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Alicorp S.A.A. and Subsidiaries
Independent Auditors’ Report
Consolidated Financial Statements
For the Years Ended
December 31, 2013 and 2012
(Free translation from a report originally issued in Spanish)
PDF impreso el 28 de mayo de 2014
ALICORP S.A.A. AND SUBSIDIARIES
TABLE OF CONTENT
Pages
INDEPENDENT AUDITORS’ REPORT
1-2
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2013 AND 2012:
Consolidated Statements of Financial Position
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
3
4
5
6
7
8-91
Beltrán, Gris y Asociados S. Civil
de R.L.
Las Begonias 441, Piso 6
San Isidro, Lima 27
Perú
INDEPENDENT AUDITORS’ REPORT
Tel: +51 (1)211 8585
Fax: +51 (1)211 8586
www.deloitte.com/pe
To the Shareholders and Directors of
Alicorp S.A.A. and Subsidiaries
1.
We have audited the accompanying consolidated financial statements of Alicorp S.A.A. and
Subsidiaries, which comprise the consolidated statements of financial position as of December 31,
2013 and 2012, and the consolidated statements of income, comprehensive income, changes in
equity and cash flows for the years then ended, and a summary of significant accounting policies
and other explanatory information.
Management's Responsibility with respect to the consolidated financial statements
2.
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards, and for such internal
control as Management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
3.
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with International Standards on Auditing approved
by the Consejo Directivo de la Junta de Decanos de Colegios de Contadores Públicos del Perú
(Board of Directors of the Council of Deans of Public Accountants Association of Peru ) for their
application in Peru. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
4.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the preparation and fair presentation of the consolidated financial
statements of the Company and its Subsidiaries in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the internal control of the Company and its Subsidiaries. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
Deloitte se refiere a una o más de las firmas miembros de Deloitte Touche Tohmatsu Limited, una compañía
privada del Reino Unido limitada por garantía, y su red de firmas miembros, cada una como una entidad única e
independiente y legalmente separada. Una descripción detallada de la estructura legal de Deloitte Touche Tohmatsu
Limited y sus firmas miembros puede verse en el sitio web www.deloitte.com/about.
“Deloitte Touche Tohmatsu Limited es una compañía privada limitada por garantía constituida en Inglaterra & Gales
bajo el número 07271800, y su domicilio registrado: Hill House, 1 Little New Street, London, EC4A 3TR, Reino
Unido”
5.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
6.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Alicorp S.A.A. and Subsidiaries as of December
31, 2013 and 2012, and of their consolidated financial performance and consolidated cash flows for
the years then ended in accordance with International Financial Reporting Standards.
Other matter
7.
The translation of this report has been made solely for the convenience of the English-speaking
readers, and has been derived from the financial statements originally issued in Spanish.
Countersigned by:
________________________ (Partner)
Patricia Mazuelos Coello
CPC Registration No. 18513
February 21, 2014
-2-
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2013 AND 2012
(In thousands of S/.)
Notes
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Other financial assets
Trade receivable (net)
Other receivable
Accounts receivable from related entities
Advances to suppliers
Inventories (net)
Income tax
Other non-financial assets
5
6
7
8
31
9
30 (c)
10
2013
S/.000
2012
S/.000
92,890
4,740
959,774
164,478
425
35,531
790,252
61,967
12,104
496,070
426
746,555
120,348
649
38,414
754,328
27,103
35,871
2,122,161
2,219,764
9,559
9,473
2,131,720
2,229,237
271,609
29,205
21,375
1,876,942
777,069
89,067
697,310
196,865
35,471
637
1,326,827
102,435
34,224
352,968
3,762,577
2,049,427
Notes
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Financial obligations
Other financial liabilities
Trade payable
Other payable
Accounts payable to related entities
Employee benefits
Provisions
Income tax
16
17
18
19
31
20
21
30 (c)
11
Total current assets
NON-CURRENT ASSETS:
Other financial assets
Investments in associates
Other receivable
Property, plant and equipment (net)
Other intangible assets (net)
Deferred income tax asset
Goodwill (net)
Total non-current assets
TOTAL
6
12
8
13
14
30 (d)
15
5,894,297
4,278,664
538,769
42,317
531,729
40,261
992
94,653
8,869
8,726
1,191,448
1,266,316
1,704,833
57,351
126,597
7,403
8,265
432,357
747,667
5,679
150,119
Total non-current liabilities
2,336,806
903,465
Total liabilities
3,528,254
2,169,781
847,192
7,388
160,903
1,263,996
77,734
847,192
7,388
129,342
1,029,995
88,206
Equity attributable to owners
of the Parent
Non-controlling interests
2,357,213
8,830
2,102,123
6,760
Total equity
2,366,043
2,108,883
5,894,297
4,278,664
NON-CURRENT LIABILITIES:
Other payable
Employee benefits
Provisions
Deferred income tax liability
EQUITY:
Issued capital
Investment shares
Legal reserve
Retained earnings
Other equity reserves
TOTAL
The accompanying notes are an integral part of these consolidated financial statements.
-3-
2012
S/.000
280,753
11,422
678,974
104,871
5,151
95,326
12,358
2,593
Total current liabilities
Assets classified as held for sale (net)
2013
S/.000
16
17
19
20
21
30 (d)
22
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
NOTES
Net operating revenues
To third parties
To related entities
31
Total operating revenues
24
Cost of sales
Gross profit
Selling and distribution expenses
General and administrative expenses
Other income (net)
25
26
27
2013
S/.000
2012
S/.000
5,777,982
44,022
4,461,863
11,854
5,822,004
4,473,717
(4,224,270)
(3,254,369)
1,597,734
1,219,348
(718,477)
(289,521)
69,898
(495,350)
(242,706)
7,366
659,634
488,658
58,558
(142,426)
(121,497)
(24,135)
(1,496)
12,003
(45,235)
26,329
(21,128)
(636)
428,638
459,991
(123,239)
(149,771)
305,399
310,220
63,489
41,170
368,888
351,390
Owners of the Parent
368,111
777
352,222
(832)
Net income for the year
368,888
351,390
0.432
0.411
0.358
0.363
0.074
0.048
Operating income
Financial income
Financial expenses
Exchange differences, net
Net loss on derivative financial instruments
Share in net income of associates
28
29
4 (b) (i)
23
12
Income before income tax
Income tax expense
30 (b)
Net income for continuing operations
Income from discontinued operations,
net of income tax
32
Net income attributable to:
Net earnings per share
Basic and diluted earning per common and investment share (S/.)
Basic and diluted earning per common and investment share
from continuing operations (S/.)
Basic and diluted earnings per common and investment share
from discontinued operations (S/.)
33
-4-
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NOTES
2013
S/.000
368,888
Components of other comprehensive income that may be
subsequently reclassified to the statement of income:
Net changes for cash flow hedges
Net (loss) gain on available-for-sale
financial assets
Foreign currency translation
Other comprehensive income
2012
S/.000
351,390
6,104
(33,061)
(23,964)
8,596
-
46,649
(38,865)
(344)
(9,264)
(25,621)
(1,208)
9,915
(1,208)
9,915
Other comprehensive income after income tax
(10,472)
(15,706)
Total comprehensive income for the year
358,416
335,684
Comprehensive income attributable to:
Owners of the Parent
357,639
777
336,516
(832)
358,416
335,684
22(c)
22(e)
Other comprehensive income before income tax
Income tax relating to components of
other comprehensive income:
Net changes for cash flow hedges
30(d)
Income tax relating to components of
other comprehensive income
-5-
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Other equity reserves
Net
Net
changes
gain on
from
Equity
Foreign
attributable to
Issued
Investment
Legal
Retained
available-for-sale
cash flow
currency
owners of the
Non-controlling
Total
capital
shares
reserve
earnings
investments
hedges
translation
Sub-total
parent
Interests
Equity
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
(Note 22 (a))
(Note 22 (b))
(Note 22 (c))
(Note 22 (g))
(Note 22 (d))
(Note 22 (e))
(Note 22 (f))
BALANCES AS OF JANUARY 1, 2012
847,192
7,388
97,091
872,738
114,303
-
-
-
352,222
-
income tax
-
-
-
-
-
-
351,878
Cash dividends declared
-
-
-
(162,370)
-
-
-
-
Transfer to legal reserve
-
-
32,251
(32,251)
-
-
-
-
-
-
-
Other changes
-
-
-
-
-
-
-
-
-
6,237
6,237
847,192
7,388
129,342
1,029,995
160,952
88,206
2,102,123
6,760
2,108,883
-
-
-
368,111
-
-
368,111
777
368,888
income tax
-
-
-
-
-
-
-
368,111
Cash dividends declared
-
-
-
(102,549)
Transfer to legal reserve
-
-
31,561
(31,561)
Other changes
-
-
-
847,192
7,388
160,903
(943)
-
(9,792)
-
103,568
1,927,977
-
352,222
1,355
(832)
1,929,332
351,390
Other comprehensive income after
BALANCES AS OF DECEMBER 31, 2012
(344)
46,649
(23,146)
(38,865)
(15,362)
(15,706)
46,649
(23,146)
(38,865)
(15,362)
336,516
(24,089)
(48,657)
(162,370)
(832)
-
(15,706)
335,684
(162,370)
-
-
(23,964)
4,896
8,596
(10,472)
(10,472)
(23,964)
4,896
8,596
(10,472)
357,639
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,293
1,293
1,263,996
136,988
77,734
2,357,213
8,830
2,366,043
Other comprehensive income after
BALANCES AS OF DECEMBER 31, 2013
-6-
(19,193)
(40,061)
(102,549)
777
-
(10,472)
358,416
(102,549)
CONSOLIDATED STATEMENTS OF CASH FLOWS
OPERATING ACTIVITIES:
Collection from:
Sales
Other cash inflows from operating activities
Payments for:
Suppliers of goods and services
Employees
Income tax
Taxes
Other cash outflows for operating activities
Cash and cash equivalents flows provided by operating activities
INVESTING ACTIVITIES:
Collection from:
Sale of property, plant and equipment
Sale of intangible asset
Dividends received
Interests
Other cash inflows from investing activities
Payments for:
Purchase of subsidiaries net of cash received
Purchase of property, plant and equipment
Purchase of intangible assets
Loans received (granted) to related entities
Cash and cash equivalents flows used in investing activities
FINANCING ACTIVITIES
Collection from:
Short-term loans received from third parties
Long-term loans received from third parties
Payments for:
Short-term loans from related entities
Short-term loans from third entities
Long-term loans from third parties
Dividends
Interests
Other cash outflows for financing activities
2013
S/.000
2012
S/.000
5,617,244
218,098
5,120,799
5,601
(4,641,590)
(551,074)
(170,555)
(24,552)
(161,746)
(4,054,957)
(437,319)
(181,241)
(167,208)
(82,337)
285,825
203,338
47,176
83,878
3,558
12,057
10,302
129,663
3,393
8,610
9,905
(589,053)
(368,691)
(4,794)
224
(207,356)
(243,791)
(685)
(403)
(805,343)
(300,664)
1,151,554
1,628,527
515,051
320,982
4,159
(1,342,573)
(1,093,628)
(102,550)
(121,326)
(7,899)
(1,455)
(69,530)
(55,927)
(162,370)
(53,641)
-
Cash and cash equivalents flows provided by
financing activities
116,264
493,110
Net (decrease) increase in cash and cash equivalents
(403,254)
395,784
496,070
101,818
Cash and cash equivalents at the beginning of the year
Effect of exchange difference on cash balances and cash equivalents
held in foreign currencies
92,890
Cash and cash equivalents at the end of the year
74
-7-
(1,532)
496,070
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Expressed in thousands of nuevos soles (unless otherwise expressed)
1.
INCORPORATION, ECONOMIC ACTIVITY, APPROVAL OF THE CONSOLIDATED
FINANCIAL STATEMENTS, MAIN TRANSACTIONS AND SUBSIDIARIES
(a)
Incorporation and economic activity
Alicorp S.A.A. (hereinafter “the Company”) was incorporated in Peru on July 16, 1956 and started
operations in August of that year. The legal address of the Company is Av. Argentina No. 4793
Carmen de la Legua Reynoso - Callao, Peru.
Its economic activity comprises the manufacture and distribution of edible oil and fats, pasta, flour,
biscuits, soap, detergents, sauces, instant beverages, food for animal consumption and personal care
products; as well as the distribution of products manufactured by third parties.
The Company and its subsidiaries primarily conducts its business in their corresponding local
markets, and also exports its products to Argentina, Brazil, Ecuador, Chile, Panama, Honduras,
Bolivia, Haiti, Papua Nueva Guinea, Nicaragua, Guatemala, USA, Colombia, Costa Rica,
Venezuela, Belize, Canada, Japan, Dominican Republic, Netherlands, Germany, Philippines, Puerto
Rico, China, Cuba, Curaçao, Paraguay, among others. For years 2013 and 2012, they represent
35.9% and 25.7% of total consolidated sales, respectively.
(b)
Approval of the consolidated financial statements
The accompanying consolidated financial statements for the year ended on December 31, 2013 have
been authorized for issuance by the Company’s Management on February 17, 2014. These financial
statements will be submitted for their approval to the Board and General Shareholders’ Meeting
within terms established by the Law. According to Management, the accompanying consolidated
financial statements will be approved at the General Shareholders’ Meeting as without changes. The
consolidated financial statements for the year ended December 31, 2012, were approved by the
General Shareholders’ Meeting on March 25, 2013.
(c)
Explanation added for translation into the English language of the original consolidated
financial statements issued in Spanish
The accompanying translated consolidated financial statements originally issued in Spanish are in
accordance with International Financial Reporting Standards (IFRS). Certain accounting practices
applied by the Company and its Subsidiaries that conform to IFRS may not conform to accounting
principles generally accepted in other countries. In the event of a discrepancy, the Spanish language
version prevails.
-8-
(d)
Main transactions
(d.1) Acquisitions and new investments
(i)
On February 6, 2013, the Company acquired, through its subsidiary Alicorp Do Brasil
Participaçoes S.A., indirect subsidiary of Alicorp Inversiones S.A., 100% of Brazilian
company Pastificio Santa Amália S.A., for R$195,000 (approximately S/.252,885), engaged
in preparing and commercializing mass consumption products such as pastas, jelly,
chocolate and instant beverages, labeled Santa Amália.
(ii)
On January 4, 2013, the Company acquired 99.10% common shares and 93.68%
investment shares; and subsequently, on June 11, 2013, it acquired 4.11% investment shares
of Industrias Teal S.A., engaged in manufacturing, commercializing and distributing flours,
pastas, biscuits, panettone, chocolates and candies. Total amount paid for this transaction
was S/.424,475 (Note 15).
(iii) On December 20, 2012, the Company, along with its subsidiary Alicorp Inversiones S.A.,
acquired 100% shares in Industria Nacional de Conservas Alimenticias S.A., Alimentos
Peruanos S.A., Garuza Transporte S.A. and S.G.A. & CO S.A. (Incalsa Group), companies
engaged in manufacturing, commercializing and distributing sauces, for an amount of
US$23,590 (equivalent to S/.60,486) (Note 15).
(iv) On October 31, 2012, the Company, through an a sale and purchase agreement signed with
Ucisa S.A., agreed to the acquisition of certain assets in relation to production activities,
branding, inventory of finished goods and supplies related with edible oil and fat.
Additionally, said contract included the non-competition commitment assumed by the
selling part (Note 14(b)). Inventories purchase was made on October 31, 2012, for
S/.17,877, and on January 15, 2013, fixed assets were acquired for S/.6,914, and intangibles
for S/.9,798.
(v)
On September 5 and November 6, 2012, Alicorp Holdco España S.L. (subsidiary of Alicorp
Inversiones S.A.), acquired 100% shares in Salmofood Group (Salmofood S.A. and its
subsidiary Cetecsal S.A.) for US$64,549 (equivalent to S/.161,721), who is mainly engaged
in producing food for fish farming, breeding and fattening up (Note 15).
(d.2) Sale of assets and disposition of discontinued operations
(i)
On December 3, 2013, the Company transferred to Empresas Carozzi S.A. (Chile) and to
its subsidiary Molitalia S.A. (Peru), assets related to the business of balanced food for
pets. Sale value amounted to US$35,841 (equivalent to S/.100,612). This operation
included the sale of Mimaskot and Nutrican brands, as well as productive assets. On the
same date, production contract was signed with Molitalia S.A. (Note 32).
(ii)
On January 31, 2012, by means of purchase and sale agreement, the Company and its
subsidiary Molinera Inca S.A. transferred to ONC (Peru) S.A.C. assets of its property, in
relation to the production of fish oil with Omega 3, whose plant is located in Piura.
Amount for this transfer was of US$52,679 (Note 32).
-9-
(e)
Subsidiaries
Subsidiaries are all entities in which the Group has the power to govern financial and operating
policies. This situation is usually evidenced by a controlling shareholding of more than half of the
shares entitled to vote.
Subsidiaries are fully consolidated from the date on which effective control is transferred to the
Group and until such control ceases.
As of December 31, 2013 and 2012, the share percentage of the Company in the consolidated
subsidiaries is as follows:
Direct and indirect
share ownership
2013
2012
Agassycorp S.A.
Alicorp Argentina S.C.A.
Alicorp Colombia S.A.
Alicorp Do Brasil Participaçoes S.A.
Alicorp Ecuador S.A.
Alicorp Guatemala S.A.
Alicorp Holdco España S.L.
Alicorp Honduras S.A.
Alicorp Inversiones S.A.
Alicorp San Juan S.A.
Alicorp Trading (Shenzhen) Ltd. Co.
Alicorp Uruguay S.R.L.
Alimentos Peruanos S.A.
Cernical Group S.A.
Cetecsal S.A.
Consorcio Distribuidor Iquitos S.A.
Downford Corporation
Farmington Enterprises Inc.
Garuza Transportes S.A.
Inbalnor S.A.
Industria Nacional de Conservas Alimenticias S.A.
Industrias Teal S.A.
Italo Manera S.A.
Molinera Inca S.A.
Pastas Especiales S.A.
Pastificio Santa Amália S.A.
Prooriente S.A.
S.G.A. & CO. S.A.
Salmofood S.A.
Sanford S.A.C.I.F.I. y A.
Sulfargen S.A.
TVBC S.C.A.
- 10 -
100%
100%
99.98%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
99.84%
100%
100%
100%
75%
100%
98.72%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
99.98%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
99.84%
100%
100%
100%
75%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Presented below, details of economic activity of consolidated subsidiaries and their operations:
Agassycorp S.A.
It was incorporated on February 25, 2005 in Guayaquil, Guayas Province, Ecuador, the legal
address is Urb. Santa Leonor Solar 4 Mz. 10. The Company began operations on August 1, 2005.
As of December 31, 2013, the subsidiary does not perform commercial operations.
The legal address is Ingeniero Butty 275, 11th floor – Buenos Aires, Capital Federal, Argentina. Its
main activity is the manufacture and commercialization of personal care and household cleaning
products. It is a subsidiary of Alicorp S.A.A. as from May 30, 2008.
Alicorp Colombia S.A.
It was incorporated on August 15, 2006, in the city of Bogota, Colombia. Its legal address is Carrera
7 No. 73 – 55, 7th floor. It began operations in September 2006. Its economic activity comprises the
distribution of mass consumption products and the commercialization and distribution of animal
nutrition products. On December 1, 2008, Alicorp Colombia S.A. merged with Productos
Personales S.A. (Propersa) - company acquired in 2008.
Alicorp Do Brasil Participações S.A.
It was incorporated on September 17, 2012, in the city of Sao Paulo, Brazil. Its legal address is
Calçada das Papoulas No. 74, Room 03, Condominio Centro Comercial Alphaville. It started its
operations on January 22, 2013. It is engaged in holding interests in other Brazilian corporations, as
shareholder or partner, and in rendering business administration services.
Alicorp Ecuador S.A.
It was incorporated on August 1, 1985, in Quito, Ecuador, with legal address in Calle Bartolome
Sanchez 72 – 328, Office PB Carcelén Alto, Pichincha, Quito. This entity is a subsidiary of Alicorp
S.A.A. as from May 4, 2007. It is engaged in commercializing all kinds of items.
Alicorp Guatemala S.A.
It was incorporated on September 30, 2009 in Guatemala, and began commercial operations on
December 1, 2009. Its legal address is 2 Calle 23 – 80, zona 15, Vista Hermosa II Edificio Avante
13th floor, office 1301. The Company's primary activity is the manufacturing, export, import,
distribution and commercialization of mass consumption products, mainly food and cleaning
products.
Alicorp Holdco España S.L.
It was incorporated in May 22, 2012. Its legal address is 08007 Paseo de Gracia, 21, 4th floor,
Barcelona, Spain. It is mainly engaged in the acquisition, holding, use and administration, direction
and management of security titles and/or shares.
- 11 -
Alicorp Honduras S.A.
It was incorporated on February 7, 2008, with legal address in the city of San Pedro de Sula,
Departamento de Cortés, Honduras. The Company's main activity is the commercialization and
distribution of animal nutrition products.
Alicorp Inversiones S.A.
It was incorporated on May 26, 2011. Its legal address is Av. Argentina 4793, Carmen de la Legua
Reynoso, Callao, Peru. Its main activity is to develop all types of investments in Peru and abroad,
and rendering general services.
Alicorp Uruguay S.R.L.
It is a limited liability company domiciled in Calle Yaguarón 1407, offices 915 – 916 Montevideo,
Uruguay. It is engaged in commercializing all forms of merchandise and raw materials in branches
and sub-branches of food, cosmetics and personal care; animal nutrition, imports, exports,
representations, commissions and consignations; shareholding, incorporation or acquisition of
companies operating in the aforementioned branches. It is subsidiary of Alicorp S.A.A. as from
May, 2008.
Alimentos Peruanos S.A.
It was incorporated in July 1, 2011. It is subsidiary of Alicorp S.A.A. as from December 20, 2012.
Its legal address is Avenida Francisco Bolognesi 551, Santa Anita, Lima, Peru. It is mainly engaged
in habilitating raw materials.
Cernical Group S.A.
It was incorporated in January 13, 2006, in Panama City, Panama. It is mainly engaged in
promoting, establishing or developing companies or businesses.
Cetecsal S.A.
It was incorporated on October 31, 1995. Its legal address is Ruta 5 Sur, kilómetro 1170, comuna
Castro, Chile. Cetescal is a subsidiary of Alicorp S.A.A. as from September 5, 2012. It is mainly
engaged in studying and elaborating diets for fish and animal food, developing technologies and
processes regarding genetics, technology and food adsorption, establishing labs and land and
maritime cultivation centers.
The Company was incorporated and started operations on October 21, 1980. Its legal address is
Calle Cuzco No. 470, Distrito de Punchana, Provincia de Maynas, Loreto, Peru. Its economic
activity is the distribution of all kinds of items or products, primarily oil and fats, pasta and flour in
the jungle of Peru. As of December 31, 2013, the Subsidiary does not perform commercial
operations.
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Downford Corporation
It was incorporated in the British Virgin Islands and began operations on October 4, 1996. The
stated purpose of the Company is to perform any legal commercial activity under the laws of the
British Virgin Islands. It is a subsidiary of Alicorp S.A.A. since July 10, 2008.
Farmington Enterprises Inc.
It was incorporated in the British Virgin Islands and started operations on August 10, 1992. This
entity is a subsidiary of Alicorp S.A.A. since October 20, 2006. In January 2009, it changed its
address to Panama; and in June 2013, to Peru. The object of the entity is to undertake investment
activities. It also owns 50% of the common shares of Molinera Inca S.A.
Garuza Transportes S.A.
It was incorporated on August 14, 2007. It is a subsidiary of Alicorp S.A.A. as from December 20,
2012. Its legal address is Avenida Francisco Bolognesi 551, Santa Anita, Lima, Peru. Garuza
Transportes is mainly engaged in load transportation.
Inbalnor S.A.
It was incorporated on March 3, 2011, in Ecuador. Its legal address is in Ciudad de Milagro, Cantón
Milagro, Provincia del Guayas. It is a subsidiary of Alicorp S.A.A. as from 2011. Inbalnor is
engaged in producing animal food.
It was incorporated on February 2, 1970. It is a subsidiary of Alicorp S.A.A. as from December 20,
2012. Its legal address is Avenida Francisco Bolognesi 551, Santa Anita, Lima, Peru. This company
is mainly engaged in producing, commercializing and distributing canned food and sauces.
Industrias Teal S.A.
It was incorporated on January 4, 1936, in Lima, Peru. Its legal address is Av. Nicolas Ayllon 1779,
Distrito de Ate. It is engaged in the mill industry and in producing and commercializing pasta,
biscuits, pantone, candies and chocolates under Sayón brand. It is subsidiary of Alicorp as from
January 4, 2013.
Italo Manera S.A.
The legal address is Ruta 229, Km 6.7, Bahia Blanca, Buenos Aires Argentina. Its main activity is
the manufacture, commercialization and distribution of pasta, cakes and juices. It is a subsidiary of
Alicorp Argentina S.C.A. since June 21, 2011.
Molinera Inca S.A.
It was incorporated in Peru on January 10, 1964 and it is a subsidiary of Alicorp S.A.A. since
October 20, 2006. Its economic activity comprises grain milling, biscuit manufacturing, and
marketing of own products and products from third parties. It has three production plants. Two of
them are located in Trujillo, Carretera Panamericana Norte Km 557 and 558, respectively. The third
plant is located in Carretera Paita – Sullana Km 3.5, Province of Paita – Piura. Its legal address is
Carretera Panamericana Norte Km 557 – District and Province of Trujillo –La Libertad.
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Pastas Especiales S.A.
The legal address is Av. Juan Manuel de Rosa No. 3685 Bahía Blanca, Buenos Aires Argentina. Its
main activity is the manufacture and commercialization of pastas and cakes. It is a subsidiary of
Alicorp Argentina S.C.A. since June 21, 2011.
Pastificio Santa Amália S.A.
It was incorporated on September 4, 1969, in the city of Machado, Estado de Minas Gerais, Brazil.
Its legal address is Rodovio Br 267, Km 2, industrial district of Machado. It started operating on
September 30, 1969. It is a subsidiary of the Company as from February 5, 2013. It is mainly
engaged in elaborating and commercializing mass consumption products such as pastas, jelly,
chocolates and instant beverages, under Santa Amália brand.
Prooriente S.A.
It was incorporated on October 2, 2007, with legal address in Calle Cuzco No. 470 – Distrito de
Punchana, Provincia de Maynas, Loreto, Peru. The Company began operations in December 2007,
for the stated purpose of commercializing all kinds of items or products, primarily oils and fats,
pasta and flour in the jungle of Peru.
S.G.A. & CO. S.A.
It was incorporated on April 17, 1984. It is a subsidiary of Alicorp S.A.A. as from December 20,
2012. Its legal address is Avenida Francisco Bolognesi 551, Santa Anita, Lima, Peru. It is mainly
engaged in distributing food products.
Salmofood S.A.
It was incorporated in May 26, 1993 and started operating on February 1, 1995. Its legal address is
Ruta 5 Sur kilómetro 1170, comuna Castro, Chile. It is a subsidiary of Alicorp S.A.A. as from
September 5, 2012. It is mainly engaged in producing food for farming, breeding and fattening up of
fish, birds and animals in general.
Sanford S.A.C.I.F.I. y A.
The legal address is Ingeniero Enrique Butty 275, 11th floor, Buenos Aires, Capital Federal. Its
main activity is the manufacture and commercialization of food products. It is a subsidiary of
Alicorp Argentina S.C.A. since May 31, 2010.
TVBC S.C.A. and Subsidiaries
The legal address of TVBC S.C.A. and its subsidiary Sulfargen S.A. is Ingeniero Butty 275, 11th
floor, Buenos Aires, Capital Federal, Argentina; and the legal address of subsidiary Alicorp San
Juan S.A. is ruta 40 and calle 7, Pocito Aberestian, San Juan.
TVBC S.C.A. has a stake of 99.9% of shares in Alicorp San Juan SA, which is mainly engaged in
the manufacture and commercialization of personal care and home care products and 95% in shares
of Sulfargen S.A. whose plant is currently idle. Both companies are subsidiaries of Alicorp S.A.A.
since May 30, 2008.
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Liquidation of non-operating companies
As of December 31, 2013, the Company liquidated and closed operations of Alicorp Trading
(Shenzhen) Ltd. Co. Liquidation did not affect liabilities or profit and loss.
2.
SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies used by the Company and its subsidiaries for the preparation and
presentation of the consolidated financial statements are summarized as follows:
(a)
Statement of compliance and basis of preparation and presentation
The accompanying consolidated financial statements were prepared in conformity with International
Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board
(IASB) effective as of December 31, 2013 and 2012, which include International Financial
Reporting Standards (IFRS), International Accounting Standards (IAS) and Interpretations issued by
the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing
Interpretations Committee (SIC) - adopted by the IASB. As it is explained below in the significant
accounting policies section, the historical cost basis was used for this purpose, except for some
items of properties and financial instruments measured by appraised value or fair value, as indicated
in this note. The historical cost is generally based in the fair value of the consideration given for the
exchange of assets.
Fair value is the price that would be receive when selling an asset, or paid when transferring a
liability in an organized transaction between market participants at a measure date, regardless of the
fact that said price is directly observable or considerable through another appraisal technique. When
estimating the fair value of an asset or liability, the Company considers the characteristics of said
asset or liability in the event that market participants would want to consider them as of when
setting a price as of measurement date. Fair value for measurement and/or disclosure purposes in
these financial statements is determined on said basis, except transactions of share-based payment
(which are within the scope of IFRS 2), leasing transactions (within the scope of IAS 17), and
measurements somehow similar to fair value, but not fair value, such as net realizable value in IAS
2, or value in use in IAS 36.
(b)
Basis of consolidation
The accompanying consolidated financial statements include the accounts of the Company and from
those entities under its control (subsidiaries). The Company considers achieving control over an
entity, when: (a) it has the power to direct its financial and operating policies, in order to obtain
benefits from its activities, (b) it is exposed, or owns rights, on variable returns for its relation with
the controlled entity, and (c) has the capacity of using its power to improve its returns. The
Company reassesses the control over a controlled entity if events and circumstances indicate
changes in one or more of the three aforementioned control elements.
As of December 31, 2013 and 2012, financial statements include consolidated accounts of the
Company and its subsidiaries described in Note 1 (e).
All intra-group transactions have been fully eliminated. When necessary, adjustments are made to
the financial statements of certain subsidiaries to comfort their accounting policies with those used
by the Parent Company.
- 15 -
Income and expenses of subsidiaries acquired or disposed of during the year are included in the
consolidated statement of comprehensive income from the effective date of acquisition and up to the
effective date of disposal, as the case may. Total comprehensive income of subsidiaries is attributed
to the owners of the Company and to the non-controlling interests even if this result having a deficit
balance.
Changes in the Group ownership in its subsidiaries, which do not result in a loss of control, are
recorded as equity transactions. The carrying amounts of the ownership of the shareholders of the
Company and that of the non-controlling interest of the subsidiaries are adjusted to reflect the
changes in the respective ownership. Any difference between these amounts and the fair value of the
consideration paid or received is recognised directly in equity and attributed to owners of the
Company.
(c)
Responsibility for information and estimates
The Company’s Management is responsible for the information contained in the consolidated
financial statements. Certain estimates made to quantify some assets, liabilities, revenues, expenses
and commitments recorded therein have been used based on the experience and other relevant
factors. Final results could differ from those estimates.
These estimates are reviewed on an ongoing basis. Changes in accounting estimates are
prospectively recognized by recording the effects of changes in the corresponding consolidated
statement of income for the year in which the corresponding revisions are conducted.
The most important estimates and sources of uncertainty related with the preparation of the
Company’s consolidated financial statements refer to:
-
Determination of functional currency and recording of foreign currency transactions.
Revenue recognition.
Operating leases.
Impairment losses of certain assets (Notes 7, 9, 11, 13, 14 and 15).
Useful life of property, plant and equipment and other intangible assets.
Goodwill (Note 15).
Fair values, classification and risks of financial assets and liabilities (Note 4).
Provisions (Note 21).
Probability of contingencies (Note 37).
Current and deferred income tax (Note 30).
(d)
Functional and presentation currency
The Company prepares and presents its consolidated financial statements with its subsidiaries in
Peruvian nuevos soles, which is its functional currency. The functional currency is the currency of
the main economic environment in which an entity operates, which has an impact on the selling
prices of traded goods, among other factors.
(e)
Foreign currency
The functional currency of the Company and its subsidiaries is the currency of the country in which
each entity operates. Transactions in currencies other than the functional currency are deemed to be
"foreign currency", and are recognized at the rates of exchange prevailing at the date of transactions.
At the end of each reporting period, the balances of monetary items denominated in foreign
currencies are translated at the rates prevailing at that date. Non-monetary items carried at fair value
- 16 -
that are denominated in foreign currencies are translated at the rates prevailing at the date when the
fair value was determined. Non-monetary items which are recognized at historical cost in foreign
currencies are translated using rates of exchange prevailing at the date of transactions.
Exchange differences arising on monetary items are recognized in profit or loss in the period in
which they arise, except for:
-
-
exchange differences on foreign currency borrowings related to assets under construction for
future productive use, which are included in the cost of those assets when they are regarded as
an adjustment to interest costs on these borrowings;
exchange differences on transactions entered into in order to hedge foreign exchange risks in
cases of transactions designated to hedge accounting, and
exchange differences on monetary items receivable from or payable to a foreign operation for
which settlement is neither planned nor likely to occur in the foreseeable future (therefore
forming part of the net investment in the foreign operation), which are recognized initially in
other comprehensive income and reclassified to profit or loss for the period on repayment of
the monetary items.
For the purposes of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are translated into Currency Units using exchanges rates prevailing at
the end of each reporting period. Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuate significantly during that period, in which case
the exchange rates ay the dates of the transactions are used. Exchange difference arising, if any, are
recognized in other comprehensive income and accumulated in equity (attributed to non-controlling
interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation,
a disposal involving loss control over a jointly controlled entity that includes a foreign operation, or
a disposal involving loss of significant influence over an associate that includes a foreign operation),
all of the exchange differences accumulated in equity in respect of that operation attributable to the
owners of the Company are reclassified to profit or loss.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing
control over the subsidiary, the proportionate share of accumulated exchange difference are reattributed to non-controlling interest and are not recognized in profit or loss. For all other partial
disposals (i.e. partial disposals of associates of jointly controlled entities that do not result in the
Group losing significant influence or joint control), the proportionate share of the accumulated
exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments on identifiable assets and liabilities acquired arising on the
acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and
translated at the rate of exchange prevailing at the end of each reporting period. Exchange
differences arising are recognized in other comprehensive income and accumulated in equity.
(f)
Cash and cash equivalent
Cash and cash equivalent include cash in banks and investments in time deposits with maturities
under three months, respectively.
- 17 -
(g)
Financial instruments
Financial instruments are contracts that give rise simultaneously to a financial asset in a company
and a financial liability or equity instrument in another company. Financial assets and liabilities are
recognized when the Company and its subsidiaries are part of contractual agreements of the
corresponding instrument.
Financial assets and financial liabilities are initially measured at fair value plus the transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial liabilities,
except for those classified at fair value through profit or loss, which are initially recognized at fair
value and whose transaction costs directly attributable to the acquisition or issue of financial assets
or financial liabilities are recognized immediately in profit or loss for the year.
Financial assets
Conventional purchase or sale of financial assets are recognized and written off using the trade date
accounting, or at the settlement date accounting. The Company will apply the same method in a
consistent way for all purchases and sales of financial assets that classify in the same way.
The trade date accounting is when an entity commits to purchase or sale an asset. The accounting of
the trade date refers to: (a) the recognition of the asset to be received and liability to be paid as of
the trade date accounting, and (b) write off the asset being sold, the recognition of the eventual
result of the disposition, and recognition of a receivable from the buyer as of the contracting date.
Usually, interest do not accumulate (accrue) on the asset and corresponding liability until the
liquidation date, when the security is transferred.
The settlement date accounting is when an asset is delivered or received by the entity. The
accounting by the settlement date refers to: (a) the recognition of the asset as of the day in which the
entity receives it, and (b) write off the asset and the recognition of any result by disposition as of the
day its delivery by the entity takes place. When the accounting of liquidation date is applied, an
entity will account any change in fair value of the asset receivable, that takes place during the period
starting as of the contracting date until the liquidation date, in the same way as it accounts the
acquired asset, that is to say, the change in value will not be recognized in assets measured at
amortized cost; but in the gains for the period for assets classified as financial assets measured at
fair value through profit and loss; and will be recognized in other comprehensive income for
investments in equity instruments.
Financial assets are classified into the following specified categories:
-
Financial assets at fair value through profit or loss;
Held-to-maturity investments;
Loans and receivables;
Available-for-sale financial assets.
Financial assets are classified as at fair value through profit or loss when the financial asset is either
held for trading or, on initial recognition; it is designated by the Company and its subsidiaries to be
recorded at fair value through profit or loss.
- 18 -
A financial asset is classified as held for trading if:
-
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group
manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not a financial guarantee contract, nor it is a derivative that is not
designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as at fair value
through profit or loss upon initial recognition if:
-
-
such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both,
which is managed and its performance is evaluated on a fair value basis, in accordance with
the Group's documented risk management or investment strategy, and information about the
grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits
the entire combined contract (asset or liability) to be designated as at financial assets at fair
value through profit or loss.
Financial assets at fair value through profit or loss are stated at fair value, with any gain or losses
arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or
loss incorporates any dividend or interest earned on the financial asset.
Non-derivative financial assets with a fixed maturity date, whose payments are fixed or
determinable amounts, and the Company and its subsidiaries have the effective intention and,
additionally, the capacity of preserving until its maturity, are classified as held to maturity
investments. These are recorded at amortized cost by applying the effective interest rate less any
recognized accumulated impairment loss, recognizing income throughout the corresponding period.
Trade receivable, loans and other non-derivative receivable with fixed or determinable payments
that are not traded in an active market are classified as loans and receivable. These items are
recorded at amortized cost by applying the effective interest rate method less any recognized
accumulated impairment loss. Effective interest rate is the discount rate which exactly equalizes
cash flows receivable or payable, estimated throughout the instrument’s life. Interest income is
recognized by applying the effective interest rate, except for short-term receivables when the
recognition of interest would be immaterial.
Available-for-sale investments are non-derivative financial assets specifically designated as
available-for-sale, or classified as: (a) loans and receivable, (b) held-to-maturity investments, or (c)
financial assets at fair value through profit or loss. These investments are valued at fair value. Profit
and loss provided by variations in the fair value of these investments are directly recognized under
Other comprehensive income, except for impairment value losses, interests calculated according to
the effective interest rate and profit or loss for variation in exchange rate of debt instruments
denominated in foreign currency, which are directly recognized in profit or loss for the period when
they are produced. When the investment is disposed of or is determined to be impaired, the
cumulative gain or loss previously accumulated in other comprehensive income is reclassified to
profit or loss. Dividends of equity instruments classified as available-for-sale are recognized in
profit or loss for the period when the rights entitling the Company and its subsidiaries to receive the
corresponding payment are established.
- 19 -
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm's length transaction. Quoted market prices in an active
market are the best evidence of fair value and should be used, where they exist, to measure the
financial instrument. If a market for a financial instrument is not active, an entity establishes fair
value by using a valuation technique that makes maximum use of market inputs and includes recent
arm's length market transactions, reference to the current fair value of another instrument that is
substantially the same or at discounted cash flow analysis, applying market interest rate for similar
financial instruments (same term, currency, interest rates and similar equivalent risk assessments).
Financial liabilities
Financial liabilities and equity instruments are classified as either financial liabilities or as equity in
accordance with the content of the contractual arrangements and the economic substance of the
contract. An equity instrument is any contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities.
Financial liabilities held by the Company and its subsidiaries are classified either as financial
liabilities at fair value or as other financial liabilities.
Financial liabilities are classified as at fair value through profit or loss when the financial liability is
either held for trading or at initial recognition have been designated by the Company as at fair value
through profit or loss.
A financial liability is classified as held for trading if:
-
it has been acquired principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group
manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not a financial guarantee contract, nor it is a derivative that is not
designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at fair value
through profit or loss upon initial recognition if:
-
-
such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both,
which is managed and its performance is evaluated on a fair value basis, in accordance with
the Group's documented risk management or investment strategy, and information about the
grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits
the entire combined contract (asset or liability) to be designated as at fair value through profit
or loss.
Financial liabilities at fair value through profit or loss are stated at fair value. Profit or loss in fair
value changes of these liabilities are recognized in profit or loss for the year when they are
produced. Profit or loss recognized in profit or loss includes any interest paid on said financial
liabilities.
Other financial liabilities are subsequently measured at amortized cost using the effective interest
method, recognizing interest expense throughout the corresponding period.
- 20 -
(h)
Derivative financial instruments
The Company and its subsidiaries use derivative financial instruments such as: exchange rate swaps,
exchange rate options, interest rate swaps, cross currency swaps, futures and options for
commodities to hedge its interest rates and currency risks, and commodity price, respectively.
Details of operations with derivatives held by the Company and its subsidiaries are presented in
Note 23.
Derivative financial instruments are initially recognized at fair value as of the date the contracts are
entered into and are subsequently re-measured to their fair value as of the date of the consolidated
financial statements. Derivatives are recorded as financial assets when fair value is positive and as
financial liabilities when fair value is negative. The resulting gain or loss from changes in fair value
of derivatives is recognized directly in profit or loss, and in net loss on derivative financial
instruments line item, except for the effective portion of cash flow hedges, which are recognized
directly in consolidated equity.
At the inception of the hedge relationship, the Company and subsidiaries formally designate and
document the relationship between the hedging instrument and the hedged item along with risk
management objectives and strategy. The documentation includes identification of the hedging
instrument, the hedged item or the nature of the risk hedged, and whether the hedging instrument is
highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to
the hedged risk.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are
recognized in profit or loss immediately, together with any changes in the fair value of the hedged
asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging
instrument and the change in the hedged item attributable to the hedged risk are recognized on the
net loss on derivative financial instruments line item in the consolidated statement of income.
Hedge accounting is discontinued when the Company and its subsidiaries revoke the hedging
relationship, when the hedging instrument expires or is sold, terminated or exercised, or when it no
longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the
hedged item arising from the hedged risk is amortized to profit or loss from that date.
As of December 31, 2013 and 2012, the Company and its subsidiaries do not have fair value hedge
contracts.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that were designated and qualify as
cash flow hedges is recognized directly in the line of other comprehensive income, while the profit
or loss relating to the ineffective portion is recognized immediately in the income statement line net
loss on derivative instruments.
Amounts previously recognized in other comprehensive income and accumulated in equity are
reclassified to profit or loss in periods when the hedged item is recognized as profit or loss in the
consolidated statement of income.
- 21 -
Hedge accounting is discontinued when the Company and its subsidiaries revoke the hedging
relationship, when the hedging instrument expires or is sold, terminated or exercised, or when it no
longer qualifies for hedge accounting.
Non-hedging designated contracts
Such contracts are carried at fair value at the date of the financial statements and recorded as
financial assets when fair value is positive and as financial liabilities when fair value is negative.
Profit or loss from changes in fair value of derivatives not designated as hedges are included
directly in the consolidated statement of income as loss of derivative financial instruments.
(i)
Inventories
Inventories are valued at the lower of production or acquisition cost, or net realizable value. Costs
comprises direct materials and, in its case, direct labor and general production expenses, including
as well expenses incurred in when moving stock to its current location and conditions. In periods
with low production level, or with idle capacity, the amount of general fixed production expenses
attributed to each production unit does not increase as a result of this circumstance. In periods of
unusually high production, the amount of general fixed production expenses attributed to each
production unit will decrease, therefore the stock will not be valuated above real cost.
Trade discounts, obtained rebates and other similar items are deducted in the determination of
acquisition price.
Cost is estimated using the average method. The net realizable value represents the estimate of sales
price less all estimated finishing costs and costs that will be incurred in the processes of
commercialization, sale and distribution.
(j)
Investments in associates
An associate is an entity over which the Company has significant influence and that is neither a
subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the
financial and operating policy decision of the investee but is not control or joint control over those
policies.
Profit or loss, and assets and liabilities of associates are incorporated in the consolidated financial
statements through the equity share method. Under this method, investment in associate is initially
recognized in the consolidated statement at cost, subsequently adjusted to recognize interest in
profit or loss and other comprehensive income of the associate. Distributions received from the
associate, such as dividends, shall reduce the carrying amount of the investment. Losses of the
associate exceeding the Company’s share in said associate are recognized to the extent that the
Company has incurred in a legal or constructive obligation, or has made payments on behalf of the
associate.
Any excess of the cost of acquisition over the Company’s share of the net fair value of identifiable
assets, liabilities and contingent liabilities of an associate recognized as of acquisition date, is
recognized as goodwill. This goodwill is included in the carrying amount of the investment in the
associate and is assessed for impairment as part of the investment therein. Excess of the Company’s
share in net fair value of identifiable assets, liabilities and contingent liabilities of the associate
recognized as of acquisition date, over acquisition cost, is immediately recognized, after its
assessment, in profit or loss for the period.
- 22 -
The requirements of IAS 39 are applied to determine whether it is necessary to recognize any
impairment loss with respect to the Company and its subsidiaries’ investment in an associate. When
necessary, the entire carrying amount of the investment (including goodwill) is tested for
impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its
recoverable amount (higher of value in use and fair value loss cost to sell) with its carrying amount.
Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal
of the impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable
amount of the investment subsequently increases.
Upon disposal of an associate that results in the Company and its subsidiaries losing significant
influence over the associate, any retained investment is measured at fair value at the date and the
fair value is regarded as its fair value on initial recognition as a financial asset in accordance with
IAS 39. The difference between the previous carrying amount of the associate attributable to the
retained interest and its fair value is included in the determination of the gain or loss on disposal of
the associate. In addition, the Company and its subsidiaries accounts for all amounts previously
recognized in other comprehensive income in relation to the associate on the same basis as would be
required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain
or loss previously recognized in other comprehensive income by that associate would be reclassified
to profit or loss on the disposal of the related assets or liabilities, the Company and its subsidiaries
reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when it
loses significant influence over that associate.
All unrealized profit and loss of significant transactions between the Company and its subsidiaries,
and associates, have been deleted to the extent that they correspond to their shares in the associate.
(k)
Property, plant and equipment
Property, plant and equipment are recorded at cost and are presented net of accumulated
depreciation. These costs should be recognized as assets when it is probable that the future
economic benefits associated with the asset will flow to the entity, and the cost of the asset can be
measured reliably. Disbursements for maintenance and repairs are expensed during the period as
incurred. The profit or loss arising on the sale or disposal of an item of property, plant and
equipment is determined as the difference between the sales proceeds and the carrying amount of
the asset and is recognized in the income statement upon realization of the sale.
Property, plant and equipment in the course of construction on acquisition are carried at cost, less
any recognized impairment loss. Cost includes professional fees and, for qualifying assets,
borrowing costs. Such properties are classified to the appropriate categories of property, plant and
equipment when completed and ready for intended use. Depreciation of these assets, on the same
basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is calculated based on the straight-line method over the remaining useful life of assets.
The annual depreciation is recognized as an expense and calculated considering the estimated useful
lives of the different captions:
Years range
4 – 50
2 – 54
3–7
10
4
10– 25
Buildings, plants and other constructions
Machinery and equipment
Vehicles
Furniture and fixtures
Computer equipment
Sundry equipment
- 23 -
(l)
Assets held for sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use. This condition
is regarded as met only when the sale is highly probable and the non-current asset (or disposal
group) is available for immediate sale in its present condition. Also, management is committed to
the sale, which is expected to be qualified for recognition as a completed sale within one year from
the date of classification, when the depreciation of these assets is suspended.
Non-current assets (or disposal groups) classified as held for sale are measured at lower of their
previous carrying amount and fair value less costs to sell.
(m) Review on impairment goodwill
For purposes of impairment testing, goodwill is assigned to each cash-generating unit of the
Company, expected to benefit synergies of the business combination. A cash-generating unit, to
which bought goodwill has been distributed to, is annually subjected to impairment verification, as
well as when there are indications that the unit may have been impaired. If the recoverable amount
of the cash-generating unit were lower than the carrying amount of the unit, impairment loss is
primarily distributed to reduce carrying amount of any bought goodwill distributed to the cashgenerating unit and, subsequently, to all other assets of the unit, prorating based on the carrying
amount of each of the unit’s assets. A recognized impairment loss in bought goodwill is not
reversed in subsequent periods.
Accounting policy for the accounting treatment of goodwill resulting in acquisition of subsidiaries
and associates are described under “business combination” and “investments in associate”,
respectively.
(n)
Other intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortization and accumulated impairment losses. Amortization is recognized on a
straight-line basis over their estimated useful lives, represented by equivalent amortization rates.
The estimated useful life of these assets is between 2 and 10 years.
(o)
Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value, which is calculated as the sum of the
acquisition date fair values of the assets transferred by the Company, liabilities incurred by the
Company to the former owners of the acquiree and the equity interests issued by the Company in
exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or
loss as incurred.
As of acquisition date, identifiable acquired assets and assumed liabilities are recorded by their fair
value, except for:
-
Deferred taxes assets or liabilities and assets or liabilities in relation to agreements of
employee benefits, recognized and measured according to IAS 12 and IAS 19, respectively.
-
Liabilities or equity instruments in relation with agreements of share-based payments of the
acquired entity, measured according to IFRS 2.
- 24 -
-
Assets (or disposal groups) classified as held for sale, according to IFRS 5, Non-current assets
held for sale and discontinued operations, measured according to this standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity
interest in the acquire (in any) over the net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts
of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquire and the fair value of the
acquirer´s previously held interest in the acquire (if any), the excess is recognized immediately in
profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a
proportionate share of the entity’s net assets in the event of liquidation may be initially measured
either at fair value or at the non-controlling interests´ proportionate share of the recognized amounts
of the acquiree´s identifiable net assets. Other types of non-controlling interests are measured at fair
value or, when applicable, on the basis specified in another IFRS.
When the compensation transferred by the Company and its subsidiaries in a business combination
includes assets or liabilities provided by a contingent compensation agreement, the contingent is
measured at fair value as of the acquisition date and included as part of the transferred compensation
in a business combination. Changes in fair value of the contingent compensation that classify as
adjustments of the “measurement period” (which cannot exceed one year from the acquisition date)
are adjusted after, with corresponding adjustments with effects in goodwill. Adjustments for
valuation arising from additional information obtained during the measurement period on facts and
circumstances existing at acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not
qualify as measurement period adjustments depends on how the contingent consideration is
classified. Contingent consideration that is classified as equity is not remeasured at subsequent
reporting dates and its subsequent settlement is recorded for within equity, contingent consideration
is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with
IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the
corresponding gain or loss being recognized in profit or loss.
When a business combination is achieved in stages, the Company’s previously held equity interest
in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Company
obtains control) and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising
from interests in the acquiree prior to the acquisition date that have previously been recognized in
other comprehensive income are reclassified to profit or loss where such treatment would be
appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the Company reports provisional amounts for the items for which
the accounting is incomplete. Those provisional amounts are adjusted during the measurement
period (see above), or additional assets or liabilities are recognized, to reflect new information
obtained about facts and circumstances that existed at the acquisition date that, if known, would
have affected the amounts recognized at the date.
- 25 -
If the Company and its subsidiaries is in process of measuring the business combination; during the
measurement period, it will retrospectively adjust provisional amounts recognized as of the
acquisition date in order to reflect new information obtained on facts and circumstances that exist as
of the acquisition date and that, if known before, would have affected the measurement of
recognized amount in that date. During the measurement period, the Company will as well
recognize additional assets or liabilities if it obtains new information on facts and circumstances that
existed as of the acquisition date and that, if known before, would have resulted in the recognition
of these assets and liabilities as of that date. Measurement period will end as soon as the Company
receives the information it was seeking on facts and circumstances that existed as of the acquisition
date, or it concludes that no more information can be obtained. However, the measurement period
will not exceed one year as from the acquisition date.
(p)
Review of long-term assets impairment, except goodwill
The Company and its subsidiaries periodically review the carrying amounts of their tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). When it is not possible to estimate the
recoverable amount of an individual asset, the Company and its subsidiaries estimate the
recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and
consistent basis of allocation can be identified, corporate assets are also allocated to individual cashgenerating units, or otherwise they are allocated to the smallest group of cash-generating units for
which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested
for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the
asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognized immediately as expense. An impairment loss
can subsequently reverse and recorded as income in profit or loss for the year, up to the amount in
which the increased carrying amount of the asset does not exceed the carrying amount that would
have been determined had no impairment loss been recognized for the asset (or cash-generating
unit) in prior years.
(q)
Provisions
Provisions are recognized when the Company and its subsidiaries have a present obligation (legal or
constructive) as a result of a past event, it is probable that the Company and its subsidiaries have to
give away resources that incorporate economic benefits in order to settle the obligation, and the
amount of the obligation can be reliably estimated.
Amount recognized as provision correspond to the best estimation, as of the date of the statement of
financial position, of the necessary disbursement to settle the present obligation, considering risks
and uncertainties surrounding most of the events and circumstances concurrent to its valuation.
When the amount of the provision is measured by applying estimated cash flows for such
obligation, the carrying amount is the present value of corresponding disbursement.
- 26 -
In the event that a portion, or the whole disbursement necessary to settle the provision is expected to
be recovered by a third party, the portion receivable is recognized as an asset when its recovery is
practically certain, and the amounts of such portion can be reliably determined.
(r)
Contingent assets and liabilities
Contingent liabilities are not recognized in the consolidated financial statements, they are only
disclosed in a note to the consolidated financial statements unless the possibility of an outflow of
resources is remote. Contingent assets are not recognized in the consolidated financial statements,
they are only disclosed in a note to the consolidated financial statements when it is probable that an
inflow of resources will take place.
Items previously treated as contingent assets or liabilities will be recognized in the consolidated
financial statements of the period in which the change in probabilities occurs; that is, when in the
case of liabilities it is determined as probable, or virtually certain in the case of assets, that an
outflow or inflow of resources will take place, respectively.
(s)
Benefits to employees and workers
Benefits to employees and workers include, among other, short-term benefits, such as wages and
salaries and social security contributions, annual vacations, sick leaves and profit sharing and
bonuses paid within the term of twelve months after the closing of the period; are recognized as a
liability when the worker has rendered services in exchange for the right to receive future payments;
and as expense when the Company and its subsidiaries have consumed the economic benefits
arising from the service rendered by the worker in exchange for retributions.
(t)
Leases
Determining whether an arrangement is or contains a lease is made based on the substance of the
contract at inception date. It is necessary to consider whether the fulfillment of the contract depends
on the use of a specific asset or assets or if the contract transfers the right to use the asset.
Leases are classified as financial leases whenever the terms of the lease transfer substantially all
risks and rewards of ownership of the leased asset. All other leases are classified as operating leases.
For contracts qualifying as financial leases where the Company and its subsidiaries act as lessee,
leased property and equipment are initially recognized as assets of the Company and its subsidiaries
at the lowest between their fair value or present value of minimum lease payments, at the beginning
of the lease term.
Payments of the financial leases are divided in two parts that respectively represent financial
charges and reduction of the corresponding liability so as to obtain a constant interest rate for each
period, over the debt balance pending of amortization. Contingent payments are charged as
expenses in periods in which they are incurred.
The profit on sale of fixed assets under a leaseback arrangement is deferred and amortized over the
term of the lease.
Payments derived from operating lease agreements where the Company and its subsidiaries act as
lessees are recognized as expense on the straight line method during the course of the lease period,
except those in which other systemic base of allocation is more representative to reflect more
adequately the pattern of leasing benefits. Contingent payments are charged as expenses in periods
in which they are incurred.
- 27 -
(u)
Revenue recognition
Revenues are measured using the reasonable value of the consideration, received or receivable,
arising therefrom. These revenues are reduced by those estimates such as customer returns, rebates
and other similar concepts.
Sale of products – Income from sale of finished products and other products are recognized when
the following conditions are complied with:
-
-
the Company and its subsidiaries have transferred relevant risks and rewards of ownership of
the goods to the buyer;
the Company and its subsidiaries do not hold for themselves any involvement in the current
management of sold goods, to the degree usually associated with the property, nor do have the
effective control over them;
the amount of income can be reliably measured;
it is likely that the Company and its subsidiaries receive economic benefits associated with the
transaction; and
incurred costs, or costs to be incurred, regarding the transaction can be reliably measured.
Rendering of services – Are recognized in the period in which they are rendered, considering the
stage of completion of the transaction, calculated on the bases of the service actually rendered as a
proportion of the total of services to be rendered.
Dividends and interests – Income from dividends of investments are recognized when rights of
shareholders to receive the corresponding payment have been established (once determined that it is
likely that the Company and its subsidiaries receive economic benefits associated with the
transaction and that the amount may be reliably measured).
Interest income is recognized by applying the effective interest rate method. They are accumulated
over a periodic base, considering as reference the pending principal balance and effective rate of
applicable interest.
(v)
Costs and expenses recognition
Costs of sold inventories are recorded as income or loss for the period in which the corresponding
operating income is recognized. Expenses are recognized when there has been a decrease in future
economic benefits relating to a decrease in assets or increase in liabilities. Additionally, the expense
can be reliably measured, regardless of the moment when they are paid.
(w) Income tax
Income tax expense comprises estimated current income tax plus deferred income tax.
Current income tax is determined by applying the tax rate established in the tax legislation on the
net taxable income for the year.
Deferred income tax corresponds to the tax amount expected to be recovered or paid over temporary
differences between carrying amounts reported of assets and liabilities, and their corresponding tax
basis. Deferred income tax liabilities are generally recognized for all taxable temporary differences.
Deferred income assets are generally recognized for all deductible temporary differences and tax
credit, non-utilized credits and tax losses, to the extent that the Company and its subsidiaries will
have enough future tax profits to recover them. Such assets and liabilities are not recognized if
- 28 -
temporary differences proceed from goodwill or initial recognition (except for business
combinations) of other assets and liabilities in an operation that does not affect the tax or financial
results.
Deferred income tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint ventures, except in those cases when the
Company is able to control the moment of reversion of the temporary difference and it is likely that
this difference will not be revert in a foreseeable future. Deferred income tax assets arising from
deductible temporary differences associated with such investments and shares are only recognized
to the extent that it is likely that temporary differences revert in a foreseeable future and there is
taxable profit in which such temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at the end of each reporting period
and reduced to the extent that it is not likely that the Company and its subsidiaries hold enough
future tax profit to recover all, or a part, of such assets.
Deferred income tax liabilities and assets are measured at the income tax rate expected to be applied
to the taxable income in the moment in which the liabilities are settled or the assets are recovered,
based on rates and approved tax laws, or which approval process is basically finished at the end of
the reporting period. Measurement of such deferred income reflects the taxable consequences that
could derive from the way that the Company expects to recover or settle the carrying amount of
their assets and liabilities by the end of the reporting period.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are
recognized in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognized in other comprehensive income or directly in equity, respectively.
In the case of current or deferred taxes arising from the initial recognition of a business
combination, taxable effects are included in the accounting of the corresponding business
combination.
(x)
Operating income
Operating income is the total income from ordinary activities less cost of sales, expenses and other
non-financial income.
(y)
Earning per share
Basic earnings per common investment and shares were computed by dividing net income
attributable to common and investment shareholders by the weighted-average number of common
and investment outstanding shares during each year. There are no potential common and investment
shares with diluting effects, that is, financial instruments or other contracts that give the right to
obtain common and investment shares, diluted earnings per common and investment share is equal
to basic earnings per common and investment shares.
- 29 -
(z)
Reclassification
Certain amounts of the consolidated financial statements for 2012 have been reclassified to make
them comparative with those for 2013.
S/.000
Consolidated statement of financial position
From other financial assets to
Accounts receivable from related entities
Other receivable
649
3,682
From other assets to
Other receivable
Other non-financial assets
Advances to suppliers
Income tax
116,666
35,871
38,414
27,103
From other financial liabilities to
992
From other liabilities to
Other payable
Inventories (net)
40,261
896
3,426
From deferred income to
1,105
Consolidated statement of income
From income tax to
Income from discontinued operations
17,644
These reclassifications were made to homogenize the presentation of the consolidated financial
statements of the Company and subsidiaries with the format established by the Superintendencia del
Mercado de Valores (Superintendence of the Securities Market).
Consolidated statement of cash flows
The following items have been reclassified for the stated amounts, from Operating activities to
Investing and Financing activities:
S/.000
Investing activities:
Interests
Sale of property, plant and equipment
8,610
76,000
Financing activities:
Interests
53,641
- 30 -
3.
NEW STANDARDS AND INTERPRETATIONS INTERNATIONALLY ISSUED
(a)
New IFRS and interpretations that did not significantly affect reported amounts and their
disclosures in the current and previous year
The following standards, interpretations and amendments to current standards were published with
mandatory application of accounting periods starting January 1, 2013, or following periods, but
were not relevant to the Company’s and its subsidiaries’ operations:
-
Amendments to IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities.
Effective for annual periods beginning on or after January 1, 2013. Amendments to IFRS 7
increase disclosure requirements for transactions involving the offset of financial assets and
financial liabilities. As a result of said amendments, entities shall disclose information
regarding offsetting rights and related agreements (such as requirements to record guarantees)
for those financial instruments under an applicable offsetting frame agreement, or similar
agreement. Amendments have been retrospectively applied. Given that the Company and its
subsidiaries does not have any offsetting agreement, the application of these amendments has
not have a material effect over disclosures or amounts recognized in the consolidated financial
statements.
During the current year, the Company and its subsidiaries have applied IFRS 10, IFRS 11,
IFRS 12 and IAS 28 (reviewed in 2011). IAS 27 (reviewed in 2011) is not applicable for the
Company and its subsidiaries, given that it solely refers to separate financial statements.
-
IFRS 10 Consolidated Financial Statements. Effective for annual periods beginning on or
after January 1, 2013. IFRS 10 replaces some parts of IAS 27 Consolidated and Separate
Financial Statements. SIC 12 Consolidation – Special Purpose Entities has been withdrawn in
in relation to the issuance of IFRS 10. Under IFRS 10, there is only one basis for
consolidation, which is control. Additionally, it includes a new definition of control containing
three elements: (a) power over the society in which it participates, (b) exposure, or rights to
variable returns from equity share in society, and (c) ability to influence society to affect the
amount of returns for investors. Management has assessed that the application of this standard
has not had a significant impact over amounts and disclosures of the consolidated financial
statements of the Company and its subsidiaries.
-
IFRS 11 Joint Agreements. Effective for annual periods beginning on or after January 1,
2013. IFRS 11 replaces IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint
agreement whereby two or more companies have joint control should be classified. SIC 13
Jointly Controlled Entities – Non-monetary Contributions by Venturers has been withdrawn in
relation to the issuance of IFRS 11. Under IFRS 11, joint agreements are classified as joint
operations or joint ventures, depending on the rights and obligations of the parties to the
agreement. On the opposite, IAS 31 comprises three kinds of joint ventures: jointly controlled
entities, jointly controlled assets and jointly controlled operations. Additionally, joint ventures
under IFRS 11 have to be accounted using the participation method, while jointly controlled
entities, according to IAS 31, can be accounted using the participation method or the
proportionate consolidation method. The application of this standard did not affect the
consolidated financial statements of the Company and its subsidiaries.
- 31 -
-
IFRS 12 Disclosure of Interests in Other Entities. Effective for annual periods beginning on
or after January 1, 2013. IFRS 12 is a disclosure rule applicable to entities that have interests
in subsidiaries, joint agreements, partnerships and/or entities with non-consolidated structure.
In general, the requirements under IFRS 12 on issues of disclosure are more stringent than
current standards, resulting in more disclosures in the consolidated financial statements.
Management has assessed that the application of this standard has not had a significant impact
on amounts and disclosures of the consolidated financial statements of the Company and its
subsidiaries.
-
IAS 27 (reviewed in 2011) Separate Financial Statements. Effective for annual periods
beginning on or after January 1, 2013. IAS 27 contains requirements for registration and
disclosure requirements for investments in subsidiaries, joint ventures and associates when an
entity prepares separate financial statements. IAS 27 requires the entity preparing separate
financial statements to account investments at cost or in accordance with IFRS 9. IAS 27
(reviewed in 2011) is not applicable to the Company, given that it solely refers to separate
financial statements. The application of this standard did not affect the consolidated financial
statements.
-
IAS 28 (reviewed in 2011) Investments in Associates and Joint Ventures. Effective for
annual periods beginning on or after January 1, 2013. IAS 28 contains requirements for
recording investments in associates and describes the conditions for applying the equity
method when investments in associates and joint ventures are recorded. Management has
assessed that the application of this standard has not had a significant impact on amounts and
disclosures of the consolidated financial statements.
-
IFRS 13 Fair Value Measurement. Effective for annual periods beginning on or after January
1, 2013. IFRS 13 establishes a single resource guide for determining the fair value
measurement disclosures about fair value. The standard defines fair value, establishes a
framework for measuring fair value and requires disclosures on fair value measurement. The
scope of IFRS 13 is broad because it applies to financial instruments, such as the non-financial
for which other IFRSs require or allow fair value measurement and disclosures about fair
value measurements, except under specific circumstances. In general, the requirements of
IFRS 13 are more extensive than required under current rules. For instance, qualitative and
quantitative information based on fair value’s hierarchy of the three levels that currently
require financial instruments, only under IFRS 7 Financial Statements: Disclosures will
extend through IFRS 13 in order to cover all assets and liabilities within its scope. IFRS 13 is
effective for annual periods beginning on or after January 1, 2013, early application is
allowed. Management has assessed that the application of this standard has not had a
significant impact on amounts, but had an impact in disclosures of the consolidated financial
statements.
-
Amendments to IAS 1 - Presentation of items of other comprehensive income. Effective for
annual periods beginning on or after January 1, 2013. Amendments to IAS 1 maintain the
option of filing the statement of income and other comprehensive income in one statement or
in two separate but consecutive statements. However, the amendment to IAS 1 requires
additional disclosures to be in other comprehensive income section so that these elements are
grouped into two categories: (a) items which will not be subsequently reclassified to the
income statement and (b) elements that will be subsequently reclassified to the income
statement when specific conditions are met. Income tax over elements of other comprehensive
income is required in order to be assigned in the same base. Presentation of elements of other
comprehensive income has been modified according to new requirements.
- 32 -
-
IAS 19 (reviewed 2011) Employee benefits. Effective for annual periods beginning on or after
January 1, 2013. Amendments to IAS 19 modify accounting of defined benefit plans and
termination benefits. The most significant change relates to accounting for changes in defined
benefit obligations and assets plan. The amendments require the recognition of changes in
defined benefit obligations and fair value of assets plan when they occur, and therefore
eliminate intermediate treatment allowed by the previous version of IAS 19, and accelerate the
recognition of past services costs. The amendments require that all actuarial profits and losses
are recognized in other comprehensive income so that net pension assets or liabilities
recognized in the statement of financial position reflect the total value of plan surplus or
deficit. Amendments to IAS 19 are effective for periods beginning on January 1, 2013 and
allow retrospective early application, with certain exceptions. Management does not estimate
that the amendment shall affect financial statements of the Company and its Subsidiaries,
given that they do not grant pension plans to their employees.
-
Amendments to IFRS Annual improvements to IFRS 2009-2011 cycle. Effective for annual
periods beginning on or after January 1, 2013. Amendments include amendments to IAS 16
Property, Plant and Equipment and IAS 32 Financial Instruments: Presentations. Amendments
to IAS 16 clarify that replacements, relevant auxiliary equipment and permanent maintenance
equipment shall be classified as property, plant and equipment when they comply definitions
of IAS 16, or otherwise, inventory. Amendments to IAS 32 clarify that deferred income taxes
regarding distributions to owners of equity instruments and transaction costs of an equity
transaction must be accounted in compliance with IAS 12 Income Taxes. Management
estimates that the application of these amendments has not had a relevant impact in amounts
and disclosures of the consolidated financial statements.
(b)
New IFRS and interpretations issued applicable after the date of submission of the
consolidated financial statements
The following standards and interpretations have been published to be applicable for periods
beginning after the date of presentation of these consolidated financial statements:
-
IFRS 9 Financial Instruments. Effective for annual periods beginning on or after January 1,
2017. IFRS 9, published in November 2009, introduces new requirements for the classification
and measurement of financial assets. Amendment to IFRS 9 in October 2010 includes
requirements for the classification and measurement of financial liabilities and de-recognition.
Key requirements of IFRS 9 are as follows:
IFRS 9 requires that all recognized financial assets within the scope of IAS 39 Financial
Instruments: Recognition and Measurement are later measured at their amortized cost or fair
value. Specifically, investments in debt instruments held within a business model in order to
earn contractual cash flows, exclusively corresponding to payments of capital and interests
over capital, are generally measured at their amortized cost in periods subsequent to the
closing date.
The most significant effect of this standard, regarding the classification and measurement of
financial liabilities, refers to accounting of changes in fair value of a financial liability,
attributable to changes in its credit risk. Specifically, under IFRS 9 the amount of change in
fair value of financial liabilities that are designated at fair value through profit and loss, that is
attributable to changes in the credit risk of the liability, is presented in other comprehensive
income, unless the recognition of effects of change of credit risk of the liability in other
comprehensive income originates or increases an imbalance in the profit or loss. Changes in
fair value, attributable to credit risk of a financial liability are not later reclassified in the
statement of income. Before, under IAS 39, the amount of variation in the financial liability’s
- 33 -
fair value designated at fair value through profit and loss was presented in the statement of
profit or loss and other comprehensive income.
IFRS 9 is effective for annual periods beginning after January 1, 2015, and its early
application is allowed. Management of the Company and its subsidiaries estimates that IFRS 9
will be adopted in financial statements for annual period beginning January 1, 2015, and that
its application can have a significant impact in the reported numbers corresponding to
financial assets and financial liabilities of the Company and its subsidiaries.
-
Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities. Effective for annual
periods beginning on or after January 12, 2014. Early application is allowed.
Amendments to IFRS 10 define investment entities and require that entities complying with
said definitions do not consolidate their subsidiaries, but that they measure them at fair value
through profit or loss in their separate and consolidated financial statements.
The following are required conditions for an entity to qualify as investment entity:

Obtaining funds from one or more investors with the purpose of rendering investment
management professional services.

Guaranteeing its investor(s) that the purpose of his business is to invest funds solely for
capital appreciation returns, investment revenue, or both.

Measuring and assessing the performance of virtually all its investments on a fair value
basis.
Consequently, amendments to IFRS 12 and IAS 27 have been made for them to present new
disclosure requirements for investment entities.
Management of the Company and its subsidiaries does not estimate that amendments on
investment entities affect the consolidated financial statements of the Group, given that the
Company is not an investment entity.
-
Amendments to IAS 32 Offsetting of financial assets and financial liabilities. Effective for
annual periods beginning on or after January 1, 2014 and 2013, regarding disclosures.
Amendments clarify matters of application relating to requirements for offsetting financial
assets and financial liabilities. Specifically, amendments clarify the meaning of “currently has
a legally enforceable right to offset” and “settle on a net basis, or to simultaneously realize the
asset and settle the liability”. Additionally, it requires the disclosure of information about
offsetting rights and related agreements (such as collateral) for financial instruments,
subjected to an executable master netting agreement, or similar. Management estimates that
the application of these amendments will not have a significant impact in amounts and
disclosures in the consolidated financial statements.
-
IFRIC 21 Levies. Effective for annual periods beginning on or after January 1, 2014. IFRIC
21 provides a guideline about when to recognize a liability for a levy imposed by the
Government, for levies to be accounted for with IAS 37 Provisions, Contingent Liabilities and
Contingent Assets, and those where moment and amount of the levy is true. Interpretation
includes the accounting of the outflow of resources imposed to companies by Governments
(including government agencies and similar organizations), according to laws and/or
regulations. However, it does not include income tax, fines and other sanctions, imposed by
infractions to law. Management estimates that the application of this interpretation is not
applicable to operations held by the Company or subsidiaries.
- 34 -
4.
FINANCIAL RISKS AND INSTRUMENTS
(a)
Categories of financial instruments
The financial assets and liabilities of the Company and its subsidiaries are comprised as follows:
2013
S/.000
Financial assets:
Held-to-maturity investments
Available-for-sale investments
Loans and receivables
Derivative instruments designated as hedge accounting
Total
Financial liabilities:
At fair value through profit or loss
At amortized cost
Derivative instruments designated as hedge accounting
Total
(b)
2012
S/.000
92,890
1,940
190,572
1,081,739
75,938
496,070
2,366
194,925
871,127
-
1,443,079
1,564,488
2,762,745
68,773
1,321
1,845,306
40,996
2,831,518
1,887,623
Financial risks
During the normal course of business, the Company and its subsidiaries are exposed to a variety of
financial risks. The risk management program of the Company and its subsidiaries is mainly
focused on financial markets and tries to minimize potential adverse effects on the financial
performance of Company and its subsidiaries. Ultimate responsibility for risk management rests
within the Vice President of Finance, which identifies, assesses and covers financial risks.
(i)
Market risks
Exchange rate risk
The Company and its subsidiaries invoice local sales of its products mainly in the currency in
which they operate, which allow meeting its obligations in that currency. The exchange rate
risk is mainly generated by accounts receivable related to foreign sales, purchase of raw
materials, and loans and other liabilities that are held in U.S. dollars. The Company and its
subsidiaries maintain forward contracts to hedge its exposure to exchange rate risk.
During 2013, the Company and its subsidiaries entered into several forwards for the purchase
of U.S. dollars (US$) and currency options with financial institutions, which were liquidated
in the year, generating gain of S/.808, included under net loss for derivative financial
instruments in the consolidated statements of income. As of December 31, 2013, the Company
and its subsidiaries have effective cross currency swaps and currency options for hedging
future liability positions of foreign currency, for US$388,291 (Note 23).
- 35 -
During 2012, the Company and its subsidiaries entered into several forwards for the purchase
of U.S. dollars (US$) with financial institutions, which were liquidated in the year, generating
loss of S/.1,679, included under net loss difference for derivative financial instruments in the
consolidated statements of income. As of December 31, 2012, the Company and its
subsidiaries have cross currency swaps and currency options for hedging future liability
positions of foreign currency, for US$24,000 (Note 23).
Presented below, carrying amount of monetary assets and liabilities in foreign currency as of
December 31, reflected in accordance with accounting basis described in Note 2(e) to the
consolidated financial statements:
2013
US$000
Assets:
Other assets
Total
Liabilities:
Trade payable
Other liabilities
Total
Liability position, net
Purchase position of derivative instruments (Note 23)
2012
US$000
15,226
146,511
16,811
121,895
155,143
26,003
178,548
303,041
611,175
108,032
18,522
439,554
110,258
7,528
737,729
557,340
(559,181)
(254,299)
388,291
24,000
As of December 31, 2013, balances of financial assets and liabilities denominated in foreign
currency correspond to balances denominated in U.S. dollars (US$) and are expressed in
nuevos soles at the supply and demand exchange rate published by the Superintendencia de
Banca, Seguros y AFP (Superintendence of Banking, Insurance and AFP – SBS) effective at
that date, which was S/.2.796 per US$1.00 for sales (S/.2.551 for sales in as of December 31,
2012).
For the year ended December 31, 2013, the Company and its subsidiaries have recorded an
exchange loss, net of S/.121,497 (gain of S/.26,329 for the year ended December 31, 2012).
- 36 -
The effect of a 5% variation in the foreign exchange rates (U.S. dollars) on income before
income taxes of the Company and its subsidiaries, holding that all other variables remain
constant, is as follows:
Increase/decrease
in the exchange rate
Effect on income
before income tax
S/.000
2013:
Foreign currency/Nuevos Soles
+5%
-5%
(78,174)
78,174
2012:
+5%
-5%
(32,436)
32,436
Interest rate risk on fair value and cash flows
The Company and its subsidiaries do not have significant assets bearing interests; the
operating revenues and cash flows of the Company are independent from changes in market
interest rates, except for contracted swaps.
The Company and its subsidiaries may obtain financing with fixed or variable interest rates
provided that they incur a low financial cost. In some cases, after obtaining the funding, the
interest rate is compared to current and future market rate and necessary derivative
transactions are conducted in order to mitigate the impact of fluctuations thereon.
The Company and its subsidiaries manage interest rate risk by obtaining borrowings mainly at
fixed interest rate. Also, when necessary, the Company and its subsidiaries enter into hedge
agreements to exchange variable interest rates for fixed rates and thus reduce the risk of
fluctuations in interest rates. Management believes that risks of fluctuations in interest rates
are hedged.
In addition, operating cash flows of the Company and its subsidiaries are substantially
independent from changes in market interest rates. Accordingly, in the opinion of
Management, the Company and its subsidiaries do not have significant exposure to interest
rate risks.
During 2013 and 2012, the Company and its subsidiaries entered into several hedge
agreements to exchange variable interest rates for fixed ones to reduce the risk of interest rate
fluctuations with financial entities, which were liquidated in 2013, generating a loss for
S/.1,779 (S/.617 as of December 31, 2012), included in net loss for derivative financial
instruments in the consolidated statements of income (Note 23).
The Management of the Company and its subsidiaries considers 1% variation increase
(decrease) as reasonable in interest rate risk assessment.
- 37 -
Presented below, sensitivity analysis assuming an increase in interest rate equivalent to the
aforementioned rate, considering that all other variables remain constant, and that
indebtedness as of the closing of the reporting period had remained constant during the year:
Decrease in:
Net income
Equity
for the year
net
S/.000
S/.000
2013:
Loans at variable interest rate
2,202
-
2012:
Loans at variable interest rate
4,379
-
Exposure of the Company and its subsidiaries to interest rates of financial assets and liabilities
are presented in detail in the liquidity risk section.
Price risk
The Company and its subsidiaries are exposed to business risks generated by changes in the
price of raw material (commodities) required for manufacturing their products, which are
hedged through corporate negotiations of the Group with the corresponding suppliers.
Regarding the price of raw materials purchased, the Company has options (purchase and sale)
of raw material to cover the effect of changes in commodity prices.
Management believes that a 10% increase or decrease in commodity prices over the next six
months will not have a significant effect on the Company’s consolidated financial statements.
Other price risks
The Company and its subsidiaries are exposed to market risk arising from its investments in
equity instruments. These investments are mainly held for strategic purposes, rather than with
market trading purposes.
Management of the Company and its subsidiaries considers 5.0% increase as reasonable for
sensitivity rate in market risk assessment.
- 38 -
Presented below, sensitivity analysis to market risk of these financial instruments, assuming a
variation equivalent to the aforementioned rate, over investments in equity instruments
existing as of the date of the consolidated statement of financial position:
Increase
Net income
Equity
for the year
net
S/.000
S/.000
(ii)
2013:
Classified as available for sale
-
9,787
2012:
Classified as available for sale
-
9,967
Credit risk
Financial assets of the Company and its subsidiaries potentially exposed to significant
concentrations of credit risk consist primarily of bank deposits and trade receivables.
Regarding bank deposits, as of December 31, 2013, the Company and its subsidiaries maintain
35% (77% in 2012) of the balances of cash and cash equivalents in a local financial institution.
On that regard, the Company and its subsidiaries do not expect significant losses arising from
this risk since funds are deposited in a prestigious financial institution.
With respect to trade receivables, management believes that credit risk is mitigated because it
maintains an average collection period of 44 days (35 days in 2012) with its customers and
guarantees have been granted in favor of the Company and its subsidiaries. No significant
issues related to questionable collections have been observed in the past. Furthermore, the
balances of trade receivables are presented in the consolidated statement of financial position
net of allowance for impaired receivables.
During years ended December 31, 2013 and 2012, the Company and its subsidiaries held
credit risk concentrations 61.9% and 46.7%, respectively; from the amount of their gross
monetary assets.
The Company and its subsidiaries place their cash in in prestigious financial institutions;
establish conservative credit policies and constantly asses the conditions of the market they
operate. Consequently, the Company and its subsidiaries do not expect significant losses in
this regard.
(iii) Liquidity risk
A reasonable management of liquidity risks implies maintaining sufficient cash and cash
equivalents, and the possibility of obtaining and/or having obtained financing through an
adequate number of sources of credit. The Company and its subsidiaries have appropriate
levels of cash and cash equivalents and available credit facilities.
- 39 -
The Company and its subsidiaries maintain short-term financial assets, except for investments
in bonds – Panificadora Bimbo, which are classified according to their maturity. The
remaining period to reach maturity at the consolidated balance sheet date is as follows:
1 year
S/.000
As of December 31, 2013
428
426
1 and 2
years
S/.000
435
428
2 and 5
years
S/.000
1,077
1,336
More than
5 years
S/.000
176
Total
S/.000
1,940
2,366
Interests in associates do not mature, they are considered as of non-current nature.
An analysis of the financial liabilities of the Company and its subsidiaries classified based on
their maturity date and considering the period left to reach that due date at the consolidated
statement of financial position date, is as follows:
Less than
1 year
S/.000
As of Decmeber 31, 2013
Trade payable
Other payable
Trade payable
Other payable
1 and 2
years
S/.000
2 and 5
years
S/.000
More than
5 years
S/.000
Total
S/.000
280,753
11,422
678,974
5,151
74,409
41,500
10,236
12,106
404,879
18,719
6,519
1,258,454
28,396
-
1,985,586
68,773
678,974
5,151
93,034
1,050,709
63,842
430,117
1,286,850
2,831,518
538,769
43,309
531,729
992
40,261
408,087
-
269,573
-
70,007
-
1,286,436
43,309
531,729
992
40,261
1,155,060
408,087
269,573
70,007
1,902,727
As of December 31, 2013, the Company holds unutilized credit lines at year ended, for
US$513,000 (US$311,240 as of December 31, 2012). The Company expects to comply with
its obligations of operational cash flows and available funds of financial assets at maturity.
- 40 -
As of December 31, estimated maturity of derivative financial instruments of the Company
and its subsidiaries is as follows (non-discounted contractual amounts, including estimated
interests):
Less than
1 month
S/.000
Net settlement:
Cross currency Swap
Purchase options
Total
Net settlement:
Interest rate swaps
Forwards
Cross currency Swap
Total
1 and 3
months
S/.000
3 months
and 1 year
S/.000
1 and 5
years
S/.000
More than
5 years
S/.000
Total
S/.000
361
-
706
4,720
19,206
4,798
42,280
38,101
25,692
8,796
88,245
56,415
361
5,426
24,004
80,381
34,488
144,660
244
-
373
-
924
4,054
1,747
6,086
-
3,044
244
10,140
244
373
4,978
7,833
-
13,428
(iv) Capital risk management
The Company and its subsidiaries’ capital risk management is aimed at safeguarding its ability
to continue as a going concern in order to generate returns for its shareholders, benefits for
other groups of interest and maintain an optimal capital structure to minimize the cost of
capital.
The Company and its subsidiaries monitor their capital based on the leverage ratio; this ratio is
calculated by dividing the total net debt by equity. The net debt corresponds to total financial
obligations less cash and cash equivalent.
As of December 31, leverage ratio was as follows:
2013
S/.000
2012
S/.000
Less: Cash and cash equivalents
1,985,586
(92,890)
1,286,436
(496,070)
Net debt
1,892,696
790,366
Total equity
2,366,043
2,108,883
0.80
0.37
Leverage ratio
(v)
Fair value of financial instruments
Management considers that the carrying amounts of financial instruments of the Company and
its subsidiaries (current assets and liabilities) as of December 31, 2013 and 2012 do not differ
significantly from their fair value.
- 41 -
Except for the following, Management of the Company and its subsidiaries estimates that the
carrying amount of financial instruments recorded at amortized cost is approximately its fair
value:
2013
Book value
S/.000
(Note 16)
Bonds
1,243,313
2012
Fair value
S/.000
1,122,920
Book value
S/.000
133,573
Fair value
S/.000
140,375
In order to calculate fair value, Management has projected each long-term debt of the
Company and its subsidiaries according to terms and conditions agreed at contraction date,
and have discounted them at effective market rates, considering the following: facility type,
amortization schemes, duration and equivalent period, credit risk of the Company and its
subsidiaries, country where it was disbursed, among others. Market rates have been obtained
through a combination of public sources, as well as of recent bank quotations received by the
Company and its subsidiaries.
Regarding long-term debt, the Management considers carrying amount as higher than fair
value, given that effective rates as of the contraction date are, averagely, lower that those
equivalent to effective market rates.
Fair value measurements recognized in the consolidate statement of financial position
The following table provides an analysis as of December 31 of the financial instruments
measured at fair value subsequent to initial recognition, grouped in levels 1 to 3, depending on
the degree to which the fair value is observable.
-
Fair value measurements of Level 1 are quoted prices (unadjusted) in active markets for
identical assets or liabilities;
-
Fair value measurements in Level 2 are inputs other than quoted prices included in Level
1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices);
-
Fair value measurements in Level 3 are variables used for the asset or liability that are
not based on observable market data (unobservable inputs).
- 42 -
Level 1
S/.000
2013:
Financial assets:
Derivative instruments designated as hedge
accounting
Level 2
S/.000
Total
S/.000
190,572
-
-
190,572
-
75,938
-
75,938
190,572
75,938
-
266,510
Level 1
S/.000
2012:
Financial assets:
Level 3
S/.000
Level 2
S/.000
Level 3
S/.000
Total
S/.000
194,925
-
-
194,925
-
40,996
-
40,996
-
1,321
-
1,321
-
42,317
-
42,317
Derivative instruments designated as hedge
accounting
Derivative instruments designated as non-hedge
accounting
Fair value measurement of derived instruments is classified in Level 2, given that they are
indirect derived measurements of mark to market and prices. There have not been transfers
from Levels 1 and 2 during the year.
5.
CASH AND CASH EQUIVALENTS
As of December 31, cash and cash equivalents are as follows:
2013
S/.000
Cash and banks
Time deposits
Total
2012
S/.000
59,081
33,809
142,164
353,906
92,890
496,070
Cash and banks correspond to deposits in checking accounts, held in local and foreign banks, in
Peruvian nuevos soles, U.S. dollars and euros, and are freely available.
As of December 31, 2013 and 2012, the Company and its subsidiaries hold time deposits in
domestic currency and U.S. dollars in local financial entities, with current maturities, generating
interests at market rates.
- 43 -
6.
OTHER FINANCIAL ASSETS
As of December 31, other financial assets comprise the following:
Current
2013
S/.000
Fiancial assets designated as
hedge instruments (Note 23):
Derivative instruments designated as
hedge accounting
Held to maturity investments
Redeemable bonds maturing in 2018
at annual interest rate Limabor plus spread 2%
Available for sale investments:
Common shares of Credicorp Ltd.,
equivalent to 0.54% share
Common shares of Inversiones Centenario S.A.,
Common shares of Universal Textil S.A., equivalent
to 0.55% share
Common shares Fábrica de Tejidos La Bellota S.A.,
Other
Loans and other receivable
Funds restricted
Non-current
2013
2012
S/.000
S/.000
2012
S/.000
4,312
-
71,626
-
4,312
-
71,626
-
428
426
1,512
1,940
428
426
1,512
1,940
-
-
183,865
188,400
-
-
5,938
5,673
-
-
366
434
-
-
273
130
273
145
-
-
190,572
194,925
-
-
7,899
-
4,740
426
271,609
196,865
Financial assets designated as hedge instruments
As of December 31, 2013, it comprises:
-
Fair value of purchase options related to two call spread operations during 2013 (Note 23).
-
Fair value of cross currency swaps of its Subsidiary Pastificio Santa Amália S.A. with
Citibank and Bank of America Merrill Lynch, for S/.4,300 (Note 23).
-
Fair value and interests accrued pending of payment of cross currency swap of its Subsidiary
Molinera Inca S.A. with The Bank of Nova Scotia, for S/.13 (Note 23).
Held to maturity investments
As of December 31, 2013 and 2012, comprise asset-backed securities under a trust of Panificadora
Bimbo del Perú, an associated entity of the Company.
- 44 -
As of December 31, 2013 and 2012, corresponds to fair value of investments in equity, gain and
loss provided by variations in fair value of these investments are directly recognized in other
comprehensive income.
In 2013, the Company and its Subsidiary Cernical Group S.A. received dividends for: (i) Credicorp
Ltd., of S/.3,391 (S/.3,122 in 2012); (ii) Inversiones Centenario S.A., of S/.167 (S/.150 in 2012),
(iii) Seguros El Pacífico-Peruano Suiza S.A., of S/.3 in 2012; (iv) Universal Textil S.A., of S/.10 in
2012; and (v) Inversiones Pacasmayo S.A., for S/.108 in 2012 (Note 28).
In 2012, the Company sold its shares in Inversiones Pacasmayo S.A. and obtained a net gain of
S/.4,581, included in the consolidated statement of income, under other income (net).
Available-for-sale investments are valued at fair value with Level 1 measurement (Note 4(b) (v)).
7.
TRADE RECEIVABLE (NET)
As of December 31, it comprises the following:
2013
S/.000
Invoices receivable
Invoices receivable from related entities (Note 31)
Notes receivable
Allowance for doubtful accounts
Total
2012
S/.000
960,958
32,309
12,611
(46,104)
749,342
14,395
9,910
(27,092)
959,774
746,555
Invoices receivable have current maturities and do not accrue interests. Notes receivable do not
generate interests and mature within 30 and 60 days. Certain trade receivables are secured with
mortgages, pledges and bond up to US$80,328 (US$89,132 as of December 31, 2012).
The Company and its subsidiaries assess credit limits of their new clients through an internal
analysis of their credit experience, and assign credit limits per client. These credit limits are
constantly reviewed.
As of December 31, 2013, the Company and its subsidiaries hold accounts receivable within
maturity terms, for S/.771,226 (S/.624,406 as of December 31, 2012).
- 45 -
As of December 31, 2013, the Company and its subsidiaries hold trade receivable overdue but not
impaired, for S/.188,548 (S/.122,149 as of December 31, 2012), for allowance for doubtful accounts
has not been recorded, given their credit experience has not significantly varied, and Management of
the Company and its subsidiaries considers that said amounts are still being recoverable. The aging
summary is presented below:
2013
S/.000
1 to 30 days
31 to 180 days
More than 180 days
Total
2012
S/.000
154,408
19,854
14,286
112,693
6,287
3,169
188,548
122,149
For the years ended, as of December 31, movement in the allowance for doubtful accounts is as
follows:
2013
S/.000
2012
S/.000
Opening balance
Acquisitions
Additions (Note 25 and 26)
Recoveries (Note 27)
Write-offs
Sale of portfolio (a)
Exchange difference
27,092
2,569
20,500
(3,174)
(53)
(830)
58,643
7,981
(1,963)
(521)
(40,440)
3,392
Ending balance
46,104
27,092
(a)
In November 2012, the Company and subsidiaries Molinera Inca S.A. and Consorcio
Distribuidor Iquitos S.A. sold a portfolio of impaired credits, of S/.40,440 par value. Agreed
sale value was S/.264, determined based on a technical appraisal made by an independent
professional, and is presented in other income (expenses), net in the consolidated statement of
income.
Aging of accounts receivable and the situation of clients are constantly monitored to safeguard the
properness of the estimate in the consolidated financial statements. Credit risk concentrations
regarding trade accounts receivable are limited due to the great number of clients owned by the
Company and its subsidiaries. Management believes that the allowance for doubtful accounts
properly hedges impairment risk as of December 31, 2013 and 2012.
Management believes that carrying amounts of trade accounts receivable less estimate for
impairment are similar in their fair values, given their current maturity.
- 46 -
8.
OTHER RECEIVABLE
Current
2013
S/.000
Claims to insurances (a)
Tax reimbursements (b)
Value added tax (c)
Guarantee funds (d)
Tax claims
Credit for other taxes, net (e)
Accounts receivable from personnel
Sundry
Total
2012
S/.000
Non-current
2013
2012
S/.000
S/.000
46,308
31,125
25,042
24,139
19,319
10,882
4,504
3,159
3,616
36,298
12,848
34,028
22,518
3,682
7,358
17,081
4,294
-
637
164,478
120,348
21,375
637
(a)
Claims to insurances mainly correspond to carrying amount of loss assets in 2013, from
subsidiary Alicorp Argentina S.C.A.
(b)
Tax reimbursements correspond to requests filed to the local Tax Administrations of the
subsidiaries.
(c)
Value added tax corresponds to the credit of this tax, that shall be applied with VAT payable,
generated by operations taxed with said tax, performed by the Company and its subsidiaries,
in Peru, Argentina, Ecuador and Brazil.
(d)
Guarantee fund corresponds to minimum cash margin that the Company must hold in the
broker account for contracted options.
(e)
Credit for other taxes, net, manly corresponds to balances in favor for withholding and
collection regimes of Alicorp Argentina S.C.A.
(f)
Management of the Company and its subsidiaries consider that other accounts receivable shall
be recovered in the short-term, except for certain tax credits that shall be recovered in the
long-term.
- 47 -
9.
INVENTORIES (NET)
2013
S/.000
Merchandise
Finished goods
Byproducts
Products in process
Raw and auxiliary materials
Containers, packaging, and miscellaneous supplies
Inventories in transit
Total
Allowance for obsolescence of inventory
40,963
160,225
7,396
34,073
431,134
68,210
53,928
23,951
148,396
7,027
28,168
445,662
51,562
52,560
795,929
757,326
(5,677)
Total
2012
S/.000
790,252
(2,998)
754,328
Management estimates that inventories will be shortly realized or utilized.
Management believes that the allowance for obsolescence of inventories properly hedges
obsolescence risk as of December 31, 2013 and 2012.
For the years ended December 31, changes in the allowance for obsolescence of inventories are
comprised as follows:
2013
S/.000
Opening balance
Acquisitions
Additions (Note 24)
Recoveries (Note 24)
Ending balance
- 48 -
2012
S/.000
2,998
612
7,378
(5,311)
7,255
6,993
(11,250)
5,677
2,998
10.
OTHER NON-FINANCIAL ASSETS
2013
S/.000
Pre-paid insurances
Advance to employees
Liscences
Advertising
Others
Withholding in operations of derivative financial instruments
Total
2012
S/.000
7,256
2,190
564
448
1,646
-
4,214
1,745
279
29,633
12,104
35,871
Withholding in operations of derivative financial instruments corresponded to the fund retained by
the broker for the equivalent to negative market value of derivative financial instruments at the date
of the financial statements (Note 23).
11.
ASSETS CLASSIFIED AS HELD FOR SALE (NET)
Assets classified as held for sale correspond to unutilized cotton gins, factories and lands, whose
carrying amount as of December 31, 2013 is S/.9,559 (S/.9,473 as of December 31, 2012).
Management plans selling these assets through a real estate agent, and expects said plan to be
carried out in the short-term.
For the years ended December 31, changes in assets classified as held for sale are as follows:
2013
Opening
balance
S/.000
COST:
Desmotadoras
Cotton gins
Fábricas
Minor factories
menores
Predios
Lands
Total
DEPRECIATION AND
ACCUMULATED IMPAIRMENT:
Desmotadora
Cotton gin
Fábricas
Minor factories
menores
Predios
Lands
Total
NET COST:
Transfers
S/.000
Sales
S/.000
Adjustment to
market value
S/.000
Closing
balance
S/.000
3,525
2,699
6,943
(795)
6,869
879
(7,727)
-
-
2,730
1,841
7,822
13,167
6,953
(7,727)
-
12,393
2,091
443
1,160
(795)
4
6
(443)
-
368
-
1,296
372
1,166
3,694
(785)
(443)
368
2,834
(368)
9,559
9,473
- 49 -
7,738
(7,284)
2012
Opening
balance
S/.000
COST:
Fábricas
Minor factories
menores
Desmotadoras
Cotton gins
Predios
Lands
Total
DEPRECIATION AN
ACCUMULATED IMPAIRMENT:
Fábricas
Minor factories
menores
Desmotadora
Cotton gin
Predios
Lands
Total
NET COST:
12.
Transfers
S/.000
Adjustment to
market value
S/.000
Sales
S/.000
Closing
balance
S/.000
46,691
6,258
1,706
(15,293)
(402)
6,943
(28,699)
(2,225)
(1,706)
(106)
-
2,699
3,525
6,943
54,655
(8,752)
(32,630)
(106)
13,167
28,123
4,698
-
(15,293)
(402)
1,160
(12,387)
(2,211)
-
6
-
443
2,091
1,160
32,821
(14,535)
(14,598)
6
3,694
21,834
5,783
(18,032)
(112)
9,473
INVESTMENTS IN ASSOCIATES
As of December 31, investments in associates are comprised as follows:
Number
in shares
Panificadora Bimbo del Perú S.A.
Industria Textil Piura S.A.
Heladosa S.A.
Bimar S.A.
Others
2,539,242
7,372,629
44,100,091
424,328
Total
Share
capital
%
30.00
10.59
25.00
30.00
2013
S/.000
2012
S/.000
20,335
4,497
4,076
297
21,832
4,497
4,796
4,076
270
29,205
35,471
In 2013, share in profit or loss of associates, was a loss of S/.1,496 (S/.636 in 2012).
In January 2013, subsidiary Alicorp Ecuador S.A. sold its shares in Heladosa S.A., equivalent to
25% capital stock of said associate, for US$4,000 (Note 32).
The existence of significant influence by the Company and its Subsidiaries is evidenced in its
participation in decision-making processes, of Industria Textil Piura S.A.
- 50 -
Relevant information included in the consolidated financial statements of the Company and its subsidiaries by the equity method are summarized below:
Total asset
Total liability
Equity
Net sales
Net (loss) income
Industrias
Panificadora Bimbo
Textil Piura S.A.
del Perú S.A.
Bimar S.A.
Heladosa S.A.
2013
2012
2013
2012
2013
2012
2013
2012
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
332,938
336,209
117,653
113,674
(164,248)
(150,336)
(49,866)
(40,901)
168,690
185,873
67,787
72,773
87,344
114,485
129,114
121,550
(17,184)
11,432
(5,621)
(3,525)
14,113
(528)
13,585
(298)
14,113
-
36,900
-
(24,487)
13,585
-
12,413
-
-
51,954
-
9,196
(528)
(298)
Financial statements of Industrias Textil Piura S.A., Panificadora Bimbo del Perú S.A. and Bimar S.A. correspond to financial statements audited in the prior year, which are the last available
as of the date of the consolidated financial statements.
- 51 -
13.
PROPERTY, PLANT AND EQUIPMENT (NET)
For the years ended December 31, 2013 and 2012, changes in property, plant and equipment are as follows:
COST:
Balances as of January 1, 2012
Additions
Purchase of subsidiaries
Allocation of goodwill (Note 15)
Disposals
Transfer
Others
Foreign exchange difference
Land
Building, plants
and other
constructions
Machinery and
equipment
Vehicles
Furniture and
fixtures
Computer
equipment
Sundry
equipment
Works in
progress
Total
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
S/.000
316,667
5,102
2,782
3,815
(4,113)
54,912
(2,098)
472,047
902,840
1,035
32,474
8,508
(11,182)
23,176
1,523
(5,828)
17,805
67,143
10,069
(47,577)
19,974
468
(12,096)
13,821
52
237
86
(637)
1,989
(157)
89
198
82
(491)
1,580
63
(139)
133
8,422
64
(869)
(1,902)
1,471
(1,781)
22
(5,375)
15,897
-
219,553
1,179
(3,303)
(112,463)
(3,525)
(1,753)
243,791
112,435
22,624
(73,547)
3,163
(23,852)
Additions
Disposals
Transfer
Others
150
39,012
94,396
(14,620)
4,308
(167)
(5,555)
1,138
74,184
5,417
(15,511)
40,791
(436)
(12,253)
4,011
208,838
(26,746)
93,617
647
(20,070)
Balances as of December 31, 2013
494,591
615,083
1,218,923
17,951
56,975
48,164
151,136
402,048
3,004,871
-
256,775
478,976
13,016
38,151
35,410
58,141
-
880,469
3,054
5,329
(2,055)
6,734
790
(908)
6,878
(1,785)
(44)
-
-
69,843
55,609
(23,297)
13,506
(330)
(9,717)
48,354
63,190
-
986,083
-
92,314
75,301
(16,817)
84
(1,071)
(7,965)
-
Additions
Disposals
Transfer
Others
-
-
306,348
639,935
14,131
48,023
41,757
77,735
-
1,127,929
NET COST:
494,591
308,735
578,988
3,820
8,952
6,407
73,401
402,048
1,876,942
377,067
243,079
415,954
1,543
6,266
12,827
61,503
208,588
1,326,827
22,154
12,750
(6,256)
(1)
(85)
(888)
542,672
56,454
58,924
(12,426)
530
(417)
(5,802)
- 52 -
303
153
(566)
1,056
(114)
13,848
(218)
805
(179)
4
(10)
(119)
1,104
113
(218)
316
(121)
368,691
331,690
99,813
(58,761)
(7,994)
(283)
(41,195)
-
278,674
41,800
33,524
(13,683)
9,983
(1,096)
(6,832)
361,214
1,187
(388)
(166,582)
37
(2,008)
2,312,910
Additions
Disposals
Transfer
Others
16,704
16,490
(6,775)
(2,798)
20
(1,742)
90
(3,993)
31,026
(257)
(423)
208,588
2,028,296
958,626
513
3,974
(283)
(16,534)
(6)
(681)
124,693
108,900
521,753
720
2,624
3,144
4,963
(101)
14
61,181
114,149
377,067
855
1,871
(364)
417
(219)
45,611
55,643
ACCUMULATED DEPRECIATION:
Balance as of January 1, 2012
15,391
44,229
39,345
1,505
1,014
3,056
3,253
(273)
123
3,379
1,808
(196)
(10,817)
(25)
(746)
9,040
(816)
7,115
(261)
(533)
(a)
Depreciation of property, plant and equipment for the year is included in the following
accounts:
2013
S/.000
Cost of sales (Note 24)
General and administrative expenses (Note 26)
Selling and distribution expenses (Note 25)
Inventories (Note 24)
Total
2012
S/.000
75,303
9,074
3,563
4,374
51,426
4,623
2,562
11,232
92,314
69,843
(b)
In 2013, the Company acquired subsidiaries Industrias Teal S.A. an Pastificio Santa Amália
S.A. Property, plant and equipment acquired had a net value of S/.56,132 and S/.200,257,
respectively.
(c)
In 2012, Alicorp Holdco España S.L. (subsidiary of Alicorp Inversiones S.A.) acquired 100%
shares of Salmofood S.A. and its subsidiary Cetecsal S.A., producer of fish food. Property,
plant and equipment acquired had a net value of S/.53,484.
(d)
In 2012, Alicorp S.A.A. acquired 100% shares of Industrias Nacional de Conservas
Alimenticias S.A., Alimentos Peruanos S.A., Garuza Transportes S.A. and S.G.A. & CO.
S.A., mainly engaged to the production, trading and distribution of sauces and canned foods.
Property, plant and equipment acquired of that business group had a net value of S/.3,342.
(e)
Management believes that there are no situations that may affect the projections of the
expected results in the remaining years of useful life of fixed assets, and in its opinion as of
December 31, 2013 and 2012, there are no indications of impairment in property, plant and
equipment.
(f)
The Company and its subsidiaries have formalized insurance policies, in accordance with
policies established by Management to hedge possible risks several elements of their property,
plant and equipment subjected to, acknowledging that said policies sufficiently hedge all risks
they are subjected to.
(g)
For 2013 and 2012, neither the Company nor its subsidiaries capitalized borrowing interests
for loans, given that loans held in said periods are not directly attributable to the acquisition,
construction or production of qualifying assets.
(h)
The item of works in progress primarily includes purchases of machinery and equipment
related to plant expansion for the mass consumption business.
(i)
Fair value assigned to fixed assets provided by business combinations was calculated by
independent appraisers by using a methodology based on the best market practices.
- 53 -
14.
OTHER INTANGIBLE ASSETS (NET)
For the years ended December 31, 2013 and 2012, changes in other intangible assets (net) are as
follows:
Licenses and
software
S/.000
COST:
As of January 1, 2012
Additions
Transfer
Disposals
89,010
Brands
S/.000
86,670
685
44
273
-
491
1,418
3,169
(96)
399
Right to
noncompetitions
S/.000
Customer
Portfolio
S/.000
Others
S/.000
Total
S/.000
-
-
-
175,680
11,607
-
-
1,521
328
(422)
-
-
1,427
195,097
685
2,056
13,025
3,770
(518)
399
90,012
92,051
11,607
Additions
Transfer
Disposals
408
2,974
949
(23)
(1,339)
3,218
499,014
132
(19,432)
151,269
(7,282)
6,580
38,941
614
11
12,924
(1,425)
10,217
2,974
702,148
1,081
(23)
(28,864)
92,981
574,983
155,594
46,135
12,937
882,630
86,501
3,304
-
-
-
89,805
Additions
Transfer and other changes
1,958
43
(3,587)
816
53
3,441
133
-
-
-
85,731
6,931
-
-
-
ACCUMULATED AMORTIZATION
Additions
Transfer and other changes
1,517
634
14
(421)
996
(4)
(4)
970
-
7,562
387
(68)
1,316
5
(5)
2,011
43
(146)
949
92,662
12,361
634
402
(498)
87,475
7,919
970
7,881
1,316
105,561
NET COST:
Total as of December 31, 2013
5,506
567,064
154,624
38,254
11,621
777,069
Total as of December 31, 2012
4,281
85,120
11,607
-
1,427
102,435
(a)
Brands held by the Company and its subsidiaries are considered as intangible assets with
indefinite useful life, due to the fact that they do not have a maturity period and Management
does not have an intention to discontinue them. Therefore, there is no foreseeable limit for
which it is expected that these brands will continue generating future entries of net cash flows
for the Company and its subsidiaries.
(b)
The right to non-competitions corresponds to commitments assumed by sellers under the
purchase and sale agreement signed in said years.
(c)
Fair value assigned to intangibles provided by business combinations, whose measurement
classification is Level 3, and was calculated by specialists through the methodology based on
the best market practices.
- 54 -
(d)
In 2013 and 2012, amortization of intangible assets is comprised as follows:
2013
S/.000
Cost of sales (Note 24)
Selling and distribution expenses (Note 25)
General and administrative expenses (Note 26)
15.
2012
S/.000
38
60
12,264
60
1,951
12,362
2,011
GOODWILL (NET)
For the years ended December 31, changes in goodwill (net) was as follows:
2013
S/.000
Cost:
Opening balance
Additions
Fair value allocation
2012
S/.000
378,916
914,226
(546,072)
(23,812)
320,062
88,769
(23,318)
(6,597)
Ending balance
723,258
378,916
Accumulated impairment losses
(25,948)
(25,948)
Total
697,310
352,968
As of December 31, 2013 and 2012, goodwill corresponds to the excess of the consideration given
on the net fair value of assets, liabilities and contingent liabilities identifiable by the subsidiary
recorded at the acquisition date less any accumulated impairment losses.
The acquisition dates were:
-
November 30, 1997 Nicolini Hermanos S.A. and Compañía Molinera del Perú S.A.;
October 30, 2006 Asa Alimentos S.A.;
May 30, 2008 TVBC S.C.A. and subsidiaries;
July 10, 2008 Downford Corporation;
May 31, 2010 Sanford S.A.C.I.F.I. y A;
June 21, 2011 Italo Manera S.A. and Pastas Especiales S.A. (Manera Group);
September 5, 2012 Salmofood S.A. and subsidiary Cetecsal (Salmofood Group);
December 20, 2012 Industria Nacional de Conservas Alimenticias S.A. and subsidiary Alimentos
Peruanos S.A., along with Garuza Transporte S.A. y SGA & CO. S.A. (Incalsa Group).
January 4 and June 11, 2013 Industrias Teal S.A.
February 6, 2013 Pastificio Santa Amália (Brazil).
- 55 -
Payments made

Industrias Teal S.A. was acquired for S/.424,475. According to the purchase and sale
agreement, the Company has withhold S/.31,041 from the sellers, to be settled in three
installments according to the Schedule established in the agreement, plus a compensatory
interest rate equivalent to 5% of each disbursement (Note 19).

Pastificio Santa Amália S.A. was acquired for R$195,000 (equivalent to S/.252,885),
comprising R$190,000 paid to the sellers and R$5,000 related costs. Three escrow accounts
were opened. The first one for R$30,000 (equivalent to S/.35,807), which shall be freed in
three installments in February 2015, 2017 and 2018. The second escrow account was for
R$5,000 (equivalent to S/.5,968), in order to safeguard the payment of any price adjustment of
the sellers in favor of the buyer. The third escrow account was for R$5,000 (equivalent to
S/.5,968), in order to safeguard the payment of any price adjustment of the purchaser to the
sellers.

Salmofood Group was acquired for US$64,549 (equivalent to S/.161,721) and paid in cash as
of the transaction date. Two escrow accounts were opened. The first one for US$1,000
(equivalent to S/.2,528), settled in 2012. The second one for US$6,500 (equivalent to
S/.16,954), for period of four years.

Incalsa Group was acquired for US$23,590 (equivalent to S/.60,486) and all cash was paid as
of the transaction date. An escrow account was opened for US$1,200 (equivalent to S/.3,077)
for a period of three years.
- 56 -
Assets and liabilities, and equity at fair values determined as of acquisition dates, were as
follows:
Industrias
Teal S.A.
S/.000
Accounts receivable
Inventories
Other assets
Financial Investments
Intangibles
Plant and equipment
Financial liabilities
Accounts payable
Deferred income tax
Traslation
2013
Pastificio Santa
Amalia S.A.
S/.000
2012
Salmofood
Group
S/.000
Incalsa
Group
S/.000
22,765
64,515
28,950
1,506
346,961
155,945
(76,538)
(22,933)
(140,200)
-
34,501
83,087
43,580
1,278
36
240,049
200,257
(243,025)
(469,611)
(44,153)
32,410
3,646
196,128
73,078
1,075
270
49,949
53,497
(65,718)
(138,166)
(22,386)
(7,192)
11,205
4,289
2,490
10
69,543
3,342
(1,377)
(8,214)
(20,714)
-
Fair value of net assets
380,971
(121,591)
144,181
60,574
Purchase price
424,475
252,885
161,721
60,486
43,504
374,476
17,540
Goodwill
(88)
Net outflow cash on acquisition of subsidiaries
2013
Industrias
Pastificio Santa
Teal S.A.
Amalia S.A.
S/.000
S/.000
Net payment:
Pay in cash
Less: Withholding without interests (Note 19)
Less: Cash and cash equivalents balance acquired
Total
2012
Salmofood
Group
S/.000
Incalsa
Group
S/.000
424,475
(31,041)
(22,765)
252,885
(34,501)
161,721
(3,646)
60,486
(11,205)
370,669
218,384
158,075
49,281
Allocation of goodwill
During 2013, the Company completed its assessment of fair value of assets and liabilities for the
purchase of Incalsa Group and Industrias Teal S.A. Furthermore, along with its subsidiaries Alicorp
Holdco España S.L. and Alicorp Do Brasil Participaçoes S.A., they completed its assessment of fair
value of assets and liabilities for the purchase of Salmofood Group and Pastificio Santa Amália
S.A., respectively. Additionally, in 2012, the subsidiary, Alicorp Argentina S.A., completed the
study of fair value of assets and liabilities of Manera Group based on the methodology described in
IFRS 3: “Business Combination”, effective as of that date.
- 57 -
Presented below, the aforementioned assessments in detail:
Salmofood
Group
S/.000
Property, plant and equipment
Intangibles
Liabilities
Deferred income tax
Net payment
2013
Industrias
Teal S.A.
S/.000
Incalsa
Group
S/.000
Pastificio Santa
Amália S.A.
S/.000
Total
S/.000
2012
Manera
Group
S/.000
48,429
(14,529)
69,050
(20,714)
99,813
346,961
(134,032)
237,708
(8,777)
(77,837)
99,813
702,148
(8,777)
(247,112)
22,624
13,687
(12,993)
-
33,900
48,336
312,742
151,094
546,072
23,318
According to the analysis performed by the Company, as of December 31, 2013 and 2012, there is
no impairment in goodwill assigned to the cash-generating unit of mass consumption and animal
food.
Impact of acquisitions in the consolidated results of the Company and subsidiaries in 2013
Consolidated results for 2013 include S/.66,402, attributable to additional operations generated by
Pastificio Santa Amália S.A. and S/.5,266, attributable to Industrias Teal S.A. Revenues for the year
include S/.506,373, for Pastificio Santa Amália S.A. and S/.244,817, for Industrias Teal S.A.
Had this business combinations taken effect at January 1, 2013, the revenues of the Company and
subsidiaries from continuing operations would not have been significantly varied, due to the fact that
they were acquired in January and February 2013.
Impact of acquisitions in the consolidated results of the Company and subsidiaries in 2012
Consolidated results for 2012 include S/.88, attributable to additional operations generated by Incalsa
Group y S/.3,611, attributable to Salmofood Group. Revenues for the year include S/.643, for Incalsa
Group and S/.108,987, for Salmofood Group.
Had this business combinations taken effect at January 1, 2012, the revenues of the Company and
subsidiaries from continuing operations would have been of S/.4,760,359, and net income for the year
from continuing operations would have been of S/.359,553. Management considers these ‘pro-forma’
numbers to represent an approximate measure of the performance of Incalsa Group and Salmofood
Group on an annualized basis.
16.
FINANCIAL OBLIGATIONS
As of December 31, financial obligations are comprised as follows:
Current
2013
S/.000
Bank overdraft (a)
Bank loans (b)
Import financings (c)
Bonds (d)
Total
- 58 -
2012
S/.000
Non-current
2013
2012
S/.000
S/.000
64,320
216,433
-
40,522
90,428
399,343
8,476
461,520
1,243,313
622,570
125,097
280,753
538,769
1,704,833
747,667
(a)
Bank overdrafts
Bank overdrafts correspond to financings contracted by Alicorp Argentina S.C.A. for working
capital, maturing in the first quarter of 2014, and they accrue interest at a 27.1% annual average
interest rate.
(b)
Bank loans
As of December 31, 2013, comprises borrowings from local and foreign banks to finance working
capital with maturity dates until September 2018 and accruing interest at a fixed annual interest rate
of 3.875% and 8.35%, and variable interest rate plus a spread between 1.6% and 2.5%.
Four of the contracted loans have certain restrictions for the Company and its subsidiaries, which
mainly include the maintenance of specific financial ratios and the presentation of certain reports
and information required by the respective financial entities.

Main requirements to the Company by a financial institution for the loan obtained by its
subsidiary Salmofood S.A., are:
(i)
(ii)
(iii)
(iv)

subsidiary Pastificio Santa Amália S.A., are:
(i)
(ii)
(iii)
(iv)

To maintain, during the contract term, a debt coverage ratio equal or lower to 3.25.
To maintain a debt service coverage ratio no lower than 1.6.
To maintain a minimum individual net equity of S/.1,426,597.
To maintain a minimum consolidated net equity of S/.1,412,331.
To maintain, during the contract term, a debt coverage ratio equal or lower to 3.25.
To maintain a debt service coverage ratio no lower than 1.6.
To maintain a minimum individual net equity of S/.1,426,597.
To maintain a minimum consolidated net equity of S/.1,412,331.
subsidiary Molinera Inca S.A., are:
(i) To maintain, during the contract term, a debt coverage ratio equal or lower to 3.25.
(ii) To maintain a debt service coverage ratio no lower than 1.6.
(iii) To maintain an indebtedness ratio no higher than 1.6.
(iv) To maintain a minimum net equity US$190,000.

Main requirements to subsidiaries Alicorp Argentina S.A. and Alicorp San Juan S.A. by a
financial institution, for loans granted, are
(i)
(ii)
(iii)
(iv)
(v)
(vi)
To maintain a total liability ratio/net equity no higher than 3.5 as of the closing of 2012.
To maintain a total liability ratio/net equity no higher than 3 as of the closing of 2013.
To maintain a total financial debt/EBITDA no higher than 3.25, as of the closing of the
current year.
- 59 -
In Management’s opinion, the Company is in compliance with all restrictive clauses and
responsibilities in connection with these loans, as of December 31, 2013 and 2012.
(c)
Import financings
As of December 31, 2013, there was no import financing held with foreign or local financial
institutions.
As of December 31, 2012, it comprised loans received from foreign financial institution for the
financing of raw material imports maturing between January and June 2014, accrued interest at
1.268% annual average rate and were not specifically secured. These loans were settled in 2013.
(d)
Bonds
Senior Notes
On March 15, 2013 Alicorp issued bonds in the international market, for US$450,000 under Rule
144A and Rule S. Coupon rate reached was 3.875% and the investment degree of international risk
raters Fitch Ratings (“BBB”) and Moody’s (“Baa2”). Said Bonds shall be redeemed to their
maturity in March 2023, they accrue interests at 3.875% annual nominal rate and coupon interests
are biannually paid.
The Company is under the obligation of complying with certain restrictions that do not imply
financial rations. As of December 31, 2013, the Management considers to have complied with said
restrictions.
Series A
On September 23, 2009, a corporate bond in soles (Series A) was issued, equivalent to US$33,200
corresponding to the third issue of the Second Program of Corporate Bonds for US$100,000. Option
was executed from the rescue of said bonds on September 27, 2013, and they were unlisted from
Bolsa de Valores de Lima (Lima Stock Exchange).
Single Series
On March 15, 2007, corporate bonds in soles (single series) were issued, equivalent to US$20,000
corresponding to the second issue of the Second Program of Corporate Bonds for US$100,000. On
September 27, was executed the option of redemption of said bonds and they were unlisted from the
Lima Stock Exchange.
- 60 -
(e)
Maturity of financial obligations is as follows:
2013
S/.000
2013
2014
2015
From 2016 to 2023
Total
17.
2012
S/.000
280,753
41,500
1,663,333
538,769
408,087
214,483
125,097
1,985,586
1,286,436
OTHER FINANCIAL LIABILITIES
As of December 31, other financial liabilities are comprised as follows:
Current
2013
S/.000
FINANCIAL LIABILITIES DESIGNATED
COMO
AS HEDGE
INSTRUMENTOS
INSTRUMENTS:
DE
Instrumentos
Derivative financial
financieros
instruments
derivados
swap
contratos
contracts
swaps
Instrumentos
financieros
instruments
derivados
future
contratos
contracts
futuros
yand
opciones
options contracts
Instrumentos
financieros
instruments
derivados
currency
contratos
options
opciones
sobre
contracts
divisas
Non-current
2013
2012
S/.000
S/.000
2012
S/.000
6,892
1,321
-
-
-
40,996
-
-
4,530
-
57,351
-
11,422
42,317
57,351
-
Financial liabilities designated as hedge instruments
-
Fair value of cross currency swaps held to reduce the risk of exchange rate fluctuations for
long-term financial obligations, and premium for currency options contract.
-
Fair value of operations or raw material prices, which are realized through fund deposited in
Newedge USA, LLC (Note 23).
-
Fair value of currency options held as of December 31, 2012, to reduce the risk of exchange
fluctuation for long-term financial obligations.
- 61 -
18.
TRADE PAYABLE
As of December 31, trade payable are comprised as follows:
2013
S/.000
Third parties
Related entities (Note 31)
Total
2012
S/.000
659,775
19,199
513,634
18,095
678,974
531,729
Trade payables are denominated in nuevos soles, U.S. dollars, Argentinian pesos, Chilean pesos,
Colombian pesos and Brazilian reales. Such balances are due in the short-term, do not bear interests
and have no specific guarantees.
19.
OTHER PAYABLE
As of December 31, other payable comprise:
Current
2013
S/.000
Financing interests
Taxes payable
Purchase of shares of Industrias Teal S.A.
Commissions
Advertising
Public services
Dividends
Others
Total
2012
S/.000
Non-current
2013
2012
S/.000
S/.000
36,302
30,462
13,688
6,221
4,383
4,115
698
9,002
7,201
18,434
724
3,329
1,209
905
8,459
107,972
18,625
-
-
104,871
40,261
126,597
-
Non-current taxes payable correspond to re-financings agreed with the corresponding tax authority,
by Pastificio Santa Amália S.A. in Brasil. Taxes include governmental taxes, as well as federal and
compensations.
- 62 -
20.
EMPLOYEE BENEFITS
As of December 31, employee benefits comprise:
Current
2013
S/.000
Non-current
2013
2012
S/.000
S/.000
2012
S/.000
Employees' profit sharing
Payroll
Performance bonds
Payroll taxes
Severance indemnities
49,287
26,936
9,461
6,344
3,298
57,148
15,861
10,550
5,747
5,347
6,967
436
5,679
-
Total
95,326
94,653
7,403
5,679
Changes in employee profit sharing during 2013 and 2012 is as follows:
2013
S/.000
Opening balances
Payments
Adjustment of prior year estimate
Current year's profit sharing
Ending balances
21.
2012
S/.000
57,148
(61,128)
59
53,208
58,891
(62,704)
60,961
49,287
57,148
PROVISIONS
Changes during 2013 and 2012 in provisions for administrative and labor processes are as follows:
Tax
claims
S/.000
Other
claims
S/.000
6,045
Payments
-
6,045
Additions
Acquisitions (a)
Recoveries (b)
Total
S/.000
3,393
(569)
2,824
9,438
(569)
8,869
12,055
246,726
(250,517)
3,735
(245)
15,790
246,726
(250,762)
14,309
6,314
20,623
Current
6,044
6,314
12,358
Non-current
8,265
-
8,265
- 63 -
Tax claims:
(a)
Correspond mainly to contingencies provided by subsidiary Pastificio Santa Amália S.A.,
acquired in February 2013 (Note 15). Said contingencies are related in tax and labor
processes.
(b)
Correspond mainly to the reduction and payments of tax contingencies of Pastificio Santa
Amália S.A. In October, 2013, Brazilian tax authority announced a tax debt division program
(known as REFIS in Spanish), through Law 12.865/2013, which grants new payment of
division modalities to companies for their tax debts. Subsidiary adopted said program, for a
total of R$209,901 (equivalent to S/.250,517), obtaining a R$94,634 benefit (equivalent to
S/.112,946) and paying R$115,267 (equivalent to S/.137,571).
Labor claims:
The Company and its subsidiaries maintain labor processes for which this allowance has been
recorded for. According to Management criteria described in Note 2 (q), it hedges risk of loss.
22.
EQUITY
(a)
Issued capital
As of December 31, 2013 and 2012, capital stock is represented by 847,191,731 common,
authorized, issued and paid shares, with a par value of S/.1.00 each.
Common shares of the Company are registered in the Lima Stock Exchange. As of December 31,
2013, its quotation value was of S/.9.10 (in Peruvian nuevos soles) per share (S/.8.30 (in Peruvian
nuevos soles) as of December 31, 2012).
The corporate structure of the Company as of December 31, 2013 and 2012 was as follows:
Individual equity share in capital (in %):
Up to 1.00
From 1.01 to 5.00
From 5.01 to 10.00
From 10.01 to 20.00
(b)
Shareholders
N°
Equity share
%
1,434
10
4
2
21.33
25.72
29.69
23.26
1,450
100.00
Investment shares
As of December 31, 2013 and 2012, investment shares are comprised of 7,388,470 shares at S/.1.00
par value each.
Quotation value of investment shares amounts to S/.4 (in Peruvian nuevos soles) per share, as of
December 31, 2013 (S/.4.95 (in Peruvian nuevos soles) as of December 31, 2012).
- 64 -
Investment shares have the same right than common shares, and entitle their holders to receive a
discretionary preference dividend according to their par value (this preference has not been
determined by current legislation).
(c)
Legal reserve
According to the “Ley General de Sociedades” (General Law of Corporations), the legal reserve is
increased by transferring 10%, as a minimum, of the net income for each period, after deducting
accumulated losses, until reaching an amount equivalent to a fifth of capital. In the absence of
undistributed earnings or freely available reserves, the legal reserve shall be used to offset losses,
and subsequently replaced. The legal reserve may be capitalized, in which case, it shall also be
subsequently replaced. An amount of S/.8,535 shall be transferred from retained earnings to legal
reserve in 2014, which the Company reaches the limit required by the General Law of Corporations.
(d)
Net income from available-for-sale investments
For the years ended December 31, changes in net income from available-for-sale investments are
comprised as follows:
2013
S/.000
2012
S/.000
Opening balances
Sale of available-for-sale investments (Note 8)
Increase (decrease) on fair value of
available-for-sale investments
160,952
-
114,303
(1,305)
(23,964)
47,954
Ending balances
136,988
160,952
(e)
Net income from cash flow hedges
For the years ended December 31, changes in net income from cash flow hedges is comprised as
follows:
2013
S/.000
2012
S/.000
Opening balances
Changes in fair value of cash flows hedges (Note 23)
(24,089)
4,896
(943)
(23,146)
Ending balances
(19,193)
(24,089)
- 65 -
(f)
Foreign currency translation effect
For the years ended December 31, the movement of foreign currency translation effect, resulting
from translating foreign subsidiaries is as follows:
2013
S/.000
2012
S/.000
Opening balances
Changes of foreign currency translation
(48,657)
8,596
(9,792)
(38,865)
Ending balances
(40,061)
(48,657)
(g)
Retained earnings
(g.1) Regulatory Peruvian framework
Pursuant to Legislative Decree No. 945, dated December 23, 2003, domiciled legal entities that
agree to allocate dividends or any other type of profit sharing shall withhold 4.1% on the amount to
be allocated, except if any such dividends or profit sharing will be allocated to domiciled legal
entities.
There are no restrictions for dividends remittances or for the capital repatriation to foreign investors.
(g.2) Payment of dividends by the Company
On March 25, 2013, General Shareholders’ Meeting agreed to distribute dividends for S/.102,549,
approximately equivalent to S/.0.12 per share, paid on May 27, 2013.
On March 29, 2012, General Shareholders’ Meeting agreed to distribute dividends for S/.162,370,
approximately equivalent to S /.0.19 per share, paid on May 23, 2012.
- 66 -
23.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company and its subsidiaries Molinera Inca S.A., Pastificio Santa Amalia S.A. y Salmofood S.A. entered into swaps, futures, options, forwards and cross currency swap agreements to
cover any fluctuation in interest rates, exchange rates and commodity prices. The effects of accounting for derivative financial instruments held by the Company and its subsidiaries as of
December 31, 2013 and 2012 are as follows:
Effect in statement of financial
position asset (liability), net
2013
2012
S/.000
S/.000
Effect on income statement
(loss) gain
2013
2012
S/.000
S/.000
Effect on equity, net
of income tax
2013
2012
S/.000
S/.000
Derivative financial instruments designated as hedge:
Call spread contracts (paragraph (a))
Coupon swap contracts (paragraph (a))
Swap contract (paragraph (b))
Swap contract (paragraph (c))
Swap contract (paragraph (d))
Swap contract (paragraph (e))
Swap contract (paragraph (f))
Cross currency swap (paragraph (g))
Cross currency swap (paragraph (h))
Currency Forwards and Options (paragraph (i))
Future contracts and options (paragraph (j))
Operations contracted and paid during the current year
Subtotal
9,744
(6,892)
13
4,300
-
(350)
(236)
(262)
(1,432)
(493)
(8,359)
(232)
(29,632)
-
4,321
(583)
(405)
(239)
(276)
(1,328)
(516)
(2,661)
(8,001)
1,793
(21)
(10)
(17)
(133)
(45)
(6,237)
(232)
(12,174)
(2,230)
(4,627)
409
171
266
909
314
(3,701)
(10,882)
21,978
59
(409)
(171)
(266)
(909)
(314)
(858)
(20,160)
(59)
7,165
(40,996)
(7,895)
(21,099)
4,896
(23,146)
-
(1,321)
(16,240)
-
(29)
-
7,165
(42,317)
(24,135)
(21,128)
4,896
75,938
(68,773)
(42,317)
Derivative financial instruments designated as non-hedge:
Future contract and options (paragraph (k))
Swap contract (paragraph (l))
Total
Total asset (Note 6)
Total liability (Note 17)
- 67 -
(23,146)
The characteristics and effects of such contracts are described below:
Derivative financial instruments designated as hedge
Cash flow hedges
(a)
Call spread and coupon swap contracts
In June 2013, Management of the company contracted a call spread and coupon swap, for
US$225,000 to hedge 50% exposure in foreign currency provided by the issuance of the
international bond, in March 2013.
Subsequently, in December 2013, Management contracted other call spread and coupon swap
to hedge additional US$50,000. In consequence, the Company has a hedge of 61% related to
exchange rate of the international bond issuance.
Both contracts mature in March 20, 2023. Detail of these operations is presented below:
Entity
Alicorp S.A.A.
J.P.Morgan
Call
Put
Entity
Alicorp S.A.A.
Bank of América
(b)
Call
Put
Contract
value
Agreed
rate
Maturity
US$ 225,000
US$ 225,000
Fixed rate
Fixed rate
March 20, 2023
March 20, 2023
Contract
value
Agreed
rate
Maturity
US$ 50,000
US$ 50,000
Fixed rate
Fixed rate
March 20, 2023
March 20, 2023
Hedge item value
2013
2012
S/. 616,500
US$ 225,000
-
Hedge item value
2013
2012
S/. 138,625
US$ 50,000
-
Swap agreement – Bank of America
In September 2011, the Company signed a swap agreement with Bank of America, which was
designated as cash flow hedges, in order to reduce the risk of changes in the interest rate of the
debt maintained. The variable rate was exchanged for a fixed rate of the loan signed with Bank
of America and Citibank, of US$110,000. The details of this operation are as follows:
Entity
Alicorp S.A.A.
Bank of América
Contract
value
Agreed
rate
Maturity
US$ 30,000
US$ 30,000
Fixed rate
Variable rate
September 15, 2014
September 15, 2014
Hedge item value
2013
2012
-
S/. 280,610
US$ 110,000
By means of this operation, the Company set the cost related to the debt equivalent to
US$30,000, for a period of three years. In April 2013, this derivative financial instrument was
settled, generating a loss for changes in its fair value, recognized as net loss of derivative
financial instruments in the statement of income, for S/.370. Fair value of swap agreement was
determined considering future discounted cash flows, using the curve of interest rates at
liquidation date, considering risks inherent to the contract.
Additionally, the Company recorded changes in interest rate obtained as a loss, for
S/.35 (S/.21 as of December 31, 2012); included on net loss of derivative financial instruments
in the consolidated statement of income.
- 68 -
(c)
Swap agreement – BBVA Banco Continental S.A.
In September 2011, the Company signed a swap contract with BBVA Banco Continental S.A.,
which was designated as a cash flow hedge, in order to reduce the risk of changes in the
interest rate of the debt held. The variable rate was exchanged for a fixed rate of the loan
signed with Bank of America and Citibank for US$110,000. The details of this operation are
as follows:
Entity
Alicorp S.A.A.
BBVA Banco Continental
Contract
value
Agreed
rate
Maturity
US$ 20,000
US$ 20,000
Fixed rate
Variable rate
September 15, 2014
September 15, 2014
Hedge item value
2013
2012
-
S/. 280,610
US$ 110,000
settled, generating loss for changes in fair value recognized as net loss of derivative financial
instruments in the statement of income, for S/.221. Fair value of swap agreement was
determined considering future discounted cash flows, using the curve of interest rates as of
their liquidation date, considering risks inherent to the contract.
Additionally, the Company recorded changes in interest rate obtained as a loss for S/.18 (S/.10
as of December 31, 2012); included on net loss of derivative financial instruments in the
statement of income.
(d)
Swap agreement – Citibank
In September 2011, the Company signed a swap agreement with Citibank, which was
designated as a cash flow hedge, in order to reduce the risk of changes in interest rates of the
debt held. The variable rate was exchanged for a fixed rate of the loan signed with Bank of
America and Citibank of US$110,000. The details of this operation are as follows:
Entity
Alicorp S.A.A.
Citibank
Contract
value
Agreed
rate
Maturity
US$ 20,000
US$ 20,000
Fixed rate
Variable rate
September 14, 2014
September 14, 2014
Hedge item value
2013
2012
-
S/. 280,610
US$ 110,000
settled, generating loss for changes in fair value recognized as net loss of derivative financial
instruments in the statement of income, for S/.248. Fair value of swap agreement was
determined considering future discounted cash flows, using the curve of interest rates as of
their liquidation date, considering risks inherent to the contract.
Additionally, the Company recorded changes in interest rate obtained as a loss for S/.28 (S/.17
as of December 31, 2012); included on net loss of derivative financial instruments in the
- 69 -
(e)
Swap agreement – JP Morgan
In April 2012, the Company signed a swap contract with J.P. Morgan, designated as cash flow
hedge, in order to reduce variation of interest rates risk of the debt held, exchanging the
variable date for a fixed rate, from the loan contracted with Bank of America & Citibank, of
US$110,000. The detailed transaction is as follows:
Entity
Alicorp S.A.A.
J.P.Morgan
Contract
value
Agreed
rate
Maturity
US$ 30,000
US$ 30,000
Fixed rate
Variable rate
September 14, 2018
September 14, 2018
Hedge item value
2013
2012
-
S/. 280,610
US$ 110,000
financial instruments in the statement of income, for S/.1,232. Fair value of swap agreement
was determined considering future discounted cash flows, using the curve of interest rates at
S/.96 (S/.133 as of December 31, 2012); included on net loss of derivative financial
instruments in the consolidated statement of income.
(f)
Swap agreement – Bank of America
In April 2012, the Company signed a swap contract with Bank of America, designated as a
cash flow hedge, in order to reduce variation of interest rates risk of the debt held, exchanging
the variable rate for a fixed rate, from the loan contracted with Bank of America & Citibank,
for US$110,000. The detailed transaction is as follows:
Entity
Alicorp S.A.A.
Bank of América
Contract
value
Agreed
rate
Maturity
US$ 10,000
US$ 10,000
Fixed rate
Variable rate
September 14, 2018
September 14, 2018
Hedge item value
2013
2012
-
S/. 280,610
US$ 110,000
financial instruments in the statement of income, for S/.462. Fair value of swap agreement was
determined considering future discounted cash flows, using the curve of interest rates at
S/.54 (S/.45 as of December 31, 2012); included on net loss of derivative financial instruments
in the consolidated statement of income.
- 70 -
(g)
Cross Currency Swap – The Bank of Nova Scotia
In November 2010, the Subsidiary Molinera Inca S.A. signed with The Bank of Nova Scotia, a
Cross currency swap contract, which was designated as a cash flow hedge, in order to reduce
the risk of changes in exchange rates and interest rates of the debt maintained. The variable
rate was exchanged for a fixed rate of the loan signed with that institution of US$40,000. The
details of this operation are as follows:
Entity
Molinera Inca
The Bank of Nova Scotia
Description of
Contract
Receives US$
and pays S/.
Receives S/.
and pays US$
Hedged item value
2013
2012
Contract
value
Agreed
rate
Maturity
S/. 112,600
Fixed rate
November 30, 2015
S/. 44,736
S/. 61,224
US$ 40,000
Variable rate
November 30, 2015
US$ 16,000
US$ 24,000
The subsidiary Molinera Inca S.A. paid or received semiannually (on each interest payment
date of the loan) the difference between the LIBOR rate applicable to the loan market in that
period and the fixed rate agreed upon in the hedging contract. Flows received or paid by the
subsidiary are recognized as an adjustment to interest expense in the period. In 2013, the
subsidiary recognized interest expense related to this agreement for an amount of S/.2,661
(S/.6,237 in 2012), which is included on the net loss on derivative financial instruments line
item in the consolidated statements of income.
(h)
Cross Currency Swap – Bank of America Merrill Lynch
In 2013, the subsidiary Pastificio Santa Amália S.A. signed three cross currency swaps
agreement with the Bank of Nova Scotia, which was designated as cash flow hedges, in order
to reduce the risk of changes in interest rates of the debt maintained. The variable rate was
exchanged for a fixed rate of the loan signed with said institution for US$90,000. Details of
this operation are as follows:
Hedge item value
2013
2012
Contract
value
Agreed
rate
Maturity
Pastificio Santa Amália
Bank of America Merrill Lynch
US$ 45,000
US$ 45,000
Fixed rate
Variable rate
April 5, 2018
April 5, 2018
R$ 90,738
US$ 45,000
-
US$ 30,000
US$ 30,000
Fixed rate
Variable rate
April 5, 2018
April 5, 2018
R$ 69,750
US$ 30,000
-
US$ 15,000
US$ 15,000
Fixed rate
Variable rate
April 5, 2018
April 5, 2018
R$ 35,100
US$ 15,000
-
Entity
The subsidiary Pastificio Santa Amália S.A. paid or received semiannually (on each interest
payment date of the loan) the difference between the LIBOR rate applicable to the loan market
in that period and the fixed rate agreed upon in the hedging contract. Flows received or paid
by the subsidiary are recognized as an adjustment to interest expense in the period. In 2013,
the Subsidiary recognized interest expense related to this agreement for an amount of S/.7,553,
which is included in the category of net loss of derivative financial instruments in the
- 71 -
Cross Currency Swap – Citibank
In 2013, the subsidiary Pastificio Santa Amália S.A. signed three cross currency swaps
agreement with the Bank of Nova Scotia, which was designated as cash flow hedges, in order
to reduce the risk of changes in interest rates of the debt maintained. The variable rate was
exchanged for a fixed rate of the loan signed with said institution for US$7,291. Details of this
operation are as follows:
Hedge item value
2013
2012
Entity
Contract
value
Agreed
rate
Maturity
Citibank
US$ 1,720
US$ 1,720
Fixed rate
Variable rate
November 11, 2014
November 11, 2014
R$ 4,000
US$ 1,720
-
Citibank
US$ 1,371
US$ 1,371
Fixed rate
Variable rate
October 29, 2014
October 29, 2014
R$ 3,000
US$ 1,371
-
Citibank
US$ 4,200
US$ 4,200
Fixed rate
Variable rate
August 27, 2014
August 27, 2014
R$ 10,007
US$ 4,200
-
The subsidiary Pastificio Santa Amália S.A. paid or received quarterly (on each interest
payment date of the loan) the difference between the LIBOR rate applicable to the loan market
in that period and the fixed rate agreed upon in the hedging contract. Flows received or paid
by the subsidiary are recognized as an adjustment to interest expense in the period. In 2013,
the Subsidiary recognized interest expense related to this agreement for an amount of S/.448,
which is included in the category of net loss of derivative financial instruments in the
consolidated statement of income
(i)
Forwards
In November, 2012, the Company signed a forward contract with Banco de Crédito del Perú
S.A., designated to hedge future liability positions of foreign currency of US$8,000, which
will be settled in January 2013.
(j)
Future contracts and options
The Company and its subsidiary Molinera Inca S.A. conduct hedging transactions because of
volatility of the prices of important commodities to the production process, such as wheat,
edible oil and soybean. The Company engages in futures contracts and / or options on
recognized markets related to specific commodities.
The operations are conducted through an international broker. Open positions and changes in
market prices are covered with their own resources.
- 72 -
As of December 31, 2012, current contracts are due in February and March 2013, and were
settled as follows:
Metric
tonnes
Edible oil
Wheat
Soybean meal
35,924
320,160
17,237
2012
Hedge
percentage
30%
41%
92%
Fair
value
US$000
(4,622)
(6,944)
(50)
The effectiveness of this hedging designated as cash flow has been evaluated by management
through the cash flows offset method. According to Management, this is the method that best
reflects the objective of risk management in relation to the hedging.
Changes in the fair value of derivative financial instruments related to hedging activity as of
December 31, 2012, are recognized net of deferred income taxes in the consolidated statement
of changes in equity.
Derivative financial instruments designated as non-hedge
(a)
Future contracts and options
The Company and its subsidiary Molinera Inca S.A. conduct hedging transactions because of
volatility of the prices of important commodities to the production process, such as wheat,
edible oil and soybean. The Company engages in futures contracts and / or options on
recognized markets related to specific commodities.
The operations are conducted through an international broker. Open positions and changes in
market prices are covered with their own resources.
As of December 31, 2013 and 2012, current contracts are due between February and March
2014, and between February and March 2013, respectively, as follows:
Metric
tonnes
Edible oil
Wheat
Soybean meal
64,550
311,496
6,802
- 73 -
2013
Hedge
percentage
26%
29%
47%
Fair
value
US$000
(170)
(809)
(628)
(b)
Swap contract – Santander Chile
The Company signed a Swap contract with Banco Santander Chile, in order to reduce
variation of interest rates risk of the debt held, exchanging the variable rate for a fixed rate.
The detailed transaction is as follows:
Entity
Contract
value
Agreed
rate
Maturity
Salmofood S.A.
Santander Chile
US$ 7,500
US$ 7,500
Fixed rate
Variable rate
September 2014
September 2014
Hedge item value
2013
2012
-
S/. 10,630
US$ 4,167
Salmofood S.A. paid or received biannually (on each day of loan interest payment) the
difference between LIBOR market rate applicable to the loan in such period and the fixed rate
agreed in the hedge agreement. Flows effectively received or paid by the subsidiary were
recognized as a correction of the financial expense for the year. In 2012, the subsidiary
recognized a greater financial expense for this contract amounting to S/.29, which is presented
on the net loss of derivative financial instruments line item in the consolidated statement of
income.
24.
COST OF SALES
For the year ended December 31, cost of sales comprises:
2013
S/.000
2012
S/.000
Opening balance of inventories (Note 9)
Purchases
Ending balance of inventories (Note 9)
Recovery of allowance for obsolescence of inventories (Note 9)
Estimates for the year:
Obsolescence of inventories (Note 9)
Depreciation (Note 13)
757,326
3,629,760
(795,929)
(5,311)
742,531
2,739,611
(757,326)
(11,250)
7,378
4,374
6,993
11,232
Inventory consumption
3,597,598
2,731,791
269,992
233,664
3,360
44,315
217,325
213,231
13,386
27,150
75,303
38
51,426
60
4,224,270
3,254,369
Personnel expenses
Third parties services (a)
Taxes
Other expenses
Amortization (Note 14)
Total
(a)
Third parties services mainly comprise freights of finished products, repair and maintenance
services, utilities, and plant rentals.
- 74 -
25.
SELLING AND DISTRIBUTION EXPENSES
As of December 31, selling and distribution expenses are as follows:
2013
S/.000
Personnel expenses
Third parties services
Taxes
Other expenses
Doubtful accounts (Note 7)
26.
2012
S/.000
148,937
501,084
1,226
43,610
114,571
352,242
1,626
16,368
3,563
60
19,997
2,562
7,981
718,477
495,350
GENERAL AND ADMINISTRATIVE EXPENSES
For the year ended December 31, general and administrative expenses are as follows:
2013
S/.000
Personnel expenses
Third parties services
Other expenses
Taxes
Doubtful accounts (Note 7)
Total
- 75 -
2012
S/.000
130,028
97,345
20,006
20,301
112,779
86,037
12,994
24,322
9,074
12,264
503
4,623
1,951
-
289,521
242,706
27.
OTHER INCOME (NET)
For the year ended December 31, other income (net) is comprised as follows:
2013
S/.000
Other income:
Reduction of tax obligations (a)
Gain from operations designated as non-hedge instruments (b)
Reimbursement of taxes (c)
Net gain on sale of fixed asset
Gain from sale of available-for-sale investments
Recovery of allowance for doutbful accounts (Note 7)
Gain from sale of raw material
Rentals
Others
2012
S/.000
57,209
12,150
10,552
7,503
5,506
3,174
2,037
917
1,499
12,172
3,413
7,591
1,963
3,335
256
6,894
100,547
35,624
Other expenses:
Scrap materials
Value added tax on gifts and bonuses
Fiscal penalties and incurred taxes
Contingencies
Sale of auxiliary materials
Others
12,188
3,734
4,047
2,844
7,836
7,931
3,422
784
1,875
14,246
Total
30,649
28,258
Other income, net
69,898
7,366
Total
(a)
Reduction of tax obligations corresponds to the re-estimate of the provision for said concept,
resulting of a tax amnesty program (REFIS) adopted by subsidiary Pastificio Santa Amália
S.A. in Brazil. Said program generated as well a benefit for reduction of interests (Note 21).
(b)
Net gain from trading operations comprises net income obtained in operations with derivative
financial instruments designated as non-hedge and not related to the core business.
(c)
Tax reimbursement mainly corresponds to a claim filed by Alicorp Ecuador S.A. for currency
outflow tax, for payments in excess made in prior years.
- 76 -
28.
FINANCIAL INCOME
For the year ended 31 December, financial income is as follows:
2013
S/.000
Benefit for reduction of interests - Brazil
Interests on loans and items receivable
Dividends (Note 6)
Interests on bank deposits
Other financial income
Total
2012
S/.000
42,944
5,094
3,558
2,548
4,414
1,441
3,393
6,428
741
58,558
12,003
Benefit for reduction of interests generated by Pastificio Santa Amália S.A. when adopting the tax
amnesty program (REFIS) in Brazil (Note 21).
29.
FINANCIAL EXPENSES
For the year ended 31 December, financial expenses are as follows:
2013
S/.000
Interests on loans and bank overdrafts
Interests on corporate bonds
Tax interests
Interests for import financing
Option premium for bonds redemption (Note 16(d))
Other financial expenses
30.
2012
S/.000
62,752
43,894
15,526
3,910
2,749
13,595
26,728
8,970
2,440
7,097
142,426
45,235
INCOME TAX
(a)
Income tax regime in Peru
(i)
Tax rates
The income tax rate for legal entities domiciled in Peru is 30%.
Legal entities domiciled in Peru are subjected to an additional rate of 4.1% on any amount that
may be considered indirect income, including, among others, amounts charged to expenses
and unreported income, expenses which may have benefited the shareholders or workers,
among others, outside business expenses or shareholders participation, which are assumed by
the legal entity.
- 77 -
(ii)
Transfer pricing
For the purposes of income tax calculation and Value added tax in Peru, legal entities engaged
in transactions with related companies or with companies resident in territories with low or no
taxation, shall: (a) file an annual affidavit for transfer pricing information when the amount of
their transactions with related parties being greater than S/.200, and (b) have a Transfer
Pricing Technical Study, including the supporting documentation for this study. This formal
obligation arises when the amount of accrued income exceeds S/.6,000, and the entity has
conducted transactions with related companies for an amount over S/.1,000.
Both formal obligations will also be payable in the event that at least one transaction to, from
or through countries with low or no taxation had been made.
The Company and its subsidiaries conducted the corresponding Transfer Pricing Study for
2012 and they are conducting the corresponding study for 2013.
In Management opinion, no significant liabilities will be generated for the consolidated
financial statements as of December 31, 2013 and 2012, in connection with transfer pricing.
(iii) Significant amendments to the income tax regulations in Peru
Presented below, a summary of the most relevant amendments by the Tax Administration,
during year ended December 31, 2013:
-
Cost basis. It is established that the cost basis should be supported with the
corresponding receipt validly issued. In the case of real estate acquired by financial
leasing or lease-back, cost basis will increase with subsequent costs incorporated to the
asset, according to accounting standards.
-
Transfers of shares or other securities. In order to determine the market value, the higher
available value will be considered between the transaction value, the stock market value
(if applicable), the equity value or any other established by Regulations, according to the
nature of the value. On the other hand, loss of third category capital will not be
deductible when, at the time of the transfers, before or after it, in a period no longer than
30 calendar days, acquisition of shares or transferable securities of the same type or
purchase options are produced.
-
Depreciation. The percentage of depreciation should be applied over the result of adding
subsequent costs incurred to the acquisition, production and construction value. Such are
costs incurred regarding a good that has been affected to the generation of taxable
income that, in compliance with accounting standards, should be recognized as cost.
Deductible amount or maximum deductible will be the amount regarding the last
paragraph, except if in the last year the deductible amount is higher that the value of the
good left for depreciation, in which case this last one will be deduced.
-
Non-deductible expenses. Expenses constituted by the difference between the par value
of a credit originated between related parties and its transfer value to third parties that
assume the debtor’s credit risk are not deductible.
- 78 -
In the event that these credit transfers generate accounts receivable in favor of the
transferring entity, provisions and/or write-offs for the impossibility to charge these
accounts do not constitute a deductible expense.
-
Exchange differences. Standards about capitalization of the exchange difference for
liabilities in foreign currency, related to stock and fixed assets will be deleted as from
year 2013. However, exchange difference generated until December 2012, that regarding
standards in force has been activated, will continue to be ruled by previous treatment.
-
Staff training expenses. Limit of deduction is eliminated from training expenses of the
Company’s staff.
-
Transportation expenses. Limit for deduction of expenses incurred in motorized vehicles
of some truck categories.
-
Investigation expenses and Technology Innovation. Standards are incorporated to
achieve the deduction of expenses in scientific investigation, technology and technology
innovation to determine “third category” net income.
-
Technical assistance. Regarding the application of 15% rate, the requirement of
obtaining an income tax return from the company rendering the service is eliminated.
The requirement of obtaining a report from an audit society through which the rendering
of technical services is certified is established only for services which total
compensation is higher than 140 UIT (tax units), in force as of the contract signature.
-
Payments to monthly accounts. Applicable aliquot has been reduced from 2% to 1.5%
under the percentage system, and has been modified in the calculation system of
payments to accounts. Modification implies the payment as monthly advance of the
higher amount when comparing the amount after applying the coefficient system with
the amount after applying the 1.5% percentage. Law No. 29999 has incorporated the
possibility of modifying the percentage based on February’s, March’s or April’s monthly
advance with the prior compliance of certain requirements. In the event of doing so, as
from May, they may be performed based on results from the profit and loss statement as
of April 30, applying the coefficient resulting from said financial statement.
-
Reorganization of societies. In the case of voluntary reevaluation with no taxable effect,
new presumptions have been established. This does not admit proof to the contrary and
intends to tax the profit that would be distributed. Regarding simple demergers and
reorganizations in which it is agreed not to reevaluate assets integrating the transferred
equity block, presumptions have been established. These intend to tax the potential
equity that would arise from the difference between market value and computable cost of
transferred assets. In the case of voluntary reevaluations with taxable effect, taxable
income as a result of reorganizations shall not be offset with tax losses from entities
taking part of the reorganization.
Finally, by means of Law No. 30050 - Ley de Promoción del Mercado de Valores (Law for
the Promotion of the Securities Market) and Law No. 30056 - Ley que facilita el impulso y el
desarrollo productivo y crecimiento empresarial (Law Enabling the Promotion and Productive
Development and Business Growth), certain sections of the Ley del Impuesto a las Ganancias
(Income Tax Law) have been amended in order to enable transactions in the stock exchange
market, or in relation to expenses in projects of scientific and technologic investigation, as
- 79 -
well as technological innovation, credit for training expenses, among others, which shall be
effective mainly in 2014.
(iv) Tax situation of the Company and its subsidiaries
Income tax returns of the Company and its subsidiaries Molinera Inca S.A., Prooriente S.A.,
Alicorp Inversiones S.A., Industria Nacional de Conservas Alimenticias S.A., Alimentos
Peruanos S.A., Garuza Transportes S.A., S.G.A. & CO. S.A. and Consorcio Distribuidor
Iquitos S.A. for the years 2009 to 2012, as applicable, and that to be filed and the tax return
that will be filed for 2013, are pending review by the tax administration, which is authorized to
perform reviews within four years following the year of submittal of the corresponding
income tax return. Management considers that no significant liabilities will arise resulting
from pending reviews.
Income tax returns from subsidiary Industrias Teal S.A. for years 2009 to 2012, and that to be
filed for 2013, are pending of review by the tax administration, which is authorized to perform
reviews within four years following the year of submittal of the corresponding income tax
return. Management considers that no significant liabilities will arise resulting from pending
reviews.
The subsidiaries domiciled in the Republic of Argentina are subjected to income tax at a rate
of 35%. The corresponding income tax returns of Alicorp Argentina S.C.A. for 2009 to 2012
and that to be filed for 2013 are pending of review by the regulating agency. While income tax
returns of Alicorp San Juan S.A., Sulfargen S.A., TVBC S.C.A., Sanford S.A.C.I.F.I y A.,
Italo Manera S.A. and Pastas Especiales S.A. for 2007 to 2012 and that will be filed for 2013
are pending review by the Argentinian Tax Administration.
Alicorp Ecuador S.A. and Agassycorp S.A. are subjected to income tax in Ecuador, at a rate of
22%. The income tax returns of Alicorp Ecuador S.A. for the years 2008 to 2012 and the tax
return that will be submitted for 2013, are pending review by the regulator in Ecuador.
Company Inbalnor S.A. is under a special tax regime in Ecuador and consequently it is taxexempted until 2016.
Alicorp Colombia S.A. is subjected to income tax and surtax at a rate of 25% and 9% equity
income tax (CREE) for 2013; an 33% rate for 2012, corresponding to income tax and surtax.
Income tax returned for 2012 and that to be filed for 2013 are pending of review by the
Colombian Tax Administration.
Salmofood S.A. and subsidiary Cetecsal S.A. are subjected to 20% income tax rate. Income
tax returns from 2007 to 2012, and that to be filed in 2013, are pending of review by the
regulating agency in Chile.
Alicorp Uruguay S.R.L. is subjected to 25% income tax rate. Income tax return to be filed in
2013 is pending of review by the regulating agency in Uruguay.
Alicorp Holdco España S.L. is subjected to 30% income tax rate. Income tax return to be filed
in 2013 is pending of review by the regulating agency in Spain.
Alicorp Do Brasil Participaçoes S.A. and subsidiary Pastificio Santa Amália S.A. are subjected
to 25% income tax rate. Income tax return to be filed in 2013 is pending of review by the
regulating agency in Brazil.
- 80 -
Due to possible interpretations from tax authorities on legal regulations in force, it is not
possible to determine whether liabilities for the Company and its subsidiaries will result from
future reviews. Consequently, any eventual higher tax or charge that might result from fiscal
reviews, will be charged to the net income (loss) for the year in which they are determined.
However, Management considers that no potential additional settlement of taxes would be
significant for the financial statements as of December 31, 2013 and 2012.
(b)
Income tax rate recognized in net income for the year
Income tax expense recognized in profit or loss for the year ended December 31, is detailed
below:
2013
S/.000
Current income tax
Adjustments recognized in the current year related to
income tax of prior years
Deffered income tax related to
changes in temporary differences with impact in net income
Total
Income tax for:
Continuing operations
Discontinued operations (Note 32)
Total
2012
S/.000
137,438
168,238
2,980
2,232
10,031
(3,055)
150,449
167,415
123,239
27,210
149,771
17,644
150,449
167,415
Estimated current income tax corresponds to tax payable calculated by the Company and its
subsidiaries at corresponding income tax rates, after deducting employees’ profit sharing
when applicable.
During the years ended on December 31, 2013 and 2012, effective rate of income tax expense
differs from tax rate applicable to profit before tax. The nature of this difference is due to the
fact that certain items in relation with tax income determination, whose effects over tax rate
applicable are summarized as follows (in percentages over income before taxes):
2013
S/.000
Tax and tax rate applicable to
profit before taxes
Non-taxable income
Non-deductible expenses
Provisions
Others
Adjustments recognized in the current year related to
income tax of prior years
Income tax expenses and tax rate
applicable to profit
- 81 -
2012
%
S/.000
154,054
%
150,971
29.1
29.7
(35,659)
39,237
(7,225)
144
(6.9)
7.6
(1.4)
-
(1,533)
6,322
(999)
3,058
(0.3)
1.2
(0.2)
0.6
2,981
0.6
6,513
1.3
150,449
29.0
167,415
32.3
(c)
Current income tax
As of December 31, 2013, the Company and its subsidiaries maintain current income tax
receivable for S/.61,967, and payable for S/.2,593 (S/.27,103 receivable and S/.8,726 payable
as of December 31, 2012).
(d)
Balances of deferred income tax
Deferred income tax assets and liabilities are comprised as follows:
Opening
balance
S/.000
As of December 31, 2013:
Asset:
Hedging transactions
Carry-forward losses
Estimate for
impariment of interests
in subsidiaries
Others, net
Purchase of
subsidiary
S/.000
Allocation of
goodwill
S/.000
Note 12
Other
comprehesive
income
S/.000
Translation
difference
S/.000
Ending
balance
S/.000
11,067
2,781
(1,548)
54,406
-
-
(1,208)
-
1,430
(7,545)
9,741
49,642
2,405
17,971
(72,106)
83,492
2,984
-
(5,062)
2,405
27,279
34,224
(19,248)
83,492
2,984
(1,208)
(11,177)
89,067
Liability:
Property, plant and
equipment, net
Intangibles, net
Inventories, net
Others
(120,737)
(26,274)
(1,095)
(2,013)
4,604
1,014
580
3,019
(55,976)
-
(250,096)
-
-
8,588
7,035
(1,006)
(163,521)
(268,321)
(515)
-
Total liabilities
(150,119)
9,217
(55,976)
(250,096)
-
14,617
(432,357)
Total assets
Opening
balance
S/.000
(e)
Profit/loss
for the year
S/.000
Profit/loss
for the year
S/.000
Purchase of
subsidiary
S/.000
Allocation of
goodwill
S/.000
Note 12
Other
comprehesive
income
S/.000
Translation
difference
S/.000
Ending
balance
S/.000
As of December 31, 2012:
Asset:
Hedging transactions
Carry-forward losses
Estimate for impairment
of interests in
subsidiaries
Others, net
705
1,215
356
(2,191)
-
-
9,915
-
91
3,757
11,067
2,781
1,774
24,586
631
(2,061)
1,659
-
-
(6,213)
2,405
17,971
Total assets
28,280
(3,265)
1,659
-
9,915
(2,365)
34,224
Liability:
Property, plant
and equipment, net
Intangibles, net
Inventories, net
Others
(134,354)
(1,537)
(495)
-
8,477
(1,987)
(600)
430
(8,732)
(480)
(12,993)
-
-
5,140
(1,025)
(1,963)
(120,737)
(26,274)
(1,095)
(2,013)
Total liabilities
(136,386)
6,320
(9,212)
(12,993)
-
2,152
(150,119)
Deferred income tax recognized in other consolidated comprehensive income
Income tax recognized in other comprehensive income in relation to fair value of options is a
credit of S/.1,208, as of December 31, 2013 (debit of S/.9,915 as of December 31, 2012).
- 82 -
31.
BALANCES AND TRANSACTIONS WITH RELATED ENTITIES
Trade operations
During 2013 and 2012, the Company and its subsidiaries entered into the following significant
transactions with related entities, during their normal course of business:
Sales
2013
S/.000
Purchases
2012
S/.000
2013
S/.000
2012
S/.000
Associates
Other related entities
33
43,989
809
11,045
15,003
284,256
120,131
13,417
Total
44,022
11,854
299,259
133,548
As a result of these transactions and other minors, the following balances receivable and payable
were generated as of December 31:
2013
S/.000
Trade receivable (Note 7):
Associates
Related entities
Total
Trade payable (Note 18):
Associates
Related entities
Total
2012
S/.000
5,287
25,158
1,864
6,502
7,513
380
32,309
14,395
389
17,408
1,402
350
15,901
1,844
19,199
18,095
Trade receivables and trade payables are mainly generated by the purchase and sale products and
services. These accounts are due in the short-term, do not bear interests and have no specific
guarantees.
As of December 31, 2013 and 2012, the Company and its subsidiaries have granted guarantees to
financial institutions on behalf of related entities (Note 36).
Other receivable and payable to related entities
Other receivables and payables are due in the short-term, do not bear interest and have no specific
guarantees.
- 83 -
Remunerations to the Board of Directors and key personnel
During 2013 and 2012 the following payments were made: (a) to the Board of Directors for S/.1,229
and S/.1,282, respectively; and (b) to key personnel for S/.9,736 and S/.11,494, respectively.
32.
DISCONTINUED OPERATIONS (NET)
As of December 31, 2013 and 2012, the Company and its subsidiary Salmofood S.A. have
generated income from the sale of paralyzed plants and discontinued operations, as follows:
2013
S/.000
Net income from:
Plantas
Paralized
paralizadas
plants (Note
(Nota
11)11)
Operaciones
Discontinueddiscontinuadas
operations
Total
Income tax (Note 30(b))
Total discontinued, net
2012
S/.000
2,221
88,478
11,079
47,735
90,699
58,814
(27,210)
(17,644)
63,489
41,170
Net income from discontinued operations
In 2013 it mainly comprises the sale of the animal food business to Molitalia S.A., for
approximately US$35,841 (equivalent to S/.100,612), resulting in a net profit of S/.87,678.
In 2012 it mainly comprises the sale of fish oil processing business, with Omega 3. Net profit for
this transaction was of S/.46,521.
33.
NET EARNINGS PER SHARE
Earnings per basic share are calculated by dividing net profit for the period between the weighted
average of the number of outstanding shares for the period. Earnings per basic and diluted share are
the same, given that there are no diluting effects on profit.
Presented below, calculation of earnings per share:
Common shares
Investment shares
Weighted average of issued shares
- 84 -
2013
2012
847,191,731
7,388,470
847,191,731
7,388,470
854,580,201
854,580,201
2013
S/.000
2012
S/.000
Basic and diluted earnings per common and investment share
368,888
351,390
0.432
0.411
305,399
310,220
0.358
0.363
63,489
41,170
0.074
0.048
Basic and diluted earning per common and investment share (S/.)
Basic and diluted earning per common and
investment share from continuing operations:
Net income for continuing operations
Basic and diluted earnings per common and investment
shares from continuing operations (S/.)
investment share from discontinued operations:
Net income from discontinued operations
investment share from discontinued operations (S/.)
34.
SEGMENT INFORMATION
For management purposes, the Company and its subsidiaries prepare segment information based on
the business units they operate, namely: consumer business, industrial products, animal food and
others.
Management does not consider necessary to include geographical information, mainly because there
is not a different component dedicated to provide goods and services within a particular
environment subjected to different risks and profitability. All the operations of the Company and its
subsidiaries are subjected to the same risks; consequently, there are not profitability differences
based on the region or place where sales are conducted.
In December 2013, the Company sold the animal food business (Note 32).
In January 2012, the Company sold assets related to the processing of fish oil with Omega 3
business (Note 32).
- 85 -
Presented below, relevant financial information corresponding to business segments as of December 31, 2013 and 2012:
2013
Total revenue from sales and services
Operating income
Assets by segment:
Inventories (net)
Goodwill (net)
Not allocated assets
Peru
S/.000
Consumer goods
International
S/.000
Total
S/.000
Business to business
branded products
S/.000
Animal
Nutrition
S/.000
Others
S/.000
Total
S/.000
2,193,722
1,285,908
3,479,630
1,464,616
877,684
74
5,822,004
293,383
122,719
416,102
145,493
80,778
17,261
659,634
368,888
170,071
509,699
603,756
442,097
1,419,294
679,770
209,879
214,454
261,529
-
144,689
133,701
168,223
17,540
1,450
27,896
-
959,774
790,252
1,876,942
697,310
1,570,019
Total assets
5,894,297
Total not allocated liabilities
3,528,254
2012
Total revenue from sales and services
Operating income
Assets by segment:
Inventories (net)
Goodwill (net)
Not allocated assets
Peru
S/.000
Consumer goods
International
S/.000
Total
S/.000
Business to business
branded products
S/.000
Animal
Nutrition
S/.000
Others
S/.000
Total
S/.000
1,961,746
680,194
2,641,940
1,304,833
500,190
26,754
4,473,717
263,717
32,795
296,512
140,123
34,653
17,370
488,658
351,390
291,172
17,548
446,351
218,119
944,827
308,720
217,855
460,687
210,648
-
78,847
67,970
140,356
44,248
3,502
7,552
30,996
-
746,555
754,328
1,326,827
352,968
1,097,986
Total assets
4,278,664
Total not allocated liabilities
2,169,781
- 86 -
35.
NON-MONETARY TRANSACTIONS AND STATEMENTS OF CASH FLOWS
For the years ended December 31, the following non-cash investing and financing activities had an
effect on assets and liabilities as follows:
2013
S/.000
Unrealized gain (loss) in hedging transactions
Transfer of property, plant and equipment to
available-for-sale assets
Unrealized gain (loss) of
available-for-sale investments
Exchange difference by translating
foreign operations
Benefits for reduction of interests (Brazil)
Provision of interest
36.
2012
S/.000
4,896
(23,146)
7,738
5,782
23,964
46,649
8,596
57,209
42,944
(38,865)
-
COMMITMENTS
Guarantees in relation to Alicorp S.A.A.:


The Company has obtained the following guarantee letters for public tenders from:
-
SUNAT totaling US$995, these guarantees have been issued by Secrex Compañía de
Seguros y Garantías, and they correspond to a guarantee surety bond for custom
warehouse due in January 2014 (US$1,234 in 2012 due in January 2013). Moreover, the
Company has provided SUNAT with bank comfort letters issued by a local financial
institution to secure the customs tax debt and other obligations related to the Inbond
Code Procedure for raw materials totaling S/.3,493 due in July 2014 (US$9,512 due
between February and December 2013).
-
Ministerio del Interior for S/.3,297 maturing between February and July 2014 (S/.1,695
as of December 31, 2012 maturing between January and September 2013).
-
Oficina Nacional del Gobierno Interior for S/.1,780 maturing between April and July
2014 (US$1,558 in 2012, maturing between January and April 2013).
Guarantee letters issued to guarantee the purchase of fixed assets totaling US$ 1,531, issued
by a local financial institution due between January and July 2014.
Guarantees related to Molinera Inca S.A.:

Guarantee letters in favor of the SUNAT totaling US$160 issued by Secrex Compañía de
Seguros y Garantías, corresponding to the guarantee surety bond from customs warehouse,
due in January 2014.
- 87 -
Guarantees related to Alicorp Argentina S.C.A. and subsidiaries:

Guarantee letters issued to guarantee the purchase of fixed assets, for US$185,270; issued by
local financial institutions, maturing between November 2013 and January 2014.
Guarantees granted by Inbalnor S.A.:

Mortgage over the balanced food plant, for up to US$5,000.
Guarantees related to Salmofood S.A.:

On October 24, 2013, concealment of each and every pledge and mortgage was carried out,
held by each corporation as of December 31, 2012, for syndicated credit.
Guarantees related to Industrias Teal S.A.:

Subsidiary holds a guarantee letter in favor of Gas Natural de Lima y Callao, for US$118,
guaranteeing the natural gas supply until January 2015.
Guarantees related to Pastifício Santa Amália S.A.:

37.
Guarantee over all buildings located in Machado, Brazil, for up to US$18,111.
CONTINGENCIES
(a)
Alicorp S.A.A.

As of December 31, 2013, the Company has received tax assessments related to income
tax (2002, 2003, 2004, 2005, 2006 and 2007), value added tax (1992, January to April
1993, January to March and July 2002, March to May and December 2003, 2004, 2005
and 2006), payments on account of income tax (March to December 2013) and reduction
of tax losses (2002 and 2003) for S/.53,062 (S/.69,683 in 2012), regarding contributions
to ESSALUD S/.4,983 (S/.4,983 as of December 31, 2012) and municipal claims for
S/.1,155 (S/.663 as of December 31, 2012), which include arrears and fines.
Management and its legal counsels believe that the issues listed above should have a
favorable outcome for the Company, for which it has not been recorded any provision.

As of December 31, 2013, the Company has been served with labor claims amounting to
approximately S/.33,038 (S/.33,712 as of December 31, 2012), from which S/.3,437
(S/4,111 as of December 31, 2012) correspond to several labor processes of former
employees, and S/.29,601 (S/.29,601 as of December 31, 2012) for claims from the
Syndicate of workers, for nullity of legal act – collective agreement. Management and its
legal counsels believe that the issues listed above should have a favorable outcome for
the Company, for which it has not made any provision in this regard.

As of December 31, 2013, the Company has claims for S/.85 (S/.728 as of December 31,
2012). Management and its legal counsels believe that the issues listed above should
have a favorable outcome for the Company, for which it has not made any provision in
this regard.
- 88 -
(b)

As of December 31, 2012, the Company has claims brought by AFP Horizonte S.A.,
AFP Prima S.A. and AFP Profuturo (Pension Fund Administrators) for approximate
amounts S/.4,444 (S/.4,295 as of December 31, 2012). Management and its legal
counsels believe that the issues listed above should have a favorable outcome for the
Company, for which it has not made any provision in this regard.

As a result of the fire incident occurred on December 3, 2009 at Ransa Comercial S.A.
warehouse (a related company), accounting and labor ledgers were lost for Alicorp
S.A.A. prior to April 2009 and for its Subsidiary Molinera Inca S.A. from January 2007
through April 2009. In this regard, both companies issued legal communications to tax
authorities and other public entities as required. The tax authority granted to the
Company and its Subsidiary the right to rebuild their books, and get from their
customers and suppliers copies of lost documents. In 2010, the Company and its
subsidiary have complied with rebuilding of their books for the tax periods open for
review and have sent letters to customers and suppliers requesting copies of the missing
information within the deadlines given by the tax authority. Management believes that,
as of December 31, 2013 and 2012, no significant liabilities will arise relative to
potential audits available to carry out the tax or labor on the periods in which the
information was lost.
The subsidiary maintains Claims and Appeals with respect to the tax refund of Value Added
Tax for the months of November and December 2004 and January, November and December
2005; January to December 2006, 2007, 2008 and 2011, January to February, April to July,
and October to December 2012, for S/.13,511 (S/.16,781 in 2012), for the replacement of
income tax return from January to December 2001, for S/.508 (S/.508 in 2012).
Additionally, the Subsidiary held a claim filed before intendance resolutions in relation with
value added tax determination from January to December 2004 and 2005. In 2013, by Tax
Court Resolution No. 5008-9-2013 appealed intendance resolutions were confirmed, the
Company presented a preventive measure pursuing not to innovate; the updated amount as of
the date is S/.156,740 (S/.59,640 in 2012).
Management and its legal counsels believe that the claims filed by the subsidiary should have
a favorable outcome.
(c)
Molinera Inca S.A.
The Subsidiary has labor claims against, for an approximate amount of S/.1,656 (S/.3,598 in
2012) and debts of S/.58 (S/.58 in 2012) for municipal claims. Management and its legal
counsels believe that the issues listed above should have a favorable outcome for the
Subsidiary, for which it has not made any provision in this regard.
(d)
Salmofood S.A.
As of December 31, 2013, the Subsidiary has a claim against Caleta Bay S.A. for the of
US$3,148 in debts (equivalent to S/.8,801). Additionally, it has a counterclaim from Caleta
Bay S.A., for US$7,915 (equivalent to S/.22,130). The legal advisor of the Subsidiary
considers as likely a favorable outcome from claim presented by Salmofood S.A.; and a
possible favorable outcome from claim presented by Caleta Bay.
- 89 -
In the event that claim from Caleta Bay S.A. had an unfavorable outcome for the Subsidiary,
former owners shall compensate the Company for up to US$6,500 (equivalent to S/.18,174),
for losses and damages suffered by the Company in said process.
Management and its legal counsels believe that the issues listed above should have a favorable
outcome for the Company and its subsidiaries, for which it has not made any provision in this
regard.
(e)
Pastifício Santa Amália S.A.
The Subsidiary has labor, tax and civil claims in process, involving contingent liabilities.
Processes are under the administrative defense or in process in court.
(f)
As of December 31, 2013, the Subsidiary has a legal process against Lacteos Company S.A,
for a debt of S/.169, given that said company does not recognize debt held with the Company.
(g)
As of December 31, 2013, it has quantifiable contingencies to labor claims, S/.687, and
additional administrative claims, for S/.13.
-
Alicorp San Juan S.A.:
As of December 31, 2013, it has quantifiable contingencies to labor claims, for S/.172,
and additional claims of Other Taxes, for S/.482.
-
Sanford S.A.C.I.F.I. y A.:
and additional claims of Other Taxes, for S/.1,452.
-
Italo Manera S.A.:
-
Pastas Especiales S.A.:
Management and its legal advisors consider that claims presented by the Company and its
subsidiaries should have a favorable outcome; therefore no provision has been established on that
regard.
- 90 -
38.
SUBSEQUENT EVENTS
We are not aware of subsequent events occurring between the closing date of these consolidated
financial statements and the date of this report that may significantly affect them.
_____________________________________________________________________________________
- 91 -

opinion de los contadores publicos independientes

Transcription

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