ANNUAL REPORT OF FARMACIAS AHUMADA S.A 2002

Transcription

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ANNUAL REPORT
OF FARMACIAS AHUMADA S.A
2002
a
o n
t i
"This document is a free translation of the
official Annual Report of Farmacias Ahumada
S.A, originally issued in Spanish, that can
be requested directly in our offices, or to
[email protected]"
[ I N D E X ]
c o mmi
tm
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1
Letter from the Chairman
Identification of the Company
Indicators of Interest
Property Ownership and Control
Board of Directors
Organizational Structure
Businesses
Corporate Structure
Information about Affiliates
Identification of Other Companies and Related Companies
Consolidated Financial Statements
Individual Financial Statements
Summarized Financial Statements
Analysis of Financial Statements
Relevant Facts
c
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c h a i r m a n
c o m p a n y
[
L E T T E R
F R O M
T H E
C H A I R M A N
]
JOSÉ CODNER CHIJNER
Chairman of the Board
Farmacias Ahumada S.A.
To our Shareholders:
4
It is an honor for me to submit to you the 2002 Annual
Report of Farmacias Ahumada S.A. (FASA), corresponding
to the management of the company during the year 2002.
states of that country, totaling 136,000 m2 of sales floor
space. The company employs about 6,000 and serves about
100 million customers every year.
The year that now ends will stand out as a very important
landmark for the company: its entry into Mexico’s Retail
Pharmacy sector.
The decision to enter the Mexican pharmaceutical
market –the largest in Latin America, with a population in
excess of 100 million inhabitants– followed a rigorous
strategic and financial analysis and represented the
culmination of a 2 year process of mutual approaches and
negotiations.
Last December 23, the company materialized the
acquisition of 67.95% of Mexico’s Farmacias Benavides
(Far-Ben S.A. de C.V.) Pharmacy Chain investing US$ 45
million, by virtue of which we now control Far-Ben S.A. de
C.V. and have become the largest Pharmacy Chain in Latin
America.
On the other hand, this
complex global economic
competitive environment in
where we operate, with the
financial results.
year we had to face a very
situation and a very tough
those countries and markets
ensuing deterioration of our
Acquisition of FFarmacias
armacias Bena
vides
Benavides
The purchase of Farmacias Benavides in Mexico
represents a very significant landmark in the history of our
company.
This purchase, in addition to our sustained sales growth
in Chile, Brazil and Peru has transformed us into the main
Pharmacy Chain in Latin America and one of the 12
largest in the world, with overall sales projections in the
range of Ch$ 650,000 million; namely, in the order of US$
900 million for 2003.
Farmacias Benavides recorded 2002 sales over US$ 427
million, reaching a 3,1% market share in Mexico. It
operates 523 Pharmacies throughout 108 cities and 17
Our control over Farmacias Benavides will enable FASA
to generate significant advantages –both in terms of
economies of scale as in our capacity to generate value
and transfer of our business know-how– especially in
managing Pharmacies and applying technology.
Additionally, diversifying our income will enable us to
ensure a stable long-term source of financing.
In order to finance this acquisition, FASA issued a
US$ 45 million 7 year Bond in the Chilean market, at a
rate of UF + 5.79% per year. Such attractive terms, in
addition to the 20% excess demand recorded when
placing them, reflect the confidence of the market in the
manner in which our Company is being managed and
developed.
This acquisition, however, is merely the first step
toward meeting our strategic and profitability objectives.
It is quite clear to us that our challenge in the years ahead
will not be focused on the growth of sales –which we have
met three years in anticipation of our plans as a result of
our entry in Mexico– but rather, in being able to
consolidate and make profitable our operations in each of
the countries where FASA operates.
[
L E T T E R
F R O M
T H E
C H A I R M A N
]
The extensive operational restructuring required by own pace of growth. Thus, during 2002, the increment of
Farmacias Benavides constitutes a huge challenge for our Pharmacy counters was significantly higher than the 8,1%
management. Moreover, each market in which we operate increment of the country’s pharmaceutical market.
represents a different challenge that has to
“This pur
chase, in addition to our sustained sales
purc
be faced with a common competitive
wth in Chile, Br
azil and P
eru has tr
ansformed us
transformed
growth
Brazil
Peru
strategy, suitable to be adapted to each gro
specific market in the most effective and into the main Pharmac
y Chain in Latin America and
Pharmacy
profitable manner possible.
one of the 12 largest in the w
orld, with o
ver
all sales
world,
ov
erall
FASA oper
ations in Chile, Br
azil and
operations
Brazil
Peru.
one of the 12 largest in the world, with overall sales
projections in the rrange
ange of Ch$ 650,000 million;
namely
”.
2003”.
namely,, in the order of US$ 900 million for 2003
Our operations in Chile, Brazil and Peru had to face an
extremely difficult macroeconomic environment.
The last two years were characterized by a contracted
economic activity, weakening growth signals, and increasing
social and political inestability, especially in some countries
of Latin America. The expectations of increased economic
activity have been continuously postponed because of a
number of macroeconomic imbalances, the sharpening of
the Middle East crisis, the drop of economic activity in the
United States and a general slowdown in all the economies
of Latin American and in Chile’s other main commercial
partners.
Additionally, in those countries in which we operate,
the pharmaceutical market has increased its
competitiveness, thus forcing us to adapt our strategy in
order to achieve our predefined profitability objectives.
A particularly competitive and complex enviroment
has developed in Chile, such as we had not seen in the
country for over a decade.
The considerably higher margins of the year 2001,
generated resources that enabled all market
participants to expand over and above the industry’s
These developments generated a strong competition
among the different Drugstore Chains, unleashing a
veritable price war toward the end of the last quarter of the
year.
The manner of confronting such aggressively competitive
environment has lead us to boost our strategic focus, which
will continue to be in increasing
our operational efficiency so as to
have a competitive and sustainable
structure and to increase our
market share of general merchandise
and non-pharmaceutical products.
In keeping with such strategy,
last December the company started
an aggressive cost reduction
program that will bring about substantial savings to the
company beginning in the year 2003.
“It is quite clear to us that
our cchallenge
hallenge in the yyears
ears
ahead will not be focused on the
gro
wth of sales – w
hic
h we ha
ve met
growth
whic
hich
hav
three yyears
ears in anticipation of our
plans as a result of our entry in
Mexico – but rrather
ather
ather,, in being able to
consolidate and make profitable our
oper
ations in eac
h of the countries
operations
each
where FFASA
ASA oper
ates.
operates.
ates.””
5
[
L E T T E R
F R O M
T H E
C H A I R M A N
On the other hand, we have continued to expand our
“Drugstore”® type Pharmacy format, in tandem with the
new habits of Chilean consumers that favors this type of
convenience store format. Our future expansion plan is
mostly geared towards incrementing our base of
Pharmacies with self-service features, replacing our points of
sale with small formats that depend almost exclusively from
medication sales. We believe that –just as it happens in
more developed markets such as those of the Northern
Hemisphere and the United States in particular– these
formats will continue to generate traffic based on their
convenience, proximity and level of service.
6
During the year 2002, 74.6% (as compared to 77.8%
in 2001) of our consolidated income and 83.0% (88.8% in
2001) of our EBITDA was generated by our operations in
Chile, thus becoming our main source of business. Our
2002 market share -according to figures reported by IMS
Health (the Nielssen equivalent for measuring
pharmaceutical markets)– reached 33.1%, while sales
increased by 6.7%.
In Br
azil, the environment of uncertainty generated by
Brazil,
the presidential elections and the subsequent
macroeconomic imbalances made us reorient our
short-term expansion plan there. The combined impact of
a slower pace of expansion in the number of Pharmacies
and an enhanced focus by management on internal
operational improvements began to show its results during
the year 2002 with a 46.2% growth in EBITDA, as
compared to the year 2001 and a 15.4% growth in sales;
both of them measured in local currency. Nevertheless, at
the same time, we faced a devaluation of the Brazilian
Real with respect to the Chilean Peso.
]
Among the many operational improvements introduced
in Brazil, it is important to highlight the roll out of SAP
financial modules, the adaptation and modernization of
the Distribution Center, and the introduction of the
Recetario Magistral (compounding) customized
prescription drugs, among the many other projects
materialized. We expect management to continue
focusing on optimizing internal operations in order to
generate greater comparative advantages for the Company.
Additionally, during the year 2003, we will begin to
implement our exclusive agreement with GNC, Inc. for the
Brazilian market. This, along with an expansion plan based
solely on organic growth, will help to continue to improve
the Company’s financial indicators for the year 2003.
During the year 2002, 14.8% (14.4% in 2001) of our
consolidated income and 6.3% (5.8% in 2001) of our
consolidated EBITDA were generated by our operations in
Brazil, where we reached a market share of 5.2% in the
southern region of the country, as reported by IMS.
Our oper
ation in P
eru finally completed our objective
operation
Peru
of achieving nationwide market coverage during the year
2002. This strong expansion boosted our sales level by 26%,
as compared with the previous year –measured in local
currency– reaching a nationwide market share of 8.1%, a
figure that is significantly higher than our closest competitor.
Our plans for Peru are aimed at strongly enhancing our
profitability during the coming years; we already have a
solid base on which to continue to grow in terms of market
share, without the need to grow significantly in terms of
new sale outlets.
During the year 2002, 10.6% (7.8% in 2001) of our
consolidated income and 10.7% (5.4% in 2001) of our
consolidated EBITDA were generated by our operations in
Peru, where we achieved a market share of 15.2% in the
city of Lima and of 8.1% nationwide.
“F
or the second consecuti
ve yyear
ear
“For
consecutiv
ear,,
FASA has been considered one of the
w orld’
y Chains b
y the
orld’ss Top-10 Pharmac
Pharmacy
by
prestigious North American magazine, Chain
Drug Review
Review,, in its December edition.
edition.””
I n s u m , our consolidated sales grew by 7.4%
(Ch$ 313,418 million) with respect to the results obtained
in the year 2001. Operating costs amounted to
Ch$ 235,902 million, as reflected by an increase of 8.6%
with respect to 2001, while administrative & sale
expenses totaled Ch$ 74,293 million (Ch$ 65,550
million in 2001).
[
L E T T E R
F R O M
T H E
C H A I R M A N
The operating result for the year reached Ch$ 3,223
million (Ch$ 9,071 million in 2001), namely, 64.5% lower
than that of 2001. Consolidated EBITDA reached Ch$ 8,667
million –2.8% of sales– representing a drop of 33.6% as
compared to the year 2001, which was indeed a very
atypical year.
Finally, as a result of the events narrated above, the
Company obtained a net profit of Ch$ 1,738 million –0.6%
of sales– as compared to Ch$ 6,778 million obtained in
2001.
The Company’s consolidated investments totaled
Ch$ 12,651 million (Ch$ 10,521 million in 2001), aimed
at increasing sales or implementing operative
improvements, bringing about cost reductions; a
permanent objective of Company policy.
]
Shareholders
Shareholders, we are pleased with progress to date,
but we are mindful that our job is far from concluded. The
challenge in the years ahead is to use the foundations that
we have laid out to achieve increasing financial returns.
Our 2002 results were below expectations; however,
they provided us with lessons that behoove us to consider
in order to commence 2003 with stronger than ever
before. You may rest assured that our efforts will be aimed
at maintaining the leadership that we have achieved and
taking advantage of the opportunities that lie before us to
add value to our shareholders.
We are beginning this year 2003 with a strengthened
organization, an efficient corporate area and collaborators
who are guided by a clear vision and willing to assume
challenges responsibly for the benefit of our shareholders,
Clients and suppliers.
Despite the short-term current deterioration of our 2002
financial results –when compared with the previous year–
Cordially,
our strategy has generated, and will to
continue to generate, increasing returns that
are higher than our capital cost.
For the second consecutive year, FASA
has been considered one of the world’s
Top-10 Pharmacy Chains by the prestigious
North American magazine, Chain Drug
Review, in its December edition. Our
suppliers recognize us as the best in the
sector. Our investments in technology and
our operational know-how have permitted us
to generate important returns for our shareholders,
while delivering the resources necessary to
pursue our value creation strategy. Our Clients –
according to independent surveys conducted
recently– have distinguished us as the Pharmacy
Chain that provides the best service in practically all
the variables that were measured.
7
José Codner
Chairman of the Board
“W
e are beginning this yyear
ear 2003 with a
“We
strengthened organization, an efficient
corpor
ate area and collabor
ators w
ho are
corporate
collaborators
who
guided b
y a clear vision and willing to
by
assume cchallenges
hallenges responsibly for the
benefit of our shareholders, Clients and
suppliers”.
[ I D E N T I F I C A T I O N
O F
T H E
C O M P A N Y ]
_
Business name:
_
Commercial name:
Farmacias Ahumada.
_
Articles of Incorporation:
Public Deed of November 28, 1997 granted before
the Santiago Public Notary; Mr. Alvaro Bianchi Rosas.
_
RUT – Taxpayer ID number:
93.767.000-1.
_
Legal Address:
Avda. Vicuña Mackenna 585, Santiago.
_
Telephone:
56-2-2221122.
_
Fax:
56-2-6619410.
_
Website:
www.farmaciasahumada.cl; www.fasacorp.cl
_
Type of entity:
Open Stock Company, registered in the Securities
Registrar under N° 629.
_
Registration in Commercial Registrar:
Sheet 310, N° 167 of the Commercial Registrar of
the Santiago Real Estate Registrar, 1978,
_
Stock Exchange symbol:
FASA.
_
Quantity of shares of stock subscribed and paid:
150.000.000
_
Registration N° of the first issue (1997):
N° 629 of the Securities Registrar.
_
Registration N° of the capital increase (1999):
N° 584 of the Securities Registrar.
_
Main banks:
Bice, BCI, CorpBanca, CitiBank N.A., Banco de Chile,
Santiago, Santander.
_
External Auditors:
Deloitte & Touche.
_
Risk Ratings:
Fitch Chile –
8
Humphreys –
_
Shares - First Class, level 3.
Bonds Nº 309 – Category AShares - First Class, level 3.
Bonds N° 309 – Category A
Main legal counsels:
Vial y Palma Legal Counsel - Chile
Agüero, Aitken, Frías & Henríquez Legal Counsel.
[ I D E N T I F I C A T I O N
O F
T H E
C O M P A N Y ]
Incorpor
ation Bac
kground
Incorporation
Background
The Company was legally incorporated under the
business name of Farmacias Ahumada S.A., as recorded in
public deed dated November 28, 1977, granted by the
Santiago Public Notary, Mr. Alvaro Bianchi Rosas.
On October 15, 1997, Farmacias Ahumada S.A. was
registered in the Securities Registrar of the Superintendence
for Securities and Insurance Companies under Nº 629; thus,
it is fiscalized by the referred superintendence.
Business Bac
kground
Background
The history of FASA –throughout its 34-year old
trajectory– is the result of work committed and oriented
toward meeting the needs of its Clients, enabling it to evolve
from the traditional Pharmacy that it once was to Latin
America’s largest and most modern Pharmacy Chain
today.
Its source of business is the sale of medications as well
as health, hygiene and personal care products –among others–
to the public through its Pharmacy Chains in the 4
countries where it presently operates: Chile, Mexico,
Brazil, and Peru.
Its main objective is giving access to medications and
good health and, thus contributing to improving the
quality of life of the community. In order to achieve this
objective, Farmacias Ahumada S.A. has oriented its efforts
toward offering a broad array of products and services
providing more economical and higher quality alternatives
to consumers.
com
m
it
m
The various product categories that FASA
has managed to offer its customers a broad
mix representing some 22,600 products;
notable among them: its own private
label products, Recetario Magistral
(compounding) customized prescription
drugs, GNC and others; efforts that
will be continuously boosted in
order to increase brand name
differentiation, customer retention
and purchasing value. The foregoing
has permitted expanding the total
number of customers served, thus
serving over 169 million Clients
last year, which represents a 140%
increase with respect to the
e
nt
previous year, an increment that is mostly attributable to
the incorporation of the Mexican pharmaceutical market.
Business Objecti
ve
Objectiv
The business objective of Farmacias Ahumada S.A. is
to manufacture toiletries, chemical and pharmaceutical
products; to import, export, distribute and market
products of the industry or of similar products of other
industries, both domestically and abroad; the organization,
management and development of retail commercial
establishments for the sale of foodstuffs, such as mini-markets,
selfservice convenience stores, supermarkets and others
and to represent national and foreign companies within
the scope and range of the Company’s business objective.
9
t
r
u
s
t
t
r
u
s
t
i n d i c a t o r s
o f
i n t e r e s t
[ I N D I C A T O R S
O F
I N T E R E S T ]
A. NET EARNINGS.
In billion pesos as of December 2002
Consolidated Profits for the year 2002 amounted to Ch$ 1,738 million, representing 0.6% of sales.
6.8
4.4
3.4
3.7
1.7
12
1998
1999
2000
2001
2002
Does not consolidate with Mexico in 2002
O F
I N T E R E S T ]
B. EBITDA .(Earnings before Interest, Tax Depreciation and Amortization)
In billion pesos as of December 2002
The EBITDA amounted to Ch$8,667 million –2.8% of
sales– while that of the year 2001 amounted to Ch$13,059
13.1
million.
8.7
8.6
5.5
1998
6.4
1999
2000
2001
2002
C. SALES.
In billion pesos as of December 2002.
The Chain’s consolidated sales increased by 7.4% with
respect to the previous year, amounting to Ch$ 313,418
313.4
million, demonstrating FASA’s solid leadership in the
region.
298.5
241.1
173.1
137.5
1998
1999
2000
2001
2002
13
O F
I N T E R E S T ]
D. CAPITAL INVESTMENTS.
In billion pesos as of December 2002.
Following a planned strategy, materialized investments
totaled Ch$ 12,652 million, mainly aimed at operational
improvements to enable increased sales and reduced
costs.
12.7
10.5
8.7
6.5
1998
5.8
1999
2000
2001
2002
14
E. NUMBER OF PHARMACIES.
Continuing our expansion and internationalization
plan, the number of Pharmacies increased by 161% with
respect to the previous year, which is mainly
attributable to 523 new outlets in Mexico and to the
opening of 71 Pharmacies in Chile, Brazil and Peru, all of
963
which meant concluding the year with 963 Pharmacies.
Chile
Brazil
Peru
Mexico
369
315
167 195
1998 1999
2000
2001
2002
O F
I N T E R E S T ]
F. SALES ROOM FLOOR AREA.
IN THOUSAND SQUARE METERS.
Sale room square meters increased by 248% with
respect to the previous year, amounting to 197,000 square
meters, which enabled serving and meeting the needs of
over 169 million Clients. The foregoing is mainly
attributable to the addition of 136,000 square meters in
Mexico.
196.9
Chile
Brazil
Peru
Mexico
56.5
46.4
22.3
16.6
1998
1999
2000
2001
2002
15
G. NUMBER OF CUSTOMERS SERVED.
Thousand clients served.
During the year 2002, the number of Clients served
increased by 140%, as compared to the previous year,
totaling 169 million. This increment was mainly owed to
the addition of Farmacias Benavides in Mexico, which
served more that 94 million customers. The foregoing
implies a huge challenge for the Company, as it continues
to apply high standards of commitment, efficiency and
service to the community.
168.5
Chile
70.3
Brazil
Peru
Mexico
59.2
38.0
45.6
1998 1999
2000
2001
2002
O F
I N T E R E S T ]
H. NUMBER OF EMPLOYEES.
Thousand people.
The Company continues to be an important source of
work in those countries in which it operates. Thus, in
2002, contract personnel increased by 115% -as
compared with the previous year- representing a fully
committed and well trained labor force of over 13,000
13.0
colaborators; of which, over 6,000 of them work in FASA
Mexico.
Chile
Brazil
Peru
Mexico
5.5
3.1
1998
6.1
3.5
1999
2000
2001
2002
16
I. PHARMACEUTICAL MARKET SHARE (SALES),
BY COUNTRY (%)
Chile
FASA is the Number One in all the markets in which
it operates, its market share is:
33.1
Brazil (Southern Zone *)
5.2
66.9
Peru
8.1
Mexico
3.1
94.8
91.9
(*)Drogamed has operations in the states of Parana, Santa Catalina
and Rio Grande di Sul.
96.9
O F
I N T E R E S T ]
“W
e are pleased with our progress to date, but we are mindful
“We
that our job is far from be concluded. The cchallenge
hallenge in the yyears
ears
ahead is to have the foundations that we have laid out these last
years translate into greater yields”.
17
s
t
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u
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p
a
r
e
n
c
y
y
s
c
n
n
a
e
r
r
t
t
r
a
n
s
p
a
p r o p e r t y
o w n e r s h i p
b o a r d
a n d
c o n t r o l
o f
d i r e c t o r s
o r g a n i z a t i o n a l
s t r u c t u r e
b u s i n e s s
c o r p o r a t e
a c t i v i t i e s
s t r u c t u r e
[
P RR OO PP E I R E T DY A
DO W Y N E CR OS H
N IT P R
O A LN ] D
C O N T R O L ]
OWNERSHIP STRUCTURE.
As of December 31, 2002, there were 150,000,000 registered shares subscribed and paid, whose ownership is
distributed among 446 shareholders as follows:
Shareholders
Nº of Shares
Number of Members % de Shareholding
Codner Family
y and Executives
71,396,454
109
47.6%
Falabella
30,000,000
1
20.0%
Institutional
17,138,061
56
11.4%
AIG
11,087,339
4
7.4%
LHF
11,000,010
1
7.3%
9,378,136
275
6.3%
150,000,000
446
100%
Minority Shareholders
Total Shares
20
6.3 %
7.3 %
Codner Family and Executives
7.4 %
Minority Shareholders
47.6 %
LHF
AIG
Institutional
11.4 %
Falabella
20.0 %
[
DO W Y N E CR OS H
N IT P R
O A LN ] D
C O N T R O L ]
CONTROLLER IDENTIFICATION.
The following table depicts the members that comprise the group that controls the company:
Controling Group
Company RUT
Natural Person
Natural Person
RUT
% shareholding
% shareholding of
of the natural person in
the Controling Company Farmacias Ahumada S.A.
Inversiones Galia S.A.
79.799.330-1
José Codner Chijner
4.255.530-4
50.00%
21.6%
Inversiones Zermatt Dos Limitada
77.690.510-0
Jaime Sinay Assael
6.377.768-4
60.00%
0.5%
Inversiones Zermatt Limitada
78.482.780-1
Jaime Sinay Assael
6.377.768-4
60.00%
3.5%
Inversiones Los Alpes S.A.
96.508.010-4
4.255.530-4
99.99%
Inversiones Positano S.A.
96.947.530-8
Denise Codner Dujovne
6.377.789-7
96.63%
4.1%
2.6%
Inversiones La Golondrina S.A.
Inversiones Tomalex S.A.
96.947.550-2
96.947.510-3
Ethel Codner Dujovne
6.377.788-9
Karen Codner Dujovne
7.629.503-4
96.63%
96.63%
Inversiones Tulum Limitada
78.482.810-7
Bernardo Bendov Codner 6.584.450-8
90.00%
2.6%
2.6%
0.7%
The agreements executed by the Controlling Shareholders, are recorded under the respective Shareholder
Agreements duly registered in the Company’s Shareholder Registrar.
The company S.A.C.I. Falabella - RUT Taxpayer identification number 90.749.000-9 - represents 20% of the
property ownership of Farmacias Ahumada S.A. and is not a member of the controlling group.
LIST OF THE COMPANY’S TWELVE PRINCIPAL SHAREHOLDERS
The Company’s 12 largest shareholders represent 74.4% of the property ownership of the Company.
SHAREHOLDER'S NAME
Shareholding as of
December 2002
Percent Property
Ownership
1 INVERSIONES GALIA S.A.
32,326,273
21.6%
2 S.A.C.I. FALABELLA
30,000,000
11,000,010
6,179,018
5,596,998
5,295,944
4,445,155
20.0%
7.3%
4.1%
3.7%
3 LATIN HEALTH CARE CHILE LIMITADA
4 INVERSIONES LOS ALPES S.A.
5 FICE DE RIESGO AIG LATIN AM.EQUITY P.LD.
6 INVERSIONES ZERMATT LTDA.
7 AFP PROVIDA S.A. PARA FONDO DE PENSIONES
3.5%
3.0%
2.6%
8 INVERSIONES LA GOLONDRINA S.A.
3,969,728
9 INVERSIONES POSITANO S.A.
3,969,728
3,969,728
2.6%
10 INVERSIONES TOMALEX S.A.
11 AFP CUPRUM S.A. PARA FONDO DE PENSIONES
3,079,939
2.1%
12 LARRAIN VIAL S.A.CORREDORES DE BOLSA
1,892,926
1.3%
25.6%
13 OTHERS 434 SHAREHOLDER'S
Total
38,274,553
150,000,000
2.6%
100%
21
[
CHANGES
IN
DO W Y N E CR OS H
N IT P R
PROPERTY
O A LN ] D
C O N T R O L ]
OWNERSHIP.
The most important changes in FASA’s property ownership occurring during 2002 were:
Rut
Shareholder
22
Number of 2002
Shares
Number of 2001
Shares
Change %
INVERSIONES GALIA S.A.
79.799.330-1
28,762,026
32,326,273
12.4
AFP PROVIDA S.A. PARA FONDO DE PENSIONES
98.000.400-7
2,563,582
4,445,155
73.4
AFP HABITAT S.A. PAR
98.000.100-8
0
1,788,303
100.0
LARRAIN VIAL S.A.CORREDORES DE BOLSA
80.537.000-9
692,321
1,892,926
173.4
CNA CHILE, COMPAÑIA DE SEGUROS DE VIDA
96.579.280-5
743,315
0
(100.0)
CITICORP CHILE FDO DE INV.MOBILIARIA
96.613.580-8
1,150,932
305,598
(73.4)
MONEDA S.A. AFI PARA PIONERO FIM
96.684.990-8
4,505,241
1,815,000
(59.7)
INVERSIONES ZERMATT LTDA.
77.690.510-0
8,815,575
5,295,944
(39.9)
SHARES PURCHASED/SOLD.
The stock traded among FASA’s board members and senior executives was the following :
Shareholder
Rut
Number of shares
traded
Unit Price
Transaction
Relationship
with the Company
Shareholder
79.799.330-1
3,564,247
851
Inversiones Zermatt Ltda.
78.482.780-1
3,519,631
22.8
Inversiones Zermatt Dos Ltda. 78.690.510-0
3,519,631
22.8
Inversiones Zermatt Dos Ltda. 78.690.510-0
2,815,575
811
Sale
Via board members
96.508.010-4
373,672
1.030
Sale
Via board members
7.770.224-5
500,000
900
José Ferrer F.
14.657.095-K
350,000
740
Marcelo Weisselberger
10.032.623-K
200,000
900
Acquisition
Executive
Eduardo Trénova
7.550.572-8
100,000
900
Acquisition
Executive
Fernando Marín
9.991.512-9
75,000
900
Acquisition
Executive
Cristián Troncoso
6.974.142-8
75,000
900
Acquisition
Executive
Stephan Jarpa
9.028.072-4
50,000
900
Acquisition
Executive
Jorge Vidal
9.747.239-4
75,000
900
Acquisition
Executive
78.482.780-1
31,000
900
Acquisition
Executive
Inversiones Los Alpes S.A.
Alejandro Rosemblatt K.
Rodrigo Nieto
Acquisition
Sale
Acquisition
Acquisition
Sale
Via board members
Via board members
Executive
Executive
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N IT P R
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DIVIDEND POLICY.
The Company’s by laws establish that the minimum dividends to be distributed – unless unanimous agreement of
the shareholders must be the equivalent of 30% of each year’s profit. Notwithstanding the foregoing, the Board may
agree to distribute higher dividends, when the Company’s economic and financial condition, as well as that of the
countries in which it operates, may so warrant.
Next, there is a list of the last 14 dividends paid out by the Company:
Payment Date
Fiscal Year
Condition
01-11-96
1995
1996
Final
Temporary
3.500
58,660,509
7.670
58,660,509
04-28-97
1997
Temporary
Temporary
04-29-98
1997
1997
1.100
6.000
58,660,509
01-23-98
01-12-99
1998
05-10-99
12-13-96
Ch$/Share (Histórical)
Nº Shares
Final
Temporary
1.026
97,947,521
97,947,521
7.000
97,947,521
1998
Final
2.217
97,947,521
01-20-00
1999
Temporary
5.000
148,479,719
05-11-00
1999
Final
2.935
150,000,000
09-20-00
2000
Temporary
4.000
150,000,000
05-10-01
2000
Final
5.928
150,000,000
09-20-01
2001
Temporary
9.000
150,000,000
05-07-02
2001
Final
7.000
150,000,000
2002
Temporary
8.000
150,000,000
09-24-02
23
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SHARE PRICE PERFORMANCE.
Fasa
IPSA
FASA vs IPSA 2002
250
200
150
100
dec-02
sep-02
jun-02
mar-02
dec-01
sep-01
jun-01
mar-01
dec-00
sep-00
jun-00
mar-00
dec-99
sep-99
jun-99
mar-99
dec-98
sep-98
jun-98
mar-98
dec-97
50
The trend shows the excellent performance of the Company as reflected in FASA’s price per share performance,
which grew by 15.8% during 2002, while the IPSA index of selected stock prices was -15.5%.
24
SUMMARY OF SHAREHOLDERS’ COMMENTS AND PROPOSALS.
Pursuant to the provisions established by article 74 of Law N° 18,046 about Publicly Traded Corporations, we
hereby report that no comments were received about the Company’s business operations between January 1 and
December 31, 2002 from majority shareholders or from groups of shareholders adding up to 10% of more of the
Company’s issued shares with right to vote.
t
r
a
n
s
p
a
r
e
n
c
y
“THE MARKET CO
TINUES T O VALUE AND
COTINUES
TRUST OUR WORK. THIS IS REFLECTED IN THE
FACT THA
T WE HA
VE BECOME ONE OF CHILE’S
THAT
HAVE
T OP PERFORMING SHARES OF THE YEAR
2002.
2002.””
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BOARD OF DIRECTORS.
Farmacias Ahumada S.A. is managed by a Board of Directors comprised of 9 board members and 9 alternate
board members elected to serve for a 3-year term of office, subject to reelection.
The Board of Directors is integrated by the following members:
Name
Position
Profession
R.U.T.
Chairman
Pharmacist
4.255.530-4
Eduardo Bellinghausen Pizarro
Vice Chairman
Lawyer
Gabriel Berczely Apor
Juan Cúneo Solari
Board Member
Lic. Degree in Management
Board Member
Comercial Engineer
Alexander Fernández Montenegro
Board Member
Business Administrator
9.604.686-3
Carlos Heller Solari
Board Member
Agronomist
8.717.000-4
Raymond Joseph Dunn IV
Board Member
Jaime Sinay Assael
Board Member
Industrial Civil Engineer
6.377.768-4
Mario Valdivia Bernstein
Board Member
6.987.378-2
Manuel José Vial Vial
Secretary off the
board of directors
Lawyer
5.894.819-5
3.515.184-2
12.084.477-6
3.066.418-3
Foreigner
This Annual Report was unanimously subscribed by the Company’s Board of Directors.
25
DIRECTORS’ FEES
The fees paid out during the year 2002 and 2001 – in local currency – to Farmacias Ahumada S.A.’s Board members, were the
following:
2002
Board
Directors'
of Directors Committee
Ch$ th.
Jose Codner Ch.
13,339
Ch$ th.
3,806
Dividend
Part.
Ch$ th.
2001
Professional
Services
Ch$ th.
Total
Ch$ th.
19,699
2,554
Total
Directors'
Committee
Ch$ th.
Ch$ th.
Ch$ th.
4,785
1,559
19,674
8,254
13,330
Dividend
Part.
Professional
Services
Board
of Directors
Ch$ th.
Ch$ th.
Eduardo Bellinghausen P.
7,022
2,554
9,576
6,695
1,559
Gabriel Berzely A.
5,269
2,554
7,823
4,601
1,559
6,160
Juan Cúneo S.
6,436
2,554
8,990
6,665
1,559
8,224
Alexander Fernández M.
7,019
17,475
7,252
1,559
13,596
Carlos Heller
4,093
5,109
2,554
2,793
1,355
5,448
Raymond Joseph D.
Jaime Sinay A.
6,434
7,022
2,554
5,109
Manuel José Vial V.
2,314
20,010
5,351
2,554
11,022
14,685
6,665
1,542
1,542
4,910
1,199
3,513
8,813
Julio Urrutia E.
Karen Codner
Totals
1,060
1,060
Mario Valdivia B.
Bernardo Fontaine T.
4,785
4,785
1,559
1,500
8,410
1,559
6,170
19,179
4,910
1,559
502
586
586
59,534
10,874
586
586
14,024
21,974
13,815
109,347
65,928
14,355
12,472
8,172
100,927
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DIRECTORS’ EXPENSES
During the year 2002, the expenses incurred by the Board of Directors of Farmacias Ahumada S.A. totaled Ch$
109,347,000, corresponding to Director’s fees, dividend participation and professional services.
The remuneration perceived by board members from Affiliates is only that which was paid out by ABF S.A. to Mrs.
Eduardo Bellinghausen P. and Winston Chinchón totaling Ch$ 4,017 thousand.
DIRECTORS’ COMMITTEE
Farmacias Ahumada S.A.’s Directors’ Committee is comprised by the following board members:
Name
26
Pharmacist
4.255.530-4
Alex Fernández Montenegro
9.604.686-3
6.987.378-2
s
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R.U.T.
p
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Profession
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e
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c
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COMMITTEE ACTIVITIES.
The activities developed by the Directors’ Committee are framed within the provisions established pursuant to
article 50 bis and Law N° 18,046; namely: to examine and approve the financial statements, to propose the external
auditing firm and the risk rating firm, to examine the background information regarding operations as well as the
remuneration systems and benefit plans for Managers and senior executives.
COMMITTEE EXPENSES.
Total expenses incurred by the Directors’ Committee amounted to Ch$ 14,024 thousand.
“T
he history of FFASA
ASA -throughout its 34-y
ear old tr
ajectory–
“The
34-year
trajectory–
is the result of work committed and oriented toward meeting
the needs of its Clients, enabling it to evolve from the
tr
aditional Pharmac
y that it once w
as to Latin America’
traditional
Pharmacy
was
America’ss
y Chain toda
y.”.
largest and most modern Pharmac
today
Pharmacy
27
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FARMACIAS AHUMADA S.A.’S MANAGEMENT.
BOARD
OF DIRECTORS
Enrique Cibié
Corporate Chief Executive Officer
C
Alejandro Rosemblatt
Corporate Chief Finance Officer
Marcelo Salinas
Corporate
p
Chief
Development
p
Officer
Cristián Troncoso
Corporate
p
Chief
ffor Strategic
g Products Officer
Elmer Torres
Director for Pharmaceutical
& Regulatory Affairs
Felipe Hurtado
Corporate General
Secretaryy
Liliana Ramírez
Corporate Auditing
Officer
Rafael Vicuña
General Counsel
28
Bernardo Ben-D
Dov
Fasa Chile Chief Execut
ut
utive
Officer
Ricardo Terrazas
Fasa Brasil Chief Executive
Officer
Ricardo Palominos
Fasa Peru Chief Executive
Officer
Alvaro Rodr
R íguez
g
Fasa Mexi
xico Chief Executive
xic
Officer
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UPPER MANAGEMENT.
Name
Position
Profession
R.U.T.
Nationality
y
Enrique Cibié B.
Corporate Chief Executive Officer
Comercial Engineer
6.027.149-6
Chilean
Alejandro Rosemblatt K.
Corporate Chief Finance Officer
Comercial Engineer
7.770.224-5
Chilean
Elmer Torres C.
Director for Pharmaceutical & Regulatory Affairs
Pharmacist
4.839.517-1
Chilean
Felipe Hurtado P.
Corporate General Secretary
Lawyer
7.010.347-8
Chilean
Marcelo Salinas P.
Corporate Chief Development Officer
8.531.787-3
Chilean
Cristian Troncoso J.
Corporate Chief for Strategic Products Officer
Comercial Engineer
6.974.142-8
Chilean
Liliana Ramírez M.
Bernardo Ben - Dov C.
Corporate Auditing Officer
Fasa Chile Chief Executive Officer
Accountant Auditor
Comercial Engineer
9.405.149-9
6.584.450-8
Chilean
Chilean
Álvaro Rodríguez A.
Fasa Mexico Chief Executive Officer
Lic. Degree in Economics
Ricardo Terrazas M.
Fasa Brazil Chief Executive Officer
Naval Engineer
8.586.797-0
Chilean
Ricardo Palominos R.
Fasa Peru Chief Executive Officer
Medical Technologist
6.513.025-4
Chilean
Foreigner
Mexican
Managers’ Compensation
Gross compensation paid out to Company’s Managers during the year 2002 amounted to Ch$ 2,485,962 thousand.
Incenti
v es Plan
Incentiv
Company executives participate in an Incentives Plan that compensates them as a function of the results
obtained by Management, in addition to a Company’s Share Options program.
Sev
er
ance P
ay
Sever
erance
Pa
During the year 2002, the Company paid out Ch$ 140,468 thousand on account of severance pay for years of
service to those managers who ceased their employment with the Company.
Management of Subsidiaries:
The Company is organized in a manner such as to clearly separate corporate management & direction, from
the tasks related to distribution & sales through Pharmacy Chains operating in the four markets.
29
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1. Senior Management Chile.
Name
Position
Profession
R.U.T.
Nationality
y
Chief Executive Officer
Comercial Engineer
6.584.450-8
Chilean
Chief Comercial Officer
Comercial Engineer
7.550.572-8
Chilean
Chief Operation Officer
Marcelo Weisselberger A.
Chief Admin. and Finance Officer
Comercial Engineer
8.069.997-2
10.032.623-K
Chilean
Chilean
Hernán Ramadanovich C.
Chief Real Estate Property Officer
5.065.612-8
Chilean
Rodrigo Picas O.
Chief Information Systems Officer
7.981.229-3
Chilean
Patricio Lira K.
Chief Logistics Officer
8.494.420-3
Chilean
Bernardo Ben-Dov C.
Eduardo Trenova C.
Jorge Cañas A.
2. Senior Management Mexico.
Name
30
Position
Profession
R.U.T.
Nationality
y
Foreigner
Mexican
Alvaro Rodríguez A.
Jaime Poblete S.
8.285.435-5
Chilean
Enrique Mendoza D.
14.637.209-0
Spanish
Alberto Herane H.
Lawyer
Comercial Engineer
Fernando Benavides S.
6.374.695-9
Foreigner
Chilean
Mexican
3. Senior Management Brazil.
Name
Position
Profession
R.U.T.
Nationality
y
Ricardo Terrazas M.
Naval Engineer
8.586.797-0
Chilean
Paulo Camargo S.
Foreigner
Gilson Coelho N.
Franc Correa R.
Chief Commercial Officer
Foreigner
Brazilian
Brazilian
Accountant
Foreigner
Brazilian
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4. Senior Management - Peru.
Name
Profession
Position
R.U.T.
Nationality
y
6.513.025-4
Chilean
Maryse Verano R.
Foreigner
Peruvian
Luis Díaz U.
Comercial Engineer
8.518.061-4
Chilean
José Antonio Vargas G.
Foreigner
Peruvian
Distribution of Human Resources
Following is a list of employees working at Farmacias Ahumada S.A. and its related companies - as of December
31, 2002 - hired under indefinite term contracts:
FASA Corp
p
FASA Brazil
FASA Chile
FASA Peru
FASA Mexico (*)
Total
Principal Managers and Executives
5
34
4
4
31
78
Pharmacists.
0
574
253
226
0
1,053
7
3,096
1,620
828
6,346
12,897
11
3,704
1,877
1,058
6,377
13,028
Workers
Totals
(*) FFASA
ASA Mexico considers the oper
ation of FFarmacias
armacias Bena
vides, Cafeterias and Photo Shops.
operation
Benavides,
The success of FASA along its existence is based on a solid Human Resources Policy whose aim is to meet the
aspirations of its collaborators by maintaining and developing a healthy and safe working environment enabling
them to develop personally and professionally.
This policy includes, primarily, continuous training at all levels of the organization and
a strong support to extra curricular activities like sports, cultural or social events
that tend to strengthen their sense of belonging and permit enjoying direct and
positive interpersonal relationships.
Its continuous commitment to generating an open and respectful
communication with its employees, guided by the objective of
satisfactorily aligning their individual interests with the goals and
objectives of the Company has helped develop the entrepreneurial
qualities that have distinguished FASA in the domestic market
bolstering its international growth perspectives.
31
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Review of Historical Expansion.
The origins of Farmacias Ahumada S.A. can be traced
diversifying its income sources by providing medications
back to 1968, the year in which Mr. José Codner Chijner
acquired Farmacia York, located on Compañía Street, in
coverage to various regular companies and insurance
companies.
Santiago. Subsequently, in 1969, a second Pharmacy
was opened up on the corner of Ahumada and Huérfanos
In the year 2000, an association was established with
streets, thereby originating the name of today’s Chain.
AIG Capital Partners Inc. (AIG), by virtue of the
incorporation of Fasint Ltda., in which FASA has a 65%
During the decade of the 1970’s, a gradual expansion
plan was launched totaling 10 sale outlets. Likewise,
stake and AIG 35%, with the purpose of making inroads
into the Brazilian market. In May of that same year, it
during that same period, the Company exhibited an
innovative management style that has remained over time.
acquired 77% of Drogamed in US$ 25 million (historical
figure), which is the main Pharmacy Chain in the South of
Brazil.
In the beginning of the decade of the 1990’s, the
32
Company launched a business area growth and
expansion plan. In 1992, Farmacias Ahumada had 44
Also in the year 2000, FASA acquired 50% of the
property ownership of Compañía de Nutrición General
Pharmacies in the Santiago Metropolitan Region and
opened its first Pharmacy in the Fifth Region.
S.A. (CNG), representative of the world’s main nutritional
products company, GNC. This operation enabled the
The Company’s international expansion plan began
Company to distribute in Chile products of natural
origin, nutritional supplements, and vitamins.
in the 1996 with the incorporation of Boticas FASA S.A.
in Peru. That same year, the Company inaugurated a
Farmacias Ahumada S.A. has implemented an expansion
new DLI Distribution Center that significantly enhanced
its logistical operations.
strategy in Latin America, with development plans
oriented mainly to the detection and evaluation of
In December 1997, the Company launched its initial
markets that exhibit high development potential. With
this purpose, during the same year 2000, the Company
public offering, and began trading its shares at the Santiago
Stock Exchange carrying out a US$ 21 million (historical
reorganized into three divisions for the operation
of its Pharmacies in
figure) capital increase. Two years afterwards, in 1999, it
carried out a second capital increase; this time for US$
Chile, Brazil and
Peru, respectively,
47 million.
and created a
corporate
area
In 1998, the Company incorporated its affiliate ABF,
Administradora de Beneficios Farmacéuticos S.A.
whose task is the
overall coordination
(pharmacy benefits manager), with the purpose of
of FASA.
“During the decade of the 1970’
s, a gr
adual
1970’s,
gradual
expansion plan was launched totaling 10
sale outlets. Likewise, during that same
period, the Company exhibited an innovative
management style that has remained over
time”.
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During the first half of the year 2001, the Company
increased its shareholding in CNG to 67% and obtained
Financing
100% control of its business ventures in Peru and Brazil;
in the latter country, jointly with AIG, by virtue of the
On December 5, 2002, Farmacias Ahumada S.A.
issued de-materialized Bonds to the order of the Bearer
acquisition of the remaining 15% and 23% stake in
Boticas FASA and Drogamed, respectively. Also during
in the Chilean market for 2 million UF, registered under
N°309 of October 17, 2002 in the Securities Registrar of
that same year, the Company incorporated its affiliate
Administradora de Beneficios Farmacéuticos do Brasil S.A.
the Superintendence for Securities and Insurance
Companies at the nominal rate of 5.25% per year. The
In October 2001, the Company launched its SAP
maturity of these bonds is 7 years, with 2 years of grace,
and it may be prepaid totally or partially as of the second
project, whose objective was to implant in all the FASA
operations in Chile and Brazil an overall solution that
year. The first amortization installment was set for April
15, 2005.
would provide a common Business Model for all the
Subsidiaries.
These bonds were classified as A- by Fitch and as A
by Humphreys.
During the first half of the year 2002, the Company
executed a Master-type licensing contract with GNC, for
the Peruvian territory. Additionally, it launched its own
Among the individual and consolidated financial
safeguards FASA must maintain a level of indebtedness
website: www.farmaciasahumada.cl, thus becoming the
first Chilean website to make available to users wide
information about medications and pharmaceutical
not higher that 0.8 times and maintain in its individual
financial statement a coverage ratio for net financial
services through the web.
On December 23, 2002, Farmacias Ahumada S.A.,
through its affiliates Fasa Investment S.A. and Inverex S.A.,
took over the stock control of the Mexican company, Far-Ben
S.A. de C.V., by virtue of subscribing and paying a capital
increase in Far-Ben of US$ 45 million.
Throughout its over 34 years, Farmacias
Ahumada S.A. has managed to consolidate
strong competitive advantages that s
ustain its current leadership in the
Retail Pharmaceutical industry. The
size of the Company, its knowledge
of the business, the solid positioning
of its brand names, the privileged
location of its Pharmacies, its
strategic alliances and scope of the
differents products and services
that it delivers, are now an integral
part of its business strategy.
expenses not below 2.5 times, at the closing of each quarter
up to the quarter ending on December 31, 2003, and not
below 3.0 times at the closing of each subsequent quarter.
In addition to the financial clauses it also establishes that
the issuer may not divest itself of essential assets, such as
its trademarks Farmacias Ahumada and FASA.
The funds raised by the referred Bond Issue shall be
allocated to the stock control takeover of the Mexican
company Far-Ben S.A. de C.V.
The Bond issue was placed in the Santiago Stock
Exchange at the average rate of 5.79%, which was
equivalent to a 257-point spread over equivalent bonds
issued by the Central Bank of Chile. The conditions that
the Company was able to secure for such bond
placement are a reflection of the good perception
enjoyed by Farmacias Ahumada S.A. in the market as well
as by its risk rating. The bonds were mostly acquired by
institutional investors, among them pension funds, life
insurance companies, mutual funds, banks, stock
brokers and managed portfolios.
33
[
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Company Activities.
Clients
The Clients of Farmacias Ahumada S.A. add up to over
169 million custumer who visit our Pharmacies yearly in
Chile, Mexico, Brazil and Peru. Additionally, the Client
portfolio is comprised of insurance companies and private
companies, which - through the ABF affiliates subsidiaries
in Chile and Brazil - provide medication benefits to its
affiliate members and employees.
Contracts
Most of the Company’s contracts currently in effect,
relate to the rental of sale outlets for the installation of
Pharmacies.
34
I
T
I
E
S
]
Suppliers
The Company maintains relationships with all
pharmaceutical manufacturers in those countries in
which it operates and other suppliers - both domestic
and foreign - to procure its products for sale.
Insur
ance P
olicies
Insurance
Policies
The insurance program established by Farmacias
Ahumada S.A. and its affiliates includes coverage for the
most diverse risks, including among them, insurance over
stocks, fires, remittal of securities, theft, civil responsability,
equipment and damages for stoppage.
[
B
U
S
I
N
E
S
S
A
C
T
I
V
“ We ha
ve continued to expand our
hav
Drugstore ® type Pharmacy format,
in tandem with the new habits of
Chilean consumers that favors this
type of convenience store format. “
I
T
I
E
S
]
Investment and Financing Policies.
In
v estment P
olic
y
Inv
Polic
olicy
FASA will continue its investment program in order to
meet its expansion plan. To that effect, the Company’s
Management shall be empowered to materialize investments
in the business on the basis of the plans previously
approved by the Board as well as in profitable projects,
according to technical and economic criteria.
F inancing P
olic
y
Polic
olicy
FASA has a financing policy that favors maintaining a
low level of debt. To that effect, the Company has used its
own resources from its profit flow and/or capital increases,
and it is the intention of its shareholders to stick to
such policy in the long run.
Main Consolidated Figures of the Year 2002 (*)
Net Profits totaled over US$ 2.4 million.
Sales grew by 7.4%, reaching US$ 436.1 million.
The consolidated EBITDA amounted to US$12.1 million.
Continuing with the Expansion Plan, investments totaled
US$ 17.6 million.
Upon ending the year 2002, there were 963 Pharmacies
in operation; of which, 234 were in Chile, 115 in Brazil
and 523 in Mexico.
There were 71 new Pharmacy openings during the year.
The company’s Sales room floor area grew by 248%,
totaling 196,000 square meters.
More than 169 million customers were served.
The Company’s total labor force now exceeds 13,000
employees
(*) Operating indicators include Fasa Mexico operation.
The exchange rate was $/US$ = 718.61.
35
[
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T
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I
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S
]
RISK FACTORS.
The Compan
y’
ces are:
Company’
y’ss main risk sour
sources
Risk of increased competition from alternative channels.
The incorporation of alternative distribution channels for pharmaceutical products, such as supermarkets, could
translate into lower market shares and/or a greater pressure over price margins.
Risk associated to the increasing importance of institutional Clients in the health industry
industry..
The effort displayed by Insurance Companies, ISAPRE health care insurance companies and other Institutional
Clients to control health expenses, could lead such entities to acquire a greater weight in their beneficiaries’ medication
purchase decisions, thus applying a greater pressure over price margins or via direct agreements with the drug
manufacturers. In anticipation of such trend, FASA created its ABF, Administradora de Beneficios Farmacéuticos S.A.
affiliate, which is geared precisely to look after the needs and requirements of Institutional Clients.
Risk associated to the internationalization process.
The Company has developed an international expansion program covering Mexico, Brazil and Peru. In the
36
future, it may well wish to consider expanding into other Latin American countries. The outcome of this process
will greatly depend on the Company’s management capacity to adapt its business model to the particular and
specific conditions of those markets that it wishes to penetrate.
Political, regulatory and economic risk of countries.
A negative change in the political, regulatory or economic conditions of the countries could negatively impact
the results of the Company.
RISK CLASSIFICATION
Farmacias Ahumada S.A.’s risk rating as of December 31, 2002 is as follows:
Fitch
Humphreys
Shares
First class, level 3
First class, level 3
Bonds
AA
[
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CORPORATE
P
O
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A
T
E
S
T
R
U
C
T
U
R
E
]
STRUCTURE.
GROUP FASA
100 %
Farmacias
Ahumada S.A
Chile
Brazil
Peru
Mexico
100 %
ABF
100 %
100 %
Lab. FASA
CNG
100 %
DLI
37
100 %
FASAMED
100 %
ABF do Brasil
* This structure represent a simplified ilustration of our subsidiaries.
67,95 %
Farmacias
Benavides
100 %
Boticas
FASA
100 %
Drogueria
La Victoria
p
e
a
c
e
o
f
m
i
n
d
p
e
a
c
e
o
f
m
i
n
d
I n d i v i d u a l
B a c k g r o u n d
i d e n t i f i c a t i o n
r e l a t e d
o f
o t h e r
I n f o r m a t i o n
a f f i l i a t e d
( c o - l i n k e d )
a n d
c o m p a n i e s
pe
a
ce
of
mind
40
[ I I N D I V I D U A L
B A C K G R O U N D
I N F O R M A T I O N ]
CHILE / FARMACIAS AHUMADA
Farmacias Ahumada S.A, is Chile’s largest Pharmacy Chain in terms of sales, totaling Ch$ 233,685 million. It grew
by 6.7% with respect to the year 2001 and it ended the year with a market share of 33.1%. As of the month of
December there were 234 Pharmacies operating in 36 different cities –from Arica to Punta Arenas– totaling 35,000
square meters of sale space serving 51.3 million Clients.
Name
Position
Profession
R.U.T.
Nationality
y
Bernardo Ben-Dov C.
Comercial Engineer
6.584.450-8
Chilean
Eduardo Trenova C.
Comercial Engineer
7.550.572-8
Chilean
Jorge Cañas A.
Marcelo Weisselberger A.
Comercial Engineer
8.069.997-2
10.032.623-K
Chilean
Chilean
Hernán Ramadanovich C.
Chief Real Estate Property Officer
5.065.612-8
Chilean
Rodrigo Picas O.
7.981.229-3
Chilean
Patricio Lira K.
Chief Logistics Officer
8.494.420-3
Chilean
41
Main Figures of the Year 2002
(In million of chilean pesos as of December 2002)
Sales: M$233,685
Sales growth: 6.7%
Market Share: 33.1%
Number of Pharmacies: 234
Openings: 48
Closures: 3
Square meters: 34,930
Coverage: Arica to Punta Arenas
Number of cities: 36
Clients served: 51 million
Personnel: 3,704
Investments during the period: $10,204 million
[ I N D I V I D U A L
B A C K G R O U N D
The pharmaceutical retail market grew by
8.1% with respect to 2001, generating sales
amounting to Ch$ 474,000 million, i.e.
approximately US$ 665 million. However, in
terms of units, the pharmaceutical market
shrunk by –1.6%, with a
approximately 165 million units.
total
of
“T
he number of Pharmacies of the Chain grew
“The
by 45 net sale outlets, while other 6 outlets
were refurbished, which means having
inaugurated or remodeled a Pharmacy
every 7 days”.
The number of Pharmacies of the Chain grew by 45
net sale outlets, while other 6 outlets were refurbished,
which means having inaugurated or remodeled one
This positioning was strengthened
by the investment made in
Pharmacy every 7 days. This growth added 6,000 square
meters of sale room space to the operations.
professionals and equipment
toward the development and
Sales totaled Ch$ 233,685 million, thus reflecting a
decrease in comparable stores of merely 0.12% (SSS) with
respect to the year 2001, which was principally due to
42
of its excellent price/quality ratio.
control in the quality of
products.
In order to boost and
the high number of Pharmacies inaugurated by various
Chains throughout the year and the adverse domestic
recognize its most important
Clients, the Company
consumption scenario affecting the country. EBITDA
(Earnings Before Interest, Taxes, Depreciation and
launched its FasaClub
Fidelization Program,
Amortization) was 3.1% of sales, which compares
unfavorably with the 5.3% achieved in the year 2001.
which recognizes that the
strategic
focus
to
The total investment –of FASA and its subsidiaries in
maintain the trade name
leadership rests in
Chile– during 2002, amounted to Ch$ 10,204 million,
mostly allocated to continue the Pharmacy expansion
generating a longterm relationship with such
and remodeling program and certain technological
projects, noteworthy among which is the start-up of an
Clients. As of December,
FasaClub has registered
ERP (SAP) system.
1,543,918 card holders
with a use rate of over 50%.
ABF, Administradora de Beneficios Farmacéuticos S.A.
-an affiliate of Farmacias Ahumada S.A., whose mission
consists in designing and managing pharmaceutical
benefits that would facilitate individual’s access to
medications– grew by 4% through Farmacias Ahumada
S.A., as compared to the year 2001, representing about
7% of Farmacias Ahumada S.A.’s total sales, maintaining
over 2 million beneficiaries by the closing of the year
2002 and a 12% growth of approved transactions.
Private label products shared of total revenues was
6.3%, which means that each day consumers have greater
confidence in FASA products (the “house brand”) because
“T
he total
“The
investment –of
FASA and its
affiliates in
Chile– during
2002, amounted
to Ch$ 10,204
million, mostly
allocated to
continue the
Pharmacy
expansion and
remodeling
program and
certain
technological
projects,
notew
orth
y
noteworth
orthy
among which is
the start-up of an
ERP (SAP)
system”.
B A C K G R O U N D
Compañía de Nutrición General S.A. -an affiliate of
Farmacias Ahumada S.A. oriented to market GNC products–
experienced a revenue growth of 62.2%, when compared
with the previous year. Its product lines: Vitamins, Minerals,
Natural Products, among others, are available to consumers
throughout the entire Chain of Farmacias Ahumada. By the
date of closing of the year 2002, there were 4 free standing
outlets and 40 such outlets placed inside the Pharmacies
under the denomination of “ Store Within Store ” and
“Assisted Corner“.
The functions of distribution and logistics are carried
out through our own Distribution Center (DLI Distribuidora Logística Integral), whose objective is to
optimize the supply Chain from the reception of
products on the part of suppliers up to its delivery to the
Pharmacies, for which purpose it runs facilities using up
to 16,000 square meters in the city of Santiago. Its
current technology standards place this Distribution
Center at the level of international logistics standards.
The pharmaceutical services has incorpored 5 new
Nursery Services, now totaling 33 units from Arica to Punta
Farmacias Ahumada S.A. and the University of Chile. On
the other hand, the programs given by the University of
Valparaiso, the Catholic University and the University of
Concepción had very good results on the part of the
students and over 120 of them carried out academic
activities in the company.
Additionally, the III Pharmaceutical Convention of
Farmacias Ahumada was held in the year with the
participation of over 400 professionals from Chile, Brazil
and Peru, which undoubtedly constituted a significant
contribution to pharmaceutical development and
collaboration within the Company. Also, we held the First
School of Service, in which professionals from all areas
of the Company attended courses about various topics
such as leadership, teamwork, negotiation techniques and
customer service culture.
As of the closing of the year, the Company employed
3,704 colaborators; 3,100 of which work in Pharmacies,
470 in the Headquarters and 134 in the Distribution
Center.
Arenas. These nursery services provided 322,000 services
and increased sales by 216% as compared with the year
2001.
The Center for Toxicological and Medication
Information resolved more than 193,000 inqueries
received over the telephone or via our website, thereby
becoming the most heavily demanded center in this
ambit of the country.
Within the realm of training activities, 100
Pharmacists obtained a Pharmacy Management
Diploma issued by the School of Physical
Sciences and Mathematics of the University
of Chile; other 60 Pharmacists took the
e-Farm remote education program, in
technical topics given by the School of
Chemical and Pharmaceutical Sciences of
the same university, within the framework
of the standing agreements between
43
p
e
a
c e
o
f
m i
n
d
B A C K G R O U N D
MEXICO / FARMACIAS BENAVIDES.
Far-Ben, S.A. de C.V. is Mexico’s largest
Pharmacy Chain in number of branch stores and
sales. It operates under the business name of
Farmacias Benavides and its main activity is the
retail marketing of products related to the health,
welfare and quality of life of its customers.
Included among the variety of products offered,
those that stand out are the medications, toiletries,
cosmetic products, personal hygiene products,
photography and miscellaneous. During the year
2002, the sale of medications represented 51.6%
of total sales.
In 2002, Farmacias Benavides completed an 85year old history, during which time it has achieved broad
44
Main Figures of the Year 2002*
(In million of Mexican pesos as of December 2002)
Sales: $4,435
Sales growth: -5.7%
Market Share: 3.1%
Openings: 8
Closures: 69
Realocations: 2
Photo Shops: 20
Cafeterias: 7
Coverage: Northern and Western Mexico, including 17 of the
32 states.
Customers served: 94 million
Personnel: 6,377
Investments during the period: $31,1
(*) It does not include Farmacias El Fénix
Upper Management
Name
Alvaro Rodríguez A.
Position
Profession
R.U.T.
Nationalityy
Foreigner
Mexican
Chilean
Jaime Poblete S.
8.285.435-5
Enrique Mendoza D.
Spanish
Lawyer
Comercial Engineer
14.637.209-0
Alberto Herane H.
Fernando Benavides S.
6.374.695-9
Foreigner
Chilean
Mexican
m
p
e
a
c
e
o
f
d
i n
B A C K G R O U N D
coverage over 108 cities along Mexico’s Northern
and Western regions. Currently, it operates 523
Pharmacies, 20 Photographic Stores and 7
Cafeterias including 136,000 square meters of
overall sales floor pace.
Farmacias Benavides’ 2002 sales totaled
M$ 4,435 million (Mexican pesos), a drop of 5.7%
as compared with 2001 sales. Its nationwide share
of the pharmaceutical market –according to IMS–
Health is 3.1%. The company served more than
94.4 million customers during the year; a rate of
259,000 per day.
Far-Ben S.A. de C.V. has a 50% stake in Droguería y
Farmacias El Fénix S.A. de C.V., a Chain that operates 65
Pharmacies under the business name of Farmacias El
Fénix, concentrated around the Gulf of Mexico. During
the year 2002, its revenues were M$ 487 million,
representing an 11.5% drop with respect to the year 2001.
Beginning with the ending of fiscal year 2002, it is shown
Mexico’s private pharmaceutical market experienced
a nominal growth of 12.3%, as compared to the year
under non-operating results.
2001, generating sales in the order of M$ 69 billion
(Mexican pesos), i.e. approximately US$ 7.2 billion at
The shares of Farmacias Benavides are traded in the
Mexican Stock Exchange, under the acronym of
prices to the public. In terms of units, sales increased by
1.4%, totaling about 979 million units.
“BEVIDESB”.
Toward the end of the year 2001, as a part of a
detailed profitability and
contribution analysis, it was
“T
he goal is to create a management team, as well as to
“The
strengthen controls in terms of human resources, expenses,
working capital and investments, while overhauling the
compan
y’
company’
y’ss organizational culture”.
decided to launch a
selective store closure
program. As a result of that,
67 branches were closed
during the year, ending the
year 2002 with 523 Pharmacies
in 3 different formats: 487 of
them in the traditional
Drugstore® format; 13 in clinics and hospitals, and 23 in
supermarkets.
45
B A C K G R O U N D
Sales totaled M$4,435 million, which marked a 5.7%
drop with respect to 2001. EBITDA (Earnings Before Interest,
Taxes, Depreciation and Amortization) amounted to
implied a real drop of 4.9% when compared to those of
the year 2001, while it was strongly impacted by ceasing
sales to ISSTESON (Health Institution of the State of Sonora)
because of its low level of profitability.
“In 2002, FFarmacias
armacias Bena
vides completed an 85-y
ear
Benavides
85-year
old history
hic
h time it has ac
hiev
ed broad
achiev
hieved
history,, during w
whic
hich
co
ver
age o
ver 108 cities along Mexico’
cov
erage
ov
Mexico’ss Northern and
Western regions”.
M$63.4 million, representing a 24.0% drop, as compared
to 2001.
Those Clients with the greatest increase
were PEMEX (15.6%), Private Companies
(13.4%) and Banks (2.7%).
During the year 2002, the Vecino
Consentido (Pampered Neighbor) and
Tratamientos Prolongados (Extended
Treatment) programs were continued. On
the other hand, the Tratamientos
Prolongados program focused on those persons with
chronic illnesses and granted preferential discounts to its
members.
On the other hand, the sale of medications represented
46
51.6% of total sales; thus, similar and
generic medications represented 5.9% of total sales, as
compared to 4.8% in 2001.
As of the closing of the year, the company employed
6,377 persons; of which, 5,466 work in the Pharmacies,
245 in the Regional Offices, 353 at the Main Headquarters,
54 in Logistics, and 259 in Photo Shops and Cafeterias.
Credit sales represented 9.7% of total sales,
amounting to M$ 428 million. This
During the year 2002, Farmacias Benavides
concentrated in its process of financial and capital
restructuring. In August of the same year, a letter of
intention was signed with Farmacias Ahumada S.A. that
contained the general terms and conditions of the financial
restructuring. In September, the Assembly of Bondholders
(Asamblea de Obligacionistas) proposed –and it was so
accepted– to extend the expiration date of the company’s
Obligations (US$ 70 million) for another 7 years, raising
the rate of interest to 6% in UDIS. Additionally, for those
bondholders who would so decide for reasons or liquidity
or equity, they would be eligible –at their own
discretion– to opt in favor of receiving their capital in
advance, with a discount of 25%, or to convert their
obligations in BEVIDES shares.
The US$ 45 million capitalization process on the part
of Farmacias Ahumada S.A. was completed on December 23,
2002, whereas on December 30 the information was
publicly released that 42.3% of the BEVIDES 97U bond
B A C K G R O U N D
issue would continue until its date of expiration. FASA
Farmacias Benavides’ main projects are:
retained 67.95% of property ownership.
· To renew its systems infrastructure
In this manner, Farmacias Benavides maintained –as
of the end of the year 2002– a total debt of US$ 29.1
· To introduce a pricing policy consistent with
the market
million, plus cash and time deposits totaling US$ 26.3
million.
· To develop commercial projects: Recetario Magistral
(Compounding) and own private label products.
Upon completion of the financial restructuring, a new
chapter opens up in the history of Farmacias Benavides.
A portion of its cash and time deposit investments will be
· To adapt the best Logistics practices.
· To remodel 276 branch stores
· To develop a project of professional services
to customers.
allocated to put the house in order and to establish the
basis to recover profitability and leadership. The goal is to
create a management team, as well as to strengthen
controls in terms of human resources,
expenses, working capital and
investments, while overhauling the
company’s
culture.
“Upon completion of the
financial restructuring, a new
chapter opens up in the
history
of
FFa
armacias
Bena
vides. A portion of its
Benavides.
cash and time deposit
investments will be allocated
to put the house in order and
to establish the basis to
recover profitability and
leadership”.
organizational
47
B A C K G R O U N D
BRASIL / DROGAMED.
Drogamed is present in the States of
Parana, Santa Catarina and Rio Grande
do Sul; it recorded sales of R$ 185
million and grew by 15.4% with
respect to 2001, while reaching a
market share in southern Brazil of
5.2%. As of December there were 115
Pharmacies operating in 23 different
cities of southern Brazil, managing
through 18,000 square meters
achievieng the attention of over 13 million
customers.
Brazil is the sixth largest pharmaceutical
Main figures of 2002
(In millon Brazilian reales of December 2002)
Sales: R$ 185 million
Sales growth: 15.4%
Market share: 5.2%
Openings: 11
Closures: 4
Coverage: Southern Brazil
Clients served: 12,9 million
Total personnel: 1,877
Fiscal year investments: R$ 2,8 million
market in the world and the second in Latin America,
with medication sales of approximately US$ 6.3
billion per year at retail prices made through some 52,000
Pharmacies. The States of Parana, Santa Catarina and Rio
48
Upper Management.
Name
Position
Profession
R.U.T.
Nationalityy
Ricardo Terrazas M.
Naval Engineer
8.586.797-0
Chilean
Paulo Camargo S.
Foreigner
Gilson Coelho N.
Franc Correa R.
Foreigner
Brazilian
Brazilian
Accountant
Foreigner
Brazilian
B A C K G R O U N D
Grande do Sul represent almost 15% of the total market,
During the year 2002, the number of Pharmacies grew
with sales in the range of US$ 945 million at retail prices
and a population bordering the 25 million inhabitants.
by 6.5% closing the year with a total of 114 Pharmacies.
This growth added 1,000 square meters to sales room
operations
The industry’s high degree of fragmentation
represents an attractive opportunity for
Pharmacy Chains, which are in a position to
increase their market share by taking
advantage of cost benefits associated to a
larger business volume, the implementation
of
technological
and
logistical
improvements, and marketing campaigns.
“Drogamed, continuing with its policy of adding
value to the Client / Pharmacist relationship,
launched a program aimed at developing the
modern Pharmacy creating the specialized area of
Pharmaceutical Services“.
The regulations being promoted by the Government
of Brazil have been aimed, principally, at reducing the
With now almost three years of operation following
its acquisition, Drogamed is the main Chain in the State
cost of medications for the population, especially through
the promotion of generic brands, thereby weakening the
of Parana. Its sales increased to R$ 185 million, growing
by 15.4% as compared to 2001. EBITDA (Earnings
position of independent Pharmacies with respect to the
Chains which, by virtue of a rationalized operation
Before Interest, Taxes, Depreciation and Amortization)
increased by 46.2% with respect to 2001 marking 3.0%
focused on obtaining economies of scale, are able to
operate with lower priced products.
of sales, as compared with 2.3% for the previous year;
the latter because of improved operational efficiency.
As part of the company’s expansion plan, investments
were made in the order of R$ 2.8 million allocated to
opening and remodeling Pharmacies, modernizing the
Distribution Center, developing several technological -type
The main Chains now operating in the states of Parana, Santa
Catarina and Río Grande do Sul are:
STATE
Santa Catarina
Parana
Rio Grande do Sul
DRUG CHAIN
SALES 2002
(
(MMUS$)
$) ((*))
products, noteworthy among which is the installation of
an SAP enterprise management system, adapting the
point-of-sale software developed in Chile to the local
conditions, connecting the Pharmacies in real time with
central servers and expanding the operations of Recetario
Magistral (compounding) customized
SESI Farmacias
34
Drogaria Catarinense
23
Farma & Farma
21
Masterfarma
38
Drogamed (*)
45
Nissei
17
experienced by this
service during
Panvel
63
2002.
Panvel Franquias
11
Sesi
35
Capile
13
Assoc. Agafarma
35
(*) The Exchange Rate was R$/US$=3,5
prescription drugs, all of which
required building a new
laboratory to meet the
increasing demand
49
B A C K G R O U N D
ABF do Brasil is the business unit affiliate created after
personal development, motivation and overall business
the one existing in Chile, with the objective of managing
the pharmaceutical benefits both of regular companies
vision. Within this sphere, the creation of Drogamed
University stands out which -through four different training
and insurance companies. ABF offers on-line services at
the time of purchase, granting immediate allowances for
modules (i.e., Understanding the Pharmacy; 101%
Manager; Sales Techniques Certification; and Passion for
medication coverage to the beneficiaries of the Companies
and Institutions. Additionally, it manages agreements with
Sales)- has managed to train 100% of the company’s
employees.
companies enabling employees to acquire products on
line with the Pharmacy and pay afterwards via employee
As of the date of closing, the Company employed 1,877
payroll deductions. For the year 2002 it consolidated its
operations; noteworthy among which was the commercial
persons; of which 1,509 work in the Pharmacies, while
255 do so at the company’s Main Headquarters and 113
agreement executed with Unimed-Londrina, that city’s
main health plan.
in the Distribution Center.
Our own private label products have began to
be successfully marketed and consumers are now
beginning to appreciate the benefits of this type of
Drogamed, continuing with its policy of adding value
to the Client / Pharmacist relationship, launched a
program aimed at developing the modern Pharmacy
crea-ting the specialized area of Pharmaceutical Services.
To that effect, it makes available exclusive floor space
within five pilot Pharmacies to provide professional
advice to Clients in a personalized manner, while
m
offering the possibility of maintaining a confidential
pharmacological file per Client, keeping records of
o
c
a
e
a Pharmaceutical Services Program, fully in line with the
overall objectives of the WHO World Health Organization.
e
prescriptions, illnesses and allergic reactions, while
attempting –in the near future– to engulf this activity within
p
50
products, which have reached a 0.8% share of total Chain
sales.
In accordance with its own corporate Human
Resources Policy, Drogamed focused on training its
collaborators providing new management tools so as to
create a solid base enabling them to face the new
challenges that lie ahead. In this sense, training was
oriented to Pharmacy personnel giving them specific
management know-how, such as sales techniques,
merchandising, computer use, hygiene and administration,
among others. Similarly, Pharmacy managers received
continuous training related to leadership abilities,
f
d
i n
B A C K G R O U N D
PERU / BOTICAS FASA.
Boticas Fasa -present in the cities
of Lima, Trujillo, Chiclayo, Piura,
Talara, Chincha, Arequipa and
Huancayo– is now Peru’s leading
Pharmacy Chain, with sales totaling
S$ 160 million (Peruvian soles), it
experienced a 25.8% growth and
achieved a 15.2% market share in the
City of Lima; it has 91 Pharmacies,
spreading over 7,675 square meters of
sales room floor space, serving over 9.8
million Clients.
Main Figures for 2002
(In million Peruvian soles of December 2002)
Sales: S$ 160 million
Sales growth: 25.8%
Market share: 8.1%
Openings: 22
Closures: 4
Square Meters: 7,675
Coverage: Lima and Provinces (North, Center and South
Peru)
Number of cities: 8
Clients served: 9.8 million
Total personnel: 1,058
Fiscal year investments: S$ 6 million
Upper Management.
51
Name
Position
Profession
R.U.T.
Nationality
y
6.513.025-4
Chilean
Maryse Verano R.
Foreigner
Peruvian
Luis Díaz U.
Comercial Engineer
8.518.061-4
Chilean
José Antonio Vargas G.
Industrial Engineer
Foreigner
Peruvian
“Las vventas
entas crecieron
53% con respecto al
2000, alcanzando los
US$37 millones, que
permitieron aumentar
la participación de
mer
cado a 12,5% en
mercado
Lima.
Lima.””
B A C K G R O U N D
Peru’s pharmaceutical market dropped by 0.1% in
competition is represented by 6 Chains, the second
terms of value, as compared with the 2001 period, with
total invoicing amounting to US$ 334,5 million (US$ 445
largest of which has only 40 stores.
million at retail prices). The unit volume increased by
3.4%, amounting to 61 million units per year.
The Company’s expansion plan called for a S$ 6 million
(Peruvian soles) investment, is to be mostly allocated to
opening new Pharmacies, to cutting edge systems and to
The Chain’s number of stores increased by 26%, with
22 new points of sale, covering the most important areas
of the country.
In order to expand its coverage, Boticas Fasa
entered into strategic alliances with leading
companies in the industry, including the Santa
Hipermercado Tottus (Falabella)
in the North Cone of Lima.
c
e
them in the Department of
Arequipa and the other in Mega
a
simultaneously; and finally, Falabella,
which houses 2 Pharmacies, one of
p
52
f
e
houses 10 and Blockbuster ended the
year with 4 new points opening up
d
o
Isabel Supermarket Chain, which houses 15
Pharmacies, Plaza Vea, which houses 4, Shell
m
i
n
EBITDA (Earnings Before
Interest, Taxes, Depreciation
and Amortization) is S$ 2
million.
The Company competes
in a highly fragmented market,
where the total number of
Pharmacies existing in the
country is approximately
11,000. In terms of sales, it is
estimated that the Pharmacy
Chains represent anywhere
between 35-40% of Peru’s total
private market sales. Pharmacy
Chains have experienced a significant
growth during these last years in
Peru and this trend is expected to
continue in the future. Our main
“P
eru’
y
“Peru’
eru’ss pharmaceutical market dropped b
by
0.1% in terms of value, as compared with
the 2001 period, with total invoicing
amounting to US$ 334,5 million (US$ 445
million at retail prices). The unit vvolume
olume
increased by 3.4%, amounting to 61
million units per year”.
B A C K G R O U N D
the Recetario Magistral (compounding prescription
operation). Some of the most significant investments made
were in the area of technology, basically computer platform
changes, migrating to a relational Database, in addition to
incorporating the new Financing & Accounting System
Pharmacists, which seeks to develop individual skills and
expertise so that pharmaceutical professionals may
assume greater responsibilities and challenges in the
future.
(Oracle Financial) and merchandising systems, mainly
aimed at enhancing efficiency and
information retrieval speed. These
investments enable us to meet new
demands from our Clients and to develop
systems that serve as basis to grow and
differentiate ourselves even further from
our competitors.
“Boticas FFasa,
asa, in line with its Human Resour
ces P
olic
y,
Resources
Polic
olicy
has made it a priority within its objectives to train its
personnel by means of a continuous training program
through various means”.
The commercial effort of Boticas Fasa
is aimed at positioning its private label
products, one of whose main attributes is its good priceto-quality ratio. Its share of total sales during the period
represented 2.2%.
For newly drafted employees, we developed staff
induction programs aimed at boosting their individual
capacities, focusing them on serving and looking after
the needs of the Client.
Similarly, during the present year the company
incorporated GNC –a world renowned brand name – to
the line of brands managed by FASA in the market.
In a complementary manner –and with the purpose of
identifying its brand name and strengthening its image of
service to the community– Boticas Fasa has launched
several gratuitous public health campaigns offering
medical consultations by specialty and medical samples,
with successful results in all the social segments where
these campaigns have been launched.
FONOFASA continued to develop the concept of
Pharmaceutical Services through information and dispensation
provided to our chronic Clients via special programs.
Boticas Fasa, in line with its Human Resources Policy,
has made it a priority within its objectives to train its
personnel by means of a continuous training program
through various means. Noteworthy among them are the
agreements executed with Instituto Técnico Carrión
institute, for Pharmaceutical Technicians; and with
Universidad Nacional Mayor de San Marco university, in
order to develop the Pharmaceutical Service Program for
By the closing of the year, the Company employed
1,058 colaborators; 847 of which work in the pharmacies,
168 in Headquarters; and 43 in the Distribution Center.
53
STATEMENT OF LIABILITY.
The undersigned board members of Farmacias Ahumada S.A. and its general manager, who execute this statement
of liability, hereby assume responsibility -under oath- about the veracity of all the information provided in the present
Annual Report, pursuant to general regulation N° 30, issued by the Superintendence for Securities and Insurance
Companies.
Name
54
Position
R.U.T.
Chairman
4.255.530-4
Vice Chairman
3.515.184-2
Board Member
12.084.477-6
Juan Cúneo Solari
Board Member
3.066.418-3
Board Member
9.604.686-3
Board Member
8.717.000-4
Jaime Sinay Assael
Board Member
6.377.768-4
Board Member
6.987.378-2
Raymond Joseph Dunn IV
Board Member
Foreigner
Enrique Cibié Bluth
Corporate Chief
Executive Officer
6.027.149-6
[IDENTIFICATION OF OTHER AFFILIATED AND RELATED (CO-LINKED) COMPANIES ]
Name: ABF, Administradora de Beneficios Farmacéuticos S.A.
Type of Entity: Private Corporation – Fully Owned Subsidiary (Chilean).
(Taxpa
axpay
RUT (T
axpa
y er identification number): 96.863.980-3
Address: Vicuña Mackenna 585, Santiago, Chile.
elephone-Fax:
Telephone-F
ax: 631.30.40 - 222.22.58
External A uditors: Deloitte & Touche.
Legal Counsel: Vial y Palma Abogados.
Subscribed and P
aid Capital as of 31.12.02: CH $1,533,613 thousand
Paid
% direct and indirect shareholding as of 31.12.02: 100.00
% of In
v estment o
v er P
arent Compan
y Assets: 0,4
Inv
ov
Parent
Company
v e: To organize, manage and develop health care systems, particularly systems
Company’
y’ss Business Objecti
Objectiv
Compan
y’
related to the intermediation, marketing, distribution and consumption of medications.
Chairman of the Board of Directors: Bernardo Ben-Dov Codner.
Members of the Board of Directors: Alejandro Rosemblatt Kiblisky, Enrique Cibié Bluth, Marcelo Weisselberger
Araujo, Eduardo Trénova Celedón.
General Manager: Ricardo Bahamondes Lorca.
Name: Laboratorios FASA S.A.
(Taxpa
axpay
RUT (T
axpa
y er identification number): 79.663.290-9
elephone-Fax:
Telephone-F
ax: 631.36.37 - 665.32.24
Subscribed and P
aid Capital as of 31.12.02: CH $531,240 thousand
Paid
% of In
v estment o
v er P
arent Compan
y Assets: 0.5
Inv
ov
Parent
Company
v e: To manufacture, buy, sell, distribute and, in general, to market pharmaceutical
Company’
Objectiv
Compan
y’
products, cosmetics and toiletries, by itself or on behalf of third parties.
Chairman of the Board of Directors: Enrique Cibié Bluth.
Members of the Board of Directors: Alejandro Rosemblatt Kiblisky, Bernardo Ben-Dov Codner.
General
Gener
al Manager: Cristián Troncoso Jorquera.
55
Name: Compañía de Nutrición General S.A.
axpay
RUT Taxpa
y er identification number: 96.792.260-9
Telephone - FFax:
ax: 366.02.56
Subscribed and P
Paid
aid Capital as of 31.12.02: CH $ 941,482 thousand
y Assets: 0.2
Inv
ov
Parent
Company
% of In
v estment o
v er P
arent Compan
Company’
Objectiv
Compan
y’
v e: To manufacture, elaborate, import, export, buy, sell, distribute and, in general, to
market, in any way, all kinds of pharmaceutical, dietetic, nutritional, homeopathic and organic
products, whether of mineral, animal or vegetal origin; vitamins, cosmetics, beauty products and
others.
Chairman of the Board of Directors: Bernardo Ben-Dov Codner.
Members of the Board of Directors: Marcelo Weisselberger Araujo, Eduardo Trénova Celedón, Jaime Sinay Assael,
Cristián Troncoso Jorquiera.
General
Gener
al Manager: Ricardo Leiva Vilarnau.
56
Name: Distribuidora y Logística Integral S.A.
axpay
RUT Taxpa
Address: Marathon 3830, Macul, Santiago, Chile.
Telephone - FFax:
ax: 631.33.78 – 631.33.52
aid Capital as of 31.12.02: CH$ 268,932 thousand
Paid
Subscribed and P
Company’
Objectiv
Compan
y’
v e: To manufacture, buy, sell, distribute and, in general, to market pharmaceutical
products, cosmetics and toiletries, by itself or on behalf of third parties.
Chairman of the Board of Directors: Enrique Cibié Bluth
Members of the Board of Directors: Alejandro Rosemblatt Kiblisky, Bernardo Ben-Dov Codner
General
Gener
al Manager: Patricio Lira Kappes.
Name: Fasa Investment S.A.
axpay
RUT Taxpa
Address: Alonso de Córdova 2600, oficina 22, Vitacura, Santiago, Chile.
Telephone - FFax:
ax: 207.01.01
Paid
Subscribed and P
aid Capital as of 31.12.02: CH$ 48,055,235 thousand
Inv
ov
Parent
Company
% of In
v estment o
v er P
arent Compan
y Assets: 30.8
Compan
y’
v e: To make all kinds of domestic or foreign investments in real estate property, personal
Company’
Objectiv
and movable property, tangible and intangible, and to manage and develop landed property, movable
property, commercial establishments, on account of itself or of third parties; to buy or sell securities
and shares of stock on any account and, likewise, to acquire stock or rights in all kinds of companies
incorporated or under incorporation, and to perform all kinds of domestic or foreign trade operations.
Chairman of the Board of Directors: José Codner Chijner.
Members of the Board of Directors: Eduardo Bellinghausen Pizarro, Mario Valdivia Bernstein, Enrique Cibié Bluth.
General
Gener
al Manager: Alejandro Rosemblatt Kiblisky.
Name: Inverex S.A.
axpay
RUT Taxpa
ax: 631 36 50 – 661 94 10
Telephone - FFax:
Subscribed and P
Paid
Company’
Objectiv
Compan
y’
v e: To make all kinds of domestic or foreign investments in real estate property, personal
and movable property, tangible and intangible, and to manage and develop landed property, movable
property, commercial establishments, on account of itself or of third parties; to buy or sell securities
and shares of stock on any account and, likewise, to acquire stock or rights in all kinds of companies
incorporated or under incorporation, and to perform all kinds of domestic or foreign trade operations.
Chairman of the Board of Directors: José Codner Chijner
Members of the Board of Directors: Eduardo Bellinghausen Pizarro, Enrique Cibié Bluth, Mario Valdivia Bernstein.
General
Gener
al Manager: Alejandro Rosemblatt Kiblisky.
57
Name: Far-Ben, S.A. de C.V.
Type of Entity: Public Corporation - Mexican Stock Exchange (Mexican).
R.F.C.:
R.F
.C.: FBE 911021 CN8
Address: Ave. Pino Suárez #602 Zona Centro Int.502 C.P.64000
Telephone: (52) 8150-7700
Legal Counsel: Creel, García-Cuellar y Müggenburg
Subscribed and P
aid Capital as of 31.12.02: CH$81,830,800 thousand
Paid
% of direct and indirect shareholding as of 31.12.02: 67.93
Company’
Objectiv
Compan
y’
v e: To acquire and develop commercial business operations in the area of medications
and Pharmacy; to establish and develop any kinds of industrial business that might be beneficial to the
company; to buy and sell medications wholesale or retail as well as products and services in the areas
of photography, perfumes and toiletries, cosmetics, foodstuffs, personal hygiene, candies, toys, among
others, the import and export of all kinds of foreign or domestic products; to operate in the area of
commissions and accept and carry out representations for industries and negotiations of any nature.
Chairman of the Board of Directors: Jaime Benavides Pompa.
Members of the Board of Directors: José Codner Chijner, Juan Cúneo Solari, Enrique Cibié Bluth, Bernardo
58
Ben-Dov Codner, Alejandro Rosemblatt Kiblisky, Jaime Sinay Assael, Miguel Albuerne Wendorf,
Sergio Autrey Maza, Armando Garza Sada, Jorge Fernández Guajardo.
General Manager: Álvaro Rodríguez Arregui
Name: Droguería Benavides S.A. de C.V.
Type of Entity: Private Corporation – Fully Owned Subsidiary of Far-Ben S.A. de C.V (Mexican).
R.F.C.:
R.F
.C.: DBE-831010-RR9
Telephone: (52) 8150-7700
Subscribed and P
aid Capital as of 31.12.02: CH$108,469,008 thousand
Paid
Company’
Objectiv
Compan
y’
v e: To acquire, dispose, operate, distribute, commission, consign and represent all
kinds of real estate properties and articles of commerce, especially those related to medications,
Pharmacies, toiletries, photography, gifts, toys, magazines, cafeteria and restaurant.
Chairman of the Board of Directors: Álvaro Rodríguez Arregui
Members of the Board of Directors: Jaime Poblete Stambuk, Enrique Mendoza Díaz.
Name: Benavides de Monterrey S.A. de C.V.
R.F.C.:
R.F
.C.: BMO-831012-ADA
Telephone: (52) 8150-7700
Paid
Subscribed and P
Company’
Objectiv
Compan
y’
v e: To provide all kinds of technical, administrative or supervision services to industrial
and/or commercial companies, whether in the Republic of Mexico or abroad.
Members of the Board of Directors: Jaime Poblete Stambuk, Enrique Mendoza Díaz
Name: Benavides de Reynosa S.A. de C.V.
R.F.C.:
R.F
.C.: BRE-831013-QC1
Telephone: (52) 8150-7700
Paid
Subscribed and P
Company’
Objectiv
Compan
y’
v e: To import and export all kinds of domestic or foreign products.
Name: Benavides del Pacífico S.A. de C.V.
R.F
.C.: BPA-831011-CM8
R.F.C.:
Telephone: (52) 8150-7700
Subscribed and P
Paid
Compan
y’
v e: To acquire, dispose, operate, distribute, commission, consign and represent all
Company’
Objectiv
kinds of real estate properties and articles of commerce, especially those related to medications,
Pharmacies, toiletries, photography, gifts, toys, magazines, cafeteria and restaurant.
General Manager: Álvaro Rodríguez Arregui.
59
Name: Droguería y Farmacias El Fénix S.A. de C.V.
Type of Entity: Private Corporation (Mexican).
R.F.C.:
R.F
.C.: DFF 840319 JS2
Address: Ayuntamiento No. 101 Col. Volantin Tampico Tamps. C.P. 89199
Telephone:
Subscribed and P
Paid
Compan
y’
v e: To buy, sell, distribute, transform, commission, represent, consign, import and
Company’
Objectiv
export all kinds of commercial goods and effects, especially pharmaceutical products and medicinal
in general.
Chairman of the Board of Directors: Sergio Govela Elizondo
Members of the Board of Directors: Gustavo González García, Valentín Holguera Altamirano, Fernando Benavides
Sauceda, Guillermo Benavides Arredondo , Diego Suárez González , Gustavo C. González Valenzuela,
Emilio Pozo Pier y Daniel Estrada Arellano.
General Manager: Gustavo González García
60
Name: Fasa do Brasil Limitada (Brazilian).
Type of Entity: Limited Liability Company.
RUT Taxpa
y er identification number: Foreign.
axpay
Address: Rua Anne Frank N° 1.919, Vila Hauer, Curitiba, Brazil.
Telephone - FFax:
ax: (041) 217.17.00 - (041) 217.17.86
External A uditors: Deloitte & Touche Tohmatsu.
Legal Counsel: Miguel Neto Abogados.
Paid
Subscribed and P
Company’
Objectiv
Compan
y’
v e: To participate in other companies as: partner, shareholder or member of a
consortium, to manage its own or third-party’s assets and to acquire or invest in properties of any kind
and manage the profits obtained from such investments.
Gener
al Manager: Ricardo Tomás Terrazas Michell.
General
Name: Fasint Limitada (Brazilian).
Type of Entity: Limited Liability Company.
axpay
RUT Taxpa
y er identification number: Foreign
Address: Rua Engenheiro Luiz Carlos Berrini 550, São Paulo, Brazil.
Telephone - FFax:
ax: (011) 5506.47.72 - (011) 5503.03.13
Subscribed and P
Paid
Compan
y’
v e: Preferably to participate as majority shareholder in companies whose main
Company’
Objectiv
business objective and activities are related to the pharmaceutical sector, in wholesale or retail sales.
Members of the Board of Directors: Mario Valdivia Bernstein, Raymond Joseph Dunn IV, Ana Vigon Tabar, Marcos Rechtman.
General Manager: Franc Ribeiro Correa.
Name: Fasamed Comercio Farmacéutico S.A. (Brazilian)
Type of Entity: Private Corporation (Brazilian).
axpay
RUT Taxpa
Address: Rua Anne Frank 1.919, Vila Hauer, Curitiba, Brazil.
Telephone - FFax:
ax: (041) 217.17.00 - (041) 217.17.86
Subscribed and P
Paid
Compan
y’
v e: To develop activities related with trading and services of Pharmacy and drugstore
Company’
Objectiv
products that will function in all the establishments of the Company, aimed at retail medication trade,
pharmaceutical factors of production and related products.
Members of the Board of Directors: Mario Valdivia Bernstein, Alejandro Rosemblatt Kiblisky, Marcos Rechtman,
Paulo Remy Gillet Neto.
General
Gener
al Manager: Ricardo Tomás Terrazas Michell.
61
Name: Administradora de Beneficios Farmacéuticos do Brasil S.A. (Brazilian).
Type of Entity: Private Corporation (Brazilian)
axpay
RUT Taxpa
Address: Rua Anne Frank 1.919, Vila Hauer, Curitiba, Brazil.
ax: (041) 217.13.00
Telephone - FFax:
External A uditors: Deloitte Touche Tohmatsu.
Subscribed and P
Paid
Compan
y’
v e: To develop activities related with commerce and providing consulting services in
Company’
Objectiv
the health area with emphasis in the intermediation and management of medical assitance and/or
agreements.
Members of the Board of Directors: Mario Valdivia Bernstein, Alejandro Rosemblatt Kiblisky, Marcos Rechtman,
Paulo Remy Gillet Neto.
General Manager: Franc Ribeiro Correa.
62
Name: Boticas Fasa S.A.
Type of Entity: Private Corporation – Fully Owned Subsidiary (Peruvian).
axpay
RUT Taxpa
Address: Av. Canadá 1125, La Victoria, Lima, Peru.
Telephone - FFax:
ax: 619.90.00 (Anexo 104).
Legal Counsel: Estudio Sparrow.
Paid
Subscribed and P
Company’
Objectiv
Compan
y’
v e: To provide services in marketing, distributing, importing, exporting, buying and
selling all kinds of products including pharmaceutical, medicinal, medical, veterinarian, hygienic,
dressing room, toiletries and/or beauty products.
Members of the Board of Directors: Jaime Sinay Assael, Juan Ricardo Palominos Ramos, Ricardo Hepp de los Ríos,
Alejandro Rosemblatt Kiblisky.
Gener
al Manager: Ricardo Palominos Ramos.
General
Name: Droguería La Victoria S.A.C.
Type of Entity: Private Corporation – Fully Owned Subsidiary (Peruvian).
axpay
RUT Taxpa
Address: Av. Canadá 1125, La Victoria, Lima, Peru.
Telephone - FFax:
ax: 619.90.28.
Legal Counsel: Estudio Sparrow.
aid Capital as of 31.12.02: CH$ 126,630 thousand.
Paid
Subscribed and P
Compan
y’
v e: To import and distribute medications, cosmetics and in general all kinds of
Company’
Objectiv
pharmaceutical, medicinal, medical, veterinarian, hygienic, dressing room, toiletries and/or beauty
products.
General
Gener
al Manager: Ruth Patricia Medina Aguilar.
Name: Farmacias Ahumada Internacional S.A.
Type of entity: Private Corporation – Fully Owned Subsidiary.
axpay
RUT Taxpa
Address: Montevideo, Uruguay
ax: (59 82) 916.06.67
Telephone - FFax:
External auditors: Deloitte & Touche
Legal Counsel: Vial y Palma Abogados
Subscribed and P
Paid
Business Objecti
v e: To invest in certificates of title, bonds, shares, government bonds, debentures, promissory
Objectiv
notes,analog documents; imports, exports, commissions, representations, agencies, financial operations.
Chairman of the Board: Manon Lecueder de San Vicente.
Member of the Board of Directors: Juan Pedro Malinow.
Name: Nutritional Labs. Inc.
Type of Entity: Private Corporation – Fully Owned Subsidiary.
axpay
RUT Taxpa
Address: 7976 NW 14 Street Miami, Florida.
Telephone - FFax:
ax: 1-786-2654817
Paid
Subscribed and P
aid Capital as of 31.12.02: CH$ 719 thousand
Compan
y’
v e: To market and distribute wholesale all kinds of goods.
Company’
Objectiv
Member of the Board of Directors: Ricardo Leiva Vilarnau.
Name: Fasa International Corp (British Virgin Islands)
Type of Entity: Private Corporation – Fully Owned Subsidiary
RUT Taxpa
axpay
Address: Trident Trust Company (B.U.I.) Limited, Trident Chambers, P.O. Box, 146, Road Town,
Tortola British Virgin Islands.
aid Capital as of 31.12.02: CH$72 thousand
Paid
Subscribed and P
Compan
y’
v e: To perform any activity that is not forbidden by the Laws of the British Virgin Islands.
Company’
Objectiv
Members of the Board of Directors: José Codner Chijner, Enrique Cibié Bluth, Alejandro Rosemblatt Kiblisky.
63
d e d i c a t i o n
d e
d
i
c
a
t
n
i o
f i n a n c i a l
s t a t e m e n t s
C o n s o l i d a t e d
F i n a n c i a l
S t a t e m e n t s
[ C O N S O L I D A T E D
F I N A N C I A L
S T A T E M E N T S ]
FARMACIAS AHUMADA S.A. AND SUBSIDIARIES
CONSOLID
ATED B
ALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001
CONSOLIDA
BALANCE
Translation of financial statements originally issued in spanish
(IN THOUSAND CHILEAN PESOS)
2002
2001
Th. Ch$
Th. Ch$
ACTIVO
ASSETS
CIRCULANTE:
CURRENT:
Cash
Disponible
Time
deposits
Depósitos
a plazo
Marketable
securities
Valores negociables
Account
Deudoresreceivables,
por ventas net
Notes
Receivables,
net
Documentos
por cobrar
Sundry
debtors
Deudores
varios
Amounts
due from
related
Documentos
y cuentas
porcompanies
cobrar a empresas relacionadas
Inventories
Existencias
Income
Taxes
Impuestos
por recoverable
recuperar
Prepaid
expensespor anticipado
Gastos pagados
Deferred
taxes
ImpuestosIcome
diferidos
Other
Otros current
activos assets
circulantes
68
10,452,111
19,837,148
4,711,688
20,376,056
132,937
2,119,128
4,828,555
85,722,805
4,438,932
473,102
969,980
579,437
7,287,881
7,651,932
2,397,068
10,002,770
616,167
2,096,349
3,925,693
42,780,046
235,710
197,967
431,987
-
Total
assets
Total current
activo circulante
154.641.879
77.623.570
FIJO:
FIXED:
Terrenos
Land
Construcciones
obras de infraestructura
Constructions
& yinfrastructure
works
Máquinas y&equipos
Machinery
equipment
Otros fixed
activos
fijos
Other
assets
20,591,160
16,371,459
21,561,398
149,397,703
3,928,315
6,136,872
36,785,398
207,921,720
(100,348,854)
46,850,585
(14,664,246)
107,572,866
32,186,339
OTROS ACTIVOS:
OTHER:
Inversión eninempresa
Investments
related relacionada
companies
Inversiones in
en other
otras companies
sociedades
Investments
Menor valor
Goodwill,
netde inversiones
Mayor Valor
de inversiones
Negative
Goowill,
net
Deudores largo
plazo
Long-term
debtors
Intangibles
Intangibles
Amortización
Less:
Acomulated Amortization
Otros assets
activos
Other
2,963,915
605,163
14,814,467
(8,422,160)
5,733,183
2,913,364
(704,371)
5,390,211
15,028,777
(871,348)
5,306,522
1,805,386
(224,633)
3,144,797
Total
Total other
otros assets
activos
23,293,772
24,189,501
285,508,517
133,999,410
Depreciacióndepreciation
acumulada
Accumulated
Net
fixed
Activo
fijoassets
neto
TOTAL ASSETS
DEL ACTIVO
TOTAL
The attached Notes N°1 thorugh N°21 are an integral part of these consolidated financial statements.
F I N A N C I A L
CONSOLID
ATED B
ALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001
CONSOLIDA
BALANCE
2002
2001
Th. Ch$
Th. Ch$
LIABILITIES
PASIVO
CIRCULANTE:
CURRENT:
Obligaciones
Short-term debt con
duebancos
to bankse and
instituciones
financial institutions
financieras a corto plazo
Obligaciones
Current portioncon
of bancos
Long-term
e instituciones
debt due banks
financieras
and
- largo plazo
financial
porción
institutions
corto plazo
short-term portion
Obligaciones
Current portion
con
of el
bonds
público
payables
- porción corto plazo (bonos)
Obligaciones
Current portion
a largo
of long
plazo
term-term
con vencimiento
notes payables
dentro de un año
Dividendos
Dividends payable
por pagar
Cuentas
pagar
Accountspor
payable
Documentos
Short term notes
por payables
pagar
Acreedores
Sundry creditors
varios
Documentos
Amounts payable
y cuentas
to related
por pagar
companies
a empresas relacionadas
Provisiones
Accrued Expenses
Retenciones
Withholdings
Impuesto
Income taxes
a la renta
payables
Otros
Other pasivos
current circulantes
assets
3,032,384
6,668,121
76,952
367,155
700,935
25,482
101,046,435
11,069,649
2,874,709
235,101
14,807,469
3,351,295
408,615
544,133
119,168
530,701
14,798
48,085,608
1,502,552
606,307
52,830
4,356,342
2,146,303
593,453
Total current
assets
Total
pasivo circulante
138,540,314
64,676,183
69
LARGO
PLAZO:
LONG TERM:
Due to banks con
and bancos
financiale institutions
Obligaciones
instituciones financieras
Bonds payablecon el público largo plazo (bonos)
Obligaciones
Long-term notes
Documentos
por payable
pagar largo plazo
Sundry creditors
Acreedores
varios
Accrued Expenses
long-term
Provisiones
- largo -plazo
Deferred Income
taxes
Impuestos
diferidos
a largo plazo
Other pasivos
Income a- largo
long-term
Otros
plazo
262,548
54,683,157
158,545
2,788,114
1,360,400
1,771,468
4,986,594
337,691
2,453,334
2,110,749
1,180,810
1,315,697
Total pasivo
a largo
plazo
long-term
liabilities
66,010,826
7,398,281
MINORITY
INTEREST
INTERES
MINORITARIO
24,127,695
5,100,383
PATRIMONIO:
SHAREHOLDERS’ EQUITY
Capital
Paid-in pagado
capital
Otras
Other reservas
reserves
Déficit
acumulado
de desarrollo
- filiales
Accumulated
deficitperíodo
subsidiaries
development
period
Utilidades
acumuladas
Retained earnings
Utilidad
del net
ejercicio
Year’s profit
income for the year
Dividendos
provisorios
Interim dividends
46,280,989
2,344,478
(439,245)
8,129,272
1,738,188
(1,224,000)
46,280,989
1,623,859
(288,113)
3,848,497
6,777,874
(1,418,543)
Total shareholders’
equity
patrimonio
56,829,682
56,824,563
285,508,517
133,999,410
LIABILITIES
TOTAL DEL
PASIVO &
Y PATRIMONIO
F I N A N C I A L
CONSOLID
ATED INCOME ST
ATEMENTS FOR THE YEARS ENDING AS OF DECEMBER 31, 2002 AND 2001
CONSOLIDA
STA
INGRESOS
DEINCOME
EXPLOTACIÓN
OPERATING
2001
Th. Ch$
Th. Ch$
313,417,767
291,861,032
COSTOS
DE EXPLOTACIÓN
OPERATING
COST
(235,901,632)
(217,240,049)
OPERATING
MARGIN
MARGEN
DE EXPLOTACIÓN
77,516,135
74,620,983
(74,292,769)
(65,550,008)
3,223,366
9,070,975
RESULTADO
NO OPERACIONAL:
NON-OPERATING
INCOME AND EXPENSES:
Interest income
Ingresos
financieros
Otheringresos
non-operating
income
Otros
fuera de
la explotación
Equity participation
inen
loss
of related
company
Pérdida
por inversión
empresa
relacionada
Amortization of
goodwill
Amortización
menor
de valor inversión
Interestfinancieros
expenses
Gastos
Otheregresos
non-operating
Otros
fuera deexpenses
la explotación
Price level monetaria
restatement, net
Corrección
Foreing Currency
translation, Net
Diferencias
de cambio
1,015,792
669,414
(12,718)
(1,948,435)
(2,162,091)
(784,158)
(332,005)
1,452,805
1,004,988
193,687
(1,763,804)
(972,924)
(468,529)
(492,059)
508,759
PÉRDIDA
NO OPERACIONAL
NON-OPERATING
EXPENSES, NET
(2,101,396)
(1,989,882)
1,121,970
7,081,093
119,756
(1,130,189)
1,241,726
5,950,904
369,567
826,970
1,611,293
6,777,874
126,895
-
1,738,188
6,777,874
GASTOS
DE ADMINISTRACION
Y VENTAS
ADMINISTRATION
& SALES EXPENSES
UTILIDAD
OPERACIONAL
OPERATING
PROFIT
70
2002
UTILIDAD
ANTES DE
IMPUESTO
A LA RENTA
INCOME BEFORE
INCOME
TAXES
MINORITY
INTEREST
E AND
INTERES
MINORITARIO
INCOME TAX
IMPUESTO
A LA RENTA
CONSOLIDATED
INCOME
UTILIDAD
CONSOLIDADA
INTERES
MINORITARIO
MINORITY
INTEREST
NET INCOME
UTILIDAD
LIQUIDA
AMORTIZATIONMAYOR
OF NEGATIVE
GOODWILL
AMORTIZACION
VALOR DE
INVERSIONES
UTILIDAD
DEL FOR
EJERCICIO
NET INCOME
THE YEAR
The attached Notes N°1 thorugh N°21 are an integral part of these consolidate financial statements.
F I N A N C I A L
CONSOLID
ATED C
ASH FLO
W ST
CONSOLIDA
CASH
FLOW
STA
2002
2001
Th. Ch$
Th. Ch$
FLUJO
ORIGINADO
ACTIVIDADES
DE LA OPERACIÓN:
CASH FLOW
FROM POR
OPERATING
ACTIVITIES
Collection
of sales
debt
Recaudación
de deudores
por ventas
Financial
income received
Ingresos financieros
percibidos
Other
income percibidos
received
Otros ingresos
Payment
to suppliers &
personnel
Pagos a proveedores
y personal
Interest
Interesespaid
pagados
Paid
income
Impuesto
a latax
renta pagado
Other
expenses
paid
Otros gastos
pagados
Paid
IVA value
added
taxes and
other
similar pagados
Impuesto
al valor
agregado
y otros
similares
383,573,502
503,707
1,286,421
(349,270,185)
(968,580)
(1,320,297)
(5,029,976)
(11,023,553)
343,842,216
778,564
1,301,269
(325,703,669)
(813,740)
(982,363)
(416,800)
(12,635,758)
Positive
cash flow
generated
from operational
activities
Flujo netonet
positivo
originado
por actividades
de la operación
17,751,039
5,369,719
14,157,537
33,010,801
(2,284,989)
(17,447,336)
(201,672)
(330,639)
31,371,904
781,798
(2,337,208)
(26,551,697)
(22,841)
26,903,702
3,241,956
FLUJO
CASH FLOW
ORIGINADO
FROMPOR
INVESTMENT
ACTIVIDADES
ACTIVITIES
DE INVERSIÓN:
Sale of de
fixed
assetsfijos
Ventas
activos
Incorporation of
assets
Incorporación
defixed
activos
fijos
Payment
of capitalized
interest
Pago
de intereses
capitalizados
Other ingresos
investment
income
Otros
de inversión
Permanent investments
Inversiones
permanentes
Other desembolsos
investment disbursements
Otros
de inversión
457,098
(12,651,466)
308,608
(32,246,426)
(1,797,962)
12,318
(10,520,889)
(22,668)
(288,400)
Negative
cash originado
flow generated
from investment
activities
Flujo neto net
negativo
por actividades
de inversión
(45,930,148)
(10,819,639)
(1,275,407)
(2,207,964)
444,172
(280,349)
(831,235)
(2,488,313)
INITIAL
AND CASH
EQUIVALENTS
AT THE BEGINING OF THE YEAR
SALDOBALANCE
INICIAL OF
DECASH
EFECTIVO
Y EFECTIVO
EQUIVALENTE
17,336,881
19,825,194
FINAL
OFEFECTIVO
CASH AND
CASH EQUIVALENTS
AT THE END OF THE YEAR
SALDOBALANCE
FINAL DE
Y EFECTIVO
EQUIVALENTE
16,505,646
17,336,881
FLUJO FLOW
ORIGINADO
ACTIVIDADES
DE FINANCIAMIENTO:
CASH
FROM POR
FINANCING
ACTIVITIES
Loans
obtained
Obtención
de préstamos
Debt
with the con
public
[bonds]
Obligaciones
el público
Other
sources de
of financiamiento
financing
Otras fuentes
Payment
of dividends
Pago
de dividendos
Loan de
services
Pago
préstamos
Payment
of issuance
& placement
expenses
debt with the
[bonds]
Pago
de gastos
por emisión
y colocación
deof
obligaciones
conpublic
el público
Other desembolsos
financing disbursements
Otros
por financiamiento
Positive
flow generated
by financing
Flujo
netonet
positivo
originado por
actividadesactivities
de financiamiento
TOTAL
NEGATIVE
NET
CASH FLOW
OF THE YEAR
FLUJO NETO
TOTAL
NEGATIVO
DEL AÑO
IMPACT OF INFLATION OVER CASH AND
CASHINFLACIÓN
EQUIVALENT
EFECTO
SOBRE EL EFECTIVO Y EFECTIVO EQUIVALENTE
NET CHANGE OF CASH AND CASH EQUIVALENT
DURING THE
VARIACIÓN
NETAYEAR
DE EFECTIVO Y EFECTIVO EQUIVALENTE DURANTE EL AÑO
71
F I N A N C I A L
FARMACIAS AHUMADA S.A. Y FILIALES
CONSOLID
ATED C
ASH FLO
W ST
CONSOLIDA
CASH
FLOW
STA
2002
2001
Th. Ch$
Th. Ch$
1,738,188
6,777,874
48,739
(28,950)
Charges(abonos)
(credits)a to
incomeque
which
do not represent
cash
flows
Cargos
resultado
no representan
flujo de
efectivo:
Depreciation
Depreciación del ejercicio
Amortization
intangibles
Amortizaciónofde
intangibles
Write-offs
accrued expenses
Castigos y and
provisiones
in losses
of related
companies
Pérdida
devengada en
inversiones
en empresas
relacionadas
Amortization
badwill
Amortizaciónofmayor
valor de inversiones
Amortization
goodwill
Amortizaciónofmenor
Price
level restatement,
net
Corrección
monetaria neta
Foreing
currency
translation,
Diferencia
de cambio
neta net
Other
which
do representan
not representflujo
cashdeflow
Otros credits
abonostoa income
resultado
que no
efectivo
Other
income which
not represent
cash
flow
Otros charges
cargos atoresultado
que nodo
representan
flujo
de efectivo
4,987,554
455,623
201,349
12,718
(126,895)
1,948,435
332,005
(1,452,805)
(1,367,355)
585,826
3,802,279
186,115
79,246
1,763,804
492,059
(508,759)
(561,551)
65,416
Changes indeassets
which
cash
Variación
activos
queaffect
afectan
al flows
flujo de efectivo:
Increase
receivables
Aumentoindetrade
deudores
por ventas
Increase
Aumentoindeinventory
existencias
Decrease
(increase)
of other
assetsactivos
Disminución
(aumento)
de otros
(3,631,865)
(1,048,602)
1,378
(3,168,129)
(9,087,309)
(2,258,609)
16,260,773
127,733
(955,871)
7,357,058
4,594
110,738
141,556
(137,878)
32,466
1,138,347
(369,567)
(826,970)
17,751,039
5,369,719
CONCILIACIÓN
EL FLUJO
NETO
ORIGINADO
POR ACTIVIDADES
CONCILIATION ENTRE
BETWEEN
THE NET
FLOW
GENERATED
BY
OPERATIONAL
ACTIVITIES
AND THE YEAR’S
RESULTS:
DE LA OPERACIÓN
Y EL RESULTADO
DEL EJERCICIO
Net income
the year
Utilidad
del for
ejercicio
Resultado en venta de activos:
Loss
(Profit)(utilidad)
from sales
assets
Pérdida
enof
venta
de activos fijos
72
Changes in
which
affect
cash de
flows
Variación
deliabilities
pasivos que
afectan
al flujo
efectivo:
Increase
withcon el
Aumentoin
deaccount
cuentas payable
por pagarassociated
relacionadas
operating
resultado results
de la explotación
Increase
payable
Aumentoofdeinterest
intereses
por pagar
Increase
in income
tax payable
(Disminución)
aumento
neto de impuesto a la renta por pagar
Increase
related
to
Aumentoindeother
otrasaccounts
cuentas payable
por pagar
relacionadas
non
results
con operating
el resultado
fuera de explotación
Net
(decrease) increase
value
tax al
and
other
similar ytaxes
(Disminución)
aumento inneto
de added
impuesto
valor
agregado
otrospayable
similares
Loss of minority
interest
Pérdida
del interés
minoritario
Positive
netpositivo
flow generated
operational de
activities
Flujo
neto
originado from
por actividades
la operación
F I N A N C I A L
REPOR
T OF INDEPENDENT ACCOUNT
ANTS
REPORT
CCOUNTANTS
To the Shareholders of Farmacias Ahumada S.A.:
We have audited the accompanying consolidated balance sheets of Farmacias Ahumada S.A. and Subsidiaries
(the “Company”) as of December 31, 2001 and 2002, and the related consolidated statements of income, shareholders’
equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards in Chile. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audits and the report of other auditors provide a reasonable basis for our opinion.
The notes for the consolidated financial statements provide sufficient, but less detailed information than that
contained in the notes, which form part of the financial statements submitted to the SVS, where they are available to
shareholders and the general public, with which we have released our report on the same date and that includes
additional information required by the Superintendency which are not essential for an adequate interpretation.
In our opinion, based on our audits and the report of other auditors, the financial statements referred to above
present fairly, in all material respects, the financial position of Farmacias Ahumada S.A. and Subsidiaries as of
December 31, 2001 and 2002, and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles in Chile.
March 14th, 2003.
73
F I N A N C I A L
FARMACIAS AHUMADA S.A.
NO
TES TO THE CONSOLID
ATED FIN
ANCIAL ST
ATEMENTS
NOTES
CONSOLIDA
FINANCIAL
STA
(IN THOUSAND PESOS)
These disclosure notes present, in the opinion of Management, sufficient information, albeit with less detail than
the information contained in the disclosure notes that are an integral part of the consolidated financial statements
submitted to the Superintendence for Securities and Insurance Companies [Superintendencia de Valores y Seguros ],
to the Stock Exchanges where they remain available to shareholders, and to the public at large. Such information may
also be consulted at the Company’s headquarters during the 15 days prior to the Extraordinary Shareholders’ Meeting.
1. REGISTRA
TION OF THE COMP
ANY IN THE SECURITIES REGISTRAR, COMP
ANY IDENTIFIC
ATION
REGISTRATION
COMPANY
COMPANY
IDENTIFICA
AND ACTIVITIES.
Farmacias Ahumada S.A. was incorporated by virtue of a public deed dated November 28, 1997 and its line of
business consists in manufacturing toiletries, cosmetics, as well as chemical and pharmaceutical products; distributing,
importing, exporting and marketing similar products of other industries, both domestically and abroad, and
representing national and foreign firms in this line of business.
Additionally, through its indirect affiliates Far – Ben S.A. de C.V. (Mexico), Boticas Fasa S.A. (Peru) and Fasa do
Brasil Ltda., it markets products of the above-mentioned line of business in Mexico, Peru and Brazil, respectively.
74
On October 15, 1997, the Company was registered in the Securities Registrar of the Superintendence for Securities
and Insurance Companies under N°629; thus, it is supervised and controlled by that Superintendence.
Debt resc
heduling of FFilial
ilial FFar
ar - Ben S.A. de C.V
rescheduling
C.V.. (Mexico) – The company’s stock capital was increased
during the present fiscal year derived from shareholder contributions and from the rescheduling of the debt
corresponding to the bond issue denominated “Bond Issue Convertible at the Option of the Holder into Series “B”
Shares of Stock of FARBEN, S.A. de C.V.” (BEVIDES 97U) denominated in UDIS Investment Units.
2. ACCOUNTING POLICIES
a. Accounting Period – The current consolidated financial statements correspond to the period comprised between
January 1 and December 31 of the year 2002. The previous period to which comparisons are made is comprised between
January 1 and December 31 of the year 2001.
b. Preparation Bases – TThe consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in Chile and the regulations issued by the SVS (Superintendence for Securities and Insurance
Companies.) , except for investments in subsidiaries, which have been entered under a single line item of the General Balance
Sheet at their proportional equity value and, therefore, they have not been consolidated. This accounting treatment alters neither
the net result (profit/loss) nor the shareholders’ equity.
In case of discrepancy, the regulations issued by the Superintendence for Securities and Insurance Companies
shall have precedence over the accounting principles issued by the Chilean Union of Accountants [ Colegio de
Contadores de Chile A.G.].
c. Consolidation bases – The consolidated financial statements eliminate any significant balances and transactions
made between the consolidated companies and recognize the minority shareholding interest.
F I N A N C I A L
The consolidated group is comprised of Farmacias Ahumada S.A. (the Parent Company) and the subsidiaries,
according to the following breakdown:
Shareholding Percentage
RUT Taxpayer Id. Company Name
Direct
%
2002
Indirect
%
79.663.290-9
96.809.530-7
96.863.980-3
99.99
99.99
0.01
-
99.99
-
0.01
100.00
64.99
100.00
100.00
64.99
99.99
99.99
64.99
-
64.98
64.98
64.98
99.97
98.00
99.97
99.99
-
64.98
100.00
0.03
2.00
100.00
99.99
0.03
100.00
67.95
67.95
67.95
67.95
67.95
100.00
64.98
100.00
100.00
100.00
100.00
99.99
100.00
100.00
67.95
67.95
67.95
67.95
67.95
99.99
100.00
64.98
99.99
67.00
98.00
99.99
99.99
99.99
67.00
96.860.090-7
Foreign
Foreign
Foreign
Foreign
96.792.260-9
Foreign
Foreign
Foreign
Foreign
Foreign
96.969.830-7
99.506.180-5
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Laboratorios Fasa S.A.
Fasa-Card S.A.
ABF, Administradora de Beneficios
Farmacéuticos S.A.
Distribuidora y Logística Integral S.A.
Fasint Ltda. (Brazil)
Fasamed Comércio Farmacêutico S.A. (Brazil)
(ex-Drogamed Comércio de Medicamentos
e Perfumaria S.A.)
Administradora de Beneficios
Farmacéuticos do Brasil S.A.
Droguería La Victoria S.A.C. (Peru)
Compañía de Nutrición General S.A.
Farmacias Ahumada Internacional S.A. (Uruguay)
Lagrynd Corp S.A. (Uruguay)
Inversiones San Silvestre S.A.C. (Peru)
Boticas Fasa S.A. (Peru)
Fasa do Brasil Ltda.
Fasa Investment S.A.
Inverex S.A.
Far-Ben S.A. de C.V. (Mexico)
Droguería Benavides S.A. de C.V. (Mexico)
Benavides de Monterrey S.A. de C.V. (Mexico)
Benavides de Reynosa S.A. de C.V. (Mexico)
Benavides del Pacifico S.A. de C.V. (Mexico)
Fasa International Corp. (British virgin islands)
Nutritional Labs. Inc. (USA)
Total
%
2001
Total
%
100.00 100.00
99.99 99.99
The affiliate Far-Ben S.A. de C.V. (Mexico) has only consolidated its asset and liability balances, because the initial
registration of the proportional equity value of such affiliate was made on the basis of the general balance sheet as of
December 31, 2002.
d. Presentation Bases – For comparative purposes the consolidated financial statements as of December 31, 2001 are
shown restated out-of-accounting at 3.0%.
Certain minor reclassifications have been made in the financial statements of 2001 that do not affect the result for
the purposes of comparison with the year 2002.
e. Monetary Correction – The consolidated financial statements have been corrected monetarily in order to reflect the
impact of changes in the currency’s purchasing power. To that effect, the main input were the changes experienced by the
consumer price index (3.0% and 3.1% as of December 31 of 2002 and 2001, respectively).
75
F I N A N C I A L
f. Conversion – Assets and liabilities stated in foreign currency and in UF inflation index units are shown at closing
prices, as follows:
Item
2002
$
US dollars
Brazilian Real
Peruvian Nuevo Sol
Mexican Peso
UF Inflation index
718,61
203,38
204,44
68,84
16.744,12
2001
$
654,79
282,18
190,01
16.262,66
The corresponding conversion differences are accounted for in the year’s results (profit/loss), except for conversion
differences generated by net investments in foreign indirect affiliates, which are accounted for under other reserves.
g. Conversion of financial statements of affiliates – The indirect foreign affiliates Boticas Fasa S.A.C. (Peru) and Droguería La
Victoria S.A.C. (Peru) carry their accounting records in Peruvian soles; the indirect subsidiary Fasa do Brasil Ltda. carries its
own records in Brazilian reales, and the indirect subsidiary Far-Ben S.A. de C.V. (Mexico) carries its accounting records in
Mexican pesos since those are the local currencies of their respective countries of operation, pursuant to the rules and
regulations established by Technical Bulletin N° 64 of the Chilean Union of Accountants. The conversion of the financial
statements of such affiliates into Chilean pesos has been made with the purpose of consolidating them with the financial
76
statements of their Chilean parent company, Farmacias Ahumada S.A.
h. Time Deposits - Include the capital plus the restatements and interests accrued by the closing of the year.
i. Marketable Securities – Correspond to investments in mutual fund shares, which are shown at the year’s closing
prices.
j. Buyback agreement operations – The acquisition of financial instruments with buyback agreements are recorded as
a fixed-income security deposit.
k.Inventories – Are shown at their monetarily corrected cost and they do not exceed their net sale value. The obsolescence
provision corresponds to low-turnover merchandise for sale.
l. Bad Debt Estimates – The provision for debt unlikely to be recovered was calculated on the basis of their antiquity,
according to criteria adopted by the Company at the year’s closing. The parameters applied to non-collectibles from sales
debtors and protested documents are the following:
Days
Sales debtors %
Protested documents %
0-30
31-60
61-90
91-120
121-150
151-180
50
2
75
10
100
15
100
20
100
40
100
+180
100
100
F I N A N C I A L
m. Fixed assets – Are shown valued at their cost of purchase corrected monetarily.
n. Fixed asset depreciation – Was determined according to the lineal method, according to the estimated useful life of
the respective assets.
The depreciation of fixtures installed on leased real estate property was determined according to the term of the
respective leasing contracts.
ñ. Leased assets – Leasing contracts for movable (personal) and immovable (real estate) property that meet the standards
of financial leasing contracts are accounted as fixed asset purchases, recognizing the total obligation and the interests on
an accrual basis. Such assets are not the legal property of the Company; consequently, for as long as the purchase option
is not exercised, the Company cannot freely dispose of them.
o. Fixed asset sales with financial leaseback agreement – The profits obtained from the sale of fixed assets with a
financial leaseback agreement are deferred throughout the residual useful life of the asset and are amortized in proportion
to their amortization.
p. Intangibles – Municipal patents [derechos de llave] are shown at cost and are amortized throughout the term of the
lease contract. Commercial trade marks and sanitary registrations are amortized lineally within a period of 5 and 20 years,
respectively, depending on the use periods estimated by the Company, according to the provisions established under
N°35 of the Technical Bulleting issued by the Chilean Union of Accountants.
q. Investments in related companies – Are shown at their proportional shareholding equity value.
The indirect subsidiaries abroad carry their accounting records in the currency of their respective country.
According to the provisions established in Technical Bulletin N°64 of the Chilean Union of Accountants, indirect
foreign affiliates incorporated as an extension of the Parent Company or as an investment vehicle are controlled in
Chilean pesos, and the indirect operative affiliate is controlled in United States dollars.
r. Lower investment value – Lower investment values are amortized within their respective estimated investment return
period. The latter is calculated from the difference resulting when comparing the total value paid for the investment with its
proportional equity value.
The amortization term has been mainly determined through calculations made by the Company regarding the
investment return period.
s. Debt with the public (Bonds) – This debt is shown at par value as of the year’s closing. The lesser value in the placement
of the bonds with respect to their par value as of the date of placement is shown under the item Other assets and is deferred
and amortized on the basis of the real interest.
77
F I N A N C I A L
t. Income tax and deferred taxes – The income tax is calculated on the basis of the taxable net income pursuant to the
tax provisions in effect as of each year’s closing.
The Company accounts for all deferred taxes by the time differences, tax losses and other events that generate
differences between the accounting & tax base of assets and liabilities, according to the provisions established in
Technical Bulletin N°60 of the Chilean Union of Accountants and its complementary provisions, and according to
Circular 1,466 of the Superintendence for Securities and Insurance Companies. In accordance with Technical
Bulletin N° 71 of the Chilean Union of Accountants, as of the year 2001, all deferred taxes are accounted by applying
the income tax rate for the year that will reverse the corresponding time difference that originated it.
u. Severance pay for years of service – The Company has no contractual obligation to its personnel on this concept.
The subsidiary company Boticas Fasa S.A. (Peru) accounts for the compensation of the years of service that must be
paid to workers – with charge to results as they accrue –according to Peru’s current labor legislation.
v. Labor obligations upon retirement – Far-Ben S.A. de C.V. (Mexico) has established a personnel pension and
retirement plan that complements the services offered by the Social Security Service for the payment of retirement and
death benefits. The obligations and costs of such plan, as well as those related to the seniority allowance to which the
personnel is entitled upon terminating a 15-year labor relationship with the company, are reflected according to
actuarial calculations prepared by independent experts using the projected unit credit method with real rates of
interest. Such indemnification is charged to results when the decision to pay them is adopted.
w. Operating income - Operating income is recognized on an accrual basis. The income is credited when the
merchandise is delivered.
78
x. Computer software – The Company has acquired computer software that has been accounted for under the item
Other Fixed Assets. Software development expenses that do not meet the criteria established by current norms are debited
to results when they are actually incurred; such expenses, however, have not been significant during the last five years.
y. Research & Development expenses – The expenses incurred under this item are debited to results when they are
actually incurred. Such expenses, however, have not been significant during the last five years.
z. Cash flow statement – The concept of cash flow statement includes time deposits, investments in fixed-income mutual
funds, and the purchase of financial instruments with buyback agreements of up to 90 days.
The positive net cash flow originated by operational activities represents the net cash income of the year as a result
of activities that affect the profit & loss statement, other than investment and financing activities.
The cash and cash equivalent of Far-Ben S.A. de C.V. (Mexico) amounts to Ch$ 18,890,191 and is not included in
the consolidated cash flow statement since only assets and liabilities are consolidated, because the initial registration
of that affiliate’s proportional equity value was calculated on the basis of the general balance sheet as of December 31,
2002.
a.a. Stock & Bond floatation costs – Stock floating costs have been absorbed by the goodwill generated from the stock
placement, when such goodwill has occurred.
Bond floating and underwriting costs have been accounted for under the item Other Assets and are amortized
lineally throughout the term of the documents.
b.b. Vacation – The cost is registered as an expense in the year when such benefit accrues.
3. ACCOUNTING CHANGES
During the period comprised between January 1 and December 31 of the year 2002 there have been no accounting
changes that could significantly affect the consolidated financial statements.
F I N A N C I A L
4. AVAILABLE
The breakdown is the following:
2002
2001
Concept
Th. Ch$
Th. Ch$
Cash in banks
Securities to be deposited
Cash & fixed fund
5,229,096
5,223,015
-
2,216,888
4,872,007
198,986
10,452,111
7,287,881
Totals
The sums included under securities to be deposited correspond mainly to funds collected during the last days of
the month of December of 2002 and 2001 from the different stores, which are deposited beginning on the next
working day.
5. SHORT AND LONG-TERM DEBTORS
Current
Up to 90 days
2002
2001
Item
Th. Ch$
Sales debtors
Bad debt estimate
Receivables
Bad debt estimate
Sundry debtors
Bad debt estimate
20,41,320
222,799
2,134,704
-
Over 90 days
up to 1 year
2002
2001
Th. Ch$
Th. Ch$
9,989,385
536,901
2,018,488
-
324,367
3,089
4,480
-
Subtotal
Th. Ch$
13,385
79,266
77,861
-
Th. Ch$
20,565,687
189,631
225,888
92,951
2,139,184
20,056
Current total (net)
2002
2001
Th. Ch$
Long Term
2002
2001
Th. Ch$
Th. Ch$
Th. Ch$
10,002,770
616,167
2,096,349
5,733,183
5,306,522
-
-
-
-
a. Short-term sundry debtors:
The breakdown of short-term sundry debtors is the following:
2002
Th. Ch$
2001
%
Th. Ch$
%
Personnel current accounts
444,516
Fund to be rendered
426,137
Advance to suppliers
197,250
Sundry current accounts
140,667
Accounts receivable shareholders
96,372
Other advances
218,991
Other debtors
595,195
20.98
20.11
9.31
6.64
4.55
10.33
28.08
570,342
89,091
255,484
393,194
116,726
301,485
370,027
27.21
4.25
12.19
18.76
5.57
14.38
17.64
Totals
100.0
2,096,349
100.0
2,119,128
79
20,376,056
132,937
2,119,128
b. Long-term sundry debtors:
The balance of the item long-term sundry debtors corresponds to loans granted to Company workers in order to
acquire shares of stock, approved according to the board meetings of December 2, 1997 and December 14, 1999.
Such loans were granted in UF and they accrue an annual interest of 6% and 5%, respectively.
F I N A N C I A L
As a manner to establish guarantees over the above-indicated loans, the shares were pledged in favor of the
Company. Finally, as agreed between the parties, each worker shall be entitled to exercise the option right, whose
final deadline is December 2004.
During the period, as a result of the reallocation of some loans, an income was generated in the amount of
Ch$ 315,320 thousand which is shown under Other non-operating income.
The loans that expired in December 2002 shall be liquidated and/or reallocated during the year 2003.
6. B
ALANCES AND TRANSA
CTIONS WITH RELA
TED ENTITIES
BALANCES
TRANSACTIONS
RELATED
a. Main companies related to the Company:
During 2002 and 2001 the Company had transactions and balances with the following related companies:
Shareholders
RUT Taxpayer Id.
79.799.330-1
Indirect subsidiary
Droguería y Farmacias El Fenix S.A. de C.V. ( México)
80
Foreign
Related via shareholders
Promotora C.M.R. Falabella S.A.
Falabella S.A.C.I.
Distribuidora y Comercial Edeka S.A.
Administradora CMR Falabella Ltda.
Viajes Falabella Ltda.
La Interamericana S.A. Cía. de Seguros de Vida
Jaime Ben-Dov Codner Ltda.
La Interamericana S.A. Cía. de Seguros Generales
Banco Falabella
90.743.000-6
90.749.000-9
85.703.300-0
79.598.260-4
78.997.060-2
99.289.000-2
78.345.300-2
99.288.000-7
96.509.660-4
Related via board members and executives
Inversiones K y V Ltda.
G y B Asesorías e Inversiones S.A.
Vial y Palma Ltda.
Inversiones Zermatt Ltda.
Iron Mountain Chile S.A.
Abogados Vial y Palma
Bellmar S.A.
Servicios e Inversiones Asefin Ltda.
Asesorías e Inversiones La Grulla Ltda.
Asesorías Latri Ltda.
Omega Inversiones y Asesorías Ltda.
Jaime Sinay
Alexander Fernandez
Pablo Lamarca Claro
78.743.430-4
96.577.790-3
84.257.600-8
78.482.780-1
96.756.680-2
78.741.580-6
96.712.590-3
77.565.530-5
78.588.910-K
77.153.300-0
79.765.310-1
6.377.768-4
6.987.378-2
9.604.686-3
5.319.489-3
b. Short-term receivables and payables:
The short and long-term balances receivable and the short and long-term balances payable originate mainly from
routine business operations under normal market conditions, which are stated in non-restatable dollars and pesos
not accruing interest, and the balance is kept in a running account.
F I N A N C I A L
c. Transactions:
The main transactions performed with related companies are the following:
2002
2001
Impact on
Impact on
results
Description of transaction
Arriendos
pagados
Leases paid
Arriendos
espacios
Leasing of de
(floor)
space
Gastos
de publicidad
Advertising
expenses
Otros
Other Ingresos
income
Servicios
pagados
Services paid
Ventas
con tarjetas
Credit card
sales de crédito
neto
comisiones
net ofdecommissions
Recaudaciones
CMR collection CMR
Comisiones
Commissionspagadas
paid
Servicios
asesorías recibidas
Services &y consulting
received
Servicios
asesorías prestadas
Services &y consulting
rendered
Seguros
de vida
Life insurance
policies
Seguros
generales
Other general
insurance policies
Contratos
de arriendo
leasing
Leasing rental
contracts
Mejoras
en locales
Store improvements
results
Amount
(charge) credit
Amount
(charge) creditLeases paid
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
1,082,722
40,067
5,900
134,812
301,947
(1,059,697)
40,067
(5,000)
114,247
(301,947)
1,091,598
40,100
80,216
39,116
191,311
(1,068,327)
40,100
(67,980)
33,150
(191,311)
41,360,194
2,215,417
301,268
102,202
143,122
41,041
87,904
184,380
943,946
(255,312)
(102,202)
(143,122)
(34,781)
(82,913)
(101,328)
(2,032)
35,802,765
326,875
230,183
29,503
29,590
144,620
193,401
1,030,709
(277,012)
(230,183)
(29,503)
(25,076)
(122,560)
(873,482)
81
7. INVENTORIES
The breakdown of the inventories is the following:
Detalle
Item
2002
2001
Th. Ch$
Th. Ch$
Mercaderías for
para
la venta
Merchandise
sale
Mercaderías
en tránsito
Goods
in transit
Materias
primas
recetario service
Basic
products
for de
prescription
Otrasminor
existencias
menores
Other
inventories
Provisión obsolescencia
Obsolescence
provision
84,811,496
116,799
632,790
241,720
(80,000)
41,628,705
438,343
442,552
353,284
(82,838)
Totales
Totals
85,722,805
42,780,046
F I N A N C I A L
8. DEFERRED TAXES AND INCOME TAXES
a. Income tax – As of December 31, 2002, the taxable net income of the affiliates Filiales Fasamed Comércio
Farmacêutico S.A. (former Drogamed Comércio de Medicamentos e Perfumaria S.A. Brazil) and Laboratorios Fasa
S.A., calculated for tax purposes, amounted to approximately Ch$217,928 thousand (Ch$6,879,618 thousand as of
December 2001) for the Parent Company and its subsidiary Fasamed Comércio Farmacêutico S.A. (former Drogamed
Comércio de Medicamentos e Perfumaria S.A. Brasil).
The breakdown of the taxes to be recovered is the following:
82
,
2002
2001
Th. Ch$
Th. Ch$
Impuesto
a la renta
de primera
categoría
First Category
Income
Tax
Pagos
provisionales
mensuales
Monthly
social security
payments
Créditos
donaciones
y créditos
Sence
Credits por
for donations
and
SENCE credits
Impuesto
extraordinario
activo fijo
Additional
tax fixed assets
Pagos
a cuenta
de impuesto
la renta 3income
categoría
Payments
on account
of 3rda category
tax
Pagos
provisionales
por for
impuestos
de primera
Provisional
payments
First Category
Taxescategoría
de
31 3)
N° 3)
forutilidades
absorbed absorbidas
profits (Art.(Art.
31 N°
Otros
recuperar
Othercréditos
credits por
recoverable
(36,480)
1,214,288
225,405
149,804
12,380
(1,032,106)
907,820
129,657
-
43,014
314,935
230,339
Subtotal
Subtotal
1,923,346
235,710
IVA
fiscal tax - fiscal credit
IVAcrédito
value added
2,515,586
-
Impuesto
por recuperar
Taxes recoverable
4,438,932
235,710
b. Accumulated tax profit – The balance of the tax profits withheld with the 15% credit amounted to approximately
Ch$ 12,763,054 thousand (Ch$ 13,791,700 as of December 31, 2001) and the corresponding credit for the profits
recorded in the F.U.T. to be allocated to shareholders when dividends are distributed, amounted to CH $1,914,458
thousand approximately (Ch$2,068,755 thousand as of December 31, 2001).
The affiliates, with the exception of Fasa do Brasil Ltda. and Laboratorios Fasa S.A., have tax losses totaling
Ch$4,684,560 thousand, when added individually.
F I N A N C I A L
DEFERRED TAXES
The balances of assets and liabilities for taxes deferred because of the legal incorporation of Far-Ben S.A. de C.V.
(Mexico) correspond to Ch$23,604,498 thousand and Ch $23,526,844 thousand, respectively, since only the
balances of the assets and liabilities have been consolidated from such affiliate. (Note 2c).
Deferred Taxes
2002
Assets
Short
term
Th. Ch$
Concepts
Diferenciasdifferences
temporarias
Temporary
Provisión
cuentas incobrables
Bad
debt provision
Ingresos anticipados
Advanced
income
Provisión provision
de vacaciones
Vacation
Amortización intangibles
intangibles
Amortization
Activos en
leasing
Leasing
assets
Depreciación ofactivo
Depreciation
fixed fijo
assets
Indemnización
años de
Severance
pay (years
of servicio
service)
Otros events
eventos
Other
Pérdidas
Tax
lossestributarias
Provisión obsolescence
de obsolescencia
de inventario
Inventory
provision
Provisión for
de unrealized
utilidades no
realizadas
Provision
profits
Obligaciones
por leasing
Leasing
obligations
Otras provisions
provisiones
Other
Cuentas por cobrar
Receivables
Prepagoprepayment
leaing
Leasing
Plan de plan
pensiones
Pension
Mejoras en inmuebles
Improvements
to leasedarrendados
real estate
Existencias
Inventories
Otros
Other
Cuentas complementarias-neto
deamortization
amortización
Complementary
accounts - net of
Provisión de
valuación
Valuation
provision
Totales
Totals
2001
Liabilities
Long
term
Th. Ch$
Short
term
Th. Ch$
Assets
Long
term
Th. Ch$
Short
term
Th. Ch$
Liabilities
Long
term
Th. Ch$
Short
term
Th. Ch$
Long
term
Th. Ch$
236,735
176,907
420,803
13,200
40,082
100,207
7,153
-
98,429
123,992
2,676,821
20,869,507
430,257
252,465
119,910
1,012,302
5,228,179
-
19,800
-
1,033,338
11,935,652
22,500
1,166,950
14,477,551
153,149
178,792
23,287
84,912
23,346
-
48,478
57,633
396,219
1,596,442
410,405
215,200
-
19,776
-
1,037,253
1,242,965
874,224
-
5,307
-
5,557,403
189.091
-
1,799,155
-
11,723
-
452,059
334,704
-
36,468
-
989,780
25,065,368
19,800
26,836,836
451,763
1.937,164
19,776
3,117,974
INCOME TAXES
2002
2001
Th. Ch$
Th. Ch$
Current
tax expenses
(tax provisions)
Gasto tributario
corriente
(provisión impuesto)
(36,480)
Tax
expense
(previousanterior)
fiscal year)
Ajuste
gasto restatement
tributario (ejercicio
Tax
benefits
for tax olosses
Efecto
por activos
pasivos por impuesto diferido del ejercicio (325,697)
Impact
on assets
or liabilities
for the
year’s deferred taxes
Beneficio
tributario
por pérdidas
tributarias
43,014
Impact
asset accounts
Efecto for
por amortization
amortizaciónofdecomplementary
cuentas complementarias
de activos
and
deferred
liabilities
y pasivos
diferidos
55,070
Impact
assets oro liabilities
for impuesto
taxes deferred
because
Efecto on
en activos
pasivos por
diferido
por cambios
ofenchanges
in thedevaluation
provision
la provisión
valuación
140,306
Other
debits en
on la
thecuenta
account
Otros charges
cargos oorabonos
243,543
(1,032,106)
(169,479)
375,731
-
Totals
Totales
(1,130,189)
119,756
(12,141)
(292,194)
-
83
F I N A N C I A L
9. FIXED ASSETS
The breakdown of the fixed assets is the following:
Gross
fixed assets
2002
Accumulated
depreciation
Th. Ch$
Terrenos
Land
Instalaciones
Facilities
Maquinarias
y equipos
Machinery
& equipment
Otrosfixed
activos
fijos:
Other
assets:
Equipamiento
computacional
Computer
equipment
Muebles&y supplies
útiles
Furniture
Vehículos
Vehicles
Activosassets
en leasing
Leased
Instalaciones
en inmuebles
arrendados
Facilitites
on leased
real estate
Otros
Other
Totalfixed
activo
fijo
Total
assets
Th. Ch$
Gross
fixed assets
2001
Accumulated
depreciation
Th. Ch$
Th. Ch$
20,591,160
16,371,459
21,561,398
6,136,929
14,437,802
3,928,315
6,136,872
-
2,196,115
-
34,369,462
57,429,171
4,175,879
5,298,542
45,285,086
2,776,563
26,014,012
30,525,860
2,871,769
1,280,785
18,991,046
90,651
10,288,812
7,589,563
359,921
5,437,866
12,500,619
608,617
4,451,176
2,872,996
204,856
1,106,279
3,798,737
34,087
207,921,720
100,348,854
46,850,585
14,664,246
Depreciation is included under administration and sales expenses and amounts to Ch$ 4,987,554 thousand in
2002 and Ch$ 3,802,279 thousand in 2001.
84
Leased fixed assets correspond mainly to computer equipment and to the installation of business premises.
During January 2001 the Company prepaid goods acquired through financial leasing for a total amount of
Ch$ 1,428,834 thousand(historical).
In the Parent Company, leased assets include computer equipment for business premises, sold with financial
leaseback agreement. The total value of the contracts that include these assets is Ch$ 1,853,809 thousand(historical).
The sale price was Ch$ 823,368 thousand (historical) and generated a profit of Ch$ 214,682 thousand that is
amortized in 48 months. The non-amortized balance as of December 31, 2002 amounted to Ch$ 80,508 thousand
(Ch$ 138,201 thousand in 2001) and is shown deducting other fixed assets. The average rate of interest of these
contracts is of 9.39%.
The management of Far-Ben S.A. de C.V. (Mexico) estimated an overvaluation of its fixed assets by approximately
Ch$ 3,442,000 thousand, thus registering a provision for the valuation of fixed assets.
10. INVESTMENTS IN RELA
TED COMP
ANIES
RELATED
COMPANIES
As of December 31, 2002, the investment balance in related companies corresponds to the investment in Droguería
y Farmacias El Fénix S.A. de C.V. (Mexico). The effect on results for the accrued loss of Ch$65,877 thousand was not
included in the income statement, since it only considers assets and liabilities of Far-Ben S.A. de C.V. (Mexico).
F I N A N C I A L
11. GOODWILL AND BADWILL
Goodwill was generated by the acquisition of shares of stock of the affiliates Boticas Fasa S.A. (Peru) in 1998 and
2001; and of Compañía de Nutrición General S.A. in 2002, 2001 and 2000; Droguería la Victoria S.A.C. (Peru) in
2001, Fasamed Comércio Farmacêutico S.A. (former Drogamed Comercio de Medicamentos e Perfumaría S.A. Brazil)
and Fasint Ltda. (Brazil) in June of the year 2000. Goodwill in Droguería y Farmacias El Fénix S.A. de C.V. (Mexico) was
incorporated by way of the consolidation of the general balance sheet of Far-Ben S.A. de C.V. (Mexico), as indicated
in Note 2. Because of the foregoing, the amortization of goodwill in Droguería and Farmacias El Fénix S.A. de C.V.
(México) amounted to Ch$28,901 thousand and it is not included in the consolidated income statement because it
only considers assets and liabilities of Far-Ben S.A. de C.V. (Mexico).
Goodwill will be amortized in 15 years in the case of Boticas Fasa S.A. (Peru), 10 years in the case of Droguería La
Victoria S.A.C. (Peru), Compañía de Nutrición General S.A., Fasamed Comércio Farmacêutico S.A. (former Drogamed
Comercio de Medicamentos e Perfumaría S.A. Brazil) and Fasint Ltda. (Brazil), and 20 years in the case of Droguería
y Farmacias El Fénix S.A. de C.V. (Mexico). These time periods have been determined considering the respective
estimated return-on-investments periods.
RUT Taxpayer Id.
Foreign
96.792.260-9
Foreign
Foreign
Foreign
Foreign
Totals
Company name
2002
Amount
amortized
Balance
in period
goddwill
Th. Ch$
Th. Ch$
Boticas Fasa S.A. (Peru)
96,989
112,904
Fasamed Comércio Farmacêutico S.A. (Brazil)
(ex-Drogamed Comércio de Medicamentos
e Perfumaria S.A.)
1,430,169
Fasint Ltda. (Brazil)
250,219
Droguería La Victoria S.A.C.(Peru)
58,154
Droguería y Farmacias El Fenix S.A. de C.V.
(Mexico)
1,948,435
2001
Amount
amortized
Balance
in period
goddwill
Th. Ch$
Th. Ch$
978,160
775,100
76,192
84,100
1,009,055
342,213
10,726,265
1,944,570
-
1,342,250
253,851
7,412
11,662,971
1,940,688
73,850
390,372
-
-
14,814,467
1,763,804
15,028,777
Badwill of Ch$ 8,422,160 thousand was generated because the acquisition of the shares of stock of the subsidiary
Fasamed Comércio Farmacêutico S.A. (Brazil) during 2001 and of Far-Ben S.A. de C.V. (Mexico) during 2002, which
are amortized in 10 and 5 years, respectively.
85
F I N A N C I A L
12. SHOR
T-TERM DEBT WITH B
ANKS AND FIN
ANCIAL INSTITUTIONS
SHORT
BANKS
FINANCIAL
They correspond to debt in UF, in non-restatable pesos, and in other currencies:
2002
Short
Long
term
term
Th. Ch$
Th. Ch$
2001
Short
Long
term
term
Th. Ch$
Th. Ch$
Banco Interbanc
64,889
Banco BCN
59,498
Banco de Crédito
5,562
Banco Santander
654,632
Banco HSBC S/A Finame
1,636,799
Banco HSBC S/A Capital de Giro
41,305
Banco Safra S/A
569,699
Corpbanca
Banco Cidade
Banco de Chile
Factoring Banco Chile
Banco Santiago
-
76,952
-
1,277,467
523,261
650,091
587,105
1,478,953
2,080,948
61,051
9,245
119,168
-
Totals
76,952
6,668,121
119,168
3,032,384
As of December 31, 2002, long-term liabilities reflected long-term debt with maturities within 1 year and totaling
86
Ch$ 76,952 thousand (Ch$ 119,168 thousand in 2001). Such debt accrues an average rate of interest of 6.9% per
year.
13. SHOR
T AND LONG-TERM CORPORA
TE BONDS
SHORT
CORPORATE
On December 5, 2002 the Company placed UF 2,000,000 in Bonds Series A-1 and A-2 in the local market. Such
placement generated resources totaling Ch$ 33,010,801 thousand.
The non-amortized balance of the discount made at the time of the auction amounted to Ch$ 690,081 thousand;
of which, Ch$ 151,876 thousand are shown under Other current assets, and Ch$ 538,205 thousand under Other
long-term assets.
The funds raised from such Bond placement were mostly allocated to taking control over the company denominated
Sociedad Mexicana Farmacias Benavides S.A. de C.V. through the companies Fasa Investment S.A. and Inverex S.A.
for a total amount of US$ 37,290,321.68 y US$ 7,000,000, respectively.
The balance is shown in the Short-Term as Ch$ 367,155 thousand corresponding to interest accrued as of
December 31, 2002 and payable on April 15, 2003.
The capital will be amortized semi-annually as of April 15, 2005.
On May 22, 1997, the Company issued the “Bond Issue Convertible at the Option of the Holder into Series “B”
Shares of Stock of FARBEN, S.A. de C.V.” (BEVIDES 97U) issuing 2,250,000 nominal bonds at a face value of 100 UDIS
each, consequently, representing a total value of 225,000,000 UDIS.
These are unsecured bonds with not specific guarantee, except for certain limitations in the Company’s financial
and corporate structure. The funds raised from such bond issue were allocated to the consolidation of liabilities.
F I N A N C I A L
By virtue of the public deed dated September 3, 2002, modifications were introduced into the minutes of the
respective bond issue, thereby agreeing that the amortization of such bonds will be carried out in three (3) equal
installments on the following dates: July 5, 2007, August 28, 2008 and September 4, 2009, and that the rate of interest
will be of 6% in UDIS.
14. ACCOUNTS P
AYABLE
PA
The breakdown of accounts payable as of December 31, 2002 and 2001 is the following:
2002
Th. Ch$
2001
Th. Ch$
Domestic suppliers
Accounts assigned by suppliers
100,973,610
72,825
42,326,928
5,758,680
Totals
101,046,435
48,085,608
The balance payable to domestic suppliers corresponds mainly to purchases of inventories, in the currencies of
the respective countries.
The accounts assigned by suppliers correspond to accounts owed to certain suppliers that assigned a portion of
their receivable portfolio to Servicios Financieros Citibank (Chile) S.A.
87
15. LONG-TERM LIABILITIES
Closing Date
Current Period
Institution
Corpbanca
Sundry Creditors (1)
Others
Years of Maturity
Restatement
currency Over 1
Over 2
Over 3
index
up to 2
up to 3 up to 5
Th. Ch$ Th. Ch$ Th. Ch$
UF
UF
$R
Soles
UF
75,014
564,156
74,546
8,682
3,007
75,014 112,520
308,614 122,147
32,392
15,960 112,978
-
Over 5
up to 10
Th. Ch$
Total L-T
as of closing
of financial
statements
Th. Ch$
Average
annual
rate of
interest
1,545,632
-
262,548
2,540,549
106,938
137,620
3,007
3.90%
9.48%
22.00%
10.00%
-
Closing Date
Previous
Period
Total L-T
as of closing
of financial
statements
Th. Ch$
337,691
2,453,334
-
(1) These liabilities correspond to leasing contract installments of computer equipment purchases, installations and equipment provisions
for business premises.
Additionally, long-term liabilities include Ch$ 54,683,157 thousand in bonds held by the public, Ch$ 158,545
thousand in documents payable, Ch$ 1,771468 thousand (Ch$ 1,180,810 thousand in 2001) in deferred taxes, and
other liabilities totaling Ch$ 4,986,594 thousand (Ch$ 1,315,697 thousand).
F I N A N C I A L
16. EQUITY CHANGES
The Equity Account changes occurring in 2002 and 2001, in historical figures, were the following:
Interim
dividends
Th. Ch$
Deficit
development
period
Th. Ch$
938,483
2,664,590
10,800
122,532
-
(600,000)
1,500,000
(889,200)
(10,800)
(27,226)
(1,350,000)
(122,804)
(153,110)
(3,807)
-
4,164,590
(4,164,590)
6,580,460
-
48,363,467
(889,200)
(153,110)
1,576,562
(413,678)
1,454,978
6,580,460
(1,350,000)
1,576,562
47,297
3,736,405
112,092
(1,377,226)
(41,317)
(279,721)
(8,392)
6,580,460
197,414
55,169,479
1,655,084
46,280,989
1,623,859
3,848,497
(1,418,543)
(288,113)
6,777,874
56,824,563
2002:
Balance at 1st, 2002
Retained earnings previous year
Final Dividend previous year
Accomulated deficit during developing period
Foreign investments valuation
Transfers
Price level restatement of equity
Net Income
Provisional dividends
44,932,999
1,347,990
-
1,576,562
720,619
47,297
-
3,736,405
4,168,310
(15,076)
239,633
-
(1,377,226)
2,412,150
(1,050,000)
15,076
(24,000)
(1,200,000)
(279,721)
(151,132)
(8,392)
-
6,580,460
(6,580,460)
1,738,188
-
55,169,479
(1,050,000)
(151,132)
720,619
1,602,528
1,738,188
(1,200,000)
End Balance at 31 of december of 2002
46,280,989
2,344,478
8,129,272
(1,224,000)
(439,245)
1,738,188
56,829,682
Paid-in
capital
Th. Ch$
Other
reserves
Th. Ch$
2001:
Balance at 1st, 2001
Retained earnings previous year
Final Dividend previous year
Accomulated deficit during developing period
Foreign investments valuation
Transfers
Price level restatement of equity
Net Income
Provisional dividends
43,581,958
1,351,041
-
401,240
1,576,562
(413,678)
12,438
-
End Balance at 31 of december of 2001
Extraordinary Actualization
44,932,999
1347,990
Price Level restatement of ending balance
Item
88
Accumulated
results
Th. Ch$
NUMBER OF SHARES
Number of
Number of
Number of
subscribed
paid
voting right
shares
shares
shares
150,000,000
150,000,000
150,000,000
Series
Single series
CAPIT
AL (AMOUNT – CH$ THOUSAND)
CAPITAL
Series
Single series
Subscribed
Paid
capital
capital
46,280,989
46,280,989
Year's
result
Th. Ch$
Total
Th. Ch$
F I N A N C I A L
DEFICIT ACCUMULA
TED DURING THE AFFILIA
TE DEVELOPMENT PERIOD
CCUMULATED
AFFILIATE
Amount
RUT Taxpayer's Id.
96.863.980-3
Foreing
Company
ABF, Administradora de
Beneficios Farmaceuticos S.A.
Farmaceuticos do Brasil S.A.
Of the year
Accumulated
Th. Ch$
Th. Ch$
Observations
-
(130,408)
Previous year balance
(151,132)
(308,837)
Previous year balance
Year's deficit
a. Accumulated deficit development period – as of December 31, 2002 and 2001 Farmacias Ahumada S.A., the
parent company, recorded an equity decrease originated by the expenses of the development period of the indirect
affiliate company Administradora de Beneficios Farmacéuticos do Brasil S.A. incurred as of that date; showing such
equity decrease in the account labeled Accumulated deficit affiliate development period, under the item Shareholders’
equity.
As of December 31, 2001, Farmacias Ahumada S.A., the Parent Company, recognized an equity reduction originated
by the expenses incurred during the period of development of the indirect affiliate ABF, Administradora de Beneficios
Farmacéuticos S.A., incurred as of that date, showing such equity decrease in the account denominated Accumulated
deficit – affiliate development period, under the Shareholders’ Equity item.
89
b. Profit distribution – According to current legislation, at least 30% of the profits must be distributed as cash
dividends, unless resolved otherwise by the Shareholders’ Meeting by the unanimous vote of all shares issued.
In 2001 the dividend policy agreed by the shareholders was to distribute at least 30% of the year’s profits, which
corresponds to the minimum mandatory dividend.
The Ordinary Shareholders’ Meeting of April 18, 2002, adopted the following resolutions with respect to the
allocation of the profits of the year 2001: to pay a minimum mandatory dividend, equivalent to 36.66% of the year’s
net profits, that is the sum of Ch$ 2,412,150 thousand (historical), and the balance of such profits, that is the sum of
Ch$ 4,168,310 thousand (historical), to be credited to the accumulated profits account.
An interim dividend in the amount of Ch$ 1,350,000 thousand (historical) was distributed in September of the
year 2001 and charged to the minimum mandatory dividend of 36.66%, namely, Ch$ 2,412,150 thousand. As a
result of the foregoing, the new balance of dividends to be distributed amounted to Ch$ 1,050,000 thousand, which
was paid in cash.
c.Payment of dividends – The Shareholders’ Meeting agreed to distribute the following dividends during the years
2002 and 2001:
Dividends
Interim
Final
Interim
Final
Year Charged
2002
2001
2001
2000
Agreement Date
Date Made Available
to Shareholders
08/29/2002
04/18/2002
08/30/2001
04/25/2001
09/24/2002
05/07/2002
09/20/2001
05/10/2001
Amount
Ch$
1,200,000
1,050,000
1,350,000
889,200
F I N A N C I A L
d. Other reserves – This reserve originates from equity changes in the investments made in related companies abroad.
(1)
Balances as of
31/12/2001
Th. Ch$
Company
Investment
conversion
Th. Ch$
Balances as of
31/12/2002
Th. Ch$
Fasa Investment S.A.
Farmacias Ahumada Internacional S.A.
Laboratorios Fasa S.A.
Beneficios Farmacéuticos S.A.
1,623,816
43
-
720,809
(415)
143
41
2,344,625
(372)
143
41
-
41
41
Totals
1,623,859
720,619
2,344,478
(1) Corresponds to balances updated as of December 31, 2001.
The reserves for Fasa Investment S.A., Laboratorios Fasa S.A., ABF and Administradora de Beneficios Farmacéuticos
S.A. originate mainly because of their investments in their affiliates Fasa do Brasil Ltda. and Boticas Fasa S.A. (Peru),
while those for Compañía de Nutrición General S.A. originate because of its investment in its affiliate Nutrilabs
(U.S.A.).
17. MONET
AR
Y CORRECTION
MONETAR
ARY
90
Item
Restatement
index
(Charges) credits:
Assets, expenses and costs
IPC
UF
Total credits
Liabilities, income
IPC
UF
Total charges
Monetary correction loss
Amount
2002
Th. Ch$
2001
Th. Ch$
6,263,525
217,220
4,499,764
248,657
6,480,745
4,748,421
(6,698,078)
(114,672)
(5,010,934)
(229,547)
(6,812,750)
(5,240,480)
(332,005)
(492,059)
18. EXCHANGE DIFFERENCES
Item
(charges)/ credits
Assets
Liabilities
Profit for exchange difference
Currency
Ame. Dollars
brasilian real
Ame. Dollars
Amount
2002
2001
Th. Ch$
Th. Ch$
395,065
11
(1,057,729)
968,547
146
(459,934)
1,452,805
508,759
F I N A N C I A L
19. CONTINGENCIES AND RESTRICTIONS
Lawsuits and other legal actions
There are five small-amount civil lawsuits for indemnification of damages against the Company. In the opinion of
the Company’s legal counsels, there is no possibility that these lawsuits could derive into significant losses for the
Company.
Contingencies
As of December 31, 2002, the Company is not exposed to contingencies that are not provisioned for.
Commitments
The Company agreed with the employees who executed loan contracts to acquire shares, that the Company
would absorb the eventual lesser value caused in case that the proceeds of the sale of the shares was less that the debt
owed by each worker to the Company for that concept. As of December 31, 2002, there are no liabilities for such
concept.
Restrictions
By virtue of a public deed dated September 2, 2002 granted by the Santiago Public Notary’s Office of Mr. Patricio
Raby Benavente, the Company executed a bond issue contract through which the Company commits to maintaining
certain financial indicators (covenants) calculated over its individual and consolidated financial statements, as fo-llows:
Bonds Series A1 and A2:
Restrictions related to Bond Issues
(A) A level of indebtedness, measured over figures of its consolidated and individual balance sheets, defined as the
ratio between (i) Financial Liabilities (account 5.21.10.10 plus account 5.21.10.20 plus account 5.21.10.30 plus account
5.21.10.40 plus account 5.21.10.50 plus account 5.22.10.00 plus account 5.22.20.00 plus account 5.22.40.00 of the
FECU) and, (ii) Shareholders’ Equity (account 5.23.00.00 plus account 5.24.00.00 of the FECU), (hereinafter the “Level of
Indebtedness”), not higher than zero point eighty times. In order to determine the Level of Indebtedness in the consolidated
FECU, the following shall be regarded as financial liabilities of the ISSUER: the amounts of all endorsed guarantees, simple
or joint-and-several surety bonds, joint and several debt or other guarantees, personal or collateral, which the Issuer or its
affiliates would have given to secure third-party liabilities, with the exception of: (i) those given by the ISSUER or its affiliates
on account of liabilities of other affiliate companies of the ISSUER; and (ii) those given by ISSUER affiliate companies on
account of liabilities of the ISSUER. In turn, in order to determine the Level of Indebtedness in the individual FECU, the
following shall be regarded as financial liabilities of the ISSUER: the sum total of all endorsed guarantees, simple or joint-andseveral surety bonds, joint and several debt or other guarantees, personal or collateral, given by the ISSUER to guarantee
third-party liabilities, even if they belong to its affiliates.
(B) A Financial Expense Hedging Ratio, measured over figures of its individual balance sheets, defined as the ratio
between: (i) the Operating Result (account 5.31.11.00 of the FECU) plus Depreciation(Account 5.50.30.05 of the FECU)
and (ii) Net Financial Expenses (Account 5.31.12.60 minus Account 5.31.12.10 of the FECU), not less than two point fifty
times as of the closing of each quarter until that which ends on December 31 of the year 2003; and no less that three point
zero times as of the closing of each subsequent quarter. The Financial Expense Hedging Ratio must be calculated over the
91
F I N A N C I A L
last 12-month period concluded as of the date of the corresponding FECU. All values must be stated in the currency of
their respective FECU.
These indicators, for the year ending on December 31, 2002, were the following:
Consolidated level of indebtedness
Individual level of indebtedness
0.76
0.66
Financial Expense Hedging Ratio
7.20
Benavides’ Bonds
The long-term debt includes several restrictions that limit the Company to obtain and guarantee additional debt,
as well as abiding by certain financial restrictions. Additionally, they include financial restrictions that must be
maintained on the basis of the Company’s consolidated financial statements. The Company’s ability to pay dividends
is, consequently, restricted by the referred consolidated financial restrictions. The financial ratios for the consolidated
and for the affiliates include the following: (i) The current-assets-to-current-liabilities ratio, (ii) the total-liabilities-to-networth
ratio, (iii) the current-debt-to-net-worth ratio and, (iv) the ratio of operating profit plus depreciation, plus virtual items
that do not represent cash outflows to net financial expenses. The consolidated financial ratios that they must
maintain are: (i) not less than 1.0 (ii) not more than 1.2 (iii) not more than 0.80, and (iv) not less than 1.5, respectively
Direct guarantees
92
Supplier-related Invoices and Guarantee Bills [Boletas y Letras de Garantía] – which do not commit assets as of
December 31, 2002 – amount to Ch$ 123,424 thousand (Ch$ 123,045 thousand in 2001).
20. NATION
AL AND FOREIGN CURRENCY
TIONAL
ASSETS
Types of Currency (2002)
Item
Current liabilities
Fixed assets
Other assets
Totals
Non-restatable
pesos
Restatable
pesos
US Dollars
55,231,167
31,000,482
3,271,744
63,027
7,540,384
7,610,388
(3,691,124)
Totals
Other
Currencies
91,737,297
76,572,384
16,172,768
2002
Th. Ch$
2001
Th. Ch$
154,641,879
107,572,866
23,293,772
77,623,570
32,186,339
24,189,501
285,508,517
133,999,410
F I N A N C I A L
CURRENT LIABILITIES
Up to 90 days
2002
Item
Average annual
rate of
Amount
interest
Th. Ch$
%
Currency
Current liabilities
Ch Pesos
US Dollars
UF
Other currencies
53,600,492
1,676,240
1,002,199
81,744,676
90 days to 1 year
2001
7.68
Amount
Th. Ch$
44,656,233
1622,220
411,065
17,475,103
2002
Average annual
rate of
interest
%
Amount
Th. Ch$
38,937
477,770
-
8.15
2001
Average annual
rate of
interest
%
Amount
Th. Ch$
511,562
-
7.68
Average annual
rate of
interest
%
8.15
Totals
2002
Th. Ch$
Total
2001
Th. Ch$
53,639,429
1,676,240
1,479,969
81,744,676
44,656,233
1,622,220
922,627
17,475,103
138,540,314
64,676,183
LONG-TERM LIABILITIES
2002
1 to 3 years
Item
Currency
Amount
Th. Ch$
Long-term liabilities
UF
Ch. Pesos
Other currencies
3 to 5 years
Average annual
rate of
interest
%
7,779,047
237,355
6,750,055
7.62
Amount
Th. Ch$
13,571,404
1,537,120
7,064,972
Average annual
rate of
interest
%
7.62
5 to 10 years
Amount
Th. Ch$
Average annual
rate of
interest
%
14,940,928
14,129,945
Over 10 years
Amount
Th. Ch$
8.34
Average annual
rate of
interest
%
-
Total
Th. Ch$
36,291,379
1,774,475
27,944,972
Totals
66,010,826
2001
1 to 3 years
Item
Curency
UF
Ch. Pesos
Other currencies
Total
3 to 5 years
Average annual
rate of
Amount
interest
Th. Ch$
%
998,510
1,233,185
3,386,088
8.2
Amount
Th. Ch$
234,758
-
Average annual
rate of
interest
%
8.2
5 a 10 años
Amount
Th. Ch$
409,516
-
Más de 10 años
Average annual
rate of
interest
%
9.39
Amount
Th. Ch$
1,136,224
-
Average annual
rate of
interest
%
9.39
Total
Th. Ch$
2,779,008
1,233,185
3,386,088
7,398,281
21
ACTS
21.. SUBSEQUENT FFA
On January 6, 2003, the Company notified the Superintendence for Securities and Insurance Companies that Mr.
Felipe Hurtado Parot joined as Corporate General Secretary of Farmacias Ahumada S.A. as of January 2, 2003.
On February 28, 2003, the Company notified the Superintendence for Securities and Insurance Companies that
Mr. Marcelo Salinas Plandiura joined as Corporate Studies & Planning Manager of Farmacias Ahumada S.A. as of
February 1, 2003.
93
I n d i v i d u a l
F i n a n c i a l
S t a t e m e n t s
F I N A N C I A L
GENERAL BALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001
2002
2001
Th. Ch$
Th. Ch$
ACTIVO
ASSETS
96
CIRCULANTE:
CURRENT
Disponible
Cash
Depósitos
a plazo
Time
deposits
Valores negociables
Marketable
securities
Deudoresreceivables,
por ventas net
Account
Documentos por cobrar
Receivables
Deudores
varios
Sundry
debtors
Documentos
cuentas
porcompanies
cobrar a empresas relacionadas
Amounts
due yfrom
related
Existencias
Inventories
Impuestos
por Recoverable
recuperar
Income
taxes
Gastos pagados
Prepaid
expensespor anticipado
ImpuestosIncome
diferidostaxes
Deferred
Otros activos
Other
current circulantes
assets
6,315,456
2,021,247
4.686.495
7,108,081
105,426
875,542
7,687,979
31,843,574
1,432,400
99,289
523,480
575,928
4,819,975
7,649,383
2,136,719
7,123,081
408,488
1,219,404
5,458,721
31,512,977
76,063
416,363
-
Total
assets
Total current
activo circulante
63,274,897
60,821,174
FIXED
FIJO:
Land
Terrenos
Constructions
& infrastructure
works
Construcciones
y obras de infraestructura
Other
assets
Otros fixed
activos
fijos
1,922,682
3,968,295
37,879,946
2,454,814
3,339,750
28,159,704
43,770,923
(14,203,427)
33,954,268
(10,912,896)
Net
fixed
Activo
fijoassets
neto
29,567,496
23,041,372
OTHER ASSETS
OTROS ACTIVOS:
Investments
in related
companies
Inversiones en
empresas
relacionadas
Goodwill,
netde inversiones
Menor valor
Long-term
debtors
Deudores largo
plazo
Amounts
due yfrom
related
Documentos
cuentas
porcompanies
cobrar empresas relacionadas largo plazo
Intangibles
Less:
Acumulated Amortization
Amortización
Other
assets
Otros activos
48,521,202
775,100
5,733,183
28,924
2,244,232
(521,758)
2,135,893
16,134,791
342,213
5,301,721
39,823
1,447,037
(298,474)
1,201,148
Total
Total other
otros assets
activos
58,916,776
24,168,259
151,759,169
108,030,805
Accumulated
Depreciacióndepreciatioin
acumulada
DEL ACTIVO
TOTAL ASSETS
The attached Notes N°1 through N°20 are an integral part of these financial statements.
F I N A N C I A L
GENERAL BALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001
2002
2001
Th. Ch$
Th. Ch$
LIABILITIES
PASIVO
CIRCULANTE:
CURRENT
Obligaciones
instituciones
financieras a corto plazo
Short-term
debt con
duebancos
to bankse and
financial institutions
Obligaciones
e instituciones
financieras
- largoinstitutions
plazo
Current
portioncon
of bancos
Long-term
debt due banks
and financial
porción portion
corto plazo
short-term
Obligaciones
con
público
- porción corto plazo (bonos)
Current
portion
of el
bonds
payables
Obligaciones
plazo
con vencimiento
dentro de un año
Current
portiona largo
of long
term-term
notes payables
Dividendospayable
por pagar
Dividends
Cuentas por
pagar
Accounts
payable
Documentos
por payables
pagar
Short
term notes
Acreedores
varios
Sundry
creditors
Documentos
y cuentas
por pagar
Amounts
payable
to related
companies
Provisiones
Accrued
Expenses
Retenciones
Withholdings
Impuestotaxes
a la renta
Income
payables
-
2,665,187
76,952
367,155
589,451
23,579
45,586,559
975,390
796,095
2,706,478
3,82,663
1,081,665
-
119,168
530,701
14,798
35,163,395
1,476,703
457,229
1,939,654
2,674,428
1,287,570
109,048
Total
liabilities
Total current
pasivo circulante
55,985,987
46,437,881
Other
long-term
liabilities
Otros pasivos
a largo
plazo
262,548
33,488,240
2,530,926
2,591,459
70,327
337,691
2,422,222
1,968,090
40,358
Total
liabilities
Total long-term
pasivo a largo
plazo
38,943,500
4,768,361
SHAREHOLDERS’
PATRIMONIO: EQUITY:
Paid-in
Capital capital
pagado
Other
reserves
Otras reservas
Accumulated
deficitperíodo
subsidiaries
development
period
Déficit acumulado
de desarrollo
- filiales
Retained
Utilidadesearnings
acumuladas
Year’s
profit
income for the year
Utilidad
del net
ejercicio
Interim
dividends
Dividendos
provisorios
46,280,989
2,344,478
(439,245)
8,129,272
1,738,188
(1,224,000)
46,280,989
1,623,859
(288,113)
3,848,497
6,777,874
(1,418,543)
patrimonio
Total shareholders’
equity
56,829,682
56,824,563
151,759,169
108,030,805
LONG
LARGOTERM:
PLAZO:
Due
to banks con
and bancos
financiale institutions
Obligaciones
instituciones financieras
Bonds
payable
Obligaciones con el público largo plazo (bonos)
Sundry
creditors
Acreedores
varios
Deferred
taxes
ImpuestosIncome
diferidos
a largo plazo
TOTAL DEL
PASIVO &
Y PATRIMONIO
TOTAL
LIABILITIES
97
F I N A N C I A L
INCOME ST
ATEMENT FOR THE YEARS ENDED AS OF DECEMBER 31, 2002 AND 2001
STA
INGRESOS
DE INCOME
EXPLOTACION
OPERATING
2001
Th. Ch$
Th. Ch$
233,685,394
219,074,072
COSTOS
DE EXPLOTACION
OPERATING
COST
(175,741,808)
(161,634,457)
OPERATING
MARGIN
MARGEN
DE EXPLOTACION
57,943,586
57,439,615
(54,268,868)
(48,813,281)
3,674,718
8,626,334
446,622
4,862
487,565
(786,769)
(112,405)
(565,460)
(824,421)
(411,104)
355,996
788,082
535,975
92,025
(1,336,630)
(156,037)
(497,125)
(408,852)
(445,752)
967,373
(1,405,114)
(460,941)
2,269,604
8,165,393
(531,416)
(1,387,519)
1,738,188
6,777,874
ADMINISTRATION
& SALES EXPENSES
GASTOS
DE ADMINISTRACION
Y VENTAS
OPERATING
PROFIT
UTILIDAD
OPERACIONAL
98
2002
RESULTADO
NO OPERACIONAL:
NON-OPERATING
INCOME AND EXPENSES:
Interestfinancieros
income
Ingresos
Utilidad
por inversiones
en empresas
relacionadas
in income
of related
companies
Otros
ingresos
fuera
de
la
explotación
Other non-operating income
Pérdida
inversiones
Equity por
participation
in en
lossempresas
of relatedrelacionadas
company
Amortización
menor
de
valor
inversión
Amortization of goodwill
Gastos
financieros
Interest
expenses
Otros
egresos
fuera de expenses
la explotación
Other
non-operating
Corrección
monetaria
Price level restatement, net
Diferencias
de cambio
Foreing Currency
translation, Net
PÉRDIDA
NO OPERACIONAL
NON-OPERATING
EXPENSES, NET
UTILIDAD
DE INCOME
IMPUESTOTAXES
A LA RENTA
INCOMEANTES
BEFORE
IMPUESTO
A LA RENTA
INCOME TAXES
UTILIDAD
DEL EJERCICIO
NET INCOME
FOR THE YEAR
F I N A N C I A L
CASH FLO
W ST
ATEMENTS FOR THE YEARS ENDED AS OF DECEMBER 31, 2002 AND 2001
FLOW
STA
FLUJO
ORIGINADO
POR ACTIVIDADES
DE LA OPERACION:
NET CASH
FLOW FROM
OPERATING ACTIVITIES
Recaudación
deudores
Collection of de
sales
debtors por ventas
Ingresos
percibidos
Financialfinancieros
income received
Otros
Other ingresos
income percibidos
received
Pagos
a proveedores
y personal
Payments
to personnel
& suppliers
Intereses
pagados
Interest paid
Impuesto
a la
renta pagado
Income tax
paid
Otros
pagados
Other gastos
expenses
paid
Impuesto
valortax
agregado
otros similares
pagados
IVA Valuealadded
& othery similar
paid
2002
2001
Th. Ch$
Th. Ch$
279,164,812
446,302
188,497
(258,073,990)
(414,088)
(1,320,110)
(264,637)
(5,140,489)
259,054,433
476,427
110,612
(245,651,291)
(404,058)
(835,186)
(235,363)
(5,936,135)
Flujo
netoflow
positivo
originado
por actividades
de la operación
Net cash
provided
by operating
activities
14,586,297
6,579,439
FLUJO
ORIGINADO
POR ACTIVIDADES
DE FINANCIAMIENTO:
NET CASH
FLOW FROM
FINANCING ACTIVITIES
Obtención
de préstamos
Loans obtained
Obligaciones
el público
Debt with thecon
public
(bonds)
Pago
de dividendos
Payment
of dividends
Pago
préstamos
Loan de
payments
Pago
de gastos
porissue
emisión
colocación
de obligaciones con el público
Payment
of bond
and yplacement
expenses
33,010,801
(2,284,989)
(2,702,229)
(201,672)
23,424,795
(2,337,208)
(20,913,282)
-
Flujo
netoflow
positivo
originado
por actividades
de financiamiento
Net cash
provided
by financing
activities
27,821,911
174,305
FLUJO
ORIGINADO
POR ACTIVIDADES
INVERSION:
NET CASH
FLOW FROM
INVESTMENTDE
ACTIVITIES
Ventas
activos
fijos
Sale of de
fixed
assets
Incorporación
de fixed
activos
fijos
Incorporation of
assets
Inversiones
permanentes
Permanent investments
Otros
a empresas
relacionadas
Other préstamos
loans to related
companies
Otros
de inversión
Other desembolsos
investment disbursements
485,700
(10,204,418)
(32,631,096)
(515,056)
(1,081,137)
848
(7,314,410)
(682,910)
(157,127)
-
Flujo
netoflow
negativo
originado
por actividades
de inversión
Net cash
provided
by investment
activities
(43,946,007)
(8,153,599)
1,537,799)
(1,399,855)
349,810
(214,128)
VARIACION
NETAIN
DECASH
EFECTIVO
NET VARIATION
AND Y EFECTIVO EQUIVALENTEDURANTE EL AÑO
CASH EQUIVALENT DURING THE YEAR
(1,187,989)
(1,613,983)
SALDO
INICIAL
DE EQUIVALENTS
EFECTIVO Y EFECTIVO
CASH AND
CASH
AT THE EQUIVAENTE
BEGINNING OF THE YEAR
14,606,077
16,220,060
SALDO
FINALCASH
DE EFECTIVO
Y EFECTIVO
CASH AND
EQUIVALENTS
AT THEEQUIVALENTE
END OF THE YEAR
13,418,088
14,606,077
TOTAL NETO
NEGATIVE
NET
CASH FLOW
FLUJO
TOTAL
NEGATIVO
DEL FOR
AÑO THE YEAR
EFECTO
INFLACION
SOBRE
EL EFECTIVOON
Y EFECTIVO
QUIVALENTE
EFFECT OF
PRICE LEVEL
RESTATEMENT
CASH AND
CASH EQUIVALENT
99
F I N A N C I A L
CASH FLO
W ST
ATEMENTS FOR THE YEARS ENDED AS OF DECEMBER 31, 2002 AND 2001
FLOW
STA
2002
2001
Th. Ch$
Th. Ch$
1,738,188
6,777,874
48,758
(7,029)
3,378,868
223,284
201,349
(4,862)
786,769
112,405
411,104
(355,996)
(307,392)
527,895
2,732,393
143,298
143,439
(535,975)
1,336,630
156,037
445,752
(967,373)
8,784
(1,495,444)
(1,410,585)
109,255
(2,042,727)
(5,843,450)
(1,173,772)
11,526,935
127,733
(955,871)
4,218,988
4,594
110,738
63,340
(139,436)
381,506
689,732
14,586,297
6,579,439
CONCILIACION ENTRE EL FLUJO NETO ORIGINADO POR ACTIVIDADES
CONCILIATION BETWEEN THE NET FLOW GENERATED BY
DE
LA OPERACION
Y EL RESULTADO
DEL EJERCICIO
OPERATING
ACTIVITIES
AND THE YEAR’S
RESULTS :
Net income
the year
Utilidad
del for
ejercicio
Resultado en venta de activos:
Loss
(Profit)(utilidad)
from salesenofventa
assetsde activos fijos
Pérdida
Charges(abonos)
(credits)a to
incomeque
which
do not represent
flows
Cargos
resultado
no representan
flujo decash
efectivo:
Depreciation
Depreciación del ejercicio
Amortization
Amortizaciónofdeintangibles
intangibles
Write-offs
accrued expenses
Castigos y and
provisiones
Equity
participation
of related
companies
Utilidad
devengadainenincome
inversiones
en empresas
relacionadas
Equity
participation
of related
companiesrelacionadas
Pérdida
devengada in
enlosses
inversiones
en empresas
Amortization
goodwill
Amortizaciónofmenor
Price
level restatement,
net
Corrección
monetaria neta
Foreing
currency
translation,
Diferencia
de cambio
neta net
Other
which
do representan
not representflujo
cashdeflow
Otros credits
abonostoa income
resultado
que no
efectivo
Other
income which
not represent
cash
flow
Otros charges
cargos atoresultado
que nodo
representan
flujo
de efectivo
100
Changes indeasset
which
affect
in cash
flows
Variación
activos
que
afectan
al flujo
de efectivo:
Increase
receivables
Aumentoindetrade
deudores
por ventas
Increase
Aumentoindeinventory
existencias
Decrease
(increase)
of other
assets
Disminución
(aumento)
de otros
activos
Changes in
which
affect
cash de
flows
Variación
deliabilities
pasivos que
afectan
al flujo
efectivo:
Increase
with
Aumentoin
deaccount
cuentas payable
por pagarassociated
relacionadas
con el
operating
resultado results
de la explotación
Increase
of interest
payable
Aumento
de intereses
por pagar
Increase
in income
tax payable
(Disminución)
aumento
neto de impuesto a la renta por pagar
Increase
Aumentoindeother
otrasaccounts
cuentas payable
por pagar relacionadas
associated
with non-operating
results
con
el resultado
fuera de explotación
Net
(decrease) aumento
increase inneto
value
tax al
and
other
similar ytaxes
(Disminución)
de added
impuesto
valor
agregado
otrospayable
similares
Flujo
neto flows
positivo
originado
por actividades
de la operación
Net cash
provided
by operational
activities
F I N A N C I A L
REPOR T OF INDEPENDENT ACCOUNT
ANTS
CCOUNTANTS
To the Shareholders of Farmacias Ahumada S.A.:
We have audited the accompanying balance sheets of Farmacias Ahumada S.A. (the “Company”) as of December
31, 2001 and 2002, and the related statements of income, changes in shareholders’ equity and cash flows for the
years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards in Chile. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audits and the report of other auditors provide a reasonable basis for our opinion.
For adequate interpretation, these financial statements should be read and analyzed in conjunction with the
consolidated financial statements of Farmacias Ahumada S.A. and its subsidiaries which are required by generally
accepted accounting principles in Chile. This report is presented only for the information and use of the Board of
Directors, the Company’s management and the Superintendency of Securities and Insurance.
In our opinion, based on our audits and the report of other auditors, the financial statements referred to above
present fairly, in all material respects, the financial position of Farmacias Ahumada S.A. as of December 31, 2001 and
2002, and the results of its operations and its cash flows for the years then ended in conformity with generally
accepted accounting principles in Chile.
March 14, 2003
101
F I N A N C I A L
NO
TES TO THE FIN
ANCIAL ST
ATEMENTS
NOTES
FINANCIAL
STA
These disclosure notes present, in the opinion of Management, sufficient information, albeit with less detail than
the information contained in the disclosure notes that are an integral part of the individual financial statements
submitted to the Superintendence for Securities and Insurance Companies [ Superintendencia de Valores y Seguros],
to the Stock Exchanges where they remain available to shareholders, and to the public at large. Such information may
also be consulted at the Company’s headquarters during the 15 days prior to the Extraordinary Shareholders’ Meeting.
1. REGISTRA
TION OFTHE COMP
ANY INTHE SECURITIES REGISTRAR, COMP
ANY IDENTIFIC
ATIONAND ACTIVITIES.
REGISTRATION
COMPANY
COMPANY
IDENTIFICA
Farmacias Ahumada S.A. was incorporated by virtue of a public deed dated November 28, 1997 and its line of
business consists in manufacturing toiletries, cosmetics, as well as chemical and pharmaceutical products; distributing,
importing, exporting and marketing similar products of other industries, both domestically and abroad, and
representing national and foreign firms in this line of business.
Additionally, through its indirect affiliates Far – Ben S.A. de C.V. (Mexico), Boticas Fasa S.A. (Peru) and Fasa do
Brasil Ltda., it markets products of the above-mentioned line of business in Mexico, Peru and Brazil, respectively.
On October 15, 1997, the Company was registered in the Securities Registrar of the Superintendence for
Securities and Insurance Companies under N°629; thus, it is supervised and controlled by that Superintendence.
102
2. ACCOUNTING POLICIES
a. Accounting P
Period
eriod – The current financial statements correspond to the period comprised between January 1
and December 31 of the year 2002. The previous period to which comparisons are made is comprised between
January 1 and December 31 of the year 2001.
b. Prepar
ation Bases – The current financial statements have been prepared in accordance with accounting
Preparation
principles generally accepted in Chile and the regulations issued by the SVS Superintendence for Securities and
Insurance Companies, except for investments in affiliates, which have been entered under a single line item of the
General Balance Sheet at their proportional equity value and, therefore, they have not been consolidated. This
accounting treatment alters neither the net result (profit/loss) nor the shareholders’ equity.
In case of discrepancy, the regulations issued by the Superintendence for Securities and Insurance Companies
shall have precedence over the accounting principles issued by the Chilean Union of Accountants [ Colegio de
Contadores de Chile A.G.].
These financial statements have been issued solely to facilitate the individual analysis of the Company;
consequently, they must be read jointly with the consolidated financial statements, which are required by Chile’s
generally accepted accounting principles.
c. Presentation Bases – For comparative purposes the financial statements as of December 31, 2001 are shown
restated out-of-accounting at 3.0%.
d. Monetary Correction – The financial statements have been price level prestated in order to reflect the impact
of changes in the currency’s purchasing power. To that effect, the main input were the changes experienced by the
consumer price index (3.0% and 3.1% as of December 31 of 2002 and 2001, respectively).
e. Conversion – Assets and liabilities stated in foreign currency and in UF inflation index units [Unidades de
Fomento] are shown at closing prices, as follows:
Item
US dollars
UF inflation index units
2002
2001
$
$
718,61
16,744,12
654,79
16,262,66
F I N A N C I A L
The corresponding conversion differences are accounted for in the year’s results (profit/loss), except for conversion
differences generated by net investments in foreign indirect affiliates, which are accounted for under other reserves.
f. Time Deposits - Include the capital plus the restatements and interests accrued by the closing of the year.
g. Marketable Securities – Correspond to investments in mutual fund shares, which are shown at the year’s
closing prices.
h. In
v entories – Are shown at their monetarily corrected cost and they do not exceed their net sale value. The
Inv
obsolescence provision corresponds to low-turnover merchandise for sale.
i. Bad Debt Estimates – The provision for debt unlikely to be recovered was calculated on the basis of their
antiquity, according to criteria adopted by the Company at the year’s closing. The parameters applied to
non-collectibles from sales debtors and protested documents are the following:
Da
ys
Days
Sales debtors %
Protested documents %
0-30
50
31-60
2
75
61-90
10
100
91-120
15
100
121-150
20
100
151-180
181 +
40
100
100
100
j. FFixed
ixed assets – Are shown valued at their cost of purchase corrected monetarily.
k. Fixed asset depreciation – Was determined according to the lineal method, according to the estimated useful
life of the respective assets.
The depreciation of fixtures installed on leased real estate property was determined according to the term of the
respective leasing contracts.
l. Leased assets – Leasing contracts for movable (personal) and immovable (real estate) property that meet the
standards of financial leasing contracts are accounted as fixed asset purchases, recognizing the total obligation and
the interests on an accrual basis. Such assets are not the legal property of the Company; consequently, for as long as
the purchase option is not exercised, the Company cannot freely dispose of them.
m. FFixed
ixed asset sales with financial leasebac
k agreement – The profits obtained from the sale of fixed assets with
leaseback
a financial leaseback agreement are deferred throughout the residual useful life of the asset and are amortized in
proportion to their amortization.
n. Intangibles – Municipal patents [derechos de llave] are shown at cost and are amortized throughout the term
of the lease contract. Commercial trade marks and sanitary registrations are amortized lineally within a period of 5
and 20 years, respectively, depending on the use periods estimated by the Company, according to the provisions
established under N°35 of the Technical Bulleting issued by the Chilean Union of Accountants.
o. Investments in related companies – Are shown at their proportional shareholding equity value.
The indirect affiliates abroad carry their accounting records in the currency of their respective country. According
to the provisions established in Technical Bulletin N°64 of the Chilean Union of Accountants, indirect foreign
affiliates incorporated as an extension of the Parent Company or as an investment vehicle are controlled in Chilean
pesos, and indirect operative affiliates are controlled in United States dollars.
103
F I N A N C I A L
p.Good
will – Goodwill are amortized within their respective estimated investment return period. The latter is
p.Goodwill
calculated from the difference resulting when comparing the total value paid for the investment with its proportional
equity value.
The amortization term has been mainly determined through calculations made by the Company regarding the
investment return period.
q. Income tax and deferred incometaxes – The income tax is calculated on the basis of the taxable net income
pursuant to the tax provisions in effect as of each year’s closing.
The Company accounts for all deferred taxes by the time differences, tax losses and other events that generate
differences between the accounting & tax base of assets and liabilities, according to the provisions established in
Technical Bulletin N°60 of the Chilean Union of Accountants and its complementary provisions, and according to
Circular 1,466 of the Superintendence for Securities and Insurance Companies. In accordance with Technical
Bulletin N° 71 of the Chilean Union of Accountants, as of the year 2001, all deferred taxes are accounted by applying
the income tax rate for the year that will reverse the corresponding time difference that originated it.
ate bonds – These bonds are usually shown valued at their par value as of the year’s closing. The lesser
r. Corpor
Corporate
value in the placement of the bonds with respect to their par value as of the date of placement is shown under the item
Other Assets and is deferred and amortized on the basis of the real interest.
104
s. Oper
ating income – Income is credited on an accrual basis. The income is credited when the merchandise is
Operating
delivered.
t. Computer softw
are – The Company has acquired computer software that has been accounted for under the
software
item Other Fixed Assets. Software development expenses that do not meet the criteria established by current norms
are debited to results when they are actually incurred; such expenses, however, have not been significant during the
last five years.
u. Resear
c h and Dev
elopment expenses – The expenses incurred under this item are debited to results when
Researc
Development
they are actually incurred. Such expenses, however, have not been significant during the last five years.
v. Oper
ations with buybac
k agreement – The purchase of financial instruments with buyback agreements are
Operations
buyback
registered as fixed-rate lending.
w. Statements of Cash flo
w – The concept of cash flow statements includes time deposits, investments in
flow
fixed-income mutual funds, and the purchase of financial instruments with leaseback agreements of up to 90 days.
The positive net flow originated by operational activities represents the net cash income of the year as a result of
activities that affect the profit and loss statement, other than investment and financing activities.
x. Stock and Bond floatation costs – Stock floating costs have been absorbed by the goodwill generated from
the stock placement, when such goodwill has occurred.
Bond floating and underwriting costs have been accounted for under the item Other Assets and are amortized
lineally throughout the term of the documents.
y. Vacation – The cost is registered as an expense in the year when such benefit accrues.
z. Sev
er
ance pa
y for yyears
ears of service – The Company has no contractual obligation to its personnel on this
Sever
erance
pay
concept.
3. ACCOUNTING CHANGES
During the period comprised between January 1 and December 31 of the year 2002 there have been no accounting
changes that could significantly affect the financial statements.
F I N A N C I A L
4. AVAILABLE
The breakdown is the following:
2002
Th. Ch$
2001
Th. Ch.$
Cash in banks
Securities to be deposited
1,301,828
5,013,628
484,185
4,335,790
Totals
6,315,456
4,819,975
The sums included under securities to be deposited correspond mainly to funds collected during the last days of
the month of December of 2002 and 2001 from the different stores, which are deposited beginning on the next
working day.
5. SHORT AND LONG-TERM DEBTORS
Cash
Over 90
up to 1 year
2002
2001
Up to 90 days
2002
2001
Item
Rubro
Th. Ch.$
Sales debtors
Deudores
por ventas
Bad debt estimate
Estimación
deudores incobrables
Receivables por cobrar
Documentos
Bad debt estimate
Estimación
Sundry debtors
Deudores
varios
Bad debt estimate
Estimación
7,256,090
197,589
895,598
-
Th. Ch.$
Th. Ch.$
7,305,369
377,910
1,243,067
-
-
Subtotal
Th. Ch.$
79,266
-
Total cash (net)
2002
2001
Th. Ch.$
Th. Ch.$
7,256,090
148,009
197,589
92,163
895,598
20,056
Long term
2002
2001
Th. Ch.$
Th. Ch.$
Th. Ch.$
7,108,081
105,426
875,542
7,123,081
408,488
1,219,404
5,733,183
5,301.721
-
-
-
-
a. Short-term sundry debtors:
The breakdown of short-term sundry debtors is the following:
2002
2001
Th. Ch$
%
Th. Ch$
%
Personnel
current accounts
Cuentas
corrientes
del personal
Fund to
berendir
rendered
Fondo
por
Various corrientes
current accounts
Cuentas
varias
Otheranticipos
advances
Otros
344,806
190,478
140,667
199,591
39,4
21,8
16,0
22,8
476,502
82,150
393,466
267,286
39.1
6.7
32.3
21.9
Totales
Totals
875,542
100,0
1,219,404
100.0
b. Long-term sundry debtors:
The balance of the item long-term sundry debtors corresponds to loans granted to Company workers in order to
acquire shares of stock, approved according to the board meetings of December 2, 1997 and December 14, 1999.
Such loans were granted in UF and they accrue an annual interest of 6% and 5%, respectively.
As a manner to establish guarantees over the above-indicated loans, the shares were pledged in favor of the
Company. Finally, as agreed between the parties, each worker shall be entitled to exercise the option right, whose
final deadline is December 2004.
During the period, as a result of the reallocation of some loans, an income was generated in the amount of
Ch$ 315,320 thousand which is shown under Other non-operating income.
The loans that expired in December 2002 shall be liquidated and/or reallocated during the year 2003.
105
F I N A N C I A L
6. BALANCES AND TRANSA
CTIONS WITH RELA
TED ENTITIES
TRANSACTIONS
RELATED
a) Main companies related to the Company:
During 2002 and 2001 the Company had transactions and balances with the following related companies:
Accionistas
Shareholders
106
RUT Taxpayer Id.
Inversiones
GaliaGalia
S.A. S.A.
Inversiones
79.799.330-1
Affiliates
Filiales
Fasa Fasa
Investment
S.A. S.A.
Investment
Laboratorios
Fasa Fasa
S.A. S.A.
Laboratorios
Fasa-Card
S.A. S.A.
Fasa-Card
ABF, ABF,
Administradora
de Beneficios
Farmacéuticos
S.A. S.A.
Administradora
de Beneficios
Farmacéuticos
Compañía
de Nutrición
General
S.A. S.A.
Compañía
de Nutrición
General
Lagrynd
Corp Corp
S.A. (Uruguay)
Lagrynd
S.A. (Uruguay) (año 2001)
Farmacias
Ahumada
Internacional
S.A. (Uruguay)
Farmacias Ahumada
Internacional
S.A. (Uruguay)
96.969.830-7
79.663.290-9
96.809.530-7
96.863.980-3
96.792.260-9
Foreign
Foreign
Indirect Affiliates
Filiales indirectas
Distribuidora
y Logística
Integral
S.A.
Distribuidora
y Logística
Integral
S.A.
FasintFasint
Ltda.Ltda.
(Brasil)
(Brasil)
Fasamed
Comércio
Farmacêutico
S.A. S.A.
(Brasil),
Fasamed
Comércio
Farmacêutico
(Brasil)
Boticas
Fasa Fasa
S.A. S.A.
(Perú)
Boticas
(Perú)
Inverex
Inverex
S.A S.A.
96.860.090-7
Foreign
Foreign
Foreign
99.506.180-5
Relacionadas
a través de accionistas
Related
via shareholders
Promotora
C.M.R.
Falabella
S.A.S.A.
Promotora
C.M.R.
Falabella
Administradora
C.M.R.
Falabella
Ltda.
Administradora
C.M.R.
Falabella
Ltda.
Viajes
Falabella
Ltda.
Viajes
Falabella
Ltda.
Falabella
S.A.C.I.
Falabella
S.A.C.I.
La Interamericana
S.A.S.A.
Cía.Cía.
de de
Seguros
dede
Vida
La Interamericana
Seguros
Vida
La Interamericana
S.A.S.A.
Cía.Cía.
dede
Seguros
La Interamericana
SegurosGenerales
Generales
JaimeJaime
Ben-Dov
Codner
Ltda.
Ben-Dov
Codner
Ltda.
Banco
Falabella
Banco
Falabella
Distribuidora
y Comercial
Edeka
S.A.
Distribuidora
y Comercial
Edeka
S.A.
90.743.000-6
79.598.260-4
78.997.060-2
90.749.000-9
99.289.000-2
99.288.000-7
78.345.300-2
96.509.660-4
85.703.300-0
Relacionadas
través de or
directores
o ejecutivos
Related
via boarda members
executives
Inversiones
K yLtda.
V Ltda.
Inversiones
K yV
y B. Asesorías
e Inversiones
G y G.
B Asesorías
e Inversiones
S.A. S.A.
Inversiones
Zermatt
Ltda.
Inversiones
Zermatt
Ltda.
Bellmar
Bellmar
S.A.S.A.
Mountain
Chile
Iron Iron
Mountain
Chile
S.A.S.A.
Asesorías
e Inversiones
La Grulla
Ltda.
Asesorías
e Inversiones
La Grulla
Ltda.
Asesorías
Ltda.
Asesorías
LatriLatri
Ltda.
Omega
Inversiones
y Asesorías
Ltda.
Omega
Inversiones
y Asesorías
Ltda.
Servicios
e Inversiones
Asefin
Ltda.
Servicios
e Inversiones
Asefin
Ltda.
y Palma
Vial Vial
y Palma
Ltda.Ltda.
Abogados
y Palma
Abogados
Vial Vial
y Palma
Sinay
JaimeJaime
Sinay
Alexander
Fernández
Alexander
Fernández
Lamarca
Claro
PabloPablo
Lamarca
Claro
Mario
Valdivia
Bernstein
Mario
Valdivia
Bernstein
78.743.430-4
96.577.790-3
78.482.780-1
96.712.590-3
96.756.680-2
78.588.910-K
77.153.300-0
79.765.310-1
77.565.530-5
84.257.600-8
78.741.580-6
6.377.768-4
9.604.686-3
5.319.489-3
6.987.378-2
F I N A N C I A L
b) Receivable and payable:
The short and long-term balances receivable and the short and long-term balances payable originate mainly from
routine business operations under normal market conditions, which are stated in non-restatable dollars and pesos
not accruing interest, and the balance is kept in a running account.
c) Transactions:
The main transactions performed with related companies are the following:
2002
Descripción de la transacción
Description of transaction
Arriendo
de espacio
Space (floor)
leasing
Arriendo
Leasingy&bodegaje
storage
Arriendos
pagados
Leases paid
Asesorías
pagadas
Consulting
services paid
Comisiones
pagadas
Commissions
paid
Compra
de existencias
Inventory
purchases
Contrato
arriendo
leasing
Leasingde
rental
contract
Gastos
de publicidad
Advertising
expenses
Mejoras
en locales
Store improvements
Mutuo
Loanotorgado
granted
Otros
egresos
Other
expenses
Otros
ingresos
Other
income
Pago
de acreedores
Creditor
payments
Recaudación
por su cuenta
Own collection
Recuperación
de gastos
Expense recovery
Seguros
de vida policies
Life insurance
Seguros
generales
General
insurance policies
Servicios
bodegaje
Storage de
services
Servicios
logísticos
Logistical
services
Servicios
Servicespagados
paid
Servicios
prestadas
Servicesy &asesorías
consulting
rendered
Servicios
recibidas
Servicesy &asesorías
consulting
received
Traspaso
de Fondos
Funds transferred
Venta
deasset
activo
fijo
Fixed
sales
Venta
de existencias
Inventory
sales
Ventas
ABF
Salescon
withtarjeta
ABF card
Ventas
CMR
Salescon
withtarjeta
CMR card
Ventas
Fasacard
Salescon
withtarjeta
Fasacard
2001
Impact on
Impact on
results
results
Amount
(charge) credit
Amount
(charge) credit
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
505,722
21,162
1,073,445
107,504
2,774,791
10,291,897
184,380
5,900
943,946
5,448
890
298,313
201,690
3,048,429
1,770,947
41,041
87,904
4,258,288
482,995
302,221
247,989
154,501
219,204
8,765
14,680,357
41,360,194
637,165
434,690
(12,704)
(1,051,835)
(107,504)
(2,351,518)
(101,328)
(5,000)
(2,032)
5,448
(754)
255,957
13,142
(34,781)
(82,913)
(3,608,718)
(409,317)
(302,179)
(122,937)
(231,992)
8,256
-
107,211
15,963
1,082,243
99,213
2,475,121
7,176,381
193,401
80,216
1,030,709
214,849
21,917
77,940
265,870
1,349,478
165,628
29,590
144,620
3,839,644
358,989
191,311
206,881
160,473
51,763
9,338
10,155,834
35,802,765
1,010,682
96,974
(13,528)
(1,060,399)
(99,213)
(2,097,560)
(454,601)
(67,980)
(873,482)
9,085
(18,574)
66,051
163,250
(25,076)
(122,560)
(3,253,936)
(304,228)
(191,311)
(203,188)
(160,473)
277
-
107
F I N A N C I A L
7. INVENTORIES
The breakdown of the inventories is the following:
Detalle
Item
108
2002
2001
Th. Ch$
Th. Ch$
Mercaderíasforpara
Merchandise
sale la venta
Mercaderías
Goods
in transiten tránsito
Materias
primas
de recetarioservice
Basic
products
for prescription
Otrasminor
existencias
menores
Other
inventories
Provisión obsolescencia
Obsolescence
provision
31,207,351
523,355
192,868
(80,000)
30,760,957
138,238
386,930
309,252
(82,400)
Totales
Totals
31,843,574
31,512,977
8. DEFERRED TAXES AND INCOME TAXES
a. Income tax – The taxable net income calculated for tax purposes for fiscal year 2002 generated a loss of
approximately Ch$ 287,000 thousand.
In 2001 the taxable net income calculated for tax purposes amounted to approximately Ch$ 6,811,000 thousand.
The breakdown of (receivable) payable income is the following:
2002
2001
Th. Ch$
Th. Ch$
Impuesto
a la renta
de primera
categoría
First Category
Income
Tax
PagosMonthly
provisionales
mensuales
social security
payments
Créditos
porfor
donaciones
y créditos
Credits
donations and
SENCE Sence
credits
PagosProvisional
provisionales
por impuesto
de Primera
payments
for First Category
Taxes
Categoría
de utilidades
absorbidas
for absorbed
profits (Art.
31 N° 3)(Art. 31 N° 3)
(1,183,207)
(206,179)
1,021,730
(784,398)
(128,284)
(43,014)
-
Totales
Totals
(1,432,400)
109,048
F I N A N C I A L
b. Accumulated tax profit – The balance of the tax profits withheld with the 15% credit amounts to approximately
Ch$ 12,763,054 thousand and the corresponding credit for the profits recorded in the F.U.T. to be allocated to
shareholders when dividends are distributed amounts to Ch$ 1,914,458 thousand, approximately.
DEFERRED INCOME TAXES
Deferred Taxes
2002
Assets
Short
term
Concepts
Conceptos
Diferencias
temporarias
Temporary
differences
Provisión
cuentas
incobrables
Bad debt
provision
Ingresos
anticipados
Advanced
income
Provisión
deprovision
vacaciones
Vacation
Amortización
intangibles
Amortization
of intangibles
Activos
en assets
leasing
Leased
Depreciación
activo
fijo assets
Depreciation
of fixed
Provisión
de obsolescence
obsolescenciaprovision
de inventario
Inventory
Provisión
de utilidades
no realizadas
Unrealized
profit provision
Obligaciones
por leasing
Leasing obligations
Instalaciones
inmuebles
arrendados
Facilities inenleased
real estate
Prepago
Leasing
Prepaid
leasing
Otros
Other
Cuentas
complementarias-neto
de of
amortización
Complementary
accounts - net
amortization
Provisión
de valuación
Valuation
provision
Totales
Totals
2001
Liabilities
Assets
Liabilities
Long
term
Short
term
Long
term
Short
plazo
Long
term
Short
term
Long
term
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
234,555
155,236
13,200
40,082
100,207
-
98,429
430,257
119,910
19,800
-
708,656
1,364,449
1,166,950
-
152,181
162,575
13,184
23,287
84,912
-
48,478
57,633
410,405
215,200
19,776
-
704,663
1,177,332
817,811
-
-
-
-
-
-
-
-
-
543,280
648,596
19,800
3,240,055
436,139
731,716
19,776
2,699,806
INCOME TAX
2002
2001
Th. Ch$
Th. Ch$
Gasto
corriente
(provisión impuesto)
Currenttributario
tax expenses
(tax provisions)
Ajuste
gasto restatement
tributario (ejercicio
Tax expense
(previous anterior)
fiscal year)
Efecto
activos
pasivos for
porthe
impuesto
diferidotaxes
del ejercicio
Impactpor
of assets
or o
liabilities
year’s deferred
Beneficio
tributario
por pérdidas tributarias
Tax benefits
for tax losses
(58,178)
(516,252)
43,014
(1,021,730)
(162,338)
(203,451)
-
Totales
Totals
(531,416)
(1,387,519)
109
F I N A N C I A L
9. FIXED ASSETS
The breakdown of the fixed assets is the following:
2002
110
2001
Net
Fixed Assets
Th. Ch$
Accumulated
Depreciation
Th. Ch$
Net
Fixed Assets
Th. Ch$
Accumulated
Depreciation
Th. Ch$
Land
Terrenos
Facilities
Instalaciones
Other
assets
Otrosfixed
activos
fijos:
Computer
equipment
Equipamiento
computacional
Furniture
Muebles& yoffice
útilessupplies
Vehicles
Vehículos
Leased
assets
Activos
en leasing
Facilities
on leased
estate arrendados
Instalaciones
en real
inmuebles
Other
Otros
1,922,682
3,968,295
1,588,676
2,454,814
3,339,750
1,314,024
10,211,058
5,573,587
122,451
4,984,411
15,044,048
1,944,391
4,805,000
2,527,236
58,642
815,844
4,332,590
75,439
7,347,646
4,573,171
115.535
5,343,651
10,451,315
328,386
3,283,660
1,857,608
50,111
1,096,118
3,311,375
-
Total
Assets
TotalFixed
activo
fijo
43,770,923
14,203,427
33,954,268
10,912,896
Depreciation is included under administration and sales expenses and amounts to Ch$ 3,378,868 thousand in
2002 and Ch$ 2,732,393 thousand in 2001.
Leased fixed assets correspond mainly to computer equipment and to the installation of business premises.
During January 2001 the Company prepaid goods acquired through financial leasing for a total amount of
Ch$ 1,428,834 thousand (historical).
Leased assets include computer equipment for business premises, sold with financial leaseback agreement. The
sale price was Ch$ 823,368 thousand (historical) and generated a profit of Ch$ 214,682 thousand that is amortized
in 48 months. The non-amortized balance as of December 31, 2002 amounted to Ch$ 80,508 thousand
(Ch$ 138,201 thousand in 2001) and is shown deducting other fixed assets. The average rate of interest of these
contracts is of 9.39%.
10. INVESTMENTS IN RELA
TED COMP
ANIES
RELATED
COMPANIES
· On December 23, 2002, Farmacias Ahumada S.A., through its affiliates Fasa Investment S.A. and Inverex S.A.,
acquired stock capital of Farmacias Benavides by virtue of a capital contribution of US$ 44,290,321.68; which
enabled it to acquire up to 67.95% of the registered shares of stock of Far-Ben S.A. de C.V., thereby assuming the
management and operative control of such pharmacy chain and its subsidiaries.
F I N A N C I A L
· On October 25, 2002, The Extraordinary Shareholders’ Meeting of Fasa Investment S.A. agreed to increase that
company’s stock capital from US$ 27,041,995 subdivided into 27,041,995 nominal shares of equal value and
without face value, to US$ 73,041,995 subdivided into 73,041,995 nominal shares of equal value and without face
value. This capital increase was fully subscribed and paid by Farmacias Ahumada S.A.
· On October 11, 2002, Farmacias Ahumada S.A., incorporated the company denominated Sociedad Fasa
International Corp. in the British Virgin Islands, with an initial capital contribution of US$ 100.
· On April 2002, Farmacias Ahumada S.A. paid Ch$ 416,000 thousand toward a capital increase of its affiliate
Compañía de Nutrición General S.A., remaining with a total shareholding of 7.59%.
· On November 4, 2002, Farmacias Ahumada S.A. paid the sum of Ch$ 540,000 thousand corresponding to the
shareholding of the minority shareholders of the affiliate Compañía de Nutrición General S.A., to that date, thus
retaining a total shareholding of 99.9%.
· In September 2002, the company denominated Sociedad Inversiones San Silvestre S.A.C. (Peru), a direct affiliate
of Fasa Investment S.A., was disbanded. This operation generated an effect on the results of our affiliate Fasa Investment
S.A. in the amount of Ch$ 3,809 thousand, which is shown under other non-operating income.
· The loss accrued because of the permanence of this investment in Fasa Investment S.A. is shown under the item
loss of investment in related companies and it amounted to Ch$ 12,718 thousand
· On September 3, 2002, 100% of the shareholding of Fasint Ltda. (Brazil) in ABF, Administradora de Beneficios
Farmacéuticos do Brazil S.A. – equivalent to 99.9721% - was assigned to Fasamed Comercio Farmacéutico S.A.
(Brazil) corresponding to indirect affiliates of our direct affiliate Fasa Investment S.A. This operation did not generate
any effect on results.
· In June 2002, the affiliate Fasa Investment S.A. acquired 99.9998% of the stock capital of Droguería La Victoria
S.A.C. for the total sum of Ch$ $113,402 thousand (historical), thereby generating a lesser value of Ch$ 55,681
thousand.
· During the year 2002, Farmacias Ahumada S.A., incorporated in Uruguay the company Farmacias Ahumada
Internacional S.A., with a capital contribution of US$ 4,900, equivalent to 98% of the stock capital.
· On June 18, 2002, the company Lagrynd Corp S.A. (Uruguay) was disbanded, assigning the related accounts to
the company Farmacia Ahumada Internacional S.A.
The investment in the company Fasacard S.A. and in Farmacias Ahumada Internacional S.A. as of December 31,
2002 are shown as valued in Ch$ 1, and a provision was made for the equity deficit that they presented as of that
date, for Ch$ 68,227 thousand and Ch$ 2,100 thousand, respectively, and which are shown under other long-term
liabilities.
· The General Shareholders’ Meeting of May 22, 2002 approved the dissolution of Inversiones San Silvestre S.A.,
according to the provisions of Peru’s General Law on Corporations (Ley General de Sociedades), considering that it
111
F I N A N C I A L
was convenient for the Company not to keep the company in effect. As a result of such agreement, and having
initiated the dissolution process, the company as of July 1, 2002 changed the base on which it prepared its financial
statements from an operative company to one undergoing dissolution.
·
Unrealized results correspond to the sale of the inventories of its affiliates Laboratorios Fasa S.A. and Compañía
de Nutrición General S.A. to the Company during the fiscal year. This profit shall be realized when the inventories acquired
from such affiliates are sold by the Company to third parties.
·
On November 15, 2001, Farmacias Ahumada S.A. restructured its overseas investments and incorporated in
Chile the company Fasa Investment S.A. with the objective of placing its foreign investments through such investment
vehicle. By way of initial contribution, the Company subscribed and paid 8,441,820 shares of stock by contributing
18,318,338 shares of the Peruvian company denominated Boticas Fasa S.A. pursuant to certificate or share title N°19
for US$ 8,441,820, to which effect their tax cost was taken into consideration, calculated as of December 31, 2000,
thus generating a greater investment value of Ch$ 1,388,844 thousand (historical), which had been fully amortized
by the closing of fiscal year 2001.
·
112
On November 29, 2001, the stock capital of Fasa Investment S.A. was increased by 18,591,995 nominal
shares of equal value without any face value, which were subscribed and paid as follows:
With 3,232,638 shares of the Peruvian company Boticas Fasa S.A. valued in US$ 1,599,995, corresponding to the
tax cost as of June 22, 2001, with 4,819 shares of the Peruvian company Inversiones San Silvestre S.A.C., valued in
US$ 2,000, corresponding to the tax cost as of December 31, 2000, and with 99.99% the property ownership of the
Brazilian company Fasa do Brasil Ltda., valued in US$ 16,990,000, corresponding to the tax cost as of December 31,
2000, thus generating a greater investment value of Ch$ 1,069,312 thousand (historical), which had been fully
amortized by the closing of fiscal year 2001.
·
The Company’s investment in Fasacard S.A. as of December 31, 2001 is shown as valued in Ch$ 1, and a
provision was made for the equity loss presented as of that date for Ch$ $40.358 thousand.
·
During the 2001 period, Fasint Ltda. – an affiliate of Fasa do Brasil Ltda. – acquired the additional 22.68%
shareholding of Fasamed Comercio Farmacéutico S.A. for Ch$ 2,585,129 thousand (historical). This same company,
Fasint Ltda., incorporated in the year 2001; the company Administradora de Beneficios Farmacéuticos do Brasil S.A.
with a capital contribution of Ch$ 102,578 thousand, equivalent to 99.98% of the stock capital.
·
By virtue of the public deed dated December 11, 2000, as of January 9, 2001 Farmacias Ahumada (Peru) S.A.
changed its business name to that of Inversiones San Silvestre S.A.C.
In January of 2001, Inversiones San Silvestre S.A.C. (Peru) received 5,799 shares of stock of the company Droguería
La Victoria S.A.C. (Peru) – equivalent to 99.99% of that company’s stock capital – from Alberto Sparrow.
F I N A N C I A L
BREAKDOWN OF INVESTMENTS
RUT Taxpayer Id.
Foreing
Company
Country
Investment
Control
Number
Of Origin
Currency
Of Shares
Shareholding
Percentage
2002
Th. Ch$
2001
Th. Ch$
Companies'
Shareholder Equities
2002
Th. Ch$
Fiscal Year
Results
2001
Th. Ch$
2002
Th. Ch$
Accrued
Resuslts
2001
Th. Ch$
2002
Th. Ch$
Results
Not Realized
VPP
2001
Th. Ch$
2002
Th. Ch$
- (947,295)
-
2001
Th. Ch$
2002
Th. Ch$
-
Accounting value
of investment
2001
Th. Ch$
2002
Th. Ch$
2001
Th. Ch$
Brazil
Ch.$
-
0.00
0.00
-
-
-
-
-
-
-
-
Foreing
Boticas Fasa S.A.
Peru
79.663.290-9 Laboratorios Fasa S.A. Chile
US $
Ch.$
421,341
0.00
99.99
0.00
99.99
931,628
764,251
167,345
79,889
167,344
161,800
79,889
931,627
764,250 (183,227)
(125,810)
748,400
638,440
Ch.$
1,346,000
99.99
99.99
613,262
608,371
4,861
371,044
4,861
371,044
613,253
608,368
-
-
613,253
608,368
(97,256)
339,575
68,897
(59,696)
(19,737)
279,879
49,160
(73,530)
-
-
-
-
-
-
3,131
14,839,970 (521,081) (2,685,598) (520,833) (152,891)46,879,598
14,835,518
-
-
96.863.980-3 ABF, Administradora
de Beneficios
Farmacéuticos S.A. Chile
96.792.260-9 Compañía de Nutrición
Chile
Ch.$
38,772
99.97
67.00
339,663
102,831 (190,403)
96.809.530-7 Fasa-Card S.A.
Foreing
Inversiones San
General S.A.
Chile
Ch.$
146,300
99.99
99.99
(68,227)
(40,360)
Silvestre S.A.C.
96.969.830-7 Fasa Investment S.A.
Peru
Chile
Ch.$
Ch.$
73,033,815
0.00
99.99
0.00
99.97
46,884,849
Uruguay
US $
4,900
98.00
00.00
(2,101)
-
(5,694)
-
(5,693)
-
-
-
-
-
-
-
US $
US $
4,900
100
0.00
100.00
98.00
0.00
72
3,372
-
-
-
-
-
72
3,305
-
-
-
72
3,305
-
16,280,338 (242,923)
(145,547)
Foreing
Farmacias Ahumada
Internacional S.A.
Foreing
Foreing
Lagrynd Corp S.A.
Uruguay
Fasa International Corp. British Virgin
(157,234) (156,796)
(27,868)
(73,531)
(27,868)
46,879,598 14,835,518
Island
Totals
48,764,125
113
11. SHOR
T-TERM DEBT WITH B
ANKS AND FIN
ANCIAL INSTITUTIONS
SHORT
BANKS
FINANCIAL
They correspond to debt stated in UF and in non-restatable pesos, as follows:
2002
Short
Long
term
term
Th. Ch$
Th. Ch$
2001
Short
Long
term
term
Th. Ch$
Th. Ch$
Banco de Chile
Corpbanca
-
76,952
2,078,082
587,105
119,168
Totals
-
76,952
2,665,187
119,168
12. ACCOUNTS P
AYABLE
PA
The breakdown of accounts payable as of December 31, 2002 and 2001 is the following:
2002
Th. Ch$
48,521,202 16,134,791
2001
Th. Ch$
Domestic
suppliers
Proveedores
nacionales
Accounts
by suppliers
Cuentas assigned
cedidas por
proveedores
Foreign
suppliers
Proveedores
extranjeros
37,902,820
7,610,914
72,825
29,279,676
5,758,680
125,039
Totals
Totales
45,586,559
35,163,395
F I N A N C I A L
The outstanding balance payable to domestic suppliers corresponds mainly to inventory purchases, stated in
non-restatable pesos.
The accounts assigned by suppliers correspond to accounts owed to certain suppliers who assigned a portion of
their receivable portfolio to Servicios Financieros Citibank (Chile) S.A.
13. LONG-TERM LIABILITIES
Closing Date
Current Fiscal Year
Years of Maturity
Institution
114
Corpbanca
Sundry credidtors (1)
Restatement Over 1
Currency
Up to 2
Index
Th. Ch$
UF
UF
Over 2
Up to 3
Th. Ch$
Over 3
Up to 5
Th. Ch$
Over 5
Up to 10
Th. Ch$
75,014 75,014 112,520
555,728 307,419 122,147 1,545,632
Closing Date
Previous
Period
Total Long-
Average
Term at
closing of
Financial St.
Th. Ch$
Interest
Rate
Per Year
Term at
closing of
Financial St.
Th. Ch$
3.90%
9.39%
337,691
2,422,222
262,548
2,530,926
Total Long-
(1)These liabilities correspond to leasing contract installments of computer equipment purchases, installations and equipment provisions for business
premises.
Additionally, long-term liabilities include Ch$ 2,591,459 thousand (Ch$ 1,968,090 thousand in 2001) in
non-restatable pesos, which correspond to Deferred taxes and Ch$ 70,327 thousand (Ch$ 40,358 thousand) to
deficit provisions of affiliates.
F I N A N C I A L
14. SHOR
T AND LONG-TERM CORPORA
TE BONDS
SHORT
CORPORATE
On December 5, 2002 the Company placed UF 2,000,000 in Bonds Series A-1 and A-2 in the local market. Such
placement generated resources totaling Ch$ 33,010,801 thousand. The non-amortized balance of the discount
made at the time of the auction amounted to Ch$ 690,081 thousand; of which, Ch$ 151,876 thousand are shown
under Other current assets, and Ch$ 538,205 thousand under Other long-term assets.
The funds raised from such Bond placement were mostly allocated to taking control over the company denominated
Sociedad Mexicana Farmacias Benavides S.A. de C.V. through the companies Fasa Investment S.A. and Inverex S.A.
for a total amount of US$ 37,290,321.68 y US$ 7,000,000, respectively.
The balance is shown in the Short-Term as Ch$ 367,155 thousand corresponding to interest accrued as of
December 31, 2002 and payable on April 15, 2003.
The capital will be amortized semi-annually as of April 15, 2005:
Current
Registration N° or
Instrument Identification N°
Series
Nominal
Amount
In Effect
Bond
Restatem.
Unit
Rate
of
Interest
Final
Deadline
Periodicity
Interest
Amortization
Payments
Payments
%
Par Value
2002
2001
Th. Ch$
Th. Ch$
Placement
in Chile
or
Abroad
Long-term bonds - short-term portion
309
A-1
-
U.F.
5.25%
10/15/2009
Semi-annually
Semestral
275,366
-
National
309
A-2
-
U.F.
5.25%
10/15/2009
Semi-annually
Semestral
91,789
-
National
367,155
-
25,116,180
8,372,060
-
33,488,240
-
Total - short-term portion
Long-term bonds
309
309
Total Long-term
A-1
A-2
1,500,000
500,000
U.F.
U.F.
5.25%
5.25%
10/15/2009
10/15/2009
Semi-annually
Semi-annually
Semestral
Semestral
National
National
115
F I N A N C I A L
15. EQUITY CHANGES
The Equity Account changes occurring in 2002 and 2001, in historical figures, were the following:
Paid-in
Capital
Th. Ch$
Other
Reserves
Th. Ch$
Accumulated
Results
Th. Ch$
Interim
Dividends
Th. Ch$
Deficit
of Develop.
Period
Th. Ch$
Year's
Results
Th. Ch$
Total
Th. Ch$
of January
1, 2001
SaldoBalance
al 1° deasenero
de 2001
Distribution
of results
previous
fiscal year
Distribución
resultado
ejercicio
anterior
Final dividend
fiscal
year
Dividendo
definitivoprevious
ejercicio
anterior
Accumulated
of de
development
Déficit
acumulado deficit
período
desarrollo period
Assessment
foreign investments
Valorizacion
de of
inversiones
en el exterior
Transfers
Traspasos
Reassessment
of own
capital
Revalorización
capital
propio
Year’s del
results
Resultado
ejercicio
Interim provisorios
dividends
Dividendos
43,581,958
1,351,041
-
401,240
1,576,562
(413,678)
12,438
-
938,483
2,664,590
10,800
122,532
-
(600,000)
1,500,000
(889,200)
(10,800)
(27,226)
(1,350,000)
(122,804)
(153,110)
(3,807)
-
4,164,590
(4,164,590)
6,580,460
-
48,363,467
(889,200)
(153,110)
1,576,562
(413,678)
1,454,978
6,580,460
(1,350,000)
of December
31, 2001
SaldoBalance
al 31 deasdiciembre
de 2001
Non-accounting
update
Actualización
extracontable
44,932,999
1,347,990
1,576,562
47,297
3,736,405
112,092
(1,377,226)
(41,317)
(279,721)
(8,392)
6,580,460
197,414
55,169,479
1,655,084
as ofdeDecember
31, 2001
SaldoUpdated
al 31 debalance
diciembre
2001, actualizados
46,280,989
1,623,859
3,848,497
(1,418,543)
(288,113)
6,777,874
56,824,563
of January
1, 2002
SaldoBalance
al 1° deasenero
de 2002
Distribution
of results
previous
fiscal year
Distribución
resultado
ejercicio
anterior
Final dividend
fiscal
year
Dividendo
definitivoprevious
ejercicio
anterior
Accumulated
of de
development
Déficit
acumulado deficit
período
desarrollo period
Assessment
foreign investments
Valorizacion
de of
inversiones
en el exterior
Transfers
Traspasos
Reassessment
of own
capital
Revalorización
capital
propio
Year’s del
results
Resultado
ejercicio
Interim provisorios
dividends
Dividendos
44,932,999
1,347,990
-
1,576,562
720,619
47,297
-
3,736,405
4,168,310
(15,076)
239,633
-
(1,377,226)
2,412,150
(1,050,000)
15,076
(24,000)
(1,200,000)
(279,721)
(151,132)
(8,392)
-
6,580,460
(6,580,460)
1,738,188
-
55,169,479
(1,050,000)
(151,132)
720,619
1,602,528
1,738,188
(1,200,000)
of December
31, 2002
SaldoBalance
al 31 deasdiciembre
de 2002
46,280,989
2,344,478
8,129,272
(1,224,000)
(439,245)
1,738,188
56,829,682
Item
116
NUMBER OF SHARES
Number of
Number of
Shares
Shares
Shares With
Subscribed
Paid
Voting Rights
Series
Single series
150,000,000
Number of
150,000,000
150,000,000
CAPIT
AL (AMOUNT – CH$ THOUSAND)
CAPITAL
Series
Single series
Subscribed
Paid
Capital
Capital
46,280,989
46,280,989
F I N A N C I A L
DEFICIT ACCUMULA
TED DURING THE AFFILIA
TE DEVELOPMENT PERIOD
CCUMULATED
AFFILIATE
Amount
RUT Taxpayer Id.
96.863.980-3
Foreing
Company
Beneficios Farmaceuticos S.A.
Farmaceuticos do Brasil S.A.
Fiscal Year
M$
Accumulated
M$
-
130,408
151,132
308,837
Observations
Balance carried forward from previous year
Balance carried forward from previous year
and fiscal year deficit
a. Accumulated deficit dev
elopment period – as of December 31, 2002 and 2001 Farmacias Ahumada S.A., the
development
parent company, recorded an equity decrease originated by the expenses of the development period of the indirect
affiliate company Administradora de Beneficios Farmacéuticos do Brasil S.A. incurred as of that date; showing such
equity decrease in the account labeled Accumulated deficit affiliate development period, under the item Shareholders’
equity.
b. Profit distribution – According to current legislation, at least 30% of the profits must be distributed as cash
dividends, unless resolved otherwise by the Shareholders’ Meeting by the unanimous vote of all shares issued.
In 2001 the dividend policy agreed by the shareholders was to distribute at least 30% of the year’s profits, which
corresponds to the minimum mandatory dividend.
The Ordinary Shareholders’ Meeting of April 18, 2002, adopted the following resolutions respect to the allocation
of the 2001 profits, to pay a minimum mandatory dividend, equivalent to 36.66% of the year’s net profits, that is the
sum of Ch$ 2,412,150 thousand (historical), and the balance of such profits, that is the sum of Ch$ 4,168,310
thousand (historical), to be credited to the accumulated profits account.
An interim dividend in the amount of Ch$ 1,350,000 thousand (historical) was distributed in September of the
year 2001 and charged to the minimum mandatory dividend of 36.66%, namely, Ch$ 2,412,150 thousand. As a
result of the foregoing, the new balance of dividends to be distributed amounted to Ch$ 1,050,000 thousand, which
was paid in cash.
117
F I N A N C I A L
c. P
vidends – The Shareholders’ Meeting agreed to distribute the following dividends during the
Pa
dividends
ayment of di
years 2002 and 2001:
Dividends
Interim
Final
Interim
Final
Year Charged
2002
2001
2001
2000
Agreement Date
Date Made Available to
Shareholders
08/29/2002
04/18/2002
08/30/2001
04/25/2001
09/24/2002
05/07/2002
09/20/2001
05/10/2001
Amount
Ch$ thousand
1,200,000
1,050,000
1,350,000
889,200
d. Other reserv
es – This reserve originates from equity changes in the investments made in related companies
reserves
abroad.
(1)
Balances as of
31/12/2001
Th. Ch$
Investment
Conversion
Th. Ch$
Fasa
Investment S.A.
S.A.
Fasa Investment
Compañía
de Nutrición
NutriciónGeneral
GeneralS.A.
S.A.
Compañía de
Farmacias
AhumadaInternacional
InternacionalS.A.
S.A.
Farmacias Ahumada
Laboratorios
Fasa S.A.
S.A.
Laboratorios Fasa
ABF,
Administradora de
de
ABF, Administradora
BeneficiosFarmacéuticos
FarmacéuticosS.A.
S.A.
Beneficios
1,623,816
43
-
720,809
(415)
143
41
2,344,625
(372)
143
41
-
41
41
Totales
Totals
1,623,859
720,619
2,344,478
Item
Balances as of
31/12/2002
Th. Ch$
118
(1) Corresponds to balances updated as of December 31, 2001.
The reserves for Fasa Investment S.A., Laboratorios Fasa S.A., ABF and Administradora de Beneficios Farmacéuticos
S.A. originate mainly because of their investments in their affiliates Fasa do Brasil Ltda. and Boticas Fasa S.A. (Peru),
while those for Compañía de Nutrición General S.A. originate because of its investment in its affiliate Nutrilabs
(U.S.A.).
F I N A N C I A L
16. MONET
AR
Y CORRECTION
MONETAR
ARY
Item
(charges) / credits:
Assets, Expenses & Costs
Restatement
Index
IPC
UF
Total Credits
Liabilities, income
IPC
UF
Total Charges
Monetary Correction Loss
Amount
2002
Th. Ch$
2001
Th. Ch$
5,883,319
203,874
4,277,111
243,216
6,087,193
4,520,327
(6,388,457)
(109,840)
(4,740,463)
(225,616)
(6,498,297)
(4,966,079)
(411,104)
(445,752)
119
17. EXCHANGE DIFFERENCES
Item
Currency
(charges) / credits:
Assets
Liabilities
US Dollars
US Dollars
Profit for Exchange Differences
Amount
2002
2001
Th. Ch$
Th. Ch$
486,525 1,025,668
(130,529)
(58,295)
355,996
967,373
F I N A N C I A L
18. CONTINGENCIES AND RESTRICTIONS
Lawsuits and other legal actions
There are five small-amount civil lawsuits for indemnification of damages against the Company. In the opinion of
the Company’s legal counsels, there is no possibility that these lawsuits could derive into significant losses for the
Company.
Contingencies
As of December 31, 2002, the Company is not exposed to contingencies that are not provisioned for.
Commitments
The Company agreed with the employees who executed loan contracts to acquire shares, that the Company
would absorb the eventual lesser value caused in case that the proceeds of the sale of the shares was less that the debt
120
owed by each worker to the Company for that concept. As of December 31, 2002, there are no liabilities for such
concept.
Restrictions
By virtue of a public deed dated September 2, 2002 granted by the Santiago Public Notary’s Office of Mr. Patricio
Raby Benavente, the Company executed a bond issue contract through which the Company commits to maintaining
certain financial indicators (covenants) calculated over its individual and consolidated financial statements, as
follows:
Bonds Series A1 and A2:
Restrictions related to Bond Issues:
(A) A level of indebtedness, measured over figures of its consolidated and individual balance sheets, defined as
the ratio between (i) Financial Liabilities (account 5.21.10.10 plus account 5.21.10.20 plus account 5.21.10.30 plus
account 5.21.10.40 plus account 5.21.10.50 plus account 5.22.10.00 plus account 5.22.20.00 plus account
5.22.40.00 of the FECU) and, (ii) Shareholders’ Equity (account 5.23.00.00 plus account 5.24.00.00 of the FECU),
(hereinafter the “Level of Indebtedness”), not higher than zero point eighty times. In order to determine the Level of
Indebtedness in the consolidated FECU, the following shall be regarded as financial liabilities of the ISSUER: the
amounts of all endorsed guarantees, simple or joint-and-several surety bonds, joint and several debt or other guarantees,
personal or collateral, which the Issuer or its affiliates would have given to secure third-party liabilities, with the
exception of: (i) those given by the ISSUER or its affiliates on account of liabilities of other affiliate companies of the
ISSUER; and (ii) those given by ISSUER affiliate companies on account of liabilities of the ISSUER. In turn, in order to
determine the Level of Indebtedness in the individual FECU, the following shall be regarded as financial liabilities of
the ISSUER: the sum total of all endorsed guarantees, simple or joint-and-several surety bonds, joint and several debt
or other guarantees, personal or collateral, given by the ISSUER to guarantee third-party liabilities, even if they belong
to its affiliates.
F I N A N C I A L
between: (i) the Operating Result (account 5.31.11.00 of the FECU) plus Depreciation(Account 5.50.30.05 of the
FECU) and (ii) Net Financial Expenses (Account 5.31.12.60 minus Account 5.31.12.10 of the FECU), not less than two
point fifty times as of the closing of each quarter until that which ends on December 31 of the year 2003; and no less
that three point zero times as of the closing of each subsequent quarter. The Financial Expense Hedging Ratio must be
calculated over the last 12-month period concluded as of the date of the corresponding FECU. All values must be
stated in the currency of their respective FECU.
These indicators, for the year ending on December 31, 2002, were the following:
Consolidated level of indebtedness
0.76
Individual level of indebtedness
0.66
7.20
As of December 31, 2002, Farmacias Ahumada S.A. met the established covenants.
Direct guarantees
Supplier-related Invoices and Guarantee Bills [Boletas y Letras de Garantía] – which do not commit assets as of
December 31, 2002 – amount to Ch$ 123,424 thousand (Ch$ 123,045 thousand in 2001).
19. NATION
AL AND FOREIGN CURRENCY
TIONAL
ASSETS
Types of Currency
Item
Current Assets
Fixed Assets
Other Assets
Totals
Ch. Pesos
US Dollars
UF
61,943,264
29,567,496
51,347,468
1,692,078
-
89,555
7,569,308
2002
Th. Ch$
Totals
2001
Th. Ch$
63,274,897
29,567,496
58,916,776
60,821,174
23,041,372
24,168,259
151,759,169
108,030,805
CURRENT ASSETS
Up to 90 Days
2002
Item
Currenc
y
Currency
Amount
Th. Ch$
Current Liabilities Ch. Pesos
US Dollars
UF
53,880,876
1,074,518
552,823
Totals
55,508,217
90 Days to 1 Year
2001
Average
Rate of Int.
Per year
%
5.25
7.90
Amount
Th. Ch$
45,033,287
683,200
279,332
45,995, 819
2002
Average
Rate of Int.
Per year
%
8.90
Amount
Th. Ch$
477,770
477,770
2001
Average
Rate of Int.
Per year
%
7.80
Amount
Th. Ch$
Average
Rate of Int.
Per year
%
442,062
8.90
442,062
Totals
2002
Th. Ch$
2001
Th. Ch$
53,880,876
1,074,518
1,030,593
45,033,287
683,200
721,394
55,985,987
46,437,881
121
F I N A N C I A L
LONG-TERM LIABILITIES
2002
1 to 3 Years
Item
Currenc
y
Currency
Amount
Th. Ch$
Long-term Liabilities
UF
Ch. Pesos
3 to 5 Years
Average
Rate of Int.
Per year
%
7,769,382
1,124,666
6.2
5.6
5 to 10 Years
Average
Rate of Int.
Per year
%
Amount
Th. Ch$
13,571,404
1,537,120
6.2
5.3
Amount
Th. Ch$
14,940,928
-
Over 10 Years
Average
Rate of Int.
Per year
%
Amount
Th. Ch$
6.2
5.6
-
Average
Rate of Int.
Per year
%
Total
Th. Ch$
36,281,714
2,661,786
Total
38,943,500
2001
1 to 3 Years
Item
Currenc
y
Currency
Amount
Th. Ch$
122
UF
Ch. Pesos
979,415
827,594
Total
3 to 5 Years
Average
Rate of Int.
Per year
%
8.80
Amount
Th. Ch$
234,758
1,180,854
5 to 10 Years
Average
Rate of Int.
Per year
%
8.20
Amount
Th. Ch$
409,516
-
Average
Rate of Int.
Per year
%
9.39
Over 10 Years
Amount
Th. Ch$
1,136,224
-
Average
Rate of Int.
Per year
%
9.39
Total
Th. Ch$
2,759,913
2,008,448
4,768,361
20. SUBSEQUENT FFA
ACTS
On January 6, 2003, the Company notified the Superintendence for Securities and Insurance Companies that Mr.
Felipe Hurtado Parot joined as Corporate General Secretary of Farmacias Ahumada S.A. as of January 2, 2003.
On February 28, 2003, the Company notified the Superintendence for Securities and Insurance Companies that
Mr. Marcelo Salinas Plandiura joined as Corporate Studies & Planning Manager of Farmacias Ahumada S.A. as of
February 1, 2003.
F i n a n c i a l
S t a t e m e n t s
o f
S u b s i d i a r i e s
[ F I N A N C I A L
S T A T E M E N T S
O F
S U B S I D I A R I E S ]
SUMMARIZED BALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001
Laboratorios Fasa
S.A. and Subsidiary
2002
2001
Th. Ch.$
Th. Ch.$
ABF, Administradora
de Beneficios
Farmacéuticos S.A.
2002
2001
Th. Ch.$
Th. Ch.$
Fasa - Card S.A.
2002
2001
Th. Ch.$
Th. Ch.$
Cía. de Nutrición
General S.A.
and Subsidiary
2002
2001
Th. Ch.$
Th. Ch.$
Farmacias Ahumada
Internacional S.A.
2002
2001
Th. Ch.$
Th. Ch.$
Lagrynd Corp S.A.
2002
2001
Th. Ch.$
Th. Ch.$
ASSETS
ACTIV
OS
CTIVOS
126
CURRENT
CIRCULANTE:
Cash
Disponible
Debtors
Deudores
Amounts
due from
Documentos
y cuentas por cobrar
related
companies
a empresas
relacionadas
inventories
Existencias
Other
current
assets
Otros
activos
circulantes
303,502
224,363
41,225
67,271
80,045
102,359
274,692
249,837
44,021
6,083
28,199
64,881
142,872
156,694
6,875
106,676
9,278
-
-
-
180,031
2,710
1,479,400
49,408
34,866
1,348,578
168,688
57,877
500,960
38,871
141,932
11,597
25,615
56,279
28,405
50,866
626,775
18,838
101,388
602,368
16,221
-
-
-
-
Total
current
Total
activoassets
circulante
2,091,539
1,683,639
722,235
678,058
131,998
172,351
945,179
833,528
9,278
-
-
182,741
FIXED
ASSETS
ACTIVO
FIJO
Fixed
Assets
Activo
fijo
Accumulated
depreciation
Depreciación
acumulada
1,639,369
(557,064)
1,494,342
(365,590)
302,242
(139,001)
184,597
(102,454)
28,850
(26,699)
28,850
(22,009)
351,868
(166,579)
257,545
(106,271)
1,581
(316)
-
-
-
NET
FIXED ASSETS
ACTIVO
FIJO NETO
1,082,305
1,128,752
163,241
82,143
2,151
6,841
185,289
151,274
1,265
-
-
-
OTHER
ASSETS
OTROS
ACTIVOS
114,989
65,798
7,596
12,628
1,215
2,049
392,739
326,537
-
-
-
-
3,288,833
2,878,189
893,072
772,829
135,364
181,241
1,523,207
1,311,339
10,543
-
-
182,741
1,686,474
1,461,876
128
178,950
253
59,980
19,373
11,306
934,795
73,163
753,614
-
-
-
179,369
456,560
194,199
-
510,163
121,033
-
25,615
75,075
-
28,405
75,821
-
149,689
34,530
-
142,995
67,300
-
134,750
82,068
-
197,070
131,715
1,106
12,644
-
-
-
-
2,337,233
2,093,072
279,768
164,459
203,592
221,601
1,151,613
1,156,668
12,644
-
-
179,369
LONG-TERM:
LARGO PLAZO:
Docs.
& accts. payable
Documentos
y cuentas por pagar
to related
companies
a empresas
relacionadas
Other
Otros
19,703
20,597
42
-
-
-
28,924
3,007
39,823
12,017
-
Total
Long-term
Total
pasivo aliabilities
largo plazo
19,703
20, 597
42
-
-
-
31,931
51,840
-
-
-
-
MINORITY
INTERES INTEREST
MINORITARIO
269
269
-
-
-
-
-
-
-
-
-
-
SHAREHOLDERS’
PATRIMONIO EQUITY
931,628
764,251
613,262
(68,228)
102,831
(2,101)
-
-
3,372
2,878,189
893,072
(40,360)
181,241
339,663
3,288,833
608,370
772,829
1,523,207
1,311,339
10,543
-
-
182,741
TOTAL
ASSETS
TOTAL
ACTIVOS
LIABILITIES
PASIV
OS
ASIVOS
CURRENT
CIRCULANTE:
Banks
and efinancial
institutions
Bancos
instituciones
financieras
Notes
and accounts
payable
Documentos
y cuentas
por pagar
Amounts
due to yrelated
Documentos
cuentas por pagar
companies
Accrued
expenses
and withholdings
Provisiones
y retenciones
Other
Otros
Total
current
liabilities
Total
pasivo
circulante
TOTAL
PASIVOS
TOTAL
LIABILITIES
135,364
[ F I N A N C I A L
Fasa
International Corp
2002
2001
Th. Ch.$ Th. Ch.$
Fasa Investment
S.A. and Subsidiaries
2002
2001
Th. Ch.$
Th. Ch.$
S T A T E M E N T S
Inverex S.A
2002
2001
Th. Ch.$ Th. Ch.$
2002
2001
Th. Ch.$
Th. Ch.$
O F
Inversiones San
Silvestre
Drogueria La Victoria S.A.C.
S.A.C.
2002
2001
2002
2001
Th. Ch.$ Th. Ch.$ Th. Ch.$ Th. Ch.$
Boticas Fasa S.A.
2002
2001
Th. Ch.$
Th. Ch.$
Far-Ben S.A. de C.V.
2002
2001
Th. Ch.$
Th. Ch.$
72
-
-
3,556,866
14,022,564
2,197,233
3,472,936
719
-
-
243,256
2,584,999
579,879
2,060,109
1,767,283
1,883,935
1,209,591
802,446
1,164
13,763
-
-
404,610
972
18,890,191
9,539,867
-
-
-
1,151,650
53,445,971
21,549,603
368,870
10,641,557
348,809
-
-
5,098,276
242,690
6,762,942
886,219
1,401,665
5,725,355
184,805
729,466
3,830,901
57,636
1,043,152
50,140
-
-
53,699
47,714
11,274
72
-
93,726,654
17,029,405
719
-
8,169,221
10,289,149
10,963,044
6,630,040
1,108,219
-
-
518,269
555,132
42,581,031
2,851,379
74,417,600
-
-
-
161,828,468
(85,256,084)
10,930,982
(3,155,026)
-
-
7,175,364
(3,164,497)
5,851,377
(2,263,924)
6,518,660
(1,509,038)
4,933,556
(890,932)
1,751
(290)
-
-
958
(171)
147,439,541
(80,522,296)
-
-
76,572,384
7,775,956
-
-
4,010,867
3,587,453
5,009,622
4,042,624
1,461
-
-
-
-
13,245,688
16,582,077
5,030,270
-
14,718,507
15,474,437
231,131
168,564
38,805
-
-
787
73,850
66,917,245
29,116,701
-
72
-
183,544,726
41,387,438
5,030,989
-
26,898,595
29,351,039
16,203,797
10,841,228
1,148,485
-
-
592,906
170,451,546
-
-
-
3,145,643
64,813,156
3,929,518
10,810,363
-
-
3,134,108
5,072,552
2,652,051
5,901,703
4,070
9,850,262
1,277,467
4,812,699
5,562
-
-
-
25,863
49,719,579
-
-
-
2,046,869
13,317,179
544,302
231,213
2,174,091
586,599
-
-
1,331,092
543,291
1,972,252
468,239
1,079,466
503,004
-
27,200
299,954
7,869
889,352
174,697
-
-
415,442
1,217
15,064
11,481,053
-
-
-
-
83,867,149
17,731,784
-
-
10,081,043
10,994,245
11,436,802
6,425,189
1,069,611
-
-
457,586
61,200,632
-
-
-
720,060
27,944,974
-
-
720,060
2,144,525
-
-
-
49,106,548
-
28,665,034
-
-
2,864,585
220,745
118,359
118,359
-
-
3,749,574
3,749,574
220,745
-
363,486
3,386,088
3,749,574
-
-
-
-
49,106,548
-
-
-
24,127,695
5,066,110
-
-
4,846,210
5,065,126
-
-
-
-
-
-
6,767
-
72
-
46,884,848
14,839,970
5,030,989
-
9,106,757
9,542,094
4,546,250
4,297,680
78,874
-
-
135,320
60,137,599
-
72
-
183,544,726
41,387,438
5,030,989
-
26,898,595
29,351,039
16,203,797
10,841,228
1,148,485
-
-
592,906
170,451,546
-
127
[ F I N A N C I A L
S T A T E M E N T S
O F
SUMMARIZED INCOME STATEMENTS AS OF DECEMBER 31, 2002 AND 2001
ABF, Administradora
de Beneficios
Farmacéuticos S.A.
2002
2001
Laboratorios Fasa
S.A. and Subsidiary
2002
2001
Th. Ch$
Cía. de Nutrición
Farmacias Ahumada
and Subsidiary
2002
2001
General S.A.
Fasa - Card S.A.
2002
2001
Th. Ch$
Th. Ch$
Th. Ch$
11,863,583
9,063,613
1,419,924
1,664,027
60,023
(10,724,572)
(8,219,171)
(398,488)
(314,389)
MARGEN
DE EXPLOTACION
OPERATING
MARGIN
1,139,011
844,442
1,021,436
GASTOS
DE ADMINISTRACION
Y VENTAS
ADMINISTRATION
AND SALES
EXPENSES
(869,865)
(706,090)
92,141
3,427,725
2,118,836
-
-
-
-
(68,092)
(92,151)
(1,817,341)
(1,212,841)
-
-
-
-
1,349,638
(8,069)
(10)
1,610,384
905,995
-
-
-
-
(1,013,801)
(994,548)
(52,930)
(74,825)
(1,765,920)
(1,038,595)
(5,694)
-
-
-
269,146
138,352
7,635
355,090
(60,999)
(74,835)
(155,536)
(132,600)
(5,694)
-
-
-
Otros
ingresos
Other
income
Otros
egresos
Other
expenses
10,960
(76,356)
13,721
(72,241)
15,617
(13,576)
27,276
(15,187)
63,940
(30,809)
2,476
(1,172)
12,100
(76,903)
28,391
(80,344)
-
-
-
-
RESULTADO
ANTES INCOME
DE IMPUESTO
RESULT BEFORE
TAXESA LA RENTA
203,750
79,832
9,676
367,179
(27,868)
(73,531)
(220,339)
(184,553)
(5,694)
-
-
-
IMPUESTO
LA RENTA
INCOMEATAXES
(36,405)
57
(4,815)
3,865
-
-
29,936
27,319
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
167,345
79,889
4,861
371,044
(27,868)
(73,531)
(190,403)
(157,234)
(5,694)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
167,345
79,889
4,861
371,044
(27,868)
(73,531)
(190,403)
(157,234)
(5,694)
-
-
-
RESULTADO
OPERACIONAL
OPERATING
INCOME
Th. Ch$
Lagrynd Corp S.A.
2002
2001
Th. Ch$
COSTO
DE EXPLOTACION
OPERATING
COST
Th. Ch$
Internacional S.A.
2002
2001
Th. Ch$
INGRESOS
DE EXPL
OTACION
OPERATING
INCOME
Th. Ch$
Th. Ch$ Th. Ch$ Th. Ch$
RESULTADO
NO OPERACIONAL:
NON-OPERATING
RESULT
128
INTERES
MINORITARIO
MINORITY
INTEREST
RESULTADO
LIQUIDO
NET RESULT
AMORTIZACION DEL MAYOR VALOR DE
AMORTIZATION OF NEGATIVE
INVERSIONES
GOODWILL
YEAR’S PROFIT (LOSS)
UTILIDAD (PERDIDA) DEL AÑO
(1) Corresponds to the consolidated income statement for the 47-day period ending as of December 31, 2001.
(2) These results include those results obtained during the 47-day period ending as of December 31, 2001, which were included in the consolidation of Fasa
Investment S.A. and Affiliates.
[ F I N A N C I A L
Fasa
International Corp
2002
2001
Th. Ch$ Th. Ch$
Fasa Investment
2002
2001
Th. Ch$
S T A T E M E N T S
Inverex S.A.
2002
2001
Th. Ch$
2002
2001
Th. Ch$ Th. Ch$
Th. Ch$
(1)
O F
Boticas Fasa S.A.
2002
2001
Th. Ch$
Th. Ch$
Drogueria La Victoria S.A.C.
2002
2001
Th. Ch$
(2)
Th. Ch$
Th. Ch$
Inversiones San
Silvestre S.A.C.
2002
2001
Th. Ch$
(2)
Th. Ch$
2002
2001
Th. Ch$
Th. Ch$
(2)
-
-
79,807,829
7,105,762
-
-
46,469,980
46,819,868
33,306,082
24,878,701
866,846
-
-
242,782
-
-
-
-
(58,406,440)
(5,241,292)
-
-
(32,963,143)
(33,497,301)
(25,490,255)
(19,091,536)
(774,831)
-
-
(168,428)
-
-
-
-
-
-
21,401.389
1,864,470
-
-
13,506,837
13,322,567
7,815,827
5,787,165
92,015
-
-
74,354
-
-
-
-
(21,505,819)
(1,997,023)
-
-
(13,858,507)
(13,198,241)
(7,487,155)
(5,061,606)
(74,616)
-
-
(55,627)
-
-
-
-
(104,430)
(132,553)
-
-
(351,670)
124,326
328,672
725,559
17,399
-
-
18,727
-
-
2,056,028
(3,470,780)
131,515
(2,794,683)
-
-
1,871,491
(2,876,655)
21,922
(2,208,232)
104,803
(466,409)
154,995
(733,340)
10,915
(9,724)
-
-
20,026
(20,931)
-
-
-
-
(1,519,182)
(2,795,721)
-
-
(1,356,834)
(2,061,984)
(32,934)
147,214
18,590
-
-
17,822
-
-
-
-
662,141
43,568
-
-
241,338
224,822
-
-
-
-
-
-
-
-
-
-
335,960
66,556
-
-
335,960
766,984
-
-
-
-
-
-
-
-
-
-
(521,081)
(2,685,597)
-
-
(779,536)
(1,070,178)
(32,934)
147,214
18,590
-
-
17,822
-
-
-
-
-
-
-
-
126,896
-
-
-
-
-
-
(7,412)
-
-
-
-
(521,081)
(2,685,597)
-
-
(652,640)
(1,070,178)
(32,934)
147,214
18,590
-
-
10,410
-
-
129
[ F I N A N C I A L
S T A T E M E N T S
O F
SUMMARIZED CASH FLOWS AS OF DECEMBER 31, 2002 AND 2001
Laboratorios Fasa
S.A. and Subsidiary
2002
2001
ABF, Administradora
de Beneficios
Farmacéuticos S.A.
2002
2001
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
Cía. de Nutrición
General S.A.
and Subsidiary
2002
2001
Fasa - Card S.A.
2002
2001
Th. Ch$
Th. Ch$
Th. Ch$
Farmacias Ahumada
Internacional S.A.
Lagrynd Corp S.A.
2002
2001
2002
2001
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
Th. Ch$
CASH
FLOW
FROM OPERATING
ACTIVITIES
FLUJO
ORIGINADO
POR ACTIVIDADES
DE OPERACION:
Year’s
profit(pérdida)
(loss) del año
Utilidad
167,345
79,889
4,861
371,044
(27,868)
(73,531)
(190,403)
(157,234)
(5,694)
-
-
-
204,509
(190,079)
307,177
158,923
(590,132)
413,343
47,392
(238,775)
114,842
34,435
107,808
(210,213)
1,779
56,165
(18,001)
4,328
31,064
(21,364)
90,604
(28,533)
230,251
65,961
(361,928)
338,606
316
-
-
-
(2,710)
-
488,952
62,023
(71,680)
303,074
12,075
(59,503)
101,919
(114,595)
(5,378)
-
-
(2,710)
Income
obtained
through
financing activities
Ingresos
obtenidos
por actividades
de financiamiento
Other
loans obtained
Obtención
de otros préstamos
Other
disbursements
Otros
desembolsos
-
-
-
-
-
-
420,992
158,820
(376,052)
221,525
(22,841)
16,237
-
-
-
3,372
179,369
-
Positive
net cash
floworiginado
provided por
by financing
activities
Flujo neto
positivo
actividades
de financiamiento
-
-
-
-
-
-
203,760
198,684
16,237
-
-
182,741
Permanent
investments
Inversiones
permanentes
Incorporation
of fixed
assetsfijos
Incorporación
de activos
Sale
of fixed
assets fijos
Venta
de activos
Other
investment
disbursements
Otros desembolsos de inversion
(609)
(173,620)
28,621
(73,782)
(2,629)
(255,418)
(11,250)
(117,645)
(704)
(2,629)
(47,848)
(156)
-
-
(94,334)
(76,719)
(49,543)
(77,221)
(1,581)
-
-
-
Positive
(negative)
net cash
floworiginado
provided por
by investment
Flujo neto
(negativo)
positivo
actividadesactivities
de inversión
(219,390)
(269,297)
(118,349)
(50,633)
-
-
(171,053)
(126,764)
(1,581)
-
-
-
269,562
(207,274)
(190,029)
252,441
12,075
(59,503)
134,626
(42,675)
9,278
-
-
180,031
(7,285)
(8,569)
(4,618)
(5,926)
3,747
1,982
1,371
6,189
-
-
-
262,277
(215,843)
(194,647)
246,515
15,822
(57,521)
135,997
(36,486)
9,278
-
-
180,031
41,225
257,068
274,692
28,177
28,199
85,720
6,875
43,361
-
-
-
-
303,502
41,225
80,045
274,692
44,021
28,199
142,872
6,875
9,278
-
-
180,031
Charges
toaresults
that do
cash
flow
Cargos(credits)
(abonos)
resultados
quenot
norepresent
representan
flujo
de efectivo:
Net
asset changes
that
affectque
the cash
flow
Variación
neta de
activos
afectan
al flujo de efectivo
Net
liability changes
that affect
cash flow
Variación
neta de pasivos
quethe
afectan
al flujo de efectivo
Positive
(negative)
net
cash flow
provided
byactividades
operating de
activities
Flujo neto
positivo
(negativo)
originado
por
la operación
CASH
FLOW
FROM FINANCING
ACTIVITIES
FLUJO
ORIGINADO
POR ACTIVIDADES
DE FINANCIAMIENTO:
130
CASH
FLOW
FROM INVESTMENT
ACTIVITIES
FLUJO
ORIGINADO
POR ACTIVIDADES
DE INVERSION:
TOTAL
POSITIVE
(NEGATIVE)
NET(NEGATIVO)
CASH FLOWDEL
OF THE
YEAR
FLUJO
NETO TOTAL
POSITIVO
AÑO
EFFECT
OF DE
PRICE
RESTATEMENT
CASH AND
EFECTO
LA LEVEL
INFLACION
SOBRE ELON
EFECTIVO
Y EFECTIVO
CASH
EQUIVALENT
EQUIVALENTE
-
NET
CASH ANDNETA
CASHDEL
EQUIVALENT
VARIACION
EFECTIVO Y EFECTIVO EQUIVALENTE
DURING
THE
DURANTE
ELYEAR
AÑO
CASH
ANDINICIAL
CASH EQUIVALENT
YEAR
SALDO
DE EFECTIVO BEGINING
Y EFECTIVOOF
EQUIVALENTE
CASH
ANDFINAL
CASHDE
EQUIVALENT
OF YEAR
SALDO
EFECTIVO Y END
EFECTIVO
EQUIVALENTE
(1) Corresponds to the consolidated income statement for the 47-day period ending as of December 31, 2001.
(2) These results include those results obtained during the 47-day period ending as of December 31, 2001, which were included in the consolidation of Fasa
Investment S.A. and Affiliates.
[ F I N A N C I A L
Fasa International
Corp
2002
2001
Th. Ch$
Th. Ch$
Fasa Investment
2002
2001
Th. Ch$
Th. Ch$
S T A T E M E N T S
Inverex S.A.
2002
2001
Th. Ch$
Th. Ch$
2002
2001
Th. Ch$
Th. Ch$
(1)
O F
Inversiones San
Droguería La Victoria S.A.C.
Silvestre S.A.C.
2002
2001
2002
2001
Boticas Fasa S.A.
2002
2001
Th. Ch$
Th. Ch$
(2)
Th. Ch$
Th. Ch$
Th. Ch$
(2)
Th. Ch$
2002
2001
Th. Ch$
Th. Ch$
(2)
-
-
-
-
(652,641)
(1,070,178)
(32,934)
147,214
18,590
-
-
10,410
-
-
-
(521,081)
703,701
(1,724,016)
4,180,248
(2,685,597)
-
2,511,502
(1,534,417)
1,349,942
-
-
389,218
2,063,586
(2,006,387)
1,207,606
(3,678,863)
2,034,208
548,742
(2,800,174)
5,940,497
369,529
(1,319,075)
883,974
4,419
(987,431)
160,599
-
-
(13,458)
(25,795)
(112,737)
-
-
-
-
2,638,852
(358,571)
-
-
(206,224)
(1,507,227)
3,656,131
81,642
(803,823)
-
-
(141,580)
-
-
72
-
-
31,996,220
14,863,769
(14,745,107)
1,691,427
1,756,066
(605,361)
5,030,989
-
-
14,332,904
(13,383,964)
1,734,007
(8,176)
10,247
(1,364,057)
1,277,467
876,262
(814,967)
719,485
(150,908)
-
-
541,892
-
-
-
72
-
32,114,882
2,842,132
5,030,989
-
948,940
1,725,831
(1,353,810)
1,338,762
568,577
-
-
541,892
-
-
-
-
(32,035,598)
(2,061,703)
(449,593)
(261,577)
(22,202)
(5,030,270)
-
-
308,607
(940,713)
(447,233)
88,940
(1,986,557)
(155,804)
(1,120,260)
(703,598)
(866,156)
(60,870)
(730)
(43,117)
-
-
(146)
4,676
-
-
-
-
-
-
(34,546,894)
(283,779)
(5,030,270)
-
(1,079,339)
(2,053,421)
(1,823,858)
(927,026)
(43,847)
-
-
4,530
-
-
72
-
206,840
2,199,782
719
-
(336,623)
(1,834,817)
478,463
493,378
(279,093)
-
-
404,842
-
-
-
-
(101,147)
-
-
-
-
(94,765)
-
-
1
-
-
(232)
-
-
72
-
307,987
2,199,782
719
-
(336,623)
(1,929,582)
478,463
493,378
(279,092)
-
-
404,610
-
-
-
-
2,199,782
-
-
579,879
2,509,461
1,288,820
716,213
280,256
-
-
-
-
-
72
-
2,507,769
719
-
243,256
579,879
1,767,283
1,209,591
1,164
-
-
404,610
-
-
2,199,782
131
-
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2002
I. AN
AL
YSIS OF THE FIN
ANCIAL ST
ATEMENTS
ANAL
ALYSIS
FINANCIAL
STA
1. AN
AL
YSIS OF THE INCOME ST
ATEMENTS
ANAL
ALYSIS
STA
The results for the years ended as of December 31, 2002 and 2001 –which do not include the results generated
by the operations in Mexico– show the following changes:
INCOME STATEMENT (In Th. Ch$)
Operating Income
Operating Cost
Operating Margin
Administration and sales
expenses
Dec-2001
313,417,767 291,861,032
(235,901,632) (217,240,049)
Dec 02-01 %Change 02-01
21,556,735
(18,661,583)
7.39%
8.59%
77,516,135
74,620,983
2,895,152
3.88%
(74,292,769)
(65,550,008)
(8,742,761)
13.34%
3,223,366
9,070,975
(5,847,609)
(64.47%)
Interest income
1,015,792
Other non operating income
669,414
Equity participation in loss of related companies
(12,718)
Interest expenses
(2,162,091)
Other non operating expenses
(784,158)
(1,948,435)
( 332,005)
Foreing currency translation, net
1,452,805
1,004,988
193,687
(972,924)
(468,529)
(1,763,804)
(492,059)
508,759
10,804
475,727
(12,718)
(1,189,167)
(315,629)
(184,631)
160,054
944,046
1.08%
245.62%
100.00%
122.23%
67.37%
10.47%
(32.53%)
185.56%
Non Operating Loss - Expenses, net
(2,101,396)
(1,989,882)
(111,514)
5.60%
INCOME BEFORE INCOME
TAXES AND MINORITY INTEREST
1,121,970
7,081,093
(5,959,123)
(84.16%)
INCOME TAXES
119,756
(1,130,189)
MINORITY INTEREST
369,567
826,970
(457,403)
(55.31%)
1,611,293
6,777,874
(5,166,581)
(76.23%)
126,895
-
126,895
100.00%
NET INCOME
1,738,188
6,777,874
(5,039,686)
(74.35%)
R.B
.T
.I.D
.A.E.I(*)
R.B.T
.T.I.D
.I.D.A.E.I(*)
8,666,542
13,059,369
(4,392,827)
(33.64%)
11,59
45,19
(33,60)
(74.35%)
OPERA
TING INCOME
OPERATING
132
Dec-2002
NON OPERA
TING INCOME AND EXPENSE:
OPERATING
NET INCOME
Amortization of negative goodwill
EARNINGS PER SHARES $
(*) Result before taxes, interest, depreciation, amortization and extraordinary items.
1,249,945 (110.60%)
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
a. Operating Result:
The Operating result of fiscal year 2003 amounted to Ch$ 3,223,366 thousand, which represents a 64.47%
negative change (Ch$ 5,847,609 thousand) with respect to the same period of the previous year. This is mainly
explained by an increment in Administration & sales expenses of Ch$ 8,742,791 thousand (13.34%) that was
partially offset by a better Operating margin of Ch$ 2,895,152 thousand (3.88%). Administration & sales expenses
increased mostly because of the inauguration of 81 new stores during the fiscal year; thus representing an increase of
22%, reaching up to 440 pharmacies – in consolidated terms, except for Mexico – as of December 31, 2002, versus
369 pharmacies as of December 31, 2001.
b. Non-operating result:
The Non-operating result as of December 31, 2002 reflected a loss of Ch$ 2,101,396 thousand, compared with
a loss of Ch$ 1,989,882 thousand during the same period of the year 2001, thus representing a negative change of
Ch$ 111,514 thousand (5.6%). This net change is mostly attributable to the following factors: An increase in Other
income by Ch$ 475,727 thousand (245.62%), mainly generated because of the sale of Fixed assets; increased
Financial expenses of Ch$ 1,189,167 thousand (122.23%) generated from debt servicing obligations with banks and
financial institutions, mainly of the Brazilian affiliate; and, an increase in Exchange differences of Ch$ 944,046
thousand (185.56%) mostly originated from the Brazilian affiliate.
2. BALANCE SHEET AN
AL
YSIS
ANAL
ALYSIS
The main financial indicators have performed as follows:
ASSETS (In Th. Ch$)
Dec-2002
Dec-2001
Dec 02-01 % Change 02-01
Current Assets
154,641,879
77,623,570
77,018,309
99.22%
Fixed Assets
107,572,866
32,186,339
75,386,527
234.22%
Other Assets
23,293,772
24,189,501
(895,729)
( 3.70%)
Total Assets
285,508,517
133,999,410 152,509,107
113.07%
133
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
Current Assets:
The 99.22% positive change in Current assets – corresponding to a net increase of Ch$ 77,018,309 thousand –
is mostly explained by a variation in the following items:
a) An increase in Time deposits totaling Ch$ 12,185,216 thousand (159.24%), generated mostly by the balance
of the affiliate Far-Ben S.A. de C.V. (México).
b) An increase in Inventories totaling Ch$ 42,942,759 thousand (100.38%), generated mostly by the consolidation
of inventories of the affiliate Far-Ben S.A de C.V. (México) as of December 31, 2002.
c) An increase of Sales debtors by Ch$ 10,373,286 thousand (103.70%) attributable, on the one hand, by the
consolidation of Far-Ben S.A. de C.V. and, on the other hand, by an increase of sales income in Chile, Brazil and Peru.
(Net) Fixed Assets:
134
The 234.22% change in Fixed assets corresponds to a net increase of Ch$ 75,386,527 thousand, which is mostly
explained by:
a) Installing and equipping new stores by the Parent Company as well as by the affiliates Boticas Fasa (Perú) and
Fasamed Comércio de Medicamentos e Perfumaria S.A. (Brasil), and also by the remodeling of stores that are
currently operating.
b) Consolidating the balances of Far-Ben S.A. de C.V. (México) as of December 31, 2002 that incorporated Fixed
assets totaling Ch$ 66,917,245 thousand.
Other Assets:
The 3.70% drop – amounting to Ch$ 895,729 thousand – is mainly explained by the following changes:
a) An increase of Intangibles totaling Ch$ 1,107,978 thousand, generated by greater payments on account of
Municipal patents (derechos de llave), since there were more stores operating as of December of the year 2002.
b) An increase in Investments in related companies and Investments in other companies totaling Ch$ 3,569,078
thousand from the affiliate Far-Ben S.A. de C.V.(México) .
c) An increase in Others by Ch$ 2,245,414 thousand generated mainly by consolidating the balances of the
affiliate Far-Ben S.A. de C.V.(México), an increase in rental guarantees (81 new stores during the year 2002), and a
bond placement discount.
d) An increase of Ch$ 7,550,812 thousand (866.57%) in the account denominated Greater Value of Investments,
originated by the investment made in the affiliate Far-Ben S.A. de C.V. (México) by the affiliates Fasa Investment S.A.
and Inverex S.A..
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
LIABILITITES (InTh. Ch$)
Dec-2002
Current Liabilities
Dec-2001
Dec 02-01 %Change 02-01
138,540,314
64,676,183
73,864,131
114.21%
66,010,826
7,398,281
58,612,545
792.25%
Minority Interest
24,127,695
5,100,383
19,027,312
373.10%
Shareholders’ Equity
56,829,682
56,824,563
5,119
0.01%
285,508,517
133,999,410
151,509,107
113.07%
Total Liabilities
Current Liabilities:
The change of Ch$ 73,864,131 thousand occurring in this item corresponds mostly to the net impact of:
a) A Ch$ 3,635,737 thousand drop (54.52%) in the Obligations with banks and financial institutions caused by
the payments made by the Parent Company and the Brazilian affiliate.
b) Increased provisions amounting to Ch$ 10,451,127 thousand (239.91%) generated by the consolidation of
the provisions of Far-Ben S.A. de C.V. (México).
c) A Ch$ 52,960,827 thousand increase (110.14%) caused by the consolidation of Accounts payable to domestic
suppliers coming from Far-Ben S.A. de C.V. (México)
Long-term liabilities:
This item shows an increase of Ch$ 58,612,545 thousand with respect to the previous year. This change originates
mainly from the account Corporate bonds (obligations to the public) which experienced an increase of Ch$ 54,683,157
thousand (100%), for Bonds placed in Chile to finance the takeover of the affiliate Far-Ben S.A. de C.V (México) and
the balance of the Corporate bonds (obligations to the public) that were consolidated with this affiliate as of December 31, 2002.
Shareholders’ Equity:
The increase of Ch$ 5,119 thousand in the Shareholders’ Equity corresponds to a 0.001% variation that is mostly
attributed to a Ch$ 715,000 thousand reduction of Retained earnings offset by an increase of Other reserves by
Ch$ 720,619 thousand. The year’s result amounted to Ch$ 1,738,188 thousand.
135
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
LIABILITITES (InTh. Ch$)
Dec-2002
Current Liabilities
Dec-2001
Dec 02-01 %Change 02-01
138,540,314
64,676,183
73,864,131
114.21%
66,010,826
7,398,281
58,612,545
792.25%
Minority Interest
24,127,695
5,100,383
19,027,312
373.10%
56,829,682
56,824,563
5,119
0.01%
285,508,517
133,999,410
151,509,107
113.07%
Total Liabilities
The change of Ch$ 73,864,131 thousand occurring in this item corresponds mostly to the net impact of:
a) A Ch$ 3,635,737 thousand drop (54.52%) in the Obligations with banks and financial institutions caused by
the payments made by the Parent Company and the Brazilian affiliate.
b) Increased provisions amounting to Ch$ 10,451,127 thousand (239.91%) generated by the consolidation of
the provisions of Far-Ben S.A. de C.V. (México).
c) A Ch$ 52,960,827 thousand increase (110.14%) caused by the consolidation of Accounts payable to domestic
suppliers coming from Far-Ben S.A. de C.V. (México)
Long-term liabilities:
This item shows an increase of Ch$ 58,612,545 thousand with respect to the previous year. This change originates
mainly from the account Corporate bonds (obligations to the public) which experienced an increase of Ch$ 54,683,157
thousand (100%), for Bonds placed in Chile to finance the takeover of the affiliate Far-Ben S.A. de C.V (México) and
the balance of the Corporate bonds (obligations to the public) that were consolidated with this affiliate as of December 31, 2002.
Shareholders’ Equity:
The increase of Ch$ 5,119 thousand in the Shareholders’ Equity corresponds to a 0.001% variation that is mostly
attributed to a Ch$ 715,000 thousand reduction of Retained earnings offset by an increase of Other reserves by
Ch$ 720,619 thousand. The year’s result amounted to Ch$ 1,738,188 thousand.
135
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
Activity
The inventory turnover index dropped by 2.3 times and that of inventory permanence increased in 61 days; these
changes are explained by the increased inventories as a result of the opening of new stores - during the last period –
in Chile, Brazil and Peru and by the consolidation of the inventories of Far-Ben S.A. de C.V. (México).
The fixed asset turnover index dropped by 6.15 times as of December 2002, caused mostly by an increase in fixed
assets by 234.22% -because of the consolidation of the affiliate Far-Ben S.A de C.V. (México)– an increase greater
than that of income, which grew by 7.39% and was caused by not consolidating the results of the Mexican affiliate.
Restrictions associated to the Bond Issue.
(A) A level of indebtedness, measured over figures of its consolidated and individual balance sheets, defined as
the ratio between (i) Financial Liabilities (account 5.21.10.10 plus account 5.21.10.20 plus account 5.21.10.30 plus
account 5.21.10.40 plus account 5.21.10.50 plus account 5.22.10.00 plus account 5.22.20.00 plus account
5.22.40.00 of the FECU) and, (ii) Shareholders’ Equity (account 5.23.00.00 plus account 5.24.00.00 of the FECU),
(hereinafter the “Level of Indebtedness”), not higher than zero point eighty times. In order to determine the Level of
Indebtedness in the consolidated FECU, the following shall be regarded as financial liabilities of the ISSUER: the
amounts of all endorsed guarantees, simple or joint-and-several surety bonds, joint and several debt or other guarantees,
personal or collateral, which the Issuer or its affiliates would have given to secure third-party liabilities, with the
exception of: (i) those given by the ISSUER or its affiliates on account of liabilities of other affiliate companies of the
ISSUER; and (ii) those given by ISSUER affiliate companies on account of liabilities of the ISSUER. In turn, in order to
determine the Level of Indebtedness in the individual FECU, the following shall be regarded as financial liabilities of
the ISSUER: the sum total of all endorsed guarantees, simple or joint-and-several surety bonds, joint and several debt
or other guarantees, personal or collateral, given by the ISSUER to guarantee third-party liabilities, even if they belong
to its affiliates.
between: (i) the Operating Result (account 5.31.11.00 of the FECU) plus Depreciation(Account 5.50.30.05 of the
FECU) and (ii) Net Financial Expenses (Account 5.31.12.60 minus Account 5.31.12.10 of the FECU), not less than two
point fifty times as of the closing of each quarter until that which ends on December 31 of the year 2003; and no less
that three point zero times as of the closing of each subsequent quarter. The Financial Expense Hedging Ratio must be
calculated over the last 12-month period concluded as of the date of the corresponding FECU. All values must be
stated in the currency of their respective FECU.
For the year ended December 31, 2002, these indicators were as follows:
Level of consolidated indebtedness
Level of individual indebtedness
0,76
0,66
7,20
137
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
II. NET WOR
TH AND ECONOMIC VALUE OF ASSETS
ORTH
The assets were valued according to generally accepted accounting principles and norms and according to the
instructions issued to that effect by the Superintendence for Securities and Insurance Companies, set forth under Note
2 of the Financial Statements.
Depreciation was calculated on the basis of a restated value of the goods and according to the remaining years of
useful life of each article.
The values of intangibles were monetarily corrected and are amortized according to the norm indicated under
Technical Bulletin N° 55 of the Chilean Union of Accountants.
Those assets shown in foreign currency are presented at the exchange rate in effect as of the closing of the
exercise.
With respect to those assets of greater importance, the following should be noted:
-
Inventories that include pharmaceutical and chemical products, as well as toiletries and cosmetics.
-
Fixed asset goods comprised mainly of leased assets, computer equipment, facilities in leased real estate
property, and land.
-
Long-term deposits and other assets such as municipal patents and trademarks
138
III.
SIGNIFIC
ANT CHANGES
III.SIGNIFIC
SIGNIFICANT
The Company currently operates in the markets of Chile, Peru, Brazil, and - as of the end of the year 2002 – in
Mexico. The most important changes occurring in the various markets where it operates, as well as the competition
that it faces and the market share, can be visualized in the following tables:
CHILE
Total market share
Number of pharmacies in operation
Dec 02
33.1%
234
Dec 01
33.8%
189
Dec 02-01
(0.7%)
45
Competition
Mainly the pharmaceutical chains of S&B and Cruz Verde.
MEXICO
Total market share
Dec 02
3.1%
523
Dec 01
-
Dec 02-01
-
Dec 02
1%
115
Dec 01
1%
108
Dec 02-01
7
Dec 02
8.1%
91
Dec 01
7.1%
72
Dec 02-01
0.9%
19
BRASIL
Total market share
Competition
Mainly Ultramed and Multi Farma
PERU
Total market share
Competition
Mainly BTL, Incafarma, Superfarma.
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
IV
W AN
AL
YSIS
IV.. CASH FLO
FLOW
ANAL
ALYSIS
The operational activities show a positive net flow of Ch$ 17,751,039 thousand, Ch$ 12,381,320 thousand
greater than that generated as of December of the year 2001. The most significant changes occurred because of an
increase of Ch$ 39,731,286 thousand in the collection of sales debtors, increased payments to suppliers and
personnel totaling Ch$ 23,566,516 thousand, and increased other prepaid expenses by Ch$ 4,613,176.
On the other hand, financing activities show a positive net flow of Ch$ 26,903,702 thousand, thereby reflecting
an increase of Ch$ 23,661,746 thousand with respect to the same period of the year 2001. The main causes for such
variation come from an increment in obligations with the public because of the placement of corporate bonds
totaling Ch$ 33,010,801 thousand, a drop of Loans obtained by Ch$ (17,214,367 thousand), and lower loan
payments of Ch$ (9,104,361thousand).
On the other hand, investment activities generated a negative net flow totaling Ch$ 45,930,148 thousand, which
meant an increase of Ch$ 35,110,509 with respect to the flow experienced as of December of the year 2001. The
most significant changes correspond to the Incorporation of fixed assets amounting to Ch$ 2,130,577 thousand and,
Permanent investment amounting to Ch$ 32,246,426 thousand, mostly related to the takeover of the affiliate Far-Ben
S.A. de C.V. (México).
V. MARKET RISK AN
AL
YSIS
ANAL
ALYSIS
1. Rate of interest risk:
139
Most Company obligations are the result of Leasing operations, which have contractually established installments
that include the applicable rate of interest.
The Company manages its rate of interest risk by orienting its long-term debt structure towards an appropiate
combination linked to the cash flows generated by the operation.
2. Rate of exchange risk:
The Company maintains dollar operations in Time deposits and Other current assets, as a function of its short-term
obligations. The liabilities include only short-term dollar operations that are not significant with respect to total
liabilities.
Although the effective rate of exchange risk to which we are exposed depends from the fluctuation of the rates of
exchange in which the Company’s assets and liabilities are maintained, for accounting purposes our results are also
affected considering the provisions of Technical Bulletin N° 64.
With respect to our investments abroad, they face a rate of exchange risk that corresponds to the fluctuation of the
Mexican peso, the Brazilian real and the new Peruvian sol regarding the net value -on a given date- of the monetary
assets and liabilities of our indirect operative affiliates in Mexico, Brazil and Peru, respectively.
3. Risk hedging policies:
The Company’s policy consists in matching the currency in which it performs its financial operations (of both
assets and liabilities) with the flows generated from its operations.
Because of this, the Company has not had to incorporate new hedging operations.
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
ANALYSIS OF THE INDIVIDUAL FINANCIAL STATEMENT
1. AN
AL
YSIS OF THE INCOME ST
ATEMENT
ANAL
ALYSIS
STA
The results for the years ended as of December 31, 2002 and 2001 show the following changes:
INCOME ST
ATEMENT (In Th. Ch$)
STA
D ec
-2002
ec-2002
Operating Income
Operating Cost
Operating Margin
Administration and sales
expenses
D ec
-2001
ec-2001
233,685,394 219,074,072
(175,741,808) (161,634,457)
D ec 02-01 % Change 02-01
14,611,322
(14,107,351)
6.7%
8.7%
57,943,586
57,439,615
503,971
0.9%
(54,268,868)
(48,813,281)
(5,455,587)
11.2%
3,674,718
8,626,334
(4,951,616)
(57.4%)
446,622
788,082
(341,460)
(43.3%)
4,862
487,565
535,975
92,025
(531,113)
395,540
(99.1%)
429.8%
(786,769)
(556,460)
(824,421)
(112,405)
( 411,104)
335,996
(1,336,630)
(497,125)
(408,852)
(156,037)
(445,752)
967,373
549,861
(68,335)
(415,569)
43,632
34,648
(611,377)
(41.1%)
13.7%
101.6%
(28.0%)
(7.8%)
(63.2%)
(1,405,114)
(460,941)
(944,173)
204.8%
PROFIT BEFORE
INCOME TAX
2,269,604
8,165,393
(5,895,789)
(72.2%)
INCOME TAX
(531,416)
(1,387,519)
856,103
(61.7%)
NET INCOME
1,738,188
6,777,874
(5,039,686)
(74.45%)
R.B
.T
.I.D
.A.E.I(*)
R.B.T
.T.I.D
.I.D.A.E.I(*)
7,276,870
11,502,025
(4,225,155)
(36.7%)
11,59
45,19
(33,60)
(74.4%)
OPERA
TING INCOME
OPERATING
NON OPERA
TING INCOME AND EXPENSE:
OPERATING
140
Interest income
Profit for investment in
related companies
Other non-operating income
Equity participation in loss
of related companies
Interest expenses
Other non-operating expenses
Foreing currency translation, net
Non-operating profit (loss)
EARNINGS PER SHARES $
(*) Result before taxes, interest, depreciation, amortization and extraordinary items.
]
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
a. Operating Result:
The Operating result reached Ch$ 3,674,718 thousand, which represents a 57.4% negative change of
(Ch$ 4,951,616 thousand) with respect to the same period of the previous year. This is mainly explained by an
increment in operating expenses of 8.7% greater than the increment in operating income of 6.7% and to an 11.2%
increase in overhead expenses.
Administration and sale expenses correspond mainly to personnel compensation expenses, third-party payments
and normal operating expenses. These expenses increased -as compared to the previous year- from 22.3% in
December 2001 to 23.2% in December 2002.
b. Non-Operacional result:
The non-operating result generated a loss of Ch$ 1,405,114 thousand, which represents a negative change of
204.8%.
This is partly explained by the drop in the profits generated by related companies, from Ch$ 535,975 thousand as of December 2001- to Ch$ 4,862 thousand in this period; which is offset by a drop in related company losses from
Ch$ 1,336,630 -as of December 2001- to Ch$ 786,769 thousand as of December 2002. On the other hand,
although the dollar exchange rate experienced an increase in relation to the same period of last year, this impact was
softened by lower foreign exchange investments, thereby generating a lesser positive impact on results of
Ch$ 611,377 thousand, on account of exchange differences. Likewise, our financial income dropped by Ch$ 341,460
thousand as a result of lower amounts invested in time deposits and mutual funds.
2. B
ALANCE SHEET AN
AL
YSIS
BALANCE
ANAL
ALYSIS
The main financial indicators have performed as follows:
ASSETS (In Th. Ch$)
Dec-2002
Dec-2001
Dec 02-01 % Change 02-01
Current Assets
63,274,897
60,821,174
2,453,723
4.0%
Fixed Assets
29,567,496
23,041,372
6,526,124
28.3%
Other Assets
58,916,776
24,168,259
34,748,517
143.8%
Total Assets
151,759,169
108,030,805
43,728,364
40.5%
141
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
Current Assets:
The positive change in Current assets corresponding to a net increase of Ch$ 2,453,723 thousand, is mostly
explained by the following:
a)
Increased inventories by Ch$ 330,597 thousand, attributable to 45 new stores during the year 2002.
b)
Increased taxes recoverable of Ch$ 1,432,400 thousand.
c)
Increased other current assets amounting to Ch$ 575,928 thousand.
Fixed Assets:
The 28.3% change in Fixed assets corresponds to an increase of Ch$ 6,526,124 thousand, which is mostly
explained by:
142
a) Installing and equipping new stores and also by the remodeling of stores that are currently operating.
b) Computer equipment for the stores and the main company headquarters carried out within an effort to modernize
the company’s information systems, POS and communication equipment.
Other Assets:
The increase in other assets by Ch$ 34,748,517 thousand is mostly explained as follows:
a) An increase in the participation of net investments by Ch$ 32,386,411 thousand in related companies, mainly
in the direct affiliate Fasa Investment S.A. and the affiliate Compañía de Nutrición General S.A.
b) An increment in Lower Value of Investments amounting to Ch$ 432,887 thousand, generated by the investment
made in the affiliate Compañía de Nutrición General S.A.
c) A Ch$ 431,462 thousand increase in long-term debt.
d) An increase in intangibles and others by Ch$ 1,508,656 thousand, generated by increased municipal patents
and guarantees required to lease new stores.
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
LIABILITIES (In Th. Ch$)
Dec-2002
Dec-2001
Current Liabilities
55,985,987
46,437,881
9,548,106
20.6%
38,943,500
4,768,361
34,175,139
716.7%
56,829,682
56,824,563
5,119
0.0%
151,759,169
108,030,805
43,728,364
40.5%
Total Liabilities
Dec 02-01 %Change 02-01
This item’s change by Ch$ 9,643,106 thousand, corresponds mainly to:
a) Increased suppliers by Ch$ 10,423,164 thousand, as a result of the continuous growth of the company and the
expansion of new stores; b) Increased accounts payable to related companies by Ch$ 766,824 thousand; c) A drop
in documents payable by Ch$ 501,313 thousand; d) A drop in bank loans by Ch$ 2,707,403 thousand; e) Increased
provisions by Ch$ 1,108,235 thousand; and the drop in Taxes payable by Ch$ 109,048 thousand.
Long-term Liabilities:
Under this item, we show an increase of Ch$ 34,175,139 thousand which corresponds to a positive change of
716.7%, which is mostly explained by the issue of bonds and deferred taxes.
Shareholder’s Equity:
The increase in the Shareholders’ Equity account by Ch$ 5,119 thousand represents a 0.0% variation that is
mostly explained by an increase of other reserves by Ch$ 720,619 thousand, an increase in the accumulated deficit
during the period allocated toward developing the affiliates by Ch$ 151,132 thousand, a drop caused by the payment
of dividends by Ch$ 2,250,000 thousand, and an increase in the year’s results by Ch$ 1,738,188 thousand.
143
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
INDICATOR
UNIT
Dec-2002
Dec-2001
Change 02-01
LIQUIDITY
Current Liquidity
Acid Test
Working Capital
Times
Times
Th. Ch$
1,13
0,56
7, 288,910
1,31
(0,18)
0,63
(0,07)
14,383,293 (7,094,383)
Level of indebtedness
Short-term liabilities
Fin. Exp. Hedging Ratio
Times
%
%
Times
0,65
59.0%
41.0%
59,4
0,11
90.7%
9.3%
(39,0)
0,54
(31.7%)
31.7%
98,40
PROFITABILITY
Return on Equity
Return on Assets
Return on Operating Assets
Return on Dividends
%
%
%
Times
3.1%
1.3%
4.2%
2,285
12.5%
6.7%
10.8%
2,686
(9.4%)
( 5.4%)
( 6.6%)
( 401 )
ACTIVITY
Turnover of Inventory
Turnover of Fixed Assets
Turnover of Total Assets
Permanence of Inventory
Time
Times
Times
Days
5,5
7,9
1,5
65
5,1
9,5
2,0
70
(0,4)
(1,6)
(0,5)
( 5)
INDEBTEDNESS
144
Financial Indicators
Liquidity
The drop experienced by current liquidity indices - (0.18), the acid test ratio, (0,07) times the Working Capital
(Ch$ 7,094,383 thousand) – are mostly explained by an increase in current liabilities of 20.6%, with respect to
current assets of 4.0%.
Indebtedness
The Debt/Equity ratio during fiscal year 2002 was greater with respect to fiscal year 2001,, because of a
proportionally greater increase in long-term liabilities by 716.7%, as compared to the increase in short-term liabilities
by 20.8% and of shareholder’s equity by 0.0%.
Return on Equity
The 3.1% return on equity, dropped with respect to that of the year 2001 because of lower profits in 2002.
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
Activity
The inventory turnover was 5.1 times in 2001 and 5.5 times in 2002, because of the relative inventory increase
required for the new stores during the last period.
The asset turnover index was 9.5 times in 2001 and 7.9 times in 2002, caused by a 28.7% increase in fixed assets,
whereas income only increased by 6.7%.
The total asset turnover index changed 2.0 times in 2001 and 1.5 times in 2002.
II. NET WOR
TH AND ECONOMIC VALUE OF ASSETS
ORTH
The assets were valued according to generally accepted accounting principles and norms and according to the
instructions issued to that effect by the Superintendence for Securities and Insurance Companies, set forth under Note
2 of the Financial Statements.
Depreciation was calculated on the basis of a restated value of the goods and according to the remaining years of
useful life of each article.
The values of intangibles were monetarily corrected and are amortized according to the norm indicated under
Technical Bulletin N° 55 of the Chilean Union of Accountants.
Those assets shown in foreign currency are presented at the exchange rate in effect as of the closing of the
exercise.
The accounts & documents receivable from related companies are classified according to their date of maturity,
into short and long-term.
The operations are carried out in conditions of fairness similar to those that normally prevail in the marketplace.
With respect to those assets of greater importance, it is worth mentioning the following:
- Inventories include pharmaceutical and chemical products, toiletries and cosmetics.
- Fixed assets include leasing assets, computer equipment, facilities in leased real estate property, and land mostly.
- Time deposits, other assets such as municipal patents and trademarks.
- The investments abroad, mainly those in Brazil in the indirect affiliate Fasa Do Brasil Ltda., and in Peru with the
indirect affiliate Boticas Fasa S.A.
145
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
- The investments in related companies are valued at their proportional equity value. In the case of foreign
companies, they have been valued according to the norms established in Technical Bulletin N° 64 of the Chilean
Union of Accountants.
III. SIGNIFIC
ANT CHANGES
SIGNIFICANT
The Company currently operates in the markets of Chile, Peru, Brazil, and -as of the end of the year 2002– in
Mexico. The most important changes occurring in the various markets where it operates, as well as the competition
that it faces and the market share, can be visualized in the following tables:
CHILE
Total market share
Dec 02
34.7%
Dec 01
34.8%
Dec 02-01
( 0.1% )
234
189
45
Competition
Mainly the pharmaceutical chains of S&B and Cruz Verde.
146
(1) This considers the participation both in pharmaceutical products as well as in mass consumer products.
IV
ASH FLO
W AN
AL
YSIS
IV.. C
CASH
FLOW
ANAL
ALYSIS
The period covered between the months of January-December of the year 2002 shows a negative net flow of
Ch$ 1,538 million, which was generated by negative investment flows.
Operating activities show a positive net cash flow of Ch$ 14,586 million, higher than the flow of Ch$ 6,579
million recorded in 2001.
Insofar as investment activities are concerned, they generated a negative flow totaling Ch$ 43,946 million, which
resulted from the net incorporation of fixed assets, permanent investments and other investment disbursements.
Financing activities –on the other hand– show a positive net flow of Ch$ 27,822 million, principally, as a result of
the Bond Issue.
V. MARKET RISK AN
AL
YSIS
ANAL
ALYSIS
1. Rate of interest risk:
Most Company obligations are the result of Leasing operations, which have contractually established installments
that include the applicable rate of interest.
[ A N A L Y S I S
O F
T H E
F I N A N C I A L
S T A T E M E N T S
]
The Company manages its rate of interest risk by orienting its long-term debt structure towards an appropriate
combination linked to the cash flows generated by the operation.
2. Rate of exchange risk:
The Company maintains dollar operations in Time deposits and Other current assets, as a function of its short-term
obligations. The liabilities include only short-term dollar operations that are not significant with respect to total
liabilities.
Although the effective rate of exchange risk to which we are exposed depends from the fluctuation of the rates of
exchange in which the Company’s assets and liabilities are maintained, for accounting purposes our results are also
affected considering the provisions of Technical Bulletin N° 64.
With respect to our investments abroad, they face a rate of exchange risk that corresponds to the fluctuation of the
Mexican peso, the Brazilian real and the new Peruvian sol regarding the net value -on a given date- of the monetary
assets and liabilities of our indirect operative affiliates in Mexico, Brazil and Peru, respectively.
3. Risk hedging policies:
147
The Company’s policy consists in matching the currency in which it performs its financial operations (of both
assets and liabilities) with the flows generated from its operations.
Because of this, the Company has not had to incorporate new hedging operations.
[ R E L E V A N T
E V E N T S ]
On January 17, 2002 we reported to the Superintendence for Securities and Insurance Companies that Mr. Jaime
Poblete Stambuk –then Corporate Planning & Development Manager– was appointed Corporate Studies Manager.
We also reported that Mr. Alejandro Rosemblatt Kiblisky was appointed to replace Mr. Poblete as Corporate Planning
& Development Manager.
On March 20, 2002, we reported to the Superintendence for Securities and Insurance Companies that Mr. José
Ferrer Fernández –then Corporate Finance Manager– is no longer employed by the Company.
On April 2, 2002, we reported to the Superintendence for Securities and Insurance Companies that the Company’s
Ordinary Shareholders’ Meeting had been summoned to meet on April 18, 2002 at the Company’s headquarters
located in Avenida Vicuña Mackenna N° 585. The subject matters submitted for the consideration of the Shareholders’ Meeting were the following:
- To issue an opinion about the Annual Report, Balance Sheet, Financial Statements and External Auditor’s Report
corresponding to the fiscal year ending as of December 31, 2001.
- To distribute the year’s profit and ratify the payment of interim dividends.
- To review the Board of Directors’ 2001 Expense Report.
- To elect the Board of Directors and set their compensation.
148
- To report about the activities and expenses of the Director’s Committee during the year 2001 and set their 2002
compensation and budget.
- To appoint External Auditors for fiscal year 2002.
- To appoint a Risk Classification Firm for fiscal year 2002.
- To account for the operations carried out by the company pursuant to article 44 of Law 18,046 on Stock
Companies.
- To designate the newspaper that will be used for the purpose of notifying about Shareholders’ Meetings.
- Any other subject matter of general interest, other than those incumbent upon the Extraordinary Shareholders’
Meeting.
Likewise, a copy was attached of the first summons that had been published on that same date in the El Mercurio
newspaper, indicating that the two remaining summons would be published on April 2 and 9, respectively.
On April 19, 2002, we handed over to the Superintendence for Securities and Insurance Companies Form N°1 of
Circular N°660 regarding the dividend distribution agreed by the Company’s Extraordinary Shareholders’ Meeting
held on April 18, 2002.
[ R E L E V A N T
E V E N T S ]
On April 23, 2002, we delivered to the Superintendence for Securities and Insurance Companies a copy of the
Minutes of the General Ordinary Shareholders’ Meeting of Farmacias Ahumada S.A., which resolved –among other
matters– the following:
a. To elect the following persons to serve as Company board members and alternate board members:
Board Members
Alternate Board Members
Karen Codner Dujovne
Perla Dujovne Codriansky
Denise Codner Dujovne
Juan Cuneo Solari
Raymond Jay Dunn IV
Pablo Turner González
Carlos Williamson Benaprés
Ricardo García Holtz
Juan Benavides Feliú
Jaime Sinay Assael
Ethel Codner Dujovne
Fernando José Tisné Maritano
b. With respect to the allocation of the year 2001 profits, the Shareholders’ Meeting agreed the following:
- To distribute –as minimum mandatory final dividend– the sum of Ch$ 2,412,150,000, equivalent to 36.66% of
the net profit of the year 2001 totaling Ch$ 6,580,460,000.
- To deduct from the above-indicated sum to be distributed, the interim dividend of Ch$ 1,350,000,000 that was
paid in September 2001; an amount that when restated as of December 31, 2001, represents the sum of
Ch$ 1,362,150,000.
- The balance of Ch$ 1,050,000,000 will be paid as minimum mandatory final dividend in cash, thereby
representing a distribution of Ch$ 7.0 per share.
- The profit balance –amounting to Ch$ 4,168,310,000– was allocated to the accumulated profit account.
The other resolutions adopted by the General Ordinary Shareholders’ Meeting were consigned for the record in
the attached Minutes.
On May 31, 2002, we communicated to the Superintendence for Securities and Insurance Companies and to the
Stock Exchanges –as an essential event– the appointment of Mr. Marcelo Weisselberger Araujo, the current Planning
Manager, as Fasa Retail Chile’s new Administration & Finance Manager and the appointment of Ms. María Liliana
Ramírez Mellado, the current Administration & Finance Manager of Fasa Retail Chile, as Corporate Comptroller.
On May 31, 2002, we notified the Superintendence for Securities and Insurance Companies -as an essential
event– the execution of a number of acts provided under article 44 of the Law on Stock Companies.
On August 9, 2002, we notified the Superintendence for Securities and Insurance Companies –as an essential
event– that the Board of Directors of Farmacias Ahumada S.A. had unanimously agreed to subscribe a non-mandatory
Letter of Intention that would include an exclusivity and confidentiality clause to enable the Company –following the
149
[ R E L E V A N T
E V E N T S ]
pertinent audits– to take over the stock control and management of the Mexican pharmaceutical chain denominated
Farmacias Benavides.
On August 21, 2002, we replied to Official Memorandum N°6070, dated August 14, 2002, forwarded by the
Superintendence for Securities and Insurance Companies.
On August 22, 2002, Farmacias Ahumada S.A. reported the following essential event:
Farmacias Ahumada S.A., in its answer to Official Memorandum N°6070, dated August 14, 2002, forwarded by
the Superintendence for Securities and Insurance Companies by virtue of which we were asked to provide a progress
report about the negotiations and the financial impact to the Company to be derived from the eventual acquisition of
the Mexican pharmaceutical chain “Farmacias Benavides”, replied in its letter dated August 21, 2002 and communicated
the following:
As reported in the Essential Event submitted to the Superintendence for Securities and Insurance Companies on
August 9, 2002, the Board of Directors of Farmacias Ahumada S.A. unanimously agreed to subscribe a non-mandatory
Letter of Intention with the controlling shareholders of Farmacias Benavides.
The objective of the referred Letter of Intention was to begin negotiations between the parties toward having
Farmacias Ahumada S.A. become a shareholder of Farmacias Benavides by way of a capital contribution of approximately
150
US$ 45,000,000 enabling it to acquire, at least, 51% of all the equity stock of Far-Ben S.A. de C.V. (FarBen), the
property owners of Farmacias Benavides, thereby taking over the management and operative control of the entire
Pharmacy Chain and it subsidiaries.
The Letter of Intention provides a 30-day period of exclusivity for Farmacias Ahumada S.A., by virtue of which the
controlling shareholders of Farmacias Benavides commit not to negotiate or seek third-party bids in relation to an
eventual capitalization, financing, sale or investment in Farmacias Benavides, its assets or business activities, during
such period.
During those 30 days following the date of execution of the executed document already reported to the S.V.S.,
Farmacias Ahumada S.A. will have the exclusivity in order to resolve the issue of Far-Ben’s capitalization; thus, the
current majority shareholders of Far-Ben –grouped in the Fideicomiso de Control Benavides (FCB) trust and Far-Ben–
committed not to negotiate or seek third-party bids in relation to an eventual capitalization, financing, sale or
investment in Farmacias Benavides, its assets or business activities, during such period. Such period of exclusivity
will be extended for another 60 days, should a Preliminary Agreement or Memorandum of Understanding be
executed.
In parallel with the execution of a Preliminary Agreement or Memorandum of Understanding, the respective Due
Diligence process should be initiated.
Given the early stages of these negotiations, it is yet premature to project the financial impact that such investment
could represent to Farmacias Ahumada S.A.
Finally, prior to the execution of a Preliminary Agreement or Memorandum of Understanding –whose negotiation
is now being completed by a senior team of Company managers in the city of Monterrey, State of Nuevo León,
Mexico– and should an agreement be struck regarding the various financial aspects involved, the Board of Directors
of Farmacias Ahumada S.A. would be summoned to ultimately resolve about the execution of such instrument.
[ R E L E V A N T
E V E N T S ]
On August 22, 2002, we reported to the Superintendence for Securities and Insurance Companies -as an essential
event– that the Company’s Board of Directors had agreed to execute a Memorandum of Understanding with the
Controlling Shareholders of the Mexican company, Far-Ben S.A. de C.V. (Far-Ben), operator of Farmacias Benavides.
On August 30, 2002, we notified the Superintendence for Securities and Insurance Companies -as an essential
event– that the Company’s Board of Directors, in its meeting held on August 29 of this year, had agreed by the
unanimous vote of its attending board members, to distribute an interim cash dividend equivalent to Ch$ 8.- per
share; namely, the total sum of Ch$ 1,200,000,000.
On September 13, 2002, we replied the Reserved Memorandum N°075, dated September 9, 2002, issued by the
Superintendence for Securities and Insurance Companies.
On October 16, 2002, we communicated to the Superintendence for Securities and Insurance Companies -as an
essential event– that the Company’s Board of Directors, in its meeting held on October 15, 2002, had agreed to
continue to pursue the takeover of the Mexican company, Far-Ben S.A. de C.V. (Far-Ben) and to execute on October
2, 2002 a share subscription contract that would be mandatory and subject to condition with the controlling trust,
Fideicomiso de Control Benavides.
On October 22, 2002, we reported to the Superintendence for Securities and Insurance Companies –as an
essential event– about the execution of the share subscription agreement communicated on October 16, 2002,
thereby fully abiding by the resolutions adopted by the Company’s Board of Directors.
On December 4, 2002, 23 we notified the Superintendence for Securities and Insurance Companies –as an
essential event– the appointment of Mr. Eduardo Trénova Celedón, as Commercial Director and that of Mr. Jorge
Cañas Apablaza, as Operations Director of Fasa Retail Chile.
On December 23, 2002, we reported to the Superintendence for Securities and Insurance Companies –as an
essential event– the takeover of the Mexican company Far-Ben S.A. de C.V.; thus, as previously communicated in our
letters dated August 9 and 13, September 13 and October 16 and 22, respectively, Farmacias Ahumada S.A., through
its affiliates Fasa Investment S.A. and Inverex S.A., paid $ 450,000,000 Mexican pesos toward meting Far-Ben’s
capital increase, thereby enabling it to acquire, approximately, 67% of Far-Ben’s equity stock.
151
Design: Imedia

ANNUAL REPORT OF FARMACIAS AHUMADA S.A 2002

Transcription

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