LARRAIN VIAL S.A. CORREDORA DE BOLSA · LARRAIN VIAL S.A. CORREDORA DE BOLSA Separate Statements of...

LARRAIN VIAL S.A.

CORREDORA DE BOLSA Separate Financial Statements as of December 31, 2013 and 2012

and for the years then ended

(With Independent Auditor’s Report Thereon)

LARRAIN VIAL S.A.

CORREDORA DE BOLSA

CONTENTS

Independent Auditor’s Report

Separate Statements of Financial Position

Separate Statements of Comprehensive Income

Separate Statements of Changes in Equity

Separate Statements of Cash Flows

Notes to the Separate Financial Statements

ThCh$ : Amounts expressed in thousands of Chilean pesos

UF : Amounts expressed in Unidades de Fomento

US$ : Amounts expressed in United States dollars

ThUS$ : Amounts expressed in thousands of United States dollars

LARRAIN VIAL S.A. CORREDORA DE BOLSA

CONTENTS

Page

Independent Auditor’s Report 1

Separate Statements of Financial Position 4

Separate Statements of Comprehensive Income 6

Separate Statements of Changes in Equity 8

Separate Statements of Cash Flows 10

NOTES

1. Reporting Entity 11

2. Basis of preparation 14

3. Significant accounting policies 15

4. Financial risk management 25

5. Use of Estimates and judgments 36

6. Adjustment and foreign currency translation differences 38

7. Cash and cash equivalents 39

8. Financial instruments by Category 39

9. Financial instruments at fair value – securities owned 41

10. Financial instruments at amortized value – securities owned 46

11. Financial instruments at amortized value – financing operations 47

12. Derivatives 49

13. Receivables from brokers and dealers 52

14. Receivables for securities owned 54

15. Balances and transactions with related parties 56

16. Investments in other companies 74

17. Intangible assets 77

18. Property and equipment 77

19. Financial liabilities at fair value 78

20. Financing obligations 78

21. Bank borrowings 80

22. Payables to brokers and dealers 81

23. Payables for securities owned 82

24. Other receivables and payables 82

25. Provisions 83

26. Income (expense) by market line of business 84

27. Income tax and deferred taxes 86

28. Contingencies and commitments 88

29. Equity 97

30. Sanctions 98

31. Significant events 98

32. Subsequent events 99


Separate Statements of Financial Position

as of December 31, 2013 and 2012

See accompanying notes to these financial statements.

4

Assets Note 2013 2012 ThCh$ ThCh$

11.01.00 Cash and cash equivalents 7 33,660,967 28,731,129

11.02.00 Financial instruments 200,281,081 124,535,299

11.02.10 At fair value – available securities owned 23,504,953 17,753,953

11.02.11 Equity securities (IRV) 9 3,563,256 5,715,006

11.02.12 Debt securities and financial brokerage (IRF and IIF) 9 19,941,697 12,038,947

11.02.20 At fair value- committed securities owned 149,242,723 81,035,343

11.02.22 Debt securities and financial brokerage 9 149,242,723 81,035,343

11.02.30 At fair value- derivative financial instruments 12 4,575,673 1,520,239

11.02.60 At amortized cost- financing operations 22,957,732 24,225,764

11.02.61 Securities borrowed and purchased under resale

agreements on IRV 11

9,140,758 19,746,670

11.02.62 Securities borrowed and purchased under resale

agreements on IRF and IIF 11

13,355,501 4,177,309

11.02.63 Other 11 461,473 301,785

11.03.00 Receivables from brokers and dealers 13 115,780,772 63,724,953

11.04.00 Receivables for securities owned 14 494,066 288,816

11.05.00 Trade receivables due from related parties 15 6,749,697 39,661,897

11.06.00 Other receivables 24 7,999,170 18,929,635

11.07.00 Current tax assets 27 2,779,690 4,192,071

11.08.00 Deferred taxes 27 489,437 541,950

11.09.00 Investments in other companies 16 6,048,474 3,883,307

11.10.00 Intangible assets 17 2,748,642 2,179,413

11.11.00 Property and equipment 18 2,783,418 2,984,937

11.12.00 Other assets 2,610,955 2,944,852

10.00.00 Total assets 382,426,369 292,598,259


Separate Statements of Financial Position, continued

as of December 31, 2013 and 2012

See accompanying notes to these separate financial statements.

5

Liabilities and equity Note 2013 2012 ThCh$ ThCh$

21.01.00 Financial liabilities 168,283,338 99,617,691

21.01.20 At fair value- derivative financial instruments 12 4,364,964 1,821,562

21.01.30 Financing obligations 163,423,911 85,711,989

21.01.32 Securities loaned and obligations under repurchase

agreements on IRF and IIF 20

163,118,800 85,511,530

21.01.33 Other 20 305,111 200,459

21.01.40 Bank borrowings 21 494,463 12,084,140

21.02.00 Payables to brokers and dealers 22 95,272,147 54,672,390

21.03.00 Payables for securities owned 23 - -

21.04.00 Trade payables due to related parties 15 1,166,239 17,525,221

21.05.00 Other payables 24 51,371,898 36,890,819

21.06.00 Provisions 25 2,168,933 2,815,520

21.07.00 Tax payables 27 120,503 160,949

21.00.00 Total liabilities 318,383,058 211,682,590

Equity

22.01.00 Capital 29 9,933,857 9,933,857

22.02.00 Reserves 29 1,718,595 1,656,947

22.03.00 Retained earnings 29 45,008,678 62,629,875

22.04.00 Profit for the year 29 7,382,181 6,469,333

Equity attributable to the owners of the Parent 64,043,311 80,690,012

Non-controlling interests - -

22.00.00 Total equity 64,043,311 80,690,012

20.00.00 Total liabilities and equity 382,426,369 292,598,259


Separate Statements of Comprehensive Income

for the years ended as of December 31, 2013 and 2012


6

Note 2013 2012

ThCh$ ThCh$ Brokerage income and expense

30.10.01 Trading fee and commission income 11,390,216 11,737,467

30.10.03 Fee and commission expense (2,624,684) (2,163,420)

30.10.04 Other commissions 14,416,271 13,972,019

30.10.00 Total brokerage income 23,181,803 23,546,066

Service revenue

30.20.01 Revenue from portfolio management 1,731,930 1,507,092

30.20.03 Revenue from financial advisory 1,109,783 479,436

30.20.04 Other revenue 1,797,545 1,276,248

30.20.00 Total service revenue 4,639,258 3,262,776

Income from financial instruments

30.30.01 At fair value 11,076,547 10,078,946

30.30.02 At fair value – derivatives (774,355) 375,361

30.30.04 At amortized cost- financing operations 1,020,704 1,307,818

30.30.00 Total income from financial instruments 11,322,896 11,762,125

Expense from financing operations

30.40.01 Financing expenses (5,172,959) (4,082,202)

30.40.02 Other finance expenses (689,543) (559,932)

30.40.00 Total expense from financing operations (5,862,502) (4,642,134)

Administrative and selling expenses

30.50.01 Personnel expenses (7,574,567) (8,710,434)

30.50.02 Selling expenses (28,806,157) (24,879,481)

30.50.03 Other administrative expenses (774,110) (1,153,949)

30.50.00

Total administrative and selling

expenses (37,154,834) (34,743,864)

Other income (expense)

30.60.01

Adjustment and foreign currency translation

differences 6 1,757,431 (1,180,763)

30.60.02 Share of profit of equity-accounted investees 8,557,139 7,604,074

30.60.03 Other income (expense) 254,916 263,330

30.60.00 Total other income 10,568,486 6,686,641

30.70.00 Profit before income tax expense 6,696,107 5,871,610

30.80.00 Income tax expense 27 686,074 597,723

30.00.00 Profit for the year 7,382,181 6,469,333


Separate Statements of Comprehensive Income, continued

for the years ended as of December 31, 2013 and 2012


7

B. Statements of other comprehensive income Note 2013 2012 ThCh$ ThCh$

30.00.00 Profit for the year 7,382,181 6,469,333

Income (expense) recognized with a credit (debit) to

equity

31.20.00 Financial assets at fair value through equity 16 b 57,492 111,159

31.30.00

Share of other comprehensive income of equity-accounted

Investees 4,156 -

31.00.00

Total income (expense) recognized with a

credit (debit) to equity 61,648 111,159

32.00.00

Total comprehensive income recognized for

the year 7,443,829 6,580,492


Separate Statements of Changes in Equity

for the years ended December 31, 2013 and 2012


8

As of December 31, 2013

Statements of Changes in Equity

Capital

Reserves

Retained

earnings

Profit for the

year

Equity

attributable to

the owners of

the Parent

Capital

Financial

assets at fair

value through

equity

Financial

assets at fair

value through

equity

Revaluation of

property, plant

and equipment Other

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

40.10.00 Opening balance as of January 1, 2013

9,933,857 1,899,236 - (242,289) 62,629,875 6,469,333 80,690,012 - 80,690,012

40.20.00 Business combination - - - - - - - - - 40.30.00 Comprehensive income for the year - 57,492 - 4,156 - 7,443,829 7,443,829 - 7,443,829

40.30.10

Total income (expense) recognized

with a credit (debit) to equity - 57,492 - 4,156 - 61,618 - 61,618 40.30.20 Profit for the year - - - - - 7,382,181 7,382,181 - 7,382,181 40.40.00 Transfers to retained earnings - - - - 6,469,333 (6,469,333) - - -

40.50.00

Distribution of dividends or profit-

sharing - - - - (24,069,080) - (24,069,080) - (24,069,080) 40.60.00 Other adjustments to equity - - - 4,156 (21,450) - (21,450) - (40,198)

40.00.00 Balance as of December 31, 2013 9,933,857 1,956,728 - (238,133) 45,008,678 7,382,181 64,043,311 - 64,043,311


Separate Statements of Changes in Equity, continued



9


Statements of Changes in Equity

Capital

Reserves

Retained

earnings Profit for the

year

Provisional

dividends or

profit-sharing Total

Retained

earnings Financial

assets at fair

value through

equity

Financial

assets at fair

value through

equity

Revaluation of

property, plant

and equipment Other

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

40.10.00 Opening balance as of January 1, 2012

9,933,857 1,788,077 - (242,289) 45,425,963 17,203,912 74,109,520 - 74,109,520

40.20.00 Business combination - - - - - - - - - 40.30.00 Comprehensive income for the year - 111,159 - - - 6,580,492 6,580,492 - 6,580,492

40.30.10

Total income (expense) recognized

with a credit (debit) to equity - 111,159 - - - 111,159 111,159 - 111,159 40.30.20 Profit for the year - - - - - 6,469,333 6,469,333 - 6,469,333 40.40.00 Transfers to retained earnings - - - - 17,203,912 (17,203,912) - -

40.50.00

Distribution of dividends or profit-

sharing - - - - - - - - 40.60.00 Other adjustments to equity - - - - - - - - -

40.00.00 Balance as of December 31, 2012 9,933,857 1,899,236 - (242,289) 62,629,875 6,469,333 80,690,012 - 80,690,012


Separate Statements of Cash Flows



10

2013 2012

ThCh$ ThCh$

Net cash flows from operating activities

51.11.00 Fees and commissions received (paid) 23,181,803 23,546,066

51.12.00 Net receipts from (payments for) brokerage customers 32,828,541 14,932,247 51.13.00 Net receipts from (payments for)financial instruments at fair value 930,715 10,078,946 51.14.00 Net receipts from (payments for) derivative financial instruments (873,518) 375,361 51.15.00 Net receipts from (payments for) financial instruments at amortized

cost (2,829,833) 1,307,818 51.16.00 Net receipts from (payments for) financial advisory, portfolio

management and custody of securities 4,639,258 1,986,529 51.17.00 Administrative and trading expenses paid (34,988,901) (33,968,362) 51.18.00 Taxes paid (1,700,493) (1,784,439)

51.19.00 Other cash receipts from (payments for) operating activities 349,752 333,572

51.10.00 Net cash generated from operating activities 21,537,324 16,807,738

Net cash from financing activities

52.11.00 Net receipts from (payments for) financial liabilities (11,589,677) 11,464,930 52.12.00 Net receipts from (payments for) related party financing (8,786,120) (28,957,993) 52.13.00 Capital increases - - 52.14.00 Distribution of income and capital - - 52.15.00 Other cash receipts (payments) from financing activities - -

52.10.00 Net cash used in financing activities (20,375,797) (17,493,063)

Net cash from investing activities

53.11.00 Cash receipts from sale of premises and equipment - - 53.12.00 Cash receipts from sale of investments in companies - - 53.13.00 Dividends and other income received from investments in

companies 8,537,965 7,604,075 53.14.00 Acquisition of premises and equipment - - 53.15.00 Investments in other companies (2,165,167) - 53.16.00 Other cash receipts from (payments for) investing activities (569,229) (1,445,427)

53.10.00 Net cash generated from investing activities 5,803,569 6,158,648

50.10.00 Net cash flows for the year

6,965,097 5,473,323

50.20.00 Effect of exchange rate fluctuations on cash and cash equivalents (2,035,258) (1,082,909)

50.30.00 Net (decrease) increase in cash and cash equivalents 6,965,097 5,473,323

50.40.00 Cash and cash equivalents as of January 1 28,731,129 24,340,715

50.00.00 Cash and cash equivalents as of December 31 total net

cash for the year 33,660,967 28,731,129



December 31, 2013 and 2012

11

Note 1 Reporting Entity

Company name : Larraín Vial S.A. Corredora de Bolsa

Taxpayer ID : 80.537.000-9

Legal address : Av. El Bosque Norte N°0177, Las Condes.

Date of incorporation : 10/08/1954

Registration number : 6

Line of business : Security brokerage

Shareholders : Asesorías Larraín Vial Ltda. 49%

Larraín Vial S.A. 51%

100%

The Company was incorporated on August 10, 1954, is subject to the regulations in the

Securities Market Act, No.18.045 and is under the oversight of the Chilean Superintendence of

Securities and Insurance (SVS).

The Company's line of business is conducting brokerage operations on behalf of third parties

acting as a stock broker, conducting all types of activities performed by stock brokers in

accordance with all the legal and regulatory provisions currently in force or enacted in the future,

as well as the performance of all those supplementary activities that the Chilean Superintendence

of Securities and Insurance authorizes or has authorized for the performance by stock brokers.

Larraín Vial S.A. Corredora de Bolsa’s main line of business is the brokerage of securities and

performs operations on its own or on behalf of third parties. However, its line of business allows

it perform a variety of operations in accordance with legal regulations currently in force. The

Company's main lines of business include shares, simultaneous transactions, agreements, debt

securities, mutual funds, forward operations and portfolio management.




12

LV. Sociedad Agente de Bolsa. (Colombia)

Larraín Vial Inversiones Ltda.1%

99,9996%

99%

51%

99.94%

89%

90%

75%

72.48%

0.0001%

100%

Larraín Vial S.A.

0.0004%

49%

98,7%

Larraín VialProyectos e Inv.Ltda.

5% 1%

9%

Larraín VialServicios Profesionales Ltda.

Larraín Vial Activos AGF

Asesorías Larraín Vial Ltda.

Larraín Vial S.A. Corredora de Bolsa

Larraín Vial S.A. C. B. Productos

Larraín VialServicios Financieros Ltda.

LVCC Asset Management

Activa SpA

Activa S.A.

Larrain Vial Securities US LLC

LVA Índices S.A.

Asesorías Larraín Vial y Asociados Ltda.

San SebastiánImobiliária S.A.

Larraín VialGestora de Inversiones S.A.

PE02 Larraín VialS.A.F.I. (Perú)

LV.Soc. Agente de Bolsa. (Perú)

Larrain VialAdm. General de Fondos S.A.

0,00008%

Larraín VialColombia SAS

Larraín VialInvestment Inc. USD

LV Trading Group INC

(LV Brasil Consultoría Ltda.

Pro Fondos

Andes Investment

65%

10%

10%

7,51%

99.9999%0,01%

Activos Reales

50%

100%

90%

50%

100%

57,46%

30%

6%

4%

100%

75%

1%

99%

94,9904%

25%

70%

99.99%

96%

90%

5,00905%

Inversiones Sur S.A

Carlos Neely Barbieri

Mario Ventura Verme

Oscar De Osma B.

Mario AlvaradoPflucker5%

5%

5%

5%

10%

Consorcio

ADN Asesorias y Servicios20%

Ases. Profesionales e Inv. San Valentin

99.99%

0,01%

L013 LV Inversiones Dos Ltda.

97%

0,1%

0,1%

0,1%

Note 1 Reporting entity, continued

Economic Group to which the Company belongs




13

Note 1 Reporting entity, continued

Businesses/services on behalf of third

parties No. of unrelated clients Number of related

clients

57 Bis 36 1

Portfolio management 605 4 APV (Voluntary Pension Savings) 4,450 211 Financial advisory services 2,804 122 Formal exchange rate 1,848 290 Securities borrowed and purchased under

resale agreements and IIF 21 37 Investment fund shares 2,123 167 Custody 22,796 384 Forward derivatives 10 - Mutual funds 4,148 200 Financial brokerage 525 20 Foreign investments 371 24 Debt securities 771 43 Equity securities 17,966 337 Simultaneous transactions 55 2 Securities borrowed and purchased under

resale agreements and IIF 171 83 Short sales 40 -

Description of main businesses: The Company’s main lines of business or products on its own or on behalf of third parties are as

follows:

Equity securities brokerage. Purchase and sale of shares in the domestic market obtaining

revenue from fees and commissions collected from clients.

Debt securities brokerage: Relates to the purchaser and sale of debt and financial brokerage

securities from which the Company obtains income from fees and commissions collected from

clients.

Portfolio management: Relates to the business performed using the resources from a client to

be managed by the broker on behalf of and at the risk of the client.

Security custody: Services provided by the broker to secure absolute assurance on the

custody of its equity, debt or financial brokerage securities.

Securities loaned and obligations under repurchase agreements: Operation in which the

broker sells to its client certain public offering securities by executing simultaneously and with

the client a repurchase agreement for those securities.

Securities borrowed and purchased under resale agreements: Operation in which the

broker acquires from its client certain public offering securities by executing simultaneously

and with the client a repurchase agreement for those securities.




14

Note 2 Basis of preparation

(a) Statement of Compliance with IFRS

The separate financial statements of Larraín Vial S.A Corredora de Bolsa have been

prepared in accordance with International Financial Reporting Standards (IFRS), issued

by the International Accounting Standards Board (hereinafter IASB).

As of December 31, 2013 the separate financial statements of Larraín Vial S.A. Corredora

de Bolsa are presented for comparative purposes and in accordance with Circular No.1992

issued by the Superintendence of Securities and Insurance.

The financial statements were authorized for issue by the Board of Directors on

February 27, 2014.

The translation of these financial statements is provided as a free translation from the

Spanish language original, which is the official and binding version. Such translation has

been made solely for the convenience of non-Spanish readers

(b) Period covered by the financial statements

These separate financial statements of Larraín Vial S.A Corredora de Bolsa comprise the

separate statements of financial position and changes in equity as of December 31, 2013

and 2012, the separate statements of comprehensive income and cash flows for the years

ended December 31, 2013 and 2012.

(c) Functional and presentation currency

Items in the Company's financial statements are translated to functional currency; i.e., the

currency of the main economic environment where the entity operates using the exchange

rate in force at the transaction date and/or the closing date of the financial statements.

In accordance with international accounting standards 21 (IAS 21), these separate

financial statements are presented in Chilean pesos, which is the Company’s functional

currency. All amounts have been rounded to the nearest thousand, unless otherwise

indicated.

The balances of assets and liabilities in foreign currency and UF have been translated to

Chilean pesos according to the exchange rates in force at each year-end.

(d) Going concern assumption

In preparing the separate financial statements the Company assessed its ability to continue as

a going concern. The Company’s Management does not believe significant uncertainty exist

relative to events or conditions which may raise significant uncertainty as to the Company’s

ability to continue as a going concern.




15

Note 2 Basis of preparation, continued

(e) Significant reclassifications

During 2013, there have been no significant reclassifications in the Company’s financial

statements.

(f) Basis of measurement

The financial statements have been prepared on the historical basis except for the

following material items:

Financial instruments classified at fair value through profit or loss are measured at

fair value and the effects are recognized in profit or loss.

Financial instruments at amortized cost are non-derivative financial assets with

fixed or determinable payments that have the characteristics of a loan and are not

quoted in an active market.

Investments in companies are presented at fair value through equity.

Investments in companies recognized using the equity method of accounting.

Held-to-maturity financial instruments are measured at amortized cost discounted

using the effective interest method less any impairment loss.

Liabilities are measured at amortized cost.

Note 3 Significant accounting policies

The main accounting criteria used in the preparation of these financial statements are as follows:

(a) Application of new standards

a.1 Early adoption of standards

In accordance with Circular No.615 issued by the Superintendence of Securities and

Insurance, the Company has early adopted IFRS 9, Financial Instruments.

a.2 Standards, amendments and interpretations issued that became effective

during 2013

Improvements and amendments to IFRSs, as well as interpretations published during the

period are detailed below. As of the date of issuance of the financial statements these

standards are not yet effective. The Company has early adopted only IFRS 9, in

conformity with Circular No. 615 issued by the Superintendence of Securities and

Insurance dated June 10, 2010.




16

Note 3 Significant accounting policies, continued

(a) Application of new standards, continued

a.2 Standards, amendments and interpretations issued that became effective

during 2013, continued

However, the Company’s management has conducted or is conducting an assessment of

possible impacts on these financial statements as of December 31, 2013, detailed as

follows:

New IFRSs Mandatory application date

IFRS 10, Consolidated Financial Statements Annual periods beginning on or after January 1,

2013.

IFRS 11, Joint Arrangements Annual periods beginning on or after January 1,

2013.

NIIF 12, Disclosure of Interests in Other Entities Annual periods beginning on or after January 1,

2013.

IFRS 13, Fair Value Measurement Annual periods beginning on or after January 1,

2013.

IFRIC 20, Stripping Costs in the Production Phase of a Surface

Mine

Annual periods beginning on or after January 1,

2013.

Amendments to IFRSs Mandatory application date

IAS 19, Employee Benefits (2011) Annual periods beginning on or after January 1,

2013.

IAS 27 (2011), Separate Financial Statements Annual periods beginning on or after January 1,

2013.

IAS 28 (2011), Investments in Associates and Joint Ventures Annual periods beginning on or after January 1,

2013.

IFRS 7, Financial Instruments: Disclosures – Amendments to

disclosure requirements for offsetting financial assets and

financial liabilities


2013.

IFRS 10, IFRS 11 and IFRS 12 – Consolidated Financial

Statements, Joint Arrangements and Disclosure of Interests in

Other Entities – Transition guide.


2013.

The adoption of these amendments to IFRSs had no significant impact on the Company’s

accounting policies and amounts recorded in these financial statements; however, they could

affect the recognition of future transactions and agreements.




17


(a) Application of new standards, continued

a.3 Standards and interpretations issued but not yet effective

Amendments to IFRSs Mandatory application date

IAS 19, Employee benefits- employee contributions Annual periods beginning on or after January 1,

2014. Early adoption is permitted.

IAS 27, Separate Financial Statements, IFRS 10, Consolidated

Financial Statements and IFRS 12, Disclosure of Interests in

Other Entities. These amendments are applicable to Investment

Entities, provide an exception for the accounting treatment and

eliminate the consolidation requirement.


2014. Early adoption is permitted

IAS 32, Financial Instruments: Presentation –Clarifying

requirements for offsetting financial assets and financial

liabilities



IAS 36, Impairment of Assets – Recoverable Amount

Disclosures for Non-Financial Assets



IAS 39, Financial Instruments – Recognition and Measurement –

'Novation of Derivatives and Continuation of Hedge Accounting



New Interpretations Mandatory application date

IFRIC 21, Levies. Annual periods beginning on or after January 1,


The Company believes that future adoption of the Standards, Amendments and Interpretations

mentioned above will not have a significant impact on the financial statements.

(b) Cash and cash equivalents

The Company considers cash in banks and on hand and balances in current accounts, as

well as highly-liquid short-term investments made as part of the regular management of

cash surpluses that are readily convertible into known amounts of cash with original

maturities equal to or less than 90 days from the date of acquisition, which are subject to

insignificant risk of changes in their fair value, to be cash and cash equivalents. These

items are measured at amortized cost or fair value through profit or loss.




18


(c) Financial assets and financial liabilities

The Company classifies its financial assets as follows: At fair value through profit or loss

and financial assets at amortized cost. The classification depends on the purpose with

which financial assets were acquired. Management determines the classification of its

assets at the time of initial recognition.

Financial assets and liabilities at amortized cost

(i) Financial assets at amortized cost

Financial instruments at amortized cost are non-derivative assets with fixed or

determinable payments on which Management has the intent of receiving flows of

interests, adjustments and foreign currency differences in accordance with the instrument's

contractual terms. This caption mainly includes those financial assets listed below.

(ii) Securities borrowed and purchased under resale agreements in equity instruments (simultaneous transactions)

Share simultaneous transactions for investment purposes are included in assets as rights

and measured and accrued on a daily basis at cost plus the amount equivalent from the

straight-line application of the embedded increase percentage between the disposal value

at the date of subscription and the amount receivable agreed.

(iii) Securities borrowed and purchased under resale agreements in debt and financial brokerage securities (agreements)

Repurchase agreements are performed as a financing method, investments are sold subject

to a repurchase obligation that is used as guarantee for the loan. The repurchase obligation

is classified under financing obligations within liabilities, which are measured at

amortized cost at the interest rate agreed.

(iv) Financial liabilities at amortized cost in the securities market

The amortized cost of a financial liability is the initial measure of such liability less

principal reimbursements plus or minus accumulated amortization calculated using the

effective interest rate method of any difference between the initial amount and the

reimbursement amount on the maturity date.

After initial recognition, the Company will measure all its financial liabilities at amortized

cost using the effective interest rate method, except for those that had been designated as

measured at fair value through profit or loss (application of the fair value option).




19


(c) Financial assets and financial liabilities

Financial assets and liabilities at fair value

These are measured at fair value according to the market prices at the reporting date.

These investments are initially recognized at cost and subsequently their value is adjusted

on the basis of the market value with daily recognition of the effect on profit or loss.

The fair value of investments held for trading is measured on the basis of trading in active

markets.

The main financial assets that the Company holds as trading portfolio are as follows:

Domestic and foreign shares traded in a stock exchange (ADR`s).

Shares of mutual funds.

Debt securities

Investment fund shares

In conformity with IFRS, the Management of Larraín Vial has decided that the fair value

of these instruments will be their transaction amount to the extent that these are acquired

in an active market, recording in profit or loss the related transaction costs and the

difference resulting from the adjustment of the acquisition cost to market value

The fair value of shares of mutual funds and investment funds will be the surrender value

at year-end.

Debt securities agreements

Rights on securities related to unmatched purchase agreements are recorded at market

value according to the Internal Rate of Return (IRR) at year-end. The difference in regard

to the embedded IRR at the date of acquisition of the commitment is recorded in profit or

loss.

Forwards

Forwards are recorded at market value. Effects from comparing the market value to the

value agreed at the date in which the contract was entered into will be recorded in profit or

loss.




20


(d) Receivables from brokers and dealers

Trade receivables are initially recognized at fair value and subsequently at amortized cost

according to the effective interest rate method, less the allowance for impairment losses.

Receivables are recognized at nominal amount when the nominal amount of the receivable

does not significantly differ from its fair value. An allowance for impairment losses is

accrued 30 days after the right expires and therefore, not all amounts receivable will be

collected under the original terms of receivables.

Embedded interest is disaggregated and recognized as finance income when accrued.

Financial difficulty of the borrower, the probability that the borrower will enter

bankruptcy or financial reorganization and the lack of or delinquency in payments are

considered indications that the receivables are impaired.

(e) Investments in other companies

Investments in other companies correspond to one share of the Company at the Chilean

Electronic Stock Exchange, the Santiago Stock Exchange and two shares of CCLV

Contraparte Central S.A., which are measured at market value through equity and equity

value, recognizing the equity gains or losses on the investment on an accrual basis,

respectively.

The Company has ownership interest of 5% in Larraín Vial Servicios Profesionales Ltda.,

which is measured using the equity method of accounting and equity in the income or loss

from this investment is recognized as and when generated. Profits distributed by Larraín

Vial Servicios Profesionales Ltda. have been established on the basis of revenue actually

received and the amount for distribution to each partner is determined and paid as

mutually agreed on an annual basis. Revenue of Larraín Vial Servicios Profesionales Ltda.

is mainly generated by services rendered directly or through other companies both in

Chile and abroad, associated with the advisory and restructuring of investment products

for domestic and foreign customers.

In accordance with IAS 27 – Separate Financial Statements, investments in the associates

L.V. Comisionista de Bolsa and L.V. SAB Peru are recorded at the historical cost of the

investment.

(f) Property and equipment

In accordance with IFRS 1, Larraín Vial S.A Corredora de Bolsa will opt to measure

property and equipment at the date of transition to IFRS at their cost, maintaining the

carrying amount.

For the new acquisitions of property and equipment Larraín Vial S.A. Corredora de Bolsa

will be recorded using the deemed cost model, at cost less subsequent accumulated

depreciation and less accumulated impairment losses.




21


(f) Property and equipment, continued

Maintenance, preservation and repair costs will be expensed under the accrual method as

cost of the year in which they are incurred.

Depreciation will be determined using the straight-line method on the cost of assets less

its residual value.

Depreciation for each period will be expensed and calculated considering the estimated

useful lives of the different assets.

The gain or loss resulting from the disposal or withdrawal of assets will be calculated as

the difference between the sales price and the carrying amount of the asset and recognized

in profit or loss.

(g) Foreign currency and UF (inflation-adjusted units) transactions

Transactions in foreign currencies and inflation-adjusted units are recorded at the exchange

rate of the related currency or inflation-adjusted unit at the date in which the transaction

meets the requirements for its initial recognition. At the reporting date, monetary assets

and liabilities denominated in foreign currencies and inflation-adjusted units are translated

using the exchange rates in force for the related currency or inflation-adjusted unit.

Foreign currency differences generated both in the settlement of foreign currency

transactions and in the measurement of monetary assets and liabilities in foreign currency,

are included in the Statement of income under foreign currency difference whereas

differences generated by changes in inflation-¿adjusted units are recorded under foreign

currency differences.

The exchange rates for the main foreign currencies and inflation-adjusted units used in

preparing the financial statements are as follows:

Exchange rate Dec-13 Dec-12

Ch$ Ch$ U.S. dollar observed rate (US$) 524.61 479.96

Euro observed rate (€) 724.30 634.45

UF (inflation-adjusted unit) 22,315.57 22,833.37




22


(h) Impairment of assets, continued

Financial assets, continued

A financial asset is assessed at each reporting date to determine whether there is objective

evidence that it is impaired. A financial asset or group of financial assets is impaired (and

the corresponding loss is recognized) if objective evidence indicates that one or more loss

events have occurred after the initial recognition of the asset, and that the loss event had a

negative effect on the estimated future cash flows of that asset that can be estimated

reliably.

A financial asset is assessed at each reporting date to determine whether there is objective

evidence that it is impaired. A financial asset is impaired if there is objective evidence that

one or more events have had an impact on the estimated future cash flows of that asset.

The impairment estimate is determined for accounts maturing in periods exceeding 30

days.

An impairment loss in respect of a financial asset measured at amortized cost is calculated

as the difference between its carrying amount and the present value of the estimated future

cash flows discounted at the asset’s original effective interest rate.

The impairment estimate is determined on all accounts maturing in periods exceeding 30

days.

All individually significant financial assets are assessed for specific impairment. All other

financial assets are collectively assessed with similar credit risk characteristics.

All impairment losses are recognized in profit or loss. Any accumulated loss related to a

financial asset previously recognized in equity is transferred to profit or loss.

The reversal of an impairment loss occurs only when it can be related objectively to an

event occurring after the impairment loss was recognized in profit or loss. For financial

assets at amortized cost, the reversal is recognized in profit or loss. For financial assets

which are equity securities, the reversal is directly recognized in equity.




23


(i) Payables to brokers and dealers

Payables to brokers and dealers include brokerage payables on behalf of clients, fees and

commissions receivable and stock exchange rights generated by purchase and sale

transactions associated with financial instruments on behalf of clients. Furthermore, this

caption includes accounts receivables arising from forward operations generated by

simultaneous transactions on behalf of clients. Balances are recorded on a daily basis.

(j) Income tax and deferred taxes

Income tax expense includes taxes of Larraín Vial S.A. Corredora de Bolsa on the basis of

net taxable income for the period together with tax adjustments from prior years and

changes in deferred taxes.

Deferred taxes are calculated using the liability method on temporary differences arising

from the tax bases of assets and liabilities and their carrying amounts in the annual

accounts. However, should deferred taxes arise from the initial recognition of an asset or

liability in a transaction other than a business combination, which at the date of the

transaction does not affect profit for financial or tax purposes, such deferred taxes are not

recognized. Deferred taxes are determined using the tax rates (and laws) enacted or

substantially enacted at the reporting date that are expected to be applied when the

deferred tax asset is realized or the deferred tax liability is settled.

A deferred tax asset is recognized to the extent that it is probable that future tax benefits

will arise to offset temporary differences.

(k) Provisions

Provisions correspond to balances payable covering present obligations at the reporting

date, arising as a result of past events which result in legal or constructive obligations

that are specific in nature and whose amount can be estimated.

The Company records all significant provisions in respect to which it is estimated that the

possibility of paying the obligation is more than probable.




24


(l) Provisions, continued

Accrued vacations

The annual cost of vacations is recognized on an accrual basis.

Short-term benefits

The Company contemplates an annual incentive plan for its employees that is based on

individual goal compliance and such benefits comprise a given number or portion of

monthly salaries and are accrued for on the basis of the estimated amount for distribution.

(m) Revenue recognition

Sale of securities:

Revenue is recognized in profit or loss as and when accrued, which relates to the

transaction date.

The entity has transferred to the buyer the significant risks and rewards of

ownership of the securities regardless of whether title is transferred or not.

The entity retains neither continuing managerial involvement to the degree usually

associated with ownership nor effective control over the goods sold.

The amount of revenue can be measured reliably.

It is probable that the economic benefits associated with the transaction will flow

to the entity.

The costs incurred or to be incurred in respect of the transaction can be measured

reliably.

Rendering of services:

The amount of revenue can be measured reliably.

It is probable that the economic benefits associated with the transaction will flow

to the entity.

The stage of completion of the transaction at the end of the reporting period can be

measured reliably.

The costs incurred for the transaction and the costs to complete the transaction can

be measured reliably.

Revenue is recognized in profit or loss as and when accrued, which relates to the

transaction date.




25


(m) Revenue recognition, continued

Recognition of revenue from fees and commissions

Fees and commissions for brokerage services for the purchase and sale of

securities in the stock market are recognized as revenue as they occur.

Revenue recognition for interests and dividends

Interests are recognized using the effective interest rate method.

Dividends are recognized on the date in which the right by the shareholder to

receive payment is established.

(n) Borrowing Costs

Obligations with Banks and financial institutions are initially recognized at their fair value

net of costs incurred in the transaction.

Subsequently, external resources are measured at amortized cost, any difference between

the funds obtained (net of costs required for obtaining them) and the reimbursement value,

is recognized in the statement of comprehensive income over the life of the debt using the

effective interest rate method. The effective interest method consists of applying the

benchmark market rate to debt with similar characteristics at the debt value (net of costs

required for obtaining them). Note that face value will be used in the event that the

difference between face and fair value is not significant.

(o) Reclassifications

During the 2013, no significant reclassifications have been made to the Company’s

financial statements.

Note 4 Financial risk management

Risk management policies

The business in which Larraín Vial S.A. Corredora de Bolsa operates is exposed to several risks:

Credit Risk, Liquidity Risk and Market Risk. The detail of the exposure to such risks, as well as

their management, is detailed as follows:




26

Note 4 Financial risk management, continued

(i) Credit risk

Credit risk to which the Company is exposed directly relates to the probability of default

of the counterparties and the operation settlement process. The Company's counterparties

are preferably institutions and operations which are settled on a delivery versus payment

basis

Brokerage receivables

Larraín Vial S.A. Corredora de Bolsa’s collection policy is detailed as follows:

Business executives have vast knowledge of the client and maintain a daily control

of amounts owed and guarantees.

Daily collection controls are distributed to Supervisors, Managers and Control

Areas who report in regard on defaulting clients.

Domestic and international institutional counterparties that hold securities in custody with

third parties operate on the basis of delivery versus payment and therefore, there is only

one marginal credit risk resulting from the variation during the collection period of this

transaction.

Provisions

Changes in the allowance for impairment loss or doubtful accounts

Provisions ThCh$

Opening balance 391,827

Increases for the year 394,850

Application of provisions

Reversal of provisions (391,827)

TOTAL 394,850

Derivatives and revolving operational credit facilities

Simultaneous term transactions and short sales

Larraín Vial S.A. Corredora de Bolsa operates under the matched transactions and takes

no underlying positions in derivatives.




27


(i) Credit risk, continued

Derivatives and revolving operational credit facilities, continued

Simultaneous transactions, continued

Simultaneous transactions and short sales in shares required approved lines for each client,

which are granted, controlled and thoroughly analyzed on the basis of the following ratios:

Indebtedness ratios;

Interest coverage ratio;

Current ratio;

Acid test;

Return ratio

Inventory turnover, among other ratios

Note that these types of transactions are framed within the standards contained in the

Operations manual of the Chilean Stock Exchange and Electronic Stock Exchange, and

that ongoing follow-up of the positions and status of guarantees is performed.

Simultaneous transactions

The revolving operational credit facilities granted have a life of one year, are renewable

and amount to Ch$141,394 million. These lines operate in accordance with standards

currently in force in the stock exchanges and are covered through guarantees in

accordance with regulations in force.

0

1.000

2.000

3.000

4.000

5.000

6.000

Ene Feb Mar Abr Jun

Mil

lon

Distribution of maturity dates of simultaneous transactions by type

of shares (as of December 31, 2013)

Total general

A+

A

B

C




28

,00%

1,00%

2,00%

3,00%

4,00%

5,00%

Ene Feb Mar Abr Jun

Accumulated % of revolving credit facilities used (as of December

31, 2013)




Simultaneous transactions, continued

As of December 31, 2013, outstanding simultaneous transactions by classification of their

shares are distributed as follows.

Share

Amount in

Million

Ch$

% of

total

A+ 8.166.152 88,79%

A 775.893 8,44%

B 172.237 1,87%

C 83.124 0,90%

Overall total 9.197.406 100,00%




29




Simultaneous term transactions and short sales

In regards short sale only those lines with operations currently in force are considered.

The revolving operational credit facilities granted have a life of one year, are renewable

and amount to Ch$232,820 million. These lines operate in accordance with standards

currently in force in the stock exchanges and are covered through guarantees in

accordance with regulations in force.

As of December 31, 2013, outstanding short sales by classification of their shares are distributed

as follows:

Share

Amount

million

Ch$

% of

total

A+ 33,931,506 93.99%

A 2,126,236 5.89

B 45,269 0.12%

Overall total 36,103,011 100.00%

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

Ene Feb Mar Abr May Jun Jul Ago Sep Oct Nov

Mill

on

Distribution of short sale maturity dates by type of shares (as of

December 31, 2012)

Total general

A+

A

B




30




Simultaneous term transactions and short sales, continued

,00%

,500%

1,00%

1,500%

2,00%

2,500%

3,00%

3,500%


Accumulated % of revolving credit facilities used (as of December 31,

2013)

0

10

20

30

40

50

60

70

80


2014

Mill

on

Distribution of pending accruals (as of December 31, 2013)




31




U.S. dollar - Chilean peso forward transactions

The Company has no exposition in forward transactions as it has a strategy of taking

matched positions, which minimizes the exposure of transactions. In the event of taking a

position the maximum short-term amount authorized is US$3 million.

Days Portfolio

percentage

Exposure

(Purchase-Sale) 1-10 17.70% -

11-20 24.02% -

21-40 30.78% -

41-80 14.71% -

81 o + 12.78% -

As of December 31, 2013, the summary of outstanding forward transactions is as follows:

No. of lines

used

Total revolving

credit facility

Revolving credit

facility used

Long position:

Amounts

Short position:

Amounts

Short position:

Amounts

MCh$ MCh$ MCh$ MCh$ MCh$

76 21,943 10,828 2,297 3,619 4,913

Financial assets

The Company’s investment portfolio is composed of debt securities, term deposits and a

controlled equity security position, which are exposed to credit risks

The risk level allowed for these instruments portfolio is determined by the Debt Securities

Committee and measured on a regular basis and reported to the relevant areas for follow-

up on the basis of the defined investment policies and guidelines.

The chart below reflects the portfolio percentage according to the risk rating and sector.




32




U.S. dollar - Chilean peso forward transactions, continued

A A- A+ AA AA- AA+ AAA

Banks 1.78% 0.00% 0.00% 12.58% 6.70% 0.69% 8.17% Banco Central (Central

Bank) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Corporations 8.08% 5.00% 8.60% 3.40% 0.04% 0.00% 0.02%

Banks 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Overall total 9.86% 5.00% 8.60% 15.98% 6.74% 0.69% 8.19%

B BB BB+ BBB BBB- BBB+ Gob

Banks 0.00% 0.08% 0.00% 0.00% 0.00% 0.30% 0.00% Banco Central (Central

Bank) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 7.19%

Corporations 3.75% 0.00% 2.25% 5.40% 4.80% 0.00% 0.00%

Banks 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 21.19%

Overall total 3.75% 0.08% 2.25% 5.40% 4.80% 0.30% 28.38%

(ii) Liquidity risk

The liquidity risk is related to needs for funds to deal with payment obligations. Where the

Company’s objective is maintaining a balance between the continuity of funds and

financial flexibility through normal operating flows, short-term borrowings, short-term

investments and revolving credit facilities. The financing policy of transactions does not

contemplate long-term debt and therefore, solely requires short-term financing. On an

ongoing and regular basis, the Company assesses risk concentration, the portfolio and

sources of financing

As of December 31, 2013, the Company records no balances used in revolving credit

facilities.




33


(ii) Liquidity risk, continued

The liquidity sources of Larraín Vial S.A. Corredora de Bolsa are mainly originated from

three instruments: lines of credit with local banks, paid-in capital and repurchase

agreements.

General liquidity

Available and realizable assets up to 7 days

Enforceable liabilities up to 7 days ThCh$

343,040,079

327,845,926 = 1.05 times

Brokerage liquidity

Available assets + receivables from brokers and

dealers

Payables to brokers and dealers

ThCh$ 144,806,835

94,511,491 = 1.53 times

Debt ratio

Total enforceable liabilities

Net equity ThCh$

203,409,843

41,418,209 = 4.91 times

Equity hedge index

Equity hedge amount

Net equity ThCh$

12,630,889

41,418,209 = 30.50 %

Cleared equity ThCh$ 29,353,915

(iii) Market risk

Market risk is the risk of potential losses resulting from adverse changes in market prices

of different assets or financial instruments. This applies to borrowings and bank

obligations, term deposits and mutual fund shares, trade payables, trade receivables,

financial instruments and derivatives.

This risk is managed considering the following:

Interest rate risk

Interest rate risk is managed by the Debt securities desk under the guidelines of the Debt

securities Committee. This Committee determines the composition of the portfolios

between interest rate positions in local currency, nominal and inflation-adjusted units, as

well as by exposures in rates related to transactions denominated in other currencies

(mainly in U.S. dollars).




34


(iii) Market risk, continued

Interest rate risk, continued

Sector

Adjustment Overall total CLP UF IVP USD

Banking 12.72% 32.03% 0.01% 0.41% 45.17%

Central Bank 2.84% 1.89% 0.95% 0.00% 5.68% Corporate 1.48% 30.61% 0.00% 1.46% 33.55% Government 15.11% 0.49% 0.00% 0.00% 15.60%

Overall total 32.15% 65.02% 0.96% 1.87% 100.00%

Given that the financial assets of the company are invested in fixed income instruments,

the main variable that has an impact on the value of the portfolio is the interest rate; this

variable has a major or minor impact depending on its duration. This variable is managed

by keeping high liquidity instruments in the portfolio.

The term of the portfolio is actively managed in accordance with the guidelines provided

by the Fixed Income Committee.

Fixed income portfolio term = 1.67 years

%% of maturity by period

%

2014 46.0

2015 9.4

2016 10.0

2017 7.4

If the fixed income instruments increase by 20%, the effect would not be greater than

4.14% of the value of the portfolio.

Portfolio sensitivity

Rate variation

Adverse impact on the

RF portfolio

%

10% increase 2.07

20% increase 4.14




35



Exchange risk

Larraín Vial S.A. Corredora de Bolsa has a limited exchange rate exposure, which is

related to instruments in U.S. dollars; this portfolio is hedged by means of forward

contracts, therefore, the exchange risk is limited.

The total exchange risk exposure as of December 31, 2013 amounts to USD$7,530.6

million, with a maximum limit of a USD$20 million.

Asset price risk

The exposure to asset price risk is significantly related to financial instruments (shares and

funds) that are exposed to market fluctuations. However, the position held in these equity

securities is relatively small, as shown below.

Additionally, a weekly report is released on the behavior and composition of the

portfolios, which independently controls that the limits in instruments and portfolios are

consistent with the policies established by the appropriate Committee, reviewing the

efficiency of the controls and the valuation of the instruments.

1%

49% 50%

Portfolio Distribution

Acciones

Renta Fija

Derivados




36



Implementation Circular SVS No.2054

In accordance with Circular No.2.054 issued by the Superintendence of Securities and Insurance,

security dealers & brokers are required to apply a risk-based management model. Accordingly,

the Company’s Senior Management gradually developed a plan to perfect the Risk Management

model.

During this process, improvements to Risk Management and Internal Control tools were

implemented, especially with respect to risk identification matters, expanding the scope of those

improvements. Progress in the implementation of this standard was timely reported to the

Superintendence of Securities and Insurance.

Senior Management certified the sufficiency and appropriateness of the implementation of this

standard, verifying the existence of an internal control and risk management system in line with

the nature, size and complexity of businesses conducted by Larraín Vial in accordance with

Circular No.2.054.

Note 5 Use of estimates and judgments

The information contained in the financial statements is the responsibility of the Management

and all accounting principles and criteria included in IFRS have been applied accordingly.

The estimates and accounting criteria are reviewed on an ongoing basis and are based on the

historical experience and other factors, including the expectations of future events considered to

be reasonable under the circumstances.

Significant estimates and accounting criteria

The Company makes estimates and assumptions with respect to the future. The resulting

accounting estimates may differ from the actual results. There are no accounting criteria that

represent a significant risk to give rise to a material adjustment in the financial statements. The

following is an explanation of the estimates that have a significant risk of giving rise to a

material adjustment in the carrying amounts of the assets and liabilities within the following

financial year:

(a) Deferred taxes

The Company accounts for deferred tax assets based on their possibility to be recovered

on the basis of the existence of deferred tax liabilities with similar reversal terms and the

possibility to generate future taxable earnings.




37

Note 5 Use of estimates and judgments, continued

Significant estimates and accounting criteria, continued

(b) Accrued vacations

The Company recognizes accrued vacations considering its accrued basis which will be

evaluated by Management on an annual basis.

(c) Provision for bonuses

The Company recognizes a provision when it is contractually bound or when past

practices have created an implicit obligation, and when the obligation can be estimated

reliably. This bonus is recognized for accounting purposes on a monthly basis and affects

all the financial statements of the company.

Fair value hierarchy

The Company has classified the measurement of the fair value by using a hierarchy that

reflects the level of information used in the valuation. The hierarchy is comprised of 3

levels and detailed as follows:

Level 1: Quoted prices in active markets.

Level 2: Inputs other than quoted prices included within Level 1

Level 3: Inputs that are not based on observable market data.

12-2012 12-2013

Domestic shares Level 1 0.09% 0.09% Share of the Santiago Stock Exchange Level 1 2.21% 0.78% Domestic debt instruments Level 2 4.21% 48.76% Foreign shares Level 2 1.09% 0.14% Derivatives (*) Level 2 92.40% 50.23%

(*) It is considered the absolute value of the position at market value.

The sources of valuation used by the Fund correspond to prices reported directly from the

Santiago Stock Exchange or by means of public access prices (“Level 1”); prices from a

financial instrument data supplier are classified as “Level 2”.

For currency forward investments, the valuation of these is made using as a price source

the spot value informed everyday by the Central Bank of Chile; this is adjusted under the

definition of “Level 2” for this type of instrument.




38

Note 6 Adjustment and foreign currency translation differences

As of December 31 2013 and 2012, this balance is composed of the following:

Accounts

Credit (debit) to profit or loss 2013 Credit (debit) to profit or loss 2012

US $ EURO US $ EURO US $ EURO

Cash and cash equivalents (2,071,667) (63,662) - (2,135,329) 394,131 (18,189) - 375,942

Receivables from brokers and dealers (151,853) 1,268,779 - 1,116,926 35,830 809,354 - 845,184

Other accounts receivable 119,848,590 - - 119,848,590 69,803,578 - - 69,803,578

Trade receivables due from related parties (9,492) (1,766) - (11,258) 23,318 (3,437) - 19,881

Other assets (935,605) 120,945 - (814,660) (6,018,178) (92,449) - (6,110,627)

Obligations with banks and financial

institutions - - (6,164) (6,164) (32,092) - (14,792) (46,884)

Payables to brokers and dealers (99,678) (7) - (99,685) 681 (22) - 659

Other trade payables due to related parties 26 110,009 - 110,035 15,201 (453) - 14,748

Other trade payables (115,304,190) (946,834) - (116,251,024) (65,692,343) (390,902) - (66,083,245)

Total readjustment and foreign currency

exchange difference 1,276,131 487,464 (6,164) 1,757,431 (1,469,874) 303,902 (14,792) (1,180,763)




39

Note 7 Cash and cash equivalents

Cash and cash equivalents

2013 2012

ThCh$ ThCh$

Cash in Chilean pesos 6,713 6,203

Cash in foreign currency 501,776 3,225,754 Banks in Chilean pesos 7,728,844 6,267,553 Banks in foreign currency 25,423,634 19,231,619

Total 33,660,967 28,731,129

Note 8 Financial instruments by category

Financial assets as of December 31, 2013

Financial assets as per the statement of financial position

Financial assets

at fair value

from P/L

Financial assets

at fair value

from equity

Financial

assets at

amortized

value Total

ThCh$ ThCh$ ThCh$ ThCh$

Cash and cash equivalents - - 33,660,967 33,660,967

Financial instruments in available securities owned 23,504,953 - - 23,504,953

Financial instruments in committed securities owned 149,242,723 - - 149,242,723

Derivative financial instruments 4,575,673 - - 4,575,673

Financing operations - - 22,957,732 22,957,732

Receivables from brokers and dealers - - 115,780,772 115,780,772

Receivables for securities owned - - 494,066 494,066

Trade receivables due from related parties - - 6,749,697 6,749,697

Other receivables - - 7,999,170 7,999,170

Investments in companies - 2,478,411 - 2,478,411

Total 177,323,349 2,478,411 187,642,404 367,444,164




40

Note 8 Financial instruments by category, continued

Financial assets as of December 31, 2012

Financial assets as per the statement of financial

position

Financial

assets at fair

value from

P/L

Financial

assets at fair

value from

equity

Financial

assets at

amortized

value Total


Cash and cash equivalents - - 28,731,129 28,731,129

Financial instruments in available securities owned 17,753,953 - - 17,753,953

Financial instruments in committed securities owned 81,035,343 - - 81,035,343

Derivative financial instruments 1,520,239 - - 1,520,239

Financing operations - - 24,225,764 24,225,764

Receivables from brokers and dealers - - 63,724,953 63,724,953

Receivables for securities owned - - 288,816 288,816

Trade receivables due from related parties - - 39,661,897 39,661,897

Other receivables - - 18,929,635 18,929,635

Investments in companies - 3,863,047 20,260 3,883,307

Total 100,309,535 3,863,047 175,582,454 279,755,036

Financial liabilities as of December 31, 2013

Financial liabilities as per the statement of financial

position

Financial

liabilities at fair

value

Financial

liabilities at

amortized value Total

ThCh$ ThCh$ ThCh$

Financial liabilities at fair value - - -

Derivative financial instruments 4,364,964 - 4,364,964

Financing obligations - 163,423,911 163,423,911

Obligations with banks and financial institutions - 494,463 494,463

Payables to brokers and dealers - 95,272,147 95,272,147

Payables for securities owned - - -

Trade payables due to related parties - 1,166,239 1,166,239

Other payables - 51,371,898 51,371,898

Other liabilities - - -

Total 4,364,964 311,728,658 316,093,622




41

Note 8 Financial instruments by category, continued

Financial liabilities as of December 31, 2012

Financial liabilities as per the statement of financial

position

Financial

liabilities at fair

value

Financial

liabilities at

amortized value Total

ThCh$ ThCh$ ThCh$

Financial liabilities at fair value - - -

Derivative financial instruments 1,821,562 - 1,821,562

Financing obligations - 85,711,989 85,711,989

Obligations with banks and financial institutions - 12,084,140 12,084,140

Payables to brokers and dealers - 54,672,390 54,672,390

Payables for securities owned - - -

Trade payables due to related parties - 17,525,221 17,525,221

Other payables - 36,890,819 36,890,819

Other liabilities - - -

Total 1,821,562 206,884,559 208,706,121

Note 9 Financial instruments at fair value – securities owned


Financial instruments at fair value

Available

securities

owned

Committed securities owned

Total

Term

operations

Term

operations In loans

Pledged as

collateral in

other

operations Subtotal

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

Variable income instruments

Shares

Domestic 277,611 - - - - 277,611

Foreign 629,419 - - - - 629,419

Mutual funds

Domestic 9,450 - - - - 9,450

Foreign 128,765 - - - - 128,765

Investment funds

Domestic 117,853 - - - - 117,853

Foreign 2,400,158 - - - - 2,400,158

Total IRV 3,563,256 - - - - 3,563,256




42

Note 9 Financial instruments at fair value – securities owned, continued


Financial instruments at fair value

Available

securities

owned


Total

Term

operations

Term

operations In loans

Pledged as

collateral in

other

operations

Subtotal

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$


Shares

Domestic 195,078 - - - - 195,078

Foreign 1,195,488 - - - - 1,195,488

Mutual funds

Domestic 370,431 - - - - 370,431

Foreign - - - - - -

Investment funds

Domestic 3,954,009 - - - - 3,954,009

Foreign - - - - - -

Total IRV 5,715,006 - - - - 5,715,006

Domestic shares by issuer


Financial instruments at fair

value

Available

securities

owned


Total Units In forward

operations In loans

Pledged as

collateral in

other

operations Subtotal ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$


ANTARCHILE 43 - - - - 43 6

AUSTRALIS 5,533 - - - - 5,533 212,795

BANVIDA 28,011 - - - - 28,011 155,619

BCI 1,050 - - - - 1,050 36

BLUMAR 2,151 - - - - 2,151 20,193

CFMITNIPSA 197,014 - - - - 197,014 63,186

CHILE 166 - - - - 166 2,177

CIC 18,570 - - - - 18,570 1,093,022

INDIGO - - - - - - 1

INVEXANS 1,676 - - - - 1,676 170,317

LAN 4,614 - - - - 4,614 559

MOLLER 21 - - - - 21 62

PIZARREÑO 113 - - - - 113 143

PUCOBRE 7,769 - - - - 7,769 2,486

SARLAT - - - - - - 1

SIEMEL - - - - - - 2

SMSAAM 44 - - - - 44 923

SOQUICOM 797 - - - - 797 8,431

WATTS 439 - - - - 439 499

ZOFRI 9,600 - - - - 9,600 15,000

Total 277,611 - - - - 277,611 1,745,458




43


Domestic shares by issuer, continued



value

Available

securities

owned



operations In loans

Pledged as

collateral in

other

operations Subtotal

M$ M$ M$ M$ M$ M$ Variable income instruments

ANTARCHILE 44 - - - - 44 6

AUSTRALIS 49,007 - - - - 49,007 798,811

BANVIDA 19,226 - - - - 19,226 99,719

BCI 593 - - - - 593 18

BLUMAR 21,651 - - - - 21,651 160,210

CHILE 103 - - - - 103 1,328

CHILET-OSA 1,205 - - - - 1,205 199,168

INDIGO - - - - - - 1

LAN-OSA 674 - - - - 674 2,495

MADECO 12,033 - - - - 12,033 693,162

PIZARREÑO 113 - - - - 113 143

POTASIOS-A 56,934 - - - - 56,934 570,369

SARLAT 1 - - - - 1 3

SCHWAGER 6,694 - - - - 6,694 7,463,044

SIEMEL - - - - - - 2

SMSAAM 53 - - - - 53 923

SONDA-OSA 47 - - - - 47 496

SOQUICOM 13,664 - - - - 13,664 107,590

WATTS 11,998 - - - - 11,998 23,073

ZOFRI 1,038 - - - - 1,038 1,915

Total 195,078 - - - - 195,078 10,122,476




44


Foreign shares by issuer



value

Available

securities

owned



operations In loans

Pledged as

collateral in

other operations Subtotal ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$


ARGOS 1,117 - - - - 1,117 211 BANCOLOMBI 3,368 - - - - 3,368 519 BANCOLOMBIAPRE 3,544 - - - - 3,544 555 BAP 69 - - - - 69 1 CASA GRANDE 530,201 - - - - 530,201 346,972 CEMARGOS 5,618 - - - - 5,618 2,104 CEMEXLATAMH 1,218 - - - - 1,218 302 CONCONCRET 12,472 - - - - 12,472 34,289 CONTINC1 35,774 - - - - 35,774 36,000 CORFICOLLSD 10 - - - - 10 1 DAVIVIPREF 251 - - - - 251 39 EDEGEL 1,195 - - - - 1,195 2,500 GRAMONC1 112 - - - - 112 50 IFS 3,740 - - - - 3,740 230 INTRETC1 25 25 3 ISAGEN 1,937 - - - - 1,937 2,187 PFAVAL 7,353 - - - - 7,353 21,168 PFSURA 2,383 - - - - 2,383 250 PREFINVER 12,804 - - - - 12,804 2,410 SURA 6,216 - - - - 6,216 677 TABLEMAC 12 - - - - 12 5,352

Total 629,419 - - - - 629,419 455,820

As of December, 2012


value

Available

securities

owned



operations In loans

Pledged as

collateral in

other operation Subtotal ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$


CASA GRANDE 182,145 - - - - 182,145 365,892

CONCONCRET 11,975 - - - - 11,975 40,648

EDEGEL S.A. 5,466 - - - - 5,466 2,500

ALICOR 994,753 - - - - 994,753 3,500

GRAMON 91 - - - - 91 50

MPLE 1,058 - - - - 1,058 345,000

Total 1,195,488 - - - - 1,195,488 757,590




45




value

Available

securities

owned


Total

In forward

operations In loans

Pledged as

collateral in

other

operations Subtotal

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

Fixed income and financial

brokerage instruments

From Government

Domestic 16 4,630,898 - - 4,630,898 4,630,914

Foreign - - - - - -

From financial institutions

Domestic 1,204,761 85,636,153 - - 85,636,153 86,840,914

Foreign - - - - - -

From companies

Domestic 5,587,415 47,316,668 47,316,668 52,904,083

Foreign - 11,659,004 - - 11,659,004 11,659,004

Foreign market fixed income 13,149,505 - - - - 13,149,505

Total IRF and IIF 19,941,697 149,242,723 - - 149,242,723 169,184,420



value

Available

securities

owned


Total

In forward

operations In loans

Pledged as

collateral in

other

operations Subtotal




From Government

Domestic 18 4,779,065 - - 4,779,065 4,779,083

Foreign - - - - - -


Domestic 572,770 59,256,287 - - 59,256,287 59,829,057

Foreign - - - - - -

From companies

Domestic 4,028,371 16,999,991 16,999,991 21,028,362

Foreign - - - - - -

Foreign market fixed income 7,437,788 - - - - 7,437,788

Total IRF and IIF 12,038,947 81,035,343 - - 81,035,343 93,074,290




46

Note 10 Financial instruments at amortized value – securities owned

As of December 31, 2013 and 2012, the company has not valued its securities owned in financial

instruments at amortized value.

Financial instruments at

amortized value

Available

securities

owned


Total

In forward

operations In loans

Pledged as

collateral in

other

operations Subtotal




From Government

Domestic - - - - - -

Foreign - - - - - -



Foreign - - - - - -

From companies


Foreign - - - - - -

Other (define) - - - - - -

Total IRF and IIF - - - - - -




47

Note 11 Financial instruments at amortized value – financing operations

(a) Purchase operations under agreements to resale involving variable income

instruments (Simultaneous)


Counterparties Average rate

Maturity

Total

Fair value of the

underlying asset Up to 7 days

More than 7

days

% ThCh$ ThCh$ ThCh$ ThCh$

Natural person 0.53 7,605 1,402,350 1,409,955 1,409,955

Legal person 0.53 17,280 3,115,822 3,133,102 3,133,102

Security brokers 0.52 1,816,425 2,781,276 4,597,701 4,597,701

Institutional investors - - - - -

Related parties - - - - -

Total 1,841,310 7,299,448 9,140,758 9,140,758


Counterparties Average rate

Maturity

Total

Fair value of the


More than 7

days

% ThCh$ ThCh$ ThCh$ M$

Natural person 0.60 16,435 2,384,338 2,400,773 2,400,773

Legal person 0.58 2,524,267 14,454,750 16,979,017 16,979,017

Security brokers 0.60 - 366,880 366,880 366,880



Total 2,540,702 17,205,968 19,746,670 19,746,670

(b) Purchase operations under agreements to resale involving fixed income and financial

brokerage instruments (Repurchase agreements)


Counterparties

Average rate

%

Maturity

Total

Fair value of the


More than 7

days

ThCh$ ThCh$ ThCh$ M$

Natural person - - - - -

Legal person 0,45 13,355,501 - 13,355,501 13,355,501

Security brokers - - - - -



Total 13,355,501 - 13,355,501 13,355,501




48

Note 11 Financial instruments at amortized value – financing operations

(b) Purchase operations under agreements to resale involving fixed income and financial

brokerage instruments (Repurchase agreements), continued


Counterparties

Average rate

%

Maturity

Total

Fair value of the


More than 7

days


Natural person - - - - -

Legal person 0.50 - 4,177,309 4,177,309 4,177,309

Security brokers - - - - -



Total - 4,177,309 4,177,309 4,177,309

(c) Premium receivable from share loans


Counterparties

Average rate

%

Maturity

Total Up to 7 days

More than 7

days

ThCh$ ThCh$ ThCh$

Natural person 0.35 - 2,416 2,416

Legal person 0.40 - 458,328 458,328

Security brokers - - - -

Institutional investors - - - -

Related parties 0.32 - 729 729

Total - 461,473 461,473


Counterparties

Average rate

%

Maturity

Total Up to 7 days

More than 7

days

ThCh$ ThCh$ ThCh$

Natural person 0.38 - 765 765

Legal person 0.39 - 300,954 300,954

Security brokers - - - -

Institutional investors - - - -

Related parties 0.30 - 66 66

Total - 301,785 301,785




49

Note 12 Derivatives

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