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LITIGATION AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2022
LITIGATION AND CONTINGENCIES |
LITIGATION AND CONTINGENCIES | 23 – LITIGATION AND CONTINGENCIES 23.1 Lawsuits and other legal actions: In the opinion of the Company’s legal counsel, the Parent Company and its subsidiaries do not face legal or extrajudicial contingencies that might result in material or significant losses or gains, except for the following:
1) | Embotelladora del Atlántico S.A. and Andina Empaques Argentina S.A. face labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 1,397,149 thousand (CLP 1,917,657 thousand as of December 31, 2021). Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. Additionally, Embotelladora del Atlántico S.A. maintains time deposits for an amount of CLP 288,399 thousand to guaranty judicial liabilities.
2) | Rio de Janeiro Refrescos Ltda. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 45,706,634 thousand (CLP 53,965,870 thousand as of December 31, 2021). Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. As it is customary in Brazil, Rio de Janeiro Refrescos Ltda. maintains Deposit in courts and assets given in pledge to secure the compliance of certain processes, irrespective of whether these have been classified as a possible, probable or remote. The amounts deposited or pledged as legal guarantees amounted to CLP 23,260,412 thousand (CLP 23,502,962 thousand as of December 31, 2021).
Part of the assets held under warranty by Rio de Janeiro Refrescos Ltda. as of December 31, 2014, are in the process of being released and others have already been released in exchange for guarantee insurance and bond letters for BRL 1,950,203,388, with different Financial Institutions and Insurance Companies in Brazil, these entities receive an annual commission fee of 0.55%. and become responsible of fulfilling obligations with the Brazilian tax authorities should any trial result against Rio de Janeiro Refrescos Ltda. Additionally, if the warranty and bond letters are executed, Rio de Janeiro Refrescos Ltda. promises to reimburse to the financial institutions and Insurance Companies any amounts disbursed by them to the Brazilian government. Main contingencies faced by Rio de Janeiro Refrescos are as follows:
| a) | Tax contingencies resulting from credits on tax on industrialized products (IPI).
Rio de Janeiro Refrescos is a party to a series of proceedings under way, in which the Brazilian federal tax authorities demand payment of value-added tax on industrialized products (Imposto sobre Produtos Industrializados, or IPI) totaling BRL 2,867,475,111 as of December 31, 2022. The Company does not share the position of the Brazilian tax authority in these procedures and considers that it was entitled to claim IPI tax credits in connection with purchases of certain exempt raw materials from suppliers located in the Manaus free trade zone. Based on the opinion of its advisers, and legal outcomes to date, Management estimates that these procedures do not represent probable losses and has not recorded a provision on these matters. Notwithstanding the above, the IFRS related to business combination in terms of distribution of the purchase price establish that contingencies must be measured one by one according to their probability of occurrence and discounted at fair value from the date on which it is deemed the loss can be generated. As a result of the acquisition of Companhia de Bebidas Ipiranga in 2013 and pursuant to this criterion and although there are contingencies listed only as possible for BRL 552,722,424 (amount includes adjustments for current lawsuits) a start provision has been generated in the accounting of the business combination for BRL 125,421,068.
| b) | Other tax contingencies.
They refer to ICMS-SP tax administrative processes that challenge the credits derived from the acquisition of tax-exempt products acquired by the Company from a supplier located in the Manaus Free Zone. The total amount is BRL 464,269,491 being assessed by external attorneys as a remote loss, so it has no accounting provision. The company was challenged by the federal tax authority for tax deductibility of a portion of goodwill in the 2014-2016 period arising from the acquisition of Companhia de Bebidas Ipiranga. The tax authority understands that the entity that acquired Companhia de Bebidas Ipiranga is Embotelladora Andina and not Rio de Janeiro Refrescos Ltda. In the view of external lawyers, such a statement is erroneous, classifying it as a possible loss. The value of this process is BRL 546,082,453, as of the date of these financial statements.
3) | Embotelladora Andina S.A. and its Chilean subsidiaries face labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 1,552,353 thousand (CLP 1,487,509 thousand as of December 31, 2021). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.
4) | Paraguay Refrescos S.A. faces tax, trade, labor and other lawsuits. Accounting provisions have been made for the contingency of any loss because of these lawsuits amounting to CLP 39,291 thousand (CLP 41,370, thousand as of December 31, 2021). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.
23.2 Direct guarantees and restricted assets: Guarantees and restricted assets are detailed as follows: Guarantees that commit assets recognized in the financial statements: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Committed assets | ​ | Accounting value
Guaranty Creditor |  | Debtor name |  | Relationship |  | Guaranty |  | Type |  | 12.31.2022 |  | 12.31.2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ThCh$ | ​ | ThCh$
Administradora Plaza Vespucio S.A. | ​ | Embotelladora Andina S.A. | ​ | Parent company | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | 98,170 | ​ | 86,416
Cooperativa Agricola Pisquera Elqui Limitada |  | Embotelladora Andina S.A. |  | Parent company |  | Cash |  | Other non-current financial assets |  | 1,056,320 |  | 1,216,865
Mall Plaza |  | Embotelladora Andina S.A. |  | Parent company |  | Cash |  | Trade accounts and other accounts receivable |  | 330,298 |  | 290,890
Serv. Nacional Aduanas | ​ | Embotelladora Andina S.A. | ​ | Parent company | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | ​ | ​ | 18,583
Metro S.A. | ​ | Embotelladora Andina S.A. | ​ | Parent company | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | 21,207 | ​ | 24,335
Parque Arauco S.A. | ​ | Embotelladora Andina S.A. | ​ | Parent company | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | 142,901 | ​ | 126,136
Lease agreement | ​ | Embotelladora Andina S.A. | ​ | Parent company | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | 103,711 | ​ | —
Others | ​ | Embotelladora Andina S.A. | ​ | Parent company | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | 14,183 | ​ | —
Several retail |  | Vending |  | Subsidiary |  | Cash |  | Trade accounts and other accounts receivable |  | 61,395 |  | 63,792
Several retail | ​ | Transportes Refrescos | ​ | Subsidiary | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | 693 | ​ | 628
Several retail | ​ | Transportes Polar | ​ | Subsidiary | ​ | Cash | ​ | Trade accounts and other accounts receivable | ​ | 22,235 | ​ | 69,745
Workers’ claims | ​ | Rio de Janeiro Refrescos Ltda. | ​ | Subsidiary | ​ | Judicial deposit | ​ | Other non-current non-financial assets | ​ | 6,605,781 | ​ | 6,057,282
Civil and tax claims | ​ | Rio de Janeiro Refrescos Ltda. | ​ | Subsidiary | ​ | Judicial deposit | ​ | Other non-current non-financial assets | ​ | 6,457,702 | ​ | 6,562,747
Governmental entities | ​ | Rio de Janeiro Refrescos Ltda. | ​ | Subsidiary | ​ | Plant and equipment | ​ | Property, plant and equipment | ​ | 10,196,929 | ​ | 10,882,933
Distribuidora Baraldo S.H. |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 97 |  | 164
Acuña Gomez | ​ | Embotelladora del Atlántico S.A. | ​ | Subsidiary | ​ | Judicial deposit | ​ | Other non-current non-financial assets | ​ | 145 | ​ | 247
Nicanor López | ​ | Embotelladora del Atlántico S.A. | ​ | Subsidiary | ​ | Judicial deposit | ​ | Other non-current non-financial assets | ​ | 104 | ​ | 176
Municipalidad Bariloche | ​ | Embotelladora del Atlántico S.A. | ​ | Subsidiary | ​ | Judicial deposit | ​ | Other non-current non-financial assets | ​ | 2,428 | ​ | 2,230
Municipalidad San Antonio Oeste |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 10,664 |  | 18,153
Municipalidad Carlos Casares |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 431 |  | 734
Municipalidad Chivilcoy |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 66,697 |  | 113,530
Granada Maximiliano |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 870 |  | 1,480
Municipalidad de Junin |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 139 |  | 237
Almada Jorge |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 1,180 |  | 2,009
Farias Matias Luis |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 541 |  | 922
Temas Industriales SA - Embargo General de Fondos |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 60,575 |  | 103,110
DBC SA C CERVECERIA ARGENTINA SA ISEMBECK |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 10,870 |  | 18,502
Coto Cicsa |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 1,932 |  | 3,289
Cencosud |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 1,208 |  | 2,056
Jose Luis Kreitzer, Alexis Beade Y Cesar Bechetti | ​ | Embotelladora del Atlántico S.A. | ​ | Subsidiary | ​ | Judicial deposit | ​ | Other non-current non-financial assets | ​ | 4,784 | ​ | 8,143
Bariloche Case |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | — |  | 1,902
Vicentin |  | Embotelladora del Atlántico S.A. |  | Subsidiary |  | Judicial deposit |  | Other non-current non-financial assets |  | 125,683 |  | —
Marcus A.Peña |  | Paraguay Refrescos |  | Subsidiary |  | Real estate |  | Property, plant and equipment |  | 4,965 |  | 5,692
Mauricio J Cordero C |  | Paraguay Refrescos |  | Subsidiary |  | Real estate |  | Property, plant and equipment |  | — |  | 987
José Ruoti Maltese |  | Paraguay Refrescos |  | Subsidiary |  | Real estate |  | Property, plant and equipment |  | — |  | 712
Alejandro Galeano |  | Paraguay Refrescos |  | Subsidiary |  | Real estate |  | Property, plant and equipment |  | — |  | 1,365
Ana Maria Mazó |  | Paraguay Refrescos |  | Subsidiary |  | Real estate |  | Property, plant and equipment |  | 1,113 |  | 1,300
​ Guarantees that do not commit assets recognized in the Financial Statements: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Committed assets | ​ | Amounts involved
Guaranty creditor |  | Debtor name |  | Relationship |  | Guaranty |  | Type |  | 12.31.2022 |  | 12.31.2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ThCh$ | ​ | ThCh$
Labor procedures |  | Rio de Janeiro Refrescos Ltda. |  | Subsidiary |  | Guaranty receipt |  | Legal proceeding |  | 1,936,493 | ​ | 1,593,498
Administrative procedures |  | Rio de Janeiro Refrescos Ltda. |  | Subsidiary |  | Guaranty receipt |  | Legal proceeding |  | 7,616,498 | ​ | 4,717,824
Federal government | ​ | Rio de Janeiro Refrescos Ltda. | ​ | Subsidiary | ​ | Guaranty receipt | ​ | Legal proceeding | ​ | 186,607,491 | ​ | 153,491,717
State government | ​ | Rio de Janeiro Refrescos Ltda. | ​ | Subsidiary | ​ | Guaranty receipt | ​ | Legal proceeding | ​ | 117,027,313 | ​ | 64,725,638
Sorocaba Refrescos | ​ | Rio de Janeiro Refrescos Ltda. | ​ | Subsidiary | ​ | Guaranty receipt | ​ | Guarantor | ​ | 3,280,603 | ​ | 3,027,291
Others | ​ | Rio de Janeiro Refrescos Ltda. | ​ | Subsidiary | ​ | Guaranty receipt | ​ | Legal proceeding | ​ | 3,423,715 | ​ | 3,390,177
Aduana de EZEIZA |  | Andina Empaques Argentina S.A. |  | Subsidiary |  | Surety insurance |  | Faithful compliance of contract |  | 3,791 | ​ | 637,631
​

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