ann ual report

Transcription

ann ual report

ANNUAL REPORT
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ANNUAL REPORT
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Commercial Offices
Valparaíso San Ignacio, 348 San Ignacio
Valparaíso Blanco, 738 Blanco
Viña Del Mar, 275 1 Norte
Concón, 25420 Borgoño Av.
Quilpué, 625 Claudio Vicuña
Villa Alemana, 654 Santiago
Casablanca, 56 General Bonilla
Quillota, 452 Chacabuco
La Calera, 673 Latorre Av.
Limache, 338 Urmeneta
Quintero, 2025 Normandie
La Ligua, 255 Uribe
Cabildo, 748 Humeres Av.
Petorca, 535 Silva
Papudo, 176 Miraflores
Zapallar, 156 Diego Sutil
San Felipe, 233 Freire
Putaendo, 670 Sarmiento
Llay Llay, 139 San Francisco
Los Andes, 572 Santa Rosa
San Antonio, 2352 Ramón Barros Luco Av.
Cartagena, 390 Cartagena Av.
Algarrobo, 700 Peñablanca Av.
Central Offices Valparaíso, Cochrane 751
General Management and Headquarters
751 Cochrane, Valparaíso, Chile
Telephone (32) 2209000, Fax (32) 2209502
Quillota Area
452 Chacabuco, Quillota
Telephone (33) 291700, Fax (33) 310916
Mailing address: P.O. Box 66, Quillota
San Felipe - Los Andes Area
233 Freire, San Felipe
Telephone (34) 494300, Fax (34) 494390
Southern Coast Area
2410 Barros Luco, San Antonio
Telephone (35) 205500, Fax (35) 205520
Call Center 600 600 6060
www.esval.cl
[email protected]
Annual Report
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ANNUAL REPORT
Main Offices of Esval
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ANNUAL REPORT
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Table of Contents
Letter from the Chairman
7
Letter from the CEO
11
Company Information
14
Historical Account
17
Company’s Equity
20
Line of business and Activities
24
Board of Directors and Administration
26
Organizational chart
29
Management Report
31
Administration Report
55
Statement of Liability
67
Financial Statements
69
ANNUAL REPORT
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Dear Shareholders,
On behalf of the Board of Directors, I am pleased to submit the 2011 Annual Report.
Regarding the consolidated outcome at December 2011, it reached profits for $15
thousand 354 million 326 thousand, and shows a decrease of 11.2% compared to
December 2010. The decrease of the outcome of 2011, compared to 2010, is of 1
thousand 938 million and 861 thousand Chilean pesos. Although the EBITDA was
3% higher than the previous year due to greater ordinary income, the significant
drop of the global result is explained by a greater loss per adjustment unit (UF), when
going from an UF variation of 2.45% in 2010 to 3.91% in 2011. This effect has caused
a decrease in the outcome of the company for this item of -3 thousand 365 million
and 363 thousand pesos.
It is important to mention that the company has continued to make substantial
investments that reached $25 thousand 545 million pesos, out of which 8 thousand
257 million correspond to Aguas del Valle. Said investments have mainly been aimed
at improving the current infrastructure and at increasing the water resources to
mitigate the effects of a severe draught that has been affecting us for the last three
years.
As you know, this financial year was affected by the persistence of this water
shortage, which forced the company to double their human and material efforts to
provide a normal supply of drinking water to the community.
Regarding this matter, there are some considerations I would like to express. First,
I would like to thank you, in my name and on behalf of the Board of Directors,
for the personnel’s effort and for the hard work that has meant to supply all the
communities under very difficult conditions, which will probably continue in the
future. Second, we are pleased to report that no franchise area had any problems
due to the water shortage in 2011. In this respect, the company permanently
performed in a preventive manner and developed strong alternatives, broadening
and interconnection works.
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ANNUAL REPORT
Letter from
the Chairman
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8
Curauma, Placilla, and the high areas of Playa Ancha, are examples of the
success of these efforts that had to stop being fed from the plant located
at Embalse Peñuelas, due to the dramatic decrease of its reserves, which
were practically not used.
In order to face this situation, we had worked in advance in the
interconnection of the resources existing at Las Vegas Plant, 100
kilometers away; also, Concón Plant, more than 50 kilometers away,
which became the new supply sources for said areas.
Simultaneously, the Productive System of Concón was increased in
250 liters per second and, by means of an agreement with national
and regional authorities and the people who irrigate, it was possible
to reinforce Los Aromos level, with the contribution of 10 wells located
in the surroundings of Llay Llay. As a result, the supply for Concón and
the North Coast was guaranteed; also, some areas of Viña del Mar and
Valparaíso, including the aforementioned areas of Curauma and Placilla.
Also, a decanter in the Productive System of Poza Azul (Quilpué) was
built to increase the treatment capacity from 301/s to 801/s. Likewise,
the conduction system from Cachagua to Zapallar was reinforced, so,
all the North Coast, including Papudo, from 2011, is supplied from the
Concón plant, as mentioned in the previous paragraph.
In total, during this financial year, as a result from the draught, Esval
allocated more than 6 thousand 300 million Chilean pesos to expenses
and investment.
I also want to say that, in 2011 there were important changes in the
senior administration of the company, because the former Chairman of
the Board of Directors, Mr. Pedro Pablo Errázuriz Domínguez, and former
CEO, Mr. Gustavo González Doorman, submitted their resignation to
take on other positions. We thank both for their effort and for their
commitment to the growth of Esval.
On last 1 October, Mr. Rodrigo Azócar took on as the company’s CEO.
Given his broad professional experience, I am sure he will boost the
modernization the company requires now. The Board of Directors
wishes him and his work team the greatest success.
As our shareholders know, once the construction of the great works was
over, we dedicated to the renewal and broadening of the networks. In
this context, one of the main works we carried out was the renewal of
the water main of Alemania Avenue, between Las Cañas and Mariposas
Hills, with an extension of 2,678 meters and with an investment of
$1,741 million.
Additionally, and with an investment above 754 million Chilean pesos,
the strengthening of the drinking water San Antonio-Algarrobo net
was carried out. A water main was renewed and enlarged in 1,247 lineal
meters to increase the availability of drinking water in 15% for the South
Coast.
It is also worth highlighting that we advanced six years of investments
above 500 million Chilean pesos to change the drinking water matrices
and the waste water collectors of Concepción and Alegre hills. In order
to do so we entered into an agreement with the Recovery and Urban
ANNUAL REPORT
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Development Program of Valparaíso (PRDUV, in Spanish), the Honorable
Municipality of Valparaíso and Serviu (Housing and Urbanism Service).
We think it was a very good decision to join this urban remodeling
project with the modernization of the sanitary infrastructure, because
it will boost tourism and the services for these historical neighborhoods
of our city.
Finally, I want to thank my Board of Directors’ colleagues, and the
shareholders, who trusted me to chair this important company in the
V Region and Aguas del Valle, of IV Region. Therefore, I will continue
working to add value to the company and to contribute with the best
of all the team to the development of the Valparaíso and Coquimbo
regions.
Jorge Lesser García-Huidobro
Chairman of the Board of Directors
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Messrs Shareholders,
As CEO of Esval, I am pleased to inform you about the most relevant events occurred during
financial year 2011, which, as the Chairman of the Board of Directors said, was marked by
complex situations arising from the water shortage that is affecting the Valparaíso Region.
In this situation, the company acted with diligence and precaution, without sparing any
resources or efforts, and was able to comply with their usual customers and with the
thousands of tourists that arrived to the region to enjoy the beaches, rivers, mountains and
countryside.
It was not an easy task, as my arrival to the company coincided with the end of the winter,
when the Aconcagua River flow had decreased 87% with respect to a normal year. For this
reason, I would like to leave on record the dedication and responsibility of the company’s
personnel, especially those who were on the front line of the draught; also, of the authorities
and representatives of the private area, with whom I found, from the first moment, a
commendable collaboration spirit to face an extremely complex situation. This allowed us
to face summer 2011-2012 without any important stress and to make sure that every home
and family of the V Region had a secure and continuous supply.
As from the last quarter of 2011, we have been working on the update of the Strategic
Plan, focusing each and every worker on our clients, to be acknowledged for the service
quality, closeness, empathy, credibility, regional leadership and care for the environment,
closing relationships with the community and the authorities. This was made with a longterm perspective of increasing our operations level and margin, thus adding value to our
shareholders.
Together with the aforementioned, in the different areas an administration analysis was
carried out in order to detect the most important risks at an earlier stage to determine its
possible impact and mitigation measures.
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ANNUAL REPORT
Letter
from the CEO
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As part of the improvement and update of the company’s practices, in
the internal order we also work for the re-certification of our Integrated
Management System, that includes ISO 9001: 2008 (Quality Management
System), OHSAS 18:2007 (Occupational Safety and Health Management
System) and ISO 14001:2004 (Environmental Management System) for
the next three years.
In the labor aspect, within the deadlines established by the law and at
the fullest satisfaction of the parties, in 2011 we signed the collective
bargaining contract that will be in force for the next two years. This
shows the good understanding between the company’s administration
and their workers.
As the shareholders know, Esval has a relationship policy with the
community that is acknowledged everywhere. Campaign “Agua Sana
Vida Sana” [Healthy Water, Healthy Life] and “Las Gotitas” [The Droplets]
are known in countless cultural, educational, sport and social activities,
and, in 2011, the campaigns directly contacted more than 237 thousand
people, in almost 1,250 activities.
In this respect, I would like to highlight that in 2011 we made an
important effort to de-centralize the activities and so this is how the
launching of the Campaign was carried out in Valparaíso, but also in
Las Cruces, Algarrobo and San Antonio. We were also in San Felipe and
Los Andes for the official presentation of the III Sustainability Report.
Additionally, we prepared Training Seminars, to which 415 social leaders
of Marga Marga, San Antonio and Valparaíso Provinces attended.
We carried out 45 Workshops with municipalities, neighbors, public
entities and others, to deal with situations related with drinking water,
draught and others. We also continued with the implementation of
program Al Día con Esval, and during this financial year we carried out a
ceremony to acknowledge 100 new clients that satisfactorily complied
with the commitments undertaken.
We supported new sport activities, stimulating the participants
and arranging the delivery of water in hydration points. We directly
participated in the sponsoring of two relevant ones: The Full Marathon
of Viña del Mar, which summoned thousands of runners; and the
cycling event “A Pedalear por San Felipe” [Pedal for San Felipe] organized
together with Instituto Nacional del Deporte, the Province Governorship
and the Honorable Municipality.
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In the cultural scenario, we received more than 3 thousand 400 hundred
papers from schools from all the corners of the Region for the Painting
Contest, with which, year by year, we select the motifs that are later
printed in the company’s Christmas cards. For the seventh year in a
row, we made contributions for the realization of the Science and
Technology Regional Congress, organized by Explora Conicyt and the
Pontificia Universidad Católica de Valparaíso, among other activities.
Messrs shareholders, we are aware of the difficult times we are
undergoing due to the draught that is affecting different human and
economic activities. We hope to win through once more, with the
support of the company’s Board of Directors, its workers, suppliers and
contractors. I am clear of the commitment we have with the Valparaíso
and Coquimbo Regions, and we will continue making our best efforts to
contribute to the wellness and prosperity of their inhabitants.
Rodrigo Azócar Hidalgo
CEO
ANNUAL REPORT
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Company
Information
•Corporate Name Esval S.A.
Esval
•Fantasy Name
89.900.400-0
•Tax Card
•Type of Company Public Limited Company
No. 0348 dated 24 October, 1989
•Registry of Securities 751 Cochrane, Valparaíso, Chile
•Address (56-32) 2209000
•Telephone
•Fax (56-32) 2209502
•Postal Code 2370020
616 Valparaíso
•P.O. Box
http://www.esval.cl
•Internet
[email protected]
•E-mail address
Corporate Changes
Date
Notary
City
Record in Registry of Business of Valparaíso
ANNUAL REPORT
Year
15
Official Gazette
1
17/01/1991
Eduardo Bravo Ubilla
Valparaíso
Page 73 reverse page No. 76/1991
Rectification of Summary
12/02/1991-20/02/1991
2
08/11/1995
Valparaíso
Page 902 reverse page
No. 805/1995
06/12/1995
3
25/06/1996
Valparaíso
Page 462 No. 434/1996
31/07/1996
4
03/06/1998
Valparaíso
12/06/1998
5
30/09/1998
Valparaíso
Page 835 reverse page
No. 682/1998
14/11/1998
6
03/02/1999
Valparaíso
Page 180 No. 155/1999
06/02/1999-16/03/1999
7
11/11/1999
Valparaíso
06/02/1999-16/03/1999
8
27/03/2000
Valparaíso
(*)
9
08/05/2000
Valparaíso
Page 364 No. 353/2000
(*)
10
04/08/2000
Valparaíso
Page 496 No. 456/2000
Page 599 No. 546/2000
(Complements Summary)
10/08/2000-21/09/2000
11
21/07/2003
Valparaíso
Complement to Notary Certification
01/08/2003
12
08/09/2003
Valparaíso
Page 878 reverse page Nº820/2003
19/12/2003
13
26/11/2003
Valparaíso
Page 82 No. 71/2004
31/01/2004
14
26/01/2004
Valparaíso
15/12/2007
15
26/08/2011
Alejandro Sepulveda Valenzuela
Valparaíso
Page 946 No. 888/2011
21/09/2011
Documents of Incorporation
Comments and Proposals of Shareholders
INCORPORATION OF THE COMPANY Act of Incorporation granted
on 12 June 1989, before the Notary of Santiago, Mr Raúl Undurraga
Laso, summary of which was registered in the Register of Business of
Valparaíso on page 449 reverse side, number 469 of 1989, and published
in the Official Gazette on 15 June of 1989.
The shareholders representing 10% or more of the shares issued, with
right to vote have not made any comments or proposals regarding the
progress of the social businesses, so comments and proposals in said
respect are not included in this annual report.
ANNUAL REPORT
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The Chilean Development Agency and the Chilean Treasury constituted Esval S.A. (hereinafter
“Esval” or the “Company”) in 1989 under law No 18.777.
In December 1998, Esval was the first sanitary company to open to the process of
incorporating private capital, considered in law 19.459, by a bidding process. Aguas Puerto
S.A., company formed, at that time, by Enersis Group (72%) and Anglian Water Chile Ltda.
(28%), affiliate of Anglian Water Inc. (hereinafter “Anglian Water”) from UK, was awarded 40%
of Esval’s property. The property transfer and take-over on the part of Aguas Puerto S.A. were
carried out on 15 April 1999.
On 4 August 2000, Anglian Water bought their share in Aguas Puerto S.A. from Enersis Group,
becoming the controller of the Company. By the end of 2000, a 25,063 million Chilean pesos
capital increase was carried out, which consisted in the issuance of 541,559,555 shares, in
order to finance the early termination of the Investment Management Agreeement between
Esval and Aguas Quinta S.A. With the shares subscribed, Aguas Puerto S.A. remained with
49.82% of Esval’s property.
On 12 November 2003, Consorcio Financiero S.A. signed a share purchase agreement by
means of which they bought from Aguas Puerto S.A. 1,484,000,000 Esval series A shares,
accounting for 44.78% of their issued shares; therefore, the take-over by Consorcio Financiero
S.A. materialized that same day.
On 14 November 2003, through public writ of Accountability and Release between
Consorcio Financiero S.A. and Proyectos e Inversiones Longovilo S.A., BP S.A., Inversiones
Teval S.A., Consorcio Inversiones Limitada and Compañía de Seguros Generales Consorcio
Nacional de Seguros S.A., granted on the same day before notary of Santiago Mr Humberto
Santelices Narducci, Consorcio Financiero S.A. transferred: 140,314,207 shares to Consorcio
Inversiones Limitada and 240,000,000 shares to Compañía de Seguros Generales Consorcio
Nacional de Seguros S.A., both companies completely controlled by Consorcio Financiero
S.A., 30,915,792 shares to BP. S.A., company completely owned by the General Manager
and the Chairman of Consorcio Financiero S.A., 320,583,321 shares to Inversiones Teval S.A.,
company controlled by the directors of Consorcio Financiero S.A. Mr Eduardo Fernández
León and Mr José Antonio Garcés Silva, and member of the business group to which Banvida
S.A. belongs which, in turn, is holder of 47.70% of Consorcio Financiero S.A., and 320,583,321
shares to Proyectos e Inversiones Longovilo S.A., company controlled by the directors of
Consorcio Financiero S.A. Mr Juan Hurtado Vicuña and Mr Pedro Hurtado Vicuña, and his four
ANNUAL REPORT
Historical Account
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ANNUAL REPORT
18
brothers, and member of the business group to which P&S S.A. belong,
holder of 22.7% of Consorcio Financiero S.A. and Altas Cumbres S.A.
holder of 25% of Consorcio Financiero S.A.
On 25 November 2003, Esval was awarded, for a 30 years period, the
right of exploitation of the water treatment concessions operated by
Essco S.A., water treatment plant of the 4th Region, for UF 3,177,000 VAT
included, through their affiliate Aguas del Valle S.A. Thus, Esval achieved
a market share close to 17% of the customers of that area in the
country. In January 2004, share transfers subscribed by Cía. de Seguros
Generales Consorcio Nacional de Seguros S.A. by the end of 2003 were
recorded in the shareholder registry, in virtue of which, the company
was completely clear of all their shares; Compañía de Seguros de Vida
CN Life S.A. purchased 110,000,000 shares, and Compañía de Seguros de
Vida Consorcio Nacional de Seguros S.A. 130,000,000 shares. These last
two companies are controlled by Consorcio Financiero S.A.
In Extraordinary Meeting on 23 January 2004, it was agreed to increase
the capital in $24,136 million, with the issuance of 462,372,090 payment
shares, to partly finance the payment of the contract price, by which
Esval S.A. obtained the right to exploit the sanitary concessions held by
Essco S.A. in the Region of Coquimbo.
The capital increase was signed in a 92.27%, with which Esval’s signed
and paid capital is TH$162,384,714.- After the capital increase, Esval S.A.’s
controller was constituted by Consorcio Corredores de Bolsa (4.34%), CN
Life Compañía de Seguros de Vida S.A. (9.91%), Compañía de Seguros de
Vida Consorcio Nacional de Seguros S.A. (9.55%), Compañía de Seguros
de Vida Vitalis S.A. (3.45%), Proyectos e Inversiones Longovilo S.A.
(10.37%), BP S.A. (1.0%), and Inversiones Teval S.A. (10.37%), with 49.00%
of Esval S.A.’s shares.
On 18 November 2007, Inversiones OTPPB Chile III Limitada and
Westwater Investments Limited published a notification establishing
a Takeover bid (in Spanish Oferta Pública de Adquisición, OPA) for all
Esval’s series “A” shares, including series B shares that may have been
exchanged for series A shares, by virtue of what the social statutes states.
In order to declare the takeover bid as successful, Esval shareholders
had to agree, in an Extraordinary Shareholder Meeting, on a reform
of their statutes, which consisted in modifying the denomination and
distribution of the shares in which the social capital is divided in, without
increasing the latter, so that the capital is divided in three new share
series, called Series A, B and C.
On 12 December 2007, Esval’s Extraordinary Shareholder Meeting was
held, which was called to discuss all the modifications to the statutes of
incorporation, under the terms requested by the bidders. Among other
matters, they agreed to increase the number of shares in which the
capital of the Company is divided, 3,740,569,084 to 14,962,276,336,000,
without increasing the social capital, under the following terms: (i)
Series A and B shares were withdrawn and new series A, B and C shares
were created; (ii) the new series A and B shares keep all the rights and
privileges, respectively, that the old series A and B shares had; (iii) the
new series C shares do not have the right to chose directors, but they
will have the privilege of calling an extraordinary shareholder meeting,
when they request it so, at least 5% of these shares. The aforementioned
preference and limitation were established for a period of 5 years as
from 12 December 2007, which were renewed for a new period of 5
years as from 26 August 2011, according to what was established in the
General Shareholder’s Meeting held that day.
All the new shares, no matter the series they belong to, participate
in the profits and other economic rights on equal terms. In Esval’s
Extraordinary Shareholder’s meeting held on 12 December 2007, the
exchange between the old series A and B shares and the new series
A, B and C shares was approved, according to which the shareholders
received a new series A or B share for each series A or B they had, plus
ANNUAL REPORT
19
3,999 of the new series C shares. Also, they provided that the allocation
of the new shares and their update in the Shareholder Registry had to be
carried out at the closing day of the publication of the result notification
that states the takeover bid as successful. The record of the meeting was
prepared as public writ of the same date in the notary of Valparaíso of
Mr. Eduardo Bravo Ubilla and a summary of said writ was published in
the Official Gazette on 15 December 2007 and recorded in page 1143
reverse side, No. 977 of the Registrar of Real State and Commerce of
Valparaíso of 2007.
In July 2011, Corporación de Fomento de la Producción (CORFO) sold
part of their share in ESVAL, where Inversiones OTPPB Chile III Ltda,
purchased 3,654,310,102,023 Series C shares and Mareco Holdings Corp,
913,805,977 Series A shares, both amounting to 94.2% of the total shares
issued by the Company.
As in said takeover the bidders purchased more than two thirds of the
shares issued with voting power of Esval, the new controllers made
a new takeover tender for the total shares of the Company, under
the terms established by article 69 of Law 18.046 on Public Limited
Companies.
Inversiones OTPPB Chile III Limitada is a Chilean limited liability company,
which up to 31 December 2011 owned 1,122,170,725 series A shares,
and 14,092,092,951,289 series C shares of Esval. The direct controlling
institution is Inversiones OTPPB Chile III Limitada, a company that is,
in turn, controlled by Inversiones Southwater Ltda. (“ISL”), subsidiary of
AndesCan SpA., investment vehicle in Chile of the Canadian company
Ontario Teachers’ Pension Plan Board (OTPPB). Apart from Esval, they are
related to Inversiones OTPPB Chile III Limitada, OTPPB Chile Inversiones
S.A. (Tax Card No. 76.833.170-7), Castlefrank Investments Limited (Tax
Card No. 59.141.730-4), Inversiones OTPPB Chile I Limitada (Tax Card
No. 76.833.300-9), Inversiones OTPPB Chile II Limitada (Tax Card No.
76.833.340-8), and Essbio S.A. (Tax Card No. 96.579.330-5). On the other
hand, Ontario Teachers Pension Plan Board has an indirect participation
with 50% of Inversiones Los Lagos Limitada, holding company of
Sociedad Austral de Electricidad S.A. (SAESA) with 99.99% of the shares
of said company.
Due to this second takeover bid, which finished on 18 February 2008,
said controllers obtained up to that date, 69.72% of the total of the
shares issued by Esval.
Mareco Holdings Corp. is a limited liability company incorporated
according to the laws of the Ontario Province, Canada; as at 31 December
2011 it owned 2,401,326,543 series A shares of Esval.
On 21 December 2009, Westwater Investments Limited sold the total of
their shares of Esval to company Mareco Holdings Corp, which signed
a shareholders’ agreement with Inversiones OTPPB Chile III Limitada.
By virtue of the aforementioned, these companies are currently Esval´s
controllers.
Morgan McCague is the final controller of Mareco Holdings Corp. There
is a shareholder agreement between Inversiones OTPPB Chile III Limitada
and Mareco Holdings Corp, by virtue of which certain limitations were
established for the free assignment and transfer of their shares in Esval, as
well as certain preferential purchase/sale rights regarding shares. Some
regulations regarding the exercise of voting power corresponding to
Mareco Holdings Corp. in regard to the election and renewal of Esval’s
board of directors were also established.
On 21 December 2007, the notification that stated the takeover bid as
successful was published. This takeover bid was made by Inversiones
OTPP Chile III Limitada and Westwater Investments Limited to have
the control of the Company. By virtue of the aforementioned, said
companies became Esval’s controllers with 69.37% of the total of the
shares issued by the Company, which came into effect that same day.
ANNUAL REPORT
20
Company’s Equity
As at 31 December 2011, the main shareholders were:
Corporate Name
INVERSIONES OTPPB CHILE III LIMITADA
Shares
ESVAL-A
ESVAL-B
Total
ESVAL-C
Percentage
1,122,170,725
0
14,092,092,951,289
14,093,215,122,014
94.1917%
0
187.028.455
747,926,791,545
748,113,820,000
5.0000%
INVERSIONES GUALLATIRI LTDA
2,494,988
0
14,170,179,125
14,172,674,113
0.0947%
SUC ZAMORA VILLALBA DAVID
1,734,690
0
6,937,025,310
6,938,760,000
0.0464%
489,787
0
6,657,386,086
6,657,875,873
0.0445%
BUSTILLOS MUNOZ MANUEL
1.390.000
0
6,598,610,000
6,600,000,000
0.0441%
INVERSIONES TACORA LIMITADA
1.192.426
0
6,586,440,512
6,587,632,938
0.0440%
CORPORACION DE FOMENTO DE LA PRODUCCION
BANCO ESTADO SAC DE B
LARRAIN VIAL S A CORREDORA DE BOLSA
368.952
0
4,477,996,878
4,478,365,830
0.0299%
BANCHILE C DE B S A
706.939
7.877
4,133,799,800
4,134,514,616
0.0276%
THE CHILEAN TREASURY
877.294
0
3,508,298,706
3,509,176,000
0.0235%
GALLARDO BILBAO ANA MARIA
786.039
0
3,143,369,961
3,144,156,000
0.0210%
ALIAGA PONCE TEODORO
750,000
0
2,999,250,000
3,000,000,000
0.0201%
TOBAR LEIVA MANUEL
800,000
0
2,899,200,000
2,900,000,000
0.0194%
722,674
0
2,889,973,326
2,890,696,000
0.0193%
2,401,326,543
0
0
2,401,326,543
0.0160%
INMOB E INVERS LUIGI MATTERA MAZZELLA S A
MARECO HOLDINGS CORP
Other shareholders
Total
17,625,489
96,206
53,514,494,378
53,532,216,073
0.3578%
3,553,436,546
187,132,538
14,958,535,766,916
14,962,276,336,000
100.0000%
The controller group is made up by the following members:
INVERSIONES OTPPB CHILE III LIMITADA
ESVAL-B
Total
ESVAL-C
1,122,170,725
0
14,092,092,951,289
31,58%
0.00%
94.21%
Participation in Share Series
Participation in Series with Political Rights (A and B)
Percentage
14,093,215,122,014
94.19%
2,401,326,543
0.02%
14,095,616,448,557
94.21%
30.00%
MARECO HOLDINGS CORP.
2,401,326,543
0
0
67.58%
0.00%
0.00%
3,523,497,268
0
14,092,092,951,289
99.16%
0.00%
94.21%
64.20%
TOTAL SHARES RELATED WITH OTPPB III CHILE LIMITADA
94.20%
OTPPB and MARECO’s control is based on having 99.16% of series A
shares, with which they own 94.20% of the political rights of the Company
(30.00% owned by the former and 64.20% by the latter).
Summary of Share Transactions of the Company
Year
Quarter
No. of Sold/Purchased Shares
Total Sold/Purchased Amount
Average Price
2009
1
2,681,334,318
45,717,243
0.01705
2009
2
1,116,005,398
16,086,206
0.01441
2009
3
540,202,848
10,857,942
0.02010
2009
4
1,278,098,811
25,578,129
0.02000
2010
1
136,737,638
2,767,275
0.02024
2010
2
1,086,061,535
37,356,441
0.03440
2010
3
581,499,910
25,865,874
0.04448
2010
4
118,699,892
44,082,376
0.03941
2011
1
8,199,807,161
1,833,413,555
0.22359
2011
2
3,354,971,041
349,451,682
0.10416
2011
3
3,659,143,137,957
106,588,034,081
0.02913
2011
4
6,615,721,963
286,383,067
0.04329
* Including the Stock Exchange of Santiago, the Stock Exchange of Valparaíso and the electronic stock exchange
21
ANNUAL REPORT
Shares
ESVAL-A
ANNUAL REPORT
22
Dividend policy / Payment of dividends
In the Ordinary Shareholder Meeting, held on 29 April 2011, it was
agreed to distribute as definite dividends for the financial year 2010,
$0.00115578584 per share, which corresponds approximately to 100%
of the profit obtained in said financial year.
In addition, the meeting agreed on distributing an additional dividend
of $0.00033943157 per share obtained from the profits accumulated in
former financial years.
will depend on the profits actually obtained, as well as on the results
indicated by the projections periodically made by the Company, or on
the existence of certain conditions that may make said policy vary. The
dividends paid per share during the last three years are the following:
Dividend Paid 2009 – 2011
Financial
Year
Type of Dividend
2011 Dividend Policy
2008
PROVISIONAL
23-02-2009
0.000250000
2008
DEFINITIVE
18-05-2009
0.000848889
The Shareholders Meeting was informed of the Agreement of Esval S.A.’s
Board of Directors on provisional dividend policy, which consists in the
distribution of up to two provisional dividends of 0.00025 per share as
maximum – each time - charging it to the profits of financial year 2011
under the condition that said provisional dividends do not exceed 80%
of the profits of financial year 2011, and that have been verified as at
the closure of June and September 2011. If said dividends are to be
distributed, they will be paid in August 2011 and February 2011.
2009
PROVISIONAL
20-08-2009
0.000250000
2009
PROVISIONAL
02-02-2010
0.000250000
2009
DEFINITIVE
24-05-2010
0.001002960
2010
PROVISIONAL
27-08-2010
0.000250000
2010
PROVISIONAL
04-02-2011
0.000250000
2010
OBLIG MIN DEF
27-05-2011
0.000655786
2010
DEFINITIVE ADDITIONAL
27-05-2011
0.000339432
2011
PROVISIONAL
06-09-2011
0.000250000
Regarding the definite dividends related to that same financial year, the
shareholders were informed that the purpose of the Board of Directors
is to distribute at least 80% of the profits of financial year 2011. However,
the respective Ordinary Meeting will decide on the distribution of said
definitive dividends.
It was left on record that the aforementioned policy, both regarding
provisional dividends and definite dividends, corresponds to an intention
of the Board of Directors of the Company; therefore, their compliance
Payment Date
1.- In nominal currency upon the payment date.
$ Per Share
ANNUAL REPORT
23
Risk Classification
In 2011, ESVAL hired the risk classification services for their shares, bonds
and lines of bonds from Feller Rate Clasificadora de Riesgo Limitada and
ICR Clasificadora de Riesgo Limitada.
Distributable Profit
PROFIT OF FINANCIAL YEAR
2011
2010
15,324,326
DEFINITIVE DIVIDEND
PROVISIONAL DIVIDENDS
7,481,138
% SHARED AS DIVIDENDS
(*)
Inscription
No.
Serie
Classification
Feller Rate
ICT
2009(**)
17,293,187
22,476,545
17,293,187
22,476,545
100%
100%
(*) This amount will be agreed on the next Ordinary Meeting of Shareholders
(**) Values estimated according to the accounting regulation in force during
that annual period
Valid Issues
Shares
-
A, B, C
Level 4
Level 4
Negotiable
Instruments
43 *
---
AA- / Level 1+
AA / Level 1+
Negotiable
Instruments
44 *
---
AA- / Level 1+
AA / Level 1+
Negotiable
Instruments
87
13A
AA- / Level 1+
AA / Level 1+
Bonds
232
A
AA-
AA
Line of Bonds
293
D
AA-
AA
Line of Bonds
375
E
AA-
AA
Line of Bonds
419
H
AA-
AA
Line of Bonds
493
J
AA-
AA
Line of Bonds
561
K
AA-
AA
Line of Bonds
562
M
AA-
AA
On 31 December 2011, the lines of negotiable instruments 43 and 44 do
not have series issued with valid debt.
ANNUAL REPORT
24
Line of business
and Activities
Esval is a drinking water production and distribution company engaged
in the collection, treatment, and disposal of wastewater, which also
renders services regarding said activities, under the conditions stated by
the Law authorizing its creation and other applicable norms.
The operational territory of the Company includes the urban areas of
the Region of Valparaíso, which former Empresa de Obras Sanitarias
of the Region used to attended until 27 January 1986 - except the
areas franchised to private or municipal services - plus the expansion
areas included within the development plans approved by the
Superintendence of Sanitary Services, according to what is stipulated
by Law No. 18.777 and decree No. 2.166/78 and 69/89 of the Ministry
of Public Works.
Additionally, the company renders drinking water services to other
locations outside the awarded area in the commune of Algarrobo
based on agreements signed with the communities of Algarrobo Norte,
Mirasol and Las Brisas.
On 25 November 2003, Esval took over, by public bidding, the right of
exploitation for 30 years of the awardings, holder of which is ECONSSA
CHILE S.A. (at that time ESSCO S.A.), water supply and sanitary company
of the Region of Coquimbo. For such effects, a subsidiary public limited
company was incorporated, called Aguas del Valle S.A., on 4 December
2003, under the regulations for joint-stock companies. Aguas del
Valle produces and distributes drinking water and collects, treats and
disposes wastewater. For this, it also renders services related to those
activities, under the terms stated in DFL No. 382 of 1988, of the Ministry
of Public Works, and other applicable norms.
The body that regulates the activity of Esval and the sanitary sector in
its totality is the Superintendence of Sanitary Services, created in 1990,
through Law No. 18.902, to guarantee the population that the rendering
of sanitary services - in terms of amount, quality and price - corresponds
to the one offered and can be maintained in the long term, and that
the water, once used, will be treated and disposed in keeping with
sustainable development.
Operation Data 2011
ESVAL
Urban population *
Aguas del Valle
1,502,584
Consolidated
573,855
2,076,439
Drinking Water Clients
536,420
193,657
730,077
Sewerage Clients
484,951
185,005
669,956
99.3
99.9
99.5
Drinking Water Coverage (%) *
Sewerage Coverage (%) *
Drinking Water Invoicing (000m3)
Sewage Invoicing (000m3)
92.3
96.4
93.5
100,305
35,282
135,586
87,976
31,955
119,932
* Sanitary Sector Management Report 2010, published by SISS
[Superintendence of Sanitary Services].
Valparaíso Region
Coquimbo Region
Province of Petorca
Petorca, La Ligua, Cabildo, Papudo,
Zapallar.
Province of Marga Marga
Limache, Villa Alemana, Quilpué.
Province of Elqui
La Serena, Coquimbo, Vicuña, Paihuano, Andacollo.
Province of Los Andes
Calle Larga, Los Andes, Rinconada.
Province of Valparaíso
Puchuncaví, Viña del Mar, Valparaíso,
Concón, Quintero.
Province of Limarí
Ovalle, Monte Patria, Punitaqui, Combarbalá.
Province of San Felipe
San Felipe, San Esteban, Santa María,
Catemu, Llay Llay, Putaendo.
Province of San Antonio
Algarrobo, Casablanca, El Quisco,
El Tabo, Cartagena, San Antonio.
Province of Quillota
La Cruz, La Calera, Hijuelas, Quillota,
Nogales.
Locations outside the awarded area (*):
Sto. Domingo, Olmué, Panquehue.
Province of Choapa
Canela, Illapel, Salamanca, Los Vilos.
Locations outside the awarded area (*):
La Higuera, Río Hurtado.
(*)
Valparaiso Region
Province of
Elqui
Province
of Petorca
Province of
Valparaíso
Province of
San Antonio
(*)
Province
of Limarí
(*)
Province of Los Andes
Province of San Felipe
Coquimbo Region
Province of Marga Marga
(*)
(*)
Province of Quillota
Province of
Choapa
ANNUAL REPORT
25
ANNUAL REPORT
26
Board of
Directors and
Management
DIRECTORS
Stacey Leanne Purcell
48.121.218-9, Bachelor of Commerce,
Dalhousie University
Olivia Penelope Steedman
48.120.868-8, Civil Engineer,
Queen’s University
As at 31 December 2011, the board of directors
of Esval was constituted by the following
members:
Nicolás Navarrete Hederra
PRESIDENT
Jorge Lesser García Huidobro
6.198.258-2, Industrial Civil Engineer
VICE-PRESIDENT
Juan Ignacio Parot Becker
Juan Pablo Armas Mac Donald
Alejandro Ferreiro Yazigi
6.362.223-0, Lawyer
Directors’ Committee
Remuneration of the Board of Directors
Since the Company does not comply with the requirements stated
in sub-paragraph 1 of article 50 bis of the Law of Limited Companies
– which was modified by Law No. Nº20.382 – Directors’ Committee
constituted in Esval S.A. ceased its functions on 31 December 2009.
During financial year 2011, the directors did not receive direct
remunerations from Aguas del Valle S.A.
From the headquarters, the directors received the following gross
remunerations for expenses, fees and meetings of the board of directors.
Expenses for Board of Directors
and Committee of Directors
In 2011, the Board of Directors and the Directors’ Committee recorded
expenses for TH$2,947.
Allowances and Payments for Committees of Directors
Year 2011
Allowances
TH$
Kevin David Kerr
Pedro Pablo Errázuriz Domínguez
Year 2010
Fees
TH$
Committees
TH$
Allowances
TH$
Fees
TH$
Committees
TH$
-
-
-
11,353
-
-
7,732
-
515
76,463
15,087
5,098
89,682
-
1,817
34,332
-
3,052
27,572
-
-
13,443
-
-
3,770
-
2,611
7,658
-
2,046
Olivia Steedman
Carlos Williamson Banaprès
23,629
-
-
22,888
-
-
Alexander Galetovic Potsch
15,652
-
4,174
15,344
-
4,092
23,629
-
782
15,344
-
-
15,862
-
4,230
-
-
-
Alejandro Reyes Vergara
-
7,544
2,012
Mónica Singer González
-
7,544
1,006
Rodrigo Pérez Mackenna
-
7,544
1,006
9,954
-
2,127
-
-
-
-
-
-
-
-
-
217,482
-
16,256
219,457
15,087
18,312
General Total
ANNUAL REPORT
27
Main
Executives
ANNUAL REPORT
28
8
7
6
1. CEO
4. Engineering Manager
6.444.699-1, Civil Engineer
5
4
3
2
1
Leonel Fuentes Espinoza
2. Planning and Studies Manager
5. Legal Advisor
7. Finance and Administration Manager
6.645.077-5, Lawyer
7.067.713-k, Business Administrator
3. Human Resources Manager
6. Operations Manager
8. Commercial and Development Manager
8.018.789-0, Psychologist
Francisco Ottone Vigorena
Sergio Pinto Fernández
Domingo Tapia Navarro
George Seal Comte
Agustín Benavente Font de la Vall
Mauricio Coll Olivares
Esval S.A.
ANNUAL REPORT
29
Organizational Chart
Board of Directors
General Management
Public
Relations
Corporate
Management
Commercial
Management
and Development
Engineering
Management
Planning
and Studies
Management
Operations
Management
Human
Resources
Management
Internal
Audit
Administration
and Finance
Management
Legal
Advisor
ANNUAL REPORT
30
ANNUAL REPORT
31
Management
Report
ANNUAL REPORT
32
Investment
2011
During this financial year, the Company continued to expand the
services of production and distribution of drinking water, collection and
decontamination of waste waters and maintenance of assets. For this,
investments for TH$ 18,640,370.- were made in the Region of Valparaíso.
Replacement of Avenida Alemania’s water main between Cerro Las
Cañas and Cerro Mariposas. This iron main with polyethylene inner and
outer coating, with a diameter of 700 millimeters, stretches for 2,678
meters. The works required an investment of $1,741 million, including
the installation of fire faucets, valves, air relief valves and drains in its
respective chambers.
Additionally, with an investment higher than 754 million Chilean pesos,
the reinforcement of San Antonio-Algarrobo’s drinking water piping
system was carried out. The work consisted in replacing and expanding
the 700 millimeter spun concrete water main stretch for a 900 and 800
mm iron pipe with a total length of 1,247 lineal meters. These works
were needed to increase the drinking water conduction capacity from
San Antonio to Algarrobo in order to back up the urban growth due to
the population increase and to face the increasingly growing demand
of drinking water in summer time. With this work, the availability of
drinking water increased in 15% for the South Coast area.
We must highlight the agreement signed by the Programa de
Recuperación y Desarrollo Urbano de Valparaíso (PRDUV) [Urban
Recuperation and Development Program for Valparaíso], the Illustrious
Municipality of Valparaíso, Serviu and Esval, to carry out the Public Spaces
Improvement Project in Cerro Alegre and Concepción. Upon request by
the authorities, Esval invested in six years over $500 million to change the
drinking water mains and the sewage water collector of these two world
heritage hills. During this financial year, several road paving, rainwater
collector improvement, lighting and landscaping works were financed
with contributions from Banco Interamericano de Desarrollo (BID). It
was very wise to join urban redevelopment and sanitary infrastructure
modernization, because this will encourage tourism and the services
area in these historical neighborhoods of our city.
for the production of drinking water, increase of the pre and post
chlorination of the interconnection with the existing filters and related
electric works.
This work was carried out in a period of 150 days and its investment
amounted to $674,754,210.
ESVAL’s Investment as
per Stage-Gate Process
La Viuda-Villa Italia Drinking Water
Construction/Conduction
Equipment,
Technology, Others
8,0%
This work is the constructive stage of the project “San Juan-Villa
Italia Drinking Water Conduction Reinforcement” and entails the
reinforcement of the construction of a stretch between pool La Viuda
Bajo and ring road Los Romos in the Llo-Leo area. The length of the
Reinforcement is 1,247 meters. This work was carried out in a period of
180 days and its investment amounted to $665,925,176.
Production Capacity Increase Distribution
and Construction South Coast Drinking
Water
The drinking water production plant of San Juan Llo-Lleo stretches
along the northern bank of river Maipú, approximately 6 km away from
the river mouth.
The works included the increase of drinking water treatment from the
current design capacity of 750 liters per second. This ambitious project
entailed the construction of three new filtering units, the improvement
of the 11 existing filtering units and the expansion of the dosing systems
22,1%
Sewage Water
Treatment
and collection
Drinking Water
Production
and Distribution
69,9%
ANNUAL REPORT
33
ANNUAL REPORT
34
Esval and its Clients
Esval’s main management aim is satisfying its clients. For this reason,
its actions are focused on continuously improving its services, keeping
permanent communication with the Valparaíso Region and maintaining
constant participation of the company in the different activities of the
region to strengthen the links and communication channels between
Esval and its clients.
Meetings with the Community
During 2011, 159 meetings and activities were held in relation to the
delivery of information and contact with the community. In general,
this process is carried out with the participation of social organizations,
clients, neighborhood organization leaders and local authorities.
The topics addressed in these meetings are related to the needs and
concerns stated by neighbors, clients and neighborhood leaders
through service fairs and other on-site activities. The most discussed
matters were: Care of sewage and fire faucets, works to be carried out,
drinking water subsidy and commercial information.
San
Antonio
Quillota
San
Felipe
Valparaíso
Total
Meeting with the
authorities
6
2
17
4
29
Meeting with UNCOS and
Neighborhood Committees
10
6
15
48
79
Workshop with
organizations
9
18
2
18
47
No. of Meetings
Meetings for works
3
4
3
3
13
28
30
37
73
168
Esval’s Seminaries with the Community
During 2011, 4 Seminaries called “Esval together with the Community”
with the participation of 415 community leaders were carried out. The
objective of this activity was to train and prepare them to strengthen the
strategic alliance created throughout the past recent years between the
company and the community.
“Al Día con Esval” Recognition Ceremony
In order to recognize the effort of those families that regularized their
debt situation with the company, a ceremony with more than 150
invitees was carried out in December.
ANNUAL REPORT
35
ANNUAL REPORT
36
Workshops
45 workshops with neighborhood committees, communal councils and
local Health councils were formed. The topics addressed water supply
pressure and quality, drought and subsidies, among others. In addition,
27 workshops with municipal and regional authorities of Valparaíso,
Quilpué, Villa Alemana and Quintero were conducted.
Guided Tours
Coordination and Support
During 2011, educative and guided tours to different drinking water
treatment and production plants of the company were carried out. For
this, specialized signs to help the visitors follow the route and understand
in a more didactic way the process and the importance of the works
carried out by Esval were installed in Concón’s drinking water plant.
To strengthen the relationship and contact with the community, Esval
participated together with other public services in several Service Fairs
in the region.
Al Día con ESVAL
No. of Education
for Consumption
Workshops
No. of Participants
Agreements signed in 2011
No. of Plumbing
Workshops
Areas
Gran Valparaíso
237
1.425
45
Litoral Sur
77
523
23
Gran Valparaíso
Quillota
77
309
22
Litoral Sur
Quillota
San Felipe - Los Andes
San Felipe - Los Andes
General Total
52
317
19
443
2,574
109
General Total
No. of Agreements
2,061
No. of Currently
Valid Agreements
No. of Terminated
Agreements
3,105
343
580
583
105
332
358
90
713
763
153
3,686
4,809
691
ANNUAL REPORT
Areas
37
38
ANNUAL REPORT
Rural Drinking Water Service
During 2011, the Directorate of Hydraulic Works extended in twelve
more months the agreement with ESVAL for technical assistance
and project management of rural drinking water systems projects.
Thus, the technical assistance has allowed assisting 150 rural drinking
water systems in 2011, benefiting an estimated population of
200,000 inhabitants. In 2011, 237 scheduled visits to the services were
performed. The purpose of this was to improve and consolidate their
management as well as to provide technical, administrative and financial
sustainability to the people in charge of management. Within the frame
of the technical assistance, it is worth mentioning the legal assistance
provided to the rural drinking water services, aimed at supporting the
users in regularizing their water rights, land titles and water concessions.
Thus, in 2011, 227 interviews with the technical assistance lawyer were
carried out, regularizing 8 water right issues, 5 properties and 6 water
concessions.
Additionally, seven unscheduled interventions to the services
were carried out in order to solve operational emergencies. These
interventions benefitted 8,000 people approximately.
We must also mention the training conferences provided to all the
services. In 2011, three training workshops were carried out – one in
each province of the 5th Region – with an attendance of 450 people
approximately. The core topic in the workshops was Economy in the
Management of the Drinking Water Resource.
Regarding the project management, new works and designs for an
investment amount of 860 million pesos financed by the Chilean State
were conducted. Among the works carried out are the construction of
two semi-buried pools and the installation of 8,100 meters of network,
with 170 new home drinking water connections.
ANNUAL REPORT
39
ANNUAL REPORT
40
Image and
Communication
Esval is a regional company committed to providing a service of
excellence to its clients and with this, contributing to the standard of
living of the inhabitant’s of the Valparaíso Region.
Over the years, the company as worked closely with the regional,
provincial and communal authorities as well as social organizations and
the organized community in order to know their needs, problems and
possible solutions regarding issues related to the service rendered by
Esval.
ANNUAL REPORT
41
Over time, this link has strengthened and today we can say that we are
working together, taking into account the needs of our clients and the
region, framed in a process of continuous improvement that we have
adopted as a cornerstone in the development of our business.
The campaign “Agua Sana, Vida Sana” is one of our on-site strongholds.
With 9 years of work experience, we have visited housewives, providing
information on the campaign, our activities and willingness to listen and
work together; to children in their school – thinking in them as future
generations – we have taught about the water resource and its different
and complex purification processes as well as about environmental care
and our key role as humans regarding this duty.
Only in 2011, the campaign “Agua Sana, Vida Sana” contacted 237,163
people and participated in 1,264 activities. They include massive activities
like: Family running and cycling events, communal fairs, street activities
for children, carnivals and artistic-cultural events, among others.
Among the sport activities carried out is the cycling event organized by
Esval “A Pedalear por San Felipe” [Pedal for San Felipe], which gathered
more than 600 people from San Felipe. In it, bikers of all ages gathered
in the Main Square of said city and enjoyed cycling along a stretch of
7.2 kilometers that included the city’s main avenues and streets with
hydration stations and refreshing points.
Another important event was Esval’s participation in the event Full
Maratón de Viña del Mar, a 5 and 10 K running event that gathered
thousands of runners along Viña del Mar’s coastline. Esval participated
as one of the main sponsors and with providing hydration points for
the runners.
During 2011, our campaign’ motto was “Contigo en Cada Gota”, an
expression that reflects the how important is water in our daily life and
the appreciation of this vital resource.
As a way of getting closer to the little ones, the visits of Las Gotitas to
schools this year brought an innovative element. This year they came
with games and a coloring book full of magic, which were well received
by the children, who learnt in a didactic and fun way how to take care of
the water, fire faucets and sanitary installations as well as how to recycle,
among other things.
The launching of this campaign was carried out in two important events
in 2011. The first one took place in school Juana Ross de Edwards in
Valparaíso, with the participation of Regional Secretariat of Education
Patricia Colarte and several other regional authorities. Same event was
also carried out in Las Cruces, San Antonio, with the participation of the
Mayor and many children of the area, who actively participated in the
event.
ANNUAL REPORT
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As customary, we supported the Regional Congress of Science and
Technology, organized by the Program Explora CONICYT, objective of
which is to encourage the scientific research, promote learning and
the use of the scientific method among primary and secondary school
students.
This year, in December, the company organized the Contest “Paint
and Recycle this Christmas Together with Las Gotitas de Esval”, which
invited the children to soak up the Christmas spirit and capture in their
drawings their artistic creations and send them to Las Gotitas. More than
3,400 drawings were received. The first 6 places were awarded and 30
prizes to the effort and beauty of the works made were recognized.
Number of Contacts in Campaign
“Agua Sana, Vida Sana”
Area
Community
Area
Education
Area
Office
Number of Activities in Campaign
“Agua Sana, Vida Sana”
Door to
Door
Total of
Contacts
Gran
Valparaíso
85,101
37,337
7,645
1,150
131,233
Quillota
21,303
7,860
4,615
818
Area
Community
Area
Education
Area
Door to
Door
Office
Total of
Contacts
Gran
Valparaíso
256
256
77
15
604
34,596
Quillota
135
83
49
29
296
26
53
19
9
107
San Felipe Los Andes
7,150
6,256
1,325
305
15,036
San Felipe Los Andes
South Coast
41,412
12,220
2,420
246
56,298
Litoral Sur
115
109
25
8
257
154,966
63,673
16,005
2,519
237,163
Total
532
501
170
61
1,264
Total
Human Resources
71%
Staff
As at 31 December 2011, Esval staff was made up by 372 employees.
According to its distribution in levels, it was made up as follows:
27%
Administrators and operators
2%
Executives
Prevention
In 2011, Risk Prevention has continued its work to prevent accidents and
occupational diseases among our employees and continuously given
support to the most risky works.
In March of this year the company re-certified its occupational Health
and Safety management system in OHSAS 18001:2007, together
with ISO 901 and ISO 14001, Quality and Environment Management,
respectively, which together comprise the Company’s Integrated
Management System (SIG in Spanish).
ANNUAL REPORT
Professionals
and Technicians
43
ANNUAL REPORT
44
Risk Prevention, like in previous years, continues to perform a solidarity
surveillance job with the companies that render services by supporting
more risky works such as the entrance to confined spaces, mainly waste
water chambers. These support operations are carried out with special
equipments and staff trained to perform these works.
Continuous on-site inspections and check-ups to several works were
carried out in order to: 1.- Verify compliance with the safety standards,
2.- Notify the remarks to the company and 3.- Follow up the remarks
in order to check the solutions implemented. All of this was carried out
to have the works comply with Esval’s requirements in the contractual
basis regarding risk prevention.
In 2011, 9 employees had accidents, resulting in 183 days lost because
of accidents at work. In all the cases, the employees received timely and
due medical attention, had a satisfactory recuperation and returned to
their usual activities.
The accidents that caused more days lost were: A left leg exposed
fibula fracture occurred while trying to open a stuck manhole cover
hammering with chisel and sledgehammer. This caused the chisel to jet
off towards the worker’s leg, causing the injury. This accident resulted in
136 days of medical leave (74.3% out of the total); a worker had his left
hand trapped while replacing the retention valve of a pumping station.
The trapping occurred while disassembling the tripod used to move the
valve. The worker spent 17 days with medical leave (9.3%), and a worker
twisted her foot while approaching her workplace and stumbling with
a slot on the floor, twisting her ankle. This required 15 days of rest (8.2%).
The remaining accidents did not involve more than 6 days of lost days
and were mostly caused by falls or blows without serious consequences.
During the year, 1,846 man hours of training in Occupational Health and
Safety were carried out. This year, the chlorine gas safe handling course
was conducted in several sub-manager offices in the area for workers
and contractor staff.
During the year, the “Headquarters, Bustamante and San Ignacio offices
Health and Safety at work Joint Committee” was renewed and the
“South Coast Health and Safety at work Joint Committee” was formed.
This year, the amount of occupational accidents increased, with lost time
for the contractor companies, totalizing 75 accidents and 667 lost days.
Training
During 2011, 156 courses, seminars and workshops were given,
amounting to 17,363 man hours of training, corresponding to 2.25% of
the hours available in the year. This means that each employee of Esval
received, as an average, 48.45 hours of training along the year.
Out of the total training hours, 38.44% hours were conducted in the
Update Department. In this group, training courses such as Strategic
Planning, SAP Finance Module, Estimation of Remunerations, Drinking
Water Network Conduction, New Assistance System, Configuration of
the Material Management Module in SAP, English, Instruction Manual
on the Chilean Standard 409, Liquid Industrial Waste (RILES in Spanish),
Compliance and Control system were performed.
Secondly, 28.23% was spent in Professional Development. Within
this area, we must highlight the diploma-level Training Course in
Rough Building Works and Sanitary Facilities aimed at improving the
competence of Operations Management Supervisors, the diplomalevel Training Course in Logistics Management for professionals of
the Supply Department and the Professional Internship Program with
shared funding, allowing our professionals to specialize themselves in
postgraduate programs as Master’s Degree in Management, Master’s
Degree in Business Administration, Post-graduate Course in Knowledge
Management and Organizational Processes and Diploma-level Course
in Marketing Management.
Thirdly, 11.87% were channeled to Personal Development issues, mainly
aimed at strengthening the work teams through Communications
and Focusing workshops. In a more comprehensive ground, some
Conferences and Workshops on Welfare and Health Insurance
were carried out together with Management Planning and Savings
Encouragement workshops.
The training courses focused on the Quality and Environment
Management Integrated System are in fourth place with 10.83%. We
must highlight the training courses in IsoEasy Improvement AwarenessRaising, IsoEasy Action and Audit Module, Integrated System Awareness
Raising (SIG in Spanish) ISO 14.001, 9.001 and OHSAS 18.001, Continuous
Improvement Supporting Management, Costs of Quality and NonQuality and Continuous Improvement Applied to Internal Auditors. The
SIG is in the Process Maintenance stage, incorporating as from 2011 the
Operational Risks issues in their Identification and Assessment Stages.
ANNUAL REPORT
45
ANNUAL REPORT
46
The group of training courses in Occupational Health and Safety
Integrated System, with a 10.63%, was trained in strengthening
Responsible Handling of Chlorine Gas (focused on the reinforcement
of preventive knowledge), carried out in all the provinces, courses
in Hazardous Substances Storage and reinforcement of Hazard
Identification Methods and Risk Assessment.
Law 20.454 of Pre-Contract Encouragement
In 2011, after the approval of Law 20.454, which allowed the use of
an additional 0.25% of the Monthly Taxable Income for Training, Esval
allocated resources for 9 training events, broken down in 4 courses with
the participation of 40 people and 5 courses in Works in Public Spaces.
This allowed training 109 people. In total, 1,352 hours of training were
conducted.
In addition, in relation to the Pre-contract with allocation of franchisable
resources in the Normal Account of the year, a course of Water Meter
Reading was conducted to train 18 people for 360 hours in total.
Social Scholarships 2011
In the scope of social responsibility - and in consistency with the
company’s vision, which is to contribute to the development of the
community surrounding it – like in recent years, resources from the
remnants of the Sence [National Service of Employment and Training]
tax exemption were allocated to Social Scholarships, benefitting socially
vulnerable sectors with Water Meter Reading and Pastry Making
courses, with the participation of 27 people and a total of 1080 manhour of training.
Welfare
Regarding Welfare, in 2011 School Assistance benefits for students
(dependant sons and daughters of the employees) in Kindergarten,
Primary, Secondary and Special School, University and Technical Studies.
Likewise, the employees and their children who studied at the University
or Professional Technician Education could apply to social welfarerelated Study Scholarships for Academic Excellence.
Regarding the administration of benefits, the company has arranged
dental and optical care allowances for its workers and their families as
well as allowances for marriage, birth and death in coordination with the
services rendered by Caja de Compensación 18 de Septiembre.
In 2011, the Agreement with Clínica Reñaca was renewed. This alliance
allows offering a wide variety of benefits for medical care and cover for
the employees and their families, such as the preventive Health program.
We must also mention the Vaccination campaigns for the company’s
personnel against seasonal influenza and H1N1 in coordination with the
Medical Center of Caja 18 de Septiembre.
Outsourcing
Esval widened its commitment with the Quality, Environment and
Occupational Health and Safety Policy, establishing the need for:
“Gradually committing its contractors and suppliers so that their
performance regarding quality, environment, occupational health and
safety are consistent with the provisions of this policy in the activities
and services they render to the organization”.
Considering the importance of the relationship with contractors, the
Company gives clear and timely information regarding matters like
bidding processes, requirements and compliance as well as performance
assessments and requires from all the companies rendering services that
their processes be measured according to quality standards, stipulating
the termination of services and the requirements by the parties in a civil
contract.
To guarantee proper performance of the work plan with contractors,
Esval has a Contract Management System that centralizes the
administration of contracts and demands from them special compliance
with Esval’s Occupational Health and Safety Standards provided in the
Special Regulation for Contractors and Subcontractors; in addition, the
Company supports different training and updating programs.
In 2011, Esval started relationships with 52 contractors, thus generating
1,307 indirect full-time jobs.
Collective Bargaining
In August and September, the collective bargaining process with the three
unions of the company was conducted, reaching two collective agreements,
before the legal negotiation deadline expired, which will be in effect until 31
August 2013.
International Standards ISO 9.001,
ISO 14001 and OHSAS 18001
The maintenance of managing systems certified under Quality standard
ISO 9.001, Environmental standard 14.001 and Occupational Health
and Safety standard OHSAS 18.001, which make up our Integrated
Management System, comprising all the activities of the Organization, is
one of the corner stones of our strategy.
In 2011, the commitment with the audit by an external institution,
Bureau Veritas, was renewed for a period of 3 years together with the
international certification of the 3 standards. This allow us to witness the
commitment signed by the executives and employees of submitting
our daily work to an external audit, six years ago, in the case of the
environment preservation activities, and three years ago, in the case of
the continuous effort focused on the client and safe work management
for our workers.
47
ANNUAL REPORT
By means of on-site audits on compliance with the labor and safety
legislation, the contractors have greatly improved their administrative
and risk prevention responsibility.
ANNUAL REPORT
48
Aguas del Valle
49
Investments
ANNUAL REPORT
Subsidiary
Process-Stage Investment
of Aguas del Valle
In 2011, Aguas del Valle invested a total of TH$8.256.832 in infrastructure
and operational improvement.
At an urban level, 72 works were carried out, intervening 15 meters of
piping in the region to replace drinking water and sewage networks.
These works, essential to improve the service and increase the coverage,
also generated other benefits such as the renovation of pavement in
streets and sidewalks, thus contributing to the growth of cities and
locations of the region. In the province of Elqui, the Works benefitted La
Serena, Coquimbo, Vicuña and Paihuano; in Limarí: Ovalle, Huamalata,
Monte Patria, El Palqui and Combarbalá and in the province of Choapa:
Illapel, Salamanca, Los Vilos, Canela Alta and Canela Baja.
Another challenge in 2011 for Aguas del Valle was to face the water
scarcity problem that affected some areas of the region. For this,
important investments were made in order to secure the supply to
all the locations. For this, the company allocated 1,203 million pesos
in works intended to mitigate the impact of the draught and face the
growth of population that arrive in the region for the summer season.
37,3%
14,4%
Equipment,
Technology,
Others
Waste Water
Treatment
and Collection
48,4%
Drinking Water
Production
and Distribution
Infrastructure
Communications
3,468 Km of Drinking Water and Sewage Networks
25 Drinking Water Production Systems
22 Decontamination Plants
449 Motor Pumps
80 Drinking Water Pools
173 Drinking Water (121) and Waste Water (52) Pumping Stations
Aguas del Valle has a close relationship with different kinds of publics
of the region, joining and participating in several activities with the
community. Among them, we can highlight the visits made during
the campaign “Agua Sana – Vida Sana” to schools, kindergartens and
universities and colleges with presentations in which “Las Gotitas” of
Aguas del Valle handed down didactic material encouraging the care
of water, environment and healthy life. The company also participates
ANNUAL REPORT
50
in events organized by the neighborhood committees, sports
clubs and social organizations, and receives permanent visits from
students and neighbors interested in knowing the processes that the
Company develops in drinking water production and waste water
decontamination plants. In 2011, campaign Agua Sana of Aguas
del Valle took part in 2,317 activities, contacting more than
205,000 people around the entire region.
Drinking Water for Rural Areas
In 2011, through the Agreement with the Directorate of
Hydraulic Works of the Coquimbo Region, Aguas del Valle
provided technical assistance for the project management
of rural drinking water systems in the three provinces of the
region. Thus, the technical assistance has allowed assisting 179
rural drinking water systems in 2011, benefiting an estimated
population of 186,335 inhabitants.
Customers
Aguas del Valle’s users increased in 25 thousand clients between 2004
and 2011. This – for a proportion per house – represents around 100
thousand people.
These new clients have joined in due to the management and
construction of 104 real state projects. With this, now there are more
than 193,722 clients that the Company currently assists in the provinces
of Elqui, Limarí and Choapa.
Al Día con Aguas del Valle Program
Subsidy
Dec.
2004
Dec.
2005
Dec.
2006
Dec.
2007
Dec.
2008
Dec.
2009
Dec.
2010
Dec.
2011
ALLOCATED
SUBSIDIES
35,646
35,132
35,972
36,380
37,321
37,791
39,184
39,101
% OF
ALLOCATED
SUBSIDIES
99.71
96.86
97.70
96.08
97.87
98.95
98.95
98.25
% OF
SUBSIDIZED
CLIENTS
25.50
21.55
21.42
21.15
20.98
20.65
20.74
20.19
Provinces
No. of Workshops
Agreements Signed
ELQUI
22
115
LIMARÍ
11
50
CHOAPA
11
29
Total YEAR 2010
44
194
Human Resources
51
Administrative
Staff and Operators
1%
66%
Executives
ANNUAL REPORT
33%
Staff
As at 31 December 2011, the staff reached 155
employees, distributed as follows:
Professionals
and Technicians
Prevention
This year, several topic-specific training courses regarding Occupational
Health and Safety issues – in terms of gaps – such as Electric Risks or
Responsibility for serious or fatal accidents were conducted by specialists
in order to improve the safety at work for in-house and contractor staff.
We carried out the important work of making the Managers and
Supervisors aware of their responsibilities in safekeeping the safety of
their workers they are in charge of and the consequences of serious of
fatal accidents.
In 2011, 6 employees had accidents with minor injuries resulting in
111 days lost in the year. In all the cases, the employees received due
medical attention, recovered satisfactorily and their cases generated
preventive actions.
Meetings with the Health and Safety specialists of the contractors were
coordinated in order to standardize work criteria and methods regarding
Occupational Health and Safety.
The accidents that caused more days lost were: A car crash causing a
wrist injury to a worker, leading to 65 days of medical leave (58.56%) and
a fall while the worker was descending from the rear of a truck, in which
the worker twisted his right foot, causing muscular tear that required 30
days of medical leave (27.03%). The rest of the accidents are mainly falls
and twisting incidents that do not exceed 5 lost days and had no serious
consequences.
In May, for the third consecutive year, Aguas del Valle together with the
Joint Committees, participated in the “Month of Occupational Health
and Safety”, awarding three people from different departments for
being “the worker with the safest job performance and care of others”.
Along the year, the Matrix for Hazard Identification, Risk Assessment and
Control Determination was completely updated.
52
Training
ANNUAL REPORT
In 2011, 127 courses, seminars and workshops were conducted, totaling
9,909 man hours of training, corresponding to 2.98% of the hours
available that year. This means that every employee of Aguas del Valle
was trained, as an average, 64.66 hours during the year.
From the total of training courses, the higher concentration of hours of
training, with 36.52%, was conducted in the Occupational Health and
Safety Integrated System formational area. In this area, we can highlight
the training courses such as the Stress Handling Workshop, Gymnastics
during Work Breaks, Seminar on Labor, Civil and Criminal Liability for
Occupational Accidents and the Integrated Management System
Course for Internal Auditors ISO 9.001, 14.001 and OHSAS 18.001.
In second place, with 35.38%, were the topics related to Personal
Development. In this area, it is worth mentioning the training courses
in Technical Report Draft and Effective Negotiation Techniques. Here
we must also highlight the company’s Scholarship plan, which has
allowed some workers to attend their studies as Constructor Technician,
Industrial Electrician and Diploma-course in Business Administration,
among others.
In third place, amounting to 20.29%, are the Update-related training
courses such as Excel Intermediate level course, Water Fluoridation,
Water Control Standardization and Operational Aspects and Efficacy of
Water Control Systems.
In fourth place, with 6.01%, is the Personal Development area, with the
courses Knowledge of the Welfare and Financial System for a Better
Future, Team Work and Strategic Planning.
In addition, we can also highlight the training courses focused on
the Quality and Environment Management Integrated System and
the participation in the AIDIS 19th Chilean Congress of Sanitary and
Environmental Engineering.
International Standards ISO 9.001,
ISO14.001 and OHSAS 18.001
In November 2011, Aguas del Valle S.A. underwent for the first time a
simultaneous re-certification of its integrated management system in
the three standards, obtaining the recommendation by the certifying
company to maintain the certification of the three standards.
This certifies the company’s dedication for the quality of the service, the
respect for the environment and the health and safety of its employees,
clients and the community.
Outsourcing
Aguas del Valle linked with 43 contractors, generating 441 full-time
indirect jobs.
Drinking Water for Rural Areas
In 2011, the Directorate of Hydraulic Works extended in ten months
the agreement with Aguas del Valle for technical assistance and project
management of rural drinking water systems projects. Thus, the technical
assistance has allowed assisting 179 rural drinking water systems in 2011,
benefiting an estimated population of 186,335 inhabitants. In 2011, 279
scheduled visits to the services were performed. The purpose of this
was to improve and consolidate their management as well as to provide
technical, administrative and financial sustainability to the people in
charge of management. Framed under the technical assistance, it is
worth mentioning that the legal assistance provided to the rural drinking
water services, aimed at supporting the users in regularizing their water
rights, land titles and water concessions. Thus, in 2011, 43 interviews
with the technical assistance lawyer were carried out, regularizing 16
water right issues, 18 properties and 5 water concessions.
In addition, 141 emergency technical/operational assistance visits to the
Rural Drinking Water services were made together with 18 unscheduled
visits in order to find a solution for serious community issues, election
of community leaders, neighborhood committees and/or accounting
revisions due to ill management by the administration.
These interventions benefitted 52,099 people approximately.
We must also mention the training conferences provided to all the
services. In 2011, three training workshops were carried out – one in
each province of the 4th Region – with an attendance of 369 people
approximately. The main topics addressed in the workshop were:
Gender-related Issues, Labor Law and 2012 Project Portfolio.
Regarding the project management, new works and designs were
implemented for an investment amount of $2,292,193,000, financed
by the State. Among the works conducted we can highlight the
construction of 5 new systems, Emergency Works, Restoration Works
and Prefeasibility Works.
ANNUAL REPORT
53
ANNUAL REPORT
54
ANNUAL REPORT
55
Administration
Report
ANNUAL REPORT
56
ANNUAL REPORT
57
Consolidated Annual Report
Consolidated Annual Report 1
In 2011, the ordinary income increased in 8.2%, from M$ 109.552 in 2010
to M$ 118.565 in 2011. This can be explained by an increase of the mean
rate and a greater consumption of drinking water and sewage services
compared to the former year.
The EBITDA (calculated as the incomes of the ordinary activities less
the costs for raw materials and consumables used, for benefits for the
employees and other expenses, per nature) increased 3.1%, reaching
M$61,078. These EBITDA costs increased 14.2%, with greater expenses
in Services for $4,627 million (21.9%) and Energy and Fuels for $1,196
million (17.2%) mainly due to the effects of the draught.
The Non-Operational component of the Income Statement decreased
21.3%, from M$18,684 recorded in 2010 to M$22,660 in 2011, mainly
because of a greater re-evaluation of the financial debt than the
previous year. As at December 2011, the UF increased 3.9% versus 2010,
when it value decreased 2.4%.
The Net Result of 2011 was M$15,354, 11.2% less than that recorded in
2010.
Financial Year
Operational Result
2
Result of the Financial Year
2001
28,389
15,481
2002
28,117
15,614
2003
30,302
15,867
2004
39,804
21,434
2005
41,241
22,823
2006
42,755
24,904
2007
41,205
23,893
2008
38,325
19,819
2009
39,977
26,333
2010
39,852
17,293
2011
41,625
15,354
Figures of periods 2001 to 2008 under Accounting Principles Generally
Accepted in Chile, in millions of Chilean pesos of December 2009.
Figures of 2009 and 2011 under IFRS Norm, in millions of Chilean pesos
of each year.
1 Esval prepares Consolidated Financial Statements since December 2003.
2. In 2009, 2010 and 2011, the Operational Result is calculated as Ordinary Income
minus raw materials and consumables used, minus benefits for the employees, minus
depreciation and amortization minus other inherent expenses.
Annual Report
58
ANNUAL REPORT
Financial Year
Aguas del Valle
In 2011, the operational income reached M$29,087 (11.2% more than
in 2010); the EBITDA was M$13,214 (7.1% more than in 2010) and the
Net Result obtained profits for M$7,311 (17.4% more compared to 2010).
Operational Result 3
Result of the Financial Year
2004
8,139
4,841
2005
8,570
5,301
2006
9,159
6,181
2007
8,958
6,346
2008
8,614
5,822
2009
9,058
7,691
2010
8,667
6,230
2011
9,448
7,311
of each year.
3. From 2009 to 2011, the Operational Result was calculated as Ordinary Income minus raw
materials and consumables used, minus benefits for the employees, minus depreciation
and amortization minus other inherent expenses.
EBITDA
25.000
20.000
15.000
10.000
5.000
0
53.636
2010
2011
59.232
61.078
2009
58.916
2008
55.309
58.222
56.010
2003
41.037
30.000
2002
35.000
37.765
40.000
37.637
45.000
2001
50.000
2004
55.000
2007
60.000
57.891
2005
65.000
2006
of each year.
ANNUAL REPORT
59
EBITDA is calculated as the income from the ordinary activities, minus
the costs for raw materials and consumables used, by the benefits to the
employees and other inherent expenses.
60
Financing Structure
Negotiable Instruments
ANNUAL REPORT
On 25 February 2009, the company recorded in the Registry of Securities
of the S.V.S., two lines of negotiable instruments, under Nos. 43 and 44.
On 1 June 2011, the placing of Series 9A was carried out, charged to line
No. 44 for an amount of $12,850 million, obtaining $12,432 million as a
result of said operation. This way, an average interest of 0.54% per month
is obtained. These documents expired on 5 December 2011.
On 7 June 2011, a new line under No. 87 was registered with a maximum
issuance amount of $14,900 million.
On 2 August 2011, the placing of Series 13A was carried out, charged to
line No. 87 for an amount of $7,450 million, obtaining $7,002 million as a
result of said operation. This way, an average interest of 0.55% per month
is obtained. These documents expire on 13 July 2012.
Bank Credit
On 21 October 2011, a bank credit was signed with Banco BBVA for UF
1,500,000.- This credit shall be entirely paid in a period of 5 years (bullet)
in half-yearly payments with an annual interest rate of 3.85%.
Remunerations of Managers
and Main Executives
The remunerations and benefits obtained in 2011 by the company’s
managers and main executives amount to $ 918,141,477.
Incentive Plans
Esval has, for its executives, a plan of annual bonuses for the fulfillment
of objectives and individual contribution to the company’s profits. This
plan includes a definition of bonuses rank, according to the executives’
hierarchy level. The bonuses that are eventually given consist of a certain
number of monthly gross remunerations.
Subsidiaries and Affiliates
61
ANNUAL REPORT
According to the concepts stipulated in articles 86 and 87 of Law No.
18.046, investments in other companies; for the effects of operating
the franchises in the Region of Coquimbo, of which ESSCO S.A., today
ECONSSA CHILE S.A., was titular, on 4 December 2003, Esval incorporated
closed limited company Aguas del Valle S.A., subsidiary that abides by
the norms applied to open held corporations, with the only purpose
of producing and distributing drinking water; collecting, treating and
disposing waste waters; and providing the other services established in
the current sanitary legislation.
Esval S.A. participated in the formation of this company, with 99%, and
Sociedad de Servicios Sanitarios Las Vegas Limitada, with 1%. The latter
is also subsidiary of Esval S.A., and was incorporated on 1 December
2003 for said purpose. In this case, Esval S.A. participated with 99.99%.
99,00%
99,99%
Sanitary Services
Las Vegas Ltda.
1,00%
62
ANNUAL REPORT
Type of Company: Tax Card No.:
Equity: Subscribed and paid up Capital:
Closed Limited Company
99.541.380-9
TH$71,263,023
TH$20,441,842
Purpose
Aguas del Valle
Produce and distribute drinking water; collect, treat and dispose waste
waters, and provide the other services established in the current sanitary
legislation.
Board of Directors(1)
President: Vice-President: Director: Director: Director: Director: Director: Jorge Lesser García Huidobro
Stacey Purcell
Olivia Steedman
(1) All the Directors hold the same position in the Parent Company.
Executives
CEO: 4th Region Manager: (2) CEO of the Parent Company.
Rodrigo Azócar Hidalgo (2)
Ricardo Lalanne Sáez
ANNUAL REPORT
63
Participation of Esval S.A.:
99,00%
Investment proportion
on Esval S.A.’s assets:
11,1%
In 2011, 193,657 drinking water customers were served, with a sales
volume of 35,281 million of cubic meters. Regarding waste waters, the
figures reached 185,005 customers, with sales for 31,955 million of cubic
meters.
Commercial relations with Esval S.A.
Investments
The accounts payable to Esval S.A. correspond to money the Company
has received from the Parent Company in order to cover its initial operational and investment costs.
As at 31 December 2011, Aguas del Valle made annual investments for
an amount of TH$8,256,832.
Deeds and contracts with Esval S.A.
As from the taking over of the concession, Esval S.A. provides
administrative, commercial and managerial services to Aguas del Valle
S.A. This contract has an indefinite validity.
Market
Aguas del Valle S.A. is engaged in water purification, comprising the
processes of collection, treatment and distribution of the product; as well
as the purification of waste waters, including collection, treatment and
final disposal of said waters. Its coverage area comprises the urban areas of
thirteen of the fifteen communes of the Region of Coquimbo.
In order to comply with their functions, they operate eighteen productive
systems that serve the same quantity of drinking water distribution
systems and have twenty two systems of treatment and disposal of waste
waters that clean the residual waters collected from twenty two collection
systems.
Related Companies
Aguas del Valle S.A. does not have any investments in related companies.
Results
The net result of Aguas del Valle S.A. reached profits for $7,311 million for
financial year 2011.
64
ANNUAL REPORT
Type of Company: Limited Partnership
Equity: TH$712,570
Subscribed and paid up Capital: TH$165,000
Purpose
Sanitary Services
Las Vegas Ltda.
Produce and distribute drinking water, collect, treat and dispose waste
waters and carry out any other related activity, directly or indirectly,
operating or rendering said services.
Administration
Rodrigo Azócar Hidalgo (1)
Legal Representative of Las Vegas Ltda.
(1) CEO of the Parent Company.
ANNUAL REPORT
65
Participation of Esval S.A.:
99,99%
Investment proportion
on Esval S.A.’s assets:
0,1%
Investments
As at 31 December 2011 no investments are recorded.
Related Companies
Sociedad de Servicios Sanitarios Las Vegas Ltda. has a participation of
1.0% of Aguas del Valle.
Results
TH$73,114
66
Highlights
Esval
ANNUAL REPORT
Date
Document No.:
Subject
17/01/11
CEO Letter No. 20
REPORTING ON CHANGES IN THE MANAGEMENT
25/01/11
CEO LETTER NO. 42
25/01/11
CEO LETTER NO. 43
29/04/11
CEO LETTER NO. 147
REPORTING ON THE PROFIT SHARE (DIVIDEND PAYMENT)
29/04/11
CEO LETTER NO. 148
REPORTING ON ORDINARY SHAREHOLDER’S MEETING, SUMMONS, AGREEMENTS AND PROPOSALS
29/04/11
CEO LETTER NO. 151
01/06/11
CEO LETTER NO. 203
REPORTING ON ALLOCATION OF VALUES IN INTERNATIONAL AND/OR DOMESTIC MARKETS
26/07/11
CEO LETTER NO. 275
02/08/11
CEO LETTER NO. 284
REPORTING ON ALLOCATION OF VALUES IN INTERNATIONAL AND/OR DOMESTIC MARKETS
17/08/11
CEO LETTER NO. 295
REPORTING ON THE PROFIT SHARE (DIVIDEND PAYMENT) POLICY ON DIVIDENDS
26/08/11
CEO LETTER NO. 308
REPORTING ON EXTRAORDINARY SHAREHOLDER’S MEETING, SUMMONS, AGREEMENTS AND PROPOSALS
26/08/11
CEO LETTER NO. 309
29/09/11
CEO LETTER NO. 360
30/09/11
CEO LETTER NO. 367
INFORMING ON THE AMENDMENT AGREEMENT TO THE BONUS ISSUANCE CONTRACT TO COMPLY WITH THE IFRS NORMS
07/10/11
CEO LETTER NO. 374
24/10/11
CEO LETTER NO. 388
REPORTING ON THE SUBSCRIPTION AND RENEGOTIATION OF CREDITS
03/11/11
CEO LETTER NO. 401
INFORMING ON THE AMENDMENT AGREEMENT TO THE BONUS ISSUANCE CONTRACT TO COMPLY WITH THE IFRS NORMS
07/12/11
CEO LETTER NO. 451
REPORTING ON THE PROFIT SHARE (DIVIDEND PAYMENT)
These essential facts have not influenced or affected the operation and results of the Company.
Aguas del Valle
Date
17/01/2011
Document No.:
CEO LETTER No. 09
Subject
25/01/2011
CEO LETTER NO. 12
25/01/2011
CEO LETTER NO. 15
29/04/2011
CEO LETTER NO. 56
REPORTING ON ORDINARY SHAREHOLDER’S MEETING, SUMMONS, AGREEMENTS AND PROPOSALS
29/04/2011
CEO LETTER NO. 57
26/07/2011
CEO LETTER NO. 98
26/08/2011
CEO LETTER NO. 112
29/09/2011
CEO LETTER NO. 125
07/10/2011
CEO LETTER NO. 131
The shareholders representing 10% or more of
the shares issued, with right to vote have not
made any comments or proposals regarding
the progress of the social businesses, so comments and proposals in said respect are not included in this annual report.
The undersigned declare under oath to be responsible for the
truthfulness of the information contained in the Annual Report Esval
corresponding to financial year 2011.
PRESIDENT,
Jorge Lesser García-Huidobro
6.443.633-3
VICE-PRESIDENT,
7.011.905-6
DIRECTOR
Olivia Penelope Steedman
48.120.868-8
DIRECTOR
6.362.223-0
DIRECTOR
6.198.258-2
CEO
6.444.699-1
67
ANNUAL REPORT
Comments and Proposals
of the Shareholders
Statement
of Liability
ANNUAL REPORT
68
estados
financieros
ANNUAL REPORT
69
Esval S.A.
y filiales
States
Financial
ANNUAL REPORT
70
Consolidated
Esval S.A. ans Subsidiaries
ANNUAL REPORT
71
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2011 AND 2010
(In thousands of Chilean pesos - ThCh$)
Assets
Note
31/12/11
31/12/10
N°
ThCh$
ThCh$
CURRENT ASSETS:
Cash and cash equivalents
4
Other current non-financial assets
Trade and other receivables, net
5-6
14,915,169
17,073,589
1,883,809
1,814,016
28,974,896
26,888,436
Inventories
8
473,005
453,903
Current tax assets
21
628,873
1,683,081
46,875,752
47,913,025
5 - 12
4,850,139
3,705,752
Non-current other non-financial assets
13
14,272,158
14,626,951
Non-current receivable
6
26,409
29,514
Intangible assets other than goodwill
9
121,258,374
117,929,042
Property, plant and equipment, net
20
472,562,572
470,849,917
Activos por impuestos diferidos
21
Total current assets
NON-CURRENT ASSETS:
Other non-current financial assets
-
-
Total non-current assets
612,969,652
607,141,176
Total Assets
659,845,404
655,054,201
The accompanying notes are an integral part of these consolidated financial statements. AS OF DECEMBER 31, 2011 AND 2010
72
Equity And Liabilities
Note
31-12-2011
31-12-2010
N°
ThCh$
ThCh$
ANNUAL REPORT
CURRENT LIABILITIES:
Other current financial liabilities
5
34,292,805
47,885,459
Trade and other payable
5
12,450,965
10,957,968
Account payable to related companies
7
-
646
Other current provisions
14
492,748
434,297
Current tax liabilities
21
458,158
788,214
Current provisions for employee benefits
14
2,954,897
3,008,656
Other current non-financial liabilities
15
13,751,221
14,324,587
64,400,794
77,399,827
Total current liabilities
NON-CURRENT LIABILITIES:
Other non-current financial liabilities
5
253,625,087
231,756,666
Deferred tax liabilities
21
48,539,629
46,866,797
Non-current provisions for employee benefits
14
430,498
535,123
302,595,214
279,158,586
Total non-current liabilities
EQUITY:
Issued capital
15
196,176,015
196,207,284
Retained earnings
15
80,746,979
86,323,943
Share premium
15
11,112,721
11,150,887
Other reserves
15
4,813,610
4,813,610
292,849,325
298,495,724
71
64
Total equity
292,849,396
298,495,788
Total Equity And Liabilities
659,845,404
655,054,201
Equity attributable to owners of the Parent Company
Non-controlling interest
16
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements
Of Comprehensive Income
per Nature
ANNUAL REPORT
73
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
Revenues
Note
from 01/01/2011
to 12/31/2011
from 01/01/2010
to 12/31/2010
N°
ThCh$
ThCh$
18
118,565,474
109,552,694
Raw material and consumable used
(15,331,403)
(13,455,298)
Employee benefits expense
(10,429,087)
(10,125,797)
Depreciation and amortization expense
(19,453,517)
(19,379,699)
Other expenses
2.6
(31,726,548)
(26,739,653)
Other gains (losses)
2.6
(754,491)
(476,730)
947,720
401,246
(13,181,096)
(12,301,097)
Results for readjustment units
(9,672,479)
(6,307,116)
Profit before tax
18,964,573
21,168,550
(3,610,240)
(3,875,357)
15,354,333
17,293,193
-
-
15,354,333
17,293,193
Financial income
Financial costs
Tax income (expense)
Profit from continuing operations
Profit from discontinuing operations
Profit
21
(Continued)
74
Note
from 01/01/2011
to 12/31/2011
from 01/01/2010
to 12/31/2010
N°
ThCh$
ThCh$
Profit from:
Profit from owners of the Parent Company
ANNUAL REPORT
Profit from minority interests
15,354,326
16
17,293,187
7
6
15,354,333
17,293,193
0.0010
0.0012
0.0000
0.0000
0.0010
0.0012
Diluted earnings per share from continuinig
operations
0.0010
0.0012
Diluted earnings per share from discontinuinig
operations
0.0000
0.0000
0.0010
0.0012
Profit
Profit per Share:
Basic earnings per share:
Basic earnings per share from continuining
operations
22
Basic earnings per share from discontinuining
operations
Basic earnings per share
Diluted earnings per share
Diluted earnings per share
The accompanying notes are an integral part of these consolidated financial statements. Consolidated Statement Of
Comprehensive Income
Profit
Total comprehensive income
from 01/01/2011
to 12/31/2011
from 01/01/2010
to 12/31/2010
ThCh$
ThCh$
15,354,333
17,293,193
15,354,333
17,293,193
15,354,326
17,293,187
Comprehensive income attributable to
Owners of the Parent Company
Non-controlling interest
Total comprehensive income
7
6
15,354,333
17,293,193
The accompanying notes are an integral part of these consolidated financial statements. Statements Of Changes
In Net Equity
ANNUAL REPORT
75
Equity at beginning of current period
01/01/2011
Issues
Capital
Share
Premiums
Shares In Own
Portfolio
Other
Reserves
Retained
Earnings/(Losses)
Equity
Attributable To
Owners Of The
Parent Company
Non-Controlling
Interests
Total
Equity
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
196,207,284
11,150,887
-
4,813,610
86,323,943
298,495,724
64
298,495,788
Profit
-
-
-
-
15,354,326
15,354,326
7
15,354,333
Dividends
-
-
-
-
(20,931,290)
(20,931,290)
-
(20,931,290)
Increase (decrease) through transfers
and other changes
(31,269)
(38,166)
-
-
-
(69,435)
-
(69,435)
Total increase (decrease) in equity
(31,269)
(38,166)
-
-
(5,576,964)
(5,646,399)
7
(5,646,392)
Equity at end of current period
12/31/2011
196,176,015
11,112,721
-
4,813,610
80,746,979
292,849,325
71
292,849,396
Equity at end of current period
01/01/2010
196,207,284
11,150,887
-
4,813,610
97,882,276
310,054,057
58
310,054,115
Profit
-
-
-
-
17,293,187
17,293,187
6
17,293,193
Dividends
-
-
-
-
(28,851,520)
(28,851,520)
-
(28,851,520)
Increase (decrease) through transfers and
other changes
-
-
-
-
-
-
-
-
Total increase (decrease) in equity
-
-
-
-
(11,558,333)
(11,558,333)
6
(11,558,327)
196,207,284
11,150,887
-
4,813,610
86,323,943
298,495,724
64
298,495,788
Equity at end of prior period 12/31/2010
The accompanying notes are an integral part of these consolidated financial statements. ANNUAL REPORT
76
Consolidated Direct
Statements Of Cash Flows
Net cash flows from (used in) operating activities
Note
from 01/01/2011
to 12/31/2011
from 01/01/2010
to 12/31/2010
N°
ThCh$
ThCh$
Classes of cash receipts from operating activities:
Receipts from sales of goods and rendering of services
138,517,747
130,450,360
4,465,160
2,442,135
Payments to suppliers for good and services
(56,180,461)
(48,067,342)
Payments to and on behalf of a employees
(10,513,584)
(9,578,885)
Other cash payments from operating activities
(14,147,371)
(13,229,660)
Interest paid
(10,322,243)
(10,700,645)
702,376
169,008
52,521,624
51,484,971
13,848
-
(27,647,400)
(28,350,588)
Other cash receipts from operating activities
Classes of payments from operating activities:
Interest received
Net cash flows from operating activities
Net cash flows from (used in) investing activities
Amounts received from sale of property, plant and equipment
Purchase of property, plant and equipment and intangible assets
Other inflows (outflows) of cash
Net cash flow used in investing activities
(315,454)
(259,467)
(27,949,006)
(28,610,055)
ANNUAL REPORT
77
(Continued)
Net cash flows from (used in) financing activities
Proceeds from long-term borrowings
-
Proceeds from long-term borrowings
-
33,730,319
479,960
Total proceeds from borrowings
33,730,319
479,960
Repayments of borrowings
(57,894,501)
(32,391,582)
Dividends paid
(22,364,015)
(22,487,725)
19,797,159
25,360,440
(26,731,038)
(29,038,907)
Net decrease in cash and cash equivalents
(2,158,420)
(6,163,991)
Cash and cash equivalents at the beginning of period
17,073,589
23,237,580
14,915,169
17,073,589
Other inflows (outflows) of cash
Net cash flow used in financing activities
Cash and cash equivalents at the end of period
4
The accompanying notes are an integral part of these consolidated financial statements.
ANNUAL REPORT
78
Notes To The Consolidated
1. General Information
Esval S.A. and its subsidiaries make up the Esval Group. Its legal domicile is Cochrane 751,
Valparaiso, Chile and its taxpayer number is 89.900.400-0
Esval SA. was incorporated as a corporation by means of a public deed dated June 12,
1989, in Santiago, drawn up and executed before Notary Public Raúl Undurraga Laso. An
excerpt of its by-laws was published in the Official Gazette on June 15, 1989, and it was
registered on page (verso) 449, No. 469 of the 1989 Business Register. It is also registered
with the Superintendency of Securities and Insurance under registration number 0348, and,
therefore, is subject to inspection by that Superintendency.
The Company’s corporate purpose is to produce and distribute drinking water and to
collect, treat and dispose of sewage. Additionally, it renders other services related to such
activities, in the manner and subject to the terms and conditions stipulated in the law that
authorized its incorporation and any other applicable regulations. With the exception of
sectors granted to private or municipal services, the Company currently maintains the rights
of distribution throughout the urban areas of the Valparaiso Region previously serviced by
the Region’s former Sanitation Company as of January 27, 1986, in addition to expansion
zones considered in the development plans of the Ministry of Public Works approved by the
Superintendendency of Sanitary Services, as stipulated in Law 18777 and decrees 2166/78
and 69/89. The Company’s service area additionally includes urban locations whose sanitary
concessions have been awarded to Esval S.A. by the Authorities after that date, either by
regularizing the expansion areas considered in its development plans or by expanding its
concession zones. The Company also provides drinking water services in other locations,
outside the concession area, in the Community of Algarrobo, based on agreements signed
with the communities of Algarrobo Norte, Mirasol and Las Brisas.
On November 25, 2003, in a competitive bidding, the Company was awarded the right to
exploit the concessions held by ECCONSA CHILE S.A. (at that time ESSCO S.A.), the sanitary
company in the Region of Coquimbo, for 30 years. To that end, it incorporated a closelyheld subsidiary corporation called Aguas del Valle S.A., on December 4, 2003, registered
under number 88 of the Special Record of Reporting Entities (REEI) of the Superintendency
of Securities and Insurance, which is therefore subject to the inspection of such
Superintendency. Aguas del Valle produces and distributes drinking water, and collects,
The direct controlling entity is Inversiones OTPPB Chile III Limitada, which is in turn is
controlled by Inversiones Southwater Limitada (“ISL”), a subsidiary of AndesCan SpA., an
investment vehicle in Chile of the Canadian institution Ontario Teachers’ Pension Plan Board
(OTPPB).
Esval S.A. and subsidiaries have a staff of 527 workers, comprised of 65 managers, assistant
managers and department heads.
2. Basis Of Preparation And Accounting Policies
2.1 Basis of Preparation
The consolidated financial statements of Esval S.A. and subsidiaries as of December 31,
2011 have been prepared in conformity with International Financial Reporting Standards
(IFRS), issued by the International Accounting Standards Board (hereinafter “IASB”), and were
approved by its Board of Directors at their meeting held on March 21, 2012. The Company is
fully in compliance without exception with IFRS.
These consolidated financial statements faithfully reflect the financial position of Esval S.A.
and subsidiaries as of December 31, 2011 y 2010 and the results of its operations, changes in
net equity and cash flows for the year ended December 31, 2011.
The financial statements as of December 31, 2010, include a reclassification of a portion of the
item “Intangible assets” to the item “Other financial assets” for an amount of ThCh$3,705,752,
related to a revised calculation performed during 2011of the estimated value of accounts
receivable pertaining to Aguas del Valle S.A. upon termination of the concession with
Ecconsa Chile S.A. – See note 12.
The Company and its subsidiaries comply with all legal requirements of the environment
in which activities are developed under normal operating conditions in all areas of the
business. Projections show that the Company will continue to be profitable and has the
ability to access the financial system to finance its operations. As such, in the opinion of
management, the Company has the ability to continue as a going concern in accordance
with the accounting standards under which these financial statements are issued.
Functional currency
The balances included in the financial statements of each of the consolidated entities are
measured using the currency of the main economic environment in which the entity operates (Functional currency), in accordance with IAS 21.
79
ANNUAL REPORT
treats and disposes of sewage, and also renders other services related to such activities,
under the terms and conditions stipulated in Statutory Decree 382 of 1988 by the Ministry of
Public Works and other applicable regulations.
80
The consolidated financial statements are presented in Chilean pesos, which is the Company’s functional and presentation currency.
Changes to Accounting Standards
ANNUAL REPORT
As of 2011, the Group has adopted International Financial Reporting Standards (IFRS) for
the first time and this is the first presentation of the comparative financial statements under
these standards.
These consolidated financial statements for the year ended December 31, 2011 and 2010
comply with each of the international financial reporting standards enforced at this date.
2.2 New accounting pronouncements
a) New and revised IFRS effective in the current year
The following new and revised IFRS have been adopted in these financial statements:
Amendments to IFRSs
Effective date
IAS 24, Related Party Disclosures – Revised definition of related parties
Annual periods beginning on or after January 1, 2011.
IAS 32, Financial Instruments: Presentation – Amendments relating to classification of rights issues
Annual periods beginning on or after February 1, 2010.
Annual Improvements to IFRS 2010 – A collection of amendments to seven IFRSs
Mostly for annual periods beginning on or after January 1, 2011.
New Interpretations
IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
Effective date
Annual periods beginning on or after July 1, 2010.
Amendments to Interpretations
Effective date
IFRIC 14, The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.
The application of these new and revised IFRS has not had any material impact to the
financial statements of the Group.
b) New and revised IFRS in issue but not yet effective
As of the date of issuance of these consolidated financial statements, the following
accounting pronouncements have been issued by the IASB but there are not yet effective:
Effective date
IFRS 9, Financial Instruments – Classification and Measurement
IFRS 10, Consolidated Financial Statements
Annual periods beginning on or after January 1, 2013
IFRS 11, Joint Arrangements
IFRS 12, Disclosure of Involvement with Other Entities
IAS 27 (2011), Separate Financial Statements
IAS 28 (2011), Investments in Associates and Joint Ventures
IFRS 13, Fair Value Measurements
Amendments to Standards
IAS 1, Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income
Effective date:
Annual periods beginning on or after July 1, 2012
IAS 12, Income Taxes – Limited scope amendment (recovery of underlying assets)
IAS 19, Employee benefits (2011)
IAS 32, Financial instruments: presentation – Clarified requirements for offsetting of financial assets
and financial liabilities and amends disclosures
IFRS 1 (Revised), First Time Adoption of IFRS – (i)Replacement of ‘fixed dates’ for certain exceptions
with ‘the date of transition to IFRSs’ – (ii) Additional exemption for entities ceasing to suffer from
severe hyperinflation
IFRS 7, Financial Instruments: Disclosures – Amendments enhancing disclosures about transfers of
financial assets
New Interpretations
IFRIC 20, Stripping costs in the production phase of a surface mine
Management of Esval S.A. and subsidiaries estimates that the adoption of the Standards and
Interpretations above will not have a significant impact in the Group’s consolidated financial
statements.
Effective date
ANNUAL REPORT
New Standards, Interpretations and Amendments
81
82
2.3 Responsibility for the Information and Estimates made
The information contained in these consolidated financial statements is the responsibility
of the Company’s Board of Directors who expressly states that the principles and criteria
included in IFRS have been fully applied.
ANNUAL REPORT
In preparing these financial statements the following estimates have been used:
•
•
•
•
•
•
Vida útil de activos fijos e intangibles
Losses for impairment of assets
Assumptions used in the actuarial calculation of employee benefits
Unbilled revenue estimates
Provisions for commitments with third parties
Risks arising from current litigations
These estimates and judgments were made based on the best information available about
the events analyzed as of December 31, 2011 and 2010. Any event that may occur in the
future requiring changes (upwards or downwards) in estimates in future years will be
recognized when they are known and the effects of such changes will be recognized within
the statement of income or equity accounts in the financial statements, as appropriate.
2.4 Accounting policies
The following are the main accounting principles which have been consistently applied in
the preparation and presentation of the financial statements as of December 31, 2011.
A. Basis for consolidation
Subsidiaries are those entities over which the Company has the power to direct their financial
and operating policies. Such power is generally accompanied by ownership of more than
50% of the voting rights.
The consolidated financial statements include the assets, liabilities, revenue and expenses
and results of the parent and the subsidiaries of Aguas del Valle S.A. and Servicios Sanitarios
Las Vegas Limitada.
As of December 31, 2011 and 2010, the parent owns a 99% interest in Aguas del Valle S.A., and
99.99% interest in Servicios Sanitarios Las Vegas Limitada. Additionally, Servicios Sanitarios
Las Vegas Limitada owns a 1% interest in Aguas del Valle S.A.
Name
Country of origen
Functional currency
Participation percentage
Origen
Currency
Total
%
%
83
99.541.380-9
Aguas del Valle S.A.
Chile
Pesos Chilenos
99.00
0.99
99.99
76.027.490-9
Servicios Sanitarios Las Vegas Ltda.
Chile
Pesos Chilenos
99.99
0
99.99
The effects of transactions between consolidated companies have been eliminated and the
ownership interest related to non-controlling shareholders is presented in the consolidated
financial statements under Non-controlling Interests.
The accounting policies adopted by the subsidiaries are consistent with the policies adopted
by the Parent.
B. Transactions and non-controlling interests
The Group´s transactions with non-controlling interests are considered transactions with
third parties unrelated to the Company.
C. Operating segments
The Group discloses information by segment in accordance with IFRS 8, Operating Segments,
which establishes the reporting requirements for operating segments and disclosures related
to products and services. Operating segments are defined as components of an entity for
which there is discrete financial information regularly reviewed by Management to make
decisions about resources to be allocated and assess their performance. The Group manages
and measures the performance of its operations by business segment. The following are the
operating segments internally reported:
• Operations related to transactions within the Valparaiso Region.
• Operations related to transactions within the Coquimbo Region.
D. Intangibles Assets
The Company and its subsidiaries recognize an identifiable intangible asset when they can
demonstrate that it is probable that the future economic benefits attributed to the asset will
flow to the entity and the cost can be measured reliably.
ANNUAL REPORT
Tax ID
84
Esval S.A. and its subsidiaries measure their intangible assets using the cost model defined
in IAS 38.
ANNUAL REPORT
The main intangible assets with indefinite useful lives are water rights and easements,
whereas the main intangible assets with finite useful lives are the right to exploit the sanitary
concession in the Coquimbo Region, software applications and other rights.
In measuring water rights with indefinite useful lives, Esval and its subsidiaries have elected
to measured them at their fair value at December 31, 2008, defined as deemed cost at the
transition date to IFRS.
The remaining intangible assets with definite useful lives are measured at the price-level
restated acquisition cost, net of amortization, at December 31, 2008, which became the
attributed deemed cost, under the exemption allowed in IFRS 1.
The following factors, among others, should be considered in estimating the useful life:
•
•
•
•
Legal, regulatory or contractual limitations.
Foreseeable life of the business or industry.
Economic factors (obsolescence of the products, changes in demand).
Natural, climate and technology change factors affecting the ability to generate benefits.
The useful life may require modifications over time due to changes in estimates resulting
from changes in the assumptions related to the above factors.
Intangible assets with finite useful live
The amortization method applied by the Company reflects the pattern in which the asset’s
future economic benefits are expected to be used by the entity. To that end, the Company
uses the straight-line method of depreciation.
The main intangible asset with a finite useful life is the right to exploit the sanitary concession
in the Region of Coquimbo. Its initial useful life is for the term of the concession contract,
which is 30 years beginning in December of 2003. For software applications, the estimated
useful life determined is 4 years.
Assets related to the right of exploitation of the Sanitary Concession in the Coquimbo region
are additionally recognized as intangible assets which are amortized according to their
technical specifications and individually assigned.
The estimated useful life of software applications is 4 years. For other intangibles assets
with finite useful lives, the amortization period corresponds to the period established in the
contracts or rights from which they originate, which is 30 years in the case of the contract
related to the right of exploitation of the sanitary concession in the Coquimbo region.
Intangibles with indefinite useful lives:
These mainly related to water rights and easements, which were obtained for an indefinite
period.
The cost of some intangibles includes direct remunerations, consultancy services and other
inherent identifiable costs.
Service concessions:
The Aguas del Valle S.A. subsidiary owns the rights to exploit the sanitary concessions in the
Coquimbo Region that were awarded through a public bidding by Empresa de Servicios
Sanitarios de Coquimbo (ESSCO) (currently ECONSSA Chile Ltda.). These service concession
arrangements are measured in accordance with the requirements of IFRIC 12, Service
Concession Arrangements, as they correspond to public-to-private service concession
arrangements, where: (i) the grantor controls or regulates what services the operator must
provide with the infrastructure, to whom and at what price, and; (ii) the grantor controls
through ownership the beneficial entitlement or any other significant residual interest in the
infrastructure at the end of the term of the agreement.
The infrastructure under the scope of this Interpretation is not recognized as property, plant
and equipment of Aguas del Valle (the ‘operator’), independently from the degree at which
the operator assumes the incidental risk and rewards to ownership and regardless of which
party of the contracts has legal title to ownership during the agreement, given that the asset
is ‘controlled’ by the grantor. Rather, the operator recognizes a financial asset when it has an
unconditional right to receive cash or another financial asset from the grantor (‘Financial
Asset Model’); and/or an intangible asset when it has a right to charge users of the public
service (‘Intangible Asset Model’). Under both models, the operator accounts for revenue
and costs related to the construction services in accordance with IAS 11, Construction
Contracts. Revenue and costs relating to operating services are accounted for in accordance
with IAS 18, Revenue. In addition, the contractual obligations establish that as a condition
of the concession received the operator should comply with the following: (a) maintain the
infrastructure to a specified level of operability, and (b) restore the infrastructure to a specified
condition before it is handed over to the grantor at the end of the concession agreement.
The contractual obligations to maintain or restore infrastructure shall be recognized and
measured in accordance with IAS 37, i.e. at the best estimate of the expenditure that
85
ANNUAL REPORT
Estimated useful lives or amortization rates used for identifiable intangible assets with finite
useful lives are as follows:
ANNUAL REPORT
86
would be required to settle the present obligation at the end of the reporting period.
Finally, in accordance with IAS 23, borrowing costs attributable to the arrangement shall be
recognized as an expense in the period in which they are incurred unless the operator has a
contractual right to receive an intangible asset (a right to charge users of the public service).
In this case, borrowing costs attributable to the arrangement shall be capitalized during the
construction phase of the arrangement. In conformity with the concession contract signed
by the Company, it has the right to recover the value of the investments that are not repaid
upon termination of the concession, generating an account receivable presented in the
item “Other non-current financial assets” and the detail shown in Note No. 12 “Other noncurrent financial assets”. An intangible asset has been recorded for the investments made (in
infrastructure) that shall be transferred to ECONSSA CHILE S.A. upon termination of the term
of the concession contract, or 30 years as of December 2003.
Information to be disclosed on internally generated intangible assets:
The Company does not have any internally-generated intangible assets.
E. Property, plant and equipment
Basis for measurement of property, plant and equipment:
The Company and its subsidiaries measure their property, plant and equipment under
the cost model in accordance with IAS 16. Nevertheless, upon first-time adoption of IFRS
certain land was revalued and that value was recognized at deemed cost. The historical cost
includes all expenses directly attributable to the acquisition of the assets.
Expansion, modernization and improvement costs that represent an increase in productivity,
capability or efficiency or an increase in the useful lives of the assets are accounted for as
costs of the corresponding assets.
Direct remunerations, advisory fees and other inherent and identifiable costs as well as
borrowing costs are included in the cost of certain projects in progress.
Repair and maintenance costs are recorded as an expense in the period in which they are
incurred.
Borrowing costs incurred during the construction of any qualifying asset are capitalized
over the period necessary to complete and prepare the asset for its intended use. Other
borrowing costs are expensed when incurred.
Subsequent costs are included in the carrying amount of the initial asset or are recognized
as a separate asset only when it is probable that future economic benefits associated with
the item will flow to the Company and the cost of the item can be measured reliably. The
carrying amount of any item replaced is derecognized from the accounting records. All
other repairs and maintenance costs are expensed in the period when they are incurred.
Due to the nature of the assets constructed by the Company and as there are no contractual
obligations, such as those mentioned in the IFRS, the recognition requirements for
dismantling costs are not applicable to the Company.
Depreciation method for property, plant and equipment:
The depreciation method used by the Company corresponds to the pattern in which the
asset’s future economic benefits are expected to be consumed by the entity. In this regard,
the Company uses the straight-line method of depreciation over the technical useful life
of the asset, which has been determined by studies carried out by independent valuation
experts. The residual value and useful lives of the assets are reviewed and revised if necessary
at the end of each reporting period.
Estimated useful lives for property, plant and equipment:
The useful lives considered in calculating depreciation were estimated via studies carried out
by independent valuation experts. Useful lives of assets are reviewed in the event that there
is any new information indicating that useful life of an asset might have changed.
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ANNUAL REPORT
Construction works in progress are transferred to assets in service once the testing period
has been completed and the assets are available for use, which is the date depreciation of
the asset begins.
The useful lives applied by the Company are the following:
88
Item
Useful life for buildings
ANNUAL REPORT
Useful life for plant and equipament
Minimum useful life
(In years)
Maximum useful life
(In years)
20
80
5
50
Useful life for equipament and It
4
5
Useful life forfixed facilities and accessories
5
80
Useful life for motor vehicles
7
10
10
50
Useful life for other property, plant and quipament
The useful lives of the assets are determined based on several factors, which generally
include:
• Nature of the material components used in the equipment and construction
• Means of operation of the equipment
• Intensity of use
• Legal, regulatory or contractual limits on the use of the asset.
The Company and its subsidiaries depreciate their assets using the straight-line method over
the estimated useful lives.
Policy for disposal of property, plant and equipment:
The gain or loss on disposal of property, plant and equipment is determined as the
difference between the net proceeds received and the carrying amount and is recognized
in comprehensive income. When disposing of assets measured at revalued amounts, the
revaluation surplus included in equity is transferred to retained earnings.
Policy for impairment of property, plant and equipment:
The Company and its subsidiaries, based on the results of the impairment test described
in Note 2.2.f, have determined that the carrying amount of assets does not exceed their
recoverable amount.
The recoverable amount of assets is determined in accordance with IAS 16. Assets are tested
for impairment on an ongoing basis by estimating whether there will be sufficient future
economic benefits to cover all the costs including the depreciation of the property, plant
and equipment in accordance with IAS 36.
These assets mainly correspond to drinking and sewage water networks that are required
in order to provide sanitary services to newly incorporated customers. According to the
Sanitary Services Law, these assets neither represent assets of the sanitary companies for
purposes of establishing tariffs, nor do they give rise to any obligation for the Company with
those making such urbanizations.
Articles 36 to 43 and 53 of Decree Law No. 382/1998 of the Ministry of Public Works (the
General Law on Sanitary Services’) establish the responsibilities related to the installation,
for the developer, and also state that the sanitary service provider is responsible for the
maintenance and replacement of these assets.
The Company recognizes such assets at fair value and with a corresponding credit to a
complementary account named “Assets financed from developers”. The assets are recorded
as property, plant and equipment and the complementary accounts are amortized over the
same useful life associated with the corresponding assets.
F. Impairment of assets
Impairment of assets is determined based on the level of the related contribution expected
to generate financial resources for the company.
As such, based on performance of continuous service, the capacity to generate financial
resources in the Company is bundled within the operating assets, to form the aggregate
value of the “cash generating units” of Esval and Aguas del Valle, respectively.
In testing the above Cash Generating Units for impairment, the Company estimates the
present value of the expected future cash flows by using a discount rate that reflects
both the time value of money and the specific risks associated with the asset. The present
value amount is then compared to the carrying amount of the assets comprising the cash
generating unit.
Based on the comparison mentioned in the preceding paragraph, the Company has
determined that the carrying amount of the assets composing the cash-generating units is
less than the present value of the expected future cash flows. Therefore, no impairment loss
has been recognized in the period.
When the recoverable amount of an asset is less than its carrying amount, the difference is
recognized as an “Impairment loss of assets” in comprehensive income. Impairment losses
are reversed in the event of a change in estimate of the recoverable amount. Reversals of
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ANNUAL REPORT
Assets for Urbanizations:
Included in the line item for property, plant and equipment are payments made for
urbanizations financed by third parties in the development of their projects designed for the
purpose of connecting their customers to Esval S.A.’s sanitary service network.
90
impairment losses are recognized immediately in profit or loss by increasing the carrying
amount of the asset. The increased carrying amount of an asset attributable to a reversal of
an impairment loss shall not exceed the carrying amount that would have been determined
had no impairment loss been recognized for the asset in prior years.
G. Financial assets
ANNUAL REPORT
Current and non-current financial investments are classified in the following categories:
Financial assets held-for-trading
These are assets acquired principally for the purpose of generating benefits as a result of
fluctuations in their value. Financial assets included in this category are measured in the
consolidated statement of financial position at fair value. Changes in fair value are recognized
as an expense or income in the income statement accounts, as appropriate.
Loans and receivables
Loans and receivables are initially are measured at amortized cost using the effective interest
method.
Investments held-to-maturity
These are financial investments held by the Company until maturity. They are measured at
their amortized cost using the effective interest method.
Available-for-sale financial assets
These include all of Esval’s financial assets not included in the three previous categories.
These investments are measured in the consolidated statement of financial position at
their fair value. Highly liquid short-term investments that are readily convertible into known
amounts of cash which are subject to insignificant risk of change in value, such as time
deposits, repurchase agreements and mutual funds, are considered as cash equivalents in
accordance with IAS 7.
H. Inventories
Inventories are measured at the lower of cost and net realizable value.
I. Trade and other receivables
Policy for Uncollectible Accounts
The provision for uncollectible accounts is determined based on the following factors:
• Aging of the unpaid balance
• Type of customer
• Compliance with repayment agreements
The analysis of payment behavior from the different classes of debtors is affected by: i) the
classification as subsidized and non-subsidized debtors and ii) the fact that the Company is
legally entitled to suspend the service provided to customers who do not make payments.
The carrying amount of the asset is reduced in the same amount as that increasing the
provision for uncollectible accounts that is recognized as an expense in the statement
of income within the line item “finance costs”. When a receivable is determined to be
uncollectible, it is written off against the provision for uncollectible accounts.
J. Basis of translation of foreign currency
Assets and liabilities in Unidades de Fomento (UF = inflation index-linked unit of account)
and/or foreign currencies are measured at each corresponding date as follows:
Currency
Unidad de Fomento
12/31/2011
12/31/2010
ThCh$
ThCh$
22,294.03
21,455.55
US dollar
519.20
468.01
Euro
675.20
627.61
Exchange differences are recognized in profit or loss for the period, within the line item
“Results for readjustment”
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ANNUAL REPORT
Trade and other receivables are recognized initially at their fair value; subsequently, they are
measured at amortized cost. This item also includes a provision for impairment losses due to
uncollectible receivables from third parties.
K. Financial obligations
92
Borrowings and bonds payable are initially recognized at their fair value, which corresponds
to the value of the proceeds received, net of transaction costs incurred. Subsequently, they
are measured at amortized cost using the effective interest method.
ANNUAL REPORT
L. Derivative financial instruments and hedge accounting
The Company has not entered into any derivative or hedging relationships.
M. Provisions and contingent liabilities
Provisions are measured taking into account the best information available about events
and their probable outcome. Provisions are revised at the end of each reporting period. The
Company recognizes a provision when there is a present obligation of uncertain timing or
amount with third parties arising from past events for which it is probable that an outflow of
resources will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Contingent liabilities are possible obligations that arise from past events and whose existence
will only be confirmed by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the entity. Contingent liabilities are not recognized
in the financial statements.
N. Unearned income
This item essentially includes amounts of cash received from customers or government
agencies to finance the construction or acquisition of certain facilities and, in some cases,
the facilities directly received from them.
These amounts are recorded as unearned income within the liability section in the
statement of financial position and are recognized through profit or loss over the useful life
of the corresponding assets within the line item “Other operating income”, thereby offsetting
depreciation expense in the statement of comprehensive income.
O. Income tax and deferred taxes
Deferred tax assets and liabilities include all deductible and taxable temporary differences
arising from the differences between the carrying amount of assets and liabilities and their
tax base, as well as unused tax credits arising from taxable losses and other tax deductions.
Deferred tax assets and liabilities are recognized by applying the tax rate at which the
temporary differences are expected to be realized or settled.
Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax
assets are only recognized to the extent it is probable that sufficient taxable income will be
available in the future against which the deductible temporary differences can be utilized.
Current tax assets and liabilities (in each consolidated company), as well as deferred taxes,
are offset in the consolidated statement of financial position.
P. Employee benefits
The Company recognizes in the financial statements obligations arising from employee
benefits included in collective or individual contract agreements.
The severance indemnity obligation recognized as a liability in the Company’s financial
statements corresponds to employees whose individual work contracts establish this
severance indemnity in any event and is recorded at the actuarial value. The positive or
negative effect on severance indemnities caused by changes in estimates or deviations in
turnover, mortality, early retirement due to dismissal, salary increases, inflation, discount rate
or number of employees is recognized directly in profit or loss.
93
ANNUAL REPORT
Income tax expense for the period includes both current tax from applying the tax regulations
on the taxable income for the year, once all applicable tax additions and deductions have
been made, as well as the variation in deferred tax assets and liabilities and tax credits arising
from taxable losses.
Q. Revenue and expenses
ANNUAL REPORT
94
Revenue and expenses are recognized on an accrual basis, which is when the transfer of the
goods or the rendering of the services takes place, regardless of when payment is made.
Revenue from regulated sales is recognized based on each customer’s reading and billing
consumption and is measured using the tariff rates stipulated in the respective decrees. Tariff
rates are applied over a five-year period plus an estimate of unbilled sales at the end of the
reporting period. The unbilled sales estimate is determined based on the proportion of the
last reading in each billing group and measured at the tariff rates effective at the end of the
period which is quarterly adjusted.
The Company’s service area is divided into billing groups, which determine the reading
dates and subsequent billing. This process is carried out based on a monthly calendar.
R. Environmental information
Assets of an environmental nature are considered to be those that are used on a permanent
manner in the Company’s activity and whose main purposes are to minimize adverse
environmental impacts and to protect and improve the environment, including the
reduction or elimination of any future contamination by the Group’s operations. For these
purposes the Company has an ISO 14.001 environmental certification.
S. Earnings-per-share
Basic earnings-per-share is calculated by dividing profit or loss attributed to equity holders
of the parent company by the weighted average number of shares outstanding during the
period.
During the years ended December 31, 2011 and December 31, 2010, the Group has not
performed any kind of operation with potential dilutive effects that led to a diluted gain per
share differing from the basic earnings per share.
T. Dividends
Article 79 of the Chilean Corporations Law establishes that, unless otherwise unanimously
agreed in the respective shareholders’ meeting by all of the shares issued, corporations shall
distribute a cash dividend to their shareholders every year, on a pro rata basis to their shares
or in the proportion stipulated in the by-laws if there are any preferential shares, equivalent
to at least 30% of the net profits from each year, except when accumulated losses from prior
years need to be absorbed.
95
Interim and final dividends are recorded as a deduction to “Equity” when approved by the
respective body, which typically for interim dividends is the Company’s Board of Directors
and, and for final dividends is at the General Shareholders’ Meeting.
ANNUAL REPORT
As of December 31, 2011, dividends payable is presented in the item “Other financial
liabilities, current” in the amount of ThCh$8,669,820 that will be paid in the months of
February 2012 (interim dividend decided in November 2011 for ThCh$3,740,569) and May
2012 (ThCh$4,929,251 determined in order to adjust in compliance with the dividend
distribution policy agreed upon by the Shareholders’ Meeting in 2011, under which the
Company is to distribute 80% of net income for the year, reduced by the interim dividends
paid in August 2011 for ThCh$3,740,569 and the dividend that will be paid in February 2012
of ThCh$3,740,569), as per the established in the dividends policy for 2011.
U. Statement of Cash Flows
The cash flow statement uses the terms defined below:
Cash and cash equivalents: inflows and outflows of cash and equivalent financial assets, with
the latter being understood as short-term highly liquid investments subject to a low risk of
changes in value.
Operating activities: principal revenue-producing activities from the normal operations of
Esval and subsidiaries, and other activities that are not investing or financing activities.
Financing activities: activities that result in changes in the size and composition of the equity
and liabilities that are not part of ordinary activities.
Investing activities: the acquisition, sale, or disposal by other means of non-current assets
and other investments not included in cash equivalents.
2.5 Issued capital and equity
96
The Company’s capital is divided into 14,962,276,336,000 registered, no-par-value shares
distributed as follows:
ANNUAL REPORT
Serie
Subscribed
Paid-In
With Voting Right
A
3,553,436,546
3,553,436,546
3,553,436,546
B
187,132,538
187,132,538
187,132,538
C
Total
No. Of Shares
14,958,535,766,916
14,958,535,766,916
14,958,535,766,916
14,962,276,336,000
14,962,276,336,000
14,962,276,336,000
During the Extraordinary Shareholders’ Meeting held on August 26, 2011, an extension of five
additional years for the structure of the share capital established in the by-laws was agreed
upon. Under this structure, the Series C shares have the privilege to call for an Extraordinary
Shareholders’ Meeting upon the request of at least 5% of these shares, and they will not have
the right to choose Directors. Accordingly, the text of article five of the Social By-laws was
modified, informing the shareholders that this agreement grants to the rights of withdrawal,
as per the indicated in Law No. 18.046.
Due to this change of the by-laws, some shareholders have exercised their right for
withdrawal conferred to them in Article 69 of Law 18.046, for a total of 1,439,791 Series A
shares, and 2,383,059,200 Series C shares, paying them a total amount of ThCh$69,435, of
which ThCh$31,269 have been reduced from the account Paid-in Capital and ThCh$38,166
from the account Issuance Premium, considering that the value paid to the former
shareholders is higher than the book value of the shares.
This repurchase of shares was performed during October 2011. The mentioned shares, from
parting shareholders, are available for placement in the stock market as of January 1, 2012,
as follows:
ANNUAL REPORT
97
Repurchase of Shares
Reason for Repurchase of shares
Date of repurchase of share
Number of Shares
Series
Amount paid
ThCh$
Change of by-laws
October 25, 2011
1,439,791
A
29
Change of by-laws
October 25, 2011
2,383,059,200
C
69,406
Shares in portafolio as of December 31, 2011
2,384,498,991
2.6 Other income and expenses
Additional information to be disclosed as specified in IAS 1, with regard to other income and
expenses is as follows:
Other income and expenses
Other expenses per nature
from 01/01/2011
to 12/31/2011
from 01/01/2010
to 12/31/2010
ThCh$
ThCh$
31,726,548
26,739,653
Services
28,094,732
23,283,146
Overhead
3,034,762
2,895,073
597,054
561,434
Other income (expenses)
(754,491)
(476,730)
Other non-operating income
1,330,323
1,528,225
(2,084,814)
(2,004,955)
Doubtful accounts
(-) Other non-operating expenses
2.7 Current and non-current classification
In the accompanying statement of financial position, balances are classified according
to their maturities; that is, those with a maturity less than twelve months are classified as
current and those with a maturity more than twelve months are classified as non-current.
69,435
98
Obligations with a maturity of less than twelve months, but whose long-term refinancing
can be ensured by the Company’s discretion through unconditionally available credit
agreements with long-term maturities could be classified as long-term liabilities.
ANNUAL REPORT
3. Consolidated And Separate Financial Statements
The Company considers investments in subsidiaries to be those investments made in other
companies intented to be kept as a long-term investment and over which it exercises
control or significant influence.
The Company does not present separate financial statements in accordance with IFRS.
Summarized Financial Information Of Subsidiaries As Of December 31, 2011:
12/31/2011 Subsidiaries
Current
assets
Non-current
assets
Current
liabilities
Non-current
liabilities
Equity
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
6,845,486
98,266,604
7,935,954
25,913,113
71,263,023
-
712,263
60
-
712,203
Profit or loss
for the year
Ordinary
income
Ordinary
expenses
(-) Other expenses
(+) Other income
ThCh$
ThCh$
ThCh$
ThCh$
7,311,353
29,086,570
(9,581,319)
(9,515,884)
73,114
0
0
0
Summarized Financial Information Of Subsidiaries As Of December 31, 2010:
Current
assets
Non-current
assets
Current
liabilities
Non-current
liabilities
Equity
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
5,891,758
93,259,131
6,862,632
28,336,587
63,951,670
-
639,516
60
-
639,456
Profit or loss
for the year
Ordinary
income
Ordinary
expenses
(-) Other expenses
(+) Other income
ThCh$
ThCh$
ThCh$
ThCh$
6,230,013
26,168,429
(8,837,461)
(8,408,345)
62,300
0
0
0
4. Cash And Cash Equivalents
The composition of this item is as follows:
Cash and cash equivalent
Cash and banks
12/31/2011
12/31/2010
ThCh$
ThCh$
157,723
158,500
-
-
14,757,446
16,915,089
14,915,169
17,073,589
Mutual fund units
Repurchase agreements
Total
There are no restrictions in the availability or use of cash and cash equivalents.
No investing or financing transactions were carried out that do not require the use of cash
and cash equivalents.
Cash equivalents correspond to financial assets, time deposits, marketable securities, and
repurchase agreements with maturities of less than 90 days from their date of acquisition.
Details of certain cash flow statement items are as follows:
- Other inflows or outflows from other operating activities correspond to services
additional to the operation of the business.
- Income from financing sources: These correspond to the issue of Reimbursable Financial
Contributions used in the construction of infrastructure works, which will be reimbursed
in the short and long term, as stipulated in current legislation (Statutory Decree 70 of
1988).
- Reimbursement of other financial liabilities: Payment and prepayment of promissory
notes issued as Reimbursable Financial Contributions.
99
ANNUAL REPORT
100
5. Financial Instruments
I. Financial instrument detail
ANNUAL REPORT
The Group’s financial instruments consist of:
Kind of financial instruments
31/12/2011
31/12/2010
ThCh$
ThCh$
Category
ASSETS
Cash and cash equivalents
Financial Investments
Investments in Mutual Funds
Resale agreements
Trade debtors
Trade and other receivables, current
Trade and other receivables, non-current
Other non-current financial assets
Due from related companies
157,723
158,500
14,757,446
16,915,089
Cash and checking accounts
-
-
Financial asset at fair value with changes in income
14,757,446
16,915,089
Loans and accounts receivable
29,149,355
26,917,950
29,122,946
26,888,436
26,409
29,514
4,850,139
3,705,752
-
-
34,292,805
47,885,459
LIABILITIES
Loans
Current
Bank loans, current
247,396
-
Financial liabilities measured at amortized cost
Other loans, current
34,045,409
47,885,459
253,625,087
231,756,666
Bank loans, non-current
Non-Current
33,441,045
-
Other loans, non-current
220,184,042
231,756,666
Trade accounts payable
12,450,965
10,957,968
12,450,965
10,957,968
-
-
-
646
Trade and other accounts payable, current
Trade and other accounts payable, non-current
Due to related companies
II. Financial Instrument Accounting Policies
B. Trade and other receivables policy:
Trade receivables, corresponding to billings for the consumption of drinking water, sewerage
services, sewage treatment and other services, are recorded at the net value of the estimate
for uncollectible or doubtful accounts.
Trade receivables are subject to the Company’s credit policy, which stipulates the terms
and conditions of payment, as well as the different scenarios to renegotiate with past due
customers. Interest on past due customers is also charged as required by the law.
C. Policy for uncollectible or doubtful accounts:
La estimación de deudores incobrables se efectúa a través de un análisis dependiendo de
The estimate of uncollectible accounts is made based on an aging analysis of the outstanding
receivables, their collection history, and collection of accounts receivable from customers
and other debtors, all of which are specifically identified.
The analysis for different groups of debtors’ behavior is affected by: i) the type of customer;
ii) classification between renegotiation or non-renegotiation term debtors; and iii) aging of
debt. A provision of 100% has been made for withdrawn or suspended customers.
D. Cash and cash equivalent policy:
Cash surpluses are invested in instruments with a high-risk rating standard.
101
ANNUAL REPORT
A. Hedging Instruments Policy:
The Group does not have any hedging instruments.
102
E. Bank overdraft policy:
The Company keeps lines of credit and overdraft facilities and/or working capital in banking
institutions for any possible cash shortages and to finance short-term working capital.
ANNUAL REPORT
There is also planning, supervision and follow- p in place for both short- and long-term
strategic and budgetary objectives to detect and, if applicable, correct any risks arising from
deviations that could affect achievement of the objectives.
The company invests in low risk instruments that meet the rating standards stipulated in
its investment policies. Thus, mutual investment funds must have an AAfm / M1 rating
(Units with a high protection against loss, associated with credit risks / units with the
lowest sensitivity to changes in economic conditions). Fixed term deposits and agreements
contracted are N-1 rated instruments (Instruments with the highest capacity to pay capital
and interest under the conditions and terms agreed to).
The institutions issuing these instruments are Banks or Bank subsidiaries with N-1 risk rating,
with instruments with at least an AA rating (with a very high capacity to pay the capital and
interest under the conditions and terms agreed to, which would not be significantly affected
by any possible changes in the issuer, the industry to which it belongs or the economy).
F. Dividend policy:
The dividend policy is approved every year at the Ordinary Shareholders’ Meeting.
G. Financial instrument policy:
The Group’s financial instruments consist of:
• Financial assets: Mutual funds are valued at fair value (fund unit), while fixed term
deposits, repurchase agreements and trade debtors and other receivables are measured
at amortized cost using the effective interest method.
• Financial Liabilities: Bank borrowings, commercial papers, bonds, reimbursable
financial contributions (RFC) and trade and other payables are measured at amortized
cost using the effective interest method.
Financial instruments are subject to risk control policies, as specified below:
i. For liquidity risk, the Company keeps reasonable debt leverage, complying with the
financial covenants stipulated in its debt contracts. It maintains a local market risk rating
equivalent to AA- and AA for Bonds and N1 for commercial papers.
ii. Interest rate risk, resulting from possible impact on profit or loss from changes in interest
rates, is mitigated by the Company’s fixed rate debt structure.
ANNUAL REPORT
103
H. Basis for recognition and measurement of income
and expenses from financial assets and liabilities:
Instruments quoted actively in the market, whose market price is observable and which are
available to the general public, are measured at fair value.
Instruments with no active market are measured at cost.
I. Criterion to determine whether there is any objective
evidence of impairment loss:
Financial assets are assessed each period to determine whether there is any objective
evidence of impairment. A financial asset is considered to be impaired if there is objective
evidence indicating that one or more events have had a negative effect on the future cash
flow estimate for the asset.
III. Information to Be Disclosed on Financial Assets and Liabilities
A. Financial Liabilities:
Reimbursable Financial Borrowings, current portion:
Current Nominal Amount
Debtor
Company
ESVAL S.A.
Bank Or
Institution
BANCO BBVA
31.12.2011
31.12.2010
Uf
Uf
-
Indexation
Unit
-
U.F.
Nominal
Interest
Rate
3.85%
Effective
Interest
Rate
3.98%
Periodicity
Maturity
10-21-2016
Book Value
Interest
Payments
Amortization
Payments
6-MONTHLY
BULLET
31.12.2011
31.12.2010
ThCh$
ThCh$
247,396
0
Reimbursable Financial Borrowings, non-current portion:
104
Periodicity
Current Nominal Amount
ANNUAL REPORT
Debtor
Company
ESVAL S.A.
Bank Or
Institution
BANCO BBVA
31.12.2011
31.12.2010
Uf
Uf
1,500,000
Indexation
Unit
-
Nominal
Interest
Rate
U.F.
Effective
Interest
Rate
3.85%
Maturity
3.98%
Interest
Payments
21-10-2016
Book Value
Amortization
Payments
6-MONTHLY
BULLET
31.12.2011
31.12.2010
Thch$
Thch$
33,182,998
0
Reimbursable financial contributions, current portion
Inscription Nº or
identification
of the Instrument
Currency
Adjustment
rate
Nominal Amount
Book Value
31.12.2011
31.12.2010
31.12.2011
31.12.2010
UF
UF
ThCh$
ThCh$
Nominal
Rate
Issuing
Company
Secured
(YES/NO)
Promissory note
UF
18,386.72
394,497
1.99%
ESVAL S.A.
NO
Promissory note
UF
1,687.82
36,213
2.58%
ESVAL S.A.
NO
Promissory note
UF
2.98%
ESVAL S.A.
NO
122,551.69
2,732,171
122,551.69
20,074.54
2,732,171
430,710
Reimbursable Financial Contributions, non-current portion
Regis. Nr.
or ident.
of Instrum.
Currency
Adjustment
rate
Nominal Amount U.F.
31/12/2011
Book Value
31/12/2010
31/12/2011
31/12/2010
ThCh$
ThCh$
Nominal
Rate
Issuer
Secured
(YES/NO)
Promissory Note
UF
94,517.19
75,686.43
2.107.169
1,623,894
2.19%
ESVAL S.A.
NO
Promissory Note
UF
10,249.35
10,015.99
228.499
214,899
2.32%
ESVAL S.A.
NO
Promissory Note
UF
2,975.90
2,907.86
66.345
62,390
2.33%
ESVAL S.A.
NO
Promissory Note
UF
107.09
104.63
2.387
2,245
2.35%
ESVAL S.A.
NO
Promissory Note
UF
5,932.43
5,794.52
132.258
124,325
2.37%
ESVAL S.A.
NO
Promissory Note
UF
57,137.48
51,546.77
1.273.825
1,105,964
2.39%
ESVAL S.A.
NO
Promissory Note
UF
10,924.00
10,658.59
243.540
228,686
2.47%
ESVAL S.A.
NO
Promissory Note
UF
18,765.20
11,461.82
418.352
245,920
2.48%
ESVAL S.A.
NO
Promissory Note
UF
3,958.28
3,861.36
88.246
82,848
2.49%
ESVAL S.A.
NO
Promissory Note
UF
5,183.58
5,053.70
115.563
108,430
2.55%
ESVAL S.A.
NO
(Continued)
Currency
Adjustment
rate
Nominal Amount U.F.
31/12/2011
Book Value
31/12/2010
31/12/2011
31/12/2010
ThCh$
ThCh$
Promissory Note
UF
9,976.23
222,410
Promissory Note
UF
4,346.50
4,235.53
96,901
Promissory Note
UF
51,687.53
50,348.45
Promissory Note
UF
5,180.71
Promissory Note
UF
Promissory Note
UF
Promissory Note
Nominal
Rate
Issuer
105
Secured
(YES/NO)
2.58%
ESVAL S.A.
NO
90,876
2.60%
ESVAL S.A.
NO
1,152,323
1,080,254
2.64%
ESVAL S.A.
NO
5,045.48
115,499
108,254
2.66%
ESVAL S.A.
NO
38,292.84
35,284.73
853,702
757,053
2.68%
ESVAL S.A.
NO
11,545.09
11,240.49
257,387
241,171
2.69%
ESVAL S.A.
NO
UF
2,210.51
2,150.93
49,281
46,149
2.75%
ESVAL S.A.
NO
Promissory Note
UF
12,969.25
12,616.00
289.137
270,683
2.78%
ESVAL S.A.
NO
Promissory Note
UF
7,120.27
6,924.98
158,740
148,579
2.80%
ESVAL S.A.
NO
Promissory Note
UF
2,841.59
2,763.38
63,350
59,290
2.81%
ESVAL S.A.
NO
Promissory Note
UF
2,185.14
2,124.39
48,716
45,580
2.84%
ESVAL S.A.
NO
Promissory Note
UF
62,019.33
54,077.46
1,382,661
1,160,262
2.88%
ESVAL S.A.
NO
Promissory Note
UF
3,712.11
3,606.08
82,758
77,371
2.92%
ESVAL S.A.
NO
Promissory Note
UF
90,990.00
207,322.80
2,028,534
4,448,225
2.98%
ESVAL S.A.
NO
Promissory Note
UF
1,673.06
3.06%
ESVAL S.A.
NO
Promissory Note
UF
7,514.59
7,282.98
167,530
156,260
3.16%
ESVAL S.A.
NO
Promissory Note
UF
17,011.49
16,484.01
379,255
353,673
3.17%
ESVAL S.A.
NO
Promissory Note
UF
3,249.78
3.18%
ESVAL S.A.
NO
Promissory Note
UF
4,430.13
3.24%
ESVAL S.A.
NO
Promissory Note
UF
4,236.64
4,102.10
94,452
88,013
3.25%
ESVAL S.A.
NO
Promissory Note
UF
68,916.44
66,714.88
1,536,425
1,431,404
3.27%
ESVAL S.A.
NO
Promissory Note
UF
4,303.30
4,164.62
95,938
89,354
3.30%
ESVAL S.A.
NO
Promissory Note
UF
2,992.49
2,894.10
66,715
62,095
3.37%
ESVAL S.A.
NO
Promissory Note
UF
2,013.60
1,946.64
44,891
41,766
3.41%
ESVAL S.A.
NO
Promissory Note
UF
2,127.84
2,056.48
47,438
44,123
3.44%
ESVAL S.A.
NO
Promissory Note
UF
1,343.67
3.46%
ESVAL S.A.
NO
Promissory Note
UF
36,221.41
34,996.53
807,521
750,870
3.47%
ESVAL S.A.
NO
Promissory Note
UF
2,647.49
2,557.22
59,023
54,867
3.50%
ESVAL S.A.
NO
Promissory Note
UF
645.51
3.51%
ESVAL S.A.
NO
Promissory Note
UF
7,024.54
6,782.41
156,605
145,520
3.54%
ESVAL S.A.
NO
Promissory Note
UF
4,282.33
4,130.33
95,470
88,619
3.65%
ESVAL S.A.
NO
37,299
72,451
4,289.85
98,766
92,041
29,956
14,391
ANNUAL REPORT
Regis. Nr.
or ident.
of Instrum.
(Continued)
ANNUAL REPORT
106
Regis. Nr.
or ident.
of Instrum.
Currency
Adjustment
rate
Nominal Amount U.F.
31/12/2011
Book Value
31/12/2010
31/12/2011
31/12/2010
ThCh$
ThCh$
Nominal
Rate
Issuer
Secured
(YES/NO)
Promissory Note
UF
10,949.12
10,558.47
244,100
226,538
3.67%
ESVAL S.A.
NO
Promissory Note
UF
4,118.52
3,970.42
91,818
85,188
3.70%
ESVAL S.A.
NO
Promissory Note
UF
5,566.71
5,366.01
124,104
115,131
3.71%
ESVAL S.A.
NO
Promissory Note
UF
2,421.15
2,333.18
53,977
50,060
3.74%
ESVAL S.A.
NO
Promissory Note
UF
6,400.88
6,167.15
142,701
132,320
3.75%
ESVAL S.A.
NO
Promissory Note
UF
2,302.80
2,217.65
51,339
47,581
3.80%
ESVAL S.A.
NO
Promissory Note
UF
4,739.92
4,560.25
105,672
97,843
3.90%
ESVAL S.A.
NO
Promissory Note
UF
8,887.90
8,543.61
198,147
183,308
3.99%
ESVAL S.A.
NO
Promissory Note
UF
2,209.84
2,120.56
49,266
45,498
4.17%
ESVAL S.A.
NO
Promissory Note
UF
1,290.18
1,237.82
28,763
26,558
4.19%
ESVAL S.A.
NO
Promissory Note
UF
3,637.58
3,489.29
81,096
74,865
4.21%
ESVAL S.A.
NO
Promissory Note
UF
3,570.81
3,423.92
79,608
73,462
4.24%
ESVAL S.A.
NO
Promissory Note
UF
6,129.75
5,868.04
136,657
125,902
4.41%
ESVAL S.A.
NO
Promissory Note
UF
3,529.32
3,371.20
78,683
72,331
4.64%
ESVAL S.A.
NO
Promissory Note
UF
2,659.55
2,539.44
59,292
54,485
4.68%
ESVAL S.A.
NO
Promissory Note
UF
1,355.22
1,291.43
30,213
27,708
4.88%
ESVAL S.A.
NO
Promissory Note
UF
2,764.54
2,633.14
61,633
56,496
4.93%
ESVAL S.A.
NO
Promissory Note
UF
1,536.80
1,461.52
34,261
31,358
5.09%
ESVAL S.A.
NO
Promissory Note
UF
4,325.13
4,107.05
96,425
88,119
5.24%
ESVAL S.A.
NO
Promissory Note
UF
25,389.91
24,079.96
566,043
516,649
5.37%
ESVAL S.A.
NO
Promissory Note
UF
5,192.17
4,923.83
115,754
105,643
5.38%
ESVAL S.A.
NO
Promissory Note
UF
18,721.57
17,725.40
417,379
380,308
5.54%
ESVAL S.A.
NO
Promissory Note
UF
11,272.92
10,664.01
251,319
228,802
5.63%
ESVAL S.A.
NO
Promissory Note
UF
23,695.86
22,400.24
528,276
480,609
5.70%
ESVAL S.A.
NO
Promissory Note
UF
12,217.37
11,500.87
272,374
246,757
6.14%
ESVAL S.A.
NO
Promissory Note
UF
4,592.90
4,311.77
102,394
92,511
6.42%
ESVAL S.A.
NO
Promissory Note
UF
8,750.86
8,155.52
195,092
174,981
7.17%
ESVAL S.A.
NO
Promissory Note
UF
7,860.54
7,274.23
175,243
156,073
7.90%
ESVAL S.A.
NO
Promissory Note
UF
9.23%
ESVAL S.A.
NO
2,542.29
2,323.00
56,679
49,841
884.094,01
921,853,48
19,710,019
19,778,874
Commercial papers, current:
107
Series
Nominal
Value
ThCh$
Adjustment
Unit
Maturity
Promissory Note
Or Line Of Credit
Interest
Rate
1231/2011
31/12/2010
ThCh$
ThCh$
Placement In
Chile Or Abroad
43
5A
0
12,850,000
22-11-2011
0.49
12,208,245
DOMESTIC
44
9A
0
12,850,000
05-12-2011
0.54
12,547,992
DOMESTIC
87
13A
0
7,450,000
13-07-2012
0.55
7,196,975
33,150,000
7,196,975
DOMESTIC
24,756,237
Bonds
Total Current Portion.
Periodicity
Current Nominal Value
Regis. Nr.
Instrument
Series
232
A
12.31.2011
31.12.2010
UF
UF
37,232
35,094
Adjst
Unit
UF
Nomin.
Ints.
Rate
7.00%
Efect.
Ints.
Rate
7.60%
Maturity
Date
15-10-2021
Payment
Of Inter
Semester
Payment
Amortiz.
Semester
Carrying Value
12.31.2011
31.12.2010
ThCh$
ThCh$
927,606
1,050,646
Placement
In Chile
Or Abroad
Nacional
293
D
87,820
82,779
UF
6.00%
6.87%
01-06-2027
Semester
Semester
2,145,400
2,370,610
Nacional
348
E
537,500
537,500
UF
3.80%
4.13%
15-07-2012
Semester
Semester
12,207,994
12,069,618
Nacional
419
H
166,667
83,333
UF
3.50%
3.75%
15-02-2026
Semester
Semester
4,465,149
2,712,470
Nacional
121,053
UF
3.40%
3.73%
15-03-2028
Semester
Semester
3,091,234
3,323,933
Nacional
-
UF
4.95%
4.83%
27-01-2014
Semester
Semester
257,330
237,193
Nacional
-
UF
4.90%
4.72%
27-01-2030
Semester
Semester
1,021,550
934,042
Nacional
24,116,263
22,698,512
493
J
121,053
561
K
-
562
M
950,271
859,759
ANNUAL REPORT
Instrument
Reg. No.
Carrrying Value
Total Non-Current Portion
108
Current Nominal Value
ANNUAL REPORT
Regis. Nr.
Instrument
Series
12.31.2011
31.12.2010
UF
UF
Nomin.
Ints.
Rate
Adjst
Unit
PERIODICITY
Efect.
Ints.
Rate
Maturity
Date
Payment
Of Inter
CARRYING VALUE
12.31.2011
31.12.2010
ThCh$
ThCh$
Placement
In Chile
Or Abroad
232
A
455,590
492,822
UF
7.00%
7.60%
15-10-2021
SEMESTER
SEMESTER
9,939,982
10,113,885
DOMESTIC
293
D
2,075,345
2,163,165
UF
6.00%
6.87%
01-06-2027
SEMESTER
SEMESTER
43,916,816
43,537,922
DOMESTIC
348
E
-
537,500
UF
3.80%
4.13%
15-07-2012
SEMESTER
SEMESTER
-
11,374,730
DOMESTIC
419
H
2,250,000
2,416,667
UF
3.50%
3.75%
15-02-2026
SEMESTER
SEMESTER
49,475,679
50,926,309
DOMESTIC
493
J
1,876,316
1,997,368
UF
3.40%
3.73%
15-03-2028
SEMESTER
SEMESTER
40,942,861
41,574,613
DOMESTIC
561
K
500,000
500,000
UF
4.95%
4.83%
27-01-2014
SEMESTER
SEMESTER
11,164,370
10,767,232
DOMESTIC
562
M
2,000,000
2,000,000
UF
4.90%
4.72%
27-01-2030
SEMESTER
SEMESTER
45,292,361
43,683,100
DOMESTIC
9,157,252
10,107,522
200,732,070
211,977,791
Summary of Financial Liabilities:
Current Portion
Registrion or
identification Nr.
of instrument
Bank borrowings
Promissory note AFR
Commercial paper
Bonds
Payment
Amortiz.
Currency
adjustment
index
Nominal amount U.F.
Carrying value
12/31/2011
12/31/2010
ThCh$
ThCh$
12/31/2011
12/31/2010
UF
-
-
247,396.00
Nominal
rate
-
3.85%
UF
122,551.69
20,074.54
2,732,171
430,710
2.98%
ThCh$
7,450,000
25,700,000
7,196,975
24,756,237
0.00%
UF
950,270.64
859,758.93
24,116,263
22,698,512
4.03%
34,292,805
47,885,459
Non-current Portion
109
Currency
adjustment
index
12/31/2011
Carrying value
12/31/2010
12/31/2011
12/31/2010
ThCh$
ThCh$
Nominal
rate
Bank borrowings
UF
1,500,000
-
33,182,998
-
3.85%
Promissory note AFR
UF
884,094.01
921,853.48
19,710,019
19,778,874
3.34%
Bonds
UF
9,157,251.57
10,107,522.20
200,732,070
211,977,792
4.61%
253,625,087
231,756,666
The company has complied with payment of all liabilities according to the corresponding
maturities and there have been no renegotiations of debt.
B. Risks
B.1 Business Risk
The sanitary market is a regulated market, including the pricing processes for drinking water
distribution and sewer systems. The regulatory authority, in addition to establishing the
tariff rates, issues product and operating quality regulations that are necessary to provide
these services. The business risks are related to the current regulatory framework, where
the regulatory authority establishes tariff rates after a process of seeking optimal operations
and investment in each system, establishing tariff rates that allow the recovery of the initial
investment and the necessary costs to operate in agreement with current regulations.
B.2 Financial Risk
The principal objectives of financial risk management are ensuring the availability of funds
in order to comply with financial commitments, and protecting the economic flow of value
of the Group’s assets and liabilities.
Such management is performed by identifying risks, determining each risk’s tolerance,
hedging of such financial risks and controling established hedge operations. In order
to achieve the objectives, financial risk management is based on hedging all significant
exposures to the extent there are adequate instruments and the cost is reasonable.
In addition, financial risks exist related to the financing of investments, the recovery periods
of such investments, as well as the costs of financing.
ANNUAL REPORT
Registrion or
identification Nr.
of instrument
Nominal amount U.F.
i. Credit Risk
110
Credit risk refers to the possibility of financial loss from failing to discharge obligations by the
Company’s counterparties (customers).
ANNUAL REPORT
The Company has a dispersed market, which means that the credit risk of a particular
customer is not significant.
The objective is to maintain minimum levels of uncollectible amounts. There is a credit
policy in place stipulating the terms and conditions and methods of payment, and also
the terms and conditions for reaching agreements with past due customers. Management
has developed processes to control, estimate and evaluate uncollectible accounts for the
purpose of taking corrective actions to achieve the proposed fulfillments. One of the main
actions performed to maintain a low level of uncollectible accounts is the suspension of
the provision of services. The method of analysis is based on historical records of accounts
receivable from customers and other debtors.
Current plus non-current credit risk
31/12/2011
31/12/2010
ThCh$
ThCh$
Exposure according to Balance Sheet for the following risks:
Trade and other Receivables, (gross)
36,963,845
34,340,314
Estimates for uncollectible accounts
-7,988,949
-7,451,878
28,974,896
26,888,436
Net exposure, risk concentrations
Trade accounts receivable and other accounts receivable
(by aging)
Under three months
31/12/2011
31/12/2010
ThCh$
ThCh$
26,433,194
24,914,595
Between three and twelve months
1,691,141
1,172,301
Over twelve months
8,839,510
8,253,418
Estimates for uncollectible accounts
Total
-7,988,949
-7,451,878
28,974,896
26,888,436
ii. Liquidity risk
111
ANNUAL REPORT
Liquidity risk is the possibility of adverse market situations denying the Group access to
sources of financing and failure to finance its acquired commitments, such as long-term
investments and working capital needs, at reasonable market prices.
Management follows up on provisions for the Group’s liquidity reserve in light of expected
cash flows.
Various preventive measures, such as diversifying financing sources and instruments, are
used to manage liquidity risk.
Liquidity risk is controlled regularly so as to perceive, detect and correct deviations to
minimize any possible effects on profit or loss.
Maturity profiles
Other Current Financial Liabilities:
Unsecured obligations (commercial paper) that accrue interests as of 12/31/2011:
Tax Numer
Issuing
Company
89.900.400-0
Name
Issuing
Company
ESVAL S.A.
Instrument
Commercial bills
Serie 13A
Currency
Ch$ pesos
not indexed
Nominal
value
7,450,000
7,450,000
Registration
Number
SVS
87
Interest
rate
contract
0.55%
Effective
interest
rate
0.55%
Final
Term
13-07-2012
Payment of
interests
Semester
1 to 90
days
91 days to
1 year
ThCh$
ThCh$
7,450,000
7,450,000
Company
creditor
company
Chile
Unsecured obligations (commercial paper) that accrue interests as of 12/31/2010:
112
ANNUAL REPORT
Tax Numer
Issuing
Company
Name
Issuing
Company
Instrument
Currency
Nominal
value
Registration
Number
SVS
Interest
rate
contract
Effective
interest
rate
Final
Term
Payment of
interests
1 to 90
days
91 days to 1
year
ThCh$
ThCh$
Company
creditor
company
89.900.400-0
ESVAL S.A.
Commercial bills
Serie 5A
Ch$ pesos
not indexed
12,850,000
43
0.49%
0.49%
22-11-2011
Anual
12,850,000
Chile
89.900.400-0
ESVAL S.A.
Commercial bills
Serie 7A
Ch$ pesos
not indexed
12,850,000
44
0.46%
0.46%
06-06-2011
Semester
12,850,000
Chile
25,700,000
25,700,000
Unesecured obligations (bonds) that accrue interests as of 12/31/2011:
Tax Numer
Issuing
Company
Name
Issuing
Company
Instrument
Currency
Nominal
value
Registration
Number
SVS
Interest
rate
contract
Effective
interest
rate
Final
Term
Payment of
interests
1 to 90 days
91 days to 1
year
ThCh$
ThCh$
Company
creditor
company
89.900.400-0
ESVAL S.A.
Bonds Serie A
of 15/10/2000
U.F.
70,674
232
7.00%
7.60%
15-10-2021
Semester
0
1,572,056
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie D
of 01/06/2002
U.F.
214,403
293
6.00%
6.87%
01-06-2027
Semester
0
4,780,738
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie E
of 15/07/2004
U.F.
552,746
348
3.80%
4.13%
15-07-2012
Semester
6,218,947
6,103,986
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie H
of 15/02/2005
U.F.
249,077
419
3.50%
3.75%
15-02-2026
Semester
2,792,578
2,760,346
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie J
of 15/03/2007
U.F.
187,375
493
3.40%
3.73%
15-03-2028
Semester
2,100,050
2,077,304
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie K
of 27/01/2009
U.F.
24,451
561
4.95%
4.83%
27-01-2014
Semester
272,556
272,556
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie M
of 27/01/2009
U.F.
96,828
562
4.90%
4.72%
27-01-2030
Semester
1,079,343
1,079,343
Chile
12,463,474
18,646,329
1,395,554
Unsecured obligations (bonds) that accrue interests as of 12/31/2010:
Tax Numer
Issuing
Company
Name
Issuing
Company
Instrument
Currency
Registration
Number
SVS
Nominal
value
Interest
rate
contract
Effective
interest
rate
Final
Term
Payment of
interests
1 to 90 days
ThCh$
ThCh$
Company
creditor
company
89.900.400-0
ESVAL S.A.
Bonds Serie A of
15/10/2000
U.F.
70,829
232
7.00%
7.60%
15-10-2021
Semester
0
1,519,668
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie D of
01/06/2002
U.F.
214,367
293
6.00%
6.87%
01-06-2027
Semester
0
4,599,358
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie E of
15/07/2004
U.F.
572,952
348
3.80%
4.13%
15-07-2012
Semester
6,203,924
6,089,086
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie H of
15/02/2005
U.F.
170,081
419
3.50%
3.75%
15-02-2026
Semester
930,608
2,718,568
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie J of
15/03/2007
U.F.
191,457
493
3.40%
3.73%
15-03-2028
Semester
2,064,854
2,042,963
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie K of
27/01/2009
U.F.
24,451
561
4.95%
4.83%
27-01-2014
Semester
262,305
262,305
Chile
89.900.400-0
ESVAL S.A.
Bonds Serie M of
27/01/2009
U.F.
96,828
562
4.90%
4.72%
27-01-2030
Semester
1,038,749
1,038,749
Chile
10,500,440
18,270,697
1,340,965
Reimbursable Financial Contributions (Promissory Notes) as of 31/12/2011:
Tax Numer
Issuing
Company
89.900.400-0
Name
Issuing
Company
ESVAL S.A.
Instrument
Promissory notes
Currency
UF
Kind of
Rate
Fixed
Basis
Half-year
Average
Interest
Rate
3.00%
Effective
Interest
Rate
3.00%
1 to 90 days
91 days to 1 year
ThCh$
ThCh$
444,913
2,331,554
444,913
2,331,554
Company
creditor
company
Chile
ANNUAL REPORT
113
91 days to 1
year
Reimbursable Financial Contributions (Promissory Notes) at 31/12/2010:
114
Tax Numer
Issuing
Company
89.900.400-0
Name
Issuing
Company
ESVAL S.A.
Instrument
Kind of
Rate
Currency
Promissory notes
UF
Average
Interest
Rate
Basis
Fija
Half-year
Effective
Interest
Rate
2.04%
1 to 90 days
91 days to 1 year
ThCh$
ThCh$
2.04%
0
Company
creditor
company
434,263
Chile
ANNUAL REPORT
434,263
Loans from financial entities at 01/01/2011:
Tax Numer
Issuing
Company
89.900.400-0
Name
Issuing
Company
ESVAL S.A.
Country
Debtor
Company
CHILE
Tax Nr.
Creditor
Institution
Name
Creditor
Institution
Currency
97.032.000-8
Banco BBVA
UF
Kind of
Rate
Fixed
Basis
Interest
rate
contract
Semester
3.85%
Effective
Interest
Rate
1 to 90 days
91 days to 1
year
ThCh$
ThCh$
3.98%
Company
creditor
company
1,275,308
0
Chile
1,275,308
Other Non-Current Financial Liabilities:
Unguaranteed obligations (bonds) that accrue interests at 31/12/2011:
Tax Numer
Issuing
Company
Name
Issuing
Company
Instrument
Currency
Registration
Number
SVS
Nominal
value
Interest
rate
contract
Effective
interest
rate
Final
Term
Payment
of
interests
More than
1 year to 3
More than
3 years to 5
More than
5 years
ThCh$
ThCh$
ThCh$
Company
creditor
company
89.900.400-0
ESVAL S.A.
Bonos Serie A del
15/10/2000
U.F.
652,142
232
7.00%
7.60%
15-10-2021
Semester
3,121,377
3,087,909
7,544,471
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie D del
01/06/2002
U.F.
3,228,295
293
6.00%
6.87%
01-06-2027
Semester
9,566,790
9,574,616
50,439,711
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie E del
15/07/2004
U.F.
-
348
3.80%
4.13%
15-07-2012
Semester
0
0
0
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie H del
15/02/2005
U.F.
2,796,510
419
3.50%
3.75%
15-02-2026
Semester
10,719,048
10,203,337
41,423,088
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie J del
15/03/2007
U.F.
2,382,410
493
3.40%
3.73%
15-03-2028
Semester
8,081,740
7,717,781
37,314,008
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie K
del 27/01/2009
U.F.
536,677
561
4.95%
4.83%
27-01-2014
Semester
11,964,682
0
0
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie M
del 27/01/2009
U.F.
3,186,143
562
4.90%
4.72%
27-01-2030
Semester
4,317,373
4,317,373
62,397,231
Chile
47,771,010
34,901,015
199,118,509
12,782,177
Unguaranteed obligations (bonds) that accrue interests as of 12/31/2010:
115
Name
Issuing
Company
Instrument
Nominal
value
Currency
Registration
Number
SVS
Interest
rate
contract
Effective
interest
rate
Final
Term
Payment
of
interests
More than
3 years to 5
More than
5 years
ThCh$
ThCh$
ThCh$
Company
creditor
company
ANNUAL REPORT
Tax Numer
Issuing
Company
More than
1 year to 3
89.900.400-0
ESVAL S.A.
Bonos Serie A
del 15/10/2000
U.F.
687,440
232
7.00%
7.60%
15-10-2021
Semester
3,018,714
2,988,354
8,742,342
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie D
del 01/06/2002
U.F.
3,335,505
293
6.00%
6.87%
01-06-2027
Semester
9,203,538
9,210,637
53,150,924
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie E
del 15/07/2004
U.F.
552,746
348
3.80%
4.13%
15-07-2012
Semester
11,859,467
89.900.400-0
ESVAL S.A.
Bonos Serie H
del 15/02/2005
U.F.
3,045,587
419
3.50%
3.75%
15-02-2026
Semester
10,564,069
10,067,749
44,712,916
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie J del
15/03/2007
U.F.
2,569,786
493
3.40%
3.73%
15-03-2028
Semester
7,952,920
7,602,650
39,580,599
Chile
89.900.400-0
ESVAL S.A.
Bonos Serie K
del 27/01/2009
U.F.
561,128
561
4.95%
4.83%
27-01-2014
Semester
1,049,219
10,990,080
89.900.400-0
ESVAL S.A.
Bonos Serie M
del 27/01/2009
U.F.
3,282,971
562
4.90%
4.72%
27-01-2030
Semester
4,154,996
4,154,996
62,127,965
47,802,923
45,014,465
208,314,745
14,035,163
Chile
Chile
Chile
Tax Numer
Issuing
Company
89.900.400-0
Name
Issuing
Company
Esval S.A.
Identification
of the
Instruments
Currency
Promissory Notes
UF
Kind of
Rate
Basis
Fixed
Half-Year
Interest
rate
contract
3,44%
Effective
interest
rate
3,44%
More than
1 year to 3
More than
3 years to 5
More than
5 years
ThCh$
ThCh$
ThCh$
Company
creditor
company
4.146.034
9.229.900
10.243.282
Chile
4.146.034
9.229.900
10.243.282
-
More than
1 year to 3
More than
3 years to 5
More than
5 years
ThCh$
ThCh$
ThCh$
3,964,375
6,133,979
13,890,866
Chile
3,964,375
6,133,979
13,890,866
-
Tax Numer
Issuing
Company
89.900.400-0
Name
Issuing
Company
ESVAL S.A.
Identification
of the
Instruments
Promissory notes
Currency
UF
Kind of
Rate
Fixed
Basis
Half-year
Interest
rate
contract
3.33%
Effective
interest
rate
3.33%
Company
creditor
company
Loans from financial entities at 12/31/2011:
116
Tax Numer
Issuing
Company
ANNUAL REPORT
89.900.400-0
Name
Issuing
Company
ESVAL S.A.
Country
Debtor
Company
CHILE
Tax Nr.
Creditor
Institution
Name
Creditor
Institution
97.032.000-8
Currency
Banco BBVA
UF
Kind of
Rate
Basis
Fixed
Semester
iii. Interest Rate Risk
The Company has a fixed rate debt structure as specified in the table below:
Debt Instruments
Interest
Rate
12/31/2011
12/31/2010
%
%
Bank Borrowings
Fixed
Commercial Papers
Fixed
2.50%
8.85%
Bonds
Fixed
78.10%
83.92%
AFR
Fixed
7.79%
7.23%
100.00%
100.00%
Total
11.61%
0.00%
Total other financial assets by company are:
Company
Instruments
12/31/2011
12/31/2010
ThCh$
ThCh$
Esval S.A.
Cash and banks
157,723
158,500
Esval S.A.
Mutual Fund
-
-
Esval S.A.
Covenants
14,757,446
16,915,089
14.915.169
17.073.589
Total Investments (other assets)
Interest
rate
contract
Effective
Interest
Rate
3.85%
3.98%
Más de 1
año a 3
Más de 3
años a 5
ThCh$
ThCh$
2,550,615
35,991,660
2,550,615
35,991,660
Company
creditor
company
Chile
IV. Risk UF variation
117
ANNUAL REPORT
97.5% of the financial debt is structured in UF, which is consistent with the cash flows of the
Company.
The revenues of the Company correspond 100% to Chilean pesos and are mostly related
with tariff indexations. Sales tariff rates include in indicators associated to the economy (CPI
and IPMN), which indicate an adequate hedging between revenues and liabilities.
C. Derivative instruments
The Company does not have any derivative instruments.
D. Fair Value of Financial Instruments
Fair value of financial instruments measured at amortized cost is as follows:
12/31/2011
12/31/2010
Amort. Cost
Fair Value
Amort. Cost
Fair Value
ThCh$
ThCh$
ThCh$
ThCh$
Financial Assets
Investments held at amortized cost
Investments in marketable securities
43,912,312
43,912,312
43,803,525
43,803,525
-
-
-
-
Trade and other accounts receivable, net
29,154,866
29,154,866
26,888,436
26,888,436
Resale agreements
14,757,446
14,757,446
16,915,089
16,915,089
300,368,121
310,366,227
290,600,093
290,600,093
Financial Liabilities
Financial liabilities held at amortized cost
Bank borrowings
33,430,394
33,403,923
-
-
Trade and other accounts payable
12,450,229
12,450,229
10,957,968
10,957,968
7,196,975
6,942,922
24,756,237
24,756,237
224,848,333
235,856,334
234,676,303
234,676,303
22,442,190
21,712,819
20,209,585
20,209,585
Commercial papers
Bonds
AFR
Methodology and assumptions used in determining fair value.
118
Fair value of financial assets and liabilities is determined using the following methodology:
ANNUAL REPORT
The fair value of the financial assets (Trade debtors and other receivables and the Repurchase
agreements), as these are of short-term, is considered to be similar in value to the amortized
cost of such assets.
The fair value of trade and other payables, as these are short-term, is considered to be similar
in value to the amortized cost of such liabilities.
The fair value of bank loans is determined by comparison with investments in financial credit
institutions with similar characteristics, at the date of the financial statements.
The fair value of trade securities is determined by the value of the transactions of such
instruments published as of December 30, 2011 by the Superintendency of Pension Fund
Administrators.
The fair value of bonds is determined by the value of the transactions of these instruments
published in December of 2011 by the Santiago Stock Exchange.
As there exists no active market for these instruments and all transactions are not informed
to the public, the fair value of reimbursable financial contributions is determined based on
the following characteristics:
• Assimilation at market value of the J Bonds, as these have similar average rates and
company risk.
• Consideration of a higher risk effect of the J Bond, representing approximately 0.5% as
they do not count on backup clauses as those of J Bonds.
6. Trade And Other Receivable
119
12/31/2011
Current
12/31/2010
Esval S.A.
Total
Esval S.A.
Total
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
Trade accounts receivable
25,229,549
7,254,122
32,483,671
23,547,484
6,386,475
29,933,959
Provision for uncollectible accounts
(5,575,057)
(1,201,275)
(6,776,332)
(5,127,210)
(1,141,746)
(6,268,956)
Trade accounts receivable, net
19,654,492
6,052,847
25,707,339
18,420,274
5,244,729
23,665,003
Notes receivable
128,383
44,488
172,871
83,032
38,628
121,660
(71,892)
(32,655)
(104,547)
(45,610)
(29,242)
(74,852)
Notes receivable, net
56,491
11,833
68,324
37,422
9,386
46,808
Sundry debtors
3,884,733
422,569
4,307,302
4,044,489
240,206
4,284,695
(1,084,940)
(23,129)
(1,108,069)
(1,084,941)
(23,129)
(1,108,070)
Sundry debtors, net
2,799,793
399,440
3,199,233
2,959,548
217,077
3,176,625
22,510,776
6,464,120
28,974,896
21,417,244
5,471,192
26,888,436
Total trade receivables and other receivables, current, net
12/31/2011
Non Current
12/31/2010
Esval S.A.
Total
Esval S.A.
Total
M$
M$
M$
M$
M$
M$
Long-term accounts receivable
Total trade receivables and other receivables, non current, net
In general, balances included in this item do not bear interest.
203,764
0
203,764
206,869
0
206,869
(177,355)
0
(177,355)
(177,355)
0
(177,355)
26,409
0
26,409
29,514
0
29,514
ANNUAL REPORT
The detail of this item is as follows:
There are no significant restrictions on disposing of this kind of account receivable.
120
There are individually no customers that maintain significant balances in relation to the
Group’s total revenues or receivables.
See Note 7 for amounts, and terms and conditions related to accounts receivable from
related parties.
ANNUAL REPORT
Average period of collection:
Esval S.A. : Aguas del Vallle S.A. : 1.82 months
1.52 months
The analysis of trade and other receivable at the end of each reporting period is as follows:
Detail
Aged less than one month
Aged from one to three months
Aged from four to six months
12/31/2011
12/31/2010
ThCh$
ThCh$
14,143,247
12,346,715
3,486,472
3,110,469
523,944
474,852
Aged from seven to eleven months
1,167,198
697,449
Aged more than twelve months
7,438,314
7,146,662
Suspended clients
1,401,195
1,106,756
Clients from other services
8,803,475
9,457,411
36,963,845
34,340,314
7,451,878
7,069,992
537,071
381,886
Total
Changes in the debtor impairment provision were as follows:
Initial balance al January 1
Increase in the provision during the year
Final balance
Trade and Other Receivables, Net, Current
7,988,949
7,451,878
28,974,896
26,888,436
7. Related Party Disclosures
121
Taxpayer No.
Name of company
Direc %
Indirect %
Total 2011
Total 2010
%
%
%
%
ANNUAL REPORT
Identification Of Subsidiaries:
99.541.380-9
99.0000
0.9999
99.9999
99.9999
76.027.490-9
99.9900
0.0000
99.9900
99.9900
Balances and Transactions with related parties:
Transactions between the Company and its subsidiaries are performed under market
conditions. These transactions have been eliminated in the process of consolidation and are
not broken down in this note.
At December 31, 2010, accounts payable to the related company Lago Peñuelas S.A. of
ThCh$646 has been recorded.
Remuneration to Board of Directors and Directors Committee:
Esval S.A.
At December 31, 2011
Pedro Pablo Errazuriz Domínguez
Fee For
attendance
Remuneration
Directors
Committe
Other
ThCh$
ThCh$
ThCh$
ThCh$
7,732
-
515
-
89,682
-
1,817
-
27,572
-
-
-
3,770
-
2,611
-
Olivia Steedman
23,629
-
-
-
15,652
-
4,174
-
23,629
-
782
-
15,862
-
4,230
-
9,954
-
2,127
-
-
-
-
-
16,256
-
Total
217,482
-
Esval S.A.
At December 31, 2010
ANNUAL REPORT
122
Fee For
attendance
Remuneration
Directors
Committe
Other
ThCh$
ThCh$
ThCh$
ThCh$
Kevin Davi Kerr
11,353
-
-
-
Pedro Pablo Errazuriz Domínguez
76,463
-
5,098
15,087
34,332
-
3,052
-
13,443
-
-
-
7,658
-
2,046
-
Olivia Steedman
22,888
-
-
-
15,344
-
4,092
-
15,344
-
-
-
-
-
-
-
Alejandro Reyes Vergara
7,544
-
2,012
Mónica Singer González
7,544
-
1,006
-
Rodrigo Pérez Mackenna
7,544
-
1,006
-
219,457
-
18,312
15,087
Total
The fees paid to Directors and Directors Committee are presented in the Statements of
Income under the item Other Expenses.
Details of Related Parties and Transactions with Related Parties between Directors and
Executives:
- The Company’s management is not aware of any transactions between related parties and
directors and/or executives.
Key management personnel incentive plans:
Esval S.A. has set up an annual bonus plan for its key executives based on to accomplishment
of goals and the level of their individual contribution to the company’s profit or loss.
8. Inventories
123
ANNUAL REPORT
Inventory Measurement Policy:
Inventories are measured at the lower of cost and net realizable value. The cost method is
the weighted average cost.
Classes of inventories
12/31/2011
12/31/2010
ThCh$
ThCh$
Domestic material in warehouse
323,397
317,139
Chemical products
87,513
82,920
Fuel (petrol cards)
20,967
20,587
Fuel (petroleum cards)
47,295
34,583
Provision for obsolescence
Total inventories
-6,167
-1,326
473,005
453,903
The cost of inventories recognized as an expense during the year ended to December 2011
was ThCh$1,725,281 (ThCh$1,825,613 in 2010).
9. Intangible Assets
The table below presents movements in intangible assets for the reported periods, measured
as described in Note 2.4 letter d.
TABLE OF INTANGIBLE MOVEMENTS JANUARY TO DECEMBER 2011 (Consolidated)
Item
WATER RIGHTS (Indefinite useful life)
EASEMENTS (Indefinite useful life)
SOFTWARE AND LICENSES NET
Opening
Balance
Additions
Transfers
Sales
Amortization
Expenses
Other Increases
(derecognitions)
Total Changes
Closing
Balance
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
25,139,666
252,974
(467,846)
0
0
0
(214,872)
24,924,794
2,775,142
178,515
467,846
0
0
0
646,361
3,421,503
939,051
936,217
0
0
(339,908)
0
596,309
1,535,360
2,519,522
61,930
0
0
(202,742)
0
(140,812)
2,378,710
INTANGIBLES COQUIMBO SANITATION CONCESSION NET - (Initial
payment)
42,749,971
0
0
0
(1,861,133)
0
(1,861,133)
40,888,838
INTANGIBLES COQUIMBO SANITATION CONCESSION NET (Operating assets)
43,805,690
5,794,263
0
0
(1,490,784)
0
4,303,479
48,109,169
117,929,042
7,223,899
0
0
(3,894,567)
0
3,329,332
121,258,374
OTHER INTAGIBLE NET
Total Intangibles
TABLE OF INTANGIBLE MOVEMENTS JANUARY TO DECEMBER 2010 (Consolidated)
124
Item
Additions
Transfers
Sales
Amortization
Expenses
Other Increases
(derecognitions)
Total Changes
Closing
Balance
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
24,997,555
159,737
(17,626)
0
0
0
142,111
25,139,666
EASEMENTS (Indefinite useful life)
2,753,489
71,311
(49,658)
0
0
0
21,653
2,775,142
SOFTWARE AND LICENSES NET
1,542,710
112,386
0
0
(716,045)
0
(603,659)
939,051
OTHER INTAGIBLE NET
WATER RIGHTS (Indefinite useful life)
ANNUAL REPORT
Opening
Balance
2,430,664
543,547
(111,904)
0
(342,785)
0
88,858
2,519,522
INTANGIBLES COQUIMBO SANITATION CONCESSION
NET - (Initial payment)
44,657,746
0
(25,198)
0
(1,882,577)
0
(1,907,775)
42,749,971
INTANGIBLES COQUIMBO SANITATION CONCESSION
NET - (Operating assets)
43,227,373
4,637,854
204,386
0
(558,171)
(3,705,752)
578,317
43,805,690
119,609,537
5,524,835
0
0
(3,499,578)
(3,705,752)
(1,680,495)
117,929,042
Total Intangibles
As of December 31, 2011, the Company and its subsidiaries do not keep contractual
agreements for the acquisition of new intangible assets.
10. Property, Plant And Equipment
The following information is related to Property, Plant and Equipment:
Net Values:
Property, Plant And Equipment
Construction in Progress, Net
12/31/2011
12/31/2010
ThCh$
ThCh$
12,910,834
20,253,389
Land, Net
30,277,521
29906296
Buildings, Net
14,007,861
14,241,139
Plant and Equipment, Net
16,881,816
17,498,251
IT Equipment, Net
Fixtures and Fittings, Net
Motor Vehicles, Net
436,602
471,827
394,114,200
384,750,250
404,507
371,651
1,206,602
1,229,370
Other Property, Plant and Equipment, Net
1,049,246
1,079,993
Other Allocations Support Activities
Property, Plant and Equipment, Net
1,273,383
1,047,751
472,562,572
470,849,917
Gross values:
Construction in Progress, Gross
Land, gross
12/31/2010
ThCh$
ThCh$
12,910,834
20,253,389
30,227,521
29,906,296
Buildings, gross
20,626,974
20,422,559
Plant and Equipment, gross
42,547,967
40,502,545
2,922,675
2,668,084
IT Equipment, gross
572,188,910
551,648,382
Motor Vehicles, gross
Fixtures and Fittings, gross
1,646,593
1,578,425
Plant and Equipment, gross
4,499,714
4,316,844
Other Property, Plant and Equipment, gross
1,518,760
1,520,366
1,273,383
1,047,751
690,413,331
673,864,641
Property, Plant and Equipment, gross
Detail of Accumulated depreciation:
Buildings,
Plant and Equipment
IT Equipment,
Fixtures and Fittings,
12/31/2011
12/31/2010
ThCh$
ThCh$
6,619,113
6,181,420
25,666,151
23,004,294
2,486,073
2,196,257
178,074,710
166,898,132
Motor Vehicles,
1,242,086
1,206,774
Furniture and Equipment,
3,293,112
3,087,474
Other Property, Plant and Equipment
Accumulated Depreciation
469,514
440,372
217,850,759
203,014,723
Reconciliation of changes to property, plant and equipment by class:
As specified in IAS 16, paragraph 73, information is provided for each class of the entity’s
Property, Plant and Equipment.
ANNUAL REPORT
125
12/31/2011
Movement Chart Consolidated Fixed Assets January And December 2011:
126
Initial
balance
Additions
Transfers
Netting
Urbanizations
Sales
Depreciation
expenses
Other
increases
(decreases)
Changes
Total
Final Balance
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
20,253,388
13,077,154
(20,321,906)
0
0
0
(97,802)
(7,342,554)
12,910,834
Land, Net
29,906,297
304,700
81,524
0
0
0
(15,000)
371,224
30,277,521
Buildings, Net
14,241,155
129,533
74,883
0
0
(437,710)
0
(233,294)
14,007,861
17,492,285
1,302,981
758,544
0
0
(2,658,142)
(13,852)
(610,469)
16,881,816
472,070
164,266
76,931
0
0
(206,198)
0
34,999
507,069
384,758,198
6,793,462
19,385,322
(5,296,437)
0
(11,293,507)
(303,306)
9,285,534
394,043,732
ANNUAL REPORT
Concept
IT Equipment, Net
Fixes installations and accessories, Net
371,651
205,373
19,494
0
(21,695)
(139,800)
0
63,372
435,023
Furniture and equipment, Net
Motor vehicles, Net
1,230,581
111,728
8,044
0
0
(174,121)
(146)
(54,495)
1,176,086
Other property, plant and equipment, Net
1,078,388
1,605
0
0
0
(30,747)
0
(29,142)
1,049,246
Other Charges Supporting Activities
1,045,904
409,250
(82,836)
0
0
0
(98,934)
227,480
1,273,384
0
0
0
0
0
0
0
0
0
470,849,917
22,500,052
0
(5,296,437)
(21,695)
(14,940,225)
(529,040)
1,712,655
472,562,572
Total Operating Assets in Concession Coquimbo
Total Assets Esval
Movement Chart Consolidated Fixed Assets January And December 2010:
Initial
balance
Additions
Transfers
Netting
Urbanizations
Ventas
Depreciation
expenses
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
13,740,670
14,337,401
(7,809,483)
0
0
0
(15,200)
6,512,718
20,253,388
Land, Net
29,763,200
141,766
1,331
0
0
0
0
143,097
29,906,297
Buildings, Net
12,616,819
141,101
1,908,776
0
0
(416,496)
(9,061)
1,624,320
14,241,139
18,285,008
1,297,054
488,301
0
0
(2,525,816)
(46,296)
(786,757)
17,498,251
488,250
152,757
22,089
0
0
(305,217)
0
(130,371)
357,879
388,629,665
12,765,142
6,891,887
(12,786,894)
0
(10,645,142)
(104,408)
(3,879,415)
384,750,250
Concept
IT Equipment, Net
Fixes installations and accessories, Net
Changes
Total
Final Balance
ThCh$
ThCh$
Motor vehicles, Net
338,989
36,758
20,201
0
0
(87,429)
(1,227)
(31,697)
307,292
Furniture and equipment, Net
938,610
180,472
49,049
0
0
(211,800)
(1,214)
16,507
955,117
1,634,904
0
(237,978)
0
0
(316,932)
0
(554,910)
1,079,994
Other Charges Supporting Activities
898,448
1,096,471
(1,284,148)
0
0
0
0
(187,677)
710,771
Total Operating Assets in Concession Coquimbo
806,668
161,048
(50,025)
0
0
(128,152)
0
(17,129)
789,539
468,141,231
30,309,970
0
(12,786,894)
0
(14,636,984)
(177,406)
2,708,686
470,849,917
Other property, plant and equipment, Net
Total Assets Esval
The fixed assets contributed by third parties and which are associated to urbanizations, at
each year-end, are stated net of the complementary account associated with its capitalization.
The capitalization costs during the periods ended December 31, 2011 and December 31,
2010 are as follows:
Year 2011:
Esval S.A. :
Aguas del Valle S.A. :
ThCh$241,147
ThCh$255,987
Year 2010:
Esval S.A. :
Aguas del Valle S.A. :
ThCh$309.242
ThCh$211.454
For the year ended December 31, 2011, restrictions and commitments for the Company and
its Subsidiaries are as follows:
- There are no restrictions on the ownership of the property, plant and equipment, nor are
they subject to any kind of guarantees for the compliance of obligations;
- No commitments for the acquisition of property, plant and equipment that need to be
disclosed exist.
ANNUAL REPORT
127
Other
increases
(decreases)
11. Impairment Of Assets
ANNUAL REPORT
128
Information to be disclosed on impairment of the value of the assets by cash generating unit:
Each Company separately, i.e. Esval S.A. y Aguas del Valle S.A., is defined as a Cash Generating
Unit, since each is individually capable of generating future economic benefits. As specified
in the standard, the Company will assess whether there is any indication of impairment of
the value of any asset at each year-end. If there is any such indication, the Company will
estimate the recoverable amount of the asset. Indefinite-lived assets will be tested for
impairment at each year-end.
According to the impairment tests performed upon the first-time adoption of the
international standards, there was no impairment of either of the two companies.
Esval S.A. y Aguas del Valle S.A. perform annual impairment tests on their indefinite-lived
intangible assets, and property, plant and equipment.
The respective impairment tests were performed at December 31, 2011 and 2010 based on
the estimates and projections available to the Company, with no impairment occurring in
either of the Company’s two Cash Generating Units.
Comparison of the value of the property, plant and equipment and the projected future flows:
PROJECTED FUTURE FLOWS
12/31/2011
12/31/2010
ThCh$
ThCh$
722,034
722,034
Fixed assets gross
690,414
673,865
Accumulated depreciations
-217,851
-203,015
Carrying value
472,563
470,850
Intangible assets gross
150,237
147,879
-28,978
-26,244
Carrying values
Accumulated amortization
121,259
121,635
ASSETS IFRS
593,822
592,485
12,911
33,405
IMPAIRMENT ADJUSTED ASSETS
580,911
559,080
24%
29%
Difference (if negative, there is impairment)
141,123
162,954
Construction in progress
12. Other Non-Current Financial AssetS
Accounts receivable from ECONSA CHILE S.A.:
The Aguas del Valle S.A. subsidiary owns exploitation rights of the sanitary concessions of
the Coquimbo region awarded through public bid by Empresa de Servicios Sanitarios de
Coquimbo (ESSCO) (currently ECONSSA CHILE S.A.). This concession agreement is valued as
established in IFRIC 12.
According to the criteria defined in Note 2.4 d) and pursuant to the concession contract
signed by Aguas del Valle S.A., the latter will be entitled to recover the value of the investments
that are not paid through tariffs at the end of the concession. Therefore, Aguas del Valle S.A.
has recognized accounts receivable that is expected to be recovered upon termination of
the concession (in 2033), considering the following parameters for its determination:
•
All actual investments in infrastructure have been considered (whose useful life exceeds
the concession period) incurred in the years corresponding from 2004 to 2011, and
which were informed on an annual basis to Econssa Chile S.A. through Appendix 24 of
the Concession Contract.
•
The indexation of the account receivable has been determined as per the established in
the contract signed by the parties.
•
The present value of the account receivable has been determined, considering a
discount rate of 7%.
The amount of this account receivable for the years ended 2011 and 2010, is as follows:
2011:
Amount of accounts receivable valued upon termination
of the concession contract (December 2033) ThCh$
22,992,228
Present value of the account receivable
ThCh$
4,850,139 (*)
Amount of accounts receivable valued upon termination
of the concession contract (December 2033) ThCh$
17,567,230
Present value of hte account receivable
ThCh$
3,705,752 (*)
2010:
(*) = A discount rate equivalent to the expected performance rate (7% per annum) of the business and the
expected collection period is considered for these accounts receivable.
ANNUAL REPORT
129
130
13. Other Non-Current Non-Financial Assets
ANNUAL REPORT
Other non-current non-financial assets as of December 31, 2010 and 2011 is as follows:
Recovery contract management Litoral Sur
12/31/2011
12/31/2010
ThCh$
ThCh$
12,769,705
13,535,300
Sanitary study Esval S.A.
664,843
945,076
Tariff study Aguas del Valle S.A.
837,610
0
-
146,575
14,272,158
14,626,951
Other assets
Totals
14. Provisions And Contingent Liabilities
A. Provisions
The detail of this item is as follows:
Clases de provisiones
12/31/2011
12/31/2010
ThCh$
ThCh$
Other provisions, current
Provision for legal claims
242,931
141,702
Other provisions, current
249,817
292,595
Total other provisions, current
492,748
434,297
Provisions for employee benefits, current:
Participation in income and expenses
2,954,897
3,008,656
2,954,897
3,008,656
Severance indemnity provision
430,498
535,123
Total provisions for employee benefits, non-current:
430,498
535,123
Total provisions for employee benefits, current:
Provisions for employee benefits, non-current:
As of December 31, 2011 and 2010, movement in current provisions is as follows:
Initial balance provisions
Changes to provisions
Increases (decreases) in existing provisions
Provision used
Other increase (decrease)
Legal
claims
Other
provisions
ThCh$
ThCh$
ThCh$
141,702
292,595
3,008,656
Total
ThCh$
ANNUAL REPORT
131
Interests
in profits and
bonds
3,442,953
-
-
-
0
101,229
-42,778
1,666,667
1,725,118
-
-
-1,703,244
-1,703,244
-
-
-17,182
-17,182
Total changes to provisions
101,229
-42,778
-53,759
4,692
End balance provisions
242,931
249,817
2,954,897
3,447,645
B. Contingent liabilities
ESVAL S.A.:
- Lawsuits or other legal actions in which the Company is involved:
As of December 31, 2011, the Company is involved in lawsuits that, in aggregate could result
in an estimated loss of ThCh$242.931 (ThCh$141.702 at December 31, 2010), which has
been reserved for as shown in Letter A of this note.
The Company has various civil lawsuits principally related to compensation for damages
that are currently in process. The most significant lawsuits represent in aggregate a possible
contingency of approximately ThCh$6.065.938 in total.
The most significant legal proceedings are as follows:
132
Case No.
Parties
Amount
Origin
Current Status and Evaluation
Euro América Seguros vs.
Esval S.A.
5.765 UF There are
insurance covers with
a deductible of 350 UF
Compensation for damages
for alleged drop in pressure
in fire hydrants in a fire
First appealable sentence favorable. Appeal for annulment
in the form and appeal lodged by the plaintiff dismissed and
first appealable sentence confirmed.
Appeal for annulment in form and substance filed by the
plaintiff. The sentence appealed against
is expected to be validated
1st Civil Valparaíso
Herrera and others vs.
Esval
ThCh$1,011,857,118 plus
interest,
indexation and costs.
There are insurance covers with
a deductible of UF 350.
for alleged non-contractual
liability in a fire
First appealable sentence favorable. Appeal for annulment
in the form and appeal lodged by the plaintiff dismissed and
first appealable sentence confirmed.
Appeal for annulment in form and substance filed
by the plaintiff. The sentence appealed against
is expected to be validated
3027-2010
2º Civil Valparaìso
Municipality
of Viña del Mar
with Esval S.A.
ThCh$111,092,505, plus
interests (Arts. 47 and 48 L.
Municipal Income
in relation to Arts. 53,
54 and 55 of the Tax Code).
Executive lawsuits for charges of
municipal rights due
to breakdown of pavement and
occupation of public road
In first instance filed execution exceptions
which are pending of resolution
2550-2006
5th Civil Valparaíso
Fernández Toro vs.
Esval S.A.
ThCh$105.000 plus indexation,
interest and costs
non-contractual liability in
presence of sewer in premises of
plaintiff
In first instance and the period of discussion is ongoing.
Probable sentence favorable to Esval S.A.
2108-2002
2nd Civil Viña del Mar
Selame vs.
Constructora CRY and others
interest and costs, with
insurance covers with a
deductible of US$10.000.
for flooding of houses
In first instance. Perìodo probatorio extraordinario en
desarrollo. Sentence probably favourable to Esval S.A.
1946-2008
Lea (Cubillos) vs.
Esval S.A.
interest and costs
for non-contractual liability
stemming from alleged
non-performance by Esval S.A.
In first instance Probable sentence favorable to Esval S.A.
for damage to property
from overflow of sewer
In first instance the discussion stage has been
completed. Evidence stage being developed. Probable
sentence favorable to ESVAL S.A.
ANNUAL REPORT
350-2000
1952-2002
Court
2026-2007
4th Civil Valparaíso
Riberas del Aconcagua
vs
Esval S.A.
Ch$ 394,517 plus indexation,
interest and costs plus
affirmative covenant. There are
insurance covers
with a deductible of 10% of
the loss with a minimum of
UF 1400
1304-2009
5th Civil Valparaiso
Stella S.A. vs. Esval S.A.
ThCh$3.765.972, plus interest,
indexation and costs
compensation for damages
for alleged non-performance
of contract
In first instance. Probable
sentence favorable to Esval S.A.
3011- 2010
1st Civil of Valparaíso
Municipality of Viña del Mar vs.
Esval S.A.
$485.189.877, plus interests,
indexation and costs
Executive lawsuit, for municipal
rights due to rupture and
replacement of pavement.
Appeals have been files to the execution, with are currently
pending resolution.
(Continued)
5th Civil of Valparaíso
65.604-2009
2736-2007
1º de Letras de San
Antonio
1º Civil de Valparaíso
Ordinary lawsuits for
compensation of damages for
the death in a traffic accident of
a company employee, Mr. Jaime
Santibáñez Campos
In first instance. Extraordinary proof period pending. Probable
sentence favorable to Esval S.A..
Jiménez y otros con Esval S.A.
Ch$106,200,000,plus interest,
adjustments and court costs
Indemnity for damages caused
by the entry of wastewater to
different premises.
Pending in first instance.
Ch$506,168,583.-
Indemnity for damages for
contractual responsibility and
in subsidy, extracontractual,
for the nullity and breach of
contracts that plaintiff signed
with Esval S.A.
Pending in first instance.
Singecom Limitada con
Esval S.A.
In addition, the Company expects a favorable outcome in the following minor lawsuits
grouped by subject matter as follows:
Matter
Amount
Procedural Stage
Total Amount Involved
22
16 in first instance, 4 in second
instannce and 2 in cassation
ThCh$825,907,943 plus and
undetermined amount
Easements
3
All in first instace
Ch$294,847,915 pluse an
undetermined amount
Municipal Fees
2
2 in first instance
ThCh$95,773,199
Restitution of property
7
All in first instance
5 of undetermined amount and 2 for
ThCh$48.700.000
Collection of pesos
3
ThCh$87,814,300
Enviromental action
1
In first instance
Undetermined amount
Total cases
38
Total Amounts Involved
Ch$1,353,043,357
In addition, at December 31, 2011, the Company is subject to the following embargos and
precautionary measures under the terms and conditions specified in each particular case:
a) Ordinary proceedings entitled “Illustrious Municipality deLimache vs. ESVAL S.A.”, heard by
the Fourth Civil Court of Valparaiso, case number 3.069-2003, for collection of municipal fees
for execution of works on public thoroughfares. In this proceeding in which nolle prosequi
was declared Ch$75,194,142 in funds deposited in a checking account held by Esval S.A. at
Banco Santiago were seized.
133
ANNUAL REPORT
4375-2009
Pérez Romero Valentina vs.
Esval S.A.
Ch$167.000.000, plus interests,
indexation and costs. There are
insurance covres for the claim
with a deductible of 10% of
the loss with a minimum of
UF 1400.
134
b) Ordinary proceedings entitled “Le Roy vs. Esval S.A.” for restitution of property. This case
resulted in the establishment of a precautionary measure to prohibit the negotiation of
acts or contracts on the same property which forms part of the El Rebaño Farm in Quilpué.
These proceedings have concluded and Esval S.A. petitioned for, and the Court granted, the
removal of the precautionary measure. Such action currently needs to be registered in the
Real Estate Register in Quilpué.
ANNUAL REPORT
Aguas del Valle S.A.:
The Company currently faces two civil lawsuits for an undetermined amount and one labor
lawsuit for compensation of damages for approximately ThCh$772,200.
If these lawsuits, identified in the two tables below, result in an unfavorable decision,
provided that such resolution is final and enforceable, at that time a determination will be
made in regards to the the appropriate treatment in the equity of ECONSSA CHILE (formerly
ESSAN S.A) or Aguas del Valle S.A. as provided by the “Contract of Transfer of the Right to
Exploit Sanitary Concessions” and its respective appendices, signed by Empresa de Servicios
Sanitarios de Coquimbo S.A., ECONSSA CHILE (formerly ESSCO S.A.) and Aguas del Valle S.A.,
on December 22, 2003.
The significant lawsuits of a determinable amount that are included in the regulation
indicated in the previous paragraph, with the except for the last one, are as follows:
Report On Proceedings Aguas Del Valle S.A.
Case No.
Court
Parties
Amount
Origin
Current Status and Evaluation
Unfavorable first appealable sentence
issued. Appeal sentence reduces
compensation to be paid be Aguas del
Valle S.A. from Ch$142,560,000, to
Ch$100,000,000 Aguas del Valle S.A.
makes cassation appeal that is rejected
by sentence dated 11.04.11
Waiting for the execution of sentence
10-2007
3rd Civil Coquimbo
Valdés Chirinos vs
Ch$100,000,000
plus insurance for
30.000 UF and costs
in non-contractual setting due to
existence of drinking water
piping on the premises of the
plaintiff
452-2010
3rd Court of Ovalle
González Saint Loup
vs. Aguas del Valle
Ch$265,000,000
Adjustment of easement and
compensation for damages
Evidence stage concluded. Parts
summoned for sentencing
22-2009
Civil court of Illapel
Hernández Juarez, Teresa vs.
Rojas Espinoza and Aguas
del Valle
Ch$407,200,000.-
Damage indemnity for labor accident
Awaiting for notification to the main
defendant, archived on 03.23.11
Easement
2
Total Law suits
2
Ch$50,000,000, plus an undetermined
amount
Total Amount
Ch$50,000,000
Further, the following table presents lawsuits which only affect the results of Aguas del Valle
S.A. grouped according to the nature of the case . Such lawsuits include three immaterial
judgments that are expected to have a favorable result for the Company.
Matter
Damage Indemnity
Amount
Procedural Stage
2
Amount Involved
In first instance
Ch$43,000,000
Collective or diffused interest
1
In first instance
Indetermined. Request return of amounts
charged and the application of fines
Consumer Protection
1
In first instance
Ch$44,605,000
Easement
1
In first instance
Ch$50,000,000
Total Lawsuits
5
Monto total
TOTAL AMOUNTS INVOLVED
$ 93.000.000.-
Ch$187,605,000
In certain of the Parent Company’s debt contracts Aguas del Valle S.A. is prohibited from
pledging the exploitation rights of the sanitary concessions of Essco S.A.(currently ECONSSA
CHILE) and also the rights derived from such contract related to the use and benefit of the
exploitation rights, as well as those from current or future revenues or cash flows.
135
ANNUAL REPORT
In addition, the following lawsuits related to the application of the standard mentioned
above for which the Company expects a favorable result are as follows:
136
15. Net Equity
ANNUAL REPORT
15.1 Equity of the Parent
15.1.1 Subscribed and paid-in capital and number of shares
At December 31, 2011, the issued capital stock of Esval S.A. was ThCh$196.176.015
(ThCh$196.207.284 at December 31, 2010), comprised of 14.962.276.336.000 face value
shares fully registered and paid (as detailed in note 2.5) which have listed with the Santiago
Stock Exchange of Santiago de Chile, Electronic Stock Exchange of Chile, and the Stock
Exchange of Valparaíso.
These amounts decreased due to the effect of the share repurchase exercised by the
shareholders during 2011, whose shares will be given a preferential option as of January 2,
2012. See detail of this transaction in note 2.5.
15.2 Dividends:
The dividends payment policy is determined on an annual basis. Dividends approved and
paid by Esval S.A. during 2011 and 2010 were as follows:
At the Ordinary Shareholders’ Meeting held on April 29, 2011, shareholders agreed to
distribute 100% of 2010net income, equivalent to Ch$0.00115578584 per Company share,
reduced by the interim dividends paid on August 27, 2010 and February 3, 2011. The
remainder was paid to the shareholders on May 27, 2011, comprising an aggregate balance of
Ch$17,293,187, equivalent to Ch$0.00115578584 per Company share. At the same meeting,
shareholders approved the distribution of an additional divided of Ch$0.00033943157 per
share, equivalent to Ch$5,078,669, recorded as a reduction to prior year retained earnings.
This additional dividend was paid as of May 27, 2011.
At the Meeting, Shareholders were informed of the decision of the Board of Esval S.A. with
respect to 2011 net income and the interim dividend policy which includes the possible
distribution of up to a maximum of two interim distribution of Ch$0.00025 per share,
respectively, recorded as a reduction to 2011 net income, as long as such interim dividends
are not in excess of 80% of 2011 income verified at the close of June and September 2011,
respectively. The amount of ThCh$3,740,569 accrued in June 2011 was paid in September
2011.
At December 31, 2011, “Other financial liabilities, current” includes ThCh$8,669,820 of
dividends payable in the months of February 2012 (interim dividend approved in November
2011 for ThCh$3,740,569) and May 2012 for ThCh$4,929,251, in accordance with the dividend
distribution policy decided at the Shareholders’ Meeting of 2011.
At the Ordinary Shareholders’ Meeting held on April 30, 2010, shareholders agreed to
distribute 100% of 2009 net income, equivalent to Ch$0.00150221 per Company share,
reduced by interim dividends paid on August 20, 2009 and the final dividend paid on
February 2, 2010. The remainder was paid to the shareholders on May 24, 2010, comprising
an aggregatel amount of ThCh$22,476,481, equivalent to Ch$0.001502214 per Company
share.
Details of dividends paid at December 31, 2011 and 2010 are as follows:
Year 2010:
Dividend No.
Pesos per Share
Charged to Year
Amount paid
ThCh$
Type of Dividend
Date of Payment
30
Interim
02.02.2010
0.000250000
2009
3,740,569
31
Final
05.24.2010
0.001002960
2009
15,006,565
32
Interim
08.27.2010
0.000250000
2010
3,740,569
Total paid
22,487,703
Year 2011:
Dividend No.
Type of Dividend
Date of
Payment
Pesos per Share
Charged to Year
Amount paid
ThCh$
33
Interim
02.03.2011
0.000250000
2010
3,740,569
34
Final
05.27.2011
0.000655786
2010
9,812,049
35
Additional
05.27.2011
0.000339432
2010
5,078,669
36
Interim
09.06.2011
0.000250000
2011
3,740,569
Total paid
22,371,856
137
ANNUAL REPORT
The Board has informed Shareholders of its intent to distribute at least 80% of 2011 income,
however a final determination will be made at the Ordinary Meeting.
15.3 Other reserves:
ANNUAL REPORT
138
The nature and purpose of the Other reserves is as follows:
31/12/2011
31/12/2010
ThCh$
ThCh$
Other opening movements
195,942
195,942
4,617,668
4,617,668
4,813,610
4,813,610
Adjustment for monetary correction of capital 2009 (1)
Total Other Reserves
(1) This balance corresponds mainly to the price-level restatement of 2009 paid-in
capital(ThCh$4,617,668), as indicated in Circular Letter No. 456 of the Superintendency of
Securities and Insurance.
15.4 Retained earnings:
The movement of retained earnings is as follows:
31/12/2011
31/12/2010
ThCh$
ThCh$
Opening balance (does not include IFRS
convergence adjustments)
59,249,870
70,808,203
Initial adjustments for IFRS implementation (1)
(9,510,588)
(9,510,588)
Initial adjustments for IFRS implementation (2)
36,584,661
36,584,661
(20,931,290)
(28,851,520)
Dividends
Income for the period
Total Retained Earnings
15,354,326
17,293,187
80,746,979
86,323,943
31/12/2011
31/12/2010
ThCh$
ThCh$
Adjustment for aplication of effective rate to obligations
(775,680)
(775,680)
Adjustment to deferred taxes complimentary account
(2,862,210)
(2,862,210)
Adjustment for deflation in litoral sur contract
(5,494,166)
(5,494,166)
(378,532)
(378,532)
(9,510,588)
(9,510,588)
Taxes for fixed asset depreciation
(2) Corresponds to the adjustment determined at the date of convergence to IFRS (January
01, 2009), corresponding to the revaluation of fixed assets and intangible assets, net of
deferred taxes. This amount is not distributable to the shareholders, until it is realized. The
detail is as follows:
12/31/2011
12/31/2010
ThCh$
ThCh$
Adjustment for land revaluation
23,084,472
23,084,472
Adjustment for water rights revaluation
20,993,433
20,993,433
308,044
308,044
-7,801,288
-7,801,288
36,584,661
36,584,661
Adjustment value of fixed and intagible assets
Associated deferred taxes
Total Revaluation of Assets
Disclosures related to Retained Earnings:
The following reserves are included in Retained Earnings:
1.
2.
3.
4.
Revaluation of land and intangibles
Contribution from third parties
Share premium
Other reserves due to adjustments related to the intial adoption of IFRS
139
ANNUAL REPORT
(1) Corresponds to the adjustment determined at the date of convergence to IFRS (January
01, 2009), with the exception of revaluations of fixed assets and intangible assets, presented
under the following item (2).
140
The reserves for revaluation have distribution restrictions, as this balance corresponds to the
application of such amounts through the use or sale in order for distribution, as indicated
in IAS 16, IFRS 7 and Official Letter No 456 June 29, 2008 of the Securities and Insurance
Superintendency.
15.5 Issuance premiums:
ANNUAL REPORT
Issuance premiums as of December 31, 2011 and 2010 are as follows:
12/31/2011
12/31/2010
ThCh$
ThCh$
Initial balance
11,150,887
11,150,887
-38,166
0
11,112,721
11,150,887
Movements
Total issuance premiums
Issuance premiums correspond to the surcharge for the investment in the Company’s own
shares generated in the 1996, 1997, 1998, 1999 and 2004. In 2011, a charge of ThCh$38,166
was recorded, corresponding to the higher value paid in the repurchase of shares performed
in October 2011, due to the dissidence of shareholders.
16. Non-controlling interest
Non-controlling interest is as follows:
Rodrigo Bezanilla Pumarino
Taxpayer Number: 7.658.247-5
Ownership interest in Servicios Sanitarios Las Vegas Limitada: 0,01%
Minority interest of equity
Minority interest of profit or loss
12/31/2011
12/31/2010
ThCh$
ThCh$
71
64
7
6
17. Guarantees and Restrictions
17.1) Direct guarantees
Guarantee policies and performance bonds have been issued by various institutions,
including the following principal parties: The Superintendency of Sanitary Services to
guarantee the conditions for provision of services and development programs in the
Company’s concession areas; SERVIU to guarantee replacement of pavement; and to other
institutions, in the amount of ThCh$15,430,147 at December 31, 2011, and ThCh12,236,110
at December 31, 2010, respectively
The grantors of these performance bonds do not have the power to sell or pledge these
documents
Details of the direct guarantees furnished are as follows:
12/31/2011
12/31/2010
ThCh$
ThCh$
Name of Debtor
Type of
Guarantee
S.I.S.S.
Esval S.A.
Performance bond
7,444,489
5,075,954
SERVIU V REGION
Esval S.A.
Performance bond
372,117
620,139
DIRECC.REG.VIALIDAD
Esval S.A.
Performance bond
11,571
10,728
DIRECTOR OBRAS HIDR.
Esval S.A.
Performance bond
250,312
187,336
I. MUNIC. QUILPUE
Esval S.A.
Performance bond
-
2,462
EMP. DE FERROCARRILES
Esval S.A.
Performance bond
-
6,437
S.I.S.S.
Performance bond
2,486,141
2,307,308
SERVIU IV REGION
Performance bond
1,015,991
653,959
ESSAN S.A.
Performance bond
3,310,382
3,185,879
DIRECC.REG.VIALIDAD
Performance bond
10,344
17,551
DIRECTOR OBRAS HIDR.
Performance bond
187,572
158,195
SERV.SALUD.COQMBO.
Performance bond
-
10,162
CIA. MINERA DELPACÍFICO
Performance bond
22,294
-
MINIST. OBRAS PUBLICAS
Performance bond
207,602
-
DIR. GRAL. TERR. MARIT.
Performance bond
Creditor of the Guarantee
Total in Thousands of Ch$
111,332
-
15,430,147
12,236,110
ANNUAL REPORT
141
17.2) Restriction on bond issues
142
La Sociedad mantiene restricciones y obligaciones producto de las emisiones de bonos
efectuadas en el mercado nacional y son las siguientes:
ANNUAL REPORT
a) Submit to the representative of the Bond Holders, in the same term in which these have
to be delivered to the Superintendence of Securities and Insurances, a copy of its quarterly
and annual financial statements, and all other public information, without exception, that
must be sent to such institution.
b) Submit to the bond-holders’ representative a copy of the risk rating reports, within no
more than ten working days after receipt from the risk rating agencies.
c) Inform the bond-holders’ representative of the sale, assignment, transfer, contribution or
disposal in any other mannner, whether for valuable consideration or not, of the Essential
Assets, as soon as such action takes place.
d) Submit to the bond-holders’ representative information on any reduction in its share in
the capital of subsidiaries, within no more than thirty working days after such reduction is
made.
e) Maintain in its financial statements a ratio between Net Consolidated Financial Debt and
the Consolidated Adjusted EBITDA of the last twelve months less than 5.50 times (applicable
to the bond series K and M).
f ) Maintain a current liability to adjusted equity ratio of no more than 1.5 in the consolidated
balance sheet, when this balance shall be prepared under the circumstances indicated in
article ninety of the Law on Corporations (applicable to the bond series A, E, H, J).
g) Maintain a Coverage Ratio of Net Financial Assets no less than 2.0 in the Financial
Statements (applicable to Bonds Series K and M).
h) Maintain a Coverage Ratio of Net Financial Expenses no less than 2.0 in the Financial
Statements (applicable to Bonds Series A, D, E, H, J, K and M).
i) Submit to the bond-holders’ representative, together with the information specified in
letter a) above, the available information to verify compliance with the financial indicators
specified in letters e), f ), g) and h).
j) Inform the bond-holders’ representative of any breach of the obligations specified in the
above letters, as soon as the event or infraction occurs or is made known.
k) Do not perform transactions with persons related to Esval S.A. in conditions of equality
different from those commonly prevailing in the market, as provided for in article 89 of the
Law on Corporations.
l) Maintain insurance covers that protect the operating assets of Esval S.A., understood to be
the fixed assets subject to the sanitary concessions where Esval S.A. is the holder or which
are exploited by Esval S.A.
143
m) Make provisions for all adverse contingencies that might occur, which shall be reflected
in the financial statements of Esval S.A. and subsidiaries, according to generally accepted
accounting criteria.
ANNUAL REPORT
n) Esval S.A. or its subsidiaries must not become insolvent or be in a situation in which
they recognize their inability to pay their obligations at their respective maturities, or reach
agreements with their creditors to avoid bankruptcy.
o) With regard to Aguas del Valle S.A., (i) maintain, directly or indirectly, ownership of at least
two thirds of its shares or of each of the series of shares, if applicable; and (ii) maintain control
of the company;
p) Do not furnish collateral or liens or prohibitions of any kind on the shares of Aguas del
Valle S.A. owned by the Issuer, without the prior consent of the bond-holders’ representative.
q) Aguas del Valle S.A. must not furnish collateral or liens or prohibitions of any kind on (i)
the ESSCO Contract; (ii) the right to exploit the sanitary concessions acquired by Aguas del
Valle pursuant to the ESSCO Contract; (iii) the use and possession of the right to exploit the
sanitary concessions acquired by Aguas del Valle pursuant to the ESSCO Contract; and (iv)
the rights granted to Aguas del Valle S.A. from the ESSCO Contract, with regard to present
or future cash flows or revenues from the collection of tariffs and the income earned and/or
that might be earned by Aguas del Valle S.A. from the ESSCO Contract;
r) Do not contract preferential obligations related to those originated from the Bond Issues,
unless the Bond Holders participate in the guarantees furnished under the same terms and
conditions and with the same degree of preference as the other creditors.
17.3) Restriction due to the issue of the Commercial Papers
144
a) Maintain in its financial statements, a ratio between Net Consolidated Financial Debt and
the Consolidated Adjusted EBITDA of the last twelve months less than 5.75 times during
2011 and less than 5.50 times as of 2012 and thereafter. This ratio shall be verified in the
quarterly financial statements, as of the date of the Issuance Deed.
ANNUAL REPORT
b) Maintain a Coverage Ratio of Net Financial Expenses, no less than 2.0 and a Coverage Ratio
of Financial Expenses no less than 2.0 in the financial statements.
c) Maintain insurance coverage protecting the operating assets of Esval S.A., understood to
be the fixed assets subject to the sanitary concessions where Esval S.A. is the holder or which
Esval S.A. exploits, insofar as such insurance coverage is available and the cost is economically
reasonable in relation to the value of the asset, the coverage and the insurable risk.
d) Do not perform transactions with persons related to Esval S.A. in conditions of equality
different from those commonly prevailing in the market, as provided for in article 89 of the
Law on Corporations.
e) With regard to Aguas del Valle S.A. (i) maintain, directly or indirectly, ownership of at least
two thirds of its shares or of each of the series of shares, if applicable; and (ii) maintain control
of the company;
f ) Aguas del Valle S.A. must not furnish collateral or liens or prohibitions of any kind on (i)
the ESSCO Contract; (ii) the right to exploit the sanitary concessions acquired by Aguas del
Valle pursuant to the ESSCO Contract; (iii) the use and enjoyment of the right to exploit the
sanitary concessions acquired by Aguas del Valle pursuant to the ESSCO Contract; and (iv)
the rights issuing for Aguas del Valle S.A. from the ESSCO Contract, with regard to present or
future cash flows or revenues from the collection of tariffs and the income earned and/or
that might be earned by Aguas del Valle S.A. from the ESSCO Contract;
17.4) Restriction for Credit Bank BBVA:
a) Submit a copy of the Consolidated Financial Statements of the Debtor to the Bank within
sixty days of the delivery of such information to the Superintendence of Securities and
Insurance.
b) Submit to the Bank a certificate issued by the general manager and/or finance manager
of the Debtor or their replacements certifying that no Non-Compliance Clause has been
infringed, or any non-compliance, together with the delivery of the Financial Statements
referred to above.
d) The Debtor shall maintain, and ensure that each of its subsidiaries maintain, all necessary
assets for the conduct of its business and operations in good state of preservation and
maintenance, except for the wear caused by normal use. Further, the Debtor shall maintain,
and ensure that each of its Subsidiaries maintain, adequate insurance to cover such assets in
conformity with industry practices.
e) The Debtor and/or its Subsidiaries shall ensure that all operations performed with related
parties, as defined in Law No. 18,045, whether directly or through other related parties, are
performed on an arm’s length basis.
f ) Maintain in its Financial Statements a ratio between Net Consolidated Financial Debt and
Adjusted Consolidated EBITDA of the last twelve months less than or equal to 5.50 times.
g) Maintain a Financial Expense Hedge, greater than or equal to 2.0 times.
h) The Debtor shall not issue, grant or allow the existence of, and ensure that its Subsidiaries
will not issue, grant or allow the existence of, personal guarantees to guarantee third
party obligations and/or pledges over their real estate, copyrights or any other tangible or
intangible asset for its property as of the date of this document or that will be acquired in
the future, with the sole exception of Allowed Pledges and the personal guarantees and/or
Pledges granted to guarantee obligations of Subsidiaries as of the date of the instrument.
i) The Debtor shall not sign or allow the existence of, and ensure that its Subsidiaries do not
sign or allow the existence of, any contract, agreement or convention that limits, restricts
or conditions the grant of actual guarantees over any of its goods or assets, unless such
contracts, agreements or conventions allow the Debtor or its subsidiaries to grant actual
guarantees in favor of the Bank for the total of the owed amounts, in capital and interests,
except for the clauses included in the contracts for the issuance of bonds and securities
currently enforced or which will be signed in the future by the Debtor as follows: (1) Maintain
assets free of liens, based on the Financial Statements, for an amount of at least 1.5 times
the amount of the total issuance of debt included in each of the corresponding issuance
contracts of bonds and securities; (2) Refrain from granting actual pledge rights or issue liens
or prohibitions of any nature over the shares of the Subsidiary Aguas del Valle S.A. owned
145
ANNUAL REPORT
c) Inform the Bank in writing, as soon as possible, but at the latest within five working days after
the date on which any Senior Executive of the Debtor, becomes aware of a) the occurrence
of any Non-Compliance Clause or of any non-compliance; b) any related pending legal or
administrative action, lawsuit or proceeding that could generate a Significant Adverse Effect;
c) any circumstance or situation that could lead to Significant Adverse Effect in the business,
activities, operations or financial situation of the Debtor or its subsidiaries.
ANNUAL REPORT
146
by the Debtor; and (3) The Subsidiary Aguas del Valle S.A. must not grant pledge rights or
issue liens or prohibitions of any nature over (i) the ESSCO Contract (Transfer Contract of
exploitation right of sanitary concessions of Empresa de Servicios Sanitarios de Coquimbo
S.A.(”ESSCO”), signed by Aguas del Valle S.A., as operator, and by Empresa de Servicios
Sanitarios de Coquimbo S.A., per public deed dated December 22, 2003; (ii) the exploitation
right of the sanitary concessions acquired by Aguas del Valle S.A. per the ESSCO Contract;
(iii) the use and benefit of the exploitation right of the sanitary concessions acquired by
Aguas del Valle S.A. per the ESSCO Contract; and, (iv) the rights arising for Aguas del Valle
S.A. from the ESSCO Contract, related to the current or future income or cash flows from the
collection of tariffs and the income perceived and/or that could perceive Aguas del Valle S.A.
in conformity with the ESSCO Contract.
j) The Debtor will not dispose of or transfer, and will ensure that its Relevant Subsidiaries do
not dispose of or transfer, directly or indirectly, its Essential Assets.
17.5) Compliance with covenants
Based on the information at December 31, 2011, the Company is in compliance with each
and every one of the covenants established in the contracts referenced above related to the
issuance of bonds and contracts for the issuance of commercial paper, in conformity with
the provisions of each of the corresponding contracts and their ammendments.
1.
147
Consolidated Dic-11
Dic-11
Other Financial Liabilities - Current
34,292,805
Plus: Other Financial Liabilities - Non-Current
253,625,087
Plus: Financial Costs of Debt Issue
3,644,703
Less: AFR Promissory Notes
22,442,191
Financial Debt
269,120,404
Cash and Cash-Equivalent
14,915,169
Plus: Other financial Assets - Current
0
Financial Assets
14,915,169
Financial Debt - Net
254,205,235
2.
EBITDA And Individual Financial Costs - Net (See 1)
dic-11
Revenue from Ordinary Activities
89,478,904
Less: Raw materials and Fuel Used
11,993,338
Less: Employee Benefits Expenses
7,952,033
Less: Other Expenses by Nature
23,625,502
INDIVIDUAL EBITDA
45,908,031
dic-11
Financial Costs
Less: Financial Revenue
INDIVIDUAL FINANCIAL COSTS - NET
13,096,221
1,390,650
11,705,571
ANNUAL REPORT
Financial Debt
148
(1) See information of these individual financial statements of Esval S.A. in Note 21 Operating
Segments.
Information related to calculation of Covenants (Bonds Series A, D, E, H and J):
ANNUAL REPORT
Debt To Equity Ratio
Total Current Liabilities
Total Non-Current Liabilities
dec-11
ThCh$
64,400,794
302,595,214
Total Liabilities in IFRS
366,996,008
Dividends Provisiones and not Declared
(4,923,251)
Financial Costs of Debt Issue - Current
682,275
Financial Costs of Debt Issue - Non-Current
2,962,428
Net Deferred Tax Assets - Current
2,487,737
Net Deferred Tax Assets - Non-Current
Balance of deferred tax rappraissals in the implementation of IFRS
Total Current Liabilities
0
(7,493,244)
360,711,953
Adjusted Equity
To determine Adjusted Equity, the adjusted equity determined the previous quarter must
be adjusted by the variation in the CPI of the quarter and to this amount add the IFRS equity
of the last quarter, determined as follows:
Equity under IFRS Current Quarter
Dividends Provisioned and not Declared
292,849,396
4,923,251
Equity under IFRS Current Quarter
297,772,647
Equity under IFRS Previous Quarter (discounting dividends not declared)
296,786,867
Equity Variation for the Quarter
According to the idicated methodology, the Debt to Eauity covenant at
the December 31, 2011 closure is
985,780
1.30
Revenue from Ordinary Activities
Other Revenue by Nature
dec-11
149
ThCh$
118,565,474
0
Raw materials and Fuel Used
(15,331,403)
Employee Benefits Expenses
(10,429,087)
Other Expenses by Nature
(31,726,548)
EBITDA Calculated
Financial Costs According To Financial Statements
Financial Costs Coverage
61,078,436
(13,181,096)
4.63
18. Ordinary Income
Revenue from all normal operations and other events is recorded at the fair value of the
payment received or receivable, in consideration of the terms and conditions of payment,
deductions and credit memorandums.
Revenue from the sale of services is measured at fair value. Invoicing is done based on actual
consumption or work performed, net of returns, trade discounts and deductions. Therefore,
revenue is recognized when it is transferred to the buyer, recovery is considered probable,
and associated costs and possible discounts for erroneous charges may be estimated reliably.
Information based on metered consumption readings is available for the various different
billing groups and the respective rate is applied to such consumption. When days of
consumption are left out of the reading at month-end, an estimate is made based on the
historical data from the prior month valued at the current rate, for which the rate for normal
or excess consumption is considered, as applicable. Any difference between current and
estimated consumption is adjusted in the following month.
The provisions for services and all of their associated collections are made according to
actual consumption, and a monthly provision is made for consumption readings based on
prior billings rather than actual billings.
ANNUAL REPORT
Relationship Debt-Equity (12 mobile months)
Policy for recognizing revenue from sales of Potable water and Sewerage services:
150
Classes of Ordirnary Income
from 01/01/2011
to 12/31/2011
from 01/01/2010
to 12/31/2010
ThCh$
ThCh$
ANNUAL REPORT
Ordinary Income
Sale of potable water
67,642,360
63,873,836
Sewarage System Service
46,588,053
42,243,509
Other Ordinary Income
Total
4,335,061
3,435,349
118,565,474
109,552,694
19. Employee Benefits
The company, at consolidated level, has a workforce of 527 employees, 65 of which are
Managers and executives.
There are 338 (Esval 219 and ADV 119) employees that participate in collective agreements
at consolidated level .
Disclosures related to benefits upon termination of contractual relationships:
Severance indemnities for termination of labor relationships are governed by the provisions
of the Labor Code, except for in special clauses of the respective collective or individual work
contracts.
Actuarial assumptions related to the individual terms and conditions of the employees are
used for calculating the severance indemnity provision.
The collective and individual work contracts of non-executive personnel of Esval and Aguas
del Valle do not include an all-event severance indemnity.
20. Borrowing Costs
151
The borrowing costs directly attributable to the acquisition, construction or production of
assets that comply with the conditions for qualification are capitalized as part of the cost of
such assets.
Capitalization policy: Interest paid or accrued from debt that finances exclusively qualified
assets is capitalized, as stipulated in IAS 23.
Capitalized interest costs,
Property, plant and equipment
Interest cost capitalization rate
Capitalized, Property, plant and equipment
Amount of capitalized interest costs,
Property, plant and equipment
12/31/2011
12/31/2010
4.21%
4.23%
ThCh$497,134
ThCh$520,696
21. Income Tax
Income tax and deferred taxes
Income tax is recorded based on the net taxable income calculated under in the provisions
of Income Tax Law. Deferred taxes are recognized based on current regulations, considering
all of the existing temporary differences, tax loss benefits and other events.
Income tax
As of December 31, 2011, Esval S.A. has recorded a provision for income taxes of ThCh$164,594
(ThCh$30,891 at December 31, 2010).
As of December 31, 2011, Aguas del Valle S.A. has recorded a provision for income taxes of
ThCh$1,664,935 (ThCh$715,314 at December 31, 2010).
ANNUAL REPORT
Policy of interest-accruing loans:
152
As of December 31, 2011 and 2010, the company Servicios Sanitarios Las Vegas Ltda. does
not present Net Taxable Income.
The detail of recoverable taxes is as follows, which is presented “net” for each company of
the Esval Group:
ANNUAL REPORT
Concepts:
12/31/2011
12/31/2010
ThCh$
ThCh$
Monthly provisional payments, net
1,940,140
1,626,280
68,611
56,801
Remainder VAT fiscal credit
0
0
Total Recoverable Taxes
2,008,751
1,683,081
Credits for training expenses
The detail of taxes payable is as follows, presented “net” for each company of Esval Group:
Concepts:
12/31/2011
12/31/2010
ThCh$
ThCh$
Provision for income tax, net
1,829,529
746,205
8,507
42,009
1,838,036
788,214
Other taxes payable
Total recoverable taxes
The net position of recoverable (payable) taxes, per consolidated entity, is as follows:
Concepts:
12/31/2011
12/31/2010
ThCh$
ThCh$
Total recoverable taxes - ESVAL
628,873
1,683,081
Total taxes aqpyable - AGV
-458,158
-788,214
Deferred taxes
153
CONCEPTS
Temporary differences
Trade and other Receivables, net, current
Deferred tax assets
12/31/2011
ThCh
ANNUAL REPORT
Balances of non-current tax assets and liabilities is as follows:
Deferred tax liabilities
12/31/2010
ThCh
12/31/2011
ThCh
12/31/2010
ThCh
1,477,955
1,268,064
-
-
1,140
265
-
-
Intangible Assets, net
-
-
(8,954,938)
(8,239,525)
Revaluation of intangibles
-
-
(3,568,884)
(3,568,884)
Depreciation and MC Property, Plant and Equipment - Net
-
-
(33,100,442)
(29,552,348)
Capitalized Interest
-
-
(3,384,628)
(3,352,777)
Revaluation Plant and Equipment
-
-
(3,924,360)
(3,924,360)
Other Assets - Non-Current
-
-
(2,461,746)
(2,301,001)
Deferred Effects From Bond Issues and Effective Rate Differences
-
-
(83,089)
(525,980)
32,812
35,471
-
-
Vacations Provision
239,966
203,975
-
-
Accounts Payable Provision
515,800
187,686
-
-
Other Provisions - Current
333,303
293,288
-
-
-
-
-
-
4,337,482
2,609,329
-
-
Inventories
Uncollectible Accounts - Non-Current
Tax Loss
Other Liabilities - Non-Current
-
-
-
-
Subtotal
Other Events
6,938,458
4,598,078
(55,478,087)
(51,464,875)
Netting of Balances
(6,938,458)
(4,598,078)
6,938,458
4,598,078
-
-
(48,539,629)
(46,866,797)
Total - Net
Reconciliation of tax expense using the legal rate and tax expense using the effective rate:
154
Current and deferred income tax expense (income)
31-12-2011
31-12-2010
ThCh$
ThCh$
Current income tax expense
1,829,529
746,205
44,150
42,009
1,873,679
788,214
ANNUAL REPORT
Income tax on disallowed expenses
Current income tax expense, net, total
0
0
Deferred income tax expense
Adjustment to Prior Period Current Tax
1,736,561
3,087,143
Total tax expense
3,610,240
3,875,357
Numerical reconciliation of tax expense (income) and the result of multiplying accounting
gains by applicable tax rate or rates:
31-12-2011
31-12-2010
ThCh$
ThCh$
Tax expenses using the legal rate
3,792,915
3,598,654
Adjustments to tax expenses using the legal rate, total
-182,675
276,703
3,610,240
3,875,357
Tax expenses using the effective rate
Reconciliation of the legal tax rate and the effective tax rate:
31-12-2011
31-12-2010
ThCh$
ThCh$
Legal tax rate
20.00%
17.00%
Other increases (decreases) in the legal tax rate
-1.00%
1.3%
Effective tax rate
19.0%
18.3%
22. Earnings Per Share
Information to be disclosed on diluted earnings per share:
The Company has not performed any operations with potential dilutive effects that lead to
a diluted gain per share differing from the basic earnings per share.
12/31/2011
ThCh$
12/31/2010
ThCh$
ThCh$
Net profit or loss for the year ThCh$
ThCh$
15,354,333
17,293,193
Number of shares at year-end
14,959,891,837,009
14,962,276,336,000
Gains (losses) per share ThCh$
0.0000010
0.0000012
23. Business Segments
Description of the types of products and services providing the ordinary income of each
reportable segment:
The Coquimbo Region Segment involves sanitary services to allow for the delivery of
production Products and Services , distribution of drinking water, together with collection
and treatment of sewage, developed operationally in Region IV. It also includes other services
such as Cut-off and Restoration, Fixed Charge for Faucets, Postal Dispatch, Sales of Drinking
Water in Water Trucks, Treatment of Excess Liquid Industrial Waste, and sales of sanitary
solutions (for people, companies and institutions) etc. Aguas del Valle S.A. is classified in this
segment.
The Valparaiso Region Segment includes sanitary services to allow for the delivery of
production Products and Services, distribution of drinking water, together with collection
and treatment of sewage, developed operationally in Region V. It also includes other services
such as Cut-off and Restoration, Fixed Charge for Faucets, Postal Dispatch, Sales of Drinking
Water in Water Trucks, Treatment of Excess Liquid Industrial Waste, and sales of sanitary
solutions (for people, companies and institutions) etc. Esval S.A. is classified in this segment.
ANNUAL REPORT
155
The basic earnings per share is calculated by dividing profit or loss attributed to equity
holders of the parent company by the weighted average number of shares outstanding
during the period.
Significant Income and Expense Items by segment
156
Coquimbo Region and Valparaiso Region Segment
Significant items of ordinary income and expenses are mainly those related to the activity of
the segment. There are also significant amounts related to depreciation, personnel and other
sundry expenses, included in those relavant to Power and Utilities.
ANNUAL REPORT
Income
Our income mainly derives from the regulated services that we provide involving: Production
and distribution of drinking water and the collection, treatment and disposal of sewage.
Rates
The most important factor in determining the results of our operations and our financial
situation are the rates set for our regulated sales and services. As a natural monopoly, we are
regulated by the SISS, and our rates are set in accordance with the Sanitary Services Rates
Law - Statutory Decree 70 of 1988.
Our rate levels are reviewed every five years and, during that period, they are subject to
additional adjustments linked to an indexation polynomial, if the accumulated change since
the previous adjustment is 3.0% or more (rate increase), or -3.0% or less (rate decrease),
according to calculations made as a function of various inflation indices.
Tariffs Segment Region of Coquimbo
Valparaiso Region Segment Rates
In 2010, the rate negotiation process for the 2010-2015 period concluded. The new rates
approved by Decree 59 (29.01.2010) for Esval S.A., by the Ministry of Economy, Development
and Reconstruction came into effect on March 01, 2010.
Details of significant expense items
Coquimbo Region Segments
The significant expense items are mainly those related to Payroll, Utilities and Amortization
of Intangibles.
Valparaiso Region Segment
The significant expense items are mainly those related to Payroll, Power, Depreciation of
Fixed Assets and Financial Expenses.
Details of the explanation of measurements of profit or loss, assets and liabilities of each
segment:
The measurement applicable to each segment corresponds to the company directly related
to the respective region.
The accounting criterion is the accounting record of the economic events from which rights
and obligations arise in the same way as they arise in economic relations with third parties.
In particular, such records will generate committed balances in an asset and liability account
according to the nature of the transaction in each related company, in light of the segment
in which it participates. This account is known as Account due to or from Related Companies.
Upon consolidation such balances must be netted according to the same consolidation
rules explained in IAS 27.
There are no differences in the nature of the measurement of the profit or loss in the various
operating segments.
There are no differences in the nature of the measurement of assets and liabilities in the
various operating segments.
157
ANNUAL REPORT
In 2011, the tariffs’ negotiation process of Aguas del Valle concluded for the period 20112016. The tariffs were approved by Decree No. 117 (31.08.2011) of the Ministry of Economy,
Development and Tourism, effective as of September 14, 2011 through September 13, 2016.
Information to be disclosed on the entity as a whole
158
Information on the main customers:
The information on main customers is not relevant, as they are dispersed in a very large
number of clients in both segments.
Types of products Coquimbo Region – Valparaiso Region Segments:
ANNUAL REPORT
Coquimbo Region Segment
The types of products and services for the Water segment are:
•Production and distribution of drinking water.
•Collection and treatment of sewage.
•Aguas del Valle S.A. Segment.
Valparaiso Region Segment
The types of products and services for the water segment are:
• Production and distribution of drinking water.
• Collection and trealment of sewage.
• Esval S.A. Segment.
As of December 31, 2011:
Financial situation statement per
business segment
Aguas del Valle
Las Vegas
Addition
Adjustments
Esval Consolidated
dec-11
dec-11
dec-11
dec-11
dec-11
dec-11
ANNUAL REPORT
159
Esval
Assets
Total assets
40,310,428
6,845,486
0
47,155,914
-132,112
47,023,802
604,218,348
98,266,604
712,630
703,197,582
-90,375,980
612,821,602
644,528,776
105,112,090
712,630
750,353,496
-90,508,092
659,845,404
Equity and liabilities
Liabilities
Current liabilities
Total current liabilities
Total liabilities
56,596,394
7,935,954
60
64,532,408
-132,112
64,400,296
295,082,559
25,913,113
0
320,995,672
-18,400,458
302,595,214
351,678,953
33,849,067
60
385,528,080
-18,532,570
366,995,510
Equity
Paid-in capital
196,138,347
20,441,842
209,232
216,789,421
-20,651,074
196,138,347
Retained earnings
80,746,979
50,339,950
469,353
131,556,282
-50,809,303
80,746,979
Share premiums
11,150,887
0
0
11,150,887
0
11,150,887
Treasury shares
0
0
0
0
0
0
Other equity interest
0
0
0
0
0
0
4,813,610
481,231
33,985
5,328,826
-515,216
4,813,610
292,849,823
71,263,023
712,570
364,825,416
-71,975,593
292,849,823
0
0
0
0
71
71
292,849,823
71,263,023
712,570
364,825,416
-71,975,593
292,849,823
644,528,776
105,112,090
712,630
750,353,496
-90,508,163
659,845,333
Other reserves
Equity attributable to owners of the
parent company
Minority interests
Total equity
Total equity and liabilities
160
Statemet of income result per business segment
In thousand of Chilean pesos
Esval
Aguas del Valle
Las Vegas
Addition
Adjustments
Esval Consolidated
Statement of income
ANNUAL REPORT
Gains (losses)
Income fromordinary activities
89,478,904
29,086,570
0
118,565,474
0
118,565,474
Raw material and consumables used
-11,993,338
-3,338,066
0
-15,331,404
0
-15,331,404
-7,952,033
-2,477,054
0
-10,429,087
0
-10,429,086
Expense from employees' benefits
Expense from depreciation and amortization
-15,687,318
-3,766,199
0
-19,453,517
0
-19,453,517
Other expenses
-23,625,502
-10,056,972
0
-33,682,474
1,459,671
-32,222,803
660,348
541,088
0
1,201,436
-1,459,671
-258,235
Other gains (losses)
Financial income
1,390,650
0
0
1,390,650
-326,722
1,063,928
-13,096,221
-527,805
0
-13,624,026
326,722
-13,297,303
7,311,346
0
73,114
7,384,460
-7,384,460
0
0
0
0
0
0
0
Income from readjustment units
-9,055,889
-616,590
0
-9,672,479
0
-9,672,479
Gain (loss) before taxes
17,430,947
8,844,972
73,114
26,349,033
-7,384,460
18,964,574
Expense from income tax
-2,076,621
-1,533,619
0
-3,610,240
0
-3,610,241
Gain (loss) from continuing operations
15,354,326
7,311,353
73,114
22,738,793
-7,384,460
15,354,333
Financial costs
Gain (loss) in associates and joint-ventures
accounted for using the equity method of accounting
Exchange differences
Gain (loss) from minoritary interest
Gain (loss)
0
0
0
0
-7
-7
15,354,326
7,311,353
73,114
22,738,793
-7,384,467
15,354,326
As of December 31, 2010:
Financial situation statement per
business segment
Aguas del Valle
Las Vegas
Addition
Adjustments
Esval Consolidated
dec-10
dec-10
dec-10
dec-10
dec-10
dec-10
ANNUAL REPORT
161
Esval
Assets
Non-current assets
Total assets
42,004,992
6,040,067
0
48,045,059
-132,033
47,913,025
597,679,525
94,033,577
639,516
692,352,618
-85,211,441
607,141,176
639,684,517
100,073,644
639,516
740,397,677
-85,343,474
655,054,201
70,520,859
7,010,941
60
77,531,800
-132,033
77,399,827
270,667,932
29,111,032
0
299,778,964
-20,620,379
279,158,586
341,188,791
36,121,973
60
377,310,764
-20,752,412
356,558,013
Equity and liabilities
Liabilities
Current liabilities
Total current liabilities different to
the liabilities included in the groups
of assets for disposal classified as
held for sale.
Total liabilities
Equity
Paid-in capital
196,207,284
20,441,842
209,232
216,858,358
-20,651,074
196,207,284
Retained earnings
59,249,870
43,028,598
396,239
102,674,707
-43,424,837
59,249,870
Share premiums
11,150,887
0
0
11,150,887
0
11,150,887
Treasury shares
0
0
0
0
0
0
Other equity interest
0
0
0
0
0
0
31,887,683
481,231
33,985
32,402,899
-515,216
31,887,683
298,495,725
63,951,670
639,456
363,086,851
-64,591,126
298,495,725
0
0
0
0
64
64
Other reserves
Equity attributable to owners of the
parent company
Minority interests
Total equity
298,495,725
63,951,670
639,456
363,086,851
-64,591,062
298,495,789
Total equity and liabilities
639,684,516
100,073,643
639,456
740,397,615
-85,343,474
655,054,201
162
Consolidation Statement of Income per Nature
In thousand of Chilean pesos - ThCh$
Esval
Aguas del Valle
Las Vegas
Sum
Esval
Consolidated
Adjustments
Statement of Income
ANNUAL REPORT
Income (loss)
Revenues from ordinary activities
83,384,264
26,168,429
0
109,552,693
0
109,552,693
Used raw material and supplies
-10,714,933
-2,740,366
0
-13,455,299
0
-13,455,299
Expenses for employee benefits
-7,697,566
-2,428,231
0
-10,125,797
0
-10,125,797
Expense for depreciation and amortization
-15,710,835
-3,668,864
0
-19,379,699
0
-19,379,699
Other expenses, per function:
-19,970,349
-8,663,853
0
-28,634,202
1,894,549
-26,739,653
1,162,311
255,508
0
1,417,819
-1,894,549
-476,730
Other income (losses)
Financial income
1,068,782
0
0
1,068,782
-667,536
401,246
Financial expenses
12,168,484
-800,148
0
-12,968,632
667,536
-12,301,096
Participation in income (losses) of investees and joint
ventures that are recorded using the equity method
6,230,007
0
62,300
6,292,307
6,292,307
12,584,614
Results per adjustment units
-5,760,441
-546,674
0
-6,307,115
0
-6,307,115
Income (loss) before taxes
19,822,757
7,575,800
62,300
27,460,857
-6,292,307
21,168,550
Income tax expense
-2,529,570
-1,345,787
0
-3,875,357
0
-3,875,357
Income (loss) from continued operations
17,293,187
6,230,013
62,300
23,585,500
-6,292,307
17,293,193
0
0
0
-6
-6
17,293,187
6,230,013
23,585,500
-6,292,313
17,293,187
Income (loss) of minority interest
Income (loss)
24. Environment
Since 2005, Esval S.A. has certified its processes under standard ISO 14001:2004, whose
environmental management system includes capturing and distributing drinking water up
to collection, treatment and final disposal of waste water, including trading and support
processes for rendering services.
The compliance of environmental sustainability objectives in the Company depends on
each corresponding area, for which management is directly responsible for actions taken in
order to reach goals for the Company’s commitments related to this matter. Esval’s voluntary
commitment has achieved improvements in its environmental performance.
62,300
• Adopting a permanent improvement strategy in the Company’s processes.
163
• Avoiding pollution by pouring residual liquids from the Company’s processes.
ANNUAL REPORT
Actions taken to improve the Environmental Performance are:
• Avoiding pollution by controlling residuals by recycling or proper disposal.
The Environmental Management System is part of the Integrated System of management of
quality, environment, Safety and Occupational health which is based on the Integral System
Management Policy (“SIG”).
To comply with commitments in the SIG policy, the Company has established objectives
associated with a number of indicators, goals and control points, which allow the monitoring
and evaluation of compliance.
The Company has established programs to be developed, including the assignment of
responsibilities, means and terms in order to achieve its environmental objectives and goals..
In March 2011, Esval S.A. was re-certified under the standards of ISO 9001:2008, ISO
14001:2004 and OHSAS 18001:2007, by the company Bureau Veritas Certification-Chile.
Disbursements committed in environmental material:
Esval:
Adjustments to be made for environmental aspects
About 58 million
Aguas del Valle:
Handling of sludge generated in Sewage Water Treatment Plants:
288 (millions approximately).
Environmental Monitoring:
The Company performs regular control testing over the sanitation systems in the various
coastal towns and locations with treatment facilities near ocean shores. The environmental
monitoring campaigns defined by the Maritime Authorities are performed on a monthly
basis and include taking samples and performing analyses in: Effluents in the sea water by
taking samples at different depths, on beaches and along the coastline, as well as taking
samples of the benthonic communities and sediments on the sea floor, in order to determine
ANNUAL REPORT
164
how the diversity, uniformity and richness of the species have changed. Oceanographic
studies are also performed in the areas where the emissions discharge into the sea. All of this
monitoring and analysis is performed in order to ensure compliance with the environmental
quality standards stipulated by authorities. The cost of these contracts at December 31, 2011
was ThCh$504,829 (ThCh$406,860 at December 31, 2010).
Furthermore, control of the existing sewage treatment plants in locations and towns
located mainly in the inland regions, based on activated sludge and full mixture aerated
ponds, includes the implementation of monthly monitoring initiatives as defined by the
Superintendency of Sanitary Services and the Ministerio del Medio Ambiente in order
to ensure compliance with the emissions discharged into surface water, as required by
Supreme Decree 90/00.
Likewise, control is exercised over liquid industrial waste entering our sewage collectors to
control and verify compliance with Supreme Decree 609/98. To that end, the company has
rates approved by the Superintendency of Sanitary Services for monitoring these emissions,
which are paid by industrial clients.
The Company has a modern laboratory equipped for microbiological and physical-chemical
analyses both of the drinking water mains and the sewage collectors. The lab is accredited
under the INN-SISS Agreement as a Testing Lab according to NCh-ISO 17025 Of. 2001.
25. Subsequent Events
Series
N° Shares
Issue
Suscribed
% Avance
Surplus
A
1.439.791
3.277
1.436.514
0,23
C
2.383.059.200
5.787.971
2.377.271.229
0,24
The remainder of the shares series A and C were placed on the stock exchange, in accordance
with the provisions of Article 27 of the Law 18.046.
On March 1, 2012, it was reported that Mr. Nicolas Navarrete Hederra, has resigned as
Director of the Company.
On March 8, 2012, it was reported that Ms. Stacey Purcell, submitted his resignation as
Director of the Company.
Between January 1, 2012 and the date of issuance of these financial statements have been
other events of a financial or otherwise, significantly affecting stocks or interpretation of
these consolidated financial statements.
Rodolfo Toro Carrasco
General Accountan
CEO
ANNUAL REPORT
165
On February 1, 2012, concluded the period of first refusal to the sale of the Series A and C
shares of the Company, as described in note 15.1, according to the following detail:
ANNUAL REPORT
166

ann ual report

Transcription

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