where Walmart operates. Results produced (FY13) were
satisfactory for the company and this was allegedly due
to Commitment Strengthening Program focusing on
the operation. This program aimed to strengthen our
collaborators’ commitment to the Lider and Express de
Lider formats through meetings with random groups
One of Walmart Chile’s
of workers using a guided conversation methodology
to approach the most important issues discussed in the
2011 COS.
Internal Communication
Walmart Chile uses effective internal communication
to promote the organizational culture that has become
our hallmark. Along these same lines, encouraging continuous improvement in terms of the service we provide
to our end customers in a fundamental part of our daily
efforts. Regarding this challenge, in 2012 we developed
and implemented the “put yourself in your customers’
shoes” internal communication campaign for the entire
organization. We used graphic displays and information
to make collaborators aware of concepts and good practices associated to better service, which finally marks the
difference with regard to our competition and makes
customers prefer us. In addition, we encouraged a “behavioral decalogue for excellent service”.
Faced with the mission of becoming a strategic partner
for the business, this year the Internal Communications
area adapted to the industry’s needs and contingencies
by developing a food safety campaign that was implemented in its four retail formats. The campaign slogan
was “My family’s health is in my hands” and it promoted
five basic rules for safe food handling, showing even our
collaborators’ families that this issue is of vital importance
because it involves the health of our families and customers.
These communication initiatives incorporated in 2012
are part of the overall strategy, including internal marketing campaigns, internal media and corporate events
designed to promote communication and encourage
commitment for employees working at this organization.
focal points is personnel
management and planning,
ensuring that the best people are
hired to fill vacant positions. One
of the Company’s policies is to
favor internal candidates at first
instance.
Benefits
Walmart Chile constantly ensures that different support
and guidance programs are updated regarding personal,
family and workplace aspects of daily living in order to
improve quality of life for workers and their families.
In 2012 the focus was on creating lines of communication with collaborators by means of the Agreements and
Intranet Guide, in order to communicate the benefits,
new agreements and activities designed to help make
work and family life compatible for the highest possible
number of collaborators throughout Chile.
67
As for healthcare, the company’s agreement with private
healthcare provider Isapre Consalud was expanded in order to help workers that are currently covered by Fonasa
to qualify for a health plan suited to the 7% deducted
from their salaries for healthcare and providing benefits
entailed by a healthcare plan with a private agency. In
addition, complementary health insurance received by
all collaborators with indefinite employment contracts
was renewed. This insurance guarantees policyholders
reimbursement for a high percentage of health expenses not covered by public or private health systems. The
company also encouraged incorporation of disaster insurance to help leverage steep medical expenses.
Sports activities were held in order to encourage healthy
living and these were complemented by medical examinations at public health clinics and weight-size-body
mass index measurement throughout the entire country.
In addition, activities such as massive 5-km races were
organized for collaborators, together with recreational
activities for collaborators’ children (Christmas activities
benefit over 21,000 children up to the age of twelve).
As for education, the Company offers the Scholastic Encouragement Program in order to encourage academic
excellence for collaborators and their children. 1,175
scholarships were awarded for elementary and high
school, technical and university programs. In addition,
collaborators’ children with learning disabilities attending special education establishments were awarded for
the first time. These children received a financial award
and a special diploma at a moving ceremony.
Incorporation and Development of Talent
One of Walmart Chile’s main challenges is to be the best
retail company in Chile. This means that one of its focal
points is personnel management and planning, ensuring that the best people are hired to fill vacant positions.
One of the Company’s policies is to favor internal candidates at first instance.
An outstanding project in terms of the recruitment and
development of young talent is the first yearly version of
the Walmart Chile Retail Trainee Program. This program
aims to “train professionals to develop an overall and
interrelated understanding of the Company, enabling
these professionals to contribute a strategic and innovative outlook based on this vision”. Young professionals
from renowned universities were incorporated and given the opportunity to consolidate a gradual learning
process regarding Walmart Chile’s complexity and organization in order to subsequently fill a specific position.
This program provides the following:
ʭʭ
An integral and overall understanding of Walmart
Chile
ʭʭ
Theoretical and practical instruction regarding the
different areas
ʭʭ
A mentor and HR coordinator for trainees
ʭʭ
A tutor for the young trainees
Nine professionals (five women and four men) graduated from the trainee program in July 2012. These all filled
permanent positions by October 2012.
Effective collaborator management is provided by
means of Performance Management, which is executed
using two methodologies:
Performance Evaluation:
All collaborators participate, with the exception of contact personnel (those who work directly with customers).
This evaluation assesses objectives and competencies.
Two new categories were developed in order to ensure
continuous improvement in 2012:
ʭʭ
a) Strategic Objectives were cascaded based on five
strategic pillars: Profitable Growth, the Best Customer Experience, EDLC, People-Talent Development,
Corporate Responsibility-Sustainability, Diversity and
Inclusion.
ʭʭ
b) Performance Evaluation by an Internal Customer:
Service is essential for achieving results at our company. Consequently, a pilot program was designed
this year in order to include internal customers in our
performance evaluation. The human resources area
was assigned to participate for all positions that have
two reports: a direct report and a functional report.
One of the benefits is that the people involved will
be able to further their own development as they understand how the service they provide is perceived,
identifying what should remain the same and what
they can improve.
Feedback:
Contact personnel also participate, receiving their first
feedback three months after they are hired and then
once every six months.
Leadership Program:
In order for our executives to align their leadership style
with the style specified by Walmart at an international
level, in 2012 we hosted a leadership and strategic align-
Social Commitment
ment program in Chile.
Sixty-four executives belonging to the first and second
line of CEO reports attended the program. The methodology used was based on group work by real groups, as
well as coaching sessions coordinated by external consultants with outstanding expertise. Each leader attending this program completed 18.5 training hours.
Training
Contributing to its collaborators’ education and development is a priority for Walmart Chile. Integral and qualified
employees seeking excellence in their daily activities are
fundamental in order to achieve goals and objectives
that have been set.
Consequently, the Company has a Walmart Chile Studies
Program in order to ensure that its collaborators can gain
new skills and/or know-how to support their education,
personal and professional development. This program is
comprised of the following components:
The Completion of Studies Program:
This program is designed for all collaborators who wish
to complete their elementary or high school studies.
The Specialization Diplomas Program:
This program promotes collaborator training and education by means of an extensive range of post-graduate
diploma programs, whose design and contents have a
real impact on the management and development of
our business. These are designed in two extensive lines
of studies: Business Management (post-graduate diplomas in Retail Management, Commercial Management,
Project Direction and Personnel Management) and Operations Management (post-graduate diploma in Sales
Management, Customer Management and Logistics and
Operations Management).
The Higher Education Scholarships Program:
This program supports the professional development of
collaborators who are currently completing university
studies for a technical, university or graduate degree at
any of the educational institutions in Chile.
One of the Company’s main focal points is to provide
solid cultural underpinnings for our collaborators. We
have a 24-hour culture workshop known as the Walton
Institute, which was designed to make the Company’s
leaders cultural champions, able to lead and drive our
culture toward achieving results. Fifteen workshops were
hosted in 2012, amounting to a total 9,216 hours of culture training for our leaders.
As for overall training results, we wish to highlight that
340,012 classroom instruction hours were completed,
as well as 167,248 hours e-learning instruction with participation of a total 23,645 collaborators between Arica
and Punta Arenas, for a grand total of 507,260 hours of
training in 2012.
Recruitment and Selection
4,575 lateral and upward movements were made at our
company last year. 1,138 of these were the result of internal competitions.
Supporting growth is part of Walmart’s strategic pillars
and in 2012 we opened 28 stores, which required the
incorporation of 2,190 new collaborators. 18% of our
trainees were hired after their trainee period came to an
end.
69
Diversity and Inclusion
A wide range of working teams and cultivation of an
inclusive work environment are essential for Walmart
Chile’s business success. This becomes a constant pursuit
in order to make these objectives a competitive advantage for the Company. Our Mission in this area is to keep
our promise and help our customers save money so they
can live better, supporting us in the power provided by
a wide range of collaborators and providing an inclusive
work environment.
Given the importance of these issues for the Company,
the Diversity and Inclusion Division was created in 2012.
This Division aims to develop actions to promote and
facilitate the construction of a diverse work force and a
working environment in which individual differences are
accepted and appreciated. In addition, the former Council of Women Leaders became the Diversity and Inclusion Council, which is comprised of representatives from
all areas. The Council’s role is to act as a facilitator in order
to achieve the objectives set.
Working Relations
We at Walmart Chile are convinced of and focused on
developing a sustainable working relations model with
long-lasting effects. Management processes were strengthened in 2012 and the most important of these processes was collective bargaining. This bargaining process
involved over 22,000 collaborators throughout the country and successfully concluded with the signing of respective group contracts with staggered maturity dates
in 2015 and 2016. The scenario is therefore ripe for the
continuous improvement of Company-Union relations,
thus ensuring operations management for the business
over the next three years.
The area of influence for the different Walmart Chile businesses was redesigned based on strategic control of risks
involved in the compliance of labor policies (Compliance
Regulatory Risk; labor and employment) in order to build
a working relations model. The Working Relations Management has consolidated its management and control
of compliance and labor risk posed by services rendered
by the outsourcing suppliers, subcontractors and temporary services.
Social Commitment
Walmart Chile is committed to the development of Chile
and its inhabitants, especially communities where the
company operates supermarkets and shopping centers.
The company consequently makes donations, signs
alliances and collaboration agreements with non-profit
institutions working in areas that coincide with he strategic focal points determined by our Social Responsibility
policy, whose main purpose is to help improve quality of
life for vulnerable groups of our society.
Our lines of work include encouraging the economic
empowerment of women in Chile: contributing to eradicate hunger and malnutrition, and providing a space
for moving people (our customers and our workers) to
action in order to help those in need.
One example of this commitment is the strategic alliance
between Walmart Chile and Hogar de Cristo that has
been operating for over 15 years. This Corporate Volunteers Program and Leave Your Change in Good Hands
program are part of this strategic alliance and are part of
the very heart of this company.
Women
Walmart Chile contributes to the economic empowerment of women, supporting the rehabilitation and
inclusion of women who are the victims of intrafamily
violence into the workforce, together with indigenous
microentrepreneurs, small businesses managed by women traders and development of current and potential
women suppliers, among other initiatives.
Women Entrepreneurs:
encouraging women leaders
In addition, the company supports different initiatives
that encourage the integral development of women entrepreneurs, collaborators and professionals by means of
Women Entrepreneurs, providing and opening training,
career development and leadership spaces in order to
increase opportunities for women.
AsociaRSE: Overcoming domestic violence
Together with the National Women’s Service (Sernam)
and Domos Corporation, Walmart Chile participates in
the AsociaRSE program, which aims to train and provide
psychosocial support for women who have been victims
of intrafamily violence, in order to ensure subsequent incorporation into the workforce.
71
This intervention model takes approximately 10 months
and it is designed to develop polyfunctional competencies so that women can get ahead. Walmart Chile
donated CLP 20 million for program execution in 2012
and opened the doors of its Ekono and SuperBodega
aCuenta formats to incorporate the 40 persons benefited by this year’s program as workers at both supermarkets with flexible shifts (30 hours) that help to combine
their jobs and family life.
The results are highly satisfactory and over 85% of these
people were finally incorporated into the workforce.
Hunger and Nutrition
The company collaborates to eradicate hunger and malnutrition by making ongoing substantial food donations
to the needy and by encouraging healthy nutrition for
children attending schools near our supermarkets.
The Food Network:
serving those who need it the most
Walmart Chile is a strategic partner and founder of Corporación Red de Alimentos (Food Network Corporation),
an entity that acts as a bridge between companies that
donate food and non-profit organizations that need
food for their beneficiaries.
Walmart Chile has been donating perishable and nonperishable food to this institution since August 2011. We
were able to deliver important food donations amounting to a total CLP 316,107,524.
Educating for Chile
The company supports Fundación Mar de Chile in its
efforts to create awareness regarding Chile’s national
maritime heritage and to promote the consumption
of fish and seafood by elementary school students at
schools in vulnerable sectors.
Coverage provided by the “Educating for Chile” program
amounted to an approximate total of 6,700 fifth grade
students from a total 106 schools between Arica and
Punta Arenas. Fundación Mar de Chile brought together
parent/guardian associations, visited each class participating in the program and made educational material
and multimedia presentations developed especially for
the program. We wish to highlight that each of the Lider
stores that participated in the program made its facilities
available for the organization every time these were needed, working together with Fundación Mar de Chile in
order to make the initiative a big success.
Strategic Alliance with Hogar de Cristo
The company has been supporting the mission of Hogar
de Cristo over the last 15 years by means of the Corporate Volunteers and Leave Your Change in Good Hands
programs, among other collaborative measures.
Corporate Volunteers
The company uses this initiative to invite collaborators
from different Lider and Express de Lider stores throughout the country to sponsor works managed by Hogar
de Cristo throughout Chile.
The members of our company are seriously involved. In
2012, a total 122 Hogar de Chile projects were constantly
visited by our collaborators, who donated their time, care
and love.
Social Commitment
Leave Your Change in Good Hands
Thanks to an alliance established between Walmart Chile
and Hogar de Cristo in 1996, the company invited its customers to make a donation to the foundation with each
purchase, with a serious commitment made by each of
the cashiers at our stores.
This program is one of the most widely recognized social
support actions by our customers and collaborators. The
program collected CLP 746,203,611 in 2012, all of which
was delivered to Hogar de Cristo.
Funds collected directly benefit people at social risk,
such as abandoned senior citizens, young people with
addiction problems, the victims of intrafamily violence,
preschoolers and infants, among others.
The Growing with You Program
The company funds neighbor associations, parent centers, sports clubs, corporations and foundations that
approach locals asking for donations as one way of improving quality of life in communities where are supermarkets are located.
Projects presented are pre-selected by a Committee
at our stores and then one of the company’s Donation
Committees, which approves or rejects donations proposed. In 2012 a total of 234 projects were approved,
amounting to CLP 142,044,147. Sixty-one of these projects were requested by neighbor associations, sports
clubs, NGOs and foundations, parent associations, youth
organizations and groups. Another 140 projects were
proposed by Hogar de Cristo volunteers program and 33
projects were proposed by Refugio de Cristo volunteers.
These projects were designed to empower monthly
visits by volunteers for projects focusing on improving
infrastructure for projects executed by both institutions
and thus help to improve quality of life for project beneficiaries.
This program is a tool that helps us to get to know different organizations representing the communities living
around our stores, understand their needs on a first hand
basis and communicate our motivations as company in
order to further projects to favor our customers’ welfare.
Social Commitment
73
We at Walmart Chile believe that development of an efficient and profitable business is based on caring for the
world we live in. We want to give our children a better
and cleaner world and therefore our business must be
sustainable, encouraging care of people and the environment. As a company we have proposed this challenge at a global level and everyone at Walmart Chile
works hard each day to make this world a better place.
We have consequently incorporated sustainability by
means of four pillars: People, Products, Energy and Waste.
People
Walmart Chile promotes sustainability culture by disseminating contents and training its collaborators. In
addition, the My Sustainable Plan initiative encourages
collaborators to include sustainable practices in their
personal lives and with their families.
Products
My sustainable plan is a Company program that invites
collaborators to commit to simple and concrete sustainable actions in their daily lives. These help to care for the
environment improve quality of life and human relations
with families, at work and with the community.
We at Walmart Chile are working to bring increasingly
more sustainable products into our sales areas. We do
not want our customers to have to choose between a
product they can pay for and another product that is
good for their families and for the planet when making
a purchase.
In keeping with this concept, we launched the AutoCompartido campaign, a car pooling initiative designed
to optimize vehicle use by our support collaborators in
order to reduce the carbon footprint produced by commuting and to generate savings for the company.
Consequently, in April 2012 we launched the Consortium for Sustainability in Chile, whose Executive Secretariat is headquartered at Fundación Chile. This initiative
seeks to work for a more sustainable world through better products, services and consumption habits.
In 2012 we incorporated the concepts of sustainability
directly into the operation by training the collaborators
at our stores to handle liquid waste. This program trained over 1,200 collaborators in 2012 and we expect to
train over 4,000 collaborators in 2013, thus guaranteeing
standard compliance and the improvement of operating
practices.
Creation of the Consortium for Sustainability in Chile is a
major milestone for the country, in that it brings together
efforts put forth by companies, universities, government
agencies and non-governmental organizations in order
to improve their environmental and social performance
in different process stages.
more than
1,200
more than
4,000
associates were trained
in sustainability in 2012.
associates trained are planned in 2013
Social Commitment
The final and future objectives of these joint efforts are to
provide information to consumers regarding the sustainability of products and services they consume so that
they can incorporate sustainability criteria in their purchasing decisions, thus feeding a virtuous cycle of sustainable production and consumption.
In turn, we encourage our suppliers to seek higher and
higher sustainability standards for the practices and
products, such as reducing packaging material and optimizing transport, as well as the use of sustainable raw
materials, always considering processes from their very
origin and throughout the entire production chain.
Energy
In keeping with Walmart’s global objective to supply all
of its operations using renewable energies, in 2012 we
announced a tender to supply approximately one-third
of our company’s power using non-conventional renewable energies (NCRE). Bids were being pre-qualified
at the end of 2012 and contracts will be awarded in mid2013.
Waste
One of the company’s main domestic and global objectives is to completely eliminate final disposal of waste
produced by our supermarkets and thus reduce our resource consumption and save money for our customers.
In keeping with this objective, this year we have made
progress with the back-office recycling of cardboard and
stretch film discarded after unpacking the products we
commercialize. We have also installed a used plastic bag
collection system at our stores.
This provides more raw materials for manufacturing plastic bags for our customers. These bags currently contain
75% recycled material, the first of their kind in Chile, and
are certified by Universidad de Chile’s research center
IDIEM.
We have continued testing and installing energy efficiency technologies at our stores and remodeling projects throughout 2012. We are currently participating in a
research project with Universidad Católica’s engineering
firm DICTUC about the possibilities of improving air-conditioners’ energy efficiency by using green roof plants.
at
www.walmartchile.cl/
See our
Sustainability
Report
to learn
more
about how Walmart Chile adds value
75
1575
,
by incorporating
sustainability
into the business
%
6
Disclaimer
77
In conformity with current legislation, the undersigned
declare under oath: i) that they have taken cognizance of
the information contained in the individual and consolidated financial statements of Walmart Chile S.A. and its
subsidiaries for the fiscal year ending 31 December 2012;
and, ii) that they assume responsibility for information
contained in the individual and consolidated financial
statements of the Corporation and its subsidiaries for the
fiscal year ending 31 December 2012; all of the above in
conformity with the aforementioned legislation and for
the purpose of submittal to the Securities and Insurance
Supervisor.
Mr. Felipe Ibáñez Scott
Mr. Pedro Farah
Rut: 5.638.122-8
ID: 0-E
Mr. José María Urquiza
Mr. José María Eyzaguirre Baeza
ID: 0-E
Rut: 7.011.679-0
Mr. Enrique Ostalé Cambiaso
Rut: 8.681.278-9
Rut: 9.979.068-7
Mrs. Claire Babineaux-Fontanet
ID: 0-E
Rut: 5.907.040-1
Mr. Nicolás Ibáñez Scott
Mr. Gian Carlo Nucci
Rut: 5.638.106-6
ID: 0-E
Charmain
Director
Director
Director
Director
Director
Director
Director
Director
General Manager
7
Financial Statements
7 Financial Statements
As of 31 December 2012 and 31 December 2011
INDEX
82
89
89
93
105
105
113
115
118
119
121
122
126
130
130
131
135
136
140
141
143
147
150
151
151
151
153
154
156
157
158
159
160
160
160
162
163
165
172
172
176
Walmart Chile S.A. and Subsidiaries
Consolidated financial statements
Notes to the consolidated financial statements
1. Reporting entity
2. Basis of preparation
3. Significant accounting policies
4. Changes in accounting policy
5. Risk management policy
6. Management estimations, judgments and critical criteria
7. Information by segment
8. Cash and cash equivalents
9. Financial instruments
10.Other finanical assets
11.Trade and other accounts receivable
12.Balances and transactions with related companies
13Inventories
14.Investment in subsidiaries accounted for using the equity method
15.Intangible assets
16.Investment property
17.Property, plant and equipment
18.Leases
19.Deferred taxes
20.Other finanical liabilities
21.Trade and other accounts payable
22.Provisions
23.Assets y current tax liabilities
24.Other non-financial liabilities
25.Net equity
26.Income
27.Composition of significant results
28.Income after taxes
29.Earnings per share
30.Contingencies, lawsuits and other restrictions
31.Staff distribution
32.Environment
33.Subsequent events
34.Business mergers
35.Non-current assets or groups of assets for disposal classified as held for sale
36.Pro-forma cash flow statement, direct method
Inversiones Walmart Chile Limitada y Afiliadas
1. Reporting entity
2. Basis of preparation 3. Significant accounting policies
194
194
198
Inversiones Internacionales D&S Limitada y Afiliadas
1. Reporting entity
205
212
Reasoned Analysis of the Financial Statements
Significant Events
188
81
Report of Independent Auditors
(A free translation of the original report issued in Spanish)
To the Shareholders of
Walmart Chile S.A.
We have audited the accompanying financial statements of Walmart Chile S.A. and affiliates (“the Company”), which comprise the
balance sheets as of December 31, 2012 and 2011, and the related statements of comprehensive income, changes in shareholders’
equity and cash flows for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in conformity with International
Financial Reporting Standards; this includes the design, implementation , and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance
with auditing standards generally accepted in Chile. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate
in the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, based on our audits, the financial statements referred to above present fairly, in all material respects, the financial
position of Walmart Chile S.A. and affiliates as of December 31, 2012 and 2011, and the results of their operations and their cash flows
for the years then ended in conformity with International Financial Reporting Standards.
Albert Oppenländer L.
Santiago, Chile
March 27, 2013.
ERNST & YOUNG LTDA.
Classified Consolidated Balance Sheets
As of 31 December 2012 and 2011 (In thousands of Chilean pesos (CLP th))
ASSETS
Note 12-31-2012
CLP Th
12-31-2011
CLP TH
8
43,858,379
42,544,982
10
19,392,604
40,243,620
-
6,812,126
5,225,093
CURRENT ASSETS
Cash and cash equivalents
Other current financial assets
Other current non-financial assets
Trade and other current accounts receivable
11
301,964,523
282,517,789
Accounts receivable from related entities, current
12
1,422,399
-
Current inventories
13
245,144,638
217,100,494
Current tax assets
23
54,756,134
31,309,756
Total current assets other than assets or asset groups for disposal
classified as held for sale or as held for distribution to owners
-
673,350,803
618,941,734
35
-
6,158,823
Total current assets
673,350,803
625,100,557
-
25,473,662
25,012,096
Non-current accounts receivable
11
65,133,730
79,600,103
Intangible assets other than goodwill 15
22,428,921
20,322,247
Non-current assets or asset groups for disposal classified as held as for sale
NON-CURRENT ASSETS
Other non-current non-financial assets
Goodwill
15
29,523,393
29,948,810
Property, plant and equipment
17
1,114,043,374
1,011,784,159
Investment properties
16
127,723,170
129,655,015
Deferred tax assets
19
59,642,301
53,343,901
Total non-current assets 1,443,968,551
1,349,666,331
Total assets2,117,319,3541,974,766,888
The accompanying notes 1 to 36 are an integral part of these consolidated financial statements
83
Classified consolidated balance sheets
As of 31 December 2012 and 2011 (In thousands of Chilean pesos (CLP th))
LIABILITIES
Note12-31-2012 12-31-2011
CLP TH
CLP TH
CURRENT LIABILITIES
Other current financial liabilities
20
381,619,947
132,008,734
Trade and other accounts payable
21
471,536,706
441,500,244
Accounts payable to related entities, current
12
736,080
761,487
Other short-term provisions
22
3,946,052
Current tax liabilities
23
Current employee benefit provisions
22
28,684,557
30,326,249
Other current non-financial liabilities
24
39,648,761
38,971,108
926,172,103
677,305,470
Total current liabilities
-.-
-.-
7,307,859
26,429,789
NON-CURRENT LIABILITIES
Other non-current financial liabilities
20
133,275,573
336,625,456
Accounts payable to related entities, non-current
12
296,495,204
289,398,245
Deferred tax liabilities
19
37,480,529
27,271,190
Non-current employee benefit provisions
22
Other non-financial liabilities, non-current
24
2,954,113
3,780,245
Total non-current liabilities
-
470,205,419
657,135,136
Total liabilities
-1,396,377,5221,334,440,606
-.-
60,000
EQUITY
Share capital
Accumulated income (loss)
Other reserves
Equity attributable to owners of the controlling entity
Minority shares
25
-.-
25
-.-
25
457,867,231
457,867,231
253,425,276
172,618,711
9,622,109
9,815,250
720,914,616
640,301,192
27,216
25,090
Total equity
-.-
720,941,832
640,326,282
Total equity and liabilities
-.-
2,117,319,354
1,974,766,888
Consolidated income statements by function
For fiscal years ending 31 December 2012 and 31 December 2011 (In thousands of Chilean pesos (CLP th))
01-01-201201-01-2011
INCOME STATEMENTS BY FUNCTION
Note
12-31-2012
12-31-2011
CLP TH
CLP Th
Revenue from ordinary activities
26
2,892,801,969
2,604,483,217
Cost of sales
(2,102,693,725)
(1,894,182,401)
Gross income
790,108,244
710,300,816
27
11,161,630
35,030,844
Distribution costs
(31,823,514)
(23,249,065)
Other income, by function
Administrative expenses
27
(555,067,233)
(507,191,180)
Other expenses, by function
27
(36,204,335)
(36,882,196)
Other income (losses)
1,572,232
(361,458)
Financial income
27
967,642
2,252,875
Financial costs
27
(25,501,569)
(20,734,337)
Share in income (losses) of subsidiaries and joint businesses using the equity method
-
(195,679)
27
(245,076)
(6,772,808)
Income per indexation units
(9,971,088)
(15,734,513)
Income (loss) before taxes
Exchange rate differences
144,996,933
136,463,299
28
(29,358,766)
(22,558,779)
Income (loss)
115,638,167
113,904,520
115,635,906
113,891,781
25
2,261
12,739
Income (loss)
115,638,167
113,904,520
Income tax expenses
Income (loss) attributable to:
Income (loss), attributable to the controlling interest owners
Income (loss), attributable to minority interests
Income per share
Income per basic share
Income (loss) per basic share in continuing operations
29
Income (loss) per basic share in discontinued operations Income (loss) per basic share (CLP per share)
17.74
17.47
-
-
17.74
17.47
85
Consolidated comprehensive income statements
COMPREHENSIVE INCOME STATEMENT
Note
FOR THE FISCAL YEAR ENDING
01-01-2012 01-01-2011
12-31-2012
12-31-2011
CLP TH
CLP TH
Income (loss)
115,638,167
113,904,520
Exchange rate conversion differences
(193,477)
73,146
Available-for-sale financial assets
-
-
Cash flow hedging
-
-
Income tax related to components of other comprehensive income
-
-
Other comprehensive income components before taxes -
-
Total comprehensive income 115,444,690
113,977,666
Comprehensive income attributable to the controlling interest owners
115,442,429
113,964,927
Comprehensive income attributable to minority interests 2,261
12,739
Total comprehensive income
115,444,690
113,977,666
Components of other comprehensive income, before taxes
Comprehensive income attributable to
Consolidated statement of changes in net equity
Equity as of 31 December 2012:
Reserves for
Equity currencyOther
Accumulatedattributable Issued conversionmisc.Otherincometo Minority
Total capitaldifferencesreservesreserves
(loss)
controllinginterestsequity
entities
Initial balance for the current period as of 01-01-201 457,867,231
(128,007)
9,943,257
9,815,250
172,618,711
640,301,192
25,090
640,326,282
Increase (decrease) due to error correction
-
-
-
-
-
-
-
-
457,867,231
(128,007)
9,943,257
9,815,250
172,618,711
640,301,192
25,090
640,326,282
Changes in equity
-
-
-
-
-
-
-
-
- Comprehensive income
-
-
-
-
-
-
-
-
- Income (loss)
-
-
-
-
115,635,906
115,635,906
2,261
115,638,167
Restated initial balance
- Other comprehensive income
-
(193,477)
-
(193,477)
-
(193,477)
-
(193,477)
-
-
-
-
-
115,442,429
2,261
115,444,690
- Dividends
-
---
(34,829,468)
(34,829,468)
-
(34,829,468)
-
-
336
336
127
463
(135)
328
-
(193,477)
336
(193,141)
80,806,565
80,613,424
2,126
80,615,550
- Increase (decrease) due to
transfers and other changes
Total changes in equity
Final balance for current
period as of 12-31-2012
457,867,231
(321,484)
9,943,593
9,622,109
253,425,276
720,914,616
27,216
720,941,832
Reserves for
Equity currencyOther
Accumulatedattributable Issued conversionmisc.Otherincometo Minority
Total capitaldifferencesreservesreserves
(loss)
controllinginterestsequity
entities
Initial balance for the current period as of 01-01-2011 457,867,231
(133,254)
9,943,850
9,810,596
111,023,392
578,701,219
731,574
579,432,793
Increase (decrease) due to error correction
-
-
-
-
2,311,407
2,311,407
-
2,311,407
457,867,231
(133,254)
9,943,850
9,810,596
113,334,799
581,012,626
731,574
581,744,200
Changes in equity
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- Income (loss)
-
-
-
-
113,891,781
113,891,781
12,739
113,904,520
-
73,146
-
73,146
-
73,146
-
73,146
-
-
-
-
-
113,964,927
12,739
113,977,666
- Dividends
-
---
(54,607,869)
(54,607,869)
-
(54,607,869)
-
(67,899)
593
(68,492)
-
(68,492)
(719,223)
(787,715)
-
5,247
(593)
4,654
59,283,912
59,288,566
(706,484)
58,582,082
Final balance for current
period as of 12-31-2011
457,867,231
(128,007)
9,943,257
9,815,250
172,618,711
640,301,192
25,090
640,326,282
87
Consolidated indirect cash flow statements
CONSOLIDATED INDIRECT CASH FLOW STATEMENT
Note
12-31-2012
CLP Th
12-31-2011
CLP Th
-
115,638,167
113,904,520
28
29,358,766
22,558,779
Adjustments for decreased (increased) inventories
-
(22,586,180)
(32,533,170)
Adjustments for decreases (increases) in commercial accounts receivable
-
(36,536,252)
(91,048,517)
Adjustments for decreases (increases) in other accounts receivable from operating activities
-
(60,031,564)
(66,877,331)
Adjustments for increases (decreases) in commercial accounts payable
-
62,544,817
57,113,442
Adjustments for increases (decreases) in other accounts payable from operating activities
-
(3,414,417)
13,495,892
27
75,764,817
64,721,849
Adjustments for value impairment (reversals of impairment losses) recognized in the period
-
1,841,399
1,476,560
Adjustments for provisions
-
29,854,199
62,520,033
27
245,076
6,772,808
Adjustments for minority interests
-
2,126
(706,484)
Adjustments for undistributed income from subsidiaries
-
-
195,679
Other adjustments items other than cash
-
2,948,996
4,413,307
Adjustments for loss (income) from the disposal of non-current assets
-
-
(18,060,785)
Cash flow from (used in) operating activities
Income (loss)
Adjustments for income (loss) reconciliation
Adjustments for income tax expenses
Adjustments for depreciation and amortization expenses
Adjustments for unrealized foreign currency loss (income)
Other adjustments so that effects on cash are cash flows from investment or financing
23,404,887
11,926,832
Total adjustments for income (loss) reconciliation
-
103,396,670
35,968,894
Net cash flows from (used in) operating activities
-
219,034,837
149,873,414
14
-
30,000,000
Cash flow used to obtain control of subsidiaries and other businesses
-
-
(12,039,524)
Amounts from the sale of property, plants and equipment
-
7,945,321
9,148,432
Property, plants and equipment purchased
-
(178,238,018)
(142,538,275)
Amounts from other long-term assets
-
100,000
-
Intangible assets purchased
-
(9,883,864)
(6,500,695)
Charges to related entities
-
-
337,596
Cash flows from (used in) investment activities
-
Cash flow from (used in) investment activities
Cash flow from loss of control of subsidiaries and other businesses
(180,076,561)
(121,592,466)
Consolidated indirect cash flow statements
CONSOLIDATED INDIRECT CASH FLOW STATEMENT
Note
12-31-2012
CLP Th
12-31-2011
CLP Th
Cash flows from (used in) financing activities
Short-term loan amounts
-
1,320,154,376
346,488,037
Total loan amounts
-
1,320,154,376
346,488,037
Dividends paid
-
(34,305,339)
(32,954,514)
Loan payment
-
(1,280,520,203)
(340,408,747)
Liability payment for financial leasing
-
(5,755,748)
(5,581,544)
Loan payment to related entities
-
(13,079,643)
(13,120,146)
Interest paid
-
(24,187,189)
(21,295,038)
FNet cash flows from (used in) financing activities
-
(37,693,746)
(66,871,952)
Net increase (decrease) in cash and cash equivalents before the effect of exchange rate variations
-
1,264,530
(38,591,004)
Effects of exchange rate variations on cash and cash equivalents
-
48,867
12,827
Net increase (decrease) in cash and cash equivalents
-
1,313,397
(38,578,177)
Cash and cash equivalents at the start of the period
-
42,544,982
81,123,159
Cash and cash equivalents at the end of the period
8
43,858,379
42,544,982
Corresponding to the fiscal years ending 31 december 2012 and 2011
1. Reporting Entity
Walmart Chile S.A., hereinafter, “Walmart Chile” or the
“Corporation”, incorporated in Chile and domiciled in
the city of Santiago, Chile at Avenida Presidente Eduardo Frei Montalva 8301, Quilicura. Its tax list number is N°
96.439.000-2. Walmart Chile is an open stock corporation and is registered with the Securities and Insurance
Supervisor (hereinafter, “SVS”) under Number 0593. The
initial public offering of its shares took place in Chile in
December 1996 and its shares were listed on the Santiago Stock Exchange, the Valparaíso Stock Exchange and
the Santiago Electronic Stock Exchange.
As part of the consolidated group, indirect subsidiary
Walmart Chile Inmobiliaria S.A. is registered with the
Securities and Insurance Supervisor Securities Registry
under number 0414.
As part of the consolidated group, the indirect subsidiary
Presto Corredores de Seguros and Gestión Financiera
S.A. is registered with the Securities and Insurance Supervisor Securities Registry under number 6010.
As part of the consolidated group, the indirect subsidiary
Servicios y Administración de Créditos Comerciales Presto S.A. is registered under number 686 with the credit
card issuers and operators maintained by the Superintendence of Banks and Financial Institutions.
The Corporation is made up of a group of companies
whose main lines of business focus on food distribution
by means of different supermarket and hypermarket
formats, providing coverage for the entire country from
Arica to Punta Arenas, commercial credit management
services, insurance brokerage and real estate activities
involving land and commercial establishments.
The Corporation’s controlling shareholder is Inversiones
Australes Tres Limitada and the Corporation’s parent
company is Wal–Mart Stores Inc., which holds an interest
amounting to 74.65%.
The main accounting policies used for the formulation
of these consolidated financial statements are described
as follows. These policies have been designed based on
International Financial Reporting Standards (hereinafter
IFRS) and their interpretations, issued by the International Accounting Standards Board (hereinafter “IASB”) in
effect as of 31 December 2012 and 31 December 2011,
considering Securities and Insurance Supervisor (hereinafter SVS) additional information requirements, which
do not contradict IFRS, and which are uniformly applied
to all periods presented in these financial statements.
The information contained in these consolidated financial statements is the responsibility of the group’s Board
of Directors, which expressly states that it is aware of the
information contained in these consolidated financial
statements and is responsible for the information contained in these financial statements, as well as the application of the principles and criteria included in the IFRS and
standards issued by the SVS. These financial statements
were approved by the Board of Directors 27 March 2013.
2.1 Consolidated financial statements
These consolidated financial statements for Walmart Chile S.A. and its subsidiaries for the fiscal year ending 31
December 2012 have been prepared in accordance with
International Financial Reporting Standards (IFRS) and
their interpretations in effect as of 31 December 2012
and considering Securities and Insurance Supervisor
(SVS) additional information requirements, which do not
contradict IFRS.
2.2 Basis of measurement
These consolidated financial statements have been prepared in accordance with the historical cost principle, except for the valuation of certain financial assets and liabilities (including derivative financial instruments) that are
valued at fair value. (See note on financial instruments).
Preparation of these consolidated financial statements in
accordance with IFRS requires the use of certain critical
accounting calculations. It also requires the Administration to exercise judgment in the process of applying the
Corporation’s accounting policies. In the note on managing estimates and critical judgment or criteria, we have
included information about areas that require a greater
degree of judgment or complexity, or areas where the
hypotheses and estimates are significant for the consolidated financial statements.
The consolidated financial statements are presented
using income statements by function and the consolidated indirect cash flow statement.
Some comparative financial statement balances from
2011 were reclassified in order to ensure these would
be consistent with the 31 December 2012 financial statements.
2.3 Functional and presentation currency
Consolidated financial statements are presented in Chilean pesos, which is the Corporation’s functional and
presentation currency. All of the group’s corporations based in Chile and the United States have determined that
89
their functional currency is the Chilean peso and items included in the financial statements for each entity are measured
in Chilean pesos. The functional currency of subsidiaries based in Peru is the Peruvian nuevo sol, while subsidiaries based
in China use US dollars, as indicated in note 3.4. All information is presented in thousands of Chilean pesos and has been
rounded to the nearest unit, unless otherwise indicated.
2.4 New standards and interpretations issued. Invalid standards and interpretations.
At the date these consolidated financial statements were issued, certain amendments, improvements and interpretations
have been published. These came into force during the 2012 fiscal year and have been adopted by the Corporation. These
standards became mandatory as of the dates indicated below:
New standards, improvements and amendments
Mandatory application for financial years starting:
Amendment to IFRS 1
First-time adoption
07-01-2011
Amendment to IFRS 7Financial instruments: information to be disclosed
07-01-2011
Amendment to IAS 12Income tax
01-01-2012
Amendment to IAS 1Presentation of financial statements
07-01-2012
The new standards, improvements and/or amendments
are described as follows:
IFRS 1
“First-time Adoption of International Financial Reporting Standards”
Issued in December 2010, this discusses exemptions due
to severe hyperinflation. It allows companies whose transition date comes after functional currency normalization to value assets and liabilities at fair value as attributed costs and to remove fixed date requirements. It also
adjusts the fixed date included in IFRS 1 to the transition
date for operations involving the reduction of financial
assets and assets or liabilities to fair value for income under initial recognition.
IFRS 7
“Financial Instruments: Disclosures”
Issued in October 2010, this standard increases disclosure requirements for transactions involving the transfer of
financial assets. No comparative information is required
for the first year of application.
IAS 12
“Income Taxes”
Issued in December 2010, this amendment provides an
exception to the general principles of IAS 12 for investment properties measured using the fair value model
contained in IAS 40 “Investment property”. The exception also applies to investment property acquired in a
business merger if the purchaser applies the fair value
model contained in IAS 40 after the business merger.
This amendment incorporates the assumption that investment properties valued at fair value are realized
through sale and therefore a tax rate must be applied
to temporary differences stemming from these for sales
operations. Early adoption is allowed.
IAS 1
“Presentation of Financial Statements”
Issued in June 2011. The main change in this amendment is that Other Comprehensive Income must be classified and grouped, determining if these will be potentially reclassified for income in subsequent periods. Early
adoption is allowed.
In addition, at the date that these consolidated financial
statements were issued, amendments, improvements
and interpretations of current standards have been published. These have not entered into force and the Cor-
91
poration has not adopted these in advance. These will become mandatory as of the dates listed below:
New standard, improvement or amendment
Mandatory application for fiscal years starting:
IFRS 11Joint arrangements
01-01-2013
IFRS 12Disclosure of interests in other entities
01-01-2013
IFRS 13Fair value measurement
01-01-2013
IAS 19Employee benefits
01-01-2013
IAS 28Investments in associates and joint ventures
01-01-2013
IFRIC 20Stripping costs in the production phase of a surface mine
01-01-2013
IFRS 7Financial instruments: disclosures
01-01-2013
IFRS 1First-time adoption of International Financial Reporting Standards
01-01-2013
IAS 1Presentation of financial statements
01-01-2013
IAS 16Property, plant and equipment
01-01-2013
IAS 34Interim financial reporting
01-01-2013
IAS 32Presentation of financial instruments
01-01-2013
IAS 32Financial instruments: presentation
01-01-2014
IAS 27Separate financial statements
01-01-2014
IFRS 10
IFRS 9Financial instruments
The Corporation’s administration believes that none of
these standards will have a significant effect on the consolidated financial statements when applied, if required.
IFRS 11
“Joint arrangements”
IFRS 11 replaces IAS 31 Interests in joint ventures and IAS
13 Jointly controlled entities - non-monetary contributions by venturers. IFRS 11 uses some of the same terms
used in IAS 31, but with different meanings. Whereas IAS
31 identifies three types of joint ventures, IFRS 11 describes two types of joint arrangements (joint ventures and
joint operations) when there is joint control. Since IFRS
11 uses the principle of control from IFRS 10 to identify
control, the determination of whether there is joint control may change. In addition, IFRS 11 removes the option of using proportionate consolidation to account for
jointly controlled entities (JCEs). Instead, JECs that meet
the definition of joint ventures must be accounted for
using the equity method. For joint operations, which include jointly controlled assets, former jointly controlled
operations and initial jointly controlled operations (JCEs),
an entity must declare its existing assets, liabilities, revenue and expenses. The issuing of IFRS 11 changed IAS
28 to a limited extent regarding issues related to asso-
01-01-2014
01-01-2015
ciated entities and control entities available for the sale
and changes of interests remaining in associated entities
and jointly controlled entities, which must be disclosed
in that event.
IFRS 12
“Disclosure of interests in other entities”
IFRS 12 includes all disclosures previously described in
IAS 27 related to consolidation and also disclosures previously included in IAS 31 and IAS 28. These disclosures
are referred to in interests related to an entity, joint arrangements and structured entities and associates. A number of new disclosures are also required, which must be
disclosed in that event.
IFRS 13
“Fair value measurement”
IFRS 13 establishes standard guidelines as to how to
measure fair value, when this is required or allowed by
IFRS. This does not change when an entity is required
to use fair value. The standard changes the definition of
fair value - Fair value: The price that would be received
to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (a starting price). In addition, this standard
incorporates new disclosures, which must be disclosed
in that event.
IAS 19
“Employee benefits”
On 16 June 2011 the IASB published amendments to IAS
19, Employee Benefits, which changed accounting requirements for set benefit plans and termination benefits. These amendments required recognition of changes
in obligations for specified benefits and in plan assets
when these take place, eliminating the broker focus and
accelerating the recognition of past services. Changes
in the obligatory nature of specified benefits and plan
assets are broken down into three components: service
costs, net interest over net liabilities (assets) for specified
benefits and net liability (asset) remediation for specified
benefits. Net interest is calculated using a return rate for
high quality corporate bonds. This could be less than
the rate currently used to calculate expected return over
plan assets, leading to lower profits during the fiscal year.
These amendments are applicable to annual periods
starting on or after 1 January 2013 and early application
is allowed. Retrospective application is required with certain exceptions, which must be disclosed in that event.
IAS 28
“Investments in associates and joint ventures”
Issued in May 2011, IAS 28 Investments in associates and
joint ventures determines accounting requirements for
investments in associates and establishes requirements
for application of the interest method when accounting
for investments in associates and joint ventures, which
must be disclosed in that event.
IFRIC 20
“Stripping costs in the production phase of a surface
mine”
Issued in October 2011, this standard regulates stripping
costs in the production phase of a mine as an asset, as
well as initial and subsequent measurement of this asset.
In addition, the interpretation requires mining entities
that present financial statements in accordance with
IFRS to punish existing stripping costs assets against accumulated profits when these cannot be attributed to
an identifiable component of a deposit, which must be
IFRS 7
“Financial instruments: disclosures”
An amendment to IFRS 7 was issued in December 2011.
This amendment requires entities to disclose the effects
or possible effects of financial instrument compensation
agreements on the entity’s financial position in financial information. This standard is applicable starting 1
January 2013, which must be disclosed in that event.
IFRS 1
“First-time adoption of International Financial Reporting Standards”
Issued in March 2012. This provides an exception with
retroactive application to the recognition and measurement of loans received from the Government at the
transaction date. Early adoption is allowed, which must
be disclosed in that event.
IAS 1
Presentation of financial statements
“Annual Improvements 2009-2011 Cycle”, issued in May
2012, amended paragraphs 10, 38 and 41, eliminated
paragraphs 39-40 and added paragraphs 38A-38D and
40A-40D, which clarify the difference between voluntary
additional comparative information and the minimum
comparative information required. The minimum comparative period generally required is the former period.
An entity is required to include comparative information in notes related to the financial statements when
this entity voluntarily provides comparative information
beyond the minimum comparative period required. The
additional comparative period does not need to contain
a complete set of financial statements. In addition, initial balance sheet amounts (known as the third balance)
must be presented under the following circumstances:
when an entity changes its accounting policies; makes
retroactive restatements or reclassifications, and this is
the change that exerts a material effect on the balance
sheets. The initial amount stated in the balance sheets
would be at the start of the former period. However, in
contrast with voluntary comparative information, related
notes do not have to be included in the third balance.
Entities will be required to apply this amendment retrospectively in accordance with IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors for annual
periods starting 1 January 2013. Early application is
allowed, which must be disclosed in that event.
IAS 16
“Property, plant and equipment”
2012, amended paragraph 8. This amendment clarifies
that replacement parts and auxiliary equipment that
comply with the definition of property, plant and equipment are not inventory. Entities will be required to apply
this amendment retrospectively in accordance with IAS
8 Accounting Policies, Changes in Accounting Estimates
and Errors for annual periods starting 1 January 2013.
Early application is allowed, which must be disclosed in
that event.
IAS 34
“Interim financial information”
2012, amended paragraph 16A. This amendment clarifies requirements in IAS 34 related to information held by
operating segments regarding total assets and liabilities
for each of the operating segments in order to improve
coherence with the requirements of IFRS 8 Operating
Segments. The amended paragraph 16A establishes
that the total assets and liabilities for a specific operating
segment shall only be disclosed when the amounts are
regularly measured by senior management and when
there is a material change in how information disclosed
in the former financial statements is compared for this
operating segment. Entities will be required to apply this
amendment retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors for annual periods starting 1 January 2013. Early
application is allowed, which must be disclosed in that
event.
IAS 32
“Financial instruments: presentation”
2012, amended paragraphs 35, 37 and 39 and added paragraph 35A, indicating that tax for income shared with
an entity’s shareholders is to be accounted for in accordance with IAS 12 Income taxes. This amendment eliminated the existing income tax requirements in IAS 32
and requires entities to apply IAS 12 requirements to any
tax for income distributed to an entity’s shareholders.
An entity will apply these amendments retrospectively
in accordance with IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors for annual periods
starting as of 1 January 2013. Early application is allowed,
which must be disclosed in that event.
Amendments to IAS 32 issued in December 2011 are
designed to clear up differences regarding the relative
application of compensation and to reduce the level of
diversity in current practices. This standard is applicable
as of 1 January 2014 and early adoption is allowed.
IFRS 10
“Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other Entities”, IAS 27 “Separate Financial Statements”
Amendments made to IFRS 10 Consolidated Financial
Statements, IFRS 12 Disclosure of Participation in Other
Entities and IAS 27 Separate Financial Statements stem
from the Exposure Draft on Investment Entities published in August 2011. These amendments define investment entities and introduce an exception for consolidating certain subsidiaries belonging to investment
entities. These amendments require investment entities
to assess these subsidiaries at fair value with changes
made to income statements in accordance with IFRS 9
Financial Instruments in their separate consolidated financial statements. These amendments also introduce
new disclosure requirements regarding investment entities in IFRS 12 and in IAS 27. Entities are required to apply
amendments to annual periods starting 1 January 2014,
which is to be disclosed in this case. Early application is
allowed.
IFRS 9
“Financial Instruments”
This standard introduces new requirements for the classification and measurement of financial assets, allowing
early application. It requires all financial assets to be fully
classified based on the entity’s business model for managing financial assets and contractual cash flow characteristics of financial assets. Financial assets under this standard are measured at either amortized cost or fair value.
Only financial assets classified as having been measured
at amortized cost shall be tested for depreciation. Their
application is effective for annual periods starting on or
after 1 January 2015, which is to be disclosed in this case.
Early adoption is allowed.
The accounting policies established hereinafter have
been consistently applied to the consolidated financial
statements and have been consistently applied to all of
the group’s companies.
3.1 Basis of consolidation
3.1.1 Subsidiaries
Subsidiaries are defined as all entities that the Walmart
Chile Group controls. When determining whether the
company controls another entity, the existence and
effect of potential voting rights that are actually exercisable or convertible are taken into consideration. Subsidiaries are consolidated as of the date when control is
transferred and they are excluded from consolidation at
the time such control terminates.
The acquisition method is used to account for the acquisition of subsidiaries. Acquisition cost is the reasonable
value of assets delivered, equity instruments issued and
liabilities incurred or assumed the date of the transaction.
Identifiable assets acquired and the identifiable liabilities
and contingencies assumed in a business merger are initially valued at their fair value at the date of acquisition,
regardless the extent of minority interests. Acquisition
93
cost in excess of the company’s fair value in the share of
identifiable net assets required is recognized as purchased goodwill. If the acquisition cost is lower than the fair
value of the acquired subsidiary’s net assets, the difference is directly recognized in the income statement.
Consolidation eliminates inter-company transaction
balances, as well as unrealized expenses and income
for transactions between consolidated entities. Losses
stemming from a transaction between consolidated entities are also eliminated, unless the transaction provides
evidence of loss due to depreciation of the transferred
asset. Accounting policies of subsidiaries are modified
when necessary in order to ensure uniformity with policies adopted by Walmart Chile Group.
The Corporation does not own any special purpose entities.
The direct, first-line subsidiaries included in the consolidation and related subsidiaries from the different business segments are listed as follows:
Tax list
Corporation Name
number
Stake (%) 12-31-201212-31-2011
Direct IndirectTotal
Total
76.724.050-3Inversiones Walmart Chile Ltda. (*)
99.9999
0.0001
100
100
76.023.836-8Inversiones Internacionales D&S Ltda. and subsidiaries
99.999
0.001
100
100
100
-
100
100
96.829.710-4Walmart Chile Comercial S.A. and subsidiaries (**)
-
100
100
100
95.723.000-8Walmart Chile Servicios Financieros Ltda. and subsidiaries (***)(*****)
-
100
100
100
96.519.000-7Walmart Chile Inmobiliaria S.A. and subsidiary (****)
-
E-0Inversiones Pacifico LLC
All entities currently controlled have been included in
the consolidation.
Las Sociedades afiliadas directas de primera línea incluidas en la consolidación y las afiliadas matrices de los distintos segmentos de negocio, son las siguientes:
Todas las entidades sobre las cuales se tiene control han
sido incluidas en la consolidación.
(*) By means of public deed dated 20 May 2011 the corporation Inversiones D&S Chile Ltda. changed its firm
name to Inversiones Walmart Chile Ltda.
(**) The corporation Comercial D&S S.A. changed its firm
name to Walmart Chile Comercial S.A. 1 July 2011. This
change was agreed to at a special shareholders meeting
held 29 April 2011.
(***) The corporation Servicios Financieros D&S S.A. changed its firm name to Walmart Chile Servicios Financieros
S.A. 1 July 2011. This change was agreed at a special shareholders meeting held 28 April 2011.
(****) The corporation S.A. Inmobiliaria, Sitios y Establecimientos Comerciales changed its firm name to Walmart Chile Inmobiliaria S.A. 1 July 2011. This change was
agreed at a special shareholders meeting held 27 April
2011.
(*****) The Corporation Walmart Chile Servicios Financie-
99.9963
99.9963
99.9963
ros S.A. changed its firm name to Walmart Chile Servicios
Financieros Ltda. This change was agreed at a special
shareholders meeting held 31 August 2012.
The subsidiary Inversiones Walmart Chile Ltda. purchased the remaining 50% stake in the subsidiary companies Alimentos y Servicios S.A. and Inversiones Solpacific
S.A. 15 July 2011. These corporations are therefore presented as consolidated in these financial statements.
A reorganization process for the retail segment corporations was completed in 2011. This process meant the
merger of all corporations operating under the supermarket and hypermarket formats into two new legal
entities that currently operate under these formats. This
process simplified the Walmart Chile S.A. corporate structure in order to support the company’s growth, make the
taxation process more efficient and provide flexibility for
future needs in the business. As part of this process, two
new corporations called Inversiones Pacifico LLC and
Walmart Chile Comercial LLC were created. These respectively purchased a minority stake in Inversiones Walmart Chile Ltda. and Walmart Chile Comercial S.A.
The company completed a corporate reorganization
process for the financial segment in 2012. This process
divided Sociedad Administradora de Créditos Comercial
Presto Ltda. and a new corporation bearing the same
name was founded. The new corporation is responsible
for managing the Presto card while the former Sociedad
95
Administradora de Créditos Comercial Presto Ltda. was
renamed Inversiones Presto Tres Ltda. Its corporate purpose and firm name were subsequently modified and
the company became Walmart Chile Comercial Ltda. In
addition, as part of this process, the corporation Inversiones Cordilleras LLC was founded. This corporation purchased a majority stake in Inversiones Renta Presto S.A.
3.1.2 Transactions and uncontrolled interests
The Walmart Chile Group applies the policy of treating
transactions with uncontrolled interests as if these were
transactions with Group shareholders. In the case of
purchasing non-controlling interests, the difference between any compensation paid and the corresponding
share in the book value of net assets purchased from the
subsidiary are recognized in equity. Income and losses
due to write-offs that benefit the minority share are also
recognized in equity, as long as control is maintained.
3.2 Subsidiaries
Subsidiaries are all of the entities that the Walmart Chile Group influences a significant influence on but does
not control. This is generally accompanied by an interest
amounting to between 20% and 50% of the voting shares. Investment in subsidiaries is accounted for by means
of the equity method and this is initially recognized by
cost. Walmart Chile Group’s investment in subsidiaries includes purchased goodwill identified in the acquisition,
net of any losses due to accumulated depreciation.
The Walmart Chile Group’s participation in losses or gains
after the purchase of its related companies or subsidiaries is recognized in the balance sheets by function and
is included in the “Participation in income (loss) of subsi-
Date
CLP / US$
diaries accounted for using the income equity method”
line item, and its participation in equity movement after
the purchase that does not include results is assigned
to the corresponding equity reserves (and indicated as
corresponding in the other comprehensive income statements).
When the Walmart Chile Group’s participation in an
associate’s losses are equivalent to or higher than its
interest in the same, including any other uninsured account receivable, the Walmart Chile Group does not recognize additional losses, unless it has incurred in obligations and made payment on behalf of the associate.
Unrealized gains from transactions between the Walmart
Chile Group and its related companies are eliminated based on the Corporation’s interest share in these related
companies.
Unrealized losses are also eliminated, unless the transaction provides evidence of losses due to depreciation of
the asset transferred. The accounting policies of its subsidiaries are modified when required in order to ensure
uniformity with policies adopted by the Corporation.
Dilution gains or losses in related companies or subsidiaries are recognized in the comprehensive income statements.
There are no subsidiaries as of 31 December 2012 and 31
December 2011.
3.3 Exchange rate and indexation units
Assets and liabilities held in foreign currencies and those set in unidades de fomento are presented at the following respective exchange rates and closing values:
CLP / UF
CLP / PEN
CLP / EUR
12-31-2011
519.20
22,294.03
193.27
672.97
12-31-2012
479.96
22,840.75
188.15
634.45
3.4 Transactions in foreign currency
Transactions in foreign currency are expressed at the
exchange rate on the transaction date. Monetary assets
and liabilities in foreign currencies at the balance date
are expressed in Chilean pesos at the exchange rate on
that date. Exchange rate differences arising from currency translation are recognized in the income statements
by function. Non-monetary assets and liabilities measured at historical cost on the basis of foreign currency are
translated using the exchange rate on the transaction
date. Non-monetary assets and liabilities in foreign currencies and valued at their fair value are translated to
Chilean pesos at the exchange rate at which said fair value was determined.
The financial statements of “Inmobiliaria D&S Perú S.A.C”,
“Comercial D&S Perú S.A.C” and “South Pacific Trade Ltda.”
whose functional currency is the Peruvian nuevo sol
(PEN) and the US dollar (US$), respectively, are converted
into presentation currency as follows:
ʭʭ
The assets and liabilities of each financial statement
presented are converted at the exchange rate at the
closure of each period or fiscal year;
ʭʭ
Income and expenses for each income account are
converted at average exchange rates (unless the average is not a reasonable approximation of the accumulative effect of exchange rates as of the transaction dates, in which case income and expenses are
converted on the transaction dates); and
ʭʭ All resulting exchange rate differences are
recognized as a separate component of net
equity, in the “Other reserves” line item.
3.5 Property, plant and equipment
Property, plant and equipment is recorded at cost and
presented net of their accumulated depreciation and
accumulated impairment, except for land, which is not
subject to depreciation.
This cost includes the acquisition price and all costs directly related to the location of the asset at the place
and the conditions necessary so that it can operate as
planned by the Management, if this exists, as well as the
initial estimate of the costs of dismantling, removing or
partially removing the asset, as well as remediation of
the place where it is located, for which the Corporation
is responsible.
Construction or works underway include, among other,
the following concepts incurred during the construction
period:
ʭʭ
Financial costs related to external financing that are
directly attributable to construction. Activated financial costs are obtained by applying the weighted average cost of long-term financing associated to parent
company loans to average cumulative investment
susceptible to non-financed activation specifically, as
indicated in IAS 23R.
ʭʭ
Personnel costs and other of an operating nature directly related to construction.
Expansion, modernization or improvement costs that represent an increase in productivity, capacity or efficiency
and therefore an extension of the useful life of goods are
capitalized as greater cost of the corresponding goods.
Periodic maintenance, conservation and repair costs are
recorded against income as a cost for the fiscal period
in which they are incurred. A property, plant and equipment element is written off at the time of its disposal or
when future economic benefits are no longer expected
from its use or disposal. Any profit or loss arising from
this asset being written off (calculated as the difference
between the net value of disposal and the asset’s book
value) is included in the income statements by function
in the fiscal year in which the asset is written off.
Depreciation is calculated over the depreciable amount,
which corresponds to the cost of an asset or another
amount that substitutes for the cost, minus its residual
value.
Depreciation is recognized in income statements in a linear fashion over the estimated useful lives of each part
of a property, plant or equipment item, since these more
accurately represent the exception consumption pattern
of future economic benefits related to the asset. Assets
leased under financial lease contracts are depreciated
over the shortest period between the lease and their
useful lives, unless it is reasonably certain that the Group
will acquire the property at the end of the lease period.
When parts of a property, plant and equipment item
have different useful lives, these are recorded as separate
property, plant and equipment items (important components).
Estimated useful lives for the current and comparative
periods are listed as follows:
ʭʭ
Buildings:
50 years
ʭʭ
Terminations:
15 years
ʭʭ
Installations:
15 to 20 years
ʭʭ
Equipment at properties:
15 to 20 years
ʭʭ
Exterior works:
20 years
ʭʭ
Vehicles:
4 years
ʭʭ
Machinery:
4 to 5 years
ʭʭ
Furniture and office supplies: 3 to 4 years
Methods used to determine depreciation, useful lives
and residual values are revised in each fiscal year and
prospectively adjusted if necessary.
When the value of an asset is higher than its estimated
recoverable amount, its value immediately declines to its
recoverable value through the application of depreciation tests.
Losses and gains from property, plant and equipment
sales are calculated by comparing income obtained to
the book value and are then included in the income statements by function.
3.6 Investment property
Investment property is real estate (land and buildings)
held to obtain economic benefits from rental or capital
appreciation. Investment property and investment property under construction are recorded at cost and presented net of their accumulated depreciation and accumulated impairment, with the exception of land, which
is not subject to depreciation.
Acquisition cost and all other costs associated to investment property, as well as the effects of depreciation and
treatment of asset write-offs are recorded in the same
way as property, plant and equipment, as indicated in
foregoing point 3.5.
Estimated economic useful lives for the main elements
of investment property are listed as follows:
ʭʭ
Buildings:
50 years
ʭʭ
Terminations:
15 years
ʭʭ
Installations:
15 to 20 years
cupation by an owner or if development is started with
expectations to sell and the fair value as of the reclassification date becomes its cost for subsequent accounting.
3.7 Intangible assets
3.7.1 Purchased goodwill
Purchased goodwill is the difference between excess
acquisition cost over the fair value of Walmart Chile
Group’s share in the identifiable net assets of subsidiaries
or related companies at the date of acquisition. Purchased goodwill related to acquisition of subsidiaries in included in the goodwill line item.
Purchased goodwill related to acquisitions of subsidiaries is included in investment in subsidiaries, accounted for using the equity method, and is subjected to
impairment testing together with the total amount of
associated investment. Purchased goodwill is separately subjected to impairment testing on an annual basis
and is valued at cost minus accumulated losses due to
depreciation. Gains and losses from the sale of an entity
include the book value of purchased goodwill related to
the entity sold.
The cash-generating unit is defined as the smallest group
of assets for which independent cash flow can be identified. In this context, the Corporation has determined that
this condition is met at each individual store considered.
Purchased goodwill is assigned to cash-generating units
for impairment testing. This is distributed between those cash-generating units or groups of cash-generating
units expected to benefit from the business merger that
created the goodwill.
The existence of purchased goodwill depreciation is
measured on an annual basis.
The greater value from acquisition of an investment or
business merger is credited directly to the income statements by function.
Purchased goodwill does not have a specific useful life.
The residual values of assets, useful lives and depreciation methods are reviewed when preparing financial
statements each year. These are adjusted if required as a
change in prospective estimates.
3.7.2 Commercial rights and trademarks
Commercial rights and trademarks have an indefinite
useful life and are recorded at cost minus accumulated
depreciation. Impairment testing is conducted annually
at an individual level or at the cash-flow generating level.
Transfers to investment property only occur when there
is a change in use evidenced by the end of occupation
by owners, the start of an operating lease to another party or the end of construction or development. Transfers
from investment property only occur when there is evidence of a change in use evidenced by the start of oc-
3.7.3 Computer programs
Computer software licenses acquired and developed by
third parties are capitalized on the basis of costs incurred
to acquire and prepare for using a specific program minus amortization and losses due to accumulated depre-
97
ciation. Amortization is calculated on a linear basis and
its effect on income is presented in the administrative
expenses line item.
The estimated useful lives for the current and comparative periods range between 4 and 6 years.
Expenses related to the development or maintenance of
computer programs are recognized as expenses when
these are incurred.
3.8 Financing costs
Interest costs incurred for construction of any qualified
asset classified under the property, plant and equipment
line item are capitalized over the period of time required
in order to complete and prepare the asset for the intended use, according to IAS 23R. Other interest costs are
recorded in income (expenses).
3.9 Impairment of non-financial assets
Assets with an indefinite useful life are not subject to
amortization and are subjected to impairment testing
on an annual basis. Assets subject to depreciation or
amortization are subjected to impairment testing when
some event or change in circumstances indicates that
the book value may not be recoverable.
The recoverable amount of an asset or cash-generating
unit is the greater value between its value in use and its
fair value, minus sale costs. In order to determine value
in use, future estimated cash flows are deducted from
its present value using a discount rate before tax that reflects current market assessment over the temporary value of money and the specific risks an asset may have. In
order to assess depreciation, assets that cannot be individually tested are grouped together in the smallest asset
group that generates cash inflows from continued use,
which are independent of cash inflows from other assets
or asset groups (the “cash generating unit”). Depending
on the date when an operating segment’s value is tested for the purpose of goodwill impairment testing, the
cash-generating units that have been assigned goodwill
are added together so that the level impairment is tested
at reflects the lowest level at which goodwill is monitored for internal reporting purposes.
The Group’s corporate assets do not generate separate
cash inflows. If there is any indication that a corporate
asset may be impaired, the recoverable amount is determined and assigned for the cash-generating unit the
corporate asset belongs to.
Impairment is recognized if the book value of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognized in the income statements.
Impairment losses recognized in relation to cash-generating units are assigned first, in order to reduce the book
value of any goodwill assigned to the units and then to
reduce the book value of other assets in the unit (group
of units) on a pro rata basis.
Impairment loss for goodwill is not reverted. With regard to other assets, impairment losses recognized in
previous periods are evaluated at least once per year in
pursuit of any indication that the loss has been reduced
or has disappeared. An impairment loss is reverted if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is only
reverted to the extent that the book value of the asset
does not exceed the book value that would have been
determined, net of depreciation or amortization, if the
impairment loss had not been recognized.
Goodwill that is part of the book value of an investment
in a related company is not recognized separately and
is consequently not subjected to separate impairment
tests. Instead, the total amount invested in a subsidiary
is tested for impairment as a unique asset when there is
objective evidence that the investment may be impaired.
As indicated in the note on criteria for property, plant and
equipment, when the value of an asset is greater than its
estimated recoverable amount, its value is immediately
reduced to the recoverable amount through recognition of impairment losses. Impairment losses amounting to CLP 1,841,399,000 were declared 31 December
2012. Property, plant and equipment impairment losses
amounting to CLP 1,476,560,000 were declared 31 December 2011.
3.10 Categories of non-derivative financial instruments
The Walmart Chile Group classifies its financial assets in
the following categories: at fair value through profit or
loss, loans and accounts receivable, and available for sale.
Classification depends on the purpose for which the financial assets were acquired. Management determines
the classification of its financial assets at the time of initial
recognition.
3.10.1 Financial assets at fair value through profit or
loss
Financial assets at fair value through profit or loss are financial assets held for negotiation or designated as financial assets at fair value through profit or loss when
initially recognized.
A financial asset is classified in this category if it is acquired mainly for the purpose of selling the asset in the
short term.
Assets in this category are classified as current assets.
3.10.2 Loans and accounts receivable
Loans and accounts receivable are non-derivative financial assets with fixed or ascertainable payments that are
not quoted on the active market.
Assets in this category are classified as current, except for
those with maturities longer than 12 months from the
date that the balance sheets were issued, which are classified as non-current assets.
Loans and accounts receivable include trade and other
accounts receivable and receivable rights.
3.10.3 Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives assigned to this category or which are not assigned to any
of the other categories.
These are included in non-current assets unless management plans to dispose of the investment within 12
months from the date the financial statements were issued.
3.10.4 Recognition and measurement of financial assets
Acquisition and disposal of financial assets are recognized at the negotiation date, which is to say the date
when the Walmart Chile Group commits to acquire or
sell the asset.
Financial assets are initially recognized at their fair value
plus transaction costs, for all financial assets not charged
at fair value through profit or loss. Transaction costs include fees and commissions paid to agents (including
employees who act as sales agents), consultants and
intermediaries, rates established by regulatory agencies
and stock exchanges, as well as taxes and other duties to
which the transaction is subject. Transaction costs do not
include premiums or discounts for debt, financial costs,
maintenance costs or internal administrative costs.
Financial assets at fair value through profit or loss are initially recognized at their fair value and transaction costs
are changed to income.
Financial assets are written off for accounting purposes
when the rights to receive cash flows from investments
have expired or have been transferred and the Walmart
Chile Group has substantially transferred all risk and benefits of ownership.
Available-for-sale financial assets and financial assets at
fair value through profit or loss are recorded at their fair
value (with a balancing entry in other comprehensive income and income, respectively).
Loans and accounts receivable are recorded at their
amortized cost according to the effective interest rate
method.
The effective interest rate method is a method of calculating the amortized cost of a financial asset or liability
(or a group of financial assets or liabilities) and charged
to financial income or expense throughout the relevant
period. The effective interest rate is a discount rate that
ensures that the estimated cash flows to be received or
paid over the expected lifetime of the financial instrument (or, when appropriate, over a shorter period) are
the same as the net book amount of the financial asset
or liability. In order to calculate the effective interest rate,
an entity will estimate cash flows considering all contractual conditions for the financial instrument.
Gains and losses arising from changes in the fair value
of financial assets to fair value through profit or loss are
included in the income statements by function for the
fiscal period in which these changes in fair value are generated.
Dividend income from financial assets at fair value
through profit or loss and available for sale are recognized in the income statements by function in the other
income line item once the Walmart Chile Group’s right to
receive dividend payments has been established.
3.11 Derivative financial instruments
The Walmart Chile Group uses derivative financial instruments such as interest rate swap and currency forward
contracts to hedge against risks related to fluctuations in
interest rates and exchange rates that affect its financial
obligations to banks and related companies. These derivative financial instruments are initially recognized at fair
value at the date the respective contract is signed and
are measured again at fair value thereafter. Derivatives
are recorded in the other financial assets line item if they
have a positive value and in the other financial liabilities
line item if they have a negative fair value.
Any profit or loss arising from changes in the fair value
99
of derivatives during the fiscal year is directly recorded in
the income statement by function in the income statements by function in the other income or expenses line
item.
These instruments were designated for negotiation
at the time of issue. However, these provide hedging
against financial risk.
The Corporation has declared that there are no implicit
derivatives in its contracts as of 31 December 2012 and
31 December 2011.
3.12 Depreciation of financial assets
A financial asset that is not recorded at fair value through
profit or loss is assessed at each balance date to determine if there is objective evidence of impairment. A financial asset is impaired if there is objective evidence that
a loss event has occurred after initial recognition of the
asset and that this loss event has had a negative effect
on future cash flows of the asset that can be reliably calculated.
The Group uses variables based on arrears, cash flows
related to charges to customers, recoveries, customer
segments, product types, the amount of loss incurred
and comparisons with recognized practices in the financial market, adjusted according to current economic
and credit conditions that are likely to result in real losses
being greater or lower than those suggested by historical trends.
An impairment loss related to a financial asset valued at
amortized cost is calculated as the difference between
the asset’s book value and the present value of estimated future cash flows, discounted at the effective interest
rate. Losses are recognized in the income statements
and are reflected in a provision account against accounts
receivable (see chart on impairment of trade and other
accounts receivable and unpaid with impairment, in the
note on Trade and the other accounts receivable item).
Interest on the impaired asset will continue to be recognized through reversal of the effective rate. When a
subsequent event causes a reduction in the loss amount,
this reduction is reversed in the income statements.
3.13 Inventories
Inventories are valued at the acquisition cost or net realizable value as of 31 December 2011, whichever is lower.
Net realizable value represents the estimated sales value
of inventories during the normal course of business, minus all remaining production costs (own manufactured
goods) and costs required in order to execute the sale.
The costing method corresponds to the weighted ave-
rage price. Stock in transit is valued at acquisition cost.
Imports in transit are recorded when they are found under categories that transfer risks and benefits to the Corporation, i.e. “FOB”.
Commercial discounts, other discounts and other similar
items are recognized as a reduction in the sale cost of
products sold or the value of stock. These agreements
are part of a public document “General terms and conditions for provisioning merchandise”, which was designed to establish the terms and conditions that regulate relations between Walmart and its Suppliers.
The Corporation only recognizes the benefits of these
agreements with suppliers when there is evidence of the
agreement, when benefit amounts can be reasonably
estimated and reception is likely.
The Corporation modified the method used for valuation of non-perishable inventories held at points of sale
to the retail cost method as of the 2012 fiscal year. Cost
was determined using the average cost or net realization
value methods, whichever was lower, up until the 2011
fiscal year. The new costing method is determined by
deducing the inventory sale price, a percentage of the
average gross margin associated to each commercial
department. The percentage applied considers the mark
down of stock that has been valued below its original
sale price.
In order to properly record its stock, the company makes
estimates for damage and obsolescence of its inventories. These estimates are based on historical experience
and are reviewed at the annual closure date for the financial statements.
3.14 Trade and other accounts receivable
Trade and other accounts receivable are initially recognized at their fair value (a nominal value that includes implicit interest) and subsequently at their amortized cost
according to the effective interest rate method, minus
any reduction for value impairment.
An estimate is established for impairment losses of trade receivables when there is objective evidence that the
company will not be able to collect all amounts owed
in accordance with the original terms of the accounts
receivable. Some indicators of possible impairment of
accounts receivable are debtors› financial difficulties, the
likelihood of the debtor entering into bankruptcy or financial reorganization and non-compliance or failure to
make payment, as well as experience regarding the behavior and characteristics of the overall portfolio.
In order to assess and record impairment, the portfolio is
segmented by type of debtor and credit up to the levels
considered appropriate. Trade receivables presently include only operations that can be classified as consumption and therefore information about these receivables
only refers to this concept.
Impairment estimates are based on a loss approach that
aims to capture objective evidence of the impairment of
operations, which enables the company to predict which
future flows will not be received as agreed. Payment expectations are also considered in terms of the amount
and timing and the valuation of such losses based on the
difference between contractual flows and flows adjusted
for impairment. The latter are updated at the effective
loan interest rate. The amount associated to impairment
estimation is presented net of trade and other accounts
payable and its effect on income is recognized by recording it as part of administrative expenses.
3.15 Cash and cash equivalents
Cash and cash equivalents include cash balances, bank
and other investments in fixed income mutual fund
shares in Chilean pesos that mature in less than three
months and present low risk of any change in value. Any
existing overdrafts are classified in the balance sheets as
loans in current liabilities at amortized cost.
3.16 Share capital
Share capital is represented by ordinary shares of a single
class.
Incremental costs directly attributable to the issuance of
new shares are presented in net equity as a deduction,
net of capital gain taxes resulting from the issuance of
shares.
According to the Corporation’s bylaws, at least 30% of
annual profits must be distributed as cash dividends, unless otherwise unanimously agreed at the shareholders
meeting by all shares issued.
3.17 Trade and other accounts payable
Trade and other accounts payable are recognized at
amortized cost, which is not different from their nominal
value, since average payment time is reduced.
3.18 Loans and other financial liabilities
The group initially recognizes debt instruments issued
and financial liabilities on the date of their origination. All
other financial liabilities (including liabilities designated
at fair value through profit or loss) are initially recognized
at the transaction date when the group becomes a party
to the contractual provisions of the instrument.
The group writes off a financial liability when its contractual obligations are settled or expire.
Loans, public obligations and financial liabilities of a similar nature are initially recognized at their fair value, net of
costs incurred in the transaction. These are subsequently
valued at amortized cost and any difference between
the funds obtained (net of the costs necessary to obtain
them) and the reimbursement value is recognized in the
income statement over the life of the debt according to
the effective interest rate method.
3.19 Income taxes and deferred income taxes
Income taxes recorded in the income statement by
function for the first year includes current and deferred
income taxes.
Income taxes are directly recognized in the income statement by function except for those related to items that
are directly recognized in equity.
Current income tax is tax expected to be paid for the
year, calculated using rates in effect at the date of the
balance sheet and also includes any adjustment to tax to
be paid for previous years.
Deferred income tax is calculated considering differences between the book value of assets and liabilities reported for financial purposes and the amounts used for
tax purposes.
Deferred taxes are valued at tax rates expected to be
applied when the temporary differences are reversed,
based on laws that have been approved or are about to
be approved as of the balance sheet date. Deferred tax
assets and liabilities are presented in net form if there is
an enforceable legal right to adjust current tax liabilities
and assets for current taxes, and these are related to the
income tax applied by the same tax authority to the
same taxpaying entity, or to different taxpaying entities,
but the current tax liabilities and assets are to be settled
in net form, or its tax assets and liabilities will be realized
at the same time.
Deferred tax assets are recognized to the extent that there will likely be future taxable profits against which these
assets could be utilized. Deferred tax assets are reduced
101
to the extent that the related benefit will not likely be
obtained.
The Corporation does not record deferred taxes for temporary differences arising between investments in subsidiaries and related companies, since the date when
these will revert is monitored and these are not likely to
revert in the foreseeable future.
Deferred tax assets are recognized for unused tax losses, tax credits and temporary deductible differences
to the extent that future taxable gains will likely exist
against which these can be used. Deferred tax assets are
reviewed at each balance sheet date and are reduced
when it is not likely that the related tax benefits will be
obtained.
3.20 Employee benefits
Employee benefits are recognized when there is a current legal or construction obligation to pay the amount
as the result of a service provided by the employee in the
past and the obligation can be reliably estimated.
3.20.1 Employee vacations
The Corporation recognizes employee vacation expenses to the extent that this right is earned. This is a shortterm obligation that is recorded at nominal value.
3.20.2 Incentives
The Corporation provides an annual incentive plan for
its employees for meeting goals and individual contributions to income.
Incentives, which are eventually delivered, consist of
a certain number or portion of monthly salaries and
are recognized when they are likely to be paid and the
amount can be reliably estimated.
3.21 Provisions
Provisions are recognized when the group has a present
(legal or constructive) obligation as a result of a past
event and it is likely that a resource disbursement, including economic benefits, will be required to settle the
obligation and a reliable estimate of the amount owed
can be made. When the group expects part or all of the
provision to be reimbursed, for example under an issuance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually
certain. Expenses related to any provision are presented
in the income statement net of any reimbursement. If
the effect of the value over time of the money is material, provisions are discounted using a rate that reflects,
when appropriate, the specific risks of the liability. When
the discount is used, the increased value of the provision
owing to the passage of time is recognized as a financial
cost.
A provisions for onerous contracts is recognized when
the economic benefits the Group anticipates from the
contract are less than the inevitable costs of complying
with the contract obligations. The provision is recognized at the present value of the lesser of the anticipated
costs of settling the contract and the anticipated net
cost of continuing with the contract. Prior to establishing
a provision, the group recognizes any impairment loss of
the assets associated with the contract. As of 31 December 2012 and 31 December 2011, the group has not used
provisions of this kind.
3.22 Revenue from ordinary activities
Ordinary revenue includes the fair value of the considerations received or to be received for the sale of goods
and services in the ordinary course of the Corporation’s
activities. Ordinary revenue is presented net of sales tax,
returns and discounts.
The Corporation recognizes revenue when the amount
of the same can be reliably calculated, when future
economic benefits are likely to be received by the entity and the specific conditions are met for each of
the Corporation’s activities. Accurate valuation of the
amount of revenue is not considered possible until all
contingencies related to the sale of the good or service provision have been settled. Revenue from the sale
of merchandise is recognized in the income statement
when the significant risks and benefits of ownership of
goods are transferred to the buyer. Revenue is not recognized if there is significant uncertainty regarding collection, associated costs, possible return of goods or continued administrative involvement in this revenue.
Income from financial interest and adjustments is accrued as a function of the issuing of consumer loans
based on pending capital payment, and is recognized
using the effective interest rate method. The effective interest rate is the discount rate that exactly balances the
cash flows to be received with the net book value of the
asset. Calculation of the effective interest rate, when corresponding to commissions and other paid items such
as transaction costs, is incremental and directly attributable to the transaction. The Corporation ceases to recognize financial income when recovery is considered to be
highly unlikely.
The main operations that generate financial interest income are listed as follows:
ʭʭ
Installment loan interest: interest agreed to at the
effective date of the transaction and which is calculated by applying the rate (in basis 365) to the unpaid
loan balance when the installment is invoiced.
Line of credit or revolving interest: interest calculated
for the revolving debt or use the customer makes of
his or her line of credit. This is calculated on a daily
basis or project according to a parameterized revolving rate. This interest is charged daily starting on the
maturity date and up until invoicing (inclusive). On
the invoicing date, interest is projected as of the date
after invoicing and up until the date of maturity.
Interest is projected up until the end of the month
when this credit matures the next month and the second projects in from the first day of the month until
the day before maturity.
ʭʭ
Default interest: interest calculated based on the
customer’s overdue debt. This is calculated on a daily
basis or project according to a parameterized default
rate. This interest is charged daily starting on the maturity date and up until invoicing (inclusive). On the
invoicing date, interest is projected from the day after
invoicing to the date of maturity. When the loan installment matures the next month, interest is projected to the end of the month, and a second projection
is made from the first day of the month until the day
before maturity. Income from commissions is recognized in the consolidated income statement using different criteria, depending on the nature of these commissions. Those that
correspond to a single act are recorded directly in the
income statement. Those stemming from transactions or
services that occur over time are accrued over the credit
term.
Income from the lease of investment property is recognized in the income statement using the linear method
during the rental period. Other services are recognized
on an accrual basis depending on the conditions established in the contracts and business agreements.
Income from insurance brokerage is recognized in accordance with how the service is rendered, based on the
term agreed with the insurance companies.
Walmart Chile continues to operate a customer loyalty
program known as “Mi Club Lider”. Each time a customer purchases an eligible product or service, whether at
Walmart Chile or at a related business, he or she receives “Lider pesos,” which can be exchanged for products
in the next quarter. According to IFRIC 13, each time a
customer buys a product that generates “Lider pesos,”
the amount received is proportionately assigned to the
products purchased and these “Lider pesos” become
income deferred in liabilities until they are used. The
amount of the deferred income includes the estimate
of the likelihood that these “Lider pesos” will be used.
This is calculated based on historical statistics of unused
points that have expired. The fair value of “Lider pesos”
is equivalent to the same amount of pesos expressed in
the Corporation’s functional currency: the Chilean peso.
“Lider pesos” are used by clients as a means of payment
for their purchases at the Corporation’s stores.
The Corporation reports deferred income from different
transactions for which it receives cash when the aforementioned conditions for reporting income have not
been met, such as cash received upon issuing rental
contracts.
3.23 Cost of sales
Cost of sales includes the cost of purchasing products
sold and other costs incurred in order to make stock
available at locations and in conditions required for sale.
These costs mainly include net purchasing costs for discounts obtained, non-recoverable warehousing costs
and taxes, insurance and product transport to distribution centers.
Cost of sales includes losses due to impairment of the
loan portfolio, net of recovery and financial costs related
to the financial segment.
As of the 2012 fiscal year, the retail cost method is applied
to the non-perishable category available for sale at stores. This is calculated by deducing the inventory sale price, a percentage of the gross margin associated to each
commercial department.
3.24 Leases
3.24.1 The Group as lessee
Financial leases, which transfer substantially all risks and
benefits incidental to the property of a leased item to the
Group, are capitalized at the start of the rental period at
the fair value of the property leased or if lower, at the current value of minimum lease payments. Lease payments
are distributed between financing charges and the reduction of the lease obligation to obtain a constant interest rate on the unpaid liability balance. Financial costs
are charged in the income statement by function.
Leases in which the lessor conserves a significant part of
103
the risks and benefits of asset ownership are classified as
operative leases. Payments for operative leases are charged in the income statement by function on a linear basis over the lease period for the fixed party. Variable profit
is recognized as expenses for the fiscal year in which the
obligation was created, as are profit increases indexed to
consumption variation.
3.24.2 The Group as leaser
When assets are leased under a financial rental agreement, the current value of lease payments is recognized
as an account receivable. The difference between the
gross amount to be received and the current value of
that amount is recognized as financial return on the capital.
Income from financial leases is recognized in the lease
period using the net investment method, which reflects
a constant periodic rate of return.
Assets leased to third parties under operative lease contracts are included in the property, plant and equipment
item or investment property item, whichever applies.
Income derived from operative leases is recognized in
linear form over the rental period.
3.25 Distribution of dividends
According to Article 79 of Law 18,046, public companies
must distribute at least 30% of profits to their shareholders as dividends. Dividends are recognized when the
payment obligation is established.
Dividends to be paid to Walmart Chile S.A. shareholders
are recognized as a liability in the financial statements for
the period in which they are declared and approved by
the Corporation’s shareholders or when the corresponding obligation is undertaken to current legal provisions
or distribution agreements established by the shareholders.
This liability is recorded in the other current non-financial
liabilities line item and movement for the year is recorded in the consolidated statement of changes in net
equity, on the dividends line.
3.26 Earnings per share
Earnings per basic and diluted share are calculated by
dividing profit attributable to the Corporation’s common
shareholders between the weighted average number of
common shares in circulation during the year, excluding,
if any, common shares purchased by the Corporation
and held as treasury shares.
3.27 Financial information by operating segment
An operating segment is a component of the group that
participates in business activities in which it may obtain
income or incur expenses, including income and expenses related to transactions with other components of the
Group.
Information by segment is presented consistently with
internal reports provided to those responsible for making relevant operating decisions. These executives are
responsible for assigning resources and evaluating the
performance of operating segments, which have been
identified as retail, real estate and financial services, for
those who make strategic decisions, as indicated in
IFRS 8 “Operating segments”. Information related to the
company’s operating segments is disclosed in the note
on information by segment.
3.28 Other non-financial assets
Advance lease payments are recorded, related to the
different long-term lease operations for stores. Advance
lease payments are recorded at their historical cost and
are amortized over the duration of the respective contracts.
3.29 Financial income and financial costs
Financial income is comprised of interest income from
invested funds (including available-for-sale financial assets), dividend income, gains from the sale of availablefor-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss and gains
from hedging instruments that are recorded in income.
Interest income is recognized in the income statement at
amortized cost using the effective interest rate method.
Dividend income is recognized in the income statement
at the date when the Group’s right to receive payments
is established.
Financial costs are composed of interest expenses for
loans or financing, changes in fair value of financial assets to fair value through profit or loss and impairment
loses recognized in financial assets. Loan costs that are
not directly attributable to the acquisition, construction
or production of a qualified asset are recognized in income using the effective interest rate method.
3.30 Environment
Disbursements related to environmental protection are
recorded against income as they are made.
3.31 Contingent assets and liabilities
Contingent assets are possible assets arising from past
events whose existence will be only be confirmed if one
or more uncertain events take place in the future and
if these events are not entirely under the Corporation’s
control.
Contingent liabilities are possible obligations arising
from past events whose existence will only be confirmed
if one or more uncertain events occur and if these events
are not entirely under the Corporation’s control.
As of 31 December 2012 and 31 December 2011, the
Corporation does not have any recorded contingent assets or liabilities.
4. Changes in accounting policy
As of the 2012 fiscal year, the Corporation changed the
method used for the valuation of non-perishable inventories stocked at points of sale to the retail cost method.
Up until the 2011 fiscal year cost was determined using
the average cost method. The new costing method
is determined by deducing inventory sale price, a percentage of the average gross margin associated to each
commercial department. The percentage applied considers mark down of stock that has been valued below its
original sale price.
This new costing method, which is accepted by IFRS, dos
not substantially modify cost and this new valuation is
reliable and relevant for the purpose of inventory management.
This accounting change has not been retroactively
applied. It was decided that it would be impracticable
to determine relative amounts for the former periods
presented, basically because this was based on margin
estimates at the start of the application, under market
conditions at that time, which are difficult to redetermine. Subsequently and given the impracticability of
retroactive application, this change has been applied
prospectively.
5. Risk management policy
5.1 Financial risk factors
The Corporation’s activities are exposed to several types
of financial risk:
ʭʭ
Market risk
ʭʭ
Liquidity risk
ʭʭ
Credit risk
The Corporation’s global risk management program
is centered on the uncertainty of financial markets
and aims to minimize potential adverse effects on the
Corporation’s financial returns. The company uses derivatives to hedge against certain aforementioned risks.
a) Market Risk
Due to the nature of its operations, the Corporation is
exposed to the following types of market risk:
(i) Currency exchange rate risk
Foreign currency exchange rate risk is the risk that market prices will vary as a result of fluctuation in foreign
currency exchange rates, thereby affecting the Group’s
income or the value of the financial instruments it holds.
Exchange rate risk is managed in an effort to control exposure in the face of market changes, within reasonable
parameters, while simultaneously optimizing returns.
The Chilean peso is the group’s functional currency. It is
used for setting prices for services, composing its balance sheet and determining the effects of operations on
income.
As of 31 December 2012, the company does not have
accounts receivable in foreign currency.
The Corporation’s financial debt is denominated as follows: 62% in unidades de fomento, 29% in Chilean pesos
and 9% in dollars. As of 31 December 2012, the company
has US$ 89.6 million in foreign currency-denominated
financial debt.
As of 31 December 2012, the average annual exchange rate for the U.S. dollar came to CLP 479.96, down 8%
compared to the 31 December 2011 closing rate of CLP
519.20.
Given the aforementioned exchange rates, a sensitivity
analysis was conducted to determine the effect of exchange rate fluctuation on the Corporation’s income.
The analysis considered the portion not covered by the
105
natural hedge between assets and liabilities held in foreign currency and accounted for variations of ±10% in the average
value of the US dollar as of 31 December 2012.
As of 31 December 2012, the Corporation held financial assets in foreign currency amounting to US$ 40.4 million.
Dates
US$ th
US$-10% CLP th
12-31-2011
80,434
18,528,578
20,587,309
22,646,040
12-31-2012
3,466
268,643
298,492
328,342
Fluctuations in closing US dollar /
Chilean peso exchange rate
2012 Scenarios
US$ Closure
CLP th
US$+10%
CLP th
Effect on December 2012 income
CLP TH
+10%
(29,849)
-10%
29,849
As shown in the preceding table, the sensitivity analysis suggests that the effect on the Corporation’s income could have
increased (decreased) by CLP th 2,058,731 in 2012, in the face of ± 10% fluctuations in the average US dollar exchange
rate as of 31 December 2012.
Balance as of Balance as of
ASSETS
Currency12-31-2012 12-31-2011
CLP th
CLP th
CLP
38,539,685
40,375,166
Cash and cash equivalentsUS$
5,166,863
2,082,547
Cash and cash equivalentsPEN
131,876
68,401
Cash and cash equivalentsEUR
19,955
18,868
Other financial assets, currentUS$
19,392,604
40,243,620
Other non-financial assets, current
CLP
6,812,126
5,225,093
Trade and other current accounts receivable
CLP
301,964,523
282,517,789
Accounts receivable from related entities, current
CLP
1,422,399
-
Inventories
CLP
245,144,638
217,100,494
Current tax assets
CLP
54,756,134
31,309,756
Non-current assets or groups of assets for distribution classified as held for sale
CLP
-
6,158,823
Current assets, total
673,350,803
625,100,557
25,473,662
25,012,096
CLP
Non-current rights receivable
CLP
65,133,730
79,600,103
Intangible assets other than goodwill
CLP
22,428,921
20,322,247
Goodwill
CLP
29,523,393
29,948,810
Property, plant and equipment, net
CLP
1,114,043,374
1,011,784,159
Investment property
CLP
127,723,170
129,655,015
Deferred tax assets
CLP
59,642,301
53,343,901
Non-current assets, total
1,443,968,551
1,349,666,331
Assets, total
2,117,319,354
1,974,766,888
107
Balance as of Balance as of
LIABILITIES
Currency12-31-2012 12-31-2011
CLP TH
CLP TH
Other current financial liabilities
CLP
321,007,230
71,864,780
Other current financial liabilitiesUF
24,647,709
29,261,814
Other current financial liabilitiesUS$
35,965,008
30,882,140
CLP
464,484,097
430,713,247
Trade and other accounts payableUS$
7,052,609
10,786,997
Accounts payable to related entities, currentUF
736,080
686,944
Accounts payable to related entities, currentUS$
-
74,543
Other short-term provisions
CLP
3,946,052
7,307,859
CLP
-
26,429,789
Current employee benefit provisions
CLP
28,684,557
30,326,249
Other current non-financial liabilities
CLP
39,648,761
38,971,108
Current liabilities, total 926,172,103
677,305,470
CLP
19,487,728
218,914,487
Other non-current financial liabilitiesUF
113,787,845
117,710,969
Accounts payable to related entities, non-currentUF
296,495,204
289,398,245
Other non-current financial liabilities
CLP
37,480,529
27,271,190
Non-current employee benefit provisions
CLP
-
60,000
Other non-financial liabilities no currents
CLP
2,954,113
3,780,245
Non-current liabilities, total 470,205,419
657,135,136
Total liabilities 1,396,377,522
1,334,440,606
Issued capital
CLP
457,867,231
457,867,231
Accumulated income (loss)
CLP
253,425,276
172,618,711
Other reserves
CLP
9,622,109
9,815,250
Net equity attributable to the controlling interest owners 720,914,616
640,301,192
CLP
27,216
25,090
Total equity 720,941,832
640,326,282
Total net equity and liabilities 2,117,319,354
,974,766,888
Minority interests
(ii) Interest rate risk
The Corporation’s interest rate risk stems from its
third-party debt, which includes letters of credit and
an overdraft line. The Corporation’s variable income
interest rate debt exposes it to cash flow interest rate
risk, while its fixed interest rate exposes the Corporation to fair value interest rate risk.
The Corporation’s exposure to risks associated with
market interest rate fluctuations is consequently low,
given that a significant percentage of its debt is struc-
tured at a fixed rate, either directly or through derivative contracts.
The results of a sensitivity analysis on variable rate
debt net of hedging indicate that a 5% increase in
the interest rate would have meant increased losses
before taxes amounting to CLP th 696,450 if all other
variables remained constant.
The Corporation has a cross currency swap, which is
used to transform debt from Chilean pesos to UF and
from variable rate to fixed rate.
(iii) Inflation risk
As of 31 December 2012, the company held 62% of its
financial debt in UF (61% in 2011), resulting in fluctuations in the debt’s Chilean peso-denominated value.
In order to quantify the effect on the Corporation’s
pre-tax income, a sensitivity analysis was performed
assuming inflation amounting to 5% for next year,
maintaining all other variables constant.
Inflation risk is the risk that changes in market prices,
resulting from a country’s domestic inflation, affect
the group’s revenue or the value of the financial
instruments it holds. Inflation risk is managed in an
effort to control exposure in the face of inflation-related market changes, within reasonable parameters,
while simultaneously optimizing returns.
If the UF had increased by 5%, the effect on pretax income would be losses amounting to CLP th
20,741,407.
b) Liquidity Risk
Liquidity risk is defined as the Corporation’s probability of monetary loss through difficulty complying with short-term
obligations and/or difficulty obtaining financing in order to continue normal operations. A time lapse between cash disbursements and receipts translates into the company’s inability to comply with the terms and conditions of contractual
commitments to creditors and an inability to execute business plans.
Prudent liquidity risk management implies holding sufficient cash; ensuring adequate available financing through committed loan facilities and the ability to liquidate market positions.
Management monitors the Corporation’s cash position daily and continuously makes liquidity projections in order to pay,
pre-pay, refinance and/or take out new loans in accordance with the Corporation’s ability to generate cash flow.
The Corporation’s management presented negative working capital as of 31 December 2012 and 31 December 2011. The
Corporation consequently has duly approved and renewable short-term lines of credit amounting to CLP 268.9 billion
(CLP $218.0 billion in 2011), which should reasonably reduce liquidity risk. The management is currently evaluating financial debt restructuring.
The following is an analysis of financial liabilities, grouped by maturity:
Balance as of 31 December 2012
Nominal contractual flows
OverOverOver
1 year
3 years
5 years
Book Up toand up toand up toand up toOver
Liabilitiesvalue
1 year
3 years
5 years
10 years
10 yearstotal
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Non-guaranteed bank loans
364,235,076
350,875,837
20,178,060
-
-
-
371,053,897
Public obligations (bonds)
107,442,269
23,046,077
12,533,693
12,384,821
32,128,912
71,113,515
151,207,018
Financial lease obligations
33,416,545
8,510,733
15,349,237
3,315,733
6,746,464
8,800,137
42,722,304
Accounts payable to related companies
297,231,284
12,793,768
25,587,536
25,622,587
322,117,791
-
386,121,682
471,536,706
471,536,706
-
-
-
- 471,536,706
Subtotal
Derivative instruments
Total
1,273,861,880
9,801,630
866,763,121 73,648,526 41,323,141 360,993,167 79,913,6521,422,641,607
5,824,560
3,474,642
-
-
-
9,299,202
1,283,663,510 872,587,681 77,123,168 41,323,141 360,993,167 79,913,6521,431,940,809
109
Balance as of 31 December 2011
Nominal contractual flows
OverOverOver
1 year
3 years
5 years
Book Up toand up toand up toand up toOver
Liabilitiesvalue
1 year
3 years
5 years
10 years
10 yearstotal
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
313,698.728 103,241,824
199,800,266
-
-
-
303,042,090
106,798.457
6,778,121
28,683,939
12,088,376
30,220,558
76,594,828
154,365,822
33,774.813
9,499,964
12,544,366
8,351,750
9,764,027
12,424,671
52,584,778
290,159.732
13,232,715
26,393,120
26,429,275
329,024,080
-
395,079,190
442,301.491 441,500,244
-
-
-
-
441,500,244
1,186,733.221574,252,868
267,421,691
46,869,401
369,008,665
21,578,328
-
-
Subtotal
Derivative instruments
Total
14,362.192
2,024,666
1,201,095.413576,277,534 289,000,019
c) Credit risk
Definition of credit risk
Credit risk is the Group’s risk of financial loss if a customer
or counterpart in a financial instrument does not fulfill
contractual obligations. This default or non-recoverability primarily stems from loans and advances to customers
through credit card operations.
Business characteristics
The activities and business the institution engages in
are limited to those approved by the Board of Directors
and the Walmart Chile Servicios Financieros Ltda. Risk
Committee. According to the guidelines of Walmart Chile Servicios Financieros S.A., a Walmart Chile subsidiary,
the main objective of the financial business is to create
and develop a retail consumer bank, targeting all income segments. In its initial borrowing stage, the bank is
tied to Walmart Chile’s commercial business. Other businesses are concurrently developed, adding value to the
market in hopes that these will be valued by customers
and support a stable growth strategy that will produce
returns expected by the shareholders. The Corporation’s
credit portfolio is quite fragmented, without individual
debtors owing large amounts and this substantially mitigates credit risk.
Walmart Chile Servicios Financieros Ltda. offers value to
customers from its different supermarket formats, providing a payment and financing method by means of its
Presto card that encourages customer loyalty and provides additional financial options for purchases.
The Presto card value offer is complemented by the
additional option of using the card as a payment and/
46,869,401
369,008,665
89,019,499 1,346,572,124
-
23,602,994
89,019,499 1,370,175,118
or financing method at associated businesses, which
include service stations, pharmacies and retail establishments.
In addition, Walmart Chile Servicios Financieros Ltda.
complements its range of products with a series of financial products and services that include general and life
insurance, travel and payment of services, among other,
which support the one-stop shopping concept.
Operating a widely available credit requires loan and
collection processes to be highly standardized and automated from the very beginning of credit operations.
Walmart Chile has placed paramount importance on
guidelines established by the Risk Committee, separation of functions, credit policies constantly tested for
loss rates, adaptation to economic cycles and the use of
platforms and scoring models throughout each phase of
the credit process, all of which take into account the different segments in which the business operates.
Credit risk management
The Risk Committee is Walmart Chile Servicios Financieros Ltda.’s highest authority in matters of credit risk management. The Committee has delegated execution of
credit risk management policy to the Risk and Collection
Division, which reports directly to General Management.
Risk policies are ratified by the Corporation’s Board of Directors.
The Risk and Collection Division is absolutely independent of Walmart Chile’s commercial areas: financing and
retail. Execution of the credit model is decentralized.
The operations and general audit areas are responsible
for balancing interests in the credit approval processes
conducted at Presto branches. However, general credit policy decisions are made centrally by the Risk and
Collection Division and executed via the general credit
platform.
Stages in the credit risk management process
The loan origination and collection process
Obtaining, certifying and validating customer information according to evaluation guidelines, and consequently approving sale of the products, is of the utmost
importance during the loan origination and collection
process. No large-scale risk approval system can be successful if customer information is not properly entered
into the evaluation and control systems, or if customer
information entered is not accurate and complete.
The Presto evaluation model is based on strict compliance with credit policy, a scoring system and minimum
approval score, which takes into account the maximum
acceptable loss rate for the business. The cut-off score is
established by the Risk Committee.
The process is based on use of an automated evaluation
system, which contains the scheduling of authorized
credit policies. The system accepts or rejects applicants
and establishes a credit limit and corresponding lines of
credit.
The face-to-face evaluation process begins when an
applicant provides his or her information. The sales executive then analyzes the information, verifies that the
information is accurate and then enters this information
into the credit evaluation system.
All information provided by the applicant and entered
into the system is subject to audit and verification of
compliance with all of the policies, procedures, manuals,
work instructions, informational bulletins and memos related to opening accounts. The branch is responsible for
ensuring correct entry of information and compliance
with the Corporation’s standards.
Determining an applicant’s credit limit is as crucial as
the rest of the variables to be considered in the credit
evaluation process. Since it is so important, the company
has established a policy for calculating credit limits that
takes into consideration acceptable maximum limits, according to the commitment levels that can be established for each customer. The process begins by establishing the amount of income to be considered as a basis.
Monthly payment capacity is then estimated and the
amount of credit to be extended is determined.
Credit limits are established considering two types of
analysis: maximum financial burden and maximum times monthly income. The former represents monthly financial burden while the latter considers the applicant’s
total borrowing or leverage. Each analysis is conducted
as a function of the customer’s income and risk level at
the time of evaluation.
Together, the concepts of maximum financial burden
and maximum times monthly income produce an
amount-term ratio that is instrumental in the credit approval process. The Corporation manages account origination, account maintenance, credit limit upgrades,
blocks, product upgrades, etc., using technological platforms provided by suppliers such as Experian (UK) and
Fair Isaac (USA).
Finally, the Corporation has recently created a collection
subsidiary, Servicios y Cobranzas Ltda. (Seyco), which
manages all stages of the collection cycle, including
early default, late default and write-off recovery. Seyco
outsources some collection functions at certain stages of
the cycle. This is done in line with ongoing maintenance
and efforts to meet benchmarks, in order to maximize all
recovery and efficiency indicators for all processes.
Credit risk analysis
Given the nature of the Corporation’s loans, risk assessment in order to determine losses incurred for the
portfolio is conducted using group evaluation models.
The first criterion for portfolio segmentation is adequate
identification of the renegotiated portfolio. Additional
segmentation criteria are also used to identify and directly monitor specific customer groups within normal
and renegotiated portfolios, according to profiles, risk
levels and characteristics of operations.
Variables used to develop models and calculate provisions include: (a) attributes and characteristics of different customer groups; (b) internal behavior variables,
especially, credit operation default and debtor payment
behavior; (c) customers’ external behavior variables; (d)
renegotiation or payment arrangements with debtors.
Credit risk is managed by groups of customers. The objective is to continuously evaluate the entire loan portfolio, so as to make the necessary provisions in a timely
manner and ensure that provisions are sufficient for covering losses in the event that loans are not recovered.
tional card holders, and charged to the account
holder’s line of credit when the line of credit has sufficient available funds and the account has not been
blocked for any reason, for example, due to default.
Given the nature of the portfolio, a group evaluation model is applied. This is because:
ʭʭ
Credit is granted to individuals.
ʭʭ
There is a high volume of credit operations.
ʭʭ
Credit limits authorized for each customer are low.
Presto has determined that an account owner’s initial line of credit, against which purchases are charged, shall be determined based on the customer’s
risk profile and income. This credit limit is reported in
the customer’s monthly account statement and may
change depending on his or her internal and external
payment behavior, as long as this remains within the
credit limits reported to the customer when the credit card was approved. The entire portfolio can be modeled around homogenous customer characteristics, which allows the company to identify segments with varying probabilities of
loss.
Risk measurement includes indicators such as: 30 days
overdue, 60 days overdue, 90 days overdue, annual write-off rate, payments and percentage of portfolio that is
renegotiated. Methodologies used include: backtesting,
vintage, provision coverage and monitoring the minimum cut-off scores for customer approval.
For assessment and recognition of impairment, the portfolio is segmented by type of debtor and loan until appropriate levels are reached.
Presto credit card users may make purchases using
their authorized line of credit at any of Presto’s associated businesses, which include entities related and
unrelated to Walmart Chile Servicios Financieros.
The range of terms for credit card purchases is 1 to 36
months and the average is 2.5 months.
ʭʭ
The methodology applied includes risk profiles, so that
individual provisions reflect the reference group’s risk.
Therefore, provisions are calculated monthly and each
group profile is used to determine the change in customers therein.
Presto has determined that cash advances are cash
withdrawals against the line of credit, available for
a percentage of the line of credit authorized for the
account owner. The percentage available for cash
advances is determined according to the customer
profile.
Losses are measured in the following portfolio accounts:
provisions, write-offs and recoveries. The loss ratio is determined as the quotient between the aforementioned
accounts and the amount loaned or sold in each instance.
Cash advances can be withdrawn from Presto-affiliated ATMs and at Lider, Lider Express and Ekono supermarkets.
Terms for cash advances range from 1 to 24 months
and the average is 11 months.
The model considers the following information:
ʭʭ
Normal portfolio: cash-price installments, credit installments, revolving debt and cash advances.
ʭʭ
Renegotiated portfolio: the number of renegotiations
and historical record of the original product.
ʭʭ
Presto determines minimum payment in each billing
period as a function of the operations and transactions realized by the cardholder(s). This amount may
include all or a percentage of the transactions plus
the sum of amounts owed from prior transactions.
Products
Purchases
Presto has determined that purchases may be made
by Presto credit card users, account holders or addi-
Minimum payment
Presto has determined that minimum payment is the
minimum amount established for each billing period.
The credit card statement informs the cardholder of
the minimum payment due, which must be paid on
or before the due date stated therein.
Credit policies, average terms and ranges of terms
Current credit policies for the subsidiary Walmart Chile
Servicios Financieros Ltda., hereinafter “Presto”, as well as
average terms and ranges of terms for renegotiations, refinancing, provisions and write-offs are listed as follows:
ʭʭ
Cash advances
ʭʭ
Associated businesses
Presto has fixed fees charged to associated businesses for accepting the Presto card (commission or
111
ʭʭ
merchant discount) as a percentage of each transaction performed using a Presto card at the associated
business.
The minimum term between refinancing is established
based on the customer’s risk profile. Consecutive refinancing is not permitted.
The range of terms and average terms for credit purchases from associated businesses are noted in the
preceding Purchases section.
Provisions
Given the nature of Presto loans, risk assessment to
determine the provision for bad debt is conducted via
group evaluation models. Consequently, Presto’s portfolio is separated into two segments: normal portfolio and
renegotiated portfolio.
“Súper avance”
According to the provisions of Walmart Chile Servicios Financieros Ltda., Presto has determined that
customers with better risk profiles may be granted
access to installment loans associated to the credit
card. The corresponding cash amounts can be withdrawn at Presto-affiliated ATMs and at Lider, Lider Express and Ekono supermarkets.
Access to Súper Avance is subject to Presto card
account holder credit evaluation and is established
according to the customer’s profile. Súper Avance is
available for a pre-determined term.
The range of terms for Súper Avances is 12 to 60
months and the average is 39 months.
The provision associated with each account is based
on the time in arrears, the portfolio segment and other
variables. Presto has separate provision matrices for the
normal and renegotiated portfolio segments.
Write-offs
Presto has determined that debt balances for debtors
with payment past-due for over 180 days are written off.
Collection channels established by Presto are responsible for collecting on the written-off portfolio. Debtors
may negotiate payment agreements or pay the entire
written-off debt. All written-off accounts are recorded
in memorandum accounts. Income is recognized only
when payments are received.
Renegotiation
Presto has determined that customers who are between
30 and 180 days in arrears may renegotiate their total
debt.
Information about types of portfolios and subcategories
The Presto portfolio is classified into renegotiated and
non-renegotiated categories.
The renegotiation policy requires an initial deposit, the
amount of which depends on the amount owed and the
number of days in arrears. The average initial deposit for
the 2012 period came to 8.8%.
The renegotiated portfolio includes accounts with at
least one renegotiation agreement, according to the
aforementioned renegotiation policy.
To date, the maximum number of renegotiations per
customer is three, with no more than two renegotiations
within the last mobile 12-month period.
The account is disabled while the renegotiated debt is
being repaid.
Depending on the customer’s reputation, risk assessment and observance of his or her renegotiated
payment commitment, this Division may authorized account enablement.
The range of terms is between 6 and 60 months; the average is 30 months.
Refinancing
Presto has determined that customers with payment
that has been past-due for no more than 29 days can
refinance their debt over a term of 3 to 48 months. The
average is 27 months.
Guarantees
The credit evaluation model does not require guarantees
to hedge credit risk.
5.2 Equity risk management
Walmart Chile S.A.’s equity management objectives are:
ʭʭ
To safeguard the Corporation’s ability to continue
operating.
ʭʭ
To earn returns for shareholders.
ʭʭ
To maintain an optimal equity structure and reduce
its cost.
The Corporation’s policy requires that a solid equity base
be maintained in order to safeguard the confidence of
investors, creditors and the market and to support the
113
company’s future development. The Board of Directors monitors return on equity, which is defined by the Group as net
income divided by total shareholder equity, excluding non-redeemable preferred stock and minority interests. The Board
also monitors dividends paid to ordinary shareholders.
In order to maintain or adjust equity structure, the Corporation can adjust the amount of dividends payable to shareholders, reimburse shareholders equity, issue new shares, sell assets to reduce debt or postpone new investments.
To date, the company must comply with certain covenants, which are discussed in the note on Contingency, Lawsuits
and Other Restrictions
The Corporation monitors equity using debt and equity ratios. These indicators are calculated based on the consolidated
financial statements, presented according to the stipulated format and deadlines.
Debt ratio (times)
12-31-2012
12-31-2011
0.71
0.73
Equity (CLP bn)
720,942
640,326
Equity (UF th)
31,564
28,722
6. Management estimations, judgments and
critical criteria
The preparation of financial statements in accordance
with IFRS requires management to use good judgment,
estimations and assumptions that affect the application
of accounting policies and the reported amounts of
assets and liabilities, income and expenses. These estimations and the assumptions associated with them are
based on historical experience and several other factors
that are considered reasonable under the circumstances.
Actual results may differ from said estimations.
Estimations and the related assumptions are revised on
an ongoing basis. Revisions of accounting estimates are
recognized in the period in which the estimate is revised,
if the revision affects only that period or the revision period and future periods.
The book values of the following estimations are disclosed in the corresponding notes in the financial statements.
The following estimations have been made based on
the best information available when the current financial statements were issued, but events may occur in the
future and force these to be changed (up or down) over
the coming periods. This would be done prospectively,
recognizing the effects of changing estimations in the
corresponding consolidated financial statements.
6.1 Estimation of irrecoverable debt in the Presto
portfolio
The aim of the impairment policy is to permanently evaluate the entire loan portfolio in order to constitute in
a timely manner the necessary and sufficient provisions
to cover the portfolio risk, in accordance with the provisions of IAS 39.
Calculation is based on a focus on incurred losses that
seeks to capture objective evidence of operational impairment, allowing us to prevent future flows from not
being received in accordance with the agreement and
considering expectations of payment, in amount as well
as timing, and the valuation of said losses based on the
difference between the contractual flows and those adjusted for impairment, the latter updated at the effective
placement interest rate.
Given the nature of Presto loans, losses incurred are estimated using group evaluation methods. Consequently,
Presto’s portfolio is separated into different segments
and determined based on factors depending on default
category, portfolio segment and other variables. Flows
are discounted according to the actual portfolio rate.
Presto has separate provision matrices for renegotiated
and non-renegotiated portfolio segments.
6.2 Useful life and residual value of property, plant
and equipment, investment property and intangibles
6.2.1 Property, plant and equipment
The valuation of investments for construction and infrastructure projects, installations, machinery and equi-
pment and other assets includes making estimations to
determine the residual value and useful life in order to
calculate the depreciation of each asset. These estimations take into consideration technology and operations
factors and alternative uses of the assets. Walmart Chile
S.A. revises the estimated useful life and residual value
of these fixed assets at the end of each annual period or
when an event occurs that indicates that said useful life
or residual value is different. Management regularly reviews these assumptions and prospectively adjusts them
in the event that any change is identified.
Asset dismantling costs, which constitute an obligation
for the Corporation, are determined by estimating the
value of removing aggregate goods in order to leave
goods in their original condition.
6.2.2Intangible assets
The Corporation revises the book values of its tangible
and intangible assets in order to determine if there is
any indication that these assets may be impaired. For the
purpose of impairment evaluation, assets that do not independently generate cash are grouped together into
an appropriate cash generating unit (CGU). The recoverable amount for these assets or CGUs is measured as the
lesser value between their fair value (future discounted
cash flow method) and their book values.
There are intangible assets with undetermined useful lives that do not evidence any indication of impairment.
6.3 Recoverability of deferred taxes
The Walmart Chile Group accounts for deferred tax assets in consideration of the possibility of their recovery,
based on the existence of deferred tax liabilities with similar reversion periods and on the possibility of generating sufficient taxable earnings in the future. The latter is
based on internal management projections made using
the latest information available. Real income and flows of
paid or received taxes may differ from estimations made
by the Corporation as a result of future tax changes not
foreseen in the estimates.
6.4 Financial leases
In the process of applying accounting policies, management has had to make judgments that could have a
significant effect on the amounts entered into the consolidated financial statements, in relation to determining
whether operative or financial leases exist depending on
the transfer of risks and benefits of the leased assets.
Lease contracts are classified as financial when the contract transfers substantially all the risks and benefits inhe-
rent to ownership of the asset in accordance with the IAS
17 “Leases” to the Corporation.
6.5 Provisions for litigation and legal contingencies
The Walmart Chile group maintains legal proceedings
for diverse reasons and it is not possible to precisely determine the economic effects these could have on the
financial statements. For cases in which the Corporation’s
management and legal advisors consider that favorable
results will be obtained or that the results are uncertain
and the cases are ongoing, no provisions have been
created. For cases in which the Corporation’s management or legal advisors consider that the outcome may
be unfavorable, provisions have been created for expenses depending on estimations of the probable amounts
to be paid.
6.6 Building customer loyalty
6.7 Fair value of derivative instruments
The fair value of derivative contracts is determined using
valuation techniques that maximize the use of available
market information. Valuation techniques generally used
by the Corporation are: market quotations for similar instruments and/or estimation of the present value of future cash flows using future market price curves at the
close of the fiscal year.
6.8 Fair value of assets and liabilities
In certain cases IFRS require assets and liabilities to be
registered at fair value. Fair value is the amount at which
an asset can be bought or sold or the amount at which
a liability can be incurred or liquidated in a current transaction between parties duly informed of the conditions
of mutual independence, as opposed to a forced liquidation. The measurement bases of assets and liabilities
is their fair value in accordance with current prices in the
asset market. If these are not available, the Corporation
estimates said values based on the best information
available, including the use of models and other valuation techniques.
7. Information by segment
An operating segment is a component of an entity that
participates in business activities from which it can receive revenue and incur expenses (including income and
expenses related to transactions with other parts of the
same entity), whose operational income is revised regularly by the chief executive who makes decisions for the
entity with respect to resources assigned to the segment
and evaluation of its performance, and for which financial information is available.
Walmart Chile operations are limited to Chile and none
of its customers represents accounts for more than 10%
of the Corporation’s revenue.
7.1 The retail division
Walmart Chile Comercial S.A. supervises all of the
Corporation’s retail activities, including the operations of
supermarkets under the Lider, Ekono and Super Bodega
Acuenta brands. We currently operate two formats under
the Lider brand, Hiper Líder and Líder Express supermarkets. We have locations from Arica to Punta Arenas, and
as of December 2012 there were 327 stores, with a total
CLP 2.043 trillion reported during the period analyzed.
7.2 The financial services division
Walmart Chile Financial Services S.A. provides credit to
consumers through the Presto card and offers several
products and services that add value to our business.
Presto allows clients to make purchases at all Lider for-
mats and at more than 55,000 associated businesses,
which makes it the largest non-banking network in the
country. Presto is accepted nationwide from Arica to
Punta Arenas at service points and ATMs.
The financial division also provides a wide range of complementary services, such as insurance and assistance,
mutual funds, cash loans and travel, among other.
7.3 The real estate division
Walmart Chile Inmobiliaria S.A. manages and administers
real estate property. In close relation with this business,
the real estate division develops and administers supermarket, hypermarket and shopping center locations to
ensure that Walmart Chile will have the best locations
and real estate centers to better serve its customers
throughout the country.
The real estate division currently manages a portfolio of
327 supermarkets including those it owns, leases and
leases under financial lease contracts to the retail division.
Walmart Chile Inmobiliaria S.A. also manages 12 shopping centers (10 owned, 1 leased and 1 managed) and
1,779 stores (including supermarkets) that are distributed among the 12 shopping centers and stores included in different supermarket formats throughout the
country. Walmart Chile Inmobiliaria S.A. operations span
from the Parinacota Region to the Magallanes Region.
Walmart Chile Inmobiliaria S.A. is one of the leading
shopping center operators in Chile in the neighborhood
format segment (strip centers).
7.4 Corporate
Information about areas other than the business areas
described above, mainly related to obtaining financing
from third parties and providing support to the rest of
the businesses, which is not distributed among the segments, is classified as “Other” in the note on operating
segments.
115
As of 31 December 2012
Financial
INCOME STATEMENT
Retail
Real Estate
Services
Corporatetotal
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
2,742,269,408
37,641,711
111,370,868
Cost of sales
(2,043,053,801)
-
(59,639,924)
699,215,607
37,641,711
51,730,944
1,519,982
790,108,244
9,951,088
-
1,210,542
-
11,161,630
(31,823,514)
-
-
-
(31,823,514)
(488,672,419)
(10,670,603)
(47,954,944)
(7,769,267)
(555,067,233)
(25,900,481)
(5,200,486)
(4,935,597)
(167,771)
(36,204,335)
109,198
1,459,749
2,591
694
1,572,232
Gross margin
Distribution costs
Financial income
1,519,982
2,892,801,969
- (2,102,693,725)
264,344
4,691
10,010
688,597
967,642
(1,372,021)
(3,112,914)
(40,529)
(20,976,105)
(25,501,569)
(143,260)
4,073
(62,989)
(42,900)
(245,076)
Income by readjustment units
(4,189,700)
(245,892)
(1,485,146)
(4,050,350)
(9,971,088)
Income (loss) before tax
157,438,842
19,880,329
(1,525,118)
(30,797,120)
144,996,933
(26,175,411)
(3,976,066)
(613,888)
131,263,431
15,904,263
(2,139,006)
(29,390,521)
115,638,167
131,257,432
15,905,503
(2,136,508)
(29,390,521)
115,635,906
5,999
(1,240)
(2,498)
-
2,261
Income (loss)
131,263,431
15,904,263
(2,139,006)
(29,390,521)
115,638,167
Operating income
158,546,519
22,988.552
(1,494,599)
(10,509,612)
169,530,860
61,742,427
5,427.735
6,312,267
2,282,388
75,764,817
28.416.2874,817,668
(8,227,224)
245,295,677
Financial costs
Income tax expenses
Income (loss) from continuous operations
Income (loss), attributable to the controlling interest owners
Depreciation and amortization
1,406,599
(29,358,766)
Operating income plus Depreciation and amortization
220,288,946
Revenue from ordinary intercompany activities
629,487,519
93,396,991
5,932,490
102,923
728,919,923
Trade and other accounts receivable, current and non-current 95,789,059
4,418,883
266,506,265
384,046
367,098,253
Inventories
245,144,638
752,771,345
340,487,355
2,264,235
-
110,757,739
-
16,965,431
127,723,170
Trade and other accounts payable, current and non-current
446,230,329
14,054,783
10,821,740
429,854
471,536,706
Property, plant and equipment acquisition flows
140,828,496
37,054,114
355,408
-
178,238,018
-
-
-
-
-
1,263,591,410
493,500,740
304,597,165
55,630,039 2,117,319,354
Total liabilities
593,128,967
102,836,712
14,399,301
686,012,542 1,396,377,522
Net flow from operating activities
214,368,401
33,864,962
(1,857,617)
(27,340,909)
219,034,837
Net flow from investment activities
(150,712,360)
(29,108,793)
(355,408)
100,000
(180,076,561)
9,691,236
-
-
(47,384,982)
(37,693,746)
Investment property
Amount of subsidiary investments
Total assets
Net flow from financing activities
-
-
-245,144,638
18,520,439 1,114,043,374
117
Financial
INCOME STATEMENT
Retail
Real Estate
Services
Corporatetotal
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
2,438,607,826
3,026,379
2,604,483,217
Cost of sales
(1,827,435,037)
-
611,172,789
34,126,588
(66,747,364)
-
(1,894,182,401)
61,975,060
3,026,379
710,300,816
12,268,544
-
82,203
22,680,097
35,030,844
Distribution costs
(23,233,173)
-
(15,892)
-
(23,249,065)
(436,425,651)
(11,156,891)
(48,958,458)
(10,650,180)
(507,191,180)
(25,958,339)
(5,552,430)
(5,072,563)
(298,864)
(36,882,196)
(10,393)
(20,098)
14,826
(345,793)
(361,458)
Financial income
1,077,028
44,492
43,225
1,088,130
2,252,875
Financial costs
(7,427,012)
(4,589,833)
(40,347)
(8,677,145)
(20,734,337)
1,500,038
-
-
(1,695,717)
(195,679)
(6,857,462)
(606)
(141,318)
226,578
(6,772,808)
(4,987,054)
(270,163)
(3,121,541)
(7,355,755)
(15,734,513)
121,119,315
12,581,059
4,765,195
(2,002,270)
136,463,299
Gross margin
34,126,588
128,722,424
Share of income (losses) of subsidiaries
and joint ventures accounted for using the equity method
Income tax expenses
(20,087,329)
(2,516,212)
5,383,177
(5,338,415)
(22,558,779)
101,031,986
10,064,847
10,148,372
(7,340,685)
113,904,520
101,018,703
10,065,677
10,148,086
(7,340,685)
113,891,781
13,283
(830)
286
-
12,739
Income (loss)
101,031,986
10,064,847
10,148,372
(7,340,685)
113,904,520
Operating income
127,469,299
17,126,400
4,762,317
5,586,745
154,944,761
50,663,951
5,103,214
6,512,163
2,442,521
64,721,849
178,133,250
22,229,614
11,274,480
8,029,266
219,666,610
87,348,517
82,158,650
124,624
149,122
169,780,913
Trade and other accounts receivable, current and non-current 60,726,493
2,293,934
298,606,423
491,042
362,117,892
Income (loss) from continuous operations
Income (loss), attributable to controlling interest owners
Operating income plus depreciation and amortization
Revenue from ordinary intercompany activities
Inventories
217,100,494
242,237,344
742,864,742
5,738,416
-
112,358,448
-
17,296,567
392,172,113
30,397,544
18,478,191
452,396
441,500,244
67,206,784
74,834,419
3,276,063
62,247
145,379,513
-
-
-
-
-
Total assets
690,792,011
862,123,981
344,047,542
77,803,354 1,974,766,888
Total liabilities
568,349,627
148,411,336
24,025,820
593,653,823 1,334,440,606
Net flow from operating activities
115,142,359
14,687,327
2,751,769
Net flow from investment activities
(70,528,645)
(65,685,987)
Net flow from financing activities
(20,797,292)
-
Investment property
Trade and other accounts payable, current and non-current
Property, plant and equipment acquisition flows
Amount of subsidiary investments
-
-
-217,100,494
20,943,657 1,011,784,159
129,655,015
17,291,959
149,873,414
(3,276,063)
17,898,229
(121,592,466)
-
(46,074,660)
(66,871,952)
8. Cash and cash equivalents
Composition of this item as of 31 December 2012 and 31 December 2011 is presented as follows:
Types of cash and cash equivalents
Balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
Cash on hand
6,274,614
5,257,728
Bank balances
36,479,445
35,262,020
1,104,320
2,025,234
43,858,379
42,544,982
Short-term deposits
Cash and cash equivalents included in the consolidated financial statements do not differ from those presented in the
consolidated cash flow statements.
Breakdown of this item by currency as of 31 December 2012 and 2011 is presented as follows:
Cash and cash equivalents information by currency
Currency
Amount of cash and cash equivalents
CLP
Balance as of 12-31-2012
12-31-2011
CLP TH
CLP TH
38,539,685
40,375,166
Amount of cash and cash equivalentsPEN
131,876
68,401
Amount of cash and cash equivalentsUS$
5,166,863
2,082,547
Amount of cash and cash equivalentsEUR
19,955
18,868
Total cash and cash equivalents
43,858,379
42,544,982
The use of funds is administered according to our investment policy for financial resources, the main objective of which
is to regulate and establish a framework for general action to invest the Corporation’s available resources in local and/or
foreign currency, in order to optimize the use of cash at a minimum risk level, under criteria of security, liquidity, profitability and hedging, at market prices and without any intention to speculate, exclusively in institutions authorized and
supervised by the Superintendency of Banks and Financial Institutions (SBIF) or the Securities and Insurance Supervisor
(SVS) with a minimum risk classification of AA.
119
9. Financial instruments
9.1 Financial instruments by category
Accounting policies related to financial instruments have been applied to the items detailed below:
Financial assets Loans and at fair value Held untilaccounts Hedging through profit Assets
maturity receivablederivatives
or losstotal
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Other financial assets
-
-
-
19,392,604
19,392,604
Trade and other accounts receivable
-
367,098,253
-
-
367,098,253
Total
-
367,098,253
-
19,392,604386,490,857
Financial assets at fair value Other financial Hedging with changes Liabilitiesliabilitiesderivativesin resultstotal
CLP TH
CLP TH
CLP TH
CLP TH
Other financial liabilities
505,093,890
-
9,801,630
471,536,706
-
471,536,706
Accounts payable to related entities
297,231,284
-
297,231,284
Total
1,273,861,880
-
514,895,520
9,801,6301,283,663,510
Financial assets Loans and at fair value Held untilaccounts Hedging through profit Assets
maturity receivablederivatives
or losstotal
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Other financial assets
-
-
-
40,243,620
40,243,620
-
362,117,892
-
-
362,117,892
Total
-
362,117,892
-
40,243,620402,361,512
Financial assets at fair value Other financial Hedging with changes Liabilitiesliabilitiesderivativesin resultstotal
CLP TH
CLP TH
CLP TH
CLP TH
454,271,998
-
14,362,192
468,634,190
441,500,244
-
-
441,500,244
Accounts payable to related entities
290,159,732
-
-
290,159,732
Total
1,185,931,974
-
14,362,1921,200,294,166
9.2 Fair value estimation
Corporation held financial instruments recorded at fair
value.
Financial instrument categories include:
ʭʭ
(i) Term deposit investment (cash equivalent and
other financial assets),
ʭʭ
(ii) Interest rate swap contracts
ʭʭ
(iii) Currency swap contracts
The Corporation has classified the measurement of fair
value using a hierarchy that reflects the level of information used for valuation. This hierarchy consists of 3 levels:
(I) fair value based on quotation in active markets for a
similar class of assets or liabilities, (II) fair value based on
valuation techniques that use information based on the
market price or market price derivatives of similar financial instruments, (III) fair value based on valuation model
that do not use market information.
The fair value of financial instruments traded in active
markets, such as investments acquired for negotiation, is
based on market quotations at the close of the financial
year using the current purchase price. The fair value of
financial assets not traded in active markets (derivative
contracts) is determined using valuation techniques that
maximize the use of available market information. The
valuation techniques generally used by the Corporation
are: market quotations for similar instruments and/or estimation of the present value of future cash flow using
the future market price curves at the close of the fiscal
year.
The following table shows the classification of financial instruments at fair value as of 31 December 2012 and 31 December2011, according to the level of information used for valuation:
Fair value
as of
Description
12-31-2012
CLP TH
Level I
CLP TH
Measurement of fair value using values considered to be
Level II
Level III
CLP TH
CLP TH
Assets
Term deposits
19,392,604
-
19,392,604
-
9,801,630
-
9,801,630
-
Fair value
as of
Description
12-31-2011
CLP TH
Level I
CLP TH
Liabilities
Measurement of fair value using values considered to be
Level II
Level III
CLP TH
CLP TH
Assets
Term deposits
40,243,620
-
40,243,620
-
14,362,192
-
14,362,192
-
Liabilities
Fair value of interest rate derivatives
121
Furthermore, as of 31 December 2012 and 31 December 2010, the company holds financial instruments that are not
recorded at fair value. In order to comply with the requirement to disclose fair values, the Corporation has valued these
instruments as shown in the table below:
As of 31 December 2012 As of 31 December 2011
Book
Fair
Book
Fair
Descriptionvaluevaluevaluevalue
M$
CLP TH
CLP TH
CLP TH
Cash on hand
6,274,614
6,274,614
5,257,728
5,257,728
Bank balances
36,479,445
36,479,445
35,262,020
35,262,020
367,098,253
367,098,253
362,117,892
362,117,892
514,895,520
531,921,908
468,634,190
475,254,526
471,536,706
471,536,706
441,500,244
441,500,244
297,231,284
297,231,284
290,159,732
290,159,732
The book value of the current accounts payable and receivable is approximated at fair value, due to their shortterm nature. Values for cash on hand, bank balances, and
term deposits are the same value.
counting future contractual cash flows at the current
market interest rate available for similar financial instruments. Other financial assets are valued according to
market quotations at the close of the period.
The fair value of financial liabilities is estimated by dis-
10. Other financial assets
The breakdown for this item as of 31 December 2012 and 31 December 2011 is presented as follows:
As of 31 December 2012:
Original Bank
Date of Maturity Currency
Amount
Issue
Date
USD$
Agreed Original Annual Amount
Interest
Rate
CLP TH
CLP TH
Total as of
12-31-2012 CLP TH
Banco BBVA
12-19-2012
01-02-2013US$
5,201,517 0.770%
2,496,520
370
2,496,890
Banco BBVA
12-28-2012
01-04-2013US$
20,000,000 0.600%
9,599,200
644
9,599,844
Banco Santander
12-28-2012
01-04-2013US$
15,200,000 0.610%
7,295,392
478
7,295,870
19,391,112 1,492 19,392,604
Total
40,401,517 As of 31 December 2011:
Original Bank
Date of Maturity Currency
Amount
Issue
Date
USD$
Agreed Original Annual Amount
Interest
Rate
CLP TH
CLP TH
Total as of
12-31-2011 CLP TH
Banco Santander
12-20-2011
01-06-2012US$
30,000,000
1.250%
15,576,000
3,515
15,579,515
Banco Santander
12-21-2011
01-05-2012US$
8,000,000
1.550%
4,153,600
1,056
4,154,656
Banco Santander
12-27-2011
01-16-2012US$
20,000,000
1.180%
10,384,000
804
10,384,804
Banco Santander
12-30-2011
01-16-2012US$
9,000,000
1.470%
4,672,800
113
4,672,913
Banco Santander
12-30-2011
01-16-2012US$
10,500,000 1.470%
5,451,600
132
5,451,732
Total77,500,000 40,238,000
5,620 40,243,620
11.Trade and other accounts receivable
Trade and other accounts receivable, net
Current balance as of 12-31-2012
12-31-2011
CLP TH
CLP TH
Non-current balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
Financial Debtors (Presto customer portfolio)
195,940,942
213,522,614
64,574,978
79,016,674
Financial Debtors (other Presto commercial debtors)
5,919,688
5,127,721
-
28,318
Real Estate Debtors
2,006,523
1,673,058
499,946
421,277
Retail Debtors
68,441,842
42,221,252
58,806
133,834
Other Debtors
29,655,528
19,973,144
-
-
301,964,523
282,517,789
65,133,730
79,600,103
Trade and other accounts receivable, net
The breakdown for gross trade and other accounts receivable as of 31 December 2012 and 31 December 2011 is presented as follows:
Trade and other accounts receivable gross, gross
12-31-2011
CLP TH
CLP TH
12-31-2012
12-31-2011
CLP TH
CLP TH
210,178.596
233,118,628
70,897,927
88,220,826
6,149.041
5,324,734
-
28,318
Real Estate Debtors
2,952.704
2,615,108
499,946
421,277
Retail Debtors
76,648.532
46,747,637
58,806
133,834
Other Debtors
30,904.727
21,084,331
-
-
326,833.600
308,890,438
71,456,679
88,804,255
Trade and other accounts receivable, gross
Maturity dates for gross unmatured trade and other accounts receivable as of 31 December 2012 and 31 December 2011
are presented as follows:
Trade and other accounts receivable, unmatured
Maturity date within three months
Balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
178,121,989
169,889,632
Maturity date between three and six months
33,799,481
25,201,124
Maturity date between six and twelve months
40,740,499
26,059,910
Maturity date longer than twelve months
65,133,730
79,600,103
Total
317,795,699300,750,769
123
Maturity dates for gross trade receivables, matured and not impaired, as of 31 December 2012 and 31 December 2011 are
presented as follows:
Trade and other accounts receivable, matured and unpaid but not impaired
Balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
Maturity date within three months
30,596,590
51,070,871
Maturity date between three and six months
9,734,005
9,804,890
Maturity date between six and twelve months
8,971,959
491,362
-
-
Maturity date longer than twelve months
Total
49,302,55461,367,123
Gross trade receivables, matured and impaired as of 31 December 2012 and 31 December 2011 are presented as follows:
Trade and other accounts receivable, impaired
Balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
20,560,603
28,800,166
229,353
197,013
Real Estate Debtors
946,181
942,050
Retail Debtors
8,206,690
4,526,385
Other Debtors
1,249,199
1,111,187
31,192,026
35,576,801
Trade and other accounts receivable, impaired
A breakdown for impairment of trade receivables as of 31 December 2012 and 31 December 2011 is presented as follows:
and other accounts receivable provisions, matured and unpaid with impairment
Balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
Initial balance
35,576,801
64,558,183
Write-off of impaired financial assets for the period
(59,373,795)
(85,942,124)
Provisions
54,989,020
56,960,742
TFinal balance
31,192,026
35,576,801
Trade
Portfolio stratification
Balances stratified by default period segment, non-renegotiated portfolio or renegotiated portfolio and number of customers as of 31 December 2012 and 31 December 2011 are presented as follows:
Default period
segments
Number of
customers
Non-negotiated Number of customers
Renegotiated Total in non-negotiated
portfolio, in renegotiated portfolio,
Portfolio,
portfolio
gross CLP TH
portfolio
gross CLP TH
Gross CLP TH
12-31-2012 12-31-2011 12-31-2012
12-31-2011 12-31-2012 12-31-2011 12-31-2012 12-31-2011
12-31-2012 12-31-2011
Up to date
523,028
662,748
220,747,130
237,445,849
15,369
20,091
10,486,954
14,302,457
231,234.084 251,748,306
1 to 30 days
35,405
48,461
13,916,660
19,982,971
4,306
6,187
3,177,666
4,589,388
17,094,326
24,572,359
31 to 60 days
16,439
21,183
6,602,388
9,408,254
3,612
4,468
2,593,690
3,599,234
9,196,078
13,007,488
61 to 90 days
11,202
14,912
4,677,116
6,477,397
3,176
3,471
2,300,951
2,947,576
6,978,067
9,424,973
11,6663,871,3706,692,106
91 to 120 days
8,897
2,720
2,930
2,036,676
2,458,595
5,908,046
9,150,701
121 to 150 days
6,252
7,570
2,934,494
3,672,778
1,978
2,682
1,607,332
2,232,260
4,541,826
5,905,038
151 to 180 days
7,007
9,312
3,373,630
3,887,782
2,159
2,953
1,788,301
2,492,893
5,161,931
6,380,675
181 days or more
1,748
2,822
651,048
731,690
509
425
311,117
418,224
962,165
1,149,914
Total
609,978 778,674256,773,836
288,298,827 33,829
43,20724,302,68733,040,627281,076,523
321,339,454
Provisions and write-offs associated with the portfolio
Criteria used for provisions and write-offs associated with the renegotiated and non-renegotiated portfolio have not
changed from the previous year and are shown in the following table:
Total
Balance as of
12-31-2012
CLP TH
provision, non-renegotiated portfolio
Total provision, renegotiated portfolio
Total write-offs for period
Total recoveries for period (*)
Balance as of
12-31-2011
CLP TH
12,355,064
16,998,641
8,205,539
11,801,525
59,228,509
63,711,869
9,045,666
11,805,009
Additional information about the portfolio
as ofas of
12-31-2012
12-31-2011
Total number of cards issued to cardholders
Total number of cards with balance
Average number of renegotiations (**)
Total number of refinanced debtors
Percentage of refinanced debtors in non-negotiated portfolio
(*) This amount includes capital plus interest at the time of write-off.
(**)Average number of monthly renegotiations, January to December 2012.
1,236,924
1,239,491
746,466
909,730
6,053
7,033
19,330,575
14,029,942
7.53%
4.87%
125
Factors affecting provision for rescheduled and non-negotiated portfolios
Factors affecting provisions for the renegotiated and non-negotiated portfolios corresponding to 31 December 2012 and
31 December 2011 are presented as follows:
Default period segment
Non-negotiated portfolio, average loss %
12-31-2012
12-31-2011
Renegotiated portfolio, average loss % 12-31-2012
12-31-2011
Up to date
0.19%
0.07%
19.03%
20.45%
1 to 30 days
9.50%
10.04%
28.50%
25.10%
31 to 60 days
22.10%
21.89%
23.89%
26.36%
61 to 90 days
37.09%
35.77%
46.30%
48.29%
91 to 120 days
55.12%
61.21%
47.90%
51.92%
121 to 150 days
67.52%
67.23%
68.84%
76.52%
151 to 180 days
78.41%
80.36%
68.58%
78.19%
181 days or more
100.00%
100.00%
100.00%
100.00%
4.81%
5.90%
33.76%
35.72%
Weighted average
Risk indices separated into non-negotiated, renegotiated and total portfolio and write-off index
Risk indices (% of provision/portfolio) separated into non-negotiated, renegotiated and total portfolio and write-off index
(% of write-off/portfolio) are presented as follows:
Indices
Risk index, non-negotiated portfolio
Risk index, renegotiated portfolio
Risk index, total portfolio
12-31-201212-31-2011
4.81%
5.90%
33.76%
35.72%
7.31%
8.96%
21.07%
19.83%
Write-off index
Risk index (% of provision/portfolio balance) is calculated considering total individual provisions for customers
classified in the corresponding portfolio (renegotiated
or non-renegotiated) divided by the balance owed. The
provision factor corresponding to each customer is determined using variables of the model explained in the
note on Risk Management Policy.
The risk index for the total portfolio as of December 31
of the current year is lower than that of December 2011,
mainly due to more regular collection management, focused on early default segments and speeding up negotiation of longer default periods.
The write-off index (write-off/portfolio balance) is calculated considering total customer write-offs for the period
divided by the total debt balance for the portfolio.
The accumulated write-off index as of 31 December
2012 was up compared to December 2011, which is due
to a 12.5% decline in the total portfolio amount in 2012
compared to a write-off reduction amounting to 7% during the same period.
Credit quality of financial assets
The greatest exposure to credit risk at the date information was presented is the fair value of each category of
the aforementioned accounts receivable.
As of 31 December 2011 Gross Gross Net exposure Gross Gross Net exposure exposure impaired credit risk exposure impaired credit risk by balanceexposureconcentrationsby balanceexposureconcentrations
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Trade receivables
Other accounts receivable
Total
367,385,552
29,942,827
337,442,725
376,610,362 34,465,614 342,144,748
30,904,727
1,249,199
29,655,528
21,084,331 1,111,187 19,973,144
398,290,279
31,192,026
367,098,253
397,694,693 35,576,801 362,117,892
The book value of trade and customer receivables in
arrears, both unimpaired and impaired, represent a
reasonable approximation of their fair value, since they
include explicit interest for payment in arrears and consider an impairment provision where objective evidence
exists that the Corporation will not be able to recover the
amount owed.
Maximum exposure to credit risk at the report date is the
book value of each class of account receivable mentioned.
The trade receivables portfolio consists of small amounts
granted without guarantees to many Walmart Chile customers to finance their credit purchases in the Company’s
supermarkets. The credit quality of this portfolio and the
payment behavior of these debtors is suitable, and provisions have already been made for the estimated loss due
to those debtors whose payment behavior deteriorated.
Guarantees
The Presto credit portfolio is classified as consumer credit and mainly consists of revolving loans and advances
which by nature do not require guarantees to hedge credit risk in the event of impairment.
Net trade and other accounts receivable
Trade receivables correspond to accounts receivable
from customers for loans and the provision of real estate
leasing services.
Other accounts receivable as of 31 December 2012
amounting to CLP th 30,776,850 include employee
loans, taxes to be recovered and other minor amounts.
The balance as of 31 December 2011 amounting to CLP
th 19,973,144 mainly includes taxes recoverable and
other minor amounts.
12.Balances and transactions with related
companies
12.1 Balances and transactions with related companies
Transactions between the Corporation and its affiliates
are habitual operations in terms of purpose and conditions. These transactions have been eliminated in the
consolidation process and are not detailed in this note.
Conditions of balances and transactions with related
companies:
The balance payable to Walmart Store Inc. corresponds
to a current account for merchandise.
The long-term balance payable to Sociedad Inversiones
Australes Dos Ltda., a subsidiary of Wal-Mart Stores Inc.,
corresponds to a loan made in December 2009, expressed in UF at a current interest rate of 4.315% per year
(4.56% per year in 2011) maturing 11 December 2019.
Interest is paid on this obligation every six months and
the debt is not guaranteed.
The long-term balance payable to Sociedad Inversiones
Australes Cinco Ltda., a subsidiary of Wal-Mart Stores Inc.,
a subsidiary of Wal-Mart Stores Inc., corresponds to a loan
made in December 2009, expressed in UF at a current
interest rate of 4.315% per year (4.56% per year in 2011)
maturing 11 December 2019. Interest is paid on this obligation every six months and the debt is not guaranteed.
127
12.1.1 Accounts receivable from related companies
Accounts receivable from related companies
TAX LIST
NUMBER
Company
Nature of Currency
relationship
Balances as of
Current Non-current 12-31-2012
12-31-2011
12-31-2012
12-31-2011 CLP TH
CLP TH
CLP TH
CLP TH
0-EWal Mart Store Inc.Ultimate parent companyPeso
1,422,399
-
Total
1,422,399 -
-
-
-
-
12.1.2 Accounts payable to related companies
TAX LIST
NUMBER
Company
Nature of Currency
relationship
0-EWal Mart Store Inc.Ultimate parent companyUS$
Balances as of
Current Non-current 12-31-2012
12-31-2011
12-31-2012
12-31-2011 CLP TH
CLP TH
CLP TH
CLP TH
-
74,543
-
-
0-EInversiones Australes Cinco Ltda.
Common controlUF
184,020
171,736
74,123,801
72,349,561
0-EInversiones Australes Dos Ltda.
Common controlUF
552,060
515,208
222,371,403
217,048,684
736,080
761,487296,495,204 289,398,245
Total
12.1.3 Transactions with related companies and their effects on results
The amounts shown as transactions in the following table as of 31 December 2012 and 31 December 2011 correspond
to commercial operations with related companies, which are executed under market conditions in terms of price and
payment. Management has determined that their is no impairment in the balance of these transactions and therefore no
estimates of unrecoverable debt have been made to reduce unrecoverable amounts, nor are these covered by guarantees. These have been approved by the Corporation’s Board of Directors and those amounting to over CLP 5,000,000 are
disclosed.
12-31-2012 12-31-2011 Effect on
Effect on
TAX LIST
Country Description incomeincome
NUMBER The Corporation
of Nature of of Amount (charge)/ Amount (charge)/
originrelationship transaction
CLP THcredit
CLP THcredit
96671860-9AQUAPURO S.A.
ChileRELATEDMERCHANDISE PURCHASE
-
- 6,210,182
- 96671860-9AQUAPURO S.A.
ChileRELATEDMERCHANDISE ACCOUNT DEBTOR
-
96671860-9AQUAPURO S.A.
ChileRELATEDMERCHANDISE ACCOUNT CREDITOR
-
- 52,826
- - 226,526
- 96755580-0 WALMART CHILE
ALIMENTOS Y SERVICIOS LTDA.
-
- 15,477,468
ChileRELATED
-
ChileRELATEDMERCHANDISE ACCOUNT DEBTOR
-
- 88,070
ChileRELATEDMERCHANDISE ACCOUNT CREDITOR
- - 801,810
- 96695770-0 KIMBERLY CLARK CHILE S.A.
ChileRELATIONSHIP
WITH DIRECTORMERCHANDISE PURCHASE
26,697,929 - 21,782,985
- 96861750-8AGRICOLA Y FORESTAL ARCOIRIS S.A. Chile
CONTROLLED
BY SHAREHOLDERMERCHANDISE PURCHASE
484,175
- 831,667
- 76567810-2AGRICOLA ALMA LTDA.
Chile
CONTROLLED
BY SHAREHOLDERMERCHANDISE PURCHASE
5,007,955 -
4,987,520
- -
-
1,138,942
- 99520700-1AQUANATURA S.A
ChileRELATEDMERCHANDISE
ACCOUNT DEBTOR
-
-
43,799
ChileRELATEDMERCHANDISE
ACCOUNT CREDITOR
-
-
37,286
CAFETERIA FOOD SERVICES
7,919,882 (6,655,363)
81361700-5 INMOBILIARIA LOS GUINDOS S.A.
ChileRELATEDLEASES
209,503
209,503 305,759
305,759
80492200-8PLAZA VITACURA S.A.
ChileRELATEDLEASES
213,700
213,700
400,623
400,623
82535200-7 INMOBILIARIA RANCAGUA S.A.
ChileRELATEDLEASES
299,556 299,556 434,891
434,891
91443.000-3MARSOL
ChileRELATEDMAINTENANCE SERVICES
3,957,428 (3,325,570) 78413930-1HONORATO RUSSI & CIA LTDA
Chile
COMMON DIRECTORS
CONSULTING
42,197 0-E
WAL-MART STORE INCUnited StatesULTIMATE PARENT
COMPANY
(42,197) INTEGRATION EXPENSES
0-E
COMPANYEXPATRIATE EXPENSES
-
1,975,442
3,926,725 (3,299,769)
58,311
(58,311)
- 83,947
(83,947)
(1.975,442) 583,509
(583,509)
0-E
COMPANYMERCHANDISE ACCOUNT DEBTOR 1,422,399
-
- - 0-E
COMPANY
CREDITOR INTERGRATION EXPANSES
- - 432,935
(432,935)
0-E
COMPANYMERCHANDISE ACCOUNT CREDITOR
- - 1,063,942
-
0-E
INVERSIONES AUSTRALES CINCO LTDA. Chile
CONTROLLING INTEREST AND
SHAREHOLDERLOAN READJUSTMENTS
4,991,865
(4,991,865)
5,990,12 (5,990,124)
0-E
INVERSIONES AUSTRALES DOS LTDA. Chile
CONTROLLING INTEREST AND
SHAREHOLDERLOAN READJUSTMENTS
14,975,596
(14,975,596)
17,970,373 (17,970,373)
0-E
INVERSIONES AUSTRALES TRES LTDA. Chile
DIRECT PARENT
COMPANY
25,598,547
- 24,588,845
- 99061000-2LIBERTY COMPAÑIA
DE SEGUROS GENERALES S.A.
COMMON DIRECTORS INSURANCE
888,961
(747,026)
340,786
(286,375)
Chile
DIVIDENDS
129
Key personnel
12.1.4 Director salaries
The following amounts were paid to directors for the periods ending 31 December 2012 and 31 December 2011:
12-31-2012 12-31-2011 Board Board
Boardcommittee Share in
Boardcommittee Share in
Name
Positionstipendstipendprofitsstipendstipendprofits CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Felipe Ibáñez
Chairman
175,885
-
-
141,494
-
-
-
-
-
- -
-
Nicolás IbáñezDirector
72,066
-
75,339
-
-
-
José Luis Rodriguez (***)Director
-
-
-
- -
-
José María EyzaguirreDirector
71,658
-
-
69,310
-
-
Alberto EguigurenDirector
71,724
95,361
-
64,127
85,260
-
Jorge Gutiérrez PubillDirector
71,669
-
-
66,324
-
-
Christian Philippe SchraderDirector
-
-
-
-
-
-
Clarie Babineaux-FontenotDirector
-
-
-
-
-
-
Wyman Atwell (*)Director
-
-
-
-
-
-
José María Urquiza (**)Director
-
-
-
-
-
-
463,002
95,361
-
85,260
-
Eduardo SolórzanoVice Chairman
Total
416,594
(*) Director of the Corporation until January 2011
(**) Appointed director of the Corporation 01 August 2011
(***) Director until 31 August 2011.
Directors who are part of Walmart’s management do not receive stipends for serving on the boards of related companies.
The following table presents compensation paid by subsidiaries during the financial years ending 31 December 2012 and
31 December 2011 in stipends to the directors of Walmart Chile who are also directors of the Corporation’s subsidiaries:
Name
Stipend as of 12-31-2012
CLP TH
Stipend as of 12-31-2011
CLP TH
Alberto Eguiguren
54,336
48,581
54,283
52,518
12.1.5 Management team salaries
As of 31 December 2012, the total amount of salaries and
other payment made to members of the management
and executive teams came to a total CLP th 29,989,973
(CLP th 26,783,863 as of 31 December 2011).
The Walmart Chile Group has established an incentive
plan for its executives, based on meeting objectives related to their contribution to the Corporation’s results.
These incentives are structured within a minimum and
maximum gross salary range and are paid once per year.
In addition, the Corporation has a long-term incentive
plan for its executive based meeting objectives related
to the company’s results. This incentive is structured as
a percentage of base salary and are paid upon maturity
once every three years.
13. Inventories
Type of inventory
Balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
Products for sale
211,837,259
193,220,249
Imports in transit
29,091,352
22,314,301
Materials
5,272,269
2,904,807
Provision for obsolescence
(1,056,242)
(1,338,863)
Total
245,144,638217,100,494
14. Investments in related companies accounted for using the equity method
14.1 Item breakdown as of 31 December 2012
The Corporation does not report related companies as of 31 December 2012.
14.2 Item breakdown as of 31 December 2011
Country
Percentage Balance
Share Other Balance
Investments of
Functional of voting as ofin income Conversion increase as of
in subsidiaries
origincurrency
Sharepower
01-01-2011
(loss)difference (decrease) 12-31-2011
%
%
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Alimentos y Servicios S.A.
Chile
Chilean peso
100.00
100.00
3,706,271
177,061
-
(3,883,332)
-
Solpacific S.A.
Chile
Chilean peso
100.00
100.00
-
(372,740)
-
372,740
-
Alvi Supermercado Mayorista S.A. Chile
Chilean peso
-
-
- -
(11,726,820)
-
11,726,820
TOTAL 15,433,091 (195,679)
- (15,237,412) -
Alvi Supermercados Mayoristas S.A. was sold to SMU S.A. 19 January 2011 for CLP 30.0 billion. The effect on income is
presented in the other revenue by function item.
The subsidiary Inversiones Walmart Chile Limitada purchased the remaining 50% of the shares in the related companies
Alimentos y Servicios S.A. and Inversiones Solpacific S.A. 15 July 2011. This operation gave the subsidiary control of these
companies with a 100% stake, as the other 50% was already owned by other subsidiaries and these companies are starting
to be consolidated. See note on business mergers.
131
14.3 Summarized information on investments in related companies accounted for using the equity method
The Corporation has not reported any subsidiaries accounted for using the equity method as of 31 December 2012.
31 December 2011
Cash Net Inverstments %and cash Current Non-current Current Non-current Ordinary Ordinary income in subsidiaries
Shareequivalents assetsassetsliabilitiesliabilitiesrevenueexpenses
(loss)
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Alimentos y Servicios S.A.
100%
61,284
16,416,794
21,750,545
26,111,404
10,068,492
9,933,304
6,110,135
(2,136,334)
Solpacific S.A.
100%
307,732
3,051,952
4,046,582
11,851,593
3,152,198
3,293,545
2,417,618
(2,188,633)
TOTAL
369,01619,468,74625,797,12737,962,99713,220,690
13,226,8498,527,753
(4,324,967)
15. Intangible assets
The intangible assets breakdown as of 31 December 2012 and 31 December 2011 is presented as follows:
Net intangible assets
12-31-2012
CLP TH
12-31-2011
CLP TH
Purchased goodwill
29,523,393
29,948,810
Net intangible assets, without goodwill
22,428,921
20,322,247
Computer programs
21,849,245
19,361,915
406,000
771,935
61,251
76,272
112,425
112,125
Net intangible assets
51,952,314
50,271,057
Gross intangible assets
12-31-2012
CLP TH
12-31-2011
CLP TH
Purchased goodwill
29,523,393
29,948,810
Gross intangible assets, without goodwill
48,994,878
40,018,032
Computer programs
48,415,202
39,057,700
406,000
771,935
61,251
76,272
112,425
112,125
78,518,271
69,966,842
Trademarks and rights
Water rights
Internet domain
Trademarks and rights
Water rights
Internet domain
Gross identifiable intangible assets
Cumulative amortization and value impairment
12-31-2012
CLP TH
12-31-2011
CLP TH
Purchased goodwill
-
-
Total cumulative amortization and value impairment, intangible assets
-
-
Computer programs
(26,565,957)
(19,695,785)
Cumulative amortization and value impairment, identifiable intangible assets
(26,565,957)
(19,695,785)
Details of the useful lives applied in the intangibles item as of 31 December 2012 and 31 December 2011 are presented
as follows:
Estimated useful life or amortization rates used
Max. rate or life
Computer programs
Min. rate or life
6
4
Trademarks and rightsIndefiniteIndefinite
Water rightIndefiniteIndefinite
Internet domainIndefiniteIndefinite
Details of movement in intangible assets as of 31 December 2012 and 2011 are presented as follows:
12-31-2012
Trademarks Net
Purchased and Computer Water Internet intangible Movement in intangible assetsgoodwillrightsprograms
rightsdomainassets
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Initial balance al 01-01-2012
Additions for internal development
29,948.810
771,935
19,361,915
76,272
112,125
50,271,057
-
-
-
-
-
-
Additions
-
10,000
9,873,864
-
-
9,883,864
Other
-
-
-
-
-
-
Transfers between property, plant and equipment projects
-
-
(516,362)
-
-
(516,362)
Withdrawals
-
-
-
-
-
-
Amortization
-
-
(6,870,172)
-
-
(6,870,172)
Increase (decrease) due to revaluation recognized in income statement
-
-
-
-
-
-
Impairment losses recognized in net equity
-
-
-
-
-
-
Increase (decrease) in foreign currency exchange
-
-
-
-
-
-
Increases (decreases) due to revaluation
and value impairment losses (reversals) recognized in net equity
-
-
-
-
-
-
(425,417)
(375,935)
-
(15,021)
300
(816,073)
(425,417)
(365,935)
2,487,330
(15,021)
300
1,681,257
406,000
21,849,245
61,251
112,425
51,952,314
Other increases (decreases)
Total changes
Final intangible assets balance as of 12-31-2012
29,523,393
133
12-31-2011
Trademarks Net
Purchased and Computer Water Internet intangible Movement in intangible assetsgoodwillrightsprograms
rightsdomainassets
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Initial balance al 01-01-2011
325,379
136,000
21,086,967
76,272
112,125
21,736,743
-
-
-
-
-
-
29,623,431
635,935
5,864,760
-
-
36,124,126
Other
-
-
-
-
-
-
Transfers between property, plant and equipment projects
-
-
276,642
-
-
276,642
Withdrawals
-
-
(1,898,139)
-
-
(1,898,139)
Amortization
-
-
(5,968,315)
-
-
(5,968,315)
Increase (decrease) due to revaluation recognized in income statement
-
-
-
-
-
-
Impairment losses recognized in net equity
-
-
-
-
-
-
Increase (decrease) in foreign currency exchange
-
-
-
-
-
-
Increases (decreases) due to revaluation
and value impairment losses (reversals) recognized in net equity
-
-
-
-
-
-
Additions for internal development
Additions
Other increases (decreases)
Total changes
Final intangible assets balance as of 12-31-2011
-
-
29,623,431
635,935
(1,725,052)
-
29,948,810
771,935
19,361,915
-
-
-
-
-
28,534,314
76,272
112,125
50,271,057
Movement in purchased goodwill as of 31 December 2012 and 31 December 2011 is presented as follows:
Purchased goodwill
Other Tax list
Initial balanceincreases Final balance
number
The Corporation
01-01-2012
(decreases)
12-31-2012
CLP TH
CLP TH
CLP TH
CLP TH
78.298.460-8SUPERMERCADO LA FRONTERA LTDA.
96.755.580-0ALIMENTOS Y SERVICIOS LTDA.
96.519.000-7WALMART CHILE INMOBILIARIA S.A.
96.670.110-2INVERSIONES SOLPACIFIC S.A.
Total
173,248
-
173,248
21,741,992
(*) (425,417)
21,316,575
45,336
- 45,336
7,988,234
-
7,988,234
29,948,810
(425,417)
29,523,393
(*) These correspond to goodwill write-off during the first year after purchase. See additional details in the note on business mergers.
Purchased goodwill
Other Tax list
Initial balanceincreases Final balance
number
The Corporation
01-01-2011
(decreases)
12-31-2011
CLP TH
CLP TH
CLP TH
CLP TH
78.298.460-8SUPERMERCADO LA FRONTERA LTDA.
173,248
-
173,248
96.755.580-0ALIMENTOS Y SERVICIOS LTDA.
106,795
21,635,197
21,741,992
96.519.000-7WALMART CHILE INMOBILIARIA S.A.
96.670.110-2INVERSIONES SOLPACIFIC S.A. Total
45,336
-
45,336
-
7,988,234
7,988,234
325,379 29,623,431
29,948,810
Remaining
Book value of Book value of amortization significantsignificantperiod of identifiableidentifiable significant intangible intangible identifiable Significant individual assetsassetsintangible
identifiable intangible assets 12-31-2012
12-31-2011assets
CLP TH
CLP TH
(average)
Intellec Card
4,213,756
5,128,809
2 years
Integration (*)
5,220,771
E-commerce (*)
2,779,110
783,157
1,288,217
3 years
6 years
Business support (*)
2,602,903
932,483
3 years
Collection internalization software (*)
875,054
-
4 years
SAP improvements (*)
722,336
915,947
3 years
(*) These concepts include software in the capitalization stage.
The charge to the results for intangible assets amortization is presented as follows:
Income statement line item that includes amortization of identifiable intangible assets
Balance as of
12-31-2012
CLP TH
Balance as of
12-31-2011
CLP TH
(6,870,172)
(5,968,315)
Total
(6,870,172)(5,968,315)
15.1Intangible assets with indefinite useful life
15.1.1 Brand usage rights
Brand usage rights correspond to acquisition of the “BLV”
and “BLV-Boulevard” brands valued at historical cost.
The brand use period is unlimited and these are consequently considered to be assets with indefinite useful life
and are not subject to amortization. These are subjected
to annual impairment tests or when there are factors indicating possible loss of value.
15.1.2 Water rights
Water rights located in the Chicureo, Santiago sector are
presented at historical cost. The period for use of these
rights is unlimited and these are consequently considered to be assets with indefinite useful life and are not
subject to amortization. These rights are subjected to
annual impairment tests or when there are factors indicating possible loss of value.
15.1.3 Internet domain
The right to use the Internet domain for “dot cl” sites is
presented at historical cost. The period for use of this
domain rights is unlimited and this is consequently considered to be an asset with indefinite useful life and is
not subject to amortization. This domain is subjected to
annual impairment tests or when there are factors indicating possible loss of value.
15.2 Impairment of purchased goodwill
The Corporation annually reviews the book value of its
tangibles and intangible assets to determine if there is
any indication that these assets may be impaired. When
evaluating impairment, assets that do not generate independent cash flows are grouped in an appropriate cash
generating unit (CGU). The amount recoverable from
these assets or CGUs is measured as the lower amount
between their reasonable value (calculated using the
discounted future flows method) and their book value.
The Corporation reported impairment amounting to
CLP th 425,417 as of 31 December 2012 and this is presented in the other costs by function item of the income
statement.
135
15.3 Reconciliation of software amortization
Details of amortization movement during the fiscal years ending 31 December 2012 and 31 December 2011 are provided
as follows:
Movement
Initial cumulative amortization
(+) Amortization during fiscal year
(=) Final cumulative amortization
Balance as of
Balance as of
12-31-201212-31-2011
CLP TH
CLP TH
(19,695,785)
(13,727,470)
(6,870,172)
(5,968,315)
(26,565,957)
(19,695,785)
16. Investment property
16.1 Movements and breakdown of investment property
Investment property, initial cost balance model
12-31-2012
CLP TH
12-31-2011
CLP TH
129,655,015
136,120,131
Additions
-
-
Reclassification to PPE
-
(4,533,271)
(1,931,845)
(1,931,845)
127,723,170
129,655,015
Changes in investment property, cost model
Depreciation during the fiscal year
Investment property, total cost model
16.2 Valuation of investment property, fair value method
If the Corporation decides to control its investment property using the fair value method, it will be required to record a
value higher than the current value of CLP th 35.573.689 as of 31 December 2012 (CLP th 22,921,162 as of 31 December
2011) in its books. Fair values as of 31 December 2012 and 31 December 2011 are presented below.
Valuation of investment property, fair value method
12-31-2012
CLP TH
163,296,859
12-31-2011
CLP TH
152,576,177
16.3 Investment property income and expenses
Investment property income and expenses
12-31-2012
CLP TH
12-31-2011
CLP TH
Lease income from investment property
34,405,016
31,675,264
Direct operating expenses for investment property generating lease income
(11,344,607)
(11,149,765)
16.4 Reconciliation of cumulative depreciation
Depreciation movement for the fiscal years ending 31 December 2012 and 31 December 2011 is presented as follows:
Movement
Balance as of
Balance as of
12-31-201212-31-2011
CLP TH
CLP TH
Initial cumulative depreciation
(5,535,689)
(3,603,844)
(+) Depreciation during the fiscal year
(1,931,845)
(1,931,845)
(-) Decreases for write-offs
-
-
(-) Impairment loss
-
-
(7,467,534)
(5,535,689)
(=) Final cumulative depreciation
17. Property, plant and equipment
17.1The breakdown for this item as of 31 December 2012 and 31 December 2011 is presented as follows:
Types of property, plant and equipment, net
12-31-2012
CLP TH
12-31-2011
CLP TH
Construction work in progress
73,346,308
77,736,151
Sites
401,275,193
366,566,604
Buildings
248,527,625
230,529,438
77,258,159
70,406,807
267,803,738
226,668,203
5,543,040
2,116,913
38,532,675
36,614,308
1,756,636
1,145,735
Machinery and equipment
Fixed installations and accessories
Vehicles
Leased property
Other property, plant and equipment
Total
1,114,043,3741,011,784,159
Types of property, plant and equipment, gross
12-31-2012
CLP TH
12-31-2011
CLP TH
Construction work in progress
73,346,308
78,394,291
Sites
401,275,193
365,908,464
Buildings
275,302,078
248,987,590
322,497,495
290,489,232
381,519,756
312,567,149
Vehicles
19,041,886
14,653,871
Leased property
74,749,864
68,355,584
1,520,982
1,145,735
Other property, plant and equipment
Total
1,549,253,5621,380,501,916
137
Cumulative depreciation of property, plant and equipment
12-31-2012
CLP TH
12-31-2011
CLP TH
Buildings
(25,930,651)
(18,458,152)
(245,055,609)
(220,082,425)
(114,748,078)
(85,898,946)
Vehicles
(13,498,779)
(12,536,958)
Leased property
(35,977,071)
(31,741,276)
Total
(435,210,188)(368,717,757)
17.2 The following table shows the useful economic lives of assets
Method used to calculate depreciation of property, plant and equipment (useful life)
Minimum life
Maximum life
Structural work – buildings
50
50
Construction and infrastructure works:
Terminations
15
15
Terminations for leased property
15
15
Installations
15
20
Installation for leased property
15
20
Equipment
15
20
Equipment for leased property
15
20
Exterior works
20
20
Exterior works for leased property
20
20
Heating machinery
4
4
Cooling machinery
5
5
Weighing machinery
4
4
Power machinery
4
4
Other machinery
4
4
Gondolas
4
4
Desks
3
3
Other furniture
4
4
Light
4
4
Heavy
4
4
Cargo
4
4
Other vehicles
4
4
Machinery and equipment:
Furniture and supplies:
Vehicles:
17.3 The following tables show details of reconciliation of changes to property, plant and equipment by type
for fiscal years ending 31 December 2012 y 31 December 2011.
FixedOther
Machineryinstallationsproperty, Property,
andand plant and plant and Works in Buildings,equipment,accessories, Vehicles,
Leased equipment, equipment,
Movement progress
Sitesnetnetnetnetpropertynetnet
as of 12-31-2012
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Changes
Initial balance
as of 1 January 2012
Additions
Withdrawals
Transfers
77,736151
366,566,604
230,529,438
70,406,807
226,668,203
2,116,913
36,614,308
1,145,735 1,011,784,159
68,853,061
35,589,822
8,445,001
33,531,864
14,359,328
4,267,402
6,174,189
610,901
171,831,568
(441,024)
-
-
(765,708)
(68,839)
(5,756)
(3,190)
-
(1,284,517)
(72,801,880)
-
17,262,982
(273,009)
56,213,877
131,230
(16,837)
-
516,363
Assets available for sale
-
-
-
-
-
-
-
-
-
Impairment (*)
-
(881,233)
(237,297)
(203,257)
(519,612)
-
-
-
(1,841,399)
Depreciation expense
-
-
(7,472,499)
(25,438,538)
(28.849,219)(966,749) (4,235,795)
-
(66,962,800)
Total changes
(4,389,843)
34,708,589
17,998,187
6,851,352
41,135,535
3,426,127
1,918,367
610,901
102,259,215
Final balance as of
31 December de 2012
73,346,308
401,275,193
248,527,625
77,258,159
267,803,738
5,543,040
38,532,675
1,756,636
1,114,043,374
The increase corresponding to the sites item is due to the 2012 purchase of 30 sites for expansion of the different supermarket formats.
(*) According to the note on criteria for the application of impairment tests, this item presents losses amounting to CLP th 1,841,399 as of 31 December 2012 and CLP th
1,476,560 as of 31 December 2011, which was presented in other expenses by function line.
Changes
FixedOther
Machineryinstallationsproperty, Property,
andand plant and plant and Works in Buildings,equipment,accessories, Vehicles,
Leased equipment, equipment,
Movement progress
Sitesnetnetnetnetpropertynetnet
as of 12-31-2011
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Inital balance
as 1 January 2011
41,340,289
354,828,455
214,981,601
55,562,525
205,114,395
1,539,603
20,034,177
795,973
894,197,018
Additions
76,264,567
17,896,972
15,667,055
40,296,900
19,153,854
1,251,739
20,576,606
350,547
191,458,240
(982,944)
-
(2,456,938)
(1,625,009)
(3,707,947)
(9,690)
(354,857)
-
(9,137,385)
Withdrawals
Transfers
(38,885,761)
-
10,060,640
(528,700)
28,903,317
173,862
-
-
(276,642)
Assets available for sale
-
(6,158,823)
-
-
-
-
-
-
(6,158,823)
Impairment (*)
-
-
(843,802)
(183,727)
(444,500)
(67)
(4,412)
(52)
(1,476,560)
Depreciation expense
-
-
(6,879,118)
(23,115,182)
(22,350,916)
(838,534)
(3,637,206)
(733)
(56,821,689)
Total changes
36,395,862
11,738,149
15,547,837
14,844,282
21,553,808
577,310
16,580,131
349,762
117,587,141
Final balance as
of 31 December 2011
77,736,151
366,566,604
230,529,438
36,614,308
1,145,735
1,011,784,159
70,406.807
226.668.2032,116,913
139
17.4 Description of property, plant and equipment
types.
17.4.1 Construction work in progress
Construction work in progress means all construction
projects and store remodeling projects for the different
formats.
17.4.2 Sites
This type means all sites purchased for the construction
of news stores in the different formats and main offices.
17.4.3 Buildings
This asset type corresponds to buildings built at sites
owned by the Walmart Group and to be used for stores
corresponding to the different formats and main offices
where Walmart Group management is located.
17.4.4 Machinery and equipment
This asset type corresponds to the purchasing of machinery and equipment used at stores and main offices. This
includes cooling machinery, merchandise display counters and dispensers and everything required in order to
maintain the operation.
17.4.5 Fixed installations and accessories
This fixed assets type means installations at stores and
main offices that do not correspond to structural cons-
truction work, such as dividing panels, electrical installations, natural gas, water, networks, floors, etc.
17.4.6 Vehicles
This means vehicles purchased and used for the transport of merchandise and used by management, such as
trailers used to distribute merchandise.
17.4.7 Leased property
This means assets purchased through lease contracts
that are used at the different formats, such as sites, buildings, machinery, etc.
17.4.8 Other property, plant and equipment
This means all assets that are not directly classified in the
foregoing categories.
17.5 Property, plant and equipment investment policy
The Walmart Chile Group’s policy is to execute all work
required to satisfy projected market demand growth, to
keep construction and installations in good condition
and to adapt the system to technological progress, in
order to comply with all quality standards and ensure
operational continuity.
17.6 Additional information about property, plant and equipment
Additional information to be disclosed
about property, plant and equipment
Property, plant and equipment completely depreciated but still in use
Disbursements for property, plant and equipment accounts currently under construction
12-31-2012
CLP TH
12-31-2011
CLP TH
179
157
68,853,061
76,922,707
17.7 Interest costs
Detail
Capitalized interest, property, plant and equipment costs
Capitalization rate of cost for capitalized interest, property, plant and equipment
12-31-201212-31-2011
CLP TH
CLP TH
1,783,056
4.77%
1,816,275
4.97%
17.8 Reconciliation of cumulative depreciation
The following table provides details of depreciation movement during the fiscal years ending 31 December 2012 and 31
December 2011::
Movement
Balance as of
Balance as of
12-31-201212-31-2011
CLP TH
CLP TH
Initial cumulative depreciation
(368.717.757)
(313.342.264)
(+) Depreciation during the fiscal year
(66.962.800)
(56.821.689)
(-) Decreases for write-offs
470.369 (=) Final cumulative depreciation
1.446.196
(435.210.188)
(368.717.757)
17.9 Reconciliation of the effect of depreciation on the income statement
Depreciation by item in the income statements for the fiscal years ending 31 December 2012 and 31 December 2011 is
presented as follows:
Movement
Balance as of
Balance as of
12-31-201212-31-2011
CLP TH
CLP TH
Depreciation presented in administrative expenses
Depreciation presented in cost of sales
Total depreciation
(65,562,232)
(56,821,689)
(1,400,568)
-
(66,962,800)
(56,821,689)
18. Leases
18.1 Assets under financial leases
Property, plant and equipment under financial lease, net
12-31-2012
CLP TH
Sites under financial lease
Buildings under financial lease
Machinery and equipment under financial lease
Results of sale and buy-back operations
12-31-2011
CLP TH
10,313,488
10,317,314
9,046,084
7,070,126
17,421,794
17,435,263
1,751,309
1,791,605
38,532,67536,614,308
12-31-2012 12-31-2011
Reconciliation of Present Present minimum payment of financial lease, lesseevalue
Interest
Grossvalue
Interest
Gross
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
6,990,156
1,520,577
8,510,733
6,878,612
2,621,352
9,499,964
Between one year and five years
Less than one year
15,126,546
3,538,424
18,664,970
17,038,659
3,857,457
20,896,116
More than five years
11,191,247
4,355,354
15,546,601
17,600,809
4,587,889
22,188,698
Total
33,307,949 9,414,35542,722,30441,518,08011,066,69852,584,778
141
18.2 Disclosable information on operating leases as lessee
Minimum future lease payment, lessees
12-31-2012
CLP TH
12-31-2011
CLP TH
Less than one year
27,359,784
24,205,358
One to five years
121,875,400
107,823,868
447,705,552
396,087,677
Total
596.940.736528.116.903
18.3 Disclosable information on operating leases as lessor
Minimum future non-cancellable lease payments, lessor
12-31-2012
CLP TH
12-31-2011
CLP TH
Less than one year
27,109,616
24,645,425
One to five years
69,181,189
67,610,467
87,434,984
89,350,916
Total
183,725,789181,606,808
19. Deferred taxes
The origin of deferred taxes recorded as of 31 December 2012 and 31 December 2011 is provided as follows:
19.1 Deferred tax assets
Deferred tax assets
12-31-2012
CLP TH
12-31-2011
CLP TH
Deferred tax assets referred to provisions
17,593,335
28,248,528
2,440,261
2,412,228
211,248
247,690
2,491,686
1,968,882
36,566,775
16,830,633
127,249
4,950,947
1,960,326
2,448,019
61,390,881
57,106,927
Deferred tax assets related to revaluations of commercial agreements
Deferred tax assets related to inventory revaluations
Deferred tax assets related to obligations to employees
Deferred tax assets related to fiscal losses
Deferred tax assets related to miscellaneous debtors
Deferred tax assets related to future contracts
Deferred tax assets, total
19.2 Deferred tax liabilities
12-31-2012
CLP TH
12-31-2011
CLP TH
Deferred tax liabilities related to depreciation
32,651,849
24,536,037
Deferred tax liabilities related to revaluation of portfolio risk provision
1,090,607
310,010
Deferred tax liabilities related to deferred charges
4,457,766
4,461,717
Deferred tax liabilities related to leases
653,752
1,647,918
Deferred tax liabilities related to others
375,135
78,534
Deferred tax liabilities, total
39,229,109
31,034,216
19.3Unrecognized deferred taxes
No unrecognized deferred tax items were presented as
of 31 December 2012 and 31 December 2011.
19.4 Changes made to first category tax rates
Chile’s National Congress passed Law 20,455 31 July
2010. The law incorporated temporary modifications to
the first category tax rate.
This new legislation increased first category tax rates
applied to income obtained during 2011 and 2012 to
rates of 20% and 18,5% respectively. This rate will then
return to 17% for 2013 and on.
Law 20,630 that “Improves Tax Legislation and Finances
the Educational Reform” was published in the Official Gazette 27 September 2012. Among other standards, the
law raises first-category tax from 18.5% to 20% and this
comes into force starting in the 2013 tax year.
Consequently, all income accrued between January and
December of the 2012 business year will be taxed at the
new rate of 20%.
19.5Compensation of items
Deferred tax assets and liabilities are compensated when a legally executable right exists to compensate current tax assets
with current tax liabilities and when deferred tax assets and liabilities are related to the income tax applied by the same
tax authority to the same tax-paying entity or to different tax-paying entities for which there is an intention to liquidate
balances on net bases. The amounts compensated are listed as follows:
Deferred tax assets
Assets / Values Net balance
liabilities grosscompensatedat close
CLP TH
CLP TH
CLP TH
* Deferred tax assets
61,390,881
(1,748,580)
59,642,301
* Deferred tax liabilities
(39,229,109)
1,748,580
(37,480,529)
Total
22,161,772
-22,161,772
* Deferred tax assets
57,106,927
(3,763,026)
53,343,901
* Deferred tax liabilities
(31,034,216)
3,763,026
(27,271,190)
Total
26,072,711
-26,072,711
143
20. Other finanical liabilities
20.1 Types of loans that accumulate (accrue) interest
The breakdown of this item as of 31 December 2012 and 31 December 2011 is presented as follows:
Current balance as of
12-31-2012
12-31-2011
CLP TH
CLP TH
12-31-2012
12-31-2011
CLP TH
CLP TH
344,747,348
107,361,025
19,487,728
206,337,703
20,080,813
3,789,710
87,361,456
103,008,747
6,990,156
6,495,807
26,426,389
27,279,006
Future contracts
9,801,630
14,362,192
-
-
132,008,734
133,275,573
336,625,456
Total 381.619,947
20.2 Bank loans - breakdown of currencies and maturity dates
Walmart Chile S.A., restructured its financial liabilities 20
May 2010, signing a long-term syndicated credit contract with the following banks: Banco de Chile, Banco
Santander and Banco BBVA. This concentrated 100% of
its current short-term credit and the syndicated credit
signed 22 May 2008 with the following banks: Banco de
Chile, Banco BBVA, Scotiabank, Banco Itaú, Corpbanca
and Banco Santander, maturing 22 May 2010, into a single loan with final maturity at the end of May 2013.
Walmart Chile S.A. restructured its financial liabilities 28
September 2006, signing a long-term syndicated credit
contract with the following banks: Banco Santander,
Banco Estado, Banco BBVA and Citibank N.A. This concentrated a significant part of its current short-term and
long-term credit into a single loan maturing at the end
of March 2014. The lead bank for the operation is Banco
Santander and the agent bank is Banco Estado.
20.2.1 Bank loans as of 31 December 2012
Creditor Tax list Currency
Effective Nominal
Type
Guarantee
Current
Non-current
namenumber
Country Amortizationraterate
of Maturity
Current Maturity
Non-current
type
obligationtotal 5 ortotal Not up to 1 1 to 3
3 to 12as of 1 to 3
3 to 5moreas of determinedmonthmonths Months 31-12-2012yearsyearsyears12-31-2012
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH CLP TH CLP TH
Banco Santander 97.015.000-5 Chile CLPMonthly
0.42%
0.42%Bank overdraftNo guarantee 48,131,448
-
-
- 48,131,448
-
-
-
-
Banco Estado
97.030.000-7 Chile CLPMonthly
0.42%
-
-
- 35,383,973
-
-
-
-
Banco de Chile
0.41%
-
-
- 33,639,091
-
-
-
-
Banco de Chile
97.004.000-5 Chile CLPBiannual
3.35%
3.35%Variable loan rateNo guarantee
-
-
- 157,037,345 157,037,345
-
-
-
-
Banco de Chile
97.004.000-5 Chile $UFBiannual
1.83%
1.83%Fixed rate loanNo guarantee
-
-
4,680,764 4,532,603
-
-
4,532,603
Banco Estado
3.42%
-
- 12,740,782 14,973,559 27,714,341 14,955,125
-
- 14,955,125
Banco Santander 97.015.000-5 Chile $UFMonthly
1.00%
1.00%Bank guarantee bond No guarantee
2,195,378
-
-
-
2,195,378
-
-
-
-
Banco Santander 97.015.000-5 ChileUS$Monthly
0.92%
0.92%Letter of creditNo guarantee
1,345,466
-
-
-
1,345,466
-
-
-
-
Banco Corpbanca 97.023.000-9 ChileUS$Monthly
0.70%
445,619
-
-
-
445,619
-
-
-
-
Banco Estado
97.030.000-7 ChileUS$Monthly
0.57%
8,846,351
-
-
-
8,846,351
-
-
-
-
Banco BBVA
0.71%
0.71%Letter of creditNo guarantee 25,319,345
-
-
- 25,319,345
-
-
-
-
Banco de Chile
0.35%
-
-
-
-
-
-
-
-
-
Total
-
-
- -
-
-
8,227
155,314,898
2,396,689
2,284,075
8,227
- 15,137,471174,294,979344,747,34819,487,728 -
-19,487,728
Effective rates for bank loans:
Fixed rate loans: the effective rate method was used
for this type of loan. It corresponds to the rate that
equalizes effective payment flows with net amount
in the books, discounting the cost of initiating the
operation.
future interest rates, the Corporation uses the same
nominal rate for this type of loan and costs associated
with the loan are amortized together with the loan.
ʭʭ
ʭʭ
ʭʭ
Variable rate loans: Due to the difficulty of estimating
Letters of credit, bank guarantee bonds and overdrafts: This type of instrument has no origination costs
and therefore the effective rate is no different from
the nominal rate.
20.2.2 Bank loans as of 31 December 2011
Creditor Tax list Currency
Effective Nominal
Type
Guarantee
Current
Non-current
namenumber
Country Amortizationraterate
of Maturity
Current Maturity
Non-current
type
obligationtotal 5 ortotal Not up to 1 1 to 3
3 to 12as of 1 to 3
3 to 5moreas of determinedmonthmonths Months 31-12-2012yearsyearsyears12-31-2012
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH CLP TH CLP TH
Banco Santander 97.015.000-5 Chile CLPMonthly
1.00%
1.00%Bank guarantee bond No guarantee
- -
-
1,706,320
- - - -
Banco de Chile
0.35%
- 65,083
- -
65,083
- - - - Banco de Chile
0.61%
102,577 - - - 102,577 - - - - Banco de Chile
0.58%
Banco Security
0.54%
803,352 -
- - 803,352 - - - - 0.54%Fixed rate loanNo guarantee
- 190,009 - - 190,009 - - - - Banco
Crédito Inversiones 97.006.000-6 Chile CLPMonthly
0.50%
- - - 78.771 78,771 - - - - Banco
0.63%
- 909,610 - - 909,610 - - - - Banco Bice
97.080.000-k Chile CLPMonthly
0.56%
- - - 562,227 - - - - Banco Bice
97.080.000-k Chile CLPMonthly
0.54%
- 200,535 250,045 - 450,580 - - - - Banco BBVA
0.64%
- 393,235 - - 393,235 - - - - Banco BBVA
0.38%
672,826 - - - 672,826 - - - - Banco Santander 97.015.000-5 Chile CLPMonthly
1.00%
1.00%Bank overdraftNo guarantee
11,441 - - - 11,441 - -
- - Banco Estado
1.00%
1.00%Bank overdraftNo guarantee 41,609,937 - - - 41,609,937 - - - - Banco de Chile
1.00%
1.00%Bank overdraftNo guarantee
393,153 - - - 393,153 - - - - Banco
1.00% 100%Bank overdraftNo guarantee
299 - - - 299 - - - - Banco de Chile
3.57%
- - - 1,259,326 1,259,326 155,635,693 - - 155,635,693
Banco de Chile a) 97.004.000-5 ChileUFBiannual
1.83%
- - 2,384,702 2,229,403 4,614,105 8,846,919 - - 3.25%Variable loan rateNo guarantee
- - 10,677,186 11,978,848 22,656,034 41,855,091 - - 41,855,091
- - - - - -
- - Banco Estado
97.030.000-7 Chile CLPBiannual 3,25%
1,706,320 562,227 Banco Santander 97.015.000-5 ChileUS$Monthly
0.64%
7,284,913 - - - Banco de Chile
0.69%
7,316 - - - Banco Scotiabank 97.018.000-1 ChileUS$Monthly
0.40%
5,090,715 - - - 5,090.715 - - Banco Estado
0.47%
8,275,748 - - - 8,275.748 - - - - Banco Itaú
76.645.030-K ChileUS$Monthly
0.49%
1,145,505 - - - 1,145.505 - - - - Banco BBVA97.032.000-8ChileUS$Monthly 0.56%
7,974,970 - - - 7.974.970 - - - - Banco Security
0.57%
1,022,973
- - - - -
- -
-
76,744,272 1,758,472 13,311,933 15,546,348 - - 206,337,703
Total
-
-
-
-
-
-
7,284,913 8,846,919
87.316 1,022.973
-
107,361,025 206,337,703 145
20.3 Public obligations (bonds), current and noncurrent
of Series B bearer bonds with the Securities and Insurance Supervisor 18 April 2006 under No. 463. Bonds
amounting to a total UF 4.500.000 13 September
2006.
These are bonds issued by the parent company and the
indirect subsidiary Walmart Chile Inmobiliaria S.A.
The main characteristics of this issuing are:
a) Walmart Chile Inmobiliaria S.A. registered the issuing
of Series A bearer bonds with the Securities and Insurance Supervisor 9 November 1992 under No. 162.
Bonds amounting to a total UF 240,000 were issued
16 December 1993 and bonds amounting to a total
UF 110,000 were issued 8 November 1994, thus completing the maximum amount of issue.
ʭʭ
Biannual maturities
ʭʭ
Interest payments starting in April 2006 and capital payments starting in April 2008
ʭʭ
Annual interest rate of 4.2%
The main characteristics of this issuing are:
ʭʭ
No special guarantees
ʭʭ
Biannual maturities
ʭʭ
Annual interest rate at 6.5%
Restrictions regarding this obligation are presented in
the note on contingencies, lawsuits and other restrictions.
ʭʭ
No special guarantees
c) Walmart Chile registered the issuing of Series E bearer
bonds amounting to UF 6,000,000 with the Securities
and Insurance Supervisor 19 February 2007 under No.
492. These bonds were issued 25 April 2008.
Accrued interest payable as of 31 December 2011
and 31 December 2010 is presented in public obligations (bonds) in current liabilities, together with the
current portion of the obligation.
The Corporation made a voluntary early recovery at par
value of the Series C and E bearer bonds 05 November 2009, recovering 28.5% and 88.1% respectively.
This meant a total disbursement at the payment date
equivalent to UF 5,855,000 for capital plus interest accrued and unpaid as of the payment date.
Restrictions regarding this obligation are presented
in the note on contingencies, lawsuits and other restrictions.
b) Walmart Chile Inmobiliaria S.A. registered the issuing
Details for the bonds issued are presented as follows:
Non-current
Maturity
more more Registration Over 2 than 3than 5
10
Non-current or
Current Effective Current 1years yearsyears yearstotal instrument nominal Bond
Annual annual Periodicity totalto 2up toto 5to 10
oras of
Issued in identification amount indexation interest interest Final
Interest Amortization
12-31-2012years
3 yearsyearsyearsmore
12-31-2012
Chile or number
Seriesissuednumberrateratedatepaymentpayment
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP THabroad
492E
715,000UF
2.60%
4.86% 03-01-2013BIANNUAL
162A
27,632UF
6.50%
7.45% 04-01-2014BIANNUALBIANNUAL
463B
4,038,150UF
4.20%
4.55% 04-01-2028 BIANNUALBIANNUAL
-
-
Total
-
-
-
-
-
1 INSTALLMENT 16,402,176
-
-
-
-
-
-
-
Chile
138,834
-
-
-
-
138,834
Chile
3,381,983 2,483,000 2,587,284
5,505,139
17,092,074
59,555,125
87,222,622
Chile
296,654
20,080,8132,621,8342,587,284 5,505,139 17,092,074 59,555,125 87,361,456
Non-current
Maturity
more more Registration Over 2 than 3than 5
10
Non-current or
Current Effective Current 1years yearsyears yearstotal instrument nominal Bond
Annual annual Periodicity totalto 2up toto 5to 10
oras of
Issued in identification amount indexation interest interest Final
Interest Amortization
12-31-2012years
3 yearsyearsyearsmore
12-31-2012
Chile or number
Seriesissuednumberrateratedatepaymentpayment
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP THabroad
492E
715,000UF
2.60%
4.86% 03-01-2013BIANNUAL
162A
46,053UF
6.50%
463B
4,138,272UF
4.20%
-
-
Total
-
-
-
-
-
1 INSTALLMENT
-
264,997 15,339,249
-
-
-
-
15,339,249
Chile
127,636
-
-
-
409,246
Chile
3,229,915 2,325,892 2,423,566
5,156,770
14,910,365
62,443,659
87,260,252
Chile
294,798
281,610
3,789,71017,946,751 2,551,202
5,156,770 14,910,365
62,443,659 103,008,747
20.4 Financial lease obligations
Financial lease obligations are presented in detail as follows:
Administradora
Name of Walmart
Walmart de Creditos
Walmart
debtor Chile
Chile
Maquinsa
Maquinsa Comerciales
Chile
Maquinsa
Maquinsa
institution
Inmobiliaria Inmobiliaria EquipamientoEquipamiento Presto
Inmobiliaria Equipamiento EquipamientoTotal
S.a.
S.a.S.A.S.A.
Limitada
S.A.S.A.S.A.
CLP TH
Tax list number
for debtor institution
96.519.000-7 96.519.000-7 99.585.960-2
99.585.960-2
77.910.620-9
96.519.000-7
99.585.960-2
99.585.960-2
-
Name of lending institution
Compañía de seguros de vida HP
Consorcio Bice VidaFinancialIBM
nacional de Cía. deIBM deServices
de ChileBancoBancoBanco
seguros S.A.
seguros S.A.
Chile S.A.CLtda.S.A.CBiceBiceSecurity
-
Currency or readjustment unitUFUFUFUFUFUFUFUF
-
Amortization typeMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthly -
Current leasing obligations
146,287
9,484
2,035,370
141,705
749,560
1,109,729
2,113,719
684,302 6,990,156
Up to 90 days
106,781
2,332
692,872
71,969
186,893
218,697
421,654
159,729 1,860,927
39,506
7,152
1,342,498
69,736
562,667
891,032
1,692,065
524,573 5,129,229
Non-current leasing obligations 12,504,403
656,800
3,053,507
18,545
155,950
3,649,985
4,850,139
1,537,060 26,426,389
1,403,022
30,401
2,863,218
18,545
155,950
2,504,076
4,850,139
1,440,046 13,265,397
More than 3 years to 5 years 1,058,133
23,431
190,289
-
-
600,878
-
97,014 1,969,745
Over 90 days Up to 1 year
More than 1 year to 3 years
More than 5 years
10,043,248
602,968
-
-
-
545,031
-
- 11,191,247
Total leasing obligations
12,650,690
666,284
5,088,877
160,250
905,510
4,759,714
6,963,858
2,221,362 33,416,545
147
Administradora
Walmart
Walmart de Creditosalimentosalimentos
Name of Chile
Chile
Maquinsa
Maquinsa Comercialesyy
debt or Inmobiliaria Inmobiliaria Equipamiento Equipamiento Presto
Aquanatura Aquapuro Aquapuroserviciosservicios
institution
S.a.S.a.
S.A. S.A.
Limitada
S.A. S.A.S.A.S.A.S.A.Total
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
Tax list number
for debt or institution
96.519.000-7
Country of debt or institution Chile
Name of lending institution
96.519.000-7
99.585.960-2
99.585.960-2
77.910.620-9
99.520.700-1
96.671.860-9
96.671.860-9
96.755.580-0
96.755.580-0
-
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
-
Compañía de seguros de vida HP
Consorcio Bice VidaFinancialIBM
nacional de Cía. deIBM deServices
de ChileBancoBancoBancoBancoBanco
seguros S.A.
seguros S.A.
Chile S.A.C.Ltda.S.A.CBiceBiceSantanderSecurityBice
-
Currency or readjustment unitUFUFUFUFUFUFUFUFUFUF
-
Amortization typeMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthlyMonthly
-
Current leasing obligations 392,220
8,283
1,444,824
266,432
304,316
75,903
181,529
36,191
1,642,945
Up to 90 days
91,633
1,865
407,699
66,979
223,677
18,591
44,493
36,191
421,649
524,906
1,837,683
300,587
6,418
1,037,125
199,453
80,639
57,312
137,036
-
1,221,296
1,618,258
4,658,124
12,340,032
653,104
1,722,347
112,188
327,275
842,622
2,051,155
-
1,983,988
383,926
28,256
1,376,311
112,188
327,275
164,768
394,966
-
1,083,751
4,652,731
8,524,172
More than 3 years to 5 years 1,030,014
19,838
343,770
-
-
183,698
441,084
-
900,237
2,593,564
5,512,205
10,926,092
605,010
2,266
-
-
494,156
1,215,105
-
-
- 13,242,629
Total leasing obligations 12,732,252
661,387
3,167,171
378,620
631,591
918,525
2,232,684
36,191
3,626,933
9,389,459 33,774,813
Over 90 days Up to 1 year
2,143,164 6,495,807
Non-current
leasing obligations
more than 1 year to 3 years
More than 5 years
7,246,295 27,279,006
21. Trade and other accounts payable
a) The breakdown for this item as of 31 December 2012
and 31 December 2011 is presented as follows:
Domestic goods suppliers
12-31-2011
CLP TH
CLP TH
366.480.743
344.763.001
7.052.609
10.056.322
Service providers
83.297.245
79.118.062
Retention
14.706.109
7.562.859
Foreign goods suppliers
Total
Exposure to monetary or liquidity risk related to trade
and other accounts payable is analyzed in the note on
risk management policy.
471.536.706441.500.244
b) The main suppliers of goods and services determined based on the pending payment balance as of 31 December
Main suppliers of goods
Main service providers
NESTLE CHILE S.A.
EMPRESA CONSTRUCTORA TECSA S.A
CAROZZI S.A
CONSTRUCCIONES VIDRIOS Y ALUMINIOS LTDA
AGROSUPER COMERCIALIZADORA DE ALIMENTOS LTDA
DHL SUPPLY CHAIN CHILE S.A
WATT’S S.A.
CONTRUCTORA JULIO LOPEZ NAVARRO LTDA
SURLAT COMERCIAL S A
RSA SEGUROS CHILE S. A.
COOP AGRICOLA Y LECHERA DE LA UNION LTDA
BANCO BICE
CMPC TISSUE S A
SOC ASEO PROFESIONAL LTDA
EVERCRISP SNACK PRODUCTOS DE CHILE S A
QUINTEC CHILE S.A.
PRODUCTOS FERNANDEZ SA
SITRANS,SERV.INTEGRADOS DE TRANSP.LTDA.
UNILEVER CHILE S.A.
CENT.DE REST.ARAMARK MULTIS.LTDA.
COMERCIAL SANTA ELENA S A
ACCESORIOS FRIGORIFICOS SANTIAGO LTDA
IMPORTADORA CAFE DO BRASIL S A
ESTRELLA SOLITARIA S.A.
Average payment days have been calculated as average weighted payment during the 2012 fiscal year.
This weighted average was calculated considering the
document’s date of issue, actual date of payment and
the amount stated in said document.
The average payment days for suppliers as a whole comes to 51.5 days as of 31 December 2012.
c) Trade and other accounts payable stratification is presented as follows:
Suppliers with payment up to date
Type of Supplier
Amount according to payment periods
121
Up to
-
366
Average
30
31 - 60
61 - 90
91 - 120
365andpayment daysdaysdaysdaysdaysmore
Totalperiod
CLP TH
(days)
Foreign suppliers of goods
4,890,495
279,532
40,280
5,889
-
-
5,216,196
51.5
National suppliers of goods
272,103,728
69,194,669
17,189,595
2,008,738
-
-
360,496,730
51.5
Service providers
77,780,073
217,954
8,983
-
-
-
78,007,010
51.5
Retention
14,706,109
-
-
-14,706,109
30
-
-458,426,045
Total
369,480,405
-
69,692,155
-
17,238,858 2,014,627
149
Suppliers with payment in arrears
Type of supplier
Amounts according to days payment is past-due 121
Up to
-
181
30
31 - 60
61 - 90
91 - 120
180and
Total
daysdaysdaysdaysdaysmore
CLP Th
Foreign suppliers of goods
1,446,953
160
389,300
-
-
-
1,836,413
National suppliers of goods
4,506,309
1,368,567
109,137
-
-
-
5,984,013
Service providers
4,219,572
-
1,070,143
-
-
-
5,289,715
-
-
-
-
-
-
-
-
-
- 13,110,141
Retention
Total
10,172,8341,368,727 1,568,580
d) Confirming Operations
Confirming operations with unpaid balances corresponding to Walmart Chile at the end of the fiscal year are
associated to two suppliers, CLOROX CHILE and GOODYEAR. The supplier JORGE RABIEY CIA completed his
last confirming transaction in April 2012.
The Corporation’s criterion with regard to confirming is to
accept up to 50% of all invoices with pending payment
in the supplier’s account in order to eliminate eventual
financial risk associated to reduction of this account due
to negotiations with the sales area and/or returns.
Given the immaterial nature of these operations, they are
registered in the trade and other accounts payable item
and when making payment upon maturity of the debt
associated to the supplier, the beneficiary is changed the
corresponding financial or bank institution.
Balances as of 31 December 2012 are presented as follows::
Proveedor
Amount for operations during the fiscal year CLP TH
Balance as of
12-31-2012 CLP Th
CLOROX CHILE
9,993,108
2,198,091
GOODYEAR
1,290,561
317,172
150,448
-
11,434,117
2,515,263
JORGE RABIEY CIA
Total general
22. Provisions
Details for this item as of 31 December 2012 and 31 December 2011 are provided as follows:
22.1 Provisions
Balance as of
Current
Non-current
Type of provision
12-31-2012
12-31-2011
12-31-2012
12-31-2011
CLP TH
CLP TH
CLP TH
CLP TH
Bonuses and rewards
16,237,468
21,426,301
-
-
Vacation
11,499,984
8,205,276
-
-
947,105
694,672
-
60,000
28,684,557
30,326,249
-
60,000
Legal proceedings
1,598,058
1,891,500
-
-
Other
2,347,994
5,416,359
-
-
Other provisions
3,946,052
7,307,859
-
-
Total
32,630,60937,634,108
Severance pay
Provisions for employee benefits
22.1.1 Provision for bonuses and rewards
This is a provision for expenses for payable bonuses and/
or legal rewards to employees over the short term.
22.1.2 Vacation provision
This is a provision for employee vacation expenses insofar as the service is provided, measured on a non-discounted basis.
22.1.3 Severance pay provision
A provision for short-term employee severance pay expenses.
- 60,000
22.1.4 Provision for legal proceedings
This provision is for certain legal proceedings taken
on by Walmart Chile and its subsidiaries for individuals
affected in terms of contract terms or services provided.
Deadlines for the use of provision balances are limited to
the timescale of normal legal proceedings (see details in
contingencies, lawsuits and other restrictions.
22.1.5 Other provisions
This is a provision for administrative expenses to be paid
during the following period.
22.2 Movement of provisions
Severance pay Provision for provision Severance bonuses for pay for Investment and
Vacation current non-current Legal
in negative Other
Detailrewards provisionterminationsterminationsproceedingsequityprovisions Balance
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
CLP TH
17,188,429
7,259,801
929,824
92,061
2,132,340
2,019,140
4,379.689 34,001,284
Charges to income
19,141,034
8,260,892
694,672
-
47,349
-
11,190.222
39,334,169
Payments in the period
(14,903,162)
(7,315,417)
(929,824)
(32,061)
(288,189)
(2,019,140)
(10,153.552)
(35,641,345)
Total changes in provisions
4,237,872
945,475
(235,152)
(32,061)
(240,840)
(2,019,140)
1,036.670
3,692,824
21,426,301
8,205,276
694,672
60,000
1,891,500
-
Charges to income
15,885,594
4,621,588
3,880,115
-
-
-
956,411
25,343,708
Payments during the period
(21,074,427)
(1,326,880)
(3,627,682)
(60,000)
(293,442)
-
(4,024,776)
(30,407,207)
Total changes in provisions
(5,188,833)
3,294,708
252,433
(60,000)
(293,442)
-
(3,068,365)
(5,063,499)
Balance as of 12-31-2012 16,237,468
11,499,984
947,105
-
1,598,058
-
2,347,994
32,630,609
5,416.359 37,694,108
151
23. Assets and current tax liabilities
Details of assets and current tax liabilities for the fiscal years ending 31 December 2012 and 31 December 2011 are provided as follows:
Current tax assets
Assets
Liabilities
Assets
Liabilities
CLP TH
CLP TH
CLP TH
CLP TH
Monthly provisional payments
56.759.523
-
-
8.286.431
Contributions
7.765.633
-
-
6.632.028
Sence credit
2.360.882
-
-
1.650.200
Other minor loans
429.583
-
-
1.287.749
Income taxes
(45.232.307)
-
-
(44.286.197)
PPUA tax loss
10.228.607
-
14.508.016
-
Recoverable taxes from former years
22.444.213
-
16.801.740
-
Total current tax assets
54.756.134
-
31.309.756
(26.429.789)
24. Other non-financial liabilities
Details of other non-financial liabilities for the fiscal years ending 31 December 2012 and 31 December 2011 are provided
below:
Other non-financial liabilities
Current
12-31-2012
12-31-2011
CLP TH
CLP TH
Dividends payable
34,708,808
34,205,571
- -
Deferred income
4,905,879
4,717,527
1,408,204
1,408,205
34,074
48,010
1,545,909
2,372,040
39,648,761
38,971,108
2,954,113
3,780,245
Other
Total 25. Net equity
25.1 Subscribed and paid-in capital
The Corporation’s equity as of 31 December 2012 and 31
December 2011 presented a balance amounting to CLP
th 457,867,231, composed of a total 6,520,000,000 shares
without nominal value that have been totally subscribed
and paid-in. The Corporation has issued only one series
of common shares, which enjoy equal voting rights
without priority whatsoever.
Non-current
12-31-2012
12-31-2011
CLP TH
CLP TH
25.2 Dividends
A dividend of CLP 5.241 per share was approved at an
ordinary shareholders meeting held 27 April 2012. Payment of this dividend was made 16 May 2012.
An additional dividend amounting to CLP 0.02 per share
was approved at an ordinary shareholders meeting held
27 April 2012. This dividend was paid 16 May 2012.
An final dividend amounting to CLP 5.054 per share was
approved at an ordinary shareholders meeting held 27
April 2012. This dividend was paid 2 May 2011..
25.3 Minimum dividend
As of 27 October 2010 and in conformity with Newsletter
N° 1945 de 29 September 2009 and Newsletter N° 1983
dated 30 July 2010, the Walmart Chile S.A Board of Directors decided not to apply ajustment to “income (loss),
attributable to the controlling interest owners” for the
purpose of determining liquid earnings to be considered
when calculating obligatory and additional minimum dividends. As of 31 December 2012, a provision has been
recorded for minimum dididends amounting to CLP th
34,690,772 (CLP th 35,457,288 as of 31 December 2011),
which is determined based on the 30% indicated in Corporations Law N°18,046.
25.4 Accumulated income (loss)
As part of the financial statements consolidation process,
technical reappraisal (allowed by technical bulletin N°
54 “Reappraisal of Fixed Assets”) affecting the property,
plant and equipment and accumulated equity income
(loss) items was eliminated 31 December 2010. However,
since the Corporation started exhaustive IFRS auxiliary
formulation, asset by asset, for the property, plant and
equipment item in 2011, it subsequently detected that
the aforementioned elimination of technical reappraisal
had already been absorbed during the implementation
process. This was done as part of the one-time reappraisal permitted by IFRS 1 “First-time Adoption of International Financial Reporting Standards” and thus the aforementioned items were presented undervalued by CLP th
2,311,407. Consequently, these balances have been reexpressed in these financial statements. This adjustment
did not change the results for the fiscal year and therefore income per share was not affected.
25.5 Other reserves
25.5.1 Currency conversion reserve
This item reflects earnings accumulated due to fluctuations in exchange rates by converting financial statements of subsidiaries whose operational currency is
different from that of the Group (Chilean pesos).
25.5.2 Other reserves
These correspond to the reversal of share capital revaluation for the 2009 fiscal year in accordance with Securities and
Insurance Supervisor Newsletter N° 456 dated 20 June 2008 and incorporated in capital issued in accordance with the
provisions of Law 18,046, Article 10, second paragraph.
Movement of other reserves as of 31 December 2012 and 31 December 2011 is presented as follows:
Changes in other reserves attributable
to the holders of net equity Changes in other reserves instruments Conversion Other of the parent
Statement of changes in net equityreservesreservescompany, total
CLP TH
CLP TH
CLP TH
Inital balance 01-01-2011
(133,254)
9,943,850
9,810,596
Changes:
Comprehensive revenue and expenses results
73,146
-
73,146
Other increases (decreases) in net equity
(67,899)
(593)
(68,492)
Changes in equity
Final balance as of 12-31-2011
(593)
4,654
(128,007)
5,247
9,943,257
9,815,250
(193,477)
-
(193,477)
Changes:
Comprehensive revenue and expenses results
Other increases (decreases) in net equity
Changes in equity
Final balance as of 12-31-2012
-
336
336
(193,477)
336
(193,141)
(321,484)
9,943,593
9,622,109
153
25.6 Equity interest held by non-controlling companies
Composition of non-controlling equity interests as of 31 December 2012 and 31 December 2011 is presented as follows:
Detail of non-controlling equity interests
12-31-2012
12-31-2011 Income (loss) Income (loss) Percentage of attibutable attibutable non-controlling to to Country interest
Non-holding non-controlling Non-holding non-controlling Name of of in equity equity equity equity subsidiary
origin
subsidiariesinterestinterestinterestinterest
2012
2011
CLP TH
CLP TH
CLP TH
CLP TH
Supermercados Almac S.A.
Chile
0.0001
0.0001
78
1
59
1
Walmart Chile Inmobiliaria S.A.
Chile
0.0056
0.0056 27,138
2,260
25,031
3,140
Administradora de Concesiones
Comerc.de Hiper. S.A.
Chile
-
-
-
-
-
9,496
Inversiones Walmart Chile Ltda.
Chile
-
-
-
-
-
102
Total
-- 27,216 2,261
25,09012,739
26. Income
26.1 Revenue from ordinary activities
Details of ordinary revenue for the fiscal years ending 31 December 2012 and 2011 are presented as follows:
Types of ordinary revenue
Revenue from inventory sales
Revenue from financial services
Revenue from leasing
Total ordinary revenue
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
2,744,707,806
2,442,764,493
113,689,147
130,043,460
34,405,016
31,675,264
2,892,801,969
2,604,483,2177
27. Composition of significant results
27.1 Administrative expenses
Details of the main administrative and operating expenses for the fiscal years ending 31 December 2012 and 31 December 2011 are presented as follows:
Expenses by nature
Salaries and wages
Other service expenses
Trade receivable impairment
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
267,140,497
253,073,500
74,364,249
64,721,849
129,437,249
113,478,818
2,876,554
2,330,934
LEASES
35,409,215
30,290,565
Electricity
24,830,787
25,329,311
Maintenance
16,720,904
13,401,598
4,287,778
4,564,605
555,067,233
507,191,180
Other administrative expenses
Total expenses by nature
27.2 Depreciation and amortization
Details of depreciation and amortization expenses are provided for fiscal years ending 31 December 2012 and 31 December 2011 as follows:
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
Depreciation
67.494.077
58.753.534
Amortization
6.870.172
5.968.315
Total
74.364.24964.721.849
155
27.3 Financial revenue and expenses included in the income statement
Details for items included as finanical revenue and expenses for fiscal years ending 31 December 2012 and 31 December
2011 are presented as follows:
Financial results
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
Financial income
Interest on financial investment instruments
953,277
2,208,500
14,365
19,147
-
25,228
967,642
2,252,875
Interest on bank loans
(7,451,435)
(3,062,109)
Interest on bonds
(4,851,314)
(4,104,742)
(13,044,165)
(13,044,767)
(1,920,946)
(1,572,774)
(16,765)
(17,608)
1,783,056
1,816,275
-
(748,612)
(25,501,569)
(20,734,337)
Interest in related companies
Other financial income
Total financial revenue
Financial costs
Interest on promissory notes
Leasing interest
Interest on bank guarantees
Capitalized interest
Other financial costs
Total financial costs
27.4 Exchange rate difference
The exchange rate difference balance for the fiscal years ending 31 December 2012 and 31 December 2011 is presented
as follows:
Item detail
Currency
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
Cash and cash equivalentsUS$
48,987
12,826
Other financial assetsUS$
(3,509,987)
322,464
Fees receivable, non-current
-
(47,350 )
Loans accruing interestUS$
4,821,272
(1,068,846 )
Accounts payable and other accounts payable, currentUS$
(1,605,348)
(5,991,902 )
(245,076)
(6,772,808 )
Total
-
27.5 Other income by function
The other income by function balance for the fiscal years ending 31 December 2012 and 31 December 2011 is presented
as follows:
Item detail
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
Profit from sale of investments
-
18,341,079
Income from successive purchases, IFRS 3 (*)
-
10,726,057
Portfolio sales
1,061,327
-
Profit from the sale of intangible assets
1,587,767
1,539,269
Credit notes not received
3,368,960
-
Other revenue
5,143,575
4,424,439
11,161,629
35,030,844
Total other income by function
(*) See details in note on business mergers.
27.6 Other expenses by function
The balance of other expenses by function as of 31 December 2012 and 31 December 2011 is presented as follows:
Item detail
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
Advertising
22,084,734
21,292,453
Travel expenses
906,168
4,174,887
Donations
766,933
882,025
1,841,401
1,476,560
10,605,099
9,056,271
Impairment of fixed assets
Other expenses
Total
36,204,33536,882,196
28. Income after taxes
Income tax charged to results amounts to a total CLP th 29,358,766 for the fiscal year ending 31 December 2012 and to
CLP th 22,558,779 for the fiscal year ending 31 December 2011, indicated as follows:
Income tax expense (revenue) by current and deferred parts (presentation)
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
Expense for current taxes
40,093,606
33,743,585
Adjustments to current tax in the former period
(4,212,783 )
6,768,620
Other expenses for current taxes
(10,432,997 )
18,785
Total current net tax expenses
25,447,826
40,530,990
Deferred expense (income) related to the creation and reverlas of temporary differences
3,910,940
(17,972,211 )
Total deferred tax expenses, net
3,910,940
(17,972,211 )
29,358,766
22,558,779
Income tax expenses (income)
157
Income tax expenses (income) from foreign and national divisions (presentation)
Current tax expenses (revenue), foreign
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
3,754
24,038
Current tax expenses (revenue), domestic
25,444,072
40,506,952
Total net current tax expenses
25,447,826
40,530,990
Net deferred tax expenses (revenue), domestic
3,910,940
(17,972,211 )
Total net deferred income tax
3,910,940
(17,972,211 )
29,358,766
22,558,779
Net deferred tax expenses (revenue), foreign
Income tax expenses (revenue)
The following table shows reconciliation of income tax recorded and that resulting from application of the legal rate for
the fiscal years ending 31 December 2012 and 31 December 2011:
Reconciliation of tax expenses at the legal rate and for tax expenses at the effective rate
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
Tax expenses using the legal rate
28,999,386
27,292,660
Net tax price level restatement
(2,862,091)
(5,051,240)
(302,185)
199,645
Effect of reorganization
(3,182,805)
(886,389)
Ajustment for tax losses
6,617,621
1,117,558
Other increase (decrease) in charges for legal taxes
88,840
(113,455)
Tax expense adjustments using the legal rate, total
359,380
(4,733,881)
29,358,766
22,558,779
Effect of rate changes
Tax expense using the effective rate
29. Earnings per share
Basic earnings per share are calculated by dividing earnings attributable to the Corporation’s common shareholders between the weighted average of common shares in circulation that year, excluding, if any, common shares acquired by the
company and kept as treasury shares.
Basic earnings (losses) per share
Earnings (loss) attributable to the holders of equity instruments in the net equity of the parent company
Other increases (decreases) in the calculation of earnings available to common shareholders
Earnings available to common shareholders, basic
Average weighted number of shares, basic
Basic earnings (losses) per share (CLP per share)
There are no dilutive effects affecting this index.
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
115,635,906
113,891,781
-
-
115,635,906
113,891,781
6,520,000,000
6,520,000,000
17.74
17.47
30. Contingencies, lawsuits and other restrictions
30.1 Direct commitments
ʭʭ
Direct guarantees:
The Corporation does not have any direct guarantees
for Group loans as of 31 December 2012.
ʭʭ
Indirect commitments:
The Corporation does not have any indirect guarantees for Group loans as of 31 December 2012.
30.2 Management restrictions or limits to financial
indicators
financial statements. The subsidiary Walmart Chile Inmobiliaria S.A. currently complies with this indicator.
These restrictions were standardized and adjusted to
IFRS in 2011, requiring only the rephrasing of certain terminology used.
As of 31 December 2012, the Walmart Chile Group does
not have any direct restrictions or restrictions through its
subsidiaries in addition to those formerly indicated in the
bank loans or other financial instruments item.
30.3 Legal proceedings
According to the Walmart Chile S.A. bond issuing contract (SVS Securities Registry N°492), no compliance with
financial indicators or limits is required.
As of 31 December 2012, the Corporation and its subsidiaries had lawsuits pending against them for claims
related to the normal course of operations. According to
legal advisors, most of these claims do not pose risks of
significant losses.
According to indirect subsidiary Walmart Chile Inmobiliaria S.A. bond issuing contracts (SVS Securities Registry
N°162 and N° 463), Walmart Chile Inmobiliaria S.A. must
comply with the following financial indicators and limits,
which are determined using the Corporation›s consolidated financial statements presented quarterly to the
Securities and Insurance Supervisor (SVS.) and to Banco
Santander, the bondholder›s agent.
The Corporation recognizes a provision for lawsuits classified in the expenses expense provision account in current liabilities, which is calculated in accordance with a
case-by-case evaluation by the Corporation’s attorneys.
This provisions all lawsuits with a greater than 50% chance of losing by the estimated maximum amount to be
paid and then multiplies this amount by the effective
payment ratio over the last twelve months.
ʭʭ
LLeverage, understood as the quotient between total
liabilities and total equity, must be less than 1.3. The
indicator comes to 0.7 times as of 31 December 2012
and the subsidiary Walmart Chile Inmobiliaria S.A. currently meets this leverage indicator.
The Corporation recognizes a provision for lawsuits
classified in the expenses expense provision account in
current liabilities, with the total cases in which the Corporation and its subsidies are being sued, grouped by
subject as follows:
ʭʭ
Real estate assets with value greater than or equivalent to UF 12,000,000, undestood as real estate assets
defined, according to the financial statements format, as the sum of: i) Property, plant and equipment,
(sites and buildings, fixed installations and accessories) in the consolidated financial statements and
ii) investment property in the consolidated financial
statements corresponding to sites where, at the
respective time of calculation, there is construction,
works, installations or stores that can be commercially exploited or leased and these must remain leased,
either directly or indirectly through its subsidiary to
Walmart Chile S.A , or to any related company. These contracts must be valid until 31 October 2025.
As of 31 December 2012, the indicator came to UF
36,674,494 and the subsidiary Walmart Chile Inmobiliaria S.A. currently complies with this limit.
ʭʭ
Civil lawsuits: 146 lawsuits against the company
with a total associated amount of CLP th 9,975,587.
111 of these lawsuits have been evaluated by the
Corporation’s attorneys, with a greater than 50%
chance of losing, with an associated provision
amounting to CLP th 709,594.
ʭʭ
Labor lawsuits: 158 lawsuits against the company for
an associated amount of CLP th 1,440,104. 122 of these lawsuits have been evaluated by the Corporation’s
attorneys, with a greater than 50% chance of losing,
with an associated provision amounting to CLP th
147,455.
ʭʭ
Lawsuits for violation of Consumer Protection Law:
702 lawsuits in which the Corporation and/or its subsidiaries are accused, reported and/or sued, with a total associated amount of CLP th 5,099,252. 634 of these lawsuits have been evaluated by the Corporation’s
attorneys with a greater than 50% chance of losing,
with an associated provision amounting to CLP th
681,955.
ʭʭ
Maintain equity amounting to over UF 12,000,00 at a
consolidated level reflected in each of the quarterly
159
ʭʭ
Other infringement lawsuits: 124 infringement lawsuits with an associated total of CLP th 263,426.
116 of these lawsuits have been evaluated by the
Corporation’s attorneys with a greater than 50% chance of losing, with an associated provision amounting
to CLP th 59,054.
ʭʭ
The following legal proceedings for payment of the
balance owed to Walmart Chile S.A. for the sale of
Supermercados Ekono S.A. shares to Disco S.A., both
of which are Argentinian companies are reported:
“As of 10 August 2011, Walmart Chile S.A. (“WMC”),
Servicios Profesionales y de Comercialización Limitada (“SPC”), Jumbo Retail Argentina S.A. (“Jumbo”),
Disco Ahold International Holdings N.V. (“DAIH”) and
Koninklijke Ahold N.V. (“Ahold”), signed a Settlement
Agreement, by virtue of which, without recognizing
actions or rights and only for the purpose of settlement, Ahold paid WMC the total and final amount of
US$ 3,250,000. As the consequence of this payment,
WMC and SPC committed –in themselves and on behalf of their controlling, controlled or related companies, their current and former shareholders, directors,
managers, personnel, agents and/or attorneys– to (i)
desist from any action or claim of any kind, against
Jumbo, DAIH and Ahold, related to: (a) the lawsuit orginially filed by D&S against Ahold at District Court
Haarlem, Netherlands; (b) the lawsuit originally filed
by D&S and SPC against DAIH at the Courts of the
Dutch Antilles; and (c) arbitration orginally filed by
D&S against Disco S.A. (currently Jumbo) in Buenos
Aires, Argentina; (ii) totally, irrevocably and finally releasing DAIH from the obligations it had taken on as
guarantor of Disco S.A. (currently Jumbo) in the Su-
permercados Ekono S.A. share sale contract dated
23 December 1999; (iii) desist from filing any future
action or claim against Jumbo, DAIH and/or Ahold, its
controlling, controlled or related companies, current
and former shareholders, directors, managers and/
or personnel, for any reason or cause related to lawsuits and arbitration mentioned in foregoing letters
(a), (b) and (c). In turn, in virtue of the same agreement, Ahold, DAIH and Jumbo, desisted from filing
any future action or claim against WMC and/or SPC,
their controlling, controlled or related companies, directors, managers and/or personnel, for any reason or
cause related to the lawsuits and arbitration mentioned in foregoing letters (a), (b) and (c). Regarding the
aformentioned agreement, WMC withdrew its nullity
claim following the arbitration award made 3 June
2011 during arbitration brought against Disco S.A.
(currently Jumbo) referred to in foregoing letter (c);
and WMC desisted from bringing the case for appeal
before the Court of Appeals at The Hague in the case
previously referred to in letter (a).“
ʭʭ
As of 31 December 2012, a collective lawsuit is currently underway with SERNAC for “Violation of the
collective interest of consumers due to failure to
comply with Law 19,496”. The Santiago Court of Appeals revoked the decision that had declared the collective lawsuit inadmissable 28 September. SERNAC
filed a cassational complaint 17 October regarding
the form and substance in order for the Supreme
Court to revoke its declaration of the lawsuit being inadmissable. A ruling by the Supreme Court regarding
admissibility of cassational complaints is currently
being awaited.
31. Staff distribution
Corporation staff distribution for the fiscal years ending 31 December 2012 and 31 December 2011 is presented as follows:
Walmart
Walmart Chile
Chile
Comercial Negocio Negocio Negocio
Staff
S.A. S.A.
retail
inmobiliario
financieroTotal
31-12-1231-12-1131-12-1231-12-1131-12-1231-12-11 31-12-1231-12-11 31-12-1231-12-1131-12-1231-12-11
Managers and executives
7
9
87
79
222
196
29
25
22
25
367
334
Professionals and technical personnel -
-
446
364
2,630
2,411
158
149
162
146
3,396
3,070
Colloborators
1
1
745
775
38,571
352475
356
351
1,714
1,842
41,387
38,444
Total
810
1,2781,218
41,423
382082 543 5251,8982,013
45,150
41,848
32. Environment
Although the Corporation’s investments have essentially focused on supporting its business practices, these
have internalized best environmental practices related
to energy efficiency, waste recycling, transport, availability of green spaces and the adoption of environmentally
friendly technologies.
33. Subsequent events
As of 01 January 2013, Walmart Chile Comercial Ltda.,
previously known as Inversiones Presto Tres Ltda. and as
Administradora de Créditos Comerciales Presto Ltda. before that merged with Walmart Chile Comercial S.A. The
latter was absorbed and consequently the Corporation
was dissolved. All of its assets and liabilities were transferred to the acquiring Corporation.
A new agreement was signed between Walmart Chile S.A. and Inversiones Australes Dos Ltda. in February
2013, reducing the interest rate from 4.315% to 3.89%.
This new rate is applicable over UF 6,200,000 of the total
capital owed by Walmart Chile to Inversiones Australes
Dos for a loan made in December 2009 (total capital
owed: UF 9,735,731.21).
No other significant subsequent events have occurred
after 31 December 2012 and the date these financial statements were issued.
34. Business mergers
Inversiones Walmart Chile Limitada, a subsidiary of Walmart Chile S.A., purchased the remaining 50% interest
in the related companies Alimentos y Servicios S.A. and
Inversiones Solpacific S.A. 15 July 2011, thereby taking
100% control of the aformentioned companies, since
the other 50% was already owned by other related companies.
Description of the acquisition process
La Corporation has based its purchasing process for the
companies Alimentos y Servicios S.A. and Inversiones
Solpacific S.A. on its continual search for cost efficiency
through the integration of synergies to obtain higher
production levels in the companies it acquires, and passing on the lower purchase prices for inputs that Walmart Chile obtains thanks to commercial agreements it
maintains with its suppliers that result from large volume purchases. This strategy allows the company to offer
customers the best variety of high-quality products at
the lowest prices. In accordance with the above, in the
negotiating process the company agreed to pay a purchase price higher than the fair value of the assets of the
companies acquired based on future flows that would
be obtained by the aforementioned synergies, thus generating goodwill that was recorded by the purchasing
company.
a) Alimentos y Servicios S.A.
Alimentos y Servicios S.A. was established by public
deed 26 June 1995. Its purpose is to a) make, sell and
distribute all kinds of foods and prepared foods and all
food products in general, in house or externally; b) purchase, sell, import, export, distribute and sell, directly or
indirectly, all kinds of movable goods; and c) in general,
directly or indirectly perform all acts and celebrate contracts related to this purpose.
The purchase price for 50% of the shares of Alimentos y
Servicios S.A. was CLP th 11,822,570. Due to the business
merger, goodwill amounting to CLP th 21,635,197 has
been recorded in the financial statements of Walmart
Chile S.A. and its subsidiaries.
Goodwill value had dropped by CLP th 425,417 as of 31
December 2012. This variation is mainly due to returns
stemming from the difference between the purchase
price and variation in the acquisition adjustment value.
161
Summarized statement of financial position at fair value on the date of acquisition:
ITEM
CLP TH
ITEM
Current assets
16,416,794
21,256,905Non-current liabilities
Other non-current assets
CLP TH
Current liabilities
26,111,404
10,068,492
493,640Patrimonio
Total assets
1,987,443
38,167,339Total liabilities
Controlling portion
38,167,339
CLP th 1,987,443
Determination of goodwill:
DETAILS
Purchase price
Minus:
Portion purchased
CLP TH
11,822,570
993,722
Goodwill generated
10,828,848
Plus:
Result of successive purchase IFRS3 R
7,862,214
Subsequent purchase price adjustments 2,944,135
Goodwill as of 31 December 2011
Goodwill impairment
Goodwill as of 31 December 2012
b) Inversiones Solpacific S.A.
Inversiones Solpacific S.A. was established 5 March 1993
for the purpose of a) investing in all kinds of tangible and
intangible movable goods, managing those investments
and receiving the benefits thereof; and b) acquiring and
disposing of all kinds of real estate, managing them and
receiving the benefits thereof.
The purchase price for 50% of the shares of Inversiones
Solpacific S.A. was CLP th 216,694. As a result of the business merger, Walmart Chile S.A. has recorded goodwill
amounting to CLP th 7,988,234 in its financial statements.
Goodwill stemming from the acquisition process has not
evidenced any variation as of 31 December 2012.
21,635,197
(425,417)
21,209,780
Summarized statement of financial position at fair value on the date of acquisition:
ITEM
CLP TH
ITEM
CLP TH
Current assets
3,051,952
3,984,929Non-current liabilities
Current liabilities
11,851,593
3,152,198
Other non-current assets 61,653Patrimonio
(7,905,258)
Total assets
7,098,534
7,098,534Total liabilities
Controlling interest
CLP th (7,905,258)
Determination of goodwill:
DETAILS
CLP TH
Purchase price
216,694
Minus:
Portion purchased
(3,952,629)
Goodwill generated
4,169,323
Plus:
Result of successive purchase IFRS3 R
2,863,843
Subsequent purchase price adjustments
955,068
Goodwill as of 31 Diciembre 2012 and 31 December 2011
7,988,234
35. Non-current assets or groups of assets classified as held for sale
The balance of non-current assets or disposal groups classified as held for sale as of 31 December 2012 and 31 December
Details of non-current assets or groups of assets for disposal classified as held for sale
12-31-2012
CLP TH
12-31-2011
CLP TH
Sites
-
6,158,823
Total non-current assets or groups of assets for disposal classified as held for sale
-
6,158,823
In 2011 the company decided to reclassify the site
known as “El Molino” to the category of asset held for
sale. The site has an area of 113,474 m2 and is located in
the municipality of Quilicura in the Metropolitan Region.
The value of the asset held for sale corresponds to the
lower value resulting from the comparison between the
book value and the reasonable value less estimated sale
costs, which has not generated effects on income during
the fiscal year.
There are no effects on income related to impairment
losses on these assets held for sale.
The Corporation sold the site known as “El Molino” during
the third quarter of 2012, generating profits amounting
to CLP th 1,534,173.
163
36. Pro-forma cash flow status, direct method
The Securities and Insurance Supervisor established by means of Newsletter N° 2058 dated 03 February 2012 that based
on the financial statements dated 31 March 2013, all entities recorded in the Securities Registry and in the Special Registry
of Reporting Entities, with the exception of insurance companies, were to report the statement of cash flow for operating
activities using the direct method, establishing that companies which have presented statements of cash flow using the
indirect method would have to present in addition to presentation financial statements dated 31 December 2012, a statement of cash flow using the direct method in a pro-forma and non-comparative format. The aforementioned statement
of cash flow has been prepared in accordance with pro-form requirements indicated by the aforementioned Newsletter
and considering the provisions of IAS 7 included in the Normas Internacionales de Información Financiera.
DIRECT PRO-FORMA CASH FLOW STATEMENT 12-31-2012
CLP TH
Categories of operating activity charges
Charges from the sale of goods or provision of services
Other charges for operating activities
3,623,763,949
2,234,281
Payment categories
Payment to suppliers for the supply of goods and services
Payment to and on behalf of employees
Other payment for operating activities
(3,086,751,351)
(238,566,531)
(37,843,306)
Net cash flows from (used in) the operation
262,837,042
Reimbursed income (loss) taxes
(55,439,291)
Other cash inflows (outflows)
11,637,086
219,034,837
Cash flow from (used in) investment activities
Other charges due to the sale of equity or debt instruments belonging to other entitities
150,569,769
Other payments for purchasing equity or debt instruments from other entities
(150,569,769)
Amounts from the sale of property, plants and equipment
Property, plants and equipment purchased
Intangible assets purchased
7,945,321
(178,238,018)
(9,883,864)
Amounts from other long-term assets
100,000
(180,076,561)
DIRECT PRO-FORMA CASH FLOW STATEMENT 12-31-2012
CLP TH
Amounts from loans
1,320,154,376
Amounts from short-term loans
1,320,154,376
Loan reimbursement
(1,280,520,203)
Liability payment for financial leasing
(5,755,748)
(13,079,643)
Dividends paid
(34,305,339)
Interest paid
(24,187,189)
Net cash flows from (used in) financing activities
(37,693,746)
Net increase (decrease) in cash and cash equivalents, before the effect of exchange rate variations
1,264,530
48,867
1,313,397
42,544,982
43,858,379
165
Inversiones walmart chile limitada and subsidiaries
Classified consolidated financial statements
As of 31 December 2012 and 31 December 2011 (Expressed in thousands of Chilean pesos)
ASSETS
12-31-2012
CLP TH
12-31-2011
CLP TH
42,952,378
38,023,809
Other current financial assets
19,392,604
40,243,620
5,893,989
5,113,740
301,332,617
282,067,917
2,450,524
-
245,144,638
217,100,494
51,744,278
28,403,084
668,911,028
610,952,664
-
6,158,823
CURRENT ASSETS
Trade and other receivables, current
Accounts receivable from related companies, current
Inventories
Current tax assets
Total current assets other than assets or asset groups for disposal
classified as held for sale or to be distributed to owners
Non-current assets or asset groups for disposal classified as held for sale
Non-current assets or asset groups for disposal
classified as held for sale or to be distributed to owners
-
6,158,823
668,911,028
617,111,487
13,871,364
12,798,032
Collection rights, non-current
65,074,924
79,466,270
Intangible assets other than goodwill
21,537,549
18,171,017
NON-CURRENT ASSETS
Goodwill
29,523,393
29,948,810
1,095,498,732
990,979,953
Investment property
110,757,739
112,358,448
Deferred tax assets
56,571,394
47,054,865
Total non-current assets
1,392,835,095
1,290,777,395
Total assets
2,061,746,123
1,907,888,882
Las notas adjuntas de la N° 1 a la 3 forman parte integral de estos estados financieros consolidados
LIABILITIES
12-31-2012
CLP TH
12-31-2011
CLP TH
48,965,268
47,418,490
Trade and other accounts payable, current
472,225,538
441,794,914
Accounts payable to related companies, current
508,162,860
421,010,079
CURRENT LIABILITIES
Others financial liabilities, current
Other current provisions
3,570,638
7,373,567
-
27,457,987
27,715,549
28,924,615
4,935,010
6,944,969
1,065,574,863
980,924,621
113,853,962
115,943,355
8,126,441
7,659,209
37,480,529
23,560,575
-
92,061
2,935,700
2,918,129
162,396,632
150,173,329
1,227,971,495
1,131,097,950
Capital issued
491,854,585
491,854,585
Accumulated income (losses)
211,714,083
157,145,182
Other reserves
106,429,757
106,414,993
809,998,425
755,414,760
23,776,203
21,376,172
833,774,628
776,790,932
2,061,746,123
1,907,888,882
Employee benefit provisions, current
Other non-financial liabilities, current
NON-CURRENT LIABILITIES
Others financial liabilities, non-current
Accounts payable to related companies, non-current
Non-current provisions for employee benefits
Other non-financial liabilities, non-current
Total non-current liabilities
Total liabilities
EQUITY
Equity attributable to controlling interest owners
Minority interests
Total equity
167
Consolidated income statement by function
For fiscal years ending 31 December 2012 and 31 December 2011 (Expressed in thousands of Chilean pesos)
INCOME STATEMENT BY FUNCTION
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
2,891,243,002
2,617,734,874
Cost of sales
(2,090,815,400)
(1,844,270,729)
Gross income
800,427,602
773,464,145
11,113,496
10,042,763
Distribution costs
(31,823,514)
(23,249,381)
(548,496,807)
(555,602,287)
(35,108,534)
(34,752,884)
1,571,538
(15,666)
(59,883)
1,143,465
(21,286,420)
(20,341,892)
-
(187,143)
(251,043)
(6,984,717)
(8,121,569)
(7,643,121)
167,964,866
135,873,282
(30,982,914)
(17,546,898)
136,981,952
118,326,384
135,000,795
116,482,069
1,981,157
1,844,315
136,981,952
118,326,384
Other income (loss)
Financial income
Financial costs
Share in income (losses) of subsidiaries and joint businesses reported using the equity method
Income tax expense
Income (loss)
Income (loss)
Consolidated comprehensive income statement
Note
01-01-2012 01-01-2011
12-31-2012
12-31-2011
CLP TH
CLP TH
Income (loss)
136,981,952
118,326,384
Exchange rate conversion differences
-
-
-
-
Cash flow hedging
-
-
-
-
Other components of other comprehensive income before taxes -
-
118,326,384
Comprehensive income attributable to controlling interest owners 135,000,795
116,482,069
Comprehensive income attributable to minority interests 1,981,157
1,844,315
118,326,384
169
Consolidated statement of changes in equity
Equity Reserves forattributable currencyOther
Accumulated to Capital
conversionmisc.Otherincome controlling Minority
Total issueddifferencesreservesreserves
(losses)interest interestsequity
owners
Initial balance current period as of 01-01-2012
491,854,585
- 106,414,993 106,414,993
157,145,182
755,414,760
21,376,172
776,790,932
IIncrease (decrease) for error correction Restated initial balance
-
491,854,585
-
-
-
-
-
-
-
- 106,414,993
106,414,993
157,145,182
755,414,760
21,376,172
776,790,932
-
-
Changes in equity
-
Comprehensive income
--Income (loss)
135,000,795135,000,795 1,981,157136,981,952
Other comprehensive income --
-
-
----
Comprehensive income135,000,795 1,981,157136,981,952
Dividends
(80,000,000)(80,000,000) (80,000,000)
Increase (decrease)
due to transfers and other changes
-
-
14,764
14,764
(431,894)
(417,130)
418,874
1,744
-
-
14,764
14,764
54,568,901
54,583,665
2,400,031
56,983,696
0 106,429,757
106,429,757
211,714,083
809,998,425
23,776,203
833,774,628
Final balance for
current period 12-31-2012 491,854,585
Equity Reserves forattributable currencyOther
Accumulated to Capital
conversionmisc.Otherincome controlling Minority
Total issueddifferencesreservesreserves
owners
Initial balance for current period
01-01-2011
491,854,585
- 106,414,993
Increase (decrease) for error correction
-
106,414,993
97,612,063
695,881,641
20,533,105
716,414,746
-
-
-
-
-
-
- 106,414,993
106,414,993
97,612,063
695,881,641
20,533,105
716,414,746
-
-
-
Comprehensive income
-
-
-
491,854,585
Changes in equity
Income (loss)
-
116,482,069
116,482,069
1,844,315
118,326,384
Other comprehensive income
-
-
-
-
-
Comprehensive income -
116,482,069
1,844,315
118,326,384
Dividends
-
25,951,050 25,951,050
-25,951,050
Decrease (increase)
due to other distribution to owners
-
-
-
-
(82,900,000)
(82,900,000)
-
(82,900,000)
Increase (decrease)
due to transfers and other changes
-
-
-
-
-
-
(1,001,248)
(1,001,248)
-
-
-
-
59,533,119
59,533,119
843,067
60,376,186
- 106,414,993
106,414,993
157,145,182
755,414,760
21,376,172
776,790,932
Final balance for
current period 12-31-2011 491,854,585
-
-
Consolidated indirect cash flow statement
INDIRECT CASH FLOW STATEMENT
2-31-2012
CLP TH
12-31-2011
CLP TH
Income (loss)
136,981,952
118,326,384
Adjustments for Income tax expense
30,982,914
17,546,898
Adjustments for decreases (increases) in inventories
(24,744,241)
(35,333,095)
Adjustments for decreases (increases) in trade accounts receivable
(39,939,232)
(92,891,212)
(58,897,598)
(62,215,640)
Adjustments for increases (decreases) in trade accounts payable
33,581,671
57,744,766
Adjustments for increases (decreases) in other accounts payable from operating activities
(5,175,319)
(4,560,707)
Adjustments for depreciation and amortization expenses
72,502,318
62,279,328
1,841,399
1,476,560
30,254,764
62,613,264
251,043
6,984,717
2,400,031
843,067
-
195,679
8,087,280
(20,634,112)
-
(25,072,611)
Adjustments for value impairment (reversals of impairment losses) recognized in the fiscal period
Adjustments for provisions
Adjustments for unrealized losses (gains) in foreign currency
Adjustments for minority interests
Adjustments for undistributed income from subsidiaries
Others adjustments for items other than cash
Adjustments for losses (gains) for disposal of non-current assets
Other adjustments so that effects on cash are cash flows from investment or financing
Total adjustments for reconciliation of income (loss)
5,979,244
5,931,791
57,124.274
(25,091,307)
194,106.226
93,235,077
Cash flows from loss of control of subsidiaries or other businesses
-
30,000,000
Cash flows used to obtain control of subsidiaries or other businesses
-
(12,039,524)
(166,435,726)
(137,131,121)
(10,753,066)
(3,659,457)
7,443,340
-
Purchases of property, plant and equipment
Purchases of intangible assets
Amounts from the sale of property, plant and equipment
Net cash flows from (used in) investment activities
(169,745,452)
(122,830,102)
171
2-31-2012
CLP TH
12-31-2011
CLP TH
Payment for other equity interests
Short-term loan amounts
Loans corresponding to related companies
Loan payment
Liability payments for financial leases
Interest paid
Net increase (decrease) in cash and cash equivalents, before the effect of exchange rate changes
(80,000,000)
(82,900,000)
234,554,122
533,643
79,186,616
103,918,370
(241,564,386)
(9,502,003)
(5,755,748)
(678,784)
(5,895,828)
(5,961,468)
(19,475,224)
5,409,758
4,885,550
(24,185,267)
Effects of exchange rate variation on cash and cash equivalents
43,019
335,291
4,928,569
(23,849,976)
38,023,809
61873,785
42,952,378
38,023,809
For fiscal years ending 31 December 2012 and 31 December 2011
1. Reporting entity
Inversiones Walmart Chile Ltda., hereinafter the “Corporation”, incorporated in Chile 03 November 2006 and domiciled in the city of Santiago, Chile. Its corporate purpose
is to invest in movable and immovable assets, tangibles
and intangibles, such as shares, share pledges, bonuses,
installments or interests in all types of commercial or civil
corporations, communities or associations and all types
of securities and other instruments.
The Corporation agreed to change the company’s firm
name from Inversiones D&S Chile Ltda. to Inversiones
Walmart Chile Ltda. at a special shareholders meeting
held 20 May 2011..
2.1. Consolidated financial statements
These consolidated financial statements for Inversiones
Walmart Chile Ltda. and its subsidiaries for the fiscal
year ending 31 December 2012 have been prepared in
accordance with International Financial Reporting Standards (IFRS) and their interpretations in effect as of 31
December 2012 and considering Securities and Insurance Supervisor (SVS) additional information requirements,
which do not contradict IFRS.
2.2. Basis of measurement
These consolidated financial statements have been prepared in accordance with the historical cost principle, except for the valuation of certain financial assets and liabilities (including derivative financial instruments) that are
valued at fair value. (See note on financial instruments).
2.3. Functional and presentation currency
The consolidated financial statements are presented in
Chilean pesos, which is the functional and presentation
currency of the company. All of the group’s companies
based in Chile have determined that their functional currency is the Chilean peso and that items included in the
financial statements of each entity are measured using
that currency. All information is presented in thousand of
Chilean pesos and has been rounded to the nearest unit,
unless stated otherwise.
173
2.4. New standards and interpretations issued. Invalid standards and interpretations
Mandatory application for
financial years starting:
Amendment to IFRS 1
First-time adoption
07-01-2011
07-01-2011
01-01-2012
07-01-2012
IFRS 1
IFRS 7
IAS 12
“Income Taxes”
IAS 1
In addition, at the date that these consolidated financial statements were issued, amendments, improvements and interpretations of current standards have been published. These have not entered into force and the Corporation has not
adopted these in advance. These will become mandatory as of the dates listed below:
Mandatory application for fiscal years starting:
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2014
01-01-2014
IFRS 10
IFRS 11
01-01-2014
01-01-2015
28 to a limited extent regarding issues related to associated entities and control entities available for the sale
in that event.
IFRS 12
IFRS 13
in that event.
IAS 19
IAS 28
must be disclosed in that event.
IFRIC 20
mine”
IFRS 7
IFRS 1
IAS 1
IAS 16
that event.
175
IAS 34
event.
IAS 32
IFRS 10
allowed.
IFRS 9
3.1. Basis of consolidation
3.1.1 Subsidiaries
177
Direct, first-line subsidiaries included in the consolidation and related companies from the different business segments
are listed as follows:
TAX LIST
NUMBER
Corporation Name
Share percentage (%) 12-31-2012
12-31-2011
Direct Indirect Total
Total
96.829.710-4Walmart Chile Comercial S.A. and subsidiaries (*)
-
100
100
100
95.723.000-8Walmart Chile Servicios Financieros Ltda. and subsidiaries (**)(****)
-
100
100
100
96.519.000-7Walmart Chile Inmobiliaria S.A. and subsidiary (***)
-
99.9963
99.9963
All of the entities controlled by the company have been included in this consolidation.
(*) Sociedad Comercial D&S S.A. changed its firm name to Walmart Chile Comercial S.A. 1 July 2011. This change was agreed to at a special shareholders meeting held 29
April 2011.
(**) Servicios Financieros D&S S.A. changed its firm name to Walmart Chile Servicios Financieros S.A. 1 July 2011. This change was agreed to at a special shareholders
meeting held 28 April 2011.
(***) Sociedad Anónima Inmobiliaria, Terrenos y Establecimientos Comerciales changed its firm name to Walmart Chile Inmobiliaria S.A. 1 July 2011. This change was
agreed to at a special shareholders meeting held 27 April 2011.
(****) Walmart Chile Servicios Financieros S.A. changed its firm name to Walmart Chile Servicios Financieros Ltda. 31 August 2012. This change was agreed to at a special
shareholders meeting held 31 August 2012.
The subsidiary Inversiones Walmart Chile Ltda. purchased the remaining 50% stake in the subsidiary companies Alimentos y Servicios S.A. and Inversiones Solpacific
S.A. 15 July 2011. These corporations are therefore presented as consolidated in these financial statements.
A reorganization process for the retail segment corporations was completed in 2011. This process meant the
merger of all corporations operating under the supermarket and hypermarket formats into two new legal
entities that currently operate under these formats.
This process simplified the Walmart Chile S.A. corporate structure in order to support the company’s growth,
make the taxation process more efficient and provide
flexibility for future needs in the business. As part of this
process, two new corporations called Inversiones Pacifico LLC and Walmart Chile Comercial LLC were created.
These respectively purchased minority stakes in Inversiones Walmart Chile Ltda. and Walmart Chile Comercial S.A.
The company completed a corporate reorganization
process for the financial segment in 2012. This process
divided Sociedad Administradora de Créditos Comercial
Presto Ltda. and a new corporation bearing the same
name was founded. The new corporation is responsible
for managing the Presto card while the former Administradora de Créditos Comercial Presto Ltda. was renamed
Inversiones Presto Tres Ltda. Its corporate purpose and
firm name were subsequently modified and the company became Walmart Chile Comercial Ltda. In addition,
as part of this process, the corporation Inversiones Cordilleras LLC was founded. This corporation purchased a
majority stake in Inversiones Renta Presto S.A..
99.9963
3.1.2Transactions and uncontrolled interests
The Inversiones Walmart Chile Group applies the policy
of treating transactions with uncontrolled interests as if
these were transactions with Group shareholders. In the
case of purchasing non-controlling interests, the difference between any compensation paid and the corresponding share in the book value of net assets purchased
from the subsidiary are recognized in equity. Income and
losses due to write-offs that benefit the minority share
are also recognized in equity, as long as control is maintained.
3.2.Subsidiaries
Subsidiaries are all of the entities that the Inversiones
Walmart Chile Group influences a significant influence
on but does not control. This is generally accompanied
by an interest amounting to between 20% and 50% of
the voting shares. Investment in subsidiaries is accounted for by means of the equity method and this is initially
recognized by cost. Inversiones Walmart Chile Group’s
investment in subsidiaries includes purchased goodwill
identified in the acquisition, net of any losses due to accumulated depreciation.
The Inversiones Walmart Chile Group’s participation in
losses or gains after the purchase of its related companies or subsidiaries is recognized in the balance sheets
by function and is included in the “Participation in income (loss) of subsidiaries accounted for using the income
equity method” line item, and its participation in equity movement after the purchase that does not include
results is assigned to the corresponding equity reserves
(and indicated as corresponding in the other comprehensive income statements).
When the Inversiones Walmart Chile Group’s participation in an associate’s losses are equivalent to or higher
than its interest in the same, including any other uninsured account receivable, the Inversiones Walmart Chile
Group does not recognize additional losses, unless it has
incurred in obligations and made payment on behalf of
the associate.
Unrealized gains from transactions between the Inversiones Walmart Chile Group and its related companies
are eliminated based on the Corporation’s interest share
in these related companies.
Unrealized losses are also eliminated, unless the transaction provides evidence of losses due to depreciation of
the asset transferred. The accounting policies of its subsidiaries are modified when required in order to ensure
uniformity with policies adopted by the Corporation.
Dilution gains or losses in related companies or subsidiaries are recognized in the comprehensive income statements.
There are no subsidiaries as of 31 December 2012 and 31
December 2011.
3.3. Exchange rate and indexation units.
Date
$CLP / US$
$CLP / U.F.
12-31-2011
519,20
22.294,03
12-31-2012
479,96
22.840,75
3.4. Transactions in foreign currency
3.5. Property, plant and equipment
is responsible.
179
Construction or works underway include, among other,
the following concepts incurred during the construction
period::
periods are listed as follows:
ʭʭ
Buildings
:
50 years
ʭʭ
Terminations
:
15 years
ʭʭ
Installations
:
15 to 20 years
ʭʭ
Equipment at properties :
15 to 20 years
ʭʭ
Exterior works
:
20 years
Personnel costs and other of an operating nature directly related to construction.
ʭʭ
Vehicles
:
4 years
ʭʭ
Machinery
:
4 to 5 years
Expansion, modernization or improvement costs that represent an increase in productivity, capacity or efficiency
and therefore an extension of the useful life of goods are
capitalized as greater cost of the corresponding goods.
Periodic maintenance, conservation and repair costs are
recorded against income as a cost for the fiscal period
in which they are incurred. A property, plant and equipment element is written off at the time of its disposal or
when future economic benefits are no longer expected
from its use or disposal. Any profit or loss arising from
this asset being written off (calculated as the difference
between the net value of disposal and the asset’s book
value) is included in the income statements by function
in the fiscal year in which the asset is written off.
ʭʭ
Furniture and office supplies :
ʭʭ
ʭʭ
Financial costs related to external financing that are
directly attributable to construction. Activated financial costs are obtained by applying the weighted average cost of long-term financing associated to parent
company loans to average cumulative investment
susceptible to non-financed activation specifically, as
indicated in IAS 23R.
value.
3 to 4 years
3.6 Investment property
Investment property is real estate (land and buildings)
held to obtain economic benefits from rental or capital
appreciation. Investment property and investment property under construction are recorded at cost and presented net of their accumulated depreciation and accumulated impairment, with the exception of land, which
is not subject to depreciation.
Acquisition cost and all other costs associated to investment property, as well as the effects of depreciation and
treatment of asset write-offs are recorded in the same
way as property, plant and equipment, as indicated in
foregoing point 3.5.
Estimated economic useful lives for the main elements
of investment property are listed as follows:
ʭʭ
Buildings
:
50 years
ʭʭ
Terminations
:
15 years
ʭʭ
Installations
:
15 to 20 years
The residual values of assets, useful lives and depreciation methods are reviewed when preparing financial
statements each year. These are adjusted if required as a
change in prospective estimates.
Transfers to investment property only occur when there
is a change in use evidenced by the end of occupation
by owners, the start of an operating lease to another party or the end of construction or development. Transfers
from investment property only occur when there is evidence of a change in use evidenced by the start of occupation by an owner or if development is started with
expectations to sell and the fair value as of the reclassification date becomes its cost for subsequent accounting.
3.7 Intangible assets
3.7.1Purchased goodwill
Purchased goodwill is the difference between excess
acquisition cost over the fair value of Inversiones Walmart Chile Group’s share in the identifiable net assets of
subsidiaries or related companies at the date of acquisition. Purchased goodwill related to acquisition of subsidiaries in included in the goodwill line item.
Purchased goodwill related to acquisitions of subsidiaries is included in investment in subsidiaries, accounted for using the equity method, and is subjected to
impairment testing together with the total amount of
associated investment. Purchased goodwill is separately subjected to impairment testing on an annual basis
and is valued at cost minus accumulated losses due to
depreciation. Gains and losses from the sale of an entity
include the book value of purchased goodwill related to
the entity sold.
The cash-generating unit is defined as the smallest group
of assets for which independent cash flow can be identified. In this context, the Corporation has determined that
this condition is met at each individual store considered.
Purchased goodwill is assigned to cash-generating units
for impairment testing. This is distributed between those cash-generating units or groups of cash-generating
units expected to benefit from the business merger that
created the goodwill.
The existence of purchased goodwill depreciation is
measured on an annual basis.
The greater value from acquisition of an investment or
business merger is credited directly to the income statements by function.
Purchased goodwill does not have a specific useful life.
3.7.2Commercial rights and trademarks
Commercial rights and trademarks have an indefinite
useful life and are recorded at cost minus accumulated
depreciation. Impairment testing is conducted annually
at an individual level or at the cash-flow generating level..
3.7.3Computer programs
Computer software licenses acquired and developed by
third parties are capitalized on the basis of costs incurred
to acquire and prepare for using a specific program minus amortization and losses due to accumulated depreciation. Amortization is calculated on a linear basis and
its effect on income is presented in the administrative
expenses line item.
The estimated useful lives for the current and comparative periods range between 4 and 6 years.
Expenses related to the development or maintenance of
computer programs are recognized as expenses when
these are incurred.
3.8 Financing costs
Interest costs incurred for construction of any qualified
asset classified under the property, plant and equipment
line item are capitalized over the period of time required
in order to complete and prepare the asset for the intended use, according to IAS 23R. Other interest costs are
recorded in income (expenses).
As indicated in the note on criteria for property, plant and
equipment, when the value of an asset is greater than its
estimated recoverable amount, its value is immediately
reduced to the recoverable amount through recognition of impairment losses. Impairment losses amounting to CLP 1,841,399,000 were declared 31 December
2012. Property, plant and equipment impairment losses
amounting to CLP 1,476,560,000 were declared 31 December 2011.
3.10Categories of non-derivative financial instruments
The Inversiones Walmart Chile Group classifies its financial assets in the following categories: at fair value
through profit or loss, loans and accounts receivable, and
available for sale. Classification depends on the purpose
for which the financial assets were acquired. Management determines the classification of its financial assets
at the time of initial recognition.
3.10.1 Financial assets at fair value through profit or
loss
short term.
3.10.3 Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives assigned to this category or which are not assigned to any
of the other categories.
These are included in non-current assets unless management plans to dispose of the investment within 12
months from the date the financial statements were issued.
when the Inversiones Walmart Chile Group commits to
acquire or sell the asset.
at fair value through profit or loss. Transaction costs include fees and commissions paid to agents (including
181
companies. These derivative financial instruments are
initially recognized at fair value at the date the respective
contract is signed and are measured again at fair value
thereafter. Derivatives are recorded in the other financial
assets line item if they have a positive value and in the
other financial liabilities line item if they have a negative
fair value.
have expired or have been transferred and the Inversiones Walmart Chile Group has substantially transferred all
risk and benefits of ownership.
Any profit or loss arising from changes in the fair value
of derivatives during the fiscal year is directly recorded in
the income statement by function in the income statements by function in the other income or expenses line
item.
Available-for-sale financial assets and financial assets at
fair value through profit or loss are recorded at their fair
value (with a balancing entry in other comprehensive income and income, respectively).
These instruments were designated for negotiation
at the time of issue. However, these provide hedging
against financial risk.
method.
income line item once the Inversiones Walmart Chile
Group’s right to receive dividend payments has been
established.
3.11Derivative financial instruments
The Inversiones Walmart Chile Group uses derivative
financial instruments such as interest rate swap and
currency forward contracts to hedge against risks related to fluctuations in interest rates and exchange rates
that affect its financial obligations to banks and related
The Corporation has declared that there are no implicit
derivatives in its contracts as of 31 December 2012 and
31 December 2011.
3.12.Depreciation of financial assets
The Group uses variables based on arrears, cash flows
related to charges to customers, recoveries, customer
segments, product types, the amount of loss incurred
and comparisons with recognized practices in the financial market, adjusted according to current economic
and credit conditions that are likely to result in real losses
being greater or lower than those suggested by historical trends.
this reduction is reversed in the income statements .
3.13Inventories
Inventories are valued at the acquisition cost or net realizable value as of 31 December 2011, whichever is lower.
Net realizable value represents the estimated sales value
of inventories during the normal course of business, minus all remaining production costs (own manufactured
goods) and costs required in order to execute the sale.
The costing method corresponds to the weighted average price. Stock in transit is valued at acquisition cost.
Imports in transit are recorded when they are found under categories that transfer risks and benefits to the Corporation, i.e. “FOB”.
Commercial discounts, other discounts and other similar
items are recognized as a reduction in the sale cost of
products sold or the value of stock. These agreements
are part of a public document “General terms and conditions for provisioning merchandise”, which was designed
to establish the terms and conditions that regulate relations between Walmart and its Suppliers.
The Corporation only recognizes the benefits of these
agreements with suppliers when there is evidence of the
agreement, when benefit amounts can be reasonably
estimated and reception is likely.
The Corporation modified the method used for valuation of non-perishable inventories held at points of sale
to the retail cost method as of the 2012 fiscal year. Cost
was determined using the average cost or net realization
value methods, whichever was lower, up until the 2011
fiscal year. The new costing method is determined by
deducing the inventory sale price, a percentage of the
average gross margin associated to each commercial
department. The percentage applied considers the mark
down of stock that has been valued below its original
sale price.
In order to properly record its stock, the company makes
estimates for damage and obsolescence of its inventories. These estimates are based on historical experience
and are reviewed at the annual closure date for the financial statements.
3.14Trade and other accounts receivable
3.15.Cash and cash equivalents
3.16Share capital
Share capital is represented by contributions paid.
3.17Trade and other accounts payable
3.18Loans and other financial liabilities
The group initially recognizes debt instruments issued
and financial liabilities on the date of their origination. All
other financial liabilities (including liabilities designated
at fair value through profit or loss) are initially recognized
at the transaction date when the group becomes a party
to the contractual provisions of the instrument.
183
The group writes off a financial liability when its contractual obligations are settled or expire.
Loans, public obligations and financial liabilities of a similar nature are initially recognized at their fair value, net of
costs incurred in the transaction. These are subsequently
valued at amortized cost and any difference between
the funds obtained (net of the costs necessary to obtain
them) and the reimbursement value is recognized in the
income statement over the life of the debt according to
the effective interest rate method..
3.19Income taxes and deferred income taxes
income taxes.
tax purposes.
at the same time.
obtained.
obtained.
3.20Employee benefits
Employee benefits are recognized when there is a current legal or construction obligation to pay the amount
as the result of a service provided by the employee in the
past and the obligation can be reliably estimated.
3.20.1 Employee vacations
The Corporation recognizes employee vacation expenses to the extent that this right is earned. This is a shortterm obligation that is recorded at nominal value.
3.20.2 Incentives
The Corporation provides an annual incentive plan for
its employees for meeting goals and individual contributions to income.
Incentives, which are eventually delivered, consist of
a certain number or portion of monthly salaries and
are recognized when they are likely to be paid and the
amount can be reliably estimated.
3.21Provisions
Provisions are recognized when the group has a present
(legal or constructive) obligation as a result of a past
event and it is likely that a resource disbursement, including economic benefits, will be required to settle the
obligation and a reliable estimate of the amount owed
can be made. When the group expects part or all of the
provision to be reimbursed, for example under an issuance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually
certain. Expenses related to any provision are presented
in the income statement net of any reimbursement. If
the effect of the value over time of the money is material, provisions are discounted using a rate that reflects,
when appropriate, the specific risks of the liability. When
the discount is used, the increased value of the provision
owing to the passage of time is recognized as a financial
cost.
A provisions for onerous contracts is recognized when
the economic benefits the Group anticipates from the
contract are less than the inevitable costs of complying
with the contract obligations. The provision is recognized at the present value of the lesser of the anticipated
costs of settling the contract and the anticipated net
cost of continuing with the contract. Prior to establishing
a provision, the group recognizes any impairment loss of
the assets associated with the contract. As of 31 December 2012 and 31 December 2011, the group has not used
provisions of this kind.
maturity date and up until invoicing (inclusive). On
the invoicing date, interest is projected as of the date
after invoicing and up until the date of maturity.
ʭʭ
Interest is projected up until the end of the month
when this credit matures the next month and the second projects in from the first day of the month until
the day before maturity.
ʭʭ
Default interest: interest calculated based on the
customer’s overdue debt. This is calculated on a daily
basis or project according to a parameterized default
rate. This interest is charged daily starting on the maturity date and up until invoicing (inclusive). On the
invoicing date, interest is projected from the day after
invoicing to the date of maturity. When the loan installment matures the next month, interest is projected to the end of the month, and a second projection
is made from the first day of the month until the day
before maturity.
3.22Revenue from ordinary activities
contingencies related to the sale of the good or service provision have been settled. Revenue from the sale
of merchandise is recognized in the income statement
when the significant risks and benefits of ownership of
goods are transferred to the buyer. Revenue is not recognized if there is significant uncertainty regarding collection, associated costs, possible return of goods or continued administrative involvement in this revenue.
Income from financial interest and adjustments is accrued as a function of the issuing of consumer loans
based on pending capital payment, and is recognized
using the effective interest rate method. The effective interest rate is the discount rate that exactly balances the
cash flows to be received with the net book value of the
asset. Calculation of the effective interest rate, when corresponding to commissions and other paid items such
as transaction costs, is incremental and directly attributable to the transaction. The Corporation ceases to recognize financial income when recovery is considered to be
highly unlikely.
The main operations that generate financial interest income are listed as follows:
ʭʭ
Installment loan interest: interest agreed to at the
effective date of the transaction and which is calculated by applying the rate (in basis 365) to the unpaid
loan balance when the installment is invoiced.
ʭʭ
Line of credit or revolving interest: interest calculated
for the revolving debt or use the customer makes of
his or her line of credit. This is calculated on a daily
basis or project according to a parameterized revolving rate. This interest is charged daily starting on the
Income from commissions is recognized in the consolidated income statement using different criteria, depending on the nature of these commissions. Those that
correspond to a single act are recorded directly in the
income statement. Those stemming from transactions or
services that occur over time are accrued over the credit
term.
Income from the lease of investment property is recognized in the income statement using the linear method
during the rental period. Other services are recognized
on an accrual basis depending on the conditions established in the contracts and business agreements.
Income from insurance brokerage is recognized in accordance with how the service is rendered, based on the
term agreed with the insurance companies.
185
The Corporation reports deferred income from different
transactions for which it receives cash when the aforementioned conditions for reporting income have not
been met, such as cash received upon issuing rental
contracts.
3.23 Cost of sales
and taxes, insurance and product transport to distribution centers.
Cost of sales includes losses due to impairment of the loan portfolio, net of recovery and financial costs related to the financial segment.
As of the 2012 fiscal year, the retail cost method is applied
to the non-perishable category available for sale at stores. This is calculated by deducing the inventory sale price, a percentage of the gross margin associated to each
commercial department.
3.24Leases
3.24.1 The Group as lessee
Financial leases, which transfer substantially all risks and
benefits incidental to the property of a leased item to the
Group, are capitalized at the start of the rental period at
the fair value of the property leased or if lower, at the current value of minimum lease payments. Lease payments
are distributed between financing charges and the reduction of the lease obligation to obtain a constant interest rate on the unpaid liability balance. Financial costs
are charged in the income statement by function.
Leases in which the lessor conserves a significant part of
the risks and benefits of asset ownership are classified as
operative leases. Payments for operative leases are charged in the income statement by function on a linear basis over the lease period for the fixed party. Variable profit
is recognized as expenses for the fiscal year in which the
obligation was created, as are profit increases indexed to
consumption variation.
3.24.2 The Group as leaser
When assets are leased under a financial rental agreement, the current value of lease payments is recognized
as an account receivable. The difference between the
gross amount to be received and the current value of
that amount is recognized as financial return on the capital.
Income from financial leases is recognized in the lease
period using the net investment method, which reflects
a constant periodic rate of return.
Assets leased to third parties under operative lease contracts are included in the property, plant and equipment
item or investment property item, whichever applies.
Income derived from operative leases is recognized in
linear form over the rental period.
3.25Financial information by operating segment
An operating segment is a component of the group that
Group.
performance of operating segments, which have been
identified as retail, real estate and financial services, for
those who make strategic decisions, as indicated in
IFRS 8 “Operating segments”. Information related to the
company’s operating segments is disclosed in the note
on information by segment.
3.26Other non-financial assets
3.28Environment
Advance lease payments are recorded, related to the
different long-term lease operations for stores. Advance
lease payments are recorded at their historical cost and
are amortized over the duration of the respective contracts.
recorded against income as they are made..
3.27Financial income and financial costs
is established.
or production of a qualified asset are recognized in income using the effective interest rate method .
3.29Contingent assets and liabilities
control.
187
Inversiones internacionales D&S limitada and subsidiaries
ASSETS
12-31-2012
CLP TH
12-31-2011
CLP TH
CURRENT ASSETS
Accounts receivable from related companies, current
Current tax assets
131,876
340,597
1,505
99,155
1,455,753
665,037
63,787
33,123
1,652,921
1,137,912
757,998
840,192
24,203
19,692
Deferred tax assets
78,291
31,618
860,492
891,502
2,513,413
2,029,414
NON-CURRENT ASSETS
Total non-current assets
Total assets
189
LIABILITIES
12-31-2012
CLP TH
12-31-2011
CLP TH
CURRENT LIABILITIES
Trade and other accounts payable, current
Accounts payable to related companies, current
1,365,791
523,332
242,239
755,217
18,202
6,669
1,626,232
1,285,218
Total liabilities
1,626,232
1,285,218
1,243,623
1,243,623
(63,719)
(400,215)
(293,604)
(100,128)
886,300
743,280
881
916
887,181
744,196
2,513,413
2,029,414
EQUITY
Capital issued
Accumulated income (losses)
Other reserves
Equity attributable to controlling interest owners
Minority interests
Total equity
Consolidated income statement by function
INCOME STATEMENT BY FUNCTION
01-01-2012
12-31-2012
CLP TH
01-01-2011
12-31-2011
CLP TH
45,598,574
31,458,898
Cost of sales
(44,362,036)
(30,257,378)
Gross income
1,236,538
1,201,520
48,134
3,149
(1,028,184)
(651,416)
(7,367)
(14,826)
Financial income
(1,296)
21,910
Financial costs
(3,031)
(179,205)
Income tax expense
Income (loss) from continuing operations
48,866
78,752
293,660
459,884
42,920
(43,825)
336,580
416,059
336,496
416,059
84
-
336,580
416,059
Income (loss)
191
Consolidated comprehensive income statement
01-01-2012 01-01-2011
12-31-2012
12-31-2011
CLP TH
CLP TH
Income (loss)
336,580
416,059
(193,476)
73,145
-
-
Cash flow hedging
-
-
-
-
Other components of other comprehensive income before taxes
-
-
143,104
489,204
Exchange rate differences by conversion
Comprehensive income attributable to controlling interest owners
Comprehensive income attributable to minority interests
143,020
489,204
84
-
143,104
489,204
Consolidated statement of changes in equity
For fiscal years ending 31 December 2012 and 31 December 2011 (Expressed in thousands of Chilean pesos - CLP TH)
Equity Reserves for attributable currencyOther Accumulated to Capital
conversion misc. Other income controlling Minority Total
issueddifferencesreservesreserves
owners
Initial balance current period
as of 01-01-2012
1,243,623
Increase (decrease) for error correction Restated initial balance
(124,174)
24,046
(100,128)
(400,215)
743,280
916
744,196
-
-
-
-
-
-
-
-
1,243,623
(124,174)
24,046
(100,128)
(400,215)
743,280
916
744,196
Changes in equity
-
-
-
-
-
-
- Income (loss)
336496
336,496
84
336,580
-
(193,476)
-
(193,476)
143,020
84
143,104
-
(193,476)
-
(193,476)
- Dividends
-
-
-
-
-
-
-
-
(119)
(119)
-
(193,476)
-
(193,476)
336,496
143,020
(35)
142,985
1,243,623
(317,650)
24,046
(293,604)
(63,719)
886,300
881
887,181
Final balance for
current period 12-31-2012
Equity Reserves for attributable currencyOther Accumulated to Capital
conversion misc. Other income controlling Minority Total
issueddifferencesreservesreserves
owners
Initial balance for current period
01-01-2011
Increase (decrease) for error correction Restated initial balance
1,243,623
(197,319)
24,046
(173,273)
(816,274)
254,076
795
254,871
-
-
-
-
-
-
-
-
1,243,623
(197,319)
24,046
(173,273)
(816,274)
254,076
795
254,871
Changes in equity
-
-
-
-
-
-
- Income (loss)
-
416,059
416,059
-
416,059
73,145
-
73,145
-
73,145
-
489,204
-
489,204
- Dividends
-
-
-
-
Final balance for
current period 12-31-2011
73,145
-
-
-
-
-
-
-
121
121
-
73,145
-
73,145
416,059
489,204
121
489,325
1,243,623
(124,174)
24,046
(100,128)
(400,215)
743,280
916
744,196
193
For fiscal years ending 31 December 2012 and 31 December 2011 (Expressed in thousands of Chilean pesos - CLP TH)
12-31-2012
CLP TH
12-31-2011
CLP TH
Income (loss)
336,580
416,059
(42,920)
43,825
Adjustments for Income tax expense
-
55,730
Adjustments for decreases (increases) in trade accounts receivable
156,960
580,889
Adjustments for increases (decreases) in trade accounts payable
842,459
(692,882)
Others adjustments for items other than cash
(198,106)
93,358
Total adjustments for reconciliation of income (loss)
758,393
80,920
1,094,973
496,979
-
103,296
(790,716)
-
(790,716)
103,296
(512,978)
(343,772)
(512,978)
(343,772)
Net increase (decrease) in cash and cash equivalents, before the effect of exchange rate changes
(208,721)
256,503
Charges made to related companies
Loans to related companies
Net cash flows from (used in) investment activities
Payment of loans corresponding to related companies
-
(208,721)
256,503
340,597
84,094
131,876
340,597
1. Reporting entity
Inversiones Internacionales D&S Ltda., hereinafter the
“Corporation”, incorporated in Chile 12 June 2008 and
domiciled in the city of Santiago, Chile. Its corporate purpose is to invest in movable and immovable assets, tangibles and intangibles, such as shares, share pledges, bonuses, installments or interests in all types of commercial
or civil corporations, communities or associations and all
types of securities and other instruments.
At a Board of Directors meeting held 27 October 2009,
the parent company Walmart Chile S.A. decided to reduce operation of its consolidated subsidiaries Comercial
D&S Perú S.A. and Inmobiliaria D&S Perú S.A.C. and therefore commercial activities depend on the Management’s
future decisions.
The direct subsidiaries D&S Perú S.A.C, Comercial D&S
Perú S.A. and South Pacific Trade Limited are part of this
consolidated group.
2.1 Consolidated financial statements
These consolidated financial statements for Inversiones
Internacionales D&S Limitada and its subsidiaries for the
fiscal year ending 31 December 2012 have been prepared in accordance with International Financial Reporting
Standards (IFRS) and their interpretations in effect as of
31 December 2012 and considering Securities and Insurance Supervisor (SVS) additional information requirements, which do not contradict IFRS.
2.2. Basis of measurement
These consolidated financial statements have been prepared in accordance with the historical cost principle,
except for the valuation of certain financial assets and
liabilities (including derivative financial instruments) that
are valued at fair value.
2.3. Functional and presentation currency
The consolidated financial statements are presented in
Chilean pesos, which is the functional and presentation
currency of the company. All of the group’s companies
based in Chile have determined that their functional currency is the Chilean peso and that items included in the
financial statements of each entity are measured using
that currency. All information is presented in thousand of
Chilean pesos and has been rounded to the nearest unit,
unless stated otherwise.
195
2.4 New standards and interpretations issued. Invalid standards and interpretations
Mandatory application for financial years starting:
Amendment to IFRS 1First-time adoption
07-01-2011
07-01-2011
01-01-2012
07-01-2012
IFRS 1
IFRS 7
IAS 12
“Income Taxes”
IAS 1
In addition, at the date that these consolidated financial statements were issued, amendments, improvements and interpretations of current standards have been published. These have not entered into force and the Corporation has not
adopted these in advance. These will become mandatory as of the dates listed below:
Mandatory application for fiscal years starting::
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2013
01-01-2014
01-01-2014
IFRS 10
IFRS 11
01-01-2014
01-01-2015
28 to a limited extent regarding issues related to associated entities and control entities available for the sale
in that event.
IFRS 12
IFRS 13
in that event.
IAS 19
IAS 28
must be disclosed in that event..
IFRIC 20
mine”
IFRS 7
IFRS 1
IAS 1
197
IAS 16
that event.
IAS 34
event.
IAS 32
IFRS 10
allowed.
IFRS 9
199
3.1 Basis of consolidation
3.1.1 Subsidiaries
Direct, first-line subsidiaries included in the consolidation and related companies from the different business segments
are listed as follows:
TAX LIST
NUMBER
Corporation Name
Share percentage (%) 12-31-201212-31-2011
Direct Indirect Total
Total
E/OInmobiliaria D&S Perú S.A.C
99.99
-
99.99
99.99
99.99
-
99.99
99.99
E/O
Comercial D&S Perú S.A.
E/OSouth Pacific Trade Limited.
All of the entities controlled by the company have been
included in this consolidation.
No changes have occurred in the consolidation perimeter between 1 January 2012 and 31 December 2012.
3.1.2Transactions and uncontrolled interests
The Walmart Chile Group applies the policy of treating
transactions with uncontrolled interests as if these were
transactions with Group shareholders. In the case of
purchasing non-controlling interests, the difference between any compensation paid and the corresponding
share in the book value of net assets purchased from the
subsidiary are recognized in equity. Income and losses
due to write-offs that benefit the minority share are also
recognized in equity, as long as control is maintained.
100
-
100
100
3.2 Exchange rate and indexation units.
Date
$CLP / US$
$CLP / PEN
12-31-2011
519.20
193.27
12-31-2012
479.96
188.15
3.3 Transactions in foreign currency
The financial statements of “Inmobiliaria D&S Perú S.A.C”,
“Comercial D&S Perú S.A.C” and “South Pacific Trade Ltda.”
whose functional currency is the Peruvian nuevo sol
(PEN) and the US dollar (US$), respectively, are converted
into presentation currency as follows:
ʭʭ
The assets and liabilities of each financial statement
presented are converted at the exchange rate at the
closure of each period or fiscal year;
ʭʭ
Income and expenses for each income account are
converted at average exchange rates (unless the average is not a reasonable approximation of the accumulative effect of exchange rates as of the transaction dates, in which case income and expenses are
converted on the transaction dates); and
ʭʭ
All resulting exchange rate differences are recognized as a separate component of net equity, in the
“Other reserves” line item.
3.4 Property, plant and equipment
is responsible.
Any profit or loss arising from this asset being written off
(calculated as the difference between the net value of
disposal and the asset’s book value) is included in the
income statements by function in the fiscal year in which
the asset is written off.
value.
periods are listed as follows :
ʭʭ
Buildings
: 50 years
ʭʭ
Terminations
: 15 years
ʭʭ
Installations
: 15 to 20 years
ʭʭ
Equipment at properties
: 15 to 20 years
ʭʭ
Exterior works
: 20 years
ʭʭ
Vehicles
: 4 years
ʭʭ
Machinery
: 4 to 5 years
ʭʭ
Furniture and office supplies : 3 to 4 years
3.6 Categories of non-derivative financial instruments
The Walmart Chile Group classifies its financial assets in
the following categories: at fair value through profit or
loss, loans and accounts receivable, and available for sale.
Classification depends on the purpose for which the financial assets were acquired. Management determines
the classification of its financial assets at the time of initial
recognition.
3.6.1 Financial assets at fair value through profit or loss
short term.
when the Walmart Chile Group commits to acquire or
sell the asset.
at fair value through profit or loss. Transaction costs in-
201
clude fees and commissions paid to agents (including
have expired or have been transferred and the Walmart
Chile Group has substantially transferred all risk and benefits of ownership.
method.
income line item once the Walmart Chile Group’s right to
receive dividend payments has been established..
3.7 Depreciation of financial assets
this reduction is reversed in the income statements.
3.8 Trade and other accounts receivable
3.9 Cash and cash equivalents
3.10Share capital
Share capital is represented by contributions paid.
3.11Trade and other accounts payable
3.12Income taxes and deferred income taxes
income taxes.
tax purposes.
at the same time.
obtained.
obtained.
3.13Revenue from ordinary activities
contingencies related to the sale of the good or service
provision have been settled.
Revenue from the sale of merchandise is recognized in
the income statement when the significant risks and benefits of ownership of goods are transferred to the buyer.
Revenue is not recognized if there is significant uncertainty regarding collection, associated costs, possible return of goods or continued administrative involvement
in this revenue.
3.14Cost of sales
and taxes, and insurance.
3.15Financial information by operating segment
An operating segment is a component of the Group that
Group.
203
performance of operating segments, as indicated in IFRS
8 “Operating segments”, which has been identified as Retail.
3.16Financial income and financial costs
is established.
or production of a qualified asset are recognized in income using the effective interest rate method.
3.17Environment
recorded against income as they are made.
3.18Contingent assets and liabilities
control.
205
Fourth Quarter 2012 Results
1. Financial Statement Analysis
Walmart Chile S.A.’s consolidated financial statements as of 31 December 2012, which are reported to the Chilean Securities and Insurance Supervisor, are formulated in accordance with International Financial Reporting Standards (IFRS) and
criteria.
CONSOLIDATED INCOME STATEMENT CLP mn
01-01-2012
% of 12-31-2012revenue
01-01-2011
% of Yearly
12-31-2012revenuevariation %
Ordinary revenue
2,892,802
100.0%
2,604,483
100.0%
11.1%
Sales cost
(2,102,694)
-72.7%
(1,894,182)
-72.7%
11.0%
Gross income
790,108
27.3%
710,301
27.3%
11.2%
Financial expenses
Financial income
Others
Income tax expense
(555,067)
-19.2%
(507,191)
-19.5%
9.4%
(25,502)
-0.9%
(20,734)
-0.8%
23.0%
968
0.0%
2,253
0.1%
-57.0%
(65,510)
-2.3%
(48,165)
-1.8%
36.0%
144,997
(29,359)
5.0%
-1.0%
136,463
(22,559)
5.2%
-0.9%
6.3%
30.1%
Income (loss)
115,638
4.0%
113,905
4.4%
1.5%
Earnings before interest, taxes,
depreciations and amortization (EBITDA)
245,296
8.5%
219,667
8.4%
11.7%
CONSOLIDATED Retail Real Estate FINANCIAL STATEMENT CLP mn Financial Services
Ordinary revenue
2,742,269
37,642
111,371
1,520
2,892,802
Sales cost
(2,043,054)
0
(59,640)
0
(2,102,694)
Gross income
699,216
37,642
51,731
1,520
790,108
(488,672)
(10,671)
(47,955)
(7,769)
(555,067)
(1,372)
(3,113)
(41)
(20,976)
(25,502)
Financial expenses
Financial income
Corporate WMT Chile
264
5
10
689
968
(51,997)
(3,983)
(5,271)
(4,260)
(65,510)
157,439
19,880
(1,525)
(30,797)
144,997
(26,175)
(3,976)
(614)
Income (loss)
131,263
15,904
(2,139)
(29,391)
115,638
220,289
28,416
4,818
(8,227)
245,296
Others
Income tax expense
1,407
(29,359)
31 December 2011
CONSOLIDATED FINANCIAL STATEMENT M$ Retail Real Estate Financial
Services
Ordinary revenue
2,438,608
128,722
Sales cost
(1,827,435)
0
Gross income
611,173
34,127
(436,426)
(11,157)
Financial expenses
(7,427)
Financial income
Others
Income tax expense
34,127
Corporate WMT Chile
3,026
2,604,483
(66,747)
0
(1,894,182)
61,975
3,026
710,301
(48,958)
(10,650)
(507,191)
(4,590)
(40)
(8,677)
(20,734)
1,077
44
43
1,088
2,253
(47,278)
(5,843)
(8,254)
13,211
(48,165)
121,119
12,581
4,765
(2,002)
136,463
(20,087)
(2,516)
5,383
(5,338)
(22,559)
Income (loss)
101,032
10,065
10,148
(7,341)
113,905
178,133
22,230
11,274
8,029
219,667
Ordinary revenue
Accumulated ordinary revenue as of 31 December 2012
came to CLP 2,892,802 million, up 11.1% compared to
CLP 2,604,483 million for the same period the year before. This increase is mainly due to increased same store sales and to the opening of 28 new stores between
January and December 2012.
Gross income
Gross income came to CLP 790,108 million as of 31 December 2012, up 11.2% compared to the same period in
2011. This was due to increased ordinary revenue.
Accumulated administrative expenses as of December
2012 came to CLP 555,067 million, up 9.4% compared
to CLP 507,191 million for the same period in 2011. This
increase is related to increased sales reported by the
company. Administrative expenses as a percentage of
revenue went from 19.5% between January and December 2011 down to 19.2% in the same period of 2012, 29
basis points lower due to improved expense efficiency.
Net financial expenses
Accumulated net financial expenses as of 31 December
2012, understood as financial expenses plus financial in-
come, came to CLP 24,534 million, up 32.7% compared
to CLP 18,481 million in the same period in 2011. This
was mainly due to increased use of credit lines because
of an exchange rate hedging strategy and more investment in financial instruments.
Profit
Accumulated profit as of 31 December 2012 came to
CLP 115,638 million, up from CLP 113,905 million in the
same period of 2011. The difference in profit over this
period compared to the same period last year is mainly
due to increased same store sales, more efficient expense structure and the effect of other revenue by function
stemming from extraordinary profit reported in 2011.
Extraordinary profit amounting to CLP 18,341 million
from the sale of the Corporation’s stake in the Alvi S.A
wholesale supermarket corporation and to CLP 10,726
million from the purchase of the remaining 50% in order
to complete a 100% stake in the corporations Alimentos
y Servicios S.A. and Inversiones Solpacific S.A. was reported.
After subtracting extraordinary profit, the company reported profit amounting to CLP 84,837 million in 2011,
up 36.3% compared to 2012.
EBITDA
Accumulated EBITDA as of 31 December 2012 amounted to CLP 245,296 million, up 11.7% compared to CLP
207
219,667 over the same period in 2011. This was due to
more efficient expenses and higher sales. EBITDA as a
percentage of revenue came to 8.4% between January
and December 2011, and to 8.5% for the same period
in 2012. If we subtract the aforementioned extraordinary
profit in 2011 as a percentage of revenue for 2011, this
comes to 7.3%, which increased to 28.7% in December
2012.
2. Balance Sheet Analysis
The balance sheet as of 31 December 2012, which is reported to the Chilean Securities and Insurance Supervisor, are
formulated in accordance with International Financial Reporting Standards (IFRS) and criteria.
BALANCE SUMMARY Current assets
Non-current assets
Total assets
12-31-2012
12-31-2011
Variation %
673,351
625,101
7.7%
1,443,969
1,349,666
7.0%
2,117,319
1,974,767
7.2%
Current liabilities
926,172
677,305
36.7%
Non-current liabilities
470,205
657,135
-28.4%
1,396,378
1,334,441
4.6%
720,942
640,326
12.6%
2,117,319
1,974,767
7.2%
Total liabilities
Equity
Assets
As of 31 December 2012, the Company had assets
amounting to CLP 2,117,319 million, up 7.2% compared
to CLP 1,974,767 million as of December 2011. This was
due to a 7.7% increase in current assets and a 7.0% increase in non-current assets. This growth in current assets is because inventory was up 12.9% due to increased
recurring business activities recurrent business activities
and to commercial debtors and other accounts receivable up by 6.9%, mainly from retail debtors due to retroactive collection from suppliers and from other debtors. In
addition, increased non-current assets were affected by
property, plant and equipment up by 10.1% because of
the company’s investment plan. This was offset by noncurrent accounts receivable down 18.2%, due to less
commercial debtors in the Presto customer portfolio,
mainly due to more restrictive loan approval policies and
improved collection management.
Liabilities
Total liabilities as of 31 December 2012 came to CLP
1,396,378 million, up 4.6% compared to CLP 1,334,441
million as of December 2011. This is fundamentally due
to current liabilities up 36.7%, which in turn was influenced by other current financial liabilities up 189.1% and by
the increased use of credit lines and the transfer of part
of the long-term debt to the short term. Non-current liabilities as of 31 December 2012 were down 28.4% compared to the end of 2011, mainly due to a 60.4% reduction in non-current financial debt because part of the
long-term debt was transferred to the short term.
Total financial debt was up 9.9% compared to 31 December 2011, mainly due to the increased use of lines of credit as part of the exchange rate hedging strategy.
Financing Activities
Walmart Chile S.A. restructured its financial liabilities by
signing a long-term syndicated loan with Banco Santander, BancoEstado, BBVA and Citibank N.A. 28 September
2006, thus concentrating an important part of the current short-term and long-term loans into a single loan
maturing in March 2014. Banco Santander is the lead
bank in the operation and Banco Estado is the agency
bank.
Walmart Chile S.A. restructured its financial liabilities 20
May 2010 by signing a long-term syndicated loan with
Banco de Chile, Banco Santander and Banco BBVA, thereby concentrating 100% of its short-term loans and
the syndicated loan signed 22 May 2008 with Banco de
Chile, BBVA, Scotiabank, Itaú, Corpbanca and Banco Santander, which matured 22 May 2010 into a single loan
The company’s policy is to adjust for impairments of the
abovementioned assets that have been discontinued.
recoverable amount, its value is reduced immediately to
the recoverable amount through recognition of impairment loss. As of 31 December 2012, CLP 1,841 million
was recognized for impairment loss. Property, plant and
equipment deterioration losses amounting to CLP 1,477
million were reported 31 December 2011.
maturing May 2013.
3. Book Value and Market Value of Assets
amortization and are annually subjected to impairment
loss tests. Assets subject to depreciation or amortization
are subjected to impairment loss tests when events or
change in circumstances indicate that the book value
may not be recoverable.
4. Cash Flow
CASH FLOW STATEMENT CLP mn
01-01-2012
12-31-2012
01-01-2011
12-31-2011
Variation
%
Net cash flow from operating activities
219,035
149,873
46%
Net cash flow from financing activities
(37,694)
(66,872)
44%
Net cash flow from investment activities
(180,077)
(121,592)
-48%
1,265
(38,591)
103.3%
Net increase (decrease) in cash
and cash equivalents before the effect on exchange rate
49
13
1,313
281%
(38,578)
103.4%
Cash flow by segment
Retail Real Estate Financial
Services
Corporate
214,368
33,865
(1,858)
(27,341)
9,691
0
0
(47,385)
(150,712)
(29,109)
(355)
100
73,347
4,756
(2,213)
(74,626)
Reduction of cash and cash equivalents As of 31 December 2011
Retail Real Estate Financial
Services
Corporate
115,142
14,687
2,752
17,292
(20,797)
0
0
(46,075)
(70,529)
(65,686)
(3,276)
17,898
Reduction of cash and cash equivalents 23,816
(50,999)
(524)
(10,884)
209
Investment activities generated a net negative flow of
CLP 180,077 million, which is basically due to disbursements related to the opening of new stores as part of
the investment plan. CLP 150,712 million of this total corresponds to the Retail segment and CLP 29,109 million
corresponds to the Real Estate segment.
The Corporation generated a net cash increase before
the exchange rate effect of CLP 1,313 million, which is
broken down as follows: operating activities generated
a net positive flow of CLP 219,035 million due to increased operating flow stemming from the Retail (Supermarkets) and Real Estate segments because of higher
revenue and improved expense efficiency, which was
partially offset by reduced cash flow from the Financial
Services and Corporate segments.
Financing activities produced a net negative flow of CLP
37,694 million, mainly due to the payment of loans in
2012 by the Walmart Chile Corporate segment.
5. Financial Indicators
Main Indicators
12-31-2012
12-31-2011
Debt Indices
Financial debt/EquityTimes
0.71
0.73
Financial debt/EbitdaTimes
2.11
2.13
Total liabilities/Total assetsTimes
0.66
0.68
Third-party debt ratioTimes
1.52
1.63
66.3%
50.8%
Current liabilities/Total liabilities
%
Liquidity indices Liquidity ratioTimes
0.73
0.92
Acid test ratioTimes
0.46
0.60
Debt ratio
Financial debt over EBITDA
The financial debt to equity ratio fell from 0.73 in December 2011 to 0.71 in December 2012 as a result of higher
financial debt and equity, which was due to higher accumulated income.
The financial debt over EBITDA ratio dropped from 2.13
in December 2011 to 2.11 in December 2012. This was
due to increased financial debt and EBITDA.
Liquidity ratio
The liquidity ratio (current assets over current liabilities)
came to 0.73 as of 31 December 2012, down from 0.92
as of 31 December 2011. This reduction was due to the
transfer of long-term debts to short-term debts..
Acid test ratio
The acid test ratio is a liquidity indicator that is stricter than the current ratio, since it does not consider inventories among
current assets. This ratio went from 0.6 as of 31 December 2011 down to 0.46 as of 31 December 2012, mainly due to the
transfer of long-term debts to short-term debts.
Main Indicators
Activity Indices 12-31-2012
12-31-2011
Inventory turnover *Days
40.12
38.18
Average collection period**Days
46.00
48.27
Average payment period***Days
51.53
44.90
* 365 x average current inventories /sales cost ** 365 x accounts receivable / net sales *** average supplier payment period (excluding the payment of foreign suppliers)
Inventory turnover
Average collection period
Inventory turnover came to an average 40.12 days as
of December 2012, up from 38.18 days as of December
2011. This variation is mainly due to increased inventory
attributed to incorporation of a new distribution center
and the opening of new stores in 2012.
The average collection period came to 46.00 days as of
December 2012, down from 48.27 days for the same period in 2011. This was due to restructuring of the Financial Services portfolio.
Average payment period
The average payment period as of December 2012 came to 51.53 days, up from 44.9 days over the same period in 2011.
This was due to delayed payment because of the financial integration period executed starting in January 2012.
Main Indicators
12-31-2012
12-31-2011
Efficiency and Profitability Indices
Total Financial Expense Hedging *Times
10.0
11.9
Profitability over Equity
%
16.0%
17.8%
Profitability over Assets
%
5.5%
5.8%
Profit per share
CLP
EBITDA / Sales
*EBITDA/Financial Expenses 17.7
%
17.5
8.5%
8.4%
Financial expense hedging
Earnings per share
Financial expense hedging came to 10.0 times between
January and December 2012, down from 11.9 times during the same period of 2011. This variation is due to a
net financial expenses increase amounting to 32.7%.
Earnings per share as of 31 December 2012 came to CLP
17.7, up from CLP 17.5 as of 31 December 2011. This increase is due to higher profits.
Sales per m2
Profitability over equity ratios
The profitability over equity ratio came to 16.0% as of 31
December 2012, down from 17.8% for the same period
the year before. The profitability over total assets ratio
amounted to 5.5%, down from 5.8% for the same period
the year before. This variation is mainly due to equity up
12.6%, while profitability increased by 1.5%.
Retail
Annual sales /m2
3,666,136
6. Market risk analysis
The Corporation’s investments in securities traded on the
market involve a certain degree of risk. Our company’s
investment managers must carefully consider the following risk factors and other information included in
this complementary information, as well as examine the
annual reports of the company and/or any additional reported information.
The Corporation is exposed to different market variations,
including interest rate and exchange rate variations.
Interest rate risk
The Corporation’s interest rate risk stems from its debt
with third parties, which include letters of credit and
overdraft lines of credit. The variable rate debt exposes
the Corporation to cash flow interest rate risk. Debt at a
fixed interest rate exposes the Corporation to fair value
interest rate risk.
In this sense, the Corporation is exposed to little risk associated to fluctuating interest rates in the market, since
an important percentage of its debt is structured at fixed
rates, either directly or through derivative contracts.
Following a sensitivity analysis regarding the portion of
debt that currently has a net variable rate for coverage,
the effect on income under a scenario in which rates increase by 5% compared to the current rates and the rest
of the variables remain constant would be losses before
tax amounting to CLP 696,450,000 as of 31 December
2012.
The Corporation has taken out a Cross Currency Swap,
which is used to transform debt in Chilean pesos into
unidades de fomento and variable rate into fixed rate.
Exchange rate risk
Exchange rate risk is the risk that market price variations
due to foreign currency fluctuations may affect Group
income or the value of its financial instruments. The objective of exchange rate risk management is to manage
and control exposure to changes in the market due to
this concept within reasonable parameters while concurrently optimizing profitability.
The functional currency used by the Group is the Chilean peso when it comes to setting prices for its services,
balance sheet composition and effects on operating income.
The Corporation did not have any accounts receivable in
foreign currency as of 31 December 2012.
62% of the Corporation’s financial debt is in Unidades de
Fomento, 29% is in Chilean pesos and 9% is in US dollars.
As of 31 December 2012, the Corporation has a financial
debt balance in foreign currency amounting to US$ 89.6
million.
As of 31 December 2012, the observed US dollar exchange rate came to CLP 479.96, down 8% compared to the
closing value of CLP 519.20 as of 31 December 2011.
Considering the aforementioned values, a sensitivity
analysis was conducted in order to determine the effect
of exchange rate variation on the Corporation’s income,
considering the amount not covered by the natural hedge between assets and liabilities in foreign currency. This
was sensitized considering ±10% variations in the observed US dollar exchange rate as of 31 December 2012.
This sensitization meant that the effect on the
Corporation›s income before taxes could have increased
(decreased) by CLP 29,849,000 during the fiscal year.
As of 31 December 2012, the Corporation held financial
assets in foreign currency amounting to US$ 40.4 million.
Availability of capital for future expansion
The Corporation’s management cannot be absolutely
sure that the Corporation will generate sufficient cash
flow from its operations or obtain external sources of
financing that are sufficient to finance the investments
needed for future expansion. The Corporation’s ability to
access financial markets to obtain the capital needed to
finance its operations and necessary capital expansions
will depend to a large degree on market conditions, over
which the Corporation has no control.
211
Significant events
1. As of 28 March 2012, the Corporation reported
the following:
The Walmart Chile Board of Directors agreed to:
i) Summon a special shareholders meeting 25 April
2012 in order to announce the issuing of an intellectual property license between Wal-Mart Stores Inc.,
the American parent company and its Chilean subsidiary Walmart Chile S.A. for the consideration of our
shareholders.
Once the required independent evaluator report is
available at the Corporation’s offices and its webpage, this will be promptly notified by means of a material event.
ii) Summon an ordinary shareholders meeting for the
same date, immediately after the aforementioned
special shareholders meeting, for the purpose of announcing the following issues:
ʭʭ
a. Announcing the annual report, general balance,
financial statements and external auditors report for
Walmart Chile S.A. as of 31 December 2011
ʭʭ
b. Deciding on fiscal year results and profit sharing
ʭʭ
c. Total renewal of the Board of Directors
ʭʭ
d. Establishing Board salaries
ʭʭ
e. Appointing an external auditing company and risk
rating agencies
ʭʭ
f.Announcing Board of Directors agreements regarding operations governed by Article 44 of Corporations Law N°18,046
ʭʭ
g. Generally reporting on the Corporation’s business
progress and discussing all other issues corresponding to the ordinary shareholders meeting.
iii) Register a line for issuing one or more local bonds,
hereinafter the “Line of Bonds”, with the Securities and
Insurance Supervisor. This line amounts to a total UF
12.5 million, over a maximum term of 10 years as of
the issuing and placement date of the corresponding
bonds. Once the Line of Bonds has been registered
in the Securities Registry, the Board of Directors will
be required to approve issuing of the corresponding
bond(s). This Line of Bonds is designed to restructure
the company’s liabilities.
2. As of 5 April 2012, the Corporation reported
the following:
The independent evaluator’s report regarding the issuing of an intellectual property license between WalMart Stores Inc., the American parent company and its
Chilean subsidiary Walmart Chile S.A. is currently available at Walmart Chile offices and its webpage. The singing of this contract will be submitted for consideration
of our shareholders at a special shareholders meeting
summoned for 25 April 2012.
3. As of 13 April 2012, the Corporation reported
the following:
The Walmart Chile Board of Directors agreed to cancel
the summoning of a special shareholders meeting for
25 April so that our shareholders can better analyze the
transaction regarding the issue of an intellectual property license between Wal-Mart Stores Inc., the American
parent company and its Chilean subsidiary Walmart Chile S.A.
Furthermore, it was agreed that the summons to an ordinary shareholders meeting to be held 25 April 2012 at
10:00 AM would be upheld.
Significant events
4. As of 27 June 2012, the Corporation reported
the following:
At a Board of Directors meeting held at the corporation’s
offices 27 June 2012, it was agreed to change and complement the agreements reached at the Board of Directors meeting held 28 March of this year regarding the
Line of Bonds, hereinafter also the “Line”, which was
agreed to be registered at the corresponding Supervisor.
In this sense, the Board of Directors decided to extend
the term for the Line of Bonds from which the corresponding local bonds will be issued to a term of 10 years,
initially agreeing to a maximum term of 30 years. In
addition, it was formally noted that said Line will have a
maximum amount of 12,500,000 Unidades de Fomento
as the equivalent in Chilean pesos, regardless of whether
the Line is issued in Unidades de Fomento or in nominal
Chilean pesos.
Regarding the use of funds stemming from the issuing
of bonds to be issued from the Line, these will be used
for refinancing liabilities corresponding to the company
and/or its subsidiaries; financing the investment program for the company and/or its subsidiaries; and/or
other general corporate purposes of the company and/
or its subsidiaries. The foregoing is without prejudice to
each issuing from the Line indicating the specific use to
be made of these funds.
213
Annual Report 2012
Design & Production:
Baobab Diseño Limitada

Report Annual - Walmart Chile

Transcription

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