TABLE OF CONTENTS GENERAL INFORMATION ABOUT THE COMPANY EMPRESAS AQUACHILE: FROM THE SOUTH OF CHILE TO THE WORLD LETTER FROM THE CHAIRMAN

Transcription

1 ANNUAL REPORT 2011

2 TABLE OF CONTENTS 02 GENERAL INFORMATION ABOUT THE COMPANY 04 EMPRESAS AQUACHILE: FROM THE SOUTH OF CHILE TO THE WORLD 07 LETTER FROM THE CHAIRMAN 10 AQUACHILE AT A GLANCE 12 OUTSTANDING EVENTS IN OUR COMPANY 21 OWNERSHIP AND CONTROL

3 25 CORPORATE GOVERNANCE 31 THE COMPANY S ACTIVITIES 45 GENERAL INFORMATION ABOUT THE COMPANY 53 CORPORATE SOCIAL RESPONSIBILITY 61 Subsidiaries and affiliates 71 Essential events 75 Financial information 91 Financial STATEMENTS

4 GENERAL INFORMATION Firm Name: Empresas AquaChile S.A. Taxpayer Number (ID): Type of Entity: Open Stock Corporation Registration in the Securities Register: Legal Domicile: Organization: No. 1,069 of April 12, 2011 Cardonal s/n Lote B, Puerto Montt, X Region, the Lake Region Telephone: (56 65) Fax: (56 65) Casilla 30 D, Puerto Montt The company s domicile is in Puerto Montt, without detriment to its being able to set up branches, agencies and offices in Chile or abroad. The structure of Empresas AquaChile S.A. considers only General Management headquartered in Puerto Montt. Corporate Purpose: The company s purpose is to import, export, develop, produce, breed, grow, process, transform, modify and sell hydro-biologically grown species, especially salmonids. Documents of Incorporation: Deed of Incorporation Fischer Hermanos Limitada. Coyhaique, August 3, 1979, Santiago Notary Public s Office of Patricio Olate Melo. Business Register Registration: Coyhaique, page 38 No. 34 of 1979 Deed of Incorporation Salmones Pacífico Sur S.A. Puerto Montt, July 19, 1996, Santiago Notary Public s Office of Félix Jara Cadot. Business Register Registration: Coyhaique, page 364 No. 228 of

5 Address Head Office Management and Administration: Internet page: Cardonal s/n Lote B, Puerto Montt Telephone: (5665) Fax: (5665) Casilla 30 D, Puerto Montt External Auditors: PwC (PricewaterhouseCoopers Consultores Auditores y Compañía Limitada) Name on the Chilean Stock Exchange: Shareholder Information AQUACHILE DCV Registros S.A. Mail: atencionaccionistas@dcv.cl Address: Huérfanos 770, floor 22, Santiago, Telephone: (56 2) Fax: (56 2) Web page: : Relationship with investors: Mail: investor.relations@aquachile.com Address: Cardonal s/n Lote B, Puerto Montt Telephone: (5665) / 550 Web page: : Note: The company s web site ( has the 2011 Annual Report available to shareholders, investors and the general public in a digital format 03

6 EMPRESAS AQUACHILE: FROM THE SOUTH OF CHILE TO THE WORLD We farm Salmon and Tilapia to healthily feed this and future generations. Several changes have been made to the regulations governing the salmon growing industry in Chile, aimed at a more sustainable development. AquaChile has the financial strength and assets to make it competitive in this new regulatory framework, so we expect to continue to consolidate and open up new roads in the aquacultural industry. 04 We have more than 25 years experience in the aquacultural industry with an integrated company along the entire value chain from genetics and the production of fish feed to commercialize the fish in the various markets around the world. We have been, and will continue to be very active in biotechnical innovation applied to the aquacultural industry.

7 Every day more than 1 million people consume our products around the world. We provide more than 4,800 people with work in the various countries where we operate, prioritizing the employment of the people who live in the zones where we carry out our activities. Our recovery after the sanitary crisis that affected the industry in Chile has enabled us to rehire in 2011 about 20% of the workers who had to leave the company in 2009 and 2010 as a result of the ISA (Infectious Salmon Anemia Virus) crisis. We have more than 400 clients in 50 countries on the 5 continents. 05

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9 LETTER FROM THE CHAIRMAN

10 Dear Shareholders: 2011 marked a milestone in the history of Empresas AquaChile and also in the salmon industry in Chile. We moved from being a closely-held corporation to a corporation whose shares are traded on the stock market, from having six partners to having more than 10 thousand shareholders, thereby strengthening our role as a referent when it comes to laying the groundwork for a sustainable industry over the long term. This change in ownership and our initial public offering up to the market occurred at a moment of inflection for AquaChile and the aquacultural industry and it enabled us to corroborate the existing confidence in the new circumstances of the salmongrowing industry and, especially, in the competitive strengths of our company. subsidiaries and they have extensive know-how and skill sets and are committed to the company s growth and development. Our recovery after the sanitary crisis that affected the industry in Chile has enabled us to rehire in 2011 about 20% of the workers who were laid off in 2009 and The company was strengthened financially in 2011, which enabled us to be more flexible in our growth and to take advantage of multiple business opportunities. In 2011, we kicked off key projects for the future of the company. Together with the multinational company DuPont, we started to produce Verlasso salmon, which is farmed in a more environmentally to build a fish feed plant for Tilapia in Costa Rica in association with Biomar. This is combined with a plant for processing and using organic disposals from Tilapia that transforms this residue into a product used by pet food producer companies. The latter has been implemented within the framework of our association with Diana, a French company that is the world leader in this line of business. As a result of the above, we are confident in the sustainable, competitive growth of AquaChile, complying at all times with the new sanitary and production standards. Hence, we expect to achieve sustainable production of 170,000 tons of Salmon and Sea Trout and 40,000 tons of Tilapia by harmonious, balanced way. We also 08 We are a company from the South of Chile, committed to its environment, to our workers and to the communities where we carry out our activities. We are concerned and interested in what happens in the South of Chile, especially in its progress and what is happening to its people. Our sustainable development and our continued growth are based on three key features diversification, integration and innovation. We also have a team of people with technical skills and vast accumulated experience. More than 4,800 people work in Empresas AquaChile and its started to build the Chaicas hatchery, which enables us to manage our stock of Atlantic Salmon broodstock safely from a sanitary point of view. During the same period we strengthened our agreement with Novofish, thereby ensuring that we would have bio-safe production of Atlantic Salmon smolt over the long-term. We also continued with the construction of Lenca, an Aquacultural Research and Transfer Center, which will enable AquaInnovo, a subsidiary of Empresas AquaChile S.A., to maintain its worldwide leadership in genetics and technological development. Internationally, we started Progress was made in 2011 in substantially improving the new regulatory framework governing the aquacultural industry sector. This includes a series of aspects, such as rotating the fish farms, mandatory fallowing periods, a production model by geographical area, limitation of the farming density, among others. However, work still needs to be done on important matters that are still pending, such as the standard governing smolting in brackish water, rivers and lakes, the structure of the macrozones, which are areas that will group together sanitary areas, which, in turn, will be autonomous

11 VÍCTOR HUGO PUCHI ACUÑA CHAIRMAN from each other enabling them to be protected from the propagation of any disease, together with the indicators or natural thermometers which will be used to measure the production and sanitary efficiency of the sea licenses and sanitary areas. Our company has been actively involved in the debate on the industry s long-term sustainability, which is a policy very much in line with the company s own interests. After all, greater protection and value over the long-term will be provided by sanitary and environmental safety. We showed a profit again after recovering from the sanitary crisis caused by the ISA virus. In 2011, Empresas AquaChile had sales of US$ 501 million, which meant a growth of 29% in relation to the previous year, and it recorded an EBITDA of US$ 95 million, which is 65% higher than in These results serve to further strengthen the company. We are optimistic about the future of the industry. We have the trust of 10 thousand new shareholders, who make us feel proud and also set us a new challenge, which is in line with the company s requirements: greater transparency, more respect for the environment, strengthening of the relationship with our workers and with the community. Through AquaChile, Chile s southern zone has gained 10 thousand partners willing to empower it and take the healthy, highvalue food that is our salmon to the most demanding markets in the world. Víctor Hugo Puchi Acuña Chairman Empresas AquaChile 09

12 AQUACHILE AT A GLANCE OWNERSHIP STRUCTURE FISCHER FAMILY 33.03% PUCHI FAMILY 33.03% SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS OTHERS 33.92% PENSION FUNDS 5.96% OTHERS 27.99% SOURCE: AQUACHILE SUMMARIZED BALANCE SHEET SUMMARIZED BALANCE SHEET FIGURES IN US$ THOUSANDS AQUACHILE SHARE PRICE (CH$) VS. IPSA (POINTS) AQUACHILE IPSA Current assets 437, ,315 Non current assets 389, ,061 TOTAL ASSETS 826, ,376 Current liabilities 130,969 92,552 Non current liabilities 244, ,852 TOTAL LIABILITIES 375, ,404 EQUITY 429,713 12,161 Minority interest 21,384 19,811 TOTAL EQUITY AND LIABILITIES 826, ,376 AQUACHILE IPSA 5,100 4,900 4,700 4,500 4,300 4,100 3,900 3, ,500 SUMMARIZED INCOME STATEMENT FIGURES IN US$ THOUSANDS may-11 jun-11 jul-11 aug-11 sep-11 oct-11 nov-11 dec-11 Sales 501, ,841 EBIT pre FV adj. (1) 76,081 41,137 SOURCE: AQUACHILE EBITDA pre FV Adj. Margin (2) 95,356 57,724 Net Income 54,876 58,093 CONSOLIDATED SALES 2011 TOTAL: US$ 501 MILLION FIGURES IN US$ THOUSANDS Interest bearing debt 196, ,598 Cash 113,897 28,416 OTHERS 6.9% ATLANTIC SALMON 15.4% Net interest bearing debt / EBITDA (3) Financial Leverage (4) Net financial expenses coverage (5) (1) EBIT PRE FV ADJ (HEREINAFTER EBIT): INCOME FROM ORDINARY ACTIVITIES LESS COSTS TO SELL (I.E. GROSS PROFIT PRE FAIR VALUE), LESS ADMINISTRATIVE EXPENSES, LESS DISTRIBUTION COSTS. ALL OF THESE FIGURES ARE OBTAINED DIRECTLY FROM THE COMPANY S STATEMENT OF INCOME AND STATEMENT OF CASH FLOWS. (2) EBITDA PRE FV ADJ. (HEREINAFTER EBITDA): INCOME FROM ORDINARY ACTIVITIES LESS COSTS TO SELL (I.E. GROSS PROFIT PRE FAIR VALUE), LESS ADMINISTRATIVE EXPENSES, LESS DISTRIBUTION COSTS, PLUS ADJUSTMENT FOR DEPRECIATION AND AMORTIZATION EXPENSES. ALL OF THESE FIGURES ARE OBTAINED DIRECTLY FROM THE COMPANY S STATEMENT OF INCOME AND STATEMENT OF CASH FLOWS. (3) (OTHER CURRENT FINANCIAL LIABILITIES + OTHER NON-CURRENT FINANCIAL LIABILITIES LESS CASH AND CASH FISH FEED 19.6% TILAPIA 9.5% SEA TROUT 27.2% 10 EQUIVALENT) / EBITDA. (4) (TOTAL CURRENT FINANCIAL LIABILITIES PLUS TOTAL NON-CURRENT FINANCIAL LIABILITIES LESS CASH AND CASH EQUIVALENT) / (TOTAL EQUITY) (5) EBITDA / (FINANCIAL COSTS LESS FINANCIAL INCOME) PACIFIC SALMON 21.5%

13 CONSOLIDATED SALES (US$ MILLIONS) CONSOLIDATED NET INCOME (US$ MILLIONS) SOURCE: AQUACHILE SOURCE: AQUACHILE CONSOLIDATED EBITDA 2011 TOTAL: US$ 95 MILLION CONSOLIDATED INVESTMENT (US$ MILLIONS) COSTA RICA & PANAMA 6% CHILE 94% SOURCE: AQUACHILE SOURCE: AQUACHILE CONSOLIDATED EBITDA (US$ MILLIONS) CONSOLIDATED STAFF EVOLUTION (Nº OF EMPLOYEES) 136 6,547 6, ,659 4,525 4,

14 OUTSTANDING EVENTS IN 2011 Going Public In May 2011, AquaChile offered 32.3% of its ownership interest on the stock exchange, collecting US$ 373 million. More than 10 thousand new shareholders were incorporated through this operation, including local and foreign institutional investors, Pension Fund Administrators (AFPs) and individuals. This Public Offering marks a milestone for AquaChile and enables it to strengthen its financial position, have available new resources to support its plans for global expansion and thereby strengthen its position in the aquacultural industry locally and internationally. Diana Group In 2011, AquaChile entered into an association with the Diana Group, the main worldwide company of flavorings for pets. In this project, AquaChile also entered into an association with Agro Comercial Terramar, a company providing supplies for the food industry in the aquacultural sector. Thanks to this association, the company will be able to take advantage of the organic disposal of Tilapia that are not for human consumption, optimizing the use of this resource. RecognITIOn Pablo Aguilera Marín, founding partner of AquaChile, received the Order of the Rising Sun, Golden Rays and Rosette from the Japanese government. This is one of the highest distinctions awarded by Japan and it was awarded to him for his contribution to developing projects of technical cooperation between the two countries in the Salmon farming sector, as well as also stabilizing the food supply to Japan. VerlASSO AquaChile sealed an alliance with DuPont (multinational leader in the biotechnology industry) to produce salmon in a more harmonious, balanced way, thereby making a real contribution to preservation of marine resources and the environment. Verlasso is the brand name of this Salmon sold in USA. It represents a new production model for the standards of traditional aquaculture, since it maintains the nutritional qualities with high levels of Omega 3, but with a change of diet that includes replacing 75% of the required amounts of fishmeal and fish oil in their feed and development. 12

15 Financial strengthening In June 2011, the company entered into an agreement with its creditors and successfully restructured its financing, which will enable it to enjoy a more flexible growth and take advantage of the various business opportunities. The agreement with the creditors consisted of a prepayment of US$ 163 million and renegotiating the terms for the remaining debt of US$ 243 million, making an additional prepayment of US$ 70 million, and obtaining a line of credit for an equivalent amount. The agreement also meant lifting a series of financial and operating restrictions stipulated in the previous contract and stemming from the negotiation in In 2011 the company continued to develop important projects Salmones Chaicas Hatchery With technologically advanced recirculation for producing Atlantic Salmon broodstock, eggs and smolts. It will have a production capacity of 120 million eggs and 4.2 million smolts, in its first stage. The plant will be sited 30 kilometers from Puerto Montt, on the Carretera Austral (Southern Highway) and it considers an investment of US$ 20 million. Lenca Hatchery The Aquaculture Research and Transfer Center is in the final construction stage. This research center, which is unique in South America, contains a state-of-the-art central molecular genetics laboratory, challenge centers, experimental growing centers and biotechnological services, as well as a research and training center for PhD students. This project considers an investment of US$ 7 million and it is expected to start operating in the first half of Biomar Aqua CorPOrATIOn Products S.A. An agreement was set up with Biomar to build and operate a Tilapia feed plant in Costa Rica. This new plant is expected to start operating in 2012, to provide this supply to the growing production of Tilapia in Central and South America. The projected investment is US$ 12 million. 13

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17 OUR COMPANY

18 PROFILE OF AQUACHILE Empresas AquaChile S.A. is a Chilean company dedicated to producing and selling Salmon, Sea Trout and Tilapia. Through our subsidiaries we carry out genetic research activities for the aquacultural industry, we produce Salmon and Sea Trout, eggs and smolts and also fish feed for the salmon industry s fish. In 2011, we recorded consolidated sales of US$ 501 million. We have operations in Chile, Costa Rica and Panama, as well as commercial offices in the United States. We are the biggest salmon company in Chile, the largest worldwide producer of Pacific Salmon and one of the main Sea Trout producers. Our products are sent to more than 50 countries on the 5 continents and to more than 400 clients, providing employment for more than 4,800 workers in Chile, USA and Costa Rica. In 2011, a key milestone was reached in the history of AquaChile: we went public selling 32.3% of the ownership of the company on the Stock Market, collecting US$ 373 million. This resulted in more than 10 thousand new shareholders for the company. The resources obtained from this operation will be allocated to strengthening our financial position and expansion plan, which considers investments of about US$ 470 million over the next 5 years, thereby consolidating our position in the aquacultural industry, both in Chile and worldwide. 16

19 OUR MISSION, VALUES AND PRINCIPLES Mission: Objectives: Supply the world with a healthy protein, prepared from efficient, sustainable and responsible growing of Salmon, Sea Trout and Tilapia. Corporate values: Act with respect towards people, work and the environment. Be passionate about the work performed. Add value at every stage of the process, considering the safety and health of our workers and concern for the environment; in order to deliver the best product to our internal and external customers, with the best service and at a suitable price. - Throughout every stage of the process, guarantee the safety, quality and competitiveness in the production and sale of Salmon, Sea Trout and Tilapia. Be creative and show initiative every day. Be preventive and act safely. Understand new challenges and be open to change. Be austere in our actions. Principles of Corporate Responsibility to Society: Produce quality, healthy, safe food. Be proactive and respectful with the environment. Develop a safe, healthy work environment. Benefit the communities and suppliers in the places where the company operates. Achieve international recognition for the quality and consistency of the product and service, which should result in being preferred by our customers and increased sustainability of the business. Permanently improve our way of doing things, taking interest in the quality of the product, the efficiency of the processes, technological innovation and minimizing labor risks and impacts on the environment. Drive the professional and personal development of everybody making up the value chain, contributing to improve their skill sets and consolidate their commitment to the well-being of the community and preservation of the environment. Foster associativity and integration with other companies. 17

20 OUR HISTORY Empresas AquaChile S.A. was born in 1998 after the merger of Salmones Pacífico Sur S.A. (incorporated in 1979) and AquaChile S.A. (incorporated in 1988). Initially, these companies were geared towards the various stages of the Salmon farming process. Salmones Pacífico Sur was focused on the on-growing stage in the sea, while AquaChile concentrated on processing and the fresh water stage, producing Eggs, fries and smolts. The following have been the main milestones since the merger of the two companies: Acquisition of Aucar (hatchery). The first sea facility starts operating in the Aysen Region. Acquisition of Cherquenco (hatchery) Opening of the office of AquaChile Inc. in USA to market Salmon in that country. Acquisition of the assets of Pesquera BestSalmon S.A % of Antarfish S.A., the parent of Aguas Claras S.A., was acquired in two stages, making AquaChile the country s leading company in Salmon and Sea Trout sales. The name of the company was changed to Empresas AquaChile S.A Purchase of 19.09% of Antarfish S.A, achieving an interest of 99.94%. Acquisition of 60% of Salmones Chiloé S.A. (Salmosan), 100% of Pesquera Palacios S.A. and 100% of Salmones Australes S.A., 60% of the salmon business of Robinson Crusoe S.A. (Salmones Maullín S.A.) and 60% of Grupo ACI S.A. a firm headquartered in Costa Rica Sudmaris Chile S.A. was created to produce, process and export baby mussels. Salmones Chiloé, a subsidiary of Empresas AquaChile, has a 50% interest in the company. The strategic alliance with Alitec- Provimi, the local subsidiary of Provimi, world leader in animal nutrition, was brought to fruition. Creation of AquaInnovo S.A, a company born of the alliance with Universidad de Chile, AquaticHealth Chile and the contribution by the Subcommittee for Business Innovation of Innova Chile - CORFO. AquaInnovo s purpose will be to genetically improve salmon and other aquatic species around the world, using state-of-the-art technology.

21 Acquisition of the remaining 40% of the interest in Salmones Maullín not in the hands of Empresas AquaChile. Increase in the percentage of ownership of the Grupo ACI to a 72.86% interest in the company. Extraordinary Shareholders Meeting approved the submission of Empresas AquaChile to the regulations governing corporations. Registration of the Company in the Securities Register of the Superintendency of Securities and Insurance (SVS). The company sold all of its shares in Sudmaris S.A. Merger of Grupo ACI with the El Pelón Group, a large Costa Rican agroindustrial conglomerate devoted to, among other activities, the production of Tilapia. After the merger, Empresas AquaChile continued to hold a 72.86% interest in the company Application to the SVS to cancel the Company s registration in the Securities Register. Extraordinary Shareholders Meeting agreed to reduce the capital by US$ 5.9 million and agreed to increase the capital by US$ 100 million. It agreed that the Company would no longer be governed by the regulations governing Corporations. Administrative integration with its subsidiary Antarfish S.A., centralizing management of the entire group in the head offices. Renegotiation and restructuring of the short and long term bank liabilities of Empresas AquaChile S.A. and its subsidiaries Administrative integration of Salmones Chiloé S.A., centralizing its management in Puerto Montt. Increase in the interest in ACI S.A. from 72.86% to 79.95%. Extraordinary Shareholders Meeting agreed to submit the company to the regulations governing Corporations, to amend the by-laws and register the company Empresas AquaChile S.A. and its shares with the SVS. Initial Public Offering on the stock exchange of 32.3% of the ownership of Empresas AquaChile, thereby incorporating more than 10 thousand new shareholders. Alliance with Biomar to build a Tilapia feed plant in Costa Rica Alliance with DuPont to launch Verlasso Salmon. Alliance with Spécialités Pet Food S.A.S. and Inversiones Industriales Bauprés Ltd. to build a value added plant in the province of Guanacaste, Costa Rica, to take advantage of the Tilapia organic disposal generated in the Tilapia production process. 19

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23 OWNERSHIP AND CONTROL

24 CAPITAL STOCk As of December 31, 2011, the company s subscribed and paid in capital is two hundred and twenty seven million nine hundred and eighty one thousand one hundred and forty eight US dollars (US$ 227,981,148) divided into one thousand one hundred and fifty seven million shares (1,157,000,000) of the same single series. Table A shows the list of the 12 major shareholders of Empresas AquaChile, indicating the number of shares and percentage of ownership interest of each as of December 31, Table B also shows details of the companies owned by the majority shareholders that hold directly, or through some kind of relationship between them, 67.12% of the voting stock of Empresas AquaChile S.A. TABLE A Shareholders N of Shares ParticiPAtion Fondo de Inversión Privado Patagonia 382,115, % Fondo de Inversión Privado Aqua 210,000, % Inversiones Acuícolas S.A. 172,115, % Inversiones Megeve Capital Ltda. 65,583, % IM Trust S.A. Corredores de Bolsa 48,639, % Celfin Capital S.A. Corredores de Bolsa 21,619, % Inversiones Megeve Dos Ltda. 19,375, % Banchile Corredores de Bolsa S.A. 17,808, % Larrain Vial S.A. Corredora de Bolsa 15,215, % Moneda S.A. AFI para Pionero Fondo de Inversión 11,596, % AFP Provida S.A. Fondo Tipo B 9,584, % Santander S.A. Corredores de Bolsa 8,665, % The company does not have a controller and the majority shareholders do not have any formal agreement to act together. TABLE B Individuals or Legal Entities directly or indirectly owning shares that represent 10 per cent or more of the company s capital: B.1 Individuals or Legal Entities related to the Puchi Acuña and Aguilera Marín families, consisting of the brothers Mr. Víctor Hugo Puchi Acuña, ID , Mr. Mario Puchi Acuña, ID ; Mr. Juan Carlos Puchi Acuña, ID and Mr. Pablo Aguilera Marín, ID The members of the Puchi Acuña family, including Mr. Pablo Aguilera Marín, exercise their rights as individuals or through investment companies wholly owned by the same family. Shareholders Nº of Shares ParticiPAtion Fondo de Inversión Privado Patagonia 382,115, % Inversiones VHP Limitada 4,186, % Inversiones Santa Cecilia Limitada 4,100, % Inversiones MPA Limitada 1,889, % Inversiones JCP Limitada 333, % Puchi Acuña Juan Carlos 200, % total 392,824, % 22

25 Fondo de Inversión Privado Patagonia is controlled directly or indirectly by Mr. Víctor Hugo Puchi Acuña, ID , Mr. Mario Puchi Acuña, ID ; Mr. Juan Carlos Puchi Acuña, ID and Mr. Pablo Aguilera Marín, ID The members of the Puchi Acuña family and Mr. Pablo Aguilera Marín exercise their rights as individuals or through investment companies wholly owned by the same family. In turn, the company Inversiones VHP Limitada is wholly owned by Mr. Víctor Hugo Puchi Acuña, ID , and the Puchi Acuña family, made up of his wife Myriam Cecilia Reyes Abarca, ID , and the brothers Rodrigo Alejandro Puchi Reyes, ID ; Paulina Puchi Reyes, ID ; Verónica Puchi Reyes, ID ; and Cecilia Puchi Reyes, ID For its part, the company Inversiones Santa Cecilia Limitada is wholly owned by Mr. Víctor Hugo Puchi Acuña, ID , and the Puchi Acuña family, made up of his wife Myriam Cecilia Reyes Abarca, ID , and Rodrigo Alejandro Puchi Reyes, ID The company Inversiones MPA Limitada is wholly owned by Mr. Mario Puchi Acuña, ID , and the Puchi Germani family, made up of his wife Loreto Germani Díaz, ID , and the brothers Claudio Puchi Germani, ID ; Carlos Puchi Germani, ID ; Gabriel Puchi Germani, ID The company Inversiones JCP Limitada is wholly owned by Mr. Juan Carlos Puchi Acuña, ID , and the brothers Juan Carlos Puchi Ramírez, ID ; Francesca Puchi Ramírez, ID In turn, the company Inversiones Altair Ltda., ID , is wholly owned by Mr. Pablo Aguilera Marín, ID , and the Aguilera Soto family, made up of his wife Lesdi Soto Sad, ID , and the brothers Pablo Aguilera Soto, ID k, and Fernando Aguilera Soto, ID B.2 Individuals or Legal Entities related to the Fischer Llop family, made up of the brothers Humberto José Fischer Llop, ID , and Mr. Claudio Félix Fischer Llop, ID The members of the Fischer Llop family exercise their rights as individuals or through investment companies wholly owned by the same family. Shareholders Nº of Shares ParticiPAtion Fondo de Inversión Privado Aqua 210,000, % Inversiones Acuícolas SA 172,115, % Inversiones FK Ltda. 1,271, % total 383,386, % Fondo de Inversión Privado Aqua is wholly controlled directly or indirectly by the Fischer Llop family, made up of the brothers Humberto José Fischer Llop, ID , and Mr. Claudio Félix Fischer Llop, ID The members of the Fischer Llop family exercise their rights as individuals or through investment companies wholly owned by the same family. The company Inversiones Acuícolas S.A. is wholly controlled directly or indirectly by the Fischer Llop family, made up of the brothers Humberto José Fischer Llop, ID , and Mr. Claudio Félix Fischer Llop, ID The members of the Fischer Llop family exercise their rights as individuals or through investment companies wholly owned by the same family. 23

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27 CORPORATE GOVERNANCE

28 CORPORATE GOVERNANCE The company is headed by a Board of Directors made up of seven members elected by the Shareholders Meeting. The position is held for three years. Its main function is regulated by Law 18,046 on Corporations and consists of managing the company. The Board of Directors also represents the company in and out of court in everything necessary to fulfill the corporate purpose, and, in order to achieve this end, it is empowered with all of the powers of administration and disposal stipulated as vested solely in the Shareholders Meeting by the Law or the by-laws. The Board of Directors meets monthly to evaluate and guide the development of the company in economic, environmental and social aspects. The members of the Board of Directors earn a fixed fee keyed to their attendance at the meetings. The Directors do not earn any variable compensation for accomplishing goals in the economic, social or environmental spheres. The Chairman and other directors do not hold executive positions in the organization. A) BOARD OF DIRectoRS 26

29 Víctor Hugo Puchi Acuña ID: Chairman of the Board Degree in business management from the Catholic University of Chile and MBA from the University of Chicago. After graduating, his career developed in the financial area of such companies as Iansa, BHC Group and Quiñenco. He is a director of Centrovet and Empresas Hidronor. He carries out business activities in the real estate, tourism and livestock farming sectors in the Los Lagos and Aysen Region. Humberto Fischer Llop ID: Director Veterinarian who graduated from the Austral University of Chile. He was one of the pioneers in the Salmon industry, founding Salmones Pacífico Sur S.A. in This company initially focused its efforts on the seawater growth stage and the commercialization of the product. He has investments in the tourism, agricultural, livestock farming and real estate areas. He is also a director of the Dreams chain of hotels and casinos, which are installed throughout the country. Mario Puchi Acuña ID: Director University Certified Technician in Fishing from the Technical State University. He started his professional career in the Servicio Agrícola y Ganadero, SAG (Agricultural and Livestock Bureau), in Aysen and then in the Servicio Nacional de Pesca, Sernapesca (National Fishing Bureau), in the same region. This activity enabled him to specialize and participate in the project to introduce Pacific Salmon into Chile. He carries out business activities in livestock farming in the Los Lagos and Aysen Region. Claudio Fischer Llop ID: Director Airline Transport Pilot; founding partner of Salmones Pacífico Sur S.A., created in He currently has investments in tourism, real estate, agriculture and livestock faming, among others, and is a director of several companies in those areas. He is also the executive president of the Dreams S.A. chain of hotels and casinos and the Punta Arenas Duty Free Zone. Alejandro Pérez Rodríguez ID: Director Industrial Civil Engineer from the University of Chile and MA in Economics from the University of Chicago. Chairman of the Board of Directors of the San Sebastián University. He is Vice-chairman of the Board of Directors of the Clínica Indisa, a director of Entel and of Inversiones Angelini Ltda. He was general manager of Celulosa Arauco, Soprole S.A. and Watt s Alimentos S.A. Vicente Pérez Fuentes ID: Director Piero Solari Donaggio ID: Director Degree in business management from the University of Tarapacá with more than 20 years experience in the fishing and salmon industry. He is a director of Equitas Capital and Empresas Hidronor, among other companies. He was the representative of the Irish Bank, Glitnir, general manager of Congelados Pacífico ( ), general manager of Pacific Fisheries S.A.; assistant general manager of Pacific Protein ( ), director of Inversiones Ewos Ltda ( ). He has also participated in various companies involved in the fishing industry and in marketing fishing products in USA and Europe. Industrial Civil Engineer from the Catholic University, MBA from the Sloan School of Management, MIT. Executive director of Family Office Megeve Investments, director of Haldeman Mining Company and Parque del Recuerdo. He is also Vice-chairman of Aptus Chile, a non-profit educational corporation. He was chairman of the sanitary company Aguas Nuevas S.A. from 2004 to

30 B) MANAGEMENT The main managers and executives of Empresas AquaChile S.A. and subsidiaries at December 31, 2011: Alfonso Márquez de la Plata Cortés General Manager ID: Degree in Business Management Pontifical Catholic University of Chile MBA The J.L. Kellogg Graduate School of Management José Luis Vial Van Wersch Chief Financial Officer ID: Degree in Business Management Pontifical Catholic University of Chile Agustín Ugalde Preuss Chief Operational Officer ID: Agriculturist Pontifical Catholic University of Chile Franco Adam Raffo Francisco Javier Serra Freire Felipe Sandoval Precht Chief Commercial Officer ID: Aquacultural Engineer Andrés Bello University Technical Manager ID: Aquacultural Engineer Andrés Bello University MBA Loyola College in Maryland, USA Institutional Affairs Manager ID: Civil Engineer University of Chile Juan Carlos Puchi Acuña Juan Miguel Urdangarín Juan Carlos López Sebastián XI Region Fresh Water Manager ID: Mechanical Engineer National Training Institute (INACAP) Fresh Water Atlantic Salmon Manager ID: Marine Technician Pontifical Catholic University of Chile Fresh Water Sea Trout Manager ID: Veterinarian Austral University of Chile Mag. Cs Veterinarians MBA Adolfo Ibáñez University Ignacio Sandoval Gallardo Roberto Berndt Schumacher Ulises Jara Gallegos Processing Plant Manager ID: Civil Engineer Pontifical Catholic University of Chile Sea Water and Operations Manager ID: Agriculturist Austral University of Chile Health ID: Veterinarian Austral University of Chile Alejandra Cid Peña Jorge Manuel Riquelme Riquelme 28 Human Resources ID: Degree in Business Management Accountant Auditor University of Santiago - Austral University of Chile Risk Prevention ID: Risk Prevention Engineer National Training Institute (INACAP). MA in Environmental Management and Order. University of Santiago de Chile

31 Management of subsidiaries Jorge Montero General Manager Grupo ACI S.A. ID: of Costa Rica Chemical Engineer University of Costa Rica Gastón Dupré Huidobro General Manager AquaChile Inc. ID: Degree in Business Management University of Santiago Rodger Miranda Stevenson General Manager AquaInnovo S.A. ID: Aquacultural Technician University of los Lagos MA in the Environment from University of Santiago C) Organizational CHART CFO José Luis Vial XI Region Fresh Water Manager Juan Carlos Puchi COO Agustín Ugalde Fresh Water Atlantic Salmon Manager Juan Miguel Urdangarín CCM Franco Adam Fresh Water Sea Trout Manager Juan Carlos López TECHNICAL MANAGER Francisco Serra Processing Plant Manager Ignacio Sandoval CEO Alfonso Márquez de la Plata Institutional Affairs ManageR Felipe Sandoval Sea water and Operations Manager Roberto Berndt CEO GRUPO ACI Jorge Montero Health Ulises Jara CEO AquaChile Inc Gastón Dupré Human Resources Alejandra Cid CEO AquaInnovo Rodger Miranda Risk Prevention Jorge Riquelme 29

32

33 THE COMPANY S ACTIVITIES

34 THE INDUSTRY Growing demand, limited supply: Trend towards quality food: The growth in per capita income and the development of large emerging economies have contributed to the increase in the demand for animal proteins. The population s eating habits have also evolved towards healthy, nutritional food, such as sea products. Massification of the demand for sea products: Today, sea products form part of the normal diet of families in both developed and emerging countries, such as Brazil, China and Russia. The convenience of these products and their attractive price in relation to other proteins have influenced this fact. Aquaculture, the only way to meet the demand: The overexploitation of species in the wild has limited captures, so the heavy demand for sea products must be met by aquaculture. EVOLUTION OF AQUACULTURE AND FISH CAPTURES OF SALMON IN THE WORLD (THOUSANDS OF TONS WFE ) 1 WILD AQUACULTURE 3,500 3,000 2,500 2,000 1,500 1, E SOURCE: KONTALI ANALYSE AS Salmon and Tilapia are efficient convertors: These species stand out for their efficiency in feed conversion (indicator measuring how many kilos of feed is required to produce a kilo of live animal) compared to other animal proteins. FEED CONVERSION RATES TUNA 20 BOVINE 7 PIG 4 POULTRY 2 TILAPIA SALMON 1.3 (1) WFE or Whole Fish Equivalent refers to the weight of the dead, bled Salmon, trout or Tilapia. SOURCE: KONTALI ANALYSE AS / AQUACHILE

35 Growing demand for Salmon: The global demand for Salmon has grown at about 6% per year over the last 10 years 2. The traditional Salmon markets, such as the USA, Europe and Japan, are expected to continue to increase their consumption, while Russia, China and Brazil, among others, are expected to continue to grow at two digit rates in the future. EVOLUTION OF CONSUMPTION OF SALMON AND SEA TROUT (THOUSANDS OF TONS WFE) TRADICIONAL MARKETS NEW MARKETS TOTAL 2,000 1,600 1, CAGR 00-10: 4.6% CAGR 00-08: 6.4% CAGR 02-10: 11.2% E SOURCE: KONTALI ANALYSE AS Tilapia, an emerging species: Over the last few years, the Tilapia has been consolidated as the fastest growing species. USA is the main importer of this species and AquaChile, through Grupo ACI, is one of the main exporters of fresh Tilapia to this market, with approximately a 27% market share in 2011 (Source: US Department of Agriculture/ AquaChile). WORLD PRODUCTION OF TILAPIA (MILLION TONS PER YEAR) SOURCE: GOAL KUALA LUMPUR 2010 Price perspectives: As of 2004, the prices of Salmon have evidenced an upward trend, reaching their highest level for 10 years in The production potential of the Salmon industry worldwide is estimated at 2.5 million tons WFE. The estimate of the analysts indicates that this ceiling would be reached approximately between 2014 and 2017, assuming a continued growth in demand of 10% and 5%, respectively. ATLANTIC SALMON PRICE EVOLUTION (US$ / LBS) TRIM C 2-3 UB (2) Excluding 2009 and 2010, which were affected by the limitations of supply due to the sanitary crisis in Chile. SOURCE: URNER BARRY 33

36 SEA TROUT AND PACIFIC SALMON PRICE EVOLUTION (YEN$ / KG) SEA TROUT HG 4-6 LBS FIS PACIFIC SALMON HG 4-6 LBS FIS SOURCE: FIS Chile: an aquacultural power The Chilean salmon industry has become one of Chile s main exporters, climbing to third place behind Copper and Cellulose. PRODUCT EXPORTS 2011 GRAPES 1.89% SALMON AND SEA TROUT 3.74% WINE 2.22% CELLULOSE 3.79% OTHERS 32.52% COOPER 55.83% SOURCE: CHILE S CENTRAL BANK World leader: Chile and Norway are the main producers of grown Salmon and Sea Trout worldwide. Together, they represent about 75% of world production of Atlantic Salmon. WORLD PRODUCTION OF ATLANTIC SALMON (THOUSANDS OF TONS WFE) NORWAY UK CHILE CANADA OTHERS GROWTH (%) 2,000 1,500 1, E 2013E 20% 15% 10% 5% 0% -5% 34 SOURCE: ABG SUNDAL COLLIER NORGE ASA

37 Only producer country with a significant capacity for growth: Considering that Norway is close to its maximum production capacity, Chile will be the only country capable of absorbing the future requirements of the world demand. PRODUCTION OF SALMON AND SEA TROUT BY COUNTRY (THOUSANDS OF TONS WFE) POTENTIAL GROWTH 2010 PRODUCTION 1,100 1, NORWAY CHILE OTHERS SOURCE: KONTALI ANALYSE AS / AQUACHILE Chile s competitive, productive and commercial advantages: The main ones are: Weather conditions: The stability of Chile s seawater temperatures enable it to have a 15% shorter growth cycle that in Norway, with a less seasonal production profile. Geographical conditions: Chile has fjords, deep rivers, islands and bays with some of the purest waters in the world. Harmonious growing: Chile does not have wild Salmon, which means that Chilean salmon farming is a more sustainable activity than that of the northern hemisphere producers. Lower production costs: Close to the sources of the main raw material for Salmon ad Sea Trout fish feed (fishmeal and fish oil) and access to more qualified labor at relatively lower costs. Free trade agreements: Chile is a country open to trade. StructuRAl change in the industry The sanitary crisis produced by the ISA virus caused a big change in the Chilean salmon industry. This meant a series of measures aimed at protecting the industry, but it also forced it to rethink the production processes to thereby generate a structural change that would enable progress towards more sustainable conditions of development. New, more effective regulations: The new regulatory framework in Chile will strengthen the salmon industry, since it creates conditions for sustainable, less risky, responsible and profitable conditions in the long-term. Improved auditing and more empowered authorities: The new regulations have strengthened the auditing functions and attributes of the National Fishing Bureau (Sernapesca), which also significantly increased its capacity by increasing the number of inspectors. 35

38 Continuous improvement enabling long-term sustainability: The new industry structure has been reflected in a drop in the mortality indices and an increase in the harvest weight, among other things. MONTHLY MORTALITY INDEX EVOLUTION PACIFIC SALMON ATLANTIC SALMON SEA TROUT 16% 12% 8% 4% 0% mar-08 jul-08 nov-08 mar-09 jul-09 nov-09 mar-10 jul-10 nov-10 mar-11 jul-11 nov-11 SOURCE: AQUABENCH HARVEST WEIGHT EVOLUTION (GR WFE) 6,000 PACIFIC SALMON ATLANTIC SALMON SEA TROUT 5,000 4,000 3,000 2,000 1,000 mar-08 jul-08 nov-08 mar-09 jul-09 nov-09 mar-10 jul-10 nov-10 mar-11 jul-11 nov-11 SURCE: AQUABENCH 36

39 AQUACHILE Empresas AquaChile S.A. is a Chilean company devoted to the production and sale of farmed Salmon, participating along the entire production chain. We are a vertically integrated company that controls all stages of the production process; we are focused on exploiting Chile s competitive advantages and achieving the lowest production costs. Since 2005, we have also participated in the on-growing and commercialization of Tilapia for the North American market, through our Costa Rican subsidiary Grupo ACI S.A. Since 2008, we have also participated in the fish feed industry, after acquiring 50% of Alitec Pargua S.A. In 2011 AquaChile was Chile s main exporter of Salmon and Sea Trout, with an 11.5% share of the market measured in terms of net exported volume. (Source: Infotrade) EVOLUTION OF PHYSICAL SALES OF SALMON AND SEA TROUT, AND MARKET SHARE OF AQUACHILE IN TERMS OF VOLUME PHYSICAL SALES (TONS WFE) SHARE IN EXPORT MARKET (NET TONS) 1 ST PLACE 2 ND PLACE 1 ST PLACE 1 ST PLACE 1 ST PLACE 1 ST PLACE 14.2% 97, % 90, % 106, % 73, % 53, % 65, SOURCE: AQUACHILE / INFOTRADE RANKING SALMON AND SEA trout EXPORTS IN 2011 COMPANY US$ Thousands Net Tons Market Share Value Market Share Volume Empresas AquaChile S.A. 295,696 44, % 11.5% Mainstream Chile S.A. 247,137 37, % 9.6% Salmones Multiexport S.A. 219,995 22, % 5.9% Los Fiordos Limitada 194,461 30, % 7.8% Salmones Antártica S.A. 156,353 18, % 4.9% Trusal S.A. 148,737 17, % 4.5% Australis Mar S.A. 147,247 18, % 4.9% SOURce: INFotRADE We are the largest producer in the world of Pacific Salmon and one of the main producers of Sea Trout. We are also one of the most efficient in both species, achieving sales of US$ 244 million in We are also one of the largest producers of Tilapia in Central America, the largest in Costa Rica and one of the main suppliers of fresh Tilapia to USA with a market share of nearly 27% (Source: United States Department of Agriculture/ AquaChile) Thus, AquaChile currently has more than 400 clients in 50 countries on the 5 continents. 37

40 MAIN SOURCES OF SALES OF AQUACHILE S SALMON, SEA TROUT AND TILAPIA IN , ,596 4, , , , , , ,681 OPERATIONS SALES OF SALMON AND SEA TROUT IN 2011 (NET TONS) SALES OF TILAPIA IN 2011 (NET TONS) SOURCE: AQUACHILE We commercialize our products through recognized brands that enjoy high prestige in the various markets where we distribute them: AquaChile has a huge potential for growth, due to, among other factors: 38 A unique, non replicable sea license base in Chile We have 149 sea licences in Chile and we are present in 50% of the Chilean industry s sanitary areas. We estimate that these sea licenses will allow us to more than triple organically the production of salmonids obtained in 2010.

41 . Potential for growth in Tilapia: We have three fish farms in Costa Rica with a maximum production capacity of 21,000 tons WFE. We also have three licenses on Lake Bayano in Panama, which will allow us to more than double our current production. The theoretical maximum capacity of the licenses in Panama is more than 100,000 tons WFE. 15 years of successful, proven genetic development: We have developed a successful generic program to improve the productive performance and quality of the Atlantic Salmon, Pacific Salmon and Sea Trout. In 2007, we created AquaInnovo, a company devoted to genetics and molecular biology for aquaculture. Capacity and flexibility of supply of eggs and smolts: We produce Atlantic Salmon, Pacific Salmon and Sea Trout eggs, keeping a stock of broodstock on land. This allows us to be one of the main producers of disease free eggs in Chile. Currently, we are also investing in fresh water to have the flexibility and capacity to fulfill our current and future production plan. Our own processing plants capable of absorbing growth: We have 5 plants in Chile capable of processing more than 170,000 tons WFE of Salmon, and one in Costa Rica to process more than 21,000 tons WFE of Tilapia. Geographical diversification: We have one of the largest aquacultural licenses bases of the industry in Chile; it is distributed in the Los Lagos Region (38%) and the Aysen Region (62%), and we are present in 29 sanitary areas (50% of the total). Diversification of products: We farm three different kinds of species of salmonids in Chile (Atlantic Salmon, Pacific Salmon and Sea Trout), as well as Tilapia in Costa Rica and Panama. This diversification enabled us to better cope with the recent sanitary crisis of the Atlantic Salmon in Chile, by increasing our production of the other species. As of 2010, we started to release Atlantic Salmon smolts again, starting to harvest this species again as of April, 2011 with good results in terms of production. We also participated in producing fish feed for Salmonids in association with Biomar, one of the main worldwide producers of fish feed. This alliance is being replicated in Costa Rica for producing fish feed for Tilapia. Integration along the entire value chain: We are a fully integrated company that adds value in all stages of the Salmon, Sea Trout and Tilapia production chain. 39

42 AquAchile VAlue chain in the production of Salmon, Sea trout and Tilapia Salmon and Sea trout FRESH WATER eggs & smolts Sea Water On-Growing Genetics Fish Feed Processing Commercialization Tilapia Fries Production On-Growing Genetics Fish feed Processing Commercialization * Fish feed plant will be built in 2012 Source: AquAchile 40

43 The Salmon Business: Genetics: Since 1993, through our subsidiary Pesquera Antares, we have implemented a genetic development program to improve the productivity and quality of Atlantic Salmon, Pacific Salmon and Sea Trout, through selecting broodstock based on such criteria as rate of growth, feed conversion, resistance to disease, color of skin, among others. In 2007 we created a company devoted to the state-of-the-art genetics and molecular biology market - AquaInnovo. Outstanding geneticists at worldwide level collaborate in this company. As a result of its potential, AquaInnovo received US$ 5 million from the CORFO Innova Fund in order to develop its project. Although AquaInnovo was born in the salmon farming sector, it covers all aquaculture as a potential for development. The deadline for developing the project financed by CORFO Innova is 5 years and it considers the construction and outfitting of an Aquacultural Research and Transfer Center (CITA), a state-of-the-art central molecular genetics lab, challenge centers, experimental farming centers and biotechnological services, as well as a PhD student research and training center. As far as its genetic improvement programs are concerned, AquaInnovo has performed works in Empresas AquaChile S.A., Aguas Claras S.A., Grupo ACI S.A. and Terramar, the latter a Tilapia producer in Ecuador. Fresh Water Production: -Eggs: The subsidiaries of AquaChile produce Salmon and Sea Trout eggs, keeping a stock of broodstock and developing the company s genetics program. The incubation facilities are located in the Araucanía and Aysen Regions. Currently, we are one of the largest producers of eggs in Chile. -Smolt: We produce Salmon and Sea Trout fries and smolts. We have sufficient capacity and flexibility to supply all of the requirements of the group s companies and provide third parties with production services. We have hatcheries, fresh water and brackish water facilities in the Araucanía and Aysen Regions, as well as also a hatchery in the Metropolitan Region. Sea Water Production: We have sea licenses in the Los Lagos and Aysen Regions and we are present in 29 sanitary areas (50% of the total). We have applied for 55 new sea licenses in the Magallanes Region. The amendment to the Fishing and Aquaculture Law allowed sea licences to be relocated in the Los Lagos and Aysen Region, the area of one sea license to be divided and merged with another and the sea licenses in the Aysen Fjord to be partitioned and relocated outside the Fjord. All of these changes would provide sanitary and production improvements for the sea licenses that applied for relocation, division and/or merger. The process started on August 23, 2010 and we filed a total of 62 applications for relocation, division and/or merger. Fish Feed Production: AquaChile, in association with Biomar (one of the main suppliers of high performance fish feed for the aquacultural industry in the world), control equally the fish feed production plant of Alitec Pargua. This plant produces about 126,000 tons of fish feed per year. Processing Plants: We have 5 processing plants in Chile in Puerto Montt, Calbuco and the Island of Chiloé. The plants are equipped with state-of-the-art technology for processing salmonids. Commercialization: Empresas AquaChile S.A. focuses on commercialize its production globally. Our main markets are USA and Japan. We also export to Europe, Asia, the Middle East and Latin America. Since 2002, we have had our own distribution company for the North American market, AquaChile Inc. AquaChile has more than 400 geographically diversified clients in more than 50 countries on the 5 continents. 41

44 The Tilapia Business: In 2005, Empresas AquaChile S.A. acquired Grupo ACI S.A., a company headquartered in Costa Rica, which has participated in the Tilapia industry for more than 25 years. Our business strategy is focused on supplying the large supermarket chains, distributors and restaurant chains in USA with fresh Tilapia, and we have achieved a market share of nearly 27%. Genetics and Breeding: Grupo ACI S.A. has had a genetic improvement program since It is currently managed by AquaInnovo S.A. Fries, Pre on-growing and on-growing: All the Tilapia production process is carried out in more than 360 hectares of farming surface area in Cañas, Costa Rica. Each cycle takes 290 days in which the fish reach an ideal harvesting weight of 900 grams. 42

45 Proccesing Plant: Grupo ACI S.A. has the Terrapez processing plant in Cañas, which has the capacity to process 21,000 tons WFE. These facilities receive recently extracted live harvest from the on-growing tanks and, as a result, they obtain fresh and frozen, high value-added products prepared using state-of-the-art technology. Commercialization: Grupo ACI harvests and processes Tilapia 6 days a week, sending its fresh produce to Miami, from where it is distributed to its clients under the Rain Forest brand. The company has been consolidated as one of the main exporters of this product to USA. AcuaPanama: Grupo ACI, through its subsidiary AcuaPanamá, owns the only three licenses awarded in Lake Bayano for Tilapia farming, totaling 516 hectares. 43

46

47 GENERAL INFORMATION ABOUT THE COMPANY

48 CAPITAL STOCK As of December 31, 2011, the subscribed and paid-in capital of Empresas AquaChile S.A. was represented by 1,157,000,000 shares, of the same, single series. DISTRIBUTABLE PROFITS AND DIVIDEND POLICY: As of December 31, 2011 the company does not have any accumulated net profits susceptible to being distributed as dividends. According to the by-laws, the company must pay annually as a cash dividend to its shareholders on a pro rata basis to their shares at least 30% of the net profits for each year, unless the respective Shareholders Meeting unanimously agrees otherwise to distribute a lower percentage. During the past 4 years, the company has not paid any dividends. 46

49 SHARE TRADING The graph below shows the evolution in the price of AquaChile s shares compared to the evolution of the IPSA index 3, since the company s shares started to be traded: SHARE PRICE EVOLUTION AQUACHILE VS IPSA AQUACHILE IPSA INDEX SHARE PRICE AQUACHILE [CH$/SHARE.] IPSA INDEX may-11 jun-11 jul-11 ago-11 sep-11 oct-11 nov-11 dec-11 5,100 4,900 4,700 4,500 4,300 4,100 3,900 3,700 3,500 SOURCE:THE SANTIAGO STOCK EXCHANGE Quarterly trading on the Stock Exchanges since AquaChile s shares have been publicly traded in Chile, through the Santiago Stock Exchange, the Chilean Electronic Stock Exchange and the Valparaiso Stock Exchange, is as follows: 2011 Number of Shares traded Amount traded (Ch$) Average Price (Ch$) I Quarter N.A. N.A. N.A. II Quarter 702,231, ,401,741, III Quarter 88,767,933 31,870,924, IV Quarter 61,733,810 21,776,152, SOURce: The Santiago Stock Exchange, the Chilean Electronic Stock Exchange and the Valparaiso Stock Exchange (3) IPSA: Selective Chilean Share Price index, as determined by the Santiago Stock Exchange, including the 40 shares most traded in the country. 47

50 In 2011, the related shareholders traded the company s shares as specified below in the accompanying table: Shareholder Relationship Type of Operation Purchase Sale Average unit price Purchase Sale Ch$/ Ch$/ Share Share Total Amount traded Purchase ThCh$ José Luis Vial van Wersch Executive -CFO Financial Investment 22, ,000 Nordicmar Spa Company of Director Financial Investment 824, ,604 Asesorías e Inversiones Tebas Ltda. Company of General Manager Financial Investment 46, ,130 Juan Carlos López Sebastián Executive - Fresh Water Manager Financial Investment 2, ,200 Inversiones Manqui Ltda. Company of Director Financial Investment 3,855, ,746,397 Agrícola y Comercial Santa Inés Ltda. Company of Director Financial Investment 11,554, ,234,033 Inversiones FK Ltda. Company of Director Financial Investment 1,271, ,036 Inversiones Santa Cecilia Ltda. Company of Chairman of the Board Financial Investment 4,100, ,857,705 Inversiones VHP Ltda. Company of Chairman of the Board Financial Investment 4,186, ,896,291 Inversiones MPA Ltda. Company of Director Financial Investment 1,889, ,937 Inversiones JCP Ltda. Company of Executive Financial Investment 333, ,989 Jorge Allende / Director Company of Director Financial Investment 824, ,604 Ulises Jara Gallegos Executive - Head of Health Financial Investment * 60, Juan Carlos López Sebastián Executive- Fresh Water Sea Trout Manager Financial Investment * 200, ,100 Franco Adam Raffo Executive - CCM Financial Investment * 200, ,100 Alfonso Marquez de la Plata Cortés Executive - General Manager Financial Investment * 2,800, ,400 Juan Carlos Puchi Acuña Executive -XI Region Fresh Water Manager Financial Investment * 200, ,100 Agustín Ugalde Preuss Executive - COO Financial Investment * 950, ,225 Juan Miguel Urdangarín Chávez Executive -Fresh Water Atlantic Salmon Manager Financial Investment * 200, ,100 José Luis Vial van Wersch Executive - CFO Financial Investment * 350, ,925 Roberto Berndt Schumacher Executive - Sea Water and Operations Manager Financial Investment * 200, ,100 Ignacio Sandoval Gallardo Executive - Processing Plant Manager Financial Investment * 200, ,100 Felipe Sandoval Precht Executive - Institutional Affairs Manager Financial Investment * 60, Fondo de Inversión Patagonia Majority Shareholder Financial Investment * 2,885, ,868 Inversiones Acuícolas S.A. Majority Shareholder Financial Investment * 2,885, ,868 Sale ThCh$ * This transaction and its price correspond to exercising a stock option granted on February 2, 2010 and May 2, 2010 by the main shareholders to certain of the issuing company s workers, when it presented a negative equity and significant losses for the immediately prior year. DIRectoRS FEES AND EMPLOYEE SALARieS The directors earned the following fees in 2011 for their participation on the board of directors of Empresas AquaChile S.A.: DIRectoRS FEES (US$) 48 Name of Director Attendance Fee executive Committee Legal, Financial, Business and Management Advisories Víctor Hugo Puchi Acuña Presidente 46,995 19,984 96, , , ,030 Humberto Fischer Llop Director 41,951 17,997 96, , , ,000 Mario Humberto Puchi Acuña Director 41,568 19,984 96, , , ,030 Claudio Fischer Llop Director 39,482 15,997 39,482 15,997 Vicente Pérez Fuentes Director 41,026 41,026 - Alejandro Pérez Rodríguez Director 41,346 41,346 - Piero Solari Donaggio Director 14,726 14,726 - Pablo Aguilera Marín (4) Former Director 6,000 16,002 6,000 16,002 Jorge Allende Zañartu (5) Former Director 26,228 26,228 - Álvaro Varela Walker (6) Former Director 69, ,489 69, ,489 Mauricio Cárdenas García (7) Former Director 58, ,985 58, ,985 Total 299,322 89, , , , , , ,533 (4) Until april 2011 (5) Until octuber 2011 (6) Until april 2011 (7) Until april 2011 TOTAL

51 The attendance fees, remunerations and financial, business and management advisory fees received by the members of the Board of Directors for the period ended December 31, 2011 are ( for the period ended December 31, 2010). Empresas AquaChile and subsidiaries have a system of incentives based on the company s operating results, consisting of an annual bonus for its top executives and positions, which, in the company s opinion, are eligible to participate in it. The incentives system seeks to motivate, acknowledge and loyalize the executive through a formal system that rewards good individual performance and also teamwork. The total gross remuneration earned by the executives of Empresas AquaChile, including these incentives, was 1,664 as of December 31, 2011 ( 1,279 for the same period ended December 31, 2010). Furthermore, no severance indemnities were paid to managers and top executives in 2011 (in was paid). STAFF As of December 31, 2011, the staff of Empresas AquaChile S.A. and its subsidiaries consisted of 4,813 workers distributed as follows: STAFF 2011 Managers and Top Executive AdministRAtive and Technical Staff Workers Empresas AquaChile S.A Subsidiaries ,848 4,442 Total ,998 4,813 TOTAL 2010 Managers and Top Executive AdministRAtive and Technical Staff Workers Empresas AquaChile S.A Subsidiaries ,734 4,249 Total ,860 4,525 TOTAL INVEStiNG AND FINANCING PolicieS As stipulated in its by-laws, the company will make whatever investments may be necessary to fulfill its corporate purpose. To that end, the company s Management will have sufficient powers to make investments in the business, based on expansion plans approved by the Board of Directors and profitable projects according to technical and financial criteria. The sources of financing are managed in accordance with the company s financing plan. Financial resources are obtained from the company s own sources, traditional loans, public and privately placed instruments and capital contributions, if the financial and strategic conditions so advise and allow. INSURANCE The company and its subsidiaries have taken out insurance policies to cover the main risks to which its physical assets, offices, processing plants and facilities are exposed, third party liability and other minor risks affecting its equity. Thus, a significant part of the risks are reasonably covered by their transfer to local insurance companies, which, in turn, take out reinsurance for part of their risks with international reinsurance companies. The business operational risks are constantly reassessed to optimize the covers, according to competitive market offers. These insurance covers taken out include the following: 49

52 TYPE OF ASSET Live, harvested fish Buildings, facilities, machinery and finished products Fresh, frozen, smoked fish (Salmon and Sea Trout) Life insurance Public liability insurance RISKS COVERED Damages resulting from or directly caused by an external agent during their sea, air and/or land transportation. Impairment suffered by assets caused by fire, including earthquakes. Impairment suffered by assets due to damages caused by risks of nature Coverage of fire and material damages as a direct result of strikes, looting or riots. Losses and/or damages in sea, air and/or land transportation. Accidental or natural death General as per the product. Covers material damages and physical injuries to third parties. TRADEMARKS AND DOMAINS The company has current registrations and ongoing applications for its trademarks and those of its subsidiaries in the respective public registers, in accordance with the laws and regulations in force. The respective firm names are included in these registrations. The company has also registered the Internet domains linked to its trademarks, safeguarding its interests and intangible assets. RESEARch AND DEVELOPMENT We have a team of engineers, biologists and veterinarians who are constantly studying and evaluating the alternatives for improving the genetic heritage of the stock of the company and its subsidiaries, in order to have planting stock adapted in the best possible way to the conditions of the company s fish farms, in order to maximize productivity. We also have our subsidiary, AquaInnovo S.A born of the alliance with the University of Chile, Aquatic Health Chile and the contribution from the Subcommittee for Business Innovation of Innova Chile CORFO -, whose purpose is the genetic improvement of Salmon and other aquatic species. MAIN ASSETS The main assets of Empresas AquaChile S.A., which are essential for carrying out its activities, are specified in detail in the Financial Statements of the company and its subsidiaries. (See Note 9: Accounts Receivable; Notes 10 and 11: Inventory and Biological Assets; Note 13: Intangibles; Note 14: Goodwill and Note 15: Property, Plant and Equipment). The main assets are buildings, infrastructure works and machinery, mainly 6 processing plants with their respective equipment, the company s offices, the fresh water and sea water facilities, and the nets, cages, protection and safety gear, tanks, containers, vehicles and vessels. PROPERTY AND EQUIPMENT Most of the fresh water and seawater fish farms have neighboring properties, where residences have been built for the operating unit s upper level technicians, canteens for the personnel and storerooms for minor implements. The company and its subsidiaries also have floating cage rafts in each of the fish farms, both fresh water and sea water, in order to carry out the aquatic production process The harvested fish is sent to the company s processing plants. These plants are sited on land owned by the company and are as follows: 50 i) The Cardonal processing plant in Puerto Montt, which is devoted mainly to producing value added Atlantic Salmon and Sea Trout products.

53 ii) The Calbuco processing plant in Calbuco, which is devoted mainly to producing value added Atlantic Salmon and Sea Trout products. iii) The Antarfood processing plant in Chonchi, which is devoted to processing HG (Headed and Gutted) products and value-added Atlantic Salmon, Pacific Salmon and Sea Trout products. iv) The Hueñocoihue processing plant in Dalcahue, which is devoted to processing Pacific Salmon HG products. v) The Cailin processing plant in Quellon, which is devoted to processing Pacific Salmon HG products. CONTRActS At this date, there are no significant commercial contracts in force. MOST IMPORTANT SUPPLIERS Empresas AquaChile has established relationships with its suppliers, and some of them have a long standing relationship with the company. As of December 31, 2011, the company s main suppliers are Alitec Pargua S.A., Biomar S.A., Salmofood S.A., Ewos Chile S.A., among others. FINANCIAL ActiVITIES The company uses the internal credit mechanism to finance its exports, in accordance with the Compendium of Foreign Exchange Regulations. These credits are repaid using the respective foreign exchange from export earnings. The company carries out the typical financial activities of its line of business and its main source of financing is through the Loans for Exporters (PAE). Cash surpluses are invested in fixed income short-term instruments in the local financial market. 51

54

55 CORPORATE SOCIAL RESPONSIBILITY

56 People Well-being The workers are a foundational pillar for AquaChile, so, in addition to the benefits required by law, we have other additional, voluntary benefits that seek to improve the work, food, transportation, health, training and occupational safety conditions of our collaborators. Thus, each year we provide our people with more than 750 thousand lunches, and we travel more than 880 thousand kilometers to get our workers from their homes to their places of work. Also, more than 625 workers use the day nursery benefit for their children under 2 years of age. Likewise, with a view to taking care of our workers skin and protect their skin from UV rays, every year we distribute more than 425 liters of high protection sun block. And we also provide training courses, work clothes, among others. Risk Prevention and training In 2011, the workers of Empresas AquaChile and its subsidiaries devoted 28,093 man hours to training and skills development programs in various areas. This means that, on average, each employee of AquaChile had nearly 6 hours of training in areas related to his or her work area, thereby improving their skill sets and abilities. The courses and seminars were focused on such issues as Hygiene and Food Handling for the processing plants, and for the sea growing area Maritime Security Guards, Radio Operators, Captains of Small Vessels, Caligus Samplers, Certificates and Safety for Center Heads and Assistants, among others. 2 workshops were also held, aimed at making known new people management strategies, focusing on personal effectiveness for heads, technicians and professionals in the support areas of the fish farms. 157 people took part in this activity. Along the same lines, we also held a seminar aimed at recognizing, by interacting with ones peers, the common strengths and challenges starting with personal effectiveness. 93 workers with administrative and professional positions working in Puerto Montt and Calbuco participated. We understand that health is a key for our collaborators, so we contribute to financing their health expenses by providing our people with Health Insurance, a Personnel Welfare Fund, alliances with Pharmaceutical Establishments, alliances with Clinics and Hospitals, as well as also Life Insurance, allowing our workers to enjoy better financing if any high financial impact events occur. In AquaChile, we also support the social and recreational activities of our workers and their families. 54

57 Towards the end of 2011, knowledge of the salmon farming activity was reinforced by internal training provided for 138 professionals and heads from all areas of the company on the Sanitary Regulation (RESA). The company will continue with this initiative in For AquaChile, the skills, integrity and values of our people are a priority. Hence, during 2011 the Code of Conduct (published in December, 2010) was disseminated widely among the workers in all of Chile, Costa Rica and Panama. This ethical map guides the behavior of those who work in AquaChile, and, together with a series of other internal tools, serves a guideline for acting properly and efficiently. Relationship with the community in matters of training: AquaChile endorsed SENCE s request (National Training and Employment Bureau) to go beyond our workers and expand our efforts and train the inhabitants of the Los Lagos region. Thus, in 2011, 16 scholarships in the trade of Salmon Skin Crafts were awarded, aimed at the female working heads of homes in Ancud, and 35 scholarships for the course on Hygiene and Food Handling for people in positions of social vulnerability in Llanquihue. In 2011, we implemented the occupational health and safety program in each of the company s production areas, reinforcing its application by hiring new risk prevention experts in the Aysen and Melinka areas. This program focuses on knowing how to recognize, assess and control operational risks during start-up of the company s processing plants and fish farms, together with continuous training for new hires. The man hours of training provided for the induction of new hires, internal training and mutual benefit fund training were 7,815 hours. As a company, we continue to implement policies for improving the work performed by contractors. These are very strict policies that seek to comply with the Occupational Health and Safety standards imposed by the company. The general parameters of the Company Standard program are as follows: Identifying and analyzing dangers Induction of new hires On-site talks Assessment of physical agents Contingency plan Occupational health Driver occupational exams Upper extremity ailment control program Early detection of symptomatic pathologies Correct posture at work Function rotation program 55

58 Environment In AquaChile, we are firmly committed to the environment. Hence, in addition to being constantly concerned that our activity is in harmony and balance with its environment, we have incorporated the environment into our corporate mission. AquaChile s environmental management is coordinated through the Department of the Environment, which supervises the entire production chain. We are constantly concerned with controlling final disposal of organic and inorganic waste, so we treat the liquid industrial waste, control solid and dangerous waste, have converted to environmentally friendly technologies, installed underwater viewing chambers in the fish farms to observe the behavior of the fish and minimize the loss of fish feed and deposits on the sea or lake beds. We also participate actively in the clean beach campaign of the Maritime Authorities and the reforestation programs coordinated by CONAF (Chilean National Forestry Corporation). All of the above allows us to ensure clean, responsible production and integrate the environmental variable into everything we do. As part of our commitment towards the environment, AquaChile implements effluent monitoring programs in the hatcheries, in the naval artifacts of the fish farms and in the processing plants, thereby complying with the environmental regulations. We also have specific programs for monitoring sediments, water column and phytoplankton % of the industrial organic waste generated in the processing plants and of the mortality in the Salmon and Sea Trout fish farms and hatcheries were sent to reducer plants, with a view to using this waste as raw material for producing fishmeal and fish oil. TOTAL WASTE GENERATED IN 2011 (% WASTE) 88.89% 9.98% 1.14% 0.00% TOTAL ORGANIC WASTE (FISH) TOTAL OTHER RECYCLABLE WASTE PARTIALLY RECYCLABLE WASTE NON-RECYCLABLE WASTE 56 SOURCE: AQUACHILE

59 Water is our main on-growing medium and we are always concerned to maintain this resource in the best possible environmental conditions and use it efficiently. In 2011, we started construction of a big project for the company - Salmones Chaicas. This project consists of a technologically advanced recirculation hatchery for producing Atlantic Salmon broodstock, eggs and smolts on land. In addition to contributing to efficient use of water, the design of these facilities is focused on maximizing bio-safety and ensuring disease-free handling of eggs and smolt. Another important point in matters of the environment is that we started the process of registration for certifying the Atlantic Salmon growing processes under the Global GAP standard, which reaffirms the work that AquaChile has been doing constantly in matters of the environment, food safety, good production, labor, social and business practices. In 2011, we also decided to embrace the principles of the Global Pact of the United Nations (which involve the environment, labor regulations, human rights and anticorruption) as of All of this ratifies our commitment to manage the company s growth responsibly. 57

60 COMMUNITY AquaChile was born and has grown in the South of Chile. We are a company that is committed to the communities in which we operate. In this context, we carry out a series of activities in various spheres aimed at enforcing our links with them. In 2011, we set the challenge of bringing the Salmon we produce and Chileans closer together. Hence, we opened our first sales point in Puerto Montt, where we offer our best Salmon, Sea Trout and Tilapia products. We also continued with the Help us be better program, a tollfree telephone line, , open to our employees, suppliers and the community as a whole to answer their concerns. Furthermore, within the framework of the hatchery Environmental Impact Statement processes, we promised the community of La Araucanía that we would expedite access to information on the environmental performance of the company. As part of the measures to bring us closer to the community, in AquaChile we drive actions that benefit people in the zones where we operate. For example, we gave glasses to 65 children, young people and adults in Guaitecas district of Melinka. The donation was promised by the company during the Navy s mission on board the Medical-Dental Patrol Boat Cirujano Videla. 58 Other actions of this kind performed in 2011 include, for example, participating in the Clean Beaches operation in Puerto Montt and Quellón, organized by the Maritime Authorities and Sernapesca (National Fishing Bureau); the donation together with other producing companies of life jackets to the community of Melinka; the donation of school book bags for a social program implemented by the Regional Government of the Los Lagos Region; and support for the K Kids Race in Puerto Varas within the framework of the Choose Healthy Living program, in which 1,200 children of 6 to 14 years of age participated. AquaChile also donated walkways, rails, floats and metal rings no longer in use to the Municipality of Puerto Montt for reconditioning and

61 subsequent use in the construction of the new pedestrian jetty for the Puerto Montt Isla Tenglo Puerto Montt crossing. We also consider it essential to develop close ties with the authorities. Hence, in 2011 we held meetings with the Intendants of Los Lagos and Aysen and the Regional Secretary for the Economy of the La Araucania region. We also organized a program of visits for the mayors of Pucón, Vilcun, Puerto Varas, Puerto Montt, Calbuco, Cochamo, Hualaihué, Quemchi, Castro, Dalcahue, Queilen, Chonchi, Quellon, Puerto Cisnes, Puerto Aysen and Guaitecas. In these meetings, we addressed the work being performed by AquaChile, its going public, the company s growth plan and its possible contributions to the communities. In AquaChile, we value our relationship with the local communities, so we prioritize hiring people from the places where the company operates. With regard to our workers, in 2011 we held 17 focus groups, with 100 people participating in them. The objective was to have a survey available that would show us what our workers thought of the company and, on that basis, determine the most important areas that needed to be addressed. Workers living and working in the same zone: REGION Percentage Metropolitan 88% La Araucania 87% Los Lagos 98% Aysen 49% total 93% SOURCE: AQUAChile 59

62

63 SUBSIDIARIES AND AFFILIATES

64 SUBSIDIARIES AND AFFILIATES STRUCTURE OF the ORGANIZAtioN AS OF December 31, 2011 EMPRESAS AQUACHILE S.A % Inversiones Antarfish Ltda % % Inversiones Salmones Australes Ltda % % 100% % Aguas Claras S.A. Antarfish S.A AquaChile Inc. AquaChile S.A % % % % Antarfood S.A % % Servicios Aguas Claras S.A % 99.00% % % % Procesadora Aguas Claras Ltda. Salmones Australes S.A % Antares S.A % % % % 83.00% AquaInnovo S.A. 62

65 % 50.00% Grupo ACI S.A. Alitec Pargua S.A % 93.00% % % Salmones Cailín S.A. Salmones Chiloé S.A. Salmones Maullín S.A % Aquacorporacion Int l S.A. 1.00% 64.51% 99.93% 0.07% % Palacios II Ltda. Piscicultura Aquasan S.A. Cultivos Acuícolas El Volcán Ltda. Terrapez S.A % 60.00% % 0.054% % Entre Ríos S.A. Procesadora Hueñocoihue Ltda. Salmones Maullín Ltda. Aquacultura del Pacífico S.A % RFA Inc. 63

66 Empresas AquaChile S.A., is the parent that consolidates the participation of various companies making up the group. Operationally, it is devoted to growing in the on-growing stage, processing and commercialization Salmon and Sea Trout. The latter stage is carried out directly in such markets as Asia, Europe, Latin America and USA, with the latter market being targeted through the subsidiary AquaChile Inc. located in Miami. The company produces Atlantic Salmon, Pacific Salmon and Sea Trout, having specialized mostly in the production of the first two species. To that end, it has sufficient fish farm licenses and marine facilities to meet its current and future volumes of harvest, distributed in the Los Lagos region and the Aysen Region. The raw material is processed mainly in the Puerto Montt plant and its additional production in any of the other of the group s processing plants. Company Description Corporate purpose I. Production of Salmonids Inv. SALMONES AUSTRALES ltda. AQUACHILE S.A. SALMONES CHILOé S.A. SALMONES MAULLín S.A. Devoted to the fresh water production of fries and smolts, mainly for Empresas AquaChile S.A., although a percentage is destined for sale to third parties. This company has facilities on land, lakes and brackish water distributed in the Metropolitan Region and the Regions of Araucanía and Aysén. Production of fries includes the three species sold by the parent, and its supply of eggs for this process is guaranteed by the production of its subsidiary Pesquera Antares S.A.. This company produces and processes Pacific Salmon. It currently represents 50% of annual gross or WFE sales of this species of all the Pacific Salmon producing companies of the Empresas AquaChile S.A. Group. Its on-growing operations are located mainly on the Island of Chiloé and the processing is performed mainly through its subsidiary Procesadora Hueñocoihue Limitada, located in Dalcahue, Chiloé. The company has expanded its production vertically towards the fresh water stages, so it is able to supply itself via its subsidiary Aquasan S.A. This company produces and processes Atlantic Salmon and Pacific Salmon through its subsidiary Salmones Maullín Ltda. The company is vertically integrated and is equipped from the production of eggs to selling its finished products. Logistically, this entire operation is concentrated in the area around Puerto Montt. Its main purpose is a) Participating in all kinds of Chilean or foreign, civil or commercial companies, partnerships, limited partnerships, corporations or limited liability companies, whose purpose is extracting, fishing or hunting, raising, growing or capturing, freezing, refrigerating, preserving, preparing, reducing, transforming, exploiting, selling, industrializing and distributing, in any way, all kinds of beings and organisms whose normal living medium is water; preparing and processing fishmeal and fish oil and their by-products; exploitation of the fishing industry as a whole and its byproducts; manufacturing preserves and other products for consumption or industrial application; and, in general, exploitation, industrialization and use of all kinds of products and by-products of the marine resources and all lines of business related indirectly or directly to the above purposes, in order to develop the businesses to which these companies are devoted or in which they participate. b) The provision of services involving technical business, economic, administrative and financial advisories in activities related directly or indirectly to the purpose of the company, including, among others, those related to fishing and aquaculture, whether directly through this company, or indirectly through other companies. Also undertake all of the operations and businesses agreed to by the partners or related to its purpose. Exploitation in the widest possible sense of all kinds of hydro-biological resources, whether by growing, producing, distributing, marketing, industrializing, extracting, importing and exporting, being able to do so on its own account or on behalf of third parties; provide training and advisory services along those lines, do research and develop technologies. Grow, reduce, develop, capture and market all kinds of live beings or organisms whose normal living medium is water, whether sea, lake or river; industrialization, preparation, processing, conservation, dehydration, packing and marketing of these products in any form and their use: development, research and implanting of artificial breeding and growing procedures and techniques for any and all salmonid species, study of their behavior and the undertaking of studies and surveys and the creation and exploitation of fish farming establishments; provide marketing services for third parties; develop the production of supplies for the production of salmon, especially food and packaging; provide technical assistance services, construction of elements related to aquaculture and provide transportation and refrigeration services for the production of third parties. (i) Extraction, fishing, hunting or growing of beings or organisms whose normal living medium is water, including sea and fresh water aquacultural farms; (ii) Freezing, preserving, preparing and transforming these or other beings or organisms; (iii) Construction or repair of vessels suitable for commercial or industrial fishing; (iv) manufacture, processing or preparing of all kinds of food or other products; (v) Provision of all kinds of services; (vi) Selling all kinds of products or goods, including acting as local or foreign agents; (vii) Participation in other companies, legal entities and associations of any kind and for any purpose; (viii) Carrying out any related, accompanying or supplementary activities agreed to by the shareholders meeting. In all of the above, the company may act on its own behalf or on behalf of others and in the country or abroad 64

67 the Los Lagos region and the Aysen Region. The raw material is processed mainly in the Puerto Montt plant and its additional production in any of the other of the group s processing plants. The main subsidiaries of Empresas AquaChile S.A., which are devoted to producing Salmon and Sea Trout in their various stages, as well as also producing and processing Tilapia and producing fish food, are described below. Main contracts with the parent Direct and indirect interests Subscribed and Paid-in Capital (US$ thousands) Net Equity (US$ thousands) Profits (US$ thou- SANDS) Proportion of total assets of the Parent that it represents Legal Representative / AdministRAtor BoARD of Directors / Management % 38, ,656 26, % Alfonso Márquez de la Plata Cortés Supplies of smolts and aquaculture sea licenses processing services % 52,069 29,593 2, % Alfonso Márquez de la Plata Cortés Víctor Hugo Puchi Acuña Humberto Fischer Llop Claudio Fischer Llop Pablo Aguilera Marín Supplies of smolts and processing plant processing services % 11,238 29,945 10, % Agustín Ugalde Preuss Víctor Hugo Puchi Acuña Jorge Allende Zañartu Humberto Fischer Llop Alberto Claro Vial Alfonso Márquez de la Plata Cortés Supplies of smolts and processing plant processing services % 27,632-1,159-2, % Alfonso Márquez de la Plata Cortés Víctor Hugo Puchi Acuña Mario Puchi Acuña Humberto Fischer Llop Claudio Fischer Llop Alfonso Márquez de la Plata Cortés 65

68 Company Description Corporate purpose I. Production of Salmonids Antarfish S.A. This company provides administrative services and its subsidiaries are i) Servicios Aguas Claras S.A., ii) Procesadora Aguas Claras Ltda., which has a processing plant in Calbuco; and iii) Inversiones Antarfish Ltda, parent, in turn, of Aguas Claras S.A. and Antarfood S.A. The latter is a processing plant in Chonchi on the Island of Chiloé. Extracting, fishing or hunting, raising, growing, capturing, freezing, refrigerating, preserving, preparing, reducing, transforming, exploiting, selling and distributing in any way all kinds of beings and organisms whose normal living medium is water; preparing and processing fishmeal and fish oil and their by-products; exploitation of the fishing industry as a whole and its by-products; manufacturing preserves and other products for consumption or industrial application; and, in general, exploitation, industrialization and use of all kinds of products and by-products of the marine resources and all lines of business related indirectly or directly to the above purposes. AQUACHILE Inc. Subsidiary incorporated in Miami, USA, and devoted to marketing and selling the products of Empresas AquaChile S.A. and its subsidiaries in the USA. Selling and distributing products II. Production of Tilapia Grupo ACI S.A. This company is headquartered in Costa Rica, and, through its subsidiaries, it has participated in the Tilapia industry for more than 25 years. This company s business strategy is focused on supplying fresh Tilapia to the large supermarket chains, distributors and restaurant chains in the USA. The activities carried out through the companies are complementary: Aquacorporación Internacional S.A. produces Tilapia on its own farms in Cañas. The Tilapia is processed by Terrapez S.A. in its own facilities also located in Cañas. Most of the production is sold to RFA, Inc, a marketing company, which sells the products throughout the USA and Canada. Administración de Acuicultura S.A. provides administrative services for the various companies of Grupo ACI S.A. and Acuapanamá S.A. The latter was incorporated in 2009 to grow and export Tilapia in that country Trade, tourism, agriculture, aquaculture, forestry and any other profitable activity, without any limitations other than those stipulated in the law, being authorized as a result to purchase, sell, mortgage, pledge and own and dispose of in any other way all kinds of movable and immovable property, rights in rem and personal rights III. Production of Fish Feed for Salmon Alitec PARGUA S.A. This is the company through which AquaChile, in partnership with Biomar, the leading company in the world in animal nutrition, produces fish feed in Pargua, Los Lagos Region, Chile. The plant has the capacity to produce 126,000 tons of fish feed per year Preparation, production, development and processing of all kind of fish feed in the in the company s plant in Pargua, community of Calbuco, Los Lagos Region, for subsequent sale, distribution and marketing of such products to its shareholders and related companies; and perform and enter into all kinds of acts and contracts designed to fulfill the corporate purpose. 66

69 Main contracts with the parent Direct and indirect interests Subscribed and Paid-in Capital (US$ thousands) Net Equity (US$ thousands) Profits (US$ thou- SANDS) Proportion of total assets of the Parent that it represents Legal Representative / AdministRAtor BoARD of Directors / Management Provider of administrative services % ,117 16, % Agustín Ugalde Preuss Humberto Fischer Llop Mario Puchi Acuña Víctor Hugo Puchi Acuña Claudio Fischer Llop Alfonso Márquez de la Plata Cortés Sale and marketing of finished products % 200 1, % Gastón Dupré Huidobro Víctor Hugo Puchi Acuña Humberto Fischer Llop Alfonso Márquez de la Plata Cortés % 6,169 46,773 2, % Jorge Montero Humberto Fischer Llop Alfonso Márquez de la Plata Cortés Gastón Dupré Pinto Ricardo Castro Pinto Carlos Enrique González Pinto Supply of fish feed % 9,936 16, % María Cecilia Martínez Bayer Humberto Fischer Llop Víctor Hugo Puchi Acuña Felipe Ureta Vicuña Carlos Díaz Verdugo Alfonso Márquez de la Plata Cortés 67

70 Figures in thousands of US$ Empresas AquAchile S.A. (Individual) 2011 inversiones Salmones AustRAles LtDA Summarized ConsoliDAted Statement of Financial Position Total current assets 380, ,854 Total noncurrent assets 289, ,302 Total Assets 670, ,156 Total current liabilities 37, ,831 Total noncurrent liabilities 202,706 32,549 Total Liabilities 240, ,380 Shareholders Equity 429, ,656 Minority interests 0 6,120 Total Shareholders Equity 429, ,776 Total liabilities and shareholders equity 670, ,156 ConsoliDAted Comprehesive Income Statement by Function Income from regular activities 189, ,305 Cost of Sales -144, ,201 Gross Earnings pre fair value 44,973 41,103 Fair value of harvested and sold biological assets -44,264-21,105 Fair value of annual biological assets 42,848 27,413 Gross Earnings 43,557 47,412 Administration expenses and distribution costs -7,364-7,455 Financial income 1, Financial cost -10,013-3,754 Otros income / expenses (1) 31,554-1,033 Income tax expense -5,915-8,228 Profit (loss) 53,147 27,333 Profit (loss) attributable to majority interests 53,147 26,455 Profit (loss) attributable to minority interests (1) Other income, by function plus Other expenses, by function plus Exchange differences plus Results by adjustment units Statement fo Indirect Cash Flow Cash flow from (Funds used in) operational activities Cash flow from (Funds used in) investment activities -93,080 33,056-82,033-25,019 Cash flow from (Funds used in) financing activities 252,047-2,400 Net increase (decrease) in cash and cash equivalents 76,934 5,637 Year-end cash and cash equivalents 82,748 19,942 68

71 Grupo Aci S.A Alitec Pargua S.A AquAchile Inc ,347 53,267 5,076 33,465 16, ,811 69,639 5,081 13,024 52,246 3,261 5,653 1, ,678 53,562 3,261 41,134 16,077 1, ,134 16,077 1,820 59,811 69,639 5,081 63, ,264 49,726-55, ,073-48,901 7,696 3, ,696 3, ,710-2, , , ,194 1,239-8, ,056-1, ,053 4,727 1,245 4,105 5,856 1,247 69

72

73 ESSENTIAL OR RELEVANT FACTS FROM THE YEAR

74 ESSENTIAL OR RELEVANT FACTS FROM THE YEAR On March 11, 2011, the Extraordinary Shareholders Meeting agreed to declare the capital increase agreed to in the Extraordinary Shareholders Meeting of December 17, 2010 null and void and agreed to an increase in the company s capital of 236,581, divided into 1,200,000,000 ordinary, registered, nopar-value shares. The Company Board Meeting held on March 30, 2011 agreed to summon the shareholders to a General Ordinary Shareholders Meeting on April 29, On April 12, 2011, Empresas AquaChile S.A. was registered in the Securities Register of the Superintendency of Securities and Insurance under No , together with 770,000,000 fully subscribed and paid-in shares. It was also registered voluntarily so that its shares could be traded in the markets for emerging companies regulated by the country s Stock Exchanges. On that same date, the issue of 430,000,000 no-par-value cash shares of the same, single series was registered in the Securities Register. On April 29, the Ordinary Shareholders Meeting was held and it agreed to renew the entire Board of Directors of the company and elect the members for a new statutory period, with the Board of Directors being made up of the following members: Víctor Hugo Puchi Acuña (Chairman); Humberto Fischer Llop; Mario Puchi Acuña; Claudio Fischer Llop; Jorge Allende Zañartu; Alejandro Pérez Rodríguez and Vicente Pérez Fuentes. On May 6, 2011, the subsidiary Grupo ACI S.A. of Empresas AquaChile S.A. signed a preliminary agreement with Spécialités Pet Food S.A.S. and Inversiones Industriales Bauprés Limitada to build a value-added plant in the province of Guanacaste, Costa Rica, in order to take advantage of the Tilapia organic disposal generated by the production process On May 19, 2011, AquaChile reported as an essential fact that it had collected US$ 373 million from its Initial Public Offering. The operation was headed by IM Trust and BanChile Inversiones, as the IPO agents; it was undertaken at a price of Ch$ 453 per share for the 387 million shares offered. On May 24, 2011, AquaChile reported as an essential fact the termination of the process of offering the cash shares of Empresas Aquachile S.A., with the company having received the respective payment for the offering made through the Santiago Stock Exchange, by means of a mechanism known as Order Book Auction Sale. 387,000,000 cash shares of the company were placed at a single price per share of Ch$ 453. On June 24, 2011, AquaChile reported as an essential fact the termination of the renegotiation of its liabilities and the prepayment of US$ 163 million of the total debt from the loan reprogramming agreement entered into on September 9, 2007 between Empresas AquaChile S.A. and its debtor subsidiaries and the respective Creditor Banks. The debtor companies decided on the same date to repay and credit to Tranche B of the new renegotiated debt the sum of US$ 70.2 million, so that Tranche B then became a line of credit available whenever the Debtors deemed it appropriate to use it, which use may be distributed on a pro rata basis among all of the banks or one or some of them, as appropriate. On August 24, 2011, the company used part of the line of credit available, so the debt increased by US$ 10 million. On July 21, 2011, the company reported its alliance with DuPont, which enabled it to develop an innovative nutritional strategy that dramatically reduces the need for fish meal and fish oil in the Salmon diet. This change was possible due to the incorporation into the diet of a new, revolutionary, transforming product developed by DuPont, which, because of its beneficial features, could also be used in the feed for other species. It is a type of yeast that generates Omega 3 while it is fermenting. Omega 3 is a fatty acid that is necessary for the health of Salmon and for the human heart. The DuPont Omega 3 technology is covered by more than 55 patents, since it is highly innovative metabolic engineering. The new diet, created by AquaChile and DuPont, requires one kilo of wild fish to produce one kilo of Salmon, which is equivalent to 75 per cent less fish oil in the diet, while maintaining the same high levels of Omega 3 as the Salmon. This new 72

75 generation of Salmon is also produced in very low density growing cages, (12 kilos of Salmon per ton of water), while taking care of details that minimize the effects on the environment and its relationship with the surrounding environment, in a concept that we refer to as harmonious. This new approach to Salmon aquaculture has been implemented successfully in AquaChile s fish farms, in the seas of Chilean Patagonia. Initially, this Salmon, whose commercial brand is Verlasso, has been introduced in 3 towns of USA, with the first harvest having taken place in September, On June 23, 2011, in accordance with General Regulation 270 of December 31, 2009, which repealed General Regulation 211, the Board Meeting of Empresas AquaChile S.A. agreed to and approved the contents of the Information Management Manual, according to the regulations issued by the Superintendency of Securities and Insurance, pursuant to General Regulation 30. An updated version of this Manual is available in our website and the company s offices at Cardonal s/n Lot B, Puerto Montt. On September 1, 2011, the Board Meeting of Empresas AquaChile S.A., in accordance with the provisions of letter b) of the final paragraph of Art. 147 of Law on Corporations, approved the Habitualness Policy, whereby certain operations with related companies are considered ordinary in relation to the corporate line of business of Empresas AquaChile S.A. and their purpose is considered to be to contribute to the corporate interest, with their price, terms and conditions being in line with those prevailing in the market. It was also reported that the complete text of the approved policy was attached and also that it was available for the shareholders and general public on the company s website, On September 29, 2011, the Director Jorge Allende Zañartu submitted his resignation. The Board of Directors of Empresas AquaChile S.A., in addition to thanking Mr. Allende for his personal contribution and commitment, also especially acknowledged the work he had performed since he joined AquaChile. On that same occasion, the Board of Directors designated Mr. Piero Solari Donaggio as his replacement. 73

76

77 FINANCIAL INFORMATION

78 FINANCIAL INFORMATION ReASoned Analysis of the Financial Statements as of December 31, 2011 OUTSTANDING EVENTS FOR the PERIOD Empresas AquaChile S.A. and its subsidiaries grow, process and sell Salmon, Sea Trout and Tilapia to various markets. Through its subsidiaries, it also (i) carries out genetic research for the aquacultural industry; (ii) produces Salmon and Sea Trout eggs and smolts; and (iii) produces fish feed for the salmon industry. Income from the consolidated sales of Empresas AquaChile was US$ million in 2011, showing an increase of 29% in relation to the prior year. At an operational level the EBITDA pre fair value adjustment was US$ 95.4 million, 65% more than the amount recorded in The profits of Empresas AquaChile in 2011 were US$ 54.9 million, which represents a 6% decrease in relation to the US$ 58.1 million recorded in The Salmon and Sea Trout business performed well in 2011, which is explained by the higher margins recorded as a result of the favorable price scenario for all of the species in the first half of the year, the increase in the volume of harvests of Atlantic Salmon and Pacific Salmon, and the good production results achieved in all of the company s species. All of the above contributed to obtaining a significantly higher EBIT pre fair value adjustment compared to the prior year, with the Salmon segment s being US$ 73.2 million, which means a 95% increase in relation to The Tilapia business earned less income, mainly due to sowing less fish towards the end of 2010, as a result of the lower number of fries available specifically in the first stages of production. The above caused a drop of 8% in the volume of sales compared to 2010, which produced a lower EBIT result of US$ 2.9 million an 18% decrease in relation to The company s financial debt was US$ million as of December 31, 2011, compared to US$ million as of December 31, This decrease is due basically to the prepayment of credits of US$ 163 million from the liability reprogramming agreement of September 7, 2009 and the additional payment of US$ 70 million of the new credit contract signed on June 24, On August 24, 2011, the company used part of the line of credit available, so the debt increased by US$ 10 million. Cash and cash equivalent at 2011 yearend was US$ million. AquaChile s net financial debt (financial debt less cash and cash equivalent) as of December 31, 2011 was US$ 82.8 million, which is US$ million less compared to its net financial debt as of December 31, (7) ebitda Pre fv Adj. (hereinafter ebitda): Income from ordinary activities less Costs to sell (i.e. Gross pre fair value Earnings), less administrative expenses, less Distribution costs, plus adjustment for depreciation and amortization expenses. All of these figures are obtained directly from the Company s Statement of Income and the Statement of Cash Flows. (8) ebit Pre fv Adj. (hereinafter ebit): Income from ordinary activities less Costs to sell (i.e. Gross pre fair value Earnings), less administrative expenses, less Distribution costs. All of these figures are obtained directly from the Company s Statement of Income and the Statement of Cash Flows

79 ANALYSIS OF RESULTS Table 1 shows the main components of the consolidated Statement of Income of Empresas AquaChile S.A. Table 1 ConsoliDAted Income Statement FIGURES IN thousands OF US$ 4Q11 4Q QoQ YoY Sales 165, , , ,841 26% 29% Operational cost (1) -126,364-90, , ,524 39% 24% Operational margin 39,376 40, ,298 78,317-3% 48% Other cost and operating expenses (2) -6,421-11,326-20,944-20,593-43% 2% EBitDA pre FV adj. 32,955 29,297 95,355 57,724 12% 65% Depreciation & Amortization -4,824-7,939-19,273-16,587-39% 16% EBit pre FV adj. 28,131 21,358 76,081 41,137 32% 85% Net revenues from biological assets (3) 18,278 15,239 4,893 9,290 20% -47% EBIT post FV adj. 46,409 36,597 80,974 50,427 27% 61% Financial expenses -1,047-1,532-13,972-11,521-32% 21% Financial income , % 159% Other non operating items (4) , , % -80% Income taxes -8,313 16,679-14,209 16, % -187% Net income 37,137 53,713 54,876 58,093-31% -6% (1) Costs to sell deducting Adjustment for depreciation and amortization expenses (2) Distribution costs plus Administrative expenses (3) Fair Value biological assets harvested and sold plus Fair Value biological assets for the year (See Note 11 Financial Statements. Biological Assets) (4) Other income, by function plus Other expenses, by function plus Exchange differences plus Profit and loss from adjustment units source: AquaChile Empresas AquaChile S.A is the largest Salmon and Sea Trout producer in Chile; the company is also a large producer of Tilapia in Costa Rica and Panama. It is vertically integrated from the genetic development of the fish and production of the fish feed to commercialize the production, in other words, from producing the eggs to commercializing and distributing the fish. This structure favors control over the strategic resources, especially in the fresh water stage, and it also allows greater value to be creased in each of the Salmon production stages. As of December 31, 2011, AquaChile s sales grew 29% compared to 2010, while its operating costs increased by 24%. As a result, the EBIT pre fair value adjustments increased by 85% to US$ 76.1 million. The consolidated EBITDA pre fair value adjustments was US$95.4 million as of December 2011, 65% more than the US$57.7 million in This result is explained mainly by an increase in income from sales, especially the greater volumes of sales of Atlantic Salmon and the higher prices in all of the species. It must be pointed out that in 2010 the lower sales are the result of the ISA virus, which generated smaller harvests of Atlantic Salmon during that year. As a result, the EBITDA margin (EBITDA over ordinary income) recorded is 19.0% as of December 31, 2011, compared to 14.9% recorded in (*): In order to measure financial performance under IFRS, AquaChile uses the EBIT pre fair value adjustments parameter. The fair value adjustments of the fish biomass stem from the IFRS standard to value the biomass at fair value. Changes in prices and the composition of the biomass during the period may have an impact on its value. AquaChile reported its EBIT prior to the fair value adjustments to show the performance of its operations during the period. It is important to stress that the fish biomass that is at marketable weights is valued at fair value under IFRS, and, to that end, AquaChile considers a market price, which is obtained from the most recent sales made by the company in the previous month, and/or conservatively using the spot prices observed in the market that are susceptible to being applied to future sales. Similarly, in these estimates AquaChile considers -conservatively- the most basic product obtained from the processing plants, in other words, gutted HON (Head ON) fish for Atlantic Salmon and Headed and Gutted (HG) for Sea Trout and Pacific Salmon, without considering the prices of a mix of products with greater value added. It is important to point out that, among the species of fish that it grows and sells, the company includes Pacific or Coho Salmon, which is extremely seasonal, because it is released in the sea normally from November to March of each year and harvested from October to February, when it achieves its optimum selling weights. However, towards the end of 77

80 December or the fourth quarter of each year, on-growing fish very often achieve average weights of more than 2.5 Kg WFE, which, according to the company s policies, classify to be valued at fair value, thereby generating an effect on results solely as a result of the natural growth of the biomass. The above means that fish biomass are valued at market prices and, when they are sold in the following periods, they reflect a revalued sales cost with a subsequent effect on the operating margin. The net effect of the fair value adjustment of the biomass resulted in a gain of US$4.9 million in 2011, compared to the gain of US$ 9.3 million in These values are the net gain in the valuation due to the natural growth of the fish biomass. (See Note 11 to the Consolidated Financial Statements: Biological Assets) Other income and expenses presents a higher loss in relation to the prior period, which is explained mainly by the higher financial expense, associated with the greater accrual of interest on the debt under IFRS when applying the effective rate and the increase in the balance of the Income tax expense account, as a result of the increase in profits. The company s profits were US$ 54.9 million, which represents a 6% decrease in relation to the same period in SALES ANALYSIS AquaChile is characterized by its diversification of products and markets. Ordinary income accumulated as of December 31, 2011 was US$ million, 29% more than the accumulated ordinary income for the same period in This increase is due mainly to a 36% growth in valued sales of Salmon and Sea Trout and a 44% growth in valued sales of fish feed. FIGURE 1 DISTRIBUTION OF CONSOLIDATED SALES BY BUSINESS AREA ATLANTIC SALMON FIGURES IN MILLONES OF US$ FIGURES IN % SEA TROUT PACIFIC SALMON TILAPIA FISH FEED OTHERS % 36% 24% 14% 18% 8% % 27% 21% 9% 20% 7% 2011 SOURCE: AQUACHILE Figure 1 shows that, comparing the accumulated period as of December 31, 2011 with the same period in 2010, the relative contribution of the sales of Atlantic Salmon increased from 1% to 15%, due mainly to the recovery of the volumes of production of this species after the ISA virus. However, there was a drop in the relative contribution of the other species, since they show a growth in sales lower than the growth in the sales of Atlantic Salmon and fish feed. In 2011, the businesses increased their valued sales, except for Sea Trout and Tilapia. The valued increase in sales of Atlantic Salmon, Pacific Salmon and Fish Feed stand out. In 2011, the Salmon and Sea Trout businesses contributed together 64% of the total income from finished products sold to third parties. Figure 2 shows an analysis of the variations in the consolidated sale, showing the effects of the price and volume of each business unit (species). 78

81 Figure 2 Analysis of the variation in consolidated sales (price and volume effect) Figures in millions of US$ FIGURE 2 ANALYSIS OF THE VARIATION IN CONSOLIDATED SALES (PRICE AND VOLUME EFFECT) PRICE VOLUME SALES ATLANTIC SALMON 0 72 SEA TROUT PACIFIC SALMON TILAPIA -4 FISH FEED 30 OTHER INCOMES 4 SALES SOURCE: AQUACHILE SEGMENT ANALYSIS The Atlantic Salmon business increased its income by 1,624% (US$ 72.5 million) compared to 2010, driven by the recovery in the volumes of production of this species after the ISA virus, which considers an increase of 1452% (13,333 tons WFE) in the volumes of sale. The average price of the mix in 2011 increased by 11% compared to the previous year, due to the small volumes of sales and the harvests under the optimum commercial weight and size (caliber) experienced by the company in For its part, the EBIT Pre FV Adj increased by US$ 15.4 million, which is explained basically by the increase in the volume of sales, the high margins recorded as a result of the increase in the average price of the mix, as well as the specie s good production results. At unit level, the EBIT Pre FV Adj. / Kg WFE was US$ 1.03 / Kg WFE, which compares positively to the US$ / Kg WFE reached in The Sea Trout business decreased its income by 2% (US$ 3.0 million) compared to 2010, as a result of a 15% decrease (4,360 tons WFE) in the volumes of sales of this species. This smaller volume of sales was offset by an increase in the average price of the mix, which increased by 15% compared to the previous year. For its part, the EBIT Pre FV Adj. increased by 47%, which is explained by the high margins recorded as a result of the increase in the average price of the mix, as well as the specie s good production results. At unit level, the EBIT Pre FV Adj. / Kg WFE was US$ 1.18 / Kg WFE, which represents an increase of 72% compared to The Pacific or Coho Salmon business increased its income by 16% (US$ 14.7 million) compared to 2010, driven by an increase of 11% (2,513 tons WFE) in its volumes of sales and an increase of 4% in the price of sale of the mix. The EBIT Pre FV Adj. showed an increase of 60% compared to 2010, which is explained by the high margins recorded as a result of the increase in the average price of the mix, the increase in the volumes of sales, and also the specie s good production results. At unit level, the EBIT Pre FV Adj. / Kg WFE was US$ 1.13 / Kg WFE, which represented an increase of 44% compared to The Tilapia business decreased its income by 9% (US$ 4.9 million) compared to 2010, driven by a decrease of 8% (1,601 tons WFE) in its volumes of sales. This decrease is due to the smaller sowing of fish due to the smaller availability of fries specifically in the prior stages of production. For its part, the EBIT Pre FV Adj. WFE decreased 18% compared to 2010, reaching US$2.9 million. At unit level, he EBIT Pre FV Adj. WFE was US$ 0.17 / Kg WFE, which represented a decrease of 11% compared to

82 TABLE 2 STAteMENT OF FINANCIAL SITUAtioN of Statement of Financial Situation 4Q11 4Q QoQ YoY Atlantic Salmon Sales volume WFE Tons 5, , % 1452% Sales US$ Th 25, ,944 4, % 1624% Average price US$ / Kg WFE % 11% EBIT US$ Th 3, , % - EBIT / Kg WFE US$ / Kg WFE % - Sea Trout Sales volume WFE Tons 6,754 6,437 25,366 29,726 5% -15% Sales US$ Th 36,356 30, , ,512 18% -2% Average price US$ / Kg WFE % 15% EBIT US$ Th 8,102 5,251 29,816 20,346 54% 47% EBIT / Kg WFE US$ / Kg WFE % 72% Pacific Salmon Sales volume WFE Tons 13,943 14,074 25,473 22,960-1% 11% Sales US$ Th 60,049 57, ,525 92,845 4% 16% Average price US$ / Kg WFE % 4% EBIT US$ Th 16,229 16,523 28,755 18,015-2% 60% EBIT / Kg WFE US$ / Kg WFE % 44% Tilapia Sales volume WFE Tons 3,697 3,722 17,240 18,841-1% -8% Sales US$ Th 9,778 9,700 47,548 52,432 1% -9% Average price US$ / Kg WFE % -1% EBIT US$ Th ,892 3, % EBIT / Kg WFE US$ / Kg WFE % Total Sales volume WFE Tons 29,829 24,319 82,329 72,445 23% 14% Sales US$ Th 131,778 98, , ,254 34% 27% Average price US$ / Kg WFE % 12% EBIT US$ Th 28,131 21,358 76,081 41,137 32% 85% EBit / Kg WFE US$ / Kg WFE % 63% SOURCE: AquaChile STAteMENT OF FINANCIAL SITUAtioN Table 3 Summary of Statement of Financial Situation Figures in thousands of US$ Current assets 437, ,315 Non current assets 389, ,061 Total assets 826, ,376 Current liabilities 130,969 92,552 Non current liabilities 244, ,852 Total liabilities 375, ,404 Equity 429,713 12,161 Minority interest 21,384 19,811 Total Equity and Liabilities 826, ,376 SOURCE: AquaChile The main variations noted in the consolidated statement of financial situation as of December 31, 2011, compared to December 31, 2010, are summarized below: The total assets show an increase of US$ 255 million, 45% more in relation to December 31, 2010, explained by an increase of US$ in Current assets and an increase of US$ 84.3 million in non-current assets. The main variation in the Current assets in relation to December 31, 2010 is in Cash and cash equivalent, which increased by US$ 85.5 million, explained mainly by the collection associated with the process of going public and offering shares on the Santiago Stock Exchange in May, 2011, which collected US$ 373 million. 80

83 This increase is also explained by i) the increase of US$ 62.4 in Biological assets and Inventories due to the higher level of production; and ii) the increase of US$ 13.6 million in Trade and other receivables due to the company s higher levels of sales. The increase in Non-current assets is explained mainly by i) the increase of US$10.7 million in Other non-current financial assets, arising from the investment in Sociedad Fiordo Austral S.A. by the subsidiary AquaChile S.A., equivalent to a 6.12% ownership interest; ii) the increase of US$26.2 million in Biological assets due to the increased level of production; iii) the increase of US$ 27.5 million in Property, plant and equipment due to the higher level of investments needed to sustain the company s growth plan; iv) the increase of US$ 13.2 million in Deferred tax assets as a result of the tax effect of the revaluation of the fair value of the biomass subject to revaluation during the period; and v) the increase of US$4.2 million in equity accounted investments due to the investment made by Grupo ACI together with Biomar (US$3 million) for the construction of fish feed plant for Tilapia in Costa Rica and the investment made by Empresas AquaChile S.A. in Salmones Chaicas S.A. (US$ 1.2 million), equivalent to an ownership interest of 18.31% in that company. The variation in Total liabilities is explained mainly by an increase of US$38.4 million in Current liabilities and the decrease of US$202.4 million in Noncurrent liabilities. The increase in Current liabilities is explained mainly by the increase of US$ 31 million in Trade and other payables, due to the increase in productive operations. Non-current liabilities have decreased by US$ million. In fact, on June 24, 2011, Empresas AquaChile S.A. and its debtor subsidiaries proceeded to pre-pay US$ 163 million of their debt with their participating Creditor Banks according to the Liability Reprogramming agreement of September 7, The debtor companies decided on the same date to repay and credit US$ 70 million to Tranche B of the new renegotiated debt, so that Tranche B then became a line of credit available for when the Debtors deemed it appropriate to use it. This use could be on a pro rata basis to each of the banks or to one or some of them, as appropriate. On August 24, 2011, the company used part of the line of credit available, whereby the debt increased by US$ 10 million. In the same agreement, the debtor companies made a novation of the credits, concentrating all of the debts of this contract in Empresas AquaChile S.A. and Salmones Chiloé S.A., which became the new Debtors. In sum, the main refinancing agreements are as follows: a. The novated, reprogrammed debt is divided into 3 tranches: A-B and C: Tranche A: US$ 118 million with a maturity at 7 years with six-monthly payment of interest and six-monthly amortization as of December, Tranche B: A financing commitment (line of credit) available for US$ 70 million, which matures at 4 years, which may be extended. To date, US$ 10 million have been used. Tranche C: This tranche is divided into two sub-tranches: - Sub Tranche C-One: US$ 31.7 million maturing at 7 years with six-monthly payment of interest and six-monthly amortization as of December, Sub Tranche C-Two: US$ 22.6 million maturing at 4 years bullet with payment of six-monthly interest. b. The interest rate applied to Tranche A is the rate set every six months based on the average cost of the funds of the creditor banks, plus an annual spread of 1.2%. The interest rate applied to the Tranche can be calculated in two ways: The rate offered by whoever has been awarded the requested loan, or the average cost of the funds plus an annual spread of 1.45% if the disbursement of this tranche is made on a pro rata basis among the participating creditors. The interest rate of Sub Tranche C-One is a fixed rate of 3.2% per annum through to January 25, 2013 and from then on Libor plus a spread of 2.5% per year. The interest rate of the Sub Tranche C-Two is a fixed rate of 3.2% per annum through to January 25, 2013; and from then on Libor plus an annual spread of 2.5%. c. Certain financial covenants have also been established. These loans consider the fulfillment of some financial covenants calculated on the Consolidated Financial Statements of Empresas AquaChile S.A. as of December 31, 2011 and at March thirty first, June thirtieth, September thirtieth and December thirty first of the following years. They involve maintaining a minimum net financial leverage, a minimum net financial expenses coverage and a net financial debt to maximum EBITDA ratio. 81

84 Table 4 Financial Covenants Covenants 2011 ** AL 2018 Financial Leverage x 1.25x 1.20x 1.10x 1.0x 1.0x Interest Expenses Coverage 2 4.5x 4.5x 4.5x 4.5x 4.5x 4.5x Net Financial Debt / EBITDA 3 2.5x 2.5x 2.2x 2.2x 2.0x 1.75x (1) (Total Current Liabilities plus Total Non-current Liabilities less Cash and Cash Equivalent) / (Total Equity) (2) EBITDA / (Financial Costs less Financial Income) (3) (Other Current Financial Liabilities + Other Non-current Financial Liabilities less Cash and Cash Equivalent) / EBITDA. * Figures measured on a quarterly basis over the last twelve months. ** Measured at December 31, SOURCE: AquaChile 82 d. The contract stipulates the possibilities of voluntary advanced amortizations, as well as also certain obligations to report, to do and not to do, typical of this kind of agreement favoring the participating banks. e. Likewise, 99 aquacultural licenses of Empresas AquaChile S.A.; Aguas Claras S.A.; Salmones Maullín Ltda.; AquaChile S.A.; and Salmones Chiloé S.A. were furnished as pledges, becoming mortgages and releasing all of the other pledges made on sea licenses in the previous liability reprogramming agreement of September 7, f. Aguas Claras S.A. and Salmones Maullín Ltda. became reciprocal cosureties and joint and several debtors of the Banks, to guarantee fulfillment of the obligations assumed by the Debtors under the terms, conditions and with the limitations stipulated in the Agreement. (It must be clarified that Salmones Chiloé S.A. did not become a surety and joint and several debtor of the other related companies, rather the purpose of the guarantees it furnished to the Creditors is to guarantee its own obligations, not those of all of the Debtors). g. A pledge was furnished on the shares of AquaChile S.A.; Salmones Maullín S.A.; Aguas Claras S.A.; Antarfish S.A.; 93% of the shares of Salmones Chiloé S.A.; 60% of the shares of Piscicultura Aquasan S.A., all to the Creditor Banks to guarantee fulfillment of all of the obligations assumed by them. h. - With this new credit agreement, the pledges on the shares issued by Empresas AquaChile S.A., which the shareholders had pledged previously, were lifted, together with lifting the mortgages on all of the real estate and water use rights, the pledge on the vessels and naval artifacts and on the trademarks that they owned, all made out to the creditors, which had been furnished to guarantee fulfillment of all of the obligations assumed by the debtors in the liability reprogramming agreement of September 7, As of December 31, 2011, the company and the debtor companies have fully fulfilled the obligations stipulated and have maintained all of their substantial aspects of the declarations and sureties stipulated in the Liability Reprogramming Agreement. The company s total equity has increased by US$ million compared to its total equity as of December 31, 2010, which is explained basically by the increase in capital associated with the company s IPO process on May 19, 2011, from which the company collected US$ 373 million, with 32.2% of the ownership of the company going public. It is important in that regard to point out that, on December 17, 2010, the Extraordinary Shareholders Meeting agreed to the following: That the company will be subject to the standards governing corporations and to inspection by the Superintendency of Securities and Insurance, amending its by-laws. Registration of the company and its shares in the securities register, so that the shares can be traded in markets for emerging companies. Reduction in the number of shares into which the capital is divided, i.e. 12,700,000,000 registered, nopar-value shares of a single series, to 1,270,000,000 registered, no-parvalue shares of which 770,000,000 shares are subscribed and paid in by the shareholders. Likewise, it agreed that this new number of shares into which the company is divided will be distributed among the same shareholders at a ratio of one for every 10 shares they hold. The same holds true for those shares whose issue, subscription and payment are pending. Declare the increase in capital agreed to in the Extraordinary Shareholders Meeting of January 19, 2009 null and void and agree to a new capital increase of US$ 124,997,583 distributed into 202,635,470 ordinary, registered, no-parvalue cash shares. Increase the capital stock and the issue of cash shares to go public on the stock exchanges, agreeing to an amendment to the by-laws. The agreed capital increase is for the issue of US$ 11,000,000 distributed into 110,000,000 ordinary, registered, nopar-value cash shares.

85 On March 11, 2011, the Extraordinary Shareholders Meeting agreed to declare the capital increase agreed to in the Extraordinary Shareholders Meeting of December 17, 2010 null and void and agreed to increase the stock capital of the company to 236,581, divided into 1,200,000,000 ordinary, registered, nopar-value shares. On April 12, 2011, Empresas AquaChile S.A. was registered in the Securities Register of the Superintendency of Securities and Insurance under No , together with 770,000,000 fully subscribed and paid-in shares. Likewise, it was registered voluntarily to be able to trade its shares in the markets for emerging markets regulated by Chile s stock exchanges. On that same date, it registered a capital increase of 430, no-par-value cash shares of the same, single series un the Securities Register under No On May 19, 2011, AquaChile reported the collection of US$ 373 million as an essential fact after going public. The operation was headed by IM Trust and Banchile Inversiones, as the IPO agents, and the price was Ch$453 per share for the US$ 387 million shares offered. On May 24, 2011, AquaChile reported as an essential fact the termination of the process of offering the cash shares of Empresas Aquachile S.A., with the company having received the respective payment for the offering made through the Santiago Stock Exchange, by means of a mechanism known as Order Book Auction Sale. 387,000,000 cash shares of the company were placed at a single price per share of Ch$ 453. The main financial indicators of the consolidated statement of financial situation are presented below: Table N 5 Financial indicators of the statement of financial situation LIQUIDITY INDEX Current liquidity (times) (Current assets/current liabilities) Acid Ratio (times) (Available funds/current liabilities) DEBT INDEX Debt ratio (times) (Current liabilities + Non-current liabilities / Net equity) Short-term debt ratio (times) (Current liabilities / Net equity) Long-term debt ratio (times) (Non-current liabilities / net equity) Short-term debt portion % 34.9% 17.2% (Current liabilities / Current liabilities + Non-current liabilities) Long-term debt portion % 65.1% 82.8% (Non-current liabilities / Current liabilities + Non-current liabilities) Financial expense coverage (times) (Results before interest and taxes) / Financial expenses ActiVITY INDEX Total assets 826, ,376 Investments 55,505 11,162 Disposals 789 2,763 Inventory turnover Times (Annualized cost to sell / (Inventory + Average biological assets)) Permanence of inventories (days) (Average inventory / Cost to sell *360) SOURCE: AquaChile 83

86 The Acid Ratio indicator reflects the company s greater liquidity as of December 31, 2011, due to the share offering of May 19, 2011, which collected US$ 373 million, making this indicator increase from 1.2 to 1.7 times. As a result of the collection, a prepayment of US$ 163 million was made of the debt plus an additional payment of US$ 70 million of the restructured debt, as is explained in greater detail in Note 19 to the Financial Statements. This enabled the company s level of indebtedness to improve substantially. Furthermore, the distribution of the debt was changed, reducing the long-term portion and increasing the short-term portion in relative terms. The increase of US$ 44.3 million in investments stands out in the activity indicator. This includes the increase of US$ 13.7 million in non-controlling interests, which correspond to the investments of US$ 3 million made by Grupo ACI in Costa Rica, through a Joint Venture with the Biomar Group, the investment of US$ 10.7 million made by AquaChile S.A. in Fiordo Austral S.A., which is equivalent to a 6.12% interest in the latter company. The investment in Salmones Chaicas S.A. does not form part of this cash flow, since that investment was made through a contribution of assets for an equivalent value of a US$ 1.2 million, which, in turn, is equivalent to an 18.31% interest in that company. DESCRIPtioN OF CASH FLOWS Table 6 Net cash flows USD (000 s) CuRRency Variation Cash flow from operations 3,271 11,396-8,125 Cash flow from investments -61,319-8,399-52,920 Cash flow from financing 142,875-3, ,160 Change in cash and cash equivalents in the period 85, ,534 Final Cash and cash equivalents 113,897 28,416 85,481 SOURCE: AquaChile The behavior of the main components of the consolidated cash flows as of December 31, 2011, compared to December 31, 2010, is as follows: As of December 31, 2011 the company presents a total positive net cash flow for the period of US$ 85.5 million. In the same period of the prior year, it recorded a negative cash flow of US$-0.05 million. The operating activities as of December 31, 2011 generated a positive cash flow of US$ 3.3 million, less than the amount recorded in 2010, which was US$ 11.4 million. The investing activity generated a negative cash flow of US$ 61.3 million as of December, 2011, explained by the incorporation of investments of US$ 13.7 million in non-controlling interests, the net incorporation of US$ 41 million in fixed assets and the loan of US$ 6.6 million to related companies. Financing activities generated a positive cash flow of US$ million in 2011, which originate in the net collection of US$ million from the company s Initial Public Offering on the stock exchange, in the prepayment of loans worth US$ million and the obtaining of loans worth US$ 16.4 million. ANALYSIS OF the PROFITS As of December 31, 2011, the company presents retained earnings of US$ 54.9 million, which is less than the figure recorded for the same period in 2010 (US$ 58.1 million). The company has not paid dividends over the last 4 years. Currently, the company records accumulated losses in its financial statements. The main profitability indicators are presented in Table 7. 84

87 Table 7 Profitability indicators Profitability of equity % 5.7% % (Net profit / Average equity) Profitability of assets % 7.9% 10.9% (Net profit / Average total assets) Earnings per share US$ / Acción Net profit / Number of subscribed and paid-in shares) Return on dividends % n.a. n.a. Dividends per share / Market price SOURCE: AquaChile PRODUCTION INDICAtoRS The company presents a Salmonid harvest / Fish Farm in use ratio in 2011 of 1,818 tons WFE. The growing densities as of December 31 per species are as follows: i) Atlantic Salmon: 2.8 Kg / m3; ii) Pacific Salmon: 9.6 Kg / m3; and iii) Sea Trout: 5.1 Kg / m 3. Furthermore, the observed survival rates in the closed groups in 2011 were as follows: i) Atlantic Salmon: 88%; ii) Pacific Salmon: 90%, and iii) Sea Trout: 81%. Table 8 Production Indicators LIQUIDITY INDEX 2011 Salmonid harvests* Tons WFE 67,260 Used fish farms Nº 37.0 Salmonid harvests / Used fish farms Tons WFE 1,818 Farming Density** Atlantic Salmon Kg / m Pacific Salmon Kg / m Sea trout Kg / m Survival closed groups*** Atlantic Salmon % 88% Pacific Salmon % 90% Sea trout % 81% (*) These are fish farms harvested in 2011 or in the process of being harvested in the year in question. The harvest of broodstock in the period is included. (**) Density at December 31, 2011 (***) Survival rate of closed groups of fish grown in 2011 SOURCE: AquaChile 85

88 RISK FActoRS 86 The company, its assets and the aquacultural industry where it carries out is business are exposed to a series of risks and contingencies that might possibly cause a negative effect on the solvency of the company, its position in the market or its financial position, and which must be considered when it comes to making investment decisions. The most relevant risks and contingencies are described below, without detriment to the possibility of there being additional risks and contingencies that could just as equally have a negative effect on the company s business and operating results. i environmental risk Although Empresas AquaChile and subsidiaries have geographically diversified their production facilities in Chile, the salmon industry is exposed to risks of nature, such as temperature variability in sea water, weather phenomena, seismicity, algae bloom, the existence of natural predators and other factors that may affect the place where their production facilities are situated. All of these circumstances can affect the growth of Empresas AquaChile and subsidiaries, having a negative impact on their quality and even increasing mortality rates, which would lead to a reduction in production quantities and consequently in their sales and earnings. ii Phytosanitary risks Diseases, parasites and pollutants are a recurring problem in the aquaculture industry, which can lead to reduced quality of the products, increases in mortality and reduced production. Although Empresas AquaChile and subsidiaries have made significant investments in research, genetic improvement studies, mass vaccination programs, independent zone management systems, fish health monitoring, policies of low-density in the use of cages, and sanitary barriers that help control and reduce these risks, it is not possible to rule out the appearance of new diseases or plagues that might affect Salmon and/or Sea Trout production. iii Product quality AND traceability risks The products grown, produced and marketed by the Company are for human consumption, and there is a risk of contamination by negligence in the production or inadequate handling during the process of distribution and/or delivery to the end consumer, by clients, consumers or third parties. To avoid this, Empresas AquaChile has developed the most stringent quality classification controls and food safety control, with constant monitoring internally and externally by the sectorial authorities. For control of food innocuity, the Company has full traceability of the fish and, before harvesting, the authorities order the fish to be analyzed to rule out any traces of residues. The processing plants are also sampled to ensure innocuity in the processing and the raw materials. In this way, the authorities and the clients can be assured of the innocuity of the Company s products. As animals raised in an open environment, i.e., the sea, the fish are exposed to diseases that can lead to health issues. To control these impacts, the Company has a health department made up of veterinary doctors who implement the preventive policy and monitor the sanitary aspects of the fish populations and, in case of any disease, provide the appropriate treatment against it. To not do so would constitute a risk to the population of fish and a risk to the Company s earnings. IV Risks of price VARiations in consumables Some of the most significant costs in salmon production lie in supplies of fish meal and fish oil. Although sources of fish feed have been diversified, including new plant alternatives, and investments have been made in two proprietary fish feed plants to supply part of the consumable requirements, Empresas AquaChile and subsidiaries may be affected by variations in the prices that are due to circumstances beyond their control, since the fish feed industry is concentrated in a handful of global producers and there is no extensive market of futures or other derivatives to purchase several of these raw materials, which make up the diet for Salmon, Sea Trout and Tilapia. V International pricing trends The Salmon and Sea Trout supply depends on the production strategies of each of the companies involved in the industry. For this reason, projecting and estimating an equilibrium price for the products is complex. Moreover, demand for farmed Salmon has grown significantly over recent years. Accordingly, it is possible that a difference may arise between the supply and demand for salmon products, bringing with it price volatility. However, the salmon industry globally and locally has been undergoing a dynamic (11) NatuRAl events also known AS Harmful Algae BlooMS, which occur in aquatic ecosystems AND are caused by phytoplanktonic organisms that, in environmental conditions FAVorable to their development, multiply explosively and concentrate, causing alterations to the marine life and causing mortality among the fish.

89 consolidation process. It therefore allows us to forecast that future periods of growth will tend to present a more balanced behavior. On the other hand, diversification into other species, such as Tilapia, and international diversification itself, could minimize the effect and complement the portfolio which the Company offers to the markets. VI Consumer VARiations in the destination markets Although the global trend suggests it is possible to estimate a sustained rise in the consumption of farmed fish and other aquacultural products over the next few years, the Company cannot guarantee that trend will maintain itself or last over time. In the event this changes or goes into reverse, it could cause a negative effect on the business and its operating results. VII Changes in the economy of destination countries. Currently, the Company s exports are sold primarily in the markets of USA, the European Union and Japan, and possible economic stagnation, crises or depressions leading to a reduced demand cannot be ruled out. If such events were to take place this could lead to negative effects on the Company s operation and operating results. VIII ConcentRAtion of financial liabilities. On June 24, 2011, the Company signed a Debt Rescheduling Agreement with its financial creditors whereby, in addition to renegotiating with all its financial creditors the maturity terms and interest rates of the loans, the enforceable financial indexes and the collateral furnished, a series of positive and negative covenants on the part of the Company were also stipulated. This agreement also stipulates various mechanisms and quorum for the approval of any exceptions to these by the creditors. In addition to the nonpayment of any of the capital and interest owed on the agreed dates, if the Company fails to perform its positive or negative covenants stipulated therein, and maintains such nonperformance for more than 90 days, the financial creditors can demand the expiration of the terms agreed and demand early payment of the whole of the debt and interest. IX Exchange-rate risk. As a global company, exchangerate fluctuations can also affect the performance of Empresas AquaChile, since part of its costs (labor and services such as overland transport, etc.) are indexed to the peso, and its sales are denominated in foreign currencies, such as the American dollar, the euro and the yen. In addition, since the Company reports its balance sheets in dollars, changes in the strength of the dollar with respect to the rest of the currencies in which the Company does business can negatively affect its financial results. X Changes in environmental AND other legislation Caring for the environment forms an essential part of the Company s business policy. Notwithstanding, the pollution of natural resources due to external issues caused by production processes has generated on-growing concern and awareness on the part of consumers, intermediary groups and the pertinent authorities, who demand production systems that are environmentally friendly and guarantee that natural resources will be protected in the long term beforehand. These exigencies have resulted in the establishment of more stringent standards and procedures with a view to environmental sustainability, which might lead to significant increases in production costs and/or restrictions on the Company s production activity. XI Changes in aquacultural AND sea licenses legislation The Company has developed processes and constant monitoring for the proper management of fish farm sites and has a technical department and legal advisory services that oversee the proper use and handling of aquacultural licenses. However, the inadequate handling of aquacultural licenses and/ or noncompliance with the relevant standards for sustainability and proper operation of the whole of the system; inactivity of the licenses without due cause or authorization from the authorities, could lead to the application of penalties, and even imposed forfeiture of any of the aquacultural licenses by the authorities, in cases where such measure is contemplated in the applicable law. Xii Risks of the assets The fixed assets, such as facilities and buildings, and the risks of civil liability, are covered through insurance policies under standard market terms and conditions. However, given the lack of effective insurance, the high costs now prevalent in the market for insuring the living assets or biomass, and the disputes over responding for those losses which the insurers put forward, the Company currently has no insurance for its biomass against risks of diseases, theft or natural risks such as storms, tempests, sea swells, tsunamis, seaquakes, earthquakes, volcanic eruptions, currents, floods, 87

90 avalanches and/or alluvions, underwater currents, algal bloom. Consequently, any relevant damage or loss in these assets may lead to an adverse effect on the Company s businesses and financial position. Notwithstanding the above, the geographical dispersion of the on-land facilities and fish farm at sea, allow it to, if not avoid, then at least diversify the risk of these events. Xiii Subsidiaries and affiliates Empresas AquaChile S.A. is the parent company and affiliate of several companies, through which a significant part of the Company s operation is developed, and on whose operating results and financial condition it has considerable dependence. Any significant impairment in the business and profit or loss of its subsidiaries and affiliates may have an adverse effect on the operation and operating results. Difference between financial AND carrying VAlues of the ASSets As of December 31, 2011, there are no significant differences between the financial and carrying values of the company s main assets. Investments in related companies acquired before January, 2003 are equity accounted, while new investments are recognized at fair value, according to the standards stipulated in circular 1,697 of the Superintendency of Securities and Insurance and Technical Bulletin 72 of the Chilean Association of Accountants. The Salmon and Sea Trout biological assets, such as broodstock, fries, smolts and small fish in the on-growing process, are measured at fair value less estimated costs to sell, except when the fair value cannot be determined reliably as defined in IAS 41; for the above, the search for an active market for such assets must be considered in the first instance. Considering that there is no active market for the stocks of live fish in these stages of their development, valuing them at their accumulated cost at year-end has been considered. Salmon and Sea Trout biological assets in the on-growing stage and of a heavier weight are measured at their fair value less estimated costs to transform and sell. The direct and indirect costs incurred in the productive process are part of the value of the biological asset when they are activated. The accumulation of these costs at each year-end is compared to the fair value of the biological asset. The changes in the fair value of these biological assets are reflected in the statement of income for the year. The biological assets, whose projected harvest is within less than 12 months, are classified as current assets. The calculation of the fair value estimate is based on market prices for harvested fish and adjusted by the typical differences in the harvest s normal distribution of caliber and quality or ranges of weights. The price is adjusted by the cost of the harvest, the costs of the freight to destination and the processing costs to transform the fish into a bled product. Thus, the evaluation considers the life cycle stage, its current weight and the expected distribution by caliber of the fish harvest. This fair value estimate is recognized in the company s statement of income. A summary of the valuation criteria is presented below: 88

91 Stage Asset Valuation Fresh water Broodstock Direct and indirect accumulated cost in the various stages. Fresh water Eggs Direct and indirect accumulated cost in the various stages. Fresh water Smolts and fries Direct and indirect accumulated cost in the various stages. Sea water Fish in the sea Fair value according to the following: Atlantic Salmon starting from 4.0 Kilos WFE; Pacific Salmon starting from 2.5 Kilos WFE; and Sea Trout, starting from 2.5 Kilos WFE For lower weights, the accumulated cost at year-end is considered. Tilapia biological assets in the breeding stage and in the ON-GROWING stage Tilapia for broodstock are initially recorded at cost and valuated at accumulated cost, taking into consideration impairment losses, at each balance sheet date. Tilapia in the on-growing stage are recorded at cost, since by nature the prices or values determined by the market are not available in Costa Rica and the alternative estimates of fair value are considered unreliable. The cost includes all raw materials, indirect costs and labor during the Tilapia on-growing phase. The method applied for Tilapia is as follows: Stage Asset Valuation Fresh water Tilapia Direct and indirect accumulated cost in the various stages. EXchANGE RAte EXPOSURE Note 30 shows Assets and Liabilities according to their currency of origin. ANALYSIS OF MARKET RISK AND TRENDS It is not AquaChile s policy to make projections of its results or of variables that may have a significant influence on them. The consensus of the industry s analysts is that, given the growth in income of the population, the changes towards healthier eating habits and if the conditions of growth of developing countries continue, then the prospects for the demand for sea products, specifically proteins and healthy food, are good. Likewise, the demand for fresh fillet of Tilapia has continued to increase, with the current price levels being maintained. 89

92

93 CONSOLIDATED FINANCIAL STATEMENTS

94 REPORT of THE INDEPENDENT AUDITORS 92

95 93

96 EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2011, DECEMBER 31, 2010 AND JANUARY 1, 2010 Statement of Financial Position NOTE 12/31/ /31/ /01/2010 Assets Current assets Cash and cash equivalents 7 113,897 28,416 28,469 Other financial assets, current Other non-financial assets, current 2,693 2,204 1,346 Trade debtors and other accounts receivable, current 9 96,444 82,883 52,632 Accounts receivable from related entities, current 32 6, Inventories 10 45,052 21,829 28,789 Biological assets, current , ,894 87,773 Tax assets, current 12 4,244 2,088 3,501 Total current assets 437, , ,534 Non-current assets Other financial assets, non-current 13 10, Other non-financial assets, non-current 1, Fees receivable, non-current ,150 - Accounts receivable from related entities, non-current 32 1, Investments recorded using the equity method 14 4, Intangible assets other than goodwill 15 37,326 35,416 34,830 Goodwill 16 51,448 51,448 50,277 Property, plant and equipment , , ,524 Biological assets, non-current 11 33,145 6,947 8,706 Deferred tax assets 18 83,216 70,052 46,753 Total non-current assets 389, , ,255 Total assets 826, , ,789 The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements. 94

97 EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2011, DECEMBER 31, 2010 AND JANUARY 1, 2010 Statement of Financial Position 12/31/ /31/ /01/2010 Liabilities and equity Liabilities Current liabilities Other financial liabilities, current 19 12,009 7,765 11,722 Trade accounts payable and other accounts payable, current ,018 80,385 65,143 Accounts payable to related entities, current 32 2,203 1, Tax liabilities, current 12 3,372 2,368 5 Current provisions for employee benefits, current Other non-financial liabilities, current 2, Total current liabilities 130,969 92,552 78,046 Non-current liabilities Other financial liabilities, non-current , , ,753 Other accounts payable, non-current 20 2,735 3,963 1,762 Deferred tax liability 18 57,056 33,055 27,073 Total non-current liabilities 244, , ,588 Total liabilities 375, , ,634 Equity Issued capital , , ,581 Accumulated gains (losses) 22 (84,750) (137,898) (194,511) Issuance premiums 286, Other reserves 23 - (522) - Equity attributable to proprietors of the holding company 429,713 12,161 (43,930) Non-controlling interests 24 21,384 19,811 22,085 Total Equity 451,097 31,972 (21,845) Total equity and liabilities 826, , ,789 The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements. 95

98 EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME BY FUNCTION AS OF DECEMBER 31, 2011 AND 2010 Income statement by function Note 12/31/ /31/2010 Revenues from ordinary activities , ,841 Cost of sales 10 (404,126) (326,339) Gross earnings pre-fair value 97,025 61,502 Fair value biological assets harvested and sold 1 (65,368) (33,575) Fair value biological assets of the period 2 70,261 43,092 Gross earnings 101,918 71,019 Other revenues, by function 27 2,204 8,035 Distribution costs (3,082) (2,693) Administrative expense 28 (17,861) (17,900) Other expenses, by function 27 (3,096) (6,425) Financial revenues 1, Financial costs 29 (13,972) (11,521) Exchange-rate differences 30 1, Result from realignment units 22 - Gain (loss), before taxes 69,085 41,737 Expense for income taxes 18 (14,209) 16,356 Gain (loss) from continued operations 54,876 58,093 Gain (loss) from discontinued operations - - Gain (loss) 54,876 58,093 Gain (loss), attributable to Gain (loss), attributable to proprietors of the holding company 53,148 56,372 Gain (loss), attributable to non-controlling interests 24 1,728 1,721 Gain (loss) 54,876 58,093 Per-share gains Per-share gain, basic and diluted Gain (loss) per share, basic, in continued operations Gain (losses) per share, basic, in discontinued operations Gain (loss) per share, basic and diluted Per-share gains, diluted Gains (loss) per share, diluted, from continued operations Gains (loss) per share, diluted, from discontinued operations Gains (loss) diluted per share The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements. 1 Hightest cost of the biomass of fish harvested and sold, derived from the revaluation for their natural growth. (See Note 11 Biological assets). 2 Gain from the natural growth of the fish biomass (includes biomass sold and in growth). (See Note 11 Biological assets). 96

99 EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME BY FUNCTION AS OF DECEMBER 31, 2011 AND 2010 Comprehensive income statement Note 12/31/ /31/2010 Gain (loss) 54,876 58,093 Components of other comprehensive income, before taxes - - Exchange-rate differences from conversion - - Sum of income taxes related with components of other comprehensive income - - Other comprehensive income - - Total comprehensive income 54,876 58,093 Comprehensive income attributable to Comprehensive income attributable to proprietors of the holding company 53,148 56,372 Comprehensive income attributable to non-controlling interests 24 1,728 1,721 Total comprehensive income 54,876 58,093 The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements. 97

100 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF DECEMBER 31, 2011 AND 2010 Statement of change in net equity Issued capital Issuance premiums Other reserves (reserve for conversion exchange-rate differences) Accumulated gains (losses) Equity attributable to proprietors of the holding company Non-controlling interests Total Equity Initial balance, current period 01/01/ ,581 - (522) (137,898) 12,161 19,811 31,972 Changes in Equity Comprehensive income Gain (loss) ,148 53,148 1,728 54,876 Other comprehensive income Comprehensive income ,148 53,148 1,728 54,876 Equity issuance 77, ,400-77,400 Dividends (155) (155) Increase (decrease) from transfers and other changes - 286, , ,004 Total change in equity 77, , , ,552 1, ,125 Final balance, current period 12/31/ , ,482 - (84,750) 429,713 21, ,097 Initial balance, previous period 01/01/ , (194,511) (43,930) 22,085 (21,845) Changes in equity Comprehensive income Gain (loss) ,372 56,372 1,721 58,093 Other comprehensive income Comprehensive income ,372 56,372 1,721 58,093 Issuance of equity Dividends Increase (decrease) from transfers and other changes - - (522) 241 (281) (3,995) (4,276) Total change in equity - - (522) 56,613 56,091 (2,274) 53,817 Final balance, previous period 12/31/ ,581 - (522) (137,898) 12,161 19,811 31,972 The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements. 98

101 EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENT INDIRECT METHOD AS OF December 31, 2011 AND 2010 Indirect cash flow statement Gain (loss) 54,876 58,093 Adjustments for reconciliation of gains (loss) Adjustments for expense for income taxes 14,209 (16,356) Adjustments for decreases (increases) in inventories (89,883) (19,171) Adjustments for decreases (increases) in accounts receivable of trade origin (14,956) (30,778) Adjustments for decreases (increases) in other accounts receivable derived from operating activities 1,640 1,291 Adjustments for increases (decreases) in accounts payable of trade origin 22,351 16,958 Adjustments for increase (decreases) in other accounts payable derived from operating activities 7, Adjustments for depreciation and amortization expenses 19,273 16,587 Adjustments for value impairment (reversals of losses for value impairment) recognized in the income of the period 2,543 1,266 Adjustments for provisions - - Adjustments for foreign currency losses (gains), unrealized (1,320) (592) Adjustments for fair value losses (gains) (4,893) (9,517) Other adjustments for items other than cash (166) (408) Adjustments for losses (gains) from disposal of non-current assets - (2,052) Total adjustments for reconciliation of gains (loss) (43,841) (41,989) Dividends paid (155) - Interest paid (5,453) (6,121) Income taxes reimbursed (paid) (2,156) 1,413 Net cash flows from (used in) operating activities 3,271 11,396 Cash flows used in investment activities Cash flows used in purchasing non-controlling interests (13,693) (2,377) Loans to related entities (6,603) - Proceeds from the sale of property, plant and equipment 789 2,763 Purchases of property, plant and equipment (41,812) (8,785) Net cash flows proceeding from (used in) investment activities (61,319) (8,399) Cash flows from (used in) financing activities Amounts from the issuance of shares 363,822 - Amounts from long-term loans 16,430 Payments of loans (237,377) (2,655) Other cash inflows (outflows) - (630) Net cash flows from (used in) financing activities 142,875 (3,285) 12/31/ /31/2010 Net increase (decrease) in cash and cash equivalents, before the effect of changes in the exchange rate 84,827 (288) Effects of the variation in the exchange rate on cash and cash equivalents Effects of the variations in exchange rates on cash and cash equivalents Net increase (decrease) of cash and cash equivalents 85,481 (53) Cash and cash equivalents at the start of the period 28,416 28,469 Cash and cash equivalents at the end of the period 113,897 28,416 The enclosed notes numbered 1 through 35 form an integral part of these consolidated financial statements. 99

102 EMPRESAS AQUACHILE S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2011 NOTE 1 - GENERAL INFORMATION Empresas AquaChile S.A. (hereinafter the Parent Company or the Company ) and its affiliate companies, are part of the AquaChile Group (hereinafter, AquaChile or the Group ). Empresas AquaChile S.A. RUT , is a Company formed as a closed stock corporation under the registered name of Fischer Hermanos Limitada by a public instrument dated July 20, 1979, granted at the Notary Public s Office of Coyhaique of Mr. Patricio Olate Melo. An extract of this instrument was listed in the Commerce Registry of the Real Estate Registrar of Coyhaique, on page 38, no. 34 and published in the Official Gazette on August 3, Empresas AquaChile is an Open Corporation which, according to the Extraordinary Shareholders Meeting of December 17, 2010, agreed to abide by the rules governing open corporations and by the auditing of the Securities and Insurance Supervisor. On April 12, 2011, Empresas AquaChile S.A. was listed in the Securities Registry of the Securities and Insurance Supervisor under the number 1,069. The Company s principal place of business is at Cardonal s/n Lote B, Puerto Montt, Región de los Lagos, irrespective of any agencies, offices or branches that may be established in the country or abroad. The structure of the Empresas AquaChile S.A. considers a General Management only, headquartered in Puerto Montt. The duration of the Company is indefinite. The Company s purpose is: to import, export, prepare, produce, grow, farm, process, transform, modify and commercialize, both in Chile and abroad, hydrobiological farmed species, particularly salmonids. To date, the Company s subscribed and paid-in capital is two hundred twenty-seven million nine hundred eighty-one thousand one hundred forty-eight dollars (227,981) which is divided into one billion one hundred fifty-seven million shares (1,157,000,000). As of December 31, 2011, the Company has no holding company and the shareholders have made no resolution for joint action. The relations of the shareholders of Empresas AquaChile and subsidiaries are governed by their corporate by laws, with no joint-action agreement in place. Empresas AquaChile is a Chilean company engaged in the production and commercialization of farmed salmon, involved in the entire chain of production. Since 2005, the Company has also been involved in the business of farming and commercializing Tilapia for the North American market, through its subsidiary Grupo ACI S.A. located in Costa Rica. Additionally, since 2006, Empresas AquaChile and subsidiaries has been involved in the fish feed industry, through the acquisition of a 50% interest in Alitec Pargua S.A. The Company was born out of the industry s consolidation process, from the merger of two companies engaged in complementary stages of the salmon production process: AquaChile S.A., focused on the freshwater stage, and Salmones Pacífico Sur S.A., focused on the seawater stage of the process. In 2004, with the acquisition of Antarfish S.A., proprietor of Aguas Claras S.A., Empresas AquaChile S.A. became the first Chilean salmon company, a position that has been strengthened with the acquisitions of Salmones Australes S.A., Salmones Chiloé S.A. and Robinson Crusoe (now Salmones Maullín S.A). The Company s leadership is founded on its vertical formation, controlling all the stages of the production process, on the exploitation of Chile s competitive advantages in salmon farming and on focusing on achieving the lowest production costs. 100 Empresas AquaChile and subsidiaries is currently one of the world s leading salmon producers and also one of the biggest producers of Tilapia in America and one of the leading exporters of fresh Tilapia to the United States.

103 These financial statements of Empresas AquaChile and subsidiaries consist of the classified consolidated statement of financial position, the consolidated income statement by function, the consolidated statement of indirect cash flows, the consolidated statement of changes in net equity and the supplementary notes with disclosures to these consolidated financial statements. The financial statements present an accurate image of the equity and of the financial position as of December 31, 2011, and of the income from operation, changes in the equity and of the cash flows that have taken place in the Company up to the period ending on December 31, For purposes of comparison, the classified statement of financial position and the associated explanatory notes are presented in comparative form with the balances as of December 31, 2010 and January 1, The consolidated statement of comprehensive income by function, the consolidated statement of indirect cash flows and the consolidated statement of changes in the net equity are presented for the period ending on December 31, 2011 and The consolidated financial statements of Empresas AquaChile were prepared on the basis of the continuity principle. The consolidated financial statements as of December 31, 2011 and December 31, 2010, of Empresas AquaChile and subsidiaries are presented in thousands of dollars and have been prepared according to International Financial Reporting Standards ( IFRS ), issued by the International Accounting Standards Board ( IASB ) and these were approved by the Board in a meeting held on March 13, NOTE 2 - SUMMARY OF THE MAIN ACCOUNTING POLICIES Described below are the main accounting policies adopted for the preparation of the consolidated financial statements, which have been applied uniformly to all periods presented in these financial statements. 2.1 Preparation criteria These financial statements of Empresas AquaChile as of December 31, 2011, have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements as of December 31, 2011, have been prepared to comply with the requirements of the Securities and Insurance Supervisor. According to the provisions of IFRS 1, the transition date of Empresas AquaChile and subsidiaries is January 1, Under IFRS, the preparation of consolidated financial statements requires the use of certain accounting estimates and criteria. The management is also required to exercise its judgment in the process of applying the Company s accounting policies. Note 5 discloses the areas that imply a greater level of judgment and complexity or the areas where the assumptions and estimates are significant to the consolidated financial statements. As of the date of these financial statements, there are no major uncertainties regarding events or conditions that may give rise to significant questions about the possibility of the entity continuing to operate normally as an ongoing business Newly-issued standards and interpretations a) The following standards, interpretations and amendments are compulsory for the first time for financial periods beginning on January 1, 2011: Standards and interpretations IAS 24 (revised) Related Party Disclosures Issued in November 2009, replaces IAS 24 (2003), this removes the requirement, for related entities of the government, to disclose all transactions with the government and its related entities. IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Issued in November 2009, this clarifies the accounting treatment when a company renegotiates the terms of the liability by issuing equity instruments; it requires a result to be recorded calculated as the difference between the liability s fair value and the fair value of the equity instrument issued. Compulsory for periods starting on 01/01/ /01/

104 Amendments and improvements IAS 32 Financial Instruments: Presentation Issued in October 2009, this modifies the treatment of issuance rights denominated in foreign currency, requiring their classification as equity. IFRS 1 First-time Adoption of International Financial Reporting Standards Issued in January 2010, clarifying the date of the exemption for presenting the comparative information of the disclosure requirements of IFRS 7. IFRS IC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction Issued in November 2009, it removes an involuntary consequence of the drafting of the standards which prevented recognizing the asset for prepayments recovered over time through lesser recognitions of funding of defined benefit asset plans. Improvements to International Standards IFRS 1 First-time Adoption of International Financial Reporting Standards IFRS 3 (revised) Business combinations IFRS 7 Financial Instruments: Disclosures IAS 1 Presentation of Financial Statements IAS 27 Consolidated and Separate Financial Statements IAS 34 Interim Financial Reporting IFRIC 13 Customer Loyalty Programmes Compulsory for periods starting on 01/02/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/2011 The adoption of the aforementioned standards, amendments and interpretations has no significant impact on the Company s consolidated financial statements. b) The following new standards, interpretations and amendments issued are not in effect for the 2011 fiscal year, and their early adoption has not taken place: Standards and interpretations IAS 27 Separate Financial Statements Issued in May 2011, replaces IAS 27 (2008). The scope of this standard includes separate financial statements only. Additionally, it specifies that investments in subsidiaries, joint ventures and associates must be measured in accordance with IFRS 9 Financial Instruments. Compulsory for periods starting on 01/01/2013 Standards and interpretations IFRS 9 Financial Instruments Issued in December 2009, modifies the classification and measurement of financial assets. Modified in November 2010 to include the treatment and classification of financial liabilities. IFRS 10 Consolidated Financial Statements Issued in May 2011, replaces IAS 27 (2008). Provides the principles for the preparation and presentation of financial statements. Also introduces new parameters for the definition of control. IFRS 11 Joint Arrangements Issued in May 2011, replaces IAS 31 Joint Ventures and SIC 13 Jointly Controlled Entities Non-Monetary Contributions by Venturers. Its modifications include the removal of the concept of Jointly Controlled Assets and the possibility of consolidating proportionally. IFRS 12 Disclosure of Interests in Other Entities Issued in May 2011, applies to those entities with investments in subsidiaries, joint ventures, and associates. IFRS 13 Fair Value Measurement Issued in May 2011, combines how fair value is measured and the requisite disclosures about this into a single standard. Compulsory for periods starting on 01/01/ /01/ /01/ /01/ /01/2013 Amendments and improvements IAS 12 Income Taxes Issued in December 2010, includes the presumption that investment properties valued at fair value are realized through the sale, wherefore it requires applying a tax rate for sale transactions to the temporary difference. IFRS 1 First-time Adoption of International Financial Reporting Standards Issued in December 2009, treating the following issues: Exemption for severe hyperinflation: allows companies whose transition date is after the standardization of their functional currency to value assets and liabilities at fair value as attributed cost. Removal of fixed date requirements: adjusts the fixed date to the transition date, for those transactions involving derecognition and assets or liabilities at fair value for profit or loss in their initial recognition. Compulsory for periods starting on 01/01/ /01/

105 Amendments and improvements IFRS 7 Financial Instruments: Disclosures Issued in October 2010, includes disclosures about transfers of financial assets. IAS 28 Investments in Associates and Joint Ventures Issued in May 2011, regulates the accounting treatment of these investments by the application of the equity method. Compulsory for periods starting on 07/01/ /01/2011 Standards and interpretations FRS 19 Revised Employee Benefits Issued in June 2011, replaces IAS 19 (1998). This revised standard modifies the recognition and measurement of expenses for defined benefit plans and termination benefits. It also includes modifications to disclosures of all employee benefits. IAS 1 Presentation of Financial Statements Issued in June The main modification of this amendment requires that items of Other Comprehensive Income must be classified and grouped to evaluate whether they will potentially be reclassified to income in subsequent periods. Early adoption of this is permitted. Compulsory for periods starting on 01/01/ /01/2012 The Company s management estimates that the adoption of the aforementioned standards, amendments and interpretations will have no significant impact on the Company s consolidated financial statements in the period of their first application. 2.3 Consolidation criteria a) Subsidiaries Subsidiaries are all the entities (including possible special-purpose entities) over which Empresas AquaChile and subsidiaries have the power to direct the financial and working policies, which is usually associated with an interest of more than one half of the voting rights. To evaluate whether the group controls another entity requires consideration of the existence and the effect of the potential voting rights that are currently possible to exercise or convert. Subsidiaries are consolidated from the date on which the control is transferred, and they are excluded from the consolidation on the date this control ceases. The Company consolidates the subsidiary AlitecPargua S.A. because it possesses control through its majority on the board. The acquisition method is used to record the acquisition of subsidiaries in the accounts. The acquisition cost is the fair value of the assets delivered, the equity instruments issued and the liabilities incurred or assumed on the exchange date. The identifiable assets acquired and the identifiable liabilities and contingencies assumed in a business combination are valued initially at their fair value on the acquisition date, irrespective of the scope of the non-controlling interests. The excess of the acquisition cost over the fair value of the Company s equity in the identifiable net assets acquired is recognized as purchased goodwill. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement. Intercompany settlements, balances and unrealized gains for transactions between related entities are eliminated. Unrealized losses are also removed, unless the transaction provides evidence of a loss owing to impairment of the transferred asset. The subsidiaries accounting polices are modified when necessary to ensure their uniformity with the policies adopted by Empresas AquaChile and subsidiaries. 103

106 The table below shows the breakdown of the companies included in these consolidated financial statements: Percentage of Equity Tax ID Country of origin Functional currency As of December 31, 2011 As of December 31, 2010 total % As of January 1, 2010 total % AquaChile S.A Chile US$ AquaChile Inc. Foreign USA US$ Antarfish S.A Chile US$ Pesquera Antares S.A Chile US$ Entre Ríos S.A Chile US$ Aguas Claras S.A Chile US$ Antarfood S.A Chile US$ Proc. Agric. Aguas Claras Ltda Chile US$ Servicios Aguas Claras S.A Chile US$ Salmones Australes S.A Chile US$ Salmones Cailín S.A Chile US$ Salmones Chiloé S.A Chile US$ Pesquera Palacios II Ltda Chile US$ Proc. Hueñocoihue Ltda k Chile US$ Pisicultura Aquasan S.A Chile US$ Salmones Maullín S.A Chile US$ Grupo ACI S.A. Foreign Costa Rica US$ Alitec Pargua S.A Chile US$ Cult. Acuícolas El Volcán Ltda Chile US$ Salmones Maullín Ltda Chile US$ Aquainnovo S.A Chile US$ Inversiones Antarfish Ltda Chile US$ Inversiones Salmones Australes Ltda Chile US$ direct % indirect % total % In April 2010, the Company acquired 85,499 shares in Grupo ACI S.A., reaching a total of 963,356 shares equivalent to % of the company s capital stock. b) Transactions and non-controlling interests Non-controlling interests are presented under the heading Net Equity of the classified consolidated statement of financial position. The gain or loss attributable to the non-controlling interest is presented in the consolidated statement of comprehensive income by function, forming the fiscal year gain (loss). The results of transactions between the non-controlling shareholders and the controlling shareholders of the companies where ownership is shared are recorded in the equity and, therefore, shown in the consolidated statement of changes in net equity. c) Associates Associates are all those entities over which Empresas AquaChile and subsidiaries exert significant influence but have no control over the financial and operating policies. Investments in associates are recorded in books upon their formation or purchase at their cost and are subsequently adjusted using the equity method. The investment of Empresas AquaChile and subsidiaries in associates includes the goodwill identified in the acquisition, net of any loss from cumulative impairment. The equity of Empresas AquaChile and subsidiaries in the losses or gains subsequent to the acquisition of their associates is recognized in profit or loss, and their equity in movements of equity subsequent to the acquisition is recognized in the respective reserve under net equity. When the equity of Empresas AquaChile and subsidiaries in the losses of an associate is equal to or more than their investment therein, including any other uninsured account receivable, Empresas AquaChile and subsidiaries will not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. 2.4 Financial reporting by operating segments IFRS 8 requires entities to adopt the management approach when disclosing information about the result of their operating segments. Generally, this is the information the Management uses internally to evaluate the performance of the segments and to decide how to allocate resources to them. 104 Empresas AquaChile and subsidiaries presents the information by segments (relating to the business areas) based on the financial information made available to the decision makers, in connection with matters such as the measurement of profitability and allocation of

107 investments and based on the differentiation of products, in accordance with the indications of IFRS 8 Financial Reporting by Segments. This information is detailed in Note 6. The segments to be disclosed by Empresas AquaChile and subsidiaries are: Salmon and Sea Trout Farming Tilapia Farming Fish Feed Production Others 2.5 Transactions in foreign currency a) Presentation currency and functional currency The items included in the financial statements of each of the entities of Empresas AquaChile and subsidiaries are valued using the currency of the primary economic environment in which the entity operates (functional currency). The functional currency of Empresas AquaChile and subsidiaries is the United States dollar, which is also the presentation currency of the consolidated statements of financial position. b) Transactions and balances Transactions in foreign currency are converted into the functional currency using the exchange rates current on the dates of the transactions. Losses and gains in foreign currency resulting from the settlement of these transactions and from the conversion to the end exchange rates of monetary assets and liabilities denominated in foreign currency are recognized in the income statement. c) Exchange rate of foreign currency The exchange rates of the main currencies used in the accounting processes of Empresas AquaChile and subsidiaries, with respect to the United States dollar, as of December 31, 2011, December 31, 2010 and January 1, 2010 are as follows: Currency End 12/31/ /31/ /01/2010 Accumulated monthly average End Accumulated monthly average End Accumulated monthly average Chilean peso Ch$ Euro EUR Yen JPN Costa Rican colon CR Property, plant and equipment The fixed company s fixed assets consist of lands, constructions, infrastructure, machinery, equipment and other fixed assets. The main fixed assets of Empresas AquaChile and subsidiaries relate to lands, equipment and machinery of processing and maritime plants and fish farms. The constructions, plants, equipment and machinery are recognized at the initial moment and subsequently at their historic cost minus the respective depreciation and accumulated wear, if any. For purposes of transition to IFRS, according to what IFRS 1 allows, the Company s most relevant lands are revalued as of January 1, The appraisals were carried out on the basis of market value. The subsequent measurement of these is done according to IAS 16 using the cost method. The subsequent costs (replacement of components, improvements and expansions) are included in the initial value of the asset or are recognized as a separate asset, only when it is likely that the future economic benefits associated with the elements of the fixed asset are going to flow into the Group and the cost of the element is able to be determined reliably. The value of the substituted component is removed from the books. The rest of the repairs and maintenance are charged in the income (loss) for the fiscal year or period in which they are incurred. The costs derived from daily maintenance and common repairs are recognized in the income (loss) for the fiscal year. This is not the case with replacements of major parts or items and strategic replacements, which are capitalized and depreciate over the rest of the useful life of the assets, on the basis of the components approach. 105

108 Depreciation of the assets is calculated using the straight-line method, systematically distributing this throughout their useful life. This useful life has been determined on the basis of expected natural impairment, technical or commercial obsolescence derived from changes and/or improvement in the production and changes in the market demand for the products obtained in the operation with those assets. Lands are not depreciated. The estimated technical useful lives and their salvage values are as follows: Average useful life Salvage value Buildings 12 years No salvage value Plant and equipment 10 years No salvage value Information technology equipment 5 years No salvage value Fixed facilities and accessories 10 years No salvage value Motor vehicles 7 years No salvage value Other property, plant and equipment 7 years No salvage value Those facilities which the Company maintains inactive continue to depreciate by the straight-line method. The salvage value and the useful life of the assets are revised, and if necessary adjusted, at each close of the statements of financial position so as to obtain a remaining useful life in accord with the value of the assets. When the value of an asset is higher than its estimated recoverable value, its value is reduced immediately to its recoverable amount, by the application of impairment tests. The losses or gains from the sale of property, plant and equipment are calculated by comparing the revenues obtained from the sale, with the book value of the asset (net of depreciation) and are included in the income statement. 2.7 Biological assets Biological assets Salmon and Sea Trout Biological assets Salmon and Sea Trout, such as broodstock, alevins, smolts and on-growing fish, are measured at their fair value minus the estimated costs at the point of sale, except when the fair value cannot be reliably determined according to the definitions contained in IAS 41. In this case, the search for an active market for these assets must first be considered. Given that there is no active market for stocks of live fish in these stages, consideration has been given to valuing them at their accumulated cost on the closing date. Biological assets Salmon and Sea Trout in on-growing and of greater weight are measured at their fair value minus the estimated transformation and sale costs. The direct and indirect costs incurred in the productive process form part of the biological asset s value through its activation. The accumulation of these costs at the end of each fiscal year is compared with the biological asset s fair value. The changes in the fair value of these biological assets are reflected in the fiscal year s income statement. The calculation of the fair value estimate is based on the market price for harvested fish and adjusted by their own distribution differences of caliber (size) and quality or normal weight ranges at harvest. This price is adjusted by the harvest cost, destination shipping costs and processing costs, to bring it to its whole fish equivalent (WFE 3 ) value and condition. Thus, the evaluation considers the stage in the lifecycle, their current weight and the expected distribution by caliber upon actual harvest of the fish. This fair value estimate is recognized in the Company s income statement WFE (Whole Fish Equivalent): is a standard industry measure that refers to the weight of the bled salmon, also known internationally as the metric ton of round weight.

109 Below is a summary of the valuation criteria: Stage Assets Valorización Freshwater Broodstock Direct and indirect accumulated cost in their various stages. Freshwater Eggs Direct and indirect accumulated cost in their various stages. Freshwater Smolts and alevins Direct and indirect accumulated cost in their various stages. Seawater Fish in the sea Fair value, according to the following: Atlantic Salmon starting at 4.0 kilos WFE Pacific or Coho Salmon, starting at 2.5 kilos WFE, and Sea Trout, starting at 2.5 kilos WFE For lesser weights, their accumulated cost at the end date is considered Valuation model The evaluation is revised for each fish farm and is based on the existing biomass of fish at the close of each month. Its breakdown includes the total number of on-growing fish, their average estimated weight and the cost of the biomass of fish. In its calculation, the value is estimated considering the average weight of that biomass at the time, which is in turn multiplied by the value per kilo reflected by the market price. The market price is obtained from a range of prices, usually from the sales made during the previous month. Premises used to determine the fair value of on-growing fish Estimating the fair value of the biomass of fish will always be based on uncertain assumptions, even if the Company has sufficient experience in considering those factors. The estimates are applied considering the following items: volume of fish biomass, average weights of the biomass, distribution of weights at harvest and market price. Volume of fish biomass The volume of fish biomass is, as such, an estimate based on the number of smolts released in the seawater, an estimate of growth at a given moment, an estimate of the mortality observed in the period, etc. Uncertainty with respect to the biomass volume is normally lower in the absence of events of mass mortality during the cycle or if the fish have for some reason presented diseases. Distribution of weight at harvest Fish in the water grow at different rates and even in the presence of good estimates for the average weight there may be a certain dispersion in the quality and caliber of the fish. It is relevant to consider the distribution of the caliber and the quality inasmuch as different prices exist in the market. When the value of the fish biomass is estimated, a regular distribution of calibers is considered or, failing this, the most recent caliber distribution obtained in the processing by the Company s processing plants. Market Price The assumptions of market prices are important to the evaluation. Moreover, minor changes in the market prices can lead to significant changes in the evaluation. If we assume that as of December 31, 2011, there was a volume of 10,560 metric tons WFE of fish subject to valuation, a change in the price of US$1/kg WFE would have an impact of thus$12,302 on the fair value of the biological assets. Biological assets: Tilapia broodstock and Tilapia in on-growing phase Tilapia broodstock is initially recorded at cost and at each balance sheet date it is valued at its accumulated cost considering impairment losses. Tilapia in an on-growing phase is recorded at cost because, by nature, the prices or values determined by the market are unavailable in Costa Rica and the alternative estimates of fair value are considered to be unreliable. The cost includes all raw materials, indirect costs and labor during the on-growing phase of the Tilapia. In the case of Tilapia, the method applied is as follows: Stage Assets Valuation Freshwater Tilapia Direct and indirect accumulated cost in their various stages. 107

110 2.8 Intangible assets other than goodwill a) Aquaculture Sea Licenses The aquaculture sea licenses acquired from third parties are presented at historic cost. The useful life of the sea licences is indefinite, since they have no expiration date, nor any foreseeable useful life, therefore they are not amortized. The indefinite useful life is subject to review during each period/fiscal year for which information is presented, in order to determine whether the events and the circumstances are able to continue to support the evaluation of the indefinite useful life for this asset. These assets are subjected to annual value impairment tests. b) Computer softwares Licenses purchased for computer programs are capitalized on the basis of the costs incurred in purchasing them and preparing them to use the specific program. These costs are amortized during their estimated 4-year useful lives, by the straight-line method. The expenses related with the development or maintenance of computer programs are recognized as expenses when they are incurred. Costs directly related with the production of unique and identifiable computer programs controlled by Empresas AquaChile and subsidiaries, which are likely to generate higher economic benefits than the costs for more than one year are recognized as intangible assets. The direct costs include the expenses of the personnel to develop the computer programs and any kind of expense incurred in their development or maintenance. The costs of developing computer programs recognized as assets are amortized during their estimated 4-year useful lives. c) Research and development expenses Research expenses are recognized as an expense when they are incurred. The costs incurred in development projects (related with the design and testing of new or improved products) are recognized as intangible assets when the following requirements are met: technically, it is possible to complete the production of the intangible asset so that it could be available to be used or sold; the management has the intention of completing the intangible asset in question, to use it or sell it; the capacity exists to use or sell the intangible asset; it is possible to demonstrate how the intangible asset is going to generate likely economic benefits in the future; there is availability of the appropriate technical, financial or other kinds of resources, to complete the development and to use or sell the intangible asset; it is possible to value, reliably, the disbursement attributable to the intangible asset during its development. 2.9 Goodwill Goodwill represents the excess of the acquisition cost over the fair value of the interest of Empresas AquaChile and subsidiaries in the identifiable net assets of the subsidiary on the acquisition date. The goodwill related with acquisitions of subsidiaries is annually subjected to value impairment tests, recognizing the accumulated losses from impairment. The gains and losses for the sale of an entity include the amount in books of the goodwill related with the entity sold. This goodwill is allocated to cash-generating units (CGU) for the purpose of testing the impairment losses. The allocation is made in those CGUs expected to benefit from the business combinations from which that purchased goodwill emerged. According to International Financial Reporting Standard No. 3 (IFRS 3), the negative goodwill stemming from the acquisition of an investment or business combination is transferred directly to the income statement. The negative goodwill balances existing at the start of the fiscal year are transferred to accumulated profit or loss as a consequence of the adoption of IFRS Interest Costs The interest costs incurred for the construction of any qualified asset are capitalized during the period of time necessary to complete and prepare the asset for the intended use. Other interest costs are recorded in profit and loss Impairment of non-financial assets Assets with an indefinite useful life are not subject to amortization and are submitted to annual value impairment loss tests. 108 The assets subject to depreciation are submitted to impairment loss tests whenever any event or change in the circumstances of the business indicates that the assets book value may not be recoverable. An impairment loss is recognized when the book value is greater than its recoverable value.

111 The recoverable value of an asset is the higher of its fair value less the costs to sell and its value in use. For purposes of evaluating value impairment losses, assets are grouped at the lowest level for identifiable cash flows to exist separately (CGU). Non-financial assets other than purchased goodwill that have undergone an impairment loss are submitted to review on each closing date of the statement of financial position to check whether reversals of the losses have taken place. Value impairment losses can be reversed in books only up to the amount of the losses recognized in previous periods, so that the book value of these assets will not exceed the value they would have had if these adjustments had not been made. This reversal is recorded in the account other gains (losses) Financial assets Empresas AquaChile and subsidiaries classifies its financial assets in the following categories: at fair value with changes in profit or loss and loans and accounts receivable. The Group does not keep financial instruments kept to maturity and available for sale. The classification depends on the purpose for which the financial assets were acquired. The management determines the classification of its financial assets at the time of the initial recognition. Classification of financial assets a) Financial assets at fair value with changes in profit or loss Financial assets at fair value with changes in profit or loss are financial assets kept for negotiating. A financial asset is classified in this category if it is acquired primarily for the purpose of being sold in the short term. The assets in this category are classified as current assets. b) Loans and accounts receivable Loans and accounts receivable are non-derivative financial assets with fixed or determinable payments, which are not traded in an active market. Those items with maturity of less than 12 months are classified as current assets. Items with a maturity greater than 12 months are classified as non-current assets. Loans and accounts receivable are included in trade debtors and other accounts receivable. They should initially be carried at their fair value, recognizing a financial result for the intervening period between their recognition and the subsequent valuation. In the specific case of trade debtors, other debtors and other accounts receivable, it was opted to use the face value, bearing in mind the short collection terms used by the Group. Empresas AquaChile and subsidiaries evaluates on the date of each financial statement whether there is objective evidence that a financial instrument or a group of financial instruments may have sustained impairment losses. c) Recognition and measurement of financial assets Acquisitions and sales of financial assets are recognized on the date of the trade, i.e., the date on which Empresas AquaChile and subsidiaries promise to acquire or sell the asset. i) Initial recognition Financial assets are initially recognized by the fair value plus the costs of the transaction, for all financial assets not carried at fair value with changes in profit or loss. Financial assets at fair value with changes in profit or loss are initially recognized by their fair value, and the costs of the transaction are carried to profit or loss. ii) Subsequent valuation Financial assets at fair value with changes in profit or loss are subsequently recorded by their fair value with a cancelling entry in profit or loss. For loans and accounts receivable, the face value is considered as the fair value. Financial assets are cancelled in books when the rights to receive cash flows from the investments have matured or have been transferred and Empresas AquaChile and subsidiaries have substantially transferred all risks and advantages derived from their ownership. 109

112 Empresas AquaChile and subsidiaries evaluates on the date of each statement of financial position whether there is objective evidence that a financial asset or a group of financial assets may have sustained impairment losses Inventories Inventory stocks are valued at their acquisition cost or their net realizable value, whichever is the lesser. The cost is determined by the weighted average price (WAP) method. The cost of finished products and of products in process includes the costs of raw materials, direct labor, other direct costs and general manufacturing expenses (based on normal operating capacity), but does not include interest costs. The net realizable value is the estimated sale price in the normal course of the transaction, less the applicable variable costs of sale. Obsolete or slow-moving products are recognized at their realizable value Trade debtors and other accounts receivable Trade accounts receivable are recognized at their face value, since the average terms to maturity are not more than 90 days. The revenue associated with the longest payment term is recorded as deferred income in current liabilities and the accrued portion is recorded in revenues from ordinary activities. Additionally, estimates are made on any doubtful accounts receivable based on an objective review of all the amounts pending at the end of each period. Impairment losses related to bad debts are recorded in the statement of comprehensive income in the period they occur. Trade loans are included in the current assets in trade debtors and other accounts receivable, as long as their estimated time to collection does not exceed one year from the date of the financial statement Cash and cash equivalents Empresas AquaChile and subsidiaries consider as cash and cash equivalents the balances of cash kept in cash and current bank accounts, term deposits and other financial investments (very liquid marketable securities) with less than 90 days to maturity from the date of investment. Also included within this item are those investments inherent to the administration of cash, such as buy-back and sell-back agreements whose maturity is in line with the preceding definition and whose funds are freely available. Used bank overdrafts are included in other financial liabilities Capital stock Capital stock is represented by common shares of a single class. The statutory minimum dividends on common shares are recognized as goodwill in equity when they are accrued Trade accounts payable and other accounts payable Trade accounts payable are initially recognized at their fair value and are subsequently valued by their amortized cost using the effective interest rate method when their payment term is more than 90 days. For lesser terms, they are recorded at face value as they present no significant differences to their fair value Other financial liabilities Obligations with banks and financial institutions are initially recognized by their fair value, net of any costs incurred by the transaction. Subsequently, unrelated resources are valued by their amortized cost and any difference between the funds obtained (net of the necessary costs for their obtainment) and the reimbursement value, is recognized in the income statement during the life of the debt according to the effective interest rate method. The effective interest method consists in applying the reference market rate for debts with similar characteristics to the value of the debt. However, the management estimates that debt can be taken on in similar price and term conditions to those of the current debt, hence it considers the book value of the debt as the fair value. It should be mentioned that the difference between the face value and the fair value is not significant Income tax and deferred tax items The expense for income tax of the period includes the taxes of Empresas AquaChile and its subsidiaries, based on the taxable income of the period, together with the fiscal adjustments of previous periods and the change in deferred tax items.

113 Deferred taxes are calculated, according to the liability method, based on the temporary differences emerging between the fiscal bases of the assets and liabilities and their amounts in books. However, if the deferred tax item emerges from the initial recognition of a liability or an asset in a transaction other than a business combination which, at the time of the transaction, does not affect either the book gain or loss or the tax gain or loss, it is not carried. The deferred tax is determined using the tax rates (and laws) approved or about to be approved and highly likely to be enacted, in each transaction country, on the date of the statement of financial position, which is expected to be applied when the respective deferred tax asset is realized or the tax liability is settled. Deferred tax assets are recorded when it is deemed likely that the entities of the group are going to have, in the future, sufficient tax benefits against which other differences can be offset. The Company does not record deferred taxes on the temporary differences arising in Investments in related companies, since it controls the date on which these will be reversed Employee benefits a) Personnel vacations Empresas AquaChile and subsidiaries recognize the expense for personnel vacations by the accrual method, which is recorded at its face value. The item pertaining to vacation benefits does not represent a significant amount in the statement of comprehensive income. b) Post-employment benefits Empresas AquaChile and subsidiaries have no obligations for indemnifications arising from personnel severance, as there is no associated legal obligation or non-formalized practice that would give rise to such and obligation. They are recorded in profit or loss (expense) at the time they are paid to the employees, as a consequence of the Company s decision to rescind their employment contract, before normal retirement age Provisions Empresas AquaChile and subsidiaries recognizes a provision when contractually obliged to do so and whenever there is a past practice that has created an assumed obligation. Provisions for onerous contracts, litigation and other contingencies are recognized when: (i) Empresas AquaChile and subsidiaries has a present obligation, be it legal or implicit, as a result of past events; (ii) An outflow of funds is likely to be necessary to settle the obligation; and (iii) The value has been reliably estimated. The provisions are valued by the current value of the disbursements that are expected to be necessary to settle the obligation, using the best estimate of Empresas AquaChile and subsidiaries. The discount rate used to determine the current value reflects the current market evaluations, on the date of the statements of financial position, of the temporary value of the money, and the specific risk related with the particular liability Recognition of revenues Ordinary revenues includes the fair value of considerations received or to be received for the sale of goods and services over the ordinary course of the Company s activities. Ordinary revenues are presented net of sales tax, refunds, price cuts and discounts (if any) and after removing the sales within the Group. Empresas AquaChile and subsidiaries recognizes the revenues when their value can reliably be set, it is likely that the future economic benefits are going to flow into the entity and the specific conditions for each of the Group s activities are met, as described below. a) Sales of goods Revenues for sales of goods are recognized when one of the Group s entities has transferred to the buyer the risks and benefits of the products of those goods and does not maintain the right to dispose of them, or to maintain effective control. This generally means that sales are recorded at the time of the transfer of risks and benefits to the customers in accordance with the terms struck in the business agreements. 111

114 b) Interest revenues Interest revenues are recognized at face value. c) Sale of services Ordinary revenues that are proceeds from sales of services are recorded when such a service has been rendered. A service is considered rendered at the time of satisfactory receipt thereof by the client. d) Revenues from dividends Revenues from dividends are recognized when the right to receive payment is established Leases When an entity of the group is the lessee - Operating leases. Leases where the lessor preserves a significant part of the risks and advantages derived from the ownership of the asset are classified as operating leases. Payments by way of operating leases (net of any incentive received from the lessor) are charged in the income statement on a straight-line basis during the period of lease. When an entity of the group is the lessor. Assets leased to third parties under operating lease contracts are included under the heading of property, plant and equipment or in investment properties, as applicable. Revenues derived from operating leases are given straight-line recognition during the term of the lease Dividends policy Under the provisions of the Corporations Act [Ley de Sociedades Anónimas], unless otherwise agreed by unanimous vote of the shareholders, the Company is bound to distribute a compulsory minimum dividend equivalent to 30% of the profits. Under IFRS, the obligation of minimum dividends to the shareholders should be recognized before the closing date of the annual statements of financial position with the consequent reduction of net equity. According to what has been reported to the Securities and Insurance Supervisor, in connection with Directive No. 1945, for purposes of determining the distributable liquid profit of the parent Company to be considered for the calculation of dividends with regard to the December 2011 fiscal year, the following shall be excluded from the fiscal year profit or loss: i) Unrealized profits or losses, tied to the recording at fair value of biological assets regulated by the accounting standard IAS 41, reincorporating them into the liquid profit at the time of their realization. For these purposes, the portion of such fair value relating to the assets sold or disposed of by any other means shall be considered realized. ii) iii) Unrealized profits or losses generated during the acquisition of other entities and, in general, those unrealized profits or losses that stem from the application of paragraphs 24, 39, 42 and 58 of the accounting standard International Financial Reporting Standard No. 3, revised, regarding business combination operations. These profits or losses will also be reincorporated with the liquid profit at the time of their realization. For these purposes, profits or losses will be deemed realized as the entities acquired generate profits after their acquisition, or whenever these entities are sold. The effects of deferred taxes associated with the items mentioned in ii) will follow the same fate as the entry that originated them. Notwithstanding the above provisions and, pursuant to Law 18,046, when the Company has accumulated losses it must allocate its fiscal year profits to absorbing such losses Environment Disbursements related with the improvement of and/or investment in production processes that improve environmental conditions are carried as an expense in the fiscal year they are incurred. When these disbursements form part of investment projects they are recorded as negative goodwill in the heading property, plant and equipment.

115 The Group has established the following types of disbursements for environmental protection projects: a) Disbursements or expenses related with the improvement of and/or investment in production processes that lead to a reduced impact of the activity on the environment and/or improve environmental conditions, such as: monitoring of effluents from hatcheries, naval artifacts and processing plants; implementations of ensilage systems of the mortality of the fish at the seawater fish farm and hatcheries; environmental reports and initial characterizations of fish farm; etc. b) Disbursements or expenses related with verification and tracking of ordinances and laws concerned with industrial processes and facilities such as: presentation of environmental impact statements for evaluation of mortality ensilages; handling and disposal of hazardous and non-hazardous waste, monitoring of phytoplankton; monitoring of sediments and water column in fish farm; monitoring of sludges from hatcheries; environmental advisory; contracting of sampling and laboratory analysis services; etc. NOTE 3 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS 3.1 Criteria for transition to IFRS Application of IFRS 1 The transition date of Empresas AquaChile and subsidiaries is January 1, Empresas AquaChile and subsidiaries have prepared their opening statement of financial position under IFRS as of that date. The IFRS adoption date of Empresas AquaChile and subsidiaries is January 1, According to IFRS 1, to prepare the aforementioned consolidated financial statements, the Company has applied all compulsory exceptions and certain optional exemptions to the retroactive application of IFRS, which are detailed below Exemptions to the retroactive applications chosen by Empresas AquaChile and subsidiaries Empresas AquaChile and subsidiaries have opted to apply the exemptions to the retroactive application of IFRS that are detailed below: a) Business combinations The exemption allows business combinations prior to the transition date not to be reissued. IFRS 3 may or may not be applied to business combinations before the transition date. Empresas AquaChile and subsidiaries have applied the exemption taken from IFRS 1 for business combinations. Therefore, it has not restated the business combinations that took place before the January 1, 2010 transition date. b) Fair value or revaluation as acquired cost The entity may opt, on the date of transition to the IFRS, for the measurement of a fixed asset entry at its fair value and use this fair value as the cost attributed on such date. Empresas AquaChile and subsidiaries in some cases opted for the measurement of their fixed assets at their fair value, and using this value as the initial historic cost, in accordance with IFRS 1 (first-adoption standards). The fair value of the fixed assets was measured using an appraisal of independent, external experts, for certain assets, and in other cases using the historic acquisition cost. c) Assets and liabilities of subsidiary companies, associates and joint ventures If an entity adopts IFRS for the first time after its subsidiary (or associate or joint venture) it will measure, in its consolidated statements of financial position, the assets and liabilities of the subsidiary (or associate or joint venture) by the same book values as the subsidiary (or associate or joint venture), after making the appropriate adjustments upon consolidating or applying the equity method, as well as those concerning the effects of the business combinations in which such entity acquired the subsidiary. Similarly, if a holding company adopts IFRS for the first time in its separate financial statements, before or after it does so in its consolidated financial statements, it shall measure its assets and liabilities by the same values in both financial statements, except for the consolidation adjustments. In the case of the subsidiary Grupo ACI S.A., the latter had already adopted the IFRS and criteria prior to this date, so it has been decided to apply this exemption. 113

116 3.1.3 Retroactive application exceptions chosen by the Group Empresas AquaChile and subsidiaries have not had to apply the compulsory exceptions to the retroactive application of IFRS because the entries defined therein are not presented. 3.2 Reconciliation between IFRS and generally accepted accounting principles in Chile (GAAP) The reconciliations presented below show the quantification of the impact of the transition to IFRS of Empresas AquaChile and subsidiaries. The reconciliation provides the impact of the transition with the following details: Reconciliation of the net equity to the transition date (January 1, 2010) and to the date of the last annual financial statements (December 31, 2010). Reconciliation of the Comprehensive statements of income for the fiscal year ended on December 31, 2011 (December 31, 2010) Summary of adjustments to net equity and profit or loss a) Reconciliation of the equity under GAAP and under IFRS as of January 1, and December 31, /31/ /01/2010 Total net equity according to GAAP (5,644) (48,794) Negative goodwill 1 4,634 4,783 Goodwill 2 2,859 (326) Intangibles 3 5,557 4,885 Biological assets 4 19,394 9,312 Property, plant and equipment 5 (2,168) 1,706 Liabilities with banks 6 4,144 1,192 Deferred taxes 7 (4,729) (2,906) Other adjustments 8 7,925 8,303 IFRS convergence adjustments 37,616 26,949 Net equity according to IFRS 31,972 (21,845) Explanation of the effect of the transition to IFRS Below is an explanation of the most significant adjustments incorporated into the statement of financial position. 1) Negative goodwill Under the provisions of Technical Bulletin No. 72 issued by the Colegio de Contadores de Chile, the excess of net assets with respect to the price paid in a business combination is transferred to the liability account, which is carried to profit or loss in the estimated recovery period of the investment. Under IFRS 3, this item is transferred directly to directly to profit or loss, hence the balances of negative goodwill were attributed to accumulated profit or loss on the transition date. 2) Goodwill Balances of goodwill, originated prior to January 1, 2004, were determined in accordance with the stipulations of Directive No. 368 and Official Directive No. 150 of January 31, 2003, by the Securities and Insurance Supervisor, which were amortized in a straight line considering, among other aspects, the nature and characteristic of each investment, foreseeable life of the business and return on the investment, which was not more than 20 years. Balances of goodwill originated after January 1, 2004, were determined in accordance with Technical Bulletin No. 72 issued by the Colegio de Contadores de Chile A.G. and were amortized in the same way as those above. Under IFRS 3, purchased goodwill is valued initially at cost, this being the excess of the cost of the business combinations over the interest of the acquiring party in the net fair value of the assets, liabilities and contingent liabilities. The goodwill is not amortized; instead it should be submitted to a value impairment test at least once a year. Under IFRS 1, the amortization of these accounts at the transition date has been suspended, consequently reversing the effects on accumulated profit or loss. 3) Intangibles Under GAAP, intangible assets expected to generate benefits in future fiscal years are recognized at their cost, adjusted for the effect of amortization calculated in a straight line during the period in which these benefits are expected to be generated. 114

117 In the case of aquacultural licenses, under IFRS they present indefinite useful lives, hence they are subjected to value impairment testing annually. Their amortization has been reversed and their effects recognized in accumulated profit or loss. 4) Biological assets Under GAAP, the fish are classified under inventories, and are recorded at cost or the market value, if this is less. Under IAS 41, the fish are to be classified as biological assets and valued at fair value. 5) Property, plant and equipment For the application of IFRS, it has been defined that the initial balances as of January 1, 2010, are to be recorded at their fair value and for this reason an appraisal of the Company s relevant lands was performed. This procedure, carried out by experts, generated a greater value in the lands recorded against the reserve of accumulated profit or loss in the net equity. As of December 31, 2010, the Company maintained plants and production centers at a standstill. Under GAAP, depreciation of these items was suspended given that they will be at a standstill for an indefinite period of time. Under IAS 16, depreciation will not cease when the asset is unused or has been withdrawn from active use, hence this has been restored against the account retained earnings in the net equity. As of December 31, 2010 As of January 1, 2010 Balance according to GAAP 140, ,818 Land appraisal 3,826 3,826 Depreciation plants at standstill (5,994) (2,120) Balance according to IFRS 138, ,524 6) Liabilities with banks This relates to the valuation of liabilities kept with banks and financial institutions, which are recorded in accordance with the conditions of the debt in effect, hence it considers the debt s book value as reasonable. 7) Deferred taxes As described in Note No. 2.19, under IFRS the effects of deferred taxes must be recorded for all temporary differences existing between the tax and financial balance sheet, based on the liability method. Although the method established in IAS 12 is similar to that of GAAP CL, the following adjustments to IFRS need to be made: i) The removal of complementary deferred tax accounts in which the effects on the net equity of the initial application of Technical Bulletin No. 60 issued by the Colegio de Contadores de Chile A.G. (BT 60) were deferred, through amortization by debit/credit to profit or loss, over the prescribed term for reversal of the difference (or use of the related tax loss); ii) The determination of the deferred tax on items not pledged to the calculation under BT 60 (permanent differences), but which qualify as temporary differences under IFRS; and iii) The calculation of the tax effect of the IFRS transition adjustments have been recognized in Retained Profit or Loss at the transition date. 8) Other adjustments This is the effect generated in the process of consolidation of the financial statements of the subsidiary Grupo ACI S.A. under IFRS. 115

118 b) Reconciliation of income statement under GAAP and under International Financial Reporting Standards (IFRS): 01/01/2010 Result according to Chilean GAAP 47,048 Replacement amortization negative goodwill 1 (149) Replacement amortization goodwill 2 3,185 Replacement amortization sea licenses Valuation biological assets 4 10,082 Liabilities with banks 5 2,952 Depreciation plants at standstill 6 (3,874) Deferred taxes 7 (1,823) IFRS convergence adjustments 11,045 Result according to IFRS 58,093 1) Replacement amortization negative goodwill This relates to the effects on profit or loss, generated by the elimination of negative goodwill against accumulated profit or loss at the transition date and therefore of its amortization according to IFRS. 2) Replacement amortization goodwill This relates to the effects on profit or loss, generated by halting the amortization of Goodwill at the transition date in accordance with IFRS and therefore the reversal of the amortization of the 2010 fiscal year. 3) Replacement amortization sea licenses The replacement of the amortization of sea licenses is generated by defining, in accordance with IAS 38, that such intangibles possess an indefinite useful life, hence the effects of amortization are replaced. 4) Valuation biological assets This effect is caused as a consequence of the valuation at fair value of the fish with an effect on profit or loss and the highest cost component at the time of their sale. 5) Liabilities with banks This mainly relates to the effect on profit or loss of the change in the rate used to calculate the financial liabilities in consideration to the application of the effective rate for this kind of instrument under IFRS. 6) Depreciation plants at standstill This relates to the recognition of the period s depreciation of plants and production centers kept by the Company at a standstill. 7) Deferred taxes As described in Note No , under IFRS the effects of deferred taxes must be recorded for all temporary differences existing between the tax and financial balance sheet, based on the liability method. Although the method established in IAS 12 is similar to that of GAAP, the following adjustments need to be made to IFRS: i) The removal of complementary deferred tax accounts in which the effects on the net worth of the initial application of Technical Bulletin No. 60 issued by the Colegio de Contadores de Chile A.G. were deferred, through amortization by debit/credit to profit or loss, over the prescribed term for reversal of the difference (or use of the related tax loss); ii) The determination of the deferred tax on items not pledged to the calculation under Technical Bulletin No. 60 (permanent differences), but which qualify as temporary differences under IFRS; and iii) The calculation of the tax effect of the IFRS transition adjustments. 116

119 Below is a table of deferred taxes receivable and payable as of December 31, 2010: a) Receivable Deferred taxes GAAP Adjustments Deferred taxes IFRS Bad debts provision Anticipated revenues Provision, vacations Other provisions Provision, obsolescence Provision, personnel Fixed assets 152 1,019 1,171 Tax loss 68,040-68,040 Others Total deferred taxes receivable 69,033 1,019 70,052 b) Payable Deferred taxes GAAP Adjustments Deferred taxes IFRS Other provisions 2,333-2,333 Manufacturing expenses 13,357-13,357 Depreciation of fixed assets 6, ,423 Reappraisal of assets 3,366-3,366 Valuation of inventories 1,439-1,439 Others Adjustment for biological assets - 3,448 3,448 Replacement adjustment amortization sea licenses at historic value Adjustment effective rate OBIF Total deferred taxes payable 27,307 5,748 33,055 8) Minority interests Generally accepted accounting principles in Chile applied during the preparation of the previous financial statements (hereinafter GAAP CL ), recognized the interest of minority shareholders in the consolidated income statement of the fiscal year through a specific line. Under IFRS, the minority shareholders constitute part of the economic conglomerate or Group and, therefore, their interests are considered forming part of the statement of comprehensive income. c) Reconciliation of Cash flow statement under GAAP and under International Financial Reporting Standards (IFRS) as of December 31 and January 1, For the fiscal year ended as of December 31, 2010 For the period ended as of January 1, 2010 Final balance of cash and cash equivalents according to Chilean GAAP 28,416 28,469 Effect of the transition to IFRS at the date of the last annual financial statements - - Final balance, cash and cash equivalents, according to IFRS 28,416 28,469 NOTE 4 - FINANCIAL RISK MANAGEMENT The activities of Empresas AquaChile and subsidiaries are exposed to various financial risks: credit risk, liquidity risk and market risk. I Credit risk a) Risk of investments of the cash surpluses: The quality of the financial institutions with which Empresas AquaChile and subsidiaries operates and the type of financial products in which these investments are carried out defines a low-risk policy for the Company. Investments of cash surpluses are made in leading domestic and foreign financial entities. 117

120 b) Risk stemming from sale transactions: Empresas AquaChile and subsidiaries do transactions with clients by making sales with letters of credit, through prepaid expenses or else with clients with an excellent credit history. In certain cases, insurance policies are taken out to insure the collection of sales of products both in Chile and abroad (see note 8 b). II Liquidity risk Liquidity risk arises from the possibility of a mismatch between financing needs (for operating and financial expenses, investments in assets, maturing debts and dividend commitments) and financing sources (revenues from surrenders of marketable securities or financial placements, collection of client accounts and financing with financial entities). The Company maintains a policy of prudent management of liquidity risk by keeping enough cash and marketable securities and endeavoring to maintain due financing availability in the Banks. On June 24, 2011, the Company signed a Debt Rescheduling Agreement with its financial creditors whereby, in addition to renegotiating with all its financial creditors the maturity terms and interest rates of the loans, the enforceable financial indexes and the collateral furnished, a series of positive and negative covenants on the part of the Company and its shareholders were also stipulated. This agreement also stipulates various mechanisms and quorum for the approval of any exceptions to these by the creditors. In addition to the nonpayment of any of the capital and interest owed on the agreed dates, if the Company fails to perform its positive or negative covenants stipulated therein, and maintains such nonperformance for more than 90 days, the financial creditors can demand the expiration of the terms agreed and demand early payment of the whole of the debt and interest. Furthermore, any possible delay or failure to grant the approvals by the banks to dispose of or replace certain assets delivered as collateral may generate negative operating effects and delay the Company s development. The following table details the committed capital of the liabilities, grouped according to commitments: Financial liabilities Between 1 and 3 months Between 3 and 12 months Between 1 and 5 years More than 5 years Bank loans 4,048 7,961 98,637 86, ,657 Trade accounts and other accounts payable 111, ,018 Accounts payable to related entities - 2, ,203 Tax accounts payable, current - 3, ,372 Total 115,066 13,536 98,637 86, ,250 Total III Market risk a) Exchange-rate risk As a global company, exchange-rate fluctuations can also affect the performance of Empresas AquaChile and subsidiaries, since part of its costs (labor and services such as overland transport) are indexed to the peso, and its sales are denominated in foreign currencies, such as the American dollar, the euro and the yen. In addition, since the Company reports its balance sheets in dollars, changes in the strength of the dollar with respect to the rest of the currencies in which the Company does business can negatively or positively affect its financial results. In general, the policy concerning financial liabilities is to keep them geared to revenues from sales in American dollars. As of December 31, 2011, the Company s consolidated balance sheet has a net liability in pesos of 13,946 and a net liability in Costa Rican colons of 6,601, therefore a variance of a 5% increase in the exchange rate in both currencies generates an exchange-rate gain of 665 by effect in pesos and 314 by effect in Costa Rican colons. In turn, a 5% drop in the exchange rates generates an equivalent loss. The table below shows the net balance sheet exposure by currency: Exposure of Net Assets by Currency As of 12/31/11 Dollar 458,245 Costa Rican colon (6,601) Chilean pesos (13,962) 118

121 For variations of a 5% increase in exchange rates, the net assets change by the following amounts: Effect on the Exposure by Currency of Net Assets As of 12/31/11 Costa Rican colon 314 Chilean pesos 665 b) Interest rate risk Interest rate variations change future flows of the assets and liabilities referenced to a variable interest rate. Empresas AquaChile and subsidiaries have exposure to interest rate risk, since their long-term financing has a fixed rate plus banks costs of funds, which as of 2013 varies based on the 180-day LIBOR. Normally, monitoring of the conditions of these loans is performed and the suitability of taking out interest rate insurance is assessed, which, depending on market conditions, can be done whenever it is deemed appropriate. As of December 31, 2011, the Group has a total of 196,657 relating to banking liabilities in dollars. For a 1% variation in the rate, the annual interest generated by long-term loans vary for loans in dollars by 0.033%, resulting in an annual effect on financial expenses of 65. Currency Rate Capital Balance Origin Currency (thousands) Interest Origin Currency (thousands) 1% Rate Var. Origin Currency (thousands) USD 3.30% US$ 196,657 US$ 6,483 US$ 65 NOTE 5 - ESTIMATES AND SIGNIFICANT ACCOUNTING CRITERIA The estimates and criteria used are continuously evaluated and are based on the historic experience and other factors, including expectations of future events that are considered reasonable according to the circumstances. Empresas AquaChile and subsidiaries makes estimates and assumptions in relation to the future. The estimates and assumptions that have a significant risk of causing an actual adjustment in the balances of the assets and liabilities in the next period are presented below: a) Useful life of plant and equipment The management of Empresas AquaChile and subsidiaries determines the estimated useful lives and the respective charges for depreciation for their plant and equipment. Changes in the estimates could take place as a consequence of technical innovations and actions by the competition in response to severe cycles in the sector. The management will increase the depreciation charge when the useful lives are less than the lives estimated previously or will amortize or eliminate technically-obsolete or non-strategic assets that they have abandoned or sold. b) Biological assets The accounting principles and the valuation model applied to measure the biological assets are detailed in Note 2.7. NOTE 6 - FINANCIAL REPORTING BY SEGMENTS The Company does financial reporting by segments in accordance with the provisions of IFRS 8 Operating Segments. This standard sets standards for reporting information by segments in the financial statements as well as disclosures about products and services, geographical areas and primary clients. An operating segment is defined as a component of an entity about which there is separate financial information that is evaluated regularly by the top-level management for the decision making with respect to the allocation of resources and the evaluation of profit or loss. The Group segments financial information by business unit, identifying the following lines: 119

122 a) Line of Business Salmon and Sea Trout Farming Empresas AquaChile and subsidiaries have completely integrated the entire salmon chain of production, from the production of eggs to their marketing and distribution. This structure helps the control of strategic resources, particularly in the freshwater stage, and also allows more value to be created at each stage of the salmon production. (a) Fresh water Production i) Eggs The companies that make up Empresas AquaChile and subsidiaries produce Salmon and Sea Trout eggs, keeping a stock of broodstock and developing the Company s genetic program. The incubation facilities are located between the La Araucanía Region and the Aysén Region in Chile. Eggs of Atlantic Salmon, Pacific or Coho Salmon and Sea Trout are produced at these facilities. Through the subsidiaries Pesquera Antares S.A. and Aquainnovo S.A. they have set up a genetic development program to improve the egg quality of Atlantic Salmon, Pacific or Coho Salmon and Sea Trout, by selecting broodstocks based on criteria such as growth rate, maturation and others. The hatcheries are used for spawning, fertilization and incubation. ii) Smolt The Company produces salmon smolts and alevins to supply the requirements of the companies within the Group. The Company has hatcheries and freshwater and brackish water facilities, between the La Araucanía Region and the Aysén Region in Chile, as well as a hatchery in the Metropolitan Region. (b) Sea water production The Company has sea licenses located in the Los Lagos Region and the Aysén Region. Through each of its companies, it has developed sectors or clusters 4 to achieve logistical efficiency and also diversify the risk of diseases. To reduce the risk of diseases, the Company has implemented a low-density usage policy, which reduces the total theoretical capacity of each site. The Company has aquacultural licenses available to support its medium and long-term growth. (c) Processing plants To date, AquaChile has five processing plants located in the area of Puerto Montt, Calbuco and Isla de Chiloé. These plants play a specific role in the salmon processing stage, where the processing plants include H/G (headed and gutted) products, fresh fillets, frozen portions and high added-value products. The plants are equipped with the latest technology in salmon processing. (d) Sale Empresas AquaChile and subsidiaries focus on selling their production to key export markets. Their biggest markets are the USA and Japan. Currently, they are also exporting to the European, Asian, Middle Eastern and Latin American markets. Since 2003, the Company has had its own distribution company for the North American market, called AquaChile Inc. Through this company, Empresas AquaChile and subsidiaries have kept their primary clients, working closely with them in the development of new products and the introduction of new species, such as Tilapia. In general, the variety of salmon exported is tailored to the market s requirements. Exports to the North American market are predominantly Atlantic Salmon. Exports to Japan are mainly whole and H/G Sea Trout products and H/G Coho products, whereas exports to Europe are mainly fillets and frozen portions of Atlantic Salmon. b) Line of Business of Tilapia Farming and Marketing At the end of 2005, Empresas AquaChile and subsidiaries acquired Grupo ACI S.A., a company headquartered in Costa Rica, with more than 25 years experience in the Tilapia industry. The Company s business strategy is focused on supplying fresh Tilapia to the big supermarket chains, distributors and restaurant chains in the United States, with a 27% market share (Source: United States Department of Agriculture (USDA). The Company operates in the Cañas District, in the Guanacaste Region, Costa Rica, an area with optimal conditions for the production which allows it access to large volumes of water and a production-friendly climate. Moreover, it is strategically located, in logistical terms, for distributing fresh products to USA Clusters: set of suppliers-clients in the same industry who are geographically located in the same area.

123 The Company is for the most part integrated with a value chain as described below: i) Genetics and Reproduction Grupo ACI S.A. has had a genetic improvement program since This is run by the company Aquainnovo, a subsidiary of Empresas AquaChile S.A., specializing in biotechnology and molecular genetics. ii) iii) iv) Hatching, Pre on-growing and On-growing The entire Tilapia production process is carried out in over 390 hectares of growing area, in Cañas, Costa Rica. Each cycle lasts 290 days, during which the fish reach an ideal harvest weight of 900 grams. Processing Plant AquaCorporación Internacional has the Terrapez processing plant, located in Cañas. These facilities receive the live harvest, fresh from the growing tanks, and as a result they obtain high value-added, fresh and frozen, products prepared with cutting-edge technology. Marketing Grupo ACI s markets are key, mainly in USA, where it has achieved a service level of roughly 27% of the demand. v) Management Systems The farming areas (farm) and the Terrapez processing plant, whose jurisdiction is under a duty-free regime, operate under strict international standards regarding quality, the environment and occupational health and safety. Similarly, Grupo ACI is a member of the Business Alliance for Secure Commerce (BASC), guaranteeing a top-quality end product at the destination market. c) Line of Business of Fish Feed Production In July 2006, Empresas AquaChile and subsidiaries formed a strategic alliance with Alitec S.A., a local subsidiary of Provimi, a leading world company in animal nutrition (subsequently acquired by Biomar), through which both parties have equal shareholdings in the company AlitecPargua S.A., whose primary asset is a fish feed production plant located in Pargua. i) Production Process With an available capacity of 22 metric tons/hour, the AlitecPargua S.A. processing plant produces seawater fish feed in calibers of 4 to 17 millimeters. The fish feed industry is highly concentrated, with a few producers controlling roughly 88% 5 of the total volume produced (Skretting, Ewos, AlitecPargua S.A., Salmofood S.A. and Biomar). The cost of the product varies depending on the main raw materials used to manufacture them: fish meal and fish oil. Chile and Peru are the biggest producers of these consumables in the world, so there is a major local supply source that ensures availability. ii) iii) iv) Production Plants AlitecPargua S.A. has a processing plant located in Pargua, in the region of Los Lagos, Chile. These facilities currently have a capacity to produce 126,000 metric tons of fish feed per year for fish during their seawater phase. Management System The company has ISO 9001; 2000 certification and is currently in the process of certification for the standard ISO 22,000 and OHSAS 18,000. Sale or Marketing The company s main purpose is the production and marketing of fish feed for the group of Empresas AquaChile and Biomar Chile S.A., which is earmarked for the Chilean Salmon industry and to some extent the export market through Biomar Chile S.A. 5 Company source. Based on annual production

124 The assets and liabilities by segments as of December 31, 2011, December 31, 2010 and January 1, 2010, are as follows: Dec-11 Dec-10 Jan-10 Classified Statement of Financial Position Total Salmon and Sea Trout Tilapia Fish Feed Others Total Salmon and Sea Trout Tilapia Fish Feed Others Total Salmon and Sea Trout Tilapia Fish Feed Others Current assets 437, ,783 26,211 53,267 2, , ,881 26,415 42,882 3, , ,214 24,133 28, Non-current assets 389, ,660 41,453 16,372 7, , ,614 34,703 16,321 2, , ,177 34,618 17,636 (176) Assets 826, ,443 67,664 69,639 10, , ,495 61,118 59,203 5, , ,391 58,751 45, Current liabilities 130,969 56,815 13,024 52,246 8,884 92,552 41,011 5,753 42,776 3,012 78,046 42,440 6,255 29, Non-current 244, ,032 7,867 1,316 2, , ,296 10, , , ,752 9,232 1,320 1,284 liabilities Total Net Equity 451, ,596 46,773 16,077 (349) 31,972 (27,812) 44,827 15,697 (740) (21,845) (79,801) 43,264 15,512 (820) Liabilities and Equity 826, ,443 67,664 69,639 10, , ,495 61,118 59,203 5, , ,391 58,751 45, The income by segments for the years ended as of December 31, 2011 and 2010, are as follows: Dec-11 Dec-10 Income Statement by segments Total Salmon and Sea Trout Tilapia Fish Feed Others Total Salmon and Sea Trout Tilapia Fish Feed Others Gain (loss) Revenues from ordinary activities 501, ,540 63,665 98, , ,353 63,679 68, Cost of sales (404,126) (251,871) (56,109) (94,940) (1,206) (326,339) (205,094) (55,102) (65,460) (683) Gross earnings pre-fair value 97,025 86,669 7,556 3,190 (390) 61,502 50,259 8,577 2,878 (212) Fair value biological assets harvested and sold 1 (65,368) (65,368) (33,575) (33,575) Fair value biological assets of the period 2 70,261 70, ,092 43, Gross earnings 101,918 91,562 7,556 3,190 (390) 71,019 59,776 8,577 2,878 (212) Other revenues, by function 2,204 1, ,035 7, Distribution costs (3,082) (1,712) (1,370) - - (2,693) (1,042) - (1,651) - Administrative expense (17,861) (11,901) (3,294) (2,477) (189) (17,900) (12,543) (5,035) (112) (210) Other expenses, by function (3,096) (3,068) - (28) - (6,425) (6,268) - - (157) Financial revenues 1,632 1, (104) Financial costs (13,972) (13,768) (46) (156) (2) (11,521) (11,142) (93) (285) (1) Exchange-rate differences 1, (69) (45) Result from realignment units Gain (loss), before taxes 69,085 65,331 2, ,737 37,989 3, (514) Expense for income taxes (14,209) (14,135) 44 (101) (17) 16,356 17,416 (1,024) (123) 87 Gain (loss) from continued operations 54,876 51,196 2, ,093 55,405 2, (427) Gain (loss) from discontinued operations Gain (loss) 54,876 51,196 2, ,093 55,405 2, (427) NOTE 7 - CASH AND CASH EQUIVALENTS The item Cash and cash equivalents relates the balances of money kept in Current bank accounts, Term deposits and Other financial investments with less than 90 days to maturity. Also included within this item are those investments inherent to the administration of cash, such as overnights whose maturity is in line with the preceding definition, in the terms described in IAS 7. The composition of Cash and cash equivalents as of December 31, 2011, December 31, 2010 and January 1, 2010, is as follows: Types of Cash and Cash Equivalents 12/31/ /31/ /01/2010 Cash holdings Bank Balances 8,502 11,010 7,439 Term deposits 79,105 2,803 18,956 Mutual Funds and Investments 25,842 14,603 2,074 Total 113,897 28,416 28,

125 The balances by type of currency comprising Cash and cash equivalents as of December 31, 2011, December 31, 2010 and January 1, 2010, are as follows: By type of currency Currency 12/31/ /31/ /01/2010 Amount of the cash and cash equivalent in United States dollar 111,503 24,178 24,290 Amount of the cash and cash equivalent in Chilean pesos 671 3, Amount of the cash and cash equivalent in Yen Amount of the cash and cash equivalent in Euro Amount of the cash and cash equivalent in Costa Rican colon 1, ,079 Total 113,897 28,416 28,469 The breakdown of term deposits as of December 31, 2011, December 31, 2010 and January 1, 2010, is as follows: Investments in term deposits 12/31/ /31/ /01/2010 Banco Citibank ,000 Banco BBVA - - 1,656 Banco Security - 15,300 Banco BCI 20,033 2,500 - Banco Corpbanca 59, Total 79,105 2,803 18,956 The breakdown of the investments in mutual funds as of December 31, 2011, December 31, 2010 and January 1, 2010, is as follows: Investments in mutual funds 12/31/ /31/2010 Fondos mutuos BBVA - 2, CorpBanca Mutual Funds - - 1,940 Citibank N.A. 1, BCI Mutual Funds 5, BCI Administradora de Fondos Mutuos BBVA Administradora General de Fondos CorpCapital Mutual Funds Larraín Vial Mutual Funds 13,590 10,646 - Larraín Vial - Cash 5, Demand investments - 1,300 - Total 25,842 14,603 2,074 01/01/2010 The mutual fund quotas are fixed income and are carried at the market value through the quota value at the close of each period. The mutual funds are kept by the Group until it fulfills its operating obligations. Cash and cash equivalents presented in the Cash flow statement is as follows: Type of asset 12/31/ /31/ /01/2010 Cash and Cash equivalent 113,897 28,416 28,469 Cash and Cash equivalents presented in the Cash Flow Statement 113,897 28,416 28,469 NOTE 8 - FINANCIAL INSTRUMENTS 8.a) Financial instruments by category December 31, 2011 Loans and accounts receivable Assets at fair value through profit or loss Assets Cash and cash equivalent 8, , ,897 Trade debtors and accounts receivable, current 96,444-96,444 Accounts Receivable from Related Entities, Current 6,603-6,603 Fees receivable, non-current Accounts receivable from related entities, non-current 1,580-1,580 Total 113, , ,674 Total 123

126 December 31, 2011 Liabilities at fair value with changes in profit or loss Other financial liabilities Liabilities Other financial liabilities, current 12,009-12,009 Trade accounts payable and other accounts payable - 111, ,018 Accounts payable to related entities, current - 2,203 2,203 Other non-financial liabilities, current - 2,351 2,351 Other accounts payable, non-current - 2,735 2,735 Other financial liabilities, non-current 184, ,648 Total 196, , ,964 Total December 31, 2010 Loans and accounts receivable Assets at fair value through profit or loss Assets Cash and cash equivalent 11,010 17,406 28,416 Trade debtors and accounts receivable, current 82,883-82,883 Accounts Receivable from Related Entities, Current 1 1 Fees receivable, non-current 1,150-1,150 Accounts receivable from related entities, non-current Total 95,544 17, ,950 Total December 31, 2010 Liabilities at fair value with changes in profit or loss Other financial liabilities Liabilities Other financial liabilities, current 7,765-7,765 Trade accounts payable and other accounts payable - 80,385 80,385 Accounts payable to related entities, current - 1,059 1,059 Other non-financial liabilities, current Other accounts payable, non-current - 3,963 3,963 Other financial liabilities, non-current 409, ,834 Total 417,599 86, ,981 Total January 1, 2010 Loans and accounts receivable Assets at fair value through profit or loss Assets Cash and cash equivalent 7,439 21,030 28,469 Trade debtors and accounts receivable, current 52,632-52,632 Accounts receivable from related entities, non-current Total 60,571 21,030 81,601 Total January 1, 2010 Liabilities at fair value with changes in profit or loss Other financial liabilities Other financial liabilities, current 11,722-11,722 Trade accounts payable and other accounts payable - 65,143 65,143 Accounts payable to related entities, current Other financial liabilities, non-current 411, ,753 Total 423,475 65, ,999 Total 124

127 8.b) Credit quality of financial assets The Company s financial assets can mainly be classified in two large groups: i) Trade loans with clients, which, in order to measure their level of risk, are classified by age of the debt and also provisions are made for their uncollectibility, and ii) the financial investments made by the Company in accordance with the criteria mentioned in Note 2.12: Current assets Cash and cash equivalent Mutual funds and term deposits, classification AA+fm/M1 104,947 17,406 21,030 AAA Banking Current Accounts 8,502 11,010 7,439 Cash holdings Subtotal 113,897 28,416 28,469 Trade debtors and other accounts receivable Trade debtors and other accounts receivable, current 96,444 82,883 52,632 Subtotal 96,444 82,883 52,632 Total 210, ,299 81,101 None of the financial assets pending maturity have been subject to renegotiation during the period. 8.c) Estimation of the fair value As of December 31, 2011, the Company maintained financial instruments that have to be recorded at their fair value. These include: Investments in short-term Mutual Funds (cash equivalent). The Company has classified the measurement of the fair value using a hierarchy that reflects the level of information used in the valuation. This hierarchy comprises three levels: (I) fair value based on the trading price in active markets for a similar type of asset or liability, (II) fair value based on valuation techniques that use pricing information of markets or derivatives of the market price of similar financial instruments and (III) fair value based on valuation models that do not use market information. The fair values of financial instruments that are traded in active markets, such as investments acquired for trading, are based on market trading prices at the close of the period using the current buyer price. The following table shows the classification of financial instruments at fair value as of December 31, 2011, according to the level of information used in the valuation: Assets As of Measurements of fair value using values considered as Fair value Level I Level II Mutual funds, short-term 25,842 25, Total 25,842 25, Level III In addition, as of December 31, 2011, the Company has financial instruments that are not recorded at their fair value. In order to comply with the disclosure requirements of fair values, the Company has valued these instruments as shown in the table below: Financial instrument not recorded at its Book value 12/31/ /31/ /01/2010 Fair value Book value Fair value Book value Cash and cash equivalent Cash holdings Bank balances 8,502 8,502 11,010 11,010 7,439 7,439 Term deposits 79,105 79,105 2,803 2,803 18,956 18,956 Other assets and liabilities Trade debtors and other accounts receivable 96,594 96,594 84,033 84,033 52,632 52,632 Accounts receivable from related entities 8,183 8, Other financial liabilities 196, , , , , ,475 Trade accounts and other accounts payable 111, ,018 80,385 80,385 65,143 65,143 Accounts payable to related entities 2,203 2,203 1,059 1, Other accounts payable 2,735 2,735 3,963 3,963 1,762 1,762 Fair value The carrying amount of the accounts receivable and payable is assumed to be close to their fair values, owing to their short-term nature. In the case of cash holdings, bank balances, term deposits and other non-current accounts payable, the fair value is close to their book value. 125

128 NOTE 9 - TRADE DEBTORS AND OTHER ACCOUNTS RECEIVABLE The breakdown of Trade debtors and other accounts receivable is as follows: Trade debtors and other accounts receivable Current 12/31/ /31/ /01/2010 Non-current Current Non-current Current Non-current Trade debtors Domestic 3,677-30,139-17,824 - Foreign 75,048-37,266-25,365 - Uncollectible provision (396) - (664) - (1,531) - Trade debtors (net) 78,329-66,741-41,658 - Notes receivable, net Other accounts receivable, net* 15, ,604 1,150 7,546 - Others 2,213-1,641-2,932 - Uncollectible provision (45) - (103) Other accounts receivable (net) 18, ,142 1,150 10,974 - Total 96, ,883 1,150 52,632 - The fair value of trade payables and other accounts receivable does not differ, significantly, from their book value. * Includes 15,850 corresponding to net tax credit for Value-Added Tax (net VAT Credit) (13,031 December 2010). There are accounts receivable that are overdue but not impaired. The age of these accounts is as follows: Classification of debtors according to maturity Current 12/31/ /31/ /01/2010 Non-current Current Non-current From 0 to 90 days 93,486-82,255-52,224 - From 91 to 180 days From 181 to 360 days 1, days and over , Total 96, ,883 1,150 52,632 - Current Non-current The amounts relating to trade debtors and other accounts receivable individually impaired are as follows: Impairment of trade debtors and other accounts receivable 12/31/ /31/ /01/2010 Trade debtors (396) (664) (1,531) Sundry debtors (45) (103) - Total (441) (767) (1,531) The balances for currencies that comprise Trade debtors and other accounts receivable, non-current, as of December 31, 2011, December 31, 2010 and January 1, 2010, are as follows: Classification by type of currency Current 12/31/ /31/ /01/2010 Non-current Current Non-current United States dollars 76, ,153 1,150 31,306 - Chilean pesos 19,518-17,583-20,123 - Costa Rican colons - - 1,145-1,200 - Euro Total 96, ,883 1,150 52,632 - Current Non-current 126

129 The balance of Trade debtors classified by product type is as follows: Classified by product type 12/31/ /31/2010 Salmon 58,214 50,880 32,774 Tilapia 6,044 4,497 3,125 Fish Feed 30,014 24,270 12,468 Others 2,172 3,236 4,265 Total 96,444 82,883 52,632 01/01/2010 The Company establishes provisions based on evidence of impairment of trade payables. The criteria used to determine whether there is objective evidence of impairment losses are the maturity of the portfolio, specific impairment events (default) and specific market signs. Maturity Impairment Domestic Debtors more than 1 year 100% The breakdown of the movement of the impairment provision for accounts receivable is as follows: Movement of impairment provision for accounts receivable 12/31/ /31/2010 Trade debtors Initial balance (664) (1,531) Estimate, uncollectibles Adjustment of estimate for provision (255) - Balance (396) (664) Other accounts receivable Initial balance (103) - Estimate, uncollectibles - - Adjustment of estimate for provision 58 (103) Balance (45) (103) Total (441) (767) Once pre-legal and legal collection procedures have been exhausted, the assets are then cancelled against the provision so formed. For purposes of better control, the Company only uses the provision method, not the direct write-off method. Historical renegotiations and those currently in effect have little relevance and the policy is to analyze them on a case-by-case basis to classify them according to the existence of risk, after determining whether they should be reclassified to pre-legal collection accounts. If the reclassification is warranted, a provision for matured and about to mature is formed. The maximum credit risk exposure on the presentation date of the information is the fair value of each of the aforementioned categories of accounts receivable. 12/31/ /31/ /01/2010 Gross exposure Gross exposure Gross exposure Fair value Gross exposure Net risk Gross exposure Net risk Gross exposure Net risk according to according to according to impaired exposure impaired exposure impaired exposure balance sheet balance sheet balance sheet Trade debtors 78,725 (396) 78,329 80,469 (664) 79,805 48,657 (1,531) 47,126 Notes receivable (76) Other accounts receivable 18,160 (45) 18,115 3,105 (27) 3,078 5,010-5,010 Total 96,885 (441) 96,444 83,650 (767) 82,883 54,163 (1,531) 52,

130 NOTE 10 - INVENTORIES The composition of the inventories at the close of each period is as follows: Breakdown of inventories 12/31/ /31/2010 Finished products 12,374 4,684 17,128 Fair value biological assets harvested and not sold 3, Consumables 30,877 9,476 4,825 Raw material - 3,865 2,460 Raw material in transit - 4, Spare parts and supplies 1,403 2,563 2,420 Provision, market cost - - (710) Unrealized profit (2,602) (5,304) 855 Others ,165 Total 45,052 21,829 28,789 01/01/2010 Inventory policies The inventories of the Group are measured at cost or net cash value, whichever is less. Inventories measurement policy The Group values its inventories as follows: a) The production cost of the inventories manufactured comprises those costs directly related with the units produced, such as labor, variable and fixed costs that have been included to transform the raw material into finished products. The production cost of fresh and frozen Salmon is determined using the last fair value of the biological asset at the point of harvest, plus the direct and indirect production expenses. b) In the case of the cost of acquired inventory, the acquisition cost will comprise the purchase price, customs duty, transportation, storage and other costs attributable to the acquisition of the merchandise and materials. Formula for calculating the cost of inventories Inventories of finished products are valued using the weighted average cost method, i.e., the cost of each product unit is determined using the weighted average of the cost recorded at the beginning of the fiscal year, and of the cost of the articles purchased or produced during the fiscal year. The inventories of raw materials, containers and materials are valued at the weighted average cost. Information on finished products The Company has not made any write-offs of finished products at the close of the respective fiscal years. During the period ended on December 31, 2011, the fiscal year ended on December 31, 2010 and as of January 1, 2010, no inventories have been delivered on pledge as collateral. Insurance The Group has taken out insurance policies to cover the risks to which the products in processing and the finished products are subject, including also loss of profits and/or business interruption loss. Empresas AquaChile and subsidiaries consider that the coverage of these policies is adequate for the risks inherent to their activity. The insurance policies kept by Empresas AquaChile and subsidiaries are detailed below: Fresh Fish, Frozen Smoked (Salmon and Sea Trout) Losses and/or damages during transport by sea, air and/or land. 128

131 The inventories recognized in cost of sales at the close of each period are summarized below: Cost of sales Sales Cost (404,126) (326,339) Fair value biological assets harvested and sold * (65,368) (33,575) Final balance (469,494) (359,914) * Relates to the higher cost of the biomass of fish harvested and soled derived from revaluation for their natural growth. NOTE 11 - BIOLOGICAL ASSETS Biological assets Salmon and Sea Trout, such as broodstock, alevins, smolts and on-growing fish, are measured at their fair value less the estimated costs at the point of sale, except when the fair value cannot be reliably determined according to the definitions contained in IAS 41 (see Note 2.7). The Company does not maintain biological assets as collateral for financial institutions or other suppliers. The biological assets of Empresas AquaChile and subsidiaries consist of Salmon, Sea Trout and Tilapia. The biological assets which the management deems will be harvested in accordance with their production cycle are classified as current biological assets: Current Non-current Breakdown 12/31/ /31/ /01/ /31/ /31/ /01/2010 Salmon and Sea Trout* 155, ,630 76,481 31,517 5,862 7,435 Tilapia 12,881 9,264 11,292 1,628 1,085 1,271 Total 168, ,894 87,773 33,145 6,947 8,706 * The biological assets of Salmon and Sea Trout include a net valuation effect of the biomass being raised by natural growth of 4,893 as of December 31, 2011 (9,517 as of December 31, 2010). Movements 12/31/ /31/2010 Biological assets, Initial 135,841 96,479 Increases from on-growing and production 321, ,042 Decreases from sales and harvests (259,298) (201,690) Adjustment to fair value in the fiscal year, fair value decrease * 4,893 9,517 Extraordinary Mortality (1,221) (4,507) Fiscal Year Balance 201, ,841 The balance in the heading of biological assets includes 19,936 for an adjustment of fair-value valuation, which is explained in the following table: * Breakdown of fair value adjustment for growth of the biomass Higher cost for revaluation of biomass harvested and sold (65,368) (33,575) Revenue for revaluation of biomass harvested and sold 50,325 26,122 Adjustment for valuation of, on-growing Biomass 19,936 16,970 Net Effect of fair value adjustment, biomass 4,893 9,517 Policies of biological assets Biological assets are valued at their fair value less the estimated costs at the point of sale according to the definitions contained in IAS 41 and in accordance with the provisions of Note 2.7. At the close of each period, the effect of natural growth of the fish in the water, expressed in fair value less the estimated costs at the point of sale is recognized according to a measurement made based on market prices adjusted for quality and caliber. The resulting negative or positive equity is recorded in the income statement, under the item Fair value biological assets in the fiscal year which in the period ended at December 31, 2011, amounted to 70,261 (43,092 of December 31, 2010). The higher cost of the part exploited and sold derived from this revaluation is recorded in the income statement under the item Fair value biological assets harvested and sold and amounts to 65,368 as of December 31, 2011 (33,575 of December 31, 2010). 129

132 Total biological assets in units and metric tons Breakdown Seawater (On-Growing) 12/31/2011 Biomass 12/31/2010 Biomass Units Metric tons Units Metric tons Atlantic Salmon 11,496,052 8,959 4,470,968 6,088 Sea Trout 13,347,520 17,193 8,230,975 11,805 Pacific Salmon 4,398,119 11,982 2,954,839 9,085 Freshwater Atlantic Salmon 33,311, ,171, Sea Trout 22,076, ,935, Pacific Salmon 12,379, ,111, Tilapia 52,247,264 7,024 31,295,649 5,045 Tilapia (Broodstock) 429, , Total 149,684,851 47, ,457,193 34,059 Risk management policies a) Environmental risk Although Empresas AquaChile and subsidiaries have geographically diversified their production facilities in Chile, the salmon industry is exposed to risks of nature, such as temperature variability in seawater, weather phenomena, seismicity, algae bloom 6, the existence of natural predators and other factors that may affect the place where their production facilities are situated. All of these circumstances can affect the growth of Empresas AquaChile and subsidiaries, having a negative impact on their quality and even increasing mortality rates, which would lead to a reduction in production quantities and consequently in their sales and earnings. b) Phytosanitary risks Diseases, parasites and pollutants are a recurring problem in the aquaculture industry, which can lead to reduced quality of the products, increases in mortality and reduced production. Although Empresas AquaChile and subsidiaries have made significant investments in research, genetic improvement studies, mass vaccination programs, independent zone management systems, fish health monitoring, policies of low-density in the use of cages, and sanitary barriers that help control and reduce these risks, it is not possible to rule out the appearance of new diseases or plagues that might affect Salmon and/or Sea Trout production. c) Product quality and traceability risks The products grown, produced and marketed by the Company are for human consumption, and there is a risk of contamination by negligence in the production or inadequate handling during the process of distribution and/or delivery to the end consumer, by clients, consumers or third parties. To avoid this, Empresas AquaChile has developed the most stringent quality classification controls and food safety control, with constant monitoring internally and externally by the sectorial authorities. For control of food innocuity, the Company has full traceability of the fish and, before harvesting, the authorities order the fish to be analyzed to rule out any traces of residues. The processing plants are also sampled to ensure innocuity in the processing and the raw materials. In this way, the authorities and the clients can be assured of the innocuity of the Company s products. As animals raised in an open environment, i.e., the sea, the fish are exposed to diseases that can lead to health issues. To control these impacts, the Company has a health department made up of veterinary doctors who implement the preventive policy and monitor the sanitary aspects of the fish populations and, in case of any disease, provide the appropriate treatment against it. To not do so would constitute a risk to the population of fish and a risk to the Company s earnings. 130 d) Risks of price variations in consumables Some of the most significant costs in salmon production lie in supplies of fish meal and fish oil. Although sources of fish feed have been diversified, including new plant alternatives, and investments have been made in two proprietary fish feed plants to supply part of the consumable requirements, Empresas AquaChile and subsidiaries may be affected by variations in the prices that are due to circumstances beyond their control, since the fish feed industry is concentrated in a handful of global producers and there is no extensive market of futures or other derivatives to purchase several of these raw materials, which make up the diet for Salmon, Sea Trout and Tilapia. 6 Natural phenomena known as Harmful Algae Bloom (HAB) occurring in aquatic ecosystems that are caused by phytoplanktonic organisms which, in favorable environmental conditions for their development, multiply explosively and concentrate, causing disturbances to marine life and mortality among fish.

133 e) International pricing trends The Salmon and Sea Trout supply depends on the production strategies of each of the companies involved in the industry. For this reason, projecting and estimating an equilibrium price for the products is complex. Moreover, demand for farmed Salmon has grown significantly over recent years. Accordingly, it is possible that a difference may arise between the supply and demand for salmon products, bringing with it price volatility. However, the salmon industry globally and locally has been undergoing a dynamic consolidation process. It therefore allows us to forecast that future periods of growth will tend to present a more balanced behavior. On the other hand, diversification into other species, such as Tilapia, and international diversification itself, could minimize the effect and complement the portfolio which the Company offers to the markets. f) Consumer variations in the destination markets Although the global trend suggests it is possible to estimate a sustained rise in the consumption of farmed fish and other aquacultural products over the next few years, the Company cannot guarantee that trend will maintain itself or last over time. In the event this changes or goes into reverse, it could cause a negative effect on the business and its operating results. g) Changes in the economy of destination countries. Currently, the Company s exports are sold primarily in the markets of USA, the European Union and Japan, and possible economic stagnation, crises or depressions leading to a reduced demand cannot be ruled out. If such events were to take place this could lead to negative effects on the Company s operation and operating results. h) Concentration of financial liabilities. On June 24, 2011, the Company signed a Debt Rescheduling Agreement with its financial creditors whereby, in addition to renegotiating with all its financial creditors the maturity terms and interest rates of the loans, the enforceable financial indexes and the collateral furnished, a series of positive and negative covenants on the part of the Company were also stipulated. This agreement also stipulates various mechanisms and quorum for the approval of any exceptions to these by the creditors. In addition to the nonpayment of any of the capital and interest owed on the agreed dates, if the Company fails to perform its positive or negative covenants stipulated therein, and maintains such nonperformance for more than 90 days, the financial creditors can demand the expiration of the terms agreed and demand early payment of the whole of the debt and interest. i) Exchange-rate risk. As a global company, exchange-rate fluctuations can also affect the performance of Empresas AquaChile, since part of its costs (labor and services such as overland transport, etc.) are indexed to the peso, and its sales are denominated in foreign currencies, such as the American dollar, the euro and the yen. In addition, since the Company reports its balance sheets in dollars, changes in the strength of the dollar with respect to the rest of the currencies in which the Company does business can negatively affect its financial results. j) Changes in environmental and other legislation Caring for the environment forms an essential part of the Company s business policy. Notwithstanding, the pollution of natural resources due to external issues caused by production processes has generated growing concern and awareness on the part of consumers, intermediary groups and the pertinent authorities, who demand production systems that are environmentally friendly and guarantee that natural resources will be protected in the long term beforehand. These exigencies have resulted in the establishment of more stringent standards and procedures with a view to environmental sustainability, which might lead to significant increases in production costs and/ or restrictions on the Company s production activity. k) Changes in aquacultural and sea licenses legislation The Company has developed processes and constant monitoring for the proper management of fish farm sites and has a technical department and legal advisory services that oversee the proper use and handling of aquacultural licenses. However, the inadequate handling of aquacultural licenses and/or noncompliance with the relevant standards for sustainability and proper operation of the whole of the system; inactivity of the licenses without due cause or authorization from the authorities, could lead to the application of penalties, and even imposed forfeiture of any of the aquacultural licenses by the authorities, in cases where such measure is contemplated in the applicable law. l) Risks of the assets The fixed assets, such as facilities and buildings, and the risks of civil liability, are covered through insurance policies under standard market terms and conditions. However, given the lack of effective insurance, the high costs now prevalent in the market for insuring the living assets or biomass, and the disputes over responding for those losses which the insurers put forward, the Company currently has no insurance for its biomass against risks of diseases, theft or natural risks such as storms, tempests, sea swells, tsunamis, seaquakes, earthquakes, volcanic eruptions, currents, floods, avalanches and/or alluvions, underwater currents, algal bloom. Consequently, any relevant 131

134 damage or loss in these assets may lead to an adverse effect on the Company s businesses and financial position. Notwithstanding the above, the geographical dispersion of the on-land facilities and fish farm at sea, allow it to, if not avoid, then at least diversify the risk of these events. m) Subsidiaries and affiliates Empresas AquaChile S.A. is the parent company and affiliate of several companies, through which a significant part of the Company s operation is developed, and on whose operating results and financial condition it has considerable dependence. Any significant impairment in the business and profit or loss of its subsidiaries and affiliates may have an adverse effect on the operation and operating results. n) Insurance As of December 31, 2011, the Group had taken out insurance policies to cover the risks to which the biological assets, are subject, including also loss of profits and/or business interruption loss. Empresas AquaChile and subsidiaries consider the coverage of these policies to be adequate for the risks inherent to their activity. The insurance policies kept by Empresas AquaChile and subsidiaries are detailed below: Asset type Live Fish, Harvested Risks covered Damage as a direct consequence or cause brought about by an external agent, except during their transport by sea, air and/or land. NOTE 12 TAX ASSETS AND LIABILITIES The tax assets - current, are detailed below: Tax Accounts Receivable 12/31/ /31/ /01/2010 Credit, fixed asset Art. 33 bis Monthly estimated tax payment for absorbed profits 1, Monthly estimated tax payments 2,459 1,588 2,489 Credit for training Other taxes recoverable Total 4,244 2,088 3,501 Tax Accounts Payable 12/31/ /31/ /01/2010 Income Tax 3,372 2,368 5 Total 3,372 2,368 5 NOTE 13 OTHER FINANCIAL ASSETS, NON-CURRENT The breakdown of other financial assets, non-current, is as follows: Name 12/31/ /31/ /01/2010 Investment in FiordoAustral S.A. 10, Total 10, This relates to a 6.12% interest in the company Fiordo Austral S.A., acquired in May 2011 by the affiliate AquaChile S.A. 132

135 NOTE 14 INVESTMENTS RECORDED USING THE EQUITY METHOD The breakdown of other financial assets, non-current, is as follows: Name 12/31/ /31/2010 Investment affiliate Grupo ACI Costa Rica (1) 3, Salmones Chaicas S.A. (2) 1, Total 4, /01/2010 (1) This relates to joint ventures between the affiliate ACI of Costa Rica and Biomar S.A., for the construction of a fish feed plant. (2) Since May 2011, the Company has had an 18.3% holding in the company Salmones Chaicas S.A., a company in which Inversiones La Montaña S.A. holds 43.55%; CS Holding ApS and OSS Holding 2004 ApS jointly hold 7.04%, Fondo de Inversión Privado Patagonia have 15.55% and Holding Salmones S.A. have 15.55%. This project consists in a technologically advanced recycling hatchery for the production of Atlantic Salmon eggs and smolts. The hatchery will have a production capacity of 120 million eggs and 4.2 million smolts in its first stage to reach a total of 12.6 million smolts at full capacity. Empresas AquaChile s investment in this company amounts to 1,300. Empresas AquaChile has a call option for the remaining 81.7% of the shareholding of Salmones Chaicas S.A., beginning in April In addition, the rest of the shareholders of Salmones Chaicas S.A. have put options to sell all their shares to Empresas AquaChile, beginning in Summarized information of the financial statements of Biomar AquaCorporation Products and Salmones Chaicas S.A., as of December 31, Classified statement of financial position Biomar AquaCorporation Products Salmones Chaicas S.A. Current assets 2,456 5,211 Non-current assets 10,351 11,230 Assets 12,807 16,441 Current liabilities 6,807 9,899 Non-current liabilities - - Total net Equity 6,000 6,542 Liabilities and Equity 12,807 16,441 Income Statement Biomar AquaCorporation Products Salmones Chaicas S.A. Gain (loss) Revenues from ordinary activities - - Gain (loss) in the period (641) (155) NOTE 15 - INTANGIBLE ASSETS OTHER THAN GOODWILL The breakdown of the main types of intangible assets that were not generated internally are shown below: Intangible assets other than goodwill Useful Life 12/31/ /31/ /01/2010 Aquacultural Licenses Indefinite 28,859 24,154 23,877 Water rights Indefinite 4,059 6,478 6,105 Trademark rights Finite 2,365 2,642 2,564 Farm usage rights Finite 2,029 2,096 2,213 Others Finite Total 37,326 35,416 34,

136 a) Aquacultural licenses and water rights The aquacultural licenses acquired from third parties are presented at historic cost. The useful life of these licenses is indefinite, since they have no expiration date, nor any foreseeable useful life, therefore they are not amortized. The indefinite useful life is subject to review during each fiscal year for which information is presented, in order to determine whether the events and the circumstances are able to continue to support the evaluation of the indefinite useful life for this asset. b) Trademark rights The trademarks acquired are shown at the historic cost less impairment. The trademarks have a finite useful life. c) Farm usage rights The usage right of the farm relates to an intangible asset received as a contribution from a shareholder (El Pelón de la Bajura S.A.), by the subsidiary Grupo ACI S.A. located in Costa Rica, and it is amortized by the straight-line method over a term of 20 years. d) Computer softwares The intangible assets with a defined useful life are formed primarily be computer software which have all been acquired from third parties, for which the Company has defined a useful life of between 3 and 5 years. The movement of intangible assets as of December 31, 2011, is as follows: Breakdown Aquacultural Licenses Water rights Trademark rights Farm usage rights Balance as of 01/01/ ,154 6,478 2,642 2, ,416 Accumulated amortization - (1,774) (277) (67) (30) (2,148) Other increases or decreases 4,705 (645) - - (2) 4,058 Balance as of 12/31/ ,859 4,059 2,365 2, ,326 Others Totals The movement of intangible assets as of December 31, 2010, is as follows: Breakdown Aquacultural Licenses Water rights Trademark rights Farm usage rights Balance as of 01/01/ ,877 6,105 2,564 2, ,830 Accumulated amortization - - (36) (48) (25) 563 Sales of sea licenses (1,574) (1,574) Additions in the fiscal year 1, (69) - 1,597 Balance as of 12/31/ ,154 6,478 2,642 2, ,416 Others Totals The breakdown of aquacultural licenses and water rights is as follows: a) Proprietary assets: The company has 67 Water Rights with a total volume of 39, liters per second (L/s). 134

137 Breakdown of water rights: N DGA N * Region N DGA N * Region N DGA N * Region IX X X 2 51 IX X XI IX X XI IX X XI IX X X IX X X IX X X IX X X X X X X X X X X X X X X XI X X X X IX X X IX X X IX X X X X X XI X XI XI X XI X X XI X X X X XIV *DGA No.: Registration Number at the Water Bureau: Summary of Water Rights Region Quantity IX 11 X 46 XI 9 XIV 1 Total 67 The company has 162 Aquacultural Licenses (149 marine and 12 lake licenses) with a total area of 1, marine hectares and 78.3 hectares in lake. Breakdown of aquacultural licenses in rivers and sea: No. SIEP code License Name Region Hectares Approved Aquacultural License Type* Isla Chaffers XI 3.91 Portion of Water and Seabed Sea Abd el Krim XI 5.98 Portion of Water and Seabed Sea Abtao X Portion of Water and Seabed Sea Albo XI 3.97 Portion of Water and Seabed Sea Ayacara X 3.45 Portion of Water and Seabed Sea Ayacucho XI 2.44 Portion of Water and Seabed Sea Benjamín XI 4.55 Portion of Water and Seabed Sea Betecoi XI 9.99 Portion of Water and Seabed Sea Brieva XI 3.74 Portion of Water and Seabed Sea Buill X 2.37 Portion of Water and Seabed Sea Caicura X 3.95 Portion of Water and Seabed Sea Caleta Madina XI 3.98 Portion of Water and Seabed Sea Caleta Momia XI 3.04 Portion of Water and Seabed Sea Canal Avellano 1 XI 2.93 Portion of Water and Seabed Sea Canal Avellano 2 XI 5.86 Portion of Water and Seabed Sea Canal Luchín XI Portion of Water and Seabed Sea Canal Pérez Norte XI 9.64 Portion of Water and Seabed Sea Canal Refugio XI Portion of Water and Seabed Sea Canal Temuan XI 4.48 Portion of Water and Seabed Sea Canalad 1 XI Portion of Water and Seabed Sea Canalad 2 XI Portion of Water and Seabed Sea Capera X Portion of Water and Seabed Sea Carabelas XI 4.06 Portion of Water and Seabed Sea Cascada XI Portion of Water and Seabed Sea 135

138 No. SIEP code License Name Region Hectares Approved Aquacultural License Type* Coca 2 XI 2.00 Portion of Water and Seabed Sea Coca 3 XI 1.92 Portion of Water and Seabed Sea Cuervo XI 6.08 Portion of Water and Seabed Sea Cuervo Norte XI 3.03 Portion of Water and Seabed Sea Chacabuco XI 1.34 Portion of Water and Seabed Sea Chaicas X 4.29 Portion of Water and Seabed Sea Chauques X Portion of Water and Seabed Sea Chidhuapi X 5.84 Portion of Water and Seabed Sea Demhart XI 5.94 Portion of Water and Seabed Sea Detif X Portion of Water and Seabed Sea E.Magdalena XI Portion of Water and Seabed Sea El Avellano XI Portion of Water and Seabed Sea El Pino XI 5.98 Portion of Water and Seabed Sea Ensenada Pérez XI Portion of Water and Seabed Sea Ensenada Quetén X Portion of Water and Seabed Sea Estero Fino, sector 2 XI 3.91 Portion of Water and Seabed Sea Estero Frío XI 3.22 Portion of Water and Seabed Sea Estero Machildad X 2.49 Portion of Water and Seabed Sea Estero Mena XI 7.97 Portion of Water and Seabed Sea Fontaine XI 3.04 Portion of Water and Seabed Sea Fresia Sur XI 7.28 Portion of Water and Seabed Sea Fresia Weste XI 2.02 Portion of Water and Seabed Sea Gala medio / Estero del medio XI 7.92 Portion of Water and Seabed Sea Gala Sur / Estero Sur XI 4.00 Portion of Water and Seabed Sea Guaitecas II XI 5.00 Portion of Water and Seabed Sea Guamblad X 7.21 Portion of Water and Seabed Sea Halcones chicos XIV Portion of Water and Seabed Sea Herradura X Portion of Water and Seabed Sea Huapi X 5.00 Portion of Water and Seabed Sea Huelmo X Portion of Water and Seabed Sea Huenquillahue X Portion of Water and Seabed Sea Ica X 0.67 Portion of Water and Seabed Sea Ichuac X 7.87 Portion of Water and Seabed Sea Isla Chaculay XI 5.25 Portion of Water and Seabed Sea Isla Chita XI 2.44 Portion of Water and Seabed Sea Isla Gala Sur XI 7.32 Portion of Water and Seabed Sea Isla Guar X Portion of Water and Seabed Sea Isla Harry XI 7.32 Portion of Water and Seabed Sea Isla Queullín X Portion of Water and Seabed Sea Isla Sierra XI 4.48 Portion of Water and Seabed Sea Isla Suarez XI Portion of Water and Seabed Sea Isla Ubaldo XI 9.28 Portion of Water and Seabed Sea Isla Warney XI Portion of Water and Seabed Sea James 1 XI 6.77 Portion of Water and Seabed Sea James 2 XI 9.50 Portion of Water and Seabed Sea James 3 XI 2.37 Portion of Water and Seabed Sea Jesús 1 XI 4.48 Portion of Water and Seabed Sea Jesús 2 XI 4.49 Portion of Water and Seabed Sea Jesús 3 XI 4.48 Portion of Water and Seabed Sea Jesús Sur 1 XI 4.48 Portion of Water and Seabed Sea Jesús Sur 2 XI 4.48 Portion of Water and Seabed Sea Jesús Sur 3 XI 5.97 Portion of Water and Seabed Sea Kent 1 XI 6.74 Portion of Water and Seabed Sea Kent 2 XI 3.96 Portion of Water and Seabed Sea La Arena X 1.00 Portion of Water and Seabed Sea La Estancia X Portion of Water and Seabed Sea La Leona XI Portion of Water and Seabed Sea Lagreze Norte XI 9.91 Portion of Water and Seabed Sea LagrezeWeste XI 6.08 Portion of Water and Seabed Sea Laguna Cuervo XI 4.40 Portion of Water and Seabed Sea Laguna Pedregoso (Canal Pedregoso) XI Portion of Water and Seabed Sea Lalanca XI 5.96 Portion of Water and Seabed Sea Las Huichas XI 4.95 Portion of Water and Seabed Sea 136

139 No. SIEP code License Name Region Hectares Approved Aquacultural License Type* Lille 1 X Portion of Water and Seabed Sea Liucura (Cahueldao) X Portion of Water and Seabed Sea Luma XI 1.04 Portion of Water and Seabed Sea Marchant XI 6.91 Portion of Water and Seabed Sea Mauchil X Portion of Water and Seabed Sea Mauricio XI 4.47 Portion of Water and Seabed Sea Melchor 4 XI 6.77 Portion of Water and Seabed Sea Melchor 5 XI Portion of Water and Seabed Sea Melchor 7 XI Portion of Water and Seabed Sea Morro Chilco X 4.29 Portion of Water and Seabed Sea Norte Isla Valverde XI Portion of Water and Seabed Sea Paildad X 7.14 Portion of Water and Seabed Sea Pangal 1 XI Portion of Water and Seabed Sea Pangal 2 XI Portion of Water and Seabed Sea Pangal 3 XI Portion of Water and Seabed Sea Pangal 4 XI Portion of Water and Seabed Sea Pangue X 9.00 Portion of Water and Seabed Sea Paso Quenu X Portion of Water and Seabed Sea Piedra Blanca X Portion of Water and Seabed Sea Pocoihuen X 0.24 Portion of Water and Seabed Sea Porvenir II XI 7.32 Portion of Water and Seabed Sea Pta. Serapio (Cochamo) X 4.17 Portion of Water and Seabed Sea Pta. Zenteno (Canutillar) X 3.00 Portion of Water and Seabed Sea Puerto Español XI 4.47 Portion of Water and Seabed Sea Punta Aguada XI 1.24 Portion of Water and Seabed Sea Punta Bennett XI 1.09 Portion of Water and Seabed Sea Punta González XI 4.90 Portion of Water and Seabed Sea Punta Guala XI 4.01 Portion of Water and Seabed Sea Punta lille 2 X 7.42 Portion of Water and Seabed Sea Punta Paula X Portion of Water and Seabed Sea Punta Pelú X 8.29 Portion of Water and Seabed Sea Punta Porvenir XI Portion of Water and Seabed Sea Punta White X 9.97 Portion of Water and Seabed Sea Punta Yelcho - Caleta Bluff XI 2.00 Portion of Water and Seabed Sea Puqueldón X Portion of Water and Seabed Sea Quellón Viejo X 3.48 Portion of Water and Seabed Sea Quetalco X Portion of Water and Seabed Sea Quilque Sur X 9.00 Portion of Water and Seabed Sea Quinched X 2.49 Portion of Water and Seabed Sea Quiquel I X 6.42 Portion of Water and Seabed Sea Quiquel II X 4.20 Portion of Water and Seabed Sea Repollal XI Portion of Water and Seabed Sea San Pedro X 8.03 Portion of Water and Seabed Sea Seno Gato XI 7.92 Portion of Water and Seabed Sea Sotomó X 2.86 Portion of Water and Seabed Sea Tauco X 7.95 Portion of Water and Seabed Sea Teguel, Sector I X 3.24 Portion of Water and Seabed Sea Teguel, Sector II X 3.24 Portion of Water and Seabed Sea Teguel, Sector III X 3.24 Portion of Water and Seabed Sea Teguel, Sector IV X 3.24 Portion of Water and Seabed Sea Teresa 1 XI 3.74 Portion of Water and Seabed Sea Teresa 2 XI 4.48 Portion of Water and Seabed Sea Teresa 3 XI 4.47 Portion of Water and Seabed Sea Teresa Norte XI 4.48 Portion of Water and Seabed Sea Teresa Sur 1 XI 5.96 Portion of Water and Seabed Sea Teresa Sur 2 XI 5.96 Portion of Water and Seabed Sea Transito 1 XI 4.48 Portion of Water and Seabed Sea Transito 2 XI 4.48 Portion of Water and Seabed Sea Yaldad X 7.15 Portion of Water and Seabed Sea Yatac X 8.44 Portion of Water and Seabed Sea Yelcho X 7.13 Portion of Water and Seabed Sea Yutuy X 5.00 Portion of Water and Seabed Sea TOTAL 1,

140 Summary of Aquacultural Licenses Region Quantity Seawater and River Total Surface (hectares) In use as of 12/31/11 Quantity Lakes Total Surface (hectares) X XI XIV Total 149 1, In use as of 12/31/11 Also, as of December 31, 2011, the company maintains in use 42 aquacultural licenses in river and sea and 6 aquacultural licenses in lakes. *Pursuant to the classification of license type set forth in the General Law on Fisheries and Aquaculture [Ley General de Pesca y Acuicultura] No. 18,892, Art. 67. Breakdown of Aquacultural license in Lakes: Aquacultural licenses in Lakes amount to hectares at the close of the period. The breakdown is as follows: No. SIEP code** License Name Region Hectares Approved Aquacultural License Type* Puerto Octay X Portion of Water and Bed Lake Lago Riesco 1 X 3.21 Portion of Water and Bed Lake Lago Riesco 2 X Portion of Water and Bed Lake Lago Riesco 3 X Portion of Water and Bed Lake Laguna Los Palos X Portion of Water and Bed Lake Ensenada Bahía 1 X 3.75 Portion of Water and Bed Lake Ensenada Bahía 2 X 9.38 Portion of Water and Bed Lake Rupanco X 1.25 Portion of Water and Bed Lake Chapo Desagüe 1 X 0.07 Portion of Water and Bed Lake Chapo Desagüe 2 X 5.99 Portion of Water and Bed Lake Colulí X 2.90 Portion of Water and Bed Lake Bahía El Volcán X 2.00 Portion of Water and Bed Lake TOTAL * Pursuant to the classification of licenses type set forth in the General Law on Fisheries and Aquaculture [Ley General de Pesca y Acuicultura] No , Art. 67. ** SIEP: Fishing Statistics Information System [Sistema de Información de Estadísticas Pesqueras] of the National Fisheries Service (Sernapesca) b) Leased assets: The Company has no Water Rights or seawater licenses on lease. The Company leases three lake licenses totaling hectares and leases out a 2-hectare license. The breakdown is as follows: Owner Licenses Center No. of hectares Hatchery Puerto Octay Aguas Claras S.A. Rincón del Sur 6 Hatchery Puerto Octay Aguas Claras S.A. Pitote 1.2 Salmones Tecmar Aguas Claras S.A. Río del Este 4.99 Cultivos Acuícolas El Volcán Yadrán Bahía el Volcán 2.00 TOTAL

141 NOTE 16 - GOODWILL Goodwill represents the excess of the acquisition cost over the fair value of the Company s interest in the identifiable net assets of the subsidiary or affiliate on the acquisition date. The balance of the purchased goodwill at the close of each period is comprised as follows: Investor Issuer 12/31/ /31/ /01/2010 Antarfood S.A. Aguas Claras S.A. 1,981 1,981 1,981 AquaChile S.A. Pesquera Antares S.A AquaChile S.A. Salmones Australes S.A AquaChile S.A. Salmones Cailín S.A. 1,471 1,471 1,471 AquaChile S.A. Pesquera Palacios S.A Aguas Claras S.A. Salmones Australes S.A. 1,282 1,282 - Empresas AquaChile S.A. Salmones Chiloé S.A. 18,398 18,398 18,398 Empresas AquaChile S.A. Salmones Maullín S.A. 18,686 18,686 18,686 Empresas AquaChile S.A. Alitec Pargua S.A. 3,819 3,819 3,819 Empresas AquaChile S.A. Salmones Maullín Ltda Grupo ACI Aquacorporación Internacional S.A. 4,247 4,247 4,247 Total 51,448 51,448 50,277 The Management has not observed any signs of impairment with respect to goodwill. The movement of the Purchased goodwill as of December 31, 2011, is as follows: Movement of the goodwill 12/31/2011 Initial balance as of ,448 Decreases from sales of interests - Increases from acquisitions of interests - Balance as of ,448 The movement of the Purchased goodwill as of December 31, 2010, is as follows: Movement of the goodwill 12/31/2010 Initial balance as of ,277 Decreases from sales of interests (111) Increases from acquisitions of interests 1,282 Balance as of ,

142 NOTE 17 - PROPERTY, PLANT AND EQUIPMENT The breakdown of the different categories of Property, Plant and Equipment and their movements as of December 31, 2011, is as follows: Property, plant and equipment, net As of 12/31/2011 Gross value Accumulated depreciation Lands 13,643-13,643 Buildings and constructions, net 187,139 (106,220) 80,919 Plant and Equipment, net 47,302 (19,561) 27,741 Information technology equipment, net 4,482 (2,597) 1,885 Fixed facilities and accessories, net 77,778 (37,313) 40,465 Motor vehicles, net 2,899 (1,265) 1,634 Totals 333,243 (166,956) 166,287 Net value The breakdown of the different categories of Property, Plant and Equipment and their movements as of December 31, 2010, is as follows: Property, plant and equipment, gross As of 12/31/2010 Gross value Accumulated depreciation Lands 9,029-9,029 Buildings and constructions, net 195,301 (111,400) 83,901 Plant and Equipment, net 62,447 (32,311) 30,136 Information technology equipment, net 4,776 (2,939) 1,837 Fixed facilities and accessories, net 42,810 (30,528) 12,282 Motor vehicles, net 4,567 (2,959) 1,608 Totals 318,930 (180,137) 138,793 Net value The breakdown of the different categories of Property, Plant and Equipment and their movements as of January 1, 2010, is as follows: Depreciation, Property, plant and equipment As of 01/01/2010 Gross value Accumulated depreciation Lands 8,985-8,985 Buildings and constructions, net 196,559 (101,065) 95,494 Plant and Equipment, net 58,895 (26,355) 32,540 Information technology equipment, net 4,774 (2,773) 2,001 Fixed facilities and accessories, net 39,665 (27,447) 12,218 Motor vehicles, net 4,036 (2,750) 1,286 Totals 312,914 (160,390) 152,524 Net value The movement of Property, Plant and Equipment as of December 31, 2011, is as follows: Movements, Property, plant and equipment, net Initial balance as of 01/01/2010 Additions Divestments Depreciation expenses Other increases (reduc.) Final balance 12/31/2010 Lands 9, (44) - 4,163 13,643 Buildings and constructions, net 83,901 14,516 (2,844) (12,174) (2,480) 80,919 Plant and Equipment, net 30, (561) (2,473) 22 27,741 Information technology equipment, net 1, (41) (225) 9 1,885 Fixed facilities and accessories, net 12,282 33,121 (1,079) (4,821) ,465 Motor vehicles, net 1, (39) (143) - 1,634 Totals 138,793 49,262 (4,608) (19,836) 2, ,

143 The movement of Property, Plant and Equipment as of December 31, 2010, is as follows: Movements, Property, plant and equipment, net Initial balance as of 01/01/2010 Additions Divestments Depreciation expenses Other increases (reduc.) Final balance 12/31/2010 Lands 8, (6) 9,029 Buildings and constructions, net 95,494 2,704 - (10,335) (3,962) 83,901 Plant and Equipment, net 32,540 4,604 - (5,956) (1,052) 30,136 Information technology equipment, net 2, (166) (53) 1,837 Fixed facilities and accessories, net 12,218 3,620 - (3,080) (476) 12,282 Motor vehicles, net 1, (33) (209) (29) 1,608 Totals 152,524 11,626 (33) (19,746) (5,578) 138,793 Estimated Useful Lives or Rates of Depreciation The estimated useful lives by types of asset are as follows: Minimum Life or Rate Years Maximum Life or Rate Years Buildings Plant and equipment 3 15 Information technology equipment 3 6 Fixed facilities and accessories 3 20 Motor vehicles 7 7 Other property, plant and equipment 3 10 The salvage value and the useful life of the assets are revised, and if necessary adjusted, at each close of the Statements of financial position. a) Insurance The Group has taken out insurance policies to cover the risks to which the movable property, vehicles, equipment, plant and machinery are subject, including also loss of profits and/or business interruption loss. Empresas AquaChile and subsidiaries consider the coverage of these policies to be adequate for the risks inherent to their activity. The insurance policies kept by Empresas AquaChile and subsidiaries are detailed below: Asset type Risks covered Building, Facilities, Deterioration sustained by the assets as a result of fire and earthquake. Machinery and Equipment Deterioration sustained by the assets from damages caused by natural risks. Fire coverage and material damages as a direct consequence of striking, looting or popular disturbances. b) Financial leasing The assets acquired under the modality of financial leasing are classified in the heading Other property, plant and equipment. 141

144 NOTE 18 - CURRENT INCOME TAX AND DEFERRED TAX ITEMS Deferred taxes relate to the amount of tax on earnings which Empresas AquaChile and subsidiaries will have to pay (liabilities) or recover (assets) in future periods, related with temporary differences between the fiscal or taxable base and the carrying amount in books of certain assets and liabilities. The main deferred tax asset relates to tax losses of subsidiaries recoverable in future fiscal years. The main deferred tax liability payable in future fiscal years relates to temporary differences arising from manufacturing expenses, revaluation of biological assets and the revaluation of Property, plant and equipment on the date of transition to IFRS and by the application, for tax purposes, of accelerated depreciation. The deferred tax assets as of December 31, 2011, December 31, 2010 and January 1, 2010, relate to the following items: The breakdown of the deferred tax assets and liabilities is as follows: 12/31/ /31/ /01/2010 Classification Deferred Taxes Deferred tax Deferred tax Deferred tax Deferred tax assets Deferred tax assets Deferred tax assets liabilities liabilities liabilities Manufacturing expenses 16 22,231-13,357-11,286 Accelerated depreciation - 6,899-6,772-7,629 Fair value, biological assets 13,541 17,529-1,865-1,583 Licenses Tax loss 67,385-68,040-44,824 - Provisions 1,131 4,082 1,380 1,546 1,460 - Property, plant and equipment ,352-3,539 Valuation of inventories - 2,944-1, Others 996 3, , ,206 Total 83,216 57,056 70,052 33,055 46,753 27,073 Deferred taxes for temporary differences between the tax value and the book value generated by Investments in related companies have not been recognized. As of December 31, 2011, the deferred tax asset resulting from tax losses amounts to 67,385 (68,040 as of December 31, 2010 and 44,824 as of January 1, 2010). These losses are attributable to profits that may be generated in the future in the companies presenting this condition, according to the following breakdown: Deferred taxes resulting from tax losses in: Subsidiaries Deferred Tax from Tax Loss Variation with result effect 12/31/2011 Deferred Tax from Tax Loss Variation with result effect 12/31/ /31/ /31/ /31/ /01/2010 AquaChile S.A. 6,313 5, ,679 6,247 (568) Empresas Aquachile S.A. 41,935 42,736 (801) 42,736 16,675 26,061 Antarfish S.A. 11,922 13,260 (1,338) 13,260 14,410 (1,150) Salmones Chiloé S.A ,604 (1,471) Salmones Maullín S.A. 6,425 5, ,651 5, Alitec Pargua S.A (50) Total 67,385 68,040 (655) 68,040 44,824 23,216 With respect to the terms of the statute of limitations on tax losses that can be attributed to future profits, in the case of those generated in companies established in Chile they are not subject to the statute of limitations, unlike tax losses of companies established in Costa Rica, where the statute of limitation is 3 years. 142

145 The movement of deferred tax assets and liabilities is as follows: 12/31/ /31/2010 Movements, Deferred taxes Deferred tax assets Deferred tax liabilities Deferred tax assets Deferred tax liabilities Initial balance 70,052 33,055 46,753 27,073 Provision 372 (57) (80) - Anticipated revenues Vacations provision Manufacturing expenses 47 10,980-1,284 Accelerated depreciation (857) Fair value, biological assets 12,263 9, Provision ,333 Valuation of inventories ,439 Tax loss (497) 9 23,216 - Sea licenses Property, plant and equipment (187) Others 645 2, ,574 Total 83,216 57,056 70,052 33,055 To reflect the effect of the statutory modification of income tax, which raises the income tax rate in Chile from 17% to 20% for the year 2011 and to 18.5% for 2012, and going back to 17% in 2013, all credits (debits) to the result for deferred tax items from a difference in the tax versus financial valuation have been recorded, in connection with that proportion of the difference that is reversed in the aforementioned years. This effect is recorded in the consolidated statement of comprehensive income. The expense for income tax has the following composition: Expense for Income Tax by Foreign and Domestic Companies 12/31/ /31/2010 Deferred Taxes Tax expense, current (3,372) (2,368) Effect of deferred tax (10,837) 18,724 Total Tax, Current (14,209) 16,356 The following is a conciliation breakdown of the expense for income tax, using the statutory Rate with the expense for tax using the effective Rate. Conciliation of the expense for Income Tax 12/31/ /31/2010 Expenses for taxes using the Statutory Rate (13,232) (6,509) Taxation effect of other jurisdictions ratess (877) (1,024) Other charges for statutory taxes (100) 23,889 (14,209) 16,

146 NOTE 19 - OTHER FINANCIAL LIABILITIES, CURRENT AND NON-CURRENT As of December 31, 2011, Empresas AquaChile maintains a financial loan which is split into three long-term tranches. Loans earning interest Currency 12/31/ /31/2010 Less than 12 months to maturity Dollar 11,841 6,157 4,321 Interest payable, Banks Dollar 168 1,608 7,401 Total 12,009 7,765 11,722 01/01/2010 Loans earning interest Currency 12/31/ /31/ /01/2010 More than 12 months to maturity Dollar 184, , ,753 Total 184, , ,753 Additional information about the financial liabilities On June 24, 2011, Empresas AquaChile S.A. and its debtor subsidiaries proceeded to prepay US$163.2 million dollars of the debt held with their Participant Creditor Banks in accordance with the Liabilities Rescheduling Agreement dated September 7, Furthermore, and on the same date, accrued interest was paid in the amount of US$5.4 million dollars for the period between January 25, 2011 and June 24, The prepayment of capital and interest amounted to US$168.6 million dollars. Simultaneously, on the same date, June 24, 2011, the conditions of the remaining debt of US$242.5 million dollars were renegotiated. The debtor companies decided on the same date to pay and credit to Tranche B the sum of USS70.2 million dollars so that Tranche B would then be a line of credit available for when the Debtors see fit to use it. This use could be prorated to each of the banks, or one or some of them, depending on what is most suitable. At the same time, the debtor companies made a novation of their loans by then pooling the debts of this agreement with Empresas AquaChile S.A. and Salmones Chiloé S.A., who took them on as the new Debtors. To summarize, the main refinancing arrangements are as follows: a. The novated and rescheduled debt is divided into 3 tranches: A, B and C: Tranche A: for US$ 118 million dollars, with a term of 7 years, half-yearly interest payments and half-yearly amortization starting in December Tranche B: is financing commitment (line of credit) available for 70 million dollars, with a term of 4 years that can be extended. To date, US$10 million have been used. Tranche C: This tranche is subdivided into two sub-tranches: -Sub-tranche C-One: for US$ 31.7 million dollars, with a term of 7 years, half-yearly interest payments and half-yearly amortization starting in December Sub-tranche C-Two: for US$ 22.6 million dollars, with a 4-year bullet term and half-yearly interest payments. b. The interest rate applied to Tranche A relates to the rate fixed half-yearly based on the average cost of funds of the creditor banks plus a spread of 1.2% per annum. The interest rate applied to Tranche B can be determined in two ways: using the rate that is offered by whoever has been awarded the requested loan, or else, the average cost of funds plus a spread of 1.45% per annum if the disbursement of this tranche has been made pro rata among the creditors involved. The interest rate of Sub-tranche C one relates to a fixed rate of 3.2% per annum until January 23, 2013, and thereafter a rate based on the LIBOR plus a spread of 2.5% per annum. The interest rate of Sub-tranche C two relates to a fixed rate of 3.2% per annum until January 23, 2013, and thereafter a rate based on the LIBOR plus a spread of 2.5% per annum. 144

147 c. In addition, certain financial covenants are established. These obligations contemplate the fulfillment of certain financial covenants calculated using the Consolidated Financial Statements of Empresas AquaChile S.A. as of December 31, 2011 and as of March thirty-one, June thirty, September thirty and December thirty-first of the following years and they relate to maintaining a financial leverage ceiling, a minimum coverage of financial expenses and a ratio of net financial debt to maximum EBITDA. Covenants* 2011** through 2018 Financial Leverage (1) 1.25x 1.25x 1.20x 1.10x 1.0x 1.0x Interest expenses coverage (2) 4.5x 4.5x 4.5x 4.5x 4.5x 4.5x Net Fin. Debt / EBITDA (3) 2.5x 2.5x 2.2x 2.2x 2.0x 1.75x (1) (Total Current Liability plus Total Non-current Liability less Cash and Cash Equivalents) / (Total Equity) (2) EBITDA / (Financial Costs less Financial Revenues) (3) (Other Financial Liabilities, Current + Other Financial Liabilities, Non-current, less Cash and Cash Equivalents) / EBITDA. EBITDA: Revenues from ordinary activities less Costs of sales (i.e., Gross Earnings, pre-fair value), less Management expenses, less Distribution costs, plus Adjustment for depreciation and amortization. All these figures are obtained directly from the Income Statement and the Cash Flows Statement of the Company * Figures measured quarterly based on the last twelve months. ** Measured as of December 31, Breakdown of Debt Rescheduling Covenants Calculation June 2011 Financial Leverage < or equal to i) Net Debt: Total liabilities, current 130,969 Total liabilities, non-current 244,439 Less: Cash and Cash Equivalents (113,897) Total Net Debt 261,511 ii) Total Equity: Total Equity 451,097 Net Debt / Total Equity 0.58 The limit of this covenant is 1.25 and therefore it is compliant Net Financial Debt / EBITDA last twelve months < or equal to i) Net Financial Debt: Other financial liabilities, current 12,009 Other financial liabilities, non-current 184,648 Less: Cash and Cash Equivalents (113,897) Total Net Financial Debt 82,760 ii) EBITDA (last twelve months): Revenues from ordinary activities 501,151 Sales Costs (404,126) Plus: Cost of depreciation and amortization 19,273 Less: Administrative Expenses (17,861) Distribution Costs (3,082) Total EBITDA last twelve months 95,355 Net Financial Debt / EBITDA 0.87 The limit of this covenant is 2.5 and therefore it is compliant 145

148 Interest Expenses Coverage last twelve months > or equal to 4.5 i) EBITDA (last twelve months): Revenues from ordinary activities 501,151 Sales Costs (404,126) Plus: Cost of depreciation and amortization 19,273 Less: Administrative Expenses (17,861) Distribution Costs (3,082) Total EBITDA last twelve months 95,355 ii) Financial Costs: Financial Costs 13,972 iii) Financial Revenues Financial Revenues 1,632 Financial Expenses Coverage last twelve months (i (ii-iii)) 7.73 The limit of this covenant is 4.5 and therefore it is compliant d. The agreement provides for the possibility of voluntary early amortizations, as well as certain information covenants, positive and negative, inherent to these kinds of arrangements, in favor of the banks involved. e. In addition, 99 sea aquacultural licenses (book value 17,135 as of December 31, 2011) of Empresas AquaChile S.A., Aguas Claras S.A., Salmones Maullín Ltda., AquaChile S.A. and Salmones Chiloé S.A. were pledged as collateral, which were transformed into mortgages, and the remaining pledges on licenses established in the previous liabilities rescheduling agreement dated September 7, 2009, were released. f. Aguas Claras S.A. and Salmones Maullín Ltda. are established as reciprocal sureties and joint and several obligors in favor of the Banks, to guarantee the fulfillment of the obligations assumed by the Debtors in the terms, conditions and with the limitations established in the Agreement. It should be noted that Salmones Chiloé S.A. was not established as surety and joint and several obligor of the other related companies and the purpose of the guarantees which the latter established in favor of the Creditors was to guarantee its own obligations and not those of all the Debtors. g. The shares of AquaChile S.A., Salmones Maullín S.A., Aguas Claras S.A., Antarfish S.A., 93% of the shares of Salmones Chiloé S.A., and 60% of the shares of Piscicultura Aquasan S.A., were all pledged as collateral in favor of the Creditors to ensure the fulfillment of all obligations assumed by them. h. With this new credit agreement, the pledges on the shares issued by Empresas AquaChile S.A. which the shareholders had established previously were lifted, as were the mortgages on the real estate and the water exploitation rights, the pledges on ships and naval artifacts and on the trademarks they owned, all in favor of the creditors, which had been established as collateral for the fulfillment of all obligations assumed by the debtors in the liabilities rescheduling agreement dated September 7,

149 The breakdown of loans maintained by Empresas AquaChile and subsidiaries as of December 31, 2010 and January 1, 2010, is as follows: a) Current loans 12/31/2011 Country Creditor s name Currency Maturity Current 3 to 12 Current total Amortization Actual Nominal Indeterminate Securities up to 1 month 1 to 3 months months as of 12/31/2011 type rate rate Chile BBVA US$ Half-yearly 3.21% 3.21% Secured Chile BCI US$ Half-yearly 3.21% 3.21% Secured Chile BCI US$ Half-yearly 2.30% 2.30% Secured Chile BCI US$ Half-yearly 5.90% 5.39% Secured - - 2,776-2,776 Dutch Antilles Rabobank US$ Half-yearly 3.20% 3.20% Secured Chile B.Chile US$ Half-yearly 3.21% 3.21% Secured Chile Santander US$ Half-yearly 3.21% 3.21% Secured Chile B.Itau US$ Half-yearly 3.21% 3.21% Secured Chile Corpbanca US$ Half-yearly 2.20% 2.20% Secured Chile Corpbanca US$ Half-yearly 4.65% 4.65% Secured Chile Corpbanca US$ Half-yearly 6.98% 6.98% Secured Chile Corpbanca US$ Half-yearly 1.76% 1.76% Secured ,000 1,000 Chile B.Estado US$ Half-yearly 3.21% 3.21% Secured Costa Rica BNCR US$ Monthly 5.47% 5.47% Secured ,500 1,500 Costa Rica CitiGroup US$ Monthly 4.43% 4.43% Secured ,290 Costa Rica BCT US$ Monthly 6.50% 6.50% Unsecured ,943 4,111 Chile Llanos y Wames (Leasing) US$ Monthly - - Secured Chile IM Trust Forward US$ Totals ,906 7,961 12,009 12/31/2010 Country Creditor s name Currency Amortization type Actual rate Nominal rate Securities Indeterminate Maturity up to 1 month Current 1 to 3 months Chile BBVA US$ Half-yearly 3.04% 3.20% Secured Chile BCI US$ Half-yearly 4.31% 4.80% Secured ,770 2,770 Chile BCI US$ Half-yearly 3.04% 3.20% Secured Dutch Antilles Rabobank US$ Half-yearly 3.04% 3.20% Secured Chile B.Chile US$ Half-yearly 5.42% 5.42% Secured Chile B.Chile US$ Half-yearly 3.04% 3.20% Secured Chile Santander US$ Half-yearly 3.04% 3.20% Secured Chile B.Itau US$ Half-yearly 3.04% 3.20% Secured Chile Corpbanca US$ Half-yearly 1.75% 1.75% Secured - 4-1,002 1,006 Chile Corpbanca US$ Half-yearly 3.04% 3.20% Secured Chile B.Estado US$ Half-yearly 3.04% 3.20% Secured Chile BICE US$ Half-yearly 4.31% 4.31% Secured ,091 1,091 Chile BICE US$ Half-yearly 3.04% 3.20% Secured Costa Rica CitiGroup US$ Monthly 3.93% 3.93% Secured ,244 1,260 3 to 12 months Total current As of 12/31/2010 Totals - 1,608-6,157 7,765 01/01/2010 Country Creditor s name Currency Amortization type Actual rate Nominal rate Securities Indeterminate Maturity up to 1 month Current 1 to 3 months Chile BBVA US$ Half-yearly 3.04% 3.20% Secured - 1, ,713 Chile BCI US$ Half-yearly 4.41% 4.41% Secured ,769 2,769 Chile BCI US$ Half-yearly 3.04% 3.20% Secured - 1, ,011 Dutch Antilles Rabobank US$ Half-yearly 3.04% 3.20% Secured Chile B.Chile US$ Half-yearly 3.04% 3.20% Secured Chile Santander US$ Half-yearly 3.04% 3.20% Secured Chile B.Itau US$ Half-yearly 3.04% 3.20% Secured Chile Corpbanca US$ Half-yearly 1.43% 1.43% Secured ,002 1,002 Chile Corpbanca US$ Half-yearly 3.04% 3.20% Secured Chile B.Estado US$ Half-yearly 3.04% 3.20% Secured Chile Bice US$ Half-yearly 4.41% 4.41% Secured ,552 1,552 Chile Bice US$ Half-yearly 3.04% 3.20% Secured Costa Rica CitiGroup US$ Monthly 3.90% 3.90% Secured ,196 1,196 3 to 12 months Total current As of 12/31/2010 Totals - 5,203-6,519 11,

150 b) Non-current loans 12/31/2011 Maturity Total Amortization Actual Nominal Country Creditor s name Currency Securities 5 years or non-current type rate rate 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years more as of 12/31/2011 Chile BBVA US$ Half-yearly 3.21% 3.21% Secured 2,513 6,282 8,795 11,308 21,360 50,258 Chile BCI US$ Half-yearly 3.21% 3.21% Secured 1,360 3,400 4,760 6,120 11,559 27,199 Chile BCI US$ Half-yearly 2.30% 2.30% Secured , ,000 Dutch Antilles Rabobank US$ Half-yearly 3.20% 3.20% Secured 1,584 3,964 27,810 7,135 13,477 53,970 Chile B.Chile US$ Half-yearly 3.21% 3.21% Secured 434 1,085 1,520 1,953 3,691 8,683 Chile Santander US$ Half-yearly 3.21% 3.21% Secured 518 1,294 1,811 2,329 4,399 10,351 Chile B.Itau US$ Half-yearly 3.21% 3.21% Secured 447 1,117 1,564 2,011 3,798 8,937 Chile Corpbanca US$ Half-yearly 3.21% 3.21% Secured ,075 1,382 2,610 6,142 Chile B.Estado US$ Half-yearly 3.21% 3.21% Secured ,176 1,512 2,856 6,720 Costa Rica CitiGroup US$ Monthly 4.43% 4.43% Secured - - 1, ,214 Costa Rica BCT US$ Monthly 8.00% 8.00% Unsecured Subtotals 7,499 18,896 59,784 34,719 63, ,648 Totals 7,499 18,896 59,784 34,719 63, ,648 12/31/2010 Maturity Total Amortization Actual Nominal Country Creditor s name Currency Securities 5 years or non-current type rate rate 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years more as of 12/31/2011 Chile BBVA US$ Half-yearly 3.04% 3.20% Secured ,608 7, , ,669 Chile BCI US$ Half-yearly 3.04% 3.20% Secured ,316 4,632 71,421 78,832 Dutch Antilles Rabobank US$ Half-yearly 3.04% 3.20% Secured ,586 3,171 48,897 53,971 Chile B.Chile US$ Half-yearly 3.04% 3.20% Secured ,479 22,805 25,171 Chile Santander US$ Half-yearly 3.04% 3.20% Secured ,762 27,181 30,000 Chile B.Itau US$ Half-yearly 3.04% 3.20% Secured ,522 23,465 25,900 Chile Corpbanca US$ Half-yearly 1.75% 1.75% Secured 1, ,000 Chile Corpbanca US$ Half-yearly 3.04% 3.20% Secured ,046 16,126 17,800 Chile B.Estado US$ Half-yearly 3.04% 3.20% Secured ,145 17,648 19,481 Chile BICE US$ Half-yearly 3.04% 3.20% Secured ,135 8,980 Costa Rica CitiGroup US$ Monthly 3.93% 3.93% Secured 3, ,987 Subtotals 4,987 2,251 11,251 22, , ,791 Refinancing expenses (957) (957) Totals 4,987 2,251 11,251 22, , ,834 01/01/2010 Maturity Total Amortization Actual Nominal Country Creditor s name Currency Securities 5 years or non-current type rate rate 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years more as of 12/31/2011 Chile BBVA US$ Half-yearly 3.04% 3.20% Secured , , ,611 Chile BCI US$ Half-yearly 3.04% 3.20% Secured ,316 76,053 78,832 Dutch Antilles Rabobank US$ Half-yearly 3.04% 3.20% Secured ,763 57,885 60,001 Chile B.Chile US$ Half-yearly 5.42% 5.42% Secured Chile B.Chile US$ Half-yearly 3.04% 3.20% Secured ,100 31,200 Chile Santander US$ Half-yearly 3.04% 3.20% Secured ,943 30,000 Chile B.Itau US$ Half-yearly 3.04% 3.20% Secured ,987 25,900 Chile Corpbanca US$ Half-yearly 1.43% 1.43% Secured 2, ,000 Chile Corpbanca US$ Half-yearly 3.04% 3.20% Secured ,172 17,800 Chile B.Estado US$ Half-yearly 3.04% 3.20% Secured ,793 19,481 Chile BICE US$ Half-yearly 3.04% 3.20% Secured ,663 8,979 Costa Rica CitiGroup US$ Monthly 3.90% 3.90% Secured 4, ,806 Subtotals 6,906-2,250 11, , ,710 Refinancing expenses (957) (957) Totals 6,906-2,250 11, , ,

151 NOTE 20 - TRADE ACCOUNTS AND OTHER ACCOUNTS PAYABLE The items contained in this heading are as follows: Trade accounts payable and other accounts payable, current 12/31/ /31/2010 Suppliers 95,608 73,564 56,909 Withholdings from personnel 1,336 1,921 3,324 Vacations provision 2,621 1,361 1,282 Personnel remunerations 3,549 1,933 2,653 Sundry creditors 7,478 1, Others Total 111,018 80,385 65,143 01/01/2010 Other accounts payable, non-current 12/31/ /31/2010 Accounts payable 2,735 3,963 1,762 Total 2,735 3,963 1,762 01/01/2010 NOTE 21 - ISSUED CAPITAL The objectives of Empresas AquaChile and subsidiaries when managing the capital are to safeguard the ability to continue as a going concern, for the purpose of generating returns for their shareholders and benefits for other stakeholders, and maintaining an optimal structure to reduce the cost of the capital. Consistent with the industry, Empresas AquaChile and subsidiaries monitor their capital on the basis of the leverage ratio. This ratio is calculated by dividing the net debt by the total capital. The net debt relates to the total indebtedness (including current and non-current indebtedness) less cash and cash equivalents. The total capital relates to the net equity, as shown in the consolidated position statement. In this respect, Empresas AquaChile and subsidiaries have combined different financing sources, such as: flows of the operation, bank loans, etc. To date, the Company s subscribed and paid-in capital is two hundred twenty-seven million nine hundred eighty-one thousand one hundred forty-eight dollars (227,981) which is divided into one billion one hundred fifty-seven million shares (1,157,000,000). a) Capital The Company s issued, subscribed and paid-in capital is composed as follows: Series Subscribed Capita Paid-in Capital No Series 150, ,581 Capital Expansion 77,400 77,400 Total 227, ,981 Movements No. of Shares Common shares Total Initial balance as of 01/01/ ,000, ,000, ,000,000 Capital increase 387,000, ,000, ,000,000 Balance as of 12/31/2011 1,157,000,000 1,157,000,000 1,157,000,000 b) Dividends policy For purposes of determining the Company s distributable liquid profit to be considered for the calculation of dividends with regard to the 2011 fiscal year, the following shall be excluded from the fiscal year profit or loss: 1) Unrealized profits or losses, tied to the recording at fair value of biological assets regulated by the accounting standard IAS 41, reincorporating them into the liquid profit at the time of their realization. For these purposes, the portion of such increases in fair value relating to the assets sold or disposed of by any other means shall be considered realized. 2) Unrealized profits or losses generated during the acquisition of other entities and, in general, those unrealized profits or losses that stem from the application of paragraphs 34, 42, 39 and 58 of the accounting standard International Financial Reporting Standard 149

152 No. 3, revised, regarding business combination operations. These profits or losses will also be reincorporated with the liquid profit at the time of their realization. For these purposes, profits or losses will be deemed realized as the entities acquired generate profits after their acquisition, or whenever these entities are sold. 3) The effects of deferred taxes associated with the items mentioned in 1) and 2) will follow the same fate as the entry that originated them. 4) Dividend Provision For the 2011 period, the Company is presenting no provisional dividends as mentioned in Note c) Distribution of Shareholders As of December 31, 2011, the companies or natural persons holding 1% or more of the capital stock are detailed below. The actual concentration of these amounts to 83.3% Name or Business Name Tax ID N of Shares % Equity Fondo de Inversión Privado Patagonia ,115, % Fondo de Inversión Privado Aqua ,000, % Inversiones Acuícolas S.A ,115, % Inversiones Megeve Capital Ltda ,583, % IM Trust S.A. Corredores de Bolsa ,639, % Celfin Capital S.A. Corredores de Bolsa ,619, % Inversiones Megeve Dos Ltda ,375, % Banchile Corredores de Bolsa S.A ,808, % Larraín Vial S.A. Corredores de Bolsa ,215, % Moneda S.A. AFI Para Pionero Fondo de Inversión ,596, % NOTE 22 - ACCUMULATED GAINS (LOSSES) The composition of the accumulated Profit or Loss account is as follows: Accumulated profit or loss 12/31/ /31/2010 Initial balance (137,898) (194,511) Comprehensive result of revenues and expenses 53,148 56,372 Other equity variations Total accumulated profit or loss (84,750) (137,898) Breakdown of the IFRS first-adoption adjustments recorded in the heading of accumulated gains (losses), as required by Directive No. 1,945 of the Chilean Securities and Insurance Supervisor dated September 29, Item 01/01/ /31/ /31/2011 Balance to be Realized Amount Realized Amount Realized Amount Realized Balance to be Realized Negative goodwill 4,783 (4,783) - - Goodwill (326) (326) (326) Intangibles 4,885 4,885 4,885 Biological assets 9,312 (9,312) Property, plant and equipment 1,706 1,706 1,706 Liabilities with banks 1,192 1,192 (1,192) - Deferred taxes (2,906) 2,396 (510) 203 (307) Other adjustments 8,303 8,303 (378) 7,925 Total 26,949 (11,699) 15,250 (1,367) 13,

153 NOTE 23 - OTHER RESERVES The composition of the Other reserves account is as follows: Other reserves 12/31/2011 Initial balance (522) - Registration expenses for securities registry 522 (522) Total Minority Equity - (522) 12/31/2010 NOTE 24 NON-CONTROLLING INTERESTS This relates to the recognition of the equity value and profit or loss of subsidiaries belonging to Minority investors. Non-controlling interests 12/31/ /31/ /01/2010 Equity interest % % % Aquainnovo S.A (59) (126) (56) Salmones Chiloe S.A , , ,386 Procesadora Hueñocoihue Ltda (100) Piscicultura Aquasan S.A , , ,553 Grupo ACI S.A , , ,638 Alitec Pargua S.A , , ,504 Total non-controlling interests 21,384 19,811 22,085 Non-controlling interests 12/31/ /31/2010 Interest in profit or loss % % Aquainnovo S.A (73) Salmones Chiloé S.A Procesadora Hueñocoihue Ltda (160) Piscicultura Aquasan S.A Grupo ACI S.A Alitec Pargua S.A Total gain attributable to non-controlling interests 1,728 1,

154 NOTE 25 GAIN PER-SHARE AND DISTRIBUTABLE LIQUID PROFIT Gain per-share The breakdown of per-share gains is as follows: Basic per-share gains 12/31/ /31/2010 Gain (loss), attributable to proprietors of the holding company 53,148 56,372 Gain (loss), attributable to non-controlling interests 1,728 1,721 Result available to shareholders 54,876 58,093 Weighted average of number of shares 963,500, ,000,000 Gains (losses), basic per-share (US$/Share) The calculation of the basic per-share gains (losses) has been made by dividing the amounts of the profit attributable to the shareholders by the number of shares of the single series. The Company has not issued convertible debt or other equity securities. Consequently there are no potentially diluting effects on the per-share revenues of the Company Distributable liquid profit The dividends policy for the 2011 period consists in distributing as a dividend 30% of the liquid profit of the fiscal year ended on December 31, 2011, by sharing a final dividend, to be decided by the Ordinary Shareholders Meeting, payable on the date specified at such meeting. Under the provisions of Directive No of the SVS, dated September 29, 2009, as a general policy it is considered that the liquid profit for purposes of the payment of the 30% compulsory minimum dividend, established by Article 79 of Law 18,046, will be determined on the basis of the profit stripped of those relevant variations of the fair value of the assets and liabilities that are not realized, which must be reincorporated into the calculation of the liquid profit of the fiscal year in which such variations are realized. The additional dividends will be determined based on the aforementioned criteria, in accordance with the resolution adopted in that respect by the Shareholders Meeting. Consequently, for the purposes of determining the Company s distributable liquid profit, i.e. the liquid profit to be considered for the calculation of the compulsory minimum dividend with respect to the 2011 period, the following aspects will be excluded from the fiscal year s profit or loss: i) Unrealized profits or losses, tied to the recording at fair value of biological assets regulated by the accounting standard IAS 41, reincorporating them into the liquid profit at the time of their realization. For these purposes, the portion of such increases in fair value relating to the assets sold or disposed of by any other means shall be considered realized. ii) Unrealized profits or losses generated during the acquisition of other entities and, in general, those unrealized profits or losses that stem from the application of business combination operations. These profits or losses will also be reincorporated with the liquid profit at the time of their realization. For these purposes, profits or losses will be deemed realized as the amounts acquired generate profits after their acquisition, or whenever these entities are sold. iii) The effects of deferred taxes associated with the items mentioned in ii) will follow the same fate as the entry that originated them. For the 2011 period, the Company is presenting no provisional dividends as mentioned in Note NOTE 26 - ORDINARY REVENUES The composition of the Group s revenues is as follows: Ordinary revenues 12/31/ /31/2010 Sales, Salmon and Sea Trout 338, ,353 Sales, Tilapia 63,665 63,679 Sales, Fish feed 98,130 68,338 Sales, Other Total 501, ,

155 NOTE 27 - OTHER REVENUES AND OTHER EXPENSES BY FUNCTION The composition of the Group s revenues is as follows: Other revenues by function 12/31/2011 Reverse, provisions of assets Recovery of expenses 55 - Sales of fixed assets Sales of sea licenses 3 1,287 Sundry sales 306 2,521 Leases earned Company contribution, Law CORFO (Production Development Corporation) Subsidies Others 893 2,568 Total 2,204 8,035 12/31/2011 Other Expenses by function 12/31/ /31/2010 Taxes, fines and interest (189) (173) Others (617) (378) Restructuring Expenses - (3,650) Write-offs and cancellations of fixed assets (2,202) (1,266) Sundry amortizations (53) (288) Loss, minor sales (14) (515) Contributions and donations (21) (155) Total (3,096) (6,425) NOTE 28 ADMINISTRATIVE AND DISTRIBUTION EXPENSES 1) Administrative Expenses Administrative expenses 12/31/ /31/2010 Personnel expenses (8,933) (7,888) Services of third parties (3,293) (2,969) General expenses (5,126) (3,649) Depreciation and amortization (509) (3,394) Total (17,861) (17,900) a) Personnel Expenses The personnel expenses are detailed below: Personnel expense 12/31/ /31/2010 Personnel remunerations (8,053) (7,041) Personnel provision (880) (847) Total (8,933) (7,888) b) Depreciation and Amortization Depreciation and amortization are detailed below: Depreciation and Amortization 12/31/ /31/2010 Depreciation (507) (3,106) Amortization (2) (288) Total (509) (3,394) 153

156 2) Distribution Cost Below are the main distribution expenses of the Company at the close of the fiscal year: Distribution costs 12/31/ /31/2010 Promotion and marketing (1,401) (1,024) Shipping expenses (629) (239) Storage expenses (494) (268) Other sales expenses (558) (1,162) Total (3,082) (2,693) NOTE 29 - FINANCIAL COSTS The breakdown of the financial costs is as follows: Financial Costs 12/31/ /31/2010 Financial interest (12,810) (10,696) Other expenses (1,162) (825) Total (13,972) (11,521) NOTE 30 - EXCHANGE-RATE DIFFERENCES OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY a) Exchange-rate difference recognized in profit or loss The exchange-rate differences generated as of December 31, 2011 and 2010 for balances of assets and liabilities in foreign currencies, other than the functional currency, were transferred (charged) to profit or loss according to the following breakdown: Exchange-rate difference 12/31/ /31/2010 Assets in foreign currency (782) 1,956 Liabilities in foreign currency 2,102 (1,364) Total 1,

157 b) Assets and liabilities in foreign currency Below are the assets and liabilities summarized by currency: Types of current assets Currency 12/31/ /31/2010 Cash and cash equivalents Pesos, non-realignable 671 3, Cash and cash equivalents Costa Rican colons 1, ,079 Cash and cash equivalents Dollars 111,503 24,178 24,290 Cash and cash equivalents Yens Cash and cash equivalents Euros Subtotal, Cash and cash equivalents 113,897 28,416 28,469 Other financial assets, current Dollars Other financial assets, current Other non-financial assets, current Costa Rican colons Other non-financial assets, current Pesos, non-realignable Other non-financial assets, current Dollars 1,776 2, Subtotal, Other non-financial assets, current 2,693 2,204 1,346 Trade debtors and other accounts receivable, current Pesos, non-realignable 19,518 4,546 20,120 Trade debtors and other accounts receivable, current Dollars 76,926 64,153 31,306 Trade debtors and other accounts receivable, current Pesos, realignable - 13,037 3 Trade debtors and other accounts receivable, current Euros Trade debtors and other accounts receivable, current Costa Rican colons - 1,145 1,200 Subtotal, Trade debtors and other accounts receivable, current 96,444 82,883 52,632 Accounts Receivable from Related Entities, current Dollars 4, /01/2010 Accounts Receivable from Related Entities, current Pesos, non-realignable 2, Subtotal, Accounts Receivable from Related Entities, current 6, Inventories Dollars 45,052 21,829 28,789 Inventories Pesos, non-realignable Subtotal, Inventories 45,052 21,829 28,789 Biological assets, current Dollars 168, ,894 87,773 Biological assets, current 168, ,894 87,773 Tax assets, current Pesos, realignable ,443 Tax assets, current Pesos, non-realignable 2, Tax assets, current Dollars 983 1, Subtotal, Tax assets, current 4,244 2,088 3,501 Types of non-current assets Currency 12/31/ /31/2010 Other financial assets, non-current Dollars 10, Subtotal, Other financial assets, non-current 10, Fees receivable, non-current Dollars 150 1,150 - Subtotal, Fees receivable, non-current 150 1,150 - Other non-financial assets, non-current Dollars 1, Other non-financial assets, non-current Pesos, non-realignable Subtotal, Other non-financial assets, non-current 1, Accounts Receivable from Related Entities, non-current Dollars 1, Subtotal, Accounts Receivable from Related Entities, non-current 1, Investments in associates carried by the equity method Dollars 4, Subtotal, Investments in associates carried by the equity method 4, Intangible assets other than goodwill Dollars 37,326 35,416 34,830 Subtotal, Intangible assets other than goodwill 37,326 35,416 34,830 Goodwill Dollars 51,448 51,448 50,277 Subtotal, Goodwill 51,448 51,448 50,277 Property, Plant and Equipment Dollars 166, , ,524 Subtotal, Property, Plant and Equipment 166, , ,524 Biological assets, non-current Dollars 33,145 6,947 8,706 Subtotal, Biological assets, non-current 33,145 6,947 8,706 Deferred tax assets Dollars 83,216 70,052 46,753 01/01/2010 Subtotal, Deferred tax assets 83,216 70,052 46,

158 Types of current liabilities 12/31/ /31/2010 Other financial liabilities, current Dollars 12,009 7,765 11,722 Subtotal, Other financial liabilities, current 12,009 7,765 11,722 Trade accounts and other accounts payable, current Dollars 68,105 55,904 38,515 Trade accounts and other accounts payable, current Costa Rican colons 4,895 3,798 2,873 Trade accounts and other accounts payable, current Pesos, non-realignable 38,018 20,683 23,290 Trade accounts and other accounts payable, current Euro Trade accounts and other accounts payable, current Pesos, realignable Subtotal, Trade accounts and other accounts payable, current 111,018 80,385 65,143 Accounts Payable to Related Entities, current Dollars 2,203 1, Accounts Payable to Related Entities, current Pesos, realignable Subtotal, Accounts Payable to Related Entities, current 2,203 1, Tax Liabilities, current Dollars 3,372 2,368 5 Subtotal, Tax Liabilities, current 3,372 2,368 5 Current provisions for employee benefits Pesos, realignable Subtotal, Current provisions for employee benefits Other non-financial liabilities, current Dollars 2, Other non-financial liabilities, current Pesos, realignable Subtotal, Other non-financial liabilities, current 2, Other financial liabilities, non-current Dollars 184, , ,753 Subtotal, Other financial liabilities, non-current 184, , ,753 Other accounts payable, non-current Dollars 2,735 3,963 1,762 Subtotal, Other accounts payable, non-current 2,735 3,963 1,762 Deferred tax liability Dollars 53,747 33,055 27,073 01/01/2010 Deferred tax liability Costa Rican colons 3, Subtotal, Deferred tax liability 57,056 33,055 27,

159 NOTE 31 - CONTINGENCIES a) Bonds obtained from third parties At the close of this balance sheet, the Company has not received relevant bonds from third parties. b) Court cases or other legal actions. b.1) Mentioned below are the most significant suits against the Empresas AquaChile group, including all those with a minimal possibility of the occurrence of liabilities, whose claimed amounts are above 100. This list also considers those in which the claimed amounts are undefined. 1. Fishing Suits. Empresas AquaChile S.A. (parent) 1) Sernapesca versus Empresas AquaChile S.A., case no Court of First Instance and Criminal Proceedings of Castro. Matter: Infringement of RAMA 7, RESA 8 y and sanitary programs. Value: 50 to 3,000 UTM 9. Pending summons to hear judgment. Outcome uncertain. 2) Sernapesca versus Empresas AquaChile S.A., case no , Court of First Instance of Aysén. Matter: Infringement of RAMA and RESA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 3) Sernapesca versus Empresas AquaChile S.A., case no , Court of First Instance of Castro. Matter: Infringement of LGPA and RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 4) Sernapesca versus Empresas AquaChile S.A., case no , 1 Court of First Instance of Puerto Montt. Matter: Infringement of LGPA 10. Cuantía: 50 a UTM. Value: 50 to 3,000 UTM. Pending evidentiary procedural measures. Outcome uncertain. Of the affiliates: Aquachile S.A. 5) Sernapesca versus AquaChile S.A., case no , Court of First Instance and Criminal Proceedings of Puerto Aysén. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending the trial period, which is suspended by agreement of the parties. Outcome uncertain. 6) Sernapesca versus AquaChile S.A., case no , 2nd Civil Court of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Current status: Pending evidentiary hearing. Outcome uncertain. 7) Sernapesca versus AquaChile S.A., case no , 2nd Civil Court of Temuco. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending the trial period. Outcome uncertain. 8) Sernapesca versus AquaChile S.A., case no , 1st Civil Court of Puerto Montt. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending judgment. Outcome uncertain. 9) Sernapesca versus AquaChile S.A., case no , Court of First Instance of Castro. Matter: Infringement of RESA. Value: 50 to 3,000 UTM. Current status: pending defense hearing. Outcome uncertain. 10) Sernapesca versus AquaChile S.A., case no , 1st Civil Court of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Current status: pending judgment. Outcome uncertain. Salmones Maullín Limitada 11) Sernapesca versus Acuimag and Salmones Maullín Ltda., case no , 3rd Civil Court of Punta Arenas. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Licenses in which the infringement occurred was transferred by Salmones Maullín Limitada to Acuimag S.A., before the event which gave rise to it took place, hence for the Company it cannot represent an unfavorable contingency. 12) Sernapesca versus Salmones Maullín Ltda., case no , 1st Civil Court of Puerto Montt. Matter: Infringement of RAMA and RESA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 13) Sernapesca versus Salmones Maullín S.A., case no , 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA, RESA and RAMA. Value: 50 to 3,000 UTM. Pending trial period. Outcome uncertain. 7 RAMA: Reglamento Ambiental de la Acuicultura (Environmental Regulations on Aquaculture) 8 RESA: Reglamento Sanitario de la Acuicultura (Sanitary Regulations on Aquaculture) 9 Minimum to maximum range of the penalty contemplated in the legislation 10 LGPA: Ley General de Pesca y Acuicultura (General Law on Fisheries and Aquaculture) 157

160 Aguas Claras S.A. 14) Sernapesca versus Aguas Claras S.A., case no , 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending trial period. Outcome uncertain. 15) Sernapesca versus Aguas Claras S.A., case no , 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. By a decision of the court, the proceedings were set back to the state where service of process is to be made again. Outcome uncertain. 16) Sernapesca versus Aguas Claras S.A., case no , Court of First Instance of Castro. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 17) Sernapesca versus Aguas Claras S.A., case no , Court of First Instance of Castro. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 18) Sernapesca versus Aguas Claras S.A., case no , 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending defense hearing. Outcome uncertain. 19) Sernapesca versus Aguas Claras S.A., case no , 1st Court of First Instance of Puerto Montt. Matter: Infringement of RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. Salmones Cailín S.A. 20) Sernapesca versus Pesquera Palacios S.A. (now Salmones Cailín S.A.), case no , Court of First Instance of Castro. Matter: Infringement of LGPA, RESA and RAMA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 21) Sernapesca versus Salmones Cailín S.A., case no , Court of First Instance of Quellón. Matter: Infringement of LGPA, RESA and RAMA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. Pesquera Antares S.A. 22) Sernapesca versus Pesquera Antares S.A., case no , 1st Court of First Instance of Puerto Montt. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. Salmones Chiloé S.A. 23) Sernapesca versus Salmones Chiloé S.A., case no , 1st Court of First Instance of Puerto Montt. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. 24) Sernapesca versus Salmones Chiloé S.A., case no , Court of First Instance of Castro. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 25) Sernapesca versus Salmones Chiloé S.A., case no , Court of First Instance of Castro. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending evidentiary hearing. Outcome uncertain. 26) Sernapesca versus Salmones Chiloé S.A., case no , Court of First Instance of Chaitén. Matter: Infringement of RESA and RAMA. Value: 50 to 3,000 UTM. Pending measures to secure additional facts. Outcome uncertain. 27) Sernapesca versus Salmones Chiloé S.A., case no , Court of First Instance of Castro. Matter: Infringement of LGPA. Value: 50 to 3,000 UTM. Pending pronouncement of judgment. Outcome uncertain. Piscicultura Aquasan S.A. 28) Hinrichsen versus Piscicultura Aquasan S.A. and Andrés Moya, Case No.: C nd Civil Court of Valdivia. Matter: Infringement of RAMA. Value: 50 to 3,000. Favorable judgment, notification pending. 2. Civil Actions Of the parent company: 1) Empresas AquaChile S.A. versus Chile Sur S.A., case no , 22nd Civil Court in Santiago. Matter: Payment by Tender of Delivery of the total balance of price of purchase and sale of aquacultural licenses Repollal and Laguna Cuervo, as a consequence of the failure of the creditor s representative s to appear at the respective domicile for payment and then being unable to locate the representative and the company at the designated domiciles. Payment procedure was begun on February 24, 2009, with an offer of payment by Notary Public, which was unable to take place because the representative and the company could not be located at the designated domiciles. Accordingly, tender of payment was made at the Treasury General of the Republic on March 18, 2009, by a demand promissory note issued on March 10, A request was made for service of process of the tender of delivery on May 6, Value: $8,135,530. In this action, the Company is the plaintiff; therefore, there can be no possible liabilities from this ) Chile Sur S.A. versus Empresas AquaChile S.A., case no , 28th Civil Court in Santiago, begun on December 23, Matter: termination of contracts with indemnification for losses owing to nonpayment of the balance of the purchase and

161 sale prices of two aquacultural licenses.. Value: US$176,666, for the following items: contractual penalty, US$13,333 per license; losses estimated by the defendant, US$150,000. The case to be tried was received and the motions for reconsideration filed are pending. Given the impossibility of making payment of the balance of the purchase and sale price of two aquacultural licenses acquired by Empresas AquaChile S.A. (amounting to US$5,000 in each case), as neither the creditor nor its representatives are locatable, on February 24, 2009, Empresas AquaChile S.A. began a proceeding for payment by tender of delivery, making an offer of payment by means of a notary public. This could not be done as the neither the representative nor the company could be located at the designated domiciles, so delivery of the full amount of the balance of the price of both purchases was tendered with the Treasury General of the Republic on March 18, 2009, and the service of process of this was applied for in the suit styled as Empresas AquaChile S.A. versus Chile Sur S.A., case no , of the 22nd Civil Court in Santiago. All of this was done long before the action for termination of contract, as explained in a previous note relating to this suit. As the price balances claimed have been paid, this action should not constitute a potential liability for the Company. 3) Empresas AquaChile S.A. has sued for fulfillment of an insurance contract with a loss indemnity against RSA Seguros Chile S.A., for the sum of US$2,999,746 (two million nine hundred ninety-nine thousand seven hundred forty-six United States dollars), or any higher or lower sum deemed admissible under the law by the arbitration judge hearing the case, plus current interest and the adjustments and costs of the trial. The action is being processed before Arbitration Judge Andrés Cuneo Macchiavello, who has ordered RSA Seguros Chile S.A. to answer the complaint. The complaint is claiming the payment of indemnification for the losses sustained since November 8, 2008, at the Aquacultural Centers owned by Empresas AquaChile S.A., named Avellano and Mena, both located in the Melinka Sector of the Tenth Region, in which the phenomenon known as algal bloom occurred. These losses were insured by RSA Seguros Chile S.A. Of the affiliates AquaChile S.A. 4) Barría versus AquaChile S.A., case no , Court of First Instance of Puerto Aysén. Matter: Civil action for indemnification of losses for death of a contractor company s worker, resulting from the Aysén tsunami in the year Notice was served on the defendant through an attorney-in-fact who does not bear the representation of the company. It was therefore annulled by the court, and to date, the defendant has not been served through a qualified attorney-in-fact. Defense was assumed by the insurance company, after consideration that this is an event covered under civil liability insurance. Value: $1,400,000,000. A favorable outcome for the Company is expected. 5) González versus AquaChile S.A., case no , Court of First Instance of Puerto Aysén. Matter: Civil action for indemnification of losses for death of a contractor company s worker, resulting from the Aysén tsunami in the year Notice was served on the defendant through an attorney-in-fact who does not bear the representation of the company. It was therefore annulled by the court, and to date, the defendant has not been served through a qualified attorney-in-fact. Defense was assumed by the insurance company, after consideration that this is an event covered under civil liability insurance. Value: $1,400,000,000. A favorable outcome for the Company is expected. Aguas Claras S.A. 6) Oliva versus Aguas Claras S.A., case no , 2nd Civil Court of Puerto Montt. Matter: Ordinary civil action for indemnification of losses. Value: $140,500,000. Plaintiff s are seeking indemnification for losses resulting from damages caused to their mytilidae center s facilities. Pending trial period. Attorneys in charge of the case expect a favorable outcome for the Company. 7) Navarro versus Aguas Claras S.A., case no , Court of First Instance of Castro. Matter: Ordinary civil action for indemnification of losses from diving accident. Value: $240,000,000. Pending pronouncement of judgment. Outcome uncertain. b.2) Mentioned below are the most significant suits against AquaChile, including all those with a minimal possibility of the occurrence of liabilities, whose claimed amounts are less than

162 1. Labor Suits Of the affiliates: AquaChile S.A. 1) Renin versus Comercial Aquatek Chile Limitada et al. Case no.: st Civil Court of Puerto Montt. Matter: Unfair Dismissal, annulment of subcontractor dismissal. Value: indeterminate; if the Company loses the case, it would have to pay the remunerations up to the full payment of social security dues. Employee s wages $347,443, loss-of-income compensation and proportional vacation pay. Pending notice to the other co-defendants, Comercial Aquatek Chile Ltda., Pesquera Camanchaca S.A. and Marine Harvest Chile S.A. Aguas Claras S.A. 2) Sindicato de Trabajadores Empresa Aguas Claras S.A. versus Servicios de Aguas Claras S.A. Case no.: st Civil Court of Puerto Montt. Matter: Suit for collection of labor benefits. Value: 136 UF (Unidad de Fomento, literally development unit, a Chilean unit of account). Pending pronouncement of judgment. 3) Sindicato de Trabajadores Empresa Aguas Claras S.A. versus Servicios de Aguas Claras S.A. Case no.: nd Civil Court of Puerto Montt. Matter: Suit for collection of labor benefits. Value: $10,000,000. Pending pronouncement of judgment. 2. Labor Claims. Of the affiliates: AquaChile S.A. 1) Aquachile versus Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 3 UTM. A finding was handed down maintaining the fine of 3 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 25, Consequently, this action ended after December 31, ) Aquachile versus Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 100 UTM. Pending pronouncement of judgment. 3) Aquachile versus Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 40 UTM. A finding was handed down maintaining the fine of 40 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 31, Consequently, this action ended after December 31, ) Aquachile versus Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 40 UTM. Pending pronouncement of judgment. 5) Aquachile versus Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 4 IMM. Pending pronouncement of judgment. 6) Aquachile versus Labor Inspection. Case no.: nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 40 UTM. A finding was delivered maintaining the fine of 40 UTM, which was appealed and is now pending in the Puerto Montt Court of Appeals. 7) Aquachile versus Labor Inspection. Case no.: nd Civil Court of Puerto Montt. Matter: Administrative fine claim. Value: 60 UTM. A finding was delivered lowering the fine from 60 UTM to 20 UTM, which was appealed at the Puerto Montt Court of Appeals. This appeal is pending. Antarfish S.A. 8) Antarfish versus Labor Inspection, case no , 2nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 3.5 UTM. Pending pronouncement of judgment. Outcome uncertain. 160 Aguas Claras S.A. 9) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. Pending pronouncement of judgment. 10) Aguas Claras S.A., versus Regional Labor Bureau Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. Pending pronouncement of judgment. 11) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 140 UTM. A finding was handed down lowering the fine from 140 UTM to 53 UTM, which was upheld by the Court of Appeals of Puerto Montt on February 25, Consequently, as of December 31, 2011, this action is now ended. 12) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. A finding was handed down lowering the fine from 100 UTM to 40 UTM, which was upheld by the Court of Appeals of Puerto Montt on January 17, ) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim.

163 Value: 10 UTM. A finding was handed down maintaining the fine of 10 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 31, Consequently, this action ended after December 31, ) Aguas Claras S.A., versus Regional Labor Bureau Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 120 UTM. A finding was handed down maintaining the fine of 120 UTM, which was upheld by the Court of Appeals of Puerto Montt, on January 17, Consequently, this action ended after December 31, ) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. First-instance finding upheld fine. Pending decision from the Court of Appeals of Puerto Montt. 16) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 60 UTM. A finding was delivered upholding the claim. Motion pending in Puerto Montt Court of Appeals. 17) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 100 UTM. A finding was delivered maintaining the fine of 100 UTM, which was appealed and is now pending in the Puerto Montt Court of Appeals. 18) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 40 UTM. A finding was handed down maintaining the fine of 40 UTM, which was upheld by the Court of Appeals of Puerto Montt on February 15, Consequently, this action ended after December 31, ) Aguas Claras S.A., versus Regional Labor Bureau. Case no.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 180 UTM. A finding was handed down maintaining the fine of 180 UTM, which was overturned by the Court of Appeals of Puerto Montt, lowering its amount to 10 UTM on January 24, Consequently, this action ended after December 31, Servicios Aguas Claras S.A. 20) Servicio Aguas Claras S.A., versus Regional Labor Bureau, Case No.: nd Civil Court of Puerto Montt. Matter: Fine claim. Value: 1,125 IMM (the minimum monthly wage). First-instance finding upheld fine. Pending decision from the Court of Appeals of Puerto Montt. 3. Civil Actions 1) Procesadora Hueñocoihue Limitada, versus Conservas Dalcahue. Case no.: nd Civil Court of Puerto Montt. Matter: Summary action. Value: $8,000,000. Pending ruling on exceptions filed by the opponent. NOTE 32 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES The related parties consist of the following entities and individuals: a) Shareholders able to exert control b) Subsidiaries and members of subsidiaries c) Parties with an interest in the entity affording them significant influence over said entity d) Parties with joint control over the entity e) Associates f) Interests in joint ventures g) Key management personnel, of the entity or its parent h) Close relatives of the individuals described above i) An entity that is controlled, or jointly controlled, or over which any of the individuals described above has a significant influence Accounts receivable from related entities In general, transactions with related companies are concerned with immediate payment or collection and are not subject to special conditions. These transactions conform to the provisions of Articles 44 and 49 of Law No. 18,046, regarding Corporations. Short-term fund transfers from and to the parent or between related companies, which do not relate to collection or payment for services, are structured under the commercial checking account modality, and an interest rate in line with market conditions is established for the monthly balance. Accounts receivable from and accounts payable to related entities as of December 31, 2011, December 31, 2010, and January 1, 2010, respectively, are detailed below: 161

164 Company Tax ID Country of origin Type of relationship Currency 12/31/ /31/2010 Plaza Casino S.A Chile Common shareholders Pesos Inmobiliaria Aleph Ltda k Chile Common shareholders Pesos Salmones Chaicas S.A.(*) Chile Common shareholders Pesos 6, Administradora de Acuicultura Foreign Costa Rica Common shareholders Colons Aquasea de Costa Rica S.A. Foreign Costa Rica Common shareholders Colons Biomar Aquacorporation Products Foreign Costa Rica Common shareholders Dollars Total 6, /01/2010 (*) Relates to advance payments for the supply of disease-free Atlantic salmon eggs Notes and accounts receivable with Related Entities, non-current Company Tax ID Country of 12/31/ /31/ /01/2010 Type of relationship Currency origin Víctor Hugo Puchi Acuña Chile Shareholder Dollars Aquasea de Costa Rica S.A Foreign Costa Rica Common shareholders Dollars 1, Total 1, Accounts payable to related entities Accounts payable to related entities as of December 31, 2011, December 31, 2010, and January 1, 2010, respectively, are detailed below: Notes and accounts payable with Related Entities, current Company Tax ID Country of 12/31/ /31/ /01/2010 Type of relationship Currency origin Aquamet S.A Chile Common shareholders Pesos Forestal Patagonia S.A Chile Common shareholders Pesos Mario Puchi Acuña Chile Shareholder Pesos Centro Veterinario y Agric. Ltda Chile Common members Dollars 1,658 1, Ganadera Río Cochrane Ltda Chile Common members Pesos Inversiones Aéreas Patagonia Chile Common members Pesos Inmobiliaria e Inv. Aleph K Chile Common members Pesos Inversiones Trancura Ltda Chile Common members Dollars Inversiones Doña Paula Ltda Chile Common members Dollars Administradora de Acuicultura foreign Costa Rica Common members Colons El Pelón de la Bajura foreign Costa Rica Common shareholders Colons Hacienda la Pacifica S.A. foreign Costa Rica Common shareholders Colons Biomar Aquacorporation Products foreign Costa Rica Common shareholders Dollars Total 2,203 1,

165 32.3. Transactions with related parties and their effects on profit or loss Below are the transactions and their effects on profit or loss for the periods ended on December 31, 2011 and 2010: Company Tax ID Country of origin Nature of the relationship Description of the relationship Type of Currency Amount 12/31/ /31/2010 Effect on Profit or Loss Ganadera Río Cochrane Ltda Chile Common members Hatchery Lease Pesos 70 (70) 44 (44) Mario Puchi Acuña Chile Shareholder Lease of facilities Pesos 21 (21) 13 (9) Juan Carlos Puchi Acuña Chile Shareholder Remunerations Pesos 125 (125) 86 (58) Inversiones Patagonia Ltda Chile Common members Warehouse lease Pesos 56 (56) 15 (15) Inmob. Aleph Ltda k Chile Common members Lease of facilities Pesos 5 (5) 33 (33) Claudio Puchi Germani Chile Shareholder Remunerations Pesos 59 (59) 46 (46) Centro Veter. y Agric. Ltda Chile Common members Purchase of medications Dollars 9,834-1,758 - Inv. Áreas Patagonia Chile Common members Air Services Pesos 395 (395) 37 (37) Estacionamientos SBT Chile Common shareholders Parking lot service Pesos 3 (3) - - Sociedad de Rentas Inmobiliaria Ltda Chile Common members Office leasing Pesos 34 (34) 47 (47) Puchi Arquitectos asociados Chile Common members Architecture service Pesos Plaza Casino S.A Chile Common shareholders Housing service Pesos Patricio Quezada y Cía. Ltda Chile Common members Overland transportation Pesos Amount Effect on Profit or Loss Empresas AquaChile and subsidiaries have a policy of reporting all transactions done with related parties during the period, with the exception of dividends paid and capital contributions received, which are not considered as transactions Remunerations and Fees of the Senior Management and Board of Directors and Remunerations of Key Executives Per diem allowances, remunerations and financial, commercial and managerial advisory services received by the members of the Senior Management up to the period ended on December 31, 2011, amount to 716 (689 to period ended on December 31, 2010). Empresas AquaChile and subsidiaries have a systems of incentives linked to the Company s operating profit or loss, consisting of a bond applicable to their main executives and positions which, at the discretion of the Company, are eligible to take part. The compensations system endeavors to motivate, recognize and achieve the loyalty of the executive through a formal scheme that rewards improved individual performances as well as teamwork. The total gross remuneration earned by the executives of Empresas AquaChile and subsidiaries that includes these incentives, as of December 31, 2011, reached 5,184 (4,433 as of December 31, 2010). 163

166 NOTE 33 - ENVIRONMENT For Empresas AquaChile and its subsidiaries, caring for and respecting the environment holds a priority position in their management strategy. This has led to a series of actions and best practices adopted for purposes of increasing the efficiency of their operations and reducing the environmental impact of these in a significant and sustainable manner. These pro-environmental actions involve investment in improving the production processes and increased monitoring and control of aspects related with the environmental impact. The following is a breakdown of the information concerning environmentally-related disbursements: a) Parent: Empresas AquaChile S.A. (Individually) Project 1: Waste management Amount disbursed during the period: 73 (42 to December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: 542 (125 to December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: 140 (184 to December 2010) Recognition in books: Expense Amounts committed in the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. Project 4: Ensilage, Mortality Removal Amount disbursed during the period: 268 (103 to December 2010) Recognition in books: Expense Amounts committed in the future: - Estimated completion date: Dec Project 5: Ensilage Investment Amount disbursed during the period: 1,415 (101 to December 2010) Recognition in books: Property, Plant and Equipment Amounts committed in the future: 812 Estimated completion date: Jun Disbursement item, projects 4 and 5: Investment in facilities, mortality platforms and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of salmon mortality from the fish farm to the treatment plants, and use of third parties as an expense at the centers where there is no investment yet. 164 b) Subsidiary: Alitec S.A. Project 1: Environmental Amount disbursed during the period 29 (25 at December 2010) Recognition in books: Expense Project 2: Analyses and Certifications Amount disbursed during the period: 1,280 (434 at December 2010) Recognition in books: Expense Amounts committed in the future, Projects 1 and 2: - Estimated completion date, Projects 1 and 2: Dec Disbursement item, projects 1 and 2: Certifications, removal, monitoring, analyses and treatments of waste in each production stage, relating to requirements from relevant legal bodies.

167 c) Subsidiary: ACI S.A. Project 1: Waste management Amount disbursed during the period: 5 (39 at December 2010) Recognition in books: Project 2: Expense Environmental Amount disbursed during the period: 20 (17 at December 2010) Recognition in books: Project 3: Expense Analyses and Certifications Amount disbursed during the period: 25 (25 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Certifications, removal, monitoring, analyses and treatments of waste in each production stage, relating to requirements from relevant legal bodies. d) Subsidiary: Antarfood S.A. Project 1: Waste management Amount disbursed during the period: 83 (57 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: 5 (0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: 44 (39 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. e) Subsidiary: Aguas Claras S.A. Project 1: Waste management Amount disbursed during the period: 44 (32 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: 231 (70 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: 280 (360 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. Project 4: Ensilage, Mortality Removal Amount disbursed during the period: 192 (89 at December 2010) Recognition in books: Expense Amounts committed in the future: - Estimated completion date: Dec

168 Suscription the annual report The undersigned declare that they are responsible for the truth of the information included in this annual report of Empresas AquaChile S.A. at December 31, Víctor Hugo Puchi Acuña Chairman ID: Humberto Fischer Llop Director ID: Mario Humberto Puchi Acuña Director ID: Claudio Fischer Llop Director ID: Vicente Pérez Fuentes Director ID: Alejandro Pérez Rodríguez Director ID: Piero Solari Donaggio Director ID: Alfonso Márquez de la Plata Cortés General Manager ID:

169 Project 4: Ensilage, Mortality Removal Amount disbursed during the period: 62 (201 at December 2010) Recognition in books: Amounts committed in the future: - Estimated completion date: Project 5: Expense Dec Ensilage Investment Amount disbursed during the period: 120 (73 at December 2010) Recognition in books: Amounts committed in the future: - Property, Plant and Equipment Estimated completion date: Dec Disbursement item, projects 4 and 5: Investment in facilities, mortality platforms and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of salmon mortality from the fish farm to the treatment plants, and use of third parties as an expense at the centers where there is no investment yet. h) Subsidiary: Piscicultura Aquasan S.A. Project 1: Waste management Amount disbursed during the period: 180 (0 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: 9 (0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: 137 (0 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. i) Subsidiary: Procesadora Hueñocoihue Ltda. Project 1: Waste management Amount disbursed during the period: 8 (0 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: 4 (0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: 4 (0 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. 167

170 j) Subsidiary: Pesquera Antares S.A. Project 1: Waste management Amount disbursed during the period: 22 (1 at December 2010) Recognition in books: Project 2: Expense Environmental Amount disbursed during the period: 4 (5 at December 2010) Recognition in books: Project 3: Expense Analyses and Certifications Amount disbursed during the period: 48 (64 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. k) Subsidiary: Salmones Cailín S.A. Project 1: Waste management Amount disbursed during the period: 13 (7 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: 1 (0 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: 34 (24 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: 0 Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. l) Subsidiary: Aquachile S.A. Project 1: Waste management Amount disbursed during the period: 189 (56 at December 2010) Recognition in books: Expense Project 2: Environmental Amount disbursed during the period: 175 (80 at December 2010) Recognition in books: Expense Project 3: Analyses and Certifications Amount disbursed during the period: 148 (120 at December 2010) Recognition in books: Expense Amounts committed to the future, projects 1-2-3: - Estimated completion date, Projects 1-2-3: Dec Disbursement item, Projects 1-2-3: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports) and external certifications of these; removal, monitoring, analyses and treatments of waste in each stage of production. These are also required by the relevant legal bodies. 168

171 Project 4: Ensilage, Mortality Removal Amount disbursed during the period: 35 (37 at December 2010) Recognition in books: Amounts committed in the future: 0 Estimated completion date: Project 5: Expense Dec Ensilage Investment Amount disbursed during the period: 36 (31 at December 2010) Recognition in books: Amounts committed in the future: - Property, Plant and Equipment Estimated completion date: Dec Disbursement item, projects 4 and 5: Investment in facilities, mortality platforms and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of salmon mortality from the fish farm to the treatment plants, and use of third parties as an expense at the centers where there is no investment yet. m) Subsidiary: Salmones Australes S.A. Project 1: Environmental Amount disbursed during the period: 72 (0 at December 2010) Recognition in books: Expense Amounts committed in the future: - Estimated completion date: Dec Disbursement item: Studies of currents, depth, oxygenation and algae at the centers; drafting of INFAs (environmental reports). These are also required by the relevant legal bodies. n) Subsidiary: Aquainnovo S.A. Project 1: Ensilage Investment Amount disbursed during the period: 10 (0 at December 2010) Recognition in books: Property, Plant and Equipment Amounts committed in the future: 10 Estimated completion date: Jun Disbursement item: Investment in facilities, and equipment required to comply with the Environmental Law [Ley Ambiental] for adequate removal of waste to the treatment plants. o) Subsidiary: Salmones Maullín Ltda. Project 1: Ensilage, Mortality Removal Amount disbursed during the period: 29 (2 at December 2010) Recognition in books: Expense Amounts committed in the future: - Estimated completion date: Dec Disbursement item: Disbursements for the adequate removal of salmon mortality from the fish farm to the treatment plants. 169

172 Below is a more detailed breakdown of the disbursement items of the projects: Environmental: this is related with the following studies 1. Bathymetry: to determine the depths of a sea license. 2. Current profiling: to determine the dynamics of the currents in the sector under sea license. With this it is possible to find out the predominant direction or directions of the current, as well as their frequency and speeds. 3. INFAs: Environmental Reports that are made at the sea and lake centers, and are reviewed by Sernapesca. This report is made on those operating in the locations established under a ruling. 4. Pre-operating INFAs: Environmental Reports that are made before a center goes operational after a break of more than one year. 5. Oxygen Profiles: monitoring done to determine the quantity of oxygen in the column of water at the sea and lake fish farm. These are done every two months. 6. Phytoplankton Monitoring: analyses that are performed on the samples of water from the sea fish farm, primarily to determine whether there is a presence of harmful algae that might affect the normal behavior of the fish. 7. Sampling and analyses of grey and black water from the floating treatment plants: monitoring must be done of the water flowing out of the floating treatment plants. This is a requirement of the Maritime Authority. Waste Management Managing the treatment of inorganic, organic and hazardous waste in each of the Company s productive units. LIW treatment: 1. Sludges: management of removal and disposal of sludges that are generated in the hatchery and processing plants. The company carrying out the removal and disposal must have the proper sanitary and environmental permits under the environmental legislation. 2. LIW monitoring and analysis: liquid industrial waste discharged by the hatchery and plants undergo monitoring and analyses. The results are sent to the Sanitary Services Supervisor (SISS) and Maritime Authority, as appropriate. These analyses are done in accordance with the provisions of D.S. 90/2001. Environmental certifications - External laboratory analyses certif.: The analyses we ask the laboratory to perform are: - INFAs and pre-infas - LIW - Monitoring of Floating Treatment Plants - Potable Water 170

173 NOTE 34 - OTHER INFORMATION The number of employees of Empresas AquaChile and subsidiaries, by category, is as follows: Staff 12/31/ /31/2010 Managers and executives Administrative and technical staff Workers 3,998 3,859 Total 4,813 4,525 NOTE 35 - EVENTS AFTER THE DATE OF THE BALANCE SHEET a) The Company s consolidated financial statements relating to the period ended on December 31, 2011, were approved by the Senior Management in a meeting dated March 13, b) Between January 1, 2012, and the issue date of these financial statements (March 13, 2012) no other events of a financial nature or of any other kind have taken place that might significantly affect their interpretation. 171

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175 Suscription the annual report The undersigned declare that they are responsible for the truth of the information included in this annual report of Empresas AquaChile S.A. at December 31, Víctor Hugo Puchi Acuña Chairman ID: Humberto Fischer Llop Director ID: Mario Humberto Puchi Acuña Director ID: Claudio Fischer Llop Director ID: Vicente Pérez Fuentes Director ID: Alejandro Pérez Rodríguez Director ID: Piero Solari Donaggio Director ID: Alfonso Márquez de la Plata Cortés General Manager ID:

176

177 EMPRESAS AQUAchile Cardonal s/n Lote B, Puerto Montt X Region de los Lagos Phone: (56-65) Fax: (56-65) contactenos@aquachile.com DESIGN AND PRODUCTION Interfaz Diseño PHOTO AquaChile archives Degree Juan Ernesto Jaegger Thomas Wedderwille PRINtiNG QuadGraphics

178 PEFC CERtiFICAte This paper comes from sustainably managed forests and controlled sources

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