Anual Report ASF by Australis Seafoods S.A.

Content

Our Company

Our team

The Salmon Industry

Main Assets

ď ź

Consolidated Financial Statements

201 1 annual report

au StralIS SeaFooDS

australis seafoods 1

ď ˝

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements

ď ź

ď ˝

AUSTRAL AU STRALIS IS SSEAFOODS EA FOO DS M annual EM ORIArANUAL ep ort 2011

Content

CONTENIDO 2

Content Our Company

1. Letter from the President

2. Important Milestones 2011

3. Company Identification

4. Ownership and Control of the Entity

Our team

5. Administration and Personnel

6. Remuneration

7. Historical Overview

18 21

The Salmon Industry 8. The Salmon Industry

8.1 Business Descriptions

8.2 Risk Factors

32 37

Main Assets

9. Information on Subsidiaries and Affiliates and Investments in other Companies 10. Distributable Profit

38 39

11. Dividend Policy

12. Share Transactions

13. Information on Essential or Relevant Facts

14. Summary of Shareholder Comments and Proposals 15. Financial Reports

2 australis seafoods

41 41

Declaration of Responsibility

Consolidated Financial Statements

45 australis seafoods 1

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements

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

Our company We are a young company, listed on the stock exchange and led by an expert team that has made us, in 2011, one of the fastest-growing salmon company in the world and also one of the most profitable in the national industry. We understand that this dynamic must go handin-hand with a sustainability policy to make ours a business that is sustainable over time.

AUSTRAL IS S EAFOODS annual r ep ort 2011

Content

Luz 1 Fattening Center, Aysén Region. 2 australis seafoods

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Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

L e t t e r fr o m th e P r esid e n t

Rodrigo Arriagada Astrosa

1. Letter from the President

Fry with Atlantic salmon yolk sac. Landcatch Reproduction Program.

4 australis seafoods

Dear Shareholders,

bought 50% of True Salmon Pacific Hol-

We understand that we are in a solid po-

2011 was a memorable year for Australis

ding, one of the largest fish and seafood

sition to face the next periods, which will

Seafoods, because we successfully com-

marketers in the United States and Canada.

bring changes in salmon and trout prices

pleted the opening of our company, and,

With sales of over $150 million, according to

due to increased global supply from the ra-

although we are just in our fourth year of

2011 figures, and headquartered in Florida,

pid recovery of the Chilean salmon industry.

existence, we became part of the Santiago

this acquisition will help us meet the pre-

We have a solid financial position, outstan-

Stock Exchange, which has historical sal-

sent and future demands of our customers

ding assets, good technical foundations

mon companies. The market was supporti-

in both markets.

and a team of expert executives, which will

ve of our management decisions and future

As we work within the framework of an

enable us to execute our ambitious develo-

plans. With demand exceeding supply by 22

industry that must adapt to new sanitary

pment plan and consolidate the position of

times, we placed 12.77% of the company

regulations, among those one which vir-

Australis in the industry.

shares with about 3000 new investors, rai-

tually eliminates egg imports, our subsidiary

We will face these coming months in the

sing approximately $71 million USD. The goal

Landcatch, which focuses on genetics, pro-

way we know best, with our low-cost poli-

of this capital injection was to finance part

duced approximately 24 million eggs for our

cy and flexibility to adapt to challenges and

of our five-year business plan, which is am-

use and approximately 42 million to supply

seize new opportunities that arise, while

bitious, organic and sustainable.

the domestic market.

maintaining our conviction that our me-

The year was also memorable because we

2011 was also memorable in terms of re-

dium- and long-term business foundations

intensified our policy of taking strategic

sults: we have become the world’s fastest-

are solid.

positions that support future development.

growing salmon company and one of the

In this vein, we bought three fish farms:

most profitable on a national scale, with an

Las Vertientes in the La Araucanía Region,

approximate production of 30,000 tons of

Ignao in the Los Ríos Region and Ketrún

salmon, sales of $164 million USD and pro-

Rayén in the Bío Bío Region. This brought

fits of $27.4 million USD, 59% more than

us to nine fish farms, the amount deemed

that obtained in 2010.

necessary for our growth and development

In 2012 we plan production to be above

plan to 2015.

40,000 tons of salmon, and then we plan to continue with our previously designed production plans.

Also, in order to ensure quick, strategic positioning in the North American market, we

RODRIGO ARRIAGADA ASTROSA President of the Board Australis Seafoods S.A.

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Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements

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

AUSTRAL IS S EAFOODS annual r ep ort 2011

Im p o rta n t Mi l esto n es 2 0 1 1

2. Important Milestones 2011 In order to increase sales in North America, we purchased 50% of True Salmon Pacific Holding, the second largest fish and seafood product marketer in the United States and Canada by volume.

We successfully opened on the stock market and managed to collect approximately TUSD$71 to finance the company’s development plan. This became the moment when investors recognized the company’s strength and reputation.

As part of this plan, we acquired three fish farms: Las Vertientes, located in the Cunco commune, La Araucanía Region; Ignao, located in the Lago Ranco commune, Los Ríos Region; and Ketrún Rayén, located in the Los Ángeles commune, Bío Bío Region.

We created a major purchase plan that allowed us to stimulate

6 australis seafoods

We acquired Salmones Galway and Salmones Mitahues, holders

We obtained the Global GAP certificate for all operational farms and processing plants. This organization sets voluntary standards for certifying aquacultural and agricultural products worldwide. This facilitates our

of aquaculture concession applications in the

entrance into European, Asian and North Ame-

growth and consolidate our position raising

Aysén Region, which allows us to make fur-

rican markets.

freshwater smolt in controlled environments.

ther projections for operations.

australis seafoods 7

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

C o m pa n y Id e n tificat i o n

3. Company Identification a) Basic identification Name

Australis Seafoods S.A.

Fictitious business name N/A Address Av. Presidente Riesco 5711, of. 1603, Las Condes RUT*

76.003.557-2

Type of company Publicly Traded Corporation

b) Constitutive documents Articles of association City

Santiago

Date October 31st, 2007 Notary’s office

Iván Torrealba Acevedo

Legalization Date Published in Official Journal November 21st, 2007 Entry in Registry of Commerce

Santiago

Pages

48,775

Number

34,583

Date November 16th, 2007

c) Addresses, phone numbers, etc. Main address Av. Presidente Riesco 5711, of. 1603, Las Condes Phone number

(02) 299.58.00

Fax

(02) 798.96.52

legal@australis-sa.com

4. Ownership and Control of the Entity Number of shareholders

103

Name of major shareholders

Asesorías e Inversiones Benjamín S.A. Private Investment Fund Australis, represented by Administradora e Inversiones Tamarindo S.A.

* RUT = National Identification Number. Atlantic Salmon smolt. 8 australis seafoods

australis seafoods 9

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

Own e rshi p a nd C o n t r o l of th e En ti t y

List of twelve largest shareholders on December 31st, 2011

No. Name 1

Rut

Fondo de Inversión Privado Australis

76.123.347

1,101,077,936

78.48

Asesorías e Inversiones Benjamín S.A.

79.744.960

106,924,508

7.62

Larraín Vial S.A. Corredora de Bolsa

80.537.000

42,293,121

3.01

Fondo de Inversión Larraín Vial Beagle

96.955.500

40,082,255

2.86

AFP Hábitat S.A. para Fondo Pensión C

98.000.100

16,043,158

1.14

Fondo de Inversión Santander Small Cap

96.667.040

13,584,418

0.97

Compass Small Cap Chile Fondo de Inversión

96.804.330

12,254,012

0.87

AFP Hábitat S.A. Fondo Tipo B

98.000.100

10,414,253

0.74

AFP Hábitat S.A. Fondo Tipo A

98.000.100

8,969,575

0.64

Bolsa de Comercio de Santiago Bolsa de Valores

90.249.000

8,250,525

0.59

Siglo XXI Fondo de Inversión

96.514.410

5,134,128

0.37

Linzor Absolute Return Fondo de Inversión Privado

76.094.741

4,235,964

0.30

Name of controller(s) RUT Direct ownership percentage Indirect ownership percentage

Quiroga Moreno, Isidoro Ernesto 6.397.675-K 0% 86.957%

Means of exercising control

Mr. Isidoro Ernesto Quiroga Moreno exercises control of Australis Seafoods S.A. through the company Asesorías e Inversiones Benjamín S.A. and the Australis Private Investment Fund. Mr. Isidoro Ernesto Quiroga Moreno owns 0.1% of Asesorías e Inversiones Benjamín S.A. and the remaining 99.9% belongs to Inversiones El Aromo Limitada, a company in which Mr. Quiroga Moreno owns 99% of the social rights. The only contributor to the Australis Private Investment Fund is the company Rentas Acuícolas Limitada, whose members are Asesorías e Inversiones Benjamín S.A., with 99.99% of the social rights, and Inversiones El Aromo Limitada, with 0.01%.

Major changes in ownership during 2011

On June 9th, 2011, there was an initial placement of shares on the Stock Exchange. These newly issued shares were representative of 12.830% of the issued shares.

10 australis seafoods

In late 2010 the Company underwent a res-

to $23,643,442,802, which was fully subs-

concentrating investments in the ex-

tructuring process that rationalized the

cribed by shareholder Australis Private In-

subsidiary Australis S.A. and which is not

number of subsidiaries of the company,

vestment Fund, who had bought the share

part of the group of companies organized

leaving a subsidiary for freshwater ope-

belonging to the previous shareholder In-

under Australis Seafoods S.A. (hereinafter

rations, Landcatch Chile S.A., and another

versiones El Aromo Limitada.

“Grupo ASF”). Investments were maintai-

for sea water fattening activities, Austra-

Subsequently, on December 31st, 2010,

ned in companies Landcatch Chile S.A. and

lis Mar S.A.

the Company underwent a division (which

Australis Mar S.A. under Australis Seafoods

In addition, on November 18th, 2010, the

affected shareholders starting on January

S.A., continuing company.

company effected a capital increase equal

1st, 2010) that created a new company

australis seafoods 11

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

Our team Led by a top-level board of directors and a highly experienced professional team, at Australis we understand that our main strength is in the people who put forth their best effort everyday to tackle and achieve our goals.

Harvest Site, Humos 1 Center, Aysén Region. 12 australis seafoods

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Content

Our Company

Our team

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

Admin ist r at i o n a nd P e rs o n n e l

5. Administration and Personnel a) Description of organization

This structure allows for proper vertical

species fattening, and the export and mar-

Below is the general organizational chart of

the aquaculture sector, in particular in the

the company and its subsidiaries:

Genetic development and egg production

Landcatch Chile S.A.

Raising and fattening in freshwater

Landcatch Chile S.A.

Fattening in seawater

Australis Mar S.A.

Marketing and export

Australis Mar S.A.

stage, which are indicated in the following

concentrated on freshwater production through its subsidiaries, holds interests in

within the group, salmonid species production is managed all the way from genetic deis possible to add value at each business

To date, it has two major companies: one and the other on seawater fattening.

Stage

velopment to final marketing. Additionally, it

keting of these products.

Australis Seafoods S.A. is a company that,

integration of the businesses, because

Company

table, together with the company of the group executing the respective stage:

area of egg and smolt production, salmon

b) Board of directors and administrators

Australis Seafoods S.A. 100%

Comercializadora Australis SpA

The company’s board of directors is made up of the following people:

100%

Piscicultura Río Maullín SpA

Landcatch Chile S.A. (lacsa)

99.00%

RUT

Profession

Isidoro Quiroga Moreno

6.397.675-K

Civil Engineer

Rodrigo Arriagada Astrosa (President)

8.547.812-5

Civil Engineer

Federico Rodríguez Marty

9.357.625-K

Lawyer

Luis Felipe Correa González (Secretary)

11.947.424-8

Lawyer

Rafael Fernández Morandé

6.429.250-1

Civil Engineer

99.95%

99.99998 %

99.50%

Name

0.00002 %

Piscicultura Río Salvaje

Inversiones Ovas del Pacífico Ltda.

0.05 %

Australis Mar S.A. (AMSA)

1.00%

Chile Seafood S.A.

99.00%

1.00%

Salmones Gama Ltda.

99.00%

1.00%

Sociedad de Inversiones Caiquenes Ltda.

99.00%

1.00%

Galways

99.00%

1.00%

Mitahues

99.00%

0.50%

1.00%

True Pacific Holding Company, INC 50%

True Salmon Pacific Holding, LLC

True Nature Seafood, LLC

100%

50%

South Pacific Specialties, LLC 100%

Procesadora Alimentos Australis SpA

100%

Salmon Processors, LLC

From left to right: Federico Rodríguez, Rodrigo Arriagada, Isidoro Quiroga, Andrés Saint Jean, Rafael Fernández, Luis Felipe Correa.

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Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

Admin ist r at i o n a nd P e rs o n n e l

c) Organization personnel The following chart gives a list of company personnel at the end of 2011:

Company Executives

LACSA

ASF

Total

Professionals and Technicians

106

Administrators

186

196

106

238

347

Workers Total

From left to right: Luis Felipe Correa, Carlos Palma, Gabriel Guajardo, Andrés Saint Jean, Luis Norambuena, Fernando Silva, José Manuel Bernales,

AMSA

6. Remuneration

Dionisio Ramos, Ricardo Misraji.

The names and positions of each manager and senior executive are listed below:

Australis Seafoods S.A.

Australis Mar S.A.

Andrés Saint-Jean Hernández General Manager Mechanical Civil Engineer, Universidad de Concepción DPA, Universidad Adolfo Ibáñez RUT: 7.085.033-8

Luis Felipe Correa González Chief Legal Counsel Lawyer Universidad Diego Portales Master of Business Law of the Universidad de Los Andes RUT: 11.947.424-8

Gabriel Guajardo González Production Manager Fisheries Engineer, Universidad Católica de Valparaíso MBA, Faculty of Economics and Administration Universidad Austral RUT:7.853.905-4

Ricardo Daniel Misraji Vaizer Chief Financial Officer Business Administration Universidad Católica de Chile MBA, University of Cambridge, UK. RUT: 8.967.131-0

Luis Norambuena Astorga Chief Financial Officer Accountant, Universidad Austral RUT: 9.976.863-0

Landcatch Chile S.A. José Manuel Bernales Balbontín General Manager Fisheries Technician, Universidad Técnica del Estado RUT: 8.558.354-9

For the period ending on December 31, 2011,

The Company does not have a Directors

the Company paid President Rodrigo Arria-

Committee and therefore incurred no expen-

gada Astros $4,000,000, Director Isidoro

ditures in this regard.

Quiroga Moreno $6,000,000, Director Luis Felipe Correa $6,000,000, Director Federico

Total paid remuneration for managers and

Rodríguez Marty $6,000,000, and Director

executives reached $2,325,000 USD in 2011.

Rafael Ferández Morandé $6,000,000.. The Company made no compensation paThe Company incurred no board advising ex-

yments for years of service to its managers

penditures in 2010.

and chief executives in 2011.

Dionisio Ramos Salgado Production Manager Fisheries Technician, Universidad Técnica del Estado RUT: 9.020.136-0 Fernando Silva Villanueva Chief Financial Officer Accountant, Universidad de la Frontera RUT: 7.485.399-4

Carlos Palma Opazo Business Manager Industrial Civil Engineer, Pontificia Universidad Católica de Chile RUT: 8.934.457-3

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Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL AU STRALIS IS SSEAFOODS EA FOO DS annual M EM ORIAr ANUAL ep ort 2011 2011

H isto r ica l Ov e rvi ew

Matilde 2 Fattening Center, Aysén Region.

7. Historical Overview

of salmonid products and the marketing and

TUSD$45, confirming its consolidation.

Technical Support Contract was signed with

Furthermore, Grupo ASF understood that

Landcatch Natural Selection Limited, who

export of salmon to primarily foreign mar-

the need to integrate the production of eggs

agreed to provide technical consulting to

kets, through AMSA.

into a genetic enhancement program (family

LACSA on breeding issues in the reproduc-

In June 2011, Australis Seafoods opened on

selection) in Chile was an essential element

tion of salmonid species and reproduction

the Santiago Stock Exchange, successfully

for the development of the business and its

programs, among other similar issues, effec-

raising TUSD$71.3 to finance the company’s

value chain. The high risk associated with

tive until December 31st, 2015, renewable for

growth plan.

egg import was considered, as it is known

periods of three years from that date onwards.

Finally, in December 2011, Australis Seafoods

that this can be a vehicle for the transmis-

In 2010, in consideration of the growth

acquired 50% of the main salmonid marke-

sion of new diseases for these species. To

of Grupo ASF, the new acquisitions and,

ter in the United States, True Salmon Pacific

this end, in late October 2009, Grupo ASF

above all, the new challenges ahead, the

Holding, for USD$7,525,000. The purchase

acquired 100% of the shares of Landcatch

Company decided to execute a corporate

of this strategic asset will allow better dis-

Chile S.A. (hereinafter “LACSA”), from the

re-organization process of its subsidiaries,

tribution of products in the American market.

Scottish companies Landcatch Limited and

in which LACSA assumed all the activities

In this stage of development of Grupo ASF

Landcatch Natural Selection Limited. LACSA

of ASA. As a result of this process, the acti-

and its business, its controller, manage-

vities of Grupo ASF were separated into two

ment, employees and partners understand

In mid-2003, Mr. Isidoro Quiroga Moreno

allowed operations to be expanded within

has one of the best and oldest breeding pro-

acquired a stake in the freshwater smolt

the value chain of Atlantic Pacific salmon

grams in the country, which makes Grupo

business areas: (i) production of genetically

that the Company operates under a mission,

(coho) and trout and the different processes

ASF stand out in the industry.

improved eggs, fry and smolts exclusively in

vision and values that are summarized as

nafter “ASA “) and became its controller in

in each of the companies to be optimized.

Along with the purchase of LACSA shares, a

freshwater through LACSA, and (ii) fattening

follows:

2005. In 2007, through different companies,

It is worth noting that AMSA’s beginning of

the acquisition of 100% of ASA shares was

operations in March of 2008 coincided with

completed. At this time the company had

one of the biggest crises that have affec-

fish farms located in the Metropolitan Re-

ted the salmon industry in Chile. The rise in

gion, and facilities in the La Araucanía Re-

energy supplies and raw materials, a rapid

gion were subsequently incorporated.

deterioration of the exchange rate, and the

That same year, Australis Seafoods S.A. was

greatest health crisis in the national salmon

established as the parent company (Gru-

industry caused by the ISA caused a great

po ASF) in order to give a corporate group

value loss in the industry.

structure to the activities in the aquaculture

In response to the situation, there were

industry.

constant modifications to company proces-

In addition, the Group decided to participa-

ses in the year 2008 in order to minimize

te in the business of seawater salmon and

the risks that were so prominent in the in-

trout fattening and marketing the fish in in-

dustry. As a result, AMSA’s operating inco-

ternational markets. For this purpose, in No-

me for 2008, its first year of operation, was

vember of 2007, the company Australis Mar

$565,000 USD, and for their second year of

S.A. was established (hereinafter “AMSA “).

operation, TUSD$12.2. The latter result con-

The integrated operation of ASA and AMSA

trasts strongly with the results obtained in

Innovation and quality in harmony with the environment: Constant search for the best operating

grew to include everything from the buying

the same period by the rest of the industry,

solutions in order to achieve high-quality production, with the utmost caution and care for the

of eggs and/or smolts (cultivated in the fres-

which suffered the greatest losses in its

environment and the surrounding communities.

hwater facilities of ASA) to fattening in the

history. It is worth adding that Australis has

AMSA cultivation centers, where the pro-

had a successful track record, with an ope-

Best practices: Adherence to the principles of best business practices in compliance with the cu-

duction cycle ended. This business model

rating income for AMSA in 2011 greater than

rrent standards and regulations for all the activities undertaken by Directors, Managers and Em-

production company Australis S.A. (herei-

Mission To offer world-class products, developed by a production process that is environmentally friendly, has the highest hygiene standards and is responsible towards its workers, all under an efficient and flexible modern management system.

Vision To be recognized as an innovative, efficient and environmentally friendly company that is respectful of the social environment in which it operates, becoming a leading company in terms of costs and profitability.

Values Commitment to workers: Promoting the integral development of our employees in a safe, respectful and peaceful environment.

ployees of Grupo ASF.

18 australis seafoods

australis seafoods 19

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





The Salmon Industry Following the salmon industry’s vigorous recovery, accompanied by strict sanitary regulations for land and sea production, we know that medium- and long-term business fundamentals are more solid than ever. Chile is positioned as the top producer to respond to growth of global demand.

AUSTRAL IS S EAFOODS annual r ep ort 2011

Content

20 australis seafoods

australis seafoods 21

Our Company

Our team

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

Content

Patranca Fattening Center, Aysén Region.

8. The Salmon Industry

Graph No. 2: Farmed Atl antic salmon production by country (2011) 1% 3% 3%

a. The Market

Supply

The main producers of farmed salmon and

The supply of salmon around the world has

trout are Norway and Chile, together accoun-

increased steadily in recent years, mainly due

ting for near 76% of global salmon production

to increased production of farmed salmon. The

and 86% of global trout production. Both

catch of wild salmon, meanwhile, has remai-

countries have climatic and sea conditions fa-

ned relatively stable over the last decade. Cu-

vorable for farming these fish, which explains

rrently, approximately 64% of global salmon

the high concentration on the supply side. Graph No.2 and No.3)

production is farmed salmon. (Graph No.1)

Prior to the sanitary crisis, which was mainly due to the ISA virus that hit Chile in 2007,

10%

salmon and trout production in the country was similar to that of Norway. However, the gap in production between the two coun-

14%

tries increased significantly due to the high

62%

mortality rates affecting Chile in 2008 and 2009.

Nor way Chile United Kinsdon Canada

Since 2009, Norway’s total production has

Faroe Islands Ireland Others

approximately doubled Chilean production, but this gap is expected to decrease beginning in 2012.

Source: Kontali

Graph No. 1: Global salmon supply

1777

1589

1624 1598

1529

1408

1401

1333

1271

Graph No. 3: Farmed trout production by country (2011)

1054

2%1% 3% 3%

14%

1001

907

1109

758

1019

858

933

801

932

732

1000 500

1200

Thousands of Tons. WFE

1500

1200

2000

1139

2500

839

Thousands of Tons. WFE

3000

Graph No. 4: Evolution of Atl antic salmon, trout and Pacific salmon (coho) farmed in Chile and Norway

1000

936 790

800

600

601 572

Farmed Salmon Wild Salmon

1 0

11E

632 612

700

654 607

827

574

634 509

400

Source: Kontali Nor way Chile Finland Denmark Source: Kontali

22 australis seafoods

991

72%

Faroe Islands Sweden Others

431 1 0

11E

Norway Chile Source: Kontali

australis australis seafoods seafoods 23 23

Content

The Salmon Industry

Our team

Our Company

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

Th e Sa lm o n I nd ust ry

The main destination markets for global sal-

Demand

Prices

mon and trout exports are the United States,

In 2011, the global demand for Atlantic salmon

In 2011, the average price for Atlantic salmon

Asia, the European Union, Russia, and since

grew 11.9% from 2010. However, let us recall that

was $8.50 USD/kg FOB Chile, which is an in-

2010, Latin America. Within these markets,

in 2010 there was a decrease in the demand,

crease of 3% from 2010. Pacific salmon

the Norwegian industry primarily caters to

with respect to the previous year, due to a re-

(coho) and trout, meanwhile, reached ave-

the European Union, while Chilean produc-

duced supply, consequence of the reduction

rage prices of $5.80 USD/kg and $8.20 USD/

tion mainly goes to markets in the United

affecting Chilean production. The main salmon

kg, respectively, reflecting an increase of 10%

States, Asia and Latin America.

markets, including the European Union, United

and 15% compared to the previous year. It is

(Tables No.1,2,3,4 and 5)

States and Japan, together accounted for 69%

important to note that these two species are

of global demand. (Table No.6)

not affected by the ISA virus. (Table No.7)

Table No. 1: Format and destination of Norwegian Atlantic salmon exports in 2011 (thousands of tons WFE) Destination European Union

Fresh

Frozen

Filet fresh

Filet frozen

Smoked

Other

Total

Table No. 4: Format and destination of Chilean trout exports in 2011 (thousands of tons WFE) Fresh

Frozen

Filet fresh

Filet frozen

Smoked

Japan

0.0

35.9

0.0

66.2

0.0

8.8

110.9

Thailand

0.0

15.9

0.0

0.5

0.0

0.4

16.8

Destination

Other

Total

554.0

5.7

63.8

22.7

1.2

1.0

648.5

Japan

22.1

1.3

5.4

4.9

0.1

34.0

Hong Kong

14.9

2.1

0.1

0.0

0.2

17.3

USA

0.0

0.3

13.1

2.9

0.0

0.7

16.9

China

4.6

2.2

0.0

0.1

7.0

Russia

0.0

15.8

0.0

0.1

15.9

0.6

2.7

11.6

13.5

0.1

0.0

28.6

European Union

0.0

0.8

0.0

0.5

0.0

0.7

2.0

110.0

4.7

0.1

0.2

0.0

0.3

115.4

Others

1.7

18.8

0.4

5.9

0.0

0.3

27.2

Total

1.8

87.5

13.5

76.0

0.0

10.9

189.7

USA Russia Others Total

60.2

39.6

3.9

12.2

2.0

2.7

120.5

766.5

58.4

84.9

53.6

3.5

4.5

971.3

Source: Kontali

Table No. 2: Format and destination of Norwegian trout exports in 2011 (thousands of tons WFE)

Table No. 5: Format and destination of Chilean Pacific salmon (coho) exports in 2011 (thousands of tons WFE)

Frozen

Filet fresh

Filet frozen

20.9

2.2

0.0

23.0

European Union

0.0

0.7

3.4

0.0

4.2

Japan

0.0

China

0.0

3.3

0.0

3.3

China

0.0

European Union

4.5

0.7

0.3

0.4

0.0

5.9

Others

0.2

0.1

0.0

0.2

Total

0.2

Destination

Fresh

Russia Japan

USA

Smoked

Other

Total

Others

4.9

4.2

0.0

0.6

0.0

9.7

Total

31.1

13.7

0.4

1.0

0.0

46.3

Destination

Fresh

Filet fresh

Filet frozen

Smoked

0.1

0.0

0.3

0.0

1.5

2.0

124.6

0.0

1.2

0.2

126.2

6.3

0.0

6.3

9.2

0.2

4.6

0.0

1.0

15.1

140.2

0.2

6.1

0.2

2.7

149.6

Frozen

Other

Total

Source: Kontali

Table No. 3: Format and destination of Chilean Atlantic salmon exports in 2011 (thousands of tons WFE) Destination

Fresh

Frozen

Filet fresh

Filet frozen

Smoked

Other

Table No. 6: Evolution of global demand for Atlantic salmon in the main markets (thousands of tons WFE) 2009

Total

2010

2011*

∆% 2011/2010

1.9

0.7

65.9

11.4

5.1

14.2

99.1

European Union

766

737

785

Brazil

37.4

2.0

0.7

2.8

0.2

0.1

43.0

EE.UU.

281

257

287

11.7%

Japan

0.0

0.9

0.0

4.4

0.2

5.8

Japan

32.4% 19.9%

USA

Rusia

0.0

1.0

0.0

0.1

1.0

Others

European Union

0.0

0.4

0.3

9.4

0.1

7.1

17.2

Total

China

0.0

3.7

0.0

0.2

0.0

3.8

Others

4.6

19.1

3.0

8.3

1.0

1.3

37.4

Total

43.9

27.7

69.9

36.4

6.5

23.0

207.4

Growth

418

501

1.505

1.446

1.618

-3.9%

11.9%

6.5%

*Actual values through November, December; estimated Source: Kontali

Source: Kontali

24 australis seafoods

australis seafoods 25

Content

Our Company

The Salmon Industry

Our team

Main Assets



Consolidated Financial Statements



As for the price of Chilean exports accor-

If the average annual prices from Decem-

well. In Norway, the number of companies

Globally, there is also a high penetration in

ding to destination, the growth in trout

ber 2011 are compared with past prices,

making up 80% of farmed salmon produc-

marketing channels in the major markets,

shipments to Japan was notable, with

we can see they are the highest in the

tion decreased from 70 to 25 between 1997

which today require continuous availability

a rise of 19% between 2010 and 2011.

last 10 years. (Graph No. 5)

and 2009. In Chile this trend stopped in

of product. Salmon is an attractive product

2009 due to the entry of new players into

that meets this retail industry demand.

the industry. However, in light of new regu-

A recovery of the major world economies,

lations and a new production system, the

after the global financial crisis of 2007 and

Prices of exports to North America for

b. The competition

the same period did not experience significant variations for the Atlantic species. However, we can see price increases of

An analysis of the number of companies

industry is expected to consolidate in the

2008 and the European crisis in late 2011,

16% for Pacific salmon and 13% for trout

involved in salmon farming globally shows

coming years. Currently, more than 50%

is expected in the coming months, which

in “other markets.” Finally, despite the Eu-

a downward trend in the number of partici-

of export sales and exported tonnage are

would result in a resumption of the growth

ropean crisis, there were increases of 10%,

pants, a trend that could take place in Chile as

concentrated in the top ten companies.

in demand seen before these events.

(Table No.9)

Furthermore, the incorporation and conso-

8% and 8% for Atlantic salmon, Pacific

lidation of new salmon export markets such

salmon and trout, respectively. (Table No.8)

as Russia and Brazil will create, in the opi-

Graph No. 5: Evolution of average price FOB Chile USD/kg 1999-2011 (Atl antic salmon, Coho and Trout)

Table No. 7: Accumulated average prices FOB Chile USD/ kg

c. Relative market share and evolution

d. Trends

nion of Grupo ASF, an increase in demand in coming years.

Demand

AMSA’s first salmon and trout harvest was

On the demand side, there has been an

Supply

2008

2009

2010

2011

in 2008 and the company’s initial mar-

increased global consumption of animal

The limited capacity for growth of Norwe-

Atlantic salmon

6.4

6.0

8.3

8.5

ket share was modest. Starting in 2010 it

protein in recent years, mainly due to an

gian salmon production and sanitary pro-

Pacific salmon (coho)

3.6

4.7

5.2

5.8

strengthened its position, and in December

increasingly wealthier world population.

blems in the main production area, plus the

Trout

4.7

6.0

7.1

8.2

2011 it occupied the fifth spot in the leading

This, coupled with the global trend towards

fact that wild salmon catches have remai-

Atlantic salmon producers ranking.

increased consumption of healthy foods,

ned stable in recent years, place Chile as

In the national market, LACSA has been the

such as white meat and seafood in general,

the main producer to meet the needs of the

main egg supplier and also a major supplier

puts the salmon industry in a position with

growing global demand.

of high quality smolts. (Graph No.6)

high growth potential for the coming years.

Locally, changes in the regulatory fra-

In addition, we can see an increase in sales

mework and the implementation of a series

of products designed for greater consumer

of measures for the industry, including the

convenience, which will lead to an increased

creation of production areas or “neighbor-

supply of products with a higher added value.

hoods,” should ensure good sanitary and

Trout

7.6

9.0

19%

Others

10.3

10.4

Coho

9.3

9.9

Trout

8.8

9.4

Atlantic

7.0

-1%

Coho

6.6

-1%

Trout

6.1

6.5

Atlantic

8.9

9.7

10%

Coho

9.6

10.4

Trout

5.0

5.4

Atlantic

8.1

Coho

5.2

6.0

16%

Trout

6.0

6.7

13%

Source: Infotrade

Graph No. 9: Ranking of the top ten exporters Company

environmental conditions that result in

Thousands of dollars

Net tons

MAINSTREAM CHILE S.A.

247,136.5

37,155.2

SALMONES MULTIEXPORT S.A.

219,994.8

22,859.3

LOS FIORDOS LIMITADA

194,460.8

30,138.5

SALMONES ANTÁRTICA S.A.

156,352.8

18,974.2

TRUSAL S. A.

148,736.7

17,463.4

AUSTRALIS MAR S.A.

147,246.5

18,882.7

MARINE HARVEST CHILE S.A.

144,293.2

19,298.7

GRUPO ACUINOVA CHILE

143,440.3

20,291.7

129,112.9

16,493.1

GRANJA MARINA TORNAGALEONES S.A.

121,236.4

18,840.5

EMPRESAS AQUACHILE S.A.

115,263.9

18,219.2

AGUAS CLARAS S.A.

Source: Infotrade

26 australis seafoods

long-term sector sustainability.

Graph No. 6: Atl antic salmon exports by company (net tons) January - December 2011

The industry is continuously improving the production system, which, coupled with the

25,000

development of new technologies for reducing sanitary risk, should generate better

20,000

performance in production and an increased survival rate.

15,000

The sustained supply of salmon throughout the year has resulted in an increased share

10,000

of salmon in distribution channels, and this 5,000

trend is expected to continue.

0 SALMONES FRIOSUR SOCIEDAD ANONIMA

12%

INVERTEC PESQUERA MAR DE CHILOE S.A.

-2%

5.6

GRUPO ACUINOVA CHILE

8.7

5.0

AQUACHILE S.A.

8.8

Coho

SALMONES CUPQUELAN S.A.

U.E.

% Variation

AUSTRALIS MAR S.A.

A.L.

2011

Atlantic

Atlantic USA

2010

MAINSTREAM CHILE S.A.

Japan

Species

LOS FIORDOS LIMITADA

Market

SALMONES MULTIEXPORT S.A.

Table No. 8: Accumulated average price by export destination FOB Chile (USD/kg) January - December 2010/2011

MArine HARVEST CHILE S.A.

Source: Infotrade

NET TON

Especie

USD/Kg

AUSTRAL IS S EAFOODS annual r ep ort 2011

Th e Sa lm o n I nd ust ry

Source: Infotrade

australis seafoods 27

Content

Our Company

Our team

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

B usi n ess d escr i pt i o ns

Raising and fattening in freshwater:

in controlled land farms. Each of these fish

Raising and fattening in freshwater in-

farms has high sanitary standards in order to

cludes the incubation, smoltification and

produce and deliver high quality fish.

spawning processes of the fish, that is, the

8.1 Business Descriptions

Fattening in seawater:

they become fry (15 g approx.) and the sub-

Raising and fattening the fish in seawater

sequent raising and fattening of the fry until

begins when the smolts enter the various

they reach smolt condition (100 g approx.).

centers, and finishes with the harvest of

All these processes take place in LACSA fish

fish with a weight of three to five kilograms,

farms located in the Metropolitan, Bío Bío, La

depending on the species. The process

Araucanía and Los Lagos Regions in Chile.

takes place in AMSA facilities or centers,

We add that Grupo ASF does not have any

which are located in the Aysén Region.

lake or estuary concessions for the smolti-

Production of Atlantic salmon, Pacific sal-

fication process. This process takes place

mon and trout is detailed below (Table No.11):

Fish eggs, Cululí Fish Farm, Los Lagos Region

The salmon business is managed through

Genetic development:

a value chain extending from the species’

The genetic program is based on cons-

Tons by species

2010

2011

% Variation 2010/2011

genetic development to export and final

tant improvement of each generation of

Atlantic salmon

7,926

21,394

170%

marketing of the products in their various

spawning fish. Attributes such as growth,

shapes and sizes.

meat color and disease resistance, among

Pacific salmon (coho)

6,955

4,607

-34%

Salmon farming uses both freshwater and

others, are enhanced so that each new

Trout

583

4,081

600%

seawater in its different processes.

generation has an increasingly high per-

Total

15,464

30,082

95%

The freshwater phase begins with egg pro-

formance. As a result, this genetic im-

duction, obtained from the spawning sal-

provement program satisfies the need to

mon (males and females) that, in the case

reproduce fish with high reproductive per-

In the sea centers, the fish are monitored

ditions are carefully monitored throughout

of LACSA, have spent their whole lives in

formance, for both the freshwater phase

the entire time they are there, which can be

the process.

freshwater fish farms. The next step is

and the seawater fattening phase.

between 10 and 18 months, depending on

The processing plants receive the raw ma-

hatching and raising and fattening the fry

It is worth noting that in 2011, 23 million

the species. This monitoring encompasses

terial (whole trout or salmon) and, using

until they become smolts, a condition ne-

units of Atlantic salmon eggs were produ-

all variables that affect the development

the latest technology and skilled labor,

cessary for transferring them to seawater.

ced in the summer, replacing the need to

and fattening of the fish, such as their

transform it into value added products ba-

The sea phase is the last in the farming

import them and surpassing the produc-

health and weight gain, among others.

sed on the requirements of the customers

process and involves raising and fattening

tion plan of 16 million for that period.

Once the fish have reached the harvest

in the target markets.

the fish until they reach the weight requi-

Below is a table with LACSA’s egg produc-

weight or commercial size, they are trans-

Once the plant process is over, the end

red for processing and marketing.

tion (Table No.10):

ported to processing plants that supply

products, both fresh and frozen, are put

Below is a brief explanation of each of the-

AMSA with services of live fish collection,

in cold storage. From there, the fresh pro-

se processes.

slaughtering and processing, and which

ducts are shipped daily in refrigerated

are located in the Chonchi (Chiloé) and

trucks to Santiago’s international airport.

Puerto Montt area.

Meanwhile, the frozen products are kept in

2011

AMSA uses the well boat live harvest sys-

cold storage until they are loaded into con-

67.4

tem, which allows the fish to be transpor-

tainers at -18°C to be transported by sea to

ted live from the farms to the processing

different ports.

plants. The system sucks the fish up from

The products undergo a strict inspection

Table No. 11: AMSA production volumes by species.

Table No. 10: LACSA’s egg production. 2006 Atlantic salmon egg production (Millions) Source: Grupo ASF

28 australis seafoods

incubation and hatching of the eggs until

30.1

2007 16.1

2008 30.9

2009 23.6

2010 25.6

their floating cages and deposits them in

Source: Grupo ASF

the storage tanks on the well boat. The advantages of using this harvest system are operation speed, reduction of fish stress, improved quality of raw material entering the plant, and, of course, sanitary control of production. The slaughter process is painless for the fish and animal welfare and sanitary con-

australis seafoods 29

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

B usi n ess d escr i pt i o ns

process and are subjected to a microbio-

Insurance on production and assets: Grupo

logical laboratory analysis at every stage

ASF’s policy is to continuously assess the

of the process.

benefits of having proper insurance coverage for the biomass found in both fresh and sea

Marketing and export:

water in all of its stages (eggs, fry, smolt or

As a result of the strategy mentioned abo-

other). Grupo ASF’s main assets, including in-

ve, a variety of products and retail formats

land fish farms and sea centers, are insured.

are obtained, depending on the destination country. The following business strategy is

The following table shows AMSA sales vo-

used to market seawater products:

lumes for different species (Table No.12):

Pre-sold production and signing medium- and long-term contracts: 100% of the raw material that is transported from the farms to the collection centers of the processing plants is pre-sold (supply agreements). For Pacific salmon (coho) and trout, prices are agreed upon for the entire harvest season. For Atlantic

Table No. 12: AMSA finished product sales volumes by species. Variation % 2010/2011

Tons by species

2010

2011

Atlantic salmon

8,342

20,569

147%

Pacific salmon (coho)

6,698

4,203

-37%

salmon, prices for a share of the production

Trout

553

3,684

566%

(fresh to the United States) is set a week in ad-

Total

15,593

28,456

82%

vance, and for other markets (Latin America),

Source: Grupo ASF

set for an entire month. For frozen products, business closures can go as long-term programs (3, 6 or more months), depending on each case. This policy allows for price optimization and reduction of fluctuations of the spot market price.

Atlantic salmon exports in 2011 were sent to the following markets: Graph No. 7: AMSA Atl antic salmon export destination 2011

Market diversification: The Grupo ASF sales 7%

portfolio is diversified into several markets, which mitigates the risks and threats of each.

1% 3%

A policy of continuous new market development has made this possible. Client development: Having the best clients

57% 23%

in each market and developing long-term business relationships with them is a constant concern. To foster this, ASF acquired 50% of True Pacific Salmon Holding (TSP), one of the largest traders of fish and seafood in the USA by sales volumes.

USA Latin America Brazil France

Spain Hong Kong Others

Source: Infotrade

Atlantic Salmon, headed to Colombia. 30 australis seafoods

australis seafoods 31

Content

Our Company

Our team

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

Risk Facto r s

Natural risks: Salmon growth depends,

Financing of LACSA and AMSA was co-

among other factors, on climatic and

ordinated based on the policies of Grupo

ocean conditions such as ambient bright-

ASF, each one maintaining a direct finan-

ness or water temperature that can have

cing structure with the financial system.

negative effects on fish growth and food consumption.

Atlantic Salmon, headed to the United States.

Investment and financing policies

Main Assets On December 31st, 2011, the Company’s main assets are the following (Table No.13):

Considering the country’s egg import restrictions, designed to protect the indus-

8.2 Risk Factors

try from outbreaks of high risk disease from abroad (case of ISA crisis), and in order to supply its own needs and those

Table No. 13: Detail of assets of Grupo ASF on December 31st, 2011, in TUSD$ Asset

Dec.2011

The salmon business inherently involves

Interest rate: Over 75% of the company

of third parties, Grupo ASF acquired Lan-

Current assets

172,769

a number of risks that affect industry de-

debt is subject to a LIBOR rate and a fixed

dcatch Chile S.A. (“LACSA”) at the end of

Cash and cash equivalents

51,480

velopment. Some of the factors are:

spread, so the variations of this rate directly

2009. This company is a national leader

Biological assets, flows and inventories

affect the company. To date there is no me-

in supplying smolts and eggs and has de-

Trade receivables

chanism for setting this LIBOR rate. The rest

veloped a genetic enhancement program

Other current assets

commodities category, and are therefore

of the debt is in USD and with fixed rates, so

(family selection) that enhances attribu-

Fixed asset

subject to the price variations of the inter-

there is no exposure to rate variations.

tes that increase profitability in salmon

Construction and work in progress

9,274

production. Additionally worth noting is

Land

4,952

Market risk: Salmon products fall into the

national market. Because of this, the sales Operating risks: Because they are biologi-

the plan this company is developing to

sonal fluctuations in price that can be either

cal assets, salmon production is potentia-

implement infrastructure for meeting in-

upward or downward.

lly affected by a number of biological risks.

ternal egg needs and egg needs of third

Some are:

parties, as well as internal smolt needs,

prices of these products are subject to sea-

in accordance with the spawning pro-

Exchange rate risk: Grupo ASF sales are made

gram that is projected until 2015.

Buildings Plants and equipment Information technology equipment Fixtures and fittings Accumulated depreciation

in USD, and there is an implicit risk in the

Disease: Although diseases are currently

appreciation of this currency as compared

controlled by vaccines, antibiotics, good

to the Chilean peso. Both appreciations and

handling practices and through the pro-

AMSA investments in 2010 were focused

depreciations of the local currency directly

duction of high quality smolts, we cannot

on buying concessions and opening the

Intangible assets

affect Grupo ASF’s results, since some ex-

rule out the emergence of new diseases

ocean centers necessary for fish fat-

Other non-current assets

penses are in local currency.

or epidemics that could affect production.

tening in the already available conces-

Total

90,303 16,864 14,122 60,373

981 54,778 206 3,071 (12,889)

Non-current assets

62,463

Non-current biological assets

28,860 14,456 19,147 295,605

sions. These investments were financed Cost of food: Among the costs of production

Predators: The presence of natural salmon

with medium-term bank credits obtained

of salmon and trout, food is the most signi-

predators, such as sea lions, can mean a

at the end of 2008 and refinanced in

ficant direct cost, both in freshwater and

loss of biomass and even the destruction

2010, and also with the company’s own

fattening business but more so in the latter.

of the net cages. The industry has imple-

resources defined for its reinvestment

Price variations of food come from variables

mented a series of preventive measures

plan. In 2011, AMSA made investments

exogenous to Grupo ASF, such as the price or

that help mitigate the adverse effects

related to the implementation of new

cost of fish meal, which in turn depends on

caused by these predators.

centers necessary for carrying out its

the costs of the extractive fishing industry.

development plan and to the buying of concessions.

32 australis seafoods

australis seafoods 33

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

Risk Facto r s

Sensen Fish Farm.

Ignao Fish Farm.

Detail of assets:

Properties:

The list above shows an amount of

Grupo ASF properties include the Curacalco

TUSD$60,373 for fixed assets. LACSA has its

fish farm in the La Araucanía region and the

own fish farms, four in financial leasing and

property and water usage rights in the La

four under long-term lease contracts.

Araucanía and Los Lagos regions. AMSA’s

On December 31st, 2011, AMSA had 17 centers

main assets are the concessions and the

in operation, all located in the Aysén Region.

equipment of the fattening centers.

Aquaculture concessions and water rights:

Equipment:

Grupo ASF has property and freshwater usa-

ted inside the fish farms and the sea centers.

ge rights for aquaculture development in the

More specifically, in the freshwater phase,

Los Ríos and Los Lagos Regions. It also has

there are filters, tanks and all assets related to

sea concessions and applications in the pro-

water purification and circulation. In the case

cess of becoming sea concessions, with the

of seawater, the equipment is everything lo-

technical capability to produce and/or harvest

cated in each of the fattening centers, such

a biomass easily satisfying the 80 thousand

as pontoons, power supply systems, cages

tons projected in the 2015 plan.

and nets.

Curacalco Fish Farm.

The main equipment of Grupo ASF is that loca-

Humos 1 Fattening Center, Aysén Region, during the harvest process in December 2010. 34 australis seafoods

australis seafoods 35

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements

ď ź

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

Main Assets We have fish farms, operation centers, aquaculture concessions, genetics, water rights and equipment that give us a solid strategic position for sustaining our future development plans.

Female Atlantic Salmon, Ignao Fish Farm. Landcatch Reproduction Program. .

36 australis seafoods

australis seafoods 37

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

S UB S I D I AR I ES AND AF F I L I ATES

Piscicultura Río Maullín SpA Name

Piscicultura Río Maullín SpA

Naturaleza Jurídica

Joint-stock Company

Capital subscribed and paid

TCLP$ 1

Purpose

Buying, selling, breeding, cultivation, import, export and distribution of all type of marine resources, and in particular, salmonid species

Board of Directors

Rodrigo Arriagada Astrosa Federico Rodríguez Marty Luis Felipe Correa González

9. Information on Subsidiaries and Affiliates and Investments in other Companies On December 31st, 2011, the main subsidiaries of Grupo ASF are the following:

Australis Mar S.A.

General Manager

Rodrigo Arriagada Astrosa

% total participation

100%

Proportion of investment in the represented asset in the matrix

Comercializadora Australis SpA Name

Comercializadora Australis SpA

Name

Australis Mar S.A.

Legal Nature

Joint-stock Company

Legal Nature

Corporation

Capital subscribed and paid

TCLP$ 1

Capital subscribed and paid

TUSD$ 5,066

Purpose

Breeding and marketing of aquatic species, particularly salmonid species

Board of Directors

Rodrigo Arriagada Astrosa

Import, export, distribution, representation and marketing of all types of merchandise, goods and products, and above all, any sort of marine resource and salmonid species; investment in all sorts of immovable or movable property, corporeal or incorporeal, such as stocks, rights, bonds and debentures, negotiable instruments, shares or rights in any type of company

Board of Directors

Rodrigo Arriagada Astrosa

Federico Rodríguez Marty Alfredo Carvajal Molinare General Manager

Andrés Saint Jean Hernández

% total participation in the matrix

100%

Proportion of investment in the represented asset in the matrix

40%

Alfredo Carvajal Molinare Luis Felipe Correa González General Manager

Andrés Saint Jean Hernández

% total participation

100%

Proportion of investment in the represented asset in the matrix

Landcatch Chile S.A. Name

Landcatch Chile S.A.

Legal Nature

Corporation

Capital subscribed and paid

TCLP$ 5,066,055

Purpose

Production, distribution and marketing of salmon and other fish varieties in different stages of the production cycle, bred and genetically enhanced for fresh or salt water

rations and results.

Rodrigo Arriagada Astrosa

10. Distributable Profit

Board of Directors

Federico Rodríguez Marty Andrés Saint Jean Hernández General Manager

José Manuel Bernales Balbontín

% total participation

100%

Proportion of investment in the represented asset in the matrix

38 australis seafoods

In 2011, ASF did not have any business with its subsidiaries and affiliates (other than property relations). There were no contracts signed between ASF and its subsidiaries and affiliates that significantly influence ASF ope-

During the period covered in the current annual report, the company made a profit of $27,429 thousand USD. The Board of Directors proposes to the shareholders’ meeting that the amount of $8,243 thousand USD be distributed. The amount to be distributed corresponds to 30% of the net income minus all the effects of Fair Value in 2011.

11. Dividend Policy The company annually distributes at least 30% of net profits from each financial year as a cash dividend to shareholders, provided the balance between accumulated loss and net income is positive. This is without prejudice to the case in which the company’s dividend is reinvested by shareholders. In this last case, the amount of the dividends may be up to the total of the year’s net income.

australis seafoods 39

Our Company

Content

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

I NFOR M AT I ON

12. Share Transactions

For the period herein reported, the company had the following share transactions: • On March 14th, 2011, Director Rodrigo Arriagada Astrosa subscribed to 2,000,000 company shares. The share price is equal to the price at which each share was offered when it first entered the stock exchange, that is, $185. The transaction amount was $370,000,000, and the payment deadline is pending. This subscription was not made with the intention of acquiring control of the Company, but rather was a financial investment. • On March 14th, 2011, Director Federico Rodríguez Marty subscribed to 1,000,000 company shares. The share price is equal to the price at which each share was offered when it first entered the stock exchange, that is, $185. The transaction amount was $185,000,000, and the payment deadline is pending. This subscription was not made with the intention of acquiring control of the Company, but rather was a financial investment. • On June 14th, 2011, the company C. Rodríguez y Cia. Limitada, connected to Director Federico Rodríguez, bought 54,000 shares of the Company on the stock exchange, at a unit price of $185. The total transaction amount was $9,990,000. This purchase was not made with the intention of acquiring control of the Company, but rather was a financial investment.

20th, 2011: (i) Fitch Chile Clasificadora de Riesgo Ltda: First Class Level 4.

industrial sector of Puerto Chacabuco, commune and province of Aysén.

(ii) Clasificadora de Riesgo Humphreys Limitada: First Class Level 4.

The total price of the sale amounted to $1,125,000,000.

• By means of private instruments, on May 2nd, 2011 and July 19th, 2011,

• The subsidiary Landcatch Chile S.A., through public deeds on June

the subsidiary Australis Mar S.A. and Amado Rodríguez, Alejandro Almeida

30th, 2011, carried out two transactions with Banco Santander Chile in

and Francisco Pinto signed a Memorandum of Understanding in which both

order to refinance the acquisition of the Las Vertientes and Ignao fish

parties reached an agreement on the terms and conditions under which

farms. The total amount is $8,681,309 for a period of eight years with one

Australis Mar S.A. acquires 50% of the shares of True Pacific Holding Com-

grace year, 4.62% annual interest and option to prepay under parameters established starting in month 25.

pany, Inc., a company constituted in the state of Florida, United States of America, whose orientation and experience is marketing fish and seafood. • On May 19th, 2011, the Board of Directors approved the “Regularity Policy on Related Party Operations” and the “Policies of Information Dis-

geles Notary’s Office of Mr. Selim Parra, Landcatch Chile S.A. bought,

closure and Treatment and Ownership and Transaction of Securities Is-

commune of Los Ángeles, Bio Bio Region. The unit and total price of the

sued by Australis Seafoods S.A,” hereinafter the “Policies,” which must

sale amounted to $2,863,063,905.

comply with articles 9, 10, 12, 16 and subsequent articles of the Law No. 18,045 on the Securities Market and article 147 of Law No. 18,046 on Corporations and the General Standards No. 269 and No. 270 of the Securities and Insurance Superintendency. • By means of deeds dated June 3rd, 2011, issued in Mr. Ricardo Fontecilla’s notary’s office of Llanquihue, the subsidiaries of the companies Australis Mar S.A. and Piscicultura Río Maulín SpA acquired 100% of the social rights of Salmones Galway Limitada and Salmones Mitahues Limitada. These companies are owners of 89 requests for aquaculture concessions in different sectors of the ocean in the Aysén Region. The price of the aforementioned concessions was established on the basis of a fixed price, a sum of TUSD$2, paid with the signature of the co-

13. Information on Essential or Relevant Facts

During 2011 the Company reported the following essential or relevant facts: • On April 8th, 2011, by public deed executed by the Santiago notary’s office Eduardo Avello Concha, the subsidiary Landcatch Chile S.A. acquired the entire economic unit of the Las Vertientes Fish Farm, located in the La Araucanía Region, Cunco Commune. It was purchased from a non-related company and the price amounted to USD$5,600,000.

• By means of public deeds issued September 13th, 2011, in the Los Án-

rresponding deeds, and a variable price of TUSD$3, associated with the progress of the concession requests owned by the acquired companies and obtaining certain resolutions from relevant authorities regarding these requests. In addition, TUSD$100 will be paid for each concession awarded to a specific technical project starting with number 14, which has been favorably approved. • On June 8th, 2011, the Board of Directors declared successful the placement of 180,000,000 first issue shares, representative of 12.77% of the Company’s capital stock. This placement took place on June 9th, 2011 in the Santiago Stock Exchange. The first issue share offer took place in the local market through Larraín Vial S.A. Stockbrokerage, acting as placement agent, and the sale was executed in the Santiago Stock

from an unrelated third party, the Ketrún Rayén fish farm, located in the

• On October 20th, 2011, a Special Shareholders Meeting was held. Shareholders representing 97.274% of the total shares with voting entitlement attended, and the following was decided: (i) the revocation of the current Board, and the election of new members, including Mr. Rafael Fernández Morandé, who was nominated by the shareholder AFP Hábitat S.A. to represent pension funds it manages, and who was elected without the controlling shareholder votes. The other directors elected were nominated by the controlling shareholder and were already acting as directors of the Company; (ii) Determination of remuneration of Directors in their offices until the next regular shareholder meeting; (iii) Modification of currency used for Company accounting and stating statutory capital from Chilean pesos to United States Dollars; (iv) Capitalization of

15. Financial Reports

Annex No. 1 presents the company’s financial reports, properly audited under their respective rationales.

of article 26 of the Corporations Law, this capital being fixed at a sum of USD$123,032,084; (v) Reform of the permanent fifth and temporary first articles of the bylaws, in order to reflect the new agreements of the previous points. • The subsidiary Landcatch Chile S.A., by means of a public deed dated November 21st, 2011, made a leaseback transaction with BBVA Chile regarding the Ketrún Rayén fish farm, located in the commune of Los Ángeles, Bio Bio Region, for price of $5,708,336.00 for a period of eight years with a six month grace period. • On December 9th, 2011, the subsidiary Comercializadora Australis SpA acquired 50% ownership of True Salmon Pacific Holding Co. (hereinafter

Eduardo Avello Concha, the subsidiary Landcatch Chile S.A. acquired the

Book Auction.” The auction price of the offered shares was fixed by the

“TSP”), owner of 100% of the social rights or shares of True Nature Se-

entire economic unit of the Ignao Fish Farm, located in the Los Ríos Re-

Company for a sum of $185 per share, making the total amount of the

afoods Inc. and South Pacific Specialties LLC, companies through which it

gion, Lago Ranco Commune. It was purchased from a non-related com-

share placement $33,300,000,000.

markets fish and seafood in the United States of America and Canada to unrelated third parties. The total price amounts to $7,525,000 USD.

• The shares registered by the company in the Securities Registry of the

Santiago Notary’s Office of Mr. Eduardo Avello, the Company’s subsidiary

• On December 15th, 2011, Mr. Ricardo Daniel Misraji Vaizer replaced Mr. Al-

Securities and Insurance Superintendency, to be placed on the market

Procesadora de Alimentos Australis SpA bought, from an unrelated third

fredo Carvajal Molinare as the new Chief Financial Officer of Australis Se-

under the number 925, received the following risk classification on May

party, the facilities and equipment of the seafood processing plant in the

afoods S.A.

40 australis seafoods

the company did not have a board of directors.

taking out issue and placement costs, in compliance with paragraph two

• By deed, on April 20th, 2011, executed by the Santiago notary’s office

• Through public deeds awarded the 5th and 15th of July, 2011, in the

In 2011 the company did not receive any comments or proposals from shareholders owning 10% or more of the issued shares. In this period

the highest value obtained in the placement of shares on June 9th, 2011,

Exchange, Securities Exchange by means of the trading method “Orders

pany and the price amounted to UF 98,556.

14. Summary of Shareholder Comments and Proposals

australis seafoods 41

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Declaration of Responsibility The undersigned affirm that all the information contained in this 2011 annual report is reliable and true.

42 australis seafoods

Rodrigo Arriagada Astrosa President of the Board 8.547.812-5

Isidoro Quiroga Moreno Director 6.397.675-K

Federico Rodríguez Marty Director 9.357.625-K

Luis Felipe Correa González Secretary Director 11.947.424-8

Rafael Fernández Morandé Director 6.429.250-1

Andrés Saint-Jean Hernández General Manager 7.085.033-8

australis seafoods 43

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements

ď ź

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

Content

Consolidated Financial Statements AUSTRALIS SEAFOODS S.A. AND SUBSIDIARIES December 31, 2011

Content

44 australis seafoods

Independent Auditors Report

Classified consolidated statement of financial position

Consolidated income statement by function

Consolidated statement of comprehensive income

Consolidated statement of changes in net equity

Consolidated statement of cash flows - indirect method

Notes to the consolidated financial statements

US$

- US dollars

TUSD$

- Thousands of US dollars

australis australis seafoods seafoods 45 45

Content

Our Company

Our team

The Salmon Industry

Main Assets

Consolidated Financial Statements

ď ź

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Independent Auditors Report Santiago, March 14, 2012

Dear Shareholders and Directors Australis Seafoods S.A. We have audited the consolidated statements of financial position of Australis S.A. and subsidiaries as of December 31, 2011 and 2010, the consolidated statement of financial position from opening on January 1, 2010 and of the corresponding consolidated statements of comprehensive income, of the changes in equity and of cash flows for the years ending on these dates. The preparation of these financial statements (including the related notes) is the responsibility of the Administration of Australis Seafoods S.A. and subsidiaries. Our responsibility is to give our opinion about these financial statements based on the audits we conducted. These audits were conducted in accordance with the auditing standards generally accepted in Chile. These standards require that we plan and conduct the audit to obtain reasonable assurance that the consolidated financial statements are free of significant incorrect representations. An audit includes examining, based on tests, of evidence supporting the amounts and disclosures shown in the consolidated financial statements. An audit also includes an evaluation of the accounting principles used and the significant estimates made by Company Administration, as well as an evaluation of the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. In our opinion, these consolidated financial statements present accurately, in all significant aspects, the financial position of Australis Seafoods SA and subsidiaries as of December 31, 2011 and 2010 and of January 1, 2010, the comprehensive income of its operations and cash flows for the years ending December 31, 2011 and 2010, according to International Financial Reporting Standards.

Luis Enrique Alamos O. RUT: 7.257.527-8

46 australis seafoods

australis seafoods 47

Content

Our team

Our Company

The Salmon Industry

Main Assets

ď ź

Consolidated Financial Statements

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

AUSTRALIS SEAFOODS S.A. AND SUBSIDIARIES

Classified Consolidated Statement of Financial Position

Assets

Note

As of December 31, 2011 TUSD$

As of January 1, 2010 TUSD$

51,480

11,768

3,670

426

377

Other non-financial assets, current

As of December 31, 2011 TUSD$

As of January 1, 2010 TUSD$

Current liabilities Other current financial liabilities

16,445

12,630

40,365

51,330

35,244

14,283

Current accounts payable to related entities

3,893

557

2,990

Provisions for employee benefits, current

2,604

1,900

465

74,272

50,331

58,103

Trade debtors and other receivables, current

16,864

10,175

11,133

Trade accounts and other receivables, current

Accounts receivable to related entities, current

5,751

9,462

1,523

11,506

2,617

3,494

Biological assets, current

78,797

57,651

29,523

Assets for taxes, current

Inventories

Note

Liabilities

Current Assets Cash and Cash Equivalents

Equity and Liabilities

Total of Current Assets

7,945

5,748

1,211

172,769

97,798

50,589

Non-current assets Other non-financial assets, non-current

7,535

8,929

5,553

Investments recorded using accounting method of participation

7,612

Intangible assets other than goodwill

14,456

10,422

6,775

Properties, plant and equipment

60,373

30,664

20,888

Non-current biological assets

28,860

16,343

9,445

Assets for deferred taxes

4,000

1,593

1,283

Total of non-current assets

122,836

67,951

43,944

Total of Assets

295,605

165,749

94,533

Total of current liabilities Non-current liabilities Other non-current financial liabilities

65,725

52,252

379

Other non-current, payable accounts

5,259

Non-current accounts payable to related entities

628

11,395

Liability for deferred taxes

8,877

5,617

3,791

1,507

360

76,109

58,857

20,834

150,381

109,188

78,937

Other non-financial liabilities, non-current Provisions for employee benefits, non-current

Total of non-current liabilities Total of liabilities Equity Issued capital

123,081

46,652

20,114

Acumulated earnings (losses)

24,163

11,929

(4,708)

Other reserves

(2,020)

Equity attributable to the owners of the controller

145,224

56,561

15,406

Non-controlling participation

The attached notes, numbers 1-34, form an integral part of these consolidated financial statements.

48 australis seafoods

190

Total equity

145,224

56,561

15,596

Total of Liabilities and Assets

295,605

165,749

94,533

The attached notes, numbers 1-34, form an integral part of these consolidated financial statements.

australis seafoods 49

Content

Our team

Our Company

The Salmon Industry

Main Assets

ď ź

Consolidated Financial Statements

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

AUSTRALIS SEAFOODS S.A. AND SUBSIDIARIES

Consolidated Income Statement by Function

Consolidated Statement of Comprehensive Income

Note Income Statement of Earnings (loss) Income from regular activities Cost of sales Gross profit pre fair value

For the financial year ending on December 31, 2011 December 31, 2010 TUS$ TUS$

Por el ejercicio terminado As of December 31 of 2011 TUSD$ Consolidated statement of comprehensive income

163,664 (113,315) 50,349

84,401 (58,307) 26,094

(23,479) 23,420 50,290

(14,627) 13,608 25,075

29 15

450 (2,025) (8,317) (1,700) 1,921 (1,901) 87

2,200 (1,257) (5,217) (2,736) 238 (1,241) -

(4,680)

2,362

34,125

19,424

Total of comprehensive income

(6,696)

(2,047)

Comprehensive income attributable to

27,429 -

17,377 -

Income (loss)

27,429

17,377

Income (loss), attributable to Income (loss), attributable to owners of the controllers Income (loss), attributable to non-controlling interests

27,429 -

17,377 -

Income (loss)

27,429

17,377

Income per basic and diluted asset Income (loss) per basic and diluted asset in on-going operations Income (loss) per basic and diluted asset per ceased operations

0.020 -

847 -

Income (loss) per basic asset

0.020

847

(charge) credit to Fair Value Earnings of biological assets harvested and sold (charge) credit to Fair Value earnings for current development of assets Gross profit Other earnings, per function Distribution cost Management expenses Other expenses, per function Financial Earnings Financial Costs Interests in earnings (losses) from Associates and joint ventures that are recorded using the method of participation Exchange differences

26 27 28 26

Income (loss), before taxes Expenses per income tax Income (loss) from on-going operations Income (loss) from ceased operations

Income (loss)

As of December 31 of 2010 TUSD$

27,429

17,377

Income (loss) per conversion exchange differences, before taxes

Other comprehensive income, before taxes, exchange differences pro conversion

Other elements of comprehensive income, before taxes

Other comprehensive income

27,429

17,377

27,429

17,377

27,429

17,377

Elements of other comprehensive results, before taxes Conversion exchange differences

Comprehensive income attributable to owners of controller Comprehensive income attributable to non-controlling interests Total of comprehensive income

Income per asset

The attached notes, numbers 1-34, form an integral part of these consolidated financial statements.

50 australis seafoods

The attached notes, numbers 1-34, form an integral part of these consolidated financial statements

australis seafoods 51

Content

Our Company

Our team

The Salmon Industry

Main Assets

ď ź

Consolidated Financial Statements

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

AUSTRALIS SEAFOODS S.A. AND SUBSIDIARIES

Consolidated Statement of Changes in Net Equity

Consolidated Statement of Cash Flows Indirect Method

AS OF DECEMBER 31, 2011 AND 2010

Opening balance current period 01/01/2011

Issued capital

Share premium

TUSD$

Other reserves

Equity attributable to the owners of the controller

Non-controlling interests

Total equity

TUSD$

46,652

11,929

56,561

Increase [decrease] due to changes in accounting policies

Increase (decrease] for error corrections

46,652

11,929

56,561

Profit (loss)

27,429

Other comprehensive income

27,429

7,790

61,687

69,477

(8,243)

(6,952)

Opening balance restated

(2,020)

Acumulated earnings (losses)

(2,020)

Changes in equity Comprehensive income

Comprehensive income Issuance of equity Dividends Increase (decrease] due to other owner contributions

6,952

Capitalization premium

61,687

(61,687)

Total changes in equity

76,429

12,234

88,663

Final balance current period 12/31/2011

123,081

(2,020)

24,163

145,224

Other reserves

Acumulated earnings (losses)

Equity attributable to the owners of the controller

Non-controlling participation

Total equity

TUSD$

Opening balance current period 01/01/2010

Issued capital

Share premium

TUSD$

20,114

-4,708

15,406

190

15,596

Increase [decrease] due to changes in accounting policies

Increase (decrease] for error corrections

20,114

(4,708)

15,406

190

15,596

Profit (loss)

17,377

Other comprehensive income

17,377

(9,466)

Opening balance restated Changes in equity Comprehensive income

Comprehensive income Issuance of equity Dividends Increase (decrease] due to other owner contributions Increase (decrease] due to other owner distributions Increase (decrease] due to transfers and other changes

50,519

(18,083)

(8,152)

Increase (decrease] due to portfolio transactions Other increases

2,254

0 (9,466) 50,519

(190)

(18,273)

8,152

458

(2,020)

116

350

Total changes in equity

26,538

(2,020)

16,637

41,155

(190)

40,965

Final balance current period 12/31/2010

46,652

(2,020)

11,929

56,561

As part of the other reserves account balance, accounting effects derived from the application of Official Memorandum No. 456 of the SVS.

The attached notes, numbers 1-34, form an integral part of these consolidated financial statements.

52 australis seafoods

350

Statement of cash flows Cash flows from / (used in) operating activities Income (loss) Adjusments per income (loss) reconciliation Adjusment per expenses per income tax Adjustments per decrease (increase) of inventories Adjustments per decrease (increase) in comercial payable accounts Adjustments per decrease (increase) in other receivable account from operation activities Adjustments per increases (decrease) in comercial payable accounts Depreciation and amortization adjustments Provision adjustment Adjustments of unperformed foreign exchange losses (earnings) Adjustments per loss (earnings) of fair value Other adjustments per items different from cash Adjustments per non-distributed earnings of associates Total of adjustments per income (loss) reconciliation Paid dividends Net cash flows from / (used in) operating activities Cash flows from / (used in) investment activities Other payments to acquire participation in joint ventures Charges to related entities Carrying amounts from properties, plant and equipment sold Purchasing of properties, plant and equipment Purchasing of intangibles assets Net cash flows from / (used in) investment activities Net cash flows from / (used in) financing activities Items from share issue Items from long term loans Items from short term loans Loans to related entities Payment of loans Payment of liabilities due to financial leases Paid interests Payments of loans to related entities Net cash flows from / (used in) financing activities Net increase (decrease) in cash and cash equivalents before the effect of the changes in the foreign exchange rate Effects of the variation on the exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the start of the period Cash and cash equivalents at the end of the period

01/01/2011 12/31/2011

27,429

17,377

6,696 (42,300) (6,602) (803) 6,837 2,771 2,767 4,680 59 (87) (25,982) (9,248) (7,801)

2,047 (34,681) 2,415 13,003 1,300 1,106 (2,362) 1,019 (16,153) 1,224

(4,000) 9,248 8,782 (32,877) (2,666) (21,513)

(14,161) (490) (14,651)

69,477 5,292 9,248 (12,600) (230) (1,533) (628) 69,026

32,367 640 (11,285) (197) 21,525

39,712

8,098

39,712 11,768 51,480

8,098 3,670 11,768

The attached notes, numbers 1-34, form an integral part of these consolidated financial statements.

australis seafoods 53

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Consolidated Financial Statements

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Notes to the Consolidated Financial Statements As of December 31, 2011

The financial statements present an accurate image of the net worth and financial position on December 31, 2011, as well as results of operations, changes in equity and cash flows that occurred in the company for the financial year ending on December 31, 2011. For the purpose of comparison, the classified Statement of financial position and the associated explanatory notes are compared with the balances of December 31, 2010 and January 1, 2010, and the Consolidated Statement of indirect cash flow and the Consolidated Statement of changes in net equity are given for the financial year ending on December 31, 2011 and 2010. The consolidated financial statements of Australis Seafoods S.A. were prepared on a going concern basis.

Note 1 - General Information

The consolidated financial statements of Australis Seafoods S.A. and subsidiaries corresponding to the financial year ending on December 31, 2011 were approved by the board during a meeting on March 14, 2012.

Australis Seafoods S.A. RUT 76.003.557-2 (hereinafter “Australis Seafoods” or the “Company”) is a Corporation constituted by means of a public deed on October 31, 2007, executed in the notary’s office of Iván Torrealba Acevedo, according to index No. 11.56807. An extract of this deed was entered in the Register Commerce of the Real Estate Office of Santiago, pages 48,775 No. 34,583. The Company is located on Avda. Presidente Riesco 5711, office 1603, Las Condes, notwithstanding the agencies, offices or branches established in the country or abroad. The duration term of the Company is indefinite. On May 19, 2011, the Company was registered under the number 1074 in the Securities Registry of the SVS. The capital of the Company is one hundred and twenty-four million four hundred and seventy-seven thousand U.S. dollars (TUSD $ 124,477) which is divided into 1,403,002,444 shares (one billion four hundred and three million two thousand four hundred and forty-four). The Society corresponds to a parent company that integrates a group of four subsidiaries; Landcatch Chile S.A., Australis Mar S.A., Río Maullín SpA. Fish Farm and Comercializadora Australis S.A. This structure was defined at the end of 2010 in order to focus and strengthen the different businesses in the group, that is, the freshwater business through the subsidiary Landcatch Chile S.A. and the seawater business through the subsidiary Australis Mar S.A. This was done considering that the previous structure of the group

Note 2 - Summary of the Main Accounting Policies Below, the main accounting policies adopted for preparation of consolidated financial statements are described. These will be applied uniformly to all financial periods presented in these financial statements.

2.1 Basis of preparation These consolidated financial statements of Australis Seafoods S.A. a December 31, 2011 were prepared in accordance with the International Financial Reporting Standards (IFRS). The company has adopted the International Financial Reporting Standards starting on January 1, 2011, and therefore the transition date to these standards is January 1, 2010. The financial statements from December 31, 2011 have been prepared in order to comply with SVS requirements. In accordance with the provisions of IFRS 1, the date of transition of Australis Seafoods S.A. and subsidiaries is January 1, 2010 and the date of adoption is January 1, 2011.

included two subsidiaries for freshwater business, one subsidiary for seawater fattening and other additional subsidiaries, which

The preparation of these consolidated financial statements in conformity with IFRS requires the use of certain accounting estimates

made the group’s business development less efficient. Subsequently, in July 2011, the subsidiary Comercializadora Australis SpA

and criteria. It also requires that the Administration exercises judgment during the process of applying the Company´s accounting

was incorporated.

policies.

The company’s social purpose, as defined in its charter, is:

Note 5 gives the areas involving a higher degree of judgment and complexity or the areas where assumptions and estimates are

a) The import, export, distribution, representation and marketing of all kinds of merchandise, goods and products. b) The purchase, sale, exchange, leasing and disposal of all types of real estate and movable assets, aquaculture concessions, fishing and fish farm authorizations, rights and other similar assets. c) The supply of all types of services, from the company or from third parties and consultants, including those services related to fishing and fish farming, among others. d) The buying, selling, breeding, cultivation, import, export and distribution of all type of hydro-biological resources, and in particular,

relevant and significant for the consolidated financial statements. At the date of these financial statements, there are no significant uncertainties regarding events or conditions that may cause significant doubts as to whether the entity will continue to operate normally on a going concern basis.

2.2 New issued standards and interpretations a) The following standards, interpretations and amendments are mandatory for the first time for the financial periods beginning on January 1, 2011:

salmonidae species, and also all business directly or indirectly related with fishing and fish farming activities. e) Investment in all types of movable or inmovable assets, tangible or intangible assets, such as stocks, bonds and debentures, commercial instruments, savings schemes, shares or rights in any sort of company, whether commercial or civil, communities or associations, and in any type of bond or security, and in general, to execute all contracts and acts to achieve these ends, and

Mandatory for periods Standards and interpretations IAS 24 (revised) “Disclosures of related parties”

beginning on 01/01/2011

f) To form, constitute or integrate companies, associations or corporations of any type in order to achieve the social purposes. These financial statements of Austalis Seafoods S.A. and subsidiaries consist of the classified Consolidated Statement of financial position, the Consolidated Statement of comprehensive income by function, the Consolidated Statement of indirect cash flow, the Consolidated Statement of changes in net equity and the Complementary Notes with disclosures to these consolidated financial statements.

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Content

Our team

Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Amendments and improvements

Mandatory for periods beginning on

Amendments and improvements

Mandatory for periods beginning on

IAS 32 “Financial Instruments: Presentation”

02/01/2010

IAS 1 “Presentation of Financial Statements”

07/01/2012

IFRS 1 “First-time Adoption of International Financial Reporting Standards”

07/01/2010

IAS 12 “Income Taxes”

01/01/2012

Improvements to International Standards:

IFRS 1 “First-time Adoption of International Financial Reporting Standards”

07/01/2011

There have been improvements made to the IFRS 2010 in May 2010 for a set of standards and interpretations. The effective adoption dates of these minor modifications vary from standard to standard, but the majority have an adoption date of January 1, 2011:

IFRS 7 “Financial Instruments: Disclosures”

07/01/2011

IAS 28 “Investments in associates and joint ventures”

01/01/2013

IFRS 1 “First-time Adoption of International Financial Reporting Standards”

01/01/2011

IFRS 3 (revised) “Business Combinations”

07/01/2010

IFRS 7 “Financial Instruments: Disclosures”

01/01/2010

IAS 1 “Presentation of Financial Statements” IAS 27 “Consolidated and Separate Financial Statements”

01/01/2011 07/01/2010

IAS 34 “Interim Reporting”

01/01/2011

IFRIC 13 “Customer Loyalty Programs”

01/01/2011

The adoption of the standards, amendments and interpretations described above do not have a significant impact on the consolidated financial statements of the Company.

2.3. Basis of consolidation a) Subsidiaries Subsidiaries are all entities over which Australis Seafoods S.A. and subsidiaries have power to govern financial and operating policies, which generally comes with a stake of more than half of the voting rights. When evaluating if the group of companies organized

b) The newly issued standards, interpretations and amendments, not in force for the financial year 2011, have not yet been adopted. Standards and interpretations

Company administrations deems that the standards, amendments and interpretations adoption described above do not have a significant impact on the Company´s consolidated financial statements in the first period of application.

Mandatory for periods beginning on

Revised IAS 19 “Employees benefits”

01/01/2013

IAS 27 “Separate Financial Statements”

01/01/2013

IFRS 9 “Financial Instruments”

01/01/2015

IFRS 10 “Consolidated Financial Statements”

01/01/2013

IFRS 11 “Joint Agreements”

01/01/2013

IFRS 12 “Disclosure of shareholdings in other entities”

01/01/2013

IFRS 13 “Fair value measurements”

01/01/2013

IFRIC 20 “Stripping Costs in the production phase of open pit mines”

01/01/2013

under Australis Seafoods S.A., hereinafter the “Group,” controls another entity, the existence and effect of potential voting rights that are currently possible to exercise or convert are considered. The subsidiaries are consolidated from the date on which control is transferred, and are excluded from the consolidation on the date that control ends. The acquisition accounting method is used for subsidiary acquisition. The acquisition cost is the fair value of the assets relinquished, of the equity instruments issued and of the incurred or assumed liabilities at the date of exchange, plus the costs directly attributable to the acquisition. The identifiable acquired assets and the assumed identifiable liabilities and contingencies in a business combination are initially measured by their fair value at the date of acquisition, independently of the extent of non-controlling interests. The cost excess of acquisition on the fair value of the Company´s participation in the identifiable net assets acquired is recognized as goodwill. If the cost of acquisition is less than the fair value of the net assets of the acquired subsidiary, the difference is recognized directly in the income statement. Intercompany transactions are eliminated, along with balances and unrealized earnings from transactions between related entities. Unrealized losses are also eliminated, unless the transaction provides evidence of a loss due to depreciation of the transferred asset. When it is necessary in order to ensure uniformity with the policies adopted by Australis Seafoods S.A. and subsidiaries, the subsidiaries’ accounting policies will be modified.

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Content

Our team

Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Below are the details of the companies included in these consolidated statements of financial position

Company Name

Rut

Country of origin

Functional currency

b) Transactions and non-controlling shares The non-controlling interests are presented under the heading net equity of the Classified consolidated statement of financial po-

As of December 31, 2011 Direct %

Indirect %

Total %

As of December 31, 2011 %

As of January 1, 2010 %

Landcatch Chile S.A. (i)

77.071.070-7

Chile

USD

100.00

Australis Mar S.A.

76.003.885-7

Chile

USD

99.95

0.05

100.00

Pisc. Río Maullín Spa

76.082.694-4

Chile

USD

100.00

Río Calle Calle S.p.A.)

76.090.483-k

Chile

USD

99.9998

0.0002

100.00

Comercializadora Australis SpA

76.126.907-0

Chile

USD

100.00

Chile Seafoods S.A.

96.943.600-0

Chile

USD

100.00

Inversiones Caiquenes Ltda

76.043.420-5

Chile

USD

100.00

Salmones Gama Ltda.

76.065.730-1

Chile

USD

100.00

sition. The earning or loss attributable to the non-controlling share is presented in the consolidated statement of comprehensive income by function shaping the earning (loss) of the financial year. The results of the transactions between non-controlling shareholders and shareholders of the companies where ownership is shared are recognized within the equity, and, therefore, shown in the Consolidated statement of changes in net equity. c) Joint ventures Shares in joint ventures are integrated by the equity method as described in IAS 31 paragraph 38.

Landcatch Chile S.A. (ex Pisc.

2.4. Financial Information by operating segment IFRS 8 requires entities to adopt the “Administration’s focus” when disclosing information about the income of its operating segments. In general, this is the information that the Administration uses internally in order to evaluate segment performance and decide how to allocate resources. Australis Seafoods S.A. and subsidiaries present information by segments (corresponding to business areas) based on the financial

Food Processor Australis SPA

76.126.902-k

Chile

USD

100.00

Inversiones Ovas del Pacifico

76.088.812-5

Chile

USD

100.00

Piscicultura Río Salvaje

76.847.050-2

Chile

USD

100.00

information made available to decision makers, with respect to matters such as profitability measurement and investment allocation, and based on product differentiation, in accordance with the provisions of IFRS 8 - Operating Segments. This information is presented in detail in Note 6.

At the end of the 2010 financial year, Australis Seafoods S.A. (Parent Company) underwent a restructuring of the company

Segments disclosed by Australis Seafoods S.A. and subsidiaries are:

group in order to simplify its operations, separately defining the freshwater business and seawater fattening business. This

- Freshwater salmon cultivation

restructuring included the sale of shares within the group, leaving a simpler structure that included the concentration of

- Seawater salmon and trout cultivation

freshwater operations in the subsidiary Landcatch Chile S.A. (before Piscicultura Río Calle Calle SpA.) and fattening in seawater

2.5. Foreign currency transactions

operations in the subsidiary Australis Mar S.A.

a) Presentation currency and functional currency

As a result of this restructuring, the following transactions, among others, were done: On December 16, 2010, Australis S.A. sells

The items included in the financial statements for each entity of Australis Seafoods S.A. and subsidiaries are measured using the cu-

a share of Landcatch Chile S.A. to Piscicultura Río Calle Calle S.p.A. On the other hand, on December 20, 2010, at the Sharehol-

rrency of the primary economic environment in which the entity operates (functional currency). The functional currency of Australis

ders Extraordinary General Meeting, it was agreed to increase the social capital of Piscicultura Río Calle Calle SpA by TUSD$

Seafoods S.A. and subsidiaries is the U.S. dollar, which is also the presentation currency for the consolidated statements of financial

10,723 by issuing the respective payment shares. That increase was signed and paid in full by Australis Seafoods S.A. (Parent

position.

company) by providing all shares held in Landcatch Chile S.A. (old) plus a demand note. By virtue of the foregoing, Piscicultura Río Calle Calle SpA becomes owner of 100% of the shares of Landcatch Chile S.A. (old), so that the latter dissolves and the former becomes its legal successor. Additionally, in the same act, the joint stock company “Piscicultura Río Calle Calle SpA” was transformed into a closed stock corporation named “Landcatch Chile S.A.” On December 31, 2010, in Extraordinary Shareholders Meeting, the division of Australis Seafoods S.A. into two companies was approved. A new company with the name or trade name “Inversiones en Aquicultura S.A.” comes into effect, while the former maintains the same name and RUT. In the same act, the entire equity of the new company and the assets and liabilities of the divided company they correspond to the new company are approved, all with effect of January 1, 2010. The equity of the new

b) Transactions and balances Transactions in foreign currency are converted to the functional currency using the exchange rates in effect on the transaction dates. The losses and earnings in foreign currency, resulting from the transactions liquidation and from the conversion to the exchange rates at the closing of monetary assets and liabilities denominated in foreign currency, are recognized in the income statement. c) Foreign currency exchange rates The exchange rates of the major currencies used in the accounting processes of Australis Seafoods S.A. and subsidiaries, against the dollar, on December 30, 2011, December 31, 2010 and January 1, 2010 are the following:

company, and therefore the amount by which the social capital of Australis Seafoods S.A. is decreased, goes to TUSD$ 9,714,

As of December 31, 2011

which corresponds to the investment in Australis S.A. together with the respective negative goodwill. In virtue of the foregoing, Australis Seafoods S.A. is no longer owner of the company Australis S.A. Subsequently, in July 2011, the Company acquired all the shares of Comercializadora Australis SpA, an entity that at that date had no activity. Through this entity, on December 9, 50% of True Pacific Salmon Holding Co. was acquired. This company owns

Chilean peso

Closing

Cumulative monthly average

519.2

483.54

As of December 31, 2010

As of January 1, 2010

Closing

Cumulative monthly average

Closing

Cumulative monthly average

468.01

515.26

507.10

559.61

100% of the social rights or shares of True Nature Seafoods Inc. and South Pacific Specialties LLC, companies through which

2.6. Properties, plant and equipment

it develops its marketing of fish and seafood in the United States and Canada.

The Company’s fixed assets consist of land, buildings, infrastructure, machinery, equipment and other fixed assets. The main fixed assets of Australis Seafoods S.A. and subsidiaries are lands, freshwater fish farms with their equipment and machinery and seawater fattening centers. The buildings, plant, equipment and machinery are recognized both initially and subsequently at their historical cost minus any cumulative depreciation and impairment, if there was any.

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Content

Our team

Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

For the purposes of transition to IFRS, as permitted by IFRS 1, the most significant land and buildings of the Company’s freshwater

Calculation of the fair value is based on market prices for harvested fish and adjusted for distribution differences of size and quality

subsidiary were revalued at January 1, 2010. These valuations were carried out based on market value. Their subsequent measure-

or ranges of normal weights at harvest, taking into account the weight considerations indicated in the following table. This price is

ment is done in accordance with IAS 16 using the historical cost method. Seawater fixed assets are accounted for both initially and

adjusted for harvest, transportation and processing costs, to bring it to its value and condition of bled fish at breeding stage. There-

subsequently at their respective historical cost, minus any cumulative depreciation and impairment, if there was any.

fore, the evaluation includes the lifecycle stage, the current weight and the expected distribution by size of the fish harvest. This fair

Subsequent costs (replacement parts, improvements and expansions) are included in the initial asset value or are recognized as a separate asset, only when it is likely that future economic benefits associated with the fixed asset elements will go to the Group and the cost of the element can be reliably determined. The value of the substituted part is written off in the account. All other repairs and maintenance are charged in the income statement of the financial year, or the financial year in which they are incurred. Daily maintenance and common repair costs are included in the profit or loss of the financial year. This is not so for replacements of significant or strategic parts which are capitalized and depreciated over the remaining useful life of the assets, based on each component. Depreciation of assets is calculated using the straight-line method, systematically distributed throughout useful life. Useful life has been determined based on naturally expected wear and tear, by technical or commercial obsolescence arising from changes and/

value estimate is stated in the Company’s income statement. Below is a summary of the valuation criteria: Stage

Valuation

Freshwater

Spawning fish

Direct and indirect cumulative cost.

Freshwater

Eggs

Direct and indirect cumulative cost.

Freshwater

Smolts and juvenile fish

Direct and indirect cumulative cost in different stages

Seawater

Sea fish

Fair value, according to the following:

or improvements in production and by changes in market demand for the products obtained using these assets. Land is not depre-

• Atlantic salmon from 4.3 kg in water (4.0 bled), HON average price. • Coho salmon from 2.5 kg in water (2.3 bled), H&G average

ciated.

price. • Trout from 2.5 kg in water (2.3 bled), H&G average price

Estimated technical useful life and their residual values are the following: Freshwater

Buildings

Asset

Valuation model

Seawater

Useful life

Residual value

Useful life

Residual value

Average

TUSD$

Average

TUSD$

142

Plant and equipment

234

661

Information technology equipment

Fixtures and fittings

The assessment is reviewed for each cultivation center, based on the biomass of the existing fish at the end of each financial year (inventory). Details include the total number of fish being bred, their average weight and the cost of the fish biomass. In the calculation, the value is estimated by considering the average weight of this biomass, which is then multiplied by the value per kilo reflected by market price. The market price is obtained from a range of prices of latest sales in the month. Assumptions used to determine the fair value of the fish being bred The estimation of the fair value of the fish biomass will be always based on uncertain assumptions, even when the Company has significant experience with these factors. Estimates are applied considering the following: fish biomass volume (applying the

The assets residual value and useful life are reviewed and adjusted if necessary at closing of each statement of financial position,

subsidiary’s average mortality), average biomass average weight, distribution of weights at harvest and market prices.

in order to obtain the remaining useful life according to the value of the assets.

Fish biomass volume

When the value of an asset exceeds it estimated recoverable value, its value is immediately reduced to its recoverable amount, by

The fish biomass volume is an estimate based on the number of smolts in the water, the growth estimate at the time, the application

means of the application of impairment tests. Gains or losses from the sale of property, plant and equipment is calculated by comparing proceeds from the sale with the asset’s

of the mortality observed in the period, etc. The uncertainty regarding biomass volume is usually lower in the absence of mass mortality events during the cycle or if the fish for some reason have been affected by illness.

carrying value (depreciation net) and are included in the Income statement.

Together with the above, it is worth noting that this volume, use to calculate the biological asset, includes fish whose average weight

2.7 Biological assets

harvested.

Coho and Atlantic species salmonidae biological assets as well as trout in the seawater fattening stage are measured at fair value minus the estimated costs at the point-of-sale, applying weight considerations which are detailed later under this same point, except when the fair value cannot be determined reliably in accordance with the definitions in IAS 41. In this case the first consideration should be finding an active market for these assets. Moreover, the biological assets associated with the freshwater stage, that is, spawning fish, eggs, juvenile fish and smolts, are

is greater than the cuts already defined for each type. The foregoing translates into an estimate very close to the final volume to be

Market Prices Market prices´ assumptions are important for assessment. In the case of the subsidiary Australis Mar S.A. and for the financial periods corresponding to January 1, 2010, December 31, 2010 and to December 31, 2011, the average prices of recent sales by the subsidiary were used.

valued at the cumulative cost at the closing date. The direct and indirect costs incurred in the production process are part of the value of the biological asset, through activation. The accumulation of these costs at the close of each financial period are compared with the fair value of the biological asset. Changes in the fair value of these biological assets are reflected in the income statement for the financial year. The biological assets, which have a projected harvest date of less than 12 months, are classified as current assets.

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The Salmon Industry

Main Assets

Consolidated Financial Statements

ď ź

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

2.8. Intangible assets other than goodwill

Losses due to value impairment may be reversed for accounting purposes only up to the amount of losses recognized in previous

a) Aquaculture concessions

financial years, so that the carrying amount of these assets does not exceed the value that they would have had if these ad-

Aquaculture concessions acquired from third parties are recognized at historical cost. The useful life of these concessions is mainly

justments had not been made. This reversal is recorded in the account other earnings (losses).

indefinite, since they have no expiration date and do not have a predictable useful life, and therefore, they are not depreciated. Con-

2.11 Financial assets

cessions obtained under the new fishing law have a useful life of 25 years. This is renewable according to compliance with sanitary and environmental conditions. These concessions are depreciated based on useful life.

Australis Seafoods S.A. and subsidiaries classifies financial assets in the following categories: at fair value through profit or loss, loans and receivables, financial assets held to maturity and available for sale. The classification depends on the purpose for which

b) Software

the financial assets were acquired. The Administration determines the classification of its financial assets at the time of the initial

Purchased licences for software programs are capitalized based on costs incurred to acquire and prepare them in order to use the

recognition.

specific program. These costs are amortized over their estimated useful life of 4 years. Costs associated to the development or maintenance of software programs are recognized when they are incurred. Costs directly related to production of unique, identifiable software controlled by Australis Seafoods S.A. and subsidiaries, which will likely generate economic benefits that exceed costs for more than one year, are recognized as intangible assets. Direct costs include staff costs who develop software, and any type of cost incurred in development or maintenance. c) Water rights These correspond to the rights of water use associated with fish farming technical projects. These rights are indefinite and therefore not amortized. Water rights acquired from third parties are recognized at heir historical cost. d) Research and development costs Research costs are recognized when incurred. Costs incurred in development projects (related to design and testing of new or improved products) are recognized as an intangible asset when the following requirements are met:

Classification of financial assets: a) Financial assets at fair value changes in profit or loss Financial assets at fair value through profit or loss are financial assets held for negotiation. A financial asset is classified in this category if it is acquired principally for the purpose of being sold in the short term. Assets in this category are classified as current assets. b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments not listed in an active market. Those items with expiration of less than 12 months are classified as current assets. Items with an expiration of more than 12 months are classified as non-current assets. Loans and receivables are included in trade and other receivables. These must be accounted for initially at their fair market value, recognizing a financial result for the financial period that takes place between its recognition and subsequent valuation. In the case

a) Technically, it is possible to complete the production of the intangible assetct so that it is available for use or sale.

of trade, other debtors and other receivables, it was decided to use the nominal value, keeping in mind the short collection periods

b) The administration intends to complete the intangible asset in question for use or sale.

of the Company.

c) It is possible to use or sell the intangible asset. d) It is possible to demonstrate how the intangible asset will generate likely economic benefits in the future. e) There are adequate technical, financial or other types of resources available to complete development and to use or sell the intangible asset. f) It is possible to reliably assess the expenditure attributable to the intangible asset during its development.

2.9. Interest costs When applicable, costs due to incurred interests for the construction of any qualifying asset are capitalized during the period of time needed to complete and prepare the asset for its intended use. Other interest costs are reported in the outcomes.

c) Recognition and measurement of financial assets The acquisitions and disposals of financial assets are recognized on the trade date, that is, the date that Australis Seafoods S.A. agreed to acquire or sell the asset. i) Initial recognition Financial assets are initially recognized for their fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets at fair value through profit or loss are initially recognized at fair value and transaction costs are expensed. ii) Later valuation

2.10 Impairment of non-financial assets

Financial assets available for sale and financial assets at fair value through profit or loss or later accounted for at fair value are

Assets that have an indefinite useful life are not subject to depreciation and undergo anual tests for value impairment losses.

accounted later for their fair value (with compensation in other comprehensive income and results, respectively). Loans and

Assets subject to depreciation are tested for impairment losses whenever an event or change in business circumstances indicates that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the carrying amount is greater than the recoverable value. The recoverable value of an asset is the larger of the fair value of an asset minus sale costs and its value in use. In order to evaluate value impairment losses, the assets are grouped at the lowest level for which there are separately identifiable cash flows (CGU). Non-financial assets other than bought Goodwill that have suffered an impairment loss are subject to review on each statement of financial position closing date in order to see if reversals of losses have taken place.

receivables are accounted for at amortized cost with the effective interest rate method. Financial assets are written off in the account when rights to receive cash flows from investments have expired or have been transferred, and Australis Seafoods S.A. and subsidiaries has transferred all the risks and rewards derived from ownership. Australis Seafoods S.A. and subsidiaries evaluates, on the date of each statement of financial position, if there is objective evidence that a financial asset or a group of financial assets have suffered impairment losses.

2.12 Inventories Stocks are valued at acquisition cost or net realizable value, whichever is lower. The cost is determined by the weighted average price (WAP) method. The cost of finished products and products in processing includes the cost of raw materials (value of harvested biological assets), direct labor, other direct costs and general production overheads (based on normal operating capacity).

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The Salmon Industry

Main Assets

Consolidated Financial Statements

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Net realizable value is the estimated selling price in the ordinary course of business, minus variable applicable selling costs. Obsolete products or products of slow movement are recognized at their fair value.

2.13 Trade and other receivables Trade accounts receivable are recognized at nominal value, since the average expiration periods do not exceed 90 days. If there is income associated with the longer term of payment, it is reported as deferred income in the current liability and the accrued portion is reported in the financial income. At December 31, receivables held by the Company do not exceed 90 days. Additionally, estimates are made on doubtful accounts based on an objective review of all outstanding amounts at the close of the

Deferred tax is determined using approved (or about to be approved and highly likely to pass) tax rates (and laws), in each country of operation, on the date of the statement of financial position, and which is expected to be applied when the corresponding deferred tax asset is realized or the deferred tax liability is settled. Deferred tax assets are recorded when it is likely that the group entities will have sufficient future tax benefits against which other differences can be compensated. The Company does not record deferred taxes based on temporary differences arising in the investments in related companies, since it controls the date on which these will be reversed.

financial statements. Impairment losses on doubtful debts are reported in the Statement of comprehensive income in the financial

2.19 Employees benefits

year in which they occur. Commercial loans are included in the current asset in Trade and other receivables, to the extent that their

a) Staff holidays

collection estimate does not exceed one year from the date of the financial statement.

Australis Seafoods S.A. and subsidiaries recognize the cost of staff holidays using the accrual method, which is recorded at nominal

2.14 Cash and cash equivalents

value.

Australis Seafoods S.A. and subsidiaries considers cash and cash equivalents to be cash holdings or cash held in bank current

b) Post-employment benefits

accounts, fixed-term deposits and other financial investments (high liquidity securities) with an expiration at less than 90 days from

The subsidiary Landcatch Chile S.A. has contracts with its executive staff which include compensation benefits for years of service

the investment date. Also included in this item are those investments of the cash administration, such as repurchase and resale

in the event of voluntary retirement or termination. This liability is recognized according to technical standards, and considering that

agreements whose expiration is consistent with the definitions above.

the actuarial value does not vary significantly from the cost, the latter has been maintained, with periodic evaluations in case some

Bank overdraft lines used are included in other financial liabilities.

of the variables change.

2.15 Social capital

Earnings or losses due to changes in actuarial variables, if any, are recognized in the income of the financial year in which they occur.

Social capital is represented by a single class of ordinary shares.

In addition, the Company recognizes a liability for bonuses for top executives, when it is contractually obligated or when past prac-

Minimum legal dividends on ordinary shares are recognized as the lower value of equity when accrued.

2.16 Trade accounts payable and other accounts payable Trade accounts payable are recognized initially at fair value and later valued for their amortized cost using the effective interest rate method, when these accounts have obtained a payment period exceeding 90 days. For shorter payment periods, they are registered at nominal value, not presenting significant differences with fair value.

tice has created an implicit obligation.

2.20 Provisions Australis Seafoods S.A. and subsidiaries recognize a provision when it is contractually obligated and when past practice has created an assumed obligation. Provisions for onerous contracts, litigations and other contingencies are recognized when:

2.17 Other financial liabilities

(i) Australis Seafoods S.A. and subsidiaries have an obligation, either legal or implied, as a result of past events,

Liabilities with banks and financial institutions are initially recognized at fair value, net of the costs incurred in the transaction. Sub-

(ii) It is likely that an outflow of resources will be necessary to settle the obligation; and

sequently, external resources are valued at amortized cost and any difference between the proceeds (net of costs necessary to obtain them) and redemption value is recognized in the income statement during the debtÂ´s life according to the effective interest rate method. The effective interest rate method consists of applying the market reference rate for debts with similar characteristics

(iii) The value has been reliably estimated. Provisions are valued by the current value of expenditures expected to be necessary to settle the obligation, using the best estimate

to the value of the debt (net of costs necessary to obtain them).

of Australis Seafoods S.A. and subsidiaries. The discount rate used to determine the current value reflects current assessments

It is worth mentioning that if the difference between the nominal value and the fair value is not significant, the nominal value is used.

particular liability.

2.18 Income tax and deferred taxes The cost of income tax for the financial year includes taxes of Australis Seafoods S.A. and its subsidiaries, based on taxable income for the year, together with fiscal adjustments from previous years and the change in deferred taxes.

of the market on the date of the statements of financial position, the time value of money as well as the specific risk related to the

2.21 Recognition of income Ordinary income includes the fair value of the considerations received or to be received for the sale of goods and services in the ordinary course of the activities of the Company. Ordinary income is presented as net of sales tax, returns, rebates and discounts (if

Deferred taxes are calculated, according to the liability method, based on the temporary differences arising between the asset and

any) and after eliminating sales within the Group.

liability tax bases and their carrying amounts. However, if the deferred taxes arise from initial recognition of a liability or an asset in a

Australis Seafoods S.A. and subsidiaries recognize income when the value thereof can be reliably measured, when it is likely that

transaction other than a business combination, which at the moment of transaction does not affect the accountable result or the fiscal earning or loss, it is not included in the accounting.

64 australis seafoods

the future economic benefits will flow to the entity and when specific conditions for each Group activity are met, as described below.

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Consolidated Financial Statements

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

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

a) Sales of goods

ii) The effects of deferred taxes associated to the concepts indicated in i) will have the same fate as the item that gave rise to

Revenues from sales of goods are recognized when a Group entity has transferred the risks and benefits of the products of these

them.

goods to the buyer and does not retain the right to dispose of them or the right to maintain effective control. In general, this means that sales are recorded at the moment of the transfer of risks and benefits to the clients in accordance with the terms agreed upon

2.24. Environment Expenditures related to improvement of and/or investment in production processes that improve environmental conditions are ex-

in trade agreements.

penditures in the financial period in which they are incurred. When these expenditures are part of investment projects, they are

b) Interest income

recognized as the added value of the category properties, plant and equipment.

Interest income is recognized using the effective interest rate method.

The Group has established the following types of expenditures for environmental protection projects:

c) Sales of services

a) Costs associated with legal compliance for the activity. Some of these expenses are: monitoring of effluents of the fish farms,

Ordinary revenue from sales of services is recorded when the service has been rendered. A service is considered rendered at the time it is received satisfactorily by the client.

mortality removal service, effluent treatment plant maintenance, etc. b) Additional activity costs aimed at improving productive processes. Some of these expenses are: implementation of a UV disinfection system, analysis of oceanographic information, staff training on environmental variables, implementation of biosecurity

2.22 Leases

measures and infectious vector control, etc.

When an entity of the Group is the lessee - Financial lease.

Australis Seafoods S.A. and subsidiaries lease certain fixed assets. Fixed asset leases, when the Company has substantially all the lease at fair value of the property or asset leased or, at the present value of the minimum lease payments, whichever is lower.

Note 3 - Transition to International Financial Reporting Standards

Each lease payment is distributed between the liability and the financial burden in order to obtain a constant interest rate on the

3.1 Basis of transition to IFRS

outstanding debt balance. Corresponding lease obligations, net of finance burden, are included in other financial liabilities. The

3.1.1. Application of IFRS 1

the risks and benefits inherent to ownership, are classified as financial leases. Financial leases are capitalized at the beginning of

finance cost interest element is charged in the income statement during the financial period of the lease, so as to obtain a constant periodic interest rate on the outstanding liability balance for each financial period. The asset acquired under financial lease is depreciated over their useful life or the duration of the contract, whichever is less. For sales transactions with lease-back, the differentials produced by the nature of the transaction are a part of the asset value. This amount is incorporated into the fixed asset leased goods and is depreciated based on useful life of associated leased assets.

The transition date of Australis Seafoods S.A. and subsidiaries is January 1, 2010. Australis Seafoods S.A. and subsidiaries has prepared an opening statement of financial position according to IFRS to this date. The adoption date of Australis Seafoods S.A. and subsidiaries was January 1, 2011. According to IFRS 1, to prepare the aforementioned consolidated financial statements, all obligatory exceptions have been applied and some optional exemptions to the retroactive application of IFRS have also been applied and are detailed below.

When an entity of the Group is the lessee - Financial operating lease.

3.1.2 Exemptions to retroactive applications chosen by Australis Seafoods S.A. and subsidiaries

Leases where the lessor retained a significant part of the risks and rewards derived from ownership of the asset are classified as

Australis Seafoods S.A. and subsidiaries have chosen to apply the exemptions to retroactive application of IFRS detailed below:

operating leases. Payments under operating leases (net of any incentive received from the lessor) are charged in the income statement on a straight-line basis during the financial period of the lease.

2.23 Dividend policy Under the provisions of the Corporations Law, the Company is obligated to distribute a minimum dividend equal to 30% of the profits, unless shareholders unanimously agree on a lower amount. Under IFRS, recognition of obligation to shareholders must be anticipated at the date of the closing of the annual statements of financial position, with the consequent decrease in equity. According to the SVS, related to memorandum No. 1945, to determine net profits distributable of the parent Company to be considered in the calculation of dividends for the financial year 2010, the following is excluded from the income:

a) Business combinations The exemption makes it so that business combinations prior to the transition date are not submitted. It is possible for IFRS 3 not to be applied to business combinations before the transition date. Australis Seafoods S.A. and subsidiaries have applied this exemption taken from IFRS 1 for business combinations. Therefore, business combinations that took place before the transition date of January 1, 2010 have not been restated. b) Fair value or revaluation as an acquired cost The entity may elect at the date of transition to IFRS to measure a fixed asset item at fair value and to use this fair value as the deemed cost at that date. Australis Seafoods S.A. and subsidiaries in some cases opted to measure their fixed asset at fair value and to use this value as the

i) Unrealized profits or losses, related to the recording at fair value of biological assets regulated by the accounting standard “IAS

initial historical cost in accordance with IFRS 1 (standards of the first adoption). The fair value of the fixed assets was measured ac-

41,” reintegrating them into net profits the moment they are realized. For this purpose, realized will be understood as the portion

cording to an assessment by external, independent experts for certain assets and, in other cases, the historical cost of acquisition

of these fair value increases corresponding to the assets sold or disposed of by other means.

was used. In particular, for the subsidiary Landcatch Chile S.A., and investment done by external experts was used, while for the subsidiary Australis Mar S.A., the historical cost of acquisition was used. Notwithstanding the foregoing, for this latter subsidiary the useful lives of the assets and their residual values were reviewed with external experts.

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

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

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

c) Employees benefits

2) Intangibles

The first-time adopter may opt to recognize all cumulative actuarial earnings and losses from the beginning of the plan until the date

According to GAAP, intangible assets expected to generate benefits in future financial years are recognized at cost, adjusted for the

of transition to IFRS.

effect of linearly calculated depreciation during the financial year in which they are expected to generate these benefits.

This exemption does not apply, since Australis Seafoods S.A. and subsidiaries maintain employee benefits that imply actuarial and

According to IFRS aquaculture concessions have indefinite useful lives and are therefore subject to annual impairment tests. Its

investment risk at the transition date, the amount is considered immaterial.

depreciation has been reversed and its effects recognized in cumulative results.

3.1.3 Exceptions to retroactive application followed by the Group

3) Biological assets

Australis Seafoods S.A. and subsidiaries should not have to apply the required exceptions to the IFRS retroactive application, due to

According to prior GAAP, fish were classified as stocks and were recorded at cost or at market value, if this was lower.

not having presented these particular items.

In accordance with IFRS 41, fish must be classified as biological assets and are valued at fair value.

3.2. Reconciliation between IFRS and the generally accepted accounting principles (GAAP) in Chile The reconciliations presented below quantify the impact of the transition to IFRS on Australis Seafoods S.A. and subsidiaries. Reconciliation has the following impact: a) Reconciliation of net equity on the adoption date, December 31, 2010, and on the transition date of the statements of financial position on January 1, 2010.

4) Properties, plant and equipment For the application of IFRS it has been defined that opening balances on January 1, 2010 are recorded at fair value, and therefore: i) For the case of subsidiary Landcatch Chile S.A., an assessment of lands, use of water rights, equipment and buildings of the Company was performed. ii) For the case of subsidiary Australis Mar S.A., the method of historical cost of assets was used and the useful lives and residual

b) Reconciliation of the Comprehensive income statement for the financial year ending on December 31, 2010.

values of these assets were verified.

c) Statement of indirect cash flow for the financial year ending on December 31, 2010.

These procedures, carried out by experts, generated a lower value in the assets of both subsidiaries, which was recorded against

3.2.1 Summary of net equity adjustments and results

cumulative results in net equity.

3.2.1.1 Equity

5) Deferred taxes

Reconciliation of equity under the Generally Accepted Accounting Principles (GAAP) and under the International Financial Reporting

As described in Note No. 2.18, according to IFRS, the effects of the deferred taxes for all temporary differences between the tax and

Standards (IFRS) between January 1 and December 31, 2010.

financial balances must be recorded, based on the liability method.

Total net equity according to GAAP

At December 31, 2010

At January 1, 2010

TUSD$

52,720

12,472

Negative goodwill

(1)

1,422

134

Intangibles

(2)

294

214

Biological assets

(3)

5,503

5,072

Properties, plant and equipment

(4)

(812)

(563)

Deferred taxes

(5)

(859)

(983)

Stock

(6)

160

414

Functional currency

(7)

(1,467)

(1,539)

Years of service indemnity activation

(8)

(287)

Others

(9)

(113)

185

190

3,841

3,124

56,561

15,596

Non-controlling interests reclassification Adjustments to IFRS convergence Net equity according to IFRS

Although the method established in IAS 12 is similar to the Chilean GAAP, the following adjustments must be made to the IFRS: a) The elimination of “tax-deferred complementary accounts,” which deferred the effects on equity of the initial application of the Technical Bulletin No. 60 of the Colegio de contadores de Chile AG (Chilean Association of Accountants) (BT 60), being amortized with a charge/credit to the profits or losses in the planned time period for reversal of the difference (or consumption of the related tax loss); b) The determination of the deferred tax on items not subject to the calculation under BT 60 (permanent differences), but which qualify as temporary differences according to IFRS; and c) The calculation of the tax effect of the IFRS transition adjustments. Retained Earnings

Below is an explanation of the most significant adjustments incorporated in the statement of financial position. 1) Negative goodwill In accordance with Technical Bulletin No. 72, the excess of net assets in relation to the price paid in a business combination is paid to a liability account, which is carried to the results in the estimated period of investment recovery. According to IFRS 3, this concept is paid directly to income, and therefore higher investment balances were attributed to the cumulative results at the transition date.

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

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

3.2.1.2 Result

d) Below is a table of deferred taxes as of December 31, 2010: Taxes deferred GAAP TUSD$

Adjustments TUSD$

Taxes deferred IFRS TUSD$

Stock inventory differences provision

(92)

Various provisions

240

Holidays provision

Staff provision

Tax losses

494

Intangibles

158

211

Uncollectible accounts provision Fixed assets Indirect costs activated in stock Concessions Compensation for years of service Other Biological Assets Leaseback contract result Total

(262)

214

(48)

(3,839)

(111)

(47)

(29)

187

(19)

168

(1,253)

(3,165)

(859)

(4,024)

Reconciliation of results according to Generally Accepted Accounting Principles (GAAP) and according to International Financial Reporting Standards (IFRS). 01/01/2010 to 12/31/2010 TUSD$ GAAP Result

16,316

Stocks

(1)

Concessions amortization replacement

(2)

Biological asset valuation

(3)

(765)

Deferred taxes

(4)

124

Elimination of negative goodwill amortization

(5)

1,422

Functional currency

(6)

991

Indemnity for years of service

(7)

(287)

Properties, plant and equipment

(8)

(243)

Others

(9)

(5)

Convergence adjustments to IFRS Results under IFRS

6) Stocks

(254)

1,061 17,377

The adjustment done corresponds to the portion of the fair value included in the finished products, done for the valuation of the biological asset adjustment.

1) Stocks

7) Functional currency

The adjustment done corresponds to the portion of the fair value included in the finished products, done for the adjustment valuation

According to previous GAAP, the Company had some subsidiaries in Chilean pesos. When evaluating the functional currencies of

of the biological asset, which increases the cost of sale of the finished products.

each of the group’s companies, it was concluded that their operations were primarily carried out in United States dollars, hereinafter

2) Replacement amortization concessions

“Dollars,” and therefore these operating subsidiaries with different currencies were converted, in accordance with the following:

The replacement of the concessions depreciation is generated upon defining, according to IAS 38, that these intangibles have an

a) Monetary assets Opening exchange rate on January 1, 2010 or at closing on December 31, 2011.

indefinite useful life, and so the effects of depreciation are recovered.

b) Non-monetary assets: Historical exchange rate.

3) Valuation of biological assets

Non-operative subsidiaries were considered as an extension of operations, and therefore their functional currencies were changed

This effect arises as a consequence of the valuation at fair value of fish and spawning fish through profit or loss and the greatest

to dollars, applying the same criteria as above.

cost component at the time of their sale.

8) Years of service indemnity capitalization

4) Deferred taxes

According to previous GAAP, the company had capitalized expenses for indemnity for years of service, and according to IFRS they

As described in Note No. 3.2.1.1.5, according to IFRS, the effects of the deferred taxes for all temporary differences between the tax

were adjusted.

and financial balances must be recorded, based on the liability method.

9) Others

Although the method established in IAS 12 is similar to the GAAP, the following adjustments must be made to the IFRS:

Includes leaseback adjustments, monetary correction and other minor adjustments.

a) The determination of the deferred tax on items not subject to the calculation according to BT 60 (permanent differences), but which qualify as temporary differences according to IFRS; and b) The calculation of the tax effect transition adjustments to IFRS. 5) Elimination of negative goodwill amortization This corresponds to effects on profits or loss, generated by the elimination of negative goodwill against cumulative results at the date of transition, and therefore of amortization, in accordance with IFRS.

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Main Assets

Consolidated Financial Statements

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

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

6) Functional currency

The following table details non-discounted contractual flows, committed from bank loans, financial leases and accounts payable,

According to the previous GAAP, the company had some subsidiaries in Chilean pesos. When evaluating the functional currencies

grouped by commitment, at December 31, 2011:

of each of the group’s companies, it was concluded that their operations were primarily carried out in dollars, and therefore these

Between 1 and 3 months

operating subsidiaries with different currencies were converted, in accordance with the following: a) Monetary assets Initial exchange rate on January 1, 2010 or at closing on December 31, 2011. b) Non-monetary assets: Historical exchange rate. Non-operative subsidiaries were considered as an extension of operations, and therefore their functional currencies were changed to dollars, applying the same criteria as above. 7) Years of service indemnity capitalization According to previous GAAP, the company had capitalized expenses for retrospective indemnity for years of service, and according to IFRS they were adjusted. 8) Properties, plant and equipment

TUSD$ Bank loans

Between 3 and 12 months TUSD$

1,036

Payable dividends

Between 1 and 5 years TUSD$

15,771

63,035

More than 5 years TUSD$ 5,380

Total TUSD$

85,222

8,243 (1)

8,243

Trade accounts and other receivables

21,232

21,755

43,087

Accounts payable to related entities

3,525

368

3,893

(1) The amount of the “Payable Dividends” account reflects the application of IFRS regulation and does not correspond to temporary or definite dividends approved by the Board of Directors or the Company Shareholders. III Market risk

As described in note 3.2.2.4, according to IFRS there was a reassessment of the main land and buildings of the subsidiary Land-

a) Exchange rate risk:

catch Chile S.A. In addition, the functional currency switch was made, bringing the fixed assets to historical exchange rate, so the

Since the vast majority of sales of the group companies are conducted in dollars, there is no implicit risk involved in the valuation

adjustment made in 2010 corresponds to the increase in depreciation of these concepts.

of this currency against the Chilean peso. Therefore, both appreciations and depreciations of the local currency directly affect the

9) Others Includes leaseback adjustments, monetary correction and other minor adjustments.

company’s results whenever some expenses are in local currency. At December 31, 2011, the Company’s consolidated balance sheet has a net asset in pesos in the range of MTUSD$37, and so a variation of 5% increase in the exchange rate generates a loss by an exchange difference of MTUSD$0.9, in turn, a 5% decrease in

Note 4 - Financial Risk Management

the exchange rate generates a profit of the same amount. b) Interest rate risk:

The salmon business inherently involves a number of risks that, in one way or another, affect industry development. Some of the

Interest rate variations modify future flows of assets and liabilities linked to a variable interest rate.

factors are:

Australis Seafoods S.A. and subsidiaries are exposed to interest rate risk, since their long-term financing is the sum of 180 day LIBOR

I Credit risk

plus an additional fixed spread for the case of subsidiary Australis Mar S.A. For Landcatch Chile S.A., long-term debts are registered

a) Cash surplus investment risk: The quality of the financial institutions Australis Seafoods S.A. and subsidiaries works with and the type of financial product in which such investments materialize define a low-risk policy for the Company. b) Risk from sales transactions: Australis Seafoods S.A. and subsidiaries operates with clients by credit card sales, through advance payments, or with clients with an excellent credit performance, as demonstrated in their payment histories. In fact, in the last three years, the amount of uncollectable debts of the subsidiary Australis Mar S.A. has been TUSD$ 11. II Liquidity risk Liquidity risk arises from the possibility of imbalance between the needs for funds (operating and financial costs, investments in assets, debt maturities and compromised dividends) and their source (income from securities redemptions or financial placements, collection of clients debts and financing from financial institutions). The Company has a prudent management policy on liquidity risk, maintaining enough cash and tradable securities, and managing to keep proper availability of bank financing.

with fixed rates. Normally, the Administration and the Board of Directors keep track of these credit conditions, and the advisability of acquiring interest rate insurance is evaluated, to reduce the impact of 180 day LIBOR rate variations. At December 31, 2011, the Group has a total of TUSD$ 63,120 which correspond to bank liabilities in dollars with a variable interest rate. In a sensitivity analysis of the interest rates on the capital of these bank liabilities, it is observed that when the current rates are increased or decreased by 1% annually with respect to the value used, the effect on results at the close of the financial year would be equal to TUSD$ 631 of a higher or lower financial expense, as applies. c) Market risk: Salmon products fall within the commodities category. Commodities, as inferred by their definition, are subject to price variations in the international market. Taking this into account, experience tells us that sales prices of our products are subject to seasonal fluctuations that can either raise or lower prices and tend to have cyclical variations over time.

Note 5 - Significant Accounting Estimates and Criteria The estimates and criteria used are continually evaluated and are based on historical experience and other factors, including expectations of future events considered reasonable within the circumstances. Australis Seafoods S.A. and subsidiaries makes estimates and assumptions considering the future. Estimates and assumptions with a significant risk of causing material adjustment to the assets and liabilities balances in the next financial year are given below:

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Content

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Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Geographical distribution of non-current assets at December 31, 2011, December 31, 2010 and January 1, 2010

a) Useful life of plant and equipment: The Administration of Australis Seafoods S.A. and subsidiaries determines the estimated useful lives and the corresponding depreciation charges for plant and equipment. Changes in estimates could occur as a result of technical innovation and reactions of the

As of December 31, 2011 Geographic Distribution

competition to severe industry cycles. The Administration will increase the depreciation charge when useful life is less than the previously estimated lives or will amortize or eliminate technically obsolete or non-strategic assets that have been abandoned or sold.

Non-current assets in Chile

b) Biological assets:

Non-current assets in the United States

As of January 1, 2010

As of December 31, 2011

Salmon Freshwater TUSD$

Salmon Seawater TUSD$

Total TUSD$

Salmon Freshwater TUSD$

Salmon Seawater TUSD$

Total TUSD$

Salmon Freshwater TUSD$

Salmon Seawater TUSD$

Total TUSD$

32,155

83,069

115,224

18,807

49,144

67,951

10,170

33,774

43,944

7,612

32,155

90,681

122,836

18,807

49,144

67,951

10,170

33,774

43,944

The accounting principles and valuation model applied for measuring biological assets are described in Note 2.7. Non-current assets

Note 6 - Financial Information by Segments The Company reports financial information by segments in accordance with the provisions of IFRS 8 “Operating segments.” This standard regulates segment information reporting in financial statements as well as disclosures about products and services, geo-

Results by segment on December 31, 2011 and 2010 are as follows:

graphical areas and main customers. An operating segment is defined as a component of an entity, about which there is separate

As of December 31, 2011

financial information that is regularly evaluated by senior administration for decision-making purposes regarding allocation of re-

Adjustments Consolidation TUSD$ (12,282)

Adjustments Consolidation TUSD$ (1,192)

sources and evaluation of results. The Group segments of financial information by business, identifying the following lines: a) Freshwater salmon cultivation (freshwater)

Ordinary incomes External income Internal income Cost of Sales

b) Seawater salmon and trout cultivation (seawater) Assets and liabilities by segment at December 31, 2011, December 31 and January 1, 2010, are as follows:

Gross profit pre fair value

Classified statement of financial position

As of December 31, 2011 Salmon FresSalmon hwater Seawater Total TUSD$ TUSD$ TUSD$

As of January 1, 2010 Salmon FresSalmon hwater Seawater Total TUSD$ TUSD$ TUSD$

Assets Current Assets

27,307

145,462

172,769

10,817

86,981

97,798

4,013

46,576

50,589

Non-current assets

32,155

90,681

122,836

18,807

49,144

67,951

10,170

33,774

43,944

Total Assets

59,462

236,143

295,605

29,624

136,125

165,749

14,183

80,350

94,533

Total Net Liabilities and Assets Current Liabilities Non-current Liabilities Total Net Equity

Net Liabilities and Assets

18,795

55,477

74,272

8,788

41,543

50,331

3,594

54,509

58,103

26,854

49,255

76,109

9,615

49,242

58,857

1,666

19,168

20,834

13,813

131,411

145,224

11,221

45,340

56,561

8,923

6,673

15,596

59,462

236,143

295,605

29,624

136,125

165,749

14,183

80,350

94,533

5,714

(charge) credit to Fair Value results of biological assets harvested and sold (charge) credit to Fair Value results due to increase of the current biological assets Gross profit

Salmon Seawater TUSD$ 155,551 154,264 1,287 (109,772) 45,779

Total TUSD$ 163,664 163,664

(12,282) 11,138

(113,315)

(1,144)

50,349

Salmon Freshwater TUSD$ 5,373 4,181 1,192 (4,466) 907

Salmon Seawater TUSD$ 80,220 80,220

Total TUSD$ 84,401 84,401

(55,359)

(1,192) 1,518

(58,307)

24,861

326

26,094

(23,479)

(14,627)

23,420

13,608

5,714

45,720

(1,144)

50,290

907

23,842

326

25,075

74 (2,868) (251) 2 (246)

376 (2,025) (8,158) (1,449) 1,919 (1,655) 87

2,709

450 (2,025) (8,317) (1,700) 1,921 (1,901) 87

2,436 (1,892) (343) 1 (167)

445 (1,257) (3,325) (2,393) 237 (1,074)

(681) -

2,200 (1,257) (5,217) (2,736) 238 (1,241)

Exchange differences

586

(5,266)

(4,680)

(72)

2,434

2,362

Income (loss), before taxes

3,011

29,549

34,125

870

18,909

(355)

19,424

Expenses per income tax

(419)

(6,277)

(6,696)

1,462

(3,509)

2,592

23,272

1,565

27,429

2,332

15,400

(355)

17,377

-1

2,592

23,272

1,565

27,429

2,332

15,401

(356)

17,377

Other earnings, per function Distribution costs Management expenses Other expenses, per function Financial income Financial cost Interests by asset method

Income (loss) from on-going operations Income (loss), attributable to non-controlling participations Income (loss), attributable to the owners of the controller

74 australis seafoods

Salmon Freshwater TUSD$ 20,395 9,400 10,995 (14,681)

1,565

(2,047)

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Main Assets

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

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

The breakdown of revenue from ordinary activity, classified by external client and geographical location, for the financial years en-

Fixed-term investments

ding on December 31, 2011 and 2010 is as follows: As of December 31, 2011

TUSD$

9,400

8,734

18,134

9,400

8,734

External clients North America Asia Rest of America Europe Others

Total of external clients

Total of internal clients

Total

Corpbanca

As of December 31, 2010

Salmon Seawater TUSD$

Internal clients Chile

Salmon Freshwater TUSD$

Salmon Seawater TUSD$

TUSD$

5,604

12,708

18,312

18,134

5,604

12,708

18,312

67,574 35,914 36,985 5,057 -

0 67,574 35,914 36,985 5,057 -

14,301 25,418 25,841 529 0

0 14,301 25,418 25,841 529 0

145,530

66,089

9,400

154,264

163,664

5,604

78,797

84,401

Total

Salmon Freshwater TUSD$

6,681

2,190

11,506

Total fixed-term investments

22,237

6,681

2,190

Investments in agreements

As of Dec. 31, 2011 TUSD$

As of Dec. 31, 2010 TUSD$

As of Jan. 1, 2010 TUSD$

Corpbanca

173

Total investments in agreements

173

As of Dec. 31, 2011 TUSD$

As of Dec. 31, 2010 TUSD$

Investments in mutual funds

As of January 1, 2010 TUSD$

Fondo Mutuo BCI

100

Banchile

3,300

833

Larraín Vial

27,880

Total investments in mutual funds

27,880

3,300

933

Mutual fund shares are fixed income and are carried in market value by means of the share value at the close of each financial year.

Note 7 - Cash and Cash Equivalents

Mutual funds are held by the Group until operational obligations are met.

Cash and cash equivalents are balances of cash held in bank current accounts, fixed-term deposits and other financial investments

Cash and cash equivalents reported in the Statement of cash flow are as follows:

with an expiry date of less than 90 days. Also included in this item are those investments having to do with cash management, such as overnight investments whose maturity is consistent with the aforementioned, in the terms described in IAS 7.

Type of Asset

The composition of cash and cash equivalents on December 31, 2011, December 31, 2010 and January 1, 2010 is as follows: As of Dec. 31, 2011 TUSD$

As of Jan. 1, 2010 TUSD$

1,051

Banco Santander

of total revenue from ordinary activities.

As of Dec. 31, 2010 TUSD$

9,630

Citibank

Total

At the close of financial years 2010 and 2011, there are no customers whose transactions represent an amount equal to 10% or more

Classes of Cash and cash equivalents

As of Dec. 31, 2011 TUSD$

As of Dec. 31,2010 TUSD$

As of Dec. 31, 2011 TUSD$

As of Dec. 31,2010 TUSD$

As of Jan. 1, 2010 TUSD$

51,480

11,743

3,670

51,480

11,768

3,670

United States dollar Cash and Cash Equivalents in the Cash Flow

As of Jan. 1, 2010 TUSD$

Statement

Balance in banks

1,190

1,787

547

Fixed-term Deposits

22,237

6,681

2,190

Mutual Funds

27,880

3,300

933

173

51,480

11,768

3,670

Agreements Total of cash and cash equivalent

Note 8 - Financial Instruments 8.a) Financial Instruments by Category Loans and accounts payable TUSD$

Assets at value fair result TUSD$

Total TUSD$

Cash and cash equivalents

23,427

28,053

51,480

Trade accounts and other receivables

16,864

Accounts receivable to related entities

5,751

46,042

28,053

74,095

Currency balances that make up cash and cash equivalents at December 31, 2011, December 31, 2011 and January 1, 2010 are as follows: Type of currency United States dollar

At Dec. 31, 2011 As of Dec. 31, 2011 TUSD$ 2,016

As of Dec. 31,2010 TUSD$

As of Jan. 1, 2010 TUSD$

11,743

2,884

Chilean peso

49,464

786

Total

51,480

11,768

3,670

Total

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Content

Our team

Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

At Dec. 31, 2011 Trade accounts payable and other accounts payable Current accounts payable to related entities Other current financial liabilities Other non-current financial liabilities Non-current accounts payable to related entities Total

Assets at fair value with changes in TUSD$

Other liabilities financial result TUSD$

12,565 69,605 82,170

51,330 3,893 55,223

Loans and accounts payable TUSD$ At Dec. 31, 2010 Cash and cash equivalents Trade accounts and other receivables Accounts receivable to related entities Total

At Dec. 31, 2010 Trade accounts payable and other accounts payable Current accounts payable to related entities Other current financial liabilities Other non-current financial liabilities Non-current accounts payable to related entities Total

At Jan. 1, 2010 Cash and cash equivalents Trade accounts and other receivables Accounts receivable to related entities Total

At Jan. 1, 2010 Trade accounts payable and other accounts payable Current accounts payable to related entities Other non-current, payable accounts Other current financial liabilities Other non-current financial liabilities Non-current accounts payable to related entities Total

8,468 10,175 9,462 28,105

Assets at value fair result TUSD$ 3,300 3,300

8.b) Credit quality of financial assets Total TUSD$ 51,330 3,893 12,565 69,605 137,393

Total TUSD$ 11,768 10,175 9,462 31,405

Assets at fair value with changes in TUSD$

Other liabilities financial result TUSD$

Total TUSD$

12,630 52,252 64,882

35,244 557 628 36,429

35,244 557 12,630 52,252 628 101,311

Loans and accounts payable TUSD$

Assets at value fair result TUSD$

Total TUSD$

2,737 11,133 1,523 15,393

933 933

The Company’s financial assets can be classified into two main groups i) Commercial Credits with Customers, which, to measure their degree of risk, are classified by the age of the debt, and in addition, provisions for loan defaults are made, and ii) Financial Investments, which the Company makes in accordance with criteria indicated in NOTE 4. 8.b) CREDIT QUALITY OF FINANCIAL ASSETS At Dec. 31, 2011

At Dec. 31, 2010

At Jan. 1, 2010

TUSD$

Cash and cash equivalents Mutual Funds and fixed-term deposits classification AA+fm/M1

50,290

9,982

AAA Bank Current Accounts

1,190

1,122

178

AA+ Bank Current Accounts

340

365

AA Bank Current Accounts

Portfolio cheques

317

51,480

11,768

3,670

1 to 15 days

4,901

8,386

2,812

16 to 30 days

3,610

246

6,969

Total

3,123

Trade debtors and other receivables

more than 30 days

8,343

857

686

1,308

16,864

10,175

11,133

No credit rating Total

As shown above, the Company assesses credit risk by applying expiry dates to receivables. None of the outstanding financial assets have been renegotiated during the financial year.

8.c) Estimated Fair Value At December 31, 2011, the Company held financial instruments that had to be recorded at fair value. These include: a) Investments in short-term Mutual Funds (cash equivalent).

3,670 11,133 1,523 16,326

Assets at fair value with changes in TUSD$

Other liabilities financial result TUSD$

Total TUSD$

40,365 379 40,744

14,283 2,990 5,259 11,395 33,927

14,283 2,990 5,259 40,365 379 11,395 74,671

The Company classified fair value measurement using a hierarchy that reflects the level of information used in the valuation. This hierarchy is composed of three levels; (I) fair value based on quotations in active markets for a similar class of asset or liability, (II) fair value based on valuation techniques that use market prices or market price derivatives of similar financial instruments and (III) fair value based on valuation models that do not use market information. The fair values of the financial instruments traded in active markets, such as the investments acquired for their negotiation, are based on market quotations at the close of the financial statements using the current purchase price.

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Content

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Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

The following table shows the classification of financial instruments at fair value at December 31, 2011, according to the level of information used in the valuation: Fair value at December 31, 2011

Note 9 - Trade and Other Receivables The breakdown of trade and other receivables is as follows:

Fair value measurements using values:

At Dec. 31, 2011

At Dec. 31, 2010

At Jan. 1, 2010

TUSD$

National trade receivables

1,697

934

7,328

Foreign trade receivables

7,732

7,968

2,727

Uncollectible provision

(78)

(83)

(67)

Trade receivables – net

9,351

8,819

9,988

Other accounts payable

7,127

1,356

1,145

Others

386

16,864

10,175

11,133

Assets

Short-term mutual funds Short-term agreements Total

Level I TUSD$ 27,880 173 28,053

TUSD$ 27,880 173 28,053 Fair value at December 31, 2010

Level II TUSD$ -

Level III TUSD$ -

Fair value measurements using values:

Total

The fair value of the trade and other receivables does not significantly differ from their carrying value.

Assets

Short-term mutual funds

Level I TUSD$ 3,300

TUSD$ 3,300

Level I I TUSD$ -

Level III TUSD$ -

The Company sets up provisions based on evidence of bad debts. The criteria used to determine that there is objective evidence of bad debts are the maturity of the portfolio, concrete impairment facts (default) and concrete market signals. Balances by currency that make up non-current trade and other receivables on December 31, 2011, December 31, 2010 and January

Fair value at January 1, 2010

Fair value measurements using values:

1, 2010 are as follows:

Assets TUSD$ Short-term mutual funds

Level I TUSD$ 933

933

Level II TUSD$ -

Type of currency

Level III TUSD$ -

Additionally, on December 31, 2011, the Company holds financial instruments that are not recorded at fair value. In order to comply with fair value disclosure requirements, the Company valued these instruments as shown in the following table: At Dec. 31, 2011 Carrying value TUSD$

Fair value TUSD$

At Dec. 31, 2010 Carrying value TUSD$

Fair value TUSD$

Trade debtors and other receivables Accounts receivable to related entities

Carrying value TUSD$

Fair value TUSD$

1,190

1,787

547

22,237

6,681

2,190

16,864

10,175

11,133

5,751

9,462

1,523

Other financial liabilities

16,445

12,630

40,365

Other non-current financial liabilities

65,725

52,252

379

Trade accounts and other receivables, current

51,330

35,244

14,283

Accounts payable to related entities

3,893

1,185

14,385

5,259

Other non-current payable accounts

At Jan. 1, 2010 TUSD$ 11,133

United States dollar

14,276

10,175

2,588

Total

16,864

10,175

11,133

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

Seawater

7,709

8,632

9,795

Freshwater

1,642

187

193

Total

9,351

8,819

9,988

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

The balance of the trade receivables classified by segments type is as follows:

Cash on hand Fixed-term Deposits

At Dec. 31, 2010 TUSD$

Chilean peso

At Jan. 1, 2010

Cash and cash equivalent Balance in banks

At Dec. 31, 2011 TUSD$

The age of accounts receivable is as follows: Up to 90 days

Accounts receivable

9,351

8,819

9,988

Total

9,351

8,819

9,988

The Company does not have individually impaired trade and other receivables that have been renegotiated.

The carrying amount of receivables and payables is assumed to be near their fair values, due to their short-term nature. In the case of cash, bank balances, fixed-term deposits and other non-current accounts payable, the fair value approximates the carrying value.

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Content

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Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

is objective evidence of impairment loss are the maturity of the portfolio, concrete impairment facts (default) and concrete market

Note 10 - Accounts Receivable and Payable to Related Entities

signals.

Related parties include the following entities and individuals:

The Company sets up provisions based on evidence of impairment of trade receivables. The criteria used to determine that there

Maturity

Impairment

a) Shareholders who may exercise control.

% Debtors - more than 1 year

100

Receivables in judicial collection

100

b) Subsidiaries and members of subsidiaries. c) Parties with an interest in the entity which gives them significant influence over it. d) Parties with joint control of the entity.

Provision movement due to impairment losses of national trade receivables between January 1, 2011 and December 30, 2011 is as

e) Associates.

follows:

f) Interests in joint ventures. g) Key management staff of the entity or its parent.

TUSD$ At Jan. 1, 2011

h) Close relatives of the individuals described in the preceding points.

(83)

Penalties

Recoveries of uncollectibles

i) An entity controlled by any of the individuals described in the two preceding points, or jointly controls, or has significant influence over, or has directly or indirectly a significant part of the voting power. j) Accounts receivable to related entities

Increases in provision Balance at Dec. 31, 2011

(78)

In general, transactions with related parties are immediately paid or charged, and are not subject to special conditions. These ope-

Once all pre-litigation and litigation efforts at collection have been exhausted, the assets are charged against the constituted provision. The Company only uses the provision method, and not the penalty method, for better control.

Transfer of short-term funds from and to the parent company or related companies that do not correspond to charging or payment

Historical, currently in effect renegotiations are not very significant, and the policy is to analyze them case by case and to classify them according to the existence of risk, having determined if their reclassification puts them in the category of accounts receivable. If reclassification is warranted, it is constituted as an expired provision or a provision about to expire.

since the credit quality is protected by the highly diversified portfolio of the Company´s clients. These clients are economically and geographically dispersed and come from countries with low sovereign risk. There are no significant guarantees for credit operations conducted with clients with stable business relations and excellent payment behavior, or with clients who pay in advance. However, there are contractual agreements to protect certain business. Maximum exposure to credit risk on the present information´s date is the fair value of each of the categories of receivables mentioned above.

Gross exposure according to balance TUSD$

Trade receivables Other accounts receivables Total

Gross exposure deteriorated TUSD$

At Dec. 31, 2010 Net concentrated risk exposure TUSD$

Gross exposure according to balance TUSD$

Gross exposure deteriorated TUSD$

of services is structured under the mercantile current account model. a) Accounts receivable to related entities Accounts receivable to related entities on December 31, 2011, December 31, 2010 and January 1, 2010, respectively, are detailed below:

The parent company and its subsidiaries do not consider themselves to be exposed to high risk of liquidity of these financial assets,

At Dec. 31, 2011

rations are adjusted as established in articles 146 and the following articles of Law No. 18,046 on Corporations.

Gross exposure according to balance TUSD$

Gross exposure deteriorated TUSD$

Company

Rut

Inversiones Australis Ltda ( Ex Australis S.A.)

96.631.730-2

Nature of rela-

Country

Type of

At Dec. 31,

At Dec. 31, 2010

At Jan. 1, 2010

tionship

of Origin

currency

2011

TUSD$

Chile

Pesos

Common share-

1,523

holders Asesorías e Inversiones Benjamín S.A.

79.744.690-1

Shareholder

Chile

Pesos

Fondo de inversión Privado Australis

76.123.347-5

Parent company

Chile

Pesos

9,452

True Nature Seafoods

Foreign

Joint Venture

USA

Dollars

5,108

South Pacific specialities

Foreign

Joint Venture

USA

Dollars

593

Piscicultura Los Navegantes

96.862.150-5

Shareholder

Chile

Pesos

5,751

9,462

Total

At Jan. 1, 2010 Net concentrated risk exposure TUSD$

Current

1,523

Net concentrated risk exposure TUSD$

9,429

(78)

9,351

8,902

(83)

8,819

10,055

(67)

9,988

7,513

1,356

1,145

16,942

(78)

16,864

10,258

(83)

10,175

11,200

(67)

11,133

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Content

The Salmon Industry

Our team

Our Company

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

d) Remunerations and fees of the Board of Directors and the Directors Committee and Remuneration of key executives.

b) Accounts payable to related entities

At the extraordinary shareholders meeting of October 20, 2011, it was agreed to pay each director M$ 2,000 for attending board

Accounts payable to related entities on December 30, 2011, December 31, 2010 and January 1, 2010, respectively, are detailed below: Current

Nature Company

Rut

of the relationship

Country of

Type of

At Dec. 31, 2011

At Dec. 31, 2010

At Jan. 1, 2010

Origin

TUSD$

currency

TUSD$

Chile

Pesos

368

553

Shareholders

Chile

Pesos

Joint Venture

United

Dollars

Inversiones Australis Ltda ( Ex Australis S.A.)

96.631.730-2

Common share-

Asesorías e inversiones Benjamín S.A.

79.744.690-1

True Salmon Pacific Holding CO., LLC

Foreign

meetings. The amount reflected in the expenditures at December 31, 2011 was TUSD$ 58 Furthermore, the total gross remuneration received by executives of Australis Seafoods and subsidiaries amounted to TUSD$ 2,325

holders 4

at December 31, 2011. (TUSD$ 1,841 at December 31, 2011)

2,990

3,525

Moreover, it is noted that the above amounts include the incentives system, which consist of an annual bonus applicable to top

States Total

3,893

Non-Current Company

Rut

Asesorías e inversiones Benjamín S.A.

79.744.690-1

557

executives and positions eligible for participation according to Company criteria. The amount for this item at December 31, 2011 is

2,990

TUSD$ 2,043.

Nature

Country of

Type of

At Dec. 31, 2011

At Dec. 31, 2010

At Jan. 1, 2010

of the relationship

Origin

currency

TUSD$

Shareholder

Chile

Pesos

Total

628

11,395

628

11,395

This compensation system is designed to motivate, recognize and retain executives through a formal system that rewards individual as well as team performance. Top managers and executives are those who have authority over and responsibility for planning, directing and controlling the entity’s activities, whether directly or indirectly, including any member (executive or not) of the Board of Directors or the company’s

c) Transactions with related parties and their effects on results

equivalent governing body.

Here are the operations and their effects on results for the financial periods ending on December 31, 2011 and December 31, 2010. At Dec. 31, 2011

77.029.880-6

Shareholder

Chile

Remittances received (1)

Pesos

640

These shares were subscribed by private contracts on March 14, 2011, payment pending to-date. The price, determinable, (i) may

Asesorías e Inversiones Benjamín S.A.

77.029.880-6

Shareholder

Chile

Remittances paid

Pesos

884

not be less than $20.224 per share, (ii) will be equal to the price at which all 180,000,000 shares, placed among third parties in the

True Nature Seafoods (*)

Foreign

Joint Venture

United States

Sale finished products

Dollar 2,949

298

Joint Venture

United States

Sale finished products

543

119

Dollar

Amount TUSD$

accordance with the powers given by the Extraordinary Shareholders Meeting on March 4, 2011 to the company´s directors. Of these

Asesorías e Inversiones Benjamín S.A.

Foreign

Type of currency

The Company’s Board of Directors, at its meeting of March 8, 2011, directly offered 3,000,000 shares constituting capital increase, in

Effect on result TUSD$

Rut

South Pacific Specialties Inc .(*)

Description of transaction

Effect on result TUSD$

Nature of relationship

Company

Country of origin

e) Share subscription.

At Dec. 31, 2010 Amount TUSD$

(*) At December 9, 2011, Australis Seafoods, through its subsidiary Comercializadora Australis SpA acquired 50% ownership of True Salmon Pacific Holding Co., owner of 100% of the social rights or shares of True Nature Seafoods Inc. and South Pacific Specialties LLC, companies through which it markets fish and seafood in the United States of America and Canada, and companies to whom Australis Mar sells part of its production. The transactions presented here took place between December 9 and 31 of 2011. (1) Mercantile current account between Asesorías e Inversiones Benjamín (AIB) and Australis Seafoods S.A. (ASF) that shows the transactions between these two companies. This operation is non-interest bearing and the amount indicated is mainly remittances from AIB to ASF. Australis Seafoods S.A. and subsidiaries has a policy to report all transactions done with related parties during the financial year that are greater than TUSD$ 100, excluding paid dividends and received capital contributions, which are not considered transactions.

directors, only Rodrigo Arriagada Astrosa, for 2 million shares, and Federico Rodríguez Marty, for 1 million shares, accepted the offer.

Santiago Stock Exchange on June 9, 2011, were awarded, that is, $185 (Chilean pesos) per share, (iii) must be paid within a maximum period of 3 years starting on March 4, 2011, and (iv) if in these 3 years, all or part of the shares designated for the Shareholders are not placed on the Stock Exchange, the subscription price of these shares will go up to $20.224 per share.

Note 11 - Inventories Inventory composition at the close of each financial period is as follows: Inventory types

At Dec. 31, 2011 TUSD$

Finished product

8,006

961

350

2,698

1,476

982 27

Material Inputs Fish food Packaging materials Medicinal products and additives Total

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$ 2,485

172

280

11,506

2,617

3,494

Inventory Policies Group inventories are measured at cost or net realizable value. The lesser. Inventory measurement policy. The Group values its inventories according to the following:

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Content

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Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

a) The cost of production of the manufactured inventories includes costs directly related to units produced, such as labor and varia-

Movement of biological assets at December 31, 2011 and December 31, 2010 is as follows:

ble and fixed costs that were included to transform raw materials into finished products.

01/01/2011 12/31/2011 TUSD$

The cost of production of fresh and frozen salmon is determined from the last fair value of the biological asset at harvest point, plus direct and indirect costs of production.

Biological assets at opening

b) For acquired inventory cost, the acquisition cost will include the sale price, import duty, transportation, storage and other costs attributable to acquisition of goods and materials.

73,994

38,968

Increase from fattening and production

140,808

80,000

Decrease from sales and harvests

(106,351)

(43,795)

Adjustment to fair value of the financial year, fair value increase/decrease *

Formula for calculating inventory cost. Inventories of finished products are valued using the weighted average cost method, that is, the cost of each product unit is determined from the weighted average of the recorded cost at the beginning of the financial period, and from the cost of the articles bought or produced during the period.

Decrease in fair value for harvests maintained in finished Products at Dec-

The Company has not imposed penalties on finished products at the close of each financial period. During the financial year ending on December 31, 2011, December 31 and January 1, 2010, no inventories have been pledged as security.

23,420

13,608

(23,479)

(14,627)

(454)

(160)

ember 31 ***

Balance at the closing of the period

Information on finished products.

(281)

107,657

73,994

* Amounts recognized in the income statement for biological assets increase, this effect is presented separately in the statement of income by function. ** Value for the fair value adjustment transferred to the finished products, as a result of the harvests performed during the year. At the closing of the financial year this amount was charged to the results of finished products sales. This effect is shown separately in the statement of income by function.

Inventories recognized in the cost of sales at the close of each financial year are summarized below:

Inventory / cost of sale

Decrease in fair value from harvests **

Extraordinary mortality

Inventories of raw materials, containers and materials are valued at weighted average cost.

01/01/2010 12/01/2010 TUSD$

Cumulative

At Dec. 31, 2011

At Dec. 31, 2010

* ** Value for fair value adjustment transferred to the finished products that are still in inventory at the close of the financial year.

TUSD$

At December 31, 2011, the balance of seawater biological assets includes the effect of fair value determined at the close of the finan-

Cost of Sales

113,315

58,307

cial year for an amount of TUSD 4,991.

Total

113,315

58,307

The quantitative summary of biological assets at December 31, 2011, December 31 and January 1, 2010 is the following: a) Freshwater

Note 12 - Biological Assets

Freshwater

The biological assets of Australis Seafoods S.A. and subsidiaries consist of fish in water in the case of the subsidiary Australis Mar, and spawning fish, eggs, juvenile and smolts for the subsidiary Landcatch Chile S.A. The Company does not have restrictions on its biological assets, and they have not been used as guarantees for financial obligations.

On Dec. 31, 2011 Units

On Dec. 31, 2010 Units

At Jan. 1, 2010 Units

Eggs

1,374,983

Spawning fish

455,462

316,811

265,116

Juvenile

20,762,491

6,216,498

Smolts

1,524,574

4,894,661

1,742,906

Total freshwater

24,117,510

11,427,970

2,008,022

Biological assets that the administration believes will be harvested within a year are classified as current biological assets: Current Freshwater salmon Seawater salmon Total Non-current Freshwater salmon

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

16,155

6,603

963

62,642

51,048

28,560

78,797

57,651

29,523

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

At Dec. 31, 2011 TUSD$

b) Seawater Seawater

At Dec. 31, 2011 Units

At Dec. 31, 2010 Units

At Jan. 1, 2010 Units

Fish in fattening

16,584,923

8,326,881

8,539,111

Total seawater

16,584,923

8,326,881

8,539,111

At Dec. 31, 2011 Tons in Seawater

20,444

At Dec. 31, 2010 13,937

At Jan. 1, 2010 7,560

4,375

10,158

5,671

Biological asset policies

Seawater salmon

24,485

6,185

3,774

Total

28,860

16,343

9,445

Biological assets are valued at fair value minus the costs estimated at the point-of-sale in accordance with the definitions contained

Total

107,657

73,994

38,968

in IAS 41 and the provisions of Note 2.7. At the close of the financial statements, the effect of the fish’s natural growth in water, expressed in fair value minus the estimated costs at the point-of-sale, is recognized according to a measurement based on market prices adjusted for quality and size. The higher or lower resulting value is recorded in the income statement under Other Income by Function. Similarly, the higher cost of the exploited and sold part derived from this revaluation is also under Other Income by Function. According to the above, this account shows the total net effect of biological asset valuation for the financial year ending at December 31, 2011 and has a charge for TUSD$ 59 (charge for TUSD$ 1,019 in 2010).

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Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Operating risks Because salmon are biological assets, salmon production is potentially affected by a number of biological risks. Some are:

Note 14 - Other non-Current Assets

a) Disease: Although diseases are currently controlled by vaccines, antibiotics, good handling practices and by the production of high quality smolts, we cannot rule out the emergence of new diseases or epidemics that could affect production.

Ley Austral *

b) Failure to comply with current legislation and, in particular, failure to comply with resting breaks and district regulations on the part

Others Total

of other production companies, could lead to a decline in the necessary sanitary levels for a healthy biomass growth.

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

7,379

8,694

5,550

156

235

7,535

8,929

5,553

c) Predators: the presence of natural salmon predators, such as sea lions, can mean a loss of biomass and even the destruction of

* Tax credit regarding movable assets in an investment project in Regions XI and XII and in the Palena Province, until December 31, 2011 this credit is

the net cages. The industry has implemented a series of preventive measures that help mitigate the adverse effects caused by

attributable due to the first category tax of the income tax law, and, therefore, is considered an asset. The Company’s deadline for using this credit is

these predators.

December 31, 2031.

d) Natural risks: Salmon growth depends, among other factors, on climatic and ocean conditions such as environment brightness or water temperature, which can have effects on fish growth and their food consumption. e) Food cost: Food is the most significant direct cost for trout and salmon production. Its price varies due to variables exogenous to the Australis Seafoods Group, such as the price or cost of fishmeal, which in turn depends on the extractive fishing industry.

Note 15 - Investments Reported Using the Participation Method On December 9, 2011, Australis Seafoods S.A., through its subsidiary Comercializadora Australis SpA, acquired 50% ownership of True Salmon Pacific Holding Co., owner of 100% of the social rights or shares of True Nature Seafoods Inc. and South Pacific Specialities LLC, companies through which it markets fish and seafood products in the United States of America and Canada.

Note 13 - Tax Assets

The valuation of the investment in the joint venture at December 31, 2011 is as follows:

Current tax assets are as follows: Accounts receivable for taxes VAT Tax Credit Fixed asset 4% credit Provisional monthly payments for absorbed income Provisional Monthly Payments SENCE (Servicio Nacional de Capacitación y Empleo)

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

3,997

4,853

835

306

288

3,724

579

credit Provision for income taxes Ley Austral (Southern Law) * Other recoverable taxes Total

(5,827)

(934)

(904)

5,789

889

857

170

7,945

5,748

1,211

At Dec. 31, 2011

At Dec. 31, 2010

At Jan. 1, 2010

TUSD$

True Salmon Pacific Holding Co.

7,612

TOTAL

7,612

The aforementioned value includes goodwill generated at the time of acquisition, which has no impairment at December 31, 2011: At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

True Salmon Pacific Holding Co.

6,523

TOTAL

6,523

The result accrued in joint ventures is as follows: At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

The provision for First Category Income Tax for a value of TUSD$ 5,827 and TUSD$ 934 in 2011 and 2010, respectively, does not cons-

True Salmon Pacific Holding Co.

titute cash flow for the company as a result of credit from the Ley Austral (Southern Law) application, that is, it will be compensated

TOTAL

on the next payment date because of this law.

Investment movement in joint ventures at December 31, 2011 is as follows: At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

Opening balance Investments in joint ventures

7,525

Participation in joint ventures earning TOTAL

88 australis seafoods

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ď ź

Consolidated Financial Statements

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Summary of financial information ofTrue Salmon Pacific Holding Co. at December 31, 2011 is as follows:

Movement of intangible assets at December 31, 2010 is as follows: At Dec. 31, 2011

Current Assets

Useful Life Indefinite TUSD$

19,115

Non-current assets

291

Total assets company with joint control

19,406

Current liabilities

15,261

Non-current liabilities

1,406

Equity

2,739

Total liabilities and equity jointly controlled company

19,406

Ordinary income (*)

12,774

Ordinary expenses (*)

(12,599)

Net earning/(loss) (*)

175

Useful Life Definite TUSD$

Opening balance on January 1, 2010

6,775

Transfers

(1,871)

1,871

Additions

3,647

4,904

5,518

10,422

Region

Hectares

In use at close of financial period 2011

Balance at Dec. 31, 2010

The breakdown of the main types of intangible assets not generated internally is as follows: Useful Life

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

3,945

3,091

3,827

Aquaculture Concessions

Indefinite

Aquaculture Concessions

Finite

7,518

5,518

890

6,775

The breakdown of concessions and water rights at December 31, 2011 is as follows: a) Aquaculture Concessions - Seawater Own concessions No.

Name

Type

Humos 3

Salmonids

4.5

YES

Burr 1

Salmonids

3.8

YES

Rivero 1

Salmonids

3.9

YES

Elefante 1

Salmonids

4.0

Rivero 2

Salmonids

8.1

YES

Pulluche 1

Salmonids

15.0

I Rojas 2

Salmonids

4.0

Rivero 4

Salmonids

5.9

Salas 5

Salmonids

3.0

Humos 2

Salmonids

4.5

YES

Humos 1

Salmonids

4.5

YES

Humos 4

Salmonids

4.5

YES

(*) For the period between December 1 and 31, 2011

Note 16 - Intangible Assets Other Than Goodwill

Total TUSD$

Water rights

Indefinite

2,735

1,813

2,058

Trademark rights

Finite

Computer Licenses

Finite

Humos 5

Salmonids

4.5

YES

197

14,456

10,422

6,775

Matilde 1

Salmonids

3.0

YES

Humos 6

Salmonids

4.5

Italia

Salmonids

2.0

Humos 7

Salmonids

1.0

Rivero 3

Salmonids

2.0

Luz 1

Salmonids

2.0

Matilde 2

Salmonids

3.0

YES

Patranca 1

Salmonids

6.0

YES

Luz 2

Salmonids

2.0

YES

b) Intangibles subject to guarantees or restrictions

Salas 1

Salmonids

0.5

On the accounting closing date of these financial statements, the company and its subsidiaries do not have any kind of guarantee

Pulluche 2

Salmonids

2.0

YES

purchases of intangibles.

Salas 3

Salmonids

0.5

Humos 8

Salmonids

2.0

I Rojas

Salmonids

6.0

Salas 2

Salmonids

1.5

Salas 4

Salmonids

1.2

Fitz Roy

Salmonids

1.5

Pulluche 3

Salmonids

6.0

YES

Fitz Roy

Salmonids

1.0

205111340

Salmonids

1.5

Others

Indefinite

Total a) Aquaculture concessions and water rights

Aquaculture concessions acquired from third parties are recognized at historical cost. The useful life of these concessions is mainly indefinite, since they have no expiration date and do not have a predictable useful life, and therefore, not amortized. Concessions obtained under the new fishing law have a useful life of 25 years. This is renewable according to compliance with sanitary and environmental conditions. These concessions are depreciated based on useful life. These water rights are usage rights associated with fish farm technical projects. These rights are indefinite and therefore not amortized. Water rights acquired from third parties are recognized at their historical cost.

Movement of intangible assets at December 31, 2011 is as follows: Useful Life Indefinite TUSD$

Useful Life Definite TUSD$

Total TUSD$

4,904

5,518

10,422

(32)

Additions

2,005

2,061

4,066

Balance at Dec. 31, 2011

6,877

7,579

14,456

Opening balance at January 1, 2011 Cumulative amortization and impairment

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Luz 4

Salmonids

2.0

YES

Dring 1

Salmonids

2.0

Luz 3

Salmonids

2.0

Matilde 3

Salmonids

2.0

Melchor 1

Salmonids

5.8

Melchor2

Salmonids

1.5

Isquiliac 3

Salmonids

3.0

Rivero 5

Salmonids

1.5

Isla Quemada 2

Salmonids

1.5

MITAHUES 2

Salmonids

2.0

MITAHUES 3

Salmonids

7.9

RABUDOS

Salmonids

6.0

YES

Guar

Salmonids

3.0

Rulo

Salmonids

5.4

Caicaen

Salmonids

1.0

Water rights under financial lease No.

Name

Puluqui 1

Type Salmonids

Region

Hectares

In use at close of financial period 2011

11.7

Region

Hectares

In use at close of financial period 2011

Type

Region

In use at close of financial period 2011

Río Cululí

Freshwater

YES

Río Ignao

Freshwater

XIV

YES

Pozo Ignao

Freshwater

XIV

YES

Río Caliboro

Freshwater

VIII

YES

Vertiente SN

Freshwater

YES

Rio Alllipen

Freshwater

YES

Region

In use at close of financial period 2011

Water rights under operating lease

Own concessions - leased to third parties No.

Name

No.

Name

Type

Estero del Diablo

Freshwater

YES

Estero Matanza

Freshwater

YES

Estero Sen Sen

Freshwater

YES

Note 17 - Properties, Plant and Equipment The breakdown of the different categories of property, plant and equipment and their movement at December 31, 2011 is as follows:

Concessions leased from third parties No. 1

Name Jorge 1

Type Salmonids

YES At January 1, 2010

b) Water rights - Freshwater

Name

Río Negro 1

Region

In use at close of financial period 2011

Freshwater

Río Negro 2

Freshwater

Río Negro 3

Freshwater

Estero Caren 1

Freshwater

Estero Caren 2

Freshwater

Est. Allipén

Freshwater

Río Curacalco

Freshwater

Canal del Laja

Freshwater

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2,118

Land TUSD$

Net buildings TUSD$

323

4,433

Cost or valuation

Own water rights No.

Net constructions TUSD$

Type

Net plant and equipment TUSD$

Net information technology equipment TUSD$ 8

17,025

Net fixtures and fittings TUSD$

Net motor vehicles TUSD$

Net total Properties, plant and equipment TUSD$

6,977

1,821

18,846

Accumulated depreciation

(570)

(3,970)

(6)

(389)

(4,935)

Net amount at January 1, 2010

1,548

323

17,488

1,527

20,888

1,221

265

8,752

153

Additions Additions projects under construction Disposals Depreciation

(97)

Net amount at December 31, 2010

2,672

588

YES

Additions

5,935

4,364

YES

Additions projects under construction

VIII

YES

Disposals

981

836

11,227

1,600

363

1,963

(91)

(387)

(478)

(2,457)

(1)

(381)

(2,936)

25,292

154

1,958

30,664

22,178

465

33,968

(122)

881

Depreciation

(348)

Net amount at December 31, 2011

8,259

4,952

881

(10)

(4,216)

(38)

(406)

(5,018)

971

44,135

161

1,895

60,373

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

At December 31, 2011 the breakdown of Property, Plant and Equipment is as follows: Gross Value TUSD$

Daily maintenance and common repair costs are included in the profit or loss of the financial year. This is not so for replacements of

Depreciation cumulative TUSD$

significant or strategic parts. These are considered improvements and capitalized and depreciated over the remaining useful life of Net value TUSD$

Construction and work in progress

9,274

(1,015)

8,259

Land

4,952

Buildings Plant and equipment Information technology equipment Fixtures and fittings Total Properties, plant and equipment

981

(10)

971

54,778

(10,643)

44,135

206

(45)

161

3,071

(1,176)

1,895

73,262

(12,889)

60,373

the assets, based on each component. Gains or losses from the sale of property, plant and equipment is calculated by comparing proceeds from the sale with the asset’s carrying value and included in the income statement. b) Depreciation Method Depreciation of assets is calculated linearly over their useful life. This useful life has been determined based on expected wear and tear, technical or commercial obsolescence arising from changes and/or improvements in production and changes in market demand for the products obtained using these assets. c) Estimated useful life or depreciation rates Estimating useful life by type of asset are as follows:

At December 31, 2010 the breakdown of Property, Plant and Equipment is as follows: Gross Value TUSD$ Construction and work in progress Land Plant and equipment Information technology equipment Fixtures and fittings Total Properties, plant and equipment

Depreciation cumulative TUSD$

3,339

(667)

Net value TUSD$ 2,672

588

31,719

(6,427)

25,292

161

(7)

154

2,728

(770)

1,958

38,535

(7,871)

30,664

Gross Value TUSD$

Depreciation cumulative TUSD$

Net value TUSD$

Construction and work in progress

2,118

(570)

1,548

323

21,458

(3,970)

17,488

Total Properties, plants and equipment

Plant and equipment

Information technology equipment

Fixtures and fittings

The residual value and useful life of the assets are reviewed and adjusted if necessary at the closing of each Statement of financial position.

purchases of intangibles.

Land

Fixtures and fittings

Buildings

On the accounting closing date of these financial statements, the company and its subsidiaries do not have any kind of guarantee

At January 1, 2010 the breakdown of Property, Plant and Equipment is as follows:

Information technology equipment

Seawater Useful life average

d) Property, plant and equipment subject to guarantees or restrictions

Plant and equipment

Freshwater Useful life average

(6)

1,916

(389)

1,527

25,823

(4,935)

20,888

On December 31, 2011, the Company recognized financial year depreciation in the income results TUSD$ 2,771 (TUSD$ 1,300 in 2010).

At December 31, 2011, the Company does not have legal or contractual obligation to dismantle, remove or rehabilitate sites where it operates, and therefore its assets do not include costs associated with these requirements. e) Insurance The Group has insurance policies to cover risks for movable assets, equipment, plant and machinery. Australis Seafoods S.A. and subsidiaries believe that these policies have adequate coverage for the inherent risks in their activity. The insurance policies that Australis Seafoods S.A. and subsidiaries have are detailed below: Type of asset

Risks covered

Equipment and facilities

Basic coverage: Natural risks. Additional coverage: theft, collision, fire.

a) Valuation and updates The Administration has chosen the cost model as its accounting policy and applies this policy to all items that contain property, plant and equipment. The new Properties, plant and equipment are reported at acquisition cost. Acquisitions in the currency other than the functional currency are converted at the exchange rate of the day of acquisition. To measure major fixed assets and lands, which were acquired before transition to IFRS, their fair value was determined based on valuations made by expert personnel, who were external and independent in the case of subsidiary Landcatch Chile S.A. For all other fixed assets, in particular for those associated with subsidiary Australis Mar S.A., the historical cost model was used.

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

f) Financial leases

Note 18 - Current Income Taxes and Deferred Taxes

The detailed classification of assets acquired under the financial leasing model is presented below:

Deferred taxes mean the amount of taxes on the earnings that Australis Seafoods S.A. and subsidiaries will have to pay (liabilities)

At Dec. 31, 2011

At Dec. 31, 2010

At Jan. 1, 2010

Properties, plant and equipment under financial leasing, net

TUSD$

Facilities under financial leasing

5,036

411

446

Land under financial leasing

2,280

The main deferred tax asset is tax losses of the parent company and subsidiaries to be recovered in future financial years. The main

971

deferred tax liability payable in future financial years are temporary differences arising from manufacturing expenses, revaluation of

7,861

255

304

16,148

716

800

biological assets and the revaluation of Properties, plant and equipment at the date of transition to IFRS and from the application, for

Buildings under financial leasing Plant and equipment under financial leasing TOTAL

Water rights under financial leasing

or recover (assets) in future financial periods, related to temporary differences between the tax base and the accounting carrying amount of certain assets and liabilities.

tax purposes, of accelerated depreciation. The breakdown of assets and liabilities by deferred taxes is as follows:

At Dec. 31, 2011

At Dec. 31, 2010

At Jan. 1, 2010

TUSD$

Water rights under financial leasing *

1,368

TOTAL

1,368

At Dec. 31, 2011 Assets for taxes deferredTUSD$

* This is given under the heading intangible assets other than goodwill.

Indirect costs activated in stock Biological asset valuation

On June 30, 2011, the subsidiary Landcatch Chile S.A. signed two leaseback operations with Banco Santander -Chile for the amount

Anticipated revenue

of TUSD 8,681 for an 8-year period with one grace year and an annual interest rate of 4.62% on the following fish farms:

Tax Losses

b) Piscicultura Las Vertientes, located in the La Araucanía Region, Cunco commune

Provisions

The Ignao and las Vertientes fish farms have a total carrying amount of TUSD$ 10,150 at the time they are sold to Banco Santander for

Properties, plant and equipment

7,049

3,840

1,121

1,253

At Jan. 1, 2010 Assets for taxes deferred TUSD$

Liabilities for taxes deferred TUSD$ 1,368 1,216

12 48

2,282

47 494

101

43 119

193

5 519 62

215

108

449

554

Holiday provision

each do to the nature of the transaction forms part of the asset value. This amount is included in the leased assets of the fixed asset

Staff provision

and is amortized based on the associated leased assets useful lives.

Non-collectable account provision

On November 21, 2011 the subsidiary Landcatch Chile S.A. signed a leaseback operation with Banco Bilbao Vizcaya Argentaria, Chile

Intangible

for the fish farm Ketrún Rayén, located in the Los Angeles commune, Bío Bío Region, for an amount of TUSD$ 5,788 for an 8-year

Unrealized gains

period with 6 months of grace and an annual interest rate of 3.94%. (In this operation no significant differences between the assets’

Valuation provision

carrying value and the selling price to the bank were generated)

Stock Others

On November 3, 2011, Australis Seafoods S.A. signed a leasing operation with Banco Bice, Chile for an amount of TUSD$ 981 for an

In addition the subsidiary Landcatch Chile S.A. has held fish farm Cululi under financial leasing since 2008.

Liabilities for taxes deferred TUSD$

Difference in inventory provision

TUSD$ 8,681 to be received as financial leasing for the same amount. In this operation a differential of TUSD$ 1,469 was generated,

8-year period with a 4.7% interest rate. The asset acquired in this operation is the company’s corporate offices.

At Dec. 31, 2010 Assets for taxes deferred TUSD$

278

Concessions

a) Piscicultura Ignao, located in the Los Ríos Region, Lago Ranco Commune

Liabilities for taxes deferred TUSD$

Total

637

131

2 440

324

211

121

146 (149)

100 376 4,000

8,877

101

192

297

(73)

689 69

1,593

5,617

1,283

3,791

No deferred taxes have been recognized due to temporary differences between the tax value and accounting value generated by investments in related companies. Therefore, no deferred tax is recognized from Conversion Adjustments and Associated Adjustments

The value of the minimum payments associated with financial leasing are in note No. 19, b)

directly recorded in net equity.

g) Fixed Assets in disuse or fully depreciated

With respect to the statute of limitations for tax losses likely attributable to future profits, we note that there are no limitations if they

At December 31, 2011, the company does not have any fixed assets temporarily out of service or fully depreciated.

are generated in companies in Chile.

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C o ns o lid at e d Fi n a nci a l Stat em e n ts

Movement of assets by deferred taxes is as follows:

Within the Expenditure line, for the previous income tax, the provision for First Category Income Tax is given for a value of TUSD$ At Dec. 31, 2011 TUSD$

Opening balance Variation of: Inventories

At Dec. 31, 2010 TUSD$

1,593

1,283

(101)

101

(5)

Concessions Properties, plant and equipment

(193)

Unrealized gains

203

(25)

Intangible

(211)

166

Anticipated revenue

278

(12)

1,788

(25)

564

(345)

370

4,000

1,593

Tax loss Provisions Others Final balance

At Dec. 31, 2010 TUSD$

Note 19 - Other Financial Liabilities At December 31, 2011, Australis Seafoods S.A. and subsidiaries has financial loans. These loans accrue interest at an effective interest rate, which does not significantly vary from the nominal rate. Interest bearing loans - Current Bank loans

Interest bearing loans - Non-current

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

15,307

12,435

1,138

195

175

16,445

12,630

40,365

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

40,190

At Jan. 1, 2010 TUSD$

5,617

3,791

Bank loans

51,041

52,720

3,209

2,472

Financial leasing obligations

14,684

227

379

Total other financial liabilities expiring after 12 months

65,725

52,252

379

Stocks

(92)

(497)

Intangible

440

Biological assets

(132)

Provisions

Concessions

Properties, plant and equipment

(96)

(234)

Others

(70)

8,877

5,617

Final balance

the application of this law. The remaining credit at December 31, 2011 is M$ 13,168.

Total other financial liabilities expiring within 12 months At Dec. 31, 2011 TUSD$

Variation of: Manufacturing costs

will not generate an outflow of cash for the company. In other words, it will be compensated in the next payment date, as a result of

Financial leasing obligations

Movement of liabilities by deferred taxes is as follows:

Opening balance

5,827 and TUSD$ 934 in 2011 and 2010, respectively. Due to credit accumulated from the Ley Austral (Southern Law), this expense

To reflect the effect of legal modification of income tax, which raises the income tax rate in Chile from 17% to 20% for 2011 and to 18.5% for 2012, returning to 17% in 2013, all credits (charges) to the results have been recorded for deferred taxes from differences in tax versus financial valuation, based on the ratio of the difference reversed in the years mentioned. The income tax expense breaks down as follows: Cumulative at Dec. 31, 2011 TUSD$ Current tax expenditure Effect of deferred tax Others Total

Cumulative at Dec. 31, 2010 TUSD$

(5,827)

(934)

(853)

(1,516)

(16)

403

(6,696)

(2,047)

The following is a breakdown of expense conciliation for Income Tax, using the statutory rate with the tax expense using the effective rate:

Income tax expenditure using the statutory rate

Cumulative at Dec. 31, 2011

Cumulative at Dec. 31, 2010

TUSD$

(6,825)

(3,302)

Tax effect of rates of other jurisdictions

Other charge decreases for legal taxes

129

1,255

(6,696)

(2,047)

Expenditure

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C o ns o lid at e d Fi n a nci a l Stat em e n ts

Additional information on financial liabilities a) The breakdown of bank loans held by Australis Seafoods S.A. and subsidiaries at December 31, 2011 and January 1, 2010 is as follows: 2012 Rut Debtor Company

Debtor Company

Country Deb- Name creditor tor Company

76.003.885-7

Australis Mar S.A.

Chile

Banco de Chile

76.003.885-7

Australis Mar S.A.

Chile

Banco de Chile

76.003.885-7

Australis Mar S.A.

Chile

76.003.885-7

Australis Mar S.A.

Chile

76.090.483-k

Landcatch S.A.

Chile

76.090.483-k

Landcatch S.A.

Chile

76.090.483-k

Landcatch S.A.

76.090.483-k

Landcatch S.A.

Rut Creditor

Country Creditor

Currency

Amortization Type

Effective rate

Nominal Rate

Guarantees

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total current on 12-31-11 TUSD$

97.004.000-5 Chile

USD

Quarterly

2.35%

YES

8,332

97.004.000-5 Chile

USD

Quarterly

2.35%

YES

Banco Corpbanca

97.023.000-9 Chile

USD

Quarterly

2.90%

YES

Banco de Crédito e Inversiones

97.006.000-6 Chile

USD

Quarterly

2.75%

YES

Banco de Crédito e Inversiones

97.006.000-6 Chile

Pesos

Monthly

2.90%

434

Banco de Chile

97.004.000-5 Chile

Pesos

Monthly

2.90%

147

Chile

Banco de Chile

97.004.000-5 Chile

USD

Bimonthly

1.37%

366

Chile

Banco Santander

97.036.000-K Chile

USD

Monthly

4.68%

Total Bank loans

947

Refinancing costs

Total

947

Expiration Expiration Expiration Expiration Non-current Total Non1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years 5 or more current on 12TUSD$ TUSD$ TUSD$ TUSD$ years 31-11 TUSD$ TUSDS

8,332

1,958

13,884

17,800

2,218

2,200

13,400

17,800

1,662

1,650

10,050

13,350

434

147

366

190

326

787

2,091

8,359

5,865

15,307

6,134

37,660

326

787

51,041

8,359

5,865

15,307

6,134

37,660

326

787

51,041

2011 Rut Debtor Company

Debtor Company

Country Deb- Name creditor tor Company

76.090.483-k

Landcatch S.A.

Chile

Banco Santander

76.090.483-k

Landcatch S.A.

Chile

Banco de Chile

76.090.483-k

Landcatch S.A.

Chile

Banco de Crédito e Inversiones

76.090.483-k

Landcatch S.A.

Chile

76.003.885-7

Australis Mar S.A.

76.003.557-2

Australis Seafoods

Rut Creditor

Country Creditor

Currency

Amortization Type

97.036.000-K Chile

Pesos

Monthly

97.004.000-5 Chile

Pesos

Monthly

97.006.000-6 Chile

Pesos

Monthly

Banco Security

97.053.000-2 Chile

Pesos

Chile

Banco de Crédito e Inversiones

97.006.000-6 Chile

Chile

Banco Corpbanca

Effective rate

Nominal Rate

Guarantees

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total current on 12-31-11 TUSD$

Expiration Expiration Expiration Expiration Non-current Total Non1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years 5 or more current on 12TUSD$ TUSD$ TUSD$ TUSD$ years 31-11 TUSD$ TUSDS

0.68%

225

0.59%

713

0.47%

1,336

Monthly

0.63%

223

USD

Quarterly

2.56%

YES

1,661

1,650

11,700

15,011

97.023.000-9 Chile

USD

Monthly

3.30%

1,850

S.A. 76.003.885-7

Australis Mar S.A.

Chile

Banco de Chile

97.004.000-5 Chile

USD

Monthly

2.61%

YES

8,088

76.003.885-7

Australis Mar S.A.

Chile

Banco de Chile

97.004.000-5 Chile

USD

Quarterly

2.41%

YES

2.201

2,200

13,400

20,001

76.003.885-7

Australis Mar S.A.

Chile

Banco Corpbanca

97.023.000-9 Chile

USD

Quarterly

2.41%

YES

1.883

1,870

11,390

17,013

Total Bank loans

2,497

9,938

12,435

5,745

5,720

15,770

24,790

52,025

Refinancing costs

Total

2,497

9,938

12,435

5,745

5,720

15,770

24,790

52,025

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total current on 12-31-11 TUSD$

2010 Rut Debtor Company

Debtor Company

Country Deb- Name creditor tor Company

Rut Creditor

Country Creditor

Currency

Amortization Type

Effective rate

Nominal Rate

Guarantees

Jan

Feb

Expiration Expiration Expiration Expiration Non-current Total Non1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years 5 or more current on 12TUSD$ TUSD$ TUSD$ TUSD$ years 31-11 TUSD$ TUSDS

77.071.070-7

Landcatch S.A.

Chile

Banco Santander

97.036.000-K Chile

Pesos

Monthly

0.45%

380

77.071.070-7

Landcatch S.A.

Chile

Banco de Chile

97.004.000-5 Chile

Pesos

Monthly

0.42%

550

77.071.070-7

Landcatch S.A.

Chile

Banco de Crédito e Inversiones

97.006.000-6 Chile

Pesos

Monthly

0.51%

791

77.071.070-7

Landcatch S.A.

Chile

Banco Security

97.053.000-2 Chile

Pesos

Monthly

0.40%

300

77.071.070-7

Landcatch S.A.

Chile

BCI linea crédito

97.006.000-6 Chile

Pesos

Monthly

76.003.885-7

Australis Mar S.A.

Chile

Banco de Chile

97.004.000-5 Chile

USD

Quarterly

2.40%

28,074

76.003.885-7

Australis Mar S.A.

Chile

Banco Corpbanca

97.023.000-9 Chile

USD

Quarterly

1.68%

10,052

2,064

38,126

40,190

2,064

38,126

40,190

Total Bank loans Refinancing costs Total

* The Guarantees and restrictions associated with the bank loans are detailed in note No. 30. Bank obligations at 12/31/2011 do not have associated covenants.

100 australis seafoods

australis seafoods 101

Content

Our team

Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

b) The breakdown of obligations due to financial leases held by Australis Seafoods S.A. and subsidiaries at December 31, 2011 and January 1, 2010 is as follows: At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

Gross Value TUSD$

interest TUSD$

Present Value TUSD$

Gross Value TUSD$

No later than one year

1,500

362

1,138

More than one year but less than five

12,781

2,508

10,273

More than five years

4,593

182

4,111

TOTAL

18,874

3,052

15,822

Minimum payments to be payed for leasing, Financial leasing obligations

At Jan. 1, 2010 TUSD$

interest TUSD$

Present Value TUSD$

Gross Value TUSD$

interest TUSD$

Present Value TUSD$

217

195

200

175

253

227

425

379

Note 21 - Provisions for Employees Benefits, Current and Noncurrent Provision for staff bonuses The Company has a provision for employee bonus payments when it is contractually obligated or when conditions of employee compliance and performance at the close of the financial year merits it. Provision for employee holidays The Company recognizes an employee holiday expense by the accrual method based on the amount of time worked by each individual.

470

422

625

554

Obligations due financial leases correspond to the following leasing contracts:

Indemnity for years of service The subsidiary Landcatch Chile S.A. has contracts with executive personnel which include compensation benefits for years of service in the event of voluntary retirement or termination. This liability is recognized according to technical standards, and considering

IM USS amount

Number of quotas

Annual interest

Option of purchase TUSD$

Type

Institution

Date of contract

Piscicultura Cululi

Banco BCI

01-31-2008

818

4.60%

Piscicultura Huacamalal

Banco Santander -(Chile

06-30-2011

3,330

4.62%

Piscicultura Las Vertientes

Banco Santander -Chile

06-30-2011

5,351

4.62%

Offices Australis Seafoods S.A.

Banco BICE

11-03-2011

981

4.70%

Ketrun Rayen Fish Farm

Banco BBVA

11-21-2011

5,788

3.94%

that the actuarial value does not vary significantly from the cost, the latter has been maintained, with periodic evaluations in case some of the variables change. Earnings or losses due to changes in actuarial variables, if any, are recognized in the income of the financial year in which they occur. Because of this, there are no: a) service costs for the current period b) interest costs c) contributions made by participants d) accounting earnings and losses e) expected return on plan assets

Note 20 - Trade Accounts Payable and Other Accounts Payable

The breakdown at the closing of each financial year is as follows:

The items making up this category are: Current Suppliers Staff retention Payable dividend Others Accounts payable Sundry creditors Total

Non-current

At Dec. 31, 2011 TUSD$ 41,880

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

19,956

11,993

243

152

278

8,243

9,457

697

348

3,750

1,330

176

1,581

680

51,330

35,244

14,283

At Dec. 31, 2011 TUSD$

At Dec. 31, 2010 TUSD$

At Jan. 1, 2010 TUSD$

Sundry creditors L/P

5,259

Total

5,259

f) contributions made by the employer

Provision for staff bonuses Provision for employee holidays Total provisions for employee benefits, current Indemnity for years of service

At Dec. 31, 2011 TUSD$

At Jan. 1, 2011 TUSD$

2,043

1,466

210

561

434

255

2,604

1,900

465

450

360

Provisions for other benefits

1,057

Total provisions for employee benefits, non-current

1,507

360

The variation from one financial year to another in these provisions is as follows: Provision for staff bonuses Opening balance

At Dec. 31, 2011 TUSD$

1,466

210

Increase (decrease) in existing provisions

2,043

1,466

Provision used

(1,466)

(210)

2,043

1,466

TOTAL

102 australis seafoods

At Dec. 31, 2011 TUSD$

australis seafoods 103

Content

The Salmon Industry

Our team

Our Company

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Provision for employee holidays

At Dec. 31, 2011 TUSD$

Opening balance

434

255

Increase (decrease) in existing provisions

429

273

(302)

(94)

561

434

At Dec. 31, 2011 TUSD$

Opening balance

360

Increase (decrease) in existing provisions

360

450

360

At Dec. 31, 2011 TUSD$

1,057

Provision used TOTAL Indemnity for years of service

Provision used TOTAL Provisions for other benefits Opening balance Increase (decrease) in existing provisions Provision used TOTAL

public deed before Iván Torrealba Acevedo. In this meeting the following, among other items, was decided: a) To increase the Company’s capital from $21,833,579,871 to a total amount of $24,673,419,797, paid by shareholders by capitalizing on profits retained by the Company, following loss absorption, corresponding to the account “Other Reserves,” with the capitalized profits amount rose to $2,839,839,925. b) To increase the number of shares among which the Company’s capital is divided from 20,507 registered shares, without nominal value, of the same and unique series, each with equal value, to 1,220,002,444 registered shares, without nominal value, of the same and unique series, each with equal value, without increasing statutory capital. For these purposes, the next step was the exchange of the respective stock certificates in the manner determined by the Shareholders group. In accordance with the above, each Company shareholder receives 59,492 shares for each currently issued share. c) To request registration of the Company and its shares in the Securities Registry of the Superintendencia de Valores y Seguros (hereinafter the “Superintendencia”), with which, once the shares are registered, the Company would be subject to the standards governing publicly traded corporations. The Company would be subject to Superintendencia audits, thus complying with articles 2 of the Ley de Sociedades Anónimas (Corporations Law), 5 and 7 of Law No. 18,045 of the Securities Market (hereinafter the “Ley de Mercado de Valores” (Securities Market Law)) and 2 of the Reglamento de Sociedades Anónimas (Corporations Regulations). This is so, that the Company’s shares can be publicly offered and traded in Markets for Emerging Companies that regulate Securities Exchanges, in accordance with article 8 subsection 2 of the Securities Market Law and the General Standard No. 118 of the Superintendencia and its modifications. d) To increase the capital of the Company from $24,673,419,797, including the revaluation of capital as reported in the General Shareholder Meeting on March 4, 2011, divided in 1,220,002,444 registered shares, without nominal value, of the same and unique se-

Note 22 - Issued Capital

ries, each of equal value, to the amount of $28,515,993,870, divided in 1,410,002,444 registered shares, without nominal value, of the same and unique serie, each of equal value, which implies an increase in capital of the Company of $3,842,574,074, done by

To date the capital subscribed and paid of the Company is one hundred and twenty-three million eighty-one thousand dollars (TUSD$

issuing 190,000,000 new payment registered shares, without nominal value, of the same and unique serie, each of equal value,

123,081) divided in one billion four hundred and three million two thousand four hundred and forty-four shares (1,403,002,444).

the Shareholders setting the minimum placement value of the shares and, jointly, to approve the amount of $141,568,519 of this capital increase to go to a compensation plan for employees of the Company or its subsidiaries, according to the terms of article

a) Capital

24 of the Ley de Sociedades Anónimas (Corporations Law).

The Company’s paid capital breaks down as follows:

2.- On March 14th, 2011, Director Rodrigo Arriagada Astrosa privately subscribed to 2,000,000 company shares. The share price

on Dec. 31, 2011 Series Only

Subscribed Capital N° of shares

is equal to the price at which each year is offered when it first enters is exchange, that is, $185 (Chilean pesos). The transaction

Paid Capital N° of shares

1,403,002,444

amount was $370,000,000 (Chilean pesos), and the payment deadline is pending. 3.- On March 14th, 2011, Director Federico Rodríguez Marty privately subscribed to 1,000,000 company shares. The share price is

1,400,002,444

equal to the price at which each year is offered when it first enters is exchange, that is, $185 (Chilean pesos). The transaction

amount was $185,000,000 (Chilean pesos), and the payment deadline is pending.

Number of shares

Shares own

Own Shares

Total

4.- On June 8th, 2011, the Board of Directors declared successful the placement of 180,000,000 first issue shares, representative

At January 1, 2010

2,000

of 12.77% of the Company’s capital stock. This placement took place on June 9th, 2011 in the Bolsa de Comercio de Santiago (San-

Capital increase

18,507

tiago Stock Exchange). The first issue share offer took place in the local market through Larraín Vial S.A. Stockbrokerage, acting as

Balance at December 31, 2010

20,507

placement agent, and the sale was executed in the Santiago Stock Exchange, Securities Exchange by means of the trading me-

Number of shares

Shares ordinary

Shares own

Ordinary shares

thod “Subasta de un Libro de Órdenes” (Orders Book Auction). The auction price of the offered shares was fixed by the Company Ordinary shares At January 1, 2011 Exchange of shares Capital increase Balance at December 31, 2011

for a sum of $185 (Chilean pesos) per share, making the total amount of the share placement $33,300,000,000 (Chilean pesos). Total

20,507

1,220,002,444

183,000,000

1,403,002,444

The main equity movements of the period are: 1.- On March 4, 2011, the AUSTRALIS SEAFOODS S.A. Extraordinary Shareholders Meeting act, held the same date, was summarized in

104 australis seafoods

5.- On October 20th, 2011, a Special Shareholders Meeting was held. Shareholders representing 97.274% of the total shares with voting entitlement attended, and the following, among other items, was decided: a) The modification of currency used for Company accounting and stating statutory capital from Chilean pesos to United States of America Dollars; a. The capitalization of the highest value obtained in the placement of shares on June 9, 2011, discounting issue and placement expenses, in compliance with subsection 2 of article 26 of the Ley de Sociedades Anónimas (Corporation Law).

australis seafoods 105

Content

Our team

Our Company

The Salmon Industry

Main Assets



Consolidated Financial Statements



AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

- Dividend policy In order to determine distributable net profit of the Company to be considered for dividend calculation, the following will be excluded from the financial year results:

Note 23 - Cumulative Earnings (losses) The Cumulative Results account breaks down as follows:

1) Unrealized profits or losses, related to the recording at fair value of biological assets regulated by the accounting standard “IAS 41,”

At Dec. 31, 2011

At Dec. 31, 2010

reintegrating them into net profits the moment they are realized. For this purpose, realized will be understood as the portion of these

TUSD$

fair value increases corresponding to the assets sold or disposed of by other means.

Opening balance

2) Unrealized income generated in the acquisition of other entities and, in general, unrealized results produced from the application

11,929

(4,708)

Income results and comprehensive costs

27,429

17,377

of paragraphs 34, 42, 39 and 58 of the accounting standard “Captain international Financial Reporting Standard No. 3,” revised,

Other variations in equity

(6,952)

8,726

referring to business combination operations. These results will also be re-integrated into net profit at the moment of realization. For

Interim dividends

(8,243)

(9,466)

these purposes, results will be understood as realized as long as acquired entities generate profit after acquisition, or when these

Total

24,163

11,929

entities are sold.

As required by Memorandum No. 1,945 of the Superintendency of Securities and Insurance, Chile on September 29, 2009, below

3) The effects of deferred taxes associated with the items indicated in 1) and 2) will be regulated in the same way as the item that

are the adjustments of the first applications of IFRS, recorded with a credit to cumulative earnings (losses), pending realization.

gives rise to them.

2010

Dividend Provision

Adjustments cumulative at 01/01/2010

The Company reports as interim dividends the equivalent of 30% of distributable net profit for the 2011 period. b) Distribution of Shareholders

Items

The main shareholders of Australis Seafoods S.A. are the following: Name

No. Shares

% Ownership

2011

Amount realized in 2010

Balance for realize at 12/31/2010

Amount realized in 2011

TUSD $

Biological assets

(1)

5,072

(5,072)

Functional currency

(2)

(1,539)

Properties, plant and equipment

(3)

(563)

FONDO DE INVERSIÓN PRIVADO AUSTRALIS

1,101,077,936

78.5%

ASESORIAS E INV BENJAMIN S A

106,924,508

7.6%

Deferred taxes

(4)

(983)

1,216

233

42,293,121

3.0%

Stock

(5)

414

(414)

40,082,255

2.9%

Intangibles

(6)

214

AFP HABITAT S A PARA FDO PENSION C

16,043,158

1.1%

Negative goodwill

(7)

134

(134)

FONDO DE INVERSIÓN SANTANDER SMALL CAP

13,584,418

1.0%

185

COMPASS SMALL CAP CHILE FONDO DE INVERSIÓN

12,254,012

0.9%

Reclassification of interests, non-controlling *

AFP HABITAT S A FONDO TIPO B

10,414,253

0.7%

TOTAL

(4,404)

(1,470)

AFP HABITAT S A FONDO TIPO A

8,969,575

0.6%

BOLSA DE COMERCIO DE SANTIAGO BOLSA DE VALORES

8,250,525

0.6%

LARRAIN VIAL S A CORREDORA DE BOLSA FONDO DE INVERSIÓN LARRAIN VIAL BEAGLE

SIGLO XXI FONDO DE INVERSIÓN LINZOR ABSOLUTE RETURN FONDO DE INVERSIÓN PRIVADO

5,134,128

0.4%

4,235,964

0.3%

1,369,263,853

97.6%

Others

190 3,124

(1) Biological assets: According to prior GAAP, fish were classified as inventory and were recorded at cost or at market value, if this was lower. In accordance with IFRS 41, fish must be classified as biological assets and are valued at fair value. This adjustment was made in 2010 at the time of sale of these assets. (2) Functional currency: According to previous GAAP, the Company had some subsidiaries in Chilean pesos. When evaluating the functional currencies of each of the group’s companies, it was concluded that their operations were primarily carried out in United States of America dollars, hereinafter “Dollars,” and therefore these operating subsidiaries with different currencies were converted to “Dollars.” These adjustments were made to the extent that the item with which they are associated is disposed of. (3) Properties, plant and equipment: For the application of IFRS it has been defined opening balances at January 1, 2010 are recorded at fair value, and therefore: i) For the case of subsidiary Landcatch Chile S.A., an assessment of lands, water use rights, equipment and buildings of the Company was performed. ii) For the case of subsidiary Australis Mar S.A., the method of historical cost of the assets was used and the useful lives and residual values of these assets were verified.

106 australis seafoods

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Content

Our team

Our Company

The Salmon Industry

Main Assets

Consolidated Financial Statements





AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

These adjustments were made to the extent that the item with which they are associated is disposed of. (4) Deferred taxes: According to IFRS, all effects of deferred taxes from temporary differences between the tax and financial balance sheet must be recorded, using the liability method. These adjustments are made using the same ratio as the items with which they

i) Unrealized profits or losses, related to the recording at fair value of biological assets regulated by the accounting standard “IAS 41,” reintegrating them into net profits the moment they are realized. For this purpose, realized will be understood as the portion of these fair value increases corresponding to the assets sold or disposed of by other means.

are associated.

ii) The effects of deferred taxes associated with the concepts indicated in i) will have the same fate as the item that gave rise to them.

(5) Stocks: The adjustment done corresponds to the portion of the fair value included in the finished products, done for the valuation

Although distributable profit for determining dividends is calculated based on annual results, for informational purposes, the deter-

of the biological asset adjustment. This adjustment was made in 2010 at the time of sale of these assets.

mination of net profit for the financial year ending on December 31, 2011 is given below: At Dec. 31, 2011 TUSD$

(6) Intangibles: According to IFRS aquaculture concessions have mainly indefinite useful lives and are therefore subject to annual impairment tests. Depreciation has been reversed and its effects recognized in the cumulative results. These adjustments were made

Earning attributable to the controlling interest

to the extent that the item with which they are associated is disposed of. (7) Negative goodwill: According to IFRS 3, this concept is paid directly to income, and therefore higher investment balances were attributed to the cumulative results at the transition date. This adjustment does not have an effect on future financial years, and

27,429

Change in the fair value of biological assets

Deferred taxes associated with the fair value of biological assets

(11)

therefore has been considered as made in the adjusted period.

Distributable net profit

* Non-controlling shares reclassification: According to IFRS, this item is considered part of equity, unlike according to the previous

Application of dividend policy (30%)

27,477 8,243

GAAP. For this reason, it will not be applied in future financial years.

Note 24 - Earnings per Share and Net Distributable Profits 24.1. Earning per share

Note 25 - Ordinary Revenue The revenue of the Group breaks down as follows:

Earnings per share break down as follows:

Freshwater Sales At Dec. 31, 2011

At Dec. 31, 2010

US$/No. of shares

0.02

847

Earning per share

The calculation of basic earnings (losses) per share was done by dividing the profit attributable to shareholders by the number of shares of the same unique serie. The Company has not issued convertible debt or other equity securities. As a result there are no potentially diluting effects on the Company’s earning per share.

24.2. Distributable net profit

4,181

154,264

80,220

Total

163,664

84,401

The Group’s ordinary revenue mainly consists of sales from products derived from the harvest of biological assets.

Note 26 - Other Income/Expenses by Function

2011, by means of the distribution of a final dividend. The Ordinary Meeting of Shareholders must approve this, and it is payable on

Other operating income

the date they designate.

be determined based on total profits from the relevant changes of yet unrealized assets and liabilities, which must be re-integrated into the calculation of net profit for the financial year in which these changes take place. Additional dividends will be determined based on these criteria according to the agreement adopted at the Shareholders Meeting. As a result, it was agreed that, in order to determine distributable net profit of the Company, that is, net profit considered for calcu-

TUSD$

Seawater Sales

The revenue of the Group breaks down as follows:

policy that net profit, for purposes of the minimum obligatory dividend payment of 30%, established by article 79 of Law 18,046, will

Cumulative at Dec. 31, 2010

TUSD$ 9,400

Dividend policy for the financial year 2011 is to distribute as a dividend at least 30% of net profit of the year ending on December 31,

According to the provisions of memorandum No. 1945 of the SVS, dated December 29, 2009, it was agreed to establish as a general

Cumulative at Dec. 31, 2011

At Dec. 31, 2011 Negative goodwill from acquisitions

At Dec. 31, 2010

1,556

Others

307

546

Leases

Costs recovery Reimbursements by Law No.18,708 Total

450

2,200

lating the minimum obligatory dividend for financial year 2011, the following aspects will be excluded from the results of the financial year:

108 australis seafoods

australis seafoods 109

Content

Our team

Our Company

The Salmon Industry

Main Assets

ď ź

Consolidated Financial Statements

ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Other operating costs At Dec. 31, 2011 Others

(368)

Penalties and disposals of fixed assets

At Dec. 31, 2010 (477)

(27)

(181)

(1,305)

(1,717)

Confiscation of plant product

(74)

Settled personnel compensation

(287)

(1,700)

(2,736)

Rest centers

Total

Note 29 - Financial Costs (net) Financial COSTS at the closing of the financial statement are detailed below: Cumulative at Dec. 31, 2011

Cumulative at Dec. 31, 2010

TUSD$

Financial Interests

(1,785)

(1,162)

Loan Commission

(65)

(68)

(18)

(11)

Notary costs Bank costs Total

Note 27 - Distribution Expenses

(1,901)

(1,241)

Distribution costs are detailed below: Cumulative at Dec. 31, 2011 TUSD$

Cumulative at Dec. 31, 2010 TUSD$

Land transport

(582)

(251)

Third-party cold stores

(262)

(275)

Selling costs

(215)

(56)

General pre-shipment and shipment costs

(367)

(122)

Employees Salaries

(451)

(441)

Commissions

(75)

(65)

Other selling costs

(73)

(47)

(2,025)

(1,257)

Total

(33)

Note 30 - Exchange Differences of Assets and Liabilities in Foreign Currency a) Exchange differences recognized in results Exchange differences generated at December 31, 2011 and 2010 by the balances of assets and liabilities in foreign currencies other than the functional currency were credited (charged) to the results of the financial year as follows: Cumulative At Dec. 31, 2011 TUSD$ Assets in foreign currency Liabilities in foreign currency Total exchange differences

Note 28 - Administration Costs

Employees costs Depreciation and amortization Third-party services

(5,910)

2,918

1,230

(556)

(4,680)

2,362

b) Assets and liabilities in foreign currency

Below are the main administration costs of the company at the close of the financial statements:

Lease

Classes of current assets

Currency

Cumulative at Dec. 31, 2011

Cumulative at Dec. 31, 2010

Cash and cash equivalents

Non-index linked pesos

TUSD$

Cash and cash equivalents

Dollars

Cash and cash equivalents

Index-linked pesos

(238)

(181)

(4,971)

(3,025)

(47)

(163)

(1,896)

(1,336)

Others

(1,165)

(512)

Total

(8,317)

(5,217)

Subtotal Cash and cash equivalents Other non-financial assets, current

Non-index linked pesos

Other non-financial assets, current

Dollars

Subtotal other non-financial assets, current

Employee costs Employee costs are detailed below:

2,109

11,742

2,957

656

51,480

11,768

3,670

174

355

252

30 35

377 -

Trade debtors and other receivables, current

Dollars

14,278

10,175

11,133

16,864

10,175

11,133

9,462

5,701

1,523

Accounts receivable to related entities, current

Non-index linked pesos

Accounts receivable to related entities, current

Dollars

Accounts receivable to related entities, current

Index-linked pesos

Subtotal accounts receivable to related entities, current

TUSD$

Salaries

(2,814)

(2,775)

Biological assets, current

Non-index linked pesos

Benefits

(2,085)

(115)

Biological assets, current

Dollars

(72)

(135)

Biological assets, current

Index-linked pesos

(4,971)

(3,025)

Inventories

Dollars

Subtotal Inventories

Subtotal Biological assets, current Assets for taxes, current

Non-index linked pesos

Assets for taxes, current

Dollars

Assets for taxes, current

Index-linked pesos

Subtotal Assets for taxes, current

110 australis seafoods

49,371

426

Cumulative at Dec. 31, 2010

At Jan. 1, 2011 TUSD$

2,586

TUSD$

Total

At Dec. 31, 2011 TUSD$

Non-index linked pesos

Cumulative at Dec. 31, 2011

Others

At Dec. 31, 2011 TUSD$

Trade debtors and other receivables, current Subtotal trade debtors and other receivables, current

Employees costs:

Cumulative At Dec. 31, 2010 TUSD$

5,751

9,462

1,523

11,506

2,617

3,494

11,506

2,617

3,494

78,797

57,651

29,523

78,797

57,651

29,523

196

1,874

344

7,749

3,874

867

7,945

5,748

1,211

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Classes of non-current assets Other non-financial assets, non-current Other non-financial assets, non-current Subtotal other non-financial assets, non-current Investments recorded using accounting method participation Subtotal Investments recorded using the participation method Intangible assets other than goodwill Intangible assets other than goodwill Intangible assets other than goodwill Subtotal Intangible assets other than goodwill Properties, plant and equipment Subtotal Properties, plant and equipment Biological assets, non-current Subtotal Biological assets, non-current Assets for deferred taxes Subtotal Assets for deferred taxes

Currency Non-index linked pesos Dollars

Non-index linked pesos Dollars Index-linked pesos Dollars Dollars Dollars

Classes of current liabilities

Currency

Other current financial liabilities

Non-index linked pesos

Other current financial liabilities

Dollars

Other current financial liabilities

Index-linked pesos

Subtotal other current financial liabilities Trade accounts and other receivables, current

Non-index linked pesos

Trade accounts and other receivables, current

Dollars

Subtotal Trade accounts and other receivables, current Current accounts payable to related entities

Non-index linked pesos

Current accounts payable to related entities

Dollars

Subtotal Current accounts payable to related entities Provisions for employee benefits, current

Non-index linked pesos

Provisions for employee benefits, current

Dollars

Subtotal provisions for employee benefits, current

Classes of non-current liabilities

Currency

Other non-current financial liabilities

Dollars

Other non-current financial liabilities

Index-linked pesos

Subtotal other non-current financial liabilities

At Dec. 31, 2011 TUSD$ 7,379 156 7,535 7,612

At Dec. 31, 2011 TUSD$ 8,694 235 8,929

At Jan. 1, 2011 TUSD$ 5,550 3 5,553

14,456 14,456 60,373 60,373 28,860 28,860 4,000 4,000

10,422 10,422 30,664 30,664 16,343 16,343 1,593 1,593

6,775 6,775 20,888 20,888 9,445 9,445 1,283 1,283

At Dec. 31, 2011 TUSD$

At Jan. 1, 2011 TUSD$

581

2,497

2,064

15,682

9,938

38,126

182

195

175

16,445

12,630

40,365

17,713

15,500

10,119

33,617

19,744

4,164

51,330

35,244

14,283

368

557

2,990

3,525

3,893

557

2,990

2,604

1,900

465

2,604

1,900

465

At Dec. 31, 2011 TUSD$

65,680

52,025

227

379

65,725

52,252

379

At Jan. 1, 2011 TUSD$

Other non-current, payable accounts

Dollars

5,259

Other non-current, payable accounts

Index-linked pesos

5,259

628

11,395

628

11,395

8,877

5,617

3,791

Subtotal Other non-current, payable accounts Non-current accounts payable to related entities

Non-index linked pesos

Subtotal Accounts payable to related entities related, non-current Liability for deferred taxes

Non-index linked pesos

Liability for deferred taxes

Dollars

Subtotal Liability for deferred taxes

8,877

5,617

3,791

Other non-financial liabilities, non-current

Non-index linked pesos

Other non-financial liabilities, non-current

Dollars

450

360

Subtotal other non-financial liabilities, non-current Provisions for employee benefits, non-current

Non-index linked pesos

Provisions for employee benefits, non-current

Dollars

a) Pledged shares According to the financing contracts of the subsidiary Australis Mar S.A., controlling shareholders of Australis Seafoods S.A. assumed the obligation to pledge over 50.1% of their shares in favor of the financing banks of the aforementioned subsidiary, which are

7,612 -

At Dec. 31, 2011 TUSD$

Note 31 - Contingencies

Banco Chile, Corpbanca and Banco de Crédito e Inversiones. b)Direct guarantees At the closing date of these financial statements, the company had no direct guarantees of any kind. c)Indirect guarantees Debtor

Committed Assets

Type

Asset Accountable TUSD$

Corpbanca

Australis Mar S.A.

Subsidiary

Guarantor

Does not apply

Banco Chile

Australis Mar S.A.

Subsidiary

Guarantor

Does not apply

Banco Crédito e Inversiones

Australis Mar S.A.

Subsidiary

Guarantor

Does not apply

BBVA Chile

Landcatch Chile S.A.

Subsidiary

Surety

Does not apply

Guarantee creditor

Name

Relation

Type of guarantee

d) Guarantees from third parties In accordance with the bank financing contracts of Australis Mar S.A. (subsidiary), this company’s debts with Banco de Chile, Banco de Crédito e Inversiones and Corpbanca are secured by Mr. Isidoro Ernesto Quiroga Moreno, Asesorías e Inversiones Benjamín S.A. Australis Seafoods S.A. and Landcatch Chile S.A. Awarding and maintenance of these guarantors does not accrue any charge for the Company or its subsidiaries. e) Guarantees In order to guarantee the obligations of subsidiary Comercializadora Australis SpA according to the contracts awarded on the purchase of fifty percent of the social rights of True Salmon Pacific Holding Co. LLC (hereinafter “TSP”), this subsidiary served as a pledge in favor of the salerepresentatives for their social rights in TSP. It was agreed that this pledge would be lifted on January 26, 2012. e) Restrictions In accordance with the bank financing contracts of Australis Mar S.A. (subsidiary), this company is subject to the following restrictions until 2015 unless the company has prepaid the debt balances. a) Not being a guarantor and/or surety and co-debtor, or to compromise its patrimony directly or indirectly, of obligations of third parties that make up an amount greater than or equal to five hundred thousand dollars, individually or collectively. b) Australis Mar S.A. may not constitute or award pledges or mortgages on its movable or immovable property, except for those authorized in the financing contracts. c) Australis Mar S.A. may not sell, transfer or sign away in any way assets that are part of the debtor’s fixed asset, unless such a disposal does not imply a significant decrease in equity. d) Australis Mar S.A. may not distribute profits or dividend payments over thirty percent of the profit of the respective financial year, for the entire term of the credit, unless, in excess, they are capitalized in the debtor or designated for reinvestment in Australis Seafoods S.A. or any company controlled by it. e) The TUSD$ 10,686 debt that Australis Mar S.A. has to Australis Seafoods S.A. (parent company) must be subordinated in favor of

1,057

the creditor banks.

Subtotal Provisions for benefits to employees, non-current.

1507

360

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AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Note 32 - Environment

Note 33 - Events After the Balance Sheet Date

Australis Seafoods S.A. and subsidiaries, as part of their business strategy, have defined care and respect for the environment as a

a) On January 26, 2012, the pledge was lifted for obligations assumed by the subsidiary Comercializadora Australis SpA based on

priority. For this reason, a number of actions have been taken that make operations more efficient and considerably reduce environ-

contracts awarded at the time of purchase of fifty percent of the social rights of True Salmon Pacific Holding Co., LLC (hereinafter

mental impact, basically with the following types of expenditures:

“TSP”).

a) Expenditures or costs related to improvement of and/or investment in production processes that reduce environmental impact

b) The consolidated financial statements of the Company for the financial year ending on December 31, 2011 were approved by the

and/or improve environmental conditions such as: monitoring effluents from fish farms, marine devices and processing plants;

Board in session on March 14, 2012.

fish mortality silage system implementations in the sea rearing centers and fish farms; environmental reports and initial as-

c) Between December 31, 2011 and the issue date of these consolidated financial statements, there were no financial or other events

sessments of rearing centers; etc.

that significantly affects the interpretation of these statements.

b) Expenditures or costs related to verifying and monitoring ordinances and laws regarding industrial processes and facilities such as: filing environmental impacts declarations to evaluate mortality silage; managing and final disposal of hazardous and non-

Note 34 - Other Information

hazardous wastes, phytoplankton monitoring; monitoring sediments and the water column in rearing centers; monitoring mud from fish farms; environmental consulting; hiring sampling and laboratory analysis services; etc.

The number of employees of Australis Seafoods and subsidiaries, by category, is as follows:

For the future, Australis Seafoods and subsidiaries reaffirm their commitment to caring for the environment by means of new investments, continual training of employees and signing of new agreements that allow for progress towards sustainable development, in order to achieve harmony between operations and the environment.

Indefinite contracts

The breakdown of expenditures for environmental protection projects undertaken by the Group in 2011 is as follows: At December 31, 2011

Company that incurred the Expense

Project name

Reason for the expenditure

Cost TUSD$

Investment TUSD$ 40

At December 31, 2010

Amount designated for future periods

Ox yg e n equipment

09/30/2012

12/31/2011

Estimated date of project end

Implementation of oxygen monitoring systems

Australis Mar S.A.

Preparation of preliminary environmental studies of the concessions

Third-party services

09/30/2012

12/31/2011

Australis Mar S.A.

Implementation of biosecurity and vector measures

Third-party services

09/30/201

12/31/2011

Australis Mar S.A.

E nv i ro n m e n ta l analysis

Environmental analysis of the sites by means of on-site testing

Third-party services

09/30/2012

12/31/2011

Landcatch S.A.

Effluent incubation UV disinfection system

Effluent incubation UV disinfection system / Liquid waste monitorin

120

Liquid waste monitoring / UV System

250

09/30/2012

12/31/2011

126

Australis Mar S.A.

E nv i ro n m e n ta l analysis

Environmental analysis of the sites by means of on-site testing

Landcatch S.A.

Effluent incubation UV disinfection system

Effluent incubation UV disinfection system / Liquid waste monitoring

120

401

246

Fixed term contracts

Total contracts

347

284

Investment TUSD$

Costs TUSD$

Australis Mar S.A.

401

At Dec. 31, 2010

312

Exact or estimated date on which future expenditures will be made

Description of the asset or cost item TUSD$

At Dec. 31, 2011

Third-party services

09/30/2012

12/31/2011

Liquid waste monitoring / UV System

250

09/30/2012

12/31/2011

126

Environmental expenditures of the subsidiary Australis Mar S.A. have to do with enabling new rearing centers, and while these have an estimated completion date, these projects will continue in the future as long as there are new rearing centers.

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ď ˝

AUSTRAL IS S EAFOODS annual r ep ort 2011

C o ns o lid at e d Fi n a nci a l Stat em e n ts

Condensed Financial Statements of Subsidiary Companies GENERAL BALANCE TUSD$

Australis Mar S.A.

Landcatch Chile S.A.

Piscicultura Rio Maullin SPA 2011

Comercializadora Australis SPA

2010

2011

STATEMENT OF CHANGES IN EQUITY AUSTRALIS MAR S.A. TUSD$

2011

2010

2011

2010

Current Assets

107,954

83,990

27,307

10,817

Opening balance previous period 01/01/2011

Non-current assets

80,263

47,946

32,155

18,807

149

104

7,612

Total Assets

188,217

131,936

59,462

29,624

149

104

7,612

57,730

30,231

18,795

8,788

122

3,525

Non-current Liabilities

66,470

67,757

26,854

9,615

4,005

Equity

64,017

33,948

13,813

11,221

Total Liabilities and Assets

188.217

131,936

59,462

29,624

149

104

7,612

Australis Mar S.A.

Landcatch Chile S.A.

Fish Farm Rio Maullin SPA

2010

2011

Gross profit

45,270

23,842

5,714

907

Other income (losses)

-7,539

-4,041

-2,703

-36

Profit (loss) before taxes

37,731

19,801

3,011

871

Income tax

-7,667

-3,947

-419

1,461

30,064

15,854

2,592

2,332

2011

Comercializadora Australis SPA

2011

INCOME (LOSS)

2010

CASH FLOW TUSD$

2010

2011

Australis Mar S.A.

Accumulated Earnings

Other reserves

2010

Current Liabilities

INCOME STATEMENT TUSD$

Capital

2010

Landcatch Chile S.A.

Equity attributable to owners of the holding company

5,066

28,791

33,857

Earnings

30,063

Other movements

Total changes in equity

5,066

58,854

Final balance current period 12/31/2011

5,066

58,854

Accumulated Earnings

Non-controlling Interests

Assets total

33,948

30,063

30,064

63,920

64,017

63,920

64,017

STATEMENT OF CHANGES IN EQUITY LANDCATCH CHILE S.A. TUSD$

Capital

Opening balance previous period 01/01/2011

10,825

1,574

-1,178

11,221

Earnings

2,592

Other movements

Total changes in equity

10,825

4,166

-1,178

13,813

Final balance current period 12/31/2011

10,825

4,166

-1,178

13,813

STATEMENT OF CHANGES IN EQUITY FISH FARM RIO MAULLIN SPA TUSD$

Capital

Accumulated Earnings

Other reserves

Equity attributable to owners of the holding company

Non-controlling Interests

Assets total

Opening balance previous period 01/01/2011

Earnings

2011

2010

2011

2010

Other movements

8,919

1,451

-11

-88

Total changes in equity

-16,686

-14,110

-8,962

-41

Final balance current period 12/31/2011

Net cash flows from / (used in) financing activities

-646

21,023

9,158

-138

Net increase in cash and equivalent in cash

-8,413

8,364

185

-267

Cash and cash equivalents at the start of the period

11,443

3,079

324

591

Cash and cash equivalents at the end of the period

3,030

11,443

509

324

Net cash flows from / (used in) operating activities Net cash flows from / (used in) investment activities

CASH FLOW TUSD$

Fish Farm Rio Maullin SPA 2011

STATEMENT OF CHANGES IN EQUITY COMERCIALIZADORA AUSTRALIS SPA TUSD$

Comercializadora Australis SPA

2010

2011

2010

Net cash flows from / (used in) operating activities

-5

Net cash flows from / (used in) investment activities

-4,000

Net cash flows from / (used in) financing activities

4,005

Net increase in cash and cash equivalents

Cash and cash equivalents at the start of the period

Cash and cash equivalents at the end of the period

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Capital

Accumulated Earnings

Other reserves

Equity attributable to owners of the holding company

Non-controlling Interests

Assets total

Opening balance previous period 01/01/2011

Earnings

Other movements

Total changes in equity

Final balance current period 12/31/2011

The accounting policies applied to each subsidiary are those described in the consolidated financial statements of Australis Seafoods S.A. The complete financial statements of the subsidiaries presented are at the disposition of the public in the offices of Australis Seafoods S.A. and the Superintendency of Securities and Insurance.

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DESIGN

100% Diseño MEMORY TEXT EDITING

Comsulting Photography

Morten Andersen Portraits

Cristina Alemparte Printing

Fyrma Gráfica

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