2011 Annual Report
Index
Corporate Name
Address
Type of Company
Taxpayer ID No.
Walmart Chile S.A.
Avenida Presidente Eduardo Frei Montalva
Nº 8301. Quilicura, Santiago, Chile.
Public Corporation
96.439.000-2
Website
www.walmartchile.cl
E-mail
info@walmartchile.cl
Telephone
+56 (2) 200-5000
Fax
+56 (2) 200-5100
Incorporation
Walmart Chile was founded through public deed
dated September 17, 1985, executed before
notary public of Santiago, Enrique Morgan Torres.
An extract of the public deed of incorporation was
registered in the with the Santiago Real Estate
Registrar’s Commerce Registry in 1985, on page
14,695 under number 7,603. Said extract was also
published in the Official Gazette (Diario Oficial) on
September 21, 1985.
Public Offering
Walmart Chile has carried out its initial public
offering of ordinary shares and registered with the
Securities and Insurance Supervisor, under number
0593. The initial public offering in Chile took place
in December 1996. Shares were registered with
the Santiago Stock Exchange, the Valparaiso Stock
Exchange and Chile’s Electronic Stock Exchange.
Bylaws
Walmart Chile’s updated bylaws are available to
shareholders on the company’s website.
04
Chairman’s Letter
07Mission and Values
08Our Business
10 12 14 15
17 Our Employees
20
Corporate Governance
22
25
26 30 32 The Company
Our History
Suppliers
The Industry
Board of Directors and Corporate Governance Policies
Management
Ownership and Control
Group Structure
Company Ownership Chart
34Management Report
36 39 41 Our Strategic Pillars
The Year’s Accomplishments
Financial Risk Management
44Performance by Business Area
46 50
52
54
56
Supermarkets
Real Estate
Financial Services
Distribution and Logistics
Other Businesses
58Social Responsibility
60 64
66
68
Our Commitment to our Employees
Our Commitment to the Community
Our Commitment to Sustainability
Declaration of Responsibility
70Financial Statements
3
Chairman’s Letter
TO OUR SHAREHOLDERS:
commercial proposals and the rolling out of our Every Day
Low Price (EDLP) policy have all contributed to this strong
It gives me great pleasure to present you with the
performance.
Annual Report for 2011, a year in which Walmart Chile
made sustained progress with its internal development
Total administration and sales costs increased 6% from the
and excellence plan and achieved an historic financial
previous year, which in view of the 14.4% increase in total
performance with total sales of over US$5 billion.
sales revenue, shows a significant increase in productivity.
The company generated EBITDA of US$ 449 million and
The economic outlook in Chile is auspicious, the gross
a net utility of US$ 219 million, well above the previous
domestic product has grown by 6%, more than 300,000
year’s figures. An additional US$ 58.7 million can be largely
new jobs have been created and there has been a strong
attributed to the sale of Walmart’s 35% share in Alvi and
upsurge in consumer spending. At the same time the rate
goodwill assets arising from the purchase of the remaining
of inflation has risen to more than 4% overall while food
50% share of the Aliserv, AquaPuro and AquaNatura group.
prices have escalated at an even higher rate. The retail
industry is showing vitality and there is vigorous competition
Throughout 2011, we worked with focus and determination
in the supermarket sector.
in every aspect our business to fulfill our mission of “saving
people money so they can live better”. Not only did we
In this promising economic climate, the company has
increase our price difference with our competitors, we also
opened 41 new retail units including 23 Ekono, 13 Super
ran a number of highly successful promotional campaigns
Bodega Acuenta, 4 Express and 1 Hypermarket. Total
during the year, including the Back to School campaign in
investment for the year was more than US$ 313.5 million
March and the Easter, Spring and Christmas campaigns.
and featured an intensive program of remodeling and the
There was also the promotional launch of the new range
opening of a new distribution center.
of American beef, a new clothing line exclusive to Líder
by Selena Gómez and new imported product lines from
Walmart Chile’s total sales revenue for the year amounted
Walmart’s worldwide network of suppliers. Finally, by
to US$ 5,016 million, an increase of 14.4% compared
consolidating our sales strategy for Walmart’s own brands
to the previous year. New retail units accounted for one-
such as Great Value, Parent’s Choice and Equate, sales of
third of these sales while the remaining two-thirds can be
these produced increased by 25% over the year.
attributed to increased sales in existing units. Substantial
4
improvements to our distribution and supply networks,
On other areas of our business, we focused our efforts
information systems and internal processes, innovative
on improving our operations and systems procedures by
integrating with Walmart Inc.’s systems and adopting best
leadership. My special thanks go out to each and every
practices from around the world. We introduced modern
one of our 40,218 employees for their hard work which
systems for the administration of our master articles,
has resulted in Walmart Chile consolidating its leadership
inventories and logistical centers and a new system for
position in the retail industry.
in-store administration. One of the highlights of 2011 was
the opening of the Lo Aguirre Distribution Center which is
In summary, we have made orderly and systematic progress
being hailed as one of the most modern distribution centers
on many fronts. The Walmart standards and culture grow
in South America. Measuring 625,000 square feet, this
stronger every day and we have made significant progress
warehouse is equipped with an automated sorter with a
in modernizing our logistics, processes and information
capacity for handling 250,000 cases a day which can be
systems. The company is in a solid financial position
increased to 320,000 in the medium term. This technology
and in excellent shape as it looks ahead to its five-year
has made it possible to redistribute flows and will increase
development plan.
productivity by 30%.
The company’s commitment to environmental sustainability
is stronger than ever, with a considerable increase in the
use of recycled materials, the introduction of sophisticated
energy-saving programs and the launch of a new line of
own brand phosphate-free detergents. Additionally, through
our sustainable agriculture program we have doubled the
number of local farmers who are providing us with top quality
products farmed using environmentally friendly practices. In
the area of Social Responsibility we continue to work closely
with the Hogar de Cristo charity on our “Your change in good
hands” program, we are collaborating with communities at
each of our retail locations and we are now the cooperating
partner and sponsor of Chile’s first food bank.
Felipe Ibáñez Scott
Finally, and in line with Walmart’s unique spirit, we have
Chairman of the Board of Directors
put a great emphasis on developing talents, creating an
efficient and pleasant working environment within the
company and on a host of initiatives that make Walmart
Chile a great place to work. Notably, in 2011 approximately
2,400 employees were promoted to positions of greater
responsibility and around 30,000 received training in
both technical areas and skills such as management and
5
6
2 011 | Annua l R ep o rt
Wal mar t Chil e
Mission and Values
Our
Mission
We save people money so they can
live better.
Our
Values
Integrity guides our conduct and
relationships with clients, suppliers
and the community. We practice
integrity every day through our
three basic principles.
This was Sam Walton’s mission when he
opened the first Walmart store in the United
States. This focus drives everything we do at
Walmart Chile. To the millions of customers
that visit our stores throughout Chile every
week, it is reassurance that we have low
prices every day.
* Respect
for the individual
* Service
to our customers
* Striving
for excellence
7
Chapter
01
OUR BUSINESS
Wal mar t Chil e
2 011 | Annua l R ep o rt
The Company
“
Walmart Chile’s growth is based on a continuous strategy of low prices
and a comprehensive array of customer services”
Walmart Chile is a Chilean retail company whose main
aCuenta - and was the country’s largest chain in terms of
business is supermarkets. The company’s chains, including
supermarket sales, which reached Ch$2,407,248 million.
Lider, Express de Lider, Ekono and SuperBodega aCuenta, are
located throughout the country, from Arica to Punta Arenas.
In addition, Walmart Chile develops real estate projects
694,028 m2
Sales surface area
though Walmart Chile Inmobilaria and provides financial
services through Walmart Chile Servicios Financieros. These
businesses allow the company to develop comprehensive
95,973 m
2
value proposals for all the segments it serves.
Walmart Chile’s growth is based on a continuous strategy
of low prices and a comprehensive array of customer
54,079 m2
454,015 m
2
89,961 m2
services. These two elements are complemented by
constant expansion of our network of multi-format stores,
located at strategic points throughout the country. With
more than 50 years of experience, 314 supermarkets, 12
shopping centers, as well as 1.49 million current Presto
Financial Services
cards, Walmart Chile has become the country’s largest
supermarket chain, with a wide customer base that draws
The financial services business unit provides consumer
from every socioeconomic stratum.
credit via Presto cards and offers various value-added
products and services. Presto offers coverage from Arica
Supermarkets
to Punta Arenas, with 117 points of service (modules and
branches) and ATMs.
In order to satisfy the needs of more than 5 million Chileans
from diverse socioeconomic groups, Walmart Chile has
The Presto card has 1.49 million users and is accepted at
developed various supermarket formats.
more than 53,000 associated businesses throughout the
country, where customers can obtain cash advances, make
Worldwide, Walmart has become known for its “every day
purchases (with or without installments) and register for any
low price” slogan. Accordingly, Walmart Chile works daily
of the services offered by Walmart Chile and its business
to fulfill its mission to save customers money so they can
areas (Supermarkets, Presto Viajes (travel), Lider.cl and
live better. The company focuses its strategy on delivering
Presto Seguros (insurance)).
excellent quality at the market’s lowest prices.
Various complementary services, such as, life, health,
10
At the end of 2011, the Company had 314 stores - 69 Lider,
automobile and home insurance and mutual funds and
57 Express de Lider, 137 Ekono and 51 SuperBodega
consumer loans are also available.
Real Estate
The company currently owns 314 supermarkets and
manages 12 shopping centers and more than 1,736 stores
Walmart Chile Inmobilaria develops real estate projects in
throughout the country. In total, it owns and manages
accordance with the Company’s growth plans and multi-
1,361,773 m2 of rental space, which makes it one of the
format strategy.Thus, it is responsible for identifying potential
country’s largest retail real estate operations companies,
sites for supermarkets and shopping centers, as well as their
working daily to improve the quality of life of Chileans.
construction and management.
TOTAL QUANTITY BY BUSINESS
LIDER
69
EXPRESS DE LIDER
XV
LÍDER: 1
EXPRESS: 1
PRESTO: 2
LÍDER: 2
EXPRESS: 1
PRESTO: 3
S. CENTERS: 1
II
III
LÍDER: 3
EXPRESS: 1
ACUENTA: 1
PRESTO: 4
57
SUPER BODEGA ACUENTA
137
PRESTO BRANCHES AND KIOSKS
117
LÍDER: 5
EXPRESS: 11
ACUENTA: 5
EKONO: 11
PRESTO: 12
S. CENTERS: 3
V
LÍDER: 4
EXPRESS: 2
ACUENTA: 2
EKONO: 3
PRESTO: 7
RM
LÍDER: 35
EXPRESS: 28
ACUENTA: 19
EKONO: 123
PRESTO: 59
S. CENTERS: 6
VI
VII
SHOPPING CENTERS
12
LÍDER: 1
PRESTO: 1
IV
51
EKONO
LÍDER: 1
PRESTO: 1
I
VIII
LÍDER: 4
EXPRESS: 5
ACUENTA: 8
PRESTO: 7
S. CENTERS: 1
IX
XIV
LÍDER: 2
EXPRESS: 2
ACUENTA: 4
PRESTO: 5
X
LÍDER: 6
EXPRESS: 3
ACUENTA: 7
PRESTO: 8
LÍDER: 1
ACUENTA: 2
PRESTO: 1
LÍDER: 1
EXPRESS: 1
PRESTO: 2
S. CENTERS: 1
LÍDER: 3
EXPRESS: 2
ACUENTA: 3
PRESTO: 5
XII
Our Business
11
Wal mar t Chil e
2 011 | Annua l R ep o rt
Our History
“
The first supermarket in Chile and Latin America, Almac, opened in 1957.
This new format - with parking spaces, a wide variety of merchandise
and check-out lines at the exit - enabled the company to grow in terms of
service and quality”
ORIGINS
SUSTAINED GROWTH
DIVERSIFICATION
1893: Gratenau y Cia, a wholesale
importer and distributor, was founded.
1984: The first Ekono supermarket
1992: The real estate division, Saitec,
opened in Santiago. This discount
format has since consolidated its
presence in the country.
was formed and the company’s first
shopping center, La Dehesa Shopping,
opened.
1985: D&S Distribución y Servicio
S.A. began operations as a distributor
and service provider for the company’s
supermarkets.
1996: D&S introduced the lowcost megamarket concept, opening
Hipermercado Lider Pajaritos in
Santiago. The company also conducted
its initial public offering on the
Santiago Stock Exchange, becoming
a public corporation. The Presto
card was also launched that year.
1930: Depósitos Tres Montes begins
retail food sales.
1954:
The first self-service stores
with a wide selection of products open.
1957: The first supermarket in Chile
and South America opened under
the name Almac. This new format with parking spaces, a wide variety of
merchandise and check-out lines at
the exit - enabled the company to grow
in terms of service and quality.
1987: The first Hipermercado Ekono
opened. This concept was based on
the low-price supermarket model, but
offered a larger sales floor and non-food
merchandise.
1990: The plan to expand throughout
Chile began with the Hipermercado
Ekono in Viña del Mar, the first outside
Santiago.
1997: The Service School (Escuela
de Servicio), a unit created to teach the
Company’s suppliers and employees,
began operating. The distribution
center, also known as LTS, opened in
Santiago. Additionally, the company’s
first ADR was issued on the New
York Stock Exchange (NYSE: D&S).
1993: International expansion began
with the first Ekono supermarket in
Argentina. However, this initiative ended
in 1999 when D&S sold the shares in its
subsidiary, Supermercados Ekono S.A.
(Argentina).
12
2000: The first Lider Vecino, a
compact hypermarket, opened.
Since
1957
NATIONAL PRESTIGE
2001: FarmaLider opened. In 2006,
an agreement with Farmacias Ahumada
S.A. ended the company’s direct
involvement in pharmacies.
2002: The company listed its stock
on the Madrid Stock Exchange in the
Latibex market.
2003:
Supermarkets
and
hypermarkets were unified under
the Lider brand name. Compact
supermarkets and hypermarkets were
branded Lider Express. At the end
of the year, the company reached an
agreement with the French chain,
Carrefour, purchasing its operations
(seven hypermarkets) in Chile.
2005: Presto became the first open,
non-bank credit card. The Presto
insurance brokerage was created.
CONSOLIDATION
2006: The first two Espacio Urbano
shopping centers opened. Also,
the company opened the world’s
southernmost shopping center in
Punta Arenas.
2007: Lider hypermarkets were rebranded Hiper Lider and Lider Express
supermarkets were re-branded Express
de Lider. At the same time, the company
launched its new Ekono discount format
in Santiago and a discount warehouse
format, SuperBodega aCuenta.
2008:
In December, D&S merged
with US supermarket chain Walmart, an
important milestone in the company’s
history.
2009: The process of integrating D&S
and Walmart began, with three main
focuses: culture, corporate governance
and value creation. The acquisition
process, known as Forge (Future
Organization and Readiness for Global
Expansion), aimed to create incremental
value by implementing best practices
from other countries where Walmart
operates. D&S also began integrating
sustainability, which has been part of
Walmart’s business strategy since 2005.
2010: D&S S.A. changed its corporate
name to Walmart Chile S.A.
2011: As a part of the consolidation
process, the financial services and
real estate divisions changed their
corporate names to Walmart Chile
Servicios Financieros S.A. and Walmart
Chile Inmobilaria S.A., respectively. In
addition, all Hiper Lider stores changed
their logo and name to Lider, improving
the brand’s strength, proximity,
innovation and modernity.
Our Business
13
Our Employees
At Walmart Chile, people are a fundamental element of our
In an effort to contribute to the country’s growth and
business, which is why we have a robust human resources
development, the company has endeavored to provide
policy that seeks to benefit employees and develop their
work opportunities for young people between 18 and 24
abilities. Toward that end, Walmart Chile has developed
years old. Today, this group accounts for 29% of Walmart
cutting-edge training programs and policies, which have
Chile employees.
created an excellent working environment. As of December
2011, the company had 40,218 employees, 54% of whom
were women.
HUMAN CAPITAL STATISTICS
2011
Number of employees
40,218
% between the ages of 18 and 24
29%
% of women
54%
Number of training hours
446,269
Number of promotions
2011 STAFFING
Walmart Chile S.A.
Walmart Chile Comercial S.A.
Retail Business Unit
MANAGERS AND EXECUTIVES
PROFESSIONALS &
TECHNICIANS
ASSOCIATES
TOTAL
9
0
1
10
79
364
775
1.218
36,452
196
2,411
33,845
Real Estate Business Unit
25
149
351
525
Financial Services Business Unit
25
146
1,842
2.013
334
3,070
36,814
40,218
Total
14
2,466
Our Suppliers
“
Collaboration with our suppliers is vital in light of the complex
commercial, operational and financial variables that interact to provide
our customers with the best products and prices”
Last year (2011) was an extraordinary year in terms of
change. We are proud to say that the goal has been met. We
initiatives undertaken in conjunction with our suppliers.
are now one step closer to converting stores to the Walmart
These initiatives aimed to offer our customers the best
system and enjoying all of the efficiency it provides.
possible value proposal. Year after year, in order to fulfill our
mission, we focus our priorities on our Every Day Low Prices
Similarly, logistics, the area that ensures that each product
strategy. In 2011, the four key focuses were: collaboration,
is on the shelves when our customers need it, supports
innovation, integration and efficiency.
development of our supplier relationships. Efforts to
streamline product distribution have materialized in a new
Collaboration with our suppliers is vital in light of the complex
continuous-flow warehouse and construction of a modern
commercial, operational and financial variables that interact
distribution center with a daily processing capacity of
to provide our customers with the best products and prices.
250,000 boxes. In the medium term, this daily capacity
In that context, we can proudly say that there are formal,
could be expanded to 300,000 boxes. In 2017, the center
relationship-governing agreements with the suppliers of
will process 40% of the company’s daily flow.
100% of the products on our shelves. This is yet another
step toward integrity and transparency in our strategic
These additions complement existing regional warehouses
partner relationships.
in Antofogasta, Chillán, Temuco and Santiago. We now
have a total of nine merchandise processing centers,
Innovation is one of the driving forces of growth and
which streamline deliveries from our suppliers, making the
structural change in the supermarket industry.
distribution chain more efficient and reducing associated
costs. There are still sizable challenges to be faced related
Through this strategic focus, we aim to impress our
to improving and continuously reducing distribution costs.
customers with high-quality products, low prices and
We have enthusiastically incorporated those challenges into
industry-leading efficiency and sustainability initiatives in
our future plans.
the supply industry. Initiatives that will always have a place
in our strategy include: sustainable packaging, reduction of
In closing, we share the results of a study, conducted by
unnecessary material, easily replaceable products, and first-
international consultants The Advantage Group, that fill us
to-market and exclusive products. Concrete steps toward
with pride.
effective delivery of these proposals are possible only with
the cooperation of our suppliers.
“The Advantage Mirror Report” is an annual study that
seeks to identify the best supermarket operator from among
Also, in 2011 our suppliers became part of the process of
a group of seven retail industry leaders, by directly surveying
integrating our parent company’s systems and procedures.
57 suppliers in various business areas. The results are
The implementation of our new supplier and merchandise
striking: Walmart Chile was named the best company from
system, which is the heart of Walmart’s management
among its main competitors at the national level, leading the
processes and systems, has been a symbolic and positive
rankings in practically all the evaluated aspects.
Our Business
15
The success recognized by The Advantage Group was
PERFORMANCE AREA
achieved in conjunction with our suppliers, our strategic
partners, and we are grateful for their efforts and trust.
We assure them that we will continue to work together to
maintain this collaborative work standard.
NEW DISTRIBUTION CENTER
Overall Performance
1
Business Relationships
1
Personnel / Organization
1
Categories/ Business Development
2
Execution of Initiatives
1
Supply Chain
1
Private Label Brand Development
1
MAIN SUPPLIERS IN 2011
PROCESSING
CAPACITY
Nestle Chile S.A.
Unilever Chile S.A.
250,000
Agrosuper Comercializadora de Alimentos Ltda.
Boxes per Day
CMPC Tissue S.A.
Comercial Santa Elena S.A.
Empresas Carozzi S.A.
Procter & Gamble Chile Ltda.
IT WILL PROCESS
40%
Of daily flow by 2017
16
RANKING
(7 RETAILERS)
Watt´s S.A.
Coop Agrícola y Lechera de la Unión Ltda.
Embotelladora Andina S.A.
The Industry
Economic Environment
China’s GDP grew by 8.9% and Peru grew by 6.9%.
Together, these two nations represent 20% of Chile’s trade.
The Chilean economy was strong in 2011 with growing
Retail Sales
internal demand, driven by a 2.9% increase in employment,
a 1.8% increase in salaries in real terms and a 6.0% increase
in GDP relative to the year prior. The average unemployment
According to the report issued by Chile’s National Chamber
rate was 7.1%, 114 basis points lower than 2010.
of Commerce (Cámara Nacional de Comercio), retail sales in
the Metropolitan Region grew by 8.1% in 2011. This increase
In 2011, cumulative inflation reached 4.4%, which
was primarily attributable to the year’s rising employment and
was above the Central Bank’s target range of 2-4%.
wages, as well as expanded financing for consumer goods.
Consequently, the government reduced the monetary
stimulus, raising the monetary policy rate by 200 basis
The following is a graphic illustration of the increase in annual
points over the course of the year. This rate ended the year
sales in the Metropolitan Region:
at 5.25%.
Finally, despite deteriorating macroeconomic scenarios in
some European countries, the global economy experienced
average GDP growth of around 4.3%, relative to 2010.
Retail sales in the Metropolitan Region (% annual variation, in real terms)
17,6
10,4
8,1
8,0
5,4
4,7
5,1
3,3
1,7
1,8
2010
2009
2008
2005
2004
-1,9
2003
2002
2001
-2,6
3,3
0,6
2000
-0,5
1999
1997
1996
1995
1994
1993
1992
1991
-0,7
1998
2,2
4,9
2007
4,8
2006
6,9
2011
10,4
Source: National Chamber of Commerce, 2011
Our Business
17
Supermarket Sector
ties to the banking industry, commerce, cooperatives,
compensation funds and insurance brokerages.
Sales in the supermarket industry grew by 9.1% in 2011.
Walmart Chile’s participation in the industry includes the
The industry has diversified its product range to include
traditional supermarket line (groceries and perishables) as
consumer loans, insurance intermediation, financing
well as lines traditionally dominated by department stores,
and sales of travel packages, among other items. This
such as clothing, footwear, electronic appliances, and
diversification has facilitated access to loans for sectors of
home and furniture lines.
society whose access to bank financing is limited.
VARIATION IN SALES, METROPOLITAN
REGION
JA NUA RY-DECEMB ER 2 011
SHOPPING CENTERS
The shopping center industry, which brings together an
attractive, highly valued array of products, service and
ITEM
Perishables
% VARIATION
-3.1%
entertainment options, began to develop in Chile in 1982
and has progressively grown.
Groceries
0.8%
Furniture
8.6%
Rising income has reduced the number of households
Home
8.1%
necessary to support a shopping center. The current trend
Electronics
15.9%
is moving away from large malls on the outskirts of cities
Footwear
19.9%
toward smaller consolidated urban centers. New services,
Clothing
13.9%
such as medical centers and offices, are also being included
Source: National Chamber of Commerce, 2011
in these urban centers. The main players in the shopping
center market are Mall Plaza, Walmart Chile Inmobilaria
and Cencosud Shopping Center S.A. These companies are
FINANCIAL SERVICES
also exporting their business models to countries in which
they have established retail presences.
The financial services industry has made a significant
contribution to the diversification and penetration of credit
REGULATORY ENVIRONMENT
sources in financial markets. It plays an important role
in the economy and in improving quality of life for a vast
Walmart’s
segment of the population. Through credit, these people
are
have access to goods and services that would otherwise be
aforementioned, those activities are subject to a diverse
difficult to obtain.
range of generally applicable standards, especially
main
classified
as
economic
and
unregulated.
business
activities
Notwithstanding
the
regarding how those businesses must operate. Antitrust,
18
The competitiveness of the financial services industry
consumer protection and labor legislation are particularly
is evident in the participation of various companies with
applicable.
“
Sales in the supermarket
industry grew by 9.1% in 2011.”
Financial activity through the Presto credit card is
In terms of consumer protection, the company has adopted
regulated however, primarily by the Central Bank and
a policy of complete public transparency. It continuously
the Superintendency of Banks and Financial Institutions
updates its web pages www.walmartchile.cl and www.
(Superintendencia de Bancos e Instituciones Financieras,
presto.cl with extensive information of interest and legal
or SBIF). Chile’s antitrust legislation is aimed at preventing
information for consumers. The company also has sufficient
monopolistic practices or activities and abuse of power in
human resources and technology to respond to customers’
any market or industry. In recent years, the relative size and
needs in a timely fashion.
market power acquired by the main supermarket operators
has become an increasing concern. In that context, the
During the first quarter of 2010, the company’s bylaws
Office of the National Economic Prosecutor (Fiscalía
were modified as a result of enactment of the Corporate
Nacional Económica) and the Antitrust Tribunal (Tribunal
Governance Law (Ley de Gobiernos Corporativos), which
de Defensa de la Libre Competencia) have actively sought
modified Laws 18,045 and 18,046.
to prevent abuses by said operators in their relationships
with suppliers, the competition or customers. Walmart Chile
As a result of Law 20,393’s provisions regarding the
currently abides by the General Terms and Conditions for
criminal responsibility of corporations, Walmart Chile is
the Supply of Goods, (Términos y Condiciones Generales
currently implementing a crime prevention model for itself
de Aprovisionamiento de Mercaderías, or TCGA), which
and its subsidiaries.
have been in place since May 2007.The document is
available on the company’s website: www.walmartchile.cl.
Regarding issuance and operation of Presto credit cards,
Law 20,555, passed in December 2011, grants authority
The TCGA, among other provisions, established a Suppliers’
in financial matters, as of 2012, to the National Consumer
Ombudsman, charged with preventing, receiving, examining
Service (Servicio Nacional del Consumidor). The company
as well as impartially and objectively resolving, in good
is currently adopting all the (legal and operational)
faith and as a mediator, any difficulty or dispute that arises
measures necessary to fulfill the established requirements.
between the company and any of its supermarket suppliers.
Recent labor reforms in Chile have established new
obligations and responsibilities for employers. In October
2006, the Labor Code (Código del Trabajo) was modified via
the so-called Subcontracting Law, which made employers
jointly and severally liable for certain labor obligations related
to its contracted and subcontracted workers. The company
does not anticipate that these provisions will have any
substantial affects on its operations; however, it is impossible
to predict the effects of future reforms and regulations.
Our Business
19
Chapter
02
CORPORATE
GOVERNANCE
Wal mar t Chil e
2 011 | Annua l R ep o rt
Board of Directors and
Corporate Governance Practices
“
The Board of Directors is charged with ensuring there is a strategic planning
process, so that the company is managed in accordance with its own best
interest, safeguarding the rights of shareholders and investors”
AS OF DECEMBER 31, 2011, THE BOARD OF DIRECTORS IS COMPOSED OF THE FOLLOWING INDIVIDUALS:
FELIPE
IBÁÑEZ S.
NICOLÁS
IBÁÑEZ S.
Director
Business Degree
ID: 5.638.106-6
JOSÉ MARÍA
EYZAGUIRRE B.
Director
Attorney
ID: 7.011.679-0
Chairman
Business Degree
ID: 5.638.122-8
BOARD OF
DIRECTORS
2011
JOSÉ MARÍA
URQUIZA
Director
Economist
ID: 08380025071
CLAIRE
BABINEUAX FONTENOT
Director
Attorney
ID: 476077868
Board of Directors
EDUARDO
SOLÓRZANO
Vice Chairman
Economist
ID: GO.250.799-7
CHRISTIAN
PHILLIPE SCHRADER
Director
Business Degree
I.D C5PHN9N7X
JORGE
GUITIÉRREZ P.
Director
Business Administration
Degree
ALBERTO
EGUIGUREN C.
Director
Attorney
ID: 9.979.068-7
RUT: 5.907.040-1
The Board must ensure implementation of appropriate
information, control and auditing mechanisms and establish
The company’s Board of Directors is composed of nine
standards of conduct aligned with the company’s principles.
members, without alternates. In addition to the Board’s
22
legal rights and responsibilities, it is charged with ensuring
A Code of Ethics, reflecting our unwavering commitment
there is a strategic planning process, so that the company
to ethics and transparency, is distributed to each and
is managed in accordance with its own best interest,
every employee. The code clearly establishes the
safeguarding the rights of shareholders and investors”
corporate values, principles and standards that must guide
Toward that end, it is responsible for appointing a top-notch
professional behavior, both internally and in the presence
executive team.
of customers.
Furthermore, each year every employee is asked to sign an
Directors who are members of Walmart’s management
affidavit certifying that they are not part of any commercial
team do not receive stipends for their participation in the
relationship, subject to any contractual obligations or other
Board of Walmart Chile S.A.
obligations that could be in conflict with the company’s
interests.
Table 2 details subsidiaries’ stipend payments to Walmart
Chile board members who also serve as directors of the
BOARD OF DIRECTORS COMPENSATION
Company’s subsidiaries.
The following table details the compensation paid in
stipends and other fees, specifically to the company’s
directors in 2011:
TABLE 1
COMPENSATION PA ID IN ST IPENDS AND OTHER FEES
Name
Dieta 2010 (ThCh$)
Dieta 2011 (ThCh$)
Felipe Ibáñez Scott
160,335
141,494
Eduardo Solórzano
-
-
65,547
75,339
Wyman Atwell (*)
-
-
Christian Phillipe Schrader
-
-
José Luis Rodríguez Macedo (**)
-
-
54,058
69,310
Alberto Eguiguren Correa
160,304
149,387
Jorge Gutiérrez Pubill
105,053
66,324
José María Urquiza (***)
-
-
Claire Babineuax Fontenot
-
-
Nicolás Ibáñez Scott
José María Eyzaguirre Baeza
(*) SERVED AS DIRECTOR OF THE COMPANY UNTIL JANUARY, 2011
(**) SERVED AS DIRECTOR UNTIL AUGUST 31, 2011
(***) APPOINTED DIRECTOR OF THE COMPANY ON AUGUST 1, 2011
TABLE 2
COMPENSATION PA ID BY SUB SIDIA RIES IN 2011
NAME
2010 STIPEND (ThCh$)
2011 STIPEND (ThCh$)
Alberto Eguiguren Correa
49,390
48,581
Jorge Gutiérrez Pubill
44,746
52,518
Corp ora te Governance
23
“
DIRECTORS’ COMMITTEE
In 2007, the Board established
a policy on insider information
and transactions involving
securities issued by Walmart
Chile and its subsidiaries.”
The Board decided that Walmart Chile would also apply
the standard to transactions involving its own shares,
At an extraordinary shareholders meeting held on April 30,
in the event that such operations were approved at the
2010, shareholders agreed to discontinue the Directors’
shareholders’ meeting. A manual and explanatory guide on
Committee described in Article 50 of Law 18,046 on
application of the policy have also been published.
Corporations. The company does not meet the legal
requirements that would make such a committee obligatory.
The policy establishes authorization, warning and blockage
systems for Walmart Chile securities transactions by
MANAGEMENT OF INSIDER INFORMATION
directors and key managers and executives of Walmart
Chile and its subsidiaries. Among other measures, and
In 2007, the Board established a policy on insider information
in light of the informational asymmetry that could exist
and transactions involving securities issued by Walmart
between the Company’s executives and the public, the
Chile and its subsidiaries. Walmart Chile implemented the
policy divides the time between periodic public disclosures
policy as a self-regulatory standard. The policy classifies
into three periods.
and guides potential conflicts of interest related to insider
information, within the context of current legislation.
Then, in 2008, with the SVS’ issuance of General Standards
210 and 211, the Board adopted a new standard to
complement the insider information policy and provisions
related to “Information of Interest”. Walmart Chile has
committed to making this information available to the public,
following the procedure established for that purpose.
An Information Committee comprised of Walmart Chile’s
CEO, Legal Counsel and Manager of Corporate Affairs is
responsible for general coordination of information-control
tasks and related disciplinary actions designed to maintain
the necessary controls over information disseminated to the
securities market and investors.
24
Management
As part of the consolidation process and in order to optimize operations and meet new business requirements, Walmart
Chile adopted a new organizational structure at the end of 2010. The new structure, depicted in the following graphic, was
implemented in 2011.
Board
of Directors
Internal Auditing Manager
CEO
Legal Counsel
Corporate Affairs
Manager
Corporate
Manager of
Human
Resources
CFO
Systems
and Integration
Manager
COO
Financial
Services
Division
Manager
Real Estate
Division
Manager
Special
Businesses
Manager
ORGANIZATIONAL STRUC TURE 2011
INDIVIDUA LS HOLD ING EX ECUT IVE POSITIONS
NAME
ID NUMBER
POSITION
PROFESSIONAL DEGREE
Enrique Ostalé Cambiaso
8.681.278-9
CEO, Walmart Chile
Business
Olga Gonzalez Aponte
23.766.227-k
CFO
Business
Carmen Román Arancibia
10.335.491-9
Legal Counsel
Law
Eduardo Herrera Barros
8.455.707-2
Systems and Integration Manager
Civil Engineering
Claudio Hohmann Barrientos
6.578.844-6
Corporate Affairs Manager
Civil Engineering
Karina Awad Pérez
9.291.267-1
Corporate Human Resources Manager
Psychology
Sebastián Rozas Heusser
10.601.201-6
Real Estate Division Manager
Business
Michel Awad Bahna
5.864.156-1
Financial Services Division Manager
Business
José Antonio Fernández
23.746.280-7
COO
Biomedical Engineering
Manuel López Barranco
7.014.100-0
Commercial Manager
Business
Rodrigo de la Cuadra
8.396.078-7
Special Businesses Manager
Food Engineering
The Walmart Chile group has established an executive incentive plan tied to targets and contribution to results. These
incentives, which are included in a minimum and maximum gross remuneration structure, are paid once a year. The company
does not currently offer stock options.
Corp ora te Governance
25
Wal mar t Chil e
2 011 | Annua l R ep o rt
Ownership and Control
Walmart Chile views investor relations as a process of continuous
communication, focusing on individual and institutional investors as
well as financial analysts and regulatory bodies, the objective of which is
timely and sufficient disclosure of company information.
Shareholders
Investor Relations
In accordance with its bylaws, the company’s capital is
Walmart Chile views investor relations as a process of
represented by 6.25 billion shares, fully subscribed and
continuous communication focusing on individual and
paid-in, all in the same series and without nominal value.
institutional investors as well as financial analysts and
As of December 31, 2011 the shares were distributed
regulatory bodies, the objective of which is timely and
amongst 325 shareholders.
sufficient disclosure of company information.
Walmart Stores Inc. indirectly controls Walmart Chile
Walmart Chile’s investor relations effort aims to comply with
through a number of companies that are grouped within
obligations concerning company-information and is based
the shareholder Inversiones Australes Tres Ltda. Walmart
upon the principle of providing transparent, sufficient,
Stores Inc. was incorporated on October 31, 1969 under
timely, coherent and reliable information.
the laws of the State of Delaware, United States of America.
More than 40% of shares in Walmart Stores Inc. is owned
by Alice L. Walton, Jim C. Walton, S. Robson Walton,
Helen R. Walton’s heir (represented by the first three
aforementioned) and John T. Walton’s heir (represented
by the first three aforementioned), all of whom share
ownership, directly or indirectly, in Walton Enterprises, LLC
(represented by the first three aforementioned). With the
exception of the aforementioned persons and their heirs, no
individual or entity owns more than 5% of the total shares
issued by Walmart Stores Inc.
As of December 31, 2011, Walmart directly or indirectly
holds 4,867,453,738 shares of Walmart Chile, which is
equal to 74.65% of the company’s total share capital.
26
Principal Shareholders
The following table lists the company’s 12 largest shareholders as of December 31, 2011:
12 LARGEST SHAREHOLDERS
DECEM B ER 31 , 2 011
NAME OR BUSINESS NAME
SHARES
Inversiones Australes Tres Limitada
%
4,867,453,738
74.65%
Fondo Inversión Privado Aurora III
722,962,068
11.09%
Rentas Fis y Compañía Sociedad Colectiva Civil
686,572,844
10.53%
Serv. Profesionales y de Comercialización Cuatro Ltda.
107,423,598
1.65%
Serv. Profesionales y de Comercialización Dos Ltda.
107,303,248
1.65%
Schouten N V Agencia en Chile
9,503,838
0.15%
Larrain Vial S.A. Corredora de Bolsa
5,589,750
0.09%
Banchile Corredora de Bolsa S.A.
4,132,418
0.06%
IM Trust S.A. Corredora de Bolsa
2,306,321
0.04%
Santander S.A. Corredora de Bolsa
1,344,864
0.02%
Findel Westermeier Alicia
826,992
0.01%
Chile Market S.A. Corredora de Bolsa
716,104
0.01%
Share Price
Walmart Chile’s stock is traded on the Santiago Stock
As of December 31, 2011, the closing price for Walmart
Exchange and the Electronic Exchange, under the ticker
Chile shares on the Santiago Stock Exchange was
symbol WMTCL.
Ch$252.70.
350
PRICE PER SHARE
300
250
200
150
100
50
0
2001
2003
2004
2005
2006
2007
2008
2009
2010
2011
Corp ora te Governance
27
Quarterly Statistics
Quarterly statistics for transactions over the last three years involving Walmart Chile shares, including transactions on the
Santiago Stock Exchange, the Valparaiso Stock Exchange and Chile’s Electronic Stock Exchange, are as follows:
QUARTE RLY STATISTICS
SHA RE TRA NSACTIONS
NO. OF SHARES TRADED
(THOUSANDS)
2009
2010
2011
AVERAGE PRICE ($)
TOTAL AMOUNT (THCH$)
255,849
251.32
64,300
Second Quarter
4,952
215.99
1,070
Third Quarter
6,024
218.98
1,319
Fourth Quarter
1,783
211.82
378
First Quarter
1,682
201.42
339
Second Quarter
1,220
197.58
241
Third Quarter
3,001
199.74
600
Fourth Quarter
12,093
298.29
3,607
First Quarter
2,549
317.63
810
Second Quarter
1,096
315.69
346
Third Quarter
5,260
260.17
1,369
Fourth Quarter
4,655
252.59
1,176
First Quarter
SHARE TRANSACTIONS BETWEEN RELATED PARTIES
Related party transactions involving Walmart Chile shares were as follows:
RELATED PARTY
28
PURCHASE OR SALE
QUANTITY
PRICE (Ch$)
GAINED CONTROL
Inversiones Australes Tres Limitada
Purchase
209,564
251
No
Inversiones Australes Tres Limitada
Purchase
10,000
250
No
Inversiones Australes Tres Limitada
Purchase
6,121
250
No
Inversiones Australes Tres Limitada
Purchase
57,300
250
No
Inversiones Australes Tres Limitada
Purchase
2,294,721
260
No
Inversiones Australes Tres Limitada
Purchase
10,800
242
No
“
On December 31, 2011, the
closing price of Walmart
Chile shares on the
Santiago Stock Exchange
was Ch$252.70”
DIVIDEND POLICY
In accordance with Walmart Chile bylaws and applicable regulations, at least 30% of net income is distributed as dividends,
except by unanimous agreement at an extraordinary shareholders’ meeting.
The following table details the dividends distributed pursuant the requirements in the company’s bylaws.
AMOUNTS DISTRIBUTED
DIV IDENDS
Year
AMOUNT IN THCH$ (HISTORICAL)
CH$ PER HISTORICAL SHARE
2000
11,037
2001
8,280
8
6
2002
13,800
10
2003
13,800
10
2004
17,250
12,5
2005
13,040
2
2006
26,080
4
2007
25,878
4
2008
38,772
6
2009
13,040
2
2010
32,600
5
2011
32,955
5,054
DISTRIBUTABLE INCOME
The reconciliation of net income and distributable earnings is as follows:
DISTRIBUTABLE INCOME
ThCh$
Income (loss)
Amortization of negative goodwill on investments
-
Accumulated losses
-
Accumulated deficit from subsidiary development
Distributable income
113,904,520
Corp ora te Governance
29
Wal mar t Chil e
2 011 | Annua l R ep o rt
Group Structure
The following table details equity interests in Walmart Chile S.A. and its subsidiaries. It should be noted that all equity interest in subsidiary
companies is owned, directly or indirectly, by Walmart Chile.
WALMART CHILE S.A.’S EQUITY INTEREST IN SUBSIDIARIES
DIRECT SUBSIDIARY
Inversiones Internacionales
D&S Ltda.
LEGAL NATURE
LLC
Inversiones Walmart Chile
Limitada
LLC
Walmart Chile
Inmobiliaria S.A.
Closed corporation
subject to
regulations on
public corporations
Walmart Chile
Comercial S.A.
Walmart Chile Servicios
Financieros S.A.
30
Closed corporation
Closed corporation
DIRECT SHARE
99.999%
99.99%
99.99%
99.99%
99.99%
PARENT
COMPANY
SUMMARIZED BUSINESS OBJECTIVE
Walmart Chile S.A.
To make investments, directly or indirectly, in Chile and abroad,
tangible and intangible, such as stocks, futures, bonds, and
percentage ownership or other rights to any type of partnerships, whether commercial or civil, communities or associations, via all types of titles and intangible goods. To purchase
sell, contribute or preserve those investments and take interest
in or participate as a partner or shareholder in companies or
partnerships of any nature, as well as received and invest the
results of those investments.
Walmart Chile S.A.
To make investments in tangible and intangible goods, such as
stocks, futures, bonds, percentage ownership or other rights to
any type of partnerships, be they commercial or civil, communities or associations, via all types of titles and intangible goods.
To purchase sell, contribute or preserve those investments and
take interest in or participate as a partner or shareholder in
companies or partnerships of any nature.
Inversiones
Walmart Chile
Limitada
To make real estate investments and enter into all types of related contracts and undertake construction, transformations and
any other type of operation it deems necessary on acquired
property. To execute all types of civil and commercial operations, manage and utilize these investments and undertake all
other similar or complementary lines of business upon which
the partners agree.
Inversiones
Walmart Chile
Limitada
To purchase, sell, produce, import, export, commercialize,
consign and distribute all types of merchandise, food products, pharmacy products, and cosmetics (wholesale and
retail). To Construction on its own or using third parties. To
provide services and consulting services related to installation,
operation and functioning of supermarkets, shopping centers,
restaurants, industrial kitchens and stores, as well as their administration. To acquire, transfer, import, export, market and
rent equipment and machinery. To export supermarkets and
provide representation.
Inversiones
Walmart Chile
Limitada
To provide and manage mutual funds and loans. To provide
financing for consumption or any type of expense. To issue
and operate credit cards. To provide insurance intermediation,
financial services and consulting. To invest in tangible and
non-tangible assets, real estate or intangible goods.
BOARD OF DIRECTORS
MANAGEMENT (MANAGERS
& EXECUTIVES)
SUBSCRIBED & PAID-IN
CAPITAL (ThCh$)
% OF PARENT COMPANY ASSETS INVESTED IN
THE SUBSIDIARY
Chief Executive Officer
Enrique Ostalé Cambiaso
1,243,623
0.04%
Chief Executive Officer
Enrique Ostalé Cambiaso
491,854,585
37.40%
Julio Gomes (Chaiman), Alberto Eguiguren
Correa, Ricardo Marotta, Jorge Gutiérrez Pubill
and Enrique Ostalé Cambiaso
Chief Executive Officer
Sebastián Rozas Heusser
432,778,108
32.94%
Enrique Ostalé Cambiaso (Chairman), Alberto
Eguiguren Correa, Olga González Aponte,
Sebastián Rozas Heusser and Jorge Gutiérrez
Pubill
Chief Executive Officer José
Antonio Fernández
90,363,559
7.01%
Juan Carlos Pedró (Chairman), Alberto Eguiguren
Correa, Trudy Fahie, Jorge Gutiérrez Pubill and
Enrique Ostalé Cambiaso.
Chief Executive Officer
Michel Awad Bahna
24,271,837
-0.53%
Corp ora te Governance
31
Company Ownership Chart
99.9999 %
100 %
0.0001 %
INVERSIONES PACÍFICO LLC
INVERSIONES WALMART CHILE LTDA.
99.99999722 %
99.99 %
Walmart Chile Servicios
Financieros S.A.
99 %
Inversiones y Rentas
Presto Ltda.
99 %
Presto Corredores de
Seguro y Gestión
Financiera S.A.
0.01 %
Walmart Chile comercial S.A.
1%
1%
100 %
Comercial Walmart Chile LLC
99.99982 %
Ekono S.A.
99.99981 %
Inversiones Comerciales
Uno Ltda
99 %
Abarrotes Económicos S.A.
99.999 %
Maquinsa Equipamiento S.A.
99.99 %
Lider Domicilio Ventas y
Distribución Ltda.
99.95 %
Escuela de Capacitación
Técnica Escatec Ltda.
99.99 %
O´ Clock S.A.
0.000183 %
0.00019 %
99.99 %
Soc. de Servicios de
Marketing MDC Ltda.
0.0000028 %
0.01 %
1%
99.9996 %
99.9838 %
Administradora de
Créditos Comerciales
PRESTO Ltda.
Servicios y
Administración de
Créditos Comerciales
PRESTO S.A
0.0039 %
0.0001 %
0.01 %
0.0163 %
0.05 %
99.99 %
Soc. de Servicios de
Comerc. y Apoyo y
Gestión PRESTO Ltda.
30 %
Astro S.A
99 %
PRESTO
Telecomunicaciones S.A
99.9 %
99 %
Servicios de Viajes
y Turismo
PRESTO Ltda
Servicios de Recaudación
PRESTO Ltda.
0.01 %
70 %
1%
99,398221 %
Inversiones Hipermercados
Ltda.
99.291124 %
Inversiones Supermercados
Ltda.
99 %
Distribuidora y
Comercializadora Emporium
Ltda.
99.888889 %
Grupo de Restaurantes Chile
Ltda.
0.601779 %
0.708876 %
0.1 %
1%
1%
0.111111 %
99.99 %
99 %
32
Servicios y Cobranza
Ltda.
0.01 %
1%
Supermercados
Almac S.A.
0.01 %
0.001 %
99.999 %
INVERSIONES
INTERNACIONALES D&S LTDA.
90 %
96.728268 %
Logística, Transporte y
Servicios LTS Ltda
3.2671686 %
Walmart Chile
Inmobiliaria S.A.
10 %
0.0008297 %
99.9 %
0.003733433 %
99 %
Ekono Logística Ltda.
1%
99.99986 %
Alimentos y
Servicios S.A.
0.000142 %
0.1 %
99.9375 %
0.068322 %
0.0625 %
Estilos y Diseños S.A:C.
Sermob S.A.
Servicios Empresariales
Pioneros Ltda.
50 %
99.99931 %
98 %
2%
Minoritarios
99.9 %
Inmobiliaria D&S
Perú SAC
0.1 %
Inversiones
Solpacfic S.A.
50 %
99.968602 %
Aquanatura S.A.
Comercial D&S
Perú S.A
0.0156985 %
0.0156985 %
100 %
South Pacific
Trade Limited
100 %
South Pacific Trade
Limited Shangai Office
99.968602 %
Aquapuro S.A.
0.0156985 %
0.0156985 %
40 %
Casa
Mare-Emporium S.A
1%
Adm. de Supermercado
Hiper Ltda.
99 %
1.34056211 %
98.65943789 %
60 %
Adm. de Supermercado
Express Ltda.
Minoritario
Gob ierno corporativo
33
Chapter
03
Management
Report
Our Strategic Pillars
SUSTAINED, PROFITABLE GROWTH
QUALITY MANAGEMENT
The company has attained a leadership position, adopting
In 2011, the company continued its Food Safety Audit
international standards and projecting itself as one of the
program. The audits were conducted by third parties in line
industry’s most reliable, efficient and profitable consumer
with Walmart Stores, Inc.’s approved and internationally
goods distribution networks. Its three divisions (retail, real
standardized format.
estate and financial services) have become stronger in
recent years even in a highly competitive market, enabling
Hazard Analysis and Critical Control Points (HACCP)
the company to secure financing for its future projects.
implementation was bolstered, guaranteeing safe preparation
and handling of food.
In order to achieve its objectives, Walmart Chile has
developed a business strategy rooted in high levels of
The company continuously updates its procedures and
competitiveness and sustained growth.
technical material on:
We have a diversified business format portfolio with store
* Evaluation
types that vary by format, providing us with the flexibility
of suppliers according to the technical
standards of the Global Food Safety Initiative (GFSI).
to harness and adapt to market growth opportunities while
optimizing invested capital and returns.
* Improving signage and nutrition labeling on products.
EXCEPTIONAL VALUE AT LOW PRICES
* Store signage, based on the 5 Keys to Safer Food, verified
with Quick Check.
Our value proposal is based on a combination of various
factors that together give customers the opportunity to
* Standardizing
and updating operational procedures
obtain a basket of consumer products at the lowest prices.
based on the Keys to Safer Food and best practices,
Each of our business formats offers a differentiated value
applying globally accepted strategies.
proposal, aiming to satisfy the consumer needs of the
market segment it serves.
This differentiated proposal is supported by a culture of
continuous improvement and low-cost operation, so we
can offer our customers everyday low prices.
36
The following are some Quality Management milestones:
* Second
year conducting Pest Audits, according to
Walmart standards.
“
* First
year of supplier participation in the Perishables
“Convinced of the role privatelabel brands play in our
everyday low price proposal,
Walmart Chile continues to add
value through quality products
at attractive prices, with the
right breadth and depth
of merchandise.”
PRIVATE-LABEL BRANDS
Supplier Development Program funded by CORFO and
Walmart Chile. The objective of the program is to help
Convinced of the role private-label brands play in our everyday
small and mid-sized suppliers reach GFSI standards
low prices proposal, Walmart Chile continues to add value by
within a three-year period.
providing quality products at attractive prices, with the right
breadth and depth of merchandise.
* Food Safety Audits were conducted at 100% of distribution
centers.
The development of private-label products in 2011 was
noteworthy. In total, 474 products were launched, including
* The Aliserv, Aquapuro and Aquanatura companies
new and re-designed products as well as reformulations,
were incorporated and their processes were integrated
associated with eight prominent brands. Three new brands
according to Walmart standards. Aliserv is British Retail
were incorporated in 2011: Equate, in personal care; Spring
Consortium-certified in the bakery and prepared meals
Valley, in vitamins and supplements; and Parent’s Choice,
categories.
in diapers and baby wipes. Each has been met with great
consumer acceptance. These achievements have driven
* Stricter controls on red meat suppliers at distribution
16% penetration of the comparable product universe.
centers and supermarkets, including increased sampling
rate, cold chain monitoring and microbiological product
Through its commercial division, Walmart Chile sells 17
analysis.
private-label brands that complement its product range.
The new brands in 2011 were: Canopy and Mainstays, for
* Implementation
of a temperature monitoring system
for use during transport from distribution centers
the home; and Danskin, George, Starter, Faded Glory and
Motivation in clothing.
to supermarkets. The objective is to achieve 100%
implementation within the next year.
The private-label brand program, which began in 1992, today
delivers a range of 25 brands. Our parent company, Walmart,
PRODUCTIVITY AND OPERATIONAL EXCELLENCE
highlighted Private Label magazine’s recognition of Walmart
Chile as the world-leader in private-label brand development.
The company, through multidisciplinary teams and as part
of a regional-level Walmart project, implements initiatives
that are guided by world-class process improvement
techniques and best practices. These initiatives aim to
improve store operations models in order to save customers
money, so they can live better. »These initiatives focus on
staffing and in-store merchandise management.
Ma nagem ent Rep or t
37
PRESTO
program. It offers significant benefits to clients who shop
at the Company’s supermarkets or use their Presto card at
Customers can use their Presto credit card to make credit
associated businesses.
purchases at Lider, Express de Lider, Ekono, SuperBodega
aCuenta and Emporium stores, in addition to the more
Mi Club has become an essential tool in our value proposal,
than 53,000 other associated businesses. The benefits
rewarding loyalty and thereby increasing the frequency with
and services available to Presto users continue to expand
which customers shop. It has improved segmentation and
each year, adding another important element to our value
the effectiveness of marketing efforts.
proposal. Through an array of initiatives, the card and its
associated benefits and services save millions of customers
SUSTAINABILITY
money on their purchases.
Sustainability is a fundamental pillar of Walmart Chile’s
MI CLUB (MY CLUB)
business. We recognize that a company can be efficient
and profitable while being responsible to its people
The Mi Club program, implemented in 2006, is one of
and environment; and committing itself to responsible
the strategic pillars of Walmart Chile’s customer loyalty
economic, social and environmental management.
PRIVATE-LABEL BRANDS
FOOD
CLOTHING
38
HOME
HEALTH AND WELLNESS
ELECTRONICS
SPORTS
HARDLINES
The Year’s Accomplishments
REVENUE INCREASE OF 14.4%
LAUNCH OF SUPERMARKET SECTION ON LIDER.CL
Revenue reached Ch$2,604,483 million, representing a
In June 2011, Walmart Chile launched the first web site in
14.4% increase compared to 2010’s Ch$2,276,702 million
Chile to sell both food products and general merchandise.
in revenue.
The number of monthly visits to the site has increased from
250,000 to more than 1,000,000 as of December.
41 NEW SUPERMARKETS
SuperBodega aCuenta, 1 Lider and 4 Express de Lider.
INTRODUCTION OF 474 NEW PRODUCTS,
RE-DESIGNS AND REFORMULATIONS UNDER
PRIVATE-LABEL BRANDS
OPENING OF LO AGUIRRE DISTRIBUTION CENTER
In 2011, 474 new items including new, re-designed and
In 2011, 41 new supermarkets opened: 23 Ekono, 13
reformulated products were introduced, thanks to efforts by
The company’s Lo Aguirre distribution center is designed to
the Private Label Division.
be one of the most modern in South America. Its automatic
sorter processes 250,000 boxes a day. In the medium term
the sorter will be able to handle 320,000 boxes, increasing
inventory handling efficiency.
OPENING OF NEW ESPACIO URBANO SHOPPING
CENTER IN DOWNTOWN VIÑA DEL MAR
The shopping center is located on Valparaíso street in an
urban renewal area that connects downtown Viña del Mar
with the bus station.
The shopping center has 78,400 m2, with 22,800 m2 of
rental space and 1,300 parking spaces.
PRESTO: 3 NEW BRANCHES AND 2 NEW KIOSKS
The new branches in San Fernando, Villarrica and Viña
del Mar and the new kiosks in Curicó and Concón are an
important pillar of growth and improved customer service.
HIPER LIDER BRAND IS NOW LIDER
As part of the value proposal consolidation process, the
Lider brand is now using the radiant spark design, which
adds shine and warmth to the new logo. Lider has adopted
the design used by Walmart in 16 countries.
Ma nagem ent Rep or t
39
Wal mar t Chil e
4% INCREASE IN MI CLUB MEMBERSHIP
INCORPORATION OF ALISERV, AQUAPURO AND
AQUANATURA
2 011 | Annua l R ep o rt
As of December 31, 2011, there were 5,249,000 Mi club
members and more than 5,109,000 savings checks had
June 2011 brought a new milestone in the company’s
been issued for a total of Ch$24,411 million.
history. Three companies joined the Walmart Chile
family: Aliserv, which produces bread, prepared meals
178,000 NEW PRESTO CREDIT CARD ACCOUNTS
and cafeteria services; Aquapro, which specializes in
preparation of seafood; and Aquanatura, which is dedicated
As of December 31, 2011, there were 1.49 million current
to plants and flowers. The incorporation of these companies
Presto credit card accounts. Presto credit cards represent
is intended to benefit the retail business, ensuring supply
the second-most common payment method, after cash, at
for the coming years and supporting the Every Day Low Cost
Lider supermarkets and are used for 13.6% of total sales.
(EDLC) strategy. As a result, 1,500 additional employees
became part of the Walmart family.
1,49
millon
IMPROVED FELLER RATE RISK RATING
CURRENT ACCOUNTS
178
NEW ACCOUNTS
16% INCREASE IN AALES AT PRESTOASSOCIATED BUSINESSES
In September 2011, Feller Rate improved its credit rating of
Walmart Chile and Series A and B bonds issued by its real
estate division to AA. The improved rating is a reflection of
the company’s performance in recent years.
MORE THAN 30,000 EMPLOYEES TRAINED AND
MORE THAN 2,400 PROMOTIONS
The professional growth of our employees depends on
With 53,000 businesses accepting Presto and a 16%
their effort as well as the information we provide. More
increase in purchases at Presto-associated businesses,
than 30,000 employees received training through various
Walmart Chile Servicios Financieros is growing steadily.
courses and workshops, offered in face-to-face training
sessions and via e-learning. In addition, more than 2,400
SERVICIOS FINANCIEROS CREATES SEYCO,
OFFERING SERVICES AND COLLECTION
In 2011, Walmart Chile Servicios Financieros took on
this line of business in order to guarantee excellence and
efficiency in collection services. At the end of the year,
Seyco had more than 300 employees.
INTEGRATION OF WALMART SYSTEMS
The process of integrating Walmart’s world-wide systems
and procedures into all areas of our company continued
in 2011. Thanks to tremendous effort by our employees,
Walmart Chile is incorporating better tools in order to work
more quickly and efficiently. These tools will allow us to
share information and manage the entire company from
a single perspective, with integrated systems, simplified
business processes and review of operational procedures.
40
employees were promoted within the company.
Financial Risk Management
The company’s earnings are exposed to different types of
company has low exposure to risk associated with interest
risks, which can be classified as market risk, liquidity risk
rate fluctuations in the market.
and credit risk. Walmart Chile S.A.’s global risk management
program is designed to minimize the potentially harmful
Risk of variation in the unidad de fomento
effects on profits of uncertainty in the financial markets.
As of December 31, 2011 the company maintains 61%
of its financial debt in unidades de fomento, generating a
MARKET RISK
valuation effect with respect to the Chilean peso.
There are currently three types of market risks to which the
LIQUIDITY RISK
company is exposed:
Liquidity risk, also known as solvency risk, is defined as
Currency risk
the probability that a company, due to the difficulty of
Given the nature of the business, the functional currency
meeting its short-term obligations and/or the difficulty of
of the company is the Chilean peso in terms of setting
obtaining financing to continue normal operations, which
the prices of its services, the composition of its balance
translates into the company’s potential inability to fulfill on
sheet and effects on earnings and operations. To minimize
time and in form the contractual commitments it has to
exposure to risk from variations in exchange rates, the
its creditors, due to the difference in time between cash
company’s policy is to maintain a balance between assets
inflows and outflows.
and liabilities denominated in currencies other than the
Chilean peso.
As of December 31, 2011, the company maintains current
assets valued at US$81.4 million in foreign currency.
On the other hand, the denomination of the company’s
financial debt is 61% in unidades de fomento (UF), 33%
in Chilean pesos and 6% in U.S. dollars, and it maintains a
debt balance in foreign currency of US$80.4 million.
The observed value of the dollar as of December 31,
2011 was Ch$519.20, 10.9% higher than the closing
value as of December 31, 2010, when it reached a value
of Ch$ 468.01.
Cash flow interest rate risk
Debts owed to third parties generates the company’s
interest rate risk. Variable-rate debt exposes the company
to cash flow interest rate risk. Fixed-interest debt exposes
the company to fair value interest rate risk.
The majority of the debt is structured at a fixed rate whether
directly or through derivatives contracts. As a result, the
Ma nagem ent Rep or t
41
“
The company has duly
approved short-term
lines of credit that enable
it to ostensibly reduce
liquidity risk.”
The company’s management of liquidity risk is focused
Losses are included in the following accounts: Provisions,
principally on maintaining sufficient cash and maintaining
write-offs and effective recoveries of the portfolio. The
good relationships with stakeholders to ensure the
loss ratio to be considered is determined by the quotient
availability of financing through committed credit facilities
between the accounts indicated and the amount placed or
and also through its capacity to liquidate market positions.
sold in each instance.
Management controls its cash position on a daily basis
For this model, the following information is taken into
and prepares cash projections in order to pay, pre-pay,
account:
refinance and/or obtain new credit, depending on the
company’s ability to generate cash flow.
* Normal
portfolio: Broken down into Non-interest
Installments, Interest Installments, Rotating Debt and
The company has duly approved short-term credit lines
Cash Advances.
which enable it to ostensibly reduce liquidity risk.
* Renegotiated
CREDIT RISK
Credit risk is managed by customer group and the objective
is to permanently monitor the total portfolio of placements
portfolio: The number of renegotiations
and credit history are managed.
FINANCING AND INVESTMENT POLICIES AND
RESTRICTIONS ASSOCIATED WITH THIRD PARTIES
in order to promptly create the necessary and sufficient
provisions to cover losses due to possible non-recovery of
In 2011, the company invested more than US$300 million
credit granted.
in construction, equipment and land, as well as information
and logistics systems.
The company evaluates the Presto portfolio as a group,
primarily for three reasons:
As of December 31, 2011, Walmart Chile direct or indirect
obligations to creditors are in relation to the holders of
* Credit is granted to individuals.
Series A and B Bonds (issues registered in the Securities
Registry under No. 162 and 463, respectively) of the
* Transaction volume is high.
indirect subsidiary Walmart Chile Inmobiliaria:
* Credit amounts granted to each customer are low.
* Maintain
a debt level lower than 1.3 times, calculated
as total current liabilities plus total non-current liabilities
For the purposes of evaluating and creating provisions, the
divided by total equity, measured and calculated
portfolio is segmented by type of debtor and credit, to the
quarterly in the company’s financial statement.
levels deemed appropriate. Currently the Presto portfolio
only contains operations that can be classified as consumer.
42
* Maintain real estate assets valued at an amount greater
than or equal to 12,000,000 UF, defined as real estate
CLASSIFICATION
Fitch ratin gs - feller rate
assets in the Property, Plants, Equipment, Land and
Buildings, Fixed Installations and Accessories and
Investment Property accounts. Likewise, these assets
Feller Rate
Fitch Ratings
Solvency
AA
AA- (cl)
Perspective
Stable
Stable
Shares
1st Class Level 4
1st Class Level 4
D&S Series E Bond
AAA
AAA (cl)
Saitec Series A Bond
AA
AA- (cl)
Saitec Series B Bond
AA
AA- (cl)
must be rented to Walmart Chile S.A. or any related
company, maintaining contracts that are valid at least
until October 31, 2025.
* Maintain
total consolidated equity, the Total Equity
account recorded in the Status of Changes in Net Equity,
for an amount equal to at least twelve million unidades
de fomento. This amount must be calculated quarterly.
Each of the restrictions listed above is fully met as of
December 31, 2011.
RISK CLASSIFICATION
The company’s risk level domestically is classified by Fitch
Ratings and Feller Rate, and their ratings indicate Walmart
Chile’s solid financial position.
In September 2011, Feller Rate increased the rating of
both Walmart Chile and the Series A and B Bonds issued
by its real estate division to “aa”. This improved rating
ratifies the company’s performance in recent years.
For its part, Fitch Ratings maintained its rating at “AA-”,
based on the company’s appropriate business profile and
the multiformat strategy that has enabled it to serve different
socioeconomic segments in the supermarket sector.
Ma nagem ent Rep or t
43
Chapter
04
Performance by
Business Area
Supermarkets
The subsidiary that heads the retail division is Walmart
Lider and Express de Lider stores generated 69.5% and
Chile Comercial S.A. This subsidiary, previously known
18.1% of total retail sales, respectively. The remaining
as Comercial D&S S.A., changed its corporate name as
12.4% corresponded to Ekono and SuperBodega aCuenta
part of the process of integration with Walmart Chile. As
sales, representing 3.8% and 8.5%, respectively.
of December 31, 2011, the company’s subscribed and
paid-in capital amounted to ThCh$ 90,363,559. Walmart
At year end, the Company had 126 Lider and Express
Chile owns, directly and indirectly, all the company’s share
de Lider stores, 137 Ekono stores and 51 SuperBodega
capital. No change in ownership or control has occurred.
aCuenta stores and a total sales area of 694,028 m².
Supermarkets are the principal business and driver for the
The retail division encompasses other business units in
company’s growth. Its multi-format strategy includes the
addition to supermarkets, including: the LTS distribution
following: Lider, Express de Lider, Ekono and SuperBodega
and logistics center, e-commerce, the restaurant group, the
aCuenta.
Emporium format and the Food and Services division.
As of December 2011, the retail sales division represented
93.5% of Walmart Chile’s operations revenue.
Ch$2,407,248
Million in supermarket
sales in 2011
694,028 m
2
Sales surface area
46
4
Formats
41
New
Store
in 2011
EVOLUTION OF OUR STORES
314
277
51
250
38
26
194
11
145
118
45
47
53
57
67
67
68
69
71
47
64
2008
2007
137
110
2
32
2009
2011
2010
Líder
Express
Ekono
SuperBodega aCuenta
EVOLUTION OF SALES SURFACE AREA (m2)
694.028
649.407
606.825
547.861
508.009
4.126
12.809
76.725
414.349
2007
43.856
44.210
19.707
28.812
70.304
2008
54.079
46.817
73.162
429.038
95.973
67.961
445.597
2009
82.832
89.961
451.797
454.015
2011
2010
Líder
Express
Ekono
SuperBodega aCuenta
Per forma nce by Bus iness Area
47
Wal mar t Chil e
2 011 | Annua l R ep o rt
Lider is a low-price hypermarket that follows the
“everything in one place” concept. Lider stores are
characterized by their wide variety of products non-food household items, appliances, electronics,
textiles, hardware and toys - in addition to traditional
food lines. This format features an average sales surface
area of 6,600 square meters.
69
Stores throughout the country
69.5%
Of total retail division sales
454,015
m2
Ch$
In total sales surface area
1,673,233
Million in sales in 2011
Express de Lider is a traditional supermarket that
follows the "easy shopping" concept. It is known for
speed and a wide selection of food. This format focuseson perishable food, such as fruit, vegetables, fresh meat
and prepared meals. This format features sales floors
with an average area of 1,600 square meters.
57
1
Opening in 2011
Stores throughout the country
18.13%
Of total retail division sales
89,961
m2
In total sales surface area
48
Ch$
436,180
Million in sales in 2011
4
Openings in 2011
SuperBodega aCuenta meets the shopping needs of
lower-income socioeconomic segments, delivering a
value proposal based on offering customers the lowest
prices in Chile. This format focuses on food products,
with a large portion of private label goods. Its
appearance is simple and austere.
51
Stores throughout the country
8.57%
Of total retail division sales
95,973 m
2
Ch$
In total sales surface area
205,813
Million in sales in 2011
Ekono stores are based on the proximity concept. They
are characterized by a focus on food products, locations
in densely populated areas as well as speed, easy access
and low prices. This format features an average sales
surface area of 400 square meters.
137
13
Openings in 2011
Stores throughout the country
3.8%
Of total retail division sales
54,079 m
2
In total sales surface area
Ch$
92,022
Million in sales in 2011
23
Openings in 2011
Per forma nce by Bus in ess Area
49
Wal mar t Chil e
2 011 | Annua l R ep o rt
Real Estate
“
With more than 25 years of experience in developing and managing
supermarkets and shopping centers throughout Chile, Walmart Chile
Inmobilaria is present throughout the country”.
charged with understanding the market, evaluating
potential expansion areas, planning new locations and
analyzing the variables in the sector that impact growth on
Inmobiliaria
the national level.
Walmart Chile Inmobilaria S.A., previously known as Saitec
The area’s various processes are carried in conjunction with
S.A., is the subsidiary company leading the real estate
the Shopping Center, Lider, Express de Lider, SuperBodega
division. As of December 31, its subscribed and paid-in
aCuenta and Ekono divisions, so as to ensure that growth
capital totaled ThCh$ 432,778,108.
decisions are aligned with each of the markets in which the
company participates.
Walmart Chile owns, directly or indirectly, the company’s
total share capital. In 2011, as part of the integration
In order to fulfill its mission, the area performs a series of
process, the subsidiary changed its corporate name to
analyses and periodic studies. The results provide better
Walmart Chile Inmobilaria.
understanding of the country’s demographics, distribution
of expenditures, consumer behavior and changes in the
The real estate division is responsible for developing the real
retail sector.
estate needed by Walmart Chile; capitalizing on those real
estate assets through development of profitable, efficient
DEVELOPMENT
business models; maximizing the advantages provided by
existing real estate; and developing strategic alliances with
Once the company’s potential growth areas are identified,
other players in the commercial sector.
the development area is responsible for designing real estate
according to the market conditions required by the company’s
With more than 25 years of experience in developing and
formats and conducting the negotiations necessary to
managing supermarkets and shopping centers throughout
consolidate the growth Walmart expects in Chile.
Chile, Walmart Chile Inmobilaria enjoys a national presenc,
with projects in Regions I through XII. It is one of Chile’s
This process includes detailed site analysis, considering
largest neighborhood shopping center operators.
factors such as: pedestrian access, potential visibility,
residential
safety
and
commercial
positioning. Each of these factors is weighted according to
divides its operations into four business areas: Planning
Walmart Chile’s knowledge of its operation and the value
and Research, Development, Projects and Administration.
proposals offered by each of its formats.
PLANNING AND RESEARCH
The Planning and Research area is responsible for
determining the company’s strategic path. The area is
50
surroundings,
In order to meet its objectives, Walmart Chile Inmobilaria
PROJECTS
ADMINISTRATION
Once the location and type of project has been determined,
The Administration area of Walmart Chile Inmobilaria is
a team of architects is consulted and the building process
responsible for leasing and managing commercial spaces.
begins. In order to foster efficiency and specialization, the
Once the development and construction of the real estate is
area divides its projects into two categories: supermarkets
complete, this area fills and manages the stores and space
and shopping centers.
available for lease in order to harness synergy between work
teams, maintain consistency with Walmart Chile’s multi-format
In 2011, the real estate division opened 41 new supermarkets
strategy and provide an attractive proposal that satisfies our
(23 Ekono, 13 SuperBodega aCuenta, 1 Lider and 4
customers’ expectations.
Express de Lider) and undertook 518 remodels. These new
supermarkets added 62,321 m² to the company’s real estate
Annually, 66 million visits are made to the division’s shopping
portfolio, 46,710 m² of which are sales floors. These figures
centers. Notably, Espacio Urbano 15 north receives 18 million
do not account for expansion of pre-existing locales.
visits alone.
The total investment in 2011 for new supermarket and
Walmart Chile Inmobilaria is currently one of the shopping
shopping center projects, expansions and remodels reached
center industry’s major players, with 12 locations from
approximately US$ 279 million.
Antofagasta to Punta Arenas (including downtown Viña del
Mar, which opened in late 2011) and 528 commercial spaces
for lease in more than 620,490 m².
12
Shopping
Centers
528
41
New supermarket
locations in 2011
620,490 m
Spaces available for
lease in shopping
centers
2
Total shopping center surface area
51
Wal mar t Chil e
2 011 | Annua l R ep o rt
Financial Services
The Financial Services division provides financing, through
INSURANCE
the Presto credit card, for purchases in the various Walmart
Chile supermarkets and in more than 53,000 associated
For the insurance area, 2011 was an excellent year.
businesses throughout the country. It also grants cash
The brokerage enjoyed a 27% increase in insurance
advances and consumer loans. In addition, it offers various
premiums and a 21% increase in commission revenue
services, including insurance brokerage, travel agency, bill
relative to 2010.
payment and, as of 2009, mutual funds.
COLLECTION
PRESTO CARD
In 2011, the collection business continued improving its
service and market penetration, incorporating 21 new
businesses where customers can now pay their Presto bill.
This addition increased payment locations for Walmart
Chile customers by 67%, relative to 2010. In addition,
self-service machines were updated to cutting-edge
technology, improving customers’ user experience. With
these accomplishments, the area continued its sustained
growth, collecting more than 2,150,000 payments that
The Presto card was first issued in May 1996 and
totaled more than Ch$ 47,500 billion. These figures
was designed to be the lowest-cost, easiest payment
represent 120% growth in transactions and commissions
alternative for our customers. In 2005, Presto became
over the year prior.
the first non-bank “open” credit card. Today, Presto is
present from Arica to Punta Arenas, with 117 points of
service (kiosks and branches) and extensive coverage
through ATMs. The card is the preferred payment method
of 1.49 million customers.
As of the end of 2011, Presto was still the most common
payment method in Walmart Chile stores. Annual sales
from all the company’s various formats exceeded ThCh$
353,000,000.
In 2011, cross benefits were increased for Walmart
customers, who could now use their Presto card at
associated businesses. Sales at these businesses grew
by 16% relative to the year prior, and represented 19%
of total Presto card sales. Furthermore, tremendous
progress was made in terms of coordination with
Servifácil. Collections on credit card accounts grew 70%
compared to 2010.
52
MUTUAL FUNDS
TRAVEL
In the mutual funds business, recurring savings and one
Presto Viajes is a travel agency created to provide Presto
timer funds are being developed in order to consolidate
customers with the best vacation options at the lowest
the mass distribution mutual fund model. As of December
prices. The agency has a team of specialized travel
2011, there were 140,000 participants and Ch$4,668
consultants ready to answer questions and respond to
million in managed equity. Finally, the “Mi Ahorro” (My
requests, providing first-class service.
Savings) fund reached 78,000 participants in 2011, a 40%
LOANS
increase relative to the year prior.
Through Presto’s Avance and Súper Avance programs the
financial services division offers consumer loans to Presto
card customers.
Ch$
158,720
increase in loans
140,752
participants in Mutual Funds
2,102,636
current insurance policies
Ch$
321
billion in placements
$
1.49
million current accounts
53,000
associated businesses throughout
the country
53
53
Distribution and Logistics
“
LTS logistics and distribution centers are responsible for receiving,
storing, distributing and transporting 60% of the products sold in all of
the company’s stores and formats”
LTS currently has nine distribution centers throughout the country. The following table provides details on each of them.
DISTRIBUTION CENTER
REGION
SURFACE AREA (M2)
Dry goods, Quilicura
Metropolitan
54,607
Perishable goods, Quilicura
Metropolitan
25,082
Dry goods with automatic sorter, Lo Aguirre
Metropolitan
58,000
Continuous flow warehouse, Pudahuel
Metropolitan
12,663
General merchandise, Pudahuel
Metropolitan
89,236
Ekono Distribution Center
Metropolitan
15,830
Antofagasta
Antofagasta
3,000
Chillán
Bío Bío
7,840
Temuco
Araucanía
6,591
Walmart Chile’s purchasing is done primarily through the
One of its principle features is an automatic sorter that
LTS supply area. This allows the Company to order the
processes 250,000 boxes daily. This capacity is expandable,
merchandise stores need with the various factors in mind,
in the medium-term, to 320,000 boxes daily.
including the time required for supplier delivery of the
product, peak demand at certain times of year, the products’
This new technology allows circulation flows to be
state of preservation, and reduction of the operations gap.
redistributed, modifying the cost structure and diminishing
the time boxes spend in our facility, thereby reducing the
Through a variety of trade agreements, Walmart Chile
company’s inventory days. In addition, a 30% improvement
works centrally with more than 1,380 domestic providers
in productivity and store delivery error is expected.
and significant supply sources abroad. The majority
of merchandise acquisitions are immediate or short-
The company continues to invest in technological
term operations, within the context of long-term supplier
developments that increase distribution center productivity.
relationships.
The incorporation of the Lo Aguirre distribution center is
among the most important achievements of 2011. The
center is one of the most modern in South America. It is
located in the municipality of Pudahuel and has a surface
area of 58,000 m².
54 54
“
Vox Increase
28
The incorporation of the
Lo Aguirre distribution
center is among the most
important achievements of
2011. The center is one of
the most modern in Latin
America”
Increase
16.14%
in backhaul revenue relative to 2010
in the average number of boxes per tractor
trailer in 2011, generating approximately $660
million in savings compared to the previous year
272,849 m2
in distribution center
surface area
16.65%
growth in
transfers relative
to 2011
95.9%
82.8%
15.71%
stock level in
2011
average fill-rate
in 2011
increase in
number of
transported boxes
55
“
The Emporium format brings
together various shops
specializing in high-quality
products, such as seafood,
pasta, bread, hams, cheese
and different spices”.
Other Businesses
Additionally, a system for managing delivery windows and
coverage zones has been implemented. The system even
offers customers a same-day delivery option.
Lider.cl has focused on satisfying customer needs, bringing
Following the model of ASDA, Walmart’s U.K. subsidiary,
Lider’s everyday low prices to their doorstep. To do this,
lider.cl became the first e-commerce site in Chile to offer
the number of products available through the site was
food and general merchandise on the same web site when
increased from 2,700 at the beginning of January to 9,000
it launched its “supermarket” section in July 2011.
in December. Consequently, the number of monthly visits to
the site increased from 250,000 to 1,000,000 in December.
The new food business operates from a central warehouse in
the Metropolitan Region, where orders are picked and sent
out for delivery. A new on-line product inventory management
system has also been implemented. The new system has
kept food order fulfillment above 98%.
The format aims to earn customer loyalty and have an
impact on the company’s other lines of business.
As of December 31, 2011, the Company had three
Emporium stores, located in at Espacio Urbano La Dehesa,
The Emporium format targets the ABC1-C2 segments. It brings
Lider Los Dominicos and Espacio Urbano La Reina.
together various shops specializing in high-quality products,
Customers can purchase and enjoy high-end products at
such as seafood, pasta, bread, hams, cheese and different
the best price-quality ratio, in surroundings with attractive
spices. This selection is complemented by the assortment
interior architecture.
offered in Lider and Express de Lider supermarkets, thus
reinforcing the “one-stop shopping” concept.
56
Walmart Chile Grupo Restaurantes (restaurant group) develops
and operates restaurants, self-service establishments and
cafeterias aimed at meeting specific customer needs.
The 55 points of sale (2 Parillas, 12 Buffets, 37 Revive
Lunch, 1 Pio and 3 Revive restaurants) in supermarkets
and shopping centers provide attractive options for eating
lunch or dinner, having coffee or ice cream, or sharing a
moment with friends and family. Additionally, the restaurant
group has two production plants: one for artisan-style ice
cream and another for sandwiches and salads.
Aquapuro specializes in seafood, such as fish and shellfish;
and Aquanatura is dedicated to plants and flowers. The
incorporation of these companies is intended to support
the retail business, ensuring supply for the coming years
and supporting the Every Day Low Cost (EDLC) strategy.
In July 2011, Aliserv, Aquapuro and Aquanatura joined the
In February 2012, these companies merged to become
Walmart Chile family. Aliserv focuses on preparation of bread
Walmart Chile Alimentos y Servicios (Food and Services).
and prepared meals, as well as providing cafeteria service.
accumulate Mi Club pesos, and customers who use Presto
can accumulate more Mi Club pesos at Lider and Express de
Lider supermarkets. The program also rewards customers
with coupons and exclusive offers.
Mi Club is a customer loyalty program that rewards Walmart
As of December 31, 2011, there were 5,249,000 Mi Club
Chile customers by allowing them to accumulate pesos and
members and more than 5,109,000 savings checks had
then returning money (Mi Club pesos, not points) every
been issued, for a total of nearly Ch$ 24,411 million.
three months in the form of a Savings Check. All purchases
Per forma nce by Bus in ess Area
57
Chapter
05
SOCIAL
COMMITMENT
Wal mar t Chil e
2 011 | Annua l R ep o rt
Our Commitment to Our
Employees
“
Walmart Chile employs more than 40,000 individuals of different
cultural backgrounds, ages and socioeconomic status. The company
provides the tools to enable the healthy development of our employees,
encouraging teamwork and opportunities for participation that allow
them to grow personally and professionally”.
Our commitment to our employees is founded on the six
2011 was the second year in which we conducted the
strategic pillars described below.
Associate Opinion Survey, which is used in all countries
in which Walmart operates to measure the level of our
COMMITMENT
employees’ commitment. The results were extremely
satisfying for the company. This allows us to work with our
Upholding a high degree of commitment among our
employees to design plans of action and follow up on their
employees is one of Walmart Chile’s main challenges.
implementation, creating a virtuous cycle.
To achieve this, the company develops practices of
impartiality, fosters discussion within work teams, has an
INTERNAL COMMUNICATION
open door policy, collects feedback, employs performance
reviews and promotes the company’s core values: service
At Walmart Chile we are convinced that our company’s
to our customers, the pursuit of excellence and respect for
continuous growth and success depends to a large extent
the individual.
on our ability to effectively communicate our strategic
objectives internally and on the level of commitment of
our employees. For this reason, one of our priorities is to
promote an organizational culture that sets us apart and
allows us to embody in everything we do the value of
integrity and its three core principles: Respect, Service and
Excellence
Our company has a team of professionals that is dedicated
to maintaining a variety of permanent, effective internal
communication channels that ensure our employees
receive a constant, up-to-date flow of information. Another
focus of this area is on endomarketing campaigns and
internal events that promote communication and foster the
commitment of those working for the organization.
Our means of communication include a monthly newsletter
and Intranet system, which is a very useful management
and work tool, and an internal television channel that
60
broadcasts to all offices and stores in the country to inform,
In the area of health, an agreement was signed with the
train and entertain our employees.
health insurance provider Consalud to enable employees
who are currently covered by FONASA to use the 7%
Among our many communication events, we hold a
contribution to choose a health plan that would give them
monthly meeting of the 1,500 employees working in
coverage in private health care facilities. Additionally,
support positions in all our business units. The meeting is
catastrophic insurance to help offset the impact of high-
chaired by the CEO of Walmart Chile and is intended to
cost treatments was included in our supplementary
inform our employees about the business and generate a
health insurance plan for permanent employees, which
sense of camaraderie. In January each year we also hold
reimburses them for a high percentage of costs not covered
New Year Meetings in which the manager of each format
by Chile’s public or private health insurance providers.
meets with the respective store managers to communicate
the central operating strategies for the coming year. The
In order to promote healthy living, company sports activities
stores that performed best in the previous year are also
have been increased and corporate 5k runs have been
recognized and honored at the meeting. In August the
organized, which have been very successful and well
Holiday Meeting is held for the entire operation in Chile
attended. Other recreational activities for employees and
to communicate the main business developments for the
their families include special membership agreements with
following six-month period.
local health clubs and health checkups at clinics across
the country.
Without a doubt, one of the most important opportunities
for our associates to experience the Walmart culture is to
In the educational sphere, the company offers its employees
participate in the Annual Walmart Shareholders Meeting,
assistance through an equivalency program for secondary
which is held each year in Bentonville, Arkansas, in the
school, technical school, university and post-graduate
U.S. In 2011, a delegation of 127 Chilean employees had
studies and has awarded 1,180 scholarships to support
the opportunity to share this experience with people from
academic excellence among workers and their children.
all countries in which Walmart operates, to learn about the
company’s different store formats, visit the head office and
CAPTURING AND DEVELOPING TALENT
experience firsthand the culture that was established by
Sam Walton.
One of Walmart Chile’s main goals is to be the best retail
store in our country. One way that we achieve this is by
BENEFITS
focusing on human resources planning and management,
taking care to hire the best people to fill positions that come
Walmart Chile strives to offer its employees support
available and favoring internal candidates as our company
programs of different kinds to enable them to improve their
policy dictates.
quality of life and that of their families. In 2011 the focus
was on updating and creating new special agreements
across the country to address the health of our employees
and offer them activities to help balance work and family life.
Socia l Commitm ent
61
Our organization’s recruitment and selection policy
* Performance
Evaluation: All employees except “in
has enabled us to hire new talent without the need for
contact” staff (those in direct contact with customers)
intermediaries. The high percentage of company workers
participate in this process. The review evaluates
with permanent contracts -- which today amounts to 82.4%
objectives and competencies. In 2011, 96.6% of our
of the total -- is another factor that increases stability and
employees participated in this process.
attracts many individuals to our organization.
* Feedback:
“In contact” employees also participate in
One notable strategy we employ for capturing new talent
this process, receiving their first feedback three months
is internships. In 2011, many students from Chile’s top
after hiring and again at six months. In 2011, 84% of our
universities and technical institutes performed professional
employees attended a formal feedback session.
internships at our company and 10% of them were hired at
the end of their term.
In 2011 we continued our plan to open more stores,
ensuring that each had the necessary staffing to meet sales
96.6%
Of our employees
participated in evaluations
of objectives and skills.
targets and provide the best customer service possible
while maintaining high productivity standards.
Among all four retail formats, 41 stores were opened, and
a total of 2,115 new employees were incorporated into
positions of customer contact.
It is a priority for Walmart Chile to have employees who
TRAINING
are committed and motivated, which means providing
them with constant opportunities for professional and
Contributing
personal development. To achieve this, the company has
improvement of our employees is a priority for Walmart
to
the
development
and
continuous
a formal system for employees wishing to apply for internal
Chile, because having honest, qualified people who strive
vacancies. In 2011 alone, approximately 3,131 internal
for excellence in their day-to-day work is essential for
position changes were recorded related to 870 internal
achieving the objectives and goals we have set.
hiring competitions, which involved 8% of our associates
taking on a new position.
To accomplish this, the company carries out a variety of
training programs that allow employees at different levels to
The effective administration and management of employees
acquire new tools and skills that will enable them to stand
is handled through the Performance Management process,
out in the workplace, in their field and in their relationships.
which includes two methodologies:
Many of these initiatives are carried out in collaboration with
leading educational establishments in Chile. Some of our
programs are described below:
62
“
The company carries out a variety of
training programs that allow employees
at different levels to acquire new tools
and skills that will enable them to stand
out in the workplace, in their field and
in their relationships”.
* Specialization
Certificate
Program:
This program
Walmart also provides technical training opportunities for
fosters our employees’ educational and professional
its employees, and in 2011, 271,000 in-person hours were
development by offering a wide range of certificate
imparted as well as 174,000 online learning hours. This
programs whose orientation and content have a
means that more than 30,000 thousand employees from
real impact on the management and development
Arica to Punta Arenas were trained for a total of close to
of our business. These are divided into two broad
450,000 hours in 2011.
areas of study: Business Management (certificates in
Retail Management, Business Management, Project
Management and Human Resources Management) and
Operations (certificates in Sales Management, Client
Management and Operations and Logistics Management)
* Higher
Education Scholarship Program: This program
supports the professional development of employees
who are currently enrolled in higher education at the
technical, undergraduate or graduate level in any
educational institution in Chile.
* Equivalency
Program: This program is designed for
all employees who wish to begin and/or complete their
primary or secondary school studies.
To further their integration into Walmart, the company has
made a language program available to allow employees who
require English to perform their duties to develop knowledge
and mastery of the language. In 2011, 215 employees in
our support office participated in this program.
Another approach to integration is to provide associates
in strategic positions with the opportunity to learn more
about the company culture. This has been accomplished
through a series of cultural participation programs, the
most important of which is the Walton Institute, a 24-hour
training workshop in which all company leaders take part.
Socia l Commitm ent
63
Wal mar t Chil e
2 011 | Annua l R ep o rt
Our Commitment to the
Community
“
The idea is to teach children about different kinds of fruits, vegetables,
fish and seafood and instill healthy eating habits to increase their
consumption of fruit and vegetables to five portions per day, and fish
and seafood to two portions weekly”
Walmart Chile is committed to the development of Chile
fostering small businesses led by businesswomen, and by
and its inhabitants, especially those living in communities
seeking out current and potential female suppliers for the
where the company operates its supermarkets.
company, among other initiatives.
The company implements and supports initiatives that
HUNGER AND NUTRITION
seek to improve the quality of life of disadvantaged groups
in our society and in the communities surrounding our
The company does its part to eradicate hunger and
supermarkets. It does this through donations, partnerships,
malnutrition by making significant regular donations of
and partnership agreements with non-profit institutions
food to the Red de Alimentos, Chile’s first food bank, and
working in areas that coincide with the strategic focal areas
by encouraging healthy eating among school children in
defined in our internal Corporate Social Responsibility
communities near our supermarkets under the program
(CSR) policy.
“Por Un Chile Lider Educamos” (Education for Leadership
in Chile).
Examples of our commitment in this area include the
strategic alliance that has linked Walmart Chile to Hogar de
Cristo for more than 15 years. This commitment includes
our Corporate Volunteer Programs and our checkout
donation program “Deje Su Vuelto en Buenas Manos”
(Leave Your Change in Good Hands),” which are at the
heart of this company.
Walmart’s arrival in Chile revitalized this commitment
with new areas of action that include the development of
Food bank: Our commitment to feeding those most
women entrepreneurs and support for initiatives focused
in need
on sustainability and hunger eradication among vulnerable
Walmart Chile is a founder and strategic partner of
groups in Chile.
Corporación Red de Alimentos, a network that serves as a
bridge among companies that wish to donate food and non-
WOMEN
Walmart
profit organizations that need to feed their beneficiaries.
Chile
contributes
to
women’s
economic
Since August 2011, Walmart Chile has been making weekly
empowerment, supporting the rehabilitation and reintegration
donations of perishable and non-perishable food items to
into the workforce of victims of domestic violence,
the food bank.
encouraging indigenous women’s microenterprises, and
64
Por Un Chile Educamos
The funds collected directly benefit at-risk individuals such
The company supports Fundación Mar de Chile in its efforts
as abandoned older adults, youth with addictions, victims
to draw attention to Chile’s national maritime heritage and
of domestic violence, infants and preschoolers, and others.
promote the consumption of fish and seafood among 5th
grade students from low-income areas.
“CRECIENDO CONTIGO” - GROWING TOGETHER
PROGRAM
STRATEGIC ALLIANCE WITH HOGAR DE CRISTO
As a way of improving the quality of life of residents living
For more than 15 years now the
in the communities surrounding our supermarkets, the
company has been supporting the
company contributes funds to projects presented by
mission of Hogar de Cristo through
local groups such as neighborhood organizations, parent
our corporate volunteer programs,
associations, sports clubs and charity institutions that come
our checkout donation program,
to our stores seeking donations.
“Leave Your Change in Good
Hands,” and in other ways.
All projects submitted are shortlisted by a committee of
employees in the store and then passed on to the Company
Corporate volunteering
Donations Committee for approval (or rejection) of the
The company encourages and supports volunteer work
proposed donation.
among its employees, inviting all stores to sponsor projects
undertaken by Hogar de Cristo throughout Chile.
SUSTAINABILITY
As a result of this initiative, our associates visit the residents
Walmart Chile supports initiatives that deepen our
of 122 homes operated by Hogar de Cristo on a regular
commitment to a more sustainable economy. These include
basis, giving their time, concern and affection.
the Product Sustainability Index that is being developed in
collaboration with our suppliers.
Deje su vuelto en buenos manos
Thanks to a partnership established in 1996 between
Walmart Chile and Hogar de Cristo, the company invites
customers to donate part of their change at checkout to
the foundation.
This pioneering program in Chile is one of the most highly
recognized acts of social solidarity among our customers
and associates, and collected Ch$912,634,544 in 2011.
Socia l Commitm ent
65
“
We want to leave our
children a cleaner, better
world and therefore our
business operations must
also be sustainable”
Our Commitment to
Sustainability
At Walmart Chile, we believe that developing an efficient
and with their friends, embodying the values of sustainability
and profitable business is based on caring for the world
by making the commitments included in the program.
in which we live. We want to leave our children a cleaner,
better world and therefore our business operations must
PRODUCTS
be sustainable and promote respect for people and
the environment. As a company we have accepted this
At Walmart Chile we are working to bring more sustainable
challenge at the global level, and at Walmart Chile we work
products onto our sales floors. We do not want our clients to
each day to make that better world.
have to choose between a product they can afford and one
that is good for their families and the planet.
We do this by incorporating sustainability through four
pillars: People, Products, Energy and Waste.
For this reason we encourage our suppliers to achieve
ever higher standards of sustainability in their practices
PEOPLE
and products through actions such as reducing packaging
waste and optimizing shipping, always taking into account
Walmart Chile fosters a culture of sustainability among
processes and the entire production chain.
its employees by providing training and disseminating
information. The “Mi Plan Sustentable” (My Sustainable
As an example of this effort, we are proud to have made all
Plan) initiative also promotes sustainable living in our
of our house brand powdered detergents phosphate-free.
employees’ personal and family lives.
This achievement took more than a year of work with our
supplier and now allows us to offer our customers products
Mi plan sustentable (My sustainable plan) is a company
that do not add more of this pollutant to Chile’s waterways
program through which we invite our employees to pledge
and water bodies.
to undertake certain simple, concrete actions in their daily
lives to help care for the environment, improve their quality
And we should also mention the work we have undertaken
of life and enhance their relationships at home, in the
in sustainable agriculture, where our efforts have been
workplace and in the community.
focused on developing local suppliers and removing the
middle man. This is a country-wide effort, and in some
66
In 2011, close to half of our more than 40,000 employees
stores has doubled the number of local suppliers we
chose to adopt this program in their families, workplaces
used in 2011. Thanks to this program, we have obtained
high-quality products and more sustainable productive
WASTE
processes, capturing the efficiency of good practices. In
this way producers also receive close to 15% more for their
One of the company’s main objectives in Chile and around
products than they formerly received from intermediaries,
the world is to reduce the amount of non-recyclable waste
and Walmart Chile obtains prices that are about 10% lower,
generated by our supermarkets to zero, which will enable
allowing our company to pass these savings on to our
us to reduce our consumption of resources as well as save
customers.
our customers money.
Thus we have been able to offer our customers better
To achieve this, we recycle cardboard and stretch film in
prices while increasing the income of small farmers and
our storerooms and collected more than 29,000 tons and
reducing the carbon footprint of our products by shipping
1300 tons of these materials, respectively, in 2011.
them over shorter distances.
In addition, Walmart Chile strives to reduce the waste
ENERGY
generated by our plastic shopping bags, which now contain
75% recycled material, making them the leading recycled
At Walmart Chile we work hard to promote energy savings
bag in the country. The bags are also certified by IDIEM, the
and energy efficiency in order to reduce the release of
materials certification institute of the Universidad de Chile.
pollutants into the environment.
We also promote the use of reusable shopping bags
In December 2011, Walmart Chile implemented the Trane
through our “green checkout” program in all Lider stores
Tracer-ES System in 45 stores (40 Liders and 5 Lider
in Chile. In 2011, for the first time in Chile, checkout desks
Express. The system uses independent circuits on our sales
were designated exclusively for customers using reusable
floors to perform online measurements of systems such as
shopping bags, and we are always looking for ways to
lighting, climate control, refrigeration, bakery and others,
improve this eco-friendly project.
allowing us to manage our energy use more efficiently.
Other energy efficiency measures we have implemented
include the installation of highly efficient fluorescent
2011 Sustainability Report
www.walmartchile.cl
lighting, efficient air conditioning equipment with a “free
cooling” option for new installations, the use of LEDs in
freezer equipment, luxometers that allow us to regulate the
We invite you to read our Sustainability Report,
intensity of lighting in different zones of the supermarket,
which is available at www.walmartchile.cl, to
and high-precision digital laser thermometers to measure
learn more about how Walmart Chile adds value
the temperature of refrigerated products.
by incorporating sustainability into our business.
In 2011, Walmart Chile received the Energy Efficiency
Award from the Agencia Chilena de Eficiencia Energética
(Chilean Energy Efficiency Agency).
Our long-term goal is to shift towards cleaner renewable
energies, and this goal goes hand-in-hand with Chile’s
challenge to supply 20% of its energy grid with renewable
energies by 2020.
Socia l Commitm ent
67
Chapter
06
DECLARATION OF
RESPONSIBILITY
In accordance with current legal provisions, we the undersigned declare that all information included in this Annual Report of
Walmart Chile S.A. for the fiscal year ending December 31, 2011, is true.
FELIPE IBAÑEZ SCOTT
Chairman
ID: 5.638.122-8
EDUARDO SOLÓRZANO
Vice Chairman
ID: GO.250.799-7
Claire Babineuax-Fontenot
Director
ID: 476077868
NICOLÁS IBAÑEZ SCOTT
Director
ID: 5.638.106-6
CHRISTIAN PHILLIPE SCHRADER
Director
ID: C5PHN9N7X
José María Urquiza
Director
ID: 08380025071
JOSÉ MARÍA EYZAGUIRRE BAEZA
Director
ID: 7.011.679-0
ALBERTO EGUIGUREN CORREA
Director
ID: 9.979.068-7
JORGE GUTIÉRREZ PUBILL
Director
IDt: 5.907.040-1
ENRIQUE OSTALÉ CAMBIASO
CEO
ID: 8.681.278-9
Chapter
07
FINANCIAL
STATEMENTS
Wal mar t Chil e
2 011 | Annua l R ep o rt
Report of the Independent Auditors
To the
Shareholders and Directors
Walmart Chile S.A. and subsidiaries
We have carried out an audit of the consolidated financial situation of Walmart Chile S.A. and its subsidiaries as of
December 31, 2011 and the corresponding consolidated income statement, statement of changes in equity and
cash flows for the year ended on that date. Preparation of these financial statements (including the corresponding
notes) is the responsibility of the management of Walmart Chile S.A. Our responsibility consists of issuing an opinion
about these financial statements based on our audit. The consolidated financial statements of Walmart Chile S.A.
and its subsidiaries for the year ended December 31, 2010 were audited by other auditors. Their report, dated
March 30, 2011 on these financial statements included a proviso due to limitation of the scope in the revision of
ThCh$7,823,828 in the item Trade and other receivables.
We conducted our audit in accordance with auditing standards generally accepted in Chile. Those standards require
that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of
significant incorrect representations. 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 audit provides a reasonable basis for our opinion.
In our opinion the aforementioned consolidated financial statements reasonably present, in all significant aspects, the
financial situation of Walmart Chile S.A. and its subsidiaries as of December 31, 2011 and the results of its operations
and cash flows for the year ended on that date, in accordance with international financial information standards.
Albert Oppenländer L.
Santiago, March 28, 2012
72
ERNST & YOUNG LTDA.
FINANCIAL STATEMENTS OF WALMART CHILE S.A. AND SUBSIDIARIES
CLASSIFIED CONSOLIDATE D FINANCIAL STATEMENTS
A S OF DEC EM B E R 3 1 , 2 011 A ND 2 0 10, EX PRESSED IN THOUSANDS OF PESOS (Th C h $ )
ASSETS
NOTe
12-31-2011
12-31-2010
ThCh$
ThCh$
42,544,982
81,123,159
CURRENT ASSETS
Cash and cash equivalents
8
Other current financial assets
Other current non-financial assets
40,243,620
-
5,225,093
3,931,163
266,078,532
Trade and other receivables, current
10
282,517,789
Accounts receivable from related companies, current
11
-
337,596
Inventories
12
217,100,494
179,183,149
31,309,756
15,085,875
618,941,734
545,739,474
6,158,823
-
625,100,557
545,739,474
25,012,096
27,530,994
Current tax assets
Total current assets other than assets or asset groups for disposal
classified as maintained for sale or to be distributed to owners
Non-current assets or asset groups for disposal classified as
maintained for sale
32
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other non-current financial assets
Collection rights, non-current
10
79,600,103
60,725,471
Investments recorded using the equity method
13
-
15,433,091
Intangible assets other than goodwill
14
13,878,228
16,543,073
Goodwill
14
29,948,810
325,379
Property, plant and equipment
16
1,018,228,178
899,065,309
Investment properties
15
129,655,015
136,120,131
Deferred tax assets
18
53,343,901
50,995,898
TOTAL NON-CURRENT ASSETS
1,349,666,331
1,206,739,346
TOTAL ASSETS
1,974,766,888
1,752,478,820
THE ACCOMPANYING NOTES 1 TO 32 ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
Fina ncia l Sta tem ents
73
Wal mar t Chil e
CLASSIFIED CONSOLIDATE D FINANCIAL STATEMENTS
2 011 | Annua l R ep o rt
A S OF DEC EM B E R 3 1 , 2 011 A ND 2 0 10, EX PRESSED IN THOUS ANDS OF PESOS (Th C h $ )
LIABILITIES
NOTE
12-31-2011
12-31-2010
ThCh$
ThCh$
CURRENT LIABILITIES
Other current financial liabilities
19
132,008,734
83,645,279
Trade and other accounts payable, current
20
441,500,244
351,364,402
Accounts payable to related entities, current
11
761,487
2,991,442
Other provisions, current
21
Current tax liabilities
Provisions for employee benefits, current
21
Other non-financial liabilities, current
TOTAL CURRENT LIABILITIES
7,307,859
6,512,029
26,429,789
11,802,681
30,326,249
25,378,054
38,971,108
24,724,313
677,305,470
506,418,200
NON-CURRENT LIABILITIES
Other non-current financial liabilities
19
337,426,703
349,249,622
Accounts payable to related entities, non-current
11
289,398,245
278,513,957
Other provisions, non-current
21
-
2,019,140
Deferred tax liabilities
18
27,271,190
31,291,466
Provisions for employee benefits, non-current
21
60,000
92,061
Other non-financial liabilities, non-current
TOTAL NON-CURRENT LIABILITIES
Total LIABILITIES
2,978,998
3,150,174
657,135,136
664,316,420
1,334,440,606
1,170,734,620
457,867,231
457,867,231
172,618,711
113,334,799
9,815,250
9,810,596
640,301,192
581,012,626
25,090
731,574
640,326,282
581,744,200
1,974,766,888
1,752,478,820
EQUITY
Share capital
22
Cumulative income (losses)
Other reserves
22
EQUITY ATTRIBUTABLE TO THE OWNERS OF THE CONTROLLING
ENTITY
Minority shares
TOTAL EQUITY
TOTAL EQUITY AND LIABILITIES
22
THE ACCOMPANYING NOTES 1 TO 32 ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
74
CONSOLIDATED INCOME STATE MENT BY FUNC TION
FOR THE PER IODS ENDING DECEM B ER 31 , 2 011 A ND 2 0 10, EXPRESSED IN THOUSANDS OF PESOS (Th C h $ )
INCOME STATEMENT BY FUNCTION
Revenue from ordinary activities
NOTE
23
Cost of sales
GROSS INCOME
Other income, by function
24
Distribution costs
01-01-2011
01-01-2010
12-31-2011
12-31-2010
ThCh$
ThCh$
2,604,483,217
2,276,702,447
(1,828,092,646)
(1,587,648,279)
776,390,571
689,054,168
34,282,232
992,556
(23,249,065)
(17,253,810)
Administrative expenses
24
(558,981,244)
(527,162,077)
Other expenses, by function
24
(36,882,196)
(62,117,230)
(361,458)
102,441
Other income (loss)
Financial income
24
2,252,875
986,003
Financial costs
24
(34,285,416)
(27,378,141)
Share in income (losses) of subsidiaries and joint businesses reported
using the equity method
13
(195,679)
(768,293)
Exchange rate differences
24
(6,772,808)
(674,239)
Income per indexation units
24
INCOME (LOSS) BEFORE TAXES
Income tax expense
25
INCOME (LOSS)
(15,734,513)
(9,160,423)
136,463,299
46,620,955
(22,558,779)
(4,852,831)
113,904,520
41,768,124
113,891,781
41,713,930
INCOME (LOSS) ATTRIBUTABLE TO:
Income (loss), attributable to the controlling interest owners
Income (loss), attributable to minority interests
22
INCOME (LOSS)
12,739
54,194
113,904,520
41,768,124
17.47
6.40
-
-
17.47
6.40
INCOME PER SHARE
INCOME PER BASIC SHARE
Income (loss) per basic share in continuing operations
26
Income (loss) per basic share in discontinued operations
INCOME (LOSS) PER BASIC SHARE ($ PER SHARE)
THE ACCOMPANYING NOTES 1 TO 32 ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
Fina ncia l Sta tem ents
75
Wal mar t Chil e
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
2 011 | Annua l R ep o rt
FOR THE PER IODS ENDING DECEMB ER 31 , 2 011 A ND 2 0 1 0, EXPRESSED IN THOUSANDS OF PESOS (Th C h $ )
FOR THE PERIOD FROM
COMPREHENSIVE INCOME STATEMENT
NOTE
01-01-2011
12-31-2011
ThCh$
Income (loss)
01-01-2010
12-31-2010
ThCh$
113,904,520
41,768,124
COMPONENTS OF OTHER COMPREHENSIVE INCOME, BEFORE
TAXES
73,146
112,984
Available-for-sale financial assets
Exchange rate conversion differences
-
-
Cash flow hedging
-
-
Income tax related to components of other comprehensive income
-
-
Other comprehensive income
-
-
113,977,666
41,881,108
113,964,927
41,826,914
12,739
54,194
113,977,666
41,881,108
TOTAL COMPREHENSIVE INCOME
COMPREHENSIVE RESULT ATTRIBUTABLE TO
Comprehensive income attributable to controlling interest's owners
Comprehensive income attributable to minority interests
TOTAL COMPREHENSIVE INCOME
THE ACCOMPANYING NOTES 1 TO 32 ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
76
CONSOLIDATED STATE MENT OF CHANGES IN EQUITY
FOR THE PER IODS ENDING DECEM B ER 31 , 2 011 A ND 2 0 10, EXPRESSED IN THOUSANDS OF PESOS (Th C h $ )
EQU ITY A S OF DECEM B ER 31 , 2 011 .
Initial balance current period as of
01-01-2011
ISSUED
CAPITAL
RESERVES FOR
CURRENCY
CONVERSION
DIFFERENCES
OTHER
MISC.
RESERVES
OTHER
RESERVES
ACCUMULATED
INCOME
(LOSSES)
457,867,231
(133,254)
9,943,850
9,810,596
111,023,392
578,701,219
731,574
579,432,793
-
-
-
-
2,311,407
2,311,407
-
2,311,407
457,867,231
(133,254)
9,943,850
9,810,596
113,334,799
581,012,626
731,574
581,744,200
113,891,781
113,891,781
12,739
113,904,520
73,146
-
73,146
-
73,146
-
73,146
113,964,927
12,739
(54,607,869)
(54,607,869)
Increase (decrease) for error
correction (*)
Restated initial balance
EQUITY
ATTRIBUTABLE
TO CONTROLLING
ENTITIES
MINORITY INTEREST
TOTAL EQUITY
EQUITY
Changes in equity
Comprehens ve income
Income (loss)
Other comprehensive income
Comprehensive income
Dividends
Increase (decrease) for transfers
and other changes
-
(67,899)
(593)
(68,492)
-
5,247
(593)
4,654
457,867,231
(128,007)
9,943,257
9,815,250
Total changes in equity
FINAL BALANCE FOR CURRENT
PERIOD 12-31-2011
113,977,666
(54,607,869)
(68,492)
(719,223)
(787,715)
59,283,912
59,288,566
(706,484)
58,582,082
172,618,711
640,301,192
25,090
640,326,282
EQU ITY A S OF DECEM B ER 31 , 2 010.
RESERVES FOR
EQUITY
OTHER
ACCUMULATED
CURRENCY
OTHER
ATTRIBUTABLE
MINORITY
MISC.
INCOME
CONVERSION
RESERVES
TO CONTROLLING INTEREST EQUITY
RESERVES
(LOSSES)
DIFFERENCES
ENTITIES
ISSUED
CAPITAL
Initial balance current period as of
01-01 2010
457,867,231
(246,238)
9,943,850
9,697,612
112,984
-
112,984
TOTAL
EQUITY
114,423,641
581,988,484
678,003
582,666,487
41,713,930
41,713,930
54,194
41,768,124
-
112,984
-
112,984
41,826,914
54,194
(45,114,179)
(45,114,179)
2,311,407
2,311,407
(623)
2,310,784
Changes in equity
Comprehensive income
Income (loss)
Other comprehensive income
Comprehensive income
Dividends
Increase (decrease) for transfers
and other changes (*)
-
-
-
-
112,984
-
112,984
(1,088,842)
(975,858)
53,571
(922,287)
457,867,231
(133,254)
9,943,850
9,810,596
113,334,799
581,012,626
731,574
581,744,200
Total changes in equity
FINAL BALANCE FOR CURRENT
PERIOD 12-31-2010
41,881,108
(45,114,179)
(*): SEE DETAILS IN NOTE ON NET EQUITY.
THE ACCOMPANYING NOTES 1 TO 32 ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
Fina ncia l Sta tem ents
77
FOR THE PER IODS ENDING DECEM B ER 31 , 2 011 A ND 2 0 10, EXPRESSED IN THOUSANDS OF PESOS (Th C h $ )
2 011 | Annua l R ep o rt
Wal mar t Chil e
CONSOLIDATED INDIREC T CASH FLOW STATEMENT
INDIRECT CASH FLOW STATEMENT
NOTE
12-31-2011
12-31-2010
ThCh$
ThCh$
INDIRECT CASH FLOW STATEMENT CASH FLOW FROM (USED IN) OPERATIONS ACTIVITIES
Income (loss)
113,904,520
41,768,124
Adjustments for income (loss) reconciliation
Adjustments for income tax expense
22,558,779
4,852,831
Adjustments for decreases (increases) in inventories
(32,533,170)
(39,470,208)
Adjustments for decreases (increases) in trade accounts receivable
(91,048,517)
(46,962,118)
Adjustments for decreases (increases) in other accounts receivable from operations activities
(66,877,331)
(5,719,312)
Adjustments for decreases (increases) in trade accounts payable
57,113,442
69,542,170
Adjustments for decreases (increases) in other accounts payable from operations activities
13,495,892
33,835,155
64,721,849
57,969,197
Adjustments for depreciation and amortization expenses
25
24
Adjustments for value impairment (reversals of impairment losses) recognized in the fiscal period
Adjustments for provisions
Adjustments for unrealized losses (gains) in foreign currency
24
Adjustments for non-controlling interests
Adjustments for undistributed income from subsidiaries
13
Other adjustments for items other than cash
Adjustments for losses (gains) for disposal of non-current assets
Other adjustments so that effects on cash are cash flows from investment or financing
Total adjustments for reconciliation of income (loss)
NET CASH FLOWS FROM (USED IN) OPERATIONS ACTIVITIES
1,476,560
3,464,702
62,520,033
70,727,741
6,772,808
674,239
(706,484)
53,571
195,679
768,293
4,413,307
(4,467,232)
(18,060,785)
(253,654)
723,050
13,180,483
24,765,112
158,195,858
138,669,632
199,963,982
CASH FLOW FROM (USED IN) INVESTMENT ACTIVITIES
Cash flow from loss of control of subsidiaries or other businesses
13
30,000,000
-
Cash flow used to obtain control of subsidiaries or other businesses
31
(12,039,524)
-
Amounts from sale of property, plants and equipment
Purchases of property, plant and equipment
Purchases of intangible assets
9,148,432
-
(145,379,513)
(91,048,931)
(3,659,457)
(4,455,258)
Loans to related entities
-
-
Other charges for the sale of equity or debt instruments of other entities
-
311,562
Charges to related entities
337,596
306,043
-
(456,715)
(121,592,466)
(95,343,299)
Short-term loan amounts
346,488,037
215,296,398
Total loan amounts
346,488,037
215,296,398
Dividends paid
(32,954,514)
(45,114,179)
Loan payments
(340,408,747)
(246,529,451)
Other cash inflows (outflows)
NET CASH FLOWS FROM (USED IN) INVESTMENT ACTIVITIES
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Liability payments for financial leases
(5,581,544)
(4,786,869)
Loan payments to related entities
(1,916,364)
(36,095,351)
(21,295,038)
(10,477,240)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
(55,668,170)
(127,706,692)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, BEFORE THE EFFECT OF EXCHANGE RATE
VARIATIONS
(38,591,004)
(23,086,009)
Interest paid
EFFECTS OF EXCHANGE RATE VARIATIONS ON CASH AND CASH EQUIVALENTS
Effects of exchange rate variations on cash and cash equivalents
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
THE ACCOMPANYING NOTES 1 TO 32 ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
78
8
12,827
183,691
(38,578,177)
(22,902,318)
81,123,159
104,025,477
42,544,982
81,123,159
NOTES TO THE CONSOLIDATE D FINANCIAL STATEMENTS
FOR F IS C A L YE A R S ENDED DECEMB ER 31 , 2 011 A ND 2 0 10
1. REPORTING ENTITY
2. BASES FOR PREPARATION
Walmart Chile S.A., hereinafter “Walmart Chile” or the “Company,”
Following is a description of the main accounting policies used in
incorporated in Chile and with domicile in the city of Santiago, Chile,
preparing these consolidated financial statements. The policies have
at Avenida Presidente Eduardo Frei Montalva 8301, Quilicura. Its
been designed based on International Financial Reporting Standards
tax ID number is 96439000-2. Walmart Chile is a public corporation
(hereinafter IFRS) in effect as of December 31, 2011 and standards
and is registered with the Securities and Insurance Supervisor
issued by the SVS applied uniformly to all periods presented in these
(Superintendencia de Valores y Seguros, hereinafter the “SVS”) under
financial statements.
Number 0593. The initial public offering of its shares occurred in Chile
in December 1996 and its shares were registered in the Santiago Stock
The information contained in these consolidated financial statements
Exchange (Bolsa de Comercio de Santiago), Valparaíso Stock Exchange
is the responsibility of the Board of Directors of the group, which states
(Bolsa de Corredores de Valparaíso) and the Chilean Electronic
that it is aware of the information contained in these consolidated
Exchange (Bolsa Electrónica de Chile), where its shares are traded.
financial statements and is responsible for the information contained in
the same and the application of the principles and criteria included in
Part of the consolidated group, the indirect subsidiary Walmart Chile
the IFRS and standards issued by the SVS. These financial statements
Inmobiliaria S.A. is registered with the Securities Registry of the SVS
were approved by the Board of Directors on March 28, 2012
under number 0414.
2.1. Consolidated financial statements
Part of the consolidated group, the indirect subsidiary Walmart Chile
Inmobiliaria S.A. is registered with the Securities Registry of the SVS
These consolidated financial statements of Walmart Chile S.A. and
under number 0414.
its subsidiaries for the fiscal year ended on December 31, 2011 have
been prepared in accordance with the IFRS and its interpretations in
Part of the consolidated group, the indirect subsidiary Servicios y
effect as of December 31, 2011 and standards issued by the SVS.
Administración de Créditos Comerciales Presto S.A. is registered
under number 686 with the credit card issuers and operators
2.2. Bases of Measurement
registry maintained by the Superintendency of Banks and Financial
Institutions.
The consolidated financial statements have been prepared in
accordance with the historical cost principle, except for the valuation
On November 22, 2010, the Company agreed, in an extraordinary
of certain financial assets and liabilities (including derivative financial
shareholders meeting, to change the business name of the company
instruments) that are valued at fair value (see note on financial
from Distribución y Servicios D&S S.A. to Walmart Chile S.A.
instruments).
The Company is made up of a group of companies whose main
The preparation of these consolidated financial statements in
businesses are centered on food distribution through various
accordance with IFRS requires the use of certain critical accounting
supermarket and hypermarket formats, with coverage of the entire
calculations. It also requires that management exercise its judgment
country from Arica to Punta Arenas; commercial credit management
in the process of applying the company’s accounting policies. In the
services; and real estate activities involving land and commercial
note on management estimates and critical judgments or criteria,
establishments.
we provide information about the areas that require a greater degree
of judgment or complexity or the areas where the hypotheses and
The controlling investor of the company is Inversiones Australes Tres
estimates are significant for the consolidated financial statements.
Limitada and the parent company of the company is Wal-Mart Stores
Inc., with a share of 74.61%.
Fina ncia l Sta tem ents
79
Wal mar t Chil e
2 011 | Annua l R ep o rt
The consolidated financial statements are presented using the income
is the Peruvian nuevo sol as indicated in note 3.4. All information is
statement by function and the indirect cash flow statement.
presented in thousands of pesos and has been rounded to the nearest
unit, unless stated otherwise.
2.3. Functional and Presentation Currency
2.4. New standards and interpretations issued and invalid ones
The consolidated financial statements are presented in Chilean pesos,
which is the functional and presentation currency of the company.
At the date of issuance of these consolidated financial statements,
All of the group’s companies based in Chile have determined that
certain amendments, improvements and interpretations to existing
their functional currency is the Chilean peso and that items included
standards have been published that have entered into effect during
in the financial statements of each entity are measured using that
the 2012 fiscal year, and which the company has adopted. Adoption
currency. The functional currency of the subsidiaries based in Peru
of these standards was mandatory as of the dates indicated below:
STANDARDS AND AMENDMENTS
REQUIRED APPLICATION FOR FISCAL
YEARS STARTED ON:
IAS 32
Financial Instruments: Presentation
February 1, 2010
IFRS 1
First-time Adoption of International Financial Reporting Standards
July 1, 2010
IAS 24 (revised)
Disclosure of related parties
January 1, 2011
Amendment to IFRS 1
First-time Adoption of International Financial Reporting Standards
July 1, 2011
Amendment to IFRS 3 (revised)
Business Merger
July 1, 2010
Amendment to IFRS 7
Financial Instruments: Disclosures
July 1, 2010
Amendment to IAS 1
Presentation of financial statements
January 1, 2011
Amendment to IAS 27
Consolidated and separate financial statements
July 1, 2010
Amendment to IAS 34
Interim Information
January 1, 2011
INTERPRETATIONS
REQUIRED APPLICATION FOR FISCAL
YEARS STARTED ON:
IFRIC 14
The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their
Interaction
January 1, 2011
IFRIC 13
Customer Loyalty Programs
January 1, 2011
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
July 1, 2010
Likewise, at the date of issuance of these consolidated financial statements, certain amendments, improvements and interpretations to existing
standards have been published that have not entered into effect and which the company has not yet adopted. Adoption of these standards is
mandatory as of the dates indicated below:
80
NEW STANDARD, IMPROVEMENTS AND AMENDMENTS
REQUIRED APPLICATION FOR
FISCAL YEARS STARTED ON:
IFRIC 7
Financial Instruments: Disclosures
January 1, 2013
IFRIC 9
Financial Instruments: Classification and Measurement
January 1, 2012
IFRIC 10
Consolidated Financial Statements
January 1, 2013
IFRIC 11
Joint Arrangements
January 1, 2013
IFRIC 12
Disclosure of Participation in Other Entities
January 1, 2013
IFRIC 13
Measurement of Fair Value
January 1, 2013
IAS 1
Presentation of Financial Statements
July 1, 2012
IAS 12
Income Taxes
January 1, 2012
IAS 19
Employee Benefits
January 1, 2013
IAS 28
Investments in Associates and Joint Ventures
January 1, 2013
IAS 32
Financial Instruments: Presentation
January 1, 2014
IFRIC 20
INTERPRETATIONS
REQUIRED APPLICATION FOR FISCAL
YEARS STARTED ON:
“Stripping costs” in the production phase
January 1, 2013
The company’s management believes that none of these standards
the identifiable liabilities and contingencies assumed in a business
will have a significant effect on the consolidated financial statements
merger are initially valued at their fair value as of the acquisition
when they are applied.
date, regardless of the extent of minority interests. The acquisition
cost in excess of the fair value of the share of the company in the
3. SIGNIFICANT ACCOUNTING POLICIES
identifiable net assets required is recognized as purchased goodwill.
If the acquisition cost is lower than the fair value of the net assets of
The accounting policies established herein have been applied
the subsidiary acquired, the difference is recognized directly in the
consistently to these consolidated financial statements and have been
income statement.
applied consistently to all of the group’s companies.
With
3.1. Bases of consolidation
consolidation,
unrealized
inter-company
expenses
and
income
transaction
for
balances
transactions
and
between
consolidated entities are eliminated. Losses originating in a
3.1.1. Subsidiaries
transaction between consolidated entities are also eliminated, unless
Subsidiaries are all of the entities that the Walmart Chile Group
the transaction provides evidence of a loss due to deterioration of the
controls. When assessing whether the company controls another
transferred asset. The accounting policies of subsidiaries are modified
entity, the existence and effect of potential voting rights that are
when necessary to ensure uniformity with policies adopted by the
actually exercisable or convertible are considered. The subsidiaries
Walmart Chile group.
are consolidated starting on the date on which control is transferred
and they are excluded from the consolidation on the date on which
The company does not have any special purpose entities.
such control ceases.
3.1.2. Subsidiary entities
To account for the acquisition of subsidiaries, the acquisition method
The direct, first-line subsidiary companies included in the consolidation
is used. The acquisition cost is the fair value of the assets delivered,
and related companies of the different business segments, are the
the equity instruments issued and the liabilities incurred or assumed
following:
on the date of the transaction. The identifiable assets acquired and
SHARE PERCENTAGE
31-12-2011
Taxpayer ID Number
TOTAL
31-12-2010
TOTAL
-
99.9999
99.9999
0.001
100
100
COMPANY NAME
DIRECT
INDIRECT
99.9999
99.999
100
-
100
-
100
100
100
76.724.050-3
Inversiones Walmart Chile Ltda. (*)
76.023.836-8
Inversiones Internacionales D&S Ltda. and subsidiaries
E-0
Inversiones Pacifico LLC
96.829.710-4
Comercial Walmart Chile S.A. and subsidiaries (**)
-
95.723.000-8
Walmart Chile Servicios Financieros S.A. and subsidiaries (***)
-
100
100
100
96.519.000-7
Walmart Chile Inmobiliaria S.A. and subsidiary (****)
-
99.9963
99.9963
99.9963
All of the entities over which the company does not have control have been included in the consolidation.
(*) Through public deed dated May 20, 2011, the company Inversiones D&S Chile Ltda. changed its business name to Inversiones Walmart Chile Ltda.
(**) On July 1, 2011, Sociedad Comercial D&S S.A. changed its business name to Comercial Walmart Chile S.A., a change that was approved in an extraordinary shareholders’
meeting on April 29, 2011.
(***) On July 1, 2011, the company Servicios Financieros D&S S.A. changed its business name to Walmart Chile Servicios Financieros S.A., a change that was approved in an
extraordinary shareholders’ meeting on April 28, 2011.
(****) On July 1, 2011, the company S.A. Inmobiliaria, Terrenos y Establecimientos Comerciales changed its business name to Walmart Chile Inmobiliaria S.A., a change that was approved at
an extraordinary shareholders’ meeting on April 27, 2011.
Fina ncia l Sta tem ents
81
Wal mar t Chil e
2 011 | Annua l R ep o rt
On July 15, 2011 the subsidiary company Inversiones Walmart Chile
Unrealized earnings for transactions between the Walmart Chile
Ltda. acquired the remaining 50% share of the related companies
group and its related companies are eliminated depending on the
Alimentos y Servicios S.A. and Inversiones Solpacific S.A., and as a
share percentage the company holds in them.
result these companies are included in these consolidated financial
statements.
Unrealized losses are also eliminated, except if the transaction
provides evidence of loss due to depreciations of the asset that is
In 2011, a company reorganization process in the retail segment was
begin transferred. The accounting policies of related companies are
implemented. This process entailed the merger of all the companies
modified when necessary to ensure uniformity with policies adopted
operating under the supermarket and hypermarket formats into two
by the Walmart Chile group.
new legal entities that today operate under these formats. This process
simplified the company structure of Wal-Mart Chile S.A. in order to
Dilution gains or losses in related companies are recognized in the
support the company’s growth, make the tax process more efficient
income statement.
and achieve the flexibility necessary for future business requirements.
3.3. Exchange rate and indexation units.
3.1.3. Transactions and non-controlling share
The Walmart Chile group treats transactions with the non-controlling
Assets and liabilities held in foreign currencies and those set in
interest as if they were transactions with group shareholders. In
unidades de fomento are presented at the following exchange rates
the case of non-controlling interests, the difference between any
and closure values, respectively:
compensation paid and the corresponding share in the book value of
the net assets acquired from the subsidiary are recognized in equity.
Income and losses due to write-offs that benefit the minority share, as
long as control is maintained, are also recognized in equity.
CH$ / US$
CH$ / US$
CH$ / PEN
12-31-2010
DATE
468.01
21,455.55
166.79
12-31-2011
519.20
22,294.03
193.27
3.2. Related companies
Related entities are those over which the Walmart Chile group exercises
3.4. Transactions in foreign currency
significant influence but does not control, which generally involves a
share of between 20% and 50% of the voting rights. Investments in
Transactions in foreign currency are translated at the exchange rate
related companies are accounted for using the equity method and are
on the transaction date. Monetary assets and liabilities in foreign
initially recognized at cost. The investment of the Walmart Chile group
currencies at the balance date are translated to Chilean pesos at
in related companies includes the identified goodwill purchased in the
the exchange rate on that date. Exchange rate differences arising
acquisition, net of any loss for accumulated depreciation.
from currency translation are recognized in the income statement by
function. Non-monetary assets and liabilities measured at historical
The Walmart Chile group’s share in losses or gains subsequent to
cost on the basis of foreign currency are translated using the exchange
the acquisition of related companies or subsidiaries is recognized
rate on the transaction date. Non-monetary assets and liabilities in
in the income statement by function and is included in the item
foreign currency and valued at fair value are translated to Chilean
“Share in income (loss) of subsidiaries accounted for using the equity
pesos at the exchange rate on which said fair value was determined.
method in income,” and its share in equity movements subsequent
to the acquisition that do not constitute income, are attributed to the
The financial statements of Inmobiliaria D&S Perú S.A.C and
corresponding equity reserves (and are reflected as appropriate in the
Comercial D&S Perú S.A.C whose functional currency is the Peruvian
Other integral income statement).
nuevo sol (PEN) are converted to the presentation currency as follows:
When the Walmart Chile group’s share in the losses of a subsidiary
* The assets and liabilities of each financial statement presented are
is equal to or greater than its share in the same, including any other
converted at the exchange rate at the closure of each period or
non-guaranteed receivable, Grupo Walmart Chile does not recognize
fiscal year.
additional losses, unless it has incurred obligations or made payments
in the name of the subsidiary.
82
* The
income and expenses of each account are converted at
Depreciation is calculated on the depreciable amount, which
average exchange rates (unless the average is not a reasonable
corresponds to the cost of an asset or another amount that substitutes
approximation of the cumulative effect of exchange rates as of the
for the cost, less its residual value.
transaction dates, in which case the income and expenses are
converted on the transaction dates).
Depreciation is recognized in the income statement in a linear form
over the estimated useful lives of each part of a property, plant
* All resulting exchange rate differences are recognized as a separate
component of net equity, in the “Other reserves” line item.
and equipment line item, given that these more accurately reflect
the expected consumption pattern of the future economic benefits
related to the asset. Assets leased under financial lease contracts
3.5. Property, plant and equipment
are depreciated over the shortest period between the lease and their
useful lives, unless it is reasonably certain that the group will acquire
Property, plant and equipment are recorded at cost and presented
the property at the end of the lease period.
net of their accumulated depreciation and accumulated impairment,
except for land, which is not subject to depreciation.
When parts of an item in Property, plant and equipment have
different useful lives, they are recorded as separate items (important
The cost includes the acquisition price and all costs directly related to
components) of property, plant and equipment.
the location of the asset in the place and conditions necessary so that
it can operate as foreseen by the management, if this exists, as well
The useful lives for the current and comparative periods are detailed
as the initial estimate of the costs of dismantling, removing or partially
as follows:
removing the asset, as well as rehabilitation of the place where it is
located, for which the company is responsible.
Construction or works in progress include, among others, the following
concepts incurred during the construction period:
* Financial
cost related to external financing that are directly
Buildings
50 years
Terminations
15 years
Installations
15 to 20 years
Equipment at properties
15 to 20 years
Exterior works
20 years
Vehicles
4 years
attributable to the construction.Activated financial costs are
Machinery
4 to 5 years
obtained by applying the weighted average cost of long-term
Furniture and office supplies
3 to 4 years
financing to the average cumulative investment that is susceptible
to non-financed activation specifically, as described in IAS 23R.
Methods used to determine depreciation, useful lives and residual
* Personnel costs and others of an operating nature directly related
to the construction.
values are revised in each fiscal period and adjusted prospectively if
necessary . Estimations of certain property, plant and equipment line
items are periodically revised.
Enlargement, modernization or improvement costs that represent
an increase in productivity, capacity or efficiency and therefore an
When the value of an asset is higher than its estimated recoverable
extension of the useful life of the goods are capitalized as greater
amount, its value immediately declines to its recoverable value,
cost of the corresponding goods. Periodic maintenance, conservation
through the application of depreciation tests.
and repair costs are recorded against income as a cost for the fiscal
period in which they are incurred. An element of property, plant and
equipment is written off at the time of its disposal or when future
economic benefits are no longer expected from its use or disposal.
Any profit or loss arising from the write-off of the asset (calculated as
the difference between the net value of disposal and the asset’s book
value) is included in the income statement by function in the period
in which the asset is written-off.
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Losses and gains for sales of property, plant and equipment are
3.7. Intangible assets
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calculated by comparing the income obtained to the book value and
are included in the income statement by function.
3.7.1. Purchased goodwill
Purchased goodwill is the difference between the excess acquisition
3.6. Investment properties
cost and the fair value of the Walmart Chile group’s share in the
identifiable net assets of subsidiaries or related companies as of
Investment properties are real estate (land and buildings)
the acquisition date. Purchased goodwill related to acquisition of
held to obtain economic benefits from their rental or capital
subsidiaries is included in intangible assets.
appreciation. Investment properties and investment properties
under construction are recorded at cost and presented net of their
Purchased goodwill related to acquisitions of related companies is
accumulated depreciation and accumulated impairment, except
included in investments in related companies, accounted for using
for land, which is not subject to depreciation.
the equity method, and is subjected to impairment testing along with
the total amount of the associated investment. Purchased goodwill is
The acquisition cost and all other costs associated with investment
separately subjected to impairment testing annually and is valued at
properties as well as the effects of depreciation and treatment of
cost less accumulated losses due to depreciation. Gains and losses
asset write-offs are recorded as they are for Property, plant and
from the sale of an entity include the book value of purchased goodwill
equipment described in point 3.5 above.
related to the entity sold.
The economic useful lives estimated for the main elements of
The cash-generating unit is defined as the smallest group of assets
investment properties are:
for which an independent cash flow can be identified. In this context,
the company has established that this condition is fulfilled in each
store considered individually. Purchased goodwill is assigned to cash-
Buildings
50 years
Terminations
15 years
Installations
15 to 20 years
generating units for the purpose of impairment testing. Distribution
is carried out between those cash-generating units or groups of
cash-generating units that are expected to benefit from the business
merger in which the goodwill originates.
The residual values of the assets, useful lives and depreciation
methods are reviewed when preparing the financial statements each
Each year, the existence of depreciation of purchased goodwill is
year, and these are adjusted if appropriate as a change in prospective
measured.
estimates.
The greater value from the acquisition of an investment or business
Transfers to investment properties occur only when there is a change
merger is credited directly to the income statement by function.
in use evidenced by the end of occupation by the owners, the start
of an operating lease to another party or the end of construction or
Purchased goodwill does not have a defined useful life.
development. Transfers from investment properties occur only when
there is evidence of a change in use due to the start of occupation
3.7.2. Commercial rights and trademarks
by the owner or the beginning of development with plans to sell and
Commercial rights and trademarks have an indefinite useful life and
the fair value as of the date of the reclassification becomes its cost for
are recorded at cost less accumulated depreciation. Impairment
subsequent accounting.
testing is done annually, whether at the individual level or at the cashgenerating unit level.
3.7.3. Computer programs
Computer software licenses acquired are capitalized on the
basis of the costs incurred to acquire and prepare for using the
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specific program less amortization and accumulated depreciation.
Impairment is recognized if the book value of an asset or its cash-
Amortization is calculated on a linear basis and its effect on income
generating value exceeds its recoverable value. Impairment losses are
is presented in the administrative cost line item.
recognized in the income statement.
The estimated useful lives for the current and comparative periods
Impairment losses recognized in relation to cash–generating units are
are 4 and 5 years.
assigned first, to reduce the book value of any goodwill assigned to
the units and then to reduce the book value of other assets in the unit
Expenses related to development or maintenance of computer
(groups of units) on a pro rata basis.
software are recognized as expenses when they are incurred.
Impairment loss for goodwill is not reverted. Regarding other assets,
3.8. Financing costs
impairment loses recognized in previous periods are evaluated on
the date of each balance to look for any indication that the loss has
Interest costs incurred for construction of any qualified asset are
been reduced or has disappeared. An impairment loss is reverted if
capitalized over the period of time necessary to complete and prepare
there has been a change in the estimations used to determine the
the asset for the intended use, according to IAS NIC 23R. Other
recoverable amount. An impairment loss is only reverted to the extent
interest costs are recorded in income (expenses).
that the book value of the asset does not exceed the book value that
would have been determined, net of depreciation or amortization, if
3.9. Impairment of non-financial assets
the impairment loss had not been recognized.
Assets with an indefinite useful life are not subject to amortization
Goodwill that is part of the book value of an investment in a related
and are subjected to impairment testing each year. Assets subject
company is not recognized separately and as a consequence they are
to depreciation or amortization are subjected to impairment testing
not subjected to separate impairment tests. On the contrary, the total
when some event or change in circumstances indicates that the book
amount of investment in a related company is tested for impairment
value may not be recoverable.
as a unique asset when there is objective evidence that the investment
may be impaired.
The recoverable amount of an asset or cash-generating unit is the
greater value between its value in use and its fair value, less costs
As indicated in the note on criteria for property, plant and equipment,
of sale. To determine value in use, future estimated cash flows are
when the value of an asset is greater than its estimated recoverable
deducted from its present value using a discount rate before taxes
amount, its value is reduced immediately to the recoverable amount
that reflects current market assessment s of the temporary value of
through recognition of impairment losses. As of December 31, 2011,
money and the specific risks that an asset may have. For the purpose
ThCh$1,476,560 was recognized for Property, plant and equipment
of assessing depreciation, assets that cannot be tested individually
(in 2010, this amount was Th$3,464,702 en 2010).
are grouped in the smallest asset group that generates cash inflows
from continued use, which are independent of cash inflows of other
3.10. Categories of non-derivative financial instruments
assets or asset groups (the “cash-generating unit”). Depending on
the date of value testing of an operating segment, for the purpose of
The Walmart Chile group classifies its financial assets in the following
testing goodwill impairment, the cash-generating units that have been
categories: at fair value through profit or loss, loans and accounts
assigned goodwill are added so that the level on which impairment
receivable, and available for sale. The classification depends on the
is tested reflects the lowest level on which goodwill is monitored for
purpose for which the financial assets were acquired. Management
internal reporting purposes.
determines the classification of its financial assets at the time of initial
recognition.
The group’s corporate assets do no generate separate cash inflows.
If there is any indication that a corporate asset may be impaired,
the recoverable amount is determined and assigned for the cashgenerating unit to which the corporate asset belongs.
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3.10.1. Financial assets at fair value through profit or loss
Financial assets are written off for accounting purposes when the
Financial assets at fair value through profit or loss are financial assets
rights to receive cash flows from the investments have expired or
maintained for negotiation or are designated as financial assets at fair
have been transferred and the Walmart Chile group has substantially
value through profit or loss when initially recognized.
transferred all the risks and benefits of ownership.
A financial asset is placed in this category if it is acquired mainly for
Financial assets available for sale and financial assets at fair value
the purpose of sale in the short term.
through profit or loss are later recorded at their fair value (with
a balancing entry in Other comprehensive income and income,
Assets in this category are classified as current assets.
respectively).
3.10.2. Loans and accounts receivable
Loans and accounts receivable are recorded at their amortized cost
Loans and accounts receivable are financial assets with fixed or
according to the effective interest rate method.
ascertainable payments that are not quoted in an active market.
The effective interest rate method is a method of calculating the
Assets in this category are classified as current, except for those
amortized cost of a financial asset or liability (or of a group of financial
with maturities longer than 12 months from the date of the financial
assets or liabilities) and charged to financial income or expense over
statements, which are classified as non-current assets.
the relevant period. The effective interest rate is a discount rate that
ensures that the estimated cash flows to be received or paid over the
Loans and accounts receivable include trade and other accounts
expected lifetime of the financial instrument (or, when appropriate,
receivable and receivables rights.
over a shorter period) are exactly equal to the net book amount of
the financial asset or liability. To calculate the effective interest rate,
3.10.3. Financial assets available for sale
an entity will estimate the cash flows taking into account all of the
Financial assets available for sale are non-derivatives assigned to this
financial instrument’s contractual conditions.
category or which are not assigned to any of the other categories.
Gains and losses that arise from changes in the fair value of financial
They are included in non-current assets unless management plans
assets to fair value through profit or loss are included in the income
to dispose of the investment within 12 months from the date of the
statement by function in the fiscal period in which such changes in
financial statements.
fair value are generated.
3.10.4. Recognition and measurement of financial assets
Dividend income from financial assets at fair value through profit or
Acquisition and disposal of financial assets are recognized at the
loss and available for sale are recognized in the income statement by
negotiation date; in other words, the date on which the Walmart Chile
function, in the other income item, once the right of the Walmart Chile
group makes a commitment to acquire or sell the asset.
group to receive the dividend payments has been established.
Financial assets are initially recognized at their fair value plus
3.11. Derivative financial instruments
transaction costs, for all financial assets not charged at fair value
through profit or loss. Transaction costs include fees and commissions
The Walmart Chile group uses derivative financial instruments
paid to agents (including employees who act as sales agents),
such as interest rate swap and currency forward contracts to
advisors and intermediaries, rates established by regulatory agencies
hedge against risks related to fluctuations in interest rates and
and securities exchanges, as well as taxes and other duties to which
exchange rates that affect its financial obligations to banks and
the transaction is subject. Transaction costs do not include premiums
related companies. Such derivative financial instruments are
or discounts on debt, financial costs, maintenance costs or internal
initially recognized at fair value on the date on which the derivative
administrative costs.
contract is signed and are measured again at fair value thereafter.
Derivatives are recorded in the Other financial assets item if they
Financial assets at fair value through profit or loss are initially
have a positive value and in the Other financial liabilities item if
recognized at their fair value, and the transaction costs are charged
they have a negative fair value.
to income.
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Any profit or loss arising from changes in the fair value of
In order to properly record its stock, the company makes estimates
derivatives during the fiscal period is directly recorded in the
for damage and obsolescence of its inventories. These estimates
income statement by function in the Other income or expenses
are based on historical experience and rotation of its articles and
item, by function.
are reviewed at the closure date of each fiscal period.
3.12. Impairment of financial assets
3.14.Trade and other receivables
A financial asset that is not recorded at fair value through profit
Trade and other receivables are initially recognized at their fair value
or loss is assessed at each balance date to determine if there is
(a nominal value that includes implicit interest) and later at their
objective evidence of impairment. A financial asset is impaired if
amortized cost according to the effective interest rate method, less
there is objective evidence that a loss event has occurred after
any reduction for value impairment.
initial recognition of the asset, and that this event has had a
negative effect on future cash flows of the asset that can be reliably
An estimate is established for impairment losses of trade receivables
calculated.
when there is objective evidence that the company will not be
able to collect all of the amounts owed to it in accordance with the
When evaluating collective impairment, the group uses variables
original terms of the accounts receivable. Some indicators of possible
based on arrears, cash flows related to charges to customers,
impairment of accounts receivable are the debtor’s financial difficulties,
recoveries, customer segments, types of products, the amount of
the likelihood that the debtor is entering into bankruptcy or financial
the loss incurred and comparisons with recognized practices in
reorganization and non-compliance or failure to make payment, as
the financial market, adjusted according to management’s opinion
well as experience regarding the behavior and characteristics of the
regarding whether current economic and credit conditions are
portfolio as a whole.
likely to result in the real losses being greater or smaller than those
suggested by historical trends.
For the purposes of assessing and recording impairment, the portfolio
is segmented by type of debtor and credit up to the levels deemed
An impairment loss related to a financial asset valued at amortized
appropriate. Currently, trade receivables include only operations that
cost is calculated as the difference between the asset’s book value
can be classified as consumption, so their information only refers to
and the present value of estimated future cash flows, discounted
this concept.
at the effective interest rate. Losses are recognized on the income
statement and are reflected in a provision account against accounts
The estimate of impairment is based on a loss approach that seeks to
receivables (see chart on impairment of trade receivables and other
capture objective evidence of impairment of operations, enabling the
expired and unpaid with impairment, in the note on Trade and
company to predict which future flows will not be received as agreed.
other accounts receivable item). Interest on the impaired asset will
Also taken into consideration are expectations of payment, in terms
continue to be recognized through reversal of the effective rate.
of both amount and timing and the valuation of such losses based
When a subsequent event causes a reduction in the loss amount,
on the difference between contractual flows and flows adjusted for
this reduction is reversed on the income statement.
3.13. Inventory
Inventories are valued at the lesser of acquisition cost or net
realizable value. Net realizable value represents the estimated
sales value of the inventory, during the normal course of business,
less all remaining production costs (own manufactured goods)
and the costs necessary to carry out the sale. The costing method
corresponds to the weighted average price. Stock in transit is
valued at the acquisition cost.
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impairment. The latter are updated at the effective interest rate of
income statement over the life of the debt according to the effective
placement. The amount associated with the estimation of impairment
interest rate method.
is presented net of trade and other accounts payable and its effect
on income is recognized by recording it in Administrative expenses.
3.19. Current and deferred income taxes
3.15. Cash and cash equivalents
Deferred income taxes recorded on the income statement by function
for the year includes current and deferred income taxes.
Cash and cash equivalents includes cash balances, bank and other
investments in fixed-income mutual fund shares in pesos with a
Income taxes are directly recognized on the income statement by
maturity of less than three months. In the financial statements,
function except for those related to items that are directly recognized
overdrafts, if any, are classified as loans in current liabilities at
in equity.
amortized cost.
Current income tax is the tax expected to be paid for the year,
3.16. Paid-in capital
calculated using rates in effect on the date of the balance and also
including any adjustment to the tax to be paid for previous years.
Paid-in capital is represented by ordinary shares of a single class.
Deferred income tax is calculated taking into account the differences
The incremental costs directly attributable to issuance of new shares are
between the book value of the assets and liabilities reported for
presented in net equity as a deduction, net of capital gains taxes resulting
financial purposes and the amounts used for tax purposes.
from issuance of shares.
Deferred taxes are valued at tax rates expected to be applied when
According to the company’s statutes, at least 30% of annual profits must be
the temporary differences are reversed, based on the laws that have
distributed as cash dividends, unless otherwise unanimously agreed on at
been approved or are about to be approved as of the balance sheet
the Shareholders’ Meeting by all shares issued.
date. Deferred tax assets and liabilities are presented in net form,
if there is an enforceable legal right to adjust current tax liabilities
3.17.Trade and other payables
and assets for current taxes, and they are related to the income tax
applied by the same tax authority to the same taxpaying entity, or to
Trade and other payables are recognized at amortized cost, which is
different taxpaying entities, but the current tax liabilities and assets
not different from their nominal value, as their average time of payment
are to be settled in net form, or its tax assets and liabilities are realized
is reduced.
at the same time.
3.18. Loans and other financial liabilities
A deferred tax asset is recognized to the extent that it is likely that
there will be future taxable profits against which the asset can be
The group initially recognizes debt instruments issued and financial
utilized. Deferred tax assets are reduced to the extent that it is not
liabilities on the date of their origination. All other financial liabilities
likely that the related benefit is obtained.
(including liabilities designated at fair value through profit or loss)
are initially recognized at the transaction date in which the group
The company does not record deferred taxes on temporary
becomes a party to the contractual provisions of the instrument.
differences that arise between investments in subsidiaries and related
companies, as the date on which these will revert is monitored and it
The group writes off a financial liability when its contractual obligations
is likely they will not do so in the foreseeable future.
are settled or expire.
A deferred tax asset is recognized for unused tax losses, tax credits
Loans, public obligations and financial liabilities of a similar nature
and temporary deductible differences, to the extent that it is likely
are initially recognized at their fair value, net of costs incurred in the
that future taxable gains will exist against which these can be used.
transaction. Subsequently, they are valued at amortized cost and any
Deferred tax assets are reviewed at each balance sheet date and
difference between the funds obtained (net of the costs necessary
reduced when it is not likely that the related tax benefits will be
to obtain them) and the reimbursement value is recognized in the
obtained.
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3.20. Employee Benefits
3.22. Revenue from ordinary activities
Employee benefits are recognized when there is a current legal or
Ordinary revenue includes the fair value of the considerations received or
constructive obligation to pay the amount as a result of a service
to be received for the sale of goods and services in the ordinary course of
provided by the employee in the past and the obligation can reliably
the company’s activities. Ordinary revenue is presented net of sales tax,
be estimated.
returns and discounts.
3.20.1. Personnel vacation
The company recognizes revenue when the amount of the same can
The company recognizes an expense for personnel vacations to the
reliably be calculated, it is likely that future economic benefits are going to
extent that they provide the service. This is a short-term obligation that
be received by the entity and the specific conditions are met for each of
is measured on a non-discounted basis.
the company’s activities. It is not considered possible to value the amount
of revenue accurately until all contingencies related to the sale of the good
3.20.2. Incentives
or service provision have been resolved.
The company provides an annual incentive plan for its employees for
fulfillment of objectives and individual contributions to results.
Revenue from the sale of merchandise is recognized in the income
statement when the significant risks and benefits of ownership of the
The incentives, which are eventually delivered, consist of a certain
goods are transferred to the buyer. Revenue is not recognized if there
number or portion of monthly salaries and are recognized when they are
is significant uncertainty about collection, the associated costs, possible
likely to be paid and their amount can reliably be estimated.
return of goods or continued administrative involvement in the same.
3.21. Provisions
Income from financial interest and adjustments is accrued as a function
of the placement of consumer loans based on the capital that is pending
Provisions are recognized when the group has a present (legal or
payment, and is recognized using the effective interest rate method. The
constructive) obligation as a result of a past event and it is likely that a
effective interest rate is the discount rate that exactly balances the cash
resource disbursement, including economic benefits, will be required
flows to be received with the net book value of the asset. Calculation of
to settle the obligation and a reliable estimate can be made of the
the effective interest rate, when it corresponds to commissions and other
obligation amount. When the group expects that part or all of the
paid items like transaction costs, is incremental and directly attributable
provision will be reimbursed, for example under an insurance contract,
to the transaction.
the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense related to any provision
The main operations that generate financial interest income are:
is presented in the income statement net of any reimbursement. If the
effect of the value over time of the money is material, the provisions are
* interest
on installment credit: this is the interest agreed at the
discounted using a rate that reflects, when appropriate, the specific
effective date of the transaction and is calculated by applying the
risks of the liability. When the discount is used, the increase in the
rate (in base 365) to the unpaid credit balance at the time the
provision owing to the passage of time is recognized as a financial cost.
installment is invoiced.
A provision for onerous contracts is recognized when the economic
benefits that the group anticipates from this contract are less than
the inevitable costs of complying with the contract obligations. The
provision is recognized at the present value of the lesser of the
anticipated costs of settling the contract and the net cost anticipated
of continuing with the contract. Prior to establishing a provision, the
group recognizes any impairment loss of the assets associated with
the contract.
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and to the “Lider pesos,” and the latter become a form of deferred
daily basis or projected according to a parametrized revolving rate.
income in liabilities until they are used. The amount of the deferred
This interest is charged daily starting on the maturity date and until
income includes the estimate of the likelihood that the “Lider pesos”
invoicing (inclusive). On the invoicing date, a projection is made
will be used. The fair value of “Lider pesos” is equivalent to the same
of interest from the date following invoicing to the date of maturity.
amount of pesos expressed in the company’s functional currency: the
When maturity occurs the next month, the interest is projected to
Chilean peso. “Lider pesos” are used by clients as a means of payment
the end of the month, and the second projection is from the first
for their purchases in the company’s stores.
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* Line of credit or revolving interest: This calculation is done on a
day of the month until the day before maturity.
3.23. Leases
* Interest for arrears: this is calculated based on the overdue debt
the customer maintains. This calculation is done on a daily basis
3.23.1. The group as lessee
or projected according to a parametrized arrears rate. This interest
Financial leases, which transfer to the group substantially all of the
is charged daily starting on the maturity date and until invoicing
risks and benefits incidental to the property of the leased item, are
(inclusive). On the invoicing date, a projection is made of interest
capitalized at the beginning of the lease period at the fair value of the
from the date following invoicing to the date of maturity. When
property leased or if lower, at the present value of the minimum lease
maturity occurs the next month, the interest is projected to the end
payments. Lease payments are distributed among the financing
of the month, and the second projection is from the first day of the
charges and the reduction of the lease obligation to obtain a constant
month until the day before maturity.
interest rate on the pending balance of the liability.
Income for commissions is recognized in the consolidated income
Financial costs are charged in the income statement by function.
statement using different criteria, depending on the nature of the
commissions. Those that correspond to a single act are recorded
Leases in which the lessor conserves a significant part of the risks
directly in the income statement. Those that originate in transactions
and benefits of ownership of the good are classified as operative
or services that occur over time are accrued over the credit term.
leases. Payments for operative leases (net of any incentive received
from the lessor) are charged in the income statement by function on
Income from logistical services is recognized on an accrual basis
a linear basis over the lease period.
depending on the business agreements in effect, as long as the result
of the transaction can accurately be estimated.
3.23.2. The group as lessor
When assets are leased under a financial rental agreement, the
Income from the lease of investment properties is recognized in the
current value of the lease payments is recognized as an account
income statement using the linear method during the rental period.
receivable. The difference between the gross amount to be
Other services are recognized on an accrual basis depending on the
received and the current value of that amount is recognized as a
conditions established in the contracts and business agreements.
financial return on the capital.
Walmart Chile maintains a customer loyalty program known as “Mi Club
Income from financial leases is recognized in the lease period
Lider”. Each time a client buys a product included in the promotion,
using the net investment method, which reflects a constant
whether at Walmart Chile or at a related business, he or she receives
periodic rate of return.
“Lider pesos,” which can be exchanged for products in the quarter
following the one in which they were generated. According to IFRIC 13,
Assets leased to third parties under operative lease contracts are
each time a customer buys a product that generates “Lider pesos,” the
included in the Property, plant and equipment item or Investment
amount received is assigned proportionally to the products acquired
property item, whichever is applicable.
Income derived from operative leases is recognized in linear form
over the rental period.
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3.24. Distribución de dividendos
3.28. Financial income and financial costs
According to Article 79 of Law 18,046, public companies must
Financial income is comprised of interest income on invested funds
distribute at least 30% of profits to their shareholders as dividends.
(including financial assets available for sale), dividend income, gains
Dividends are recognized when the payment obligation is established.
from the sale of financial assets available for sale, changes in the
fair value of financial assets at fair value through profit or loss and
Dividends to be paid to Walmart Chile S.A. shareholders are recognized
gains from hedging instruments that are recorded in income. Interest
as a liability in the financial statements in the period in which they are
income is recognized in the income statement at amortized cost using
declared and approved by the company’s shareholders or when the
the effective interest rate method. Dividend income is recognized
corresponding obligation is undertaken to current legal provisions or
in the income statement on the date on which the group’s right to
distribution agreements established by the shareholders.
receive payments is established.
This liability is recorded in the Other current non-financial liabilities
Financial costs are composed of interest expenses for loans or
item and the movement for the year is recorded in the Statement of
financing, rectification of discounts on provisions, changes in fair value
Changes in Equity in Net consolidated equity, in the Dividends line.
of financial assets to fair value through profit or loss, impairment loses
recognized in financial assets and losses in hedging instruments that
3.25. Earnings per share
are recognized in income. Loan costs that are not directly attributable
to the acquisition, construction or production of a qualified asset are
Basic earnings per share are calculated by dividing the profit
recognized in income using the effective interest rate method.
attributable to the common shareholders of the company among the
weighted average number of common shares in circulation during
3.29. Environment
the year, excluding, if any common shares acquired by the company
and maintained as treasury shares.
Disbursements related to environmental protection are recorded
against income as they are made.
3.26. Financial information by operating segments
3.30. Contingent assets and liabilities
An operating segment is a component of the group that
participates in business activities in which it may obtain income
A contingent asset is a possible asset, arising from past events, whose
or incur expenses, including income and expenses related to the
existence will be confirmed only if one or more uncertain events occur
other components of the group.
in the future and these events are not entirely under the control of the
company.
Information by segment is presented consistently with internal
reports provided to those responsible for taking the relevant
A contingent liability is a possible obligation arising from past events
operating decisions. These executives are responsible for
whose existence will only be confirmed only if one or more uncertain
assigning resources and evaluating the performance of operating
events occurs and these events are not entirely under the control of
segments, which have been identified as: retail, real estate and
the company.
financial services, for those who take strategic decisions, as
indicated in IFRS 8 “Operating segments”. Information related to
As of December 31, 2011 and 2010, the company does not have any
the operating segments of the company is disclosed in the note on
recorded contingent assets or liabilities.
Information by segments.
3.27. Other non-financial assets
Advance lease payments are recorded, related to the various longterm lease operations of stores. The advance lease payments are
recorded at their historical cost and amortized over the duration of
the respective contracts.
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4. CHANGES IN ACCOUNTING ESTIMATES
will vary as a result of fluctuation in foreign currency exchange rates,
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thereby affecting the group’s income or the value of the financial
During the year ended December 31, 2011, no accounting changes
instruments held by the group.
were adopted.
Exchange rate risk is managed in an effort to control exposure in
5. RISK MANAGEMENT POLICY
the face of market changes, within reasonable parameters, while
simultaneously optimizing returns.
5.1. Financial Risk Factors
The Chilean peso is the group’s functional currency, used for setting
The Company’s activities are exposed to various types of financial risk:
prices for services, composing its balance sheet and determining
the effects of operations on income. As of December 31, 2011, the
a) Market Risk
company does not have accounts receivable in foreign currency.
b) Liquidity Risk
c) Credit Risk
The company’s financial debt is denominated as follows: 61%
in unidades de fomento, 33% in pesos and 6% in dollars. As of
The company’s global risk management program is centered on
December 31, 2011, the company has US$ 80.4 million in foreign
the uncertainty of financial markets and aims to minimize potential
currency-denominated financial debt.
adverse effects on the company’s financial returns.
As of December 31, 2011, the average annual exchange rate for the
The company uses derivatives to hedge against certain
U.S. dollar was Ch$519.20 -- 10.9% higher than the December 31,
aforementioned risks.
2010 closing rate of Ch$468.01.
a) Market Risk
Given the aforementioned exchange rates, a sensitivity analysis
Due to the nature of its operations, the Company is exposed to the
was conducted to determine the potential effect of exchange rate
following types of market risk:
fluctuation on the company’s income. The analysis considered the
portion not covered by the natural hedge between assets and liabilities
(i) Currency exchange rate risk
held in foreign currency and accounted for variations of ±10% in the
Foreign currency exchange rate risk is the risk that market prices
average value of the dollar as of December 31, 2011.
SCENARIOS
US$ CLOSING
ThCh$
ThCh$
US$+10%
ThCh$
Dates
ThUS$
As of 12-31-2010
47,071
22,029,666
22,029,666
22,029,666
As of 12-31-2011
80,434
18,528,578
20,587,309
22,646,040
3,501,088
1,442,357
(616,374)
EFFECT IN EXCHANGE RATE DIFFERENCE
FLUCTUATIONS IN CLOSING DOLLAR/PESO
EXCHANGE RATE
92
US$-10%
EFFECT ON INCOME
DECEMBER 2011
+10%
(2.058.731)
-10%
2.058.731
As shown in the preceding table, the sensitivity analysis suggests that the effect on the company’s income could have increased (decreased) by
ThCh$ 2,058,731 in 2011, in the face of ± 10% fluctuations in the average U.S. dollar exchange rate as of December 31, 2011.
CURRENCY
BALANCE AS OF
12-31-2011
ThCh$
ThCh$
Cash and cash equivalents
Ch$
40,375,166
78,490,770
Cash and cash equivalents
US$
2,082,547
2,540,868
Cash and cash equivalents
PEN
68,401
84,094
Cash and cash equivalents
EUR
18,868
7,427
Other current financial assets
US$
40,243,620
-
Other current non-financial assets
Ch$
5,225,093
3,931,163
Trade and other accounts receivable, current
Ch$
282,517,789
266,078,532
ASSETS
BALANCE AS OF
12-31-2010
Accounts receivable from related entities, current
Ch$
-
337,596
Inventories
Ch$
217,100,494
179,183,149
Current tax assets
Ch$
31,309,756
15,085,875
Non-current assets or asset groups for disposal classified as maintained for sale
Ch$
6,158,823
-
625,100,557
545,739,474
TOTAL CURRENT ASSETS
Other non-financial assets, non-current
Ch$
25,012,096
27,530,994
Non-current collection rights
Ch$
79,600,103
60,725,471
Investments recorded using the equity method
Ch$
0
15,433,091
Intangible assets other than goodwill
Ch$
13,878,228
16,543,073
Goodwill
Ch$
29,948,810
325,379
Property, plant and equipment
Ch$
1,018,228,178
899,065,309
136,120,131
Investment properties
Ch$
129,655,015
Deferred tax assets
Ch$
53,343,901
50,995,898
TOTAL NON-CURRENT ASSETS
Ch$
1,349,666,331
1,206,739,346
1,974,766,888
1,752,478,820
TOTAL ASSETS
Fina ncia l Sta tem ents
93
Wal mar t Chil e
CURRENCY
BALANCE AS OF
12-31-2011
ThCh$
ThCh$
Other current financial liabilities
Ch$
101,126,594
49,796,071
2 011 | Annua l R ep o rt
LIABILITIES
BALANCE AS OF
12-31-201o
Other current financial liabilities
US$
30,882,140
33,849,208
Trade and other accounts payable
Ch$
430,713,247
335,277,217
Trade and other accounts payable
US$
10,786,997
16,087,185
Accounts payable to related entities, current
Ch$
686,944
2,556,062
Accounts payable to related entities, current
Ch$
74,543
435,380
Other short-term provisions
Ch$
7,307,859
6,512,029
Current tax liabilities
Ch$
26,429,789
11,802,681
Current provisions for employee benefits
Ch$
30,326,249
25,378,054
Other current non-financial liabilities
Ch$
38,971,108
24,724,313
TOTAL CURRENT LIABILITIES
677,305,470
506,418,200
Other non-current financial liabilities
Ch$
337,426,703
349,249,622
Accounts payable to related entities, non-current
Ch$
289,398,245
278,513,957
Other long-term provisions
Ch$
0
2,019,140
Deferred tax liabilities
Ch$
27,271,190
31,291,466
Non-current provisions for employee benefits
Ch$
60,000
92,061
Other non-current non-financial liabilities
Ch$
2,978,998
3,150,174
657,135,136
664,316,420
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
1,334,440,606
1,170,734,620
Capital issued
Ch$
457,867,231
457,867,231
Cumulative income (losses)
Ch$
172,618,711
113,334,799
Other reserves
Ch$
9,815,250
9,810,596
640,301,192
581,012,626
NET EQUITY ATTRIBUTABLE TO OWNERS OF THE CONTROLLING INTEREST
Minority interests
CL$
TOTAL EQUITY
Total patrimonio neto y pasivos
25,090
731,574
640,326,282
581,744,200
1,974,766,888
1,752,478,820
(ii) Interest rate risk
(iii) Inflation Risk
The company’s interest rate risk stems from its third-party debt. The
Inflation risk is the risk that changes in market prices, resulting from a
company’s variable interest rate debt exposes it to cash flow interest
country’s domestic inflation, affect the group’s revenue or the value of
rate risk, while its fixed interest rate debt exposes it to fair value
the financial instruments it holds. Inflation risk is managed in an effort
interest rate risk.
to control exposure in the face of inflation-related market changes,
within reasonable parameters, while simultaneously optimizing
The company’s exposure to risks associated with market interest
returns.
rate fluctuations is low, given that a significant percentage of its
debt is structured at a fixed rate, either directly or through derivative
As of December 31, 2011, the company held 62% of its financial debt
contracts.
in UF, resulting in fluctuations in the debt’s peso-denominated value.
In order to quantify the effect on the company’s pre-tax income, a
The results of the sensitivity analysis on variable rate debt, as of
sensitivity analysis was performed to examine the effects of a +/-10%
December 31, 2011, are that a 10% increase in the interest rate
fluctuation in the value of the UF, as of December 31, 2011.
would have increased expenses by ThCh$1,298.
The Company has a cross currency swap, which is used to transform
debt from pesos to UF and from variable rate to fixed-rate.
94
If the UF had risen 10%, pre-tax income would have decreased by
Management monitors the company’s cash position daily and
ThCh$1,525,000 and the opposite would have occurred had the UF
continuously makes liquidity projections, with the objective of paying,
dropped by 10%.
pre-paying, refinancing and/or obtaining new loans, in accordance
with the company’s ability to generate cash flow.
b) Liquidity Risk
Liquidity risk is defined as the company’s probability of monetary
As of December 31, 2011, the company had approved and renewable
loss, due to difficulty complying with short-term obligations and/or
short-term lines of credit for ThCh$218,000,000, which reasonably
difficulty obtaining financing in order to continue normal operations.
reduces liquidity risk.
A time lapse between cash disbursements and receipts translates
into the company’s inability to comply with the terms and conditions
The following is an analysis of financial liabilities, grouped by maturity:
of contractual commitments to creditors and an inability to execute
business plans.
Prudent liquidity risk management implies holding sufficient cash;
ensuring adequate available financing, through committed loans; and
the ability to liquidate market positions.
BALANCE AS OF DECEMBER 31, 2011
NOMINAL CONTRACTUAL FLOWS
LIABILITIES
BOOK VALUE
ThCh$
UP TO 1
YEAR
ThCh$
FROM MORE
THAN 1 TO 3
YEARS
FROM MORE
THAN 3 YEARS
TO 5 YEARS
FROM MORE
THAN 5 YEARS
TO 10 YEARS
MORE THAN
10 YEARS
ThCh$
ThCh$
ThCh$
ThCh$
TOTAL
ThCh$
Non-guaranteed bank loans
313,698,728
103,241,824
199,800,266
-
-
-
303,042,090
Public obligations (bonds)
106,798,457
6,778,121
28,683,939
12,088,376
30,220,558
76,594,828
154,365,822
34,576,060
9,499,964
12,544,366
8,351,750
9,764,027
12,424,671
52,584,778
290,159,732
13,232,715
26,393,120
26,429,275
329,024,080
-
395,079,190
Financial lease obligations
Accounts payable to related companies
Trade and other accounts payable
SUBTOTAL
Derivative instruments
Total
441,500,244
441,500,244
-
-
-
-
441,500,244
1,186,733,221
574,252,868
267,421,691
46,869,401
369,008,665
89,019,499
1,346,572,124
14,362,192
2,024,666
21,578,328
-
-
-
23,602,994
1,201,095,413
576,277,534
289,000,019
46,869,401
369,008,665
89,019,499
1,370,175,118
BALANCE AS OF DECEMBER 31, 2010
Flujos nominales contractuales
LIABILITIES
BOOK VALUE
ThCh$
UP TO 1 YEAR
ThCh$
FROM MORE
THAN 1 TO 3
YEARS
ThCh$
FROM MORE
THAN 3 YEARS
TO 5 YEARS
FROM MORE
THAN 5 YEARS
TO 10 YEARS
MORE THAN
10 YEARS
ThCh$
ThCh$
ThCh$
TOTAL
ThCh$
291,985,325
60,446,672
212,996,553
19,264,669
-
-
292,707,894
Public obligations (bonds)
105,021,997
2,705,602
19,577,343
4,960,408
13,771,541
65,867,976
106,882,870
Financial lease obligations
19,777,331
5,070,917
4,687,172
2,325,928
15,145,711
1,049,869
28,279,597
Accounts payable to related companies
281,647,255
12,700,236
25,435,268
25,400,473
329,384,493
-
392,920,470
Trade and other accounts payable
351,364,402
351,364,402
-
-
-
-
351,364,402
1,049,796,310
432,287,829
262,696,336
51,951,478
358,301,745
66,917,845
1,172,155,233
16,110,248
5,676,402
12,644,825
2,848,030
-
-
21,169,257
1,065,906,558
437,964,231
275,341,161
54,799,508
358,301,745
66,917,845
1,193,324,490
Non-guaranteed bank loans
SUBTOTAL
Derivative instruments
Total
Fina ncia l Sta tem ents
95
Wal mar t Chil e
c) Credit Risk
standardized and automated. In the standardization and automation
2 011 | Annua l R ep o rt
process, Walmart Chile has placed paramount importance on
Definition of Credit Risk
guidelines established by the Risk Committee, separation of functions,
Credit risk is the group’s risk of financial loss if a customer or
credit policies that are constantly tested for loss rates, adapting to
counterpart in a financial instrument does not fulfill contractual
economic cycles, and using world-class platforms and scoring models
obligations. This default or non-recoverability originates primarily from
in each phase of the credit process, all of which take into account the
loans and advances to customers through credit card operations.
various segments in which the business operates.
Business Characteristics
Credit Risk Management
The activities and businesses the institution engages in are limited to
The Risk Committee is the company’s highest authority in matters of
those approved by the Board of Directors and the Walmart Chile Risk
credit risk management. The Committee has delegated execution of
Committee. According to the guidelines of Walmart Chile Servicios
the credit risk management policy to the Risk and Collections Division,
Financieros S.A., a Walmart Chile subsidiary, the main objective of the
which answers directly to General Management. Risk policies are
financial business is to create and develop a retail consumer bank,
ratified by the company’s Board of Directors.
targeting all socioeconomic segments. In its initial borrowing stage,
the bank is tied to Walmart Chile’s commercial business, contributing
The Risk and Collections Division is absolutely independent of
to the value created by the group in Chile. Another institutional goal
Walmart Chile’s commercial areas: financing and retail. Execution of
is development of other businesses that add value to the market, in
the credit model is decentralized. The operations and general audit
hopes that they will be valued by customers and support a growth
areas are responsible for balancing interests in the credit approval
strategy that is stable and produces the returns shareholders expect.
processes conducted in Presto branches. However, general credit
policy decisions are made centrally by the Risk and Collections
Walmart Chile Servicios Financieros S.A. offers value to customers
Division and executed via the general credit platform.
of the company’s various supermarket formats, providing a payment
method that encourages customer loyalty and provides additional
Stages in the credit risk management process
financing options for purchases.
Origination and collections processes
Obtaining, certifying and validating customer information according
The Presto card’s value is expanded through the option of using the
to evaluation guidelines, and consequently approving sale of the
card as a payment and/or financing method at associated businesses,
products, is of the utmost importance during the origination and
including service stations, pharmacies and retail establishments.
collections processes. No large-scale risk approval system can be
successful if customer information is not properly entered into the
Likewise, Walmart Chile complements its range of products with a
evaluation and control systems; or if the customer information entered
series of financial products and services. The most noteworthy of
is not accurate and complete.
these are general and life insurance, travel and payment of services,
among others, which support the “one-stop shopping” concept.
Presto’s evaluation model is based on strict compliance with the
credit policy, a scoring system and minimum approval score, which
The Presto card’s strategic objective is to facilitate consumer financing
takes into account the business’ maximum acceptable loss rate. The
for Chilean families in the A,B,C1,C2,C3 and D socioeconomic
cut-off score is established by the Risk Committee.
segments. The card seeks to provide services across segments,
supporting the retail business strategy, by serving the underserved.
The process is performed by an automated evaluation system that is
programmed with the authorized credit policy. The system accepts
Operating a widely available credit card requires that, from the
or rejects applicants and establishes a credit limit, along with
beginning of credit operations, loan and collections processes be
corresponding lines of credit.
96
The face-to-face evaluation process begins when an applicant
Credit Risk Analysis
provides his/her information. The sales representative then analyzes
Given the nature of the company’s loans, risk assessment to
the information, verifying that the information is accurate and/or not
determine the loss incurred by the portfolio is conducted via group
fraudulent, and the information is entered into the credit evaluation
evaluation models.
system.
The first criterion for portfolio segmentation is adequate identification
All of the information provided by the applicant and entered into the
of the renegotiated portfolio. Additional segmentation criteria are also
system is subject to audit and verification of compliance with all of
used to identify and directly monitor specific groups within normal
the policies, procedures, manuals, work instructions, informational
and renegotiated portfolios, according to profiles, risk levels and
bulletins and memos related to opening accounts. The branch is
characteristics of operations.
responsible for ensuring correct entry of information and compliance
with company standards.
The variables that are used to develop models and calculate provisions
include: (a) attributes and characteristics of various groups of
Determining an applicant’s credit limit is as crucial as the rest of the
customers; (b) internal behavior variables, especially, arrears in credit
variables to be considered in the credit evaluation process. Since it
operations and debtor payment behavior; (c) behavior variables that
is so important, the company has established a policy for calculating
are external to customers; (d) renegotiation or payment arrangements
credit limits that takes into consideration acceptable maximums,
with debtors.
according to the commitment levels that can be established for
each customer. The process begins by establishing the amount of
Credit risk is managed by groups of customers. The objective is to
income to be considered as a basis. Then the monthly ability to pay
continuously evaluate the entire loan portfolio, so as to make the
is estimated and the amount of credit to be extended is determined.
necessary provisions in a timely manner and ensure that provisions
are sufficient for covering losses in the event that loans are not
Credit limits are established on the basis of two analyses: maximum
recovered.
financial burden and maximum times monthly income. The former
represents the monthly financial burden, while the latter considers
Given the nature of the portfolio, a group evaluation model is applied.
the applicant’s total borrowing or leverage. Each analysis is conducted
This is because:
as a function of the customer’s income and risk level at the time of
evaluation.
* Credit is granted to individuals.
Together, the concepts of maximum financial burden and maximum
* The volume of credit operations conducted is high.
times monthly income produce an amount-term ratio that is
instrumental in the credit approval process. The company manages
* The credit limits authorized for each customer are low.
account origination via its New Business Strategy Management
platform by Experian (U.K.). Account maintenance, credit-limit
The entire portfolio can be modeled around homogenous customer
increases, blocks, product upgrades, etc. are managed using the
characteristics, which allows the company to identify segments with
Blaze platform by Fair Isaac (U.S.). Both of those companies are
varying probabilities of loss.
global leaders in the credit risk management solutions industry.
Risk measurement includes indicators such as: 30 days overdue,
Finally, in order to carry out collections, the company has recently
60 days overdue, 90 days overdue, annual write-off rate, payments
created its collections subsidiary, Servicios y Cobranzas, Ltda.
and percentage of portfolio that is renegotiated. Methodologies used
(Seyco), which manages all stages of the collections cycle, including
include: backtesting, vintage, provision coverage and monitoring the
early arrears, late arrears and recovery of write-offs. Seyco outsources
minimum cut-off scores for approval of customers.
some collection functions at certain stages of the cycle. This is done in
as part of ongoing maintenance and efforts to meet benchmarks and
aims to maximize all the processes’ recovery and efficiency indicators.
Fina ncia l Sta tem ents
97
Wal mar t Chil e
2 011 | Annua l R ep o rt
For assessment and recognition of impairment, the portfolio
Presto has determined that an account owner’s initial line of credit,
is segmented by type of debtor and loan, until the designated
against which purchases are charged, shall be determined based on
appropriate levels are reached. Currently, the portfolio only contains
the customer’s profile and income.
consumer loan operations.
Presto credit card users may make purchases using their authorized
Analysis of this special segment aims to measure current conditions
line of credit at any of Presto’s associated businesses, which include
and the commercial behavior history of customers who renegotiate.
entities unrelated to Walmart Chile Servicios Financieros.
In addition, expected risks for each customer profile are incorporated
into the risk matrix.
The range of terms for credit card purchases is 1 to 36 months; the
average is between two and three months.
The methodology applied includes risk profiles, so that individual
provisions reflect the reference group’s risk. Thus, provisions are
Cash Advances
calculated monthly and each group profile is used to determine the
Presto has determined that cash advances are cash withdrawals
change in customers therein.
against the line of credit, available for a percentage of the line of credit
authorized for the account owner. The percentage available for cash
Losses are measured in the following portfolio accounts: provisions,
advances is determined according to the customer profile.
write-offs and recoveries. The loss ratio is determined as the quotient
of the aforementioned accounts and the amount loaned or sold, in
Cash advances can be withdrawn from Presto-affiliated ATMs and at
each instance.
Lider supermarkets.
The model considers the following information:
The range of terms for cash advances is 1 to 24 months; the average
is seven months.
* Normal
portfolio: cash-price installments, credit installments,
revolving debt and cash advances.
Minimum Payment
Presto has determined that the minimum payment be established
* Renegotiated portfolio: it’s important to have the number of
renegotiations and historical record of the original product.
each billing period. The credit card statement informs the cardholder
of the minimum payment due, which must be paid on or before the
due date stated therein.
Credit Policies, Average Terms and Ranges of Terms
The current credit policies for Walmart Chile Servicios Financieros
Presto determines the minimum payment in each billing period
S.A., henceforth “Presto,” as well as average terms and ranges
as a function of the operations and transactions realized by the
of terms for the renegotiations, refinancing, provisions and write-
cardholder(s). The amount may include all or a percentage of the
offs, are as follows:
transactions plus the sum of amounts owed from prior transactions.
• Products
Associated Businesses
Regarding the fees charged to associated businesses for accepting
Purchases
the Presto card (commission or merchant discount), Presto has fixed
Presto has determined that purchases may be made by Presto
this fee as a percentage of each transaction performed with a Presto
credit card users -- account holders or additional card holders -- and
card at the associated business.
charged to the account holder’s line of credit when the line of credit
has sufficient available funds and the account has not been blocked
The range of terms and average terms for credit purchases from
for any reason, for example, for arrears.
associated businesses are noted in the preceding Purchases section.
98
“Súper avance”
Presto has separate provision policies for portfolio segments that have
Customers with better risk profiles may be granted access to
and have not been renegotiated.
installment loans. The corresponding cash amounts can be withdrawn
at Presto-affiliated ATMs and Lider supermarkets.
• Write-offs
Debt balances of debtors that are more than 180 days in arrears
Access to Súper Avance is subject to a credit-evaluation of the Presto
are written off. The collections channels established by Presto are
card account holder, and is established according to the customer’s
responsible for collecting on the written-off portfolio. Debtors may
profile. The Súper Avance is available for a pre-determined term.
negotiate payment agreements or pay the entire written-off debt. All
written-off accounts are recorded in memorandum accounts. Income
The range of terms for Súper Avances is 12 to 48 months; the average
is recognized only when payments are received.
is 28 months.
Information on Types of Portfolios and Subcategories
• Renegotiation
The Presto portfolio is classified into renegotiated and not renegotiated
Customers who are between 30 and 180 days in arrears may
categories.
renegotiate their total debt.
The renegotiated portfolio includes accounts with at least one
The renegotiation policy requires an initial deposit, the amount of which
renegotiation agreement, according to the aforementioned renegotiation
depends on the amount owed and the number of days in arrears.
policy.
To date, the maximum number of renegotiations per customer is three,
Guarantees
with no more than two renegotiations within any 12-month period.
The loan portfolio is classified as consumer loans, comprised
principally of cash advances and revolving credit, which by nature
While the renegotiated debt is being repaid, the account is disabled.
does not require guarantees to hedge credit risk in the event of loan
impairment.
The range of terms is between 4 and 48 months; the average is
22 months.
5.2. Equity Risk Management
• Refinancing
Walmart Chile S.A.’s equity management objectives are:
Customers who are not more than 29 days in arrears may refinance
their debt over a term of 3 to 48 months; the average is 17 months.
* To safeguard the company’s ability to continue operating.
Ninety-six percent of these operations include an initial deposit.
* To earn returns for shareholders.
The minimum term between refinancing is established based on the
customer’s risk profile. Consecutive refinancing is not permitted. To
* To maintain an optimal equity structure, reducing its cost.
date, there is not an established maximum number of refinancing
operations.
The company’s policy requires that a solid equity base be maintained
in order to maintain the confidence of investors, creditors and the
• Provisions
market and support the company’s future development. The Board
Given the nature of Presto’s loans, risk assessment to determine the
of Directors monitors return on equity, which is defined by the group
provision for bad debt is conducted via group evaluation models.
as net income divided by total shareholder equity, excluding non-
Consequently, Presto’s portfolio is separated into two segments:
redeemable preferred stock and minority interests. The Board also
normal portfolio and renegotiated portfolio.
monitors dividends paid to ordinary shareholders.
The provision associated with each account is based on the time in
arrears, the portfolio segment and other variables.
Fina ncia l Sta tem ents
99
Wal mar t Chil e
2 011 | Annua l R ep o rt
To maintain or adjust the equity structure, the company can adjust the
The calculation is based on a focus on incurred losses that seeks to
amount of dividends payable to shareholders, reimburse shareholders
capture objective evidence of operational impairment, allowing us to
equity, issue new shares, sell assets to reduce debt or postpone new
prevent future flows from not being received in accordance with the
investments.
agreement and considering expectations of payment, in amount as
well as timing, and the valuation of said losses based on the difference
To date, the company must comply with certain covenants, which
between the contractual flows and those adjusted for impairment, the
are discussed in the note on “Contingency, Lawsuits and Other
latter updated with the effective placement interest rate.
Restrictions”.
6.2. Useful Life and Residual Value of Property, Plant and
The Company monitors equity using debt and equity ratios. These
Equipment, Investment Properties and Intangibles
indicators are calculated on the basis of the consolidated financial
statements, presented according to the stipulated format and
The valuation of investments in construction and infrastructure
deadlines.
projects, installations, machinery and equipment and other assets
includes carrying out estimations to determine the residual value and
useful life in order to calculate the depreciation of each asset. These
12-31-2011
Debt ratio (times)
Equity (in millions of Ch$)
Equity (in thousands of UF)
12-31-2010
0.73
0.75
640,326
581,744
28,722
27,114
estimations take into consideration technology and operations factors
and alternative uses of the assets.
Walmart Chile S.A. revises the estimated useful life and residual value
of these fixed assets at the end of each annual period or when an
event occurs that indicates that said useful life or residual value is
6. ESTIMATIONS AND JUDGMENTS OR CRITICAL
CRITERIA OF MANAGEMENT
different. There are intangible assets with an undefined useful life that
The preparation of financial statements in accordance with IFRS
6.3. Recoverability of Deferred Taxes
do not present indices of impairment.
requires the use of judgment on the part of management, of estimations
and assumptions that affect the application of accounting policies and
Walmart Group Chile accounts for deferred tax assets in consideration
the reported amounts of assets and liabilities, income and expenses.
of the possibility of their recovery, based on the existence of deferred
These estimations and the assumptions associated with them are based
tax liabilities with similar reversion periods and on the possibility of
on historic experience and various other factors that are considered
generating sufficient taxable earnings in the future. The latter is based
reasonable under the circumstances. The true results may differ from
on internal management projections based on the latest information
said estimations.
available. Real income and flows of paid or received taxes may differ
from the estimations made by the company as a result of future tax
The estimations and the related assumptions are revised on a continual
changes not foreseen in the estimates.
basis. Revisions of accounting estimates are recognized in the period in
which the estimate is revised, if the revision affects only that period or
6.4. Financial Leases
the revision period and future periods.
In the process of applying accounting policies, management has had
The book values of the following estimations are disclosed in the
to make judgments that could have a significant effect on the amounts
corresponding notes in the financial statements.
entered into the consolidated financial statements, in relation to
determining whether operative or financial leases exist depending on
6.1. Estimation of Irrecoverable Debt in the Presto Portfolio
the transfer of risks and benefits of the leased assets.
The aim of the impairment policy is to permanently evaluate the entire
Lease contracts are classified as financial when the contract transfers
loan portfolio in order to constitute in a timely manner the necessary
to the company substantially all the risks and benefits inherent to
and sufficient provisions to cover the portfolio risk, in accordance with
ownership of the asset in accordance with the IAS 17 “Leases”.
the provisions of IAS 39.
10 0
6.5. Provisions for Litigation and Legal Contingencies
or liquidated in a current transaction between parties duly informed
of the conditions of mutual independence, as opposed to a forced
The Walmart Chile group maintains legal proceedings for diverse
liquidation. The measurement bases of assets and liabilities is their
reasons and it is not possible to determine precisely the economic
fair value in accordance with current prices in the asset market. If
effects that they could have on the financial statements. In those
these are not available, the company estimates said values based on
cases in which the company’s management and legal advisors
the best information available, including the use of models and other
consider that favorable results will be obtained or that the results
valuation techniques.
are uncertain and the cases are ongoing, no provisions have been
created. In the cases where the company’s management or legal
Despite the fact that these estimations have been carried out
advisors consider that the outcome may be unfavorable, provisions
according to the best information available at the date of issue of the
have been created for expenses depending on estimations of the
present consolidated financial statements, it is possible that events
probable amounts to be paid.
may take place in the future that will necessitate their modification
(up or down) in upcoming periods. This will be done prospectively,
6.6. Building Customer Loyalty
taking into account the effects of the change of estimation on the
corresponding future consolidated financial statements.
Walmart Chile has a loyalty program called “Mi Lider Club” (“My
Lider Club”). Every time a customer acquires a product included
6.9. Supplier Agreements
in a promotion, whether in Walmart Chile or an associated
business, he or she receives “Lider pesos” that can be exchanged
Commercial discounts, reductions and other similar items are
for products in the quarter following that in which they were
recognised as a reduction in the cost of sale of products sold or the
generated. In accordance with IFRIC 13, each time a customer
value of stock. These agreements are subject to the provisions of the
purchases a product that generates “Lider pesos,” the amount
public document “General Terms and Conditions of Supply of Goods,”
received is assigned proportionally to the products purchases
which establish the terms and conditions that govern relationships
and “Lider pesos”, which are accounted for as deferred revenue
between Walmart and its suppliers.
in liabilities until they are used. The amount of deferred revenue
requires estimation of the probability that the “Lider pesos” will be
The company recognizes the benefits of these supplier agreements
used, while the estimated rate of failure to use them before they
only when formal evidence of the agreement exists, the amount of the
expire is determined using monthly statistics on the expiry of non-
benefit can be reasonably estimated and its reception is likely.
exchanged pesos. The fair value of “Lider pesos” is equivalent to
the same quantity of pesos expressed in the company’s operating
7. Information by Segment
currency, Chilean pesos. “Lider pesos” are used by customers as a
payment method for purchases in the company’s stores.
An operating segment is a component of an entity that participates
in business activities from which it can receive revenue and incur
6.7. Fair Value of Derivative Instruments
expenses (including income and expenses related to transactions
with other parts of the same entity), whose operational income is
The fair value of derivative contracts is determined using valuation
revised regularly by the chief executive who takes decisions for the
techniques that maximize the use of available market information.
entity with respect to the resources assigned to the segment and the
Valuation techniques generally used by the company are: market
evaluation of its performance, and for which there exists available
quotations for similar instruments and/or estimation of the present
financial information.
value of future cash flows using future market price curves at the
close of the period.
6.8. Fair Value of Assets and Liabilities
In certain cases IFRS require that assets and liabilities be registered
at their fair value. Fair price is the amount at which an asset can
be bought or sold or the amount at which a liability can be incurred
Fina ncia l Sta tem ents
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Wal mar t Chil e
2 011 | Annua l R ep o rt
The operations of Walmart Chile are limited to Chile and none of its
country. Walmart Chile Inmobiliaria S.A. therefore has a presence
customers represent more than 10% of the company’s revenue.
throughout the country from the Parinacota Region to the Magallanes
Region and is one of the main operators of shopping centers in Chile
7.1. Retail Division
in the neighborhood format segment.
Walmart Chile S.A supervises all the retail activities of the company,
7.4 Corporate
including the operations of supermarkets under the Lider, Ekono and
Super Bodega Acuenta brands. Currently, we operate two formats
Information about areas other than the business areas described
under the Lider brand, Hiper Líder and Líder Express supermarkets.
above, related mainly to obtaining financing with third parties and
The latter has locations from Arica to Punta Arenas, and as of
providing support to the rest of the businesses, and that is not
December 2011 it had 314 stores, constituting the largest chain in
distributed among the segments, is classified as Other in the note on
the country in terms of sales, with a total of MCh$ 2,440,232,763
operating segments.
recorded in the period analyzed.
7.2. Financial Services Division
Walmart Chile Financial Services S.A. provides credit to consumers
through the Presto card and offers various products and services that
add value to our business. Presto allows clients to make purchases
in all Lider stores and in more than 55,000 associated businesses,
which makes it the biggest non-banking network in the country.
Presto is available at the national level from Arica to Punta Arenas
through kiosks and ATMs.
The financial division also provides diverse complementary services,
such as insurance and assistance, mutual funds, loans and travel,
among others.
7.3. Real Estate Division
Walmart Chile Inmobiliairia S.A. manages and administers real estate
property. In close relation with this business, the real estate division
develops and administers supermarket, hypermarket and shopping
center locations. As a result, Walmart Chile has the best locations and
real estate centers to better serve its customers countrywide.
The real estate division also administers a portfolio of 314
supermarkets including those it owns, leases and leases under
financial lease contracts to the retail division.
Walmart Chile Inmobiliaria S.A. also manages 12 shopping centers
(10 owned, 1 leased and 1 managed) and 1,736 stores (including
supermarkets) that are distributed among the 12 shopping centers
and stores located within different supermarket formats across the
102
AS OF DECEMBER 31, 2011
INCOME STATEMENT
RETAIL
REAL ESTATE
ThCh$
Revenue from ordinary activities
Sales costs
GROSS MARGIN
Other income, by function
Distribution Costs
ThCh$
Other expenses, by function
Financial income
Financial costs
Share of income (losses) of subsidiaries and joint
ventures accounted for using the participation
method
CORPORATE
ThCh$
ThCh$
TOTAL
ThCh$
2,440,232,763
32,501,651
128,722,424
3,026,379
2,604,483,217
(1,827,435,037)
-
(657,609)
-
(1,828,092,646)
612,797,726
32,501,651
128,064,815
3,026,379
776,390,571
14,556,516
(2,287,972)
82,203
21,931,485
34,282,232
(23,233,173)
-
(15,892)
-
(23,249,065)
(46,811,119)
(100,748,522)
(10,650,180)
(558,981,244)
(25,958,339)
(5,552,430)
(5,072,563)
(298,864)
(36,882,196)
(10,393)
(20,098)
14,826
(345,793)
(361,458)
1,077,028
44,492
43,225
1,088,130
2,252,875
(7,427,012)
(4,589,833)
(40,347)
(22,228,224)
(34,285,416)
1,500,038
-
-
(1,695,717)
(195,679)
Administrative expenses
Other income (losses)
FINANCIAL
SERVICES
Exchange rate differences
(6,857,462)
(606)
(141,318)
226,578
(6,772,808)
Income per indexation units
(4,987,054)
(270,163)
(3,121,541)
(7,355,755)
(15,734,513)
160,686,452
(26,986,078)
19,064,886
(16,301,961)
136,463,299
(9,029,306)
(13,574,235)
5,383,177
(5,338,415)
(22,558,779)
151,657,146
(40,560,313)
24,448,063
(21,640,376)
113,904,520
151,643,863
(40,559,483)
24,447,777
(21,640,376)
113,891,781
13,283
(830)
286
-
12,739
151,657,146
(40,560,313)
24,448,063
(21,640,376)
113,904,520
PRE-TAX INCOME (LOSS)
Income tax expense
INCOME (LOSS) FROM CONTINUOUS
OPERATIONS
Income (loss) attributable to owners of the
controlling interest
Income (loss) attributable to minority interests
INCOME (LOSS)
OPERATING INCOME
(22,440,737)
19,062,008
4,838,133
168,495,840
36,924,746
18,842,419
6,512,163
2,442,521
64,721,849
203,961,182
(3,598,318)
25,574,171
7,280,654
233,217,689
INCOME FROM ORDINARY INTERCOMPANY
ACTIVITIES
85,723,580
83,783,587
124,624
149,122
169,780,913
TRADE AND OTHER COUNTS RECEIVABLE,
CURRENT AND NON-CURRENT
60,726,493
2,293,934
298,606,423
491,042
362,117,892
PROPERTY, PLANT AND EQUIPMENT
ACQUISITION FLOWS
67,206,784
74,834,419
3,276,063
62,247
145,379,513
-
-
-
-
-
TOTAL ASSETS
690,792,011
862,123,981
344,047,542
77,803,354
1,974,766,888
TOTAL LIABILITIES
568,349,627
148,411,336
24,025,820
593,653,823
1,334,440,606
DEPRECIATION AND AMORTIZATION
OPERATING INCOME PLUS DEPRECIATION AND
AMORTIZATION
AMOUNT OF SUBSIDIARY INVESTMENTS
Fina ncia l Sta tem ents
103
Wal mar t Chil e
AS OF DECEMBER 31, 2010
2 011 | Annua l R ep o rt
INCOME STATEMENT
RETAIL
ThCh$
Revenue from ordinary activities
Sales costs
GROSS MARGIN
Other income, by function
Distribution Costs
ThCh$
ThCh$
TOTAL
ThCh$
124,032,861
1,238,027
2,276,702,447
(1,586,350,858)
-
(1,296,952)
(469)
(1,587,648,279)
535,353,060
29,727,641
122,735,909
1,237,558
689,054,168
710,918
(2)
62,766
218,874
992,556
(17,241,407)
-
(12,403)
-
(17,253,810)
(32,387,256)
(129,354,334)
(15,532,921)
(527,162,077)
(4,558,761)
(1,495,138)
(2,982,190)
(62,117,230)
-
-
4,000
102,441
2,434,690
34,246
(4,186,257)
986,003
(4,967,581)
(1,744,588)
(23,774,371)
(27,378,141)
-
-
(1,145,324)
(768,293)
(53,081,141)
Financial income
3,108,399
Share of income (losses) of subsidiaries and joint
ventures accounted for using the participation
method
Exchange rate differences
2,668,865
9
59,549
(3,402,662)
(674,239)
Income per indexation units
3,583,218
(5,026,935)
(432,835)
(7,283,871)
(9,160,423)
128,393,142
(14,778,195)
(10,146,828)
(56,847,164)
46,620,955
(1,903,182)
(6,225,718)
2,131,301
1,144,768
(4,852,831)
126,489,960
(21,003,913)
(8,015,527)
(55,702,396)
41,768,124
126,435,467
(21,003,601)
(8,015,540)
(55,702,396)
41,713,930
54,493
(312)
13
-
54,194
126,489,960
(21,003,913)
(8,015,527)
(55,702,396)
41,768,124
32,454,870
78,272,926
10,839,655
157,915
121,725,366
PRE-TAX INCOME (LOSS)
Income tax expense
INCOME (LOSS) FROM CONTINUOUS
OPERATIONS
Income (loss) attributable to owners of the
controlling interest
Income (loss) attributable to minority interests
INCOME (LOSS)
INCOME FROM ORDINARY INTERCOMPANY
ACTIVITIES
OPERATING INCOME
(12,245,304)
(8,436,486)
(52,686,071)
73,013,093
30,469,852
17,665,371
7,024,233
2,809,741
57,969,197
176,850,806
5,420,067
(1,412,253)
(49,876,330)
130,982,290
TRADE AND OTHER ACCOUNTS RECEIVABLE,
CURRENT AND NON-CURRENT
51,621,625
6,957,104
243,183,925
25,041,349
326,804,003
PROPERTY, PLANT AND EQUIPMENT
ACQUISITION FLOWS
45,317,342
39,480,830
5,833,717
417,042
91,048,931
3,706,271
-
-
4,714,994
8,421,265
TOTAL ASSETS
600,783,083
726,501,758
318,742,773
92,478,974
1,738,506,588
TOTAL LIABILITIES
396,182,372
134,431,021
38,137,627
590,322,775
1,159,073,795
DEPRECIATION AND AMORTIZATION
OPERATING INCOME PLUS DEPRECIATION AND
AMORTIZATION
AMOUNT OF SUBSIDIARY INVESTMENTS
10 4
CORPORATE
29,727,641
Other income (losses)
Financial costs
ThCh$
FINANCIAL
SERVICES
2,121,703,918
Administrative expenses
Other expenses, by function
REAL ESTATE
8. Cash and Cash Equivalents
Cash and cash equivalents included in the consolidated financial
statements do not differ from those presented in the consolidated
The composition of this item as of December 31, 2011, and December
cash flow statements.
31, 2010 is as follows:
The breakdown of this item by currency as of December 31, 2011
and December 31, 2010 is as follows:
BALANCE AS OF
CLASSES OF CASH AND CASH
EQUIVALENTS
11-31-2011
12-31-2010
Cash in hand
ThCh$
BALANCE AS OF
Bank balances
Mutual fund shares
5,257,728
35,262,020
Short-term deposits
Depósitos a corto plazo
CASH AND CASH EQUIVALENTS
-
7,578,167
REPORT ON CASH AND
CASH EQUIVALENTS BY
CURRENCY
CURRENCY
34,739,406
Amount of cash and cash
equivalents
35,650,000
2,025,234
3,155,586
42,544,982
81,123,159
12-31-2011
12-31-2010
ThCh$
ThCh$
CL$
40,375,167
78,490,770
Amount of cash and cash
equivalents
PEN
68,401
84,094
Amount of cash and cash
equivalents
US$
2,082,547
2,540,868
Amount of cash and cash
equivalents
EUR
18,868
7,427
42,544,982
81,123,159
TOTAL CASH AND CASH
EQUIVALENTS
The use of funds is administered according to our investment policy for financial resources, the principal objective of which is to regulate and
establish a framework for general action to invest the company’s available resources in local and/or foreign currency, in order to optimize the use of
cash at a minimum risk level, under criteria of security, liquidity, profitability and hedging, at market prices and without any intention to speculate,
exclusively in institutions authorized and supervised by the Superintendency of Banks and Financial Institutions (SBIF) or the Securities and
Insurance Supervisor (SVS) with a minimum risk classification of AA.
9. FINANCIAL INSTRUMENTS
9.1. Financial instruments by category
Accounting policies on financial instruments have been applied to the items detailed below:
AS OF DECEMBER 31, 2011
ASSETS
MAINTAINED
UNTIL
MATURITY
LOANS AND ACCOUNTS
RECEIVABLE
HEDGING
DERIVATIVES
ThCh$
ThCh$
ThCh$
FINANCIAL ASSETS AT FAIR
VALUE WITH CHANGES IN
RESULTS
ThCh$
TOTAL
ThCh$
Other financial assets
-
-
-
40,243,620
40,243,620
Trade and other accounts receivable
-
362,117,892
-
-
362,117,892
Accounts receivable from related
companies
-
-
-
-
-
Total
-
362,117,892
-
40,243,620
402,361,512
Fina ncia l Sta tem ents
105
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LIABILITIES
OTHER FINANCIAL
LIABILITIES
HEDGING
DERIVATIVES
FINANCIAL LIABILITIES AT FAIR VALUE
WITH CHANGES IN RESULTS
TOTAL
ThCh$
ThCh$
ThCh$
ThCh$
Other financial liabilities
455,073,245
-
14,362,192
469,435,437
Trade and other accounts payable
441,500,244
-
-
441,500,244
Accounts payable to related
companies
290,159,732
-
-
290,159,732
1,186,733,221
-
14,362,192
1,201,095,413
Total
AS OF DECEMBER 31, 2010
ASSETS
MAINTAINED
UNTIL
MATURITY
LOANS AND ACCOUNTS
RECEIVABLE
HEDGING
DERIVATIVES
ThCh$
ThCh$
ThCh$
FINANCIAL ASSETS AT FAIR
VALUE WITH CHANGES IN
RESULTS
ThCh$
TOTAL
ThCh$
Other financial assets
-
-
-
35,650,000
35,650,000
Trade and other accounts receivable
-
326,804,003
-
-
326,804,003
Accounts receivable from related
companies
-
337,596
-
-
337,596
Other Financial Assets
-
-
-
-
-
Total
-
327,141,599
-
35,650,000
362,791,599
LIABILITIES
OTHER FINANCIAL
LIABILITIES
HEDGING
DERIVATIVES
ThCh$
FINANCIAL LIABILITIES AT FAIR VALUE
WITH CHANGES IN RESULTS
TOTAL
ThCh$
ThCh$
Other financial liabilities
416,784,653
-
16,110,248
432,894,901
Trade and other accounts payable
351,364,402
-
-
351,364,402
Accounts payable to related
companies
281,505,399
-
-
281,505,399
1,049,654,454
-
16,110,248
1,065,764,702
Total
9.2. Estimate of reasonable value
ThCh$
on valuation techniques that use information based on the market
price or market price derivatives of similar financial instruments.
As of December 31, 2011 and December 31, 2010, the company
held financial instruments recorded at their fair value. The categories
The fair value of financial instruments traded in active markets, such
of financial instruments include:
as investments acquired for negotiation, is based on market quotations
at the close of the financial year using the current purchase price. The
(i) Investments in short-term mutual funds (cash equivalent and other
fair value of financial assets not traded in active markets (derivative
financial assets),
contracts) is determined using valuation techniques that maximize
the use of available market information. The valuation techniques
(ii) Contracts for interest rate-derived instruments.
generally used by the company are: market quotations for similar
instruments and/or estimation of the present value of future cash flow
The company has classified the measurement of fair value using a
hierarchy that reflects the level of information used for valuation. This
hierarchy consists of 3 levels: (I) fair value based on quotation in active
markets for a similar class of assets or liabilities, (II) fair value based
10 6
using the future market price curves at the close of the financial year.
The table below shows the classification of financial instruments at their reasonable value as of December 31, 2011 and December 31, 2010,
according to the level of information used in the valuation:
MEASUREMENTS OF FAIR VALUE USING VALUES CONSIDERED AS
DESCRIPTION
FAIR VALUE AS OF
12-31-2011
LEVEL I
LEVEL II
LEVEL III
ThCh$
ThCh$
ThCh$
ThCh$
ASSETS
Short-term mutual fund
40,243,620
40,243,620
-
-
14,362,192
-
14,362,192
-
LIABILITIES
Fair value of interest-rate derivatives
MEASUREMENTS OF FAIR VALUE USING VALUES CONSIDERED AS
DESCRIPTION
FAIR VALUE AS OF
12-31-2010
LEVEL I
LEVEL II
LEVEL III
ThCh$
ThCh$
ThCh$
ThCh$
ASSETS
Short-term mutual fund
35,650,000
35,650,000
-
-
16,110,248
-
16,110,248
-
LIABILITIES
Fair value of interest-rate derivatives
Furthermore, as of December 31, 2011 and December 31, 2010, the company holds financial instruments not recorded at their fair value. In
order to comply with the requirement to disclose fair values, the company has valued these instruments as shown in the table below:
AS OF DECEMBER 31, 2011
DESCRIPTION
Cash in hand
Bank balances
Trade and other accounts receivable
Accounts receivable from related companies
AS OF DECEMBER 31, 2010
BOOK VALUE
FAIR VALUE
BOOK VALUE
ThCh$
ThCh$
ThCh$
FAIR VALUE
ThCh$
5,257,728
5,224,405
7,578,167
7,578,167
35,262,021
35,262,021
34,739,406
34,739,406
362,117,892
362,117,892
326,804,003
326,804,003
-
-
337,596
337,596
Other financial liabilities
469,435,437
475,254,526
432,894,901
414,066,846
Trade and other accounts payable
441,500,244
441,500,244
351,364,402
351,364,402
Accounts payable to related companies
290,159,732
290,159,732
281,505,399
281,505,399
The book value of the current accounts payable and receivable
The fair value of financial liabilities is estimated by discounting future
approximate their fair values, due to their short-term nature. For cash
contractual cash flows at the current market interest rate available
in hand, bank balances, and term deposits the values are the same.
for similar financial instruments. Other financial assets are valued
according to the market quotation at the close of the period.
Fina ncia l Sta tem ents
107
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10. COMMERCIAL DEBTORS AND OTHER ACCOUNTS RECEIVABLE
The breakdown of this item as of December 31, 2011 and December 31, 2010 is as follows:
CURRENT BALANCE AS OF
TRADE AND OTHER ACCOUNTS RECEIVABLE, NET
12-31-2011
ThCh$
Financial Debtors (Portfolio of Presto customers)
213,522,614
12-31-2010
ThCh$
200,451,559
NON CURRENT BALANCE AS OF
12-31-2011
12-31-2010
ThCh$
ThCh$
79,016,674
60,255,353
Financial Debtors (Other Presto commercial debtors)
5,127,721
7,565,102
28,318
36,407
Real Estate Debtors
1,673,058
2,750,423
421,277
339,586
Retail Debtors
42,221,252
31,640,916
133,834
91,426
Other Debtors
19,973,144
23,670,532
-
2,699
282,517,789
266,078,532
79,600,103
60,725,471
TRADE AND OTHER ACCOUNTS RECEIVABLE, NET
The breakdown of gross trade and other accounts receivable as of December 31, 2011 and December 31, 2010 is as follows:
CURRENT BALANCE AS OF
TRADE AND OTHER ACCOUNTS RECEIVABLE, GROSS
12-31-2011
ThCh$
Financial Debtors (Portfolio of Presto customers)
Financial Debtors (Other Presto commercial debtors)
Real Estate Debtors
12-31-2010
ThCh$
NON CURRENT BALANCE AS OF
12-31-2011
12-31-2010
ThCh$
ThCh$
233,118,628
227,547,996
88,220,826
69,433,495
5,324,734
8,890,170
28,318
36,407
339,586
2,615,108
3,627,743
421,277
Retail Debtors
46,747,637
34,445,752
133,834
91,426
Other Debtors
21,084,331
24,781,719
-
22,167,892
308,890,438
299,293,380
88,804,255
92,068,806
TRADE AND OTHER ACCOUNTS RECEIVABLE, GROSS
The maturity dates for gross unmatured trade and other accounts receivable as of December 31, 2011 and December 31, 2010 are as follows:
BALANCE AS OF
TRADE AND OTHER ACCOUNTS RECEIVABLE, UNMATURED
Maturity date within three months
31-12-2010
ThCh$
ThCh$
169,889,632
156,601,836
Maturity date between three and six months
25,201,124
30,449,474
Maturity date between six and 12 months
26,059,910
29,957,266
Maturity date longer than 12 months
79,600,104
60,725,471
300,750,770
277,734,047
Total
10 8
31-12-2011
The maturity dates for gross trade receivables, matured and not impaired, as of December 31, 2011 and December 31, 2010 are as follows:
BALANCE AS OF
12-31-2011
12-31-2010
ThCh$
ThCh$
51,070,871
39,269,671
9,804,890
8,398,126
Maturity date between six and 12 months
340,380
1,166,862
Maturity date longer than 12 months
150,984
235,297
61,367,125
49,069,956
TRADE AND OTHER ACCOUNTS RECEIVABLE, MATURED AND UNPAID BUT NOT IMPAIRED
Maturity date within three months
Maturity date between three and six months
Total
Gross trade receivables, matured and impaired as of December 31, 2011 and December 31, 2010 are as follows:
BALANCE AS OF
TRADE AND OTHER ACCOUNTS RECEIVABLE, IMPAIRED
Financial Debtors (Portfolio of Presto customers)
12-31-2011
12-31-2010
ThCh$
ThCh$
28,800,166
36,274,579
197,013
979,254
Financial Debtors (Other Presto commercial debtors)
Real Estate Debtors
942,050
877,320
Retail Debtors
4,526,385
3,150,650
Other Debtors
1,111,187
23,276,380
35,576,801
64,558,183
TRADE AND OTHER ACCOUNTS RECEIVABLE, IMPAIRED
The detail of impairment of trade receivables as of December 31, 2011 and December 31, 2010 is as follows:
BALANCE AS OF
PROVISION FOR TRADE OTHER ACCOUNTS RECEIVABLE MATURED AND UNPAID
WITH IMPAIRMENT
Initial Balance
Write-off of impaired financial assets for the period
Provisions
FINAL BALANCE
12-31-2011
12-31-2010
ThCh$
ThCh$
64,558,183
89,321,596
(85,942,124)
(122,411,542)
56,960,742
97,648,129
35,576,801
64,558,183
Fina ncia l Sta tem ents
109
Wal mar t Chil e
2 011 | Annua l R ep o rt
Portfolio stratification
Below we present the balances as of December 31, 2011 and December, 2010 stratified by segment of period in arrears, not renegotiated or
renegotiated portfolio and number of customers.
SEGMENT OF
PERIOD IN
ARREARS
NUMBER OF CUSTOMERS
IN NON-RENEGOTIATED
PORTFOLIO
NON-RENEGOTIATED
PORTFOLIO, GROSS
NUMBER OF CUSTOMERS
IN RENEGOTIATED
PORTFOLIO
RENEGOTIATED
PORTFOLIO, GROSS
TOTAL PORTFOLIO, GROSS
ThCh$
ThCh$
ThCh$
12-31-2011 12-31-2010
12-31-2011
12-31-2010
662,748
795,424
237,445,849
200,244,836
20,091
26,061
14,302,457
18,501,355
251,748,306
218,746,191
1 to 30 days
48,461
51,949
19,982,971
16,686,125
6,187
8,949
4,589,388
6,819,378
24,572,359
23,505,503
31 to 60 days
21,183
24,266
9,408,254
8,464,794
4,468
7,692
3,599,234
5,819,962
13,007,488
14,284,756
61 to 90 days
14,912
14,841
6,477,397
5,070,087
3,471
6,946
2,947,576
5,558,570
9,424,973
10,628,657
91 to 120 days
11,666
10,869
6,692,106
3,762,061
2,930
4,851
2,458,595
4,240,790
9,150,701
8,002,851
121 to 150 days
7,570
8,434
3,672,778
3,063,458
2,682
7,117
2,232,260
6,375,343
5,905,038
9,438,801
151 to 180 days
9,312
7,921
3,887,782
2,926,683
2,953
7,753
2,492,893
8,394,962
6,380,675
11,321,645
181 days or more
2,822
1,012
731,690
371,337
425
673
418,224
681,750
1,149,914
1,053,087
778,674
914,716
288,298,827
240,589,381
43,207
70,042
33,040,627
56,392,110
321,339,454
296,981,491
Up to date
TOTALS
12-31-2011 12-31-2010
12-31-2011 12-31-2010
12-31-2011 12-31-2010
Provisions and write-offs associated with portfolio
The criteria used for the provisions and write-offs associated with the renegotiated and non-renegotiated portfolio have not changed from the
previous year and are shown in the table below:
BALANCE AS OF
12-31-2011
BALANCE AS OF
12-31-2010
ThCh$
ThCh$
Total provision, non-renegotiated portfolio
16,998,641
11,678,257
Total provision, renegotiated portfolio
11,801,525
24,596,322
Total write-offs for period
63,711,869
120,321,582
Total recoveries for period (*)
11,805,009
8,178,548
Additional portfolio information
AS OF
12-31-2011
Total no. of cards issued to cardholders
Total no. of cards with balance
Average no. of renegotiations (**)
Total amount of refinanced debtors
% debtors refinanced in non-renegotiated portfolio
(*) THIS AMOUNT INCLUDES CAPITAL PLUS INTEREST AT THE TIME OF WRITE-OFF.
(**) AVERAGE NO. OF MONTHLY RENEGOTIATIONS, FINANCIAL YEAR 2011
11 0
1,239,491
909,730
7,033
14,029,942
4.87%
Factors affecting provision for rescheduled and non-renegotiated portfolio
Below we present the factors affecting provisions for the renegotiated and non-renegotiated portfolios corresponding to December 31, 2011 and
December 31, 2010.
NON-RENEGOTIATED PORTFOLIO, AVERAGE % LOSS
RENEGOTIATED PORTFOLIO, AVERAGE % LOSS
SEGMENT OF PERIOD IN ARREARS
12-31-2011
Up to date
12-31-2010
12-31-2011
12-31-2010
0.07%
0.0%
20.45%
21.4%
1 to 30 days
10.04%
8.6%
25.10%
22.9%
31 to 60 days
21.89%
21.4%
26.36%
25.4%
61 to 90 days
35.77%
36.6%
48.29%
48.8%
91 to 120 days
61.21%
52.4%
51.92%
46.1%
121 to 150 days
67.23%
65.6%
76.52%
73.4%
151 to 180 days
78.24%
76.2%
78.19%
90.1%
181 days or more
114.03%
100.0%
100.00%
100.0%
5.90%
4.9%
35.72%
43.6%
TOTALS
Risk indices separated into non-renegotiated, renegotiated
The reduction in the write-off index observed in 2011 corresponds
and total portfolio and write-off index
to the fact that credit write-offs were applied during 2010, which
were provided for in September 2009 as the result of a change in
Below we present the risk indices (% provision/portfolio), separated
accounting criteria made at that time.
into non-renegotiated, renegotiated and total portfolio and write-off
Credit quality of financial assets
index (% write-off/portfolio).
The greatest exposure to credit risk at the date of presentation of the
Índices
12-31-2011
Risk index, non-renegotiated
portfolio
Risk index, renegotiated portfolio
5.90%
4.9%
35.72%
43.6%
8.96%
12.2%
19.83%
40.5%
Risk index total portfolio
Write-off Index
12-31-2010
information is the fair value of each category of accounts receivable
mentioned above.
The book value of trade and customer receivables in arrears, both
unimpaired and impaired, represent a reasonable approximation of
their fair value, since they include an explicit interest for payment
in arrears and consider an impairment provision where objective
The risk index (% provision/portfolio balance) is calculated considering
evidence exists that the company will not be able to recover the
the total of the individual provisions for customers classified in the
amount owed.
corresponding portfolio (renegotiated or non-renegotiated) divided
by the balance owed. The provision factor corresponding to each
The greatest exposure to credit risk at the report date is the book value
customer is determined through the variables of the model explained
of each class of account receivable mentioned.
in the Risk Management Policy note.
The trade receivables portfolio consists of small amounts granted
The risk index for the total portfolio as of December 31 of the current
without guarantees to many Walmart Chile customers to finance their
year is lower than that of December 2010, due to an improvement
credit purchases in the Company’s supermarkets. The credit quality of
in portfolio quality and a reduction in the volume of the renegotiated
this portfolio and the payment behavior of these debtors is adequate,
portfolio.
and provisions have already been made for the estimated loss due to
those debtors whose payment behavior deteriorated.
The write-off index (write-off/portfolio balance) is calculated
considering total customer write-offs for the period divided by the total
debt balance for the portfolio.
Fina ncia l Sta tem ents
111
Wal mar t Chil e
AS OF DECEMBER 31, 2011
2 011 | Annua l R ep o rt
GROSS EXPOSURE
BY BALANCE
ThCh$
Trade receivables
Other accounts receivable
Totals
376,610,362
GROSS IMPAIRED
EXPOSURE
AS OF DECEMBER 31, 2010
NET EXPOSURE CREDIT
RISK CONCENTRATIONS
ThCh$
ThCh$
34,465,614
342,144,748
GROSS EXPOSURE
BY BALANCE
GROSS IMPAIRED
EXPOSURE
ThCh$
344,412,575
ThCh$
41,281,803
NET EXPOSURE CREDIT
RISK CONCENTRATIONS
ThCh$
303,130,772
21,084,331
1,111,187
19,973,144
46,949,611
23,276,380
23,673,231
397,694,693
35,576,801
362,117,892
391,362,186
64,558,183
326,804,003
Guarantees
These transactions have been eliminated in the consolidation process
and are not detailed down in this note.
The credit portfolio derived from Presto is classified as consumer
credit, and consists principally of revolving loans and advances which
Conditions of balances and transactions with related companies:
by their nature do not demand guarantees to hedge credit risk in the
event of impairment.
In 2010, balances receivable from Inversiones Aquapuro S.A. and
Aquanatura S.A. are expressed in unidades de fomento (UF) and
Net trade and other receivables
accrue annual interest of 3.9%.
Trade receivables correspond to accounts receivable from customers
In 2010, the balance receivable from Inversiones Solpacific S.A. is
for placements and provision of real estate leasing services.
expressed in pesos and does not earn interest.
The other accounts receivable as of December 31, 2011, totaling
In 2011, the balances are consolidated as part of the present
ThCh$ 19,973,144, include balances receivable from company
financial statements due to the acquisition of a 50% shareholding in
employees, taxes to be recovered and other minor amounts.
Inversiones Solpacific S.A. (parent company of Aquapuro S.A. and
Aquanatura S.A.), so that the group now holds 100% of the shares.
The balance as of December 31, 2010 totaling ThCh$ 23,673,231
See note on Business mergers.
includes ThCh$ 5,087,051 for insurance claims for damage suffered
in the earthquake. The effects of the damage are detailed in the note
The balance payable to Walmart Store Inc. corresponds to a current
on Property, plant and equipment.
account for merchandise.
As of December 31, 2011, the item Trade and other accounts receivable
The long-term balance payable to Sociedad Inversiones Australes
includes net balances for ThCh$ 6,052,558 (ThCh$ 7,823,828 as of
Dos Ltda., a subsidiary of Wal-Mart Stores Inc., corresponds to a
December 31, 2010) corresponding to other operational accounts
loan made in December 2009, expressed in UF at an interest rate of
receivable. During 2011 company management completed an
4.56% per year, maturing on December 11, 2019. Interest is paid on
exhaustive individual analysis of the items in these balances, without
this obligation every six months. This debt is not guaranteed.
making any adjustment or regularization which might significantly
affect the financial statements of Walmart Chile S.A.
The long-term balance payable to Sociedad Inversiones Australes
Cinco Ltda., a subsidiary of Wal-Mart Stores Inc., corresponds to a
11. BALANCES AND TRANSACTIONS WITH RELATED
COMPANIES
loan made in December 2009, expressed in UF at an interest rate of
4.56% per year, maturing on December 11, 2019. Interest is paid on
this obligation every six months. This debt is not guaranteed.
11.1. Balances and transactions with related companies
Transactions between the company and its subsidiaries correspond
to operations that are habitual in terms of purpose and conditions.
11 2
11.1.1. Accounts receivable from related parties
The breakdown of this item as of December 31, 2011 and December 31, 2010 is as follows:
ACCOUNTS RECEIVABLE FROM RELATED COMPANIES
CURRENT BALANCES
NATURE OF
RELATIONSHIP
12-31-2011
12-31-2010
ID NO.
COMPANY
COUNTRY
OF ORIGIN
ThCh$
ThCh$
96670110-2
Inversiones Solpacific S.A.
Chile
Related
UF
-
254,687
96618540-6
Alvi Supermercados Mayorsitas S.A.
Chile
Related
CLP
-
82,909
-
337,596
CURRENCY
Total
11.1.2. Accounts payable to related companies
The breakdown of this item as of December 31, 2011 and December 31, 2010 is as follows:
ACCOUNTS PAYABLE TO RELATED COMPANIES
BALANCES AS OF
CURRENT
NON-CURRENT
ID NO.
COMPANY
NATURE OF
RELATIONSHIP
CURRENCY
0-E
Wal Mart Store Inc.
Common control
US$
74,543
431,503
-
-
96671860-9
Aquapuro S.A.
Related
Ch$
-
280,799
-
-
99520700-1
Aquanatura S.A.
Related
Ch$
-
35,089
-
-
96755580-0
Alimentos y Servicios S.A.
Related
Ch$
-
1,544,270
-
-
0-E
Inversiones Australes Cinco Ltda.
Common control
UF
171,736
173,976
72,349,561
69,628,489
0-E
Inversiones Australes Dos Ltda.
Common control
UF
515,208
521,928
217,048,684
208,885,468
0-E
Wal-Mart Argentina
Common control
US$
-
3,877
-
-
761,487
2,991,442
289,398,245
278,513,957
Total
12-31-2011
12-31-2010
12-31-2011
ThCh$
ThCh$
ThCh$
12-31-2010
ThCh$
Fina ncia l Sta tem ents
113
Wal mar t Chil e
2 011 | Annua l R ep o rt
11.1.3. Transactions with related companies and their
market conditions in terms of price and payment. There are no
effects on the results
estimates of unrecoverable debt to reduce amounts receivable, nor
The amounts shown as transactions in the table below as of
are they covered by any guarantees. These have been approved by
December 31, 2011 and December 31, 2010 correspond to
the company’s Board of Directors and those totaling more than ThCh$
commercial operations with related companies, carried out under
5,000 are disclosed.
12-31-2011
ID NO.
COMPANY
COUNTRY
OF
ORIGIN
NATURE OF
RELATIONSHIP
DESCRIPTION OF
TRANSACTION
AMOUNT
12-31-2010
EFFECT ON
INCOME
(CHARGE)/
CREDIT
ThCh$
96671860-9
AQUAPURO S.A.
Chile
RELATED
MERCHANDISE PURCHASE
96671860-9
AQUAPURO S.A.
Chile
RELATED
NON-ADJUSTABLE LOAN
96671860-9
AQUAPURO S.A.
Chile
RELATED
96671860-9
AQUAPURO S.A.
Chile
RELATED
Chile
RELATED
Chile
RELATED
Chile
RELATED
96755580-0
96755580-0
96755580-0
96755580-0
96695770-0
96861750-8
LTDA.
ALIMENTOS Y SERVICIOS
LTDA.
ALIMENTOS Y SERVICIOS
LTDA.
ALIMENTOS Y SERVICIOS
LTDA.
KIMBERLY CLARK CHILE
S.A.
AGRICOLA Y FORESTAL
ARCOIRIS S.A.
Chile
Chile
Chile
RELATED
RELATIONSHIP WITH
DIRECTOR
CONTROLLED BY
SHAREHOLDER
CONTROLLED BY
-
11,421,191
-
-
-
328,056
-
52,826
-
52,676
-
226,526
-
333,475
-
MERCHANDISE PURCHASE
15,477,468
-
25,263,842
-
CAFETERIA FOOD SERVICE
7,919,882
(6,655,363)
9,261,353
(7,782,650)
88,070
-
88,935
-
801,810
-
1,633,205
-
MERCHANDISE PURCHASE
21,782,985
-
19,958,976
-
MERCHANDISE PURCHASE
831,667
-
735,973
-
MERCHANDISE PURCHASE
4,987,520
-
4,412,341
-
1,138,942
-
2,204,055
-
-
-
39,682
-
43,799
-
43,457
-
37,286
-
35,104
-
-
-
6,999
6,999
-
-
2,704
2,704
LEASES
305,759
305,759
227,125
227,125
LEASES
400,623
400,623
287,747
287,747
LEASES
434,891
434,891
345,723
345,723
3,926,725
(3,299,769)
3,119,509
(2,621,437)
58,311
(58,311)
94,014
(94,014)
MERCHANDISE ACCOUNT
DEBTOR
MERCHANDISE ACCOUNT
CREDITOR
MERCHANDISE ACCOUNT
DEBTOR
MERCHANDISE ACCOUNT
CREDITOR
AGRICOLA ALMA LTDA.
Chile
99520700-1
AQUANATURA S.A
Chile
RELATED
MERCHANDISE PURCHASE
99520700-1
AQUANATURA S.A
Chile
RELATED
NON-ADJUSTED LOAN
99520700-1
AQUANATURA S.A
Chile
RELATED
99520700-1
AQUANATURA S.A
Chile
RELATED
Chile
RELATED
Chile
RELATED
96670110-2
81361700-5
80492200-8
82535200-7
91443.0003
78413930-1
INVERSIONES SOLPACIFIC
S.A.
INVERSIONES SOLPACIFIC
S.A.
INMOBILIARIA LOS
GUINDOS S.A.
PLAZA VITACURA S.A.
INMOBILIARIA RANCAGUA
S.A.
MARSOL
HONORATO RUSSI &
CIA LTDA
Chile
Chile
Chile
Chile
Chile
SHAREHOLDER
CONTROLLED BY
SHAREHOLDER
CONTROLLED BY
SHAREHOLDER
CONTROLLED BY
SHAREHOLDER
CONTROLLED BY
SHAREHOLDER
COMMON
DIRECTORS
ThCh$
6,210,182
76567810-2
96670110-2
11 4
ALIMENTOS Y SERVICIOS
AMOUNT
EFFECT ON
INCOME
(CHARGE)/
CREDIT
MERCHANDISE ACCOUNT
DEBTOR
MERCHANDISE ACCOUNT
CREDITOR
INTEREST ON ACCOUNT
BALANCE
ADJUSTMENT TO
CURRENT ACCOUNT
MAINTENANCE SERVICES
CONSULTANCY
12-31-2011
ID NO.
COUNTRY
OF
ORIGIN
NATURE OF
RELATIONSHIP
United
CONTROLLING
States
SHAREHOLDER
United
CONTROLLING
States
SHAREHOLDER
United
CONTROLLING
EXPATRIATE COSTS
States
SHAREHOLDER
CREDITOR
United
CONTROLLING
MERCHANDISE ACCOUNT
States
SHAREHOLDER
CREDITOR
INVERSIONES AUSTRALES
United
CONTROLLING
CINCO LTDA.
States
SHAREHOLDER
INVERSIONES AUSTRALES
United
CONTROLLING
DOS LTDA.
States
SHAREHOLDER
COMPANY
DESCRIPTION OF
TRANSACTION
AMOUNT
12-31-2010
EFFECT ON
INCOME
(CHARGE)/
CREDIT
AMOUNT
ThCh$
0-E
0-E
0-E
0-E
0-E
0-E
99061000-2
76867890-1
79753810-8
WALMART STORE INC
WALMART STORE INC
WALMART STORE INC
WALMART STORE INC
LIBERTY COMPAÑIA DE
SEGUROS
VERTICAL INVERSIONES
S.A
CLARO Y COMPAÑÍA
Chile
Chile
Chile
COMMON
DIRECTORS
COMMON
DIRECTORS
COMMON
DIRECTORS
EFFECT ON
INCOME
(CHARGE)/
CREDIT
ThCh$
83,947
(83,947)
1,691,437
(1,691,437)
583,509
(583,509)
536,718
(536,718)
432,935
(432,935)
323,846
(323,846)
1,063,942
-
431,503
-
2,718,832
(2,718,832)
1,617,590
(1,617,590)
8,156,497
(8,156,497)
4,852,770
(4,852,770)
340,786
(286,374)
597,092
(501,758)
CONSULTANCY
-
-
41,454
(41,454)
CONSULTANCY
227,665
(227,665)
-
-
INTEGRATION COSTS
EXPATRIATE EXPENSES
INTEREST AND
ADJUSTMENTS FOR
ACCOUNT BALANCES
INTEREST AND
ADJUSTMENTS FOR
ACCOUNT BALANCES
INSURANCE
11.2. Key personnel
11.2.1. Directors’ compensation
Detail of amounts paid for the periods ending December 31, 2011 and December 31, 2010:
12-31-2011
12-31-2010
NAME
POSITION
BOARD
STIPEND
BOARD
COMMITTEE
STIPEND
SHARE IN
PROFITS
ThCh$
ThCh$
ThCh$
Felipe Ibáñez
Chairman
141,494
-
-
Eduardo Solórzano
Vice Chairman
-
-
-
Nicolás Ibáñez
Director
75,339
-
-
José Luis Rodríguez (***)
Director
-
-
José María Eyzaguirre
Director
69,310
-
Alberto Eguiguren
Director
149,387
Jorge Gutiérrez
Director
Christian Philippe Schrader
BOARD
STIPEND
BOARD
COMMITTEE
STIPEND
SHARE IN
PROFITS
ThCh$
ThCh$
ThCh$
160,335
-
-
-
-
-
65,547
-
-
-
-
-
-
-
54,058
-
-
-
-
160,304
-
-
66,324
-
-
105,053
-
-
Director
-
-
-
-
-
-
Clarie Babineaux-Fontenot
Director
-
-
-
-
-
-
Wyman Atwell (*)
Director
-
-
-
-
-
-
José María Urquiza (**)
Director
-
-
-
-
-
-
501,854
-
-
545,297
-
-
Totals
(*) DIRECTOR OF THE COMPANY UNTIL JANUARY 2011.
(**) APPOINTED DIRECTOR OF THE COMPANY AUGUST 1, 2011.
(***) DIRECTOR OF THE COMPANY UNTIL AUGUST 31, 2011.
Fina ncia l Sta tem ents
115
Wal mar t Chil e
Directors who are part of Walmart’s management do not receive stipends
12. INVENTORIES
2 011 | Annua l R ep o rt
for serving on the boards of related companies.
The breakdown of this item as of December 31, 2011 and December
The table below contains the compensation paid by subsidiaries during
31, 2010 is as follows:
the financial years ending December 31, 2011 and December 31, 2010
in stipends to the directors of Walmart Chile who are also directors of
BALANCE AS OF
company subsidiaries:
12-31-2011
TYPES OF INVENTORY
ThCh$
Products for sale
193,220,249
163,172,306
Imports in transit
22,314,301
15,692,927
STIPEND AS OF
12-31-2011
STIPEND AS OF
12-31-2010
ThCh$
ThCh$
Materials
Alberto Eguiguren
48,581
49,390
Provision for obsolescence
Jorge Gutiérrez Pubill
52,518
44,746
Total
NOMBRE
11.2.2. Remuneration of the management team
12-31-2010
ThCh$
2,904,807
1,734,249
(1,338,863)
(1,416,333)
217,100,494
179,183,149
01-01-2011
12-31-2011
01-01-2010
12-31-2010
ThCh$
ThCh$
Additional information on inventories:
As of December 31, 2011, the total aggregate amount of remuneration
and other payments made to members of the management and
DISCLOSABLE INFORMATION ON
INVENTORIES
executive team was ThCh$ 16,381,453 (ThCh$ 16,542,232 as of
December 31, 2010).
The Walmart Chile Group has established an incentive scheme for its
executives, based on meeting objectives related to their contribution to
company results. These incentives are structured within a minimum
Reversal amount for discounts of
inventory amounts
13,796,079
11,177,760
Inventory costs recognized as an
expense during the period
1,827,435,037
1,586,350,858
and maximum range of gross remuneration and are paid once per year.
13. INVESTMENTS IN RELATED COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD
13.1. Breakdown of item as of December 31, 2011
INVESTMENTS IN
SUBSIDIARIES
COUNTRY FUNCTIONAL
OF ORIGIN CURRENCY
SHARE
%
%
ThCh$
ThCh$
CONVERSION
DIFFERENCE
OTHER INCREASE
(DECREASE)
BALANCE
AS OF
12-31-2011
ThCh$
ThCh$
ThCh$
Alimentos y
Servicios S.A.
Chile
Ch$
100.00
100.00
3,706,271
177,061
-
(3,883,332)
-
Solpacific S.A.
Chile
Ch$
100.00
100.00
-
(372,740)
-
372,740
-
Alvi Supermercado
Mayorista S.A.
Chile
Ch$
-
-
11,726,820
-
-
(11,726,820)
-
(195,679)
-
(15,237,412)
-
TOTAL
116
PERCENTAGE
BALANCE AS OF SHARE IN INCOME
OF VOTING
01-01-2011
(LOSS)
POWER
15,433,091
13.2. Breakdown of item as of December 31, 2010
INVESTMENTS IN
SUBSIDIARIES
COUNTRY OF
ORIGIN
FUNCTIONAL
CURRENCY
SHARE
PERCENTAGE OF BALANCE AS OF
SHARE IN
VOTING POWER
01-01-2011
INCOME (LOSS)
%
%
Ch$
50.00
50.00
3,075,585
630,686
-
-
3,706,271
Chile
Ch$
50.00
50.00
-
(253,654)
-
-
-
Chile
Ch$
35.00
35.00
13,196,664
(1,145,325)
(12,958)
(311,561)
11,726,820
16,272,249
(768,293)
(12,958)
(311,561)
15,433,091
Alimentos y
Servicios S.A.
Chile
Solpacific S.A.
Alvi Supermercado
Mayorista S.A.
TOTAL
ThCh$
ThCh$
CONVERSION OTHER INCREASE BALANCE AS OF
DIFFERENCE
(DECREASE)
12-31-2011
ThCh$
ThCh$
ThCh$
As of December 31, 2010, Solpacific S.A. presented negative equity.
On July 15, 2011, the subsidiary company Inversiones Walmart Chile
Its accounting value is therefore presented in the item for other non-
Limitada acquired the remaining 50% of the shares in the related
current provisions. See note on Provisions.
companies Alimentos y Servicios S.A. and Inversiones Solpacific
S.A. This operation gave it control of these companies with a share
On January 19, 2011, Alvi Supermercados Mayoristas S.A. was sold
of 100%, as the other 50% was already owned by other subsidiaries,
to SMU S.A. for ThCh$ 30 million. The effect on income is presented
and these companies are starting to be consolidated. See note on
in the item Other revenue by function.
Business mergers.
13.3. Summarized information on investments in related companies accounted for using the equity method
AS OF DECEMBER 31, 2011
INVESTMENTS
IN
ASSOCIATES
SHARE
CASH AND
CASH
EQUIVALENTS
CURRENT
ASSETS
NON- CURRENT
ASSETS
CURRENT
LIABILITIES
NON-CURRENT
LIABILITIES
ORDINARY
REVENUE
ORDINARY
EXPENSES
NET INCOME
(LOSS)
%
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
Alimentos y
Servicios S.A.
100%
61,284
16,416,794
21,750,545
26,111,404
10,068,492
9,933,304
6,110,135
(2,136,334)
Solpacific S.A.
100%
307,732
3,051,952
4,046,582
11,851,593
3,152,198
3,293,545
2,417,618
(2,188,633)
369,016
19,468,746
25,797,127
37,962,997
13,220,690
13,226,849
8,527,753
(4,324,967)
SHARE
CASH AND
CASH
EQUIVALENTS
CURRENT
ASSETS
NONCURRENT
ASSETS
CURRENT
LIABILITIES
NON-CURRENT
LIABILITIES
ORDINARY
REVENUE
ORDINARY
EXPENSES
NET INCOME
(LOSS)
%
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
Totals
AS OF DECEMBER 31, 2010
INVESTMENTS IN
ASSOCIATES
Alimentos y
Servicios S.A.
50%
122,813
11,216,333
24,946,842
16,463,857
12,417,143
36,280,713
35,011,556
1,261,370
Solpacific S.A.
50%
211,568
2,317,092
1,603,594
5,804,233
2,209,605
11,867,834
11,904,204
(507,308)
Alvi Supermercado
Mayorista S.A.
35%
2,776,981
33,136,442
48,109,765
48,621,153
19,265,318
192,666,998
194,224,337
(3,272,355)
3,111,362
46,669,867
74,660,201
70,889,243
33,892,066
240,815,545
241,140,097
(2,518,293)
Totals
Fina ncia l Sta tem ents
117
Wal mar t Chil e
2 011 | Annua l R ep o rt
14. INTANGIBLE ASSETS
CUMULATIVE AMORTIZATION
AND VALUE IMPAIRMENT
31-12-2011
31-12-2010
ThCh$
ThCh$
The details as of December 31, 2011 and December 31, 2010 are
Purchased goodwill
-
(81,607)
as follows:
TOTAL CUMULATIVE AMORTIZATION
AND VALUE IMPAIRMENT,
INTANGIBLE ASSETS
-
(81,607)
(19,695,785)
(13,727,470 )
(19,695,785)
(13,809,077)
NET INTANGIBLE ASSETS
12-31-2011
12-31-2010
ThCh$
ThCh$
Purchased goodwill
29,948,810
325,379
NET INTANGIBLE ASSETS,
WITHOUT GOODWILL
13,878,228
16,543,073
Computer programs
12,917,896
16,218,676
771,935
136,000
Trademarks and rights
Water rights
76,272
76,272
112,125
112,125
43,827,038
16,868,452
12-31-2011
12-31-2010
ThCh$
ThCh$
Internet domain
NET INTANGIBLE ASSETS
GROSS INTANGIBLE ASSETS
Purchased goodwill
29,948,810
325,379
GROSS INTANGIBLE ASSETS,
WITHOUT GOODWILL
33,574,013
30,270,543
Computer programs
32,613,681
29,946,146
771,935
136,000
Trademarks and rights
Water rights
76,272
76,272
112,125
112,125
63,522,823
30,595,922
Internet domain
GROSS IDENTIFIABLE
INTANGIBLE ASSETS
Computer programs
CUMULATIVE AMORTIZATION AND
VALUE IMPAIRMENT, IDENTIFIABLE
INTANGIBLE ASSETS
The details of the useful lives applied in the item Intangibles as of
December 31, 2011 and December 31, 2010 is as follows:
ESTIMATED USEFUL LIFE OR
AMORTIZATION RATES USED
MAX. RATE
OR LIFE
MIN. RATE
OR LIFE
5
4
Trademarks and rights
Indefinite
Indefinite
Water rights
Indefinite
Indefinite
Internet domain
Indefinite
Indefinite
Computer programs
The movement of intangibles during the financial years ending December 31, 2011 and December 31, 2010 is as follows:
12-31-2011
Movimientos en activos intangibles
INITIAL BALANCE AS OF 01-01-2011
Additions for internal development
PURCHASED
GOODWILL
TRADEMARKS
AND RIGHTS
COMPUTER
PROGRAMS
ThCh$
WATER
RIGHTS
ThCh$
INTERNET
DOMAIN
ThCh$
ThCh$
325,379
136,000
16,218,676
76,272
112,125
ThCh$
NET
INTANGIBLE
ASSETS
ThCh$
16,868,452
-
-
859,523
-
-
859,523
29,623,431
635,935
-
-
-
30,259,366
Other
-
-
-
-
-
-
Transfers from projects
-
-
3,695,104
-
-
3,695,104
Withdrawals
-
-
(1,887,092)
-
-
(1,887,092)
Amortization
-
-
(5,968,315)
-
-
(5,968,315)
Increase (decrease) due to revaluation recognized in income
statement
-
-
-
-
-
-
Impairment losses recognized in net equity
-
-
-
-
-
-
Increase (decrease) in currency exchange
-
-
-
-
-
-
Additions
INCREASES (DECREASES) DUE TO REVALUATION AND
VALUE IMPAIRMENT LOSSES (REVERSALS) RECOGNIZED
IN NET EQUITY
Other increases (decreases)
118
-
-
-
-
-
-
TOTAL CHANGES
29,623,431
635,935
(3,300,780)
-
-
26,958,586
FINAL BALANCE INTANGIBLE ASSETS AS OF 12-31-2011
29,948,810
771,935
12,917,896
76,272
112,125
43,827,038
12-31-2010
MOVEMENTS OF INTANGIBLE ASSETS
PURCHASED
GOODWILL
TRADEMARKS
AND RIGHTS
ThCh$
ThCh$
INITIAL BALANCE AS OF 01-01-2011
406,986
COMPUTER
PROGRAMS
WATER
RIGHTS
ThCh$
136,000
15,358,113
NET
INTANGIBLE
ASSETS
INTERNET
DOMAIN
ThCh$
ThCh$
ThCh$
76,272
112,125
16,089,496
Additions for internal development
-
-
-
-
-
-
Additions
-
-
4,455,258
-
-
4,455,258
Other
-
-
-
-
-
-
Transfers from projects
-
-
1,765,576
-
-
1,765,576
Withdrawals
-
-
(4,616 )
-
-
(4,616 )
Amortization
-
-
(5,355,655 )
-
-
(5,355,655 )
Increase (decrease) due to revaluation recognized in income
statement
-
-
-
-
-
-
Impairment losses recognized in net equity
-
-
-
-
-
-
Increase (decrease) in currency exchange
-
-
-
-
-
-
(81,607)
-
-
-
-
(81,607)
INCREASES (DECREASES) DUE TO REVALUATION AND
VALUE IMPAIRMENT LOSSES (REVERSALS) RECOGNIZED
IN NET EQUITY
Other increases (decreases)
(81,607)
-
-
-
-
(81,607)
TOTAL CHANGES
(81,607)
-
860,563
-
-
778,956
FINAL BALANCE INTANGIBLE ASSETS AS OF 12-31-2010
325,379
136,000
16,218,676
76,272
112,125
16,868,452
The movement of purchased goodwill as of December 31, 2011 and December 31, 2010 is as follows:
PURCHASED GOODWILL
INITIAL BALANCE
01-01-2011
OTHER INCREASES
(DECREASES)
FINAL BALANCE
12-31-2011
ThCh$
ThCh$
ThCh$
ID NO.
COMPANY ThCh$
78.298.460-8
SUPERMERCADO LA FRONTERA LTDA.
173.248
-
173.248
96.755.580-0
ALIMENTOS Y SERVICIOS LTDA.
106.795
21.635.197
21.741.992
96.519.000-7
WALMART CHILE INMOBILIARIA S.A.
96.670.110-2
INVERSIONES SOLPACIFIC S.A.
Total
45.336
-
45.336
-
7.988.234
7.988.234
325.379
29.623.431
29.948.810
INITIAL BALANCE
01-01-2010
OTHER INCREASES
(DECREASES)
FINAL BALANCE
12-31-2010
ThCh$
ThCh$
PURCHASED GOODWILL
ID NO.
COMPANY ThCh$
78.298.460-8
SUPERMERCADO LA FRONTERA LTDA.
173,248
-
173,248
96.755.580-0
ALIMENTOS Y SERVICIOS LTDA.
106,795
-
106,795
96.519.000-7
WALMART CHILE INMOBILIARIA S.A.
45,336
-
45,336
96.867.130-8
ASTRO S.A.
81,607
(81,607)
-
406,986
(81,607)
325,379
Total
SIGNIFICANT INDIVIDUAL
IDENTIFIABLE INTANGIBLE ASSETS
The main computer program is Intellec
Card
BOOK VALUE OF SIGNIFICANT
IDENTIFIABLE INTANGIBLE ASSETS
12-31-2011
BOOK VALUE OF SIGNIFICANT
IDENTIFIABLE INTANGIBLE ASSETS
12-31-2010
ThCh$
ThCh$
3,128,917
4,336,102
ThCh$
REMAINING AMORTIZATION
PERIOD OF SIGNIFICANT
IDENTIFIABLE INTANGIBLE
ASSETS (AVERAGE)
3 años
Fina ncia l Sta tem ents
119
Wal mar t Chil e
The charge to the results for the amortization of intangibles is
14.3. Reconciliation of software amortization
detailed below:
2 011 | Annua l R ep o rt
Following are details on movement of amortization during financial
years ending December 31, 2011 and December 31, 2010:
BASELINE IN INCOME STATEMENT
INCLUDING AMORTIZATION OF
IDENTIFIABLE INTANGIBLE ASSETS
Administration costs
Total
BALANCE AS OF
31-12-2011
BALANCE AS OF
31-12-2010
ThCh$
ThCh$
(5,968,315)
(5,355,656)
(5,968,315)
(5,355,656)
14.1. Intangible assets with indefinite useful life
MOVEMENT
BALANCE AS OF
12-31-2011
BALANCE AS OF
12-31-2010
ThCh$
ThCh$
Initial cumulative amortization
(13,727,470)
(10,063,872)
(+) Amortization for fiscal year
(5,968,315)
(5,355,655)
(-) Decreases for write-offs
-
1,692,057
(-) Impairment loss
-
-
(19,695,785)
(13,727,470)
(=) FINAL CUMULATIVE AMORTIZATION
14.1.1. Brand usage rights
The brand usage rights correspond to the acquisition of the “BLV” and
“BLV-Boulevard” brands, valued at historical cost. The period for use
15. INVESTMENT PROPERTIES
of these brands is unlimited and they are therefore considered to be
assets with indefinite useful life and thus not subject to amortization.
The breakdown of this item as of December 31, 2011 and December
31, 2010 is as follows:
14.1.2. Water rights
Water rights are presented at historical cost. The period for use of
15.1. Breakdown and movements of investment properties
these rights is unlimited, so they are therefore considered assets
with indefinite useful life and thus not subject to amortization. They
correspond to sites located in the Chicureo sector of Santiago.
14.1.3. Internet domain
The right to use of the internet domain for “dot cl” sites is presented
at historical cost. The period for its use is unlimited, so it is therefore
considered an asset with indefinite useful life and thus not subject to
amortization.
14.2. Impairment of purchased goodwill
Investment properties, initial cost balance
model
12-31-2011
12-31-2010
ThCh$
ThCh$
136,120,131
137,835,644
-
-
CHANGES IN INVESTMENT
PROPERTIES, COST MODEL
Additions
Reclassification to PPE
(4,533,271)
-
Fiscal year depreciation
(1,931,845)
(1,715,513 )
129,655,015
136,120,131
INVESTMENT PROPERTIES
TOTAL COST MODEL
The company has reviewed the book value of its tangible and
intangible assets to determine whether there is any indication that
15.2. Valuation of investment properties, fair value model
these assets may be impaired. In evaluating impairment, those
assets that do not generate independent cash flows are grouped in
If the company should decide to control its investment properties
an appropriate cash generating unit (CGU). The amount recoverable
using the fair value model, it must record in its books a higher asset
from these assets or CGU is measured as the lower of their reasonable
than at present, increased by ThCh$ 22,921,162 as of December
value (discounted future flows method) and their book value. The
31, 2011. Below are the fair values as of December 31, 2011 and
results of the estimates made did not produce any impairment in the
December 31, 2010.
purchased goodwill.
Valuation of investment properties, fair
value model
12 0
12-31-2011
12-31-2010
ThCh$
ThCh$
152,576,177
138,311,177
TYPES OF PROPERTY, PLANT AND
EQUIPMENT, GROSS
15.3. Income and expenses of investment properties
Construction works in progress
INCOME AND EXPENSES OF
INVESTMENT PROPERTIES
Lease income from investment properties
Direct operating expenses of investment
properties generating lease income
12-31-2011
12-31-2010
ThCh$
ThCh$
41,214,539
40,198,571
(11,149,765)
(16,531,623)
12-31-2011
12-31-2010
ThCh$
ThCh$
78,394,291
41,340,289
Sites
365,908,464
354,828,455
Buildings
249,831,392
226,560,635
Machinery and equipment
304,111,535
252,498,679
Fixed installations and accessories
311,535,089
270,138,985
Vehicles
14,653,938
13,238,027
Leased property
54,426,557
48,138,239
8,084,669
5,664,264
1,386,945,935
1,212,407,573
12-31-2011
12-31-2010
Other property, plant and equipment
Totals
15.4. Reconciliation of cumulative depreciation
The table below shows the depreciation movement during fiscal years
ending December 31, 2011 and December 31, 2010:
CUMULATIVE DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
Buildings
Machinery and equipment
MOVEMENT
BALANCES AS OF BALANCES AS OF
12-31-2011
12-31-2010
(196,936,154)
(85,898,946)
(65,024,590)
Vehicles
(12,536,958)
(11,698,424)
(31,741,276)
(28,104,062)
(368,717,757)
(313,342,264)
ThCh$
Initial cumulative depreciation
(3,603,844)
(1,888,330)
Totals
(+) Depreciation of fiscal year
(1,931,845)
(1,715,514)
(-) Decreases for write-offs
-
-
(-) Impairment loss
-
-
(5,535,689)
(3,603,844)
cember 31, 2011 and December 31, 2010:
12-31-2011
12-31-2010
ThCh$
ThCh$
78,394,291
41,340,289
Sites
365,908,464
354,828,455
Buildings
231,373,240
214,981,601
Construction works in progress
Machinery and equipment
Fixed installations and accessories
Vehicles
Leased property
Other property, plant and equipment
Totals
16.2. The table below shows the useful economic lives of
the goods
METHOD USED FOR DEPRECIATION OF
PROPERTIES, PLANT AND EQUIPMENT (LIFE)
16.1. The breakdown of this item is as follows as of De-
TYPES OF PROPERTY, PLANT AND
EQUIPMENT, NET
(11,579,034)
(220,082,425)
ThCh$
16. PROPERTY, PLANT AND EQUIPMENT
ThCh$
(18,458,152)
Fixed installations and accessories
Leased property
(=) FINAL CUMULATIVE DEPRECIATION
ThCh$
MIN.
LIFE
MAX.
LIFE
CONSTRUCTION AND INFRASTRUCTURE WORKS:
Structural work – buildings
50
50
Terminations
15
15
Terminations of leased properties
15
15
Installations
15
20
Installations of leased properties
15
20
Equipment
15
20
Equipment of leased properties
15
20
Exterior works
20
20
Exterior works of leased properties
20
20
MACHINERY AND EQUIPMENT:
84,029,110
55,562,525
Heating machines
4
4
225,636,143
205,114,395
Cooling machines
5
5
2,116,980
1,539,603
Weighing machines
4
4
22,685,281
20,034,177
Energy machines
4
4
8,084,669
5,664,264
Other machines
4
4
1,018,228,178
899,065,309
Gondolas
4
4
Office furniture
3
3
Other furniture
4
4
Light
4
4
Heavy
4
4
Cargo
4
4
Other vehicles
4
4
FURNITURE AND SUPPLIES:
VEHICLES:
Fina ncia l Sta tem ents
121
Wal mar t Chil e
16.3. The tables below show details of the reconciliation of changes to Property, plant and equipment, by type, for the
2 011 | Annua l R ep o rt
fiscal years ending December 31, 2011 and December 31, 2010.
SITES
BUILDINGS,
NET
MACHINERY
AND
EQUIPMENT,
NET
FIXED
INSTALLATIONS
AND
ACCESORIES,
NET
VEHICLES,
NET
LEASED
PROPERTY
OTHER
PROPERTY,
PLANT AND
EQUIPMENT,
NET
PROPERTY,
PLANT AND
EQUIPMENT,
NET
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
41,340,289
354,828,455
214,981,601
76,922,707
17,238,832
15,667,055
(982,944)
-
(2,456,938)
(38,885,761)
-
10,060,640
Assets available
for sale
-
(6,158,823)
Impairment (*)
-
Depreciation expense
MOVEMENT AS OF
31-12-2011
Initial balance as of
January 1, 2011
WORKS IN
PROGRESS
55,562,525
205,114,395
1,539,603
20,034,177
5,664,264
899,065,309
53,735,476
19,153,854
1,251,739
6,643,167
5,850,647
196,463,477
(1,625,009)
(3,707,947)
(9,690)
(354,857)
(11,047)
(9,148,432)
(528,700)
28,903,317
173,862
-
(3,418,462)
(3,695,104)
-
-
-
-
-
-
(6,158,823)
-
-
-
(1,476,560)
-
-
-
(1,476,560)
-
-
(6,879,118)
(23,115,182)
(22,350,916)
(838,534)
(3,637,206)
(733)
(56,821,689)
TOTAL CHANGES
34,890,002
11,080,009
16,391,639
28,466,585
20,521,748
577,377
2,651,104
2,420,405
119,162,869
FINAL BALANCE AS
OF DECEMBER 31,
2011
78,394,291
365,908,464
231,373,240
84,029,110
225,636,143
2,116,980
22,685,281
8,084,669
1,018,228,178
MACHINERY
AND
EQUIPMENT,
NET
FIXED
INSTALLATIONS
AND
ACCESORIES,
NET
VEHICLES,
NET
ThCh$
ThCh$
ThCh$
CHANGES
Additions
Withdrawals
Transfers
MOVEMENT AS OF
31-12-2010
WORKS IN
PROGRESS
SITES
BUILDINGS,
NET
ThCh$
ThCh$
ThCh$
13,860,719
341,783,591
214,319,563
56,216,231
200,101,942
1,700,629
41,854,348
9,540,776
3,811,464
22,032,002
12,372,344
(66,777)
(1,297,590)
-
(956,343)
(4,039)
(14,308,001)
4,801,678
2,860,488
(1,007,440)
-
-
(6,009,914)
TOTAL CHANGES
27,479,570
13,044,864
FINAL BALANCE
AS OF DECEMBER
31, 2011
41,340,289
354,828,455
Initial balance as of
January 1, 2010
LEASED PROP
RTY
OTHER
PROPERTY,
PLANT AND
EQUIPMENT,
NET
PROPERTY,
PLANT AND
EQUIPMENT,
NET
ThCh$
ThCh$
ThCh$
23,388,276
3,982,372
855,353,323
701,666
954,918
3,333,684
94,601,202
(2,192)
(52,819)
(5,524)
(2,385,284)
11,489,696
23,422
180,521
(1,646,268)
2,394,096
(20,721,925)
(18,845,548)
(883,922)
(4,436,719)
-
(50,898,028)
662,038
(653,706)
5,012,453
(161,026)
(3,354,099)
1,681,892
43,711,986
214,981,601
55,562,525
205,114,395
1,539,603
20,034,177
5,664,264
899,065,309
CHANGES
Additions
Withdrawals
Transfers
Depreciation
expense
(*) AS DESCRIBED IN OUR NOTE ON CRITERIA FOR APPLYING IMPAIRMENT TESTS, THIS ITEM PRESENTS A LOSS OF ThCh$ 1,476,500, WHICH WAS PRESENTED IN
INCOME IN THE OTHER EXPENSES BY FUNCTION LINE.
122
16.4. Policy for investment in property, plant and equipment
16.8. Effects of the earthquake
It is the policy of the Walmart Chile group to carry out all works
On February 27, 2010, an earthquake occurred in Chile, followed by a
necessary to satisfy growth in projected market demand, to maintain
tsunami, which significantly affected different parts of the country. This
constructions and installations in good condition, and to adapt the
event resulted in damages to certain machinery, equipment, installations
system to technological progress, in order to comply with quality
and inventory belonging to the company.
standards and ensure the continuity of its operations.
As the company has comprehensive insurance policies against
16.5. Additional information on property, plant and equipment
earthquakes and their effects covering all affected assets, including harm
due to interruption of operations, it carried out an exhaustive evaluation
of the damaged goods, involving technical staff and experts to determine,
ADDITIONAL DISCLOSABLE
INFORMATION ON PROPERTY, PLANT
AND EQUIPMENT
12-31-2011
12-31-2010
ThCh$
ThCh$
Property, plant and equipment fully
157
depreciated and still in use
144
quantify and estimate the disbursements necessary for replacements and
repairs related to the potential effects of the earthquake on the company’s
property. These evaluations identified damage and deterioration to
machinery, equipment, installations and inventory with a total book value of
Disbursements for accounts of property,
plant and equipment under construction
78,394,291
55,931,033
ThCh$ 17,609,474 and ThCh$ 8,787,557 respectively, (equivalent to US$
33.2 million and US$ 16.6 million, respectively) which were recognized in
the item Other expenses by function in the Income statement by function
for the year ending December 31, 2010.
16.6. Interest costs
At the same time the company filed a claim with the insurance companies
for losses in property, plant and equipment and stock for a total amount
DETAIL
Amount of capitalized interest cost,
property, plant and equipment
12-31-2011
12-31-2010
ThCh$
ThCh$
1,816,275
456,715
of ThCh$ 26,397,031 (equivalent to US$ 49.8 million). Of this amount,
the company recognized revenue in the item Other expenses by function
in the Income statement by function for the year (equivalent to US$ 36.1
million), since the company holds an insurance contract under which it
Capitalization rate of cost of capitalized
interest, properties, plant and equipment
4.97%
4.57%
filed a compensation claim. The loss event that generated the company’s
right to file a claim occurred on the date reported and the claim had not
been rejected by the insurer as of December 31, 2010.
16.7. Reconciliation of cumulative depreciation
As of December 31, 2011, there were no outstanding amounts receivable
from the insurance company for the earthquake.
The table below provides details on depreciation movement during
the fiscal years ending December 31, 2011 and December 31, 2010:
17. LEASES
17.1. Assets under financial leases
MOVEMENT
Initial cumulative depreciation
(+) Depreciation of fiscal period
(-) Decreases for write-offs
(-) Impairment loss
(=) FINAL CUMULATIVE
DEPRECIATION
BALANCES AS OF
31-12-2011
BALANCES AS OF
31-12-2010
ThCh$
ThCh$
(313,342,264)
(281,701,570)
(56,821,689)
(50,898,028)
1,446,196
1,647,860
-
17,609,474
(368,717,757)
(313,342,264)
PROPERTY, PLANT AND EQUIPMENT UNDER
FINANCIAL LEASE, NET
Sites under financial lease
12-31-2011
12-31-2010
ThCh$
ThCh$
10,317,314
8,006,454
Buildings under financial lease
7,070,126
5,052,028
Machinery and equipment under financial lease
3,506,236
5,003,914
Result of sale and buy-back operation
1,791,605
1,971,781
22,685,281
20,034,177
TOTAL PROPERTY, PLANT AND EQUIPMENT
UNDER FINANCIAL LEASE, NET
Fina ncia l Sta tem ents
123
Wal mar t Chil e
12-31-2011
2 011 | Annua l R ep o rt
RECONCILIATION OF MINIMUM PAYMENTS
OF FINANCIAL LEASE, LESSEE
12-31-2010
PRESENT VALUE
INTEREST
GROSS
PRESENT
VALUE
INTEREST
GROSS
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
6,878,612
2,621,352
9,499,964
4,147,999
922,918
One to five years
17,038,659
3,857,457
20,896,116
4,367,545
2,645,556
7,013,101
More than five years
17,600,809
4,587,889
22,188,698
11,261,787
4,933,856
16,195,643
41,518,080
11,066,698
52,584,778
19,777,331
8,502,330
28,279,661
Less than one year
Total
17.2. Disclosable information on operative leases as lessee
5,070,917
18. Deferred taxes
The origin of deferred taxes recorded as of December 31, 2011 and
December 31, 2010 is as follows:
MINIMUM FUTURE NONCANCELLABLE LEASE PAYMENTS,
LESSEE
Less than one year
12-31-2011
12-31-2010
ThCh$
ThCh$
24,205,358
22,861,472
One to five years
107,823,868
101,837,468
More than five years
396,087,677
374,096,821
Total
528,116,903
18.1. Deferred tax assets
12-31-2011
12-31-2010
ThCh$
ThCh$
Deferred tax assets related to
provisions
28,248,528
11,918,211
Deferred tax assets related to
revaluations of commercial
agreements
2,412,228
1,880,519
135,827
149,371
Deferred tax assets related to
inventory revaluations
4,411,825
94,819
Deferred tax assets related to
obligations to employees
1,968,882
199,410
16,830,633
42,881,218
650,985
-
2,448,019
2,880,012
57,106,927
60,003,560
DEFERRED TAX ASSETS
498,795,761
17.3. Disclosable information on operative leases as lessor
Deferred tax assets related to
revaluations of obligations at the
effective rate
MINIMUM FUTURE NONCANCELLABLE LEASE PAYMENTS,
LESSOR
Less than one year
12-31-2011
12-31-2010
ThCh$
ThCh$
26,141,493
31,899,792
One to five years
116,448,468
142,099,071
More than five years
427,769,881
521,996,589
570,359,842
695,995,452
Total
Deferred tax assets related to fiscal
losses
Deferred tax assets related to various
debtors
Deferred tax assets related to future
contracts
TOTAL DEFERRED TAX ASSETS
124
MOVEMENTS IN DEFERRED TAX
LIABILITIES
18.2. Deferred tax liabilities
Deferred tax liabilities, initial balance
DEFERRED TAX LIABILITIES
Deferred tax liabilities related to
depreciation
Deferred tax liabilities related to
revaluations of property, plant and
equipment
Deferred tax liabilities related to
revaluation of portfolio risk provision
12-31-2011
12-31-2010
ThCh$
ThCh$
12-31-2010
ThCh$
ThCh$
40,299,128
46,416,998
(10,845,844)
(5,784,392)
1,580,932
(333,478)
4,197,819
13,795,820
Other increase (decrease) in deferred
tax liabilities
20,338,218
20,307,687
TOTAL CHANGES IN DEFERRED
TAX LIABILITIES
(9,264,912)
(6,117,870)
DEFERRED TAX LIABILITIES,
FINAL BALANCE
31,034,216
40,299,128
310,010
491,370
Deferred tax liabilities related to
deferred charges
4,461,717
4,636,085
Deferred tax liabilities related to
leases
1,647,918
553,349
Deferred tax liabilities related to
others
78,534
514,817
TOTAL DEFERRED TAX LIABILITIES
Increase (decrease) in deferred tax
liabilities
12-31-2011
31,034,216
40,299,128
18.3. Movements of deferred taxes in the financial state-
18.4. Unrecognized deferred taxes
UNRECOGNIZED DEFERRED TAX
ASSETS (PRESENTATION)
12-31-2011
12-31-2010
ThCh$
ThCh$
Unrecognized deferred tax assets,
fiscal losses
-
1,746,499
TOTAL UNRECOGNIZED
DEFERRED TAX ASSETS
-
1,746,499
ment are as follows:
MOVEMENTS IN DEFERRED TAX
ASSETS
12-31-2011
12-31-2010
ThCh$
ThCh$
Deferred tax assets, initial balance
60,003,560
60,661,354
Increase (decrease) in deferred tax
assets
(2,896,633)
(674,337)
-
16,543
TOTAL CHANGES IN DEFERRED
TAX ASSETS
(2,896,633)
(657,794)
DEFERRED TAX ASSETS, FINAL
BALANCE
57,106,927
Other increase (decrease) in deferred
tax assets
18.5. Change of tax rates applicable to first category
taxpayers
On July 31, 2010, Chile’s Congress passed Law 20,455, which
implemented temporary modifications to the first category tax rate.
This new regulation consists of an increase in the first category tax
rate, applied to income obtained during financial years 2011 and
60,003,560
2012, to rates of 20% and 18.5% respectively, and then returning to
17% for 2013 onwards.
Fina ncia l Sta tem ents
125
Wal mar t Chil e
2 011 | Annua l R ep o rt
18.6. Compensation of items
Deferred tax assets and liabilities are compensated when a legally executable right exists to compensate current tax assets with current tax
liabilities and when deferred tax assets and liabilities are related to the income tax applied by the same tax authority to the same tax-paying entity
or to different tax-paying entities for which there is an intention to liquidate balances on net bases. The amounts compensated are as follows:
DEFERRED TAX ASSETS
GROSS ASSETS / LIABILITIES
VALUES COMPENSATED
NET BALANCES AT CLOSE
ThCh$
ThCh$
ThCh$
AS OF DECEMBER 31, 2011
57,106,927
(3,763,026)
53,343,901
Deferred tax liabilities
Deferred tax assets
(31,034,216)
3,763,026
(27,271,190)
Total
26,072,711
-
26,072,711
AS OF DECEMBER 31, 2010
60,003,560
(9,007,662)
50,995,898
Deferred tax liabilities
Deferred tax assets
(40,299,128)
9,007,662
(31,291,466)
Total
19,704,432
-
19,704,432
19. Other financial liabilities
19.1. Types of loans that accumulate (accrue) interest
The breakdown of this item as of December 31, 2011 and December 31, 2010 is as follows:
CURRENT BALANCE AS OF
OTHER FINANCIAL LIABILITIES
Non-guaranteed bank loans
NON-CURRENT BALANCE AS OF
12-31-2011
12-31-2010
12-31-2011
12-31-2010
ThCh$
ThCh$
ThCh$
ThCh$
107,361,025
60,446,672
206,337,703
231,538,653
Obligations to the public (bonds)
3,789,710
3,711,416
103,008,747
101,310,581
Obligations for financial leases
6,495,807
3,376,943
28,080,253
16,400,388
14,362,192
16,110,248
-
-
132,008,734
83,645,279
337,426,703
349,249,622
Future contracts
Total
19.2. Bank loans – breakdown of currencies and maturity
On May 20, 2010, Walmart Chile S.A., restructured its financial
dates
liabilities, signing a long-term syndicated credit contract with the
following banks: Banco de Chile, Banco Santander and Banco BBVA.
On September 28, 2006, Walmart Chile S.A. restructured its financial
This concentrated 100% of its current short-term credit and the
liabilities, signing a long-term syndicated credit contract with the
syndicated credit signed on May 22, 2008 with the following banks:
following banks: Banco Santander, Banco Estado, Banco BBVA and
Banco de Chile, Banco BBVA, Scotiabank, Banco Itaú, Corpbanca
Citibank N.A. This concentrated a significant part of its current short-
and Banco Santander, maturing on May 22, 2010, into a single loan
term and long-term credit into a single loan maturing at the end of
with final maturity at the end of May 2013.
March 2014. The lead bank for the operation is Banco Santander and
the agent bank is Banco Estado.
126
19.2.1. Bank loans as of December 31, 2011
CURRENT
NON-CURRENT
MATURITY
CREDITOR
NAME
ID
COUNTRY CURRENCY
TYPE OF
AMORTIZATION
EFFECTIVE NOMINAL
RATE
RATE
TYPE OF
OBLIGATION
GUARANTEE NOT DETERMINED UP TO 1 MO.
ThCh$
Banco
Santander
Banco de
Chile
Banco de
Chile
Banco de
Chile
Banco
Security
Banco Crédito
Inversiones
Banco Crédito
Inversiones
Banco Bice
97.015.000-5
Chile
Ch$
Monthly
1,00%
1,00%
97.004.000-5
Chile
Ch$
Monthly
0,35%
0,35%
97.004.000-5
Chile
Ch$
Monthly
0,61%
0,61%
97.004.000-5
Chile
Ch$
Monthly
0,58%
0,58%
97.053.000-2
Chile
Ch$
Monthly
0,54%
0,54%
97.006.000-6
Chile
Ch$
Monthly
0,50%
0,50%
97.006.000-6
Chile
Ch$
Monthly
0,63%
0,63%
97.080.000-k
Chile
Ch$
Monthly
0,56%
0,56%
Bank
No
guarantees guarantee
Fixed rate No
loan
guarantee
Fixed rate No
loan
guarantee
Fixed rate No
loan
guarantee
Fixed rate No
loan
guarantee
Fixed rate No
loan
guarantee
Fixed rate No
loan
guarantee
Fixed rate No
loan
guarantee
Fixed rate No
Banco Bice
97.080.000-k
Chile
Ch$
Monthly
0,54%
0,54%
Banco BBVA
97.032.000-8
Chile
Ch$
Monthly
0,64%
0,64%
Fixed rate No
loan
guarantee
Banco BBVA
97.032.000-8
Chile
Ch$
Monthly
0,38%
0,38%
Fixed rate No
loan
guarantee
Banco
Santander
97.015.000-5
Chile
Ch$
Monthly
1,00%
1,00%
Bank
overdraft
Banco Estado 97.030.000-7
Chile
Ch$
Monthly
1,00%
1,00%
Banco de
Chile
97.004.000-5
Chile
Ch$
Monthly
1,00%
Banco Crédito
97.006.000-6
Inversiones
Chile
Ch$
Monthly
Banco de
Chile
97.004.000-5
Chile
Ch$
Banco de
Chile a)
97.004.000-5
Chile
Banco Estado 97.030.000-7
Banco
Santander
loan
guarantee
ThCh$
MATURITY
1 TO 3 MOS.
3 TO 12 MOS.
ThCh$
ThCh$
TOTAL CURRENT
AS OF
12-31-2011
1 TO 3 YRS
ThCh$
ThCh$
3 TO 5
YRS
5 OR
MORE
YRS
ThCh$ ThCh$
TOTAL NONCURRENT AS OF
12-31-2011
ThCh$
1,706,320
-
-
-
1,706,320
-
-
-
-
-
65,083
-
-
65,083
-
-
-
-
102,577
-
-
-
102,577
-
-
-
-
803,352
-
-
-
803,352
-
-
-
-
- 190,009
-
-
190,009
-
-
-
-
-
-
-
78,771
78,771
-
-
-
-
- 909,610
-
-
909,610
-
-
-
-
-
-
-
562,227
-
-
-
-
- 200,535
250,045
-
450,580
-
-
-
-
- 393,235
-
-
393,235
-
-
-
-
562,227
672,826
-
-
-
672,826
-
-
-
-
No
guarantee
11,441
-
-
-
11,441
-
-
-
-
Bank
overdraft
No
guarantee
41,609,937
-
-
-
41,609,937
-
-
-
-
1,00%
Bank
overdraft
No
guarantee
393,153
-
-
-
393,153
-
-
-
-
1,00%
1,00%
Bank
overdraft
No
guarantee
299
-
-
-
299
-
-
-
-
Half-yearly
7,27%
7,27%
Variable
rate loan
No
guarantee
-
-
-
1,259,326
1,259,326
155,635,693
-
-
155,635,693
UF
Half-yearly
3,69%
3,28%
Fixed rate No
loan
guarantee
-
-
2,384,702
2,229,403
4,614,105
8,846,919
-
-
8,846,919
Chile
Ch$
Half-yearly
6,60%
6,60%
Variable
rate loan
No
guarantee
-
-
10,677,186
11,978,848
22,656,034
41,855,091
-
-
41,855,091
97.015.000-5
Chile
US$
Monthly
0,64%
0,64%
Letter of
credit
No
guarantee
7,284,913
-
-
-
7,284,913
-
-
-
-
Banco de
Chile
97.004.000-5
Chile
US$
Monthly
0,69%
0,69%
Letter of
credit
No
guarantee
87,316
-
-
-
87,316
-
-
-
-
Banco
Scotiabank
97.018.000-1
Chile
US$
Monthly
0,40%
0,40%
Letter of
credit
No
guarantee
5,090,715
-
-
-
5,090,715
-
-
-
-
Banco Estado 97.030.000-7
Chile
US$
Monthly
0,47%
0,47%
Letter of
credit
No
guarantee
8,275,748
-
-
-
8,275,748
-
-
-
-
Banco Itaú
76.645.030-K
Chile
US$
Monthly
0,49%
0,49%
Letter of
credit
No
guarantee
1,145,505
-
-
-
1,145,505
-
-
-
-
Banco BBVA
97.032.000-8
Chile
US$
Monthly
0,56%
0,56%
Letter of
credit
No
guarantee
7,974,970
-
-
-
7,974,970
-
-
-
-
Banco
Security
97.053.000-2
Chile
US$
Monthly
0,57%
0,57%
Letter of
credit
No
guarantee
1,022,973
-
-
-
1,022,973
-
-
-
-
13,311,933 15,546,348 107,361,025 206,337,703
-
-
206,337,703
Total
76,744,272 1,758,472
Fina ncia l Sta tem ents
127
Wal mar t Chil e
2 011 | Annua l R ep o rt
19.2.2 Bank loans as of December 31, 2010
CREDITOR
ID
NAME
COUNTRY CURRENCY
TYPE OF
AMORTIZATION
EFFECTIVE NOMINAL
RATE
RATE
TYPE OF
OBLIGATION
GUARANTEE NOT DETERMINED UP TO 1 MO.
ThCh$
Banco
97.015.000-5
Santander
Chile
US$
Monthly
1,09% 1,09%
Letter of
credit
Banco
97.015.000-5
Santander
Chile
UF
Monthly
1,00% 1,00%
Bank
No
guarantees guarantee
Banco
97.015.000-5
Santander
Chile
Ch$
Monthly
1,00% 1,00%
Bank
No
guarantees guarantee
Banco
de Chile
97.004.000-5
Chile
Ch$
Half-yearly
2,81% 2,81%
Variable
rate loan
Banco
de Chile
97.004.000-5
Chile
UF
Half-yearly
3,69% 3,28%
Banco
BCI
97.006.000-6
Chile
Ch$
Monthly
Banco
97.018.000-1
Scotiabank
Chile
Ch$
Banco
97.018.000-1
Scotiabank
Chile
Banco
Estado
97.030.000-7
Banco
de Chile
ThCh$
No
19,267,613
guarantee
CURRENT
NON-CURRENT
MATURITY
MATURITY
1 TO 3 MOS
3 TO 12 MOS
ThCh$
ThCh$
5 OR
TOTAL CURRENT
AS OF
12-31-2010
1 TO 3 YRS
ThCh$
ThCh$
3 TO 5 YRS
MORE
YRS
ThCh$
ThCh$
TOTAL NONCURRENT AS OF
12-31-2010
ThCh$
-
-
-
19, 7,613
-
-
-
-
1,272,575
-
-
-
1,272,575
-
-
-
-
38,906
-
-
-
38,906
-
-
-
No
guarantee
-
-
-
925,526
925,526
- 155,445,180
-
155,445,180
Fixed rate
loan
No
guarantee
-
-
2,337,689
2,145,555
4,483,244
8,582,220
4,173,611
-
12,755,831
1,00% 1,00%
Bank
overdraft
No
guarantee
50
-
-
-
50
-
-
-
-
Monthly
1,00% 1,00%
Bank
overdraft
No
guarantee
150,830
-
-
-
150,830
-
-
-
-
US$
Monthly
0,76% 0,76%
Letter of
credit
No
guarantee
3,496,722
-
-
-
3,496,722
-
-
-
-
Chile
Ch$
Monthly
1,72% 1,72%
Variable
rate loan
No
guarantee
-
-
10,143,255
9,583,078
19,726,333
48,425,981
14,911,661
-
63,337,642
97.004.000-5
Chile
US$
Monthly
Letter of
credit
No
guarantee
938,298
-
-
-
938,298
-
-
-
-
Banco
Itaú
76.645.030-K
Chile
US$
Monthly
0,91% 0,91%
Letter of
credit
No
guarantee
4,785,749
-
-
-
4,785,749
-
-
-
-
Banco
Security
97.053.000-2
Chile
US$
Monthly
0,93% 0,93%
Letter of
credit
No
guarantee
914,278
-
-
-
914,278
-
-
-
-
Banco
BBVA
97.032.000-8
Chile
US$
Monthly
0,92% 0,92%
Letter of
credit
No
guarantee
4,446,548
-
-
-
4,446,548
-
-
-
-
35,311,569
-
Total
12,480,944 12,654,159 60,446,672 57,008,201 174,530,452
-
231,538,653
Effective rate of bank loans:
19.3. Obligations to the public (bonds), current and non-
* Fixed
current
rate loan: For this type of loan the method used was the
effective rate. This corresponds to the rate that equalizes the
effective payment flows with the net amount on the books,
This corresponds to bonds issued by the parent company and the
discounting the cost of initiating the operation.
indirect subsidiary Walmart Chile Inmobiliaria S.A.
* Variable
rate loan: For this type of loan, due to the difficulty of
a. On November 9, 1992, the company Walmart Chile Inmobiliaria
estimating future interest rates, the company uses the same
S.A. registered with the Securities and Insurance Supervisor under
nominal rate and the costs associated with the loan are amortized
No. 162 an issue of Series A bearer bonds. On December 16, 1993,
together with the principal.
the bonds totaling 240,000 UF were placed and on November 8,
1994 bonds totaling 110,000 UF were placed, thus completing the
* Letters of credit, bank guarantees and overdrafts: Since this type
of instrument presents no origination costs, the effective rate does
not differ from the nominal rate.
1 28
maximum amount of the issue.
The principal characteristics of this issue are:
* Half-yearly maturities
* Interest payments starting in April 2006 and capital payments from
* Half-yearly maturities
* Annual interest rate of 6.5%
* No special guarantees
* Annual interest rate of 4.2%
* No special guarantees
The accrued interest payable as of December 31, 2011 and December
The restrictions associated with this obligation are presented in the
31, 2010 are presented in Obligations to the public (bonds) in current
note Contingencies, lawsuits and other restrictions.
April 2008
liabilities, together with the current portion of the obligation.
c. On February 19, 2007, Walmart Chile S.A. registered with the
The restrictions associated with this obligation are presented in the
Securities and Insurance Supervisor under No. 492 an issue of bearer
note Contingencies, lawsuits and other restrictions.
bonds (Series E) for 6,000,000 UF, which was placed on April 25, 2008.
b. On April 18, 2006, Walmart Chile Inmobiliaria S.A. registered with
On November 5, 2009, the company made a voluntary early recovery
the Securities and Insurance Supervisor under No. 463 an issue of
at par value of the Series C and E bearer bonds, recovering 28.5%
Series B bearer bonds. On September 13, 2006 the bonds totaling
and 88.1% respectively. This implied a total disbursement at the
4,500,000 UF were placed.
payment date equivalent to 5,855,000 UF, for capital plus interest
accrued and unpaid as of the payment date.
The principal characteristics of this issue are:
The details of the bonds are as follows:
AS OF DECEMBER 3, 2011
NON-CURRENT
PERIODICITY
MATURITY
CURRENT
SERIES
NOMINAL
AMOUNT
PLACED
TOTAL
BOND
INDEXATION
UNIT
INTEREST
RATE
EFFECTIVE
INTEREST
FINAL DATE
RATE
INTEREST
AMORTIZATION
PAYMENTS
PAYMENTS
TOTAL NON
CURRENT
12-31-2011
1 TO 2 YRS
ThCh$
492
E
715.000
UF
2,60%
4,86%
01-03-2013 HALF-YEARLY 1 INSTALLMENT
264,997
MORE THAN
MORE THAN
2 YRS TO
3 YRS TO
3 YRS
5 YRS
ThCh$
15,339,249
ThCh$
-
MORE THAN 5
10 OR MORE
YRS TO 10 YRS
YRS
ThCh$
ThCh$
-
-
CURRENT AS OF
12-31-2011
PLACEMENT
IN CHILE OR
ABROAD
ThCh$
-
15,339,249
Chile
162
A
46.053
UF
6,50%
7,45%
01-04-2014 HALF-YEARLY
HALF-YEARLY
294,798
281,610
127,636
-
-
-
409,246
Chile
463
B
4.138.272
UF
4,20%
4,55%
01-04-2028 HALF-YEARLY
HALF-YEARLY
3,229,915
2,325,892
2,423,566
5,156,770
14,910,365
62,443,659
87,260,252
Chile
3,789,710
17,946,751
2,551,202
5,156,770
62,443,659
103,008,747
Total
14,910,365
AS OF DECEMBER 3, 2010
NON-CURRENT
PERIODICITY
MATURITY
CURRENT
SERIES
NOMINAL
AMOUNT
PLACED
TOTAL
BOND
INDEXATION
UNIT
INTEREST
RATE
EFFECTIVE
INTEREST
FINAL DATE
RATE
INTEREST
AMORTIZATION
PAYMENTS
PAYMENTS
TOTAL NON
CURRENT
12-31-2010
1 TO 2 YRS
ThCh$
MORE THAN 2
MORE THAN 3
MORE THAN 5
10 OR MORE
YRS TO 3 YRS
YRS TO 5 YRS
YRS TO 10 YRS
YRS
ThCh$
ThCh$
ThCh$
ThCh$
CURRENT AS OF
12-31-2010
PLACEMENT
IN CHILE OR
ABROAD
ThCh$
492
E
715.000
UF
2,60%
4,86%
01-03-2013 HALF-YEARLY 1 INSTALLMENT
248,775
-
14,400,281
-
-
-
14,400,281
Chile
162
A
73.684
UF
6,50%
7,45%
01-04-2014 HALF-YEARLY
HALF-YEARLY
419,826
459,705
505,405
-
-
-
965,110
Chile
463
B
4.280.940
UF
4,20%
4,55%
01-04-2028 HALF-YEARLY
HALF-YEARLY
3,042,815
6,010,295
6,000,664
12,002,731
30,019,593
31,911,907
85,945,190
Chile
3,711,416
6,470,000 20,906,350 12,002,731
31,911,907
101,310,581
Total
30,019,593
Fina ncia l Sta tem ents
129
Wal mar t Chil e
2 011 | Annua l R ep o rt
20. TRADE AND OTHER ACCOUNTS PAYABLE
The composition of this item as of December 31, 2011 and December 31, 2010 is as follows:
CURRENT BALANCE AS OF
TRADE AND OTHER ACCOUNTS PAYABLE
12-31-2011
Domestic goods suppliers
12-31-2010
ThCh$
ThCh$
344,763,001
270,821,173
Foreign goods suppliers
10,056,322
4,982,497
Service proviers
79,118,062
69,967,443
Retention
Total
7,562,859
5,593,289
441,500,244
351,364,402
Exposure to monetary or liquidity risk related to trade and other accounts payable is analyzed in the note on the Risk Management Policy.
21. Provisions
The following provides detail of this item as of December 31, 2011 and December 31, 2010:
21.1. Provisions
BALANCES AS OF
CURRENT
NON-CURRENT
TYPE OF PROVISION
Bonuses and rewards
Vacation
Severance pay
PROVISIONS FOR EMPLOYEE BENEFITS
12-31-2011
12-31-2010
12-31-2011
12-31-2010
ThCh$
ThCh$
ThCh$
ThCh$
21,426,301
17,188,429
-
-
8,205,276
7,259,801
-
-
694,672
929,824
60,000
92,061
30,326,249
25,378,054
60,000
92,061
Legal Proceedings
1,891,500
2,132,340
-
-
Other
5,416,359
4,379,689
-
-
Negative equity
OTHER PROVISIONS
Total
-
-
-
2,019,140
7,307,859
6,512,029
-
2,019,140
37,634,108
31,890,083
60,000
2,111,201
21.1.1. Provision for bonuses and rewards
21.1.4. Provision for negative equity
This corresponds to the provision for expenses for payable bonuses and/
This provision for negative equity corresponds to the shareholding in
or legal rewards to employers in the short term.
Sociedad Inversiones Solpacific S.A, due to which the company has a
financial guarantee over the net value of this company.
21.1.2. Vacation provision
This provisions is for employee vacation expenses insofar as the service is
21.1.5. Provision for legal proceedings
provided, measured on a non-discounted basis.
The amounts for this provision correspond to the provision for certain legal
proceedings taken on by Walmart Chile and its subsidiaries for affected
21.1.3. Severence pay provision
suppliers or private persons with contract terms or provided services. The
This provision is for employee severance pay expenses in the short term.
deadlines for use of the balance of the provisions are linked to the normal
timescale of legal proceedings. (See detail in Contingencies, lawsuits and
other restrictions).
130
21.1.6. Other provisions
This is the provision for administrative expenses that must be paid during the following period.
The subsidiary company Walmart Immobiliaria S.A. has a provision for possible losses associated with particular claims. Given the possible
impact for the company, a detailed account of this material has been omitted from the present financial statements.
21.2. Movement of provisions
DETAIL
PROVISION FOR
BONUSES AND
REWARDS
ThCh$
BALANCE AS OF 01-01-2010
Charges to income
6,788,964
VACATION
PROVISION
ThCh$
5,148,176
SEVERANCE
PAY PROVISION
FOR CURRENT
TERMINATIONS
SEVERANCE PAY
PROVISION FOR
NON-CURRENT
TERMINATIONS
LEGAL
PROCEEDINGS
ThCh$
ThCh$
ThCh$
INVESTMENT
IN NEGATIVE
EQUITY
ThCh$
OTHER
PROVISIONS
BALANCE
ThCh$
ThCh$
1,421,864
-
993,085
1,765,486
2,604,511
18,848,479
27,140,436
40,399,155
929,824
92,061
1,193,613
253,654
1,775,178
71,819,668
Payments in the period
(16,740,971)
(38,287,530)
(1,421,864)
-
(54,358)
-
-
(56,666,863)
TOTAL CHANGES IN
PROVISIONS
10,399,465
2,111,625
(492,040)
92,061
1,139,255
253,654
1,775,178
15,152,805
17,188,429
7,259,801
929,824
92,061
2,132,340
2,019,140
4,379,689
34,001,284
BALANCE AS OF 12-31-2010
Charges to income
19,141,034
8,260,892
694,672
-
47,349
-
11,190,222
39,334,169
(14,903,162)
(7,315,417)
(929,824)
(32,061)
(288,189)
(2,019,140)
(10,153,552)
(35,641,345)
TOTAL CHANGES IN
PROVISIONS
4,237,872
945,475
(235,152)
(32,061)
(240,840)
(2,019,140)
1,036,670
3,692,824
BALANCE AS OF 12-31-2011
21,426,301
8,205,276
694,672
60,000
1,891,500
-
5,416,359
37,694,108
Payments in the period
22. Net Equity
In the ordinary shareholders’ meeting held on April 30, 2010, a
dividend of Ch$5.0 per share was approved; payment occurred on
22.1. Subscribed and paid-in capital
May 14, 2010.
As of December 31, 2011 and December 31, 2011, the equity of the
22.3. Minimum dividend
company presented a balance of ThCh$ 457,867,231, composed of
a total of 6,520,000,000 shares without nominal value and that have
On October 27, 2010 the Board of Directors of Walmart Chile S.A.,
been totally subscribed and paid-in. The company has issued only
in conformity with circulars 1945 dated September 29, 2009 and
one series of common shares, which enjoy equal voting rights without
1983 dated July 30, 2010 has decided not to apply adjustments to
priority whatsoever.
“Income (losses), attributable to owners of the controlling interest”
for the purpose of determining income taken into consideration
22.2. Dividends
for calculation of the obligatory, additional minimum dividend. On
December 31, 2011 a provision for the minimum dividend totaling
In the ordinary shareholders’ meeting held on April 27, 2011, a
ThCh$ 35,457,288 (ThCh$ 12,514,179 in 2010) was recorded. This
dividend of Ch$ 5.054 per share was approved; payment of this
is based on the 30% requirement contained in Corporations Law
dividend occurred on May 2, 2011.
18,406.
Fina ncia l Sta tem ents
131
Wal mar t Chil e
2 011 | Annua l R ep o rt
22.4. Accumulated Income (Loss)
22.5. Other reserves
As part of the process of consolidating the financial accounts on
22.5.1. Currency conversion reserve
December 31, 2010, the elimination of the technical reappraisal value
This item reflects the earnings accumulated, due to fluctuations in
(permitted by technical bulletin 54 “Reappraisal of Fixed Assets”) was
exchange rates, in converting the financial statements of subsidiaries
carried out on the following items: ‘Property, plant and equipment’
whose operational currency is different from that of the group
and “Cumulative income (losses) from assets’. However, because in
(Chilean pesos).
2011 the company’s IFRS assistants undertook an exhaustive and
detailed preparation, asset by asset, of the item ‘Property, plant and
22.5.2. Other reserves
equipment’, it was later detected that the aforementioned elimination
These correspond to the reverse of the revaluation of share capital
of the technical reappraisal had already been absorbed during the
of the 2009 period in accordance with Circular 456 of the Securities
adoption process, as part of the one-time reappraisal permitted by
and Insurance Supervisor, dated June 20, 2008 incorporated in the
IFRS 1 “First-Time Adoption of International Financial Standards.” As
capital issued in accordance with Law 18, 046, Article 10, second
a result, the abovementioned lines of business were undervalued by
paragraph.
ThCh$ 2,311,407, and as a result these balances have been restated
in the present financial statements. This adjustment did not modify
The movement of other reserves for the years ending December 31,
earnings during the period, so earnings per share were not affected.
2011 and December 31, 2010 is the following:
CHANGES IN OTHER RESERVES
STATEMENT OF CHANGES IN NET ASSETS
CONVERSION RESERVES
ThCh$
ThCh$
INITIAL BALANCE 01-01-2010
OTHER RESERVES
CHANGES IN OTHER RESERVES ATTRIBUTABLE TO
THE HOLDERS OF NET EQUITY INSTRUMENTS OF
THE PARENT COMPANY, TOTAL
ThCh$
(246,238)
9,943,850
9,697,612
112,984
-
112,984
-
-
-
112,984
-
112,984
(133,254)
9,943,850
9,810,596
73,146
-
73,146
(67,899)
(593)
(68,492)
5,247
(593)
4,654
(128,007)
9,943,257
9,815,250
Changes:
Comprehensive revenue and expenses result
Other increase (decrease) in net equity
CHANGES IN EQUITY
FINAL BALANCE AS OF 12-31-2010
Changes:
Comprehensive revenue and expenses result
Other increase (decrease) in net equity
CHANGES IN EQUITY
FINAL BALANCE AS OF 12-31-2011
13 2
22.6. Equity interest held by non-controlling companies
The composition of non-controlling equity interests as of December 31, 2011 and December 31, 2010 is the following:
DETAIL OF NON-CONTROLLING EQUITY INTERESTS
NAME OF SUBSIDIARY
COUNTRY
OF ORIGIN
12-31-2011
PERCENTAGE OF
NON-CONTROLLING
INTEREST IN
SUBSIDIARIES
12-31-2010
NON-HOLDING
EQUITY INTEREST
INCOME (LOSSES)
ATTRIBUTABLE
TO NONCONTROLLING
EQUITY INTEREST
NON-HOLDING
EQUITY
INTEREST
INCOME (LOSSES)
ATTRIBUTABLE TO NONCONTROLLING EQUITY
INTEREST
ThCh$
ThCh$
ThCh$
ThCh$
2011
2010
Supermercados Almac S.A.
Chile
0.0001
0.0001
59
1
78
-
Walmart Chile Inmobiliaria S.A.
Chile
0.0056
0.0056
25,031
3,140
615,991
2,745
Administradora de
Concesiones Comerc.de Hiper.
S.A.
Chile
-
0.0083
-
9,496
16,018
(39,368)
Administradora de
Concesiones Comerc. de
Super. S.A
Chile
-
0.0050
-
-
222,554
90,716
Inversiones D&S Chile Ltda.
Chile
-
0.0001
-
102
(123,067)
101
25,090
12,739
731,574
54,194
Total
23. PROFIT
EXPENSES BY NATURE
23.1. Revenue from ordinary activities
Salaries and wages
The following provides detail of the ordinary revenue for the fiscal
years ending December 31, 2011 and December 31, 2010:
TYPES OF ORDINARY REVENUE
01-01-2011
12-31-2011
01-01-2010
12-31-2010
ThCh$
ThCh$
Revenue from sales of inventory
2,442,764,493
2,129,359,460
Revenue from financial services
130,043,460
114,631,101
31,675,264
32,711,886
Revenue from leasing
Total ingresos ordinarios
2,604,483,217
2,276,702,447
Depreciation and amortization
Other service expenses
01-01-2010
12-31-2010
ThCh$
ThCh$
253,073,500
223,674,221
64,721,849
57,969,197
117,321,139
85,469,813
Estimation of portfolio risk
50,278,677
97,648,129
Leases
30,290,565
26,231,083
Electricity
25,329,311
22,664,581
Maintenance
13,401,598
12,926,102
4,564,605
578,951
558,981,244
527,162,077
Other administrative expenses
TOTAL EXPENSES BY NATURE
24.2. Depreciation and Amortization
DEPRECIATION AND
AMORTIZATION
01-01-2011
12-31-2011
ThCh$
24. COMPOSITION OF SIGNIFICANT RESULTS
24.1. Administrative costs
01-01-2011
12-31-2011
01-01-2010
12-31-2010
ThCh$
Depreciation
58,753,534
52,613,542
Amortization
5,968,315
5,355,655
64,721,849
57,969,197
Total
The following provides details on the principal administrative and
operations costs for the periods ending December 31, 2011 and
December 31, 2010:
Fina ncia l Sta tem ents
133
Wal mar t Chil e
24.3. Financial revenue and expenses included in the income
24.5. Other income by function
2 011 | Annua l R ep o rt
statement
The balance of other income by unction as of December 31, 2011
The following provides details on the items included as financial
and December 31, 2010 is composed as follows:
revenue and expenses in the periods ending December 31, 2011 and
December 31, 2010:
ITEM DETAIL
FINANCIAL RESULTS
01-01-2011
12-31-2011
01-01-2010
12-31-2010
ThCh$
ThCh$
2,208,500
971,003
Interest in related companies
19,147
9,984
Other financial revenue
25,228
5,016
2,252,875
986,003
(17,361,800)
(8,722,386)
(4,104,742)
(4,305,799)
TOTAL FINANCIAL REVENUE
FINANCIAL EXPENSES
ThCh$
18,341,079
-
Income from successive purchase,
IFRS 3 (*)
10,726,057
-
5,215,096
992,556
34,282,232
992,556
(*) See details in note on Business mergers
24.6. Other expenses by function
The balance of other expenses per function as of December 31, 2011
Interest on bank loans
Interests on bonds
Interests on promissory notes
Interest, related companies
Leasing interest
Interests on guarantee bonds
(13,514,488)
(1,572,774)
(1,277,133)
(17,608)
(15,011)
456,715
-
(39)
(34,285,416 )
(27,378,141)
Other financial costs
TOTAL FINANCIAL COSTS
(13,044,767)
1,816,275
Capitalized interest
INCOME PER INDEXATION UNITS
(15,734,513)
(9,160,423)
and December 31, 2010 is as follows:
ITEM DETAIL
01-01-2011
12-31-2011
01-01-2010
12-31-2010
ThCh$
Advertising
ThCh$
21,292,453
23,844,358
Travel costs
4,174,887
3,501,795
Impairment
1,476,560
-
882,025
722,612
Disco provision
-
21,895,080
Other expenses
9,056,271
12,153,385
36,882,196
62,117,230
Donations
Total
25. INCOME AFTER TAXES
24.4. Exchange rate difference
01-01-2011
CURRENCY 12-31-2011
ThCh$
01-01-2010
12-31-2010
ThCh$
Income tax charged to results totals ThCh$ 22,558,779 and ThCh$
4,852,831 for the periods ending December 31, 2011 and December
31, 2010 respectively, as shown in the following table:
Cash and cash equivalents
US$
12,826
(183,697)
Other financial assets
US$
322,464
-
Fees receivable, non-current
US$
(47,350 )
(1,830,379)
Loans accruing interest
US$
(1,068,846)
(1,516,872)
Accounts payable and other
accounts payable, current
US$
(5,991,902 )
2,856,709
Expense for current taxes
(6,772,808)
(674,239)
Other expenses for current taxes
INCOME TAX EXPENSE (REVENUE),
BY CURRENT AND DEFERRED PARTS
(PRESENTATION)
01-01-2011
12-31-2011
ThCh$
01-01-2010
12-31-2010
ThCh$
33,743,585
16,781,308
6,768,620
(7,131,251)
18,785
58,535
TOTAL CURRENT NET TAX EXPENSE
40,530,990
9,708,592
Deferred tax expense (income) related to creation
and reversal of temporary differences
(17,972,211)
(4,855,761)
(17,972,211)
(4,855,761)
22,558,779
4,852,831
Adjustments to current tax of previous period
TOTAL NET DEFERRED TAX EXPENSE
INCOME TAX EXPENSE (REVENUE)
13 4
ThCh$
Profit from sale of investments
TOTAL OTHER INCOME BY FUNCTION
Interest on financial investment
instruments
Total
01-01-2010
12-31-2010
Other minor revenue
FINANCIAL REVENUE
ITEM DETAIL
01-01-2011
12-31-2011
01-01-2011 01-01-2010
INCOME TAX EXPENSE (REVENUE), BY FOREIGN 12-31-2011 12-31-2010
AND DOMESTIC PARTS (PRESENTATION)
ThCh$
Net expense (income) for current taxes, foreign
BASIC EARNINGS (LOSSES) PER
SHARE
ThCh$
24,038
82,340
40,506,952
9,626,252
Earnings (loss) attributable to the holders of
equity instruments in the net equity of the
holding company
01-01-2011
12-31-2011
01-01-2010
12-31-2010
ThCh$
ThCh$
113,891,781
41,713,930
Adjustments to calculate earnings available to
common shareholders, basic
-
-
Other increase (decrease) in the calculation of
earnings available to common shareholders
-
-
EARNINGS AVAILABLE FOR COMMON
SHAREHOLDERS, BASIC
113,891,781
41,713,930
The following table shows the reconciliation of income tax recorded
Average weighted number of shares, basic
6,520,000,000
6,520,000,000
and that which would result from applying the legal rate for the periods
Basic earnings (losses) per share ($ per share)
17,47
6,40
Net expense (income) for current taxes, domestic
NET EXPENSE FOR DEFERRED TAXES, TOTAL
40,530,990
9,708,592
Net deferred tax expense, total
(17,972,211)
(4,855,761)
NET DEFERRED TAX EXPENSE, TOTAL
EXPENSE (INCOME) FOR INCOME TAX
(17,972,211) (4,855,761)
22,558,779
4,852,831
ending December 31, 2011 and December 31, 2010:
RECONCILIATION OF TAX EXPENSE AT
THE LEGAL RATE AND THE TAX EXPENSE
AT THE EFFECTIVE RATE
TAX EXPENSE USING THE LEGAL RATE
01-01-2011
12-31-2011
ThCh$
THERE ARE NO DILUTIVE EFFECTS THAT AFFECT THIS INDEX.
01-01-2010
12-31-2010
ThCh$
27,292,660
12,009,842
Tax effect of ordinary non-taxable income
(12,500,175)
(7,427,560)
Tax effect of non-taxable deductible costs
7,879,749
-
Other increase (decrease) in charges for
legal taxes
(113,455)
270,549
(4,733,881)
(7,157,011)
22,558,779
4,852,831
ADJUSTMENTS TO TAX EXPENSE USING
LEGAL RATE, TOTAL
TAX EXPENSE USING EFFECTIVE RATE
27. CONTINGENCIES, LAWSUITS AND OTHER
RESTRICTIONS
27.1. Direct Commitments
* Direct guarantees: As of December 231, 2011 and December 31,
2010 the company has no direct guarantees.
27.2. Indirect Commitments
A commitment has been taken on with Banco de Chile to maintain the
share in Aquapuro S.A.
26. EARNINGS PER SHARE
27.3. Management restrictions or limits to financial
The basic earnings per share is calculated by dividing the earnings
indicators
attributable to the company’s common shareholders among the
weighted average of the common shares in circulation in that year,
In accordance with the contracts for the issuance of bonds in the
excluding, if any, common shares acquired by the company and kept
indirect subsidiary Walmart Chile Inmobiliaria S.A. (SVS Securities
as treasury shares.
Registry nos. 163 and 467), the latter must comply with the
following limits and financial indicators which are determined using
the consolidated financial statements of said company, presented
quarterly to the Securities and Insurance Supervisor (SVS) and to
Banco Santander, bondholders’ agent.
* Leverage, understood as the quotient between total liabilities and
total equity, must be less than 1.3. As of December 31, 2011, the
company meets this requirement.
* Real estate shares with a value greater than or equal to 12,000,000
UF, understood as real estate assets defined, according to the
format of the financial statements, as the sum of: i) Property,
Fina ncia l Sta tem ents
135
Wal mar t Chil e
plant and equipment (Land and Buildings and Fixed Installations
2 011 | Annua l R ep o rt
and Accessories) in the consolidated financial statements and ii)
* 76 other cases registered with the local police in which the company
is defendant, with an associated amount of Ch$ 177,951,079.
Investment properties in the consolidated financial statements
that correspond to sites where, at the time of calculation, there
are buildings, works, installations or stores that can be exploited
* 66 civil lawsuits in which the company is plaintiff, with an associated
amount of Ch$ 3,142,942,861.
commercially or leased and these must remain leased, either
directly or indirectly through its subsidiary, to Walmart Chile S.A.
or to any related company. These contracts must be valid until
* 76
labor lawsuits in which the company is plaintiff, with an
associated amount of Ch$ 239,455,293
October 31, 2025. As of December 31, 2011, the company was in
compliance with this restriction.
* 3
arbitration cases in which the company is plaintiff, with an
associated amount of Ch$ 62,014,000,000
* Maintain assets, at a consolidated level, reflected in each of
the quarterly consolidated financial statements, greater than
12,000,000 UF. As of December 31, 2011, the company was in
* 30
criminal lawsuits in which the company is plaintiff, with an
undeterminable amount.
compliance with this indicator.
* 1 lawsuit of a different nature in which the company is a plaintiff,
These restrictions during the year 2011 were standardized with IFRS,
with an undeterminable amount.
requiring only the rephrasing of certain terminology used.
In relation to the ongoing legal proceedings aimed at achieving
27.4. Legal Proceedings
payment of the appropriate sum to Walmart Chile S.A., for the sale
to Disco S.A. of the shares of Supermercados Ekono S.A., both
As of December 31, 2011, the company and its subsidiaries had
Argentinian companies, we report the following:
lawsuits pending against them for claims related to the normal course
of operations, the majority of which, according to legal advisors, do
As has been reported, on May 2, 2003, Disco S.A. paid to Walmart
not present a risk of significant loss. For the remainder of the cases,
Chile S.A. the sum of 125 million Argentine pesos that according to
the company recognizes a provision for lawsuits, classified in the
Disco were equivalent on that date to the original debt of 90 million
expense provision account in current liabilities.
dollars, at the exchange rate of one peso per dollar plus 35 million
Argentine pesos for the applicable adjustment coefficient. In August
Among others, the most significant cases are set out as follows:
of that year, the Central Bank of Argentina authorized the company
to use Argentine pesos to buy U.S. dollars and remit them to the
* 144 civil lawsuits against the company with an associated amount
of Ch$ 12,397,598.
company, which could have been done at the exchange rate at the
time of 2.98 Argentine pesos per dollar. As such, the final amount in
dollars transferred to Walmart Chile was US$ 42,535,847.82.
* 171 employment lawsuits against the company, with an associated
amount of Ch$ 1,378,994,585.
Walmart Chile sued Disco Ahold in Curaçao, Dutch Antilles, as
guarantor of the unpaid balance of the price. The grounds of the
* 611 lawsuits for violation of consumer law in which the company is
claim were rejected by the judge of first instance in a decision
the defendant, with an associated amount of Ch$ 4,738,907,760.
issued on September 5, 2005 and then in an appeal decision
issued on November 2, 2005 in the Common Court of Appeal of
* 1 criminal case in which the company is the defendant, with an
amount of Ch$ 50,000,000
the Netherlands Antilles and Aruba. The first instance decision
and its confirmation upon appeal maintained that use of the peso
was set out by Argentine legislation and thus the payment in pesos
* 2 criminal cases in which the company is a passive party, with an
indeterminate amount.
made by Disco freed Disco Ahold from its obligations as guarantor,
beyond any provision agreed by the parties in contract and/or
under bond. The ruling also considered that there was no reason to
analyze whether the obligation of Disco Ahold had been exempted
from the application of the use of pesos because of its nature as an
136
obligation assumed by a debtor based abroad, payable with funds
part (in virtue of the application of the shared efforts doctrine) the
coming from abroad. In the opinion of our Argentine legal advisors,
balance that it claims against Disco under the Contract.”
the ruling issued by the courts of the Netherlands Antilles did not
correctly interpret Argentine law applicable to the case.
As for the counterclaim of Disco S.A., our Argentine lawyers are
of the opinion that its chances of success are remote, because it
On April 26, 2005, Walmart Chile filed a lawsuit in the courts of
is a lawsuit for reimbursement provoked precisely by the debtor
Haarlem, Holland, against Royal Ahold, demanding that Walmart
who benefited from the “pesification” and in accordance with their
Chile be compensated for all losses caused by the lack of payment
experience, they are not aware of precedents of claims of that nature
of the unpaid price balance guaranteed by Disco Ahold. The suit
taken to courts by other debtors, let alone cases in which courts
states that Disco’s refusal to pay the unpaid price balance and Disco
have upheld such claims, considering therefore that it is merely a
Ahold’s refusal to comply with its fiduciary obligations were adopted
litigation defense strategy.
by Royal Ahold, which in a direct action of contractual interference,
instructed its related companies to act in the way they did, causing
In Holland, Walmart Chile receives legal advice from and is
harm to Walmart Chile. On May 20, 2007, the court of Haarlem
represented by attorneys NautaDutilh and Allen & Overy. About
rejected the claims of Walmart Chile. Walmart Chile appealed the
the case, NautaDutilh states: “There is a reasonable possibility that
decision in March 2008.
Ahold be made responsible by the Dutch courts for the payment
of the difference between US$ 90,000,000 and the amount that
As part of the appeal proceedings, Walmart Chile requested the
it would have paid on said date, that is, the ‘pesified’ amount
presentation by Royal Ahold of various documents considered
equivalent to US$ 90,000,000, basing said responsibility on extra-
pertinent to the process and that were in the possession of Royal Ahold.
contractual responsibility”.
The court of second instance rejected this request for documents
but, at the same time, and in an unsuitable and illegal way, ruled on
“On June 6, 2011: Walmart Chile S.A. has been notified of the
the grounds, confirming the decision of first instance and rejecting
arbitration ruling in the D&S vs. Disco.” The decision rejected the
the claims of Walmart Chile. This decision of second instance was
claim brought by Distribución y Servicio D&S S.A. (“D&S”) (today
issued without the parties having had an opportunity to present their
Walmart Chile S.A.) in the February 2007 against Disco S.A.
arguments. Therefore, the decision violated procedural rules of Dutch
(Disco), in the context of the Contract for the Purchase of Shares
law and the European Convention on Human Rights and Walmart
in Supermercados Ekono S.A. (“Ekono”) in Argentina, with respect
Chile has appealed the decision before the Supreme Court.
to the claim for the balance of the price corresponding to pending
payment obligations under the aforementioned contract, for
On the February 22, 2008, Walmart Chile sued Disco in the
deferred payment and retention of prices appropriate to these types
Argentine Republic before a special arbitration ad hoc tribunal
of contracts. In these regard, and in order to reflect this situation
comprised of attorneys Alfredo L. Rovira, Sergio Alfonso Le Pera
in its financial statements, Walmart Chile proceeded to write off
and Horacio Roitman. This claim seeks payment of an additional
account receivable that has been provided for these purposes, not
amount to that already discussed, in accordance with the shared
producing any effect on the statement of earnings.”
efforts doctrine established in the legislation on “pesification,”
for the total of the balance owed. On April 3 of that year Disco
“On the August 10, 2011, Walmart Chile S.A. (“WMC”), Servicios
responded to the claim of Walmart Chile and filed a counterclaim
Profesionales y de Comercialización Limitada (“SPC”), Jumbo Retail
for payment of a fair adjustment of the price paid for the shares of
Argentina S.A. (Jumbo), Disco Ahold International Holdings N.V.
Ekono S.A., the fulfillment of which requires the reimbursement of
(“DAIH”) and Koninklijke Ahold N.V. (“Ahold”), signed a “Settlement
ARG $69,750,000, equivalent to US$ 25,000,000 at the exchange
Agreement”, by virtue of which, without recognizing facts or rights
rate on May 2, 2003, the date on which Disco made the payment
and solely for conciliatory purposes, Ahold paid to WMC the total
in pesos. In this case, the parties have concluded the submission
and definitive sum of US$ 3,250,000. Also, as a consequence of
of evidence and, unless the tribunal determines otherwise, it should
that payment, WMC and SPC were required – on their behalf and
be resolved before the end of the first quarter of 2011. In Argentina,
in representation of their parent, controlled and related companies,
Walmart Chile is advised by the law firm Allende & Brea. According
their current and previous shareholders, directors, managers,
to the latest opinion of the case, “technically there are reasonably
staff, sponsors and/or lawyers – to (i) desist from any action or
high expectations that Walmart Chile can receive in whole or in
claim, of any nature, against Jumbo, DAIH and Ahold relative to
Fina ncia l Sta tem ents
137
Wal mar t Chil e
2 011 | Annua l R ep o rt
(a) the original case filed by D&S against Ahold in the courts of
or cause related to the cases and arbitration mentioned in (a), (b)
Haarlem, Kingdom of the Netherlands; (b) the original case filed
and (c) previously. Likewise, in virtue of the same agreement, Ahold,
by D&S and SPC against DAIH in the courts of the Netherlands
DAIH and Jumbo would desist from bringing in the future any kind
Antilles; and (c) the arbitration filed originally by D&S against Disco
of action or claim against WMC and/or SPC, its parent, controlled
S.A. (currently Jumbo) in Buenos Aires, Argentina; (ii) to liberate
or related companies, current or previous shareholders, directors,
DAIH completely, irrevocably and definitively from the obligations
managers and/or staff, for whatever motive or cause related with the
that DAIH assumed as guarantor of Disco S.A. (currently Jumbo)
cases and the arbitration mentioned in (a), (b) and (c) previously.
in the contract for the purchase of shares in Supermercados Ekono
Based on this agreement, WMC withdrew its nullity claim against the
S.A. of December 23, 1999; (iii) desist from promoting in the future
arbitration decision of June 3, 2011 following the arbitration brought
any kind of action or claim against Jumbo, DAIH and/or Ahold,
against Disco S.A. (currently Jumbo) referred to in (c) previously;
their holding, controlled or related companies, current or previous
and WMC desisted in bringing the case for appeal before the Court
shareholders, directors, managers and/or staff, for whatever motive
of Appeals at The Hague in the case referred to in (a) previously”.
28. STAFFING
The distribution of Company personnel is as follows for the periods ending December 31, 2011 and December 31, 2010:
Staff
Walmart Chile S.A.
Comercial D&S S.A
Retail Business
Real Estate Business
12-31-11 12-31-10 12-31-11 12-31-10 12-31-11 12-31-10 12-31-11
12-31-10
Financial Business
12-31-11
Total
12-31-10 12-31-11 12-31-10
Managers and
Executives
9
11
79
73
196
171
25
24
25
22
334
301
Professionals and
Technicians
-
-
364
350
2,411
2,206
149
135
146
178
3,070
2,869
Other Staff
1
1
775
776
33,845
33,117
351
374
1,842
1,451
36,814
35,719
10
12
1,218
1,199
36,452
35,494
525
533
2,013
1,651
40,218
38,889
Total
29. ENVIRONMENT
Beginning in 2012 the company will modify its inventory valuation
method from average cost to the retail method, in which the cost of
The company’s investments, while essentially oriented to supporting
inventory is determined by deducting from the sale price of the item
its business activities, have internalized best environmental practices
a percentage of the gross margin associated with each department.
related to energy efficiency, waste recycling, transportation,
The percentage applied will take into account inventory that has been
availability of green spaces and the adoption of environmentally
valued below its original sale price.
friendly technologies.
On January 10, 2012, Presto S.A. received notification of a class action
30. SUBSEQUENT EVENTS
suit brought against it by Chile’s National Consumer Service, case
number 17556-2011, filed in the 16th Civil Court of Santiago for alleged
As of December 2011, inventories are valued at their acquisition cost
violation of consumer law. The suit is for an indeterminate amount and
or net realizable value, whichever is less. The net realizable value
therefore no provisions have been created for it.
is the estimated sale value of the inventory in the normal course of
business minus all remaining production costs (products produced
From January 1, 2012 to the date these financial statements were
in-house) and the costs necessary to carry out the sale. The costing
issued, no other significant events have occurred.
method corresponds to the average weighted price. In-transit inventory
is valued at acquisition cost.
138
31. BUSINESS MERGERS
fair value of the assets of the companies acquired based on future
flows that would be obtained by the synergies mentioned above. This
On July 15, 2011 Inversiones Walmart Chile Limitada, a subsidiary of
generating goodwill that was recorded by the purchasing company, with
Walmart Chile S.A., purchased the remaining 50% interest in the related
no intangibles identified that meet the conditions for being recorded
companies Alimentos y Servicios S.A. and Inversiones Solpacific S.A.,
separately.
thereby taking 100% control of the abovementioned companies, as the
other 50% was already owned by other related companies.
a) Alimentos y Servicios S.A.
Description of the acquisition process
Alimentos y Servicios S.A. was established by public deed on June 26,
The company has based its purchasing process for the companies
1995. Its purpose is to a) make, sell and distribute all kinds of foods and
Alimentos y Servicios S.A. and Inversiones Solpacific S.A. on its
prepared foods and all food products in general, in house or externally;
continual search for cost efficiency through the integration of synergies
b) purchase, sell import, export, distribute and sell, directly or indirectly,
to obtain higher production levels in the companies it acquires, and
all kinds of movable goods; and c) in general, directly or indirectly
passing on the lower purchase prices for inputs that Walmart Chile
perform all acts and celebrate contracts related to this purpose.
obtains thanks to commercial agreements it maintains with its suppliers
that result from large volume purchases. This strategy allows the
The purchase price for 50% of the shares of Alimentos y Servicios
company to offer customers the best variety of high-quality products
S.A. was ThCh$ 11,822,570. Due to the business merger, goodwill in
at the lowest prices. In accordance with the above, in the negotiating
the amount of ThCh$ 21,635,197 has been recorded in the financial
process the company agreed to pay a purchase price higher than the
statements of Walmart Chile S.A. and subsidiaries.
SU MMAR IZED STAT E M E NT O F F I NA NC I A L P O S I T I O N AT FA IR VA LU E ON T H E DAT E OF A C QU IS IT ION :
ITEM
ThCh$
TEM
ThCh$
Current assets
16.416.794
Pasivos corrientes
26,111,404
Property, plant and equipment
21.256.905
Pasivos no corrientes
10,068,492
Other non-current assets
TOTAL ASSETS
493.640
38.167.339
Patrimonio
1,987,443
Total Liabilities
38,167,339
CONTROLLING INTEREST
ThCh$ 1,987,443
D ETER MIN ATIO N O F G O O D W I L L :
DETAILS
ThCh$
Purchase price
Less: Portion purchased
993,722
GOODWILL GENERATED
10,828,848
Plus: Result of successive purchase IFRS3 R
Subsequent adjustments of purchase price
GOODWILL AT DECEMBER 31, 2011
7,862,214
2,944,135
21,635,197
As allowed under IFRS 3, the value determined for the goodwill is provisional, as the company is now undergoing a more thorough evaluation of the fair
value of the assets acquired and liabilities assumed.
Fina ncia l Sta tem ents
139
Wal mar t Chil e
b) Inversiones Solpacific S.A.
The purchase price for 50% of the shares of Inversiones Solpacific
2 011 | Annua l R ep o rt
S.A. was ThCh$ 216,694. As a result of the business merger, Walmart
Inversiones Solpacific S.A. was established on March 5, 1993 for
Chile S.A. has recorded goodwill in the amount of ThCh$ 7,988,234
the purpose of a) investing in all kinds of tangible and intangible
in its financial statements.
moveable goods, managing those investments and receiving the
benefits thereof; and b) acquiring and disposing of all kinds of real
estate, managing them and receiving the benefits thereof.
SU MMAR IZED STAT E M E NT O F F I NA NC I A L P O S I T I O N AT FA IR VA LU E ON T H E DAT E OF A C QU IS IT ION :
ITEM
ThCh$
ITEM
Current assets
3,051,952
Pasivos corrientes
Property, plant and equipment
3,984,929
Pasivos no corrientes
Other non-current assets
TOTAL ASSETS
61,653
7,098,534
ThCh$
11,851,593
3,152,198
Patrimonio
(7,905,258)
Total Liabilities
7,098,534
CONTROLLING INTEREST
ThCh$ (7,905,258)
D ETER MIN ATIO N O F G O O D W I L L :
DETAILS
ThCh$
Purchase price
Less: Portion purchased
(3,952,629)
GOODWILL GENERATED
4,169,323
Plus: Result of successive purchase IFRS3 R
2,863,843
Subsequent adjustments of purchase price
955,068
GOODWILL AT DECEMBER 31, 2011
7,988,234
As allowed under IFRS 3, the value determined for goodwill is provisional as the company is currently being subjected to a more thorough evaluation
of the fair value of the assets acquired and liabilities taken on.
32. NON-CURRENT ASSETS OR DISPOSAL GROUPS
CLASSIFIED AS HELD FOR SALE
In 2011 the company decided to reclassify the site known as “El
Molino” to the category of asset held for sale. The site has an area
of 113,474 m2 and is located in the municipality of Quilicura in the
The balance of non-current assets or disposal groups classified as
Metropolitan Region.
held for sale as of December 31, 2011 and December 31, 2010 are:
The value of the asset held for sale corresponds to the lower value
resulting from the comparison between the book value and the
DETAILS OF NON-CURRENT ASSETS
OR DISPOSAL GROUPS CLASSIFIED AS
HELD FOR SALE
Land
ALL NON-CURRENT ASSETS OR
DISPOSAL GROUPS CLASSIFIED AS
HELD FOR SALE
140
12-31-2011
12-31-2010
ThCh$
ThCh$
reasonable value less estimated sale costs, which has not generated
effects on income during the fiscal year.
6,158,823
-
6,158,823
-
There are no effects on income related to impairment losses on these
assets held for sale.
FINANCIAL STATEMENTS OF SUBSIDIARY COMPANIES
INVERSIONES WALMART CHILE LIMITADA and SUBSIDIARIES
Con s ol i dat e d f i nancial state ments as of December 3 1 , 2011 an d 2010
CONSOLIDATED CLASSIFIED BALANCE SHEETS
A s of D ec e mb e r 3 1 , 2 011 and 2 0 10. Ex p ressed in thousan d s o f C h ilean peso s (Th C h $ )
12-31-2011
12-31-2010
ThCh$
ThCh$
Cash and cash equivalents
38,023,809
61,873,785
Other current financial assets
40,243,620
-
5,113,740
3,819,596
282,067,917
263,872,074
ASSETS
CURRENT ASSETS
Other current non-financial assets
Current trade and other receivables
Current accounts receivable from related companies
-
439,771
217,100,494
179,183,149
28,403,084
-
610,952,664
509,188,375
6,158,823
-
6,158,823
509,188,375
617,111,487
509,188,375
Other non-financial, non-current assets
12,798,032
13,976,037
Collection rights, non-current
79,466,270
60,505,529
Inventories
Current tax assets
Total current assets other than assets or disposal groups classified as held for
sale or held for distribution to owners
Non-current assets or disposal groups classified as
Total current assets or disposal groups classified as held for sale or held for
distribution to owner
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Investment accounted for using equity method
Intangible assets other than goodwill
Goodwill
-
3,247,444
11,886,142
10,778,791
29,948,810
895,639
Property, plant and equipment
997,264,828
863,894,936
Investment properties
112,358,448
136,120,131
Deferred tax assets
47,054,865
42,193,235
TOTAL NON-CURRENT ASSETS
1,290,777,395
1,131,611,742
TOTAL ASSETS
1,907,888,882
1,640,800,117
THE ACCOMPANYING NOTES 1 TO 3 ARE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS.
Fina ncia l Sta tem ents
141
Wal mar t Chil e
CONSOLIDATED CLASSIFIED BALANCE SHEETS
2 011 | Annua l R ep o rt
A s of D ec e mb e r 3 1 , 2 011 and 2 0 10. Ex p ressed in thousan d s o f C h ilean peso s (Th C h $ ).
12-31-2011
12-31-2010
ThCh$
ThCh$
Other current financial liabilities
47,418,490
42,000,442
Current trade and other payables
441,794,914
351,027,747
Current accounts payable to related companies
421,010,079
314,430,354
7,373,567
5,793,131
LIABILITIES
CURRENT LIABILITIES
Other short-term provisions
Current tax liabilities
27,457,987
2,820,776
Current provisions for employee benefits
28,924,615
24,007,311
6,944,969
37,490,432
980,924,621
777,570,193
115,943,355
103,310,688
7,659,209
7,060,792
Other current, non-financial liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other non-current financial liabilities
Accounts payable to related companies
Other long-term provisions
Deferred tax liabilities
Non-current provisions for employee benefits
-
2,019,140
23,560,575
31,335,255
92,061
-
2,918,129
3,089,303
150,173,329
146,815,178
1,131,097,950
924,385,371
Issued capital
491,854,585
491,854,585
Retained earnings (losses)
157,145,182
97,612,063
Other reserves
106,414,993
106,414,993
755,414,760
695,881,641
Other non-current, non-financial liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
EQUITY
EQUITY ATTRIBUTABLE TO CONTROLLING SHAREHOLDERS
Equity attributable to minority interest
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
21,376,172
20,533,105
776,790,932
716,414,746
1,907,888,882
1,640,800,117
THE ACCOMPANYING NOTES 1 TO 3 ARE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
14 2
CONSOLIDATED STATE MENT OF INCOME BY FUNC TION
For t he f i s cal y ear s ending on December 31 , 2 011 an d 2010. Ex pressed in th o usan d s o f C h ilean peso s (Th C h $ )
CONSOLIDATED INCOME STATEMENT BY FUNCTION
Ordinary revenue
Cost of goods sold
GROSS INCOME
Other income, by function
Distribution costs
01-01-2011
01-01-2010
12-31-2011
12-31-2010
ThCh$
ThCh$
2,617,734,874
2,275,464,293
(1,844,270,729)
(1,588,631,620)
773,464,145
686,832,673
10,042,763
775,154
(23,249,381)
(17,253,810)
(187,143)
377,032
(6,984,717)
2,681,733
Administrative expenses
Other expenses, by function
Other income (losses)
Financial income
Financial expenses
Share of income (losses) of associated companies and joint ventures accounted for
using equity method
Exchange rate differences
Income per indexation units
INCOME (LOSS) BEFORE TAXES
Income tax expense
135,873,282
97,150,333
(17,546,898)
(10,927,529)
116,482,069
83,643,007
INCOME (LOSS)
EARNINGS (LOSS) ATTRIBUTABLE TO:
Income (loss) attributable to controlling interest
Income (loss) attributable to minority interest
INCOME (LOSS)
1,844,315
2,579,797
118,326,384
86,222,804
THE ACCOMPANYING NOTES 1 TO 3 ARE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
For t he f i s cal y ear s ending on December 31 , 2 011 an d 2010. Ex pressed in th o usan d s o f C h ilean peso s (Th C h $ )
FOR THE PERIOD ENDING
COMPREHENSIVE INCOME STATEMENT
01-01-2011
31-12-2011
Income (loss)
118,326,384
86,222,804
118,326,384
86,222,804
Comprehensive result attributable to controlling interest
116,482,069
83,643,007
Comprehensive income attributable to minority interests
1,844,315
2,579,797
118,326,384
86,222,804
ThCh$
01-01-2010
31-12-2010
ThCh$
COMPONENTS OF OTHER COMPREHENSIVE INCOME, BEFORE TAXES
FOREIGN CURRENCY CONVERSION DIFFERENCES
Financial assets available for sale
Cash flow hedges
Income tax related to components of other comprehensive income
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
COMPREHENSIVE INCOME ATTRIBUTABLE TO
TOTAL COMPREHENSIVE INCOME
THE ACCOMPANYING NOTES 1 TO 3 ARE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
Fina ncia l Sta tem ents
143
Wal mar t Chil e
STATEMENT OF CHANGES IN CONSOLIDATED NET EQUITY
2 011 | Annua l R ep o rt
For t he f i s cal y ear s ending Dece mber 31 , 2 011 and 2010. Ex pressed in th o usan d s o f C h ilean peso s (Th C h $ )
ISSUED
CAPITAL
RESERVES FOR
CURRENCY
CONVERSION
DIFFERENCES
491,854,585
-
Increase (decrease) for changes in
accounting policies
-
-
-
Increase (decrease) for error
correction (*)
-
-
491,854,585
-
INITIAL BALANCE CURRENT
PERIOD AS OF 01-01-2011
OTHER MISC.
RESERVES
EQUITY
ACCUMULATED
ATTRIBUTABLE
MINORITY
INCOME
TOTAL EQUITY
TO CONTROLLING INTEREST EQUITY
(LOSSES)
ENTITIES
OTHER
RESERVES
97,612,063
695,881,641
20,533,105
716,414,746
-
-
-
-
-
-
-
-
-
-
-
-
106,414,993
106,414,993
97,612,063
695,881,641
20,533,105
716,414,746
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Profit (loss)
-
-
-
-
116,482,069
116,482,069
1,844,315
118,326,384
Other comprehensive income
-
-
-
-
-
-
-
-
Comprehensive income
-
-
-
-
-
116,482,069
1,844,315
118,326,384
Dividends
-
-
-
-
25,951,050
25,951,050
-
25,951,050
Decrease (increase) due to
other distributions to owners
-
-
-
-
(82,900,000)
(82,900,000)
-
(82,900,000)
Increase (decrease) for
transfers and other changes
-
-
-
-
-
-
(1,001,248)
(1,001,248)
-
-
-
-
59,533,119
59,533,119
843,067
60,376,186
491,854,585
-
106,414,993
106,414,993
157,145,182
755,414,760
21,376,172
776,790,932
Restated initial balance
Changes in equity
Comprehensive income
TOTAL CHANGES IN EQUITY
FINAL BALANCE FOR CURRENT
PERIOD 31-12-2011
106,414,993 106,414,993
Eq u i t y a s of D ecember 31 , 2 010.
RESERVES FOR
CURRENCY
OTHER MISC.
CONVERSION
RESERVES
DIFFERENCES
ISSUED
CAPITAL
INITIAL BALANCE CURRENT
PERIOD AS OF 01-01-2010
OTHER
RESERVES
ACCUMULATED
INCOME
(LOSSES)
EQUITY
ATTRIBUTABLE
TO CONTROLLING
ENTITIES
491,854,585
-
106,411,307
106,411,307
55,061,958
653,327,850
18,504,807
671,832,657
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
491,854,585
-
106,411,307
106,411,307
55,061,958
18,504,807
671,832,657
-
-
-
-
-
-
-
-
Comprehensive income
-
-
-
-
-
-
-
-
Profit (loss)
-
-
-
-
2,579,797
86,222,804
Other comprehensive income
-
-
-
-
-
-
Comprehensive income
-
-
-
-
-
83,643,007
2,579,797
86,222,804
-
-
-
-
(25,092,902)
(25,092,902)
-
-
-
-
(16,000,000)
(16,000,000)
-
(16,000,000)
-
-
3,686
3,686
-
3,686
(551,499)
(547,813)
-
-
3,686
3,686
42,550,105
42,553,791
2,028,298
44,582,089
491,854,585
-
106,414,993
106,414,993
97,612,063
695,881,641
20,533,105
716,414,746
Increase (decrease) for changes in
accounting policies
Increase (decrease) for error
correction (*)
Restated initial balance
Changes in equity
Dividends
Decrease (increase) due to other
distributions to owners
Increase (decrease) for transfers
and other changes
TOTAL CHANGES IN EQUITY
FINAL BALANCE FOR CURRENT
PERIOD 12-31-2010
653,327,850
83,643,007
83,643,007
THE ACCOMPANYING NOTES 1 TO 3 ARE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
14 4
MINORITY
TOTAL EQUITY
INTEREST EQUITY
-
(25,092,902)
CONSOLIDATED STATE MENT OF CASH FLOW (INDIREC T METHOD)
For t he f i s cal y ear s ending Dece mber 31 , 2 011 and 2010. Ex pressed in th o usan d s o f C h ilean peso s (Th C h $ )
STATEMENT OF CASH FLOW (INDIRECT METHOD)
31-12-2011
31-12-2010
ThCh$
ThCh$
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Income (loss)
86,222,804
Adjustments to reconcile income (loss)
Adjustments for income tax expense
17,546,898
10,927,529
Adjustments for decreases (increases) in inventories
(35,333,095)
(39,470,208)
Adjustments for decreases (increases) in trade accounts receivable
(92,891,212)
(68,948,020)
Adjustments for decrease (increase) in other operating accounts receivable
(62,215,640)
(5,803,994)
Adjustments for increase (decrease) in trade accounts payable
57,744,766
69,317,981
Adjustments for increase (decrease) in other operating accounts payable
(4,560,707)
44,301,896
Adjustments for depreciation and amortization expenses
62,279,328
55,414,173
Adjustments for impairment losses (reversal of impairment losses) recorded in income statement for the period
Adjustments for provisions
Adjustments for unrealized foreign currency exchange differences
1,476,560
-
62,613,264
70,727,741
6,984,717
(2,681,733)
Adjustments for minority owners
843,067
2,028,298
Adjustments for non-distributed income from related companies
195,679
(377,032)
Adjustments for other non-cash items
(20,634,112)
(15,857,373)
Adjustments for losses (income) from disposal of non-current assets
(25,072,611)
-
5,931,791
5,617,922
Total adjustments from reconciliation of income (loss)
(25,091,307)
125,197,180
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
93,235,077
211,419,984
30,000,000
-
Other adjustments so that effects on cash are cash flows from investment or financing
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Cash flow from loss of control of subsidiaries or other businesses
Cash flow used to obtain control of subsidiaries or other businesses
Acquisition of property, plant and equipment
Acquisition of intangible assets
(12,039,524)
-
(137,131,121)
(91,034,626)
(3,659,457)
(4,455,258)
Loans to related companies
-
(66,369,999)
Other inflows (outflows) of cash
-
(456,715)
(122,830,102)
(162,316,598)
(82,900,000)
(16,000,000)
533,643
14,389,187
NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Cash payments to acquire other equity
Proceeds from short-term borrowing
Loans to related companies
Loan payments
Payments of financial lease liabilities
Dividends paid
103,918,370
-
(9,502,003)
(2,223,622)
(678,784)
(4,786,869)
-
(25,092,902)
Interest paid
(5,961,468)
(5,509,424)
NET CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES
5,409,758
(39,223,630)
(24,185,267)
9,879,756
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS BEFORE EFFECTS OF EXCHANGE RATE
EFFECTS OF EXCHANGE RATE VARIATION ON CASH AND CASH EQUIVALENTS
Effects on exchange rate on cash and cash equivalents
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period
ENDING BALANCE OF CASH AND CASH EQUIVALENTS
335,291
183,697
(23,849,976)
10,063,453
61,873,785
51,810,332
38,023,809
61,873,785
THE ACCOMPANYING NOTES 1 TO 3 ARE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
Fina ncia l Sta tem ents
145
Wal mar t Chil e
NOTES TO THE CONSOLIDATE D FINANCIAL STATEMENTS
2 011 | Annua l R ep o rt
For t he f i s cal y ear s ending on December 31 , 2 011 an d 2010
1. REPORTING ENTITY
2.2. Basis of measurement
Inversiones Walmart Chile Ltda., hereinafter ‘the company,” was
These consolidated financial statements have been prepared in
established in Chile on November 3, 2006 and is domiciled in the city
accordance with the historical cost principle, except for certain
of Santiago, Chile. The company’s main line of business is investing
financial assets and liabilities, which are valued at fair value.
in tangible and intangible property and real estate, such as shares,
promissory shares, stocks, bonds or rights in any kind of commercial
To prepare these consolidated financial statements in accordance
or civil corporation, common ownership ventures or partnerships and/
with IFRS standards, certain critical accounting estimates are used.
or in all kinds of instruments and securities.
Company management must also exercise judgment in applying
the company’s accounting policies. The note on management’s
In an extraordinary shareholders meeting held on May 20, 2011, the
estimations and critical criteria or judgments identifies areas with
company agreed to change its business name from Inversiones D&S
a greater degree of judgment or complexity and/or areas in which
Chile Ltda. to Inversiones Walmart Chile Ltda.
the hypotheses and estimates are significant for the consolidated
financial statements.
2. BASIS OF PREPARATION
The consolidated financial statements are presented using
The main accounting policies used in the preparation of these
income statements by function and the cash flow statement using
consolidated financial statements are described below.The policies
the indirect method.
are based on the International Financial Reporting Standards (IFRS)
in force on December 31, 2011 and the standards issued by the
2.3. Functional currency and presentation currency
Securities and Insurance Supervisor (SVS) applied uniformly to all
reporting periods covered in these financial statements.
The consolidated financial statements are presented in Chilean
pesos, which is both the functional and the presentation currency
The information contained in these consolidated financial statements
of the company. All companies domiciled in Chile have determined
is the responsibility of the Board of Directors of the group, which
their functional currency to be Chilean pesos, and the items
expressly affirms that has taken note of the information contained
included in the financial statements of each entity are measured
herein, takes responsibility for the information contained herein
in that currency. All information has been presented in thousands
and for the application of the IFRS principles and criteria and the
of pesos, rounded to the nearest unit unless otherwise indicated.
standards issued by the SVS, and has approved these consolidated
financial statements for issue on March 28, 2012.
2.4. New standards and interpretations issued but not in
force
2.1. Consolidated financial statements
The company has adopted all amendments, improvements and
These consolidated financial statements of Inversiones Walmart Chile
new interpretations issued for existing standards that entered into
Ltda. and its subsidiaries for the fiscal year ending on December 31,
force during the 2011 fiscal year, before the date on which these
2011 have been prepared in accordance with International Financial
consolidated financial statements were issued. Application of these
Reporting Standards and their interpretations in force on December
new standards and amendments became mandatory as of the dates
31, 2011 and the standards issued by the SVS.
specified below:
146
STANDARDS AND AMENDMENTS
MANDATORY FOR FISCAL PERIODS
BEGINNING:
IAS 32
Financial Instruments: Presentation
February 1, 2010
IFRS 1
International Financial Reporting Standards adopted for the first time
July 1, 2010
IAS 24 (revised)
Related party disclosures
January 1, 2011
Amendment to IFRS 1
International Financial Reporting Standards adopted for the first time
July 1, 2011
Amendment to IFRS 3 (revised)
Business mergers
July 1, 2010
Amendment to IFRS 7
Financial Instruments: Disclosures
July 1, 2010
Amendment to IAS 1
Presentation of financial statements
January 1, 2011
Amendment to IAS 27
Consolidated and Separate Financial Statements
July 1, 2010
Amendment to IAS 34
Interim Financial Reporting
January 1, 2011
INTERPRETATIONS
MANDATORY FOR FISCAL PERIODS
BEGINNING:
IFRIC 14
The limit on a defined benefit asset, minimum funding requirements and their
Interaction
January 1, 2011
IFRIC 13
Customer Loyalty Programs
January 1, 2011
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
July 1, 2011
The company has not adopted amendments, improvements and/or new interpretations issued for existing standards that had not entered into
force as of the date these consolidated financial statements were issued. Application of these is mandatory as of the dates specified below:
NEW STANDARDS, IMPROVEMENTS AND AMENDMENTS
MANDATORY FOR FISCAL PERIODS
BEGINNING:
IFRS 7
Financial Instruments: Disclosures
January 1, 2013
IFRS 9
Financial Instruments: Classification and measurements
January 1, 2012
IFRS 10
Consolidated Financial Statements
January 1, 2013
IFRS 11
Joint Arrangements
January 1, 2013
IFRS 12
Disclosure of Interests in Other Entities
January 1, 2013
IFRS 13
Fair Value Measurement
January 1, 2013
IAS 1
Presentation of Financial Statements
July 1, 2012
IAS 12
Income Taxes
January 1, 2012
IAS 19
Employee benefits
January 1, 2013
IAS 28
Investments in Related Companies and Joint ventures
January 1, 2013
IAS 32
Financial Instruments: Presentation
January 1, 2014
IFRIC 20
INTERPRETATIONS
MANDATORY FOR FISCAL PERIODS
BEGINNING:
Stripping Costs in the production phase of a surface mine
January 1, 2013
Company management considers that none of the abovementioned standards will have a significant effect on the consolidated financial
statements when applied.
Fina ncia l Sta tem ents
147
Wal mar t Chil e
3. SIGNIFICANT ACCOUNTING POLICIES
of the scope of minority interests. Any excess cost of acquiring the
2 011 | Annua l R ep o rt
company’s interest in the net identifiable assets acquired over and
The accounting policies set out below have been applied consistently
above fair value is recognized as goodwill purchased. Where the
to these consolidated financial statements and to all companies in
acquisition cost is lower than the fair value of the net assets of the
the group.
subsidiary acquired, the difference is recognized directly in the
statement of income.
3.1. Basis of consolidation:
In the consolidation the balances of inter-company transactions are
3.1.1. Subsidiaries
eliminated, as are unrealized income and expenses from transactions
Subsidiaries include all entities over which Grupo Inversiones Walmart
between consolidated entities. Losses resulting from a transaction
Chile has control. When evaluating whether the company has control
between consolidated entities are also eliminated, unless the
over another entity, the existence and effect of potential voting
transaction shows evidence of a loss due to impairment of the asset
rights that may currently be exercised or converted are considered.
transferred. When necessary, the accounting policies of subsidiaries
Subsidiaries are consolidated as of the date on which control is
are modified to ensure uniformity with the policies adopted by the
transferred and are excluded from the consolidation on the date on
Walmart Chile group.
which said control ceases.
The Company does not have any special purpose entities.
The acquisition method is used for recording the purchase of
subsidiaries. The acquisition cost is the fair value of assets transferred,
3.1.2. Subsidiary Companies
equity instruments issued and liabilities incurred or assumed on the
Direct subsidiary companies included in the consolidation are as
date of exchange. The identifiable assets acquired and identifiable
follows:
liabilities and contingencies assumed in a business merger are
initially valued at their fair value on the date of acquisition, regardless
SHARE PERCENTAGE
12-31-2011
ID NO.
COMPANY NAME
96.829.710-4
95.723.000-8
96.519.000-7
01-01-2010
TOTAL
DIRECT
INDIRECT
TOTAL
Comercial Walmart Chile S.A. and subsidiaries (*)
99.99
-
99.99
99.99
Walmart Chile Servicios Financieros S.A. and subsidaries (**)
99.99
-
99.99
99.99
Walmart Chile Inmobiliaria S.A. and subsidiary (***)
96.73
-
96.73
96.73
(*) On July 1, 2011 Comercial D&S S.A. changed its business name to Comercial Walmart Chile S.A. The change was approved in an extraordinary shareholders meeting held on
April 29, 2011.
(**) On July 1, 2011 the company Servicios Financieros D&S S.A. changed its business name to Walmart Chile Servicios Financieros S.A. The change was approved in an extraordinary shareholders meeting held on April 28, 2011.
(***) On July 1, 2011 the company S.A. Inmobiliaria, Terrenos y Establecimientos Comerciales changed its business name to Walmart Chile Inmobiliaria S.A. The change was
approved in an extraordinary shareholders meeting held on April 27, 2011.
148
In 2011 a reorganization process was undertaken for companies in the
Unrealized losses are also eliminated, except where the transaction
retail segment that involved the merging of all companies operating
provides evidence of loss due to impairment of the asset transferred.
under the supermarket and hypermarket formats into two new legal
When necessary, the accounting policies of related companies
entities that now operate under those formats. The process simplified
are modified to ensure uniformity with the policies adopted by the
the business structure of Wal-Mart Chile S.A. in order to support the
company.
company’s growth, streamline taxation, and provide the increased
flexibility needed for future business requirements.
Diluted earnings and losses from related companies are recognized in
the comprehensive income statement.
On July 15, 2011 the company acquired the remaining 50% interest
in the related companies Alimentos y Servicios S.A. and Inversiones
3.1.4. Transactions and minority interests
Solpacific S.A., and therefore these companies are consolidated into
It is a policy of Grupo Inversiones Walmart Chile to treat transactions
this financial statement.
with minority interests as though they were transactions with group
shareholders. For minority interests acquired, the difference between
All entities in which the company has a controlling interest are
any amount paid and the corresponding share of the book value
included in the consolidated financial statements.
of the net assets acquired from the subsidiary are recognized in
equity. Earnings and losses due to write-offs in favor of the minority
3.1.3. Related companies
interest are also recognized in equity, while the company maintains a
Related companies are all entities over which Grupo Inversiones
controlling interest.
Walmart Chile exercises significant influence but does not have
control. These are generally companies for which the company holds
3.2. Foreign exchange rates and indexation units
20 to 40% of the voting rights. Investment in related companies is
recorded using the equity method and is initially recognized by its
Assets and liabilities held in foreign currencies and indexation units
cost. The Walmart Chile group’s investment in related companies
agreed to in UF are presented using the following exchange rate and
includes goodwill purchased and identified in the acquisition, net any
accrued loss from impairment.
DATE
Grupo Inversiones Walmart Chile’s share of earnings or losses after
the acquisition of its related companies is recorded in the Income
CH$ / US$
CH$ / UF
12-31-2010
468.01
21,455.55
12-31-2011
519.20
22,294.03
Statement by Function under the heading “Equity in income (loss)
of related companies calculated by the equity method” and its share
of equity movements subsequent to the acquisition that are not
closing values, respectively:
considered income are recorded in the corresponding equity reserves
(and are reflected, as appropriate, in other comprehensive income
3.3. Foreign currency transactions
statements).
Foreign currency transactions are translated using the exchange rate
When Grupo Inversiones Walmart Chile has a loss of equity in a related
current on the date of the transaction. Monetary assets and liabilities
company that is equal to or greater than its equity in the company,
expressed in foreign currency on the date of the balance sheet are
including any unsecured accounts receivable, Grupo Inversiones
translated into Chilean pesos using the exchange rate in effect on
Walmart Chile does not record additional losses, provided that it
that date. Differences resulting from the translation are recognized in
has not incurred any obligations or made payments on behalf of the
the income statement by function. Non-monetary assets and liabilities
related company.
that are measured at the historic cost in a foreign currency are
translated using the exchange rate in effect on the transaction date.
Unrealized earnings due to transactions between the company and
Non-monetary assets and liabilities expressed in foreign currency that
any of its related companies are eliminated in proportion to the
are valued at fair value are translated into Chilean pesos using the
company’s percentage interest in that company.
same exchange rate used to determine the fair value.
Fina ncia l Sta tem ents
149
Wal mar t Chil e
3.4. Property, plant and equipment
an item of property, plant and equipment, as these more precisely
2 011 | Annua l R ep o rt
reflect the consumption pattern expected from the future economic
Property, plant and equipment are recorded at cost and presented
benefits related to an asset. Leased assets are depreciated over
net their accrued depreciation and accrued impairment, except for
either the lease period or their useful life, whichever is shorter,
land, which is not subject to depreciation.
unless it is reasonably certain that the group will acquire the asset
at the end of the leasing period.
The cost includes the price of acquisition and all costs directly
related to positioning the asset and arranging the necessary
When different parts of a property, plant and equipment item
operating conditions envisioned by company management,
have different useful lives, they are recorded as separate items
including, where applicable, initial estimates of the costs of
(important components) of property, plant and equipment.
dismantling, removal and/or partial or complete extraction of the
asset, as well as rehabilitation of the place in which it is located,
The estimated useful lives for current and comparative periods are
which is the company’s responsibility.
as follows:
Constructions or works in progress include, among others, the
following aspects incurred during the construction period:
* Financial
expenses related to external financing that are directly
attributable to theconstruction. Capitalized financial expenses
Buildings
50 years
Terminations
15 years
Installations
15-20 years
Equipment on properties
15-20 years
Exterior works
20 years
are obtained by applying the weighted average of the long-term
Vehicles
4 years
borrowing cost applicable to the average cumulative investment
Machines
4-5 years
subject to capitalization, not including financing to obtain the asset
Furniture and supplies
3-4 years
itself, as set out in IAS 23R.
* Personnel
and other operating expenses directly related to
construction.
The methods used to calculate depreciation, useful life and residual
value are reviewed every fiscal year and adjusted as needed.
Expansion, modernization and/or improvement costs that represent
Estimates for certain items of property, plant and equipment are
an increase in productivity, capacity or efficiency and therefore
reviewed regularly.
extend the useful life of the property are capitalized as part of the
carrying value of the corresponding property. Regular maintenance,
When the value of an asset is higher than its estimated recoverable
conservation and repair expenses are recorded in the income
amount, its value is immediately reduced to its recoverable amount by
statement for the fiscal year in which they were incurred. An
applying impairment tests.
element of property, plant and equipment is written off at the time
it is disposed of, or when no future economic benefits are expected
Losses and earnings resulting from the sale of property, plant and
from its use or disposal. Any earnings or losses resulting from the
equipment are calculated by comparing the income obtained with the
write-off of an asset (calculated as the difference between the net
book value, and are included in the income statement by function.
disposal value and the book value of the asset) are included in
the income statement by function for the fiscal period in which the
3.5. Investment Properties
asset is written off.
Investment properties refer to real estate (land and buildings) that
Depreciation is calculated based on the depreciable amount, which
are held to obtain economic benefit from leasing them or from capital
corresponds to the cost of an asset or other amount substituted for
appreciation. Investment properties and investment properties under
the cost, less its residual value.
construction are recorded at cost and are presented net their accrued
depreciation and accrued impairment value, except for land, which is
Depreciation is recognized in the income statement using the linear
depreciation method over the estimated useful life of each part of
150
not subject to depreciation.
The acquisition cost and all other costs associated with investment
Goodwill is assigned to cash-generating units in order to conduct
properties, as well as the effects of depreciation and treatment of
impairment testing. Goodwill is distributed among the cash-generating
assets being written off, are recorded as described for property, plant
units or groups of cash-generating units that are expected to benefit
and equipment in point 3.5, above.
from the business merger from which the goodwill emerged.
The useful economic life estimated for the main types of investment
Impairment of purchased goodwill is measured annually.
properties are as follows:
The increased value resulting from the acquisition of an investment
or business merger is posted directly on the income statement by
Buildings
50 years
Terminations
15 years
Installations
15-20 years
function.
Goodwill has no predefined useful life.
3.6.2. Trademarks and copyrights
The residual value of assets, their useful life, and depreciation
Trademarks and copyrights have an undefined useful life and are
methods used are reviewed on the date of each financial statement
recorded at their cost minus accrued impairment loss. Impairment
and adjusted as needed by making prospective changes to estimates.
testing is conducted annually at the individual level or at the level of
the cash-generating unit (CGU).
Transfers of investment properties occur only when there is a change
of use such as the end of occupation by the owners, the start up
3.6.3. Software programs
of an operative lease to another party, or the end of construction or
Licenses for software programs acquired are capitalized on the basis
development. Investment properties are only transferred when there
of the costs incurred to acquire the specific program and prepare it for
is a change of use identified by the beginning of occupation by the
use, less amortization and losses for accrued impairment. Amortization
owner or the beginning of a development with expected sale, and the
is calculated on a linear basis and its effect on the income statement
fair value on the date of reclassification is converted into its cost for
is presented under the item “administrative expenses.”
subsequent accounting.
The estimated useful lives for current and comparative periods are 4
3.6. Intangible assets
to 5 years.
3.6.1. Purchased goodwill
When incurred, the cost of developing or maintaining software
Goodwill represents the cost of acquisition over and above the
programs is recognized as an expense.
fair value of Grupo Inversiones Walmart Chile’s interest in the net
identifiable assets of subsidiaries or related companies on the date
3.7. Financing costs
of acquisition. Goodwill related to the acquisition of subsidiaries is
carried as an intangible asset.
The cost of interest incurred in the construction of any qualified asset
is capitalized over the period required to complete and prepare the
Goodwill related to acquisitions of related companies is included under
asset for the intended use, as set out in IAS 23R. Other interest costs
investment in related companies based on the equity method, and is
are recorded in the income statement as expenses.
subject to impairment testing of both the value and the total value
of the related company. Goodwill is itself also subject to impairment
testing annually and is valued at its cost minus accrued impairment
losses. Earnings and losses from the sale of an entity include the book
value of goodwill related to the entity sold.
The cash-generating unit is defined as the smallest group of assets for
which an independent cash flow can be identified. In this regard, the
company considers that each individual store meets this condition.
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3.8. Impairment of non-financial assets
where the book value of the asset is not greater than the book value
2 011 | Annua l R ep o rt
that would have been determined, net depreciation or amortization, if
Assets with an undefined useful life are not subject to amortization
no impairment loss had been recognized.
and are subject to regular impairment testing to determine loss of
value. Assets subject to depreciation or amortization are subject to
The goodwill that is included in the book value of an investment in
impairment testing where an event or change in circumstances has
a related company is not recognized separately and, therefore, no
indicated that the book value may not be recoverable.
separate impairment testing is performed. In contrast, the total value
of the investment in a related company is tested for impairment as
For goodwill and intangible assets with undefined useful lives or assets
a unique asset when there is objective evidence that the investment
not yet available for use, the recoverable value is estimated regularly.
may be impaired.
The recoverable value of an asset or cash-generating unit is the
As indicated in the note on Property, plant and equipment, when the
higher value between its value in use and its fair value, minus selling
value of an asset is higher than its estimated recoverable value, its
costs. To determine value in use, future cash flows are discounted,
value is reduced immediately to its recoverable value by recognition
estimated at their present value using a before-tax discount rate that
of a loss due to impairment. As of December 31, 2011, ThCh$
reflects current market assessments over the time value of money
1,476,560 (ThCh$ 3,464,702 in 2010) was recorded under this
and the specific risks of the asset. For the purpose of assessing
concept under Property, plant and equipment.
impairment, assets that cannot be tested individually are grouped
together into the smallest group of assets that generate cash inflows
3.9. Categories of non-derivative financial instruments
from continuous use, which are independent of cash inflows from
other assets or group of assets (the “cash generating unit”). Subject
The Walmart Chile group classifies its financial assets under the
to the date of impairment testing for an operating segment, for the
following categories: at fair value through profit or loss, loans and
purpose of testing impairment of goodwill, cash generating units to
accounts receivable, and available for sale. The classification is based
which the goodwill has been assigned are grouped together in such a
on the purpose for which financial assets are acquired. Company
way that the level at which the impairment is tested reflects the lowest
management determines which class a financial asset will belong to
level at which goodwill is monitored for internal reports.
when it is initially recognized.
The group’s corporate assets do not generate separate cash inflows.
3.9.1. Financial assets at fair value through profit or loss
Where there is any indication that a corporate asset may be impaired,
Financial assets at fair value through profit or loss are held for
the recoverable value is determined for the cash generating unit to
negotiation or designated as fair value financial assets through profit
which the corporate asset belongs.
or loss when initially recognized.
A loss due to impairment is recognized when the book value of an
A financial asset is classified in this category when it is acquired
asset or of its cash generating unit is higher than its recoverable value.
mainly in order to be sold in the short-term.
Losses from impairment are recognized in the income statement.
Assets in this category are classified as current assets.
Losses from impairment recognized in relation to cash generating
units are assigned first, in order to reduce the book value of any
3.9.2. Loans and accounts receivable
goodwill assigned to those units; the book values of other assets in the
Loans and accounts receivable are non-derivative financial assets
unit (or group of units) are then reduced on a pro rata basis.
with fixed or determinable payments that are not quoted in an active
market.
Losses due to impairment related to goodwill cannot be reversed.
In regard to other assets, impairment losses recognized in previous
Assets in this category are classified as current, except for those that
periods are evaluated on the date of each balance sheet for any
come due more than 12 months after the date of issue of the financial
indication that the loss has decreased or disappeared. An impairment
statements, which are classified as non-current assets.
loss is reversed when a change occurs in the estimations used to
determine recoverable value. An impairment loss is reversed only
152
Loans and accounts receivable include trade and other accounts
discount rate that exactly balances estimated cash flows receivable
receivable and collection rights.
or payable for the entire expected period of the financial instrument
(or, where appropriate, for a shorter period) with the net book value of
3.9.3. Financial assets available for sale
a financial asset or liability. To calculate the effective interest rate, an
Financial assets available for sale are non-derivatives in this category
entity shall estimate cash flows, taking into account all of the financial
or those that are not classified under any other category.
instrument’s contractual conditions.
They include non-current assets, except those that company
Earnings and losses from changes in the fair value of financial assets
management has decided to dispose of within 12 months of the date
to fair value through profit or loss are included in the income statement
of issue of the financial statements.
by function for the fiscal period in which the abovementioned changes
in fair value occur.
3.9.4. Recognizing and measuring financial assets
The acquisition and disposal of financial assets is recognized on the
Income from dividends on financial assets at fair value through profit
date of negotiation, which is the date on which Grupo Inversiones
or loss and those available for sale are recognized in the income
Walmart Chile pledges to acquire or dispose of the asset.
statement by function in the Other income when Grupo Inversiones
Walmart Chile has an established right to receive payment of
Financial assets are initially recognized at their fair value plus
dividends.
transaction costs for all financial assets not carried at fair value through
profit or loss. Transaction costs include fees and commissions paid to
3.10. Impairment of financial assets
agents (including employees acting as sales agents), consultants and
intermediaries, established rates for regulatory agencies and securities
A financial asset that is not posted at fair value through profit or loss
markets, and taxes and other duties required for the transaction.
is evaluated on the date of each balance sheet to determine whether
Transaction costs do not include debt premiums or discounts,
or not there is objective evidence of impairment. A financial asset
financial costs, maintenance costs or internal administration costs.
is impaired when objective evidence exists that a loss event has
occurred after its initial recognition, and that the loss event has had a
Financial assets at fair value through profit or loss are recognized
negative effect on future cash flows from the asset that can be reliably
initially by their fair value, and transaction costs are carried to the
estimated.
income statement.
Objective evidence that financial assets (including equity instruments)
Financial assets are written off when entitlements to receive cash
are impaired can include delinquency or non-compliance by the
flows from investments have expired or been transferred and Grupo
debtor, restructuring of an amount owed to the group under terms
Inversiones Walmart Chile has substantially passed on all risks and
that the group would not normally consider, indications that a debtor
benefits derived from their ownership.
or issuer will declare bankruptcy, and/or disappearance of an active
market for an instrument.
Financial assets available for sale and financial assets at fair value
through profit or loss are recorded subsequently at their fair value
(with a balancing entry in other comprehensive income statements
and income statements, respectively).
Loans and accounts receivable are recorded at their amortization cost
using the effective interest rate method.
The effective interest rate method is a method used to calculate the
amortized cost of a financial asset or liability (or of a group of financial
assets or liabilities) and to allocate the financial income or expenditure
throughout the pertinent period. The effective interest rate is the
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Additionally, for an equity instrument investment, a significant or
sale. The costing method used is the average weighted price. Goods
prolonged decrease in fair value entries below cost represents
in transit are valued at their acquisition cost.
objective evidence of impairment.
In order to adequately record its goods, the company carries out
To evaluate collective impairment, the group uses variables based
estimations related to inventory reductions and/or obsolescence.
on arrears, cash flows related to amounts collected from customers,
These estimations are based on historic experience, use a rotating
recoveries, customer segments, types of products, the amount of loss
set of articles, and are reviewed on the closing date of each financial
incurred and comparisons with recognized practices in the financial
statement.
market, adjusted as considered suitable by management, based on
whether current economic and credit conditions make it likely that real
3.12. Trade and other accounts receivable
losses will be greater or less than those arising from historic trends.
Trade and other accounts receivable are recognized initially at their fair
An impairment loss related to a financial asset valued at amortized
value (nominal value that includes implicit interest) and subsequently
cost is calculated as the difference between the book value of
at their amortized cost in accordance with the effective interest rate
the asset and the present value of estimated future cash flows,
method, less any decrease for impairment of value.
discounted to the effective interest rate. Losses are recognized in
the income statement and reflected in a provisional account against
An estimated impairment loss of trade accounts receivable is
accounts receivable (see table of trade and other delinquent accounts
established when there is objective evidence that the company will
receivable and unpaid with impairment in the note Trade and Other
not be able to collect all amounts owed to it under the original terms
Accounts Receivable). The interest on the impaired asset continues
of the receivable account. Some potential indicators of impairment of
to be recognized through a reversal of the effective rate. When a
accounts receivable are financial difficulties of the debtor, likelihood
subsequent event causes the amount of loss from impairment to
that the debtor is going to initiate bankruptcy proceedings or financial
decrease, this decrease is reversed in the income statement.
restructuring, and breach of contract or payment delinquency, as
well as experience with the behavior and characteristics of the overall
Losses from impairment of investment instruments available for
portfolio.
sale are recognized by a transfer from other reserves in equity,
net of taxes. The accrued loss that is eliminated from the other
For the purposes of assessing and recording impairment, the
comprehensive income statement and recognized in the income
portfolio is divided into different types of debtors and credits to the
statement corresponds to the difference between the acquisition
level deemed appropriate. Currently, trade debtors only present
cost, net payments of capital and amortization, and the fair value less
operations classifiable as consumption, and therefore only this kind of
any impairment loss previously recognized in the income statement.
information is provided.
Changes in impairment attributable to temporary value are reflected
as a component of interest income. If, in a subsequent period, the fair
Estimating impairment is based on an approach to loss that seeks
value of an impaired debt instrument available for sale increases, and
to capture objective evidence of impairment of operations, enabling
this increase can be objectively linked to an event occurring after the
the company to predict that future cash flows will not be received
loss from impairment had been recognized in the income statement,
as agreed. Expectation of payment, both in regard to amounts and
the loss of the income statement will be reversed. Notwithstanding
timelines, is also considered, as well as the valuation of those losses
the above, any subsequent recovery of the fair value of an equity
based on the difference between contracted flows and flows adjusted
instrument available for sale is recognized in another income
for impairment, and this last item is updated to the effective lending
statement by function.
interest rate; the amount associated with the estimated impairment is
3.11. Inventories
Inventories are valued at the cost of acquisition or net realizable value,
whichever is less. The net realizable value represents the estimated
sale value of the inventory in the normal course of business, minus
all remaining production costs (in-house products) and the costs of
15 4
presented net of trade and other accounts receivable and its effect on
directly in the income statement by function, except for income tax
income is recognized under administrative expenses.
related to entries recognized directly in equity.
3.13. Cash and cash equivalents
Current income tax is the tax that the company expects to pay for the
year, calculated using current rates in force on the balance sheet date
Cash and cash equivalents include cash and bank balances and
and also taking into account any adjustments for unpaid taxes from
investments in fixed-income mutual fund units that mature in less
previous years.
than three months. In the financial statements, any overdrafts that
exist are classified as loans in current liabilities at amortized cost.
Deferred tax is calculated by considering the differences between the
book value of assets and liabilities reported for financial purposes and
3.14. Share capital
the amounts used for tax purposes.
Share capital is represented by corporate rights that have been
Deferred taxes are valued at tax rates that are expected to be applied
integrally paid.
to temporary differences when they are reversed, based on laws
already passed or about to be passed on the date of the balance
3.15. Trade and other accounts payable
sheet. Deferred tax assets and liabilities are adjusted if there is an
enforceable legal right to adjust assets and liabilities to current taxes,
Trade and other accounts payable are recognized at amortized cost,
and they are related to income taxes applied by the same tax agency
which does not differ from their nominal value as the average payment
to the same taxable entity, or to different taxable entities, but are
deadline is reduced.
intended to liquidate current tax assets and liabilities and assets in net
form, or their tax assets and liabilities will be realized at the same time.
3.16. Loans and other financial liabilities
A deferred tax asset is recognized to the extent that it is likely that
Initially, the group recognizes debt instruments issued and financial
future taxable earnings will be available against which the asset can
liabilities on the date they originated. All other financial liabilities
be used. Deferred tax assets are reduced as it becomes less likely that
(including liabilities designated at fair value through profit or loss), are
the related benefit will be realized.
recognized initially on the date of the transaction through which the
group adhered to the instrument’s contractual provisions. The group
The company does not record deferred taxes on temporary differences
writes off a financial liability when its contractual obligations expire or
arising from investments in subsidiaries and related companies, as it
are cancelled.
controls the date on which these will revert and it is unlikely that they
will revert in the foreseeable future.
Loans, obligations to the public, and financial liabilities of a similar
nature are recognized initially at their fair value, net the costs incurred
A deferred tax asset is recognized for unrealized tax losses, tax credits
in the transaction. Subsequently they are valued at their amortized
and temporary deductible differences, to the degree that it is likely
cost and any difference between the funds obtained (net the costs
that future taxable earnings will be available against which they can
to obtain them) and the reimbursement value is recognized in the
be used. Deferred tax assets are reviewed on each balance sheet date
income statement during the life of the debt, in accordance with the
and are reduced as it becomes unlikely that the related tax benefits
effective interest rate method.
will be realized.
3.17. Income tax and deferred taxes
Income tax recorded on the yearly income statement by function
includes current and deferred income taxes. Income tax is recognized
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3.18. Employee Benefits
3.20. Revenue from Ordinary Activities
Employee benefits are recognized when the company incurs a
Ordinary revenue includes the fair value of considerations received
current legal or constructive obligation to pay as a result of past
or receivable for the sale of goods and services in the company’s
service provided by the employee and the obligation can be reliably
ordinary activities. Revenue is presented net of sales tax, returns,
estimated.
rebates and discounts.
3.18.1. Employee Vacation
The company recognizes revenue when the amount of revenue can
The company recognizes employee vacation expenses as service is
be reliably measured; it is likely that the entity will receive future
provided. Employee vacation expenses are short-term obligations
economic benefits; and the specific conditions for each of the
measured on an undiscounted basis.
company’s activities have been met. The amount of revenue is not
considered to be reliably valued until all of the contingencies related
3.18.2. Incentives
to the sale of the good or service have been resolved.
The company has an annual employee incentive plan tied to meeting
targets and individual contribution to results.
Revenue from sale of merchandise is recognized on the income
statement when the significant risks and benefits of ownership of the
The incentives are either a set figure or a percentage of monthly
goods have been transferred to the buyer. Revenue is not recorded if
remuneration. Incentives are recognized when payment of the
there is significant uncertainty related to collection, associated costs,
incentive becomes likely and the amount can be reliably estimated.
possible return of goods or continued administrative involvement with
the goods.
3.19. Provisions
Income from interest and adjustments is accrued on outstanding
Provisions are recognized when a present obligation (legal or
consumer loans depending on the amount due and is recognized
constructive) arises as a result of a past event and disbursement of
using the effective interest rate method. The effective interest rate
resources, including economic benefits, is likely to be required to
is the discount rate that ensures that the cash flows receivable are
settle the obligation and the amount of the obligation can be reliably
exactly equal to the net book value of the asset. Effective interest
estimated. When the group expects that part or all of the provision
rate calculations include, when applicable, commissions and other
will be reimbursed, for example under an insurance contract, the
items paid, such as incremental transaction costs that are directly
reimbursement is recognized as a separate asset, but only when the
attributable to the transaction.
reimbursement is virtually certain. Any provision-related expense
is included on the income statement, net of any reimbursement. If
The primary operations that generate financial interest income are:
the effect of the value of money over time is material, provisions are
discounted using a before-tax rate that reflects, when appropriate,
* interest
on installment credit: this is the interest agreed at the
the specific risks of the liability. When provisions are discounted, the
effective date of the transaction and is calculated by applying the
increase in the provision due to the passage of time is recognized as
rate (in base 365) to the unpaid credit balance at the time the
a financial cost.
installment is invoiced.
A provision for onerous contracts is recognized when the economic
* Line
of credit or revolving interest: This calculation is done on a
benefits that the group expects from the contract are less than the
daily basis or projected according to a parametrized revolving rate.
inevitable costs of complying with contractual obligations. Provisions
This interest is charged daily starting on the maturity date and until
are recognized at present value of the expected cost of terminating
invoicing (inclusive). On the invoicing date, a projection is made
the contract or the net expected cost of continuing the contract,
of interest from the date following invoicing to the date of maturity.
whichever is less.
When maturity occurs the next month, the interest is projected to
the end of the month, and the second projection is from the first
Before establishing a provision, the group recognizes any impairment
loss on the assets associated with the contract.
156
day of the month until the day before maturity.
* Interest
for arrears: this is calculated based on the overdue debt
3.21. Leasing
the customer maintains. This calculation is done on a daily basis
or projected according to a parametrized arrears rate. This interest
3.21.1. The group as lessee
is charged daily starting on the maturity date and until invoicing
Financial leases, which substantially transfer all the risks and rewards
(inclusive). On the invoicing date, a projection is made of interest
incident to ownership of the property to the group, are capitalized at the
from the date following invoicing to the date of maturity. When
lease’s commencement at the fair value of the leased property or the
maturity occurs the next month, the interest is projected to the end
present value of minimum lease payments, whichever is lower. Lease
of the month, and the second projection is from the first day of the
payments are distributed among financing charges and reduction of
month until the day before maturity.
outstanding leasing obligations to obtain a constant interest rate on
the remaining balance of the liability. Financial expenses are charged
Revenue from commissions and fees is recognized on the consolidated
to the corresponding account on the income statement.
income statement using different criteria, depending on the nature of
the revenue. Revenue originating from a single act is recorded directly
Lease agreements under which the lessor retains a substantial portion
in earnings. Revenue originating from transactions or services over
of the risks and rewards incident to ownership of the property are
time is accrued over the term of the loan.
classified as operating leases. Operating lease payments (net of any
incentives received from the lessor) are charged to the corresponding
Revenue from logistics services that can be reliably estimated is
account on the income statement over the term of the lease on a
recognized on an accrual basis according to current commercial
linear basis.
agreements.
3.21.2. The group as lessor
Revenue from investment property leases is recognized in income
When assets are leased under financial leases, the current value
using the linear method, over the term of the leasing period. Other
of lease payments is recognized as an account receivable. The
services are recognized on an accrual basis, according to the
difference in the gross amount payable and the current value of said
conditions of contracts and business agreements.
amount is recognized as financial income.
Walmart Chile has a customer loyalty program called “Mi Club Lider”.
Financial lease revenue is recognized over the lease period using
Each time a customer purchases a product included in the program,
the net investment method, which reflects a constant periodic rate
whether at a Walmart Chile store or an associated business, he or she
of return.
accumulates “Lider pesos”, which can be exchanged for products
during the subsequent quarter. Pursuant to IFRS 13, each time a
Assets leased to third parties under operating lease contracts are
customer purchases a product that accumulates “Lider pesos”, the
included in Property, plant and equipment or Investment properties,
amount of pesos earned is proportionally assigned to the products
as appropriate.
purchased, and those “Lider pesos” are recorded as deferred revenue
until they are used. Calculation of the amount of deferred revenue to
Revenue from operating leases is recognized over the term of the
be recorded takes into account the estimated probability that those
lease using the linear method.
“Lider pesos” will be used. The fair value of “Lider pesos” is equal to
the same amount of pesos in the company’s functional currency, the
3.22. Financial information by operating segment
Chilean peso. Customers use “Lider pesos” as a payment method for
purchases in the company’s stores.
An operating segment is a component of the group that engages
in business activities from which it may earn revenue and incur
expenses, including revenue and expenses related to transactions
with other components of the group.
Fina ncia l Sta tem ents
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Wal mar t Chil e
The information by segment is presented in a manner consistent with
2 011 | Annua l R ep o rt
the internal reports provided by those responsible for the relevant
operating decisions. Those executives are responsible for assigning
resources and evaluating segment performance. The following have
been identified as operating segments for which strategic decisions
are made: retail, real estate, and financial services.
3.23. Other non-financial assets
Pre-paid lease payments, for the various long-term leases of
commercial space, are recorded at historical cost and amortized over
the term of the respective contract.
3.24. Financial income and costs
Financial income is comprised of income earned on invested funds
(including available-for-sale financial assets); dividend income; gains
on sales of available-for-sale financial assets; changes in the fair value
of a financial asset at fair value, through profit or loss; and gains on
hedging instruments that are recognized in income. Interest income
is recognized in income at amortized cost, using the effective interest
rate method. Dividend income is recognized in income on the date
when the group’s right to receive payment is established.
Financial costs are comprised of interest expense on loans or
financing, rectification of discounts on provisions, changes in fair
value of financial assets at reasonable value with changes recorded in
income, impairment losses recognized on financial assets and losses
on hedging instruments that are recognized in income. Loan costs
that are not directly attributable to the acquisition, construction or
production of a qualifying asset are recognized in income using the
effective interest rate method.
3.25. Contingent assets and liabilities
A contingent asset is a possible asset arising from past events, that
will only be confirmed if one or more uncertain future events occur,
and those events are not completely under the company’s control.
A contingent liability is a possible obligation arising from past events,
that will only be confirmed if one or more uncertain future events
occur, and those events are not completely under the company’s
control.
As of December 31, 2011 and 2010, the company does not have any
contingent assets or liabilities recorded.
158
INTERNATIONAL INVESTMENTS D&S LTDA & SUBSIDIARIES
Con s ol i dat e d f i nancial state ments as of December 3 1 , 2011 an d 2010
Consolidated Classified Financial Statements
A s of D ec e mb e r 3 1 , 2 0 11 and 2 010. Exp ressed in th o usan d s o f C h ilean peso s (Th C h $ )
ASSETS
12-31-2011
12-31-2010
ThCh$
ThCh$
CURRENT ASSETS
Cash and cash equivalents
Other non-financial assets, current
84,094
99,155
Trade and other accounts receivable, current
Accounts receivable from related companies, current
Tax assets, current
98,965
-
55,730
1,455,557
1,111,785
33,123
-
1,928,432
1,350,574
Other non-financial assets, non-current
49,672
693,302
Property, plant and equipment
19,692
39,784
Deferred tax assets
31,618
51,404
100,982
784,490
2,029,414
2,135,064
12-31-2011
12-31-2010
ThCh$
ThCh$
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
pasivos CORRIENTES
Trade and other accounts payable, current
Accounts payable to related entities, current
Tax liabilities, current
1,216,214
755,217
651,921
6,669
12,058
TOTAL CURRENT LIABILITIES
1,285,218
1,880,193
TOTAL LIABILITIES
1,285,218
1,880,193
EQUITY
Share capital
1,243,623
1,243,623
Cumulative income (losses)
(400,215)
(816,274)
Other reserves
(100,128)
(173,273)
743,280
254,076
EQUITY ATTRIBUTABLE TO OWNERS OF CONTROLLING INTEREST
Minority interests
TOTAL EQUITY
TOTAL EQUITY AND LIABILITIES
916
795
744,196
254,871
2,029,414
2,135,064
NOTES 1 THRU 3 CONSTITUTE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
Fina ncia l Sta tem ents
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Wal mar t Chil e
CONSOLIDATED INCOME STATE MENT BY FUNC TION
2 011 | Annua l R ep o rt
A s of D ec e mb e r 3 1 , 2 0 11 and 2 010. Exp ressed in thousan d s o f C h ilean peso s (Th C h $ )
01-01-2011
01-01-2010
INCOME STATEMENT BY FUNCTION
12-31-2011
12-31-2010
Revenue from ordinary activities
31,458,898
21,544,863
(30,257,378)
(20,560,928)
1,201,520
983,935
ThCh$
Sales cost
GROSS INCOME
Other revenue, by function
Administrative expenses
Other expenses, by function
Financial income
Financial costs
ThCh$
3,149
-
(651,416)
(454,951)
(14,826)
(175,732)
21,910
-
(179,205)
(180,223)
Exchange rate differences
78,752
46,689
Income (loss) before taxes
459,884
219,718
Income tax expense
(43,825)
82,340
Income (loss) from continuous operations
416,059
302,058
416,059
302,049
INCOME (LOSS) ATTRIBUTABLE TO:
Income (loss) attributable to owners of controlling interest
Income (loss) attributable to minority interests
INCOME (LOSS)
-
9
416,059
302,058
NOTES 1 THRU 3 CONSTITUTE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
A s of D ec e mb e r 3 1 , 2 011 and 2 0 10. Ex p ressed in thousan d s o f C h ilean peso s (Th C h $ )
FOR THE PERIOD FROM
COMPREHENSIVE INCOME STATEMENT
Income (loss)
01-01-2011
12-31-2011
01-01-2010
12-31-2010
ThCh$
ThCh$
416,059
302,058
COMPONENTS OF OTHER COMPREHENSIVE INCOME, BEFORE TAXES
EXCHANGE RATE DIFFERENCES DUE TO CONVERSION
73,145
122,228
Financial assets available for sale
-
-
Cash flow hedging
-
-
Income taxes related to components of other comprehensive income
-
-
Other comprehensive income
-
-
489,204
424,286
489,204
424,277
-
9
489,204
424,286
TOTAL COMPREHENSIVE INCOME
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Comprehensive income attributable to controlling interest owners
Comprehensive income attributable to minority interests
TOTAL COMPREHENSIVE INCOME
NOTES 1 THRU 3 CONSTITUTE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
160
STATEMENT OF CONSOLIDATE D NET CHANGES IN EQUITY
FOR THE F IS C A L YEA RS ENDING ON DECEMB ER 31 , 2 011 AND 2010. EXPRESSED IN THOUSANDS OF C HILE AN PESOS (THC H$ )
ISSUED CAPITAL
Initial balance current period
As of 01-01-2011
OTHER
RESERVES
ACCUMULATED
INCOME
(LOSSES)
EQUITY
ATTRIBUTABLE
TO CONTROLLING
ENTITIES
MINORITY
TOTAL EQUITY
INTEREST EQUITY
1,243,623
(197,319)
24,046
(173,273)
(816,274)
254,076
795
254,871
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
¬-
1,243,623
(197,319)
24,046
(173,273)
(816,274)
254,076
795
254,871
416,059
416,059
-
416,059
489,204
-
489,204
-
-
121
121
73,145
416,059
489,204
121
489,325
(100,128)
(400,215)
743,280
916
744,196
Increase (decrease) due to changes in
accounting policies
Increase (decrease) due to correction
of errors
Restated initial balance
RESERVES FOR
CURRENCY
OTHER MISC.
CONVERSION
RESERVES
DIFFERENCES
Changes in equity
Comprehensive income
Income (loss)
Other comprehensive income
73,145
73,145
73,145
Comprehensive income
Dividends
-
Increase (decrease) for transfers
and other changes
Total changes in equity
FINAL BALANCE FOR CURRENT
PERIOD 12-31-2011
73,145
-
73,145
1,243,623
(124,174)
24,046
EQU ITY A S OF DECEM B ER 31 , 2 010
RESERVES FOR
CURRENCY
OTHER MISC.
CONVERSION
RESERVES
DIFFERENCES
ISSUED
CAPITAL
Initial balance current period
As of 01-01-2010
OTHER
RESERVES
ACCUMULATED
INCOME
(LOSSES)
EQUITY
ATTRIBUTABLE
TO CONTROLLING
ENTITIES
MINORITY
TOTAL EQUITY
INTEREST EQUITY
1,243,623
(319,547)
24,046
(295,501)
(1,118,323)
(170,201)
669
(169,532)
Increase (decrease) due to changes in
accounting policies
-
-
-
-
-
-
-
-
Increase (decrease) due to correction
of errors
-
-
-
-
-
-
-
-
1,243,623
(319,547)
24,046
(295,501)
(1,118,323)
(170,201)
669
(169,532)
302,049
9
Restated initial balance
Changes in equity
Comprehensive income
Income (loss)
302,049
Other comprehensive income
122,228
122,228
122,228
Comprehensive income
424,277
Dividends
-
Increase (decrease) for transfers
and other changes
-
Total changes in equity
FINAL BALANCE FOR CURRENT
PERIOD 12-31-2010
302,058
122,228
9
424,286
-
117
117
-
122,228
-
122,228
302,049
424,277
126
424,403
1,243,623
(197,319)
24,046
(173,273)
(816,274)
254,076
795
254,871
NOTES 1 THRU 3 CONSTITUTE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
Fina ncia l Sta tem ents
161
Wal mar t Chil e
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CONSOLIDATED INDIREC T CASH FLOW STATEMENT
FOR THE F IS C A L PERIODS ENDED DECEMB ER 31 , 2 011 A ND 2011 . EXPRESSED IN THOUSANDS OF PESOS (Th C h $ )
12-31-2011
12-31-2010
ThCh$
ThCh$
416,059
302,058
Adjustments for income tax expense
43,825
(82,340)
Adjustments for decreases (increases) in trade accounts receivable
55,730
6,722
580,889
(60,427)
NDIRECT CASH FLOW STATEMENT
CASH FLOW FROM (USED IN) OPERATIONS ACTIVITIES
Income (loss)
ADJUSTMENTS FOR INCOME (LOSS) RECONCILIATION
Adjustments for decreases (increases) in other accounts receivable from operations activities
Adjustments for decreases (increases) in trade accounts payable
(692,882)
266,766
-
(46,689)
Other adjustments for items other than cash
93,358
221,945
TOTAL ADJUSTMENTS FOR RECONCILIATION OF INCOME (LOSS)
80,920
305,977
496,979
608,035
Adjustments for unrealized currency income (losses)
NET CASH FLOWS FROM (USED IN) OPERATIONS ACTIVITIES
CASH FLOW FROM (USED IN) INVESTMENT ACTIVITIES
Loans to related entities
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
103,296
(269,338)
103,296
(269,338)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Loan payments to related entities
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, BEFORE THE EFFECT OF EXCHANGE RATE
FLUCTUATIONS
(343,772)
(550,543)
(343,772)
(550,543)
256,503
(211,846)
EFFECTS OF EXCHANGE RATE VARIATION ON CASH AND CASH EQUIVALENTS
Effects of exchange rate variation on cash and cash equivalents
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the period
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
NOTES 1 THRU 3 CONSTITUTE AN INTEGRAL PART OF THESE SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS
162
-
-
256,503
(211,846)
84,094
295,940
340,597
84,094
Notes to the Consolidated Financial Statements
For f i s cal y e ar s e nding December 31 , 2 011 and 2 0 1 0
1. Reporting Entity
2.1. Consolidated Financial Statements
Inversiones Internacionales D&S Ltda., henceforth “the company”,
The consolidated financial statements for Inversiones Internacionales
was formed in Chile on June 12, 2008 in the city of Santiago, Chile.
D&S Ltda. and its subsidiaries for the year ended December 31,
The purpose of the company is to make investments, directly or
2011 have been prepared in accordance with IFRS and the current
indirectly, in Chile and abroad, both tangible and intangible, such as
interpretations thereof and the standards provided by the SVS.
stocks, futures, bonds, and percentage ownership or other rights to
any type of partnerships, whether commercial or civil, communities or
2.2. Bases of Measurement
associations, via all types of titles and intangible goods.
The consolidated financial statements have been prepared in
At the October 27, 2009 Walmart Chile S.A. Board of Directors
accordance with the principle of historical cost, with the exception of
meeting, the Board agreed to reduce the operations of consolidated
valuation of certain financial assets and liabilities, which are valued
subsidiaries Comercial D&S Perú S.A. and Inmobiliaria D&S Perú
at fair value.
S.A.C. Therefore, their future commercial activity will depend on
management’s future decisions.
IFRS requires that certain critical accounting estimates be used in
the preparation of consolidated financial statements. It also requires
The following direct subsidiaries form part of the consolidated group:
that management exercise its judgment when applying accounting
Inmobiliaria D&S Perú S.A.C, Comercial D&S Perú S.A. and South
policies to the company.
Pacific Trade Limited.
The consolidated financial statements were presented using the
2. Preparation Bases
Income Statement by Function and the Cash Flow Statement Indirect.
The following is a description of the significant accounting policies
applied in the preparation of these consolidated financial statements.
2.3. Functional and Presentation Currency
The policies have been designed in accordance with International
Financial Reporting Standards (IFRS) in effect as of December 31,
The consolidated financial statements are presented in company’s
2011 and the standards provided by the Securities and Insurance
functional and presentation currency, the Chilean peso. All companies
Supervisor (SVS). These standards have been applied to all the
based in Chile have established the Chilean peso as their functional
periods presented in these financial statements.
currency and the items in the financial statements of each entity are
measured in that currency. The functional currency of subsidiaries
The information contained in these consolidated financial statements
based in Peru is the nuevo sol, in accordance with Note 3.4. All of the
is the responsibility of the group’s Board of Directors, who have
information is presented in thousands of pesos and has been rounded
expressly indicated that they have reviewed the financial statements
to the nearest whole, unless stated otherwise.
and declare themselves responsible for the content of the information
presented herein as well as the application of the IFRS principles
and criteria and standards provided by the SVS. The Board approved
these financial statements for publication on March 28, 2012.
Fina ncia l Sta tem ents
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2.4. New standards and interpretations issued and invalid ones
At the date of issuance of these consolidated financial statements, certain amendments, improvements and interpretations to existing standards
have been published that have entered into effect during the 2012 fiscal year, and which the company has adopted. Adoption of these standards
was mandatory as of the dates indicated below:
STANDARDS AND AMENDMENTS
REQUIRED APPLICATION FOR FISCAL
YEARS STARTED ON:
IAS 32
Financial Instruments: Presentation
February 1, 2010
IFRS 1
First-time Adoption of International Financial Reporting Standards
July 1, 2010
IAS 24 (revised)
Disclosure of related parties
January 1, 2011
Amendment to IFRS 1
First-time Adoption of International Financial Reporting Standards
July 1, 2011
Amendment to IFRS 3 (revised)
Business Merger
July 1, 2010
Amendment to IFRS 7
Financial Instruments: Disclosures
July 1, 2010
Amendment to IAS 1
Presentation of financial statements
January 1, 2011
Amendment to IAS 27
Consolidated and separate financial statements
July 1, 2010
Amendment to IAS 34
Interim Information
January 1, 2011
INTERPRETATIONS
REQUIRED APPLICATION FOR FISCAL
YEARS STARTED ON:
IFRIC 14
The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their
Interaction
January 1, 2011
IFRIC 13
Customer Loyalty Programs
January 1, 2011
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
July 1, 2010
Likewise, at the date of issuance of these consolidated financial statements, certain amendments, improvements and interpretations to existing
standards have been published that have not entered into effect and which the company has not yet adopted. Adoption of these standards is
mandatory as of the dates indicated below:
NEW STANDARD, IMPROVEMENTS AND AMENDMENTS
REQUIRED APPLICATION FOR FISCAL
YEARS STARTED ON:
IFRIC 7
Financial Instruments: Disclosures
January 1, 2013
IFRIC 9
Financial Instruments: Classification and Measurement
January 1, 2012
IFRIC 10
Consolidated Financial Statements
January 1, 2013
IFRIC 11
Joint Arrangements
January 1, 2013
IFRIC 12
Disclosure of Participation in Other Entities
January 1, 2013
IFRIC 13
Measurement of Fair Value
January 1, 2013
IAS 1
Presentation of Financial Statements
July 1, 2012
IAS 12
Income Taxes
January 1, 2012
IAS 19
Employee Benefits
January 1, 2013
IAS 28
Investments in Associates and Joint Ventures
January 1, 2013
IAS 32
Financial Instruments: Presentation
January 1, 2014
INTERPRETATIONS
REQUIRED APPLICATION FOR FISCAL
YEARS STARTED ON:
“Stripping Costs” in the Production Phase
January 1, 2013
IFRIC 20
The company’s management believes that none of these standards will have a significant effect on the consolidated financial statements when
they are applied.
16 4
3. SIGNIFICANT ACCOUNTING POLICIES
In consolidation, all balances of inter-company transactions
and unrealized expenses and income for transactions between
The accounting policies established herein have been applied
consolidated entities are eliminated. Losses stemming from a
consistently to all consolidated financial statements and have been
transaction between consolidated entities are also eliminated unless
applied consistently to all group companies.
the transaction provides evidence of impairment of the transferred
asset. When necessary to ensure consistency with the policies
3.1. Basis of consolidation
adopted by the company, the accounting policies of the subsidiaries
are modified.
3.1.1. Subsidiaries
Subsidiaries are all entities in which Inversiones Internacionales D&S
The company does not have any special purpose entities.
Ltda. has a controlling interest. When evaluating whether the company
owns another entity, consideration is given to the existence and effect
3.1.2. Transactions and non-controlling interest
of the possible voting rights currently exercised or convertible. The
The group treats transactions with the non-controlling interest as if
subsidiaries are consolidated at the date that ownership is transferred
they were transactions with shareholders of the group. In the case
and are excluded from consolidation at the date that ownership
of acquisitions of non-controlling interests, the difference between
expires.
the payment made and the corresponding share in the book value of
the net assets acquired from the subsidiary is recognized in equity.
In accounting for the purchase of subsidiaries, the acquisition method
Gains and losses due to losses benefitting the minority interest while
is used. The acquisition cost is the fair value of the assets given, the
maintaining ownership is also recognized in equity.
equity instruments issued and the liabilities incurred or assumed at the
date of exchange. The identifiable assets acquired and the identifiable
3.2. Related companies
and contingent liabilities assumed in a business merger are initially
valued at their fair value on the date of acquisition, regardless of the
Direct company subsidiaries included in the consolidation are as
scope of minority interests. The excess of the acquisition cost over
follows:
the fair value of the company’s holding in the identifiable net assets
acquired is recognized as goodwill. If the acquisition cost is lower
than the fair value of the net assets of the acquired subsidiary, the
difference is recognized directly in the income statement.
SHARE PERCENTAGE
12-31-2011
01-01-2010
TOTAL
ID NO.
COMPANY NAME
DIRECT
INDIRECT
TOTAL
E/O
Inmobiliaria D&S Perú S.A.C
99.99
-
99.99
99.99
E/O
Comercial D&S Perú S.A.
99.99
-
99.99
99.99
E/O
South Pacific Trade Limited.
100
-
100
100
All entities over which there is control are included in the consolidation. No changes have occurred in the perimeter of the consolidation between
January 1, 2011, and December 31, 2011.
Fina ncia l Sta tem ents
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3.3. Exchange rates and indexation units
3.5. Property, plants and equipment
Foreign currency assets and liabilities and indexation units are
Property, plants and equipment are recorded at cost and presented
presented at the following exchange rates and closing rates,
net of accumulated depreciation and accumulated value
respectively:
impairment, except for land which is not subject to depreciation.
The cost includes the acquisition cost and any cost directly related
DATE
Ch$ / US$
Ch$ / PEN
12-31-2010
468.01
166.79
12-31-2011
519.20
193.27
with the location of the asset and the conditions necessary for it to
operate as provided by management and the initial estimation of
any costs involved in dismantling, removing or partially removing
the asset or restoring the physical site where it is located, which
constitute an obligation for the company.
3.4. Foreign currency transactions
The costs of expansion, modernization or improvements that
Foreign currency transactions are translated at the exchange
increase production, capacity or efficiency and hence extend their
rate at the date of transaction. Monetary assets and liabilities
useful life are capitalized. Recurrent expenses for maintenance,
designated in the foreign currency at the date of the income
upkeep and repair are charged to income as an expense of the
statement are translated to Chilean pesos at the exchange rate
period in which they were incurred. An item from property, plants
of this date. Any difference in the exchange rate arising from the
and equipment is written off when it is disposed of or no further
translation is recognized in the income statement per function.
economic benefits are expected from its use or disposal. Any
Non-monetary assets and liabilities measured at the historical
profit or loss arising from writing off the asset (measured as the
cost of foreign currency are translated by using the exchange
difference between net value of the disposal and the book value
rate at the date of transaction. Non-monetary assets and liabilities
of the asset) is included in the income statement per function in
denominated in foreign currency and measured at fair value are
the year in which the asset was written off.
translated into Chilean pesos at the exchange rate at the date
when the fair value was determined.
Depreciation is calculated on the depreciable amount, which is
the cost of an asset or other amount in substitution of the cost,
The financial statements of the companies Inmobiliaria D&S
less its residual value.
Perú S.A.C and Comercial D&S Perú S.A.C whose functional
currency is the Peruvian nuevo sol (PEN) and South Pacific Trade
Depreciation is recognized in income by using the linear
whose functional currency of the U.S. dollar are translated to the
depreciation method of the estimated useful lives of each item
presentation currency in the following manner:
of property, plants and equipment, since these reflect more
accurately the expected consumption pattern of future economic
* Assets and liabilities presented in each financial statement are
benefits of the asset.
translated at the closing exchange rate of each period or year;
When property, plants and equipment items have different useful
* Revenue
and expenses of each income statement are translated
at the average exchange rate (unless this average is not a
reasonable approximation of the cumulative effect of the rates on
the transaction dates, in which case revenue and expenses are
translated at the rate of the transaction date); and
* Any
resulting exchange rate differences are recognized as a
separate component of equity under Other reserves.
16 6
lives, they are recorded as separate items (important components)
under property, plants, and equipment.
The estimated useful lives for current and comparative periods
Assets in this category are classified as current, except for those with
are as follows:
a maturity of more than 12 months as of the date of the financial
statement in which they are classified as non-current assets.
Facilities
15-20 years
Vehicles
4 years
Machinery
4-5 years
Furniture and supplies
3-4 years
Loans and accounts receivable include trade and other accounts
receivable.
3.6.3. Recognition and measurement of financial assets
Acquisition or disposal of financial assets is recognized at the trade
date, i.e., the date on which the group undertakes to acquire or sell
The methods for determining depreciation, useful lives and
the asset.
residual values are reviewed each period and adjusted if necessary.
Estimations of certain items of property, plants and equipment are
Financial assets are initially recognized at fair value plus transaction
regularly reviewed.
costs for all financial assets not carried at fair value through profit or
loss. Transaction costs include fees and commissions paid to agents
When the value of an asset is higher than its estimated recoverable
(including employees acting as sales agents), advisers, brokers
amount, its value is reduced immediately to its recoverable amount
and dealers, duties imposed by regulating agencies and securities
through application of impairment tests.
exchanges, and transfer taxes and duties. Transaction costs do not
include debt premiums or discounts, financing costs or internal
Gains and losses on the sale of property, plants and equipment are
administration costs or holding costs.
calculated by comparing the obtained revenue with the book value
and are included in the income statement per function.
Financial assets at fair value through profit or loss are recognized
initially by their fair value, and the transaction costs are recorded in
3.6. Categories of non-derivative financial instruments
net income.
The group classifies its financial assets into the following categories:
Financial assets are written off when the rights to receive cash flows
at fair value through profit or loss, loans and accounts receivable
from the investments have expired or have been transferred and the
and available for sale. The classification depends on the purpose for
group has transferred substantially all risks and advantages derived
which the financial assets were acquired. Management determines
from their ownership.
the classification of its financial assets at the time of initial recognition.
Financial assets available for sale and financial assets at fair value
3.6.1. Financial assets at fair value through profit or loss
through profit or loss are subsequently recorded for their fair value
Financial assets at fair value through profit or loss are financial assets
(with a balancing entry in Other comprehensive income and income,
held for trading or financial assets designated on initial recognition at
respectively).
fair value through profit or loss.
Loans and accounts receivable are recorded at amortized cost using
A financial asset is classified in this category if it is mainly acquired for
the effective interest method.
the purpose of selling it in the short term.
The effective interest method is a method of calculating the amortized
Assets in this category are classified as current assets.
cost of a financial asset or financial liability (or of a group of financial
assets or financial liabilities) and of allocating the interest income or
3.6.2. Loans and accounts receivable
interest expense over the relevant period. The effective interest rate is
Loans and accounts receivable are financial assets with fixed or
the discount rate that exactly matches the estimated cash inflows and
determinable payments that are not listed on an active market.
outflows over the expected life of the financial instrument (or, where
appropriate, over a shorter period), with the net carrying amount in
the books of the financial asset or financial liability.
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When calculating the effective interest rate, an entity shall estimate
An estimation is established for impairment losses of trade accounts
cash flows considering all contractual conditions of the financial
receivable when there is evidence that the company will not be able
instruments.
to collect all amounts due as per the original terms of the receivables.
Some indicators of possible impairment of accounts receivable are
Gains and losses from changes in fair value of financial assets at fair
financial difficulties of the debtor, the probability that the debtor will
value through profit or loss are included in the income statement per
enter bankruptcy or initiate a financial reorganization and defaults or
function, for the period in which such changes in fair value occurred.
arrears on payments, as well as the experience of the performance
and characteristics of the collective portfolio.
Income for dividends of financial assets at fair value through profit or
loss and available for sale, are recognized in the income statement
The impairment estimate is based on a loss approach that seeks
per function under the item Other Income when the group has the
to capture objective evidence of operational impairment suggesting
right to receive payment for dividends.
that future flows will not be received as agreed. Moreover, payment
expectations will be considered, in both the amount and timing and
3.7. Impairment of financial assets
the assessment of said losses based on the difference between
contractual flows and those adjusted for impairment, discounted at
A financial asset not recorded at fair value through profit or loss is
the effective interest rate of the loan. Also, the amount associated
assessed at the end of each reporting period to determine whether
with the impairment estimation is presented net of trade and other
there is evidence of impairment. A financial asset is impaired if there
accounts receivable and its effect on income is recognized under
is evidence that a loss event has occurred after the initial recognition
management expenses.
of the asset, and that the loss event had a negative effect on future
cash flows of that asset that can be estimated reliably.
3.9. Cash and cash equivalents
When assessing a collective impairment, the group uses variables
Cash and cash equivalents include cash in hand and bank balances.
based on arrears, cash flows related to charges made to customers,
Bank overdrafts, if any, are classified as loans in current liabilities at
recoveries, customer segmentation, product types, the amount of
amortized cost in the financial statements.
the loss incurred and comparisons with recognized practices in the
financial market, adjusted for management’s judgment as to whether
3.10. Share capital
the present economic and credit conditions make it likely that the real
losses will be more or less than historical trends suggest.
Share capital is represented by fully paid-in equity interest.
An impairment loss related to a financial asset valued at amortized
3.11. Commercial accounts payable and other accounts
cost is calculated as the difference between the book value of the
payable
asset and the current value of estimated future cash flows, discounted
at the effective interest rate.
Commercial accounts payable and other accounts payable are
recognized at amortized cost, which does not vary from its nominal
3.8. Trade and other accounts receivable
value, as its average period for payment is reduced.
Trade and other accounts receivable are initially recognized for
3.12. Income tax and deferred taxes
their fair value (nominal value including an implicit interest) and
subsequently for their amortized cost in accordance with the effective
Income tax recorded in the income statement by function for the year
interest rate method, minus any decrease for impairment of value.
includes current and deferred income tax, determined on the basis of
prevailing regulation in the company’s country of origin.
168
Income tax is directly recognized on the income statement by function,
of the Company’s activities. Ordinary income is presented net of sales
except for income tax related with items directly recognized in equity.
tax, returns, rebates and discounts.
Current income tax is the estimated tax payable for the year, using tax
The Company recognizes revenue when its amount can be reliably
rates in force at the balance sheet date and any adjustment to the tax
measured, it is probable that future economic benefits flow to the
payable with regard to previous years.
entity and that specific conditions for each one of the Company’s
activities are fulfilled. The amount of income is not considered to
Deferred tax is calculated by taking into account the differences
be reliably measurable until all contingencies related to the sale or
between book value of the assets and liabilities reported for financial
service have been resolved.
purposes and the amounts used for tax purposes.
Revenue from the sales of goods is recognized on the income
Deferred tax is measured at tax rates that are expected to apply to
statement when the significant risks and rewards of ownership of
temporary differences when they are reversed, based on approved
the goods are transferred to the buyer. Revenue is not recognized
or soon-to-be approved laws at the balance sheet date. Deferred
when there are significant uncertainties with respect to collection,
tax assets and liabilities are presented in net form if there is an
associated costs, possible returns of goods or ongoing administrative
enforceable legal right to adjust liabilities and assets for current tax,
involvement.
and are related with income tax applied by the same authority over the
same taxable entity, or different tax entities, but that intend to settle
3.14. Financial information by operating segment
assets and liabilities for current tax in net form, or their tax assets and
liabilities will be realized at the same time.
An operating segment is a component of the company that engages
in business activities from which it can earn revenue and incur
A deferred tax asset is recognized only to the extent that it is probable
expenses, including revenue and expenses relating to transactions
it will generate future profit. Deferred tax assets are reduced to the
with other components of the same entity.
extent that it is no longer probable that the company will realize the
related benefit.
Segment reporting is presented based on internal information
provided to those responsible for taking relevant operating decisions.
The company does not record deferred tax over temporary differences
These executives are responsible for allocating resources and
that arise in investments in subsidiaries and related companies since
evaluating the performance of operating segments, in accordance
it controls the date when they will be reverted and it is probable they
with the provisions of IFRS 8 “Operating Segments”, which has been
will not be reversed in the foreseeable future.
identified as retail.
An asset for deferred tax is recognized for unused tax losses, tax
3.15. Other non-financial assets
credits and deductible temporary differences to the extent that it is
probable that future taxable profit will be available against which they
Advance payments made on leasing operations of premises are
can be used. Assets for deferred tax are reviewed at each balance
reported at their historical cost and amortized over the duration of the
sheet date and reduced to the extent that it is not probable that the
respective contracts.
benefits for related tax are realized.
3.16. Financial income and financial costs
3.13. Revenue from ordinary activities
Financial income is made up of interest income from investments
Ordinary revenue includes the fair value of the consideration received
(including available-for-sale financial assets) and revenue from the sale
or receivable for the sale of goods and services in the ordinary course
of available-for-sale financial assets. Interest income is recognized in
income statements at amortized cost, using the effective rate method.
Fina ncia l Sta tem ents
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Financial costs consist of expenses for interests on loans or financing,
uncertain events occur in the future not wholly within the control of
changes in the fair value of financial assets and impairment losses
the company.
recognized in financial assets. Loan costs that are not directly
attributable to the acquisition, construction or production of a
A contingent liability is a possible obligation that arises from past
qualifying fixed asset are recognized in income statements using the
events and of which the existence will be confirmed only if one or
effective rate method.
more uncertain events occur in the future not wholly within the control
of the company.
3.17. Contingent assets and liabilities
As of December 31, 2011 and 2010 the company does not have any
A contingent asset is a possible asset that arises from past events
contingent assets or contingent liabilities.
and of which the existence will be confirmed only if one or more
REASONED ANALYSIS OF THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2011
1. ANALYSIS OF THE FINANCIAL STATEMENTS
Walmart Chile S.A.’s consolidated financial statements as of December 31, 2011, reported to the Securities and Insurance Supervisor are
prepared according to the accounting principles and standards of the International Financial Reporting Standards (IFRS).
INCOME STATEMENT BY FUNCTION
01-01-2011 31-12-2011
% OF REVENUE
01-01-2010 31-12-2010
ThCh$
Ordinary revenue
Sales cost
% OF REVENUE
ThCh$
2,604,483,217
100.0%
2,276,702,447
100.0%
(1,828,092,646)
(70.2%)
(1,587,648,279)
(69.7%)
GROSS INCOME
776,390,571
29.8%
689,054,168
30.3%
Administrative expenses
(558,981,244)
(21.5%)
(527,162,077)
(23.2%)
(34,285,416)
(1.3%)
(27,378,141)
(1.2%)
2,252,875
0.1%
986,003
0.0%
PRE-TAX INCOME (LOSS)
136,463,299
5.2%
46,620,955
2.0%
INCOME (LOSS)
113,904,520
4.4%
41,768,124
1.8%
Financial expenses
Financial income
The income statement as of December 31, 2011 shows earnings of
It should be noted that in fiscal year 2010 extraordinary expenses
Ch$ 113,905 million compared to earnings of Ch$ 41,768 million
amounting to Ch$ 14,211 million were incurred as a result of the
for the same period in 2010, including the extraordinary income
earthquake. Additionally, in 2011 extraordinary income of Ch$
described in the following paragraph. The increase in income in this
18,341 million was earned from the sale of the company’s interest
period compared to the same period last year derives from the 14.4%
in the wholesale supermarket company Alvi S.A. and Ch$ 10,726
increase in income and 12.7% growth in gross income.
million from the acquisition of the remaining 50% of Alimentos y
Servicios S.A. and Inversiones Solpacific S.A., bringing the company’s
ownership to 100%.
170
At the end of the 2011 fiscal year the company showed an increase
December 2010 period, mainly owing to a 12-point drop in gross retail
in income of Ch$ 28,858 million over the same period in 2010,
income as a percentage of retail income.
discounting for the aforementioned effects.
1.3. Administrative expenses
1.1. Ordinary revenue
Administrative expenses for January-December 2011 amounted
Ordinary revenue from January to December 2011 was Ch$
to Ch$ 558,981 million, compared to Ch$ 527,162 million for the
2,604,483 million while in the previous year it was Ch$ 2,276,702
same period in 2010, an increase of 6%. This increase is related
million, representing a 14.4% increase. The increase resulted mainly
to the growth in sales that the company has experienced, while the
from a 10.7% nominal increase in comparable store sales plus the
efficiency of administrative expenses as a percentage of revenue
opening of 41 new stores in 2011, including 13 Acuenta stores, 23
during the January-December 2011 period was 169 basis points
Ekono stores, 4 Express stores and 1 Híper store.
lower than in the same period the previous year.
1.2. Gross income
1.4. Financial expenses
Gross income for the 2011 period was Ch$ 776,391 million, compared
Net financial expenses between January 1 and December 31, 2011
to Ch$ 689,054 million in 2010, representing a 12.7% increase.
totaled Ch$ 34,285 million, compared to Ch$ 27,378 million for the
Gross income as a percentage of revenue dropped by 46 basis points
same period in 2010. This represents an increase of 25.2%, mainly
in the January to December 2011 period compared to the January to
owing to rising interest rates and an 8.4% increase in financial debt
compared to the 2010 fiscal year.
.2.
BALANCE SHEET ANALYSIS
The balance sheet as of December 31, 2011 shows a 14.5% increase in current assets compared to December 31, 2010, mainly driven by the
21.2% rise in the inventory item and the 6.2% increase in trade and other accounts receivable.
For their part, current liabilities were 33.7% higher as of December 31, 2011 than at December 31, due to a 57.8% rise in current financial
liabilities and a 25.7% rise in trade and other accounts receivable.
Balance Summary
Current Assets
12-31-2011
12-31-2010
Variation
ThCh$
ThCh$
%
625,100,557
545,739,474
1,349,666,331
1,206,739,346
11.8%
1,974,766,888
1,752,478,820
12.7%
Current Liabilities
677,305,470
506,418,200
33.7%
Non-current Liabilities
657,135,136
664,316,420
(1.1%)
1,334,440,606
1,170,734,620
14.0%
640,326,282
581,744,200
10.1%
1,974,766,888
1,752,478,820
12.7%
Non-current Assets
TOTAL ASSETS
TOTAL LIABILITIES
Equity
TOTAL LIABILITIES AND EQUITY
14.5%
Fina ncia l Sta tem ents
17 1
PRINCIPAL INDICATORS
2 011 | Annua l R ep o rt
Wal mar t Chil e
The principal financial indicators of the balance sheet and income statement as of December 31, 2011 are as follows:
12-31-2011
12-31-2010
DEBT INDICATORS
Total Liabilities
Millions of Ch$
1,334,441
1,170,735
Financial Debt
Millions of Ch$
469,435
432,895
0.74
Financial Debt/Equity
Times
0.73
Total Liabilities/ Total Assets
Times
0.68
0.67
50.8%
43.3%
Current Liabilities / Total Liabilities
%
LIQUIDITY INDICATORS
Liquidity Ratio
Times
0.92
1.08
Acid test ratio
Times
0.60
0.72
EFFICIENCY AND PROFITABILITY INDICATORS
Coverage of Financial Expenses*
Return on Equity
Return on Assets
Times
%
4.96
7.2%
5.8%
2.4%
After-tax Income (Loss)
Millions of Ch$
113,904,520
41,768,124
EBITDA (including extraordinary events)
Millions of Ch$
233,218
130,982
9%
5.8%
EBITDA Margin
%
7.28
17.8%
%
*EBITDA / FINANCIAL EXPENSES
2.1. Assets
2.2.1. Financing Activities
On September 28, 2006, Walmart Chile S.A. restructured its financial
As of December 31, 2011 the company had assets amounting to Ch$
liabilities by signing a long-term syndicated loan with Banco Santander,
1,974,767 million compared to Ch$ 1,752,479 million in December
Banco Estado, Banco BBVA and Citibank N.A., thereby concentrating
2010, an increase of 12.7% that is attributable to a 14.5% increase in
a major portion of its short-term and long-term loans into a single loan
current assets and an 11.8% rise in non-current assets, which were in
that will mature in March 2014. Banco Santander is the lead bank in
turn affected by the 6.2% rise in trade and other accounts receivable, a
the operation and Banco Estado is the agency bank.
21.2% increase in inventories, and a 13.3% increase in property, plant
and equipment.
On May 20, 2010, Walmart Chile S.A. restructured its financial liabilities
by signing a long-term syndicated loan with Banco de Chile, Banco
2.2. Liabilities
Santander and Banco BBVA, thereby concentrating 100% of its shortterm loans as well as the syndicated loan signed on May 22, 2008 with
Total liabilities as of December 31, 2011 amounted to Ch$ 1,334,441
Banco de Chile, Banco BBVA, Scotiabank, Banco Itaú, Corpbanca and
million, compared to Ch$ 1,170,735 million as of December 31, 2010,
Banco Santander, which matured on May 22, 2010, into a single loan
representing an increase of 14%. This change is due fundamentally to
that matures in May 2013.
the 33.7% increase in current liabilities, which in turn was influenced
by a 57.8% rise in other current financial liabilities and a 25.7%
2.3. Debt ratio
rise in trade and other accounts receivable. 25,7%. Financial debt,
understood as debt owed to banks, third parties, lending institutions,
The financial debt to equity ratio fell from 0.74 in December 2010 to
and other creditors from the purchase of land, increased by 8.4%
0.73 in December 2011 as a result of scheduled amortizations of equity
compared to December 31, 2010, due to a 3.91% increase generated
carried out in 2011 in the amount of Ch$ 25,315 million.
by the correction of the UF and a 54.1% increase in debt from higher
imports as of December 2011. Non-current financial debt dropped by
3.4% compared to December 2010.
17 2
2.4. Current ratio
3. BOOK VALUE AND MARKET VALUE OF ASSETS
The current ratio or liquidity ratio measures the ratio of current assets to
Asset values are presented in accordance with the principles and
current liabilities, and was 0.92 as of December 31, 2011, compared
standards of the International Financial Reporting Standards (IFRS)
to 1.08 as of December 31, 2010. The decline was driven by a 57.8%
issued by the International Accounting Standards Board (IASB). Based
increase in other current financial liabilities and an increase of 25.7%
on estimations and projections, we have reviewed the value of property,
in trade and other accounts receivable.
plants and equipment, investment properties, intangible assets other
than goodwill and other non-financial assets maintained and used
2.5. Acid test ratio
over the long term to determine whether there has been an ongoing
decrease in their value, when events or circumstances have indicated
The acid test ratio, a liquidity indicator that is stricter than current ratio
that the book value of these assets may not be recoverable.
as it does not consider inventories among current assets, decreased
from 0.72 as of December 31, 2010 to 0.6 as of December 31, 2011.
The company’s policy is to adjust for impairments of the
abovementioned assets that have been discontinued. When the
2.6. Coverage of financial expenses
value of an asset is higher than its estimated recoverable amount,
its value is reduced immediately to the recoverable amount through
The EBITDA-to-interest coverage ratio was 7.28 for the period spanning
recognition of impairment loss. As of December 31, 2011, ThCh$
January to December 2011, compared to 4.96 for the same period the
1,476,560 was recognized for Property, plant and equipment loss
year before. This variation is due to a 78.1% increase in EBITDA. It
while in 2010, ThCh$ 3,464,702 was recognized for the same item.
should be noted that the EBITDA margin for 2011 was 9% of revenue
from ordinary activities, compared to 5.8% for the same period the
4. MARKET RISK ANALYSIS
previous year.
The company’s investments in securities traded on the market involve
2.7. Profitability ratios
a certain degree of risk. Our company’s investment managers must
carefully consider the following risk factors and other information
Profitability ratios improved over the same period last year. As of
included in this complementary information, as well as examine
December 31, 2011, return on equity was 17.8%, compared to 7.2%
the annual reports of the company and/or any additional reported
for the same period the previous year, while the return on total assets
information.
was 5.8%, compared to 2.4% for the same period the year before.
This variation can be explained mainly by the higher profits in 2011
The main elements of risk that the company faces to its development
compared to the previous year, which amounted to Ch$ 113,905
and their limiting factors are:
million and include the effects of extraordinary profits in the amount of
Ch$ 29,067 million.
4.1. Competition
2.8. Earnings per share
The supermarket industry is highly competitive and therefore tends
towards lower margins. The number and type of competitors and
Earnings per share as of December 31, 2011 were Ch$ 17.47,
degree of competition vary, depending on price, quality, variety of
compared to $ 6.4 as of December 31, 2010. This increase is due to
products, and customer service and care, among other variables.
the income obtained in 2011, which amounted to Ch$ 113,905 million
Given the strength of its brand, positioning, cost structure, and strategic
compared to Ch$ 41,768 million the previous year.
development, the company is in a good position to face the current level
of competition and even a potential future increase in competition that
may be caused by the entry of new participants and/or by more intense
competition from current market players.
Fina ncia l Sta tem ents
17 3
Wal mar t Chil e
4.2. Market Participants
capital expansions at an acceptable cost will depend to a large degree
2 011 | Annua l R ep o rt
on market conditions, over which the company has no control.
The company competes in the supermarket industry with different
formats, including its Ekono convenience stores, LIDER Express
4.5. Exposure to market factors
supermarkets, LIDER hypermarkets and Bodega Acuenta. Each of
these formats has current and potential competitors. Walmart Chile’s
The company is exposed to different market variations including
major competitors in the area of retail sales are as follows: Cencosud,
interest rate and exchange rate fluctuations.
which operates the Jumbo and Santa Isabel brands; Falabella, operating
the Tottus and San Francisco brands; SMU S.A., which operates the
brands Unimarc, Deca, Covarrubias, El Pilar, La Estrella, Palmira, Los
Naranjos, Euro Market, Puerto Cristo, Ribeiro, Hiper Más, Las Brujas,
4.6. Interest rate risk exposure
Bryc, Korlaet, El Loro, Bigger, FullFresh, Diproc, Tucapel, Keymarket
mayorista 10, OK Market, Alvi Mayorista, and Muñoz Hermanos. There
The company has a low level of exposure to fluctuations in market
are also some minor competitors.
interest rates, as a significant percentage of its debt is structured at a
fixed rate, either directly or through derivative contracts.
One of the company’s strongest tools for facing both current and
potential competition is its clear low-price positioning strategy, which
Performing a sensitivity analysis on the company’s portion of variable
has enabled it to continue as the industry leader.
rate debt, the effect on our income under a scenario in which rates
were 10% higher than they are at present would require payment of
4.3. Concentration of activities
ThCh$ 1,298 more interest as of December 31, 2011.
Overall, 53.4% of the company’s operations are concentrated in the
The company has a cross currency swap in place that allows it to
Metropolitan Region with plans for further expansion to other cities
transform its debt in pesos into UF and from a variable rate to a
of Chile.
fixed rate.
4.4. Availability of capital for future expansion
4.7. Exchange rate risk exposure
Company management cannot be absolutely sure that the company
The company constantly assesses the advantage of covering the gap
will generate sufficient cash flow from its operations or obtain external
between assets and liabilities in U.S. dollars by monitoring the market
sources of financing that are sufficient to finance the investments needed
and obtaining expert advice, in order to minimize the risk of a significant
for future expansion. The company’s ability to access financial markets
rise in the exchange rate that could cause a loss for the company.
to obtain the capital needed to finance its operations and necessary
5. Main Components of Cash Flow Statement
ESTADO DE FLUJOS DE EFECTIVO
Acumulado Diciembre
Acumulado Diciembre
Variación
2011
2010
%
Flujo Neto Actividades de Operación
138,669,632
199,963,982
(31%)
Flujo Neto Actividades Financiación
(55,668,170)
(127,706,692)
(56%)
Flujo Neto Actividades Inversión
(121,592,466)
(95,343,299)
28%
Disminución Efectivo Y Efectivo Equivalente
(38,591,004)
(23,086,009)
67%
The Company generated free cash flow of Ch$ 177,260 million, which was used to pay dividends of Ch$ 32,955 million and financial debts of
Ch$ 22,713 million, and to make investments in the amount of Ch$ 121,592 million, given the company’s growth plans.
174
SIGNIFICANT EVENTS
Complementary information to the Consolidated Financial Statements
as of December 31, 2011 and 2010.
1) On January 21, 2011, the company reported the following
MATERIAL EVENT:
* In the context of the sale of 100% of its shares in ALVI Supermercados
Mayoristas S.A. (“ALVI”) to SMU S.A. (“SMU”), the termination of
the ALVI shareholders agreement dated October 13, 2005 between
the former shareholders and the reciprocal final settlement of the
rights and responsibilities established under same, on the date
that Walmart Chile sold its entire interest in ALVI to SMU, which
amounted to 35% of the shares of that company.
* The total consideration received by Walmart Chile was Ch$ 30,000
million, with Walmart Chile recording in its financial statements
after-tax earnings of approximately Ch$ 14,850 million.
2) On March 2, 2011, the company reported the following MATERIAL
EVENT: Walmart Chile has taken note of the following: The resignation
of the Director of Walmart Chile, Mr. Wyman Atwell, from his position,
effective today, Wednesday March 2. The company thanks Mr. Atwell
and values contributions made during his term.
3) On March 8, 2011, the company reported the following MATERIAL
EVENT: Mrs. Claire Babineaux-Fontenot has been appointed Director
of the Company, replacing Mr. Wyman Atwell.
4) On May 16, 2011, the company reported the following MATERIAL
EVENT: Mr. Mario José Medina, currently Chief Financial Officer
of Walmart Chile, was recently appointed Chief Financial Officer of
Walmart China. Mrs. Olga González, who is currently Vice President
of Internal Audit Services for Walmart Stores Latin America, has been
appointed to replace Mr. Medina. Additionally, Mr. José Antonio
Fernández has been appointed Chief Operating Officer of the
Company. The positions mentioned above report directly to the CEO
of the company.
5) On September 1, 2011, the company reported the following
MATERIAL EVENT: Mr. José Luis Rodríguez Macedo has submitted
his resignation to the Board of Directors of the company, and Mr. José
María Urquiza was appointed to replace him. The company thanks
Mr. Rodríguez Macedo for his valuable contribution while in office and
welcomes Mr. José María Urquiza.
Fina ncia l Sta tem ents
175