UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES AND EXCHANGE ACT OF 1934
Includes financial statements and their related notes for the nine-month period ended December 31, 2012 filed by Sociedad Química y Minera de Chile S.A. before the Chilean Securities and Insurance Commission (Superintendencia de Valores y Seguros) on March 5, 2012.
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
(Exact name of registrant as specified in its charter)
CHEMICAL AND MINING COMPANY OF CHILE INC.
(Translation of registrant's name into English)
El Trovador 4285, Santiago, Chile (562) 2425-2000
(Address and phone number of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82_________
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended
December 31, 2012
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. AND SUBSIDIARIES
In Thousands of United States Dollars
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com |
This document includes:
- | Independent Auditor’s Report | ||
- | Consolidated Classified Statements of Financial Position | ||
- | Consolidated Statements of Income by Function | ||
- | Consolidated Statements of Comprehensive Income | ||
- | Consolidated Statements of Cash Flows | ||
- | Statements of Changes in Equity | ||
- | Notes to the Consolidated Financial Statements |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
Table of Contents – Consolidated Financial Statements
Note | Page | |
Consolidated Classified Statements of Financial Position | 7 | |
Consolidated Statements of Income by function | 9 | |
Consolidated Statements of Comprehensive Income | 11 | |
Consolidated Statements of Cash Flows | 12 | |
Statements of Changes in Equity | 14 | |
Notes to the consolidated financial statements | ||
1 | Identification and Activities of the Company and Subsidiaries | |
1.1 Historical background | 17 | |
1.2 Main domicile where the Company performs its production activities | 17 | |
1.3 Codes of main activities | 17 | |
1.4 Description of the nature of operations and main activities | 17 | |
1.5 Other background | 19 | |
2 | Basis of presentation for the consolidated financial statements | |
2.1 Accounting period | 21 | |
2.2 Financial statements | 22 | |
2.3 Basis of measurement | 22 | |
2.4 Accounting pronouncements | 23 | |
2.5 Foreign currency transactions | 26 | |
2.6 Basis of consolidation | 28 | |
2.7 Significant accounting judgments, estimates and assumptions | 31 | |
3 | Significant accounting policies | |
3.1 Inventories | 32 | |
3.2 Trade and other receivables | 33 | |
3.3 Equity-accounted investees | 33 | |
3.4 Property, plant and equipment | 34 | |
3.5 Segment reporting | 36 | |
3.6 Revenue recognition | 37 | |
3.7 Income tax and deferred taxes | 39 | |
3.8 Earnings per share | 40 | |
3.9 Impairment of non-financial assets | 41 | |
3.10 Financial assets | 42 | |
3.11 Financial liabilities | 43 | |
3.12 Environment | 45 | |
3.13 Minimum dividend | 45 | |
3.14 Consolidated statement of cash flows | 45 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 1 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
Table of Contents – Consolidated Financial Statements (continued)
Note | Page | |
3.15 Obligations related to employee termination benefits and pension Commitments | 45 | |
3.16 Financial derivatives and hedging transactions | 47 | |
3.17 Leases | 49 | |
3.18 Prospecting expenses | 50 | |
3.19 Other provisions | 50 | |
3.20 Compensation plans | 51 | |
3.21 Good and service insurance expenses | 51 | |
3.22 Intangible assets | 51 | |
3.23 Research and development expenses | 53 | |
3.24 Classification of balances as current and non-current | 53 | |
4 | Financial risk management | |
4.1 Financial risk management policy | 54 | |
4.2 Risk factors | 55 | |
4.3 Risk measurement | 58 | |
5 | Changes in estimates and accounting policies (consistent presentation) | |
5.1 Changes in accounting estimates | 59 | |
5.2 Changes in accounting policies | 59 | |
6 | Background of companies included in consolidation | |
6.1 Parent’s stand-alone assets and liabilities | 60 | |
6.2 Parent entity | 60 | |
6.3 Jointly arrangements of controlling interest | 60 | |
6.4 Information on consolidated subsidiaries | 62 | |
6.5 Detail of transactions between consolidated companies | 68 | |
7 | Cash and cash equivalents | |
7.1 Types of cash and cash equivalents | 69 | |
7.2 Short-term investments, classified as cash equivalents | 70 | |
7.3 Information on cash and cash equivalents by currency | 70 | |
7.4 Amount of significant restricted (unavailable) cash balances | 71 | |
7.5 Short-term deposits, classified as cash equivalents | 72 | |
8 | Inventories | 73 |
9 | Related party: disclosures | |
9.1 Related party disclosures | 74 | |
9.2 Relationship between the Parent and the entity | 74 | |
9.3 Intermediate parent that publicly issues financial statements | 75 | |
9.4 Detailed identification of the relationship between the Parent and subsidiary | 75 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 2 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
Table of Contents – Consolidated Financial Statements (continued) | ||
Note | Page | |
9.5 Detail of related parties and related party transactions | 77 | |
9.6 Trade receivables due from related parties, current | 79 | |
9.7 Trade payables due to related parties, current | 80 | |
9.8 Board of Directors and Senior Management | 81 | |
9.9 Key Management Personnel Compensation | 83 | |
10 | Financial instruments | |
10.1 Types of other financial assets | 84 | |
10.2 Trade and other receivables, current and non-current | 84 | |
10.3 Hedging assets and liabilities | 88 | |
10.4 Financial liabilities | 90 | |
10.5 Trade and other payables | 100 | |
10.6 Financial liabilities at fair value through profit or loss | 100 | |
10.7 Financial asset and liability categories | 101 | |
10.8 Financial assets pledged as guarantee | 103 | |
10.9 Estimated fair value of financial instruments and financial derivatives | 103 | |
10.10 Nature and scope of risks arising from financial instruments | 105 | |
11 | Equity-accounted investees | |
11.1 Investments in associates recognized according to the equity method of accounting | 105 | |
11.2 Assets, liabilities, revenue and expenses of associates | 106 | |
11.3 Detail of investments in associates | 107 | |
12 | Joint ventures | |
12.1 Policy for accounting for joint ventures in a Parent’s separate financial statements | 108 | |
12.2 Disclosures of interest in joint ventures | 108 | |
12.3 Detail of assets, liabilities and profit or loss of significant investments in joint ventures by company | 109 | |
12.4 Detail of investments in joint ventures | 110 | |
13 | Intangible assets and goodwill | |
13.1 Balances | 111 | |
13.2 Disclosures on intangible assets and goodwill | 111 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 3 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
Table of Contents – Consolidated Financial Statements (continued) | ||
Note | Page | |
14 | Property, plant and equipment | |
14.1 Types of property, plant and equipment | 115 | |
14.2 Reconciliation of changes in property, plant and equipment by type | 117 | |
14.3 Detail of property, plant and equipment pledged as guarantee | 119 | |
14.4 Additional information | 119 | |
15 | Employee benefits | |
15.1 Provisions for employee benefits | 120 | |
15.2 Policies on defined benefit plans | 121 | |
15.3 Other long-term benefits | 122 | |
15.4 Post-employment benefit obligations | 123 | |
15.5 Staff severance indemnities | 125 | |
16 | Executive compensation plan | 125 |
17 | Disclosures on equity | |
17.1 Capital management | 127 | |
17.2 Disclosures on preferred share capital | 128 | |
17.3 Disclosures on reserves in equity | 130 | |
17.4 Dividend policies | 131 | |
17.5 Provisional dividends | 132 | |
18 | Provisions and other non-financial liabilities | |
18.1 Types of provisions | 134 | |
18.2 Description of other provisions | 135 | |
18.3 Other non-financial liabilities, current | 135 | |
18.4 Changes in provisions | 136 | |
18.5 Detail of main types of provisions | 138 | |
19 | Contingencies and restrictions | |
19.1 Lawsuits or other relevant events | 139 | |
19.2 Restrictions to management or financial limits | 142 | |
19.3 Commitments | 144 | |
19.4 Restricted or pledged cash | 144 | |
19.5 Sureties obtained from third parties | 144 | |
19.6 Indirect guarantees | 145 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 4 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
Table of Contents – Consolidated Financial Statements (continued) | ||
Note | Page | |
20 | Revenue | 147 |
21 | Earnings per share | 147 |
22 | Borrowing costs | 148 |
23 | Effect of fluctuations on foreign currency exchange rates | 149 |
24 | Environment | |
24.1 Disclosures on disbursements related to the environment | 150 | |
24.2 Detail of information on disbursements related to the environment | 151 | |
24.3 Description of each project indicating whether these are in process or have been finished | 168 | |
25 | Other current and non-current non-financial assets | 175 |
26 | Operating segments | |
26.1 Operating segments | 177 | |
26.2 Operating segments disclosures | 179 | |
26.3 Statement of comprehensive income classified by operating segments based on groups of products | 181 | |
26.4 Revenue from transactions with other company operating segments | 183 | |
26.5 Disclosures on geographical areas | 184 | |
26.6 Disclosures on main customers | 184 | |
26.7 Segments by geographical areas | 185 | |
26.8 Property, plant and equipment classified by geographical areas | 186 | |
27 | Gains (losses) from operating activities in the statement of income by function of expenses, included according to their nature | |
27.1 Revenue | 187 | |
27.2 Cost of sales | 187 | |
27.3 Other income | 188 | |
27.4 Administrative expenses | 188 | |
27.5 Other expenses by function | 189 | |
27.6 Other income (expenses) | 189 | |
27.7 Summary of expenses by nature | 190 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 5 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
Table of Contents – Consolidated Financial Statements (continued) | ||
Note | Page | |
28 | Income tax and deferred taxes | |
28.1 Current tax assets | 191 | |
28.2 Current tax liabilities | 192 | |
28.3 Tax earnings | 192 | |
28.4 Income tax and deferred taxes | 193 | |
29 | Disclosures on the effects of fluctuations in foreign currency exchange rates | 202 |
30 | 3.14 Consolidated statement of cash flows | 207 |
31 | Subsequent events | |
31.1 Authorization of the financial statements | 208 | |
31.2 Disclosures on events occurring after the reporting date | 209 | |
31.3 Detail of dividends declared after the reporting date | 209 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 6 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION |
ASSETS | Note No. | As of December 31, 2012 | As of December 31, 2011 | |||||||||
ThUS$ | ThUS$ | |||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 7.1 | 324,353 | 444,992 | |||||||||
Other current financial assets | 10.1 | 316,103 | 169,261 | |||||||||
Other current non-financial assets | 25 | 67,820 | 63,792 | |||||||||
Trade and other receivables, current | 10.2 | 510,616 | 412,062 | |||||||||
Trade receivables due from related parties, current | 9.6 | 101,372 | 117,139 | |||||||||
Current inventories | 8 | 896,236 | 744,402 | |||||||||
Current tax assets | 28.1 | 30,234 | 4,765 | |||||||||
Total current assets | 2,246,734 | 1,956,413 | ||||||||||
Non-current assets | ||||||||||||
Other non-current financial assets | 10.1 | 29,492 | 30,488 | |||||||||
Other non-current non-financial assets | 25 | 17,682 | 24,651 | |||||||||
Trade receivables, non-current | 10.2 | 1,311 | 1,070 | |||||||||
Investments in equity-accounted investees | 11.1 | 70,298 | 60,694 | |||||||||
Intangible assets other than goodwill | 13.1 | 24,013 | 4,316 | |||||||||
Goodwill | 13.1 | 38,388 | 38,605 | |||||||||
Property, plant and equipment | 14.1 | 1,988,290 | 1,755,042 | |||||||||
Deferred tax assets | 28.4 | 223 | 304 | |||||||||
Total non-current assets | 2,169,697 | 1,915,170 | ||||||||||
Total assets | 4,416,431 | 3,871,583 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 7 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION, (continued) |
Liabilities and Equity | Note No. | As of December 31, 2012 | As of December 31, 2011 | |||||||||
ThUS$ | ThUS$ | |||||||||||
Liabilities | ||||||||||||
Current liabilities | ||||||||||||
Other current financial liabilities | 10.4 | 152,843 | 161,008 | |||||||||
Trade and other payables, current | 10.5 | 207,944 | 183,032 | |||||||||
Trade payables due to related parties, current | 9.7 | 19 | 873 | |||||||||
Other current provisions | 18.1 | 18,489 | 16,937 | |||||||||
Current tax liabilities | 28.2 | 23,624 | 75,418 | |||||||||
Provisions for employee benefits, current | 15.1 | 33,974 | 30,074 | |||||||||
Other current non-financial liabilities | 18.3 | 172,200 | 161,961 | |||||||||
Total current liabilities | 609,093 | 629,303 | ||||||||||
Non-current liabilities | ||||||||||||
Other non-current financial liabilities | 10.4 | 1,446,194 | 1,237,027 | |||||||||
Other non-current provisions | 18.1 | 7,357 | 8,595 | |||||||||
Deferred tax liabilities | 28.4 | 125,445 | 98,594 | |||||||||
Provisions for employee benefits, non-current | 15.1 | 40,896 | 33,684 | |||||||||
Total non-current liabilities | 1,619,892 | 1,377,900 | ||||||||||
Total liabilities | 2,228,985 | 2,007,203 | ||||||||||
Equity | 17 | |||||||||||
Share capital | 477,386 | 477,386 | ||||||||||
Retained earnings | 1,676,169 | 1,351,560 | ||||||||||
Other reserves | (20,772 | ) | (16,112 | ) | ||||||||
Equity attributable to owners of the Parent | 2,132,783 | 1,812,834 | ||||||||||
Non-controlling interests | 54,663 | 51,546 | ||||||||||
Total equity | 2,187,446 | 1,864,380 | ||||||||||
Total liabilities and equity | 4,416,431 | 3,871,583 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 8 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION |
Between January and December | ||||||||||||
Note | 2012 | 2011 | ||||||||||
No. | ThUS$ | ThUS$ | ||||||||||
Revenue | 20 | 2,429,160 | 2,145,286 | |||||||||
Cost of sales | 27.2 | (1,400,567 | ) | (1,290,494 | ) | |||||||
Gross profit | 1,028,593 | 854,792 | ||||||||||
Other income | 27.3 | 12,702 | 47,681 | |||||||||
Administrative expenses | 27.4 | (106,442 | ) | (91,760 | ) | |||||||
Other expenses by function | 27.5 | (34,628 | ) | (63,047 | ) | |||||||
Other gains (losses) | 27.6 | 683 | 5,787 | |||||||||
Profit (loss) from operating activities | 900,908 | 753,453 | ||||||||||
Finance income | 29,068 | 23,210 | ||||||||||
Finance costs | 22 | (54,095 | ) | (39,335 | ) | |||||||
Share of profit of associates and joint ventures accounted for using the equity method | 24,357 | 21,808 | ||||||||||
Foreign currency translation differences | 23 | (26,787 | ) | (25,307 | ) | |||||||
Profit (loss) before taxes | 873,451 | 733,829 | ||||||||||
Income tax expense, continuing operations | 28.4 | (216,082 | ) | (179,710 | ) | |||||||
Profit (loss) from continuing operations | 657,369 | 554,119 | ||||||||||
Profit for the year | 657,369 | 554,119 | ||||||||||
Profit attributable to | ||||||||||||
Owners of the Parent | 649,167 | 545,758 | ||||||||||
Non-controlling interests | 8,202 | 8,361 | ||||||||||
Profit for the year | 657,369 | 554,119 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 9 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION (continued) |
Between January and December | ||||||||||||
Note | 2012 | 2011 | ||||||||||
No. | US$ | US$ | ||||||||||
Earnings per share | ||||||||||||
Common shares | ||||||||||||
Basic earnings per share (US$ per share) | 21 | 2.4665 | 2.0736 | |||||||||
Basic earnings per share (US$ per share) from continuing operations | 2.4665 | 2.0736 | ||||||||||
Diluted common shares | ||||||||||||
Diluted earnings per share (US$ per share) | 21 | 2.4665 | 2.0736 | |||||||||
Diluted earnings per share (US$ per share) from continuing operations | 2.4665 | 2.0736 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 10 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
Between January and December | ||||||||
2012 | 2011 | |||||||
Statements of comprehensive income | ThUS$ | ThUS$ | ||||||
Profit for the year | 657,369 | 554,119 | ||||||
Components of other comprehensive income before taxes and foreign currency translation differences | ||||||||
Gain (loss) from foreign currency translation differences, before taxes | 982 | (2,890 | ) | |||||
Other comprehensive income before taxes and foreign currency translation differences | 982 | (2,890 | ) | |||||
Cash flow hedges | ||||||||
(Gain) loss from cash flow hedges before taxes | (7,872 | ) | (1,241 | ) | ||||
Other comprehensive income before taxes and cash flow hedges | (7,872 | ) | (1,241 | ) | ||||
Other comprehensive income before taxes and actuarial gains (losses) from defined benefit plans | 711 | (918 | ) | |||||
Other miscellaneous reserves | - | (1,677 | ) | |||||
Other components of other comprehensive income before taxes | (6,179 | ) | (6,726 | ) | ||||
Income taxes associated with components of other comprehensive income | ||||||||
Income taxes associated with cash flow hedges in other comprehensive income | 1,580 | 218 | ||||||
Income taxes associated with components of other comprehensive income | 1,580 | 218 | ||||||
Other comprehensive income | (4,599 | ) | (6,508 | ) | ||||
Total comprehensive income | 652,770 | 547,611 | ||||||
Comprehensive income attributable to | ||||||||
Owners of the Parent | 644,507 | 539,359 | ||||||
Non-controlling interests | 8,263 | 8,252 | ||||||
Total comprehensive income | 652,770 | 547,611 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 11 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
Statement of Cash Flows | Note No. | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Cash flows from (used in) operating activities | ||||||||||
Profit for the year | 657,369 | 554,119 | ||||||||
Adjustment to reconcile profit for the year | ||||||||||
Adjustment for decreases (increases) in inventories | (167,826 | ) | (147,238 | ) | ||||||
Adjustment for decreases (increases) in trade receivables | (52,993 | ) | (135,401 | ) | ||||||
Adjustment for decreases (increases) in other receivables from operating activities | (57,300 | ) | (37,393 | ) | ||||||
Adjustment for decreases (increases) in trade payables | (49,025 | ) | (44,566 | ) | ||||||
Adjustment for decreases (increases) in other payables from operating activities | (204,067 | ) | (72,976 | ) | ||||||
Adjustment for depreciation and amortization | 196,158 | 195,897 | ||||||||
Adjustment for provisions | 33,657 | 23,055 | ||||||||
Income tax expense | 216,082 | 179,710 | ||||||||
Adjustment for unrealized foreign currency translation loss (gain) | 26,787 | 25,307 | ||||||||
Adjustment for undistributed profit from associates | (24,357 | ) | (21,808 | ) | ||||||
Other adjustments for items other than cash | 67,244 | 54,369 | ||||||||
Other adjustments for the effects on cash from investing or financing activities | (200 | ) | (3,680 | ) | ||||||
Reconciling adjustments | (15,840 | ) | 15,276 | |||||||
Cash flows from (used in) operating activities | 641,529 | 569,395 | ||||||||
Dividends received | 15,126 | 4,299 | ||||||||
Interest paid | (6,449 | ) | (2,349 | ) | ||||||
income taxes paid | - | - | ||||||||
Net cash from (used in) operating activities | 650,206 | 571,345 | ||||||||
Cash flows from (used in) investing activities | ||||||||||
Cash flows from loss of control of subsidiaries or other businesses | 961 | 5,736 | ||||||||
Payments to acquire interests in joint ventures | (197 | ) | (4,909 | ) | ||||||
Loans granted to related parties | (4,000 | ) | - | |||||||
Proceeds from the sale of property, plant and equipment | 2,050 | 43,231 | ||||||||
Acquisition of property, plant and equipment | (445,984 | ) | (501,118 | ) | ||||||
Cash advances and loans granted to third parties | (623 | ) | 83 | |||||||
Payment of loans granted to third parties | - | - | ||||||||
Other cash inflows (outflows) | (115,092 | ) | (59,251 | ) | ||||||
Net cash from (used in) investing activities | (562,885 | ) | (516,228 | ) |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 12 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) |
Note No. | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||||||
Cash flows from (used in) financing activities | ||||||||||||
Proceeds from long-term loans | 366,502 | 550,000 | ||||||||||
Repayment of loans | (220,000 | ) | (370,000 | ) | ||||||||
Dividends paid | (334,762 | ) | (277,334 | ) | ||||||||
Other cash inflows (outflows) | (9,437 | ) | (7,862 | ) | ||||||||
Net cash from (used in) financing activities | (197,697 | ) | (105,196 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate | (110,376 | ) | (50,079 | ) | ||||||||
Effects of exchange rate fluctuations on cash held | (10,263 | ) | (29,581 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | (120,639 | ) | (79,660 | ) | ||||||||
Cash and cash equivalents at beginning of year | 444,992 | 524,652 | ||||||||||
Cash and cash equivalents at end of year | 7 | 324,353 | 444,992 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 13 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
STATEMENTS OF CHANGES IN EQUITY |
Share capital | Foreign currency translation difference reserves | Cash flow hedge reserves | Actuarial gains (losses) from defined benefit plans | Other miscellaneous reserves | Other reserves | Retained earnings | Equity attributable to owners of the Parent | Non-controlling interests | Total | |||||||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||||||||||||||
Equity at beginning of the year | 477,386 | (1,251 | ) | (10,230 | ) | (2,954 | ) | (1,677 | ) | (16,112 | ) | 1,351,560 | 1,812,834 | 51,546 | 1,864,380 | |||||||||||||||||||||||||
Restated opening balance of equity | 477,386 | (1,251 | ) | (10,230 | ) | (2,954 | ) | (1,677 | ) | (16,112 | ) | 1,351,560 | 1,812,834 | 51,546 | 1,864,380 | |||||||||||||||||||||||||
Profit for the year | 649,167 | 649,167 | 8,202 | 657,369 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | 921 | (6,292 | ) | 711 | (4,660 | ) | (4,660 | ) | 61 | (4,599 | ) | |||||||||||||||||||||||||||||
Comprehensive income | 921 | (6,292 | ) | 711 | - | (4,660 | ) | 649,167 | 644,507 | 8,263 | 652,770 | |||||||||||||||||||||||||||||
Dividends | (324,558 | ) | (324,558 | ) | (5,146 | ) | (329,704 | ) | ||||||||||||||||||||||||||||||||
Increase (decrease) in transfers and other changes | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Increase (decrease) in equity | - | 921 | (6,292 | ) | 711 | - | (4,660 | ) | 324,609 | 319,949 | 3,117 | 323,066 | ||||||||||||||||||||||||||||
Equity as of December 31, 2012 | 477,386 | (330 | ) | (16,522 | ) | (2,243 | ) | (1,677 | ) | (20,772 | ) | 1,676,169 | 2,132,783 | 54,663 | 2,187,446 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 14 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
STATEMENTS OF CHANGES IN EQUITY |
Share capital | Foreign currency translation difference reserves | Cash flow hedge reserves | Actuarial gains (losses) from defined benefit plans | Other miscellaneous reserves | Other reserves | Retained earnings | Equity attributable to owners of the Parent | Non-controlling interests | Total | |||||||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||||||||||||||
Equity at beginning of the year | 477,386 | 1,530 | (9,207 | ) | (2,036 | ) | - | (9,713 | ) | 1,155,131 | 1,622,804 | 48,016 | 1,670,820 | |||||||||||||||||||||||||||
Restated opening balance of equity | 477,386 | 1,530 | (9,207 | ) | (2,036 | ) | - | (9,713 | ) | 1,155,131 | 1,622,804 | 48,016 | 1,670,820 | |||||||||||||||||||||||||||
Profit for the year | 545,758 | 545,758 | 8,361 | 554,119 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | (2,781 | ) | (1,023 | ) | (918 | ) | (1,677 | ) | (6,399 | ) | (6,399 | ) | (109 | ) | (6,508 | ) | ||||||||||||||||||||||||
Comprehensive income | (2,781 | ) | (1,023 | ) | (918 | ) | (1,677 | ) | (6,399 | ) | 545,758 | 539,359 | 8,252 | 547,611 | ||||||||||||||||||||||||||
Dividends | (349,329 | ) | (349,329 | ) | (3,706 | ) | (353,035 | ) | ||||||||||||||||||||||||||||||||
Increase (decrease) in transfers and other changes | - | - | (1,016 | ) | (1,016 | ) | ||||||||||||||||||||||||||||||||||
Increase (decrease) in equity | - | (2,781 | ) | (1,023 | ) | (918 | ) | (1,677 | ) | (6,399 | ) | 196,429 | 190,030 | 3,530 | 193,560 | |||||||||||||||||||||||||
Equity as of December 31, 2011 | 477,386 | (1,251 | ) | (10,230 | ) | (2,954 | ) | (1,677 | ) | (16,112 | ) | 1,351,560 | 1,812,834 | 51,546 | 1,864,380 |
The accompanying notes form an integral part of these consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 15 |
Sociedad Química y Minera de Chile S.A. and subsidiaries |
Notes to the Consolidated Financial
Statements
as of December 31, 2012
Sociedad Química y Minera de Chile S.A.
and Subsidiaries
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 16 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 1 – Identification and Activities of the Company and Subsidiaries
1.1 | Historical background |
Sociedad Química y Minera de Chile S.A. "SQM" is an open stock corporation organized under the laws of the Republic of Chile, Tax Identification No.93.007.000-9.
The Company was incorporated through a public deed dated June 17, 1968 by the notary public of Santiago MR. Sergio Rodríguez Garcés. Its existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and it was registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. SQM's headquarters are located at El Trovador 4285, Fl. 6, Las Condes, Santiago, Chile. The Company's telephone number is +56 2 425-2000.
The Company is registered with the Securities Registry of the Chilean Superintendence of Securities and Insurance (SVS) under No. 0184 dated March 18. 1983 and is subject to the inspection of the SVS.
1.2 | Main domicile where the Company performs its production activities |
The Company’s main domiciles are: Calle Dos Sur plot No. 5 - Antofagasta; Arturo Prat 1060 - Tocopilla; Administración Building w/n - Maria Elena; Administración Building w/n Pedro de Valdivia - María Elena, Former Florencia office w/n - Sierra Gorda, Anibal Pinto 3228 - Antofagasta, Kilometer 1378 Ruta 5 Norte Highway - Antofagasta, Coya Sur Plant w/n - Maria Elena, kilometer 1760 Ruta 5 Norte Highway - Pozo Almonte, Pampa Yumbes w/n - Tal-tal.
1.3 | Codes of main activities |
The codes of the main activities as established by the Chilean Superintendence of Securities and Insurance are as follows:
- | 1700 (Mining) |
- | 2200 (Chemical products) |
- | 1300 (Investment) |
1.4 | Description of the nature of operations and main activities |
Our products are mainly derived from mineral deposits found in northern Chile. We mine and process caliche ore and brine deposits. The caliche ore in northern Chile contains the only known nitrate and iodine deposits in the world and is the world’s largest commercially exploited source of natural nitrates. The brine deposits of the Salar de Atacama, a salt-encrusted depression within the Atacama desert in northern Chile, contain high concentrations of lithium and potassium as well as significant concentrations of sulfate and boron.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 17 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 1 – Identification and Activities of the Company and Subsidiaries (continued)
1.4 | Description of the nature of operations and main activities, continued |
From our caliche ore deposits, we produce a wide range of nitrate-based products used for specialty plant nutrients and industrial applications, as well as iodine and iodine derivatives. At the Salar de Atacama, we extract brines rich in potassium, lithium, sulfate and boron in order to produce potassium chloride, potassium sulfate, lithium solutions, boric acid and bischofite (magnesium chloride). We produce lithium carbonate and lithium hydroxide at our plant near the city of Antofagasta, Chile, from the solutions brought from the Salar de Atacama. We market all of these products through an established worldwide distribution network.
We sell our products in over 100 countries worldwide through our global distribution network and generate our revenue mainly from abroad.
Our products are divided into six categories: specialty plant nutrition, iodine and its derivatives, lithium and its derivatives, industrial chemicals, potassium and other products and services, described as follows:
Specialty plant nutrients: This business is characterized by being closely related to its customers for which it has specialized staff who provide expert advisory in best practices for fertilization according to each type of crop, soil and climate. Within this type of business, potassium derivative products and specially potassium nitrate have had a leading role given the contribution they make to develop crops insuring an improvement in post-crop life in addition to improving quality, flavor and fruit color. The potassium nitrate, which is sold in multiple formats and as a part of other specialty mixtures, is complemented by sodium nitrate, potassium sodium nitrate, and more than 200 fertilizing mixtures.
Iodine: The Company is a major producer of iodine at worldwide level. Iodine is widely used in the pharmaceutical industry, technology and nutrition. Additionally, iodine is used as X ray contrast media and polarizing film for LCD displays.
Lithium: the Company’s lithium is mainly used for manufacturing rechargeable batteries for cell phones, cameras and notebooks. Through the manufacturing of lithium-based products, SQM provides significant materials to face great challenges such as the efficient use of energy and raw materials. Lithium is not only used for rechargeable batteries and in new technologies for vehicles propelled by electricity, but is also used in industrial applications to lower melting temperature and to help saving costs and energy
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 18 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 1 – Identification and Activities of the Company and Subsidiaries (continued)
1.4 | Description of the nature of operations and main activities, continued |
Industrial Chemicals: Industrial chemicals are products used as supplies for a number of production processes. SQM participates in this line of business during more than 30 years producing sodium nitrate, potassium nitrate, boric acid and potassium chloride. Industrial nitrates have increased their importance over the last few years due to their use as storage means for thermal energy at solar energy plants, which are widely used in countries as Spain and the United States in their search for decreasing CO2 emissions
Potassium: The potassium is a primary essential macro-nutrient, and even though does not form part of the plant’s structure, has a significant role for the developing of its basic functions, validating the quality of a crop, increasing post-crop life, improving the crop flavor, its amount in vitamins and its physical appearance. Within this business line, SQM has also potassium chlorate and potassium sulfate, both extracted from the salt layer located under the Salar de Atacama (the Atacama Saltpeter Deposit.)
Other products and services: This business line includes revenue from commodities, services, interests, royalties and dividends.
1.5 | Other background: |
Staff
As of December 31, 2012 and 2011, staff was detailed as follows:
31/12/2012 | 31/12/2011 | |||||||
Permanent staff | 5,643 | 4,902 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 19 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 1 – Identification and Activities of the Company and
subsidiaries (continued)
1.5 | Other background, continued |
Main shareholders
The table below establishes certain information about the beneficial property of Series A and Series B shares of SQM as of December 31, 2012 and 2011. In respect to each shareholder which has interest of more than 5% of outstanding Series A or B shares. The information below is taken from our records and reports controlled in the Central Securities Depository and reported to the Superintendence of Securities and Insurance (SVS) and the Chilean Stock Exchange, whose main shareholders are as follows:
Shareholders as of December 31, 2012 | No. of Series A with ownership | % of Series A shares | No. O0f Series B with ownership | % of Series B shares | % of total shares | |||||||||||||||
Inversiones El Boldo Limitada | 44,751,196 | 31.33 | % | 17,571,676 | 14.60 | % | 23.68 | % | ||||||||||||
Sociedad de Inversiones Pampa Calichera S.A.(*) | 44,558,830 | 31.20 | % | 9,003,799 | 7.48 | % | 20.35 | % | ||||||||||||
The Bank of New York | - | - | 46,559,106 | 38.68 | % | 17.69 | % | |||||||||||||
Inversiones RAC Chile Limitada | 19,200,242 | 13.44 | % | 2,699,773 | 2.24 | % | 8.32 | % | ||||||||||||
Potasios de Chile S.A.(*) | 17,919,147 | 12.55 | % | - | - | 6.81 | % | |||||||||||||
Inversiones Global Mining (Chile) Limitada (*) | 8,798,539 | 6.16 | % | - | - | 3.34 | % | |||||||||||||
Banco Itau on behalf of investors | - | - | 4,579,293 | 3.80 | % | 1.74 | % | |||||||||||||
Inversiones La Esperanza Limitada | 3,693,977 | 2.59 | % | - | - | 1.40 | % | |||||||||||||
Banco Santander on behalf of foreign investors | - | - | 3,238,105 | 2.69 | % | 1.23 | % | |||||||||||||
Banco de Chile on behalf of non-resident third parties | - | - | 3,082,612 | 2.56 | % | 1.17 | % |
(*) Total Pampa Group 30,50%
Shareholders as of December 31, 2011 | No. Of series A with ownership | % of Series A shares | No. of Series B with ownership | % of Series B shares | % of total shares | |||||||||||||||
Inversiones El Boldo Limitada | 44,751,196 | 31.33 | % | 17,571,676 | 14.60 | % | 23.68 | % | ||||||||||||
Sociedad de Inversiones Pampa Calichera S.A.(*) | 44,758,830 | 31.34 | % | 12,241,799 | 10.17 | % | 21.66 | % | ||||||||||||
The Bank of New York | - | - | 42,036,912 | 34.92 | % | 15.97 | % | |||||||||||||
Inversiones RAC Chile Limitada | 19,200,242 | 13.44 | % | 2,699,773 | 2.24 | % | 8.32 | % | ||||||||||||
Potasios de Chile S.A.(*) | 18,179,147 | 12.73 | % | 156,780 | 0.13 | % | 6.97 | % | ||||||||||||
Inversiones Global Mining (Chile) Limitada (*) | 8,798,539 | 6.16 | % | - | - | 3.34 | % | |||||||||||||
Banchile Corredores de Bolsa S.A. | 136,919 | 0.10 | % | 4,890,193 | 4.06 | % | 1.91 | % | ||||||||||||
Corpbanca Corredores de Bolsa S.A. | 11,189 | 0.01 | % | 4,264,250 | 3.54 | % | 1.62 | % | ||||||||||||
Inversiones La Esperanza Limitada | 3,693,977 | 2.59 | % | - | - | 1.40 | % | |||||||||||||
Banco Itau on behalf of investors | - | - | 3,693,080 | 3.07 | % | 1.40 | % |
(*) Total Pampa Group 31,97%
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 20 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements
2.1 | Accounting period |
These consolidated financial statements cover the following periods
- | Consolidated Statements of Financial Position for the years ended December 31, 2012 and 2011 |
- | Consolidated Statements of Changes in Equity for the years ended December 31, 2012 and 2011. |
- | Consolidated Statements of Comprehensive Income for the years between January and December 31, 2012 and 2011. |
- | Statements of Cash Flows – Indirect method for the years ended December 31, 2012 and 2011. |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 21 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.2 | Financial statements |
The consolidated annual financial statements of Sociedad Química y Minera de Chile S.A. and Subsidiaries, have been prepared in accordance with International Financial Reporting Standards (hereinafter “IFRS”) and represent the full, explicit and unreserved application of the aforementioned international standards issued by the International Accounting Oversight Board (IASB).
These annual consolidated financial statements reflect fairly the Company’s equity and financial position and the results of its operations, changes in the statement of recognized revenue and expenses and cash flows, which have occurred during the periods then ended.
IFRS establish certain alternatives for their application. Those applied by the Company and its subsidiaries are included in detail in this Note.
The accounting policies used in the preparation of these consolidated and annual accounts comply with each IFRS in force at their date of presentation.
2.3 | Basis of measurement |
The annual consolidated financial statements have been prepared on the historical cost basis except for the following material items:
- | inventories are recorded at the lower of cost and net realizable value; |
- | other current and non-current financial liabilities at amortized cost; |
- | financial derivatives at fair value; and |
- | staff severance indemnities and pension commitments at actuarial value. |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 22 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.4 | Accounting pronouncements |
Accounting pronouncements
At the date of these consolidated financial statements, the following accounting pronouncements had been issued by the IASB but its application date is not effective.
Standards and interpretations | Mandatory for the years beginning on | |
IAS 19 Revised “Employee Benefits” | 01/01/2013 | |
Issued in June 2011, supersedes IAS 19 (1998). This revised standard amends the recognition and measurement of defined benefit plan expenses and termination benefits. Additionally, it includes amendments to disclosures of all employee benefits. | ||
IAS 27 “Separate Financial Statements” | 01/01/2013 | |
Issued in May 2011, supersedes IAS 27 (2008). The scope of this standard is restricted from this change solely to separate financial statements, given that the aspects linked to the definition of control and consolidation were removed and included in IFRS 10. Its early adoption is allowed together with IFRS 10, IFRS 11 and IFRS 12 and the amendment to IAS 28. | ||
IFRS 9 “Financial Instruments” | 01/01/2015 | |
Issued in December 2009, amends the classification and measurement of financial assets. | ||
Subsequently, this standard was amended in November 2010 to include the treatment and classification of financial liabilities. Its early adoption is permitted. | ||
IFRS 10 “Consolidated Financial Statements” | 01/01/2013 | |
Issued in May 2011, supersedes SIC 12 “Consolidation – Special Purpose Entities” and the focus on the control and consolidation of IAS 27 “Consolidated Financial Statements”. It establishes clarifications and new parameters for the definition of control, as well as the preparation of consolidated financial statements. Its early adoption is permitted together with IFRS 11, IFRS 12 and amendments to IAS 27 and IAS 28. | ||
NIIF 11 “Joint Arrangements” | 01/01/2013 | |
Issued in May 2011, supersedes IAS 31 “Interests in Joint Ventures” and SIC 13 “Joint Controlled Entities”. Provides a more realistic reflection of joint agreements focusing on the rights and obligations arising from agreements ore than their legal form. Its amendments include the elimination of the concept of jointly-controlled assets and the possibility of proportional consolidation of entities under common control. Its early adoption is permitted together with IFRS 10, IFRS 12 and amendments to IAS 27 and IAS 28. |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 23 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.4 | Accounting pronouncements, continued |
Standards and interpretations | Mandatory for the years beginning on | |
01/01/2013 | ||
IFRS 12 “Disclosure of Interests in Other Entities” | ||
Issued in May 2011, gathers in solely one standard all the disclosure requirements in the financial statements related to interests in other entities, Esther classified as subsidiaries, associates or joint operations. It is applicable to all entities with investments in subsidiaries, joint ventures and associates. Its early adoption is permitted together with IFRS 10, IFRS 11 and amendments to IAS 27 and IAS 28 | ||
IFRS 13 “Fair Value Measurement” | 01/01/2013 | |
Issued in May 2011, gathers in one single standard the method for measuring fair value of assets and liabilities and disclosures required for this purpose and incorporates new concepts and clarifications for measurement. |
Amendments and improvements | Mandatory for the years beginning on | |
IAS 1 “Presentation of Financial Statements” | 01/07/2012 | |
Issued in June 2011, the main amendment is that it requires that items in Other Comprehensive Income must be classified and grouped by assessing whether they will be reclassified to profit or loss in subsequent periods. Its early adoption is permitted. | ||
IFRS 7 “Financial Instruments” Disclosures” | 01/01/2013 | |
Issued in December 2011, requires improving the current disclosures of offsetting financial assets and financial liabilities with the aim of increasing convergence between IFRS and US GAAP. These disclosures are focused on quantitative information on financial instruments recognized which are offset in the Statement of Financial Position. Its early adoption is permitted. |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 24 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.4 | Accounting pronouncements, continued |
Amendments and improvements | Mandatory for the years beginning on | |
IAS 32 “Financial Instruments” Presentation”” | 01/01/2014 | |
Issued in December 2011. It clarifies the requirements for offsetting financial assets and financial liabilities in the Statement of Financial Position. Particularly, it indicates that the offsetting right should be available at the financial statement date and not depending on a future development. It also indicates that it must be legally binding for the counterparties both during the normal course of the business operations, as well as in the event of default, insolvency o bankruptcy. Its early adoption is permitted. | ||
Improvements to International Financial Reporting Standards issued in May 2012. | 01/01/2013 | |
IAS 16 “Property, Plant and Equipment” – This clarifies that spare-parts and service equipment will be classified as Property, plant and equipment more than as inventories when it meets the Property, plant and equipment definition. | ||
IAS 32 “Financial Instruments: Presentation” – This clarifies the treatment of income taxes related to distributions and transaction costs. | ||
IAS 34 “Interim Financial Reporting” – This clarifies the asset and liability exposure requirements by segments in interim periods, ratifying the same requirements applicable to the annual financial statements. | ||
IFRS 10“Consolidated Financial Statements”, IFRS 11 “Joint Arrangements” and IFRS 12 “Disclosures of Interests in Other Entities.” | 01/01/2013 | |
Issued in June 2012. This clarifies the transitional provisions for IFRS 10, indicating that their application is required on the first day of the period in which the Standard is adopted. Accordingly, it might be necessary that amendments be made to comparatives presented in that period, if the assessment of the control on investments differs from that recognized in accordance with IAS 27/SIC 12. |
The Company's management estimates that the adoption of standards, amendments and interpretations described above are under evaluation and it is expected that they will not have a significant impact on the Consolidated Financial Statements of the Company.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 25 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.5 | Transactions in foreign currency |
(a) | Functional and presentation currency |
The Company’s annual consolidated financial statements are presented in United States dollars (“U.S. dollars” or “USD”), which is the Company’s functional and presentation currency and is the currency of the main economic environment in which it operates.
Consequently, the term foreign currency is defined as any currency other than U.S. dollar.
The annual consolidated financial statements are presented in thousands of United States dollars without decimals.
The conversion of the financial statements of foreign companies with functional currency other than U.S. dollars is performed as follows:
- | Assets and liabilities using the exchange rate prevailing on the closing date of the consolidated financial statements. |
- | Statement of income account items using the average exchange rate for the year. |
- | Equity accounts are stated at the historical exchange rate prevailing at acquisition date. |
Foreign currency translation differences which arise from the conversion of financial statements are recorded in the account “Foreign currency translation differences" within equity.
(b) | Basis of conversion |
Domestic subsidiaries:
Assets and liabilities denominated in Chilean pesos and other currencies other than the functional currency (U.S. dollar) as of December 31, 2012 and 2011 have been translated to U.S. dollars at the exchange rates prevailing at those dates. The corresponding Chilean pesos were converted at Ch$479.96 per US$1.00 as of December 31, 2012, and Ch$519.20 per US$1.00 as of December 31, 2011.
The values of the UF (a Chilean peso-denominated, inflation-indexed monetary unit) used to convert the UF denominated assets and liabilities as of December 31, 2012 amounted to Ch$22,840.75 (US$47.59), and as of December 31, 2011 amounted to Ch$22,294.03 (US$42.94).
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 26 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.5 | Transactions in foreign currency, continued |
Foreign subsidiaries:
The exchange rates used to translate the monetary assets and liabilities expressed in foreign currency at the closing date of each period in respect to the U.S. dollar are detailed as follows:
31/12/2012 | 31/12/2011 | |||||||
US$ | US$ | |||||||
Brazilian real | 2.04 | 1.88 | ||||||
New Peruvian sol | 2.75 | 2.77 | ||||||
Argentinean peso | 4.92 | 4.30 | ||||||
Japanese yen | 86.58 | 77.74 | ||||||
Euro | 0.76 | 0.77 | ||||||
Mexican peso | 12.99 | 13.98 | ||||||
Australian dollar | 1.05 | 1.03 | ||||||
Pound Sterling | 0.62 | 0.64 | ||||||
South African rand | 8.47 | 8.10 | ||||||
Ecuadorian dollar | 1.00 | 1.00 | ||||||
Chilean peso | 479.96 | 519.20 | ||||||
UF | 47.59 | 42.94 |
(c) | Transactions and balances |
Non-monetary transaction balances denominated in a currency other than the functional currency (U.S. dollar) are translated using the exchange rate in force for the functional currency at the transaction date. Monetary assets and liabilities denominated in a foreign currency are translated at the exchange rate of the functional currency prevailing at the closing date of the consolidated statement of financial position. All differences are taken to the statement of income with the exception of all monetary items that provide an effective hedge for a net investment in a foreign operation. These items are recognized in other comprehensive income upon the disposal of the investment, at which time they are recognized in the statement of income. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 27 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.5 | Transactions in foreign currency, continued |
(d) | Group entities |
The profit or loss, assets and liabilities of all those entities with a functional currency other than the presentation currency are translated to the presentation currency as follows:
- | Assets and liabilities are translated at the closing date exchange rate as of the date of the consolidated statement of financial position. |
- | Revenue and expenses in each profit or loss account are translated at average exchange rates for the year. |
- | All resulting foreign currency exchange differences are recognized as a component separate in the foreign currency translation difference reserve |
In consolidation, foreign currency exchange differences which arise from the conversion of a net investment in foreign entities are taken to net equity (other reserves). At the disposal date, these exchange differences are recognized in the statement of comprehensive income as part of the loss or gain from the sale.
2.6 | Basis of consolidation |
(a) | Subsidiaries |
Subsidiaries are all those entities on which Sociedad Química y Minera de Chile S.A. has the control to lead the financial and operating policies, which, in general, is accompanied by participation greater than half the voting rights. Subsidiaries are consolidated from the date in which control is transferred to the Company and are excluded from consolidation on the date in which this control ceases to exist. Subsidiaries apply the same accounting policies that its Parent.
In order to recognize the acquisition of an investment, the Company uses the acquisition method. Under this method, the acquisition cost is the fair value of assets delivered, of equity instruments issued and of liabilities incurred or assumed at the exchange date plus costs directly attributable to acquisition. Identifiable assets acquired and identifiable liabilities and contingencies assumed in a business combination are initially stated at their fair value at the acquisition date. For each business combination, the acquirer measures the non-controlling interests in the acquiree at fair value or as a proportional part of the acquiree’s net identifiable assets.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 28 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.6 Basis of consolidation, continued
Companies included in consolidation:
Ownership interest | ||||||||||||||||||||||
Country of | 31/12/2012 | 31/12/2011 | ||||||||||||||||||||
TAX ID No. | Foreign subsidiaries | origin | Functional currency | Direct | Indirect | Total | Total | |||||||||||||||
Foreign | Nitratos Naturais Do Chile Ltda. | Brazil | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Nitrate Corporation Of Chile Ltd. | United Kingdom | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM North America Corp. | USA | US$ | 40.0000 | 60.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Europe N.V. | Belgium | US$ | 0.8600 | 99.1400 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Soquimich S.R.L. Argentina | Argentina | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Soquimich European Holding B.V. | The Netherlands | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Corporation N.V. | Dutch Antilles | US$ | 0.0002 | 99.9998 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQI Corporation N.V. | Dutch Antilles | US$ | 0.0159 | 99.9841 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Comercial De México S.A. De C.V. | Mexico | US$ | 0.0013 | 99.9987 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | North American Trading Company | USA | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Administración Y Servicios Santiago S.A. de C.V. | Mexico | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Perú S.A. | Peru | US$ | 0.9800 | 99.0200 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Ecuador S.A. | Ecuador | US$ | 0.0040 | 99.9960 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Nitratos Mexico S.A. De C.V. | Mexico | US$ | 0.0000 | 51.0000 | 51.0000 | 51.0000 | |||||||||||||||
Foreign | SQMC Holding Corporation L.L.P. | USA. | US$ | 0.1000 | 99.9000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Investment Corporation N.V. | Dutch Antilles | US$ | 1.0000 | 99.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Brasil Limitada | Brazil | US$ | 2.7900 | 97.2100 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM France S.A. | France | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Japan Co. Ltd. | Japan | US$ | 1.0000 | 99.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | US$ | 1.6700 | 98.3300 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Oceania Pty Limited | Australia | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Rs Agro-Chemical Trading A.V.V. | Aruba | US$ | 98.3333 | 1.6667 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Indonesia S.A. | Indonesia | US$ | 0.0000 | 80.0000 | 80.0000 | 80.0000 | |||||||||||||||
Foreign | SQM Virginia L.L.C. | USA | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Italia SRL | Italy | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Comercial Caimán Internacional S.A. | Cayman Islands | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Africa Pty. | South Africa | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Lithium Specialties LLC | USA | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Iberian S.A.(c) | Spain | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | Iodine Minera B.V. | The Netherlands | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Agro India Pvt.Ltd. | India | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
Foreign | SQM Beijing Commercial Co. Ltd. | China | US$ | 0.0000 | 100.0000 | 100.0000 | 100.0000 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 29 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.6 | Basis of consolidation, continued |
Companies included in consolidation:
Ownership interest | ||||||||||||||||||||||
Country of | 31/12/2012 | 31/12/2011 | ||||||||||||||||||||
TAX ID No. | Domestic subsidiaries | origin | Functional currency | Direct | Indirect | Total | Total | |||||||||||||||
96.801.610-5 | Comercial Hydro S.A. | Chile | US$ | 0.0000 | 60.6383 | 60.6383 | 60.6383 | |||||||||||||||
96.651.060-9 | SQM Potasio S.A. | Chile | US$ | 99.9999 | 0.0000 | 99.9974 | 99.9974 | |||||||||||||||
96.592.190-7 | SQM Nitratos S.A. | Chile | US$ | 99.9999 | 0.0001 | 100.0000 | 100.0000 | |||||||||||||||
96.592.180-K | Ajay SQM Chile S.A. | Chile | US$ | 51.0000 | 0.0000 | 51.0000 | 51.0000 | |||||||||||||||
86.630.200-6 | SQMC Internacional Ltda. | Chile | Chilean peso | 0.0000 | 60.6381 | 60.6381 | 60.6381 | |||||||||||||||
79.947.100-0 | SQM Industrial S.A. | Chile | US$ | 99.0470 | 0.9530 | 100.0000 | 100.0000 | |||||||||||||||
79.906.120-1 | Isapre Norte Grande Ltda. | Chile | Chilean peso | 1.0000 | 99.0000 | 100.0000 | 100.0000 | |||||||||||||||
79.876.080-7 | Almacenes y Depósitos Ltda. | Chile | Chilean peso | 1.0000 | 99.0000 | 100.0000 | 100.0000 | |||||||||||||||
79.770.780-5 | Servicios Integrales de Tránsitos y Transferencias S.A. | Chile | US$ | 0.0003 | 99.9997 | 100.0000 | 100.0000 | |||||||||||||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | US$ | 0.0000 | 60.6383 | 60.6383 | 60.6383 | |||||||||||||||
79.626.800-K | SQM Salar S.A. | Chile | US$ | 18.1800 | 81.8200 | 100.0000 | 100.0000 | |||||||||||||||
78.602.530-3 | Minera Nueva Victoria Ltda.(d) | Chile | US$ | 0.0000 | 0.0000 | 0.0000 | 100.0000 | |||||||||||||||
78.053.910-0 | Proinsa Ltda. | Chile | Chilean peso | 0.0000 | 60.5800 | 60.5800 | 60.5800 | |||||||||||||||
76.534.490-5 | Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. | Chile | Chilean peso | 0.0000 | 100.0000 | 100.0000 | 100.0000 | |||||||||||||||
76.425.380-9 | Exploraciones Mineras S.A. | Chile | US$ | 0.2691 | 99.7309 | 100.0000 | 100.0000 | |||||||||||||||
76.064.419-6 | Comercial Agrorama Ltda. (a) | Chile | Chilean peso | 0.0000 | 42.4468 | 42.4468 | 42.4468 | |||||||||||||||
76.145.229-0 | Agrorama S.A. (b) | Chile | Chilean peso | 0.0000 | 60.6377 | 60.6377 | 60.6377 |
(a) Comercial Agrorama Ltda. was consolidated given that the Company has control through the subsidiary Soquimich Comercial S.A.
(b) This subsidiary was incorporated on April 7, 2011.
(c) On December 14, 2011, Fertilizantes Naturales S.A. changed its company name to SQM Iberian S.A.
(d) On November 30, 2012, Minera Nueva Victoria Ltda. merged with SQM Potasio S.A. and was absorbed by it.
Subsidiaries are consolidated on a line by line basis by including in the consolidated financial statements all of their assets, liabilities, revenues, expenses and cash flows upon making the respective adjustments and eliminations of intragroup operations.
The results from subsidiary companies acquired or disposed of during the year are included in consolidated statement of income accounts from the effective date of acquisition or up to the effective date of disposal, as applicable.
Non-controlling interests represent the portion of subsidiary net assets and operating results not owned directly or indirectly by the parent.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 30 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 2 - Basis of presentation for the consolidated financial statements (continued)
2.7 | Significant accounting judgments, estimates and assumptions |
The information contained in these consolidated financial statements is the responsibility of the Company’s management, who expressly indicate that they have applied all the principles and criteria included in IFRS, issued by the IASB.
In the accompanying consolidated financial statements, judgments and estimates have been made by management to quantify certain assets, liabilities, revenues, expenses and commitments recorded and or disclosed therein. Basically, these estimates refer to the following:
- | The useful lives of tangible and intangible assets and their residual values. |
- | Impairment evaluations of certain assets, including trade receivables. |
- | Assumptions used for the actuarial calculation of commitments for employee pensions and staff severance indemnities. |
- | Provisions for commitments assumed with third parties and contingent liabilities. |
- | Inventory provisions based on technical studies which cover the different variables affecting products in stock (density. humidity. among others) and allowances on slow-moving spare parts in inventory. |
- | Future costs for the closure of mining facilities. |
- | The determination of the fair value of certain financial and non-financial assets and derivative instruments. |
- | The determination and allocation of fair values in business combinations |
Although these estimates have been made considering information available as of the date of preparation of these consolidated financial statements, it is possible that events that may occur in the future could make their modification necessary in future years. Changes would be recorded prospectively, recognizing the effects of the change in estimates in the respective future consolidated financial statements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 31 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies
3.1 | Inventories |
The Company states inventories for the lower of cost and net realizable value. The cost price of finished products and products in progress includes direct costs of materials and; as applicable, labor costs, indirect costs incurred to transform raw materials into finished products and general expenses incurred in carrying inventories to their current location and conditions. The method used to determine the cost of inventories is weighted average cost.
The net realizable value represents the estimate of the sales price less all finishing estimated costs and costs which will be incurred in commercialization, sales and distribution processes.
Commercial discounts, rebates obtained and other similar entries are deducted in the determination of the acquisition price.
The Company conducts an evaluation of the net realizable value of inventories at the end of each year recording an estimate with a charge to income when these are overstated. When the circumstances, which previously caused the rebate ceased to exist, or when there is clear evidence of an increase in the net realizable value due to a change in the economic circumstances or prices of main raw materials, the estimate made previously is modified.
The valuation of obsolete, impaired or slow-moving products relates to their net estimated net realizable value.
Provisions on the Company's inventories have been made based on a technical study which covers the different variables which affect products in stock (density, humidity, among others.)
Raw materials, supplies and materials are recorded at the lower of acquisition cost or market value. Acquisition cost is calculated according to the annual average price method.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 32 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.2 | Trade and other receivables |
Trade and other receivables relate to non-derivative financial assets with fixed and determinable payments and are not quoted in any active market. These arise from sales operations involving the products and/or services which the Company commercializes directly to its customers
These assets are initially recognized at their fair value (which is equivalent to their face value, discounting implicit interest for installment sales) and subsequently at amortized cost according to the effective interest rate method less a provision for impairment loss. An allowance for impairment loss is established for trade receivables when there is objective evidence that the Company will not be able to collect all the amounts which are owed to it according to the original terms of receivables.
Implicit interest in installment sales is recognized as interest income when interest is accrued over the term of the operation.
3.3 | Investments recognized using the equity method |
Interests in companies in which control is exercised together with another company (joint ventures) or in which the Company has significant influence (associated companies) are recorded using the equity method. Significant influence is assumed to exist when the Company has interest exceeding 20% of the investee's equity.
Under this method, the investment is recognized in the consolidated classified statement of financial position at cost plus changes subsequent to the acquisition in an amount proportional to the net associated company’s equity using the ownership interest in the associate. The associated goodwill is included at the carrying value of the investee, and it is not subject to amortization. The debit or credit to profit or loss reflects the proportional amount in the associated companies’ results for the reporting period.
Unrealized profit on transactions with associates and subsidiaries are eliminated in consolidation of the ownership percentage that the Company has on these entities. Unrealized losses are also eliminated unless the transaction provided evidence of loss from impairment of the assets transferred.
Changes in equity of the associates are recognized proportionally with a debit or credit to “Other reserves” and classified according to their origin.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 33 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.3 | Investments recognized using the equity method, continued |
The associated companies and the Company’s reporting dates and policies are similar for equivalent transactions and events under similar circumstances.
In the event that significant influence is lost or the investment is sold or is available-for-sale, the equity value method is discontinued, suspending the recognition of proportional income.
If the resulting amount according to the equity method is negative, the Company’s equity interest is reduced to zero in the consolidated financial statements, unless the Company has a contractual commitment to resolve the equity position. In this case, the respective provision for risks and expenses is recorded.
Dividends received in these companies are recorded by reducing the equity value and proportional profit or loss recognized in conformity with their interest, and are included in the consolidated statement of income under the caption “Equity in income (losses) of associates and joint ventures accounted for using the equity method”.
3.4 | Property, plant and equipment |
Tangible property, plant and equipment assets are stated at acquisition cost, net of the related accumulated depreciation, amortization and impairment losses that they might have experienced.
In addition to the price paid for the acquisition of tangible property, plant and equipment, the Company has considered the following concepts as part of the acquisition cost, as applicable:
1. Accrued interest expenses during the construction period which are directly attributable to the acquisition, construction or production of qualifying assets, which are those that require a substantial period prior to being ready for use. The interest rate used is that related to the project’s specific financing or, should this not exist, the average financing rate of the investor company. The amount capitalized for this concept is ThUS$14,156 as of December 31, 2012 and ThUS$22,249 as of December 31, 2011.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 34 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.4 | Property, plant and equipment, continued |
2. The future costs that the Company will have to experience related to the closure of its facilities at the end of their useful life are included at the present value of disbursements expected to be required to settle the obligation.
Construction-in-progress is transferred to property, plant and equipment in operation once the assets are available for use and the related depreciation and amortization begins on that date.
Extension, modernization or improvement costs that represent an increase in productivity, ability or efficiency or an extension of the useful lives of property, plant and equipment are capitalized as a higher cost of the related assets. All the remaining maintenance, preservation and repair expenses are charged to expense as incurred.
Property, plant and equipment, net in the case of their residual values are depreciated using thee straight-line method over its estimated useful lives. When portions of a property, plant and equipment item have different useful lives, these portions are recorded as separate items.
The useful life is reviewed annually, and revised if necessary. The useful lives used for the depreciation and amortization of assets included in property, plant and equipment are presented below.
The replacement of full assets which increase the asset’s useful life or its economic capacity, are recorded as a higher value of property, plant and equipment with the related derecognition of replaced or renewed elements. Based on the impairment analysis conducted by the Company’s management it has been considered that the carrying value of assets does not exceed the net recoverable value of such assets. When portions of a property, plant and equipment item have different useful lives, these portions are recorded as separate items.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 35 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.4 | Property, plant and equipment, continued |
The useful lives used for the depreciation and amortization of assets included in property, plant and equipment are presented below.
Types of property, plant and equipment | Minimum life or rate | maximum life or rate | ||||||
Buildings | 3 | 60 | ||||||
Plant and equipment | 3 | 35 | ||||||
Information technology equipment | 3 | 10 | ||||||
Fixtures and fittings | 3 | 35 | ||||||
Motor vehicles | 5 | 10 | ||||||
Other property, plant and equipment | 2 | 30 |
Gains or losses which are generated from the sale or disposal of property, plant and equipment are recognized as income (or loss) in the period and calculated as the difference between the asset’s sales value and its net carrying value.
The Company obtains property rights and mining concessions from the Chilean State Government. Property rights are usually obtained without any initial cost (other than the payment of mining licenses and minor registration expenses) and when rights are obtained on these concessions, the Company retains them while it pays the related annual license fees. Such license fees, which are paid annually, are recorded as prepaid expenses and amortized over the following twelve month period. Amounts attributable to mining concessions acquired from third parties, which are not from the Chilean State, are recorded at their acquisition cost in property, plant and equipment.
Costs derived from daily maintenance of property, plant and equipment are recognized when incurred.
3.5 | Financial information by operating segments |
IFRS 8 requires that companies adopt a “management approach” to disclose information on the operations generated by its operating segments. In general, this is the information that management uses internally for the evaluation of segment performance and making the decision on how to allocate resources for this purpose.
An operating segment is a group of assets and operations responsible for providing products or services subject to risks and performance different from those of other business segments. A geographical segment is responsible for providing products or services in a given economic environment subject to risks and performance different from those of other segments that operate in other economic environments.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 36 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.6 | Financial information by operating segments, continued |
For assets and liabilities the allocation to each segment is not possible given that these are associated with more than one segment, except for depreciation, amortization and impairment of assets, which are directly allocated to the applicable segments, in accordance with the criteria established in the costing process for product inventories.
The following operating segments have been identified by the Company:
- Specialty plant nutrients
- Industrial chemicals
- Iodine and derivatives
- Lithium and derivatives
- Potassium
- Other products and services
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 37 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.6 | Revenue recognition |
Revenue includes the fair value of considerations received or receivable for the sale of goods and services during performance of the Company's activities. Revenue is presented net of value added tax, estimated returns, rebates and discounts and after the elimination of sales among subsidiaries.
Revenue is recognized when its amount can be stated reliably, it is possible that the future economic rewards will flow to the entity and the specific conditions for each type of activity -related revenue are complied with, as follows:
(a) Sale of goods
Sales of goods are recognized when the Company has delivered products to the customer, the customer has total discretion on the distribution channel and the price at which products are sold and there is no obligation pending compliance that could affect the acceptance of products by the customer. The delivery does not occur until products have been shipped to the customer or confirmed as received by customers when the related risks of obsolescence and loss have been transferred to the customer and the customer has accepted products in accordance with the conditions established in the sale, the acceptance period has ended or there is objective evidence that those criteria required for acceptance have been met.
Sales are recognized in consideration of the price set in the sales agreement, net of volume discounts and estimated returns at the date of the sale. Volume discounts are evaluated in consideration of annual foreseen purchases and in accordance with the criteria defined in agreements.
(b) Sales of services
Revenue associated with the rendering of services is recognized considering the degree of completion of the service as of the date of presentation of the consolidated classified statement of financial position, provided that the result from the transaction can be estimated reliably.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 38 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.6 | Revenue recognition, continued |
(c) Interest income
Interest income is recognized when interest is accrued in consideration of the principal pending payment using the effective interest rate method.
(d) Income from dividends
Income from dividends is recognized when the right to receive the payment is established.
3.7 | Income tax and deferred taxes |
Corporate income tax for the year is determined as the sum of current taxes from the different consolidated companies.
Current taxes are based on the application of the various types of taxes attributable to taxable income for the year.
Differences between the book value of assets and liabilities and their tax basis generate the balance of deferred tax assets or liabilities, which are calculated using the tax rates expected to be applicable when the assets and liabilities are realized.
In conformity with current Chilean tax regulations, the provision for corporate income tax and taxes on mining activity is recognized on an accrual basis, presenting the net balances of accumulated monthly tax provisional payments for the fiscal period and associated credits. The balances of these accounts are presented in current income taxes recoverable or current taxes payable, as applicable.
Tax on companies and variations in deferred tax assets or liabilities that are not the result of business combinations are recorded in statement of income accounts or equity accounts in the consolidated statement of financial position, considering the origin of the gains or losses which have generated them.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 39 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.7 | Income tax and deferred taxes, continued |
As of the date of these consolidated financial statements, the carrying amount of deferred tax assets has been reviewed and reduced to the extent there will not be sufficient taxable income to allow the recovery of all or a portion of the deferred tax assets. Likewise, as of the date of the consolidated financial statements, deferred tax assets that are not recognized were evaluated and not recognized as it was not more likely than not that future taxable income will allow for recovery of the deferred tax asset.
With respect to deductible temporary differences associated with investments in subsidiaries, associated companies and interest in joint ventures, deferred tax assets are recognized solely provided that it is more likely than not that the temporary differences will be reversed in the near future and that there will be taxable income with which they may be used.
The deferred income tax related to entries directly recognized in equity is recognized with an effect on equity and not with an effect on profit or loss.
Deferred tax assets and liabilities are offset if there is a legally receivable right of offsetting tax assets against tax liabilities and the deferred tax is related to the same tax entity and authority.
3.8 | Earnings per share |
The basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year.
The Company has not conducted any type of operation of potential dilutive effect that assumes diluted earnings per share other than the basic earnings per share.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 40 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.9 | Impairment of non-financial assets |
Assets subject to depreciation and amortization are subject to impairment testing, provided that an event or change in the circumstances indicates that the amounts in the accounting records may not be recoverable. An impairment loss is recognized for the excess of the book value of the asset over its recoverable amount.
The recoverable amount of an asset is the higher between the fair value of an asset or cash generating unit (“CGU”) less costs of sales and its value in use, and is determined for an individual asset unless the asset does not generate any cash inflows that are clearly independent from other assets or groups of assets.
When the carrying value of an asset exceeds its recoverable amount, the asset is considered an impaired asset and is reduced to its net recoverable amount.
In evaluating value in use, estimated future cash flows are discounted using a discount rate before taxes which reflects current market evaluation on the time value of money and specific asset risks.
An appropriate valuation model is used to determine the fair value less selling costs. These calculations are confirmed by valuation multiples, quoted share prices for subsidiaries quoted publicly or other available fair value indicators.
Impairment losses from continuing operations are recognized with a debit to profit or loss in the categories of expenses associated with the impaired asset function, except for properties reevaluated previously where the revaluation was taken to equity. In this case impairment is also recognized with a debit to equity up to the amount of any previous revaluation.
As of December 31, 2012 and 2011, the Company is unaware of any indication of impairment with regard to its assets.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 41 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.9 | Impairment of non-financial assets, continued |
For assets other than acquired goodwill, an annual evaluation is conducted of whether there is impairment loss indicators recognized previously that might have already ceased to exist or decreased. The recoverable amount is estimated if such indicators exist. An impairment loss previously recognized is reversed only if there have been changes in estimates used to determine the asset’s recoverable amount from the last time in which an impairment loss was recognized. If this is the case, the carrying value of the asset is increased to its recoverable amount. This increased amount cannot exceed the carrying value that would have been determined net of depreciation if an asset impairment loss would have not been recognized in prior years. This reversal is recognized with a credit to profit or loss unless an asset is recorded at the revalued amount. Should this be the case, the reversal is treated as an increase in revaluation
3.10 | Financial assets |
The Company classifies their financial assets under the following categories: at fair value through profit or loss, loans and trade receivables, financial assets held-to-maturity and available-for-sale financial assets. The classification depends on the purpose for which financial assets were acquired. Management determines the classification of its financial assets at the time of initial recognition.
The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of assets is deemed to be impaired if and only if there is objective evidence of impairment as a result of one or more events occurring after the initial recognition of the asset or group of assets. For the recognition o fan impairment loss, the loss event should have an impact on the estimate of future flows of the asset or group of financial assets.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired mainly for the purpose of being sold in the short-term. Derivatives are also classified as acquired for trading unless they are designated as hedge accounts. Assets under this category are classified as current assets and variations generated in fair value are directly recognized in profit or loss.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 42 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.10 | Financial assets, continued |
(b) Loans and trade receivables
Loans and trade receivables are non-derivative financial assets with fixed o determinable payments not quoted in any active market. These are included in current assets, except for those with maturities exceeding 12 months from the closing date, which are classified as non-current assets. Loans and trade receivables are included under the caption “Trade and other receivables” in the consolidated classified statement of financial position and are stated at amortized cost. The subsequent measurement at amortized cost is calculated using the effective interest rate method less impairment.
(c) Financial assets held-to-maturity
Financial assets held-to-maturity are non-derivative financial assets with fixed or determinable payments and fixed maturities which management has the positive intention and ability of holding to maturity. If a significant amount of financial assets held to maturity were to be sold, the full category would be reclassified as available for sale. Assets in this category are stated at amortized cost.
(d) Financial assets available for sale
Financial assets available for sale are non-derivative instruments that have been designated in this category or are not classified in any of the other categories. They are included in non-current assets unless the Company intends to dispose of the investment in the 12 months following the closing date. These assets are stated at fair value, recognizing in other comprehensive income those variations in fair value, if any.
3.11 | Financial liabilities |
The Company classifies its financial liabilities under the following categories: at fair value through profit or loss, trade payables, interest-bearing loans or derivatives designated as hedging instruments.
The Company’s management determines the classification of its financial liabilities at the time of initial recognition.
Financial debt obligations are recorded at face value and as non-current when maturity is over twelve months and as current when maturity is less than twelve months. Interest expenses are recorded the year in which they are accrued under a financial approach.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 43 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.11 | Financial liabilities, continued |
In accordance with IAS 32 and 39, debt-related expenses are accounted for in the accompanying consolidated statement of financial position, deducting the associated debt and are imputed to the results of the year within the life of the debt using the effective interest rate method.
Financial liabilities are derecognized when the obligation is repaid, settled or it expires.
(a) Financial liabilities at fair value through profit or loss
Financial liabilities are classified at fair value when these are held for trading or designated in their initial recognition at fair value through profit or loss. This category includes derivative instruments not designated for hedge accounting.
(b) Trade payables
Trade payables to suppliers are subsequently stated at their amortized cost using the effective interest rate method.
(c) Interest-bearing loans
Loans are subsequently stated at amortized cost using the effective interest rate method. Amortized cost is calculated considering any premium or discount from the acquisition and includes costs of transactions which are an integral part of the effective interest rate.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 44 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.12 | Environment |
In general, the Company follows the criteria of considering amounts used in environmental protection and improvement as environmental expenses. However, the cost of facilities, machinery and equipment used for the same purpose are considered property, plant and equipment
3.13 | Minimum dividend |
According to the Corporations Act, a publicly traded corporation must pay dividends according to the policy decided at the General Shareholders' Meeting of each year, with a minimum of 30% of the profit for the year ended December 31, 2012 if the corporation does not have unabsorbed accumulated deficit from prior years, unless it is otherwise decided with the unanimous vote of the issued and subscribed shares.
3.14 | Consolidated statements of cash flows |
Cash equivalents relate to short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to low risk of change in value, and expire in less than three months from the date of acquisition of the instrument
For the purposes of the consolidated statements of cash flows, cash and cash equivalents comprise the balance of cash and cash equivalents as defined previously.
The statement of cash flows includes cash movements performed during the year, determined using the indirect method.
3.15 | Obligations related to employee termination benefits and pension commitments |
Obligations with the Company’s employees are in accordance with that established in the collective bargaining agreements in force formalized through collective employment agreements and individual employment contracts, except for the United States that is regulated in accordance with employment plans in force up to 2002.
These obligations are valued using actuarial calculations, according to the projected unit credit method which considers such assumptions as the mortality rate, employee turnover, interest rates, retirement dates, effects related to increases in employees’ salaries, as well as the effects on variations in services derived from variations in the inflation rate.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 45 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.15 | Obligations related to employee termination benefits and pension commitments, continued |
Actuarial losses and gains that may be generated by variations in previously defined obligations are directly recorded in profit or loss for the year.
Actuarial losses and gains have their origin in departures between the estimate and the actual behavior of actuarial assumptions or in the reformulation of established actuarial assumptions.
The discount rate used by the Company for calculating the obligation was 6% for the periods ended December 31, 2012 and 2011.
The Company’s subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation using a net salary progressive rate net of adjustments for inflation, mortality and turnover assumptions, deducting the resulting amounts at present value using a 6.5% interest rate. The net balance of this obligation is presented under the non-current provisions for employee benefits.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 46 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.16 | Financial derivatives and hedge transactions |
Derivatives are recognized initially at fair value as of the date in which the derivatives contract is signed and subsequently they are valued at fair value. The method for recognizing the resulting loss or gain depends on whether the derivative has been designated as an accounting hedge instrument and if so, it depends on the type of hedging, which may be as follows:
(a) Fair value hedge of assets and liabilities recognized (fair value hedges);
(b) Hedging of a single risk associated with an asset or liability recognized or a highly possible foreseen transaction (cash flow hedge);
At the beginning of the transaction, the Company documents the relationship existing between hedging instruments and those entries hedged, as well as their objectives for risk management purposes and the strategy to conduct different hedging operations.
The Company also documents its evaluation both at the beginning and the end of each period of whether derivatives used in hedging transactions are highly effective to offset changes in the fair value or in cash flows of hedged entries.
The fair value of derivative instruments used for hedging purposes is shown in Note 10.3 (hedging assets and liabilities). Changes in the cash flow hedge reserve are classified as a non-current asset or liability if the remaining expiration period of the hedged item is higher than 12 months and as a current asset or liability if the remaining expiration period of the entry is lower than 12 months.
Investing derivatives are classified as a current asset or liability, and the change in their fair value is recognized directly in profit or loss.
(a) Fair value hedge
The change in the fair value of a derivative is recognized with a debit or credit to profit or loss, as applicable. The change in the fair value of the hedged entry attributable to hedged risk is recognized as part of the carrying value of the hedged entry and is also recognized with a debit or credit to profit or loss.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 47 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.16 | Financial derivatives and hedging transactions, continued |
For fair value hedges related to items recorded at amortized cost, the adjustment of the fair value is amortized against profit or loss during the period through maturity. Any adjustment to the carrying value of a hedged financial instrument for which the effective rate is used is amortized with a debit or credit to profit or loss at its fair value attributable to the risk being covered.
If the hedged entry is derecognized, the fair value not amortized is immediately recognized with a debit or credit to profit or loss.
(b) Cash flow hedges
The effective portion of gains or losses from the hedge instrument is initially recognized with a debit or credit to other reserves, whereas any ineffective portion is immediately recognized with a debit or credit to profit or loss, as applicable.
Amounts taken to equity are transferred to profit or loss when the hedged transaction affects profit or loss, as when the hedged interest income or expense is recognized when a projected sale occurs. When the hedged entry is the cost of a non-financial asset or liability, amounts taken to other reserves are transferred to the initial carrying value of the non-financial asset or liability.
Should the expected firm transaction or commitment no longer be expected to occur, the amounts previously recognized in equity are transferred to profit or loss. If a hedge instrument expires, is sold, finished, and exercised without any replacement, or if a rollover is performed or if its designation as hedging is revoked, the amounts previously recognized in other reserves are maintained in equity until the expected firm transaction or commitment occurs.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 48 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.17 | Leases |
(a) Lease – Finance lease
Leases are classified as finance leases when the Company holds substantially all the risks and rewards derived from the ownership of the asset. Finance leases are capitalized at the beginning of the lease at the lower of the fair value of the leased asset or the present value of minimum lease payments.
Each lease payment is distributed between the liability and the interest expenses to obtain ongoing interest on the pending balance of the debt. The respective lease obligations, net of interest expense, are included in other non-current liabilities. The interest element of finance cost is debited in the consolidated statement of income during the lease period so that a regular ongoing interest rate is obtained on the remaining balance of the liability for each year. The asset acquired through a finance lease is subject to depreciation over the lower of its useful life or the life of the agreement.
(b) Lease – Operating lease
Leases in which the lessor maintains a significant part of the risks and rewards derived from the ownership are classified as operating leases. Operating lease payments (net of any incentive received from the lessor) are debited to the statement of income or capitalized (as applicable) on a straight-line basis over the lease period.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 49 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.18 | Prospecting expenses |
Those prospecting expenses associated with mineral reserves being exploited are included under Inventory and amortized according to the estimated mineral content reserves. Prospecting expenses associated with future mineral reserves are presented under other non-financial assets as and when minerals included in the future reserve have caliche ore-grade, which makes the mining property economically commercializable.
Those expenses incurred on mining properties in which the product has a low caliche ore-grade that is not economically commercializable, are directly charged to profit or loss.
3.19 | Other provisions |
Provisions are recognized when:
- | The Company has a present obligation as the result of a past event. |
- | It is more likely than not that certain resources must be used, including benefits, to settle the obligation. |
- | A reliable estimate can be made of the amount of the obligation. |
In the event that the provision or a portion of it is reimbursed, the reimbursement is recognized as a separate asset solely if there is certainty of income.
In the consolidated statement of income, the expense for any provision is presented net of any reimbursement.
Should the effect of the time value of money be significant, provisions are discounted using a discount rate before taxes that reflects the liability’s specific risks. When a discount rate is used, the increase in the provision over time is recognized as a finance cost.
The Company’s policy is maintaining provisions to cover risks and expenses based on a better estimate to deal with possible or certain and quantifiable responsibilities from current litigation, compensations or obligations, pending expenses for which the amount has not yet been determined, collaterals and other similar guarantees for which the Company is responsible. These are recorded at the time the responsibility or the obligation that determines the compensation or payment is generated.
The Company determines and recognizes the cost related to employee vacation on an accrual basis.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 50 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.20 | Compensation plans |
Compensation plans implemented through benefits in share-based payments settled in cash, which have been provided, are recognized in the financial statements at their fair value, in accordance with International Financial Reporting Standard No. 2 "Share-based Payments.” Changes in the fair value of options granted are recognized with a charge to payroll on a straight-line basis during the period between the date on which these options are granted and the payment date. (See Note No.16).
3.21 | Good and service insurance expenses |
Payments for the different insurance policies which the Company contracts are recognized in expenses considering the proportional amount related to the time that they cover, regardless of payment terms. Amounts paid and not consumed are recognized as prepayments within current assets.
Costs of claims are recognized in profit or loss immediately after they become known, net of recoverable amounts from insurance companies. Recoverable amounts are recorded as a reimbursable asset from the insurance company under “Trade and other receivables", calculated as established in the respective insurance policies.
3.22 | Intangible assets |
Intangible assets mainly relate to goodwill acquired, water rights, trademarks, and rights of way related to electric lines, development expenses, and computer software licenses.
(a) Goodwill acquired
Goodwill acquired represents the excess in acquisition cost on the fair value of the Company's ownership of the net identifiable assets of the subsidiary on the acquisition date. Goodwill acquired related to acquisitions of subsidiaries is included in goodwill, which is subject to impairment tests every time consolidated financial statements are issued and is stated at cost less accumulated impairment losses. Gains and losses related to the sale of an entity include the carrying value of goodwill related to the entity sold.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 51 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.22 | Intangible assets, continued |
This intangible asset is assigned to cash-generating units with the purpose of testing impairment losses. It is allocated based on cash-generating units expected to obtain benefits from the business combination from which the aforementioned goodwill acquired arose.
(b) | Water rights |
Water rights acquired by the Company relate to water from natural sources and are recorded at acquisition cost. Given that these assets represent legal rights granted to the Company for a given period, these are amortized during its useful life.
(c) | Right of way for electric lines |
As required for the operation of industrial plants, the Company has paid rights of way in order to install wires for the different electric lines in third party land. These rights are presented under Intangible assets. Amounts paid are capitalized at the date of the agreement and charged to income according to the life of the right of way.
(d) | Computer software |
Licenses for IT programs acquired are capitalized based on costs that have been incurred to acquire them and prepare them to use the specific program. These costs are amortized over their estimated useful lives.
Expenses related to the development or maintenance of IT programs are recognized as an expense as and when incurred. Costs directly related to the production of unique and identifiable IT programs controlled by the Group and which probably will generate economic benefits that are higher than costs during more than a year, are recognized as intangible assets. Direct costs include expenses incurred for employees who develop IT programs and an adequate percentage of general expenses.
The costs of development for IT programs recognized as assets are amortized over their estimated useful lives.
No impairment of intangible assets exists as of December 31, 2012 and December 31, 2011.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 52 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 3 - Significant accounting policies (continued)
3.23 | Research and development expenses |
Research and development expenses are expensed in the period in which the disbursement is made, with the exception of property, plant and equipment acquired for use in research and development, which are recognized in the accounting under the respective item within property, plant and equipment.
3.24 | Classification of balances as current and non-current |
In the attached consolidated statement of financial position, balances are classified in consideration of their remaining recovery (maturity) dates; i.e., those maturing on a date equal to or lower than twelve months are classified as current and those with maturity dates exceeding the aforementioned period are classified as non-current.
The exception to the foregoing relates to deferred taxes, which are classified as non-current, regardless of the anticipated recovery date
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 53 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 4 - Financial risk management
4.1 | Financial risk management policy |
The Financial Risk Management Policy of the Company is oriented towards safeguarding the stability and sustainability of Sociedad Química y Minera de Chile S.A. and Subsidiaries in relation to all such relevant financial uncertainty components.
The operations of the Company are subject to certain financial risk factors that may affect the financial position or results of the same. Among these risks, the most relevant are market risk, liquidity risk, currency risk, bad debt risk, and interest rate risk
There may be additional risks that are currently unknown to us or other known risks but that we currently believe are not significant, which could also affect the commercial operations, the business, the financial position or the results of the Company.
The financial risk management structure includes identifying, determining, analyzing, quantifying, measuring and controlling these events. The Management, in particular the Finance Management, is responsible for constantly assessing the financial risk. The Company uses derivatives to cover a significant portion of these risks.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 54 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 4 - Financial risk management (continued)
4.2 | Risk factors |
4.2.1 | Market risk |
Market risks are those uncertainties associated with fluctuations in market variables that affect the assets and liabilities of the Company, such as:
a) | Country risk: The economic position of the countries where the Company has a presence may affect its financial position. For example, the sales carried out in emerging markets expose SQM to risks related to economic conditions and trends in those countries. On the other hand, inventories may also be affected by the economic situation of these countries and/ or the global economy, amongst other probable economic impacts. |
b) | Price volatility risk: The prices of the products of the Company are affected by the fluctuations of international prices of fertilizers and chemical products and changes in productive capacities or market demand, all of which might affect the Company’s business, financial condition and operational results. |
c) | Commodity Price risk: The Company is exposed to changes in the prices of raw materials and energy which may have an impact on its production costs, thus giving rise to instability in the results. |
At present, the Company has a direct annual expense close to US$130 million on account of petrol, gas and equivalents and close to US$ 60 million on account of electricity. Variations of 10% in the prices of energy the Company required to operate, may involve in the short-term movements in costs of approximately US$17 million.
4.2.2 | Doubtful accounts risk |
A contraction of the global economy and the potentially negative effects in the financial position of our clients may extend the receivables collection time for SQM, increasing the bad debt exposure. While measures have been taken in order to minimize risk, the global economy may trigger losses that might have a material adverse effect on the business, financial position or the results of the Company’s operations.
As a way to mitigate these risks, SQM actively controls debt collection and uses measures such as, loan insurance, letters of credit, and prepayments with regard to some receivables.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 55 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 4 - Financial risk management (continued)
4.2.3 | Currency risk |
As a result of the influence in the price determination, of its relationship with sales costs and since a significant part of the business of the Company is carried out in that foreign currency, the functional currency of SQM is the United States dollar. However, the global business activities of the Company expose the same to the foreign exchange fluctuations of several currencies with respect to the US dollar. Therefore, SQM has hedge contracts to mitigate the exposure generated by its main mismatches (assets net of liabilities) in currencies other than the US dollar against the foreign exchange fluctuation. Those contracts are periodically up-dated depending upon the mismatch amount to be covered in these currencies. Occasionally and subject to the Board of Directors’ approval, the Company insures cash flows from certain specific items in currency other tan U.S. dollar at short-term.
A significant portion of the costs of the Company, particularly payroll, is related to the Chilean peso. Therefore, an increase or decrease in the exchange rate against the dollar would affect the net income of SQM. Approximately US$ 440 million cost of the Company are related to the Chilean peso. A significant part of the effect of such obligations in the statement of financial position is covered by operations of derivative instruments that hedge the mismatch of balance in this currency.
As of December 31, 2011, the Company had derivative instruments classified as hedging currency and interest rate associated with all the obligations denominated bonds both in Chilean pesos and UF, with a fair value of US$ 56.1 million. As of December 2012, this value amounts to US$ 100.6 million, both for SQM.
As of December 31, 2012, the Chilean peso to US dollar Exchange rate was Ch$ 479.96 per US$ 1.00, and as of December 31, 2011 it was Ch$ 519.20 per US$ 1.00.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 56 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 4 - Financial risk management (continued)
4.2.4 | Interest rate risk |
Interest rate fluctuations, due to the uncertain future behavior of markets, may have a material impact on the financial results of the Company.
The Company has short and long-term debts valued at LIBOR plus a spread. The Company is partially exposed to fluctuations of said rate, as SQM currently holds hedging derivative instruments to hedge a portion of its liabilities subject to the LIBOR rate fluctuations.
As of December 31, 2012, approximately 21% of the Company’s financial obligations are valued at LIBOR; therefore significant increases in the rate may impact its financial position. A 100 point variation in this rate may trigger variations in the financial expenses close to US$ 3.1 million. Notwithstanding, this effect is significantly counterbalanced by the returns of the Company’s investments that also relate to LIBOR.
In addition, as of December 31, 2012, the Company's financial debt is mainly in the long-term, with 8% with maturities under 12 months which decreases the exposure to changes in the interest rates.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 57 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 4 - Financial risk management (continued)
4.2.5 | Liquidity risk |
Liquidity risk is related to the fund requirements to comply with payment obligations. The object of the Company is to keep financial flexibility by comfortably balancing the fund requirements and the flows from the regular business conduct, bank loans, public bonds, short term investments, and negotiable instruments, amongst other.
The company has an important capital expense program which is subject to change over time.
On the other hand, world financial markets go through contraction and expansion periods that are not foreseeable in the long-term and may affect SQM’s access to financial resources. These factors may have a material adverse impact on the business, financial position, and operational results of the Company.
SQM constantly monitors that its obligations and investments match, taking care as part of its financial risk management strategy of the obligations and investments maturities from a conservative perspective. As of December 31, 2012, the Company had non-committed and available bank credit lines for working capital for a total of approximately US$ 530 million.
The position in other cash and cash equivalents so generated by the Company is invested in highly liquid mutual funds which have an AAA risk rating.
4.3 | Risk measurement |
The Company has methods to measure the effectiveness and efficiency of financial risk hedging strategies, both prospectively and retrospectively. Those methods are consistent with the risk management profile of the Group.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 58 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 5 - Changes in accounting estimates and policies (consistent presentation)
5.1 | Changes in accounting estimates |
There are no changes in accounting estimates as of the closing date of the consolidated financial statements.
5.2 | Changes in accounting policies |
As of December 31, 2012, the Company’s consolidated financial statements present no changes in accounting policies or estimates compared to the prior period.
The consolidated classified statements of financial position as of December 31, 2012 and December 31, 2011 and the statements of comprehensive income, equity and cash flows for the periods ended December 31, 2012 and December 31, 2011, have been prepared in accordance with IFRS, and accounting principles and criteria have been applied consistently.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 59 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation
6.1 | Parent’s stand-alone assets and liabilities |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Assets | 3,908,259 | 3,626,748 | ||||||
Liabilities | (1,775,476 | ) | (1,813,914 | ) | ||||
Assets (liabilities) | 2,132,783 | 1,812,834 |
6.2 | Parent entity |
As provided in the Company’s by-laws, no shareholder can concentrate more than 32% of the Company’s voting right shares and therefore there is no controlling entity.
6.3 | Joint arrangements of controlling interest |
Sociedad de Inversiones Pampa Calichera S.A., Potasios de Chile S.A., and Inversiones Global Mining (Chile) Limitada, collectively the Pampa Group, are the owners of a number of shares that are equivalent to 30.50% as of December 31, 2012 of the current total amount of shares issued, subscribed and fully-paid of the Company. In addition, Kowa Company Ltd., Inversiones La Esperanza (Chile) Limitada, Kochi S.A. and La Esperanza Delaware Corporation, collectively the Kowa Group, are the owners of a number of shares equivalent to 2.08% of the total amount of shares of SQM S.A. issued, subscribed and fully-paid.
The Pampa Group and the Kowa Group have informed SQM S.A., the Chilean SVS and the relevant stock exchanges in Chile and abroad that they are not and have never been related parties between them. In addition, this is regardless of the fact that both Groups on December 21, 2006 have entered into a Joint Action Agreement (JAA) related to those shares. Consequently, the Pampa Group, by itself, does not concentrate more than 32% of the voting right capital of SQM S.A., and the Kowa Group does not concentrate by itself more than 32% of the voting right capital of SQM S.A.
Likewise, the Joint Action Agreement has not transformed the Pampa and Kowa Groups into related parties between them. The Joint Action Agreement has only transformed the current controller of SQM S.A., composed of the Pampa Group, and the Kowa Group into related parties of SQM S.A.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 60 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.3 | Joint arrangements of controlling interest, continued |
Detail of effective concentration
Tax ID No. | Name | Ownership interest % | ||||
96.511.530-7 | Sociedad de Inversiones Pampa Calichera S.A. | 20.35 | ||||
96.863.960-9 | Inversiones Global Mining (Chile) Limitada | 3.34 | ||||
76.165.311-5 | Potasios de Chile S.A. | 6.81 | ||||
Total Pampa Group | 30.50 | |||||
79,798,650-k | Inversiones la Esperanza (Chile) Ltda. | 1.40 | ||||
59.046.730-8 | Kowa Co Ltd. | 0.30 | ||||
96.518.570-4 | Kochi S.A. | 0.29 | ||||
59.023.690-k | La Esperanza Delaware Corporation | 0.09 | ||||
Total Kowa Group | 2.08 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 61 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.4 | Information on consolidated subsidiaries |
Financial information as of December 31, 2012 of the companies in which the group exerts control and significant influence is as follows:
12/31/2012 | ||||||||||||||||||||||||||||||||||
Country of | Ownership interest | Assets | Liabilities | Total equity | Net profit (loss) | |||||||||||||||||||||||||||||
Subsidiary | Tax ID No. | incorporation | Functional currency | Direct | Indirect | Total | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||
SQM Nitratos S.A. | 96.592.190-7 | Chile | US$ | 99.9999 | 0.0001 | 100.0000 | 735,546 | 534,869 | 200,677 | 148,768 | ||||||||||||||||||||||||
Proinsa Ltda. | 78.053.910-0 | Chile | Chilean peso | - | 60.5800 | 60.5800 | 221 | - | 221 | - | ||||||||||||||||||||||||
SQMC Internacional Ltda. | 86.630.200-6 | Chile | Chilean peso | - | 60.6381 | 60.6381 | 292 | - | 292 | 2 | ||||||||||||||||||||||||
SQM Potasio S.A. | 96.651.060-9 | Chile | US$ | 99.9974 | - | 99.9999 | 1,149,717 | 14,306 | 1,135,411 | 259,578 | ||||||||||||||||||||||||
Serv. Integrales de Tránsito y Transf. S.A. | 79.770.780-5 | Chile | US$ | 0.0003 | 99.9997 | 100.0000 | 357,590 | 326,522 | 31,068 | 4,330 | ||||||||||||||||||||||||
Isapre Norte Grande Ltda. | 79.906.120-1 | Chile | Chilean peso | 1.0000 | 99.0000 | 100.0000 | 1,527 | 872 | 655 | 263 | ||||||||||||||||||||||||
Ajay SQM Chile S.A. | 96,592,180-K | Chile | US$ | 51.0000 | - | 51.0000 | 26,262 | 6,226 | 20,036 | 9,980 | ||||||||||||||||||||||||
Almacenes y Depósitos Ltda. | 79.876.080-7 | Chile | Chilean peso | 1.0000 | 99.0000 | 100.0000 | 451 | - | 451 | (11 | ) | |||||||||||||||||||||||
SQM Salar S.A. | 79.626.800-K | Chile | US$ | 18.1800 | 81.8200 | 100.0000 | 1,611,208 | 464,669 | 1,146,539 | 318,275 | ||||||||||||||||||||||||
SQM Industrial S.A. | 79.947.100-0 | Chile | US$ | 99.0470 | 0.9530 | 100.0000 | 1,988,068 | 1,070,450 | 917,618 | 93,488 | ||||||||||||||||||||||||
Exploraciones Mineras S.A. | 76.425.380-9 | Chile | US$ | 0.2691 | 99.7309 | 100.0000 | 31,944 | 4,383 | 27,561 | (236 | ) | |||||||||||||||||||||||
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. | 76.534.490-5 | Chile | Chilean peso | - | 100.0000 | 100.0000 | 1,037 | 902 | 135 | 17 | ||||||||||||||||||||||||
Soquimich Comercial S.A. | 79.768.170-9 | Chile | US$ | - | 60.6383 | 60.6383 | 186,462 | 73,470 | 112,992 | 8,555 | ||||||||||||||||||||||||
Comercial Agrorama Ltda. | 76.064.419-6 | Chile | Chilean peso | - | 42.4468 | 42.4468 | 17,208 | 15,996 | 1,212 | (185 | ) | |||||||||||||||||||||||
Comercial Hydro S.A. | 96.801.610-5 | Chile | Chilean peso | - | 60.6383 | 60.6383 | 8,100 | 230 | 7,870 | 430 | ||||||||||||||||||||||||
Agrorama S.A. | 76.145.229-0 | Chile | Chilean peso | - | 60.6377 | 60.6377 | 14,250 | 14,093 | 157 | 47 | ||||||||||||||||||||||||
SQM North America Corp. | Foreign | United States | US$ | 40.0000 | 60.0000 | 100.0000 | 319,812 | 284,290 | 35,522 | 23,737 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 62 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.4 | Information on consolidated subsidiaries, continued |
12/31/2012 | ||||||||||||||||||||||||||||||||||
Country of | Ownership interest | Assets | Liabilities | Total equity | Net profit (loss) | |||||||||||||||||||||||||||||
Subsidiary | Tax ID No. | incorporation | Functional currency | Direct | Indirect | Total | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||
RS Agro Chemical Trading A.V.V. | Foreign | Aruba | US$ | 98.3333 | 1.6667 | 100.0000 | 5,214 | - | 5,214 | (10 | ) | |||||||||||||||||||||||
Nitratos Naturais do Chile Ltda. | Foreign | Brazil | US$ | - | 100.0000 | 100.0000 | 290 | 5,005 | (4,715 | ) | (284 | ) | ||||||||||||||||||||||
Nitrate Corporation of Chile Ltd. | Foreign | United Kingdom | US$ | - | 100.0000 | 100.0000 | 5,076 | - | 5,076 | - | ||||||||||||||||||||||||
SQM Corporation N.V. | Foreign | Dutch Antilles | US$ | 0.0002 | 99.9998 | 100.0000 | 86,953 | 3,724 | 83,229 | (3,314 | ) | |||||||||||||||||||||||
SQM Perú S.A. | Foreign | Peru | US$ | 0.9800 | 99.0200 | 100.0000 | 904 | 1,214 | (310 | ) | (165 | ) | ||||||||||||||||||||||
SQM Ecuador S.A. | Foreign | Ecuador | US$ | 0.0040 | 99.9960 | 100.0000 | 19,419 | 18,065 | 1,354 | 244 | ||||||||||||||||||||||||
SQM Brasil Ltda. | Foreign | Brazil | US$ | 2.7900 | 97.2100 | 100.0000 | 723 | 942 | (219 | ) | 78 | |||||||||||||||||||||||
SQI Corporation N.V. | Foreign | Dutch Antilles | US$ | 0.0159 | 99.9841 | 100.0000 | 17 | 43 | (26 | ) | (8 | ) | ||||||||||||||||||||||
SQMC Holding Corporation L.L.P. | Foreign | Aruba | US$ | 0.1000 | 99.9000 | 100.0000 | 24,597 | 1,657 | 22,940 | 2,422 | ||||||||||||||||||||||||
SQM Japan Co. Ltd. | Foreign | Japan | US$ | 1.0000 | 99.0000 | 100.0000 | 2,476 | 711 | 1,765 | (125 | ) | |||||||||||||||||||||||
SQM Europe N.V. | Foreign | Belgium | US$ | 0.8600 | 99.1400 | 100.0000 | 391,590 | 356,719 | 34,871 | (14,928 | ) | |||||||||||||||||||||||
SQM Italia SRL | Foreign | Italy | US$ | - | 100.0000 | 100.0000 | 1,360 | 18 | 1,342 | - | ||||||||||||||||||||||||
SQM Indonesia S.A. | Foreign | Indonesia | US$ | - | 80.0000 | 80.0000 | 5 | 1 | 4 | - | ||||||||||||||||||||||||
North American Trading Company | Foreign | United States | US$ | - | 100.0000 | 100.0000 | 305 | 39 | 266 | - | ||||||||||||||||||||||||
SQM Virginia LLC | Foreign | United States | US$ | - | 100.0000 | 100.0000 | 29,204 | 14,829 | 14,375 | (1 | ) | |||||||||||||||||||||||
SQM Comercial de México S.A. de C.V. | Foreign | Mexico | US$ | 0.0013 | 99.9987 | 100.0000 | 79,092 | 55,672 | 23,420 | 3,254 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 63 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.4 | Information on consolidated subsidiaries, continued |
12/31/2012 | ||||||||||||||||||||||||||||||||||
Country of | Ownership interest | Assets | Liabilities | Total equity | Net profit (loss) | |||||||||||||||||||||||||||||
Subsidiary | Tax ID No. | incorporation | Functional currency | Direct | Indirect | Total | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||
SQM Investment Corporation N.V. | Foreign | Dutch Antilles | US$ | 1.0000 | 99.0000 | 100.0000 | 64,264 | 40,239 | 24,025 | 743 | ||||||||||||||||||||||||
Royal Seed Trading Corporation A.V.V. | Foreign | Aruba | US$ | 1.6700 | 98.3300 | 100.0000 | 242,707 | 253,736 | (11,029 | ) | (2,435 | ) | ||||||||||||||||||||||
SQM Lithium Specialties LLP | Foreign | United States | US$ | - | 100.0000 | 100.0000 | 15,785 | 1,265 | 14,520 | (1 | ) | |||||||||||||||||||||||
Soquimich SRL Argentina | Foreign | Argentina | US$ | - | 100.0000 | 100.0000 | 422 | 176 | 246 | (39 | ) | |||||||||||||||||||||||
Comercial Caimán Internacional S.A. | Foreign | Panama | US$ | - | 100.0000 | 100.0000 | 333 | 1,146 | (813 | ) | (58 | ) | ||||||||||||||||||||||
SQM France S.A. | Foreign | France | US$ | - | 100.0000 | 100.0000 | 351 | 114 | 237 | - | ||||||||||||||||||||||||
Administración y Servicios Santiago S.A. de C.V. | Foreign | Mexico | US$ | - | 100.0000 | 100.0000 | 50 | 811 | (761 | ) | 127 | |||||||||||||||||||||||
SQM Nitratos México S.A. de C.V. | Foreign | Mexico | US$ | - | 51.0000 | 51.0000 | 33 | 23 | 10 | - | ||||||||||||||||||||||||
Soquimich European Holding B.V. | Foreign | The Netherlands | US$ | - | 100.0000 | 100.0000 | 179,048 | 102,950 | 76,098 | (4,932 | ) | |||||||||||||||||||||||
SQM Iberian S.A | Foreign | Spain | US$ | - | 100.0000 | 100.0000 | 81,429 | 81,883 | (454 | ) | (2,135 | ) | ||||||||||||||||||||||
Iodine Minera B.V. | Foreign | The Netherlands | US$ | - | 100.0000 | 100.0000 | 16,929 | - | 16,929 | 3,708 | ||||||||||||||||||||||||
SQM Africa Pty Ltd. | Foreign | South Africa | US$ | - | 100.0000 | 100.0000 | 98,127 | 91,370 | 6,757 | (2,921 | ) | |||||||||||||||||||||||
SQM Oceania Pty Ltd. | Foreign | Australia | US$ | - | 100.0000 | 100.0000 | 5,621 | 1,613 | 4,008 | 755 | ||||||||||||||||||||||||
SQM Agro India Pvt. Ltd. | Foreign | India | US$ | - | 100.0000 | 100.0000 | 18 | 11 | 7 | (38 | ) | |||||||||||||||||||||||
SQM Beijing Commercial Co. Ltd. | Foreign | China | US$ | - | 100.0000 | 100.0000 | 3,637 | 1,779 | 1,858 | 1,621 | ||||||||||||||||||||||||
Total | 7,805,674 | 3,847,033 | 3,958,641 | 848,596 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 64 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.4 | Information on consolidated subsidiaries, continued |
12/31/2011 | ||||||||||||||||||||||||||||||||||
Country of | Ownership interest | Assets | Liabilities | Total equity | Net profit (loss) | |||||||||||||||||||||||||||||
Subsidiary | Tax ID No. | incorporation | Functional currency | Direct | Indirect | Total | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||
SQM Nitratos S.A. | 96.592.190-7 | Chile | US$ | 99.9999 | 0.0001 | 100.0000 | 819,424 | 665,515 | 153,909 | 106,473 | ||||||||||||||||||||||||
Proinsa Ltda. | 78.053.910-0 | Chile | Chilean peso | - | 60.5800 | 60.5800 | 204 | - | 204 | (1 | ) | |||||||||||||||||||||||
SQMC Internacional Ltda. | 86.630.200-6 | Chile | Chilean peso | - | 60.6381 | 60.6381 | 268 | - | 268 | (4 | ) | |||||||||||||||||||||||
SQM Potasio S.A. | 96.651.060-9 | Chile | US$ | 99.9974 | - | 99.9974 | 771,112 | 120,138 | 650,974 | 246,439 | ||||||||||||||||||||||||
Serv. Integrales de Tránsito y Transf. S.A. | 79.770.780-5 | Chile | US$ | 0.0003 | 99.9997 | 100.0000 | 277,296 | 250,558 | 26,738 | 4,302 | ||||||||||||||||||||||||
Isapre Norte Grande Ltda. | 79.906.120-1 | Chile | Chilean peso | 1.0000 | 99.0000 | 100.0000 | 1,127 | 716 | 411 | 28 | ||||||||||||||||||||||||
Ajay SQM Chile S.A. | 96,592,180-K | Chile | US$ | 51.0000 | - | 51.0000 | 26,977 | 9,855 | 17,122 | 10,066 | ||||||||||||||||||||||||
Almacenes y Depósitos Ltda. | 79.876.080-7 | Chile | Chilean peso | 1.0000 | 99.0000 | 100.0000 | 419 | 1 | 418 | (17 | ) | |||||||||||||||||||||||
SQM Salar S.A. | 79.626.800-K | Chile | US$ | 18.1800 | 81.8200 | 100.0000 | 1,438,672 | 610,538 | 828,134 | 286,239 | ||||||||||||||||||||||||
SQM Industrial S.A. | 79.947.100-0 | Chile | US$ | 99.0470 | 0.9530 | 100.0000 | 1,889,981 | 1,066,598 | 823,383 | 93,062 | ||||||||||||||||||||||||
Minera Nueva Victoria S.A. | 78.602.530-3 | Chile | US$ | 99.000 | 1.0000 | 100.0000 | 112,628 | 4,527 | 108,101 | 4,069 | ||||||||||||||||||||||||
Exploraciones Mineras S.A. | 76.425.380-9 | Chile | US$ | 0.2691 | 99.7309 | 100.0000 | 31,878 | 4,082 | 27,796 | (207 | ) | |||||||||||||||||||||||
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. | 76.534.490-5 | Chile | Chilean peso | - | 100.0000 | 100.0000 | 757 | 648 | 109 | (23 | ) | |||||||||||||||||||||||
Soquimich Comercial S.A. | 79.768.170-9 | Chile | US$ | - | 60.6383 | 60.6383 | 191,346 | 82,750 | 108,596 | 7,220 | ||||||||||||||||||||||||
Comercial Agrorama Ltda. | 76.064.419-6 | Chile | Chilean peso | - | 42.4468 | 42.4468 | 11,555 | 10,264 | 1,291 | 29 | ||||||||||||||||||||||||
Comercial Hydro S.A. | 96.801.610-5 | Chile | Chilean peso | - | 60.6383 | 60.6383 | 7,681 | 241 | 7,440 | 334 | ||||||||||||||||||||||||
Agrorama S.A. | 76.145.229-0 | Chile | Chilean peso | - | 60.6377 | 60.6377 | 328 | 226 | 102 | (91 | ) | |||||||||||||||||||||||
SQM North America Corp. | Foreign | United States | US$ | 40.0000 | 60.0000 | 100.0000 | 188,554 | 176,816 | 11,738 | (19,702 | ) |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 65 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.4 | Information on consolidated subsidiaries, continued |
12/31/2011 | ||||||||||||||||||||||||||||||||||
Country of | Ownership interest | Assets | Liabilities | Total equity | Net profit (loss) | |||||||||||||||||||||||||||||
Subsidiary | Tax ID No. | incorporation | Functional currency | Direct | Indirect | Total | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||
RS Agro Chemical Trading A.V.V. | Foreign | Aruba | US$ | 98.3333 | 1.6667 | 100.0000 | 5,224 | - | 5,224 | (4 | ) | |||||||||||||||||||||||
Nitratos Naturais do Chile Ltda. | Foreign | Brazil | US$ | - | 100.0000 | 100.0000 | 2,349 | 6,804 | (4,455 | ) | 271 | |||||||||||||||||||||||
Nitrate Corporation of Chile Ltd. | Foreign | United Kingdom | US$ | - | 100.0000 | 100.0000 | 5,076 | - | 5,076 | - | ||||||||||||||||||||||||
SQM Corporation N.V. | Foreign | Dutch Antilles | US$ | 0.0002 | 99.9998 | 100.0000 | 89,469 | 3,715 | 85,754 | 40,340 | ||||||||||||||||||||||||
SQM Perú S.A. | Foreign | Peru | US$ | 0.9800 | 99.0200 | 100.0000 | 6,466 | 6,611 | (145 | ) | (759 | ) | ||||||||||||||||||||||
SQM Ecuador S.A. | Foreign | Ecuador | US$ | 0.0040 | 99.9960 | 100.0000 | 9,724 | 9,176 | 548 | (83 | ) | |||||||||||||||||||||||
SQM Brasil Ltda. | Foreign | Brazil | US$ | 2.7900 | 97.2100 | 100.0000 | 354 | 1,050 | (696 | ) | 113 | |||||||||||||||||||||||
SQI Corporation N.V. | Foreign | Dutch Antilles | US$ | 0.0159 | 99.9841 | 100.0000 | 17 | 36 | (19 | ) | 6 | |||||||||||||||||||||||
SQMC Holding Corporation L.L.P. | Foreign | Aruba | US$ | 0.1000 | 99.9000 | 100.0000 | 21,131 | 614 | 20,517 | 10,926 | ||||||||||||||||||||||||
SQM Japan Co. Ltd. | Foreign | Japan | US$ | 1.0000 | 99.0000 | 100.0000 | 2,968 | 1,078 | 1,890 | 518 | ||||||||||||||||||||||||
SQM Europe N.V. | Foreign | Belgium | US$ | 0.8600 | 99.1400 | 100.0000 | 430,994 | 393,419 | 37,575 | 20,135 | ||||||||||||||||||||||||
SQM Italia SRL | Foreign | Italy | US$ | - | 100.0000 | 100.0000 | 1,333 | 17 | 1,316 | - | ||||||||||||||||||||||||
SQM Indonesia S.A. | Foreign | Indonesia | US$ | - | 80.0000 | 80.0000 | 5 | 1 | 4 | (1 | ) | |||||||||||||||||||||||
North American Trading Company | Foreign | United States | US$ | - | 100.0000 | 100.0000 | 306 | 39 | 267 | - | ||||||||||||||||||||||||
SQM Virginia LLC | Foreign | United States | US$ | - | 100.0000 | 100.0000 | 29,207 | 14,830 | 14,377 | (3 | ) | |||||||||||||||||||||||
SQM Comercial de México S.A. de C.V. | Foreign | Mexico | US$ | 0.0013 | 99.9987 | 100.0000 | 68,572 | 48,406 | 20,166 | (1,061 | ) |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 66 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.4 | Information on consolidated subsidiaries, continued |
12/31/2011 | ||||||||||||||||||||||||||||||||||
Country of | Ownership interest | Assets | Liabilities | Total equity | Net profit (loss) | |||||||||||||||||||||||||||||
Subsidiary | Tax ID No. | incorporation | Functional currency | Direct | Indirect | Total | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||
SQM investment Corporation N.V. | Foreign | Dutch Antilles | US$ | 1.0000 | 99.0000 | 100.0000 | 65,123 | 41,991 | 23,132 | 1,887 | ||||||||||||||||||||||||
Royal Seed Trading Corporation A.V.V. | Foreign | Aruba | US$ | 1.6700 | 98.3300 | 100.0000 | 196,735 | 203,543 | (6,808 | ) | 1,251 | |||||||||||||||||||||||
SQM Lithium Specialties LLP | Foreign | United States | US$ | - | 100.0000 | 100.0000 | 15,785 | 1,264 | 14,521 | (3 | ) | |||||||||||||||||||||||
Soquimich SRL Argentina | Foreign | Argentina | US$ | - | 100.0000 | 100.0000 | 429 | 144 | 285 | (78 | ) | |||||||||||||||||||||||
Comercial Caimán Internacional S.A. | Foreign | Panama | US$ | - | 100.0000 | 100.0000 | 477 | 1,232 | (755 | ) | (14 | ) | ||||||||||||||||||||||
SQM France S.A. | Foreign | France | US$ | - | 100.0000 | 100.0000 | 351 | 114 | 237 | - | ||||||||||||||||||||||||
Administración y Servicios Santiago S.A. de C.V. | Foreign | Mexico | US$ | - | 100.0000 | 100.0000 | 13 | 915 | (902 | ) | 100 | |||||||||||||||||||||||
SQM Nitratos México S.A. de C.V. | Foreign | Mexico | US$ | - | 51.0000 | 51.0000 | 27 | 17 | 10 | - | ||||||||||||||||||||||||
Soquimich European Holding B.V. | Foreign | The Netherlands | US$ | - | 100.0000 | 100.0000 | 153,211 | 72,969 | 80,242 | 38,850 | ||||||||||||||||||||||||
SQM Iberian S.A | Foreign | Spain | US$ | - | 100.0000 | 100.0000 | 27,225 | 25,638 | 1,587 | 258 | ||||||||||||||||||||||||
Iodine Minera B.V. | Foreign | The Netherlands | US$ | - | 100.0000 | 100.0000 | 13,228 | 7 | 13,221 | 3,100 | ||||||||||||||||||||||||
SQM Africa Pty Ltd. | Foreign | South Africa | US$ | - | 100.0000 | 100.0000 | 62,335 | 52,657 | 9,678 | 7,821 | ||||||||||||||||||||||||
SQM Venezuela S.A. | Foreign | Venezuela | US$ | - | 100.0000 | 100.0000 | 5 | 328 | (323 | ) | (157 | ) | ||||||||||||||||||||||
SQM Oceania Pty Ltd. | Foreign | Australia | US$ | - | 100.0000 | 100.0000 | 4,349 | 1,042 | 3,307 | 2,372 | ||||||||||||||||||||||||
SQM Agro India Pvt. Ltd. | Foreign | India | US$ | - | 100.0000 | 100.0000 | 63 | 18 | 45 | (27 | ) | |||||||||||||||||||||||
SQM Beijing Commercial Co. Ltd. | Foreign | China | US$ | - | 100.0000 | 100.0000 | 2,147 | 1,910 | 237 | 140 | ||||||||||||||||||||||||
Total | 6,984,905 | 3,893,058 | 3,091,847 | 864,114 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 67 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 6 - Background of companies included in consolidation (continued)
6.5 | Detail of transactions between consolidated companies |
a) | Transactions conducted in 2012 |
On November 30, 2012, SQM S.A. transferred and made a capital contribution of the 99% of the ownership interest in Minera Nueva Victoria Limitada to SQM Potasio S.A.; therefore, SQM Potasio S.A. obtains 100% of the ownership. As a result of the above, Minera Nueva Victoria Limitada merged into SQM Potasio S.A., which generates the dissolution of Minera Nueva Victoria Limitada.
Transactions conducted in 2011
On April 7, 2011, Agrorama S.A. was incorporated with ownership interest by Soquimich Comercial S.A. of 99.999% and by Sociedad Productora de Insumos Agrícolas Ltda. of 0.001%. This new company will have share capital of ThCh$100,000 (ThUS$ 211), its lifespan will be indefinite and its line of business will be the trading and distribution of fertilizers, pesticides and agricultural products or supplies.
On August 30, 2011, SQM Industrial S.A. made a capital contribution of ThUS$8,000 in its subsidiary SQMC Mexico S.A. de CV.
During September 2011, SQM Industrial S.A. made a capital contribution of ThUS$14,017 to its subsidiary, SQMC México S.A. de CV, increasing its ownership interest to 99.8739%.
During September 2011, the subsidiary, Soquimich European Holding B.V., acquires from its associate, Nutrisi Holding N.V. ownership interest of 66.6% which it maintained in the subsidiary, Fertilizantes Naturales S.A. for ThUS$3,179.
On December 12, 2011, the subsidiary, Comercial Agrorama Callegari Ltda. changed its name to “Comercial Agrorama Limitada”.
On December 14, 2011, Fertilizantes Naturales S.A. changed its name to SQM Iberian S.A.
During December 2011, the subsidiary, Soquimich European Holding B.V. sells its ownership interest of 50% in Nutrisi Holding N.V. for ThUS$5.736.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 68 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 7 - Cash and cash equivalents
7.1 | Types of cash and cash equivalents |
As of December 31, 2012 and 2011, cash and cash equivalents are detailed as follows:
a) | Cash |
12/31/2012 | 12/31/20111 | |||||||
ThUS$ | ThUS$ | |||||||
Cash on hand | 90 | 73 | ||||||
Cash in banks | 41,541 | 34,659 | ||||||
Other demand deposits | 833 | 3,291 | ||||||
Total cash | 42,464 | 38,023 |
b) | Cash equivalents |
12/31/2012 | 12/31/20111 | |||||||
ThUS$ | ThUS$ | |||||||
Short-term deposits, classified as cash equivalents | 139,943 | 263,396 | ||||||
Short-term investments, classified as cash equivalents | 141,946 | 143,573 | ||||||
Total cash equivalents | 281,889 | 406,969 | ||||||
Total cash and cash equivalents | 324,353 | 444,992 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 69 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 7 - Cash and cash equivalents (continued)
7.2 | Short-term investments, classified as cash equivalents |
As of December 31, 2012 and December 31, 2011, short-term investments, classified as cash and cash equivalents relate to mutual funds (investment liquidity funds) for investments in:
Institution | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Legg Mason - Western Asset Institutional Cash Reserves | 47,408 | 47,162 | ||||||
BlackRock - Institutional US Dollar Liquidity Fund | 47,490 | 48,025 | ||||||
JP Morgan US dollar Liquidity Fund Institutional | 47,048 | 48,386 | ||||||
Total | 141,946 | 143,573 |
Short-term investments are highly liquid fund manager accounts that are basically invested in short-term fixed rate notes in the U.S. market.
7.3 | Information on cash and cash equivalents by currency |
As of December 31, 2012 and December 31, 2011, information on cash and cash equivalents by currency is detailed as follows:
12/31/2012 | 12/31/2011 | |||||||
Original currency | ThUS$ | ThUS$ | ||||||
Chilean Peso (*) | 76,712 | 125,118 | ||||||
US$ | 234,166 | 308,631 | ||||||
Euro | 3,601 | 3,070 | ||||||
Mexican Peso | 720 | 29 | ||||||
South African Rand | 7,421 | 5,450 | ||||||
Japanese Yen | 1,369 | 2,292 | ||||||
Peruvian Sol | 75 | 16 | ||||||
Brazilian Real | 20 | 22 | ||||||
Chinese Yuan | 181 | 300 | ||||||
Indonesian rupee | 5 | 5 | ||||||
Indian rupee | 13 | 45 | ||||||
Pound sterling | 70 | 14 | ||||||
Total | 324,353 | 444,992 |
(*) The Company maintains financial derivative policies which allow dollarizing these term deposits in Chilean pesos.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 70 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 7 - Cash and cash equivalents (continued)
7.4 | Amount of significant restricted (unavailable) cash balances |
Cash on hand and in current bank accounts are available resources, and their carrying value is equal to their fair value.
As of December 31, 2012 and December 31, 2011, the Company has no significant cash balances with any type of restriction.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 71 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 7 - Cash and cash equivalents (continued)
7.5 | Short-term deposits, classified as cash equivalents |
The detail at the end of each period is as follows:
Receiver of the deposit | Type of deposit | Original Currency | Interest rate | Placement date | Expiration date | Principal ThUS$ | Interest accrued to-date | 12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||||||||||||
Banco Crédito e Inversiones | Fixed term | Chilean peso | 0.49 | 12/10/2012 | 01/17/2013 | 25,290 | 87 | 25,377 | 9,677 | |||||||||||||||||||||||
Banco Crédito e Inversiones | Fixed term | Chilean peso | 0.50 | 12/07/2012 | 02/07/2013 | 12,299 | 49 | 12,348 | 9,676 | |||||||||||||||||||||||
Banco Crédito e Inversiones | - | - | - | - | - | - | - | - | 25,209 | |||||||||||||||||||||||
Banco Crédito e Inversiones | - | - | - | - | - | - | - | - | 20,010 | |||||||||||||||||||||||
Banco Crédito e Inversiones | - | - | - | - | - | - | - | - | 20,531 | |||||||||||||||||||||||
Banco Crédito e Inversiones | - | - | - | - | - | - | - | - | 20,011 | |||||||||||||||||||||||
Banco Crédito e Inversiones | - | - | - | - | - | - | - | - | 20,014 | |||||||||||||||||||||||
Banco Santander-Santiago | Fixed term | Chilean peso | 0.49 | 12/06/2012 | 01/03/2013 | 11,609 | 47 | 11,656 | 12,093 | |||||||||||||||||||||||
Banco Santander-Santiago | Fixed term | Chilean peso | 0.49 | 12/06/2012 | 01/03/2013 | 7,493 | 30 | 7,523 | 20,110 | |||||||||||||||||||||||
Banco Santander-Santiago | Fixed term | Chilean peso | 0.45 | 12/28/2012 | 01/10/2013 | 6,252 | 3 | 6,255 | 20,110 | |||||||||||||||||||||||
Banco Santander-Santiago | Fixed term | US$ | 1.12 | 12/07/2012 | 02/07/2013 | 8,005 | 6 | 8,011 | 20,110 | |||||||||||||||||||||||
Banco Santander-Santiago | Fixed term | US$ | 0.70 | 12/21/2012 | 01/07/2013 | 3,500 | 1 | 3,501 | 3,001 | |||||||||||||||||||||||
Banco Santander Santiago | Fixed term | US$ | 0.70 | 12/21/2012 | 01/07/2013 | 3,500 | 1 | 3,501 | - | |||||||||||||||||||||||
Citibank New – York | Overnight | US$ | 0.01 | 12/31/2012 | 01/01/2013 | 20,146 | - | 20,146 | 115 | |||||||||||||||||||||||
Citibank New – York | Overnight | US$ | 0.01 | 12/31/2012 | 01/01/2013 | 1,181 | - | 1,181 | 1,586 | |||||||||||||||||||||||
Citibank New – York | Overnight | US$ | 0.01 | 12/31/2012 | 01/01/2013 | 17,256 | - | 17,256 | - | |||||||||||||||||||||||
Citibank New – York | Overnight | US$ | 0.01 | 12/31/2012 | 01/03/2013 | 10,605 | - | 10,605 | - | |||||||||||||||||||||||
Citibank New – York | Overnight | US$ | 0.01 | 12/31/2012 | 01/02/2013 | 2,582 | - | 2,582 | - | |||||||||||||||||||||||
Corpbanca | Fixed term | Chilean peso | 0.53 | 12/26/2012 | 02/01/2013 | 9,990 | - | 9,999 | 16,043 | |||||||||||||||||||||||
Corpbanca | - | - | - | - | - | - | - | - | 20,016 | |||||||||||||||||||||||
Corpbanca | - | - | - | - | - | - | - | - | 10,032 | |||||||||||||||||||||||
Corpbanca | - | - | - | - | - | - | - | - | 10,008 | |||||||||||||||||||||||
IDBI Bank | - | - | - | - | - | - | - | - | 2 | |||||||||||||||||||||||
Banco BBVA Chile | Fixed term | Indian rupee | - | 12/31/2012 | 01/31/2013 | 2 | - | 2 | 5,042 | |||||||||||||||||||||||
Total | 139,943 | 263,396 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 72 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 8 - Inventories
The composition of inventory at each period-end is as follows:
Type of inventory | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Raw material reserves | 8,675 | 10,111 | ||||||
Supplies for production reserves | 37,919 | 31,602 | ||||||
Products-in-progress reserves | 411,039 | 356,038 | ||||||
Finished product reserves | 438,603 | 346,651 | ||||||
Total | 896,236 | 744,402 |
Inventory reserves recognized as of December 31, 2012 amount to ThUS$72,687, and as of December 31, 2011 amounted to ThUS$58,220. Inventory reserves have been made based on a technical study that covers the different variables affecting products in stock (density, humidity, among others). Additionally, reserves are recognized if goods are sold cheaper than the related cost, and for differences that arise from inventory counts.
As of December 31, 2012, the sum registered as cost of sale related to inventory in the statement of income amounts to ThUS$1,093,075 and as of December 31, 2011 to ThUS$1,016,119.
The breakdown of inventory reserves is detailed as follows:
Type of inventory | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Raw material reserves | 93 | 593 | ||||||
Supplies for production reserves | 500 | 500 | ||||||
Products-in-progress reserves | 46,635 | 33,811 | ||||||
Finished product reserves | 25,459 | 23,316 | ||||||
Total | 72,687 | 58,220 |
The Company has not delivered inventory as collateral for the periods indicated above.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 73 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures
9.1 | Related party disclosures |
Balances pending at period-end are not guaranteed, accrue no interest and are settled in cash. No guarantees have been delivered or received for trade and other receivables due from related parties or trade and other payables due to related parties. For the period ended December 31, 2012, the Company has not recorded any impairment in accounts receivable related to amounts owed by related parties. This evaluation is conducted every year through an examination of the financial position of the related party in the market in which it operates.
9.2 | Relationships between the parent and the entity |
According to the Company’s by-laws, no shareholder can own more than 32% of the Company’s voting right shares.
Sociedad de Inversiones Pampa Calichera S.A., Potasios de Chile S.A., and Global Mining Investments (Chile) S.A., collectively the Pampa Group, are the owners of a number of shares that are equivalent to 30.50% as of December 31, 2012 of the current total amount of shares issued, subscribed and fully-paid of the Company. In addition, Kowa Company Ltd., Inversiones La Esperanza (Chile) Limitada, Kochi S.A. and La Esperanza Delaware Corporation, collectively the Kowa Group, are the owners of a number of shares equivalent to 2.08% of the total amount of shares of SQM S.A. issued, subscribed and fully-paid.
The Pampa Group and the Kowa Group have informed SQM S.A., the Chilean SVS and the relevant stock exchanges in Chile and abroad that they are not and have never been related parties between them. In addition, this is regardless of the fact that both Groups on December 21, 2006 have entered into a Joint Action Agreement (JAA) related to those shares. Consequently, the Pampa Group, by itself, does not concentrate more than 32% of the voting right capital of SQM S.A., and the Kowa Group does not concentrate by itself more than 32% of the voting right capital of SQM S.A.
Likewise, the Joint Action Agreement has not transformed the Pampa and Kowa Groups into related parties between them. The Joint Action Agreement has only transformed the current controller of SQM S.A., composed of the Pampa Group, and the Kowa Group into related parties of SQM S.A.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 74 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.2 | Relationship between the Parent and the entity |
Detail of effective concentration
Tax ID No. | Name | Ownership interest % | ||||
96.511.530-7 | Sociedad de Inversiones Pampa Calichera S.A. | 20.35 | ||||
96.863.960-9 | Global Mining Investments (Chile) S.A. | 3.34 | ||||
76.165.311-5 | Potasios de Chile S.A. | 6.81 | ||||
Total Pampa Group | 30.50 | |||||
79,798,650-k | Inversiones la Esperanza (Chile) Ltda. | 1.40 | ||||
59.046.730-8 | Kowa Co Ltd. | 0.30 | ||||
96.518.570-4 | Kochi S.A. | 0.29 | ||||
59.023.690-k | La Esperanza Delaware Corporation | 0.09 | ||||
Total Kowa Group | 2.08 |
9.3 | Intermediate parent that publicly issues financial statements |
The following intermediate parent of Sociedad Química y Minera de Chile S.A. publicly issues financial statements:
Soquimich Comercial S.A.
9.4 | Detailed identification of the link between the Parent and subsidiary |
As of December 31, 2012 and December 31, 2011, the detail is as follows:
Tax ID No. | Name | Country of origin |
Functional currency | Nature | ||||
Foreign | Nitratos Naturais Do Chile Ltda. | Brazil | US$ | Subsidiary | ||||
Foreign | Nitrate Corporation Of Chile Ltd. | United Kingdom | US$ | Subsidiary | ||||
Foreign | SQM North America Corp. | United States | US$ | Subsidiary | ||||
Foreign | SQM Europe N.V. | Belgium | US$ | Subsidiary | ||||
Foreign | Soquimich S.R.L. Argentina | Argentina | US$ | Subsidiary | ||||
Foreign | Soquimich European Holding B.V. | The Netherlands | US$ | Subsidiary | ||||
Foreign | SQM Corporation N.V. | Dutch Antilles | US$ | Subsidiary | ||||
Foreign | SQI Corporation N.V. | Dutch Antilles | US$ | Subsidiary | ||||
Foreign | SQM Comercial De México S.A. de C.V. | Mexico | US$ | Subsidiary | ||||
Foreign | North American Trading Company | United States | US$ | Subsidiary | ||||
Foreign | Administración y Servicios Santiago S.A. de C.V. | Mexico | US$ | Subsidiary | ||||
Foreign | SQM Perú S.A. | Peru | US$ | Subsidiary | ||||
Foreign | SQM Ecuador S.A. | Ecuador | US$ | Subsidiary | ||||
Foreign | SQM Nitratos Mexico S.A. de C.V. | Mexico | US$ | Subsidiary | ||||
Foreign | SQMC Holding Corporation L.L.P. | United States | US$ | Subsidiary | ||||
Foreign | SQM Investment Corporation N.V. | Dutch Antilles | US$ | Subsidiary | ||||
Foreign | SQM Brasil Limitada | Brazil | US$ | Subsidiary | ||||
Foreign | SQM France S.A. | France | US$ | Subsidiary | ||||
Foreign | SQM Japan Co. Ltd. | Japan | US$ | Subsidiary | ||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | US$ | Subsidiary | ||||
Foreign | SQM Oceania Pty Limited | Australia | US$ | Subsidiary | ||||
Foreign | Rs Agro-Chemical Trading A.V.V. | Aruba | US$ | Subsidiary | ||||
Foreign | SQM Indonesia S.A. | Indonesia | US$ | Subsidiary | ||||
Foreign | SQM Virginia L.L.C. | United States | US$ | Subsidiary | ||||
Foreign | SQM Venezuela S.A. | Venezuela | US$ | Subsidiary |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 75 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.4 | Detailed identification of the link between the Parent and subsidiary, continued |
As of December 31, 2012 and December 31, 2011, the detail is as follows:
Tax ID No. | Name | Country of origin |
Functional currency | Nature | ||||
Foreign | SQM Italia SRL | Italy | US$ | Subsidiary | ||||
Foreign | Comercial Caiman Internacional S.A. | Cayman Islands | US$ | Subsidiary | ||||
Foreign | SQM Africa Pty. Ltd. | South Africa | US$ | Subsidiary | ||||
Foreign | SQM Lithium Specialties LLC | United States | US$ | Subsidiary | ||||
Foreign | SQM Iberian S.A. | Spain | US$ | Subsidiary | ||||
Foreign | Iodine Minera B.V. | The Netherlands | US$ | Subsidiary | ||||
Foreign | SQM Agro India Pvt. Ltd. | India | US$ | Subsidiary | ||||
Foreign | SQM Beijing Commercial Co. Ltd. | China | US$ | Subsidiary | ||||
96.801.610-5 | Comercial Hydro S.A. | Chile | US$ | Subsidiary | ||||
96.651.060-9 | SQM Potasio S.A. | Chile | US$ | Subsidiary | ||||
96.592.190-7 | SQM Nitratos S.A. | Chile | US$ | Subsidiary | ||||
96,592,180-K | Ajay SQM Chile S.A. | Chile | US$ | Subsidiary | ||||
86.630.200-6 | SQMC Internacional Ltda. | Chile | Chilean peso | Subsidiary | ||||
79.947.100-0 | SQM Industrial S.A. | Chile | US$ | Subsidiary | ||||
79.906.120-1 | Isapre Norte Grande Ltda. | Chile | Chilean peso | Subsidiary | ||||
79.876.080-7 | Almacenes y Depósitos Ltda. | Chile | Chilean peso | Subsidiary | ||||
79.770.780-5 | Servicios Integrales de Tránsitos y Transferencias S.A. | Chile | US$ | Subsidiary | ||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | US$ | Subsidiary | ||||
79.626.800-K | SQM Salar S.A. | Chile | US$ | Subsidiary | ||||
78.602.530-3 | Minera Nueva Victoria Ltda.(b) | Chile | US$ | Subsidiary | ||||
78.053.910-0 | Proinsa Ltda. | Chile | Chilean peso | Subsidiary | ||||
76.534.490-5 | Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. | Chile | Chilean peso | Subsidiary | ||||
76.425.380-9 | Exploraciones Mineras S.A. | Chile | US$ | Subsidiary | ||||
76.064.419-6 | Comercial Agrorama Ltda. | Chile | Chilean peso | Subsidiary | ||||
76.145.229-0 | Agrorama S.A. | Chile | Chilean peso | Subsidiary | ||||
77.557.430-5 | Sales de Magnesio Ltda. | Chile | Chilean peso | Associate | ||||
Foreign | Abu Dhabi Fertilizer Industries WWL | Arabia | Arab Emirates dirham | Associate | ||||
Foreign | Doktor Tarsa Tarim Sanayi AS | Turkey | Turkish lira | Associate | ||||
Foreign | Ajay North America | United States | US$ | Associate | ||||
Foreign | Ajay Europe SARL | France | Euro | Associate | ||||
Foreign | SQM Eastmed Turkey | Turkey | Euro | Associate | ||||
Foreign | SQM Thailand Co. Ltd. | Thailand | Thai baht | Associate | ||||
Foreign | Sichuan SQM Migao Chemical Fertilizers Co Ltda. | China | US$ | Joint venture | ||||
Foreign | Coromandel SQM | India | Indian rupee | Joint venture | ||||
Foreign | SQM Vitas Fzco. | Arab Emirates | Arab Emirates dirham | Joint venture | ||||
Foreign | SQM Star Qingdao Crop Nutrition Co., Ltd. | China | US$ | Joint venture | ||||
Foreign | Kowa Company Ltd. | Japan | US$ | Other related parties | ||||
96.511.530-7 | Sociedad de Inversiones Pampa Calichera | Chile | US$ | Other related parties | ||||
79.049.778-9 | Callegari Agricola S.A. | Chile | Chilean peso | Other related parties | ||||
Foreign | Coromandel Internacional | India | Indian rupee | Other related parties | ||||
Foreign | Vitas Roullier SAS | France | Euro | Other related parties | ||||
Foreign | SQM Vitas Brasil Agroindustria | Brazil | US$ | Joint control or significant influence | ||||
Foreign | SQM Vitas Perú S.A.C. | Peru | US$ | Joint control or significant influence |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 76 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.4 | Detailed identification of the link between the Parent and subsidiary, continued |
Tax ID No. | Name | Country of origin |
Functional currency | Nature | ||||
Foreign | SQM Vitas Southern Africa Pty. | South Africa | US$ | Joint control or significant influence | ||||
Foreign | Misr Speciality Fertilizers (a) | Egypt | Egyptian pound | Associate | ||||
Foreign | NU3 N.V. (a) | Belgium | Euro | Associate | ||||
Foreign | NU3 B.V. (a) | The Netherlands | Euro | Associate |
(a) | Ownership relationship up to 2011. |
(b) | On November 30, 2012 Minera Nueva Victoria Ltda. merged with SQM Potasio S.A., being absorbed by the latter. |
9.5 | Detail of related parties and related party transactions |
Transactions between the Parent and its subsidiaries are part of the Company's common transactions. Their conditions are those customary for this type of transactions in respect of terms and market prices. In addition, these have been eliminated in consolidation and are not detailed in this note.
Maturity terms for each case vary by virtue of the transaction giving rise to them.
As of December 31, 2012 and December 31, 2011, there are no allowances for doubtful accounts related to balances pending of transactions with related parties as there is no impairment in them.
As of December 31, 2012 and 2011, the detail of transactions with related parties is as follows:
Tax ID No. | Company | Nature | Country of origin | Transaction | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||||||
Foreign | Doktor Tarsa Tarim Sanayi As | Associate | Turkey | Sale of products | 9,587 | 26,748 | ||||||||||
Foreign | Ajay Europe S.A.R.L. | Associate | France | Sale of products | 37,232 | 27,743 | ||||||||||
Foreign | Ajay Europe S.A.R.L. | Associate | France | Dividends | 3,564 | 824 | ||||||||||
Foreign | Ajay North America LLC. | Associate | United States | Sale of products | 42,081 | 47,501 | ||||||||||
Foreign | Ajay North America LLC. | Associate | United States | Dividends | 10,175 | 1,499 | ||||||||||
Foreign | Abu Dhabi Fertilizer Industries WWL | Associate | United Arab Emirates | Sale of products | 6,285 | 8,234 | ||||||||||
Foreign | Abu Dhabi Fertilizer Industries WWL | Associate | United Arab Emirates | Dividends | 525 | - | ||||||||||
Foreign | NU3 B.V. | Associate | The Netherlands | Sale of products | - | 15,708 | ||||||||||
Foreign | NU3 N.V. | Associate | Belgium | Sale of products | - | 9,993 | ||||||||||
Foreign | SQM Thailand Co. Ltd. | Associate | Thailand | Sale of products | 10,203 | 7,355 | ||||||||||
Foreign | SQM Thailand Co. Ltd. | Associate | Thailand | Dividends | 11 | - | ||||||||||
77.557.430-5 | Sales de Magnesio Ltda. | Associate | Chile | Sale of products | 1,472 | - |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 77 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.5 | Detail of related parties and related party transactions, continued |
Tax ID No. | Company | Nature | Country of origin | Transaction | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||||||
77.557.430-5 | Sales de Magnesio Ltda. | Associate | Chile | Dividends | 1,052 | 491 | ||||||||||
Foreign | Kowa Company Ltd. | Other related parties | Japan | Sale of products | 123,581 | 138,818 | ||||||||||
Foreign | SQM Vitas Brasil Agroindustria | Joint control or significant influence | Brazil | Sale of products | 40,518 | 34,514 | ||||||||||
Foreign | SQM Vitas Perú S.A.C. | Joint control or significant influence | Peru | Sale of products | 26,123 | 13,608 | ||||||||||
Foreign | SQM Vitas Southern Africa Pty. | Joint control or significant influence | South Africa | Sale of products | 10,930 | 2,287 | ||||||||||
Foreign | SQM Vitas Fzco. | Joint venture | United Arab Emirates | Sale of products | 120 | 1,562 | ||||||||||
Foreign | Sichuan SQM Migao Chemical Fertilizers Co Ltda. | Joint venture | China | Sale of services | 62 | - | ||||||||||
Foreign | Coromandel SQM | Joint venture | India | Sale of products | 2,300 | - |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 78 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.6 | Trade receivables due from related parties, current: |
Tax ID No. | Name | Nature | Country of origin | Currency | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||||||
77.557.430-5 | Sales de Magnesio Ltda. | Associate | Chile | Chilean peso | 303 | 685 | ||||||||||
Foreign | SQM Thailand Co. Ltd. | Associate | Thailand | US$ | 6,098 | 5,521 | ||||||||||
Foreign | Doktor Tarsa Tarim Sanayi AS | Associate | Turkey | US$ | - | 3,899 | ||||||||||
Foreign | Ajay Europe S.A.R.L. | Associate | France | US$ | 4,775 | 4,603 | ||||||||||
Foreign | Ajay North America LLC. | Associate | United States | US$ | 4,633 | 7,387 | ||||||||||
Foreign | Abu Dhabi Fertilizer Industries WWL | Associate | United Arab Emirates | US$ | 1,805 | 4,587 | ||||||||||
Foreign | Misr Speciality Fertilizers | Associate | Egypt | US$ | - | 199 | ||||||||||
Foreign | Kowa Company Ltd. | Jointly controlled entity | Japan | US$ | 29,929 | 44,188 | ||||||||||
96.511.530-7 | Soc.de Inversiones Pampa Calichera | Jointly controlled entity | Chile | US$ | 8 | 8 | ||||||||||
Foreign | SQM Star Qingdao Crop Nutrition Co., Ltd | Joint venture | China | US$ | 27 | 71 | ||||||||||
Foreign | SQM Vitas Brasil Agroindustria | Joint venture | Brazil | US$ | 27,903 | 27,523 | ||||||||||
Foreign | SQM Vitas Perú S.A.C. | Joint venture | Peru | US$ | 18,143 | 17,534 | ||||||||||
Foreign | SQM Vitas Southern Africa PTY | Joint venture | South Africa | US$ | 1,478 | 597 | ||||||||||
Foreign | SQM Vitas Fzco. | Joint venture | United Arab Emirates | Arab Emirates dirham | - | - | ||||||||||
Foreign | Coromandel SQM | Joint venture | India | Indian rupee | 756 | 23 | ||||||||||
Foreign | Sichuan SQM Migao Chemical Fertilizers Co Ltda. | Joint venture | China | US$ | 4,000 | - | ||||||||||
79.049.778-9 | Callegari Agrícola S.A. | Other related parties | Chile | Chilean peso | 844 | 314 | ||||||||||
Foreign | Coromandel Internacional | Other related parties | India | Indian rupee | 670 | - | ||||||||||
Total to-date | 101,372 | 117,139 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 79 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.7 | Trade payables due to related parties, current: |
Tax ID No. | Name | Nature | Country of origin | Currency | 12/31/2012 | 12/31/2011 | ||||||||||
ThUS$ | ThUS$ | |||||||||||||||
Foreign | SQM Vitas Fzco. | Joint venture | United Arab Emirates | Arab Emirates dirham | 19 | 873 | ||||||||||
Total to-date | 19 | 873 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 80 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.8 | Board of Directors and Senior Management |
1) | Board of directors |
The Company is managed by a Board of Directors which is composed of eight regular directors who are elected for a three-year period. The present Board of Directors was elected by the shareholders at the Ordinary Shareholders' Meeting of April 28, 2011.
As of December 31, 2012, the Company has an Audit Committee made up of three members of the Board of Directors. This Committee performs those duties provided in Article 50 bis of Law No. 18,046 on Shareholders Company, the Shareholders’ Company Act.
During the periods covered by these financial statements, there are no pending balances receivable and payable between the Company, its directors or members of Senior Management other than those related to remuneration, fee allowances and profit-sharing. In addition, there were no transactions conducted between the Company, its directors or members of Senior Management.
2) | Directors’ Compensation |
2.1
2.1.1 | Board of Directors |
Directors’ compensation is detailed as follows:
a) | A payment of a monthly fixed gross amount of UF 300 in favor of the Chairman of the Company’s Board of Directors and UF 50 in favor of the seven remaining board members regardless of their attendance at Board meetings or the number of meetings attended during the respective month. |
b) | A payment in domestic currency in favor of the Chairman of the Company’s Board of Directors consisting of a variable and gross amount equivalent to 0.35% of profit for the period effectively earned by the Company during fiscal year 2012. |
c) | A payment in domestic currency in favor of each Company’s directors excluding the Chairman of the Board, consisting of a variable and gross amount equivalent to 0.04% of profit for the period effectively earned by the Company during fiscal years 2012 and 2011. |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 81 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.9 | Board of Directors and Senior Management, continued |
d) | The fixed and variable amounts indicated above will not be subject to any charge between them, and those expressed as a percentage will be paid immediately after the shareholders at the respective Annual General Shareholders’ Meeting of the Company approve the statement of financial position (balance sheet), the financial statements, the annual report, the report by the account inspectors and the report of external auditors for the fiscal years ending December 31, 2012 and 2011. |
e) | Therefore, the remunerations and profit sharing paid to members of the Board of Directors and Audit Committee during 2012 amount to ThUS$3,973 (ThUS$ 3,030 as of December 31, 2011). |
2.1.2 Audit Committee
The remuneration of Directors Committee is composed of:
a) | A payment of a monthly, fixed and gross amount of UF 17 in favor of each of the three Directors who are a part of the Company’s Audit Committee regardless of the number of meetings conducted during the respective month. |
b) | A payment in domestic currency and in favor of each of the three Directors of a variable and gross amount equivalent to 0.013% of the Company’s profit for the period effectively earned by the Company during fiscal years 2012 and 2011. |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 82 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 9 - Related party disclosures (continued)
9.8 | Board of Directors and Senior Management, continued |
3) | No guarantees have been constituted in favor of the directors. |
4) | Senior management compensation |
As of December 31, 2012, the global compensation paid to the 120 main executives amounts to ThUS$32,888 (ThUS$ 22,509 as of December 31, 2011). This includes monthly fixed salary and variable performance bonuses.
The Company has a bonuses intermediate and bi-intermediate plan for compliance target and level of individual contribution to the Company’s profit or loss. These benefits are structured in a minimum and maximum of gross remunerations which are paid once a year or every two years.
5) | Additionally, the Company has retention bonuses for the Company’s executives. The amount of these bonuses is linked to the price of the Company’s share and is payable in cash between 2012 and 2016 (See Note 16). |
6) | No guarantees have been constituted in favor of the Company’s management. |
7) | The Company’s Managers and Directors do not receive or have not received any benefit during the period ended December 31, 2012 and the year ended December 31, 2011 or compensation for the concept of pensions, life insurance, paid time off, profit sharing, incentives, or benefits due to disability other than those mentioned in the preceding points. |
8) | In accordance with IAS 24, we should report that the Company's Director Mr. Wolf Von Appen B. is member of the Ultramar Group. During the period ended December 31, 2012, the amount of operations with this Group is approximately ThUS$22,577 (ThUS$13,751 as of December 31, 2011). |
9.9 | Key management personnel compensation |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Key management personnel compensation | 32,888 | 22,509 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 83 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 – Financial instruments
Financial assets in conformity with IAS 39 are detailed as follows:
10.1 | Types of other financial assets |
Types of other financial assets | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Other current financial assets (1) | 244,161 | 129,069 | ||||||
Derivatives (2) | 680 | 14,455 | ||||||
Hedging assets, current | 71,262 | 25,737 | ||||||
Total other current financial assets | 316,103 | 169,261 | ||||||
Other non-current financial assets | 107 | 117 | ||||||
Hedging assets, non-current | 29,385 | 30,371 | ||||||
Total other non-current financial assets | 29,492 | 30,488 |
(1) | Relates to term deposits with maturities exceeding 90 days from the investment date. |
(2) | Relate to forwards and options that were not classified as hedging instruments (see detail in Note 10.3). |
Detail of other current financial assets
Institution | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Banco Santander | 41,691 | 13,753 | ||||||
BBVA | 31,579 | 33,528 | ||||||
Banco de Crédito e Inversiones | 82,145 | 17,739 | ||||||
Banco de Chile | 42,992 | 44,849 | ||||||
Corpbanca | 10,499 | 19,200 | ||||||
Banco Scotiabank | 25,141 | - | ||||||
Banco Itaú | 10,114 | - | ||||||
Total | 244,161 | 129,069 |
10.2 | Trade and other receivables, current and non-current |
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
Current | Non- current | Total | Current | Non- current | Total | |||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Trade receivables | 490,770 | - | 490,770 | 387,607 | - | 387,607 | ||||||||||||||||||
Prepayments | 14,046 | - | 14,046 | 10,706 | - | 10,706 | ||||||||||||||||||
Other receivables | 5,800 | 1,311 | 7,111 | 13,749 | 1,070 | 14,819 | ||||||||||||||||||
Total trade and other receivables | 510,616 | 1,311 | 511,927 | 412,062 | 1,070 | 413,132 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 84 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 – Financial instruments (continued)
10.2 | Trade and other receivables, continued |
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
Assets before allowances | Allowance for doubtful trade receivables | Assets for trade receivables, net | Assets before allowances | Allowance for doubtful trade receivables | Assets for trade receivables, net | |||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Receivables related to credit operations, current | 507,562 | (16,792 | ) | 490,770 | 404,320 | (16,713 | ) | 387,607 | ||||||||||||||||
Trade receivables, current | 507,562 | (16,792 | ) | 490,770 | 404,320 | (16,713 | ) | 387,607 | ||||||||||||||||
Prepayments, current | 14,046 | - | 14,046 | 10,706 | - | 10,706 | ||||||||||||||||||
Other receivables, current | 7,801 | (2,001 | ) | 5,800 | 15,709 | (1,960 | ) | 13,749 | ||||||||||||||||
Current trade and other receivables | 529,409 | (18,793 | ) | 510,616 | 430,735 | (18,673 | ) | 412,062 | ||||||||||||||||
Other receivables, non-current | 1,311 | - | 1,311 | 1,070 | - | 1,070 | ||||||||||||||||||
Non-current receivables | 1,311 | - | 1,311 | 1,070 | - | 1,070 | ||||||||||||||||||
Total trade and other receivables | 530,720 | (18,793 | ) | 511,927 | 431,805 | (18,673 | ) | 413,132 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 85 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 – Financial instruments (continued)
10.2 | Trade and other receivables, continued |
Portfolio stratification, continued
The Company’s policy is to require guarantees (such as letters of credit, guarantee clauses and others) and/or maintaining insurance policies for certain accounts as deemed necessary by management.
Unsecuritized portfolio
As of December 31, 2012 and December 31, 2011, the detail of the unsecuritized portfolio is as follows:
12/31/2012 | ||||||||||||||||||||||||||||||||||||||||||||
Not overdue | 1 - 30 days | 31 - 60 days | 61 - 90 days | 91 - 120 days | 121 - 150 days | 151 - 180 days | 181 - 210 days | 211 - 250 days | Over 250 days | Total | ||||||||||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||||||||||||
Number of customers, non-renegotiated portfolio | 2,666 | 2,241 | 545 | 409 | 367 | 308 | 325 | 279 | 311 | 33,724 | 41,041 | |||||||||||||||||||||||||||||||||
Non-renegotiated portfolio, gross | 412,557 | 20,121 | 1,259 | 46,268 | 38 | 129 | 395 | 10,140 | 794 | 15,862 | 507,562 | |||||||||||||||||||||||||||||||||
Number of customers, renegotiated portfolio | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
Renegotiated portfolio, gross | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
Total portfolio, gross | 412,557 | 20,121 | 1,259 | 46,268 | 38 | 129 | 395 | 10,140 | 794 | 15,862 | 507,562 |
12/31/2011 | ||||||||||||||||||||||||||||||||||||||||||||
Not overdue | 1 - 30 days | 31 - 60 days | 61 - 90 days | 91 - 120 days | 121 - 150 days | 151 - 180 days | 181 - 210 days | 211 - 250 days | Over 250 days | Total | ||||||||||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||||||||||||
Number of customers, non-renegotiated portfolio | 5,369 | 1,701 | 640 | 401 | 340 | 340 | 332 | 335 | 340 | 2,147 | 11,945 | |||||||||||||||||||||||||||||||||
Non-renegotiated portfolio, gross | 348,299 | 27,945 | 4,778 | 12,058 | 817 | 87 | 407 | 103 | 299 | 8,673 | 403,466 | |||||||||||||||||||||||||||||||||
Number of customers, renegotiated portfolio | 1 | 2 | - | - | - | - | - | - | - | - | 3 | |||||||||||||||||||||||||||||||||
Renegotiated portfolio, gross | 504 | 350 | - | - | - | - | - | - | - | - | 854 | |||||||||||||||||||||||||||||||||
Total portfolio, gross | 348,803 | 28,295 | 4,778 | 12,058 | 817 | 87 | 407 | 103 | 299 | 8,673 | 404,320 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 86 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 – Financial instruments (continued)
10.2 | Trade and other receivables, continued |
The detail of allowance is as follows:
Allowance and write-offs | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Allowance for non-renegotiated portfolio | 20,191 | 21,961 | ||||||
Write-offs for the period | (1,398 | ) | (3,288 | ) | ||||
Total | 18,793 | 18,673 |
a) | Credit risk concentration |
Credit risk concentrations with respect to trade receivables are reduced due to the great number of entities included in the Company’s client database and their distribution throughout the world.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 87 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.3 | Hedging assets and liabilities |
The balance represents derivative instruments measured at fair value which have been classified as hedges from exchange and interest rate risks related to the total obligations relating to bonds of the Company in Chilean pesos and UF (and the exchange risk in Chilean pesos of the Company’s investment plans). As of December 31, 2012, the face value of cash flows in Cross Currency Swap contracts agreed upon in US dollars amounted to ThUS$515,156 and as of December 31, 2011 such contracts amounted to ThUS$ 405,486.
Hedging assets | Derivative instruments (CCS) | Effect on profit or loss for the period Derivative instruments | Hedging reserve in gross equity | Deferred tax hedging reserve in equity | Hedging reserve in equity | |||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||
December 31, 2012 | 100,647 | 49,853 | (18,419 | ) | 3,684 | (14,735 | ) | |||||||||||||
December 31, 2011 | 56,108 | (39,719 | ) | (12,184 | ) | 2,104 | (10,080 | ) |
Hedging liabilities | Derivative instruments (IRS) | Effect on profit or loss for the period Derivative instruments | Hedging reserve in gross equity | Deferred tax hedging reserve in equity | Hedging reserve in equity | |||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||
December 31, 2012 | 1,879 | 27 | (1,786 | ) | - | (1,786 | ) | |||||||||||||
December 31, 2011 | 270 | (120 | ) | (150 | ) | - | (150 | ) |
The balances in the effect on profit or loss column consider the interim effects of the contracts in force as of December 31, 2012 and December 31, 2011.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 88 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.3 | Hedging assets and liabilities, continued |
Derivative contract maturities are detailed as follows:
Series |
Contract amount ThUS$ |
Currency | Maturity date | |||
C | 71,841 | UF | 12/01/2026 | |||
G | 33,673 | Chilean peso | 01/05/2014 | |||
H* | 146,360 | UF | 01/05/2018 | |||
I | 56,041 | UF | 04/01/2014 | |||
J | 92,440 | Chilean peso | 04/01/2014 | |||
M | 46,463 | UF | 02/01/2017 | |||
O | 68,338 | UF | 02/01/2017 |
(*) Forward starting CCS for hedging series H bonds since 01/05/2012 to 01/05/2018
The Company uses cross currency swap derivative instruments to hedge the possible financial risk associated with the volatility of the exchange rate associated with Chilean pesos and UF. The objective is to hedge the exchange rate financial risks associated with bonds payable. Hedges are documented and tested to measure their effectiveness.
Based on a comparison of critical terms, hedging is highly effective, given that the hedged amount is consistent with obligations maintained for bonds denominated in Chilean pesos and UF. Likewise, hedging contracts are denominated in the same currencies and have the same expiration dates of bond principal and interest payments.
Hedge Accounting
The Company classifies derivative instruments as hedging that may include derivative or embedded derivatives either as fair value hedge derivative instruments, cash flow hedge derivative instruments, or hedge derivative instruments for net investment in a business abroad.
a) Fair value hedge
Changes in fair values of derivative instruments classified as fair value hedge derivative instruments are accounted for in gains and losses immediately along with any change in the fair value of the hedged item that is attributable to the risk being hedged.
The Company documents the relationship between hedge instruments and the hedged item along with the objectives of its risk management and strategy to carry out different hedging transactions. In addition, upon commencement of the period hedged and then on a quarterly basis the Company documents whether hedge instruments have been efficient and met the objective of hedging market fluctuations for the purpose of which we use the effectiveness test. A hedge instrument is deemed effective if the effectiveness test result is between 80 to 120%.
The hedge instruments are classified as effective or not effective on the basis of the effectiveness test results. As of to date, hedges are classified as effective on the basis of the effectiveness tests. This note includes the detail of fair values of derivatives classified as hedging instruments.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 89 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.3 | Hedging assets and liabilities, continued |
b) Cash flow hedges
Cash flow hedges cover exposure to the cash flow variations attributable to a risk associated with a specific transaction that is very likely to be executed, that may have material effects on the results of the Company.
10.4 | Financial liabilities |
Other current and non-current financial liabilities
As of December 31, 2012 and December 31, 2011, the detail is as follows:
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
Current | Non- current | Total | Current | Non- current | Total | |||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Bank loans | 122,373 | 379,119 | 501,492 | 141,436 | 329,150 | 470,586 | ||||||||||||||||||
Obligations with the public (bonds payable) | 20,135 | 1,067,075 | 1,087,210 | 17,129 | 907,877 | 925,006 | ||||||||||||||||||
Other financial liabilities | 10,335 | - | 10,335 | 2,443 | - | 2,443 | ||||||||||||||||||
Total | 152,843 | 1,446,194 | 1,599,037 | 161,008 | 1,237,027 | 1,398,035 |
Current and non-current loans
As of December 31, 2012 and December 31, 2011, the detail is as follows:
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Long-term loans | 379,119 | 329,150 | ||||||
Short-term loans | 120,921 | 140,538 | ||||||
Current portion of long-term loans | 1,452 | 898 | ||||||
Short-term loans and current portion of long-term loans | 122,373 | 141,436 | ||||||
Total loans assumed | 501,492 | 470,586 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 90 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
a) | Bank loans, current: |
As of December 31, 2012 and December 31, 2011, the detail of this caption is as follows:
Debtor | Creditor | Currency | 12/31/2012 Current maturities | |||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | Tax ID No. | Financial institution | Country | or adjustment index | Repayment | Effective rate | Nominal rate | Up to 90 days ThUS$ | 91 days to 1
year ThUS$ | Total ThUS$ | ||||||||||||||||||||||||
93.007.000-9 | SQM.S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | US$ | Upon maturity | 1.70 | % | 1.70 | % | - | 20,175 | 20,175 | ||||||||||||||||||||||
93.007.000-9 | SQM.S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | US$ | Upon maturity | 1.09 | % | 1.09 | % | - | 20,017 | 20,017 | ||||||||||||||||||||||
93.007.000-9 | SQM S.A. | Chile | Foreign | Banco Estado NY Branch | United States | US$ | Upon maturity | 3.01 | % | 2.69 | % | 1,139 | - | 1,139 | ||||||||||||||||||||||
79.626.800-K | SQM Salar S.A. | Chile | 97.032.000-8 | Banco BBVA Chile | Chile | US$ | Upon maturity | 1.90 | % | 1.90 | % | - | 20,243 | 20,243 | ||||||||||||||||||||||
79.626.800-K | SQM Salar S.A. | Chile | 97.018.000-1 | Scotiabank Sud Americano | Chile | US$ | Upon maturity | 1.03 | % | 1.03 | % | 20,153 | - | 20,153 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Bank of America | United States | US$ | Upon maturity | 1.83 | % | 1.52 | % | - | 141 | 141 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Export Development Canada | Canada | US$ | Upon maturity | 1.81 | % | 1.46 | % | - | 20 | 20 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Scotiabank & Trust (Cayman) Ltd. | Cayman Islands | US$ | Upon maturity | 1.60 | % | 1.54 | % | - | 235 | 235 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Scotiabank & Trust (Cayman) Ltd. | Cayman Islands | US$ | Upon maturity | 1.92 | % | 1.62 | % | - | 164 | 164 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | The Bank of Tokyo-Mitsubishi UFJ, Ltd. (New York) | United States | US$ | Upon maturity | 1.49 | % | 1.26 | % | - | 140 | 140 | ||||||||||||||||||||||
79.947.100-0 | SQM Industrial S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | US$ | Upon maturity | 1.64 | % | 1.64 | % | - | 20,172 | 20,172 | ||||||||||||||||||||||
79.947.100-0 | SQM Industrial S.A. | Chile | 97.018.000-1 | Scotiabank Sud Americano | Chile | US$ | Upon maturity | 1.04 | % | 1.04 | % | 20,162 | - | 20,162 | ||||||||||||||||||||||
Total | 41,454 | 81,307 | 122,761 | |||||||||||||||||||||||||||||||||
Borrowing costs | (26 | ) | (362 | ) | (388 | ) | ||||||||||||||||||||||||||||||
Total | 41,428 | 80,945 | 122,373 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 91 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
Debtor | Creditor | Currency | 12/31/2011 Current maturities | |||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | Tax ID No. | Financial institution | Country | or adjustment index | Repayment | Effective rate | Nominal rate | Up to 90 days ThUS$ | 91 days to 1
year ThUS$ | Total ThUS$ | ||||||||||||||||||||||||
93.007.000-9 | SQM.S.A. | Chile | 97.032.000-8 | Banco BBVA Chile | United States | US$ | Upon maturity | 1.00 | % | 1.00 | % | 20,094 | - | 20,094 | ||||||||||||||||||||||
93.007.000-9 | SQM.S.A. | Chile | 97.030.000-7 | Banco Estado | United States | US$ | Upon maturity | 0.95 | % | 0.95 | % | 20,089 | - | 20,089 | ||||||||||||||||||||||
93.007.000-9 | SQM S.A. | Chile | Foreign | Banco Estado NY Branch | United States | US$ | Upon maturity | 3.02 | % | 2.72 | % | - | 645 | 645 | ||||||||||||||||||||||
79.626.800-K | SQM Salar S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | US$ | Upon maturity | 1.24 | % | 1.24 | % | - | 20,114 | 20,114 | ||||||||||||||||||||||
79.626.800-K | SQM Salar S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | US$ | Upon maturity | 1.03 | % | 1.03 | % | 20,085 | - | 20,085 | ||||||||||||||||||||||
79.626.800-K | SQM Salar S.A. | Chile | 97.018.000-1 | Scotiabank Sud Americano | Chile | US$ | Upon maturity | 0.75 | % | 0.75 | % | 48 | 20,000 | 20,048 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Bank of America | United States | US$ | Upon maturity | 2.56 | % | 1.47 | % | - | 140 | 140 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Export Development Canada | Canada | US$ | Upon maturity | 2.36 | % | 1.75 | % | - | 24 | 24 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Scotiabank & Trust (Cayman) Ltd. | Cayman Islands | US$ | Upon maturity | 1.74 | % | 1.35 | % | 207 | - | 207 | ||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | The Bank of Tokyo-Mitsubishi UFJ, Ltd. (New York) | United States | US$ | Upon maturity | 2.17 | % | 1.23 | % | - | 137 | 137 | ||||||||||||||||||||||
79.947.100-0 | SQM Industrial S.A. | Chile | 97.004.000-5 | Banco de Chile | Chile | US$ | Upon maturity | 1.58 | % | 1.58 | % | - | 20,057 | 20,057 | ||||||||||||||||||||||
79.947.100-0 | SQM Industrial S.A. | Chile | 97.018.000-1 | Scotiabank Sud Americano | Chile | US$ | Upon maturity | 0.70 | % | 0.70 | % | 51 | 20,000 | 20,051 | ||||||||||||||||||||||
Total | 60,574 | 81,117 | 141,691 | |||||||||||||||||||||||||||||||||
Borrowing costs | (61 | ) | (194 | ) | (255 | ) | ||||||||||||||||||||||||||||||
Total | 60,513 | 80,923 | 141,436 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 92 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
b) | Unsecured obligations, current: |
As of December 31, 2012 and December 31, 2011, the detail of current unsecured interest-bearing obligations is composed of promissory notes and bonds, as follows:
Bonds
Debtor | Number of | Currency | Periodicity | 12/31/2012 Current maturities | ||||||||||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | registration or ID of the instrument | Series | Maturity date | or adjustment index | Payment of interest | Repayment | Effective rate | Nominal rate | Up to 90 days ThUS$ | 91 days to 1 year ThUS$ | Total ThUS$ | |||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 04/15/2013 | US$ | Semi-annual | Upon maturity | 6.32 | % | 6.13 | % | - | 2,577 | 2,577 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 04/21/2013 | US$ | Semi-annual | Upon maturity | 5.70 | % | 5.50 | % | - | 2,667 | 2.667 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 446 | C | 06/01/2013 | UF | Semi-annual | Semi-annual | 4.44 | % | 4.00 | % | - | 7,464 | 7,464 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | G | 01/05/2013 | Ch$ | Semi-annual | Upon maturity | 7.50 | % | 7.00 | % | 1,465 | - | 1,465 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 564 | H | 01/05/2013 | UF | Semi-annual | Semi-annual | 5.10 | % | 4.90 | % | 4,484 | - | 4,484 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | I | 04/01/2013 | UF | Semi-annual | Upon maturity | 3.35 | % | 3.00 | % | - | 532 | 532 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | J | 04/01/2013 | Ch$ | Semi-annual | Upon maturity | 6.23 | % | 5.50 | % | - | 1,470 | 1,470 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 700 | M | 02/01/2013 | UF | Semi-annual | Upon maturity | 3.62 | % | 3.30 | % | 644 | - | 644 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 699 | O | 02/01/2013 | UF | Semi-annual | Upon maturity | 3.95 | % | 3.80 | % | 1,110 | - | 1,110 | |||||||||||||||||||||||||||||
Total | 7,703 | 14,710 | 22,413 | |||||||||||||||||||||||||||||||||||||||||
Bond issue costs | (473 | ) | (1,805 | ) | (2,278 | ) | ||||||||||||||||||||||||||||||||||||||
Total | 7,230 | 12,905 | 20,135 |
Effective rates of bonds in Chilean pesos and UF are expressed and calculated in U.S. dollars based on the flows agreed in Cross Currency Swap Agreements.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 93 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
Debtor | Number of | Periodicity | 12/31/2011 Current maturities | |||||||||||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | registration or ID of the instrument | Series | Maturity date | Currency or adjustment index | Payment of interest | Repayment | Effective rate | Nominal rate | Up to 90 days ThUS$ | 91 days to 1
year ThUS$ | Total ThUS$ | |||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 04/15/2012 | US$ | Semi-annual | Upon maturity | 6.32 | % | 6.13 | % | - | 2,577 | 2,577 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 04/21/2012 | US$ | Semi-annual | Upon maturity | 5.70 | % | 5.50 | % | - | 2,667 | 2,667 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 446 | C | 06/01/2012 | UF | Semi-annual | Semi-annual | 4.44 | % | 4.00 | % | - | 6,754 | 6,754 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | G | 01/05/2012 | Ch$ | Semi-annual | Upon maturity | 7.50 | % | 7.00 | % | 1,354 | - | 1,354 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 564 | H | 01/05/2012 | UF | Semi-annual | Semi-annual | 5.10 | % | 4.90 | % | 4,045 | - | 4,045 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | I | 04/01/2012 | UF | Semi-annual | Upon maturity | 3.35 | % | 3.00 | % | - | 477 | 477 | |||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | J | 04/01/2012 | Ch$ | Semi-annual | Upon maturity | 6.23 | % | 5.50 | % | - | 1,351 | 1,351 | |||||||||||||||||||||||||||||
Total | 5,399 | 13,826 | 19,225 | |||||||||||||||||||||||||||||||||||||||||
Bond issue costs | (276 | ) | (1,820 | ) | (2,096 | ) | ||||||||||||||||||||||||||||||||||||||
Total | 5,123 | 12,006 | 17,129 |
c) | Types of non-current interest-bearing loans |
Non-current interest-bearing loans as of December 31, 2012 and December 31, 2011 are detailed as follows:
Non-current interest-bearing bank loans
Debtor | Creditor | 12/31/2012 Years to maturity | ||||||||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | Tax ID No. | Financial institution | Country | Currency or adjustment index | Repayment | Effective rate | Nominal rate | Over 1 years to 3 ThUS$ | Over 3 to 5 ThUS$ | Over 5 years ThUS$ | Total ThUS$ | |||||||||||||||||||||||||||
93.007.000-9 | SQM S.A. | Chile | Foreign | Banco Estado NY Branch | United States | US$ | Upon maturity | 3.01 | % | 2.69 | % | - | 140,000 | - | 140,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Scotiabank & Trust (Cayman) Ltd. | Cayman Islands | US$ | Upon maturity | 1.60 | % | 1.54 | % | 50,000 | - | - | 50,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Scotiabank & Trust (Cayman) Ltd. | Cayman Islands | US$ | Upon maturity | 1.92 | % | 1.62 | % | 50,000 | - | - | 50,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Bank of America | United States | US$ | Upon maturity | 1.83 | % | 1.52 | % | - | 40,000 | - | 40,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Export Development Canada | Canada | US$ | Upon maturity | 1.81 | % | 1.46 | % | - | 50,000 | - | 50,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | The Bank of Tokyo-Mitsubishi UFJ, Ltd (New York) | United States | US$ | Upon maturity | 1.49 | % | 1,26 | % | - | 50,000 | - | 50,000 | |||||||||||||||||||||||||
Total | 100,000 | 280,000 | - | 380,000 | ||||||||||||||||||||||||||||||||||||
Borrowing costs | (235 | ) | (646 | ) | - | (881 | ) | |||||||||||||||||||||||||||||||||
Total | 99,765 | 279,354 | - | 379,119 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 94 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
Debtor | Creditor | 12/31/2011 Years to maturity | ||||||||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | Tax ID No. | Financial institution | Country | Currency or adjustment index | Repayment | Effective rate | Nominal rate | Over 1 years to 3 ThUS$ | Over 3 to 5 ThUS$ | Over 5 years ThUS$ | Total ThUS$ | |||||||||||||||||||||||||||
93.007.000-9 | SQM S.A. | Chile | Foreign | Banco Estado NY Branch | United States | US$ | Upon maturity | 3.02 | % | 2.72 | % | 140,000 | - | - | 140,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Scotiabank & Trust (Cayman) Ltd. | Cayman Islands | US$ | Upon maturity | 1.74 | % | 1.35 | % | 50,000 | - | - | 50,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Bank of America | United States | US$ | Upon maturity | 2.56 | % | 1.47 | % | - | 40,000 | - | 40,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | Export Development Canada | Canada | US$ | Upon maturity | 2.36 | % | 1.74 | % | - | 50,000 | - | 50,000 | |||||||||||||||||||||||||
Foreign | Royal Seed Trading Corporation A.V.V. | Aruba | Foreign | The Bank of Tokyo-Mitsubishi UFJ, Ltd (New York) | United States | US$ | Upon maturity | 2.17 | % | 1.23 | % | - | 50,000 | - | 50,000 | |||||||||||||||||||||||||
Total | 190,000 | 140,000 | - | 330,000 | ||||||||||||||||||||||||||||||||||||
Borrowing costs | (104 | ) | (746 | ) | - | (850 | ) | |||||||||||||||||||||||||||||||||
Total | 189,896 | 139,254 | - | 329,150 |
d) | Non-current unsecured interest-bearing bonds |
The breakdown of non-current unsecured interest-bearing bonds as of December 31, 2012 and December 31, 2011 is detailed as follows:
Debtor | Currency | Periodicity | 12/31/2012 Current maturities | |||||||||||||||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | Number of registration or ID of the instrument | Series | Maturity date | or adjustment index | Payment of interest | Repayment | Effective rate | Nominal rate | Over 1 years to 3 ThUS$ | Over 3 to 5 ThUS$ | Over 5 years ThUS$ | Total ThUS$ | ||||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 15/04/2016 | US$ | Semi-annual | Upon maturity | 6.32 | % | 6.13 | % | - | 200,000 | - | 200,000 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 04/21/2020 | US$ | Semi-annual | Upon maturity | 5.70 | % | 5.50 | % | - | - | 250,000 | 250,000 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 446 | C | 12/01/2026 | UF | Semi-annual | Semi-annual | 4.44 | % | 4.00 | % | 14,280 | 14,280 | 64,260 | 92,820 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 564 | H | 01/05/2030 | UF | Semi-annual | Semi-annual | 7.5 | % | 4.90 | % | - | - | 190,401 | 190,401 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | G | 01/05/2014 | Ch$ | Semi-annual | Upon maturity | 5.10 | % | 7.00 | % | 43,764 | - | - | 43,764 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | I | 04/01/2014 | UF | Semi-annual | Upon maturity | 3.35 | % | 3.00 | % | 71,400 | - | - | 71,400 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | J | 04/01/2014 | Ch$ | Semi-annual | Upon maturity | 6.23 | % | 5.50 | % | 108,368 | - | - | 108,368 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 700 | M | 02/01/2017 | UF | Semi-annual | Upon maturity | 3.62 | % | 3.30 | % | - | 47,600 | - | 47,600 | ||||||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 699 | O | 02/01/2033 | UF | Semi-annual | Upon maturity | 3.95 | % | 3.80 | % | - | - | 71,400 | 71,400 | ||||||||||||||||||||||||||||||||
Total | 237,812 | 261,880 | 576,061 | 1,075,753 | ||||||||||||||||||||||||||||||||||||||||||||
Bond issue costs | (631 | ) | (1,420 | ) | (6,627 | ) | (8,678 | ) | ||||||||||||||||||||||||||||||||||||||||
Total | 237,181 | 260,460 | 569,434 | 1,067,075 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 95 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
Debtor | Periodicity | 12/31/2011 Current maturities | ||||||||||||||||||||||||||||||||||||||||
Tax ID No. | Subsidiary | Country | Number of registration or ID of the instrument | Series | Maturity date | Currency or adjustment index | Payment of interest | Repayment | Effective rate | Nominal rate | Over 1 years to 3 ThUS$ | Over 3 to 5 ThUS$ | Over 5 years ThUS$ | Total ThUS$ | ||||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 04/15/2016 | US$ | Semi-annual | Upon maturity | 6.32 | % | 6.13 | % | - | 200,000 | - | 200,000 | ||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | - | Single | 04/21/2020 | US$ | Semi-annual | Upon maturity | 5.70 | % | 5.50 | % | - | - | 250,000 | 250,000 | ||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 446 | C | 12/01/2026 | UF | Semi-annual | Semi-annual | 4.44 | % | 4.00 | % | 12,881 | 12,881 | 64,408 | 90,170 | ||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 564 | H | 0105//2030 | UF | Semi-annual | Semi-annual | 7.5 | % | 4.90 | % | - | - | 171,753 | 171,753 | ||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | G | 01/05/2014 | Ch$ | Semi-annual | Upon maturity | 5.10 | % | 7.00 | % | 40,446 | - | - | 40,446 | ||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | I | 04/01/2014 | UF | Semi-annual | Upon maturity | 3.35 | % | 3.00 | % | 64,408 | - | - | 64,408 | ||||||||||||||||||||||||||
93.007.000-9 | SQM S.A | Chile | 563 | J | 04/01/2014 | Ch$ | Semi-annual | Upon maturity | 6.23 | % | 5.50 | % | 100,152 | - | - | 100,152 | ||||||||||||||||||||||||||
Total | 217,887 | 212,881 | 486,161 | 916,929 | ||||||||||||||||||||||||||||||||||||||
Bond issue costs | (1,700 | ) | (1,322 | ) | (6,030 | ) | (9,052 | ) | ||||||||||||||||||||||||||||||||||
Total | 216,187 | 211,559 | 480,131 | 907,877 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 96 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
e) | Additional information |
Bonds
As of December 31, 2012 and December 31, 2011, ThUS$20,135 and ThUS$17,129, respectively are presented at short-term related to principal, current portion plus interest accrued at that date, not including bond issue costs. At the non-current portion, the Company presented ThUS$1,067,075 as of December 31, 2012 and ThUS$907,877 as of December 31, 2011 related to principal installments of Series C bonds, single Series bonds, Series G bonds, Series H bonds, Series I bonds, Series J bonds, single series second issue bonds, Series M bonds and Series O bonds.
As of December 31, 2012 and December 31, 2011, the details of each issue are as follows
Series “C” bonds
On January 24, 2006, the Company placed Series C bonds for UF 3,000,000 (ThUS$101,918) at an annual rate of 4.00%.
As of December 31, 2012 and December 31, 2011, the Company has made the following payments with a charge to the Series C bonds:
Payments made | 12/31/2012 | 12/31/2011 | ||||||
ThUS$ | ThUS$ | |||||||
Principal | 6,858 | 6,678 | ||||||
Interest payment | 4,004 | 4,169 |
Single series bonds
On April 5, 2006, the Company placed Single Series bonds for ThUS$200,000 at an annual rate of 6.125% under "Rule 144 and regulation S of the U.S. Securities Act of 1933."
As of December 31, 2012 and December 31, 2011, the Company has made the following payments with a charge to the Single Series bonds:
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Payments of interest | 12,250 | 12,250 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 97 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
Series “G” and “H” bonds
On January, 13, 2009, the Company placed two bond series in the domestic market. Series H for UF 4,000,000 (ThUS$139,216) at an annual interest rate of 4.9% at a term of 21 years with payment of principal beginning in 2019 and Series G for ThCh$ 21,000,000 (ThUS$34,146), which was placed at a term of 5 years with a single payment at the maturity of the term and an annual interest rate of 7%.
As of December 31, 2012 and December 31, 2011, the Company has made the following payments with a charge to the Series G and H bonds:
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Payment of interest, Series G bonds | 2,845 | 3,094 | ||||||
Payment of interest, Series H bonds | 8,565 | 8,989 |
Series “J” and “I” bonds
On May 8, 2009, the Company placed two bond series in the domestic market. Series J for ThCh$52,000,000 (ThUS$92,456) which was placed at a term of 5 years with single payment at the expiration date of the term and annual interest rate of 5.5% and Series I for UF 1,500,000 (ThUS$56,051) which was placed at a term of 5 years with single payment at the maturity of the term and annual interest rate of 3.00%.
As of December 31, 2012 and December 31, 2011, the Company has made the following payments with a charge to the Series J and I bonds:
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Payment of interest, Series J bonds | 5,879 | 5,665 | ||||||
Payment of interest, Series I bonds | 2,100 | 1,954 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 98 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.4 | Financial liabilities, continued |
Single series bonds, second issue
On April 21, 2010, the Company informed the Chilean Superintendence of Securities and Insurance of its placement in international markets of an unsecured bond of ThUS$250,000 with a maturity of 10 years beginning on the aforementioned date with annual interest rate of 5.5% and destined to refinance long-term liabilities
As of December 31, 2012 and December 31, 2011, the detail of payments charged to the line of single series bonds, second issue is as follows:
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Interest payment | 13,750 | 13,750 |
Series “M” and “O” bonds
On April 4, 2012, the Company placed two bond series in the domestic market. Series M for UF 1,000,000 (ThUS$46,601) was placed at a term of 5 years with a single payment at the maturity of the term and an annual interest rate of 3.3%, and Series O for UF 1,500,000 (ThUS$69,901) was placed at a term of 21 years with a single payment at the maturity of the term and an annual interest rate of 3.80%
As of December 31, 2012, the Company has made the following payments with a charge to the Series M and O bonds:
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Payment of interest, Series M bonds | 765 | - | ||||||
Payment of interest, Series O bonds | 1,320 | - |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 99 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.5 | Trade and other payables |
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
Current | Non- current | Total | Current | Non- current | Total | |||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Accounts payable | 207,429 | - | 207,429 | 182,552 | - | 182,552 | ||||||||||||||||||
Deferred income | - | - | - | - | - | - | ||||||||||||||||||
Retained (or accrued) | 515 | - | 515 | 480 | - | 480 | ||||||||||||||||||
Total | 207,944 | - | 207,944 | 183,032 | - | 183,032 |
Purchase commitments held by the Company are recognized as liabilities when the goods and services are received by the Company. As of December 31, 2012, the Company has purchase orders amounting to ThUS$127,484 (ThUS$79,045 as of December 31, 2011).
10.6 | Financial liabilities at fair value through profit or loss |
This balance relates to derivative instruments measured at their fair value, which has generated balances against the Company. The detail of this type of instrument is as follows:
Financial liabilities at fair value through profit or loss | 12/31/2012 | Effect on profit or loss as of 12/31/2012 | 12/31/2011 | Effect on profit or loss as of 12/31/2011 | ||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
Current | ||||||||||||||||
Derivative instruments (forward) | 5,612 | (4,559 | ) | 1,053 | (1,053 | ) | ||||||||||
Derivative instruments (options) | 2,492 | (1,456 | ) | 1,036 | (1,036 | ) | ||||||||||
Derivative instruments (IRS) | 2,231 | (240 | ) | 354 | (150 | ) | ||||||||||
10,335 | (6,255 | ) | 2,443 | (2,239 | ) |
Balances in the column effect on profit or loss consider the annual affects of agreements which were in force as of December 31, 2012.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 100 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.7 | Financial asset and liability categories |
a) | Financial Assets |
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
Current | Non-current | Total | Current | Non-current | Total | |||||||||||||||||||
Description of financial assets | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | ||||||||||||||||||
Financial assets at fair value through profit or loss, classified as held-for-trading | 244,161 | - | 244,161 | 129,069 | - | 129,069 | ||||||||||||||||||
Financial assets at fair value through profit or loss, mandatorily measured at fair value | 680 | - | 680 | 14,455 | - | 14,455 | ||||||||||||||||||
Financial assets at fair value through profit or loss | 244,841 | - | 244,841 | 143,524 | - | 143,524 | ||||||||||||||||||
Investments held to maturity | - | 107 | 107 | - | 117 | 117 | ||||||||||||||||||
Loans and receivables | 510,616 | 1,311 | 511,927 | 412,062 | 1,070 | 413,132 | ||||||||||||||||||
Financial assets at fair value through other comprehensive income | 71,261 | 29,385 | 100,646 | 25,737 | 30,371 | 56,108 | ||||||||||||||||||
Total financial assets | 826,718 | 30,803 | 857,521 | 581,323 | 31,558 | 612,881 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 101 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.7 | Financial asset and liability categories (continued) |
b) | Financial liabilities |
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
Current | Non-current | Total | Current | Non-current | Total | |||||||||||||||||||
Description of financial liabilities at fair value through profit or loss | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | Amount ThUS$ | ||||||||||||||||||
Financial liabilities at fair value through profit or loss, designed as such at initial recognition | 10,335 | - | 10,335 | 2,443 | - | 2,443 | ||||||||||||||||||
Financial liabilities at fair value through profit or loss | 10,335 | - | 10,335 | 2,443 | - | 2,443 | ||||||||||||||||||
Financial liabilities measured at amortized cost | 350,452 | 1,446,194 | 1,796,646 | 341,597 | 1,237,027 | 1,578,624 | ||||||||||||||||||
Total financial liabilities | 360,787 | 1,446,194 | 1,806,981 | 344,040 | 1,237,027 | 1,581,067 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 102 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.8 | Financial assets pledged as guarantee |
On November 4, 2004, Isapre Norte Grande maintains a guarantee equivalent to the total amount owed to its members and healthcare providers, which is managed and maintained by Banco de Chile.
As of December 31, 2012 and December 31, 2011, assets pledged as guarantees are as follows:
Restricted cash | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Isapre Norte Grande Ltda. | 571 | 428 | ||||||
Total | 571 | 428 |
10.9 | Estimated fair value of financial instruments and financial derivatives |
As required by IFRS 7, the following information is presented for the disclosure of the estimated fair value of financial assets and liabilities.
Although inputs represent Management's best estimate, they are subjective and involve significant estimates related to the current economic and market conditions, as well as risk features.
Methodologies and assumptions used depend on the risk terms and characteristics of instruments and include the following as a summary:
- | Cash equivalent approximates fair value due to the short-term maturities of these instruments. |
- | Other current financial liabilities are considered at fair value equal to their carrying values. |
- | For interest-bearing liabilities with original maturity of more than a year, fair values are calculated at discounting contractual cash flows at their original current market with similar terms. |
- | For forward and swap contracts, fair value is determined using quoted market prices of financial instruments with similar characteristics. |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 103 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.9 | Estimated fair value of financial instruments and financial derivatives, continued |
The detail of the Company’s instruments at carrying value and estimated fair value is as follows:
12/31/2012 | 12/31/2011 | |||||||||||||||
Carrying value | (*) Fair value | Carrying value | (*) Fair value | |||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
Cash and cash equivalents | 324,353 | 324,353 | 444,992 | 444,992 | ||||||||||||
Current trade and other receivables | 510,616 | 510,616 | 412,062 | 412,062 | ||||||||||||
Other financial assets, current: | ||||||||||||||||
- Time deposits | 244,161 | 244,161 | 129,069 | 129,069 | ||||||||||||
- Derivative instruments | 680 | 680 | 14,455 | 14,455 | ||||||||||||
- Current hedging assets | 71,262 | 71,262 | 25,737 | 25,737 | ||||||||||||
Total other current financial assets | 316,103 | 316,103 | 169,261 | 169,261 | ||||||||||||
Other non-current financial assets: | 107 | 107 | 117 | 117 | ||||||||||||
Non-current hedging assets | 29,385 | 29,385 | 30,371 | 30,371 | ||||||||||||
Other non-current financial assets: | 29,492 | 29,492 | 30,488 | 30,488 | ||||||||||||
Other financial liabilities, current: | ||||||||||||||||
- Bank loans | 122,373 | 122,373 | 141,436 | 141,436 | ||||||||||||
- Derivative instruments | 8,456 | 8,456 | 2,174 | 2,174 | ||||||||||||
- Hedging liabilities | 1,879 | 1,879 | 269 | 269 | ||||||||||||
- Unsecured obligations | 20,135 | 20,135 | 17,129 | 17,129 | ||||||||||||
Other financial liabilities, current | 152,843 | 152,843 | 161,008 | 161,008 | ||||||||||||
Current and non-current accounts payable | 207,944 | 207,944 | 183,032 | 183,032 | ||||||||||||
Other non-current financial liabilities: | ||||||||||||||||
- Bank loans | 379,119 | 401,065 | 329,150 | 348,218 | ||||||||||||
- Unsecured obligations | 1,067,075 | 1,137,363 | 907,877 | 1,074,907 | ||||||||||||
Other non-current financial liabilities: | 1,446,194 | 1,538,428 | 1,237,027 | 1,423,125 |
Fair value hierarchy
Fair value hierarchies are as follows:
- | Level 1: When only quoted (unadjusted) prices have been used in active markets. |
- | Level 2: When in a phase in the valuation process variable other than prices quoted in Level 1 have been used which are directly observable in markets. |
- | Level 3: When in a phase in the valuation process variable which are not based in observable market data have been used. |
The valuation techniques used to determine the fair value of our hedging instruments are those indicated in level 2.
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 104 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 10 - Financial instruments (continued)
10.10 | Nature and scope of risks arising from financing instruments |
As indicated in paragraphs 33 to 42 of IFRS 7 the disclosure of information associated with the nature and scope of risks arising from financial instruments is presented in Note 4 - Financial Risk Management.
Note 11 – Equity-accounted investees
11.1 | Equity-accounted investees |
As of December 31, 2012 and 2011, in accordance with criteria established in Note 2.6 and Note 3.3, investment in associates recognized according to the equity method of accounting and joint ventures are as follows:
Investment | Share on profit (loss) of equity-accounted investees | |||||||||||||||||
Note No. | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||||||||||
Equity-accounted investees | 11.1 to 11.3 | 50,955 | 43,057 | 24,104 | 22,157 | |||||||||||||
Joint ventures | 12 to 12.4 | 19,343 | 17,637 | 253 | (349 | ) | ||||||||||||
Total | 70,298 | 60,694 | 24,357 | 21,808 |
SQM Los Militares 4290 Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 105 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 11 – Equity-accounted investees (continued)
11.2 | Assets, liabilities, revenue and expenses of associates |
12/31/2012 | ||||||||||||||||||||||
TAX ID NUMBER | Associate | Country of incorporation | Functional currency | Assets ThUS$ | Liabilities ThUS$ | Revenue ThUS$ | Net profit (loss) ThUS$ | |||||||||||||||
77.557.430-5 | Sales de Magnesio Ltda. | Chile | Chilean Peso | 5,026 | 1,713 | 14,436 | 2,177 | |||||||||||||||
Foreign | Abu Dhabi Fertilizer Industries WWL | Arabia | Arab Emirates dirham | 24,662 | 4,291 | 42,899 | 3,255 | |||||||||||||||
Foreign | Doktor Tarsa Tarim Sanayi AS | Turkey | Turkish lira | 77,084 | 44,635 | 77,839 | 8,267 | |||||||||||||||
Foreign | Ajay North America | United States | US Dollar | 44,889 | 6,292 | 83,340 | 22,300 | |||||||||||||||
Foreign | Ajay Europe SARL | France | Euro | 36,106 | 12,688 | 84,203 | 12,591 | |||||||||||||||
Foreign | SQM Eastmed Turkey | Turkey | Euro | 428 | 258 | - | - | |||||||||||||||
Foreign | SQM Thailand Co. Ltd. | Thailand | Thai baht | 17,068 | 13,048 | 13,536 | 81 | |||||||||||||||
Total | 205,263 | 82,925 | 316,253 | 48,671 |
12/31/2011 | ||||||||||||||||||||||
TAX ID NUMBER | Associate | Country of incorporation | Functional currency | Assets ThUS$ | Liabilities ThUS$ | Revenue ThUS$ | Net profit (loss) ThUS$ | |||||||||||||||
77.557.430-5 | Sales de Magnesio Ltda. | Chile | Chilean Peso | 4,484 | 1,595 | 8,652 | 1,335 | |||||||||||||||
Foreign | Abu Dhabi Fertilizer Industries WWL | Arabia | Arab Emirates dirham | 22,964 | 5,849 | 38,024 | 2,985 | |||||||||||||||
Foreign | Doktor Tarsa Tarim Sanayi AS | Turkey | Turkish lira | 78,090 | 53,752 | 67,205 | 5,160 | |||||||||||||||
Foreign | Ajay North America | United States | US Dollar | 47,866 | 9,876 | 80,923 | 23,689 | |||||||||||||||
Foreign | Ajay Europe SARL | France | Euro | 32,332 | 14,600 | 59,189 | 8,384 | |||||||||||||||
Foreign | Misr Specialty Fertilizers | Egypt | Egyptian pound | 5,476 | 2,802 | - | (266 | ) | ||||||||||||||
Foreign | SQM Eastmed Turkey | Turkey | Euro | 438 | 264 | 29 | (94 | ) | ||||||||||||||
Foreign | SQM Thailand Co. Ltd. | Thailand | Thai baht | 8,130 | 4,227 | 10,895 | 175 | |||||||||||||||
Total | 199,780 | 92,965 | 264,917 | 41,368 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Phone number: (56 2) 425 2000 www.sqm.com | 106 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 11 – Investment in Associates (continued)
11.3 | Detail of investments in associates |
The Company’s ownership in its associates is detailed as follows:
Associate | Main activities of the associate | Ownership % | Investment | Investment | Share on profit (loss) of equity- accounted investees | |||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | |||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Sales de Magnesio Ltda. | Commercialization of magnesium salts. | 50 | % | 1,656 | 1,444 | 1,088 | 667 | |||||||||||||||
Abu Dhabi Fertilizer Industries Co. W.W.L. | Distribution and commercialization of specialty plant nutrients in the Middle East. | 50 | % | 9,890 | 8,558 | 1,628 | 1,492 | |||||||||||||||
Ajay North America L.L.C | Production and commercialization of iodine derivatives. | 49 | % | 15,357 | 14,866 | 10,927 | 11,608 | |||||||||||||||
Doktor Tarsa Tarim Sanayi AS | Distribution and commercialization of specialty plant nutrients in Turkey. | 50 | % | 15,346 | 12,169 | 4,134 | 2,580 | |||||||||||||||
Nutrisi Holding N.V. | Holding company | 50 | % | - | - | - | 1,720 | |||||||||||||||
Ajay Europe SARL | Production and distribution of iodine and iodine derivatives. | 50 | % | 8,495 | 3,102 | 6,295 | 4,192 | |||||||||||||||
Misr Specialty Fertilizers S.A.E. | Production and commercialization of liquid specialty plant nutrients for Egypt. | 47.4857 | % | - | 1,270 | - | (126 | ) | ||||||||||||||
SQM Eastmed Turkey | Production and commercialization of specialty products. | 50 | % | 85 | 87 | - | (46 | ) | ||||||||||||||
SQM Thailand Co. Ltd. | Distribution and commercialization of specialty plant nutrients. | 40 | % | 126 | 1,561 | 32 | 70 | |||||||||||||||
Total | 50,955 | 43,057 | 24,104 | 22,157 |
The Company has no participation in unrecognized losses in investments in associates.
The Company presents no investments not accounted for according to the equity method of accounting.
The equity method was applied to the Statement of Financial Position as of December 31, 2012 and 2011.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Phone number: (56 2) 425 2000 www.sqm.com | 107 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 12 - Joint Ventures
12.1 | Policy for accounting for joint ventures in a Parent’s separate financial statements |
The method for the recognition of joint ventures in which participation is initially recorded at cost and subsequently adjusted considering changes after the acquisition in the portion of the entity’s net assets of the entity which correspond to the investor. Profit or loss for the period of the investor will collect the portion which belongs to it in the results of the controlled entity as a whole
12.2 | Disclosures of interest in joint ventures |
a) | Operations conducted in 2012 |
On March 2012, the Company Coromandel SQM increased its capital by ThUS$394. This Company has an ownership of 50% in Soquimich European Holding B.V.
b) | Operations conducted in 2011 |
On January 27, 2011, the subsidiary SQM Industrial S.A. conducted a contribution amounting to ThUS$2,500 in Sichuan SQM Migao Chemical Fertilizer Co.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Phone number: (56 2) 425 2000 www.sqm.com | 108 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 12 - Policy for accounting for joint ventures in a Parent’s separate financial statements (continued)
12.3 | Detail of assets, liabilities and profit or loss of significant investments in joint ventures by company as of December 31, 2012 and 2011, respectively: |
12/31/2012 | ||||||||||||||||||||||||||||||||||||||||||
Asset | Liability | Ownership- | ||||||||||||||||||||||||||||||||||||||||
TAX ID NUMBER | Joint ventures | Country of incorporation | Functional currency | Current ThUS$ | Non-current ThUS$ | Total ThUS$ | Current ThUS$ | Non-current ThUS$ | Total ThUS$ | Revenue ThUS$ | related expenses ThUS$ | Profit or loss ThUS$ | ||||||||||||||||||||||||||||||
Foreign | Sichuan SQM Migao Chemical Fertilizers Co Ltda. | China | US Dollar | 21,843 | 9,984 | 31,827 | 6,899 | 4,072 | 10,971 | 29,980 | (29,407 | ) | 573 | |||||||||||||||||||||||||||||
Foreign | Coromandel SQM | India | Indian rupee | 5,059 | 1,397 | 6,456 | 4,419 | - | 4,419 | 5,633 | (5,264 | ) | 369 | |||||||||||||||||||||||||||||
Foreign | (1,059) | Arab Emirates | Arab Emirates dirham | 22,536 | 10,522 | 33,058 | 785 | - | 785 | 19,643 | (20,175 | ) | (532 | ) | ||||||||||||||||||||||||||||
Foreign | SQM Star Qingdao Crop Nutrition Co., Ltd. | China | US Dollar | 1,986 | 304 | 2,290 | 132 | - | 132 | 5,028 | (4,933 | ) | 95 | |||||||||||||||||||||||||||||
Total | 51,424 | 22,207 | 73,631 | 12,235 | 4,072 | 16,307 | 60,284 | (59,779 | ) | 505 |
12/31/2011 | ||||||||||||||||||||||||||||||||||||||||||
Asset | Liability | Ownership- | ||||||||||||||||||||||||||||||||||||||||
TAX ID NUMBER | Joint ventures | Country of incorporation | Functional currency | Current ThUS$ | Non-current ThUS$ | Total ThUS$ | Current ThUS$ | Non-current ThUS$ | Total ThUS$ | Revenue ThUS$ | related expenses ThUS$ | Profit or loss ThUS$ | ||||||||||||||||||||||||||||||
Foreign | Sichuan SQM Migao Chemical Fertilizers Co Ltda. | China | US Dollar | 18,014 | 10,576 | 28,590 | 8,306 | - | 8,306 | 23,818 | (23,455 | ) | 363 | |||||||||||||||||||||||||||||
Foreign | Coromandel SQM | India | Indian rupee | 559 | 1,074 | 1,633 | 62 | - | 62 | 23 | (60 | ) | (37 | ) | ||||||||||||||||||||||||||||
Foreign | SQM Vitas Fzco. | Arab Emirates | Arab Emirates dirham | 24,887 | 8,920 | 33,807 | 1,005 | - | 1,005 | 25,207 | (26,266 | ) | (1,059 | ) | ||||||||||||||||||||||||||||
Foreign | SQM Star Qingdao Crop Nutrition Co., Ltd. | China | US Dollar | 1,974 | 403 | 2,377 | 314 | - | 314 | 5,065 | (5,028 | ) | 37 | |||||||||||||||||||||||||||||
Total | 45,434 | 20,973 | 66,407 | 9,687 | - | 9,687 | 54,113 | (54,809 | ) | (696 | ) |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 109 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 12 - Policy for accounting for joint ventures in a Parent’s separate financial statements (continued)
12.4 | Detail of investments in joint ventures: |
Joint venture | Main activities of the joint venture | Ownership % | Investment 12/31/2012 ThUS$ | Investment 12/31/2011 ThUS$ | ||||||||
Coromandel SQM | Production and distribution of potassium nitrate. | 50% | 683 | 786 | ||||||||
Sichuan SQM Migao Chemical Fertilizers Co Ltda. Ltda. | Production and distribution of soluble fertilizers. | 50% | 10,428 | 10,142 | ||||||||
SQM Vitas Fzco. | Production and commercialization of specialty plant and animal nutrition and industrial hygiene. | 50% | 7,153 | 5,677 | ||||||||
SQM Quindao-Star Co. Ltda. | Production and distribution of nutrient plant solutions with specialties NPK soluble | 50% | 1,079 | 1,032 | ||||||||
Total | 19,343 | 17,637 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 110 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 13 - Intangible assets and goodwill
13.1 | Balances |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Intangible assets other than goodwill | 24,013 | 4,316 | ||||||
Goodwill | 38,388 | 38,605 | ||||||
Total | 62,401 | 42,921 |
13.2 | Disclosures on intangible assets and goodwill |
Intangible assets relate to goodwill, water rights, trademarks, industrial patents, rights of way and software.
Balances and movements in the main classes of intangible assets as of December 31, 2012 and 2011 are detailed as follows:
12/31/2012 | ||||||||||||||
Intangible assets and goodwill | Useful life | Gross amount ThUS$ | Accumulated Amortization ThUS$ | Net Value ThUS$ | ||||||||||
Trademarks | Finite | 3,821 | (3,821 | ) | - | |||||||||
Software | Finite | 3,765 | (2,115 | ) | 1,650 | |||||||||
Intellectual property rights, patents and other industrial property rights, service and exploitation rights | Finite | 1,198 | (820 | ) | 378 | |||||||||
Intellectual property rights, patents and other industrial property rights, service and exploitation rights | Finite | 22,612 | (1,987 | ) | 20,625 | |||||||||
Intangible assets other than goodwill | Indefinite | 1,512 | (152 | ) | 1,360 | |||||||||
Intangible assets other than goodwill | 32,908 | (8,895 | ) | 24,013 | ||||||||||
Goodwill | Indefinite | 40,178 | (1,790 | ) | 38,388 | |||||||||
Total intangible assets and goodwill | 73,086 | (10,685 | ) | 62,401 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 111 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 13 - Intangible assets and goodwill (continued)
13.2 | Disclosures on intangible assets and goodwill, continued |
12/31/2011 | ||||||||||||||
Intangible assets and goodwill | Useful life | Gross amount ThUS$ | Accumulated Amortization ThUS$ | Net Value ThUS$ | ||||||||||
Trademarks | Finite | 3,821 | (3,821 | ) | - | |||||||||
Software | Finite | 3,476 | (1,538 | ) | 1,938 | |||||||||
Intellectual property rights, patents and other industrial property rights, service and exploitation rights | Finite | 1,198 | (758 | ) | 440 | |||||||||
Intellectual property rights, patents and other industrial property rights, service and exploitation rights | Finite | 3,536 | (1,994 | ) | 1,542 | |||||||||
Intangible assets other than goodwill | Indefinite | 548 | (152 | ) | 396 | |||||||||
Intangible assets other than goodwill | 12,579 | (8,263 | ) | 4,316 | ||||||||||
Goodwill | Indefinite | 40,178 | (1,573 | ) | 38,605 | |||||||||
Total intangible assets and goodwill | 52,757 | (9,836 | ) | 42,921 |
a) | Estimated useful lives or amortization rates used for finite identifiable intangible assets |
Finite useful life, measures the lifetime or the number of productive units or other similar which constitute its useful life.
The estimated useful life for software is 3 years for other finite useful life assets, the period in which they are amortized relate to periods defined by contracts or rights which generate them.
Intellectual property rights, patents and other industrial property rights, service and exploitation rights, mainly relate to water rights and are obtained as indefinite
b) | Method used to express the amortization of identifiable intangible assets (life or rate) |
The method used to express the amortization is useful life.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 112 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 13 - Intangible assets and goodwill (continued)
13.2 | Disclosures on intangible assets and goodwill, continued |
c) | Minimum and maximum amortization lives or rates of intangible assets: |
Estimated useful lives or amortization rate | Minimum life or rate | Maximum life or rate |
Intellectual property rights, patents and other industrial property rights, service and exploitation rights | Finite | Finite |
Intangible assets other than goodwill | Indefinite | Indefinite |
Intellectual property rights, patents and other industrial property rights, service and exploitation rights | 1 year | 16 years |
Trademarks | 1 year | 5 years |
Software | 2 years | 3 years |
d) | Information to be disclosed on assets generated internally |
The Company has no intangible assets generated internally.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 113 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 13 - Intangible assets and goodwill (continued)
13.2 | Disclosures on intangible assets and goodwill, continued |
e) | Movements in identifiable intangible assets as of December 31, 2012: |
Movements in identifiable intangible assets | Trademarks Net ThUS$ | Software Net ThUS$ | Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$ | Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$ | Other intangible assets, Net ThUS$ | Goodwill, Net ThUS$ | Identifiable intangible assets, Net ThUS$ | |||||||||||||||||||||
Opening balance | - | 1,938 | 440 | 1,542 | 396 | 38,605 | 42,921 | |||||||||||||||||||||
Additions | 501 | - | 19,080 | 964 | - | 20,545 | ||||||||||||||||||||||
Amortization | (789 | ) | (62 | ) | - | - | - | (851 | ) | |||||||||||||||||||
Other increases (decreases) | - | - | 3 | - | (217 | ) | (214 | ) | ||||||||||||||||||||
Final balance | - | 1,650 | 378 | 20,625 | 1,360 | 38,388 | 62,401 |
f) | Movements in identifiable intangible assets as of December 31, 2011: |
Movements in identifiable intangible assets | Trademarks Net ThUS$ | Software Net ThUS$ | Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$ | Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$ | Other intangible assets, Net ThUS$ | Goodwill, Net ThUS$ | Identifiable intangible assets, Net ThUS$ | |||||||||||||||||||||
Opening balance | 4 | 823 | 501 | 1,546 | 396 | 38,388 | 41,658 | |||||||||||||||||||||
Additions | - | 1,812 | - | - | - | 217 | 2,029 | |||||||||||||||||||||
Amortization | (4 | ) | (697 | ) | (61 | ) | - | - | - | (762 | ) | |||||||||||||||||
Other increases (decreases) | - | - | - | (4 | ) | - | - | (4 | ) | |||||||||||||||||||
Final balance | - | 1,938 | 440 | 1,542 | 396 | 38,605 | 42,921 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 114 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 14 - Property, plant and equipment
As of December 31, 2012 and 2011, the detail of property, plant and equipment is as follows:
14.1 | Types of property, plant and equipment |
Description of types of property, plant and equipment | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Property, plant and equipment, net | ||||||||
Land | 109,060 | 108,992 | ||||||
Buildings | 169,731 | 146,532 | ||||||
Machinery | 438,331 | 424,460 | ||||||
Transport equipment | 88,954 | 82,822 | ||||||
Furniture and fixtures | 6,736 | 5,015 | ||||||
Office equipment | 5,249 | 5,312 | ||||||
Constructions in progress | 423,184 | 297,996 | ||||||
Other property, plant and equipment | 747,045 | 683,913 | ||||||
Total | 1,988,290 | 1,755,042 | ||||||
Property, plant and equipment, gross | ||||||||
Land | 109,060 | 108,992 | ||||||
Buildings | 329,397 | 291,401 | ||||||
Machinery | 1,065,641 | 972,179 | ||||||
Transport equipment | 224,462 | 199,998 | ||||||
Furniture and fixtures | 22,667 | 19,090 | ||||||
Office equipment | 36,215 | 34,480 | ||||||
Constructions in progress | 423,184 | 297,996 | ||||||
Other property, plant and equipment | 1,336,991 | 1,194,765 | ||||||
Total | 3,547,617 | 3,118,901 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 115 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 14 - Property, plant and equipment (continued)
14.1 | Types of property, plant and equipment, continued |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Accumulated depreciation and value impairment of property, plant and equipment, total | ||||||||
Accumulated depreciation and value impairment of buildings | 159,666 | 144,869 | ||||||
Accumulated depreciation and value impairment of machinery | 627,310 | 547,719 | ||||||
Accumulated depreciation and value impairment of transport equipment | 135,508 | 117,176 | ||||||
Accumulated depreciation and value impairment of furniture and fixtures | 15,931 | 14,075 | ||||||
Accumulated depreciation and value impairment of office equipment | 30,966 | 29,168 | ||||||
Accumulated depreciation and value impairment of other property, plant and equipment | 589,946 | 510,852 | ||||||
Total | 1,559,327 | 1,363,859 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 116 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 14 - Property, plant and equipment (continued)
14.2 | Reconciliation of changes in property, plant and equipment by type as of December 31, 2012 and 2011: |
Reconciliation entries of changes in property, plant and equipment by type as of December 31, 2012 | Land | Buildings, net | Machinery, net | Transport equipment, net | Furniture and fixtures, net | Office equipment, net | Constructions in progress | Other property, plant and equipment, net | Property, plant and equipment, net | |||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||||||
Opening balance | 108,992 | 146,532 | 424,460 | 82,822 | 5,015 | 5,312 | 297,996 | 683,913 | 1,755,042 | |||||||||||||||||||||||||||
Changes | ||||||||||||||||||||||||||||||||||||
Additions | 36 | - | 1,092 | 34 | 70 | 323 | 443,349 | 972 | 445,876 | |||||||||||||||||||||||||||
Divestitures | - | - | (115 | ) | - | (67 | ) | (12 | ) | (2,936 | ) | (78 | ) | (3,208 | ) | |||||||||||||||||||||
Depreciation expense | - | (14,800 | ) | (79,534 | ) | (18,400 | ) | (1,858 | ) | (1,857 | ) | - | (79,709 | ) | (196,158 | ) | ||||||||||||||||||||
Increase(decrease) in foreign currency exchange | 32 | (1 | ) | 5 | 15 | - | (13 | ) | - | 68 | 106 | |||||||||||||||||||||||||
Reclassification | - | 37,916 | 92,441 | 24,535 | 3,576 | 1,478 | (287,291 | ) | 127,345 | - | ||||||||||||||||||||||||||
Other increases (decreases) (*) | - | 84 | (18 | ) | (52 | ) | - | 18 | (27,934 | ) | 14,534 | (13,368 | ) | |||||||||||||||||||||||
Total changes | 68 | 23,199 | 13,871 | 6,132 | 1,721 | (63 | ) | 125,188 | 63,132 | 233,248 | ||||||||||||||||||||||||||
Final balance | 109,060 | 169,731 | 438,331 | 88,954 | 6,736 | 5,249 | 423,184 | 747,045 | 1,988,290 |
(*) The net balance of Other increases (decreases) corresponds to: 1) investment plan expenses which are expensed to profit or loss (forming part of cost of sales and other expenses per function, as appropriate), 2) the variation representing the purchase and use of materials and spare parts and 3) projects corresponding mainly to exploration expenditures and stain development.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 117 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 14 - Property, plant and equipment (continued)
14.2 | Reconciliation of changes in property, plant and equipment by type as of December 31, 2012 and 2011, continued: |
Reconciliation entries of changes in property, plant and equipment by type as of December 31, 2011 | Land | Buildings, net | Machinery, net | Transport equipment, net | Furniture and fixtures, net | Office equipment, net | Constructions in progress | Other property, plant and equipment, net | Property, plant and equipment, net | |||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||||||||
Opening balance | 107,869 | 88,320 | 295,467 | 48,936 | 4,450 | 5,705 | 356,551 | 546,674 | 1,453,972 | |||||||||||||||||||||||||||
Changes | ||||||||||||||||||||||||||||||||||||
Additions | 1,251 | 178 | 424 | 558 | 39 | 302 | 474,042 | 1,054 | 477,848 | |||||||||||||||||||||||||||
Divestitures | (85 | ) | (1,371 | ) | (64 | ) | (451 | ) | - | - | - | - | (1,971 | ) | ||||||||||||||||||||||
Depreciation expense | - | (11,477 | ) | (97,046 | ) | (14,902 | ) | (1,281 | ) | (2,053 | ) | - | (69,137 | ) | (195,896 | ) | ||||||||||||||||||||
Increase(decrease) in foreign currency exchange | (42 | ) | - | 1 | (23 | ) | - | 122 | - | (24 | ) | 34 | ||||||||||||||||||||||||
Reclassification | 69,410 | 228,116 | 48,717 | 1,805 | 1,442 | (546,769 | ) | 197,279 | - | |||||||||||||||||||||||||||
Other increases (decreases) (*) | (1 | ) | 1,472 | (2,438 | ) | (13 | ) | 2 | (206 | ) | 14,172 | 8,067 | 21,055 | |||||||||||||||||||||||
Total changes | 1,123 | 58,212 | 128,993 | 33,886 | 565 | (393 | ) | (58,555 | ) | 137,239 | 301,070 | |||||||||||||||||||||||||
Final balance | 108,992 | 146,532 | 424,460 | 82,822 | 5,015 | 5,312 | 297,996 | 683,913 | 1,755,042 |
(*) The net balance of Other increases (decreases) corresponds to: 1) investment plan expenses which are expensed to profit or loss (forming part of cost of sales and other expenses per function, as appropriate), 2) the variation representing the purchase and use of materials and spare parts and 3) projects corresponding mainly to exploration expenditures and stain development.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 118 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 14 - Property, plant and equipment (continued)
14.3 | Detail of property, plant and equipment pledged as guarantee |
There are no restrictions in title or guarantees for the compliance with obligations which affect property, plant and equipment.
14.4 | Additional information |
Interest capitalized in construction-in-progress:
The amount capitalized for this concept amounted to ThUS$14,156 as of December 31, 2012 and ThUS$ 22,249 as of December 31, 2011.
Financing costs are not capitalized for periods which exceed the normal term of acquisition, construction or installation of the asset, such as the case of delays, interruptions or temporary suspension of the project due to technical, financial or other issues, which prevent that the asset is maintained in good conditions for its use.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 119 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 15 - Employee benefits
15.1 | Provisions for employee benefits |
12/31/2012 | 12/31/2011 | |||||||
Classes of benefits and expenses by employee | ThUS$ | ThUS$ | ||||||
Current | ||||||||
Profit sharing and bonuses | 33,974 | 30,074 | ||||||
Total | 33,974 | 30,074 | ||||||
Non-current | ||||||||
Profit sharing and bonuses | 6,056 | 4,083 | ||||||
Severance indemnity payments | 34,431 | 28,188 | ||||||
Pension Plan | 409 | 1,413 | ||||||
Total | 40,896 | 33,684 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 120 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 15 Employee benefits (continued)
15.2 | Policies on defined benefit plan |
This policy is applied to all benefits received for services provided by the Company's employees.
Short-term benefits for active employees are represented by salaries, social welfare benefits, paid time-off, sickness leaves and other leaves, profit sharing and incentives and non-monetary benefits; e.g., healthcare service, housing, subsidized or free goods or services. These will be paid in a term which does not exceed twelve months.
The Company only provides compensation and benefits to active employees, with the exemption of SQM North America which applies the definitions under 15.4 below.
For each incentive bonus delivered to the Company’s employees, there will be a disbursement in the first quarter of the following year and this will be calculated based on Profit for the period at the end of each period applying a factor obtained subsequent to the employee appraisal process.
Employee benefits include retention bonuses for the Company’s executives, which are linked to the Company’s share price and it is paid in cash. The short-term portion is presented as provision for current employee benefits and the long-term portion as non-current.
The bonus provided to the Company’s directors is calculated based on Profit for the period at each year-end and will consider the application of a percentage factor.
The benefit related to vacations (short-term benefits to employees, current), which is provided in the Labor Code which indicates that employees with more than a year of service will be entitled to annual holidays for a period not lower than fifteen paid business days. The Company provides the benefit of two additional vacation days.
Staff severance indemnities are agreed and payable based on the last salary for each year of service for the Company or with certain maximum limits in respect to the number of years to be considered or in respect to monetary terms. In general, this benefit is payable when the employee or worker ceases to provide his/her services to the Company and the right for its collection can be acquired because of different causes, as indicated in the respective agreements; e.g., retirement, dismissal, voluntary retirement, incapacity or disability, death, etc.
Law No. 19,728 published on May 14, 2001 which became effective on October 1, 2002 required “Compulsory Unemployment Insurance” in favor of all depending employees regulated by the Chilean Labor Code. Article 5 of this law provided the financing of this insurance through monthly contribution payments by both the employee and the employer.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 121 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 15 - Employee benefits (continued)
15.3 | Other long-term benefits |
The other long-term benefits relate to staff severance indemnities and are recorded at their actuarial value.
12/31/2012 | 12/31/2011 | |||||||
Staff severance indemnities at actuarial value | ThUS$ | ThUS$ | ||||||
Staff severance indemnities, Chile | 33,731 | 27,574 | ||||||
Other obligations in companies elsewhere | 700 | 614 | ||||||
Total other non-current liabilities | 34,431 | 28,188 | ||||||
SQM North America’s pensions plan | 409 | 1,413 | ||||||
Total post-employment obligations | 409 | 1,413 |
Staff severance indemnities have been calculated under the actuarial assessment method of the Company’s obligations with respect to staff severance indemnities, which relate to defined benefit plans which consist of days of remuneration per year served at the time of retirement under conditions agreed in the respective agreements established between the Company and its employees.
Under this benefit plan, the Company retains the obligation for the payment of staff severance indemnities related to retirements without establishing a separate fund with specific assets, which is referred to as not funded. The discount interest rate of expected flows to be used was 6%.
Benefit payment conditions
The staff severance indemnity benefit relates to remuneration days for year worked for the Company with no limit of salary or years of services for the Company, when employees cease to work for the Company due to turnover or death. In this case, the maximum age for men is 65 years and 60 years old for women, which are the usual ages for retirement due to achieving the senior citizen age according to the Chilean pensions system provided in Decree Law 3.500 of 1980.
Methodology
The determination of the obligation for benefits under IAS 19, Projected Benefit Obligation (PBO) is described as follows:
To determine the Company's total liability, we used a mathematical simulation model which was programmed using a computer and which processed the situation of each employee on an individual basis.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 122 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 15 - Employee benefits (continued)
15.3 | Other long-term benefits, continued |
This model considered months as discrete time; i.e., the Company determined the age of each person and his/her salary on a monthly basis according to the growth rate. Thus, information on each person was simulated from the beginning of the life of his/her employment contract or when he/she started earning benefits up to the month in which it reaches the normal retirement age, generating in each period the possible retirement according to the Company’s turnover rate and the mortality rate according to the age reached. When he/she reaches the retirement age, the employee finishes his/her service for the Company and receives indemnity related to retirement due to old age.
The methodology followed to determine the accrual for all the employees adhered to agreements has considered turnover rates and the mortality rate RV-2010 established by the Chilean Superintendence of Securities and Insurance to calculate pension-related life insurance reserves in Chile according to the Accumulated Benefit Valuation or Accrued Cost of Benefit Method. This methodology is established in IAS 19 on Retirement Benefit Costs.
15.4 | Post-employment benefit obligations |
Our subsidiary SQM North America, has established with its employees a pension plan until 2002 called “SQM North America Retirement Income Plan”, which obligation is calculated measuring the expected future forecasted staff severance indemnity obligation using a net salary gradual rate of restatements for inflation, mortality and turnover assumptions discounting the resulting amounts at present value using the interest rate defined by the authorities for 2012 and 2011.
Since 2003, SQM North America offers to its employee’s benefits related to pension plans based on the 401-K system, which do not generate obligations for the Company.
The following table represents the plan financing status and the amounts recognized in the consolidated classified statements of financial position.
Reconciling table | 2012 | 2011 | ||||||
ThUS$ | ThUS$ | |||||||
Changes in benefit obligation | ||||||||
Benefit obligation at the beginning of the year | 6,620 | 6,548 | ||||||
Service costs | 1 | 1 | ||||||
Interest costs | 406 | 413 | ||||||
Actuarial loss | (236 | ) | (46 | ) | ||||
Other benefits | (309 | ) | (297 | ) | ||||
Benefit obligation at the year-end | 6,482 | 6,619 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 123 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 15 - Employee benefits (continued)
15.4 | Post-employment benefit obligations, continued |
Fluctuations in the plan assets: | ||||||||
Plan assets fair value at the beginning of the year | 5,206 | 5,847 | ||||||
Employer’s contributions | 436 | 189 | ||||||
Plan assets actual return (losses) | 740 | (533 | ) | |||||
Benefits paid | (309 | ) | (297 | ) | ||||
Plan assets fair value at the year-end | 6,073 | 5,206 | ||||||
Statement of Income | (409 | ) | 1,413 | |||||
Items not recognized yet as regular social security payment expenses, net: | ||||||||
Actuarial loss net at the beginning of the year | (2,954 | ) | (2,111 | ) | ||||
Amortization during the year | 131 | 84 | ||||||
Net profit or loss estimated for the year | 580 | (927 | ) | |||||
Adjustment to recognize the minimal social security payment obligation | (2,243 | ) | (2,954 | ) |
As of December 31, 2012 and 2011, net regular social security payment expense was comprised as follows:
2012 | 2011 | |||||||
Reconciliation | ThUS$ | ThUS$ | ||||||
Service cost or benefit earned during the year | 2 | 1 | ||||||
Interest cost in benefit obligation | 406 | 413 | ||||||
Plan assets actual return | 739 | (532 | ) | |||||
Loss amortization for prior periods | 131 | 84 | ||||||
Net profit during the year | (344 | ) | 973 | |||||
Regular social security payment expenses, net | 142 | 57 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 124 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 15 - Employee benefits (continued)
15.5 | Staff Severance indemnities |
As of December 31, 2012 and 2011, severance indemnities calculated at the actuarial value are as follows:
2012 ThUS$ | 2011 ThUS$ | |||||||
Opening balance | (28,188 | ) | (27,208 | ) | ||||
Current cost of service | (8,087 | ) | (7,871 | ) | ||||
Interest cost | (1,037 | ) | (1,106 | ) | ||||
Actuarial gain/loss | 40 | (151 | ) | |||||
Exchange rate difference | (2,237 | ) | 2,693 | |||||
Contributions paid | 5,078 | 5,455 | ||||||
Balance | (34,431 | ) | (28,188 | ) |
The liability recorded for staff severance indemnity is valued at the actuarial value method, using the following actuarial assumptions:
12/31/2012 | 12/31/2011 | |||||||||||
Mortality rate | RV - 2011 | RV - 2010 | ||||||||||
Actual annual interest rate | 6 | % | 6 | % | ||||||||
Voluntary retirement rotation rate: | ||||||||||||
Men | 0.9 | % | 0.9 | % | annual | |||||||
Women | 1.53 | % | 1.53 | % | annual | |||||||
Salary increase | 3.0 | % | 3.0 | % | annual | |||||||
Retirement age: | ||||||||||||
Men | 65 | 65 | years | |||||||||
Women | 60 | 60 | years |
Note 16 - Executive compensation plan
The Company counts on a compensation plan for its executives, by means of the granting of payments based on the SQM share price change, paid in cash, and the executives may exercise their rights until the year 2016.
Characteristics of the plan
This compensation plan is related with the company performance through the price of the Series B SQM share (Santiago Stock Exchange).
Participants in this plan
This compensation plan includes 40 executives of the Company, who are entitled to this benefit, provided they stay with the Company during the dates these options are executed. The dates for exercising the options will be the first 7 calendar days of May following to the fiscal year.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 125 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 16 - Executive compensation plan (continued)
Compensation
The compensation for each executive is the differential between the average prices of the share during April of each year compared to the base price established by Company’s management. The base price fixed by the Company for this compensation plan amounts to US$ 50 per share. The Company reserves the right to exchange that benefit by shares or share options.
The movement of the options in effect for the period, the average prices for the fiscal year of the options and the average contractual life of the options in effect as of December 31, 2012 and 2011 are the following:
Movement for the period | 2012 | 2011 | ||||||
In effect as of January 1 | 2,340,000 | 3,370,025 | ||||||
Granted during the fiscal year | 103,500 | |||||||
Redundant workers | 103,500 | |||||||
Exercised during the fiscal year | 139,500 | 1,030,025 | ||||||
In circulation as of December 31 | 2,200,500 | 2,340,000 | ||||||
Average contractual life | 40 months | 48 months |
The amounts accrued by the plan, as of December 31, 2012 and 2011, amount to:
Effect on profit or loss | 2012 ThUS$ | 2011 ThUS$ | ||||||
Amount accrued during the year | 3,142 | 11,200 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 126 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 17 - Disclosures on equity
The detail and movements in the funds of equity accounts are shown in the consolidated statement of changes in equity.
17.1 | Capital Management |
The main object of capital management relative to the administration of the Company’s financial debt and equity is to ensure the regular conduct of operations and business continuity in the long term, with the constant intention of maintaining an adequate level of liquidity and in compliance with the financial safeguards established in the debt contracts in force. Within this framework, decisions are made in order to maximize the value of SQM.
Capital management must comply with, among others, the limits contemplated in the Financing Policy approved Board of Directors, which establish a maximum consolidated indebtedness level of 1.5 times the debt/equity. This limit can only be exceeded only if the Company’s management has a written and previously granted authorization issued at the Extraordinary Shareholders’ Meeting.
In addition, capital management must comply with the external capital requirements imposed (or covenants) in its financial obligations, which regulate the indebtedness level in 1.4 times, in its more strict level.
In conjunction with the level of indebtedness, it is also important for the Company to maintain a comfortable profile of maturities for its financial obligations, to oversight the relation between its short-term financial obligations and the long-term maturities, and the relation they have with the Company’s asset distribution. Consequently, the Company has maintained a liquidity level of 3 times during the last periods.
The Company’s management controls capital management based on the following ratios:
CAPITAL MANAGEMENT |
12/31/2012 | 12/31/2011 | Description (1) | Calculation (1) | ||
Net Financial Debt | 929,197 | 753,410 | Financial Debt – Financial Resources | Other current Financial Liabilities + Other Non-Current Financial Liabilities – Cash and Cash Equivalents – Other Current Financial Assets – Hedging Assets, non-current | ||
Liquidity | 3.69 | 3.11 | Current Asset divided by Current Liability | Total Current Assets / Total Current Liabilities | ||
Net Debt / Capitalization | 0.30 | 0.29 | Net Financial Debt divided by Total Equity | Net financial debt / ( Net financial debt + Total Equity) | ||
ROE | 30.1% | 29.7% | Income divided by Total Equity | Total Income / Equity (UH 12 months) | ||
ROA | 25.1% | 24.1% | EBITDA – Depreciation divided by Net Total Assets of financial resources less related parties investments | (Gross Income – Administrative Expenses)/ (Total Assets – Cash and Cash Equivalents – Other Current Financial Assets Other Non-Current Financial Assets – Equity-accounted Investees) (UH 12 months) | ||
Indebtedness | 1.02 | 1.08 | Total Liability on Equity | Total Liabilities / Total Equity | ||
(1) Assumes the absolute value of the accounting records |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 127 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 17 - Disclosures on equity (continued)
17.1 | 17.1 Capital management, continued |
The Company’s capital requirements change depending on variables such as: work capital requirements, of new investment financing and dividends, among others. The Company manages its capital structure and makes adjustments on the basis of the predominant economic conditions so as to mitigate the risks associated with adverse market conditions and take advantage of the opportunities there may be to improve the liquidity position.
There have been no changes in the capital management objectives or policy within the years reported in this document. No breaches of external requirements of capital imposed (or covenants) have been recorded.
17.2 | 17.2 Disclosures on preferred share capital |
Issued share capital is divided into 263,196,524 fully paid and subscribed shares with no par value composed of 142,819,552 Series "A" shares and 120,376,972 Series “B” shares, where both series are preferred shares.
The preferential voting rights for each series are detailed as follows:
Series “A”:
If the election of the Company’s President results in a tie vote, the Company's directors may vote once again, without the vote of the director elected by the Series B shareholders.
Series “B”:
1) A general or extraordinary shareholders' meeting may be called at the request of shareholders representing 5% of the Company's Series B shares.
2) An extraordinary meeting of the Board of Directors may be called with or without the agreement of the Company's President, at the request of the director elected by Series B shareholders.
As of December 31, 2012 and 2011, the Group does not maintain shares in the parent either directly or through its companies in which it has investments.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 128 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 17 - Disclosures on equity (continued)
17.2 | Disclosures on preferred share capital, continued |
Detail of types of capital in preference shares:
Type of capital in preferred shares | 12/31/2012 | 12/31/2011 | ||||||||||||||
Description of type of capital in preferred shares | Series A | Series B | Series A | Series B | ||||||||||||
Number of authorized shares | 142,819,552 | 120,376,972 | 142,819,552 | 120,376,972 | ||||||||||||
Number of fully subscribed and paid shares | 142,819,552 | 120,376,972 | 142,819,552 | 120,376,972 | ||||||||||||
Number of subscribed, partially paid shares | - | - | - | - | ||||||||||||
Par value of shares in ThUS$ | 0.9435 | 2.8464 | 0.9435 | 2.8464 | ||||||||||||
Increase (decrease) in the number of current shares | - | - | - | - | ||||||||||||
Number of current shares | 142,819,552 | 120,376,972 | 142,819,552 | 120,376,972 | ||||||||||||
Number of shares owned by the entity or its subsidiaries or associates | - | - | - | - | ||||||||||||
Number of shares whose issuance is reserved due to the existence of options or agreements to dispose shares | - | - | - | - | ||||||||||||
Capital amount in shares ThUS$ | 134,750 | 342,636 | 134,750 | 342,636 | ||||||||||||
Amount of premium issuance ThUS$ | - | - | - | - | ||||||||||||
Amount of reserves ThUS$ | - | - | - | - | ||||||||||||
Total number of subscribed shares, total | 142,819,552 | 120,376,972 | 142,819,552 | 120,376,972 |
As of December 31, 2012 and 2011, the Company has not placed any new issuances of shares on the market.
SQM
S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 129 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 17 - Disclosures on equity (continued)
17.3 | Disclosures on reserves in equity |
Reserves for currency exchange conversion
This balance reflects retained earnings for changes in the exchange rate, when converting financial statements of subsidiaries whose functional currency is from each company’s origin country and the presentation currency is the US dollar.
Reserve for cash flow hedges
The Company maintains as hedge instruments, financial derivatives related to obligations with the public issued in Unidades de Fomento and Chilean pesos. Changes from the fair value of derivatives designated and classified as hedges are recognized under this classification.
Reserve for actuarial gains or losses in defined benefit plans
Our subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation of IAS using a net salary progressive rate net of adjustments to inflation, mortality and turnover assumptions, deducting the resulting amounts at present value using a 6.5% interest rate for 2012 and 2011.
Other reserves
Corresponds to the acquisition of the subsidiary SQM Iberian S.A., which was already under ownership of the Company at the acquisition date (IAS 27 R).
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Revaluation surplus | ||||||||
Reserve for currency exchange conversion | (330 | ) | (1,251 | ) | ||||
Reserve for cash flow hedges | (16,522 | ) | (10,230 | ) | ||||
Reserve for actuarial gains or losses in defined benefit plans | (2,243 | ) | (2,954 | ) | ||||
Reserve of gains and losses for new measurement of available-for-sale financial assets | - | - | ||||||
Other reserves | (1,677 | ) | (1,677 | ) | ||||
Total other reserves | (20,772 | ) | (16,112 | ) |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 130 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 17 - Disclosures on equity (continued)
17.4 | Dividend policies |
As required by Article 79 of the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued and subscribed shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated Profit for the period for year ended as of December 31, unless and except to the extent it has a deficit in retained earnings (losses not absorbed in prior years).
The Company’s dividend policy for 2012 is as follows:
- | Distribution and payment in favor of each shareholder of a final dividend which will be equivalent to 50% of Profit for the period obtained in 2012. |
- | Distribution and payment, if possible during 2012, of a provisional dividend which will be recorded against the aforementioned final dividend. This provisional dividend will be paid probably during the last quarter of 2012 and its amount could not exceed 50% of the retained earnings for distribution obtained during 2012, which are reflected in the Company’s financial statements as of September 30, 2012. |
- | The distribution and payment by the Company of the remaining balance of the final dividend related to Profit for the period for the 2012 commercial year in up to two installments, which will have to be effectively paid and distributed prior to June 30, 2013. |
- | An amount equivalent to the remaining 50% of the Company’s Profit for the period for 2012 will be retained and destined to the financing of operations of one or more of the Company’s investment projects with no prejudice of the possible future capitalization of the entirety or a portion of this. |
- | The Board of Directors does not consider the payment of any additional and interim dividends. |
- | The Board of Directors considers as necessary to indicate that the aforementioned Dividends Policy correspond to the intention or expectation of the Board regarding this matter. Consequently, the enforcement of such Policy Dividends is necessarily conditioned to net incomes finally obtained, to the results indicating the Company’s regular forecasts or the existence of certain conditions that could affect them. Notwithstanding the above and to the extent that such policy dividend does not suffer a significant change, SQM S.A. will timely communicate its shareholders on this matter. |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 131 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 17 - Disclosures on equity (continued)
17.5 | Provisional dividends |
On November 20, 2012, the Board of Directors of Sociedad Química y Minera de Chile S.A, agreed to pay and distribute to the Company’s shareholders a provisional of US$0.94986 per share. The above, since December 12, 2012, is charged against the income accrued during the first 9 months of said fiscal year, in favor of the Shareholders who appeared registered in SQM’s Shareholders Registry by the 5th working day prior to the date the dividend will be paid, and in its equivalent in Chilean pesos according to the value of the “Observed dollar” or “USA dollar” that appears published in the Official Gazette on December 5, 2012.
On April 26, 2012, at the 36th General Shareholders' meeting it was agreed to pay a final dividend of US$1.03679 per share in relation to net profit for the commercial year 2011. US$0.73329 per share was already paid as an interim dividend, and this amount should be subtracted from the dividend detailed above. In line with this, the balance, amounting to US$0.30350 per share, will be paid and distributed among shareholders of the Company who are registered with their respective shareholders registry as of the fifth business day prior to the day in which this dividend will be paid. Such amount, if appropriate, will be paid in its equivalent in Chilean pesos according to the value of the “Observed dollar” or “USA dollar” that appears published in the Official Gazette on April 26, 2012.
The Company’s Board of Directors (SQM), in its meeting on November 22, 2011, unanimously agreed to pay and distribute the provisional dividend referred to in SQM’s current “2011 Dividends Policy” which was informed to SQM’s General Annual Ordinary Shareholders Meeting that was held on April 28 of this year. This, for the essential purpose of being able to pay and distribute as of December 19, 2011, a provisional dividend of US$0.73329 per share –and which is approximately equivalent to the total amount of US$193 million and the latter corresponds to 50% of the distributable net income of the fiscal year 2011 that has been accrued at September 30, 2011. The above, is charged against the net income of said fiscal year, in favor of the Shareholders who appeared registered in SQM’s Shareholders Registry by the 5th working day prior to December 19th, 2011, and in its equivalent in Chilean pesos according to the value of the “Observed dollar” or “USA dollar” that appears published in the Official Gazette on December 13, 2011.
At the Annual Board of Directors meeting held on April 28, 2011, the Directors unanimously agreed to pay a final dividend of US$0.7259 per share in relation to net profit for the year. Notwithstanding the above, US$0.41794 per share was already paid as an interim dividend, and this amount should be subtracted from the final dividend detailed above, In line with this, the balance, amounting to US$0.30798 per share, will be paid and distributed among shareholders of the Company who are registered with their respective shareholders registry as of the fifth business day prior to the day in which this dividend will be paid.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 132 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 17 - Disclosures on equity (continued)
17.5 | Provisional dividends, continued |
Dividends presented deducted from equity are:
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Dividends attributable to owners of the parent | 253,438 | 270,915 | ||||||
Dividends payable | 76,267 | 82,120 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 133 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 18 - Provisions and other non-financial liabilities
18.1 | Types of provisions |
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||
Current | Non-current | Total | Current | Non-current | Total | |||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Provision for legal complaints (*) | 5,567 | 3,000 | 8,567 | 4,571 | 3,000 | 7,571 | ||||||||||||||||||
Provision for dismantling, restoration and rehabilitation cost | - | 4,357 | 4,357 | - | 3,724 | 3,724 | ||||||||||||||||||
Other provisions | 12,922 | - | 12,922 | 12,366 | 1,871 | 14,237 | ||||||||||||||||||
Total | 18,489 | 7,357 | 25,846 | 16,937 | 8,595 | 25,532 |
(*) Provisions for legal complaints relate to legal expenses for lawsuits whose resolution are pending, and correspond to funds estimated necessary to make the disbursement of expenses incurred for this purpose. This provision relates mainly to the litigation of its subsidiary located in Brazil and United States (see note 19.1) and other minor litigations.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 134 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 18 - Provisions and other non-financial liabilities (continued)
18.2 | Description of other provisions |
Description of other provisions | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Current provisions, other short-term provisions | ||||||||
Provision for tax loss in fiscal litigation | 1,606 | 1,441 | ||||||
Royalties, agreement with CORFO (the Chilean Economic Development Agency) | 7,712 | 6,800 | ||||||
Fine to Brazil | 2,500 | 2,500 | ||||||
Indemnity Yara South Africa | - | 624 | ||||||
Miscellaneous provisions | 1,104 | 1,001 | ||||||
Total | 12,922 | 12,366 | ||||||
Other long-term provisions | ||||||||
Mine closure | 4,357 | 3,724 | ||||||
Indemnity Yara South Africa | - | 1,871 | ||||||
Total | 4,357 | 5,595 |
18.3 | Other non-financial liabilities, current |
Description of other liabilities | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Tax withholdings | 11,887 | 9,837 | ||||||
VAT payable | 16,481 | 21,087 | ||||||
Guarantees received | 872 | 920 | ||||||
Accrual for dividend | 76,267 | 81,325 | ||||||
Monthly tax provisional payments | 22,073 | 11,239 | ||||||
Deferred income | 16,291 | 15,284 | ||||||
Withholdings from employees and salaries payable | 7,546 | 5,554 | ||||||
Accrued vacations | 20,710 | 15,874 | ||||||
Other current liabilities | 73 | 841 | ||||||
Total | 172,200 | 161,961 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 135 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 18 - Provisions and other non-financial liabilities (continued)
18.4 | Changes in provisions as 12/31/2012 |
Description of items that gave rise to variations | Guarantee | Restructuring | Legal complaints | Onerous contracts | Provision for dismantling, restoration and rehabilitation cost | Other provisions | Total | |||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||
Total provisions, initial balance | - | - | 7,571 | - | 3,724 | 14,237 | 25,532 | |||||||||||||||||||||
Changes in provisions: | ||||||||||||||||||||||||||||
Additional provisions | - | - | 1,000 | - | 633 | 8,863 | 10,496 | |||||||||||||||||||||
Provision used | - | - | (4 | ) | - | - | (10,061 | ) | (10,065 | ) | ||||||||||||||||||
Increase(decrease) in foreign currency exchange | - | - | - | - | - | (117 | ) | (117 | ) | |||||||||||||||||||
Total provisions, final balance | - | - | 8,567 | - | 4,357 | 12,922 | 25,846 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 136 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 18 - Provisions and other non-financial liabilities (continued)
18.4 | Changes in provisions as 12/31/2011 |
Description of items that gave rise to variations | Guarantee | Restructuring | Legal complaints | Onerous contracts | Provision for dismantling, restoration and rehabilitation cost | Other provisions | Total | |||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||||||||||
Total provisions, initial balance | - | - | 4,590 | - | 3,500 | 12,424 | 20,514 | |||||||||||||||||||||
Changes in provisions: | ||||||||||||||||||||||||||||
Additional provisions | - | - | 3,000 | - | 224 | 13,076 | 16,300 | |||||||||||||||||||||
Provision used | - | - | (19 | ) | - | - | (11,080 | ) | (11,099 | ) | ||||||||||||||||||
Increase (decrease) in foreign currency exchange | - | - | - | - | - | (183 | ) | (183 | ) | |||||||||||||||||||
Total provisions, final balance | - | - | 7,571 | - | 3,724 | 14,237 | 25,532 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 137 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 18 - Provisions and other non-financial liabilities (continued)
18.5 | Detail of main types of provisions |
Legal expenses: This provision depends on the pending resolution of a legal lawsuit, to pay the expenses associated to and incurred during such lawsuit (incurred mainly in Brazil and U.S.A.).
Tax accrual in tax litigation: This accrual relates to lawsuits pending resolution related to taxes in Brazil for two of our subsidiaries, SQM Brazil and NNC.
CORFO (Economic Development Agency) Royalties agreement: Relates to the commercialization of mining properties that SQM Salar S.A. pays the Economic Development Agency for on a quarterly basis. The amount of the lease payable is calculated based on sales of products extracted from the Atacama Saltpeter deposit.
The settlement of the aforementioned amounts is performed on a quarterly basis.
To date, the Company and its subsidiaries have no significant uncertainties about the timing and amount of one class of provision.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 138 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions
According to note 18.1 the Company has only registered a provision for those lawsuits in which the probability to lose is “more likely than not”. The Company is party to lawsuits and other relevant legal actions that are detailed as follows:
19.1 | Lawsuits and other relevant events |
1. | Plaintiff | : | JB Comércio de Fertilizantes and Defensivos Agrícolas Ltda. (JB) |
Defendant | : | Nitratos Naturais do Chile Ltda. (NNC) | |
Date | : | December 1995 | |
Court | : | MM 1ª, Vara Civel de Comarca de Barueri, Brazil. | |
Reason | : | Compensation claim filed by JB against NNC for having appointed a distributor in a territory of Brazil for which JB had an exclusive contract. | |
Status | : | Lower court ruling against Nitratos Naturais do Chile Ltda. and recourse of appeal pending resolution. | |
Nominal value | : | ThUS$ 1,880 |
2. | Plaintiff | : | Nancy Erika Urra Muñoz |
Defendants | : | Fresia Flores Zamorano, Duratec-Vinilit S.A. and SQM S.A. and their insurers | |
Date | : | December 2008 | |
Court | : | 1st Civil Court of Santiago | |
Reason | : | Labor Accident | |
Status | : | Evidence | |
Nominal value | : | ThUS$550 |
3. | Plaintiffs | : | Eduardo Fajardo Nuñez, Ana Maria Canales Poblete, Raquel Beltran Parra, Eduardo Fajardo Beltran and Martina Fajardo Beltran. |
Defendants | : | SQM Salar S.A. and its insurers | |
Date | : | November 2009 | |
Court | : | 20th Civil Court in Santiago | |
Reason | : | Labor Accident | |
Status | : | Summon to hear the sentence | |
Nominal value | : | ThUS$1,880 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 139 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions (continued)
19.1 | Lawsuits and other relevant events, continued |
4. | Plaintiff | : | City of Pomona, California USA |
Defendant | : | SQM North America Corporation | |
Date | : | December 2010 | |
Court | : | United States District Court Central District of California | |
Reason | : | Payment of expenses and other amount related to the treatment of groundwater to allow for consumption by removing the existing perchlorate in such groundwater and that supposedly come from Chilean fertilizer. | |
Status | : | Pending of the appeal | |
Nominal value | : | Not possible to determine |
5. | Plaintiff | : | City of Lindsay, California USA |
Defendant | : | SQM North America Corporation | |
The lawsuit also was filed against Sociedad Química y | |||
Minera de Chile S.A. this lawsuit has not yet been notified to the Company | |||
Date | : | December 2010 | |
Court | : | United States District Court Eastern District of California | |
Reason | : | Payment of expenses and other amount related to the treatment of groundwater to allow for consumption by removing the existing perchlorate in such groundwater and that supposedly come from Chilean fertilizer. | |
Status | : | Claim. Suspended procedure | |
Nominal value | : | Not possible to determine |
6. | Plaintiff | : | Metalúrgica FAT Limitada |
Defendant | : | SQM Salar S.A. | |
Date | : | August 2011 | |
Court | : | 9th Civil Court in Santiago | |
Reason | : | Compensation for early termination of supply contract and installation of metal structures | |
Status | : | Evidence | |
Nominal value | : | ThUS$200 |
7. | Plaintiff | : | Angelina Castillo Figueroa and others |
Defendant | : | SQM Nitratos S.A. and its insurers | |
Date | : | June 2012 | |
Court | : | 2nd Civil Court in Santiago | |
Reason | : | Compensation claim for alleged civil liability under tort derived from explosion occurred on September 6, 2010 near Baquedano causing the death of 6 workers | |
Status | : | Replay to claim. | |
Nominal value | : | ThUS$9,400 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 140 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions (continued)
19.1 | Lawsuits and other relevant events, continued |
8. | Plaintiff | : | Nilda Ester Muñoz Muñoz and others |
Defendants | : | Alejandro Reyes R., Transportes Transerik Limitada, Constructora Excon SQM Salar S.A. and its insurers | |
Date | : | July 2012 | |
Court | : | 15th Civil Court in Santiago | |
Reason | : | Compensation claim for alleged civil liability under tort derived from accident occurred on October 22, 2010 at the Salar de Atacama causing the death of Mr. Daniel Opazo Muñoz | |
Status | : | Replay to claim. | |
Nominal value | : | ThUS$2,400 |
9. | Plaintiff | : | Sociedad Industrial Seguel and Ortíz Limitada |
Defendant | : | SQM Salar S.A. | |
Date | : | August 2012 | |
Court | : | Arbitral | |
Reason | : | Compensation for early termination of service rendering contract | |
Status | : | Replay to claim. | |
Nominal value | : | ThUS$3,500 |
10. | Plaintiff | : | María Angélica Alday Fuentes |
Defendant | : | Vladimir Roco Alvarez, Compass Catering S.A. and SQM S.A. | |
Date | : | August 2012 | |
Court | : | 1st Civil Court in Antofagasta | |
Reason | : | Compensation for moral damages for attempt to sexual abuse. | |
Status | : | Replay to claim. | |
Nominal value | : | ThUS$200 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 141 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions (continued)
19.2 | Lawsuits and other relevant events, continued |
The Company and its subsidiaries have been involved and will probably continue being involved either as plaintiffs or defendants in certain judicial proceedings that have been and will be heard by the Arbitral or Ordinary Courts of Justice that will make the final decision. Those proceedings that are regulated by the appropriate legal regulations are intended to exercise or oppose certain actions or exceptions related to certain mining claims either granted or to be granted and that do not or will not affect in an essential manner the development of the Company and its subsidiaries.
Soquimich Comercial S.A. has been involved and will probably continue being involved either as plaintiff or defendant in certain judicial proceedings through which it intends to collect and receive the amounts owed, the total nominal value of which is approximately ThUS$700.
The Company has made efforts and continues making efforts to obtain payment of certain amounts that are still owed it on occasion of their activities. Such amounts will continue to be required using judicial or non-judicial means by the plaintiffs, and the actions and exercise related to these are currently in full force and effect.
The Company and its subsidiaries have not received legal notice of any claims other than those mentioned in paragraph I above. The claims detailed above seek to annul certain mining claims that were purchased by SQM S.A. and Subsidiaries, the proportional purchase value of which, with respect to the portion affected by the superimposition, exceeds the nominal and approximate amount of ThUS$150. The claims seek payment of certain amounts allegedly owed by the Company due to its own activities, which exceed the approximate, nominal and individual amount of ThUS$150.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 142 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions (continued)
19.2 | Restrictions to management or financial limits |
Credit contracts subscribed by the Company and its subsidiaries with domestic and foreign banks and for issuance of bonuses in the local and international market, requires the Company complies with the following level of consolidated financial indicators, calculated for a moving period which considers the last twelve months:
- | To maintain a minimum equity of ThUS$900,000. |
- | To maintain a Net Financial Debt and EBITDA ratio not higher than 3 times. |
- | To maintain a Total Indebtedness Ratio not higher than 1.4 times Total Indebtedness level defined as the Total Liabilities ratio divided by Total Equity. |
- | To maintain a ratio between the operating subsidiaries SQM Industrial S.A. and SQM Salar S.A., or their respective legal successor’ financial debt and the total Issuer’s consolidated current assets not higher than 0.3 times. |
As of December 31, 2012, the aforementioned financial indicators are as follows:
Indicator | 12/31/2012 | 12/31/2011 | ||||||
Equity ThUS$ | 2,187,446 | 1,864,380 | ||||||
Net Financial Debt/ EBITDA | 0.83 | 0.79 | ||||||
Indebtedness | 1.02 | 1.08 | ||||||
SQM Industrial and SQM Salar debt / Current assets | 0.04 | 0.05 |
Issuance contracts for bonuses issued abroad require the Company does not merge or dispose at any title the asset as a whole or as a substantial part of it, unless the following copulative conditions are met: (i) the legal successor company is an entity subject to Chilean or United States’ laws, and assumes under a complimentary contract the Company’s obligations, (ii) the Issuer does not fail to comply immediately after the merge or disposal, and (iii) The Issuer delivers a legal opinion stating the merge or disposal and the complimentary contract meet the requirements described in the original contract.
In addition, SQM S.A. is committed to disclose financial information on quarterly basis.
The Company and its subsidiaries have complied and are fully complying with all aforementioned limitations, restrictions and obligations.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 143 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions (continued)
19.3 | Commitments |
The subsidiary SQM Salar S.A. has signed a rental contract with the Economic Development Agency (CORFO), which establishes that this subsidiary will pay rent to CORFO for the concept of commercialization of certain mining properties owned by CORFO and for the products resulting from this commercialization. The annual rent stated in the aforementioned contract is calculated on the basis of sales of each type of product. The contract is in force until 2030, and rent began being paid in 1996 reflecting an expense amount of ThUS$27,193 as of December 31, 2012 (ThUS$ 23,951 as of December 31, 2011).
19.4 | Restricted or pledged cash |
The subsidiary Isapre Norte Grande Ltda. in compliance with that established by the Chilean Superintendence of Healthcare, which regulates the running of pension-related health institutions, maintains a guarantee in financial instruments, delivered in deposits, custody and administration to Banco de Chile.
This guarantee, according to the regulations issued by the Chilean Superintendence of Healthcare is equivalent to the total sum owed to its members and medical providers, Banco de Chile reports the present value of the guarantee to the Chilean Superintendence of Healthcare and Isapre Norte Grande Ltda. on a daily basis. As of December 31, 2012, the guarantee amounts to ThUS$571.
19.5 | Securities obtained from third parties |
The main security received from third parties (distributors) to guarantee Soquimich Comercial S.A.’s compliance with obligations in contracts of commercial mandates for the distribution and sale of fertilizers amounted to ThUS$4,126 as of December 31, 2012; as of December 31, 2011 these amounted to ThUS $4,467 which is detailed as follows:
Entity name | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Llanos y Wammes Soc. Com. Ltda | 2,084 | 1,926 | ||||||
Fertglobal Chile Ltda. | 1,042 | 1,541 | ||||||
Tattersall Agroinsumos S.A. | 1,000 | 1,000 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 144 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions (continued)
19.6 | Indirect guarantees |
Guarantees in which there is no pending balance indirectly reflect that the respective guarantees are in force and approved by the Company's Board of Directors and have not been used by the respective subsidiary.
Debtor | Pending balances as of the closing date of the financial statements | |||||||||||||
Creditor of the guarantee | Name | Relationship | Type of guarantee | 12/31/2012
ThUS$ | 12/31/2011
ThUS$ | |||||||||
Australian and New Zealand Bank | SQM North America Corp | Subsidiary | Bond | - | - | |||||||||
Australian and New Zealand Bank | SQM Europe N.V. | Subsidiary | Bond | - | - | |||||||||
Generale Bank | SQM North America Corp | Subsidiary | Bond | - | - | |||||||||
Generale Bank | SQM Europe N.V. | Subsidiary | Bond | - | - | |||||||||
Kredietbank | SQM North America Corp | Subsidiary | Bond | - | - | |||||||||
Kredietbank | SQM Europe N.V. | Subsidiary | Bond | - | - | |||||||||
Banks and financial institutions | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - | |||||||||
Banks and financial institutions | SQM Europe N.V. | Subsidiary | Bond | - | - | |||||||||
Banks and financial institutions | SQM North America Corp | Subsidiary | Bond | - | - | |||||||||
Banks and financial institutions | Nitratos Naturais do Chile Ltda. | Subsidiary | Bond | - | - | |||||||||
Banks and financial institutions | SQM México S.A. de C.V. | Subsidiary | Bond | - | - | |||||||||
Banks and financial institutions | SQM Brasil Ltda. | Subsidiary | Bond | - | - | |||||||||
“BNP” | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - | |||||||||
Sociedad Nacional de Mineria A.G. | SQM Potasio S.A. | Subsidiary | Bond | - | - | |||||||||
Scotiabank & Trust (Cayman) Ltd. | Royal Seed Trading A.V.V. | Subsidiary | Bond | 50,235 | 50,207 | |||||||||
Scotiabank & Trust (Cayman) Ltd. | Royal Seed Trading A.V.V. | Subsidiary | Bond | 50,164 | - | |||||||||
Bank of America | Royal Seed Trading A.V.V. | Subsidiary | Bond | 40,141 | 40,140 | |||||||||
Export Development Canada | Royal Seed Trading A.V.V. | Subsidiary | Bond | 50,020 | 50,024 | |||||||||
The Bank of Tokyo-Mitsubishi UFJ Ltd. | Royal Seed Trading A.V.V. | Subsidiary | Bond | 50,140 | 50,137 | |||||||||
JP Morgan Chase Bank | SQM Industrial S.A. | Subsidiary | Bond | - | - | |||||||||
The Bank of Nova Scotia | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - | |||||||||
Morgan Stanley Capital Services | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - | |||||||||
The Bank of Tokyo-Mitsubishi UFJ Ltd. | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 145 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 19 - Contingencies and restrictions (continued)
19.6 | Indirect guarantees, continued |
Debtor | Pending balances as of the closing date of the financial statements | |||||||||||||
Creditor of the guarantee | Name | Relationship | Type of guarantee | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||||
HSBC | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - | |||||||||
Deutsche Bank AG | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - | |||||||||
Credit Suisse International | SQM Investment Corp. N.V. | Subsidiary | Bond | - | - |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 146 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 20 - Revenue
As of December 31, 2012 and 2011, revenue is detailed as follows:
December | ||||||||
2012 | 2011 | |||||||
Types of revenue | ThUS$ | ThUS$ | ||||||
Sales of goods | 2,420,357 | 2,138,165 | ||||||
Provision of services | 8,803 | 7,121 | ||||||
Total | 2,429,160 | 2,145,286 |
Note 21 - Earnings per Share
Basic earnings per share are calculated by dividing net income attributable to the Company’s shareholders by the weighted average of the number of shares in circulation during that period.
As expressed, earnings per share are detailed as follows:
Basic earnings per share | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Earnings (losses) attributable to owners of the parent | 649,167 | 545,758 |
12/31/2012 Units | 12/31/2011 Units | |||||||
Number of common shares in circulation | 263,196,524 | 263,196,524 |
12/31/2012 | 12/31/2011 | |||||||
Basic earnings per share (US$ per share) | 2.4665 | 2.074 |
The Company has not made any operation with a potential dilutive effect that assumes diluted earnings per share different from the basic earnings per share.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 147 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 22 - Borrowing costs
The cost of interest is recognized as expenses in the year in which it is incurred, except for interest that is directly related to the acquisition and construction of tangible property, plant and equipment assets and that complies with the requirements of IAS 23. As of December 31, 2012, total interest expenses incurred amount to ThUS$54,095 (ThUS$39,335 as of December 31, 2011).
The Company capitalizes all interest costs directly related to the construction or to the acquisition of property, plant and equipment, which require a substantial time to be suitable for use.
Costs of capitalized interest, property, plant and equipment
The cost of capitalized interest is determined by applying the average or weighted average of all financing costs incurred by the Company to the monthly end balances of works-in-progress meeting the requirements of IAS 23.
The rates and costs for capitalized interest of property, plant and equipment are detailed as follows:
12/31/2012 | 12/31/2011 | |||||||
Capitalization rate of costs for capitalized interest, property, plant and equipment | 7 | % | 7 | % | ||||
Amount of costs for interest capitalized in ThUS$ | 14,156 | 22,249 |
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 148 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 23 - Effect of fluctuations on the foreign currency exchange rates (continued)
a) | Foreign currency exchange differences recognized in profit or loss except for financial instruments measured at fair value through profit or loss: |
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Conversion foreign exchange gains (losses) recognized in the result of the year. | (26,787 | ) | (25,307 | ) | ||||
Conversion foreign exchange reserves attributable to the owners of the controlling entity | 921 | (2,781 | ) | |||||
Conversion foreign exchange reserves attributable to the non-controlling entity | 61 | (109 | ) |
b) | Reserves for foreign currency exchange differences: |
As of December 31, 2012, and 2011, foreign currency exchange differences are detailed as follows:
Detail | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | ||||||
Changes in equity generated through the equity method: | ||||||||
Comercial Hydro S.A. | 937 | 937 | ||||||
SQMC Internacional Ltda. | 36 | 23 | ||||||
Proinsa Ltda. | 27 | 17 | ||||||
Agrorama Callegari Ltda. | 152 | 102 | ||||||
Isapre Cruz del Norte Ltda. | 89 | 55 | ||||||
Almacenes y Depósitos Ltda. | 103 | 57 | ||||||
Sales de Magnesio Ltda. | 177 | 48 | ||||||
Sociedad de Servicios de Salud S.A. | 33 | 24 | ||||||
Agrorama S.A. | (11 | ) | (11 | ) | ||||
Doktor Tarsa | (1,035 | ) | (1,964 | ) | ||||
Nutrisi Holding | (42 | ) | (42 | ) | ||||
SQM Vitas Fzco | (318 | ) | (159 | ) | ||||
Ajay Europe | (275 | ) | (176 | ) | ||||
Misr Specialty Ferti | (39 | ) | (39 | ) | ||||
SQM Eastmed Turkey | (42 | ) | (40 | ) | ||||
SQM Thailand Co. Lta. | (32 | ) | (52 | ) | ||||
Coromandel SQM India | (118 | ) | (31 | ) | ||||
SQM Italia SRL | 28 | - | ||||||
Total | (330 | ) | (1,251 | ) |
c) | Functional and presentation currency |
The functional currency in these companies corresponds to the currency of the country of origin of each entity, and its presentation currency is the US dollar.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 149 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 23 - Effect of fluctuations on the foreign currency exchange rates (continued)
d) | Reasons to use one presentation currency and a different functional currency |
- | The total revenues of these subsidiaries are associated with the local currency. |
- | The commercialization cost structure of these companies is affected by the local currency. |
- | The equities of these companies are expressed in local currency (Chilean peso). |
Note 24 - Environment
24.1 | Disclosures of disbursements related to the environment |
The Company is continuously concerned with protecting the environment both in its production processes and with respect to products manufactured. This commitment is supported by the principles indicated in the Company’s Sustainable Development Policy. The Company is currently operating under an Environmental Management System (EMS) that has allowed it to strengthen its environmental performance through the effective application of the Company’s Sustainable Development Policy.
Operations that use caliche as a raw material are carried out in desert areas with climatic conditions that are favorable for drying solids and evaporating liquids using solar energy. Operations involving the open-pit extraction of minerals, due to their low waste-to-mineral ratio, generate remaining deposits that slightly alter the environment. A portion of the ore extracted is crushed, a process in which particle emissions occur. Currently this operation is conducted only at the Pedro de Valdivia worksite and no ore crushing process is conducted in the Maria Elena sector.
Many of the Company’s products are shipped in bulk at the Port of Tocopilla. In 2007 the city of Tocopilla was declared a zone Saturated with MP10 Particles mainly due to the emissions from the electric power plants that operate in that city. In October 2010 the Decontamination Plan for Tocopilla was put in place. Accordingly, the Company has committed to taking several measures to mitigate the effects derived from bulk product movements in the port. These measures have been successfully implemented since 2007.
The Company carries out environmental follow-up and monitoring plans based on specialized scientific studies. Within this context, the Company entered into a contract with the National Forestry Corporation (CONAF) aimed at researching the activities of flamingo groups that live in the Salar de Atacama (Atacama Saltpeter Deposit) lagoons. Such research includes a population count of the birds, as well as breeding research. Environmental monitoring activities carried out by the Company at the Salar de Atacama and other systems in which it operates are supported by a number of studies that have integrated diverse scientific efforts from prestigious research centers, including Dictuc from the Pontificia Universidad Católica in Santiago and the School of Agricultural Science of the Universidad de Chile.
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 150 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.1 | Disclosures of disbursements related to the environment, continued |
Furthermore, within the framework of the environmental studies which the Company is conducting, the Company performs significant activities in relation to the recording of Pre-Columbian and historical cultural heritage, as well as the protection of heritage sites, in accordance with current Chilean laws. These activities have been especially performed in the areas surrounding Maria Elena and the Nueva Victoria plants. This effort is being accompanied by cultural initiatives within the community and the organization of exhibits in local and regional museums.
As emphasized in its Sustainable Development Policy, the Company strives to maintain positive relationships with the communities surrounding the locations in which it carries out its operations, as well as to participate in communities’ development by supporting joint projects and activities which help to improve the quality of life for residents. For this purpose, the Company has focused its efforts on activities involving the rescue of historical heritage, education and culture, as well as development, and in order to do so, it acts both individually and in conjunction with private and public entities.
24.2 | Detail of information on disbursements related to the environment |
The accumulated disbursements in which the Company incurred as of December 31, 2012 for the concept of investments in production processes, verification and control of compliance with ordinances and laws relative to industrial processes and facilities, including prior year disbursements related to these projects amounted to ThUS$23,207 and are detailed as follows:
SQM S.A. Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 151 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Accumulated expenses as of 12/31/2012
Identification of the Parent or subsidiary | Name of the project with which the disbursement is associated | Concept for which the disbursement was made or will be made | Asset / Expense | Description of the asset or expense Item | Amount of disbursement for the Period | Actual or estimated date on which disbursements were or will be made | ||||||||
SQM Industrial S.A. | Environmental and Community Management (Expense as the fourth quarter of 2012) | Not classified | Expense | Not classified | 1,808 | 12-31-2012 | ||||||||
SQM Industrial S.A. | IQ8G – Improvement of Bureau of Exchange, offices and facilities | Medium projects (between ThUS$300 and ThUS$999) | Asset | Not classified | 72 | 12-31-2012 | ||||||||
SQM Industrial S.A. | JQEZ – Change of Bertrams Prilling Boiler CS | Sustainability: Replacement of equipment | Asset | Development | 235 | 12-31-2012 | ||||||||
SQM Industrial S.A. | JQH9 – Purchase of Bertrams Boiler | Sustainability: Environment and Risk prevention | Asset | Development | 600 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena | Environmental processing | Expense | Not classified | 37 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MP5W - Normalization TK´s Combustibles | Sustainability: Environment and Risk prevention | Asset | Not classified | 841 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MPQU - Construction of Hazardous Chemical Supplies warehouse | Sustainability: Environment and Risk prevention | Asset | Development | 211 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MQ8M - Reconditioning monitoring station ME | Sustainability: Natural Resources | Expense | Not classified | 8 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MQA8- Normalization gas system, external cafeterias (Stage 1: projects) | Sustainability: Environment and Risk prevention | Expense | Not classified | 106 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MQAJ - Improvements to Camp Water and Sewage (P Contesse commitment to DDSS) | Sustainability: Natural Resources | Expense | Not classified | 8 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MQHF -Sustaining of batteries ME | Sustainability: Environment and Risk prevention | Asset - Expense | Not classified | 161 | 12-31-2012 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 152 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Accumulated expenses as of 12/31/2012, continued
Identification of the Parent or subsidiary | Name of the project with which the disbursement is associated | Concept for which the disbursement was made or will be made | Asset / Expense | Description of the asset or expense Item | Amount of disbursement for the Period | Actual or estimated date on which disbursements were or will be made | ||||||||
SQM Industrial S.A. | PPC1-Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia | Sustainability: Environment and Risk prevention | Expense | Not classified | 147 | 12-31-2012 | ||||||||
SQM Industrial S.A. | PPNK-Management of Ammonia PV stoppage plant | Sustainability: Environment and Risk prevention | Asset / Expense | Not classified | 193 | 12-31-2012 | ||||||||
SQM Industrial S.A. | PPZU - Standardize and certify Plant Fuel Tanks | Environmental processing | Asset | Not classified | 1,763 | 12-31-2012 | ||||||||
SQM Industrial S.A. | SQ7X-Reach 2011-2013 | Sustainability: Environment and Risk prevention | Expense | Not classified | 199 | 12-31-2012 | ||||||||
SQM Industrial S.A. | TQA2 - Drainage Improvement Villa Prat | Sustainability: Environment and Risk prevention | Expense | Not classified | 16 | 12-31-2012 | ||||||||
SQM Industrial S.A. | CQLX- SCarmen and Lagarto hazardous waste yard | Sustainability: | Expense | Not classified | 47 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MQBM - Archaeological Digging Deployment Maria Elena - Toco | Sustainability: Environment and Risk prevention | Expense | Not classified | 7 | 12-31-2012 | ||||||||
SQM Industrial S.A. | MQK2 – Elimination of PCBs I | Sustainability: Environment and Risk prevention | Expense | Not classified | 16 | 12-31-2012 | ||||||||
SQM Industrial S.A. | JQ8K – DIA Line 4 Floor Drying, Coya Sur | Environmental processing | Asset | Not classified | 32 | 12-31-2012 | ||||||||
SQM Industrial S.A. | FP55 - FPXA-EIA Pampa Blanca Expansion | Environmental processing | Asset | Not classified | 1,425 | 12-31-2012 | ||||||||
SQM Industrial S.A. | JQB6 - DIA Plant NPT4, Coya Sur | Environmental processing | Asset | Not classified | 65 | 12-31-2012 | ||||||||
SQM Industrial S.A. | PQLV-DIA Pedro de Valdivia Mine | Environmental processing | Asset | Not classified | 131 | 12-31-2012 | ||||||||
SQM S.A. | AQ0A - Well Drilling 4 Uptake Change Point Tamarugal Pampa | Capacity Expansion | Asset | Development | 534 | 12-31-2012 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 153 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Accumulated expenses as of 12/31/2012, continued
Identification of the Parent or subsidiary | Name of the project with which the disbursement is associated | Concept for which the disbursement was made or will be made | Asset / Expense | Description of the asset or expense Item | Amount of disbursement for the Period | Actual or estimated date on which disbursements were or will be made | ||||||||
SQM S.A. | IPFT - Cultural Heritage Region I | Sustainability: | Expense | Not classified | 166 | 12-31-2012 | ||||||||
SQM S.A. | IPXE - Environmental Monitoring Plan Llamara Salt flat | Cost reduction | Expense | Not classified | 872 | 12-31-2012 | ||||||||
SQM S.A. | IPXF - Environmental Monitoring Plan Pampa del Tamarugal | Sustainability: Environment and Risk prevention | Expense | Not classified | 881 | 12-31-2012 | ||||||||
SQM S.A. | IQ08 - PSA Llamara & Pampa del Tamarugal | Sustainability: Environment and Risk prevention | Asset | Development | 1,759 | 12-31-2012 | ||||||||
SQM S.A. | IQ0C - Mine Area Enhancement NV | Sustainability: Environment and Risk prevention | Expense | Not classified | 66 | 12-31-2012 | ||||||||
SQM S.A. | IQ1K - Construction of 3 observation wells in Sur Viejo | Capacity Expansion | Asset | Development | 195 | 12-31-2012 | ||||||||
SQM S.A. | IQ1M - PSA Re-injection of water to Puquios Llamara | Sustainability: Environment and Risk prevention | Asset | Not classified | 1,653 | 12-31-2012 | ||||||||
SQM S.A. | IQ3S- Hazardous Materials Management Standardization | Sustainability: | Asset - Expense | Not classified | 251 | 12-31-2012 | ||||||||
SQM S.A. | IQ52 - New Victoria Environment Office | Minor projects (between ThUS$50 and ThUS$299) | Expense | Not classified | 29 | 12-31-2012 | ||||||||
SQM S.A. | IQ53 - Cultural heritage route Soronal adduction (Pampa Hermosa) | General projects (< ThUS$50) | Expense | Not classified | 24 | 12-31-2012 | ||||||||
SQM S.A. | IQ54 - Cultural heritage Pampa Hermosa | Minor projects (between ThUS$50 and ThUS$299) | Asset | Not classified | 500 | 12-31-2012 | ||||||||
SQM S.A. | IQ9V – Quillagua Project | Minor projects (between ThUS$50 and ThUS$299) | Expense | Not classified | 788 | 12-31-2012 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 154 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Accumulated expenses as of 12/31/2012, continued
Identification of the Parent or subsidiary | Name of the project with which the disbursement is associated | Concept for which the disbursement was made or will be made | Asset / Expense | Description of the asset or expense Item | Amount of disbursement for the Period | Actual or estimated date on which disbursements were or will be made | ||||||||
SQM S.A. | PQB9-PQB9 - Change of exhaust extractor SO2 gas | Not classified | Asset | Not classified | 178 | 12-31-2012 | ||||||||
SQM S.A. | MQLQ- Gas scrubbing system | Not classified | Asset | Development | 324 | 12-31-2012 | ||||||||
SQM S.A. | IQOW- Deposit authorization for Humberstone heritage | Sustainability: Environment and Risk prevention | Expense | Not classified | 1 | 12-31-2012 | ||||||||
SQM S.A. | IQPJ- Mine Area equity measures Stage I | Sustainability: | Expense | Not classified | 61 | 12-31-2012 | ||||||||
SQM S.A. | IQ6M -IQ6N-DIA Nueva Victoria Sur Mine Expansion | Environmental processing | Asset | Not classified | 115 | 12-31-2012 | ||||||||
SQM S.A. | IP83 - DIA Expansion TLN-15 | Environmental processing | Asset | Not classified | 23 | 12-31-2012 | ||||||||
SQM Salar S.A. | CQ4M – Regularization of Contractor facilities | Sustainability: Environment and Risk prevention | Asset | Not classified | 17 | 12-31-2012 | ||||||||
SQM Salar S.A. | CQ8U - New Changing Room CL - HL | Sustainability: Environment and Risk prevention | Asset | Not classified | 242 | 12-31-2012 | ||||||||
SQM Salar S.A. | LP82 - Project for the Promotion of Agricultural Activity in Communities of the Salt deposit | Sustainability: Environment and Risk prevention | Expense | Development | 1,126 | 12-31-2012 | ||||||||
SQM Salar S.A. | LPTF – Environmental study and exploration 2010 | Environmental processing | Expense | Not classified | 398 | 12-31-2012 | ||||||||
SQM Salar S.A. | LPTJ - Improvements Sanitary Works | Sustainability: | Asset | Not classified | 206 | 12-31-2012 | ||||||||
SQM Salar S.A. | LQDM – Certification of tanks | Sustainability: Replacement of equipment | Asset | Not classified | 146 | 12-31-2012 | ||||||||
SQM Salar S.A. | LQI6-EIA Operating maintenance at Salar de Atacama | Environmental processing | Asset | Not classified | 358 | 12-31-2012 | ||||||||
SQM Salar S.A. | LQNI-DIA KCI Floor Drying and compacting expansion | Environmental processing | Asset | Not classified | 19 | 12-31-2012 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 155 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Accumulated expenses as of 12/31/2012, continued
Identification of the Parent or subsidiary | Name of the project with which the disbursement is associated | Concept for which the disbursement was made or will be made | Asset / Expense | Description of the asset or expense Item | Amount of disbursement for the Period | Actual or estimated date on which disbursements were or will be made | ||||||||
SIT S.A. | MQ6Y-MQ6Y - Maintenance and repair of ME and Tocopilla bureau of exchange | Sustainability: Environment and Risk prevention | Expense | Not classified | 20 | 12-31-2012 | ||||||||
SIT S.A. | TPR8 - Disposal of liquid waste generation by aspiration | Sustainability: | Expense | Not classified | 64 | 12-31-2012 | ||||||||
SIT S.A. | TPYX - Enabling the dust collector of the crib and court seal 3 Tocopilla | Sustainability: Environment and Risk prevention | Asset / Expense | Development | 1,658 | 12-31-2012 | ||||||||
SIT S.A. | TQAP - Paving Field No. 3 and No. 4 | Capacity Expansion | Expense | Not classified | 13 | 12-31-2012 | ||||||||
SIT S.A. | TQAV - Paving paths IV | Sustainability: | Asset | Development | 3 | 12-31-2012 | ||||||||
SIT S.A. | TQM2- Unloading/loading encapsulation project/Field 1 and 8 | Sustainability: | Asset | Not classified | 8 | 12-31-2012 | ||||||||
SIT S.A. | TQLY- Dust extractor packing machine No. 1 | Environmental processing | Asset | Not classified | 25 | 12-31-2012 | ||||||||
SIT S.A. | TQNA- Tocopilla weather station (Tocopilla Decontamination Plan Network) | Sustainability: Environment and Risk prevention | Asset | Not classified | 15 | 12-31-2012 | ||||||||
SIT S.A. | TQQ5- Environmental curtains Field No. 8 | Sustainability: Environment and Risk prevention | Expense | Not classified | 22 | 12-31-2012 | ||||||||
SQM Nitratos S.A | IQDN - Storage Rises – Maintenance of Mine NV | Not classified | Asset | Not classified | 26 | 12-31-2012 | ||||||||
Minera Nueva Victoria S.A. | IQ4C - Development Camp (Osmosis and Others) | Minor projects (between ThUS$50 and ThUS$299) | Asset | Not classified | 1,987 | 12-31-2012 | ||||||||
SQM Nitratos S.A | PQI9 – Mine waste water treatment plant | Sustainability: Environment and Risk prevention | Asset | Not classified | 47 | 12-31-2012 | ||||||||
SQM Nitratos S.A | IQMH - Normalization Mine NV area operation | Sustainability: Environment and Risk prevention | Asset | Not classified | 99 | 12-31-2012 | ||||||||
SQM Salar S.A. | LQFD – Bureaus of exchange | Not classified | Asset | Not classified | 160 | 12-31-2012 | ||||||||
23,207 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 156 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Future expenses as of 12/31/2012
Identification of the Parent or subsidiary | Name of the project with which the disbursement is associated | Concept for which the disbursement was made or will be made | Asset / Expense | Description of the asset or expense Item | Amount of disbursement for the Period | Actual or estimated date on which disbursements were or will be made | ||||||||
SQM Industrial S.A. | Environmental and Community Management (Budget available for the second quarter of 2012) | Not classified | Expense | Not classified | 2,027 | 12-31-2013 | ||||||||
SQM Industrial S.A. | MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena | Environmental processing | Expense | Not classified | 68 | 12-31-2013 | ||||||||
SQM Industrial S.A. | MP5W - Normalization TK´s Combustibles | Sustainability: Environment and Risk prevention | Asset | Not classified | 1,600 | 12-31-2013 | ||||||||
SQM Industrial S.A. | MPQU - Construction of Hazardous Chemical Supplies warehouse | Sustainability: Environment and Risk prevention | Asset | Development | 152 | 30-062013. | ||||||||
SQM Industrial S.A. | MQHF -Sustaining of batteries ME | Sustainability: Environment and Risk prevention | Asset - Expense | Not classified | 16 | 08-01-2013 | ||||||||
SQM Industrial S.A. | PPC1-Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia | Sustainability: Environment and Risk prevention | Expense | Not classified | 44 | 12-31-2013 | ||||||||
SQM Industrial S.A. | PPZU - Standardize and certify Plant Fuel Tanks | Environmental processing | Asset | Not classified | 1,315 | 12-31-2013 | ||||||||
SQM Industrial S.A. | SQ7X-Reach 2011-2013 | Sustainability: Environment and Risk prevention | Expense | Not classified | 20 | 01-31-2014 | ||||||||
SQM Industrial S.A. | TQA2 - Drainage Improvement Villa Prat | Sustainability: Environment and Risk prevention | Expense | Not classified | 104 | 06-30-2013 | ||||||||
SQM Industrial S.A. | CQLX- SCarmen and Lagarto hazardous waste yard | Sustainability: | Asset | Not classified | 53 | 03-31-2013 | ||||||||
SQM Industrial S.A. | JQL7- KNO3 prilled dust collection and drying engineering and project | Sustainability: | Asset | Research | 200 | 08-01-2013 | ||||||||
SQM Industrial S.A. | MQBM - Archaeological Digging Deployment Maria Elena - Toco | Sustainability: Environment and Risk prevention | Expense | Not classified | 49 | 03-31-2013 | ||||||||
SQM Industrial S.A. | MQK2 – Elimination of PCBs I | Sustainability: Environment and Risk prevention | Expense | Not classified | 554 | 03-31-2014 | ||||||||
SQM Industrial S.A. | FP55 - FPXA-EIA Pampa Blanca Expansion | Environmental processing | Asset | Not classified | 135 | 08-31-2013 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 157 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Future expenses as of 12/31/2012
Identification of the Parent or subsidiary | Name of the project with which the disbursement is associated | Concept for which the disbursement was made or will be made | Asset / Expense | Description of the asset or expense Item | Amount of disbursement for the Period | Actual or estimated date on which disbursements were or will be made | ||||||||
SQM Industrial S.A. | JQB6 - DIA Planta NPT4, Coya Sur | Environmental processing | Asset | Not classified | 5 | 11-30-2013 | ||||||||
SQM Industrial S.A. | PQLV-DIA Pedro de Valdivia Mine | Environmental processing | Asset | Not classified | 243 | 09-30-2013 | ||||||||
SQM S.A. | IPFT - Cultural Heritage Region I | Sustainability: | Expense | Not classified | 17 | 03-31-2013 | ||||||||
SQM S.A. | IPXE - Environmental Monitoring Plan Llamara Salt flat | Cost reduction | Expense | Not classified | 87 | 03-31-2013 | ||||||||
SQM S.A. | IPXF - Environmental Monitoring Plan Pampa del Tamarugal | Sustainability: Environment and Risk prevention | Expense | Not classified | 168 | 06-30-2013 | ||||||||
SQM S.A. | IQ1M - PSA Re-injection of water to Puquios Llamara | Sustainability: Environment and Risk prevention | Asset | Not classified | 441 | 12-31-2013 | ||||||||
SQM S.A. | IQ3S- Hazardous Materials Management Standardization | Sustainability: | Asset - Expense | Not classified | 148 | 12-31-2013 | ||||||||
SQM S.A. | IQ54 - Cultural heritage Pampa Hermosa | Minor projects (between ThUS$50 and ThUS$299) | Asset | Not classified | 219 | 12-31-2013 | ||||||||
SQM S.A. | MQLQ- Gas scrubbing system | Not classified | Asset | Development | 288 | 06-30-2013 | ||||||||
SQM S.A. | IQOW- Deposit authorization for Humberstone heritage | Sustainability: Environment and Risk prevention | Expense | Not classified | 38 | 03-31-2013 | ||||||||
SQM S.A. | IQ6M -IQ6N-DIA Nueva Victoria Sur Mine Expansion | Environmental processing | Asset | Not classified | 2 | 03-31-2013 | ||||||||
SQM Salar S.A. | LQDM – Certification of tanks | Sustainability: Replacement of equipment | Asset | Not classified | 600 | 12-31-2013 | ||||||||
SQM Salar S.A. | LQI6-EIA Operating maintenance at Salar de Atacama | Environmental processing | Asset | Not classified | 265 | 06-30-2013 | ||||||||
SQM Salar S.A. | LQNI-DIA KCI Floor Drying and compacting expansion | Environmental processing | Asset | Not classified | 16 | 08-31-2013 | ||||||||
SIT S.A. | TPYX - Enabling the dust collector of the crib and court seal 3 Tocopilla | Sustainability: Environment and Risk prevention | Asset / Expense | Development | 40 | 12-31-2013 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 158 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Future expenses as of 12/31/2012
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period |
Actual or estimated date on which disbursements were or will be made | ||||||
SIT S.A. | TQAV - Paving paths IV | Sustainability: | Asset | Development | 162 | 12-31-2013 | ||||||
SIT S.A. | TQQ5- Environmental curtains Field No. 8 | Sustainability: Environment and Risk prevention | Expense | Not classified | 30 | 04-27-2013 | ||||||
SQM Nitratos S.A | IQMH - Normalization Mine NV area operation | Sustainability: Environment and Risk prevention | Asset | Not classified | 157 | 03-31-2013 | ||||||
SQM Salar S.A. | LQG8 – Waste room Toconao Campsite | Sustainability: Natural Resources | Expense | Not classified | 16 | 03-31-2012 | ||||||
Total | 9,279 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 159 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24- Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Accumulated expenses as of 12/31/2011
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
SQM Industrial S.A. | Environment management (Expense 2011 to December) | Not classified | Expense | Not classified | 1,868 | 12-31-2011 | ||||||
SQM Industrial S.A. | SQ7X - Reach 2011-2013 | Sustainability | Expense | Not classified | 59 | 1-31-2014 | ||||||
SQM Industrial S.A. | ANMI - Infrastructure consulting for the storage of dangerous chemical substances | Sustainability: Environment and Risk prevention | Asset | Development | 46 | 6-30-2011 | ||||||
SQM Industrial S.A. | FNWR EID Discard field Pampa Blanca | Sustainability: Environment and Risk prevention | Expense | Development | 30 | 12-31-2011 | ||||||
SQM Industrial S.A. | FP55 - FPXA - Mine Area EIS PB - PB Expansion EIS (Projects: Pampa Blanca Saltwater - Saltwater Stage I | Sustainability | Asset | Development | 945 | 12-31-2012 | ||||||
SQM Industrial S.A. | JNTU - Assessment of waters at San Isidro | Sustainability: Environment and Risk prevention | Asset | Not classified | 556 | 12-31-2011 | ||||||
SQM Industrial S.A. | JPX9 - Enhanced Ground Granulated EID-Prilado Coya Sur (Project: Pilot Plant TD and Pilot Testing of Resin) | Sustainability: Research and Development | Asset | Research | 11 | 6-30-2011 | ||||||
SQM Industrial S.A. | MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena | Sustainability: Environment and Risk prevention | Asset | Not classified | 29 | 12-1-2011 | ||||||
SQM Industrial S.A. | MP17 - Standardization Water Chlorination ME / CS / PV | Sustainability | Asset | Not classified | 7 | 6-30-2011 | ||||||
SQM Industrial S.A. | MP5W - TK's Fuel Standards | Sustainability | Asset | Not classified | 613 | 12-31-2011 | ||||||
SQM Industrial S.A. | MPIS - Stabilization of streets and sidewalks dust suppression | Sustainability | Asset | Development | 736 | 6-30-2011 | ||||||
SQM Industrial S.A. | MPL5 - Repair sanitary and electrical services | Sustainability | Asset | Development | 184 | 6-30-2011 | ||||||
SQM Industrial S.A. | Automation and Alarm Monitoring Station Hospital information | Not classified | Asset | Not classified | 10 | 6-30-2011 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 160 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Nota 24 - Environment (continued)
24.2 | Detail of information on disbursements related to the environment (continued) |
Accumulated expenses, as of December 31, 2011
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
SQM Industrial S.A. | MQ51 - Terms of Reference Project ME equity measures | Sustainability: Environment and Risk prevention | Expense | Not classified | 2 | 12-31-2011 | ||||||
SQM Industrial S.A. | PPNK - Management of Ammonia PV stoppage plant | Sustainability: Environment and Risk prevention | Asset | Not classified | 22 | 12-31-2011 | ||||||
SQM Industrial S.A. | PPZU - Standardize and certify Plant Fuel Tanks | Sustainability: Environment and Risk prevention | Asset - Expense | Not classified | 785 | 12-1-2011 | ||||||
SQM Industrial S.A. | JQ8K – DIA Line 4 Floor Drying , Coya Sur (Project: Drying Line 4) | Capacity Upgrade | Asset | Development | 17 | 9-1-2012 | ||||||
SQM Industrial S.A. | IQ8G – Improvement of Bureau of Exchange, offices and facilities | Sustainability | Asset | Not classified | 45 | 12-31-2011 | ||||||
SQM Industrial S.A. | MQ7P - ME Village sewer lids change | Sustainability | Expense | Not classified | 19 | 12-31-2011 | ||||||
SQM Industrial S.A. | JQB6 - EID Ground NPT4, Coya Sur (Project: NPTIV) | Capacity Upgrade | Asset | Development | 5 | 4-30-2012 | ||||||
SQM Industrial S.A. | TQ78 - motorized sweepers | Sustainability: Equipment Replacement | Asset | Development | 206 | 12-31-2011 | ||||||
Minera Nueva Victoria Ltda. | IPMN - Capacity Expansion Sanitary Iris | Capacity Upgrade | Asset | Development | 85 | 6-30-2011 | ||||||
SQM Industrial S.A. | MPQU - Construction of Hazardous Chemical Supplies warehouse | Sustainability: Environment and Risk prevention | Asset | Development | 199 | 12-31-2011 | ||||||
SQM Industrial S.A. | PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia | Sustainability: Equipment Replacement | Asset – Expense | Not classified | 68 | 12-31-2012 | ||||||
SQM Industrial S.A. | MQ8M - Reconditioning monitoring station ME | Sustainability: Repair | Asset | Not classified | 7 | 12-31-2011 | ||||||
SQM Industrial S.A. | MQAJ - Improvements to Camp Water and Sewage (P Contesse commitment to DDSS) | Not classified | Asset | Not classified | 3 | 12-31-2011 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 161 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 - Environment (continued)
24.2 | Detail of information on disbursements related to the environment (continued) |
Accumulated expenses as of December 31, 2011, continued
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
Minera Nueva Victoria Ltda. | IPNW - Improvements Halls C / D / B Iris | Sustainability | Asset | Not classified | 44 | 8-31-2011 | ||||||
Minera Nueva Victoria Ltda. | IQ4C - Development Camp (Osmosis and Others) | Capacity Upgrade | Asset | Not classified | 1,630 | 12-31-2012 | ||||||
SIT S.A. | TPLR - Implementation sewage pumping system to sewer | Sustainability: Environment and Risk prevention | Asset | Not classified | 68 | 6-30-2011 | ||||||
SIT S.A. | TPM7 – Environmental nets field 3 and 4 | Not classified | Asset - Expense | Not classified | 524 | 6-30-2011 | ||||||
SIT S.A. | TPR8 - Disposal of liquid waste generation by aspiration | Sustainability: Environment and Risk prevention | Asset - Expense | Not classified | 64 | 12-31-2011 | ||||||
SIT S.A. | TPYX - Enabling the dust collector of the crib and court seal 3 Tocopilla | Sustainability: Environment and Risk prevention | Asset | Development | 1,496 | 12-31-2011 | ||||||
SIT S.A. | TQAV - Paving paths IV | Sustainability: Environment and Risk prevention | Expense | Development | 3 | 12-1-2011 | ||||||
SIT S.A. | TQAP - Paving Field No. 3 and No. 4 | Capacity Upgrade | Expense | Not classified | 4 | 10-30-2012 | ||||||
SQM Nitratos S.A | IP6W - Treatment Plant Riles | Sustainability: Environment and Risk prevention | Asset | Not classified | 39 | 6-30-2011 | ||||||
SQM Nitratos S.A | PP0V - Environmental Projects Maintenance ME-PV-NV-PB | Sustainability: Environment and Risk prevention | Asset - Expense | Development | 82 | 6-30-2011 | ||||||
SQM S.A. | AQ0A - Well Drilling 4 Uptake Change Point Tamarugal Pampa | Sustainability: Natural Resources | Asset | Development | 534 | 12-31-2011 | ||||||
SQM S.A. | IPFT - Cultural Heritage Region I | Sustainability: Environment and Risk prevention | Expense | Not classified | 127 | 12-31-2011 | ||||||
SQM S.A. | IPXE - Environmental Monitoring Plan Llamara Salt flat | Sustainability: Environment and Risk prevention | Expense | Not classified | 465 | 12-31-2012 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 162 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 – Environment (continued)
24.2 | Detail of information on disbursements related to the environment, continued |
Accumulated expenses as of December 31, 2011, continued
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
SQM S.A. | IPXF - Environmental Monitoring Plan Tamarugal Pampa | Sustainability: Environment and Risk prevention | Expense | Not classified | 230 | 12-31-2012 | ||||||
SQM S.A. | IQ08 - PSA Llamara & Pampa Tamarugal | Sustainability: Environment and Risk prevention | Expense | Development | 1,740 | 12-31-2011 | ||||||
SQM S.A. | IQ0C - Mine Area Enhancement NV | Sustainability: Environment and Risk prevention | Expense | Not classified | 65 | 12-31-2011 | ||||||
SQM S.A. | IQ1K - Construction of 3 observation wells in Sur Viejo | Sustainability: Natural Resources | Asset | Development | 195 | 12-31-2011 | ||||||
SQM S.A. | IQ1M - PSA Re-injection of water to Puquios Llamara | Not classified | Asset | Not classified | 962 | 12-31-2011 | ||||||
SQM S.A. | IQ3S - Hazardous Materials Management Standardization | Sustainability: Environment and Risk prevention | Asset | Not classified | 100 | 12-31-2012 | ||||||
SQM S.A. | IQ52 - New Victoria Environment Office | Not classified | Asset | Not classified | 29 | 12-31-2011 | ||||||
SQM S.A. | IQ53 - Cultural heritage route Soronal adduction (Pampa Hermosa) | Sustainability: Environment and Risk prevention | Asset | Not classified | 9 | 12-31-2011 | ||||||
SQM S.A. | IQ54 - Cultural heritage Pampa Hermosa | Sustainability: Environment and Risk prevention | Asset | Not classified | 188 | 12-31-2012 | ||||||
SQM S.A. | SCI6 - Environmental Studies - Project Region I | Not classified | Asset | Not classified | 2,376 | 12-31-2011 | ||||||
SQM S.A. | IQ6M - DIA Expansion Nueva Victoria Sur Mine | Sustainability: Natural Resources | Asset | Not classified | 262 | 1-31-2012 | ||||||
SQM S.A. | IQ9V – Quillagua Project | Not classified | Asset | Not classified | 323 | 12-31-2014 | ||||||
SQM Salar S.A | CPTP - Installing emergency showers drinking water | Sustainability | Asset | Not classified | 26 | 12-31-2011 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 163 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Nota 24 – Environment (continued)
24.2 | Detail of information on disbursements related to environment, continued |
Accumulated expenses as of December 31, 2011, continued
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
SQM Salar S.A | CPZH - Management of Descartes Filter Presses Hydroxide | Sustainability: Environment and Risk prevention | Expense | Not classified | 39 | 12-31-2011 | ||||||
SQM Salar S.A | LP5J - Water Recharge Study Atacama Salt flat | Sustainability: Environment and Risk prevention | Expense | Research | 105 | 12-31-2011 | ||||||
SQM Salar S.A | LP82 - Project for the Promotion of Agricultural Activity in Communities of the Salt deposit | Sustainability | Expense | Development | 761 | 12-31-2014 | ||||||
SQM Salar S.A | LPTF – Environmental study and exploration 2010 | Sustainability | Expense | Not classified | 370 | 12-31-2011 | ||||||
SQM Salar S.A | LPTJ - Improvements Sanitary Works | Sustainability | Asset | Not classified | 206 | 12-31-2011 | ||||||
SQM Salar S.A | LQ38 - Field Drying Sludge | Sustainability: Environment and Risk prevention | Asset - Expense | Not classified | 26 | 12-31-2011 | ||||||
SQM Salar S.A | CQ8U - New Changing Room CL - HL | Capacity Upgrade | Asset | Not classified | 238 | 12-31-2011 | ||||||
SQM Salar S.A | LQAK - garbage rooms MOP and SOP | Sustainability | Expense | Not classified | 25 | 12-31-2011 | ||||||
Total | 19,912 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 164 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 – Environment (continued)
24.2 | Detail of information on disbursements related to environment, continued |
Future Expenses
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
SQM Industrial S.A. | Environment management (Budget 2011- expenses as of December 2011) | Not classified | Expense | Not classified | 2,243 | 12-31-2011 | ||||||
SQM Industrial S.A. | SQ7X - Reach 2011-2013 | Sustainability | Expense | Not classified | 551 | 1-31-2014 | ||||||
SQM Industrial S.A. | FP55 - FPXA - Mine Area EIS PB - PB Expansion EIS (Projects: Pampa Blanca Saltwater - Saltwater Stage I) | Sustainability | Asset | Development | 800 | 12-31-2012 | ||||||
SQM Industrial S.A. | MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena | Sustainability: Environment and Risk prevention | Asset | Not classified | 107 | 12-1-2011 | ||||||
SQM Industrial S.A. | MP5W - TK's Fuel Standards | Sustainability | Asset | Not classified | 487 | 12-31-2011 | ||||||
SQM Industrial S.A. | MPQU - Construction of Hazardous Chemical Supplies warehouse | Sustainability: Environment and Risk prevention | Asset | Development | 264 | 12-31-2011 | ||||||
SQM Industrial S.A. | PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia | Sustainability: Equipment Replacement | Asset - Expense | Not classified | 122 | 12-31-2012 | ||||||
SQM Industrial S.A. | PPNK - Management of Ammonia PV stoppage plant | Sustainability: Environment and Risk prevention | Asset | Not classified | 178 | 12-31-2011 | ||||||
SQM Industrial S.A. | PPZU - Standardize and certify Plant Fuel Tanks | Sustainability: Environment and Risk prevention | Asset - Expense | Not classified | 2,715 | 12-1-2011 | ||||||
SQM Industrial S.A. | JQ8K – DIA Line 4 Floor Drying , Coya Sur (Project: Drying Line 4) | Capacity Upgrade | Asset | Development | 13 | 9-1-2012 | ||||||
SQM Industrial S.A. | IQ8G – Improvement of Bureau of Exchange, offices and facilities | Sustainability | Asset | Not classified | 30 | 12-31-2011 | ||||||
SQM Industrial S.A. | JQB6 - EID Ground NPT4, Coya Sur (Project: NPTIV) | Capacity Upgrade | Asset | Development | 50 | 4-30-20122 | ||||||
SQM Industrial S.A. | TQA2 - Drainage Improvement Villa Prat | Not classified | Asset | Not classified | 170 | 12-31-2011 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 165 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 – Environment (continued)
24.2 | Detail of information on disbursements related to environment, continued |
Future expenses (continued)
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
SQM Industrial S.A. | MQAJ - Improvements to Camp Water and Sewage (P Contesse commitment to DDSS) | Not classified | Asset | Not classified | 297 | 12-31-2011 | ||||||
SQM Industrial S.A. | MQA8 - Normalization gas system, external cafeterias (Stage 1: projects) | Not classified | Asset | Not classified | 150 | 12-30-20111 | ||||||
SQM Industrial S.A. | MQBM - Archaeological Digging Deployment Maria Elena - Toco | Sustainability: Environment and Risk prevention | Expense | Not classified | 56 | 12-31-2011 | ||||||
Minera Nueva Victoria Ltda. | IQ4C - Camp Development (Osmosis and Others) | Capacity Upgrade | Asset | Not classified | 1,370 | 12-31-2012 | ||||||
SIT S.A. | TPR8 - Disposal of liquid waste generation by aspiration | Sustainability: Environment and Risk prevention | Asset- expense | Not classified | 86 | 12-31-2011 | ||||||
SIT S.A. | TPYX - Enabling the dust collector of the crib and court seal 3 Tocopilla | Sustainability: Environment and Risk prevention | Asset | Development | 204 | 12-31-2011 | ||||||
SIT S.A. | MQ6Y - Maintenance and repair and bureau of exchange Tocopilla ME | Sustainability: Environment and Risk prevention | Asset | Not classified | 20 | 12-30-2011 | ||||||
SIT S.A. | TQAV - Paving paths IV | Sustainability: Environment and Risk prevention | Expense | Development | 297 | 12-1-2011 | ||||||
SQM Nitratos S.A | IQDN - Storage Rises – Maintenance of Mine NV | Sustainability: Environment and Risk prevention | Asset | Not classified | 40 | 7-30-2012 | ||||||
SQM S.A. | IPFT - Cultural Heritage Region I | Sustainability: Environment and Risk prevention | Expense | Not classified | 96 | 12-31-2011 | ||||||
SQM S.A. | IPXE - Environmental Monitoring Plan Llamara Salt flat | Sustainability: Environment and Risk prevention | Expense | Not classified | 1,276 | 12-31-2012 | ||||||
SQM S.A. | IPXF - Environmental Monitoring Plan Tamarugal Pampa | Sustainability: Environment and Risk prevention | Expense | Not classified | 1,836 | 31-12-2012 | ||||||
SQM S.A. | IQ08 - PSA Llamara & Pampa Tamarugal | Sustainability: Natural Resources | Expense | Development | 27 | 12-31-2011 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 166 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 – Environment (continued)
24.2 | Detail of information on disbursements related to environment, continued |
Future expenses (continued)
Identification of the Parent or subsidiary |
Name of the project with which the disbursement is associated |
Concept for which the disbursement was made or will be made |
Asset / Expense |
Description of the asset or expense Item |
Amount of disbursement for the Period ThUS$ |
Actual or estimated date on which disbursements were or will be made | ||||||
SQM S.A. | IQ0C - Mine Area Enhancement NV | Sustainability: Environment and Risk prevention | Expense | Not classified | 11 | 12-31-2011 | ||||||
SQM S.A. | IQ1K - Construction of 3 observation wells in Sur Viejo | Sustainability: Natural Resources | Asset | Development | 2 | 12-31-2011 | ||||||
SQM S.A. | IQ1M - PSA Re-injection of water to Puquios Llamara | Not classified | Asset | Not classified | 783 | 12-31-2011 | ||||||
SQM S.A. | IQ3S - Hazardous Materials Management Standardization | Sustainability: Environment and Risk prevention | Asset | Not classified | 300 | 12-31-2012 | ||||||
SQM S.A. | IQ52 - New Victoria Environment Office | Not classified | Asset | Not classified | 1 | 12-31-2011 | ||||||
SQM S.A. | IQ53 - Cultural heritage route Soronal adduction (Pampa Hermosa) | Sustainability: Environment and Risk prevention | Asset | Not classified | 15 | 12-31-2011 | ||||||
SQM S.A. | IQ54 - Cultural heritage Pampa Hermosa | Sustainability: Environment and Risk prevention | Asset | Not classified | 764 | 12-31-2012 | ||||||
SQM S.A. | IQ9V – Quillagua Project | Not classified | Asset- expense | Not classified | 849 | 12-31-2014 | ||||||
SQM S.A. | PQB9 - Change of exhaust SO2 gas | Sustainability | Asset | Not classified | 178 | 12-1-2011 | ||||||
SQM Salar S.A | CQ4M – Regularization of Contractor facilities | Sustainability: Environment and Risk prevention | Asset | Not classified | 26 | 12-31-2012 | ||||||
SQM Salar S.A | LP82 - Project for the Promotion of Agricultural Activity in Communities of the Salt deposit | Sustainability | Expense | Development | 822 | 12-31-2014 | ||||||
SQM Salar S.A | CQ8U - New Changing Room CL - HL | Capacity Upgrade | Asset | Not classified | 102 | 12-31-2011 | ||||||
Total | 17,338 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 167 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Nota 24 – Environment (continued)
24.3 | Description of each project, indicating whether they are in process or have been finished |
SQM Industrial S.A.
IQ8G: This project contemplates the improvement of restrooms and the expansion of their capacity. In addition to water storage sector would be improved. The project is closing process.
JQEZ: This Project includes purchasing and installing Bertrams Boilers in Coya Sur Prill, in order to improve the level of combustion, decreasing and controlling the emission of fumes to the environment. The project is finished.
JQH9: The purpose of this project is to purchase Bertram’s boilers in order to improve the combustion levels, decreasing and controlling the emission of fumes to the environment. The project is in process.
MNYS: Preparation and execution of a project of geoglyphs conservation; editing and publishing a book and implementing a diffusion center. Construction of a collection deposit. All these are compensation measures of the project Technological Change Maria Elena. The project is in process.
MP5W: Normalization of the fuel storage and distribution system in SQM installations. The project is in process.
MPQU: Construction of warehouses for dangerous chemicals supplies in order to decrease the chance of accidents and pollution. The project is in process.
MQ8M: Performing maintenance to structures and closing monitoring stations in Maria Elena. The project is finished.
MQA8: Normalization of gas networks of periferical casinos (stage 1: projects): CS, Lagarto, Iodum, PV, Toco and Rancho 6. The Project is in process.
MQAJ: Improve the water and sewerage network in Maria Elena for better operations. The project is finished.
MQBM: Implementing archeological measures in Maria Elena – Toco site, such as the archeological registry, analysis of lithic materials, and generation of reports. The project is in process.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 168 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 – Environment (continued)
24.3 | Description of each project indicating whether they are in process or have been finished (continued) |
MQHF: Enable a wastewater plant in Toco according to SD 594, a change room for operators and contractors, among other things. The project is in process.
MQK2: The project involves the decontamination of equipment and items contaminated with PCBs and / or final disposal in accordance with applicable regulations. The project is in process.
PPC1: Purchase and replacement of equipment contaminated with PCB and obsolete equipment without spare parts. The project is in process.
PPNK: Project to ensure the control of the ammonia gas in the crystal plant stoppage. The project is finished.
PPZU: The necessary actions to normalize and certify certified fuel tanks in the plants in María Elena, Coya Sur and Pedro de Valdivia were performed. The project is in process.
SQ7X: The purpose of this project is obtaining and recording information of components and finished products of SQM in the ECHA database to comply with the requirements set forth by the REACH regulation of the European Union. The project is in process.
TQA2: This project aims to improve the sewerage system of Villa Prat. The project is in process.
CQLX: The project includes the construction at each location a courtyard of 145 m2 approx. The project is in process.
JQL7: This project aims to improve product recovery, and control emissions. The project is in process.
JQ8K: This project has the purpose of building a new drying plant in Coya Sur. The projected expenses correspond only to the environmental filing. The project is in process
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 169 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 - Environment (continued)
24.3 | Description of each Project indicating whether they are in process or have been finished (continued) |
FP55 – FPXA: These 2 projects have a final objective consisting in the installation of a sea water sucking system of 87 km from the Mejillones area to the SQM facilities located in Pampa Blanca. The projected expenses correspond only to the filing of the EIA of the PB mine zone and the EIA of the PB expansion. Both projects are in process.
JQB6: Preparation and filing of the EID of project NPT4 of Coya Sur, which increases the salt production capacity. The project is in process.
PQLV: Preparation and filing of EID Pedro de Valdivia. The project is in process.
SQM S.A.
AQ0A: To enable the use of water rights that have been granted in several pits of the Conaf reservation Pampa del Tamarugal and to take them outside of the tamarugo forest and of the reservation, reducing the environmental impact of its exploitation. The project is in process.
IPFT: The project contemplates the implementation of measures committed in projects in the area of the Nueva Victoria mine, update of operations in Nueva Victoria, evaporation ducts and pits in Iris. The project is in process.
IPXE: To implement the plan of environment follow-up of Project Pampa Hermosa in Salar de Llamara. The project is in process.
IPXF: To implement the environment plan follow-up of the project Pampa Hermosa in Pampa del Tamarugal. The project is in process.
IQ08: The project considers the following works for the water reservoirs in Pampa del Tamarugal and Salar de Llamara: constructing and enabling observation and monitoring pits, pumping tests, construction of roads over hard sand terrain and Salar crust. The project is finished.
IQ0C: This project consists in implementing a program of adding value and area adjacent to route 5, which will enable the development of a self-guided tour of the area called Cantón de Lagunas in the context of the saltpeter history. The project is finished.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 170 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 - Environment (continued)
24.4 | Description of each project indicating whether they are in process or have been finished (continued) |
IQ1K: Construction of 3 observation pits in Sur Viejo to comply with the environmental commitments proposed in the EIS of Pampa Hermosa and to be able to monitor the water reservoir near said pits. The project is finished.
IQ1M: To implement environmental commitments included in the EIS of project “Pampa Hermosa” to safeguard the puquíos zone that is in the Salar de Llamara water reservoir. The project is in process.
IQ3S: Improvements in the storage installations of dangerous raw materials in Nueva Victoria. The project is in process.
IQ52: This project includes the enabling and expansion of the environment offices in Nueva Victoria. The project is finished.
IQ53: To perform equity assay to the new location of the Soronal abduction trace Project Pampa Hermosa approved through N° 890/2010. The project is in process.
IQ54: This corresponds to the implementation of environmental commitments acquired through the environment assessment of the project Pampa Hermosa (RCA N°890/2010). The project is in process.
IQ9V: To support the development of agriculture and tourist industry in the location of Quillagua, in order to enhance the activity through productive measures, technical assistance and marketing. The project is in process.
PQB9: installation of two larger SO2 extractors at the end of the process. The project is in process.
IQLR: The scope of this stage includes the updating of the Design, Implementation and Operation of the mitigation measure of puquios in Salar de Llamara. The project is finished.
MQLQ: Design and implement a system to scrub gases allowing mitigating SO2 emissions, this system should be aligned to SQM´s Sustainable Development Policy. The project is in process
IQ6M – IQ6N: Preparation and filing of the EID of the Project “Expansion of Mina Nueva Victoria”. The projected expenses only include the environment document filing. The project is in process.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 171 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 - Environment (continued)
24.3 | Description of each Project indicating whether they are in process or have been finished (continued) |
IP83: Preparation and filing of the EID of the Project “Extension TLN-15”. The projected expenses only include the environment document filing. The project is in process.
IQOW: Enable a deposit in Humberstone Saltpeter to store material of heritage interest recovered in land campaigns of Project ZMNV. The Project is in process.
IQPJ: The project consists of the implementation of heritage measures involved in the Environmental Assessment for the mine areas. The measures will be implemented according to the requirements of the mining operation VPONV. The Project is in process.
SQM Salar S.A.
LQFD: The project includes the construction of currency exchange offices in order to comply with the rules and comfort to our workers. The project is finished.
LQG8: Increase the capacity of the waste room of Toconao Camp, in order to avoid accumulation problems and waste handling. The project is in process.
LQ38: This project has the purpose to comply with the current regulations and with observations raised by the SEREMI of Health. The project is in process.
LQAK: The project considers the construction of garbage rooms in lunchrooms in MOP and SOP, in order to increase the waste storage capacity. The project is finished.
LQNI:. Preparation and processing of EID of project "Expansion of Drying and KCI Compacting Plant". The expenses considered include environmental processing only. The project is in process.
CQ4M: The project contemplates the regularization of the electric facilities, change of cables, electric and illumination control panels. It also contemplates the installation of enough restroom with showers for the contractor’s permanent personnel. The project is finished.
CQ8U: To improve the condition and capacity of the exchange rooms in Salar del Carmen. The project is finished.
LP82: To support the development of demonstration lots, provide technical assistance for the improvement of agriculture practices such as watering. The project is in process.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 172 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 - Environment (continued)
24.3 | Description of each Project indicating whether they are in process or have been finished (continued) |
LPTF: To perform semi-annual reports, given that it is necessary to present improvements and optimizations at environmental control points, and the knowledge on geologic and hydrogeologic variables must be improved near Salar de Atacama. The project is finished.
LPTJ: The plan considers the acquisition of stand equipment to ensure the operating continuity of the TAS and OR plants, the change in the current control system of TK's regarding the accumulation of drinking water, wastewater, and wastewater elevation chambers, among others. The project is finished.
LQDM: Certification of the liquid fuel storage tanks. The project is in process.
LQI6: Preparation and processing of the EIA Update Operations in the Salar de Atacama. The project is in process.
SIT S.A.
TQNA: Installation of a meteorological station to measure wind speed and direction in the Southern Sector of Tocopilla in order to fulfill the commitment with the authority. The project is in process.
MQ6Y: To maintain and repair the bureau of exchange in María Elena and Tocopilla, in order to comply with Decree No.594. The project is finished.
TPR8: This project pretends to increase the generation of industrial waste through the use of vacuum and no-washing technologies, through the implementation of a vacuum system that avoids the use of water and therefore the generation of liquid industrial waste. The project is finished.
TPYX: To comply with the commitment of decreasing the emission of particulate material towards the city of Tocopilla. The project is in process.
TQAP: to decrease the environmental pollution and losses produced by the product’s storage. The project is finished.
TQAV: Paving and maintenance of internal roads of the port of Tocopilla, to decrease pollution and to comply with the Supreme Decree related to the saturated zone. The project is in process.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 173 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 24 - Environment (continued)
24.3 | Description of each Project indicating whether they are in process or have been finished (continued) |
TQM2: The project involves recovering operating conditions by changing the pitch pipe No.1 thus reducing the environmental pollution. The project is in process.
TQLY: This project aims at eliminating environmental contamination that may exist in the areas of work of operators. The project is in process.
TQQ5: This project aims to contain emissions of particulate material to prevent contamination to adjacent communities. The project is in process.
SQM POTASIO S.A.
IQ4C: Supply, construction and assembly of the osmosis and septic pits plant required to enable the camp in plant Iris and other. The project is finished.
SQM Nitratos S.A.
IQDN: Construction of a parapet forming a square pool (or rectangular) with an impermeable membrane that covers its entire length, to serve as a reservoir of sludge (Rises). The project is in process.
PQI9: Construction of a new pit replacing the current with a new waste water treatment technology. The project is in process.
IQMH: Creation of an area allowing to store hazardous substances. The project is in process.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 174 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 25 - Other current and non-current non-financial assets
As of December 31, 2012, and December 31, 2011, the detail of other current and non-current assets is as follows:
Other non-financial assets, current | 12/31/2012 | 12/31/2011 | ||||||
ThUS$ | ThUS$ | |||||||
Domestic Value Added Tax | 42,136 | 46,243 | ||||||
Foreign Value Added Tax | 9,306 | 5,879 | ||||||
Prepaid mining licenses | 1,512 | 1,228 | ||||||
Prepaid insurance | 8,278 | 6,979 | ||||||
Other prepayments | 494 | 308 | ||||||
Other assets | 6,095 | 3,155 | ||||||
Total | 67,821 | 63,792 |
Other non-financial assets, non-current | 12/31/2012 | 12/31/2011 | ||||||
ThUS$ | ThUS$ | |||||||
Stain development expenses and prospecting expenses (1) | 16,839 | 21,395 | ||||||
Guarantee deposits | 571 | 428 | ||||||
Other assets | 272 | 2,829 | ||||||
Total | 17,682 | 24,652 |
(1) | Assets for the exploration or evaluation of mineral resources are amortized to the extent that the explored or evaluated area has been exploited. For this purpose, a variable rate is applied to extracted tons, which is determined based on the measured initial reserve and evaluation cost. The Company presents expenses associated with Exploration and Evaluation of Mineral Resources. Of these expenses, those that are under exploitation are included under Inventory and are amortized according to the estimated ore reserves contained, and expenses associated with future reserves are presented under Other non-current assets. Those expenses incurred on properties with low ore grade that are not economically exploitable are directly charged to income. As of December 31, 2012 balances associated with the exploration and assessment of mineral resources is presented under Inventory for ThUS$ 6,174 (ThUS$ 3,699 as of December 31, 2011). |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 175 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 25 - Other current and non-current non-financial assets (continued)
Reconciliation of changes in assets for exploration and mineral resource evaluation, by type
Movements in assets for the exploration and evaluation of mineral resources as of December 31, 2012 and December 31, 2011:
Reconciliation | 12/31/2012 | 12/31/2011 | ||||||
ThUS$ | ThUS$ | |||||||
Assets for the exploration and evaluation of mineral resources, net, opening balance | 21,395 | 21,350 | ||||||
Changes in assets for exploration and assessment of mineral resources: | ||||||||
Additions, other than business combinations | 843 | 3,777 | ||||||
Depreciation and amortization | (2,080 | ) | (1,883 | ) | ||||
Increase (Decrease) due to transfers and other charges | (3,319 | ) | (1,849 | ) | ||||
Assets for exploration and assessment of mineral resources, net, closing balance | 16,839 | 21,395 |
As of the presentation date, no reevaluations of assets for exploration and assessment of mineral resources have been conducted.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 176 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments
26.1 | Operating segments |
General information:
The amount of each item presented in each operating segment is equal to that reported to the maximum authority who makes decisions regarding the operation, in order to decide on the allocation of resources to the defined segments and to assess its performance.
Factors used to identify segments on which a report should be presented:
Segments reported are strategic business units that offer different products and services. These are managed separately because each business requires different technology and marketing strategies.
Description of the types of products and services on which each reportable segment obtain its income from ordinary activities
The operating segments, through which incomes of ordinary activities are obtained, that generate expenses and whose operating results are reviewed on a regular basis by the maximum authority who makes decisions regarding operations, relate to the following groups of products:
1.- Specialty plant nutrients
2.- Iodine and its derivatives
3.- Lithium and its derivatives
4.- Industrial chemicals
5.- Potassium
6.- Other products and services
Description of income sources for all the other segments
Information relative to assets, liabilities and profit and expenses that cannot be assigned to the segments indicated above, due to the nature of production processes, is included under "Unassigned amounts” category of the disclosed information.
Basis of accounting for transactions between reportable segments
Sales between segments are made in the same conditions as those made to third parties, and are consistently measures as presented in the income statement.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 177 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.1 | Operating segments, continued |
Description of the nature of the differences between measurements of results of reportable segments and the result of the entity before the expense or income tax expense of incomes and discontinued operations.
The information reported in the segments is extracted from the Company´s consolidated financial statements and therefore is not required to prepare reconciliations between the data mentioned above and those reported in the respective segments, according to what is stated in paragraph 28 of IFRS 8, "Operating Segments".
Description of the nature of the differences between measurements of assets of reportable segments and the Company´s assets
Assets are not shown classified by segments, as this information is not readily available, some of these assets are not separable by the type of activity to which these are affect and since this information is not used by management in decisions making with respect to resources to be allocated to each defined segment. All assets are disclosed in the "unallocated amounts" category.
Description of the nature of the differences between measurements of liabilities of reportable segments and the Company´s liabilities
Liabilities are not shown classified by segments, as this information is not readily available, some of these liabilities are not separable by the type of activity to which these are affected and since this information is not used by management in decisions making regarding resources to be allocated to each defined segment. All liabilities are disclosed in the "unallocated amounts" category.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 178 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.2 | Operating segment disclosures as of December 31, 2012 and December 31, 2011: |
12/31/2012 | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating segment items | Specialty plant nutrients | Iodine and its derivatives | Lithium and its derivatives | Industrial chemicals | Potassium | Other products and services | Reportable segments | Operating segments | Elimination of inter- segments amounts | Unallocated amounts | Significant reconciliation entries | Total 12/31/2012 | ||||||||||||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||||||||||||||||||||
Revenue | 675,350 | 578,091 | 222,238 | 245,208 | 605,059 | 103,214 | 2,429,160 | 2,429,160 | - | - | - | 2,429,160 | ||||||||||||||||||||||||||||||||||||
Revenues from transactions with other operating segments of the same entity | 265,814 | 848,243 | 154,248 | 348,667 | 569,219 | 493,884 | 2,680,075 | 2,680,075 | (2,680,075 | ) | - | - | - | |||||||||||||||||||||||||||||||||||
Revenues from external customers and transactions with other operating segments of the same entity | 941,164 | 1,426,334 | 376,486 | 593,875 | 1,174,278 | 597,098 | 5,109,235 | 5,109,235 | (2,680,075 | ) | - | - | 2,429,160 | |||||||||||||||||||||||||||||||||||
Interest revenue | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Interest expense | - | - | - | - | - | - | - | - | 225,396 | (279,491 | ) | - | (54,095 | ) | ||||||||||||||||||||||||||||||||||
depreciation and amortization expense | (54,383 | ) | (47,100 | ) | (17,896 | ) | (19,745 | ) | (48,723 | ) | (8,311 | ) | (196,158 | ) | (196,158 | ) | - | - | - | (196,158 | ) | |||||||||||||||||||||||||||
The entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method | - | - | - | - | - | - | - | - | - | 24,357 | - | 24,357 | ||||||||||||||||||||||||||||||||||||
income tax expense, continuing operations | - | - | - | - | - | - | - | - | - | (216,082 | ) | - | (216,082 | ) | ||||||||||||||||||||||||||||||||||
Other items other tan significant cash | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
Income (loss) before taxes | 217,880 | 362,518 | 110,695 | 83,055 | 246,027 | 8,419 | 1,028,594 | 1,028,594 | (786,634 | ) | 631,491 | - | 873,451 | |||||||||||||||||||||||||||||||||||
Net income (loss) from continuing operations | 217,880 | 362,518 | 110,695 | 83,055 | 246,027 | 8,419 | 1,028,594 | 1,028,594 | (786,634 | ) | 415,409 | - | 657,369 | |||||||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 217,880 | 362,518 | 110,695 | 83,055 | 246,027 | 8,419 | 1,028,594 | 1,028,594 | (786,634 | ) | 415,409 | - | 657,369 | |||||||||||||||||||||||||||||||||||
Assets | - | - | - | - | - | - | - | - | (7,296,791 | ) | 11,713,222 | - | 4,416,431 | |||||||||||||||||||||||||||||||||||
Equity-accounted investees | - | - | - | - | - | - | - | - | (3,423,758 | ) | 3,494,056 | - | 70,298 | |||||||||||||||||||||||||||||||||||
Increase of non-current assets | - | - | - | - | - | - | - | - | 255,363 | - | 255,363 | |||||||||||||||||||||||||||||||||||||
Liabilities | - | - | - | - | - | - | - | - | (3,393,525 | ) | 5,622,510 | - | 2,228,985 | |||||||||||||||||||||||||||||||||||
Equity | 2,187,446 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity and liability | 4,416,431 | |||||||||||||||||||||||||||||||||||||||||||||||
Impairment loss recognized in profit or loss | (10,281 | ) | (2,081 | ) | (162 | ) | (3,043 | ) | (2,471 | ) | (120 | ) | (18,158 | ) | (18,158 | ) | - | (2,900 | ) | - | (21,058 | ) | ||||||||||||||||||||||||||
Cash flows from (used in) operating activities | - | - | - | - | - | - | - | - | - | 650,206 | - | 650,206 | ||||||||||||||||||||||||||||||||||||
Cash flows from (used in) investing activities | - | - | - | - | - | - | - | - | - | (562,885 | ) | - | (562,885 | ) | ||||||||||||||||||||||||||||||||||
Cash flows from (used in) financing activities | - | - | - | - | - | - | - | - | - | (197,697 | ) | - | (197,697 | ) |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 179 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.2 | Operating segment disclosures as of December 31, 2012 and December 31, 2011: |
12/31/2011 | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating segment items | Specialty plant nutrients | Iodine and its derivatives | Lithium and its derivatives | Industrial chemicals | Potassium | Other products and services | Reportable segments | Operating segments | Elimination of inter- segments amounts | Unallocated amounts | Significant reconciliation entries | Total 12/31/2011 | ||||||||||||||||||||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||||||||||||||||||||
Revenue | 721,696 | 454,468 | 183,403 | 139,508 | 555,742 | 90,469 | 2,145,286 | 2,145,286 | - | - | - | 2,145,286 | ||||||||||||||||||||||||||||||||||||
Revenues from transactions with other operating segments of the same entity | 268,628 | 620,516 | 136,894 | 265,298 | 568,393 | 365,225 | 2,224,954 | 2,224,954 | (2,224,954 | ) | - | - | - | |||||||||||||||||||||||||||||||||||
Revenues from external customers and transactions with other operating segments of the same entity | 990,324 | 1,074,984 | 320,297 | 404,806 | 1,124,135 | 455,694 | 4,370,240 | 4,370,240 | (2,224,954 | ) | - | - | 2,145,286 | |||||||||||||||||||||||||||||||||||
Interest revenue | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Interest expense | - | - | - | - | - | - | - | - | 196,461 | (235,796 | ) | - | (39,335 | ) | ||||||||||||||||||||||||||||||||||
depreciation and amortization expense | (65,902 | ) | (41,500 | ) | (16,747 | ) | (12,739 | ) | (50,748 | ) | (8,261 | ) | (195,897 | ) | (195,897 | ) | - | - | - | (195,897 | ) | |||||||||||||||||||||||||||
The entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method | - | - | - | - | - | - | - | - | - | 21,808 | - | 21,808 | ||||||||||||||||||||||||||||||||||||
income tax expense, continuing operations | - | - | - | - | - | - | - | - | - | 179,710 | - | 179,710 | ||||||||||||||||||||||||||||||||||||
Other items other tan significant cash | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
Income (loss) before taxes | 227,476 | 262,361 | 85,230 | 56,005 | 218,264 | 5,456 | 854,792 | 854,792 | (757,832 | ) | 636,869 | - | 733,829 | |||||||||||||||||||||||||||||||||||
Net income (loss) from continuing operations | 227,476 | 262,361 | 85,230 | 56,005 | 218,264 | 5,456 | 854,792 | 854,792 | (757,832 | ) | 457,159 | - | 554,119 | |||||||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 227,476 | 262,361 | 85,230 | 56,005 | 218,264 | 5,456 | 854,792 | 854,792 | (757,832 | ) | 457,159 | - | 554,119 | |||||||||||||||||||||||||||||||||||
Assets | - | - | - | - | - | - | - | - | (6,740,071 | ) | 10,611,654 | - | 3,871,583 | |||||||||||||||||||||||||||||||||||
Equity-accounted investees | - | - | - | - | - | - | - | - | (2,595,886 | ) | 2,656,580 | - | 60,694 | |||||||||||||||||||||||||||||||||||
Increase of non-current assets | - | - | - | - | - | - | - | - | 207,320 | - | 207,320 | |||||||||||||||||||||||||||||||||||||
Liabilities | - | - | - | - | - | - | - | - | (3,699,768 | ) | 5,706,971 | - | 2,007,203 | |||||||||||||||||||||||||||||||||||
Equity | 1,864,380 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity and liability | 3,871,583 | |||||||||||||||||||||||||||||||||||||||||||||||
Reversal of impairment losses recognized in profit and loss for the year | 1,543 | 1,543 | 1,543 | 179 | 1,722 | |||||||||||||||||||||||||||||||||||||||||||
Impairment loss recognized in profit or loss | (3,379 | ) | (596 | ) | (420 | ) | (3,085 | ) | - | (207 | ) | (7,687 | ) | (7,687 | ) | - | (5,364 | ) | - | (13,051 | ) | |||||||||||||||||||||||||||
Cash flows from (used in) operating activities | - | - | - | - | - | - | - | - | - | 571,345 | - | 571,345 | ||||||||||||||||||||||||||||||||||||
Cash flows from (used in) investing activities | - | - | - | - | - | - | - | - | - | (516,228 | ) | - | (516,228 | ) | ||||||||||||||||||||||||||||||||||
Cash flows from (used in) financing activities | - | - | - | - | - | - | - | - | - | (105,196 | ) | - | (105,196 | ) |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 180 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.3 | Statement of comprehensive income classified by operating segments based on groups of products as of December 31, 2012: |
Items in the statement of comprehensive income | Specialty
plant nutrients ThUS$ | Iodine
and its derivatives ThUS$ | Lithium
and its derivatives ThUS$ | Industrial
chemicals ThUS$ | Potassium
ThUS$ | Other
products and services ThUS$ | Corporate
Unit ThUS$ | Total
segments and Corporate unit ThUS$ | ||||||||||||||||||||||||
Revenue | 675,350 | 578,091 | 222,238 | 245,208 | 605,059 | 103,214 | - | 2,429,160 | ||||||||||||||||||||||||
Cost of sales | (457,470 | ) | (215,573 | ) | (111,543 | ) | (162,153 | ) | (359,032 | ) | (94,796 | ) | - | (1,400,567 | ) | |||||||||||||||||
Gross profit | 217,880 | 362,518 | 110,695 | 83,055 | 246,027 | 8,418 | - | 1,028,593 | ||||||||||||||||||||||||
Other incomes by function | - | - | - | - | - | - | 12,702 | 12,702 | ||||||||||||||||||||||||
Administrative expenses | - | - | - | - | - | - | (106,442 | ) | (106,442 | ) | ||||||||||||||||||||||
Other expenses y function | - | - | - | - | - | - | (34,628 | ) | (34,628 | ) | ||||||||||||||||||||||
Other gains (losses) | - | - | - | - | - | - | 683 | 683 | ||||||||||||||||||||||||
Financial income | - | - | - | - | - | - | 29,068 | 29,068 | ||||||||||||||||||||||||
Financial costs | - | - | - | - | - | - | (54,095 | ) | (54,095 | ) | ||||||||||||||||||||||
interest in the profit or loss of associates and joint ventures accounted for by the equity method | - | - | - | - | - | - | 24,357 | 24,357 | ||||||||||||||||||||||||
Exchange differences | - | - | - | - | - | - | (26,787 | ) | (26,787 | ) | ||||||||||||||||||||||
Profit (loss )before taxes | 217,880 | 362,518 | 110,695 | 83,055 | 246,027 | 8,418 | (155,142 | ) | 873,451 | |||||||||||||||||||||||
Income tax expense | - | - | - | - | - | - | (216,082 | ) | (216,082 | ) | ||||||||||||||||||||||
Profit (loss )from continued operations | 217,880 | 362,518 | 110,695 | 83,055 | 246,027 | 8,418 | (371,224 | ) | 657,369 | |||||||||||||||||||||||
Profit (loss ) from discontinued operations | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Profit (loss) | 217,880 | 362,518 | 110,695 | 83,055 | 246,027 | 8,418 | (371,224 | ) | 657,369 | |||||||||||||||||||||||
Profit (loss, attributable to | ||||||||||||||||||||||||||||||||
Profit (loss ) attributable to the controller´s owners | - | - | - | - | - | - | - | 649,167 | ||||||||||||||||||||||||
Profit (loss ) attributable to the non controllers | - | - | - | - | - | - | - | 8,202 | ||||||||||||||||||||||||
Profit (loss) | - | - | - | - | - | - | - | 657,369 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 181 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.3 | Statement of comprehensive income classified by operating segments based on groups of products as of December 31, 2011: |
Items in the statement of comprehensive income | Specialty
plant nutrients ThUS$ | Iodine
and its derivatives ThUS$ | Lithium
and its derivatives ThUS$ | Industrial
chemicals ThUS$ | Potassium
ThUS$ | Other
products and services ThUS$ | Corporate
Unit ThUS$ | Total
segments and Corporate unit ThUS$ | ||||||||||||||||||||||||
Revenue | 721,696 | 454,468 | 183,403 | 139,508 | 555,742 | 90,469 | - | 2,145,286 | ||||||||||||||||||||||||
Cost of sales | (494,220 | ) | (192,107 | ) | (98,173 | ) | (83,503 | ) | (337,478 | ) | (85,013 | ) | - | (1,290,494 | ) | |||||||||||||||||
Gross profit | 227,476 | 262,361 | 85,230 | 56,005 | 218,264 | 5,456 | - | 854,792 | ||||||||||||||||||||||||
Other incomes by function | - | - | - | - | - | - | 47,681 | 47,681 | ||||||||||||||||||||||||
Administrative expenses | - | - | - | - | - | - | (91,760 | ) | (91,760 | ) | ||||||||||||||||||||||
Other expenses y function | - | - | - | - | - | - | (63,047 | ) | (63,047 | ) | ||||||||||||||||||||||
Other gains (losses) | - | - | - | - | - | - | 5,787 | 5,787 | ||||||||||||||||||||||||
Financial income | - | - | - | - | - | - | 23,210 | 23,210 | ||||||||||||||||||||||||
Financial costs | - | - | - | - | - | - | (39,335 | ) | (39,335 | ) | ||||||||||||||||||||||
interest in the profit or loss of associates and joint ventures accounted for by the equity method | - | - | - | - | - | - | 21,808 | 21,808 | ||||||||||||||||||||||||
Exchange differences | - | - | - | - | - | - | (25,307 | ) | (25,307 | ) | ||||||||||||||||||||||
Profit (loss )before taxes | 227,476 | 262,361 | 85,230 | 56,005 | 218,264 | 5,456 | (120,963 | ) | 733,829 | |||||||||||||||||||||||
Income tax expense | - | - | - | - | - | - | (179,710 | ) | (179,710 | ) | ||||||||||||||||||||||
Profit (loss )from continued operations | 227,476 | 262,361 | 85,230 | 56,005 | 218,264 | 5,456 | (300,673 | ) | 554,119 | |||||||||||||||||||||||
Profit (loss ) from discontinued operations | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Profit (loss) | 227,476 | 262,361 | 85,230 | 56,005 | 218,264 | 5,456 | (300,673 | ) | 554,119 | |||||||||||||||||||||||
Profit (loss, attributable to | ||||||||||||||||||||||||||||||||
Profit (loss ) attributable to the controller´s owners | - | - | - | - | - | - | - | 545,758 | ||||||||||||||||||||||||
Profit (loss ) attributable to the non controllers | - | - | - | - | - | - | - | 8,361 | ||||||||||||||||||||||||
Profit (loss) | - | - | - | - | - | - | - | 554,119 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 182 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.4 | Revenue from transactions with other operating segments of the Company as of December 31, 2012 |
Items in the
statement of comprehensive income | Specialty
plant nutrients ThUS$ | Iodine
and its derivatives ThUS$ | Lithium
and its derivatives ThUS$ | Industrial
chemicals ThUS$ | Potassium
ThUS$ | Other
products and services ThUS$ | Total
segments and Corporate unit ThUS$ | |||||||||||||||||||||
Revenue | 675,350 | 578,091 | 222,238 | 245,208 | 605,059 | 103,214 | 2,429,160 |
26.4 | Revenue from transactions with other operating segments of the Company as of December 31, 2011 |
Items in the statement
of comprehensive income | Specialty
plant nutrients ThUS$ | Iodine
and its derivatives ThUS$ | Lithium
and its derivatives ThUS$ | Industrial
chemicals ThUS$ | Potassium
ThUS$ | Other
products and services ThUS$ | Total
segments and Corporate unit ThUS$ | |||||||||||||||||||||
Revenue | 721,696 | 454,468 | 183,403 | 139,508 | 555,742 | 90,469 | 2,145,286 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 183 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.5 | Disclosures on geographical areas |
As indicated in paragraph 33 of IFRS 8, the entity discloses geographical information on its revenue from operating activities with external customers and from non-current assets that are not financial instruments, deferred income tax assets, assets related to post-employment benefits or rights derived from insurance contracts.
26.6 | Disclosures on main customers |
With respect to the degree of dependency of the Company on its customers, in accordance with paragraph N° 34 of IFRS N° 8, the Company has no external customers who individually represent 10% or more of its revenue. Credit risk concentrations with respect to trade and other accounts receivable are limited due to the significant number of entities in the Company’s portfolio and its worldwide distribution. The Company’s policy requires guarantees (such as letters of credit, guarantee clauses and others) and/or to maintain insurance policies for certain accounts as deemed necessary by the Company's Management.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 184 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.7 | Segments by geographical areas as of December 31, 2012 and 2011 |
Items | Chile | Latin America and the Caribbean | Europe | North America | Asia and others | 12/31/2012 | ||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Revenue | 269,421 | 416,089 | 558,245 | 619,667 | 565,738 | 2,429,160 | ||||||||||||||||||
Non-current assets: | 2,054,806 | 488 | 35,709 | 18,066 | 29,602 | 2,138,671 | ||||||||||||||||||
Equity-accounted investees | 1,656 | - | 24,051 | 15,357 | 29,234 | 70,298 | ||||||||||||||||||
Intangible assets other than goodwill | 23,630 | - | - | 378 | 5 | 24,013 | ||||||||||||||||||
Goodwill | 26,929 | 86 | 11,373 | - | - | 38,388 | ||||||||||||||||||
Property, plant and equipment, net | 1,985,128 | 183 | 285 | 2,331 | 363 | 1,988,290 | ||||||||||||||||||
Investment property | - | - | - | - | - | - | ||||||||||||||||||
Other non-current assets | 17,463 | 219 | - | - | — | 17,682 |
Items | Chile | Latin America and the Caribbean | Europe | North America | Asia and others | 12/31/2011 | ||||||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||
Revenue | 247,510 | 284,605 | 837,126 | 445,048 | 330,997 | 2,145,286 | ||||||||||||||||||
Non-current assets: | 1,809,871 | 1,757 | 28,681 | 15,335 | 27,664 | 1,883,308 | ||||||||||||||||||
Equity-accounted investees | 1,444 | - | 16,919 | 14,867 | 27,464 | 60,694 | ||||||||||||||||||
Intangible assets other than goodwill | 3,877 | - | - | 439 | - | 4,316 | ||||||||||||||||||
Goodwill | 27,146 | 86 | 11,373 | - | - | 38,605 | ||||||||||||||||||
Property, plant and equipment, net | 1,752,991 | 1,433 | 389 | 29 | 200 | 1,755,042 | ||||||||||||||||||
Investment property | - | - | - | - | - | - | ||||||||||||||||||
Other non-current assets | 24,413 | 238 | - | - | - | 24,651 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 185 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 26 - Operating segments (continued)
26.8 | Property, plant and equipment classified by geographical areas |
The company's main productive facilities are located near their mines and extraction facilities in northern Chile. The following table presents the main production facilities as of March 31, 2012 and December 31, 2012 and December 31, 2011:
Location | Products: | |
Pedro de Valdivia | Production of nitrite, sulfate, and iodine | |
María Elena | Production of nitrite, sulfate, and iodine | |
Coya Sur | Production of nitrite, sulfate, and iodine | |
Nueva Victoria | Production of iodine and nitrate salts | |
Salar de Atacama | Potassium chloride, Lithium chloride and boric acid | |
Salar del Carmen | Production of Lithium carbonate and lithium hydroxide, production of boron | |
Tocopilla | Port facilities |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 186 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Nota 27 - Gains (losses) from operating activities in the statement of income by function of expenses, included according to their nature
27.1 | Revenue |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Products | 2,420,357 | 2,138,264 | ||||||
Services | 8,803 | 7,022 | ||||||
Total | 2,429,160 | 2,145,286 |
27.2 | Cost of sales |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Raw material and supplies | (1,066,803 | ) | (762,350 | ) | ||||
Types of employee benefits expenses | ||||||||
Salaries and wages | (134,400 | ) | (104,757 | ) | ||||
Other short-term employee benefits | (66,370 | ) | (52,804 | ) | ||||
Termination benefit expenses | (4,325 | ) | (4,646 | ) | ||||
Total employee benefits expenses | (205.095 | ) | (162,207 | ) | ||||
Depreciation and amortization expenses | (190,509 | ) | (163,438 | ) | ||||
Impairment loss (review of impairment losses) recognized in profit or loss for the year | (18,158 | ) | (6,144 | ) | ||||
Other expenses, by nature (*) | 79,998 | (196,355 | ) | |||||
Total | (1,400,567 | ) | (1,290,494 | ) |
(*) | Include the variation of finished and products in-process |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 187 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 27 - Gains (losses) from operating activities in the statement of income by function of expenses, included according to their nature (continued)
27.3 | Other income |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Discounts obtained from suppliers | 648 | 777 | ||||||
Compensation received | 53 | 876 | ||||||
Penalties charged to suppliers | 312 | 453 | ||||||
Taxes recovered | 15 | 12 | ||||||
Insurance recovered | 5,187 | 395 | ||||||
Excess in the provision of liabilities with 3rd parties | 669 | 630 | ||||||
Excess in allowance for doubtful accounts | 154 | 178 | ||||||
Sale of Property, plant and equipment | 281 | 2,213 | ||||||
Sale of materials, spare parts and supplies | 1,388 | 959 | ||||||
Sale of mining concessions | 1,578 | 613 | ||||||
Sale of scrap | 176 | 141 | ||||||
Indemnity Minera Esperanza | 28 | 192 | ||||||
Excess indemnity provision Yara South Africa | 335 | - | ||||||
Excess inventory provision | - | 559 | ||||||
Other services | 2 | 84 | ||||||
Other operating results | 1,876 | 1,920 | ||||||
Sale of mining concessions Sierra Gorda SCM | - | 37,679 | ||||||
Total | 12,702 | 47,681 |
27.4 | Administrative expenses |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Employee benefit expenses by nature | ||||||||
Salaries and wages | (44,429 | ) | (42,609 | ) | ||||
Other short-term benefits to employees | (2,868 | ) | (3,884 | ) | ||||
Total employee benefit expenses | (47.297 | ) | (46,493 | ) | ||||
Other expenses, by nature | (59,145 | ) | (45,267 | ) | ||||
Total | (106,442 | ) | (91,760 | ) |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 188 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Nota 27 - Gains (losses) from operating activities in the statement of income by function of expenses, included according to their nature (continued)
27.5 | Other expenses by function |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Employee benefit expenses by nature | ||||||||
Other short-term benefits to employees | (24 | ) | (16 | ) | ||||
Depreciation and amortization expenses | ||||||||
Depreciation of stopped assets | (5,649 | ) | (32,459 | ) | ||||
Impairment loss (review of impairment losses) recognized in profit or loss for the year | ||||||||
Impairment of allowance for doubtful accounts | (1,054 | ) | (3,364 | ) | ||||
Provision for loss in auction of materials and spare parts | (2,000 | ) | (2,000 | ) | ||||
Subtotal to date | (3,054 | ) | (5,364 | ) | ||||
Other expenses, by nature | ||||||||
Legal Expenses | (1,984 | ) | (2,422 | ) | ||||
VAT and other unrecoverable tax | (1,182 | ) | (685 | ) | ||||
Investment plan expenses | (13,578 | ) | (11,462 | ) | ||||
Donations rejected as expense | (5,517 | ) | (2,557 | ) | ||||
Provision for work closing | (634 | ) | (224 | ) | ||||
Trial in Brazil | - | (3,500 | ) | |||||
Indemnities paid | (281 | ) | (3,495 | ) | ||||
Other operating expenses | (2,725 | ) | (863 | ) | ||||
Subtotal to date | (25,901 | ) | (25,208 | ) | ||||
Total | (34,628 | ) | (63,047 | ) |
27.6 | Other income (expenses) |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Adjustment of Equity Method, prior year | 736 | 422 | ||||||
Sale of investment in associates | (404 | ) | 1,467 | |||||
Provision for retirement plan | - | 880 | ||||||
Adjustment of prior year equity value | - | - | ||||||
Provision for closure in El Toco | - | 3,016 | ||||||
Other | 351 | 2 | ||||||
Total | 683 | 5,787 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 189 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 27 - Gains (losses) from operating activities in the statement of income by function of expenses, included according to their nature
27.7 | Summary of expenses by nature : |
January to December | September to December | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
Raw material and supplies used | (1,066,803 | ) | (762,350 | ) | (305,380 | ) | (242,713 | ) | ||||||||
Types of employee benefits expenses | ||||||||||||||||
Salaries and wages | (178,829 | ) | (147,366 | ) | (51,350 | ) | (40,092 | ) | ||||||||
Other short-term employee benefits | (69,262 | ) | (56,704 | ) | (15,566 | ) | (16,744 | ) | ||||||||
Termination benefit expenses | (4,325 | ) | (4,646 | ) | (2,034 | ) | (1,238 | ) | ||||||||
Total employee benefit expenses | (252,416 | ) | (208,716 | ) | (68,950 | ) | (58,074 | ) | ||||||||
Depreciation and amortization expenses | ||||||||||||||||
Depreciation expense | (196,158 | ) | (195,897 | ) | (50,181 | ) | (56,695 | ) | ||||||||
Impairment loss (reversal of impairment losses) recognized in profit or loss for the year | (21,212 | ) | (11,508 | ) | 4,230 | (3,982 | ) | |||||||||
Other expenses, by nature | (5,048 | ) | (266,830 | ) | 11,697 | (8,641 | ) | |||||||||
Total expenses, by nature | (1,541,637 | ) | (1,445,301 | ) | (408,584 | ) | (370,105 | ) |
This table corresponds to the summary from Note 27.2 to 27.6 required by the Chilean Superintendence of Securities and Insurance
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 190 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Nota 28 - Income Tax and Deferred Taxes
Accounts receivable from taxes as of December 31, 2012 and December 31, 2011, are as follows:
28.1 | Current tax assets: |
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Monthly provisional income tax payments, Chilean companies current year | 23,713 | 1,758 | ||||||
Monthly provisional payment Royalty | 2,430 | - | ||||||
Monthly provisional income tax payments, foreign companies | 1,979 | 857 | ||||||
Corporate tax credits (1) | 144 | 394 | ||||||
Corporate tax absorbed by tax losses (2) | 1,968 | 1,756 | ||||||
Total | 30,234 | 4,765 |
(1) | These credits are available to companies and relate to the corporate tax payment in April of the following year. These credits include, amongst others, training expense credits (SENCE) and property, plant and equipment acquisition credits that are equivalent to 4% of the property, plant and equipment purchases made during the year. In addition, some credits relate to the donations the Group has made during 2012 and 2011. |
(2) | This concept corresponds to the absorption of non-operating losses (NOL’s) determined by the company at year end, which must be imputed or recorded in the Retained Taxable Profits Registry (FUT). |
In accordance with the laws in force and as provided by article 31, No. 3 of the Income Tax Law, when profits recorded in the FUT that have not been withdrawn or distributed are totally or partially absorbed by NOL’s, the corporate tax paid on such profits (20%, 17%, 16.5%, 16%, 15%, 10% depending on the year in which profits were generated) will be considered to be a provisional payment with respect to the portion representing the absorbed accumulated tax profits.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 191 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.1 | Current tax assets, continued |
Taxpayers are entitled to apply for a refund of this monthly provisional income tax payments on the absorbed profits recorded in the FUT registry via their tax returns (Form 22).
Therefore, the provisional payment for absorbed profits (PPAP) recorded in the FUT is in effect a recoverable tax, and as such the Company records it as an asset.
28.2 | Current tax liabilities: |
Current tax liabilities | 12/31/2012 | 12/31/2011 | ||||||
ThUS$ | ThUS$ | |||||||
Companies incorporated in Chile | 13,408 | 67,543 | ||||||
Companies incorporated abroad | 10,206 | 7,868 | ||||||
Tax under article 21 | 10 | 7 | ||||||
Total | 23,624 | 75,418 |
Income tax is determined on the basis of the determination of tax result to which the tax rate currently in force in Chile is applied. As established by Law 20.630, beginning on 2012 and after this tax rate is 20%.
The provision for royalty is determined by applying the tax rate determined for the Net operating income (NOI).
In conclusion, both concepts represent the estimated amount the Company will have to pay for income tax and specific tax on mining.
28.3 | Tax earnings |
As of December 31, 2012, and December 31, 2011, the Company and its subsidiaries have recorded the following consolidated balances for retained tax earnings, income not constituting revenue subject to income tax, accumulated tax losses and credit for shareholders:
12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Taxable profits with credit rights (1) | 1,262,201 | 1,053,651 | ||||||
Taxable profits without credit right(1) | 138,535 | 150,234 | ||||||
Taxable loss | 9,931 | 15,069 | ||||||
Credit for shareholders | 294,146 | 242,143 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 192 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.3 | Tax earnings, continued |
The Retained Taxable Profits Registry (FUT) is a chronological registry where the profits generated and distributed by the company are recorded. The object of the FUT is to control the accumulated tax profits of the company that may be distributed, withdrawn or remitted to the owners, shareholders or partners, and the final taxes that must be imposed, called in Chile Global Aggregate Tax (that levies persons resident or domiciled in Chile), or Withholding Tax (that levies persons “Not” resident or domiciled in Chile).
The FUT Register contains profits with credit rights and profits without credit rights, which arise out of the inclusion of the net taxable income determined by the company or the profits received by the company that may be dividends received or withdrawals made during the period.
Profits without credit rights represent the tax payable by the company within the year and filed the following year, therefore they will be deducted from the FUT Registry the following year.
Profits with credit rights may be used to reduce the final tax burden of owners, shareholders or partners, which upon withdrawal are entitled to use the credits associated with the relevant profits.
In summary, companies use the FUT Registry to maintain control over the profits they generate that have not been distributed to the owners and the relevant credits associated with such profits.
28.4 | Income tax and deferred taxes |
Assets and liabilities recognized in the Statement of financial position are offset if and only if:
1 | The Company has legally recognized before the tax authority the right to offset the amounts recognized in these entries; and |
2 | Deferred income tax assets and liabilities are derived from income tax related to the same tax authority on: |
(i) | the same entity or tax subject; or |
(ii) | different entities or tax subjects who intend either to settle current fiscal assets and liabilities for their net amount, or to realize assets and pay liabilities simultaneously in each of the future periods in which the Company expects to settle or recover significant amounts of deferred tax assets or liabilities. |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 193 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
Deferred income tax assets recognized are those income taxes to be recovered in future periods, related to:
(a) deductible temporary differences;
(b) the offset of losses obtained in prior periods and not yet subject to tax deduction; and
(c) the offset of unused credits from prior periods.
The Company recognizes a deferred tax asset when there is certainty that these can be offset with tax income from subsequent periods, losses or fiscal credits not yet used, but solely as long as it is more likely than not that there will be tax earnings in the future against which to charge to these losses or unused fiscal credits.
Deferred tax liabilities recognized refer to the amounts of income taxes payable in future periods related to taxable temporary differences
d.1 | Income tax assets and liabilities as of December 31, 2012 are detailed as follows: |
Net position, assets | Net position, liabilities | |||||||||||||||
Description of deferred income tax assets and | Assets | Liabilities | Assets | Liabilities | ||||||||||||
liabilities | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||
Depreciation | - | - | - | 145,251 | ||||||||||||
Doubtful accounts impairment | - | - | 5,807 | - | ||||||||||||
Accrued vacations | - | - | 3,971 | - | ||||||||||||
Manufacturing expenses | - | - | - | 60,160 | ||||||||||||
Unrealized gains (losses) from sales of products | - | - | 105,879 | - | ||||||||||||
Fair value of bonds | - | - | 3,684 | - | ||||||||||||
Severance indemnity | - | - | - | 4,483 | ||||||||||||
Hedging | - | - | - | 22,890 | ||||||||||||
Inventory of products, spare parts and supplies | 37 | - | 14,990 | - | ||||||||||||
Research and development expenses | - | - | - | 4,917 | ||||||||||||
Tax losses | - | - | 1,509 | - | ||||||||||||
Capitalized interest | - | - | - | 20,449 | ||||||||||||
Expenses in assumption of bank loans | - | - | - | 2,243 | ||||||||||||
Unaccrued interest | - | - | 215 | - | ||||||||||||
Fair value of property, plant and equipment | - | - | - | 2,743 | ||||||||||||
Employee benefits | - | - | 2,027 | - | ||||||||||||
Royalty deferred income taxes | - | - | - | 8,430 | ||||||||||||
Other | 186 | - | 8,039 | - | ||||||||||||
Balance to date | 223 | - | 146,121 | 271,566 | ||||||||||||
Net balance | 223 | - | - | 125,445 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 194 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
d.2 | Income tax assets and liabilities as of December 31, 2012 are detailed as follows |
Net position, assets | Net position, liabilities | |||||||||||||||
Description of deferred income tax assets | Assets | Liabilities | Assets | Liabilities | ||||||||||||
and liabilities | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||
Depreciation | - | - | - | 114,151 | ||||||||||||
Doubtful accounts impairment | 16 | 4,045 | - | |||||||||||||
Vacation accrual | 9 | - | 2,633 | - | ||||||||||||
Production expenses | - | - | - | 54,747 | ||||||||||||
Unrealized gains (losses) from sales of products | - | - | 97,441 | - | ||||||||||||
Bonds fair value | - | - | 2,104 | - | ||||||||||||
Employee termination benefits | - | - | - | 3,036 | ||||||||||||
Hedging | - | - | - | 16,636 | ||||||||||||
Inventory of products, spare parts and supplies | 85 | - | 7,781 | - | ||||||||||||
Research and development expenses | - | - | - | 4,598 | ||||||||||||
Tax losses | - | - | 1,046 | - | ||||||||||||
Capitalized interest | - | - | - | 17,461 | ||||||||||||
Expenses in assumption of bank loans | - | - | - | 1,855 | ||||||||||||
Unaccrued interest | - | - | 386 | - | ||||||||||||
Fair value of property, plant and equipment | - | - | 1,539 | - | ||||||||||||
Employee benefits | - | - | 1,177 | - | ||||||||||||
Royalty deferred income taxes | - | - | - | 10,035 | ||||||||||||
Other | 194 | - | 5,773 | - | ||||||||||||
Balance to date | 304 | - | 123,925 | 222,519 | ||||||||||||
Net balance | 304 | - | - | 98,594 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 195 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
d.3 | Deferred taxes related to benefits for tax losses |
The Company’s tax loss carryforwards (NOL carryforwards) were mainly generated by losses in Chile, which in accordance with current Chilean tax regulations have no expiration date.
As of December 31, 2012 and December 31, 2011, tax loss carryforwards (NOL carryforwards) are detailed as follows:
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Chile | 1,509 | 1,046 | ||||||
Other countries | - | - | ||||||
Other countries | 1,509 | 1,046 |
Tax losses as of December 31 correspond mainly to Servicios Integrales de Tránsitos y Transferencias S.A., Exploraciones Mineras e Isapre Norte Grande Ltda.
d.4 | Unrecognized deferred income tax assets and liabilities |
Unrecognized deferred tax assets and liabilities as of December 31, 2012 and December 31, 2011 are as follows:
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Assets (liabilities) | Assets (liabilities) | |||||||
Tax losses (NOL’s) | 139 | 139 | ||||||
Doubtful accounts impairment | 81 | 81 | ||||||
Inventory impairment | 1,020 | 1,020 | ||||||
Pensions plan | (536 | ) | (536 | ) | ||||
Accrued vacations | 29 | 29 | ||||||
Depreciation | (57 | ) | (57 | ) | ||||
Depreciation | (19 | ) | (19 | ) | ||||
Balances to date | 657 | 657 |
Tax losses mainly relate to the United States, and they expire in 20 years.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 196 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
d.5 | Movements in deferred tax assets and liabilities |
Movements in deferred tax assets and liabilities as of December 31, 2012 and December 31, 2011 are detailed as follows:
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Liabilities (assets) | Liabilities (assets) | |||||||
Deferred tax assets and liabilities, net opening balance | 98,290 | 100,416 | ||||||
Increase (decrease) in deferred taxes in profit or loss | 28,512 | (3,664 | ) | |||||
Tax Recovery of first category credit absorbed by tax losses | - | 1,756 | ||||||
Increase (decrease) in deferred taxes in equity | (1,580 | ) | (218 | ) | ||||
Balances to date | 125,222 | 98,290 |
d.6 | Disclosures on income tax expense (income) |
The Company recognizes current tax and deferred taxes as income or expenses, and they are included in profit or loss, unless they arise from:
(a) | a transaction or event recognized in the same period or in a different period, outside profit or loss either in other comprehensive income or directly in equity; or |
(b) | a business combination |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 197 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
Current and deferred tax expenses (income) are detailed as follows:
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Income (expenses) | Income (expenses) | |||||||
Current income tax expense | ||||||||
Current income tax expense | (187,715 | ) | (181,424 | ) | ||||
Adjustments to prior year current income tax | 145 | (1,950 | ) | |||||
Current income tax expense, net, total | (187,570 | ) | (183,374 | ) | ||||
Deferred tax expense | ||||||||
Deferred tax expense (income) relating to the creation and reversal of temporary differences | (28,512 | ) | 3,664 | |||||
Deferred tax expense (income) relating changes in tax rates or the application of new taxes | - | - | ||||||
Deferred tax expense, net, total | (28,512 | ) | 3,664 | |||||
Tax expense (income) | (216,082 | ) | (179,710 | ) |
Tax expenses (income) for foreign and domestic parties are detailed as follows:
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Income (expenses) | Income (expenses) | |||||||
Current income tax expense by foreign and domestic parties, net | ||||||||
Current income tax expense, foreign parties, net | (14,790 | ) | (5,231 | ) | ||||
Current income tax expense, domestic, net | (172,780 | ) | (178,143 | ) | ||||
Current income tax expense, net, total | (187,570 | ) | (183,374 | ) | ||||
Deferred tax expense by foreign and domestic parties, net | ||||||||
Deferred tax expense, foreign parties, net | 474 | (651 | ) | |||||
Deferred tax expense, domestic, net | (28,986 | ) | 4,315 | |||||
Deferred tax expense, net, total | (28,512 | ) | 3,664 | |||||
Income tax expense | (216,082 | ) | (179,710 | ) |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 198 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
d.7 | Equity interest in taxation attributable to equity-accounted investees |
The Company does not recognize any deferred tax liability in all cases of taxable temporary differences associated with investments in subsidiaries, branches and associated companies or interest in joint ventures, because as indicated in the standard, the following two conditions are jointly met
(a) | the parent, investor or interest holder is able to control the time for reversal of the temporary difference; and |
(b) | It is more likely than not that the temporary difference is not reversed in the foreseeable future. |
In addition, the Company does not recognize deferred income tax assets for all deductible temporary differences from investments in subsidiaries, branches and associated companies or interests in joint ventures because it is not possible to meet for the following requirements:
(a) | Temporary differences are reversed in a foreseeable future; and |
(b) | The Company has tax earnings, against which temporary differences can be used. |
d.8 | Disclosures on the tax effects of other comprehensive income components: |
12/31/2012 | ||||||||||||
ThUS$ | ||||||||||||
Income tax related to components of other | Amount before | (Expense) | ||||||||||
income and expense with a charge or credit to | taxes | income for | Amount | |||||||||
net equity | (expense) gain | income taxes | after taxes | |||||||||
Cash flow hedge | (6,236 | ) | 1,580 | (4,656 | ) | |||||||
Total | (6,236 | ) | 1,580 | (4,656 | ) |
12/31/2011 | ||||||||||||
ThUS$ | ||||||||||||
Income tax related to components of other | Amount before | (Expense) | ||||||||||
income and expense with a charge or credit to | taxes | income for | Amount | |||||||||
net equity | (expense) gain | income taxes | after taxes | |||||||||
Cash flow hedge | (1,091 | ) | 218 | (873 | ) | |||||||
Total | (1,091 | ) | 218 | (873 | ) |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 199 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
d.9 | Explanation of the relationship between expense (income) for tax purposes and accounting income. |
In accordance with paragraph No. 81, letter c) of IAS 12, the Company has estimated that the method that discloses more significant information for the users of its financial statements is the reconciliation of tax expense (income) to the result of multiplying income for accounting purposes by the tax rate in force in Chile. This option is based on the fact that the Parent and its subsidiaries incorporated in Chile generate almost the total amount of tax expense (income) and the fact that amounts of subsidiaries incorporated in foreign countries have no relevant significance within the context of the total amount of tax expense (income.)
Reconciliation of numbers in income tax expenses (income) and the result of multiplying financial gain by the rate prevailing in Chile
12/31/2012 | 12/31/2011 | |||||||
ThUS$ | ThUS$ | |||||||
Income (expense) | Income (expense) | |||||||
Consolidated income before taxes | 873,451 | 733,829 | ||||||
Income tax rate in force in Chile | 20 | % | 20 | % | ||||
Tax expense using the legal rate | (174,690 | ) | (146,766 | ) | ||||
Effect of royalty tax expense | (25,486 | ) | (24,487 | ) | ||||
Tax effect of non-taxable revenue | 7,419 | 6,865 | ||||||
Effect of taxable rate of non-deductible expenses for determination of taxable income (loss) | (3,091 | ) | (2,548 | ) | ||||
Tax effect of tax rates supported abroad | (5,265 | ) | (3,173 | ) | ||||
Effect on the tax rate arising from changes in the tax rate | - | - | ||||||
Other tax effects from the reconciliation between the accounting income and tax expense (income) | (14,969 | ) | (9,601 | ) | ||||
Tax expense using the effective rate | (216,082 | ) | (179,710 | ) |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 200 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 28 - Income Tax and Deferred Taxes (continued)
28.4 | Income tax and deferred taxes, continued |
d.10 | Tax periods potentially subject to verification: |
The Group’s Companies are potentially subject to income tax audits by tax authorities in each country. These audits are limited to a number of interim tax periods, which, in general, when they elapse, give rise to the expiration of these inspections.
Tax audits, due to their nature, are often complex and may require several years. Below, we provide a summary of tax periods that are potentially subject to verification, in accordance with tax regulations in force in the country of origin:
a) | Chile: |
According to article 200 of Decree Law No. 830, the tax authority shall review for any deficiencies in its settlement and taxes turn giving rise, by applying a requirement of 3 years term from the expiration of the legal deadline when payment should have been made. Besides, this requirement was extended to 6 years term for the revision of taxes subject to declaration, when such declaration was not been filed or has been presented maliciously false.
b) | United States |
In the United States, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event that an omission or error is detected in the tax return of sales or cost of sales, the review can be extended for a period of up to 6 years.
c) | Mexico: |
In Mexico, the tax authority can review tax returns up to 5 years from the expiration date of the tax return.
d) | Spain: |
In Spain, the tax authority can review tax returns up to 4 years from the expiration date of the tax return.
e) | Belgium: |
In Belgium, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return if no tax losses exist. In the event of detecting an omission or error in the tax return, the review can be extended for a period of up to 5 years.
f) | South Africa: |
In South Africa, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event an omission or error in the tax return is detected, the review can be extended for a period of up to 5 years.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 201 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates
Assets held in foreign currency subject to fluctuations in exchange rates are detailed as follows:
Class of asset | Currency | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | BRL | 20 | 22 | |||||||||
Cash and cash equivalents | CLP | 76,712 | 125,118 | |||||||||
Cash and cash equivalents | CNY | 181 | 300 | |||||||||
Cash and cash equivalents | EUR | 3,601 | 3,070 | |||||||||
Cash and cash equivalents | GBP | 70 | 14 | |||||||||
Cash and cash equivalents | IDR | 5 | 5 | |||||||||
Cash and cash equivalents | INR | 13 | 45 | |||||||||
Cash and cash equivalents | MXN | 720 | 29 | |||||||||
Cash and cash equivalents | PEN | 75 | 16 | |||||||||
Cash and cash equivalents | YEN | 1,369 | 2,292 | |||||||||
Cash and cash equivalents | ZAR | 7,421 | 5,450 | |||||||||
Subtotal cash and cash equivalents | 90,187 | 136,361 | ||||||||||
Other current financial assets | CLP | 182,427 | 129,069 | |||||||||
Subtotal other current financial assets | 182,427 | 129,069 | ||||||||||
Other current non-financial assets | ARS | 29 | 35 | |||||||||
Other current non-financial assets | AUD | - | 91 | |||||||||
Other current non-financial assets | BRL | 5 | 4 | |||||||||
Other current non-financial assets | CLF | 23 | 22 | |||||||||
Other current non-financial assets | CLP | 42,378 | 46,366 | |||||||||
Other current non-financial assets | CNY | 29 | 16 | |||||||||
Other current non-financial assets | EUR | 8,534 | 4,504 | |||||||||
Other current non-financial assets | INR | - | 17 | |||||||||
Other current non-financial assets | MXN | 736 | 606 | |||||||||
Other current non-financial assets | PEN | 55 | 37 | |||||||||
Other current non-financial assets | YEN | 15 | - | |||||||||
Other current non-financial assets | ZAR | 702 | 1,443 | |||||||||
Subtotal other current non-financial assets | 52,506 | 53,141 | ||||||||||
Trade and other receivables | AUD | 14 | - | |||||||||
Trade and other receivables | BRL | 58 | 41 | |||||||||
Trade and other receivables | CLF | 826 | 1,172 | |||||||||
Trade and other receivables | CLP | 78,112 | 107,973 | |||||||||
Trade and other receivables | CNY | 2,014 | 1,811 | |||||||||
Trade and other receivables | EUR | 47,962 | 60,382 | |||||||||
Trade and other receivables | GBP | 399 | 488 | |||||||||
Trade and other receivables | MXN | 200 | 141 | |||||||||
Trade and other receivables | PEN | 114 | 211 | |||||||||
Trade and other receivables | ZAR | 16,004 | 16,004 | |||||||||
Subtotal trade and other receivables | 145,703 | 188,223 | ||||||||||
Receivables from related parties | AED | - | 379 | |||||||||
Receivables from related parties | CLP | 1,154 | 999 | |||||||||
Receivables from related parties | EUR | 34 | 150 | |||||||||
Receivables from related parties | YEN | 28 | 93 | |||||||||
Receivables from related parties | ZAR | 3,312 | - | |||||||||
Subtotal receivables from related parties | 4,528 | 1,621 | ||||||||||
Current tax assets | AUD | 452 | - | |||||||||
Current tax assets | CLP | 457 | 590 | |||||||||
Current tax assets | EUR | 72 | 70 | |||||||||
Current tax assets | INR | 5 | - | |||||||||
Current tax assets | MXN | 698 | 6 | |||||||||
Current tax assets | PEN | 363 | 239 | |||||||||
Current tax assets | YEN | 135 | 34 | |||||||||
Subtotal current tax assets | 2,182 | 939 | ||||||||||
Total current assets | 477,533 | 509,354 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 202 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates (continued)
Class of asset | Currency | 12/31/2012 ThUS$ | 12/31/2011 ThUS$ | |||||||
Non-current assets: | ||||||||||
Other non-current financial assets | BRL | 30 | 30 | |||||||
Other non-current financial assets | CLP | 20 | 20 | |||||||
Other non-current financial assets | EUR | - | 3 | |||||||
Other non-current financial assets | YEN | 54 | 61 | |||||||
Subtotal other non-current financial assets | 104 | 114 | ||||||||
Other non-current non-financial assets | BRL | 219 | 238 | |||||||
Other non-current non-financial assets | CLP | 624 | 477 | |||||||
Subtotal other non-current non-financial assets | 843 | 715 | ||||||||
Non-current rights receivable | CLF | 602 | 362 | |||||||
Non-current rights receivable | CLP | 709 | 709 | |||||||
Subtotal non-current rights receivable | 1,311 | 1,071 | ||||||||
Equity-accounted investees | AED | 17,044 | 14,236 | |||||||
Equity-accounted investees | CLP | 1,656 | 1,444 | |||||||
Equity-accounted investees | EGP | - | 1,270 | |||||||
Equity-accounted investees | EUR | 8,495 | 3,102 | |||||||
Equity-accounted investees | INR | 683 | 785 | |||||||
Equity-accounted investees | THB | 1,608 | 1,561 | |||||||
Equity-accounted investees | TRY | 15,431 | 12,256 | |||||||
Subtotal equity-accounted investees | 44,917 | 34,654 | ||||||||
Intangible assets other than goodwill | CLP | 170 | 42 | |||||||
Intangible assets other than goodwill | CNY | 6 | - | |||||||
Subtotal intangible assets other than goodwill | 176 | 42 | ||||||||
Property, plant and equipment | CLP | 3,639 | 3,264 | |||||||
Subtotal property, plant and equipment | 3,639 | 3,264 | ||||||||
Total non-current assets | 50,990 | 39,860 | ||||||||
Total assets | 528,523 | 549,214 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 203 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates (continued)
Liabilities held in foreign currencies are detailed as follows:
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||||
Class of liability | Currency | Up to 90 days ThUS$ | Over 90 days up to 1 year ThUS$ | Total ThUS$ | Up to 90 days ThUS$ | Over 90 days up to 1 year ThUS$ | Total ThUS$ | |||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||
Other current financial liabilities | CLF | 5,967 | 7,465 | 13,432 | 3,906 | 6,640 | 10,546 | |||||||||||||||||||
Other current financial liabilities | CLP | 1,265 | 1,470 | 2,735 | 1,217 | 799 | 2,016 | |||||||||||||||||||
Subtotal other current financial liabilities | 7,232 | 8,935 | 16,167 | 5,123 | 7,439 | 12,562 | ||||||||||||||||||||
Trade and other payables | ARS | 1 | - | 1 | 3 | - | 3 | |||||||||||||||||||
Trade and other payables | BRL | 71 | - | 71 | 320 | - | 320 | |||||||||||||||||||
Trade and other payables | CHF | 155 | - | 155 | 221 | - | 221 | |||||||||||||||||||
Trade and other payables | CLP | 132,037 | 35 | 132,072 | 115,694 | 236 | 115,930 | |||||||||||||||||||
Trade and other payables | CNY | 1,642 | - | 1,642 | 1,821 | - | 1,821 | |||||||||||||||||||
Trade and other payables | EUR | 18,983 | 279 | 19,262 | 12,265 | 181 | 12,446 | |||||||||||||||||||
Trade and other payables | GBP | 142 | - | 142 | 24 | - | 24 | |||||||||||||||||||
Trade and other payables | INR | 4 | - | 4 | 1 | - | 1 | |||||||||||||||||||
Trade and other payables | MXN | 808 | 2 | 810 | 426 | - | 426 | |||||||||||||||||||
Trade and other payables | PEN | 36 | - | 36 | 31 | - | 31 | |||||||||||||||||||
Trade and other payables | YEN | 66 | 49 | 115 | 124 | - | 124 | |||||||||||||||||||
Trade and other payables | ZAR | 1,810 | - | 1,810 | 2,831 | 108 | 2,939 | |||||||||||||||||||
Subtotal trade and other payables | 155,755 | 365 | 156,120 | 133,761 | 525 | 134,286 | ||||||||||||||||||||
Other short-term provisions | ARS | - | - | - | 62 | - | 62 | |||||||||||||||||||
Other short-term provisions | BRL | 17 | 1,606 | 1,623 | - | 1,459 | 1,459 | |||||||||||||||||||
Other short-term provisions | CLP | 28 | - | 28 | 29 | - | 29 | |||||||||||||||||||
Other short-term provisions | EUR | 248 | - | 248 | 140 | - | 140 | |||||||||||||||||||
Other short-term provisions | MXN | - | - | - | - | 250 | 250 | |||||||||||||||||||
Subtotal other short-term provisions | 293 | 1,606 | 1,899 | 231 | 1,709 | 1,940 | ||||||||||||||||||||
Current tax liabilities | INR | 5 | - | 5 | - | - | - | |||||||||||||||||||
Current tax liabilities | BRL | - | 3 | 3 | - | - | - | |||||||||||||||||||
Current tax liabilities | CLP | - | 2,660 | 2,660 | - | 2,129 | 2,129 | |||||||||||||||||||
Current tax liabilities | CNY | - | 22 | 22 | 49 | - | 49 | |||||||||||||||||||
Current tax liabilities | EUR | - | 2,742 | 2,742 | - | 2,011 | 2,011 | |||||||||||||||||||
Current tax liabilities | MXN | 36 | - | 36 | 140 | - | 140 | |||||||||||||||||||
Current tax liabilities | YEN | - | - | - | - | 386 | 386 | |||||||||||||||||||
Current tax liabilities | ZAR | - | 55 | 55 | - | 109 | 109 | |||||||||||||||||||
Subtotal current tax liabilities | 41 | 5,482 | 5,523 | 189 | 4,635 | 4,824 | ||||||||||||||||||||
Current provisions for employee benefits | CLP | 7,557 | 14,760 | 22,317 | 6,915 | 22,807 | 29,722 | |||||||||||||||||||
Current provisions for employee benefits | MXN | - | 212 | 212 | - | 334 | 334 | |||||||||||||||||||
Subtotal current provisions for employee benefits | 7,557 | 14,972 | 22,529 | 6,915 | 23,141 | 30,056 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 204 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates (continued)
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||||
Class of liabilities | Currency | Up to 90 days ThUS$ | Over 90 days up to 1 year ThUS$ | Total ThUS$ | Up to 90 days ThUS$ | Over 90 days up to 1 year ThUS$ | Total ThUS$ | |||||||||||||||||||
Other current non-financial liabilities | ARS | , | , | , | - | - | - | |||||||||||||||||||
Other current non-financial liabilities | BRL | 12 | 44 | 56 | 12 | 44 | 56 | |||||||||||||||||||
Other current non-financial liabilities | CLP | 9,561 | 26,714 | 36,275 | 7,464 | 36,006 | 43,470 | |||||||||||||||||||
Other current non-financial liabilities | CNY | 26 | - | 26 | 12 | - | 12 | |||||||||||||||||||
Other current non-financial liabilities | EUR | 637 | - | 637 | 631 | - | 631 | |||||||||||||||||||
Other current non-financial liabilities | MXN | 250 | 103 | 353 | 1,331 | 53 | 1,384 | |||||||||||||||||||
Other current non-financial liabilities | PEN | 70 | - | 70 | 118 | - | 118 | |||||||||||||||||||
Other current non-financial liabilities | YEN | - | - | - | - | - | - | |||||||||||||||||||
Other current non-financial liabilities | ZAR | 9 | - | 9 | - | - | - | |||||||||||||||||||
Subtotal other current non-financial liabilities | 10,565 | 26,861 | 37,426 | 9,568 | 36,103 | 45,671 | ||||||||||||||||||||
Total current liabilities | 181,443 | 58,221 | 239,664 | 155,787 | 73,552 | 229,339 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 205 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates (continued)
12/31/2012 | 12/31/2011 | |||||||||||||||||||||||||||||||||
Class of liabilities | Currency | Over 1 year up to 3 years ThUS$ | Over 3 years up to 5 years ThUS$ | Over 5 years ThUS$ | Total ThUS$ | Over 1 year up to 3 years ThUS$ | Over 3 years up to 5 years ThUS$ | Over 5 years ThUS$ | Total ThUS$ | |||||||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||||||||||
Other non-current financial liabilities | CLF | 85,681 | 61,119 | 321,857 | 468,657 | 76,417 | 12,510 | 232,938 | 321,865 | |||||||||||||||||||||||||
Other non-current financial liabilities | CLP | 151,500 | - | - | 151,500 | 139,770 | - | - | 139,770 | |||||||||||||||||||||||||
Subtotal other non-current financial liabilities | 237,181 | 61,119 | 321,857 | 620,157 | 216,187 | 12,510 | 232,938 | 461,635 | ||||||||||||||||||||||||||
Deferred tax liabilities | CLP | - | - | 43 | 43 | 57 | - | 56 | 113 | |||||||||||||||||||||||||
Deferred tax liabilities | MXN | 159 | - | - | 159 | 590 | - | - | 590 | |||||||||||||||||||||||||
Subtotal deferred tax liabilities | 159 | - | 43 | 202 | 647 | - | 56 | 703 | ||||||||||||||||||||||||||
Non-current provisions for employee benefits | CLP | - | - | 33,766 | 33,766 | - | - | 27,573 | 27,573 | |||||||||||||||||||||||||
Non-current provisions for employee benefits | MXN | - | - | 132 | 132 | - | - | 520 | 520 | |||||||||||||||||||||||||
Non-current provisions for employee benefits | YEN | - | - | 532 | 532 | - | - | 94 | 94 | |||||||||||||||||||||||||
Subtotal non-current provisions for employee benefits | - | - | 34,430 | 34,430 | - | - | 28,187 | 28,187 | ||||||||||||||||||||||||||
Total non-current liabilities | 237,340 | 61,119 | 356,330 | 654,789 | 216,834 | 12,510 | 261,181 | 490,525 |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 206 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 30 – Consolidated Statement of Cash Flows
As established in Circular N°2058 of the Superintendence of Securities and Insurance, the statement of cash flow as of December 31, 2012, using the direct method, is presented as follows:
Direct Statement of Cash Flow | ||||
12/31/2012 ThUS$ | ||||
Cash flows from (used in) operating activities | ||||
Classes of flows by operating activities | ||||
Flows from sales of goods and provision of services | 2,387,979 | |||
Other flows from operating activities | - | |||
Classes of payments | ||||
Payments to suppliers for the supply of goods and services | (1,492,399 | ) | ||
Other payments for operating activities | (8,396 | ) | ||
Dividends paid | - | |||
Dividends received | 15,126 | |||
Interests paid | (59,509 | ) | ||
Interests received | 24,368 | |||
Reimbursed (paid) income taxes | (250,201 | ) | ||
Other incomes (outflows) of cash | 33,238 | |||
Net Cash Flows from (used in) operating activities | 650,206 | |||
Cash Flows from (used in) investing activities | ||||
Cash flows from the loss of control of subsidiaries or other businesses | 961 | |||
Other payments to acquire stakes in joint ventures | (197 | ) | ||
Loans to related entities | (4,000 | ) | ||
Amounts from the sale of property, plant and equipment | 2,050 | |||
Acquisition of Property, plant and equipment | (445,984 | ) | ||
Advances of cash and loans granted to third parties | (623 | ) | ||
Other incomes (outflows) of cash | (115,092 | ) | ||
Net Cash Flows from (used in) investing activities | (562,885 | ) |
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 207 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 30 - Consolidated Statement of Cash Flows (continued)
Direct Statement of Cash Flow | ||||
Statement of Cash Flow | 12/31/2012 ThUS$ | |||
Cash Flows from (used in) financing activities | ||||
Amounts from the issuance of other capital instruments | - | |||
Amounts from long-term loans | 366,502 | |||
Amounts from short-term loans | ||||
Total amounts from loans | 366,502 | |||
Payments of loans | (220,000 | ) | ||
Dividends paid | (334,762 | ) | ||
Other incomes (outflows) of cash | (9,437 | ) | ||
Net Cash Flows from (used in) financing activities | (197,697 | ) | ||
Net increase (decrease) in cash and cash equivalent before the effect of changes in exchange rate | (110,376 | ) | ||
Effects of variation in exchange rate on cash and cash equivalent | (10,263 | ) | ||
Net increase (decrease) of cash and cash equivalent | (120,640 | ) | ||
Initial balance of Cash and cash equivalent | 444,992 | |||
Final balance of Cash and cash equivalent | 324,353 |
Note 31 – Subsequent events
31.1 | Authorization of the financial statements |
The consolidated financial statements of Sociedad Química y Minera de Chile S.A. and subsidiaries prepared in accordance with International Financial Reporting Standards for the period ended December 31, 2012 were approved and authorized for issuance by the Board of Directors at their meeting held on March 5, 2013.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 208 |
Notes to the Consolidated Financial Statements as of December 31, 2012 |
Note 31 - Subsequent events (continued)
31.2 | Disclosures on events occurring after the reporting date |
Management is not aware of any other significant events that occurred between December 31, 2012 and the date of issuance of these consolidated financial statements that may significantly affect them.
31.3 | Detail of dividends declared after the reporting date |
As of the closing date of these financial statements, there are no dividends declared after the reporting date.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com | 209 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Conf: | /s/ Ricardo Ramos R. | ||
Ricardo Ramos R. | |||
Chief Financial Officer |
Date: April 11, 2013.
SQM Los Militares 4290, Las Condes, Santiago, Chile Tel: (56 2) 425 2000 www.sqm.com |