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LITIGATION AND CONTINGENCIES

12 Months Ended

Dec. 31, 2024

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:

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 722,249 thousand (CLP 490,108 thousand as of December 31, 2023). 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 61,269 thousand to guaranty judicial liabilities.

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 53,001,124 thousand (CLP 52,997,682 thousand as of December 31, 2023). 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 24,406,656 thousand (CLP 25,845,561 thousand as of December 31, 2023).

Part of the assets held under warranty by Rio de Janeiro Refrescos Ltda. are in the process of being released and others have already been released in exchange for guarantee insurance and bond letters for BRL 2,442,962,831 with different Financial Institutions and Insurance Companies in Brazil, these entities receive an annual commission fee of 0.13%. 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:

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 3,516,866,679 at the date of these financial statements.

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 647,235,052 (amount includes adjustments for current lawsuits) a start provision has been generated in the accounting of the business combination for BRL 127,294,115.

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 569,660,017 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 1,060,752,324, as of the date of these financial statements.

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 1,472,915 thousand (CLP 1,267,215 thousand as of December 31, 2023). Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.

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 49,511 thousand (CLP 46,891 thousand as of December 31, 2023). 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

12.31.2024

12.31.2023

ThCh$

Administradora Plaza Vespucio S.A.

Embotelladora Andina S.A.

Parent company

Guarantee receipt

Trade accounts and other accounts receivable

141,900

169,150

Cooperativa Agrícola Pisquera Elqui Limitada

Embotelladora Andina S.A.

Parent company

Guarantee receipt

Other non-current financial assets

1,212,500

1,125,595

Mall Plaza

Embotelladora Andina S.A.

Parent company

Guarantee receipt

Trade accounts and other accounts receivable

628,381

666,024

Metro S.A.

Embotelladora Andina S.A.

Parent company

Guarantee receipt

Trade accounts and other accounts receivable

23,204

22,222

Parque Arauco S.A.

Embotelladora Andina S.A.

Parent company

Guarantee receipt

Trade accounts and other accounts receivable

312,712

299,464

Lease agreement

Embotelladora Andina S.A.

Parent company

Guarantee receipt

Trade accounts and other accounts receivable

92,875

96,299

Others

Embotelladora Andina S.A.

Parent company

Guarantee receipt

Trade accounts and other accounts receivable

98,879

59,468

Several retail

Vending

Subsidiary

Guarantee receipt

Trade accounts and other accounts receivable

—

Several retail

Transportes Refrescos

Subsidiary

Guarantee receipt

Trade accounts and other accounts receivable

—

Several retail

Transportes Polar

Subsidiary

Guarantee receipt

Trade accounts and other accounts receivable

22,235

17,656

Workers’ claims

Rio de Janeiro Refrescos Ltda.

Subsidiary

Judicial deposit

Other non-current non-financial assets

8,045,861

7,100,709

Civil and tax claims

Rio de Janeiro Refrescos Ltda.

Subsidiary

Judicial deposit

Other non-current non-financial assets

6,370,534

7,485,574

Governmental entities

Rio de Janeiro Refrescos Ltda.

Subsidiary

Plant and equipment

Property, plant & equipment

9,990,170

11,259,278

Distribuidora Baraldo S.H.

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

Acuña Gomez

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

Nicanor López

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

Municipalidad Bariloche

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

434

Municipalidad San Antonio Oeste

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

2,131

2,395

Municipalidad Carlos Casares

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

Municipalidad Chivilcoy

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

13,331

14,979

Granada Maximiliano

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

174

195

Municipalidad de Junin

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

Almada Jorge

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

236

265

Others

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

Temas Industriales SA - Embargo General de Fondos

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

12,107

13,604

DBC SA C CERVECERIA ARGENTINA SA ISEMBECK

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

2,559

2,441

Coto Cicsa

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

1,014

1,139

Cencosud

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

241

271

Jose Luis Kreitzer, Alexis Beade Y Cesar Bechetti

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

25,920

Vicentin

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

956

1,074

Provincia de Entre Ríos

Embotelladora del Atlántico S.A.

Subsidiary

Judicial deposit

Other non-current non-financial assets

6,981

—

Marcus A.Peña

Paraguay Refrescos

Subsidiary

Real estate

Property, plant & equipment

5,252

5,332

Ana Maria Mazó

Paraguay Refrescos

Subsidiary

Real estate

Property, plant & equipment

1,137

1,077

Stefano Szwao Giacomelli

Paraguay Refrescos

Subsidiary

Real estate

Property, plant & equipment

3,054

2,892

Sofía Cartes

Paraguay Refrescos

Subsidiary

Real estate

Property, plant & equipment

2,637

—

Guarantees that do not commit assets recognized in the Financial Statements:

Committed assets

Amounts involved

Guaranty creditor

Debtor name

Relationship

Guaranty

Type

12.31.2024

12.31.2023

ThCh$

Labor procedures

Rio de Janeiro Refrescos Ltda.

Subsidiary

Guaranty receipt

Legal proceeding

6,648,889

2,681,242

Administrative procedures

Rio de Janeiro Refrescos Ltda.

Subsidiary

Guaranty receipt

Legal proceeding

80,036,491

11,245,798

Federal government

Rio de Janeiro Refrescos Ltda.

Subsidiary

Guaranty receipt

Legal proceeding

188,083,737

223,415,663

State government

Rio de Janeiro Refrescos Ltda.

Subsidiary

Guaranty receipt

Legal proceeding

116,943,181

108,317,724

Sorocaba Refrescos

Rio de Janeiro Refrescos Ltda.

Subsidiary

Guaranty receipt

Guarantor

—

3,623,490

Others

Rio de Janeiro Refrescos Ltda.

Subsidiary

Guaranty receipt

Legal proceeding

1,407,340

1,369,766

Aduana de EZEIZA

Andina Empaques Argentina S.A.

Subsidiary

Surety insurance

Faithful compliance of contract

576,829

658,369

Aduana de EZEIZA

Andina Empaques Argentina S.A.

Subsidiary

Surety insurance

Faithful compliance of contract

4,414

3,886