UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington , D.C. 20549
 
FORM 6 - K
 
Report of Foreign Private Issuer
 
Pursuant to Rule 13a - 16 or 15d - 16 under
 
the Securities Exchange Act of 1934
 
For the month of May , 2017
 
Commission File Number 001-35575
 
Cencosud S.A.
 
(Translation of registrant’s name into English)

Av. Kennedy 9001, Piso 6
Las Condes, Santiago
Chile
(Address of principal executive office)
 
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  ☒	 	Form 40 F  ☐ 	
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

This report on Form 6-K is being furnished for the purpose of providing a copy of the registrant's unaudited condensed consolidated interim financial statements as of and for the three month period ended March 31, 2017 (the “Consolidated Financial Statements”). The Consolidated Financial Statements are presented in Chilean pesos and prepared in accordance with International Financial Reporting Standards.
 
The attachment contains forward-looking statements. The registrant desires to qualify for the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995, and consequently is hereby filing cautionary statements identifying important factors that could cause the registrant’s actual results to differ materially from those set forth in such forward-looking statements.
 
The registrant’s forward-looking statements are based on the registrant’s current expectations, assumptions, estimates and projections about the registrant and its industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions.
 
The forward-looking statements included in the attached involve various risks and uncertainties, including, among others: (i) changes in general economic, business or political or other conditions in Chile, Argentina, Brazil, Peru, Colombia or elsewhere in Latin America or global markets; (ii) changes in capital markets in general that may affect policies or attitudes towards investing in Chile, Argentina, Brazil, Peru, Colombia or securities issued by companies in such countries; (iii) the monetary and interest rate policies of the Central Banks of Chile, Argentina, Brazil, Peru and Colombia; (iv) high levels of inflation or deflation; (v) unanticipated increases in financing and other costs or our inability to obtain additional debt or equity financing on attractive terms; (vi) movements in interest and/or foreign exchange rates, and movements in equity prices or other rates or prices; (vii) changes in, or failure to comply with, applicable regulations or changes in taxes; (viii) loss of market share or changes in competition and pricing environments in the industries in which the Company operates; (ix) difficulties in successfully integrating recent and future acquisitions into the Company’s operations; (x) the Company’s inability to hedge certain risks economically; (xi) changes in consumer spending and saving habits; (xii) implementation of new technologies; (xiii) limitations on the Company’s ability to open new stores and operate them profitably; (xiv) difficulties in completing proposed store openings, expansions or remodeling; (xv) difficulties in acquiring and developing land in Chile, Argentina, Brazil, Peru or Colombia, and restrictions on opening new large stores in any such countries; and (xvi) the factors discussed under the heading “Risk Factors” as well as risks included in the Company’s other filings and submissions with the United States Securities and Exchange Commission.
 
Although the registrant believes that its expectations expressed in these forward-looking statements are reasonable, its expectations may turn out to be incorrect. The registrant’s actual results could be materially different from its expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in the attached might not occur, and the registrant’s future results and its performance may differ materially from those expressed in these forward-looking statements due to, including, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.
 
The forward-looking statements made in the attached relate only to events or information as of the date on which the statements are made in the attached. The registrant undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

 
 
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.
 
 	Cencosud S.A.	 	
 	 	 	 	
 	By:  	/s/  Sebastián Rivera Mart’nez	 	
 	Name: 	Sebastián Rivera Mart’nez  	 	
 	Title:	Legal Manager  	 	
Date: May 31, 2017

 

 

Cencosud S.A. and subsidiaries, condensed consolidated interim statements of financial position

 
 	 
As of
 	
Assets	 
Note
 	 
March 31, 2017
 	 
December 31, 2016

 
 	 
ThCh$
 	 
ThCh$

 
 	 
(unaudited)

 	

 	 

 
 	
Current assets	 

 

 	
Cash and cash equivalents 	 

 
210,730,480

275,219,003
 	
Other financial assets, current 	 
 
5

135,722,987

219,988,622
 	
Other non-financial assets, current 	 

 	 
 
40,047,676

23,628,279
 	
Trade receivables and other receivables 	 
 
6

810,966,618

867,139,677
 	
Receivables due from related entities, current 	 

 	 
 
19,752,035

28,988,176
 	
Inventory 	 
 
8

1,189,061,331

1,149,286,014
 	
Current tax assets 	 

 	 
 
92,771,518

74,135,647

 

 

 

Total current assets other than non-current assets held for sale 	 

 	 
 
2,499,052,645

2,638,385,418

 

 

 

Assets classified as held for sale 	 
 
21

64,335,677

57,123,872

 

 

 

Total current assets 	 

 	 
 
2,563,388,322

2,695,509,290

 

 

 

Non-current assets	 

 	 

 	 

 	
Other financial assets, non-current 	 
 
5

260,141,584

287,360,674
 	
Other non-financial assets, non-current 	 

 	 
 
54,238,261

52,335,275
 	
Trade receivable and other receivables, non-current 	 
 
6

15,405,265

11,893,706
 	
Equity method investment 	 

 	 
 
203,199,847

200,727,534
 	
Intangible assets other than goodwill 	 
 
9

413,353,370

408,168,114
 	
Goodwill 	 
 
10

1,474,940,351

1,432,319,489
 	
Property, plant and equipment 	 
 
11

2,597,225,118

2,578,793,573
 	
Investment property 	 
 
12

2,118,997,973

2,081,694,027
 	
Non-current tax assets, 	 

 	 
 
87,840,827

83,376,450
 	
Deferred income tax assets 	 

 	 
 
650,353,766

616,579,356

 

 

 

Total non-current assets 	 

 	 
 
7,875,696,362

7,753,248,198

 

 

 

Total assets 	 

 	 
 
10,439,084,684

10,448,757,488

 
The accompanying notes are an integral part of these condensed consolidated interim financial statements.

1

 
Cencosud S.A. and subsidiaries, condensed consolidated interim statements of financial position

 
 	 
As of
 	
Net equity and liabilities	 
Note
 	 
March 31, 2017
 	 
December 31, 2016

 
 	 
ThCh$
 	 
ThCh$

 
 	 
(unaudited)

 	

 	 

 
 	
Current liabilities	 

 

 	
Other financial liabilities, current 	 
 
13

421,486,044

408,009,016
 	
Trade payables and other payables 	 

 	 
 
1,775,953,152

1,926,847,052
 	
Payables to related entities, current 	 

 	 
 
14,397,527

18,722,919
 	
Provisions and other liabilities 	 
 
14

12,125,285

11,779,434
 	
Current income tax liabilities 	 

 	 
 
75,154,539

74,585,510
 	
Current provision for employee benefits 	 

 	 
 
84,938,467

106,496,839
 	
Other non-financial liabilities, current 	 

 	 
 
40,966,569

26,977,677

 

 

 

Total current liabilities other than non-current assets held for sale	 

 	 
 
2,425,021,583

2,573,418,447

 

 

 

Liabilities classified as held for sale 	 
 
21

6,952,107

15,669,233

 

 

 

Total current liabilities 	 

 	 
 
2,431,973,690

2,589,087,680

 

 

 

Non-current liabilities	 

 	 

 	 

 	
Other financial liabilities, 	 
 
13

2,886,736,735

2,903,625,666
 	
Trade accounts payables 	 

 	 
 
4,154,208

4,803,725
 	
Provisions and other liabilities 	 
 
14

69,875,329

68,256,160
 	
Deferred income tax liabilities 	 

 	 
 
742,903,658

719,542,091
 	
Non-current income tax liabilities 	 

 	 
 
13,700,884

-
 	
Other non–financial liabilities, non–current 	 

 	 
 
80,710,692

79,390,431

 

 

 

Total non-current liabilities 	 

 	 
 
3,798,081,506

3,775,618,073

 

 

 

Total liabilities 	 

 	 
 
6,230,055,196

6,364,705,753

 

 

 

Equity	 

 	 

 	 

 	
Paid-in capital 	 
 
15

2,420,564,735

2,420,564,735
 	
Retained earnings 	 

 	 
 
2,542,197,135

2,489,410,413
 	
Issuance premium 	 

 	 
 
461,302,097

461,302,097
 	
Other reserves 	 

 	 
 
(1,214,712,932
)	 
 
(1,286,017,106
)	

 

 

 
 	
Equity attributable to controlling shareholders 	 

 	 
 
4,209,351,035

4,085,260,139
 	
Non-controlling interest 	 

 	 
 
(321,547
)	 
 
(1,208,404
)	

 

 

 
 	
Total equity 	 

 	 
 
4,209,029,488

4,084,051,735

 

 

 

Total equity and liabilities 	 

 	 
 
10,439,084,684

10,448,757,488

 
The accompanying notes are an integral part of these condensed consolidated interim financial statements.

2
 
Cencosud S.A. and subsidiaries, condensed consolidated interim statement of profit and loss (unaudited)

 
 	 
For the three months ended
 	
Statements of profit and loss	 
Note
 	 
3/31/2017
 	 
3/31/2016

 
 	 
ThCh$
 	 
ThCh$
 	
Revenues from ordinary activities 	 
 
18

2,523,563,293

2,481,884,240
 	
Cost of Sales 	 
 
16

(1,785,921,395
)	 
 
(1,765,306,972
)	
Gross Profit 	 

 	 
 
737,641,898

716,577,268

 

 

 

Other income by function 	 
 
16

29,472,472

40,774,188
 	
Distribution cost 	 
 
16

(6,438,007
)	 
 
(6,242,744
)	
Administrative expenses 	 
 
16

(585,030,025
)	 
 
(541,751,349
)	
Other expenses by function 	 
 
16

(39,740,805
)	 
 
(36,495,483
)	
Other losses, net 	 
 
16

(2,677,663
)	 
 
(3,462,534
)	
Operating profit 	 

 	 
 
133,227,870

169,399,346

 

 

 

Finance income 	 
 
16

4,043,544

3,840,794
 	
Finance expenses 	 
 
16

(66,617,768
)	 
 
(69,323,451
)	
Participation in profit of equity method associates 	 

 	 
 
4,508,818

2,860,171
 	
Exchange differences 	 
 
16

31,615,843

38,525,604
 	
Losses from indexation 	 
 
16

(2,785,855
)	 
 
(3,468,411
)	
Profit before income tax 	 

 	 
 
103,992,452

141,834,053

 

 

 

Income tax expense 	 
 
17

(35,915,116
)	 
 
(32,805,216
)	

 

 

 
 	
Profit from continuing operations 	 

 	 
 
68,077,336

109,028,837

 

 

 

Profit from discontinued operations 	 
 
22

-

-
 	
Profit attributable to controlling shareholders                                                                                           	 

 	 
 
67,167,284

107,681,808
 	
Profit attributable to non–controlling shareholders 	 

 	 
 
910,052

1,347,029

 

 

 

Net Profit 	 

 	 
 
68,077,336

109,028,837

 

 

 

Earnings per share	 

 	 

 	 

 	
Basic earnings per share from continued operations 	 

 	 
 
23.5

38.1
 	
Basic earnings per share from discontinued operations 	 

 	 
 
-

-
 	
Diluted earnings per share from continued operations 	 

 	 
 
23.5

37.8
 	
Diluted earnings per share from discontinued operations	 

 	 
 
-

-

 
The accompanying notes are an integral part of these condensed consolidated interim financial statements.

3

 
Cencosud S.A. and subsidiaries, condensed consolidated interim statement of comprehensive income (loss) (unaudited)

For the three months ended
 	
Statements of comprehensive income (loss)	 
3/31/2017
 	 
3/31/2016

ThCh$
 	 
ThCh$
 	
Net Profit 	 
 
68,077,336

109,028,837

 

 

Other comprehensive profit	 

 	 

 	
Items that will not be reclassified to profit and loss	 

 	 

 	
Revaluation surplus 	 
 
-

-
 	
Re-measurements of employee benefit obligations 	 
 
-

-
 	
Total OCI that will not be reclassified to profit and loss	 
 
-

-

 

 

Items that may be reclassified to profit and loss	 

 	 

 	
Foreign currency translation losses 	 
 
82,017,006

(92,461,573
)	
Cash flow hedge 	 
 
(16,209,131
)	 
 
(139,627
)	
Total items that may be reclassified to profit and loss	 
 
65,807,875

(92,601,200
)	

 

 
 	
Other comprehensive income, before taxes 	 
 
65,807,875

(92,601,200
)	

 

 

 

 

Income tax related to revaluation surplus 	 
 
-

-
 	
Income tax related to re-measurement of employee benefit obligations	 
 
-

-
 	
Total income tax that will not be reclassified to profit and loss	 
 
-

-

 

 

Income tax related to cash flow hedge 	 
 
4,376,465

38,945
 	
Total income tax that may be reclassified to profit and loss 	 
 
4,376,465

38,945

 

 

Total other comprehensive loss 	 
 
70,184,340

(92,562,255
)	

 

 
 	
Total comprehensive income (loss) 	 
 
138,261,676

16,466,582

 

 

Income (loss) attributable to	 

 	 

 	
Owners of the Company 	 
 
137,374,819

15,371,505
 	
Non-controlling interest 	 
 
886,857

1,095,077

 

 

Total comprehensive income (loss) 	 
 
138,261,676

16,466,582

The accompanying notes are an integral part of these condensed consolidated interim financial statements.
 
4

 
Cencosud S.A. and subsidiaries,
Condensed consolidated interim statement of changes in net equity
for the three months ended March 31, 2017 (unaudited)
 
Statement of changes innet equity ThCh$	 
Paid-incapital
 	 
Share premium
 	 
Revaluation surplus reserves
 	 
Translationr eserves
 	 
Hedge reserves
 	 
Employee benefit reserves
 	 
Share based payments reserves
 	 
Other reserves
 	 
Total reserves
 	 
Retained 
earnings
 	 
Equity attributable to parent company shareholders
 	 
Non-controlling interest
 	 
Total equity
 	
Opening balance as of January 1, 2017	 
 
2,420,564,735

461,302,097

14,252,148

(1,250,381,663
)	 
 
(22,078,872
)	 
 
(1,120,048
)	 
 
26,949,962

(53,638,633
)	 
 
(1,286,017,106
)	 
 
2,489,410,413

4,085,260,139

(1,208,404
)	 
 
4,084,051,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Changes in equity	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Net profit 	 
 
-

-

-

-

-

-

-

-

-

67,167,284

67,167,284

910,052

68,077,336
 	
Other comprehensive (loss) profit 	 
 
-

-

-

82,040,201

(11,832,666
)	 
 
-

-

-

70,207,535

-

70,207,535

(23,195
)	 
 
70,184,340

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Comprehensive (loss) profit 	 
 
-

-

-

82,040,201

(11,832,666
)	 
 
-

-

-

70,207,535

67,167,284

137,374,819

886,857

138,261,676

 

 

 

 

 

 

 

 

 

 

 

 

 

Share issuance 	 
 
-

-

-

-

-

-

-

-

-

-

-

-

-
 	
Dividends 	 
 
-

-

-

-

-

-

-

-

-

(14,380,562
)	 
 
(14,380,562
)	 
 
-

(14,380,562
)	
Stock option (see Note 20) 	 
 
-

-

-

-

-

-

1,096,628

-

1,096,628

-

1,096,628

-

1,096,628
 	
Decrease due to changes in ownership interest without a loss of control	 
 
-

-

-

-

-

-

-

11

11

-

11

-

11

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions with owners 	 
 
-

-

-

-

-

-

1,096,628

11

1,096,639

(14,380,562
)	 
 
(13,283,923
)	 
 
-

(13,283,923
)	

 

 

 

 

 

 

 

 

 

 

 

 

 
 	
Total Changes in equity 	 
 
-

-

-

82,040,201

(11,832,666
)	 
 
-

1,096,628

11

71,304,174

52,786,722

124,090,896

886,857

124,977,753

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance, as of March 31, 2017 	 
 
2,420,564,735

461,302,097

14,252,148

(1,168,341,462
)	 
 
(33,911,538
)	 
 
(1,120,048
)	 
 
28,046,590

(53,638,622
)	 
 
(1,214,712,932
)	 
 
2,542,197,135

4,209,351,035

(321,547
)	 
 
4,209,029,488

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

5

 
Cencosud S.A. and subsidiaries,
Condensed consolidated interim statement of changes in net equity
for the three months ended March 31, 2016 (unaudited)
 
Statement of changes innet equity ThCh$	 
Paid-incapital
 	 
Share premium
 	 
Revaluation surplus reserves
 	 
Translation reserves
 	 
Hedge reserves
 	 
Employee benefit reserves
 	 
Share based payments reserves
 	 
Other reserves
 	 
Total reserves
 	 
Retained 
earnings
 	 
Equity attributable to parent company shareholders
 	 
Non-controlling interest
 	 
Total equity
 	
Opening balance as of January 1, 2016	 
 
2,321,380,936

526,633,344

-

(1,187,109,821
)	 
 
14,859,584

(229,427
)	 
 
19,276,599

(52,476,934
)	 
 
(1,205,679,999
)	 
 
2,329,411,478

3,971,745,759

(933,941
)	 
 
3,970,811,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Changes in equity	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Net profit 	 
 
-

-

-

-

-

-

-

-

-

107,681,808

107,681,808

1,347,029

109,028,837
 	
Other comprehensive (loss) profit 	 
 
-

-

-

(92,209,621
)	 
 
(100,682
)	 
 
-

-

-

(92,310,303
)	 
 
-

(92,310,303
)	 
 
(251,952
)	 
 
(92,562,255
)	

 

 

 

 

 

 

 

 

 

 

 

 

 
 	
Total Comprehensive (loss) profit 	 
 
-

-

-

(92,209,621
)	 
 
(100,682
)	 
 
-

-

-

(92,310,303
)	 
 
107,681,808

15,371,505

1,095,077

16,466,582

 

 

 

 

 

 

 

 

 

 

 

 

 

Share issuance 	 
 
48,837,899

(35,102,239
)	 
 
-

-

-

-

-

-

-

-

13,735,660

-

13,735,660
 	
Dividends 	 
 
-

-

-

-

-

-

-

-

-

(24,151,239
)	 
 
(24,151,239
)	 
 
-

(24,151,239
)	
Stock option (see Note 20) 	 
 
-

-

-

-

-

-

3,739,726

-

3,739,726

-

3,739,726

-

3,739,726
 	
Decrease due to changes in ownership interest without a loss of control	 
 
-

-

-

-

-

-

-

(1,161,699
)	 
 
(1,161,699
)	 
 
-

(1,161,699
)	 
 
(52,597
)	 
 
(1,214,296
)	

 

 

 

 

 

 

 

 

 

 

 

 

 
 	
Total transactions with owners 	 
 
48,837,899

(35,102,239
)	 
 
-

-

-

-

3,739,726

(1,161,699
)	 
 
2,578,027

(24,151,239
)	 
 
(7,837,552
)	 
 
(52,597
)	 
 
(7,890,149
)	

 

 

 

 

 

 

 

 

 

 

 

 

 
 	
Total Changes in equity 	 
 
48,837,899

(35,102,239
)	 
 
-

(92,209,621
)	 
 
(100,682
)	 
 
-

3,739,726

(1,161,699
)	 
 
(89,732,276
)	 
 
83,530,569

7,533,953

1,042,480

8,576,433

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance, as of March 31, 2016 	 
 
2,370,218,835

491,531,105

-

(1,279,319,442
)	 
 
14,758,902

(229,427
)	 
 
23,016,325

(53,638,633
)	 
 
(1,295,412,275
)	 
 
2,412,942,047

3,979,279,712

108,539

3,979,388,251

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

6

 
Cencosud S.A. and subsidiaries,
Condensed consolidated interim statements of cash flows (unaudited)

For the three months ended March 31,

2017
 	 
2016
 	
Cash flows from (used in) operating activities	 
ThCh$
 	 
ThCh$

 

 	
Types of revenues from operating activities	 

 
 	
Revenue from sale of goods and provision of services 	 
 
3,126,287,700

3,003,212,238
 	
Other operating activities revenue 	 
 
4,927,075

5,896,987

 

 

Types of payments	 

 	 

 	
Payments to suppliers for supply of goods and services 	 
 
(2,614,020,513
)	 
 
(2,583,357,497
)	
Payments to and on behalf of personnel 	 
 
(363,279,335
)	 
 
(305,999,620
)	
Other operating payments 	 
 
(154,456,609
)	 
 
(155,528,361
)	
Interest paid                                                                                    	 
 
(27,470
)	 
 
(5,288
)	
Interest received                                                                                    	 
 
19,335

588,135
 	
Taxes paid 	 
 
(29,955,192
)	 
 
(19,709,011
)	
Other cash inflows (outflows) 	 
 
(2,902,577
)	 
 
987,025

 

 

Cash flows from (used in) operating activities (continuing operations)	 
 
(33,407,586
)	 
 
(53,915,392
)	
Cash flows used in operating activities (discontinued operations).	 
 
-

-

 

 

Net cash flow (used in) from operating activities 	 
 
(33,407,586
)	 
 
(53,915,392
)	

 

 
 	
Cash flows (used in) from investing activities	 

 	 

 	
Cash flows used to acquire non-controlled interests 	 
 
-

(1,434,532
)	
Cash flows from sales of other entities' equity or debt instruments	 
 
-

9,010,753
 	
Proceeds from sales of property, plant and equipment 	 
 
392,748

1,779,681
 	
Purchases of property, plant & equipment 	 
 
(42,461,362
)	 
 
(41,889,961
)	
Purchases of intangible assets 	 
 
(9,406,431
)	 
 
(8,074,386
)	
Interest received 	 
 
500,456

435,537
 	
Proceeds from sale of other financial assets—mutual funds 	 
 
3,518,610,985

953,380,279
 	
Purchases of other financial assets—mutual funds 	 
 
(3,435,611,104
)	 
 
(797,536,248
)	
Cash flows from (used in) investing activities (continuing operations) 	 
 
32,025,292

115,671,123
 	
Cash flows used in investment activities (discontinued operations)…    .	 
 
-

-

 

 

Net cash flow from (used in) investment activities 	 
 
32,025,292

115,671,123

 

 

Cash flows from (used in) financing activities	 

 	 

 	
Proceeds from exercise of stock options 	 
 
-

13,735,660

 

 

Proceeds from borrowing at long–term 	 
 
-

-
 	
Proceeds from borrowing at short–term 	 
 
37,795,315

45,464,010
 	
Total loan proceeds from borrowing 	 
 
37,795,315

45,464,010

 

 

Repayments of borrowing 	 
 
(21,888,435
)	 
 
(40,479,068
)	
Interest paid 	 
 
(83,280,534
)	 
 
(76,680,969
)	
Other cash outflows 	 
 
(584,191
)	 
 
(1,570
)	

 

 
 	
Cash flows used in financing activities (continuing operations)  ..	 
 
(67,957,845
)	 
 
(57,961,937
)	
Cash flows from financing activities (discontinued operations)..  .	 
 
-

-

 

 

Net cash flow used in financing activities 	 
 
(67,957,845
)	 
 
(57,961,937
)	

 

 
 	
Net increase (decrease) in cash and cash equivalents before the effects of exchange rates variations	 
 
(69,340,139
)	 
 
3,793,794

 

 

Effects of variations in the exchange rate on cash and cash equivalents	 
 
4,851,616

(20,529,028
)	

 

 
 	
Net decrease in cash and cash equivalents 	 
 
(64,488,523
)	 
 
(16,735,234
)	
Cash and cash equivalents at the beginning of the period 	 
 
275,219,003

268,275,126

 

 

Cash and cash equivalents at the end of the period 	 
 
210,730,480

251,539,892

 

 

Incuded in cash and cash equivalents per the statement of financial situation	 
 
210,730,480

251,539,892
 	
Incuded in the assets of the disposal group	 
 
-

-

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

7

Cencosud S.A. and subsidiaries
Notes to the unaudited condensed consolidated interim financial statements
 
1 	General information	
 
Cencosud S.A. (hereinafter “Cencosud Group,” “the Company,” “the Holding,” “the Group”) taxpayer ID number 93.834.000-5 is a public corporation with an indefinite life, with its legal residence at Avda. Kennedy 9001, 4th floor, Las Condes, Santiago, Chile.
 
Cencosud S.A. is a public company registered with the Chilean Superintendence of Securities and Insurance (SVS), under No.743, which shares are quoted in Chile on the Stock Brokers-Stock Exchange (Valpara’so), the Chilean Electronic Stock Exchange and the Santiago Stock Exchange; it is also quoted on the United States of America Stock Exchange (“NYSE”) in New York in the form of American Depositary Receipts (ADRs).
 
Cencosud S.A. is a retail operator in Latin America, which has active operations in Chile, Argentina, Brazil, Colombia and Peru, where it has developed a successful multi-format and multi-brand strategy reaching sales of ThCh$ 2,523,563,293 as of March 31, 2017.
 
During the year ended March 31, 2017, the Company employed an average of 136,963 employees, ending with a total number of 135,235 employees.
 
The Company’s operations include supermarkets, hypermarkets, home improvement stores, department stores, shopping centers, as well as real estate development and financial services, which makes it the most diversified retail company of Latin-American capital in South America with the biggest offering of square meters, it caters to the consumption needs of over 180 million customers.
 
Additionally, it operates other lines of business that complement the main retail operations, such as insurance brokerage, a travel agency, customer loyalty services and family entertainment centers. All of these services have gained recognition and prestige among customers, with brands that excel at quality and service.
 
The Company splits its equity among 2,862,536,947 shares of a single series whose main shareholders are the following:
 
Major shareholders as of March 31, 2017	 
Shares
 	 
Interest

 
 	 
%
 	
Inversiones Quinchamali Limitada	 
 
573,754,802

20.044
%	
Inversiones Latadia Limitada	 
 
550,823,211

19.243
%	
Inversiones Tano Limitada	 
 
287,328,548

10.038
%	
Banco de Chile on behalf of third parties	 
 
190,547,411

6.657
%	
Banco Itau on behalf of investors	 
 
158,753,528

5.546
%	
Provida C Pension Fund	 
 
75,326,810

2.632
%	
Horst Paulmann Kemna	 
 
70,336,573

2.457
%	
Banco Santander - JP Morgan	 
 
59,184,339

2.068
%	
Fondo de Pensiones Habitat C	 
 
54,606,787

1.908
%	
Capital C Pension Fund	 
 
50,153,631

1.752
%	
Cuprum C Pension Fund	 
 
45,557,640

1.592
%	
Provida B Pension Fund	 
 
43,323,908

1.514
%	
Other shareholders	 
 
702,839,759

24.553
%	

 

 
 	
Total 	 
 
2,862,536,947

100.000
%	

8

The Cencosud group is controlled by the Paulmann family, as detailed below:
 
Interest of Paulmann family as of March 31, 2017	 
Interest

%
 	
Inversiones Quinchamali Limitada	 
 
20.044
%	
Inversiones Latadia Limitada	 
 
19.243
%	
Inversiones Tano Limitada	 
 
10.038
%	
Horst Paulmann Kemna	 
 
2.457
%	
Manfred Paulmann Koepfer	 
 
0.486
%	
Peter Paulmann Koepfer	 
 
0.492
%	
Heike Paulmann Koepfer	 
 
0.486
%	
Succession of Mrs. Helga Koepfer Schoebitz	 
 
0.113
%	
Inversiones Alpa Limitada	 
 
0.002
%	

 
 	
Total 	 
 
53.360
%	
 
These condensed consolidated interim financial statements of Cencosud group as of March 31, 2017, were approved by the Board of Directors in a session held on May 25, 2017.

9

2 	Summary of the main accounting policies	
 
2.1 	Presentation basis	
 
The consolidated financial statements of Cencosud S.A. have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
 
These condensed consolidated interim financial statements for the three months ended March 31, 2017 have been prepared in accordance with IAS 34, “Interim financial reporting” and do not include all the information required for a complete set of IFRS annual financial statements. Accordingly, the condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended December 31, 2016, which have been prepared in accordance with IFRS.
 
The presentation of the financial statements in conformity with IFRS requires the use of certain accounting estimates, and also requires Management to exercise its judgment in the process of applying the Company’s accounting policies. Note 4 to these financial statements shows the areas in which a greater level of judgment has been applied, or where there is a higher level of complexity and therefore hypothesis and estimates are material to the financial statements.
 
Figures in the accompanying financial statements are expressed in thousands of Chilean pesos, as the Chilean peso is the functional and presentation currency of the Company. All values have been rounded to the nearest thousands of pesos, except where mentioned.
 
For the purpose of presenting comparative information, certain figures presented on the consolidated financial statements of the Group as of December 31, 2016 have been reallocated based on the presentation shown on the consolidated financial statement as of March 31, 2017.
 
2.2                      	New and amended standards adopted by the group	
 
(a) The following standards and interpretations are compulsory for the first adoption for annual periods beginning on or after January 1, 2017.

Amendments and improvements
 
Amendment to IAS 7 — Statement of Cash Flows. Issued on February 2016. The amendments are intended to clarify IAS 7 to improve disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities.
 
Amendment to IAS 12 — Income Taxes. Issued on February 2016. The IASB had concluded that the diversity in practice around the recognition of a deferred tax asset that is related to a debt instrument measured at fair value is mainly attributable to uncertainty about the application of some of the principles in IAS 12. Therefore the amendments consist of some clarifying paragraphs and an illustrating example.
 
Management has assessed the adoption of these standards, amendments and interpretations, and it has concluded that there are not a material impact on Financial Statements of the Group.
 
(b) New standards, amendments and interpretations not yet adopted.
 
Standards and interpretations	Description	Application for annual periods beginning on or after:	
IFRS 9 “Financial Instruments”	The complete version of IFRS 9 replaces most of the guidance in IAS 39. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39.	01-01-2018	
 
IFRS 15 “Revenue from Contracts with Customers”	 
This standard defines a new model to recognize revenue from contracts with costumers. The standard deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations.	 
01-01-2018	
 
IFRS 16 “Leases”	 
Specifies how an IFRS reporter will recognise, measure, present and disclose leases. The new standard brings most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however remains largely unchanged and the distinction between operating and finance leases is retained. The standard also provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value.	 
01-01-2019	
 
IFRIC 22 — Foreign Currency Transactions and Advance Consideration	 
IFRIC 22 clarifies the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency.	 
01-01-2018	

10

Amandments and improvements	Description	Application for annual periods beginning on or after:	
Amendment to IFRS 2 — Share-based Payment	The amendments to IFRS 2 clarify the classification and measurement of share-based payment transactions. The amendments address several requests that the IASB and the IFRS Interpretations Committee received and that the IASB decided to deal with in one combined narrow-scope project.	01-01-2018	
 
Amendment to IFRS 15 — Revenue from Contracts with Customers	 
The amendments in Clarifications to IFRS 15 'Revenue from Contracts with Customers' address three of the five topics identified (identifying performance obligations, principal versus agent considerations, and licensing) and provide some transition relief for modified contracts and completed contracts. The IASB concluded that it was not necessary to amend IFRS 15 with respect to collectability or measuring non-cash consideration. In all its decisions, the IASB considered the need to balance helping entities with implementing IFRS 15 and not disrupting the implementation process.	 
01-01-2018	
 
Amendment to IAS 40 — Investment Property	 
The amendment provides guidance on transfers to, or from, investment properties. More specifically, the question was whether a property under construction or development that was previously classified as inventory could be transferred to investment property when there was an evident change in use.	 
01-01-2018	
 
Amendment to IFRS 12 — Disclosure of Interests in Other Entities	 
The amendment clarifies the scope of the standard by specifying that the disclosure requirements in the standard, except for those in paragraphs B10–B16, apply to an entity’s interests listed in paragraph 5 that are classified as held for sale, as held for distribution or as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations	 
01-01-2018	
 
Amendment to IAS 28 — Investments in Associates and Joint Ventures (2011)	 
The amendment clarifies that the election to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition	 
01-01-2018	
 
Amendment to IFRS 10 — Consolidated Financial Statements	 
The IASB has made limited scope amendments to IFRS 10 Consolidated financial statements and IAS 28 Investments in associates and joint ventures.
The amendments clarify the accounting treatment for sales or contribution of assets between an investor and its associates or joint ventures. They confirm that the accounting treatment depends on whether the non-monetary assets sold or contributed to an associate or joint venture constitute a ‘business’ (as defined in IFRS 3 Business Combinations).
Where the non-monetary assets constitute a business, the investor will recognise the full gain or loss on the sale or contribution of assets. If the assets do not meet the definition of a business, the gain or loss is recognised by the investor only to the extent of the other investor’s investors in the associate or joint venture. The amendments apply prospectively.
** In December the IASB decided to defer the application date of this amendment until such time as the IASB has finalised its research project on the equity method.	 
N/A**	
 
These standards, amendments and interpretations are not expected to have a material impact on the Group, except for the following:
 
IFRS 9 - Financial Instruments
 
IFRS 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets.
 
While the Group has not yet undertaken a detailed assessment of the classification and measurement of financial assets, debt instruments currently classified as available-for-sale (AFS) financial assets would appear to satisfy the conditions for classification as at fair value through other comprehensive income (FVOCI) and hence there will be no change to the recognition of such assets.
 
The other financial assets held by the group mainly include:
 
●	Mutual Fund Shares	
●	Derivatives (hedging and economical)	
●	Highly liquid financial instruments, and	
●	Financial investments long term	

11

The Group does not expect the new guidance to have a significant impact on the classification and measurement of these financial assets.
 
There will be no impact on the group's recognition for financial liabilities, as the new requirements only affect the recognition for financial liabilities that are designated at fair value through profit or loss and the group does not have liabilities with such classification. The derecognition rules have been transferred from IAS 39 Financial Instruments: Recognition and Measurement and have not been changed.
 
The new hedge accounting rules will align the recognition for hedging instruments more closely with the group's risk management practices. As a general rule, more hedge relationships might be eligible for hedge accounting, as the standard introduces a more principles-based approach. While the Group is yet to undertake a detailed assessment, it would appear that the Group's current hedge relationships would qualify as accounting hedges upon the adoption of IFRS 9. Accordingly, the Group does not expect a significant impact on the accounting for its hedging relationships.
 
The new impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses as is the case under IAS 39. It applies to financial assets classifies at amortized cost, debt instruments measured at FVOCI, contracts under IFRS 15 Revenue from Contracts with Costumers, lease receivables, loan commitments and certain financial guarantee contracts. While the group has not yet undertaken a detailed assessment of how its impairment provisions would be affected by the new model, it may result in an earlier recognition of credit losses.
 
The new standard also introduces expanded disclosure requirements and changes in presentation. These are expected to change the nature and extend of the Group's disclosures about its financial instruments particularly in the year of the adoption of the new standard.
 
IFRS 9 must be applied mandatorily for financial years commencing on or after January 1, 2018.
The Group does not intend to adopt IFRS 9 before its mandatory date. At this stage, the Group does not intend to adopt the standard before its effective date.
 
IFRS 15 - Revenue from Contracts with Costumers
 
The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contracts for goods and services and IAS 11 which covers construction contracts.
 
The new standard is based on the principle that revenue is recognized when control of a good or service transfers to a customer.
 
The standard permits a full retrospective or modified retrospective approach for adoption.
 
Management is currently assessing the effects of applying the new standard on the Group’s financial statements and has identified the following areas that are likely to be affected:
 
●	Accounting for the customers loyalty program – IFRS 15 requires that the total consideration received must be allocated to the points and goods based on relative stand-alone selling prices rather than based on the residual value method; this could result in different amounts being allocated to the goods sold and deffera in the recognition of a portion of the revenue, and	
●	GIFT CARD - IFRS 15 allows that when it is adequately established the rate of wastage from clients, over their totalcontractual rights (breakage), the variable consideration treatment is given and a portion of such rightsis recognized as revenue; This could lead to a recognition of revenue in advance.	
 
IFRS 15 must be applied mandatorily for financial years commencing on January 1, 2018. The expected date of adoption by the Group: January 1, 2018. At this stage, the Group is not able to estimate the impact of this new standard on the Group´s financial statements, the Group will make a more detailed assessment of the impact over the next twelve months.

12

IFRS 16 - Leases
 
IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases.
 
The accounting for lessors will not significantly change.
 
The standard will affect primarily the recognition of the Group’s operating leases. As at the reporting date, the Group has non-cancellable operating leases commitments of MM $ 1,728,759. However, the Group has not yet determined to what extend these commitments will result in the recognition of an asset and liability for future payments and how this will affect the Group’s profit and classification of cash flows.
 
Some of the commitments may be covered by the exception for short-term and low-value leases and some commitments may relate to arrangements that will not qualify as leases under the new IFRS 16 definitions.
 
IFRS 16 is mandatory for financial years commencing on or after January 1, 2019. At this stage, the Group does not intend to adopt the standard before its effective date.
 
2.3 	Accounting policies	
The accounting policies adopted are consistent with those applied during the previous financial year and corresponding interim reporting period.
Income taxes for interim periods are accounted for using the tax rate that would be applicable to expected total annual income before taxes.
 
2.4 	Changes in accounting policies	
 
The Company assess accounting policies frequently, and decide to change any of the adopted standards only if the change: i) is required by a new IFRS ; or ii) results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity's financial position, financial performance, or cash flows.
 
No changes in accounting policies have been adopted by the Company during for the three months ended March 31, 2017 and 2016.
 
2.5 	Income tax.	
 
On September 29, 2014, Law No. 20,780 was enacted and published in the Official Gazette, introducing various amendments to the current income tax law and taxation rules for other taxes in Chile. Under the recently enacted tax law, the income tax rate will increase to 21%, 22.5%, 24%, 25.5% and 27%, for the years 2014, 2015, 2016, 2017 and 2018 and following fiscal years, respectively, such newly enacted rates are applicable based on the Company’s adoption of the partially integrated system.
 
The above implies that the income tax rate in Chile is 25.5% for the 2017 fiscal year. Therefore, for the close of the financial statements as of March 31, 2017, a tax rate of 25.5% has been considered in the determination of the income tax provision in Chile.
 
2.6 	Assets and liabilities held for sale and discontinued operations	
 
Non current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and the sale is considered highly probable. Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell, except forinvestment properties, financials instruments and others that are carried at fair value. An impairment loss is recognized for any initial or subsequent write down of the asset (or disposal group) to fair value less cost to sell. A gain is recognized for any subsequent increases in fair value less costs to sell of an asset ( or disposal group), but not in excess of any cumulative impairment loss previously recognized. A gain or loss not previously recognized by the date of the sale of the non current asset (or disposal group) is recognized at the date of recognition. Non-current assets (including those that are part of disposal group) are notdepreciated or amortized while they are classified as held for sale.

13

Non current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the statement of financial position. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the statement of financial position.
 
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations, net of tax, are presented separately in the statement of profit and loss. Net cash flows attributable to the operating, investing and financing activities of discontinued operations are required to be disclosed either in the notes to the financial statements or on the face of the statements of cash flows. IFRS 5 requires that a company “re-present” its statement of comprehensive income as if the operation had been discontinued for all prior periods presented.
 
Assets held for sale, and associated liabilities, are detailed on note 21 to these condensed interim financial statements.
 
2.7 	Seasonability	
 
The Company experiences distinct seasonal sales patterns at supermarkets due to heightened consumer activity throughout the Christmas and New Year holiday season, as well as during the beginning of each school year in March. During these periods, the Company promotes the sale of non-food items particularly by discounting imported goods, such as toys throughout the Christmas holiday season, and school supplies during the back-to-school period. Conversely, the Company usually experiences a decrease in sales during the summer vacation months of January and February.
 
The Company does not experience significant seasonality in the home improvement sector.
 
Department stores have also experienced historically distinct seasonal sales patterns due to heightened consumer activity throughout the Christmas and New Year holiday season. As a result, the strongest quarter in terms of sales is the fourth quarter.
 
Shopping center revenues generally increase during the Christmas and New Year holiday season, reflecting the seasonal sales peak for shopping centers.

14

3 	Risk management policies	
 
The Company is exposed to a variety of financial risks: market risk (including interest rate risk and foreign exchange rate risk), credit risk and liquidity risk.
 
The condensed interim consolidated financial statements do not include all financial risk management information and disclosure required in the annual financial statements, and should be read in conjunction with the Company’s annual consolidated financial statements as of December 31, 2016.
 
There have been no changes in the risk management policies and procedures between the dates of the annual and these interim consolidated financial statements as of March 31, 2017.
 
3.1. 	Valuation methodology (initially and subsequently).	
 
Financial instruments that have been accounted for at fair value in the statement of financial position as of March 31, 2017 and December 31, 2016 have been measured using the methodologies as set forth in IFRS 13. These methodologies applied for each class of financial instruments are classified using the following hierarchy:
 
Level I: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted (unadjusted) market prices at the end of the reporting period. The quoted marked price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
 
Level II: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
 
Level III: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
 
Specific valuation techniques used to value financial instruments include:
 
●	Quoted market prices or dealer quotes for similar instruments;	
●	The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves;	
●	The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value;	
●	Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.	

Group valuation process
 
The Group has established control framework with respect to the measurements of fair value. This includes a valuation team that has an overall responsibility for overseeing all significant fair value measurements, including level 3 fair values, and reports directly to the regional CFO.
 
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence from third parties to support the conclusion that such valuations meet the requirements of IFRS, including the fair value hierarchy in which such valuation should be classified.
 
Taking into account the nature and characteristics of the instruments maintained in its portfolio, the Company classifies its valuation methodologies in the three aforementioned levels. Currently, the valuation process considers internally developed valuation techniques, for which parameters and observable market inputs are used, mainly using the present value methodology.

15

As of March 31, 2017 and December 31, 2016, the Group has no financial instruments that have been valuated using inputs assessed as level III, however, the procedures above are in line with the Group policies regarding the estimation and review of the inputs used in fair-valuing financial asset and recurrent and non-recurrent non-financial assets.
 
The tables below show the total value of each type of the financial instruments valued under each category, and its respective percentage, as of March 31, 2017 and December 31, 2016:
 
Table Valuation methodologies.
 
March 2017
 
 	  	  	 	Valuation method	  Amortized	 	
Classification	Group	Type	 	Value	Level I	Level II	Level III	cost	 	
 	 	 	 	ThCh$	%	%	%	%	 	
At fair value through profit or loss	Mutual funds 	Mutual funds 	 	106,873,757	100%	-	-	-	 	
 	Other financial Instruments	Highly liquid financial instruments	 	28,849,230	100%	-	-	-	 	
 	 	Other financial investments	 	255,539	100%	-	-	-	 	
Loans and trade receivables, net	Cash and cash equivalents	Cash balances 	 	36,243,319	-	-	-	100%	 	
 	 	Bank balances 	 	119,425,033	-	-	-	100%	 	
 	 	Short-term deposits 	 	55,062,128	-	-	-	100%	 	
 	Receivables 	Trade receivables, net	 	826,371,883	-	-	-	100%	 	
 	Receivables from related entities	Related entities, current	 	19,752,035	-	-	-	100%	 	
Financial liabilities and payables	Bank loans 	Current 	 	244,555,004	-	-	-	100%	 	
 	 	Non-Current 	 	199,969,698	0.1%	-	-	99.9%	 	
 	Bonds payable 	Current 	 	109,291,538	-	-	-	100.0%	 	
 	 	Non-Current 	 	2,608,318,115	0.3%	-	-	99.7%	 	
 	Other loans (lease) 	Current 	 	2,701,004	-	-	-	100%	 	
 	 	Non-Current 	 	19,253,821	-	-	-	100%	 	
 	Deposits and saving accounts	Current 	 	54,496,733	-	-	-	100%	 	
 	 	Non-Current 	 	44,713,727	-	-	-	100%	 	
 	Debt purchase affiliates	Non-Current 	 	1,834,202	-	-	-	100%	 	
 	Other financial liabilities	Current 	 	2,401,062	-	-	-	100%	 	
 	Trade payables 	Current 	 	1,575,117,514	-	-	-	100%	 	
 	 	Non-Current 	 	191,783	-	-	-	100%	 	
 	Withholding taxes 	Current 	 	200,835,638	-	-	-	100%	 	
 	 	Non-Current 	 	3,962,425	-	-	-	100%	 	
 	Payables to related entities	Current 	 	14,397,527	-	-	-	100%	 	
 	Other financial liabilities	Forward 	 	1,845,932	-	100%	-	-	 	
Hedges	Hedging derivatives 	Cash flow hedging liability	 	13,058,576	-	100%	-	-	 	
 	 	Fair value hedging liability	 	5,783,367	-	100%	-	-	 	
 	 	Cash flow hedging asset	 	241,515,051	-	100%	-	-	 	
 	 	Fair value hedging asset	 	18,370,994	-	100%	-	-	 	

16

December 2016

 	 
 	 
 	 	Valuation method	  Amortized	 	
Classification
	Group
	Type
	 	Value
	Level I
	Level II
	Level 
III
	cost
	 	
 	 	 	 	ThCh$	%	%	%	%	 	
At fair value through profit or loss	Mutual funds 	Mutual fund shares 	 	189,960,780	100%	-	-	-	 	
 	Derivatives 	Forward 	 	1,398,557	-	100%	-	-	 	
 	Other financial Instrument	Highly liquid financial instruments	 	28,629,285	100%	-	-	-	 	
 	 	Financial investments – long term	 	240,874	100%	-	-	-	 	
Loans and trade receivables, net	Cash and cash equivalents	Cash balances 	 	52,646,980	-	-	-	100%	 	
 	 	Bank balances 	 	135,282,148	-	-	-	100%	 	
 	 	Short-term deposits 	 	87,289,875	-	-	-	100%	 	
 	 	Trade receivables, net	 	879,033,383	-	-	-	100%	 	
 	Receivables from related parties	Related parties, current	 	28,988,176	-	-	-	100%	 	
Financial liabilities and payables	Bank loans 	Current 	 	215,393,417	-	-	-	100%	 	
 	 	Non-Current 	 	206,299,337	 	0.1%	-	99.9%	 	
 	Bonds payable 	Current 	 	127,530,284	-	-	-	100.0%	 	
 	 	Non-Current 	 	2,618,875,407	 	0.3%	-	99.7%	 	
 	Other loans (lease)  	Current 	 	2,713,893	-	-	-	100%	 	
 	 	Non-Current 	 	19,256,643	-	-	-	100%	 	
 	Deposits and saving accounts	Current 	 	56,128,948	-	-	-	100%	 	
 	 	Non-Current 	 	45,030,033	-	-	-	100%	 	
 	Debt purchase affiliates	Non-Current 	 	1,722,769	-	-	-	100%	 	
 	Other financial liabilities	Current 	 	2,091,081	-	-	-	100%	 	
 	Trade payables 	Current 	 	1,726,983,368	-	-	-	100%	 	
 	 	Non-Current 	 	191,397	-	-	-	100%	 	
 	Withholding taxes 	Current 	 	199,863,684	-	-	-	100%	 	
 	 	Non-Current 	 	4,612,328	-	-	-	100%	 	
 	Payables to related parties	Current 	 	18,722,919	-	-	-	100%	 	
Hedges	Hedging derivatives 	Cash flow hedging liabilities	 	13,514,328	-	100%	-	-	 	
 	 	Fair value hedging liabilities	 	3,078,542	-	100%	-	-	 	
 	 	Cash flow hedging assets	 	264,820,710	-	100%	-	-	 	
 	 	Fair value hedging assets	 	22,299,090	-	100%	-	-	 	
 
Instruments classified as Level II correspond mainly to interest rate swaps and cross currency swaps that have been valued by discounting the future cash flows stipulated in the contract for both the asset and liability component of each instrument. The structure of interest rates used to bring the future cash flows to present value is constructed based on the currency of each component and inferred from transactions involving risk-free instruments in the relevant market.
 
The Group recognizes transfers between levels of the fair value hierarchy at the end the reporting period during the change has occurred. As of March 31, 2017 and December 31, 2016, there have been no transfers between level I and II, and transfers out of level III to another level of fair value.
 
3.2. 	Reclassifications.	
 
As of the end of this reporting period, the Company has not reclassified any entries in the aforementioned financial instrument categories.

17

3.3. 	Liquidity risk.	
 
The concept of liquidity risk is used by the Company to refer to financial uncertainty, at different time horizons, related to its capacity to respond to cash needs to support its operations, under both normal and exceptional circumstances.
 
Compared to year ended, there was no material change in the contractual undiscounted cash out flows for financial liabilities that affect the Company´s liquidity risk.
 
3.4	Fair value of financial assets and liabilities measured at amortized cost.   	

In order to estimate the fair value of debt instruments accounted for at amortized cost, the Company has estimated the cash flows from variable interest obligations using relevant swap curves. The structure of interest rates used to bring the future cash flows to present value is constructed based on the currency of each obligation and corresponds to the risk-free curve in the relevant market plus a credit spread inferred from the initial contractual conditions of each obligation.  
 
The fair value of borrowings (bank loans and bons payables) which are classified within Level II of the fair value hierarchy, are as follows:

As of
 	
Borrowings	 
March 31,2017
 	 
December 31,2016

ThCh$
 	 
ThCh$
 	
Current 	 
 
354,152,386

338,155,386
 	
Non-Current 	 
 
2,857,234,092

2,893,489,541
 	
Total 	 
 
3,211,386,185

3,231,944,927

The fair value of the following financial assets and liabilities approximate their carrying amount:
 
●	Trade and other receivables	
●	Other current financial assets	
●	Cash and cash equivalents (excluding bank overdrafts)	
●	Trade and other payables	
●	The following assets and liabilities within the held-for-sale disposal group:	
–	Cash and cash equivalents	
–	Other current assets	
–	Trade and other payables	
–	Borrowings	
–	Other current liabilities	

18

4 	Estimates, judgment or criteria applied by management	
 
The estimates and criteria used are continuously assessed and are based on prior experience and other factors, including the expectation of occurrence of future events that are considered reasonable according to the circumstances.
 
The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
 
In preparing these condensed interim financial statements, the significant judgments made by management in applying the group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2016, with the exception of changes in estimates that are required in determining the provision for income taxes and changes derived from adoption of new pronouncements as mentioned in Note 2.5.
 
4.1  	Investment property	
 
a) Fair value measurement for lands
 
The fair value for land was determined by the Company’s finance department, consulting with external and independent property valuers who have the appropriate recognized professional qualification and recent experience in the location and category of the property being valued.
 
The methodology used in determining the fair value of lands was the market approach, which consists of determining the fair value based on recent transactions occurred in the market.
 
This measurement corresponds to level II of the fair value hierarchy.
 
b) Fair value measurements for investment properties other than land.
 
The Company’s finance department is responsible for determining fair value measurements included in the financial statements, including Level 3 fair values of investment properties. The Company’s finance department includes a valuations team that prepares a valuation for each investment property every quarter. The valuation team reports directly to the Chief Financial Officer (CFO) and the Audit Committee (AC).Discussions of valuation processes, key inputs and results are held between the CFO, AC and the valuation team at least once every quarter, in line with the Company’s quarterly reporting dates.
 
The fair value measurement for this type of investment has been categorized as a level III fair value based on the inputs used in the valuation technique. Investment properties are valued on a highest and best use basis. Changes in Level 3 fair values are analyzed at each reporting date during the quarterly valuation discussions between the CFO, AC and the valuation team. As part of this discussion, the team presents a report that explains the reasons for the fair value movements.
 
For all of the Company’s investment properties, the current use is considered to be the highest and best use.
 
The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. There were no transfers in or out of Level 3 fair value measurements for investment properties during the period, nor transfers between Level 1 and Level 2 of the fair value hierarchy.
 
For investment property the methodology of the discounted future cash flows uses a country-specific WACC post- tax rate, measured in real terms and differentiated by country. To this effect, a calculation is performed to obtain the net revenues that correspond to the lease income minus the direct costs and operating expenses. Additionally, the projected cash flows used the historical information of the recent years and the projected macroeconomic variables that will affect each country.

19

The rates used as of March 31, 2017 and December 31, 2016 are as follows:

WACC rate as of
 	
Country
	 
3/31/2017
 	 
12/31/2016

 

 	
Chile  	 
 
6.11
%	 
 
6.19
%	
Argentina 	 
 
12.17
%	 
 
12.27
%	
Peru 	 
 
6.66
%	 
 
6.75
%	
Colombia 	 
 
6.98
%	 
 
7.03
%	
 
The cash flows are calculated in a scenario of moderated growth for those investment properties that have reached the expected maturity level and the main variables used are:
 
1.  	Determination of the Discount Rate	
 
The discount rate is reviewed quarterly for each country and consists of the following factors:
 
a)  	BETA: Because the American market presents a greater number of comparable companies within this industry, using betas of companies in that country.	
b)  	Risk-free rate: It draws on the U.S. Treasury rate at 30 years (30yr T-Bond)	
c)  	Risk premium: Estimated on long-term returns of the stock market and the country risk of each transaction, estimated by the Credit Default Swap to 10 years (10yr CDS). In the case of Argentina’s country risk used is the average of the last three years.	
d)  	Leverage Ratio: Estimated as of BETA referring them on 66.4% equity and 33.6% debt.	
e)  	Tax rate: We use the tax rate in effect in each country	
f)  	Spread: The international bond spread of Cencosud is used to estimate the return on debt which is similar to the Industry spread. With all these factors we estimate the discount rate (WACC) nominal and real, the latter being used as the flow is estimated at UF (Unidad de Fomento) in Chile, or adjusted for inflation in Peru and Argentina	
 
2.        	Revenue growth:	
 
The evolution of income depends on the property, but remains between 0.5% and 1.0% annual real growth, except those newly opened malls whose maturation does expect superior performance improved in the first years of operation. The revenue projection is reviewed quarterly so that it is aligned to the budget approved by the board in the short term and that their expectations of long-term trends are in line with the life cycle in which the asset is (Shopping).
 
3.  	Growth in costs and expenses:	
 
As income, change in expenditure depends on the property but always reflects the standard structure resulting from the operation of such properties and operating agreements signed with tenants. These are also reviewed quarterly to be aligned with the budget and expected evolution for each Shopping.
 
4.  	Investment Plan:	
 
For each shopping center, the Company reviews whether the investment plans is in line with the characteristics of each property and the life cycle in which they are placed.
 
Based on the points described above, the estimated available flow projection thirty-year term, after which is estimated a perpetuity. The present value of these flows determines the fair value of the investment property.
 
5.         	Valuation technique and Inter-relationship between key unobservable inputs.	
 
Valuation technique (Discounted cash flows): The valuation model considers the present value of the net cash flows to be generated from the property taking into account expected revenue growth, occupancy rates, other cost and expenses not paid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates (see above on “determination of discount rate”). Among other factors, the discount rate estimation considers the quality of a building and its location, tenant credit and lease terms.

20

Class
	Country (*)
	Unobservable input	Range	
 	 	 	 	
Malls 	Chile	Expected revenue growth (real)	0.5% - 1%	
 	 	Occupancy rate	90% - 100%	
 	 	 	 	
 	Argentina	Expected revenue growth (real)	0.5% - 1%	
 	 	Occupancy rate	90% - 100%	
 	 	 	 	
Office  	Chile	Expected revenue growth (real)	0.5% - 1%	
 	 	Occupancy rate (1 st through 5 th year)	50% - 90%	
 	 	Thereafter	80% - 98%	
 
(*) The group concentrates 89% of the total of the investment properties in Chile and Argentina.
 
The estimated fair value of the investment properties would increase (decrease) if:
 
●	Risk-adjusted discount rate were lower (higher)	
●	Expected revenue growth were higher (lower)	
●	The occupancy rate were higher (lower)	

21

5 	Other financial assets, current and non-current	

The composition of this item as of March 31, 2017 and December 31, 2016 includes the following:  

As of
 	
Other financial assets, current	 
March 31,
2017
 	 
December 31,
2016

ThCh$
 	 
ThCh$
 	
Mutual Funds units (*) 	 
 
106,873,757

189,960,780
 	
Hedging derivatives 	 
 
-

1,398,557
 	
Highly liquid financial instruments 	 
 
28,849,230

28,629,285

 

 

Total other financial assets, current 	 
 
135,722,987

219,988,622

 

 

 
 	 
As of
 	
Other financial assets, non-current	 
March 31,
2017
 	 
December 31,
2016

ThCh$
 	 
ThCh$
 	
Hedging derivatives 	 
 
259,886,045

287,119,800
 	
Financial investments Long term 	 
 
255,539

240,874
 	
Total other financial assets, non-current 	 
 
260,141,584

287,360,674

(*) 	Mutual Funds units are mainly fixed rate investments.	

22

6 	Trade receivables and other receivables	
 
Trade receivables and other receivables as of March 31, 2017 and December 31, 2016 are as follows:

As of
 	
Trade receivables and other receivables net, current	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Trade receivables net, current 	 
 
134,405,144

187,736,950
 	
Credit card receivables net, current 	 
 
443,673,091

409,219,883
 	
Other receivables, net, current 	 
 
232,888,383

270,182,844
 	
Total 	 
 
810,966,618

867,139,677

 	 
As of
 	
Trade receivables and other receivables, net, non-current	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Trade receivables net, non-current 	 
 
-

373,386
 	
Credit card receivables net, non-current 	 
 
11,554,198

8,412,427
 	
Other receivables, net, non-current 	 
 
3,851,067

3,107,893
 	
Total 	 
 
15,405,265

11,893,706

 	 
As of
 	
Trade receivables and other receivables, gross, current	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Trade receivables gross, current 	 
 
143,315,999

201,676,904
 	
Credit card receivables gross, current 	 
 
464,684,308

428,296,390
 	
Other receivables gross, current 	 
 
248,091,486

280,824,236
 	
Letters of credit loans 	 
 
-

158,572
 	
Total 	 
 
856,091,793

910,956,102

 	 
As of
 	
Trade receivables and other receivables, gross, non-current	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Trade receivables gross, non-current 	 
 
-

373,386
 	
Credit card receivables gross, non-current 	 
 
11,554,198

8,412,427
 	
Other receivables gross, non-current 	 
 
3,851,067

3,107,893
 	
Total 	 
 
15,405,265

11,893,706

 	 
As of
 	
Trade receivables and other receivables close to maturity	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Less than three months 	 
 
581,692,750

645,374,201
 	
Between three and six months 	 
 
95,201,373

88,253,127
 	
Between six and twelve months 	 
 
70,485,825

73,541,986
 	
In more than twelve months 	 
 
15,405,265

11,893,706
 	
Total 	 
 
762,785,213

819,063,020

 
23

The maturity of past due trade receivables as of March 31, 2017 and December 31, 2016 is as follows:

As of
 	
Trade receivables past due but not impaired	 
March 31, 2017
 	 
December 31, 201

ThCh$
 	 
ThCh$
 	
Past due less than three months 	 
 
81,483,623

77,517,208
 	
Past due between three and six months 	 
 
10,327,689

10,223,002
 	
Past due between six and twelve months 	 
 
6,188,321

3,325,672
 	
Past due in more than twelve months 	 
 
10,712,212

12,720,906
 	
Total 	 
 
108,711,845

103,786,788

The movement of the bad debt allowance is as follows:

As of
 	
Change in bad debt allowance	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Initial balance 	 
 
43,816,425

44,636,783
 	
Increase in provision 	 
 
34,999,650

57,105,655
 	
Utilized provision 	 
 
(12,388,797
)	 
 
(26,885,538
)	
Decrease in provision 	 
 
(21,302,103
)	 
 
(31,040,475
)	
Total 	 
 
45,125,175

43,816,425

The maximum exposure to credit risk at the date of the report is the book value in each category of the trade account; Cencosud Group does not request collateral as a guarantee.

24

7 	Transactions with related parties	
 
Transactions with related companies are based on immediate payment or collection or with a term of up to 30 days, and are not subject to special conditions. These operations comply with what is established in articles 44 and 49 of Law N° 18,046 that regulates the Corporations. It is noteworthy that the related party transactions are in accordance with IAS 24 (Revised) “Related Parties”. The Company has a policy to disclose all transactions performed with related parties during the period.
 
7.1 	Trade receivables from related entities	
 
The composition of the item as of March 31, 2017 and December 31, 2016 is as follows:
 
 	 	Receivables from related entities	Balance as of	
Tax ID Number	Company	Transaction
description	Transaction
term	Nature of
relationship	Currency	Current	Non Current	
						3/31/2017	12/31/2016	3/31/2017	12/31/2016	
 	 	 	 	 	 	ThCh$	ThCh$	 	 	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Trade receivable	Current	Associate	Chilean Pesos	11,678,020	20,226,071	-	-	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Dividends receivable	Current	Associate	Chilean Pesos	5,488,493	4,135,701	-	-	
77.218.570-7	CAT Corredores de Seguros y Servicios S.A.	Trade receivable	Current	Associate	Chilean Pesos	353,190	443,446	-	-	
77.218.570-7	CAT Corredores de Seguros y Servicios S.A.	Dividends receivable	Current	Associate	Chilean Pesos	612,604	370,903	-	-	
76.388.146-6	Operadora de Procesos S.A.	Dividends receivable	Current	Associate	Chilean Pesos	571,090	487,097	-	-	
76.388.146-6	Operadora de Procesos S.A.	Trade receivable	Current	Associate	Chilean Pesos	104,481	2,624,104	-	-	
76.388.155-5	Servicios Integrales S.A.	Dividends receivable	Current	Associate	Chilean Pesos	932,117	682,020	-	-	
76.388.155-5	Servicios Integrales S.A.	Trade receivable	Current	Associate	Chilean Pesos	12,040	18,834	-	-	
 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	 	 	19,752,035	28,988,176	-	-	
 
7.2 	Trade payables to related entities	
 
The composition of the item as of March 31, 2017 and December 31, 2016 is as follows:
 
 	 	Payables to related entities	Balance as of	
Tax ID number	Company	Transaction
description	Transaction
term	Nature of
relationship	Currency	Current	Non Current	
						3/31/2017	12/31/2016	3/31/2017	12/31/2016	
 	 	 	 	 	 	ThCh$	ThCh$	ThCh$	 	
-	Loyalti Del Perú S.A.C.	Fund transfer	Current	Associate	Peruvian
New Sol	613,144	675,399	-	-	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Trade payable	Current	Associate	Chilean Pesos	12,383,516	16,765,170	-	-	
77.218.570-7	CAT Corredores de Seguros y Servicios S.A.	Trade payable	Current	Associate	Chilean Pesos	734,410	243,112	-	-	
76.388.146-6	Operadora de Procesos S.A.	Trade payable	Current	Associate	Chilean Pesos	627,524	989,095	-	-	
76.388.155-5	Servicios Integrales S.A.	Trade payable	Current	Associate	Chilean Pesos	38,933	50,143	-	-	
Total	 	 	 	 	 	14,397,527	18,722,919	-	-	

25
 
7.3 	Transactions with related parties and impact on profit and loss	
 
The operations and its impact on profit and loss are presented for the years ended March 31, 2017 and 2016, as follows:
 
Transactions	
Tax ID Number	Company	Nature of relationship	Transaction description	Currency	Country	3/31/2017	Impact to profit and loss (charge/credit)	3/31/2016	Impact to profit and loss (charge/credit)	
 	 	 	 	 	 	ThCh$	ThCh$	ThCh$	ThCh$	
96.863.570-0	Inmobiliaria Mall Viña Del Mar S.A.	Associate 	Leases paid 	Chilean pesos 	Chile	-	-	890,000	(890,000)	
96.863.570-0	Inmobiliaria Mall Viña Del Mar S.A.	Associate 	Utilities Paid 	Chilean pesos 	Chile	-	-	571,626	(571,626)	
96.863.570-0	Inmobiliaria Mall Viña Del Mar S.A.	Associate 	Sale of goods 	Chilean pesos 	Chile	-	-	1,598	1,598	
77.209.070-6	Viña Cousiño Macul S.A.                                           	Common director 	Merchandise buying 	Chilean pesos 	Chile	79,332	(79,332)	201,477	(201,477)	
92.147.000-2	Wenco S.A.                                           	Common director 	Merchandise buying 	Chilean pesos 	Chile	858,021	(858,021)	968,042	(968,042)	
92.147.000-2	Wenco S.A.                                           	Common director 	Sale of goods 	Chilean pesos 	Chile	8,092	8,092	-	-	
76.076.630-5	Maxi Kioskos Chile S.A.                                           	Company’s Director 	Leases collected 	Chilean pesos 	Chile	209,119	209,119	128,891	128,891	
76.076.630-5	Maxi Kioskos Chile S.A.                                           	Company’s Director 	Utilities collected 	Chilean pesos 	Chile	85,068	85,068	1,595	1,595	
78.410.320-K	Imp y Comercial Regen Ltda.                                            	Company’s Director 	Merchandise buying 	Chilean pesos 	Chile	61,901	(61,901)	43,403	(43,403)	
78.410.320-K	Imp Y Comercial Regen Ltda.                                            	Company’s Director 	Leases collected 	Chilean pesos 	Chile	68,639	68,639	78,242	78,242	
78.410.320-K	Imp Y Comercial Regen Ltda.                                            	Company’s Director 	Sale of goods 	Chilean pesos 	Chile	7,269	7,269	7,991	7,991	
78.410.320-K	Imp Y Comercial Regen Ltda.                                            	Company’s Director 	Common expenses collected 	Chilean pesos 	Chile	24,072	24,072	-	-	
79.595.200-4	Adelco Santiago Ltda                                            	Company, director relationship 	Goods purchases   	Chilean pesos 	Chile	6,770	6,770	7,931	(7,931)	
88.983.600-8	Teleductos S.A.                                            	Common director 	Leas collected 	Chilean pesos 	Chile	10,913	10,913	12,645	12,645	
88.983.600-8	Teleductos S.A.                                            	Common director 	Services provided 	Chilean pesos 	Chile	111,172	(111,172)	332,918	(332,918)	
92.491.000-3	Labsa Inversiones Ltda. 	Company, director relationship 	Leases paid 	Chilean pesos 	Chile	111,973	(111,973)	151,546	(151,546)	
93.737.000-8	Manquehue Net S.A.                                            	Common director 	Services provided 	Chilean pesos 	Chile	2,084	(2,084)	5,737	(5,737)	
96.566.940-K	Agencias Universales S.A.                                            	Common director 	Services provided 	Chilean pesos 	Chile	9,916	(9,916)	1,672	(1,672)	
96.566.940-K	Agencias Universales S.A.                                            	Common director 	Sale of goods 	Chilean pesos 	Chile	5,622	5,622	1,981	1,981	
92.580.000-7	Empresa Nacional de Telecomunicaciones S.A.	Common director 	Services provided 	Chilean pesos 	Chile	134,541	(134,541)	111,976	(111,976)	
92.580.000-7	Empresa Nacional de Telecomunicaciones S.A.	Common director 	Leas collected 	Chilean pesos 	Chile	24,279	24,279	-	-	
90.193.000-7	Empresa El Mercurio.S.A.P.                                            	Common director 	Leases paid 	Chilean pesos 	Chile	9,915	9,915	-	-	
90.193.000-7	Empresa El Mercurio.S.A.P.                                            	Common director 	Common expenses collected 	Chilean pesos 	Chile	1,558	1,558	-	-	
90.193.000-7	Empresa El Mercurio.S.A.P.                                            	Common director 	Services provided 	Chilean pesos 	Chile	20,623	20,623	21,062	21,062	
90.193.000-7	Empresa El Mercurio.S.A.P.                                            	Common director 	Services received 	Chilean pesos 	Chile	698,760	(698,760)	477,292	(477,292)	
96.628.870-1	Entel Telefon’a Local S.A.                                            	Common director 	Services provided 	Chilean pesos 	Chile	-	-	4,580	(4,580)	
96.806.980-2	Entel PCS Telecomunicaciones S.A.	Common director 	Services provided 	Chilean pesos 	Chile	103,378	(103,378)	135,207	(135,207)	
96.806.980-2	Entel PCS Telecomunicaciones S.A.	Common director 	Services provided 	Chilean pesos 	Chile	830,779	(830,779)	839,994	(839,994)	
96.806.980-2	Entel PCS Telecomunicaciones S.A.	Common director 	Lease collected 	Chilean pesos 	Chile	331,734	331,734	470,902	470,902	
96.806.980-2	Entel PCS Telecomunicaciones S.A.	Common director 	Services provided 	Chilean pesos 	Chile	48,162	48,162	40,723	40,723	
96.566.940-K	Cia Nacional de Telefonos,Telefònica del Sur S.A	Common director 	Services provided 	Chilean pesos 	Chile	269	(269)	321	(321)	
96.628.870-1	Industria Productos Alimenticios S.A.	Common director 	Merchandise buying 	Chilean pesos 	Chile	314,246	(314,246)	166,630	(166,630)	
79.675.370-5	Assets- Chile S.A                                            	Common director 	Sale of goods 	Chilean pesos 	Chile	-	-	1,425	1,425	
70.649.100-7	Centros de Estudios Pùblicos                                            	Company, director relationship 	Services provided 	Chilean pesos 	Chile	-	-	162	(162)	
O-E	JetAviation Flight Services Inc.                                            	Company, director relationship 	Services provided 	US Dollar 	Chile	293,124	(293,124)	229,256	(229,256)	
92434000	Besalco S.A                                            	Common director 	Services provided 	Chilean pesos 	Chile	73	(73)	-	-	
88.417.000-1	Sky Airline S.A.                                            	Company, director relationship 	Leases collected 	Chilean pesos 	Chile	-	-	5,682	5,682	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Associate                              	Financial retail income 	Chilean pesos 	Chile	               4,741,908	                   4,741,908	               4,801,441	                   4,801,441	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Associate                              	Cencosud Card sales 	Chilean pesos 	Chile	           165,074,450	                                -	           172,252,029	                                -	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Associate                              	Statements collection 	Chilean pesos 	Chile	           279,590,192	                                -	           249,284,855	                                -	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Associate                              	Leases collected 	Chilean pesos 	Chile	                      4,113	                          4,113	                    50,269	                        50,269	
99.500.840-8	CAT Administradora de Tarjetas S.A.	Associate                              	Gift Cards buying 	Chilean pesos 	Chile	                      3,133	                          3,133	                  186,725	                      186,725	
77.218.570-7	CAT Corredores de Seguros y Servicios S.A.	Associate                              	Gift Cards buying 	Chilean pesos 	Chile	                    20,738	                        20,738	                    14,925	                        14,925	
77.218.570-7	CAT Corredores de Seguros y Servicios S.A.	Associate                              	Merchandise buying 	Chilean pesos 	Chile	                  210,886	                      210,886	                    83,602	                        83,602	
77.218.570-7	CAT Corredores de Seguros y Servicios S.A.	Associate                              	Financial retail income 	Chilean pesos 	Chile	                    22,145	                        22,145	                    47,883	                        47,883	
76.388.155-5	Servicios Integrales S.A.	Associate                              	Merchandise buying 	Chilean pesos 	Chile	                            -	                                -	                      3,053	                          3,053	
76.388.155-5	Servicios Integrales S.A.	Associate                              	Gift Cards buying 	Chilean pesos 	Chile	                            -	                                -	                    28,970	                        28,970	
76.388.155-5	Servicios Integrales S.A.	Associate                              	Financial retail income 	Chilean pesos 	Chile	                    22,145	                        22,145	                    47,883	                        47,883	
76.388.146-6	Operadora de Procesos S.A.	Associate                              	Commissions payment 	Chilean pesos 	Chile	               1,447,413	                 (1,447,413)	               1,553,213	                 (1,553,213)	
76.388.146-6	Operadora de Procesos S.A.	Associate                              	Financial retail income 	Chilean pesos 	Chile	               1,694,282	                   1,694,282	               1,982,086	                   1,982,086	

26

7.4 	Board of Directors and key management of the Company	
 
The Board of Directors as of March 31, 2017 is comprised of the following people:
 
Board of directors	Role	Profession	
Horst Paulmann Kemna	Chairman	Businessman	
Heike Paulmann Koepfer	Director	Commercial Engineer	
Peter Paulmann Koepfer	Director	Commercial Engineer	
Roberto Oscar Phillips	Director	National Public Accountant	
Cristián Eyzaguirre Johnston	Director	Economist	
Richard Büchi Buc	Director	Civil Engineer	
David Gallagher Patrickson	Director	Businessman	
Julio Moura Neto	Director	Engineer	
Mario Valcarce Durán	Director	Commercial Engineer	
 
Key management of the Company as of March 31, 2017 is composed of the following people:
 
Senior management	Position	Profession	
Jaime Soler	Chief Executive Officer	Commercial Engineer	
Carlos Mechetti	General Counsel	Attorney at law	
Bronislao Jandzio	Audit Managing Director	Business Administrator	
Renato Fernández	Corporate Affairs Manager	Journalist	
Antonio Ureta Vial	Home Improvement Managing Director	Commercial Engineer	
Patricio Rivas	Financial Retail Managing Director	Commercial Engineer	
Rodrigo Hetz	Human Resources Director	Industrial Engineer	
Andres Artigas	Chief Information Officer	Industrial Engineer	
Rodrigo Larrain	Chief Financial Officer	Industrial Engineer	
Ricardo Bennett	Department Store Managing Director	Industrial Engineer	
Tomás Zabala	Corporate Strategy Manager	Industrial Engineer	
Carlos Madina	Shopping Centers Managing Director	Business Administrator	
 
7.5 	Board of Directors compensation	
 
In accordance with Article 33 of Law N° 18,046 in regards to Corporations, the Ordinary Shareholders’ Meeting held on April 29, 2016, set the following amounts for the 2016 period:
 
● 	Fees paid for attending Board sessions: payment of UF 330 each month for those holding the position of Director of the Board and twice this amount for the President of the Board, if and only if they attend a minimum of 10 ordinary sessions each year,	
● 	Fees paid for attending the Directors’ Committee: payment to each Director of UF 110 for each session they attend,	
 
The details of the amount paid to Directors for the three months ended March 31, 2017 and 2016 are as follows:
 
Name	Role	 
March 31,
2017
 	 
March 31,
2016

ThCh$
 	 
ThCh$
 	
Horst Paulmann Kemna 	Chairman	 
 
52,259

50,925
 	
Heike Paulmann Koepfer 	Director	 
 
26,130

25,462
 	
Peter Paulmann Koepfer 	Director	 
 
26,130

25,462
 	
Cristián Eyzaguirre Johnston 	Director	 
 
26,130

25,462
 	
Roberto Oscar Philipps 	Director	 
 
34,839

33,950
 	
David Gallagher Patrickson 	Director	 
 
34,839

33,950
 	
Julio Moura 	Director	 
 
26,130

25,462
 	
Richard Bûchi Buc 	Director	 
 
34,839

33,950
 	
Mario Valcarce Durán 	Director	 
 
34,839

-
 	
Total 	 	 
 
296,135

254,623

7.6 	Compensation paid to senior management	
 
Key management compensation	 
March 31,
 2017
 	 
March 31,
 2016

ThCh$
 	 
ThCh$
 	
Salary and other short term employee benefits 	 
 
1,193,534

1,358,707
 	
Share based payments 	 
 
779,824

732,630
 	
Total 	 
 
1,973,358

2,091,337

The Cencosud Group has established an incentive plan, which rewards management for the achievement of individual objectives in the achievement of the company’s results. These incentives are structured as a minimum and a maximum of gross compensation and are paid once a year.

27

8                 	Inventory	
 
The composition of this item as of March 31, 2017 and December 31, 2016 is as follows:

As of
 	
Inventory category	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Raw materials 	 
 
4,168,070

4,740,484
 	
Goods 	 
 
1,332,552,430

1,293,309,256
 	
Provisions 	 
 
(147,659,169
)	 
 
(148,763,726
)	
Total 	 
 
1,189,061,331

1,149,286,014

The composition of inventories by business line as of March 31, 2017 and December 31, 2016 is as follows:

As of March 31, 2017
 	
Inventory category	 
Departmentstores
 	 
Supermarkets
 	 
Homeimprovement
 	 
Total

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Raw material 	 
 
783,011

3,385,059

-

4,168,070
 	
Goods 	 
 
206,044,214

732,680,405

246,168,642

1,184,893,261
 	
Total 	 
 
206,827,225

736,065,464

246,168,642

1,189,061,331

 	 
As of December 31, 2016
 	
Inventory category	 
Departmentstores
 	 
Supermarkets
 	 
Homeimprovement
 	 
Total

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Raw material 	 
 
1,164,458

3,576,026

-

4,740,484
 	
Goods 	 
 
192,143,210

697,409,780

254,992,540

1,144,545,530
 	
Total 	 
 
193,307,668

700,985,806

254,992,540

1,149,286,014

The Company periodically assesses its inventories at their net realizable value, by separating the inventory for each line of business and verifying the age, inventory turnover, sales prices and seasonality. Any adjustments are carried against income of the period.
 
The goods included in inventory are valued at the lower between their purchase price or production cost, net of allowance for obsolescence, and their net realizable value.
 
The carrying amount of inventories carried at March 31, 2017 and December 31, 2016 to its net realizable value less selling costs, provides for:
 
Current Inventories:

Inventories at net realizableas of
 	
Net realizable value movements	 
3/31/2017
 	 
12/31/2016

ThCh$
 	 
ThCh$
 	
Beginning Balance 	 
 
49,219,377

66,062,640
 	
Increase of Inventory to NRV (Net Realizable Value) 	 
 
4,913,154

8,671,880
 	
Decrease of Inventory to NRV (Net Realizable Value) 	 
 
(3,437,454
)	 
 
(25,515,143
)	
Total 	 
 
50,695,077

49,219,377

 
28

Other information relevant to inventory:

For the three months ended
March 31,
 	
Additional information inventory	 
2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Cost of inventories recognized as expenses during the year 	 
 
1,654,415,417

1,652,195,243

Provision movements:

Balance as of
 	
Provisions	 
3/31/2017
 	 
12/31/2016

ThCh$
 	 
ThCh$
 	
Beginning Balance 	 
 
148,763,726

133,510,682
 	
Amount of inventory reductions 	 
 
-

16,568,409
 	
Amount of reversals of inventory reductions 	 
 
(1,104,557
)	 
 
(1,315,365
)	
Total 	 
 
147,659,169

148,763,726

The circumstances or events that led to the reversal of any write-down of inventories as of March 31, 2017 and December 31, 2016 relate mainly to settlements and auctions recovering amounts higher than the estimated net realizable value for inventories.
 
The Company has not given inventories as collaterals at the end of the periods reported.

29

9.                 	Intangible assets other than goodwill	
 
Intangible assets are mainly composed of software and brands acquired in business combinations. The detail as of March 31, 2017 and December 31, 2016 is as follows:

As of
 	
Intangibles assets other than goodwill net	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Finite life intangible assets, net 	 
 
142,203,131

140,640,088
 	
Indefinite life intangible assets, net 	 
 
271,150,239

267,528,026
 	
Intangible assets, net 	 
 
413,353,370

408,168,114

 

 

Patents, Trade Marks and Other Rights, Net 	 
 
271,150,239

267,528,026
 	
Software (IT) 	 
 
110,544,151

109,301,075
 	
Other Identifiable Intangible Assets, net (*) 	 
 
31,658,980

31,339,013

 

 

Identifiable Intangible Assets, Net 	 
 
413,353,370

408,168,114

	 
As of
 	
Intangibles assets other than goodwill gross	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Finite life intangible assets, Gross 	 
 
300,935,452

291,475,386
 	
Indefinite life intangible assets, Gross 	 
 
271,150,239

267,528,026

 

 

Intangible Assets, Gross 	 
 
572,085,691

559,003,412

 

 

Patents, Trade Marks and Other Rights, Gross 	 
 
271,150,239

267,528,026
 	
Software (IT) 	 
 
248,157,564

239,383,522
 	
Other Identifiable Intangible Assets, Gross (*) 	 
 
52,777,888

52,091,864

 

 

Identifiable Intangible Assets, Gross 	 
 
572,085,691

559,003,412

	 
As of
 	
Accumulated amortization and value impairment	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Finite life intangible assets 	 
 
(158,732,321
)	 
 
(150,835,298
)	
Indefinite life intangible assets 	 
 
-

-

 

 

Intangible Assets, Gross 	 
 
(158,732,321
)	 
 
(150,835,298
)	

 

 
 	
Software (IT) 	 
 
(137,613,413
)	 
 
(130,082,447
)	
Other Identifiable Intangible Assets (*) 	 
 
(21,118,908
)	 
 
(20,752,851
)	

 

 
 	
Accumulated amortization and value impairment 	 
 
(158,732,321
)	 
 
(150,835,298
)	
 
(*) Other identifiable intangible assets mainly correspond to customer’s data base.
 
The Group performs an annual recoverability analysis, according to the described criteria in note 2.11 “under Impairment loss of non-financial assets IAS 36 “impairment of assets.”.

30

The detail of the useful lives applied to intangible assets as of March 31, 2017 and December 31, 2016 is as follows:
 
Estimated useful lives or amortization rates used	Minimumlife	Maximumlife	
Development costs 	1	7	
Patents, Trade Marks and Other Rights 	Indefinite	Indefinite	
Software (IT) 	1	7	
Other identifiable Intangible Assets 	1	5	
 
The movement of intangible assets for the three months ended March 31, 2017 is the following:
 
Intangible movements	 
Patents, trademarks and other rights
 	 
Applications (IT)
 	 
Other identifiable intangible assets
 	 
Intangible assets, net

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Initial balance as of January 1, 2017 	 
 
267,528,026

109,301,075

31,339,013

408,168,114
 	
Additions 	 
 
-

8,375,481

-

8,375,481
 	
Retirements 	 
 
-

(550,264
)	 
 
-

(550,264
)	
Amortization 	 
 
-

(7,530,966
)	 
 
(366,057
)	 
 
(7,897,023
)	
Decrease in foreign exchange 	 
 
3,622,213

948,825

686,024

5,257,062
 	
Balance at March 31, 2017 	 
 
271,150,239

110,544,151

31,658,980

413,353,370

The movement of intangible assets as of and for the year ended December 31, 2016 is the following:
 
Intangible movements	 
Patents, trademarks and other rights
 	 
Applications (IT)
 	 
Other identifiable intangible assets
 	 
Intangible assets, net

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Initial balance as of January 1, 2016 	 
 
267,839,511

103,417,708

30,492,198

401,749,417
 	
Additions 	 
 
-

37,671,772

-

37,671,772
 	
Retirements 	 
 
-

(1,517,096
)	 
 
-

(1,517,096
)	
Amortization 	 
 
-

(29,772,784
)	 
 
(1,335,738
)	 
 
(31,108,522
)	
Decrease in foreign exchange 	 
 
(311,485
)	 
 
(498,525
)	 
 
2,182,553

1,372,543
 	
Balance at December 31, 2016 	 
 
267,528,026

109,301,075

31,339,013

408,168,114

 
31

The detail of the amounts of identifiable intangible assets that are individually significant as of March 31, 2017 and December 31, 2016 is as follows:
 
Individually significant identifiable Intangible assets	 
Book Value March 2017
 	 
Book Value December 2016
 	Remaining amortization period	Country of origin	Segment	
 	 
ThCh$
 	 
ThCh$
 	 	 	 	
Paris Brand 	 
 
120,754,313

120,754,313
 	Indefinite	Chile	Department stores	
Johnson’s Brand 	 
 
15,501,628

15,501,628
 	Indefinite	Chile	Department stores	
Pierre Cardin License 	 
 
171,584

171,584
 	Defined	Chile	Department stores	
Wong Brand 	 
 
32,698,606

31,840,410
 	Indefinite	Peru	Supermarkets	
Metro Brand 	 
 
71,342,413

69,469,986
 	Indefinite	Peru	Supermarkets	
Bretas Brand 	 
 
17,772,191

17,255,743
 	Indefinite	Brazil	Supermarkets	
Perini Brand 	 
 
795,773

772,648
 	Indefinite	Brazil	Supermarkets	
Prezunic Brand 	 
 
12,113,731

11,761,714
 	Indefinite	Brazil	Supermarkets	
Total 	 
 
271,150,239

267,528,026

The charge to the profit and loss statement for amortization of intangibles for the three months ended March 31, 2017 and 2016 are detailed below:

For the three months ended
March 31,
 	
Item line in statement of profit and loss which includes amortization of identifiableIntangible assets	 
2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Administrative expenses 	 
 
7,897,023

6,105,968
 	
Total 	 
 
7,897,023

6,105,968

As of March 31, 2017 and December 31, 2016, there are no relevant intangible assets encumbered. There are also no restrictions on ownership of them.
 
As of March 31, 2017 and December 31, 2016, there are no commitments to acquire intangible assets.
 
No significant intangible assets that have been fully amortized are in use as of As of March 31, 2017 and December 31, 2016.

32

10 	 	Goodwill	
 
The goodwill represents the excess of the acquisition cost, over the fair value of the Group’s interest in the identifiable net assets of the subsidiary/associate as of the date of acquisition. Goodwill is allocated to each store or group of stores, as appropriate, in each country and operating segment (CGUs cash generating units).
 
10.1                 	Measuring recoverable value of the Goodwill,	
 
Goodwill is assessed at least annually. Valuations at interim periods could be done, if there are any signs that the carrying value of our goodwill may not be recoverable. These signs may include a significant change in the economic environment affecting business, new laws, operating performance indicators, competition movements, or the transfer of an important part of a cash-generating unit (CGU).
 
To check whether goodwill has suffered an impairment loss of value, the company compares the carrying amount of the assets, against their recoverable value. We may recognize an impairment loss if the carrying amount of the asset excess its recoverable amount. The Group believes that value in use approach using the discounted cash flow method, is the most reliable way to determine the recoverable value of the CGU method.
 
Reversal of an impairment loss for goodwill is prohibited.
 
10.2                 	Goodwill by segment and country,	
 
The following table details goodwill balances and movements by operating segment and country as of March 31, 2017 and December 31, 2016:
 
Goodwill per operating segment and country	 
As of
December, 2016
 	 
Impairment
 	 
Increase (decrease) foreign exchange
 	 
As of
March, 2017

ThCh$

 	 
ThCh$
 	 
ThCh$
 	
Real Estate & Shopping—Argentina 	 
 
89,569

-

1,610

91,179
 	
Supermarkets—Chile 	 
 
106,991,957

-

-

106,991,957
 	
Supermarkets—Brazil 	 
 
397,062,475

-

11,776,476

408,838,951
 	
Supermarkets—Peru 	 
 
264,355,612

-

7,042,777

271,398,389
 	
Supermarkets— Colombia 	 
 
439,366,277

-

19,971,195

459,337,472
 	
Financial services – Colombia 	 
 
52,305,509

-

2,377,523

54,683,032
 	
Shopping Centers – Colombia 	 
 
31,383,305

-

1,426,514

32,809,819
 	
Home Improvement—Argentina 	 
 
1,377,864

-

24,767

1,402,631
 	
Home Improvement—Chile 	 
 
1,227,458

-

-

1,227,458
 	
Department stores—Chile 	 
 
138,159,463

-

-

138,159,463

 

 

 

 

Total 	 
 
1,432,319,489

-

42,620,862

1,474,940,351

 
33

The following table details goodwill balances and movements by operating segment and country as of December 31, 2015 and December 31, 2016:
 
Goodwill per operating segment and country	 
As of
December, 2015
 	 
Impairment
 	 
Increase (decrease) foreign exchange
 	 
As of
December, 2016

ThCh$

 	 
ThCh$
 	 
ThCh$
 	
Real Estate & Shopping—Argentina 	 
 
115,986

-

(26,417
)	 
 
89,569
 	
Supermarkets—Chile 	 
 
106,991,957

-

-

106,991,957
 	
Supermarkets—Brazil 	 
 
343,976,582

-

53,085,893

397,062,475
 	
Supermarkets—Peru 	 
 
275,687,596

-

(11,331,984
)	 
 
264,355,612
 	
Supermarkets— Colombia 	 
 
439,366,277

-

-

439,366,277
 	
Financial services – Colombia 	 
 
52,305,509

-

-

52,305,509
 	
Shopping Centers – Colombia 	 
 
31,383,305

-

-

31,383,305
 	
Home Improvement—Argentina 	 
 
2,477,939

-

(1,100,075
)	 
 
1,377,864
 	
Home Improvement—Chile 	 
 
1,227,458

-

-

1,227,458
 	
Department stores—Chile 	 
 
138,159,463

-

-

138,159,463

 

 

 

 

Total 	 
 
1,391,692,072

-

40,627,417

1,432,319,489

10.3 Key assumptions for the 2016 test
 
a)	Discount rate	
 
The real discount rate applied to annual test conducted in September 2016, was estimated based on an average cost of capital rate historical data, with a leverage of 31% and considering as reference the major competitors in the industry. Different discount rates are used in each of the countries where the Company operates depending on the associated risk. See table below:

2016

 

 	 

 

 	
Segment and Country	 
Chile
 	 
Argentina
 	 
Peru
 	 
Colombia
 	 
Brazil

%
 	 
%
 	 
%
 	 
%
 	 
%
 	
Supermarkets 	 
 
9.01

-

10.08

9.44

9.97
 	
Home Improvement 	 
 
8.41

-

-

-

-
 	
Department stores 	 
 
8.84

24.84

-

-

-

b)	Other assumptions	
 
The Group has defined a financial model which considers the revenues, expenditures, cash flow balances, net tax payments and capital expenditures on a five years period (2017-2021), and perpetuity beyond this tranche. As an exception, the Supermarkets – Colombia segment has been forecasted in an eight years horizon, as a result of the recent inclusion of the Jumbo and Metro brands. These brands are on a pathway to maturity and they have extended room for increase their sales by square meter, getting close to regional and local averages.
 
The financial projections to determine the net present value of future cash flows are modeled considering the principal variables that determine the historic flows of each group of CGU and the budgets approved by the Board. Conservative growth rates are used for this purpose, which fluctuate from 0% to 5% annual average for the first five year of the projections and the terminal growth rates are between 0.5% and 1%, beyond fifth year, taking into account the maturity of each segment. Higher growth rates may be assigned depending on the business performance in each country, and their periods of stabilization and maturity.

34

The most sensitive variables in these projections are the discount rates applied in determining the net present value of projected cash flows, operating costs, and market prices of the goods and services traded.
Sensitizations tests were applied for the group of CGUs, (considering the following reasonable scenarios:
 
●	EBITDA margin would have been 5% lower, than management´s estimates, or	
●	Perpetuity growth rate would have been 10% lower, than management´s estimates, or	
●	the estimated cost of capital used in determining the discount rate, would have been 5% higher, than management´s estimates,	
 
After considering the mentioned scenarios in isolation, there were no reasonably possible changes in any of the key assumptions that would have resulted in an impairment write-down.
As of March 31, 2017 the Company has not identified any signs that could indicate that the carrying amount of the goodwill may not be recoverable. T here have been no significant changes from the date of our annual 2016 impairment test.
 
11                      	Property, plant and equipment	
 
11.1 	The composition of this item as of March 31, 2017 and December 31, 2016 is as follows:	

As of
 	
Property, plant and equipment categories, net	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Construction in progress 	 
 
74,774,112

66,402,237
 	
Land 	 
 
656,757,938

659,605,782
 	
Buildings 	 
 
1,068,317,050

1,048,864,332
 	
Plant and equipment 	 
 
228,239,358

226,080,180
 	
Information technology equipment 	 
 
37,584,566

36,328,354
 	
Fixed installations and accessories 	 
 
312,084,747

319,768,058
 	
Motor vehicles 	 
 
678,024

670,349
 	
Leasehold improvements 	 
 
210,509,466

212,594,588
 	
Other property plant and equipment 	 
 
8,279,857

8,479,693
 	
Totals	 
 
2,597,225,118

2,578,793,573

 	 
As of
 	
Property, plant and equipment categories, gross	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Construction in progress 	 
 
74,774,112

66,402,237
 	
Land 	 
 
656,757,938

659,605,782
 	
Buildings 	 
 
1,330,988,851

1,299,194,334
 	
Plant and equipment 	 
 
612,010,352

601,670,994
 	
Information technology equipment 	 
 
159,337,868

152,482,771
 	
Fixed installations and accessories 	 
 
790,129,158

767,264,238
 	
Motor vehicles 	 
 
5,240,422

5,099,000
 	
Leasehold improvements 	 
 
336,667,293

308,250,531
 	
Other property plant and equipment 	 
 
13,588,475

13,779,119
 	
Totals	 
 
3,979,494,469

3,873,749,006

 	 
As of
 	
Accumulated depreciation and impairment of property, plant and equipment	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Buildings 	 
 
(262,671,801
)	 
 
(250,330,002
)	
Plant and equipment 	 
 
(383,770,994
)	 
 
(375,590,814
)	
Information technology equipment 	 
 
(121,753,302
)	 
 
(116,154,417
)	
Fixed installations and accessories 	 
 
(478,044,411
)	 
 
(447,496,180
)	
Motor vehicles 	 
 
(4,562,398
)	 
 
(4,428,651
)	
Leasehold improvements 	 
 
(126,157,827
)	 
 
(95,655,943
)	
Other property plant and equipment 	 
 
(5,308,618
)	 
 
(5,299,426
)	
Totals	 
 
(1,382,269,351
)	 
 
(1,294,955,433
)	

35

11.2   The following table shows the technical useful lives for the assets.
 
Method used for the depreciation of property, plant and equipment (life)	Rate explanation	Minimumlife	Maximumlife	
Buildings 	Useful Life (years)	25	60	
Plant and equipment 	Useful Life (years)	7	20	
Information technology equipment 	Useful Life (years)	3	7	
Fixed installations and accessories 	Useful Life (years)	7	15	
Motor vehicles 	Useful Life (years)	1	5	
Leasehold improvements 	Useful Life (years)	According to contract length	
Other property plant and equipment 	Useful Life (years)	3	15	
 
The Group reviews the estimated useful lives of property, plant and equipment at the end of each annual period. The Company has determined that there are no significant changes in the estimated useful lives for the reported periods.

36
 
11.3  Reconciliation of changes in property, plant and equipment
 
The following chart shows a detailed roll-forward of changes in property, plant and equipment, by class between January 1, 2017 and March 31, 2017:
 
Movement for the three months ended March 31, 2017	 
Construction In progress
 	 
Land
 	 
Building, net
 	 
Plant and equipment net
 	 
Information technology equipment, net
 	 
Fixed installations and accessories, net
 	 
Motor vehicles, net
 	 
Lease improvements, net
 	 
Other property, plant and equipment, net
 	 
Property, plant and equipment, net

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Opening balance January 1, 2017 	 
 
66,402,237

659,605,782

1,048,864,332

226,080,180

36,328,354

319,768,058

670,349

212,594,588

8,479,693

2,578,793,573
 	
Changes	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Additions 	 
 
17,033,447

1,129,900

1,837,571

8,248,717

3,285,282

6,982,480

54,471

474,591

798,620

39,845,079
 	
Removal 	 
 
(9,923
)	 
 
-

(200,913
)	 
 
(93,826
)	 
 
(400
)	 
 
(42,823
)	 
 
-

(41,937
)	 
 
-

(389,822
)	
Depreciation expenses 	 
 
-

-

(8,090,598
)	 
 
(13,083,933
)	 
 
(4,205,994
)	 
 
(18,307,873
)	 
 
(60,369
)	 
 
(8,451,247
)	 
 
(9,192
)	 
 
(52,209,206
)	
Increase (decrease) for revaluation charged to equity 	 
 
-

-

-

-

-

-

-

-

-

-
 	
Increase (decrease) in foreign exchange 	 
 
2,027,302

12,186,470

21,694,062

3,480,704

369,918

3,327,112

13,573

5,239,831

(989,264
)	 
 
47,349,708
 	
Transfer to (from) non—current assets and disposal groups held for sale 	 
 
-

(16,164,214
)	 
 
-

-

-

-

-

-

-

(16,164,214
)	
Other increase (decrease) 	 
 
(10,678,951
)	 
 
-

4,212,596

3,607,516

1,807,406

357,793

-

693,640

-

-
 	
Total changes 	 
 
8,371,875

(2,847,844
)	 
 
19,452,718

2,159,178

1,256,212

(7,683,311
)	 
 
7,675

(2,085,122
)	 
 
(199,836
)	 
 
18,431,545
 	
Final balance as of March 31, 2017 	 
 
74,774,112

656,757,938

1,068,317,050

228,239,358

37,584,566

312,084,747

678,024

210,509,466

8,279,857

2,597,225,118

 
37

The following chart shows a detailed roll-forward of changes in property, plant and equipment, by class between January 1, 2016 and December 31, 2016:
 
Movement for the year ended December 31, 2016	 
Construction In progress
 	 
Land
 	 
Building, net
 	 
Plant and equipment net
 	 
Information technology equipment, net
 	 
Fixed installations and accessories, net
 	 
Motor vehicles, net
 	 
Lease improvements, net
 	 
Other property, plant and equipment, net
 	 
Property, plant and equipment, net

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Opening balance January 1, 2016 	 
 
63,017,895

725,437,554

1,075,995,255

246,716,665

32,046,485

343,696,782

577,489

202,460,078

21,542,427

2,711,490,630
 	
Changes	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Additions 	 
 
112,960,591

2,637,687

14,673,368

27,951,919

4,281,236

19,393,558

64,748

9,534,011

894,142

192,391,260
 	
Decrease derived from loss of control in subsidiaries 	 
 
(26,452
)	 
 
-

(294,862
)	 
 
(36,007
)	 
 
(34,940
)	 
 
-

-

-

-

(392,261
)	
Transfers to (from) investment properties 	 
 
(6,299,632
)	 
 
(41,143,628
)	 
 
(1,890,902
)	 
 
(733,140
)	 
 
224,296

(756,374
)	 
 
-

-

(3,306,574
)	 
 
(53,905,954
)	
Retirements 	 
 
(227,085
)	 
 
(992,318
)	 
 
(5,922,284
)	 
 
(5,606,035
)	 
 
(567,568
)	 
 
(298,660
)	 
 
-

(212,866
)	 
 
(2,259,506
)	 
 
(16,086,322
)	
Depreciation expenses 	 
 
-

-

(31,219,656
)	 
 
(52,165,648
)	 
 
(14,005,719
)	 
 
(67,906,543
)	 
 
(221,744
)	 
 
(30,452,796
)	 
 
(632,791
)	 
 
(196,604,897
)	
Increase (decrease) for revaluation charged to equity 	 
 
-

18,435,465

-

-

-

-

-

-

-

18,435,465
 	
Impairment losses recognized in results 	 
 
-

(2,639,637
)	 
 
-

-

-

-

-

-

-

(2,639,637
)	
Decrease (increase) in foreign exchange 	 
 
(2,225,068
)	 
 
(14,638,273
)	 
 
(21,515,463
)	 
 
(718,868
)	 
 
(919,762
)	 
 
(2,617,885
)	 
 
(25,217
)	 
 
14,468,605

(2,343,689
)	 
 
(30,535,620
)	
Transfer to non—current assets and disposal groups held for sale 	 
 
-

(27,520,057
)	 
 
(9,440,631
)	 
 
(537,066
)	 
 
(1,684
)	 
 
(445,337
)	 
 
-

-

(5,414,316
)	 
 
(43,359,091
)	
Other increase (decrease) [1] 	 
 
(100,798,012
)	 
 
28,989

28,479,507

5,095,507

15,306,010

13,178,168

275,073

38,434,758

-

-
 	
Total changes 	 
 
3,384,342

(65,831,772
)	 
 
(27,130,923
)	 
 
(26,749,338
)	 
 
4,281,869

(39,453,073
)	 
 
92,860

31,771,712

(13,062,734
)	 
 
(132,697,057
)	
Final balance as of December 31, 2016 	 
 
66,402,237

659,605,782

1,048,864,332

219,967,327

36,328,354

304,243,709

670,349

234,231,790

8,479,693

2,578,793,573

[1] It corresponds to in-process assets that are being transferred to definitive assets. As a result of that, asset classes are offset.

38

11.4             	The Company has traditionally maintained the policy to carry out all the necessary work in response to the opportunities and changes experienced in domestic and regional markets where the Company operates, to capture the best opportunities and results for each of its business units.	
 
The cost includes disbursements directly attributable to the acquisition or construction of an asset, as well as interests from related financing in the case of qualifying assets.
 
11.5 	Borrowing costs:	
 
The company incorporates borrowing costs that are directly attributable to the acquisition, construction or production of a qualified asset during the period to complete and prepare the asset for its intended use.
 
As of March 31, 2017, and December 31, 2016, there is no capitalization of borrowing costs.
 
11.6 	Assets granted	
 
As of March 31, 2017 and December 31, 2016, properties, plant and equipment granted as security amounted ThCh$ 4,116,768 and ThCh$ 3,867,501, respectively. Nevertheless, there are no restrictions on ownership of assets. Nevertheless, there are no restrictions on transfer of assets.
 
11.7 	Commitments to acquire assets	
 
As of March 31, 2017 and December 31, 2016, there are commitments to acquire property, plant and equipment of ThCh$ 88,314,962, and of ThCh$ 86,104,812, respectively.
 
11.8 	Assets out of service	
 
As of March 31, 2017 and December 31, 2016, there are no essential elements or assets that are temporarily out of service. The property, plant and equipment mainly relate to stores and operating fixed assets to enable the performance of the retail business every day of the year, except when there are restrictions for public holidays established in each country.
 
11.9 	Assets fully depreciated	
 
In view of the nature of the retail business, the Company has no significant assets that are fully depreciated and that are in use as of March 31, 2017 and December 31, 2016. These assets relate mainly to minor equipment such as scales, furniture, computers, cameras, lighting and others. The retail business assets are depreciated based on the term of the lease agreement.
 
11.10 	Impairment losses	
 
Assets subject to amortization are tested for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be recovered. It recognizes an impairment loss when the carrying amount is greater than its recoverable amount. The recoverable amount of an asset is the higher of an asset’s fair value less costs to sell and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which identifiable cash flows exist separately. As discussed below, the Company has recognized an impairment loss, related to property, plant and equipment, in the amount of ThCH$ 2,639,637 for the period ended December 31, 2016. No impairment related to property, plant and equipment was recorded for the periods ended December 31, 2015 and 2014.
 
During 2016, the Company has initiated a detailed plan for a non-strategic sale of assets in Chile. These assets were previously classified within the property, plant and equipment category.
 
International Financial Reporting Standard IFRS 5 "Assets Held for Sale" indicates that the assets of a company must be classified according to the use or destination that the company decides to give them. Accordingly, these assets must be reclassified as a consequence of a change of plans by management, since the intention of the company is to realize the sale of such assets within a period not exceeding one year.

39

In order to comply with IFRS5, the market value obtained by management was compared with the book value of the assets included in the sales plan. From this comparison, it was verified that in eight of the locations in the process of commercialization, the book value exceeds its recoverable value amounted to ThCh $ 2,639,637, proceeding to record the impairment prior to reclassification to assets held for sale. Assets held for sale at December 31, 2016 amounts to carrying value of ThCh $ 10,883,992, recoverable amount of ThCh $ 8,244,355 and related impairment of ThCh $ 2,639,637.
 
Management has determined the fair value of each asset held for sale, based on market information. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available management consider information from a variety of source including current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences. The key input under this approach is the price per square meter from recent sales. These values were determined using level II inputs in accordance with the definitions of IFRS 13.
 
11.11 	Property Plant and Equipment components:	
 
The main items that compose each asset class are:
Plant and equipment: presented in this asset class are primarily properties used in the operation of retail business such as mixers, sausages portioning machines, system ready meals, frozen island, cold containers, and refrigerated display cases, forming bread ovens, blender, among others.
 
Equipment for information technology: correspond to items such as computers, printers, notebook, labeling, scanner, clock control, price inquiries and servers, among others.
 
Fixed installations and accessories: presented in this asset class are expenditures to enable operations of stores, such, ceilings, floors, wall finishes, lighting the sky, smoke detectors, sprinklers, air ducts and heating, communications networks , escalators, elevators, hoists, electrical substation and central air conditioning among others.
 
Leasehold improvements: presented in this asset class are disbursements associated with enabling or leased store improvements such as remodeling of facades, finishes, floors, ceilings and walls among others.
Other property, plant and equipment: mainly corresponds to fixed assets in transit and assets acquired under finance lease.
 
11.12 	Property Plant and Equipment valuation	
 
During 2016, several pieces of land, included within the Propertiy, plant and equipment item amounting a historical cost of ThCh $ 23.527.099 were revalued. Such revaluation was made as required by IAS 40 prior to the transfer of such assets from property, plant and equipment to investment property. In order to determine the amount of the revaluation, the fair value of the mentioned land pieces was determined by management, with experience in the localities and category of the appraised properties.
 
The revaluation implied a net increase in the value of property, plant and equipment amounted to ThCh $ 18,435,465 credited to equity through other comprehensive income in 2016.
 
As of March 31, 2017 and December 31, 2016, Cencosud maintains a total of 1,171 stores located in Chile, Argentina, Peru, Brazil and Colombia. A total of 444 of those locations are stores operated on their own land, classified under the item "Properties, plants and equipment".
 
As of December 31, 2016, of a sample of 103 own land locations were tested to compare their book values against their market values, in order to know the reasonableness of the book values measured by the accounting policy under the cost method. In this comparison, it was verified that the market value, in an average, is 45% higher than the book value of such assets, with the exception of Argentina, where this percentage is significantly increased by the effects of local inflation presented during recent years.
 
The methodology used in determining the market value assumes that the values ​​assigned are representative of the most likely transaction values ​​that an independent buyer is willing to pay at the valuation date.
 
11.13 	Property Plant and Equipment components:	
 
The main items that compose each asset class are:
Plant and equipment: presented in this asset class are primarily properties used in the operation of retail business such as mixers, sausages portioning machines, system ready meals, frozen island, cold containers, and refrigerated display cases, forming bread ovens, blender, among others.
 
Equipment for information technology: correspond to items such as computers, printers, notebook, labeling, scanner, clock control, price inquiries and servers, among others.
 
Fixtures and fittings: presented in this asset class are expenditures to enable operations of stores, such, ceilings, floors, wall finishes, lighting the sky, smoke detectors, sprinklers, air ducts and heating, communications networks , escalators, elevators, hoists, electrical substation and central air conditioning among others.
 
Leasehold improvements: presented in this asset class are disbursements associated with enabling or leased store improvements such as remodeling of facades, finishes, floors, ceilings and walls among others. Other property, plant and equipment: mainly corresponds to fixed assets in transit and assets acquired under finance lease.

40

12                 	Investment properties	
 
12.1 	The roll-forward of investment properties as of March 31, 2017 and December 31, 2016 is the following:	

As of
 	
Roll-forward of investment properties, net, fair value method	 
March 31, 2017
 	 
December 31, 2016

ThCh$
 	 
ThCh$
 	
Investment properties, net, initial value 	 
 
2,081,694,027

1,807,095,204
 	
Effect of fair value in profit or loss 	 
 
26,614,201

287,519,826
 	
Additions 	 
 
1,818,907

1,225,878
 	
Transfer from owner-occupied property, investment property, cost model	 
 
-

53,905,954
 	
Transfer to assets classified as “held for sale” 	 
 
-

(2,939,242
)	
Retirements, Fair Value Method 	 
 
(3,563,885
)	 
 
(3,579,094
)	
Increase (decrease) in foreign exchange rate 	 
 
12,434,723

(61,534,499
)	
Changes in Investment Properties, Total 	 
 
37,303,946

274,598,823
 	
Investment Properties Final Balance 	 
 
2,118,997,973

2,081,694,027

12.2 	Income and expense from investment properties	

For the three months ended
 	
Roll-forward of investment properties, net fair value method	 
March 31,
2017
 	 
March 31,
2016

ThCh$
 	 
ThCh$
 	
Revenue from Investment Property Leases 	 
 
59,483,158

54,003,766
 	
Direct operating expenses of Investment Properties which generate lease revenue	 
 
13,131,973

11,817,321

12.3  	As of March 31, 2017 and December 31, 2016, investment properties are not encumbered,	
 
12.4  	As of March 31, 2017 there are commitments to acquire investment properties by ThCh$ 4,430,051 (ThCh$ 4,331,676 as of December 31, 2016),	
 
12.5  	There are no restrictions on ownership of assets,	
 
12.6  	Investment Properties	
 
At March 31, 2017 and December 31, 2016, these assets are valued using the fair value model. The methodology used in the valuation of these assets and significant assumptions used are described in note 4.1.. The Costanera Center project corresponds to assets that have been classified as investment property. The shopping mall is in operation since June, 2012. First 15,000 square meters of tower 2 and 4 were allowed to be leased as commercial offices by the municipality authority from August 2015.

41
 
13 	Other financial liabilities, current and non-current	
 
The composition of this item as of March 31, 2017 and December 31, 2016 is the following:
 
13.1                 	Types of interest bearing (accruing) loans	

Balance as of 3/31/2017
 	 
Balance as of 12/31/2016
 	
Loans	 
Current
 	 
Non-current
 	 
Current
 	 
Non-current

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Bank loans (1) 	 
 
244,555,004

199,969,698

215,393,417

206,299,337
 	
Bond debt (2) 	 
 
109,291,538

2,608,318,115

127,530,284

2,618,875,407
 	
Other loans—leases 	 
 
2,701,004

19,253,821

2,713,893

19,256,643
 	
Other financial liabilities (forward)	 
 
1,845,932

-

-

-
 	
Other financial liabilities (hedge derivatives) (3)	 
 
6,194,771

12,647,172

4,151,393

12,441,477
 	
Time deposits (4) 	 
 
54,486,946

44,713,727

56,113,724

45,030,033
 	
Term savings accounts 	 
 
9,787

-

15,224

-
 	
Debt purchase Bretas 	 
 
-

1,834,202

-

1,722,769
 	
Other Financial liabilities—other 	 
 
2,401,062

-

2,091,081

-
 	
Totals Loans 	 
 
421,486,044

2,886,736,735

408,009,016

2,903,625,666

(1) 	Bank loans correspond to loans taken out with banks and financial institutions,	
(2) 	Bond debt corresponds to bonds placed in public securities markets or issued to the public in general,	
(3) 	Other financial liabilities (hedge derivatives) includes cross currency swaps, interest rate swaps and forward contracts.	
(4) 	Time deposits are the main funding source of the subsidiary Banco Cencosud Peru.	
 
13.2 	Restrictions	
 
Loan agreements and outstanding bonds of the Company contain a number of covenants requiring compliance with certain financial ratios and other tests, As of March 31, 2017 and December 31, 2016 the Company was in compliance with all financial debt covenants subscribed.

42

14                      	Provisions and other liabilities	
 
14.1 	Provisions	

The composition of this item as of March 31, 2017 and December 31, 2016 is as follows:

As of
 	
Accruals and provision	 
March 31,
2017
 	 
December 31,
2016
 	 
March 31,
2017
 	 
December 31,
2016

Current
 	 
Non-current

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Legal claims provision (1) 	 
 
10,691,944

10,340,136

59,973,249

58,005,001
 	
Onerous contracts provision (2) 	 
 
1,433,341

1,439,298

9,902,080

10,251,159
 	
Total 	 
 
12,125,285

11,779,434

69,875,329

68,256,160

(1)	The nature of these obligations is as follows:	
 
Civil provision: This primarily corresponds to civil and commercial trials that mainly deal with claims from customers, defects in products, accidents of customers in the stores and law suits related with customer service.
 
Labor provision: This primarily corresponds to staff severance indemnities and salary disputes from former employees.
 
Tax provision: This primarily corresponds to tax claims in the countries in which the Company operates.
 
The following table shows the civil, labor and tax proceedings faced by the Company and its subsidiaries (by country). The proceedings comprising each category are those that present probable occurrence likelihood and the amount of loss can be quantified or estimated.

Provision Legal Claims (2)
 	 
Exposure

Civil
 	 
Labor
 	 
Tax
 	 
Total
 	 
Current
 	 
Non-current

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Total as of March 31,2017 	 
 
28,967,404

20,645,304

21,052,485

70,665,193

10,691,944

59,973,249
 	
Total as of December 31,2016 	 
 
28,708,673

21,405,740

18,230,724

68,345,137

10,340,136

58,005,001

Provision By Country	 
March 31, 2017
ThCh$
 	 
December 31, 2016
ThCh$
 	
Chile 	 
 
15,357,517

15,351,464
 	
Argentina 	 
 
19,678,944

19,260,544
 	
Brazil 	 
 
30,476,940

29,078,658
 	
Peru 	 
 
915,754

673,291
 	
Colombia 	 
 
4,236,038

3,981,180
 	
Total Provision 	 
 
70,665,193

68,345,137

(2) Provisions for onerous contracts
 
The provisions recorded under this concept correspond mainly to the excess over the fair value payable related to onerous lease contracts recorded in business combinations of the previous periods.

43

14.2                 	Movement of provisions:	
 
Provision type	 
Legal claims
 	 
Onerous contracts
 	 
Total

ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Initial Balance January 1, 2017 	 
 
68,345,137

11,690,457

80,035,594
 	
Movements in Provisions:	 

 	 

 	 

 	
Creation of additional provisions 	 
 
1,828,225

-

1,828,225
 	
Increase (decrease) in existing provisions 	 
 
561,550

(355,036
)	 
 
206,514
 	
Application of provision 	 
 
(850,675
)	 
 
-

(850,675
)	
Reversal of non-used provisions 	 
 
(634,456
)	 
 
-

(634,456
)	
Increase (decrease) in foreign exchange rate	 
 
1,415,412

-

1,415,412
 	
Changes in provisions, total 	 
 
2,320,056

(355,036
)	 
 
1,965,020
 	
Total provision, closing balance as of March 31, 2017	 
 
70,665,193

11,335,421

82,000,614

Provision type	 
Legal claims
 	 
Onerous contracts
 	 
Total

ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Initial Balance January 1, 2016 	 
 
77,816,222

16,014,325

93,830,547
 	
Movements in Provisions:	 

 	 

 	 

 	
Creation of additional provisions 	 
 
8,075,575

-

8,075,575
 	
Increase and decrease in existing provisions	 
 
578,142

(4,323,868
)	 
 
(3,745,726
)	
Application of provision 	 
 
(12,127,645
)	 
 
-

(12,127,645
)	
Reversal of unused provision 	 
 
(2,504,731
)	 
 
-

(2,504,731
)	
Increase (decrease) in foreign exchange rate	 
 
(3,492,426
)	 
 
-

(3,492,426
)	
Changes in provisions, total 	 
 
(9,471,085
)	 
 
(4,323,868
)	 
 
(13,794,953
)	
Total provision, closing balance as of December 31, 2016	 
 
68,345,137

11,690,457

80,035,594

 
44
 
15 	Net equity	
 
The objectives of the Cencosud Group regarding capital management are to safeguard its capacity to continue as a going concern, ensuring appropriate returns for its shareholders and benefits for other stakeholders, and maintaining an optimum capital structure while reducing capital costs.
 
Capital management
 
The Group’s objective regarding capital management is to safeguard the capacity to continue ensuring appropriate returns for the shareholders and benefits for other stakeholders, and maintaining an optimum capital structure while reducing capital costs  .
 
In line with the industry, we monitor our capital using a leverage ratio calculation. This ratio is calculated by dividing net financial debt by total equity. We define net financial debt as total financial liabilities (a) less (i) total cash and cash equivalents, (ii) total other financial assets, current and non-current, and (iii) other financial liabilities, current and non-current, from Banco Paris and Banco Peru, (b) plus (i) cash and cash equivalents from Banco Paris and Banco Peru and (ii) total other financial assets, current and non-current, from Banco Paris and Banco Peru. Total financial liabilities is defined as Other financial liabilities, current, plus Other financial liabilities, non-current.
 
In accordance with the above, we combine different financing sources, such as: capital increases, operating cash flows, bank loans and bonds.
 
15.1  	Paid-in capital	
 
As of June 22, 2012, the Company proceeded to increase the authorized Capital through the issuance of 270,000,000 of shares, without a par value and in a unique series, as agreed at the shareholders meeting held on April 29, 2011 which complemented and modified preliminary agreements made at extraordinary shareholders meetings on March 1, 2012 and May 15, 2012. 27,000,000 shares out of the capital increase were set aside to offer them in a stock option plan for the Company’s upper management.
 
The referential share price reported to the SVS (Superintendencia de Valores y Seguros) was ThCh$ 3,555.56. The final issue share price was ThCh$2,600 per share.
 
In connection with share issuance, 59,493,000 shares were issued in the United States of America in the form of American Depositary Shares (ADSs) and the remaining 210,507,000 shares were issued in the local market in Chile.
 
At the extraordinary shareholders meeting held on November 20, 2012, the shareholders agreed to increase capital by ThCh$835,000,000 through the issuance of 332,987,717 of shares in one series and without a par value. 10% of the total issuance was set aside to offer them in a stock option plan for employees, the remaining of the shares was offered to the Company’s shareholders.
 
The following table shows the movement of the fully paid shares described above between January 1, 2016 and March 31, 2017:

Movement of paid shares	 
No of
shares
 	 
Shares
Issuances
(Th$)
 	 
Shares
premium
(Th$)

 

 	 

Paid shares as of January 1, 2016	 
 
2,828,723,963

2,321,380,936

526,633,344
 	
Stock options issuance 2016	 
 
33,812,984

99,183,799

(65,331,247
)	
Paid shares as of December 31, 2016	 
 
2,862,536,947

2,420,564,735

461,302,097
 	
Paid shares as of January 1, 2017	 
 
2,862,536,947

2,420,564,735

461,302,097
 	
Paid shares as of March 31, 2017	 
 
2,862,536,947

2,420,564,735

461,302,097

 
45

15.2 	Authorized shares	
 
The following table shows the movement of the fully authorized shares between January 1, 2016 and March 31, 2017:
 
Movement of authorized shares	 
No of
Shares

 
 	
Authorized shares as of January 1, 2016	 
 
2,889,022,734
 	
Expired shares as of April 29, 2016	 
 
(13,264,341
)	
Authorized shares as of December 31, 2016	 
 
2,875,758,393
 	
Authorized shares as of January 1, 2017	 
 
2,875,758,393
 	
Authorized shares as of March 31, 2017	 
 
2,875,758,393

As of March 31, 2017 and December 31, 2016, 13,221,446 issued shares were pending of subscription and payment, of which expiration will be on November 20, 2017.
 
15.3  Dividends
 
The dividend distribution policy adopted by Cencosud S,A, establishes the payment of dividends of 30% of the distributable net profits.
 
In relation to SVS Ruling No. 1945, on October 29, 2010, the Company’s Board of Directors agreed that the net distributable profits for the year 2010 and following years will be the figure reflected in the financial statements as “profit for the year attributable controlling shareholders”, excluding the unrealized result for fair value appraisal of investment properties, net of deferred taxes.
 
On April 29, 2016, the Ordinary Shareholders Meeting agreed on distributing a definitive dividend in relation to the profits of 2015 amounted to Ch$ 73,684,179,628, which represents about to 80.55% of the distributable profit. This also represents a dividend of Ch$ 25.92268 per share. The aforementioned distribution of profits shall be made by: (i) the distribution of an additional dividend in the amount of $ 10 per share; plus (ii) the distribution of an interim dividend of $ 16 per share already paid from December 4, 2015.
 
In addition, the Shareholders Meeting approved an extraordinary dividend in the amount of $ 50 per share, chargeable to retained earnings from previous years, reducing the reserve fund for future dividends amounted to Ch$ 142,122,981,100. The payment of the above dividend will be made from May 17, 2016.
 
On November 2, 2016, the Board of Directors agreed on distributing an interim dividend of Ch$20 per share in relation to the profits of 2016. This dividend was given to the shareholders order from December 7, 2016.
 
The company recorded a minimum dividend by Th$Ch$ 14,738,502 as of March 31, 2017 (Th$Ch$ 357,939 as of December 31, 2016). The total charge to equity as of March 31, 2017 amounted to ThCh$ 14,380,562 (ThCh$ 227,755,932 as of December 31, 2016).
 
15.4  Non-controlling interest
 
Details of the non-controlling interest as of March 31, 2017 and December 31, 2016 are as follows:
 
Equity:

Non-controlling
Interest Mar 31,
 	 
Non-controlling
Interest
Dec 31,
 	 
Balances
as of,

2017
 	 
2016
 	 
Mar 31, 2017
 	 
Dec 31, 2016
 	
Company	 
%
 	 
%
 	 
ThCh$
 	 
ThCh$
 	
Cencosud Shoppings Centers S.A. 	 
 
0.00004
%	 
 
0.00004
%	 
 
492

479
 	
Mercado Mayorista P y P Ltda. 	 
 
10.00000
%	 
 
10.00000
%	 
 
93,871

93,871
 	
Easy Retail S.A. 	 
 
0.07361
%	 
 
0.07361
%	 
 
16,582

18,795
 	
Comercial Food and Fantasy Ltda. 	 
 
10.00000
%	 
 
10.00000
%	 
 
(12,921
)	 
 
-
 	
Administradora del Centro Comercial Alto Las Condes Ltda.	 
 
55.00000
%	 
 
55.00000
%	 
 
(709,183
)	 
 
(1,608,229
)	
Cencosud Retail S.A. 	 
 
0.03760
%	 
 
0.03760
%	 
 
241,082

231,864
 	
Jumbo Retail Argentina S.A. 	 
 
0.07600
%	 
 
0.07600
%	 
 
48,530

54,816
 	
Total 	 

 	 

 	 
 
(321,547
)	 
 
(1,208,404
)	

46

Results:

Non-controlling
Interest Mar 31,
 	 
Non-controlling
Interest
Dec 31,
 	 
Balances
as of,

2017
 	 
2016
 	 
Mar 31, 2017
 	 
Dec 31, 2016
 	
Company	 
%
 	 
%
 	 
ThCh$
 	 
ThCh$
 	
Cencosud Shoppings Centers S.A. 	 
 
0.00004
%	 
 
0.00004
%	 
 
13

9
 	
Easy Retail S.A. 	 
 
0.07361
%	 
 
0.42500
%	 
 
(2,214
)	 
 
800
 	
Comercial Food and Fantasy Ltda. 	 
 
10.00000
%	 
 
10.00000
%	 
 
11,080

-
 	
Administradora del Centro Comercial Alto Las Condes Ltda.	 
 
55.00000
%	 
 
55.00000
%	 
 
899,046

1,331,401
 	
Cencosud Retail S.A. 	 
 
0.03760
%	 
 
0.03906
%	 
 
9,215

11,488
 	
Jumbo Retail Argentina S.A. 	 
 
0.07600
%	 
 
0.07600
%	 
 
(7,088
)	 
 
3,331
 	
Total 	 

 	 

 	 
 
910,052

1,347,029

 
47

16                      	Breakdown of significant results	
 
The items by function from the Statements of Income are described as follows in 16,1, 16,2 y 16,3,
 
Expenses by nature of integral income by function  	 
 
3-31-2017

3-31-2016

 
ThCh$

 
ThCh$

Cost of sales 	 
 
1,785,921,395

1,765,306,972
 	
Distribution cost 	 
 
6,438,007

6,242,744
 	
Administrative expenses 	 
 
585,030,025

541,751,349
 	
Other expenses by function 	 
 
39,740,805

36,495,483
 	
Total 	 
 
2,417,130,232

2,349,796,548

16.1 	Expenses by nature	
 
The following is a breakdown of the main operating and management costs and expenses of the Cencosud Group for the following periods:  
 
Expenses by nature	 
For the three months ended March 31

2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Cost of goods sold 	 
 
1,654,415,417

1,652,195,243
 	
Other cost of sales 	 
 
131,505,978

113,111,729
 	
Personnel expenses 	 
 
356,332,965

324,051,034
 	
Depreciation and amortization 	 
 
60,106,229

51,280,017
 	
Distribution cost 	 
 
6,438,007

6,242,744
 	
Other expenses by function 	 
 
39,740,805

36,495,483
 	
Cleaning 	 
 
18,388,106

17,707,593
 	
Safety and security 	 
 
15,795,109

14,626,829
 	
Maintenance 	 
 
19,231,332

18,365,315
 	
Professional fees 	 
 
17,748,707

16,578,907
 	
Bags for Customers 	 
 
3,979,960

4,904,531
 	
Credit card commission 	 
 
25,002,124

23,397,692
 	
Lease 	 
 
49,431,123

47,510,269
 	
Other 	 
 
19,014,370

23,329,162
 	
Total 	 
 
2,417,130,232

2,349,796,548

16.2 	Personnel expenses	
 
The following is a breakdown of personnel expenses for the following periods:
 
Personnel expenses	 
For the three months ended March 31

2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Salaries 	 
 
278,186,828

254,825,533
 	
Short-term employee benefits 	 
 
67,391,379

61,683,110
 	
Termination benefits 	 
 
10,754,758

7,542,391
 	
Total 	 
 
356,332,965

324,051,034

 
48

16.3 	Depreciation and amortization	
 
The following is a breakdown of depreciation and amortization for the following periods:
 
Depreciation and amortization	 
For the three months ended March 31

2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Depreciation 	 
 
52,209,206

45,174,049
 	
Amortization 	 
 
7,897,023

6,105,968
 	
Total 	 
 
60,106,229

51,280,017

16.4 	Other gains (losses)	
 
Other gain (losses)	 
For the three months ended March 31

2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Complementary remittance tax 	 
 
(1,179,553
)	 
 
(1,197,646
)	
Wealth tax Colombia 	 
 
(2,222,000
)	 
 
(5,566,905
)	
Insurance claims  	 
 
(1,912,891
)	 
 
1,607,520
 	
Sales of businesses and properties 	 
 
144,105

9,547,202
 	
Other net losses 	 
 
2,492,676

(7,852,705
)	
Total 	 
 
(2,677,663
)	 
 
(3,462,534
)	
 
16.5 	Other operating income	
 
Other operating income	 
For the three months ended March 31

2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Sell Carton and Wraps 	 
 
739,755

931,922
 	
Recovery of fees 	 
 
542,959

545,676
 	
Increase on revaluation of Investment properties (see note 12.1)	 
 
26,614,201

37,958,719
 	
Other Income 	 
 
1,575,557

1,337,871
 	
Total 	 
 
29,472,472

40,774,188

 
49

16.6                 	Financial results	
 
The following is the financial income detailed for the periods ended:
 
Financial results	 
For the three months ended March 31

2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Other finance income from investments 	 
 
4,043,544

3,840,794

 

 

 	 

 	 

 	
Financial Income 	 
 
4,043,544

3,840,794

 

 

Bank loan expenses 	 
 
(26,054,991
)	 
 
(25,255,302
)	
Bond debt expenses 	 
 
(34,621,531
)	 
 
(36,048,575
)	
Interest on bank deposits 	 
 
-

(452,093
)	
Valuation of financial derivatives 	 
 
(5,941,246
)	 
 
(7,567,481
)	

 

 
 	
Financial Expenses 	 
 
(66,617,768
)	 
 
(69,323,451
)	

 

 
 	
Results from UF indexed bonds in Chile 	 
 
(2,858,616
)	 
 
(3,325,580
)	
Results from UF indexed Brazil 	 
 
(72,422
)	 
 
(142,831
)	
Results from UF indexed Other 	 
 
145,183

-

 

 

(Losses) gains from indexation 	 
 
(2,785,855
)	 
 
(3,468,411
)	

 

 
 	
Financial debt IFC-ABN Argentina 	 
 
(278,025
)	 
 
(96,366
)	
Debt to the public Bonds and Banks (Chile)	 
 
31,917,132

38,721,668
 	
Financial debt Peru 	 
 
(79,111
)	 
 
(243,029
)	
Financials Assets and Debts (Colombia) 	 
 
55,847

143,331

 

 

Exchange difference 	 
 
31,615,843

38,525,604

 

 

Financial results total 	 
 
(33,744,236
)	 
 
(30,425,464
)	

50

17 	Corporate income tax	
 
The charge (credit) to periodic results within the Interim consolidated statement of profit and loss by function related to the income tax amounts were M$ 35,915,116 as of March 31, 2017; and M$ 32,805,216, as of March 31, 2016, as the table below:

March 31, 2017
 	 
March 31, 2016
 	
Current and deferred income tax	 
ThCh$
 	 
ThCh$

 

 	
Net current income tax expense 	 
 
42,889,991

32,066,483
 	
Previous year adjustment 	 
 
(4,238,817
)	 
 
2,718,420

 

 

Income tax expense 	 
 
38,651,174

34,784,903

 

 

Deferred tax expense (income) due to taxes arising from the creation and reversal of temporary differences	 
 
(4,208,705
)	 
 
(2,410,877
)	
Deferred expenses (income) due to taxes arising from the changes in tax rates or new rates	 
 
1,472,647

431,190

 

 

Deferred income tax expense 	 
 
(2,736,058
)	 
 
(1,979,687
)	

 

 
 	
Net tax expense (income) 	 
 
35,915,116

32,805,216

The following chart shows the reconciliation between the corporate income tax calculations resulting from the application of the legal and effective rates for the periods:

For the three months ended, March 31
 	
Reconciliation of income tax expense using the statutory rate to income taxexpense using the effective rate	 
2017
 	 
2016

ThCh$
 	 
ThCh$
 	
Income tax expense using the legal rate                                                                             	 
 
26,518,075

34,040,173

 

 

Tax effect of rates in other territories                                                                             	 
 
756,452

6,377,609
 	
Tax effect on non-deductible expenses                                                                             	 
 
2,286,212

2,690,697
 	
Chile - Taxable effects from investment and equity                                                                             	 
 
(750,317
)	 
 
(733,968
)	
Tax rate effect of adjustments for current tax of prior periods	 
 
4,238,817

(2,718,420
)	
Colombia - Wealth tax (non-deductible)                                                                             	 
 
933,592

2,226,762
 	
Chile – Taxable fair value adjustments related to derivatives and stock options	 
 
(2,194,851
)	 
 
1,556,536
 	
Chile –not recognized provisional payment on absorbed profits (PPUA)	 
 
-

(6,349,176
)	
Colombia - Goodwill write off (Mercadefam 2014)                                                                             	 
 
219,691

102,965
 	
Colombia –Presumptive Income rate adjustment 9% (rate 34% and credit 25%)	 
 
-

406,776
 	
Tax effect of changes in tax rates                                                                             	 
 
(1,556,839
)	 
 
431,190
 	
Nontaxable profits from investments accounted for using the equity method.	 
 
(1,138,839
)	 
 
(673,437
)	
Brazil – Tax losses valuation                                                                             	 
 
11,558,786

-
 	
Other (decrease) increase for legal tax                                                                             	 
 
(4,955,663
)	 
 
(4,552,491
)	

 

 
 	
 Adjustments to tax expenses using the legal rate, total….	 
 
9,397,041

(1,234,957
)	

 

 
 	
Income tax expense using the effective rate                                                                             	 
 
35,915,116

32,805,216

 
51

Main components of effective tax rate reconciliation include:
 
i.	During the third quarter 2016 Brazil has ceased the recognition of deferred tax asset over carry forward losses amounted to ChTh$ 11,558,785.	
 
a) 	Tax losses:	
 
The Company has deferred assets for tax losses arising from the different countries where it has investments. These arise mainly in the retail and real estate areas, both in Chile and abroad. For the tax losses carry-forward obtained before January 1, 2017, there are no limits regarding their usage. Law 1,819 issued on December 2016 in Colombia, limits losses carry forward up to a maximum of 12 years, however, former losses are not limited to an specific period. Realization of tax losses is estimated based on the Group future projections.
 
b) 	Reversal of asset and liability timing differences:	
 
The reversal of asset and liability timing differences is directly related to the nature of the asset and liability accounts generating these differences. There is no set term for the reversal of timing differences, due to the reversal of some and the origin of others.
 
c) 	Rate of income tax.	
 
Chile
 
The current income tax rate in Chile that affects the Company is 24% (Dec 2016: 22.5%). Under the 2014 enacted tax law, the income tax rate will increase to 21%, 22.5%, 24%, 25.5% and 27%, for the years 2014, 2015, 2016, 2017, 2018 and following fiscal years, respectively, based on the adoption of the partially integrated system.
 
According to regulations applicable to open listed societies, the income tax system applicable by Cencosud is the partially integrated system.
 
Any other later effects have been recognized within the income statement.
 
Foreign subsidiaries
 
The rates that affect its foreign subsidiaries are: 35% in Argentina
 
Peru 29.5%. Peru enacted in law Nº 30.296 which pretended to envisage gradual reduction in taxes from 30% to 28% in 2015-2016, 27% in 2017-2018, and 26% from 2019 onwards. However, the mentioned reduction will not have any effect; being that Legislative Decree No. 1261 published on December 10, 2016 contemplates a rate of 29.5% effective from the 2016 financial year.
 
Colombia 40%. Law 1,739 issued on December 2014 modified the income tax for equity “CREE” tax [1] from a rate of 8% to 9%, beginning since 2016 financial year. Additional 5%, 6%, 8% y 9% rates were established in a temporary way for the 2015, 2016, 2017 y 2018 financial years respectively.
 
Law 1,819 issued on December 2016 eliminated the income tax for equity “CREE” tax (lately 6%), but simultaneously created a complementary income tax rate, defining a total 40% rate being that nominal income tax rate was already 34%.
 
Brazil remains with a 34% income tax rate.
 
[1] The CREE used to be a Colombian National tax which applies over profits and gains obtained by companies which are likely to enrich them. This tax replaced certain wage-based social contributions.

52

18                      	Information by segment	
 
The Company reports the information by segment according to what is set forth in IFRS 8 “Operating Segments,” An operating segment is defined as a component of an entity over which separated financial information is available and is regularly reviewed.
 
In the information by segments, all transactions between the different operating segments have been eliminated.
 
18.1 	Segmentation criteria	
 
For management purposes, the Company is organized in five operative divisions: Supermarkets, Shopping Centers, Home Improvement stores, Department stores and Financial Services. These segments are the basic on which the Company makes decisions with respect to its operations and resource allocation.
 
The operative segments are disclosed in a similar way with the presentation of the internal reports used by Management in the control and decision making process, considering the segments from a point of view according to the type of business and geographical area.
 
The operating segments that are reported derive their revenues mainly from the sale of products and rendering of services to final consumers of retail. There are no customers whose purchases represent more than 10% of the consolidated revenue, nor a specific business segment.
 
The rest of the minor activities, mainly including the travel agency and family-entertainment centers businesses, plus certain consolidation adjustments and corporate expenses administered centrally, are included in the segment “Support services, financing, adjustments and other”.

53

 
18.2  Regional information by segment
 
The segment information which is delivered to the chief operating decision maker (“Board of Directors”) of the reportable segments for the three months ended March 31, 2017 and March 31, 2016 in thousands of Chilean pesos is the following:
 
Regional information by segment
 
Consolidated statement of  income	 
Supermarkets
 	 
Shopping Centers
 	 
Home improvement
 	 
Department stores
 	 
Financial services
 	 
  Support services, financing, adjustment sand other
 	 
  Consolidated total
 	
For the quarter ended March 31, 2017	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Revenues from ordinary activities 	 
 
1,814,359,150

59,483,158

331,757,452

262,799,548

53,158,758

2,005,227

2,523,563,293
 	
Cost of sales 	 
 
(1,346,627,119
)	 
 
(6,790,616
)	 
 
(224,462,810
)	 
 
(186,774,461
)	 
 
(20,844,735
)	 
 
(421,654
)	 
 
(1,785,921,395
)	

 

 

 

 

 

 

 
 	
Gross Margin 	 
 
467,732,031

52,692,542

107,294,642

 

32,314,023

1,583,573

737,641,898

 

 

 

 

 

 

 

Other revenues by function 	 
 
2,226,663

26,535,858

286,295

256,203

-

167,453

29,472,472
 	
Sales, general and administrative expenses 	 
 
(411,699,257
)	 
 
(6,341,357
)	 
 
(80,707,752
)	 
 
(70,147,191
)	 
 
(12,298,693
)	 
 
(50,014,587
)	 
 
(631,208,837
)	
Financial expenses, net 	 
 
-

-

-

-

-

(62,574,224
)	 
 
(62,574,224
)	
Participation in profit of equity method associates 	 
 
42,781

-

-

-

4,466,037

-

4,508,818
 	
Exchange differences 	 
 
-

-

-

-

-

31,615,843

31,615,843
 	
Losses from indexation 	 
 
-

-

-

-

-

(2,785,855
)	 
 
(2,785,855
)	
Other losses, net 	 
 
(277,289
)	 
 
-

(1,635,602
)	 
 
-

-

(764,772
)	 
 
(2,677,663
)	
Income tax expense 	 
 
-

-

-

-

-

(35,915,116
)	 
 
(35,915,116
)	

 

 

 

 

 

 

 
 	
Net profit (loss)  	 
 
58,024,929

72,887,043

25,237,583

6,134,099

24,481,367

(118,687,685
)	 
 
68,077,336
 	
Net profit (loss) from continued operations 	 
 
58,024,929

72,887,043

25,237,583

6,134,099

24,481,367

(118,687,685
)	 
 
68,077,336
 	
Net profit (loss) from discontinued operations 	 
 
-

-

-

-

-

-

-
 	
Net profit (loss) of attributable to non-controlling interest 	 
 
-

-

-

-

-

(910,052
)	 
 
(910,052
)	

 

 

 

 

 

 

 
 	
Net profit for the year attributable to controlling shareholders, Total	 
 
58,024,929

72,887,043

25,237,583

6,134,099

24,481,367

(119,597,737
)	 
 
67,167,284
 	
Depreciation and amortization 	 
 
40,643,067

1,396,743

5,948,964

7,595,653

443,307

4,078,495

60,106,229

 
54

Consolidated statement of  income	 
Supermarkets
 	 
Shopping Centers
 	 
Home improvement
 	 
Department stores
 	 
Financial services
 	 
  Support services, financing, adjustments and other
 	 
  Consolidated total
 	
For the quarter ended March 31, 2016	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Revenues from ordinary activities 	 
 
1,813,974,167

54,003,766

324,368,894

247,215,355

39,733,346

2,588,712

2,481,884,240
 	
Cost of sales 	 
 
(1,350,118,155
)	 
 
(5,556,222
)	 
 
(215,805,344
)	 
 
(179,512,697
)	 
 
(13,255,733
)	 
 
(1,058,821
)	 
 
(1,765,306,972
)	

 

 

 

 

 

 

 
 	
Gross Margin 	 
 
463,856,012

48,447,544

108,563,550

67,702,658

26,477,613

1,529,891

716,577,268

 

 

 

 

 

 

 

Other income by function 	 
 
2,466,271

37,836,338

103,863

124,352

(149
)	 
 
243,513

40,774,188
 	
Sales, general and administrative expenses 	 
 
(378,004,290
)	 
 
(6,261,099
)	 
 
(74,357,921
)	 
 
(67,394,237
)	 
 
(12,336,195
)	 
 
(46,135,834
)	 
 
(584,489,576
)	
Financial expenses, net 	 
 
-

-

-

-

-

(65,482,657
)	 
 
(65,482,657
)	
Participation in profit of equity method associates 	 
 
54,181

-

-

-

2,805,990

-

2,860,171
 	
Exchange differences 	 
 
-

-

-

-

-

38,525,604

38,525,604
 	
Losses from indexation 	 
 
-

-

-

-

-

(3,468,411
)	 
 
(3,468,411
)	
Other gains (losses), net 	 
 
-

-

-

-

-

(3,462,534
)	 
 
(3,462,534
)	
Income tax expense 	 
 
-

-

-

-

-

(32,805,216
)	 
 
(32,805,216
)	

 

 

 

 

 

 

 
 	
Net profit (loss)  	 
 
88,372,174

80,022,783

34,309,492

432,773

16,947,259

(111,055,644
)	 
 
109,028,837
 	
Net profit (loss) from continued operations 	 
 
88,372,174

80,022,783

34,309,492

432,773

16,947,259

(111,055,644
)	 
 
109,028,837
 	
Net profit (loss) from discontinued operations 	 
 
-

-

-

-

-

-

-
 	
Net profit (loss) of attributable to non-controlling interest 	 
 
-

-

-

-

-

(1,347,029
)	 
 
(1,347,029
)	

 

 

 

 

 

 

 
 	
Net profit for the year attributable to controlling shareholders, Total	 
 
88,372,174

80,022,783

34,309,492

432,773

16,947,259

(112,402,673
)	 
 
107,681,808
 	
Depreciation and amortization 	 
 
31,806,859

1,568,010

6,002,721

7,275,658

788,576

3,838,193

51,280,017

The Company controls the results of each of the operating segments, at the level of revenues, costs and management expenses. The support services, exchange rates, readjustments, taxes and non-recurring income and expense, or financial income, are not allocated, as they are centrally managed.
 
The financing policy of the Group has been historically getting financed and managing these resources through the Company Holding Cencosud S,A., the funds are subsequently transferred to other countries as required to finance the local investments. This policy aims to reduce the financial cost of the Group.

55
 
18.3  Gross margin by country and segment, in thousands of Chilean pesos:
 
Gross margin by country and segment  
 
For the quarter ended  March 31, 2017	 
Supermarkets
 	 
Shopping centers
 	 
Home improvement
 	 
Department stores
 	 
Financial services
 	 
Support services, financing, adjustments and other
 	 
Consolidated total

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

 

 	 

 

 	 

 
 	
Chile	 

 

 	 

 

 	 

Ordinary income, total 	 
 
630,335,950

36,208,796

135,890,474

247,384,026

38,546

1,629,542

1,051,487,334
 	
Cost of sales 	 
 
(462,731,602
)	 
 
(2,190,160
)	 
 
(99,905,096
)	 
 
(173,871,770
)	 
 
10,643

(20,118
)	 
 
(738,708,103
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
167,604,348

34,018,636

35,985,378

73,512,256

49,189

1,609,424

312,779,231

 

 

 

 

 

 

 

Argentina	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Ordinary income, total 	 
 
396,131,410

16,095,187

180,405,964

-

35,891,532

1,112,401

629,636,494
 	
Cost of sales 	 
 
(264,043,135
)	 
 
(3,884,803
)	 
 
(112,714,092
)	 
 
-

(13,769,223
)	 
 
(402,035
)	 
 
(394,813,288
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
132,088,275

12,210,384

67,691,872

-

22,122,309

710,366

234,823,206

 

 

 

 

 

 

 

Brazil	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Ordinary income, total 	 
 
403,439,464

-

-

-

833,384

-

404,272,848
 	
Cost of sales 	 
 
(321,854,791
)	 
 
-

-

-

-

-

(321,854,791
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
81,584,673

-

-

-

833,384

-

82,418,057

 

 

 

 

 

 

 

Peru	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Ordinary income, total 	 
 
200,435,117

4,941,874

-

15,415,522

15,049,599

200,678

236,042,790
 	
Cost of sales 	 
 
(152,557,861
)	 
 
(652,751
)	 
 
-

(12,902,691
)	 
 
(7,086,156
)	 
 
(3,430
)	 
 
(173,202,889
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
47,877,256

4,289,123

-

2,512,831

7,963,443

197,248

62,839,901

 

 

 

 

 

 

 

Ordinary income, total 	 
 
184,017,209

2,237,301

15,461,014

-

1,345,697

(937,394
)	 
 
202,123,827
 	
Cost of sales 	 
 
(145,439,730
)	 
 
(62,902
)	 
 
(11,843,622
)	 
 
-

1

3,929

(157,342,324
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
38,577,479

2,174,399

3,617,392

-

1,345,698

(933,465
)	 
 
44,781,503

 
56
 
Gross margin by country and segment

For the quarter ended  March 31, 2016	 
Supermarkets
 	 
Shopping centers
 	 
Home improvement
 	 
Department stores
 	 
Financial services
 	 
Support services, financing, adjustments and other
 	 
Consolidated total

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

 

 	 

 

 	 

 
 	
Chile	 

 

 	 

 

 	 

Ordinary income, total 	 
 
626,355,817

31,807,909

135,674,523

233,513,088

413,978

1,993,339

1,029,758,654
 	
Cost of sales 	 
 
(468,139,519
)	 
 
(1,077,436
)	 
 
(99,488,952
)	 
 
(168,502,568
)	 
 
29,867

(219,617
)	 
 
(737,398,225
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
158,216,298

30,730,473

36,185,571

65,010,520

443,845

1,773,722

292,360,429

 

 

 

 

 

 

 

Argentina	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Ordinary income, total 	 
 
409,606,067

15,713,620

173,389,012

-

22,991,018

653,519

622,353,236
 	
Cost of sales 	 
 
(278,107,393
)	 
 
(3,718,751
)	 
 
(104,822,121
)	 
 
-

(7,134,755
)	 
 
(183,838
)	 
 
(393,966,858
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
131,498,674

11,994,869

68,566,891

-

15,856,263

469,681

228,386,378

 

 

 

 

 

 

 

Brazil	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Ordinary income, total 	 
 
377,705,355

-

-

-

1,149,388

-

378,854,743
 	
Cost of sales 	 
 
(290,435,146
)	 
 
-

-

-

-

-

(290,435,146
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
87,270,209

-

-

-

1,149,388

-

88,419,597

 

 

 

 

 

 

 

Peru	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Ordinary income, total 	 
 
211,258,711

4,413,174

-

13,702,267

13,890,954

867,332

244,132,438
 	
Cost of sales 	 
 
(162,317,268
)	 
 
(695,992
)	 
 
-

(11,010,129
)	 
 
(6,150,845
)	 
 
(777,803
)	 
 
(180,952,037
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
48,941,443

3,717,182

-

2,692,138

7,740,109

89,529

63,180,401

 

 

 

 

 

 

 

Colombia	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Ordinary income, total 	 
 
189,048,217

2,069,063

15,305,359

-

1,288,008

(925,478
)	 
 
206,785,169
 	
Cost of sales 	 
 
(151,118,829
)	 
 
(64,043
)	 
 
(11,494,271
)	 
 
-

-

122,437

(162,554,706
)	

 

 

 

 

 

 

 
 	
Gross margin 	 
 
37,929,388

2,005,020

3,811,088

-

1,288,008

(803,041
)	 
 
44,230,463

 
57

18.4  	Regional information by segment: Total assets  	

Supermarkets
 	 
Shopping centers
 	 
Home improvement
 	 
Department stores
 	 
Financial services
 	 
Support services, financing, adjustments and other
 	 
Consolidated total
 	
At March 31, 2017	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Current Assets	 

 

 	 

 

 	 

Cash and cash equivalents 	 
 
159,029,259

3,615,929

6,279,757

49,405

498,180

41,257,950

210,730,480
 	
Other financial assets, current 	 
 
-

-

-

-

-

135,722,987

135,722,987
 	
Other non-financial assets, current 	 
 
17,806,241

1,156,405

3,029,056

1,190,502

14,492,822

2,372,650

40,047,676
 	
Trade receivables and other receivables 	 
 
243,187,297

25,002,531

49,916,431

23,311,369

450,882,930

18,666,060

810,966,618
 	
Receivables due from related entities, current 	 
 
-

-

-

-

19,752,035

-

19,752,035
 	
Inventory 	 
 
736,065,464

-

246,168,642

206,827,225

-

-

1,189,061,331
 	
Current tax assets 	 
 
21,289,312

11,076,321

13,948,283

14,362,650

3,727,351

28,367,601

92,771,518
 	
Assets classified as held for sale, current 	 
 
25,078,000

8,821,279

-

-

-

30,436,398

64,335,677
 	
Total current assets 	 
 
1,202,455,573

49,672,465

319,342,169

245,741,151

489,353,318

256,823,646

2,563,388,322

 

 

 

 

 

 

 

Non-Current Assets	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Other financial assets, non-current 	 
 
-

-

-

-

-

260,141,584

260,141,584
 	
Other non-financial assets, non-current 	 
 
41,846,144

7,745,218

2,941,037

1,697,221

8,641

-

54,238,261
 	
Trade receivables and other receivables, non-current 	 
 
3,438,728

-

11,966,537

-

-

-

15,405,265
 	
Equity method investments 	 
 
1,060,656

-

-

-

202,139,191

-

203,199,847
 	
Intangible assets other than goodwill 	 
 
199,533,196

432,171

11,421,870

159,930,203

172,260

41,863,670

413,353,370
 	
Goodwill 	 
 
1,246,566,769

32,900,998

2,630,089

138,159,463

54,683,032

-

1,474,940,351
 	
Property, plant and equipment 	 
 
1,612,260,422

415,342,744

292,200,323

253,213,838

1,651,165

22,556,626

2,597,225,118
 	
Investment property 	 
 
-

2,118,997,973

-

-

-

-

2,118,997,973
 	
Income tax assets, non-current 	 
 
82,341,785

194,325

785,153

4,509,476

-

10,088

87,840,827
 	
Deferred income tax assets 	 
 
-

-

-

-

-

650,353,766

650,353,766

 

 

 

 

 

 

 

Total non-current assets 	 
 
3,187,047,700

2,575,613,429

321,945,009

557,510,201

258,654,289

974,925,734

7,875,696,362
 	
Total Assets	 
 
4,389,503,273

2,625,285,894

641,287,178

803,251,352

748,007,607

1,231,749,380

10,439,084,684

 
58

 	 
Supermarkets
 	 
Shopping centers
 	 
Home improvement
 	 
Department stores
 	 
Financial services
 	 
Support services, financing, adjustments and other
 	 
Consolidated total
 	
At December 31, 2016	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Current Assets	 

 

 	 

 

 	 

Cash and cash equivalents 	 
 
181,727,680

4,377,803

13,760,047

2,246,159

1,008,517

72,098,797

275,219,003
 	
Other financial assets, current 	 
 
-

-

-

-

-

219,988,622

219,988,622
 	
Other non-financial assets, current 	 
 
7,618,030

758,065

1,541,496

1,014,364

11,070,047

1,626,277

23,628,279
 	
Trade receivables and other receivables 	 
 
291,088,879

30,693,990

68,693,890

30,059,294

420,662,271

25,941,353

867,139,677
 	
Receivables due from related entities, current 	 
 
37,222

-

-

-

28,950,954

-

28,988,176
 	
Inventory 	 
 
700,985,806

-

254,992,540

193,307,668

-

-

1,149,286,014
 	
Current tax assets 	 
 
16,633,102

2,090,444

3,647,748

13,803,843

3,722,153

34,238,357

74,135,647
 	
Assets classified as held for sale, current 	 
 
17,886,465

-

-

-

-

39,237,407

57,123,872
 	
Total current assets 	 
 
1,215,977,184

37,920,302

342,635,721

240,431,328

465,413,942

393,130,813

2,695,509,290

 

 

 

 

 

 

 

Non-Current Assets	 

 	 

 	 

 	 

 	 

 	 

 	 

 	
Other financial assets, non-current 	 
 
-

-

-

-

-

287,360,674

287,360,674
 	
Other non-financial assets, non-current 	 
 
40,549,624

7,677,318

2,390,633

1,707,428

10,083

189

52,335,275
 	
Trade receivables and other receivables, non-current 	 
 
3,100,863

-

8,792,843

-

-

-

11,893,706
 	
Equity method investments 	 
 
989,721

-

-

-

199,737,813

-

200,727,534
 	
Intangible assets other than goodwill 	 
 
195,476,999

418,055

11,146,455

160,203,723

159,887

40,762,995

408,168,114
 	
Goodwill 	 
 
1,207,776,321

31,472,874

2,605,322

138,159,463

52,305,509

-

1,432,319,489
 	
Property, plant and equipment 	 
 
1,546,905,547

470,346,933

284,046,215

248,862,284

2,827,945

25,804,649

2,578,793,573
 	
Investment property 	 
 
-

2,081,694,027

-

-

-

-

2,081,694,027
 	
Income tax assets, non-current 	 
 
77,993,287

194,325

669,273

4,509,476

-

10,089

83,376,450
 	
Deferred income tax assets 	 
 
-

-

-

-

-

616,579,356

616,579,356

 

 

 

 

 

 

 

Total non-current assets 	 
 
3,072,792,362

2,591,803,532

309,650,741

553,442,374

255,041,237

970,517,952

7,753,248,198
 	
Total Assets	 
 
4,288,769,546

2,629,723,834

652,286,462

793,873,702

720,455,179

1,363,648,765

10,448,757,488

 
59
 
18.5 	Current Asset and liabilities by segment	
 
Regional information by segment
Current assets and liabilities
at March 31, 2017	Supermarkets	ShoppingCenter	Home Improvement	Department Stores	Financial Services (Insurance +cards + bank)	Support Services, Financing, and Other Settings	Total Consolidated	
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	
Trade accounts payable and other payables	1,203,139,635	48,774,536	266,073,978	184,543,881	37,202,001	36,219,121	1,775,953,152	
 
Regional information by segment
Current assets and liabilities
at December 31, 2016	Supermarkets	ShoppingCenter	Home Improvement	Department Stores	Financial Services (Insurance +cards + bank)	Support Services, Financing, and Other Settings	Total Consolidated	
	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	ThCh$	
Trade accounts payable and other payables	1,294,692,757	35,089,329	273,630,631	246,827,811	39,764,889	36,841,635	1,926,847,052	
 
18.6 	Information by country, assets and liabilities	
 
In thousands of Chilean pesos:
 
Assets and liabilities by country

Chile
 	 
Argentina
 	 
Brazil
 	 
Peru
 	 
Colombia
 	 
Consolidated total
 	
At March 31, 2017	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Total assets 	 
 
4,630,827,644

1,494,790,219

1,409,815,790

1,241,527,804

1,662,123,227

10,439,084,684
 	
Total liabilities 	 
 
4,070,820,061

821,940,222

517,343,768

374,113,886

445,837,259

6,230,055,196
 	
Total Net equity 	 
 
1,010,627,226

655,906,732

781,437,358

693,076,414

1,067,981,758

4,209,029,488
 	
Adjustments to net investment	 
 
(450,619,643
)	 
 
16,943,265

111,034,664

174,337,504

148,304,210

-
 	
Net investment 	 
 
560,007,583

672,849,997

892,472,022

867,413,918

1,216,285,968

4,209,029,488
 	
            Percentage of Net equity	 
 
24.0
%	 
 
15.6
%	 
 
18.6
%	 
 
16.5
%	 
 
25.4
%	 
 
100.0
%	
     Percentage of equity	 
 
13.3
%	 
 
16.0
%	 
 
21.2
%	 
 
20.6
%	 
 
28.9
%	 
 
100.0
%	

Chile
 	 
Argentina
 	 
Brazil
 	 
Peru
 	 
Colombia
 	 
Consolidated total
 	
At December 31, 2016	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Total assets 	 
 
4,779,856,500

1,411,985,049

1,431,919,219

1,240,938,778

1,584,057,942

10,448,757,488
 	
Total liabilities 	 
 
4,202,937,399

813,235,515

530,551,320

403,728,564

414,252,955

6,364,705,753
 	
Total Net equity 	 
 
885,649,473

655,906,732

781,437,358

693,076,414

1,067,981,758

4,084,051,735
 	
Adjustments to net investment	 
 
(308,730,372
)	 
 
(57,157,198
)	 
 
119,930,541

144,133,800

101,823,229

-
 	
Net investment 	 
 
576,919,101

598,749,534

901,367,899

837,210,214

1,169,804,987

4,084,051,735
 	
            Percentage of Net equity	 
 
21.7
%	 
 
16.1
%	 
 
19.1
%	 
 
17.0
%	 
 
26.2
%	 
 
100.0
%	
     Percentage of equity	 
 
14.1
%	 
 
14.7
%	 
 
22.1
%	 
 
20.5
%	 
 
28.6
%	 
 
100.0
%	

60

18.7 	Regional information, including intersegments is as follows:	

For the three months ended March 31, 2017
 	
Regional information, by segment	 
Total revenue by segment
 	 
Total revenue intra-segment
 	 
Total segment revenue

ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Supermarkets 	 
 
1,814,359,150

-

1,814,359,150
 	
Shopping 	 
 
90,852,058

31,368,900

59,483,158
 	
Home Improvement 	 
 
332,017,106

259,654

331,757,452
 	
Department stores 	 
 
262,799,548

-

262,799,548
 	
Financial Services 	 
 
53,158,758

-

53,158,758
 	
Others 	 
 
2,005,227

-

2,005,227

 

 

 

TOTAL 	 
 
2,555,191,847

31,628,554

2,523,563,293

 	 
For the three months ended March 31, 2016
 	
Regional information, by segment	 
Total segment revenue
 	 
Total segment revenue
 	 
Total segment revenue

ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Supermarkets 	 
 
1,813,974,167

-

1,813,974,167
 	
Shopping 	 
 
89,687,280

35,683,514

54,003,766
 	
Home Improvement 	 
 
324,691,518

322,624

324,368,894
 	
Department stores 	 
 
247,215,355

-

247,215,355
 	
Financial Services 	 
 
39,733,346

-

39,733,346
 	
Others 	 
 
2,588,712

-

2,588,712

 

 

 

TOTAL 	 
 
2,517,890,378

36,006,138

2,481,884,240

 
61
 
18.8  	Non-current assets by country	
 
At March 31, 2017	 
Chile
 	 
Argentina
 	 
Brazil
 	 
Peru
 	 
Colombia
 	 
Consolidated total

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Other non-financial assets	 
 
23,141,427

8,212,658

21,073,867

1,803,869

6,440

54,238,261
 	
Trade receivables and other receivables	 
 
-

12,031,198

3,374,067

-

-

15,405,265
 	
Equity Method investments	 
 
202,139,191

-

-

1,060,656

-

203,199,847
 	
Intangible assets other than goodwill	 
 
220,458,618

10,220,320

64,026,156

110,774,272

7,874,004

413,353,370
 	
Goodwill 	 
 
246,378,878

1,493,810

408,838,951

271,398,389

546,830,323

1,474,940,351
 	
Property Plant and Equipment	 
 
1,105,404,191

216,077,151

335,816,769

358,487,417

581,439,590

2,597,225,118
 	
Investment Property 	 
 
1,553,130,558

331,755,657

-

203,492,203

30,619,555

2,118,997,973
 	
Income tax assets, non-current	 
 
4,852,773

9,374,978

73,613,076

-

-

87,840,827

 

 

 

 

 

 

Non -current assets—Total	 
 
3,355,505,636

589,165,772

906,742,886

947,016,806

1,166,769,912

6,965,201,012

At December 31, 2016	 
Chile
 	 
Argentina
 	 
Brazil
 	 
Peru
 	 
Colombia
 	 
Consolidated total

ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Other non-financial assets	 
 
23,356,132

7,663,639

19,431,481

1,877,863

6,160

52,335,275
 	
Trade receivables and other receivables	 
 
-

8,815,714

3,077,992

-

-

11,893,706
 	
Equity Method investments	 
 
199,737,813

-

-

989,721

-

200,727,534
 	
Intangible assets other than goodwill	 
 
219,352,035

9,823,814

64,145,345

106,901,729

7,945,191

408,168,114
 	
Goodwill 	 
 
246,378,878

1,467,433

397,062,475

264,355,612

523,055,091

1,432,319,489
 	
Property Plant and Equipment	 
 
1,107,174,199

212,741,017

340,287,996

355,639,693

562,950,668

2,578,793,573
 	
Investment Property 	 
 
1,531,658,588

323,482,594

-

197,264,575

29,288,270

2,081,694,027
 	
Income tax assets, non-current	 
 
4,852,774

5,409,578

73,114,098

-

-

83,376,450

 

 

 

 

 

 

Non -current assets—Total	 
 
3,332,510,419

569,403,789

897,119,387

927,029,193

1,123,245,380

6,849,308,168

The amounts for non-current assets by country shown in this note exclude other non-current financial assets, deferred tax assets as per IFRS 8.

62

18.9  Additions to non-current assets:

Supermarkets
 	 
Shopping Center
 	 
Home Improvement
 	 
Department Stores
 	 
Financial Services (Insurance +cards +bank)
 	 
Support Services, Financing,a nd Other Settings
 	 
Total Consolidated
 	
As of March 31, 2017	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Property plant and equipment	 
 
25,202,757

5,608,454

3,878,478

3,890,078

112,409

1,152,903

39,845,079
 	
Intangible asset, other that goodwill	 
 
2,356,686

45,740

681,399

1,752,606

48,618

3,490,432

8,375,481
 	
Goodwill	 
 
-

-

-

-

-

-

-
 	
Investment property	 
 
-

1,818,907

-

-

-

-

1,818,907

 

 

 

 

 

 

 

Total additions	 
 
27,559,443

7,473,101

4,559,877

5,642,684

161,027

4,643,335

50,039,467

	 
Supermarkets
 	 
Shopping Center
 	 
Home Improvement
 	 
Department Stores
 	 
Financial Services (Insurance +cards +bank)
 	 
Support Services, Financing, and Other Settings
 	 
Total Consolidated
 	
As of December 31, 2016	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	 
ThCh$
 	
Property plant and equipment	 
 
113,455,353

33,906,164

11,131,370

27,836,982

1,258,327

4,803,064

192,391,260
 	
Intangible asset, other that goodwill	 
 
8,638,903

138,107

2,964,884

9,083,317

584,489

16,262,072

37,671,772
 	
Goodwill	 
 
-

-

-

-

-

-

-
 	
Investment properties	 
 
-

1,225,878

-

-

-

-

1,225,878
 	
Total additions	 
 
122,094,256

35,270,149

14,096,254

36,920,299

1,842,816

21,065,136

231,288,910

63

19 	Restrictions, contingencies, legal proceedings and other matters	
 
19.1 	Civil legal proceedings	
 
● 	The subsidiaries Cencosud Retail S.A. , Easy S.A., Cencosud Shopping Centers S.A., and Administradora del Centro Comercial Alto Las Condes Ltda., are involved in lawsuits and litigation that are pending as of March 31, 2016. The amounts of these claims are covered by a civil liability insurance policy.	
 
● 	On May 22, 2015 the municipality constructions authority of Vitacura ordered the stagnation of the project developed by Cencosud Shopping Centers S.A., on the piece of land located at the 8950 of Kennedy Avenue in Santiago. This Municipality based its decision on the fact that the construction does not have the required permission. The Company filed an appeal on June 19, 2015 to the metropolitan administrative authority (Secretaria Regional Ministerial – “SEREMI”), who issued a ruling accepting the Company`s pretentions and ordering the Municipality to adjust its decision.	
 
On November 13, 2015, SEREMI resolved the Appeal brought by Cencosud Shopping Centers S.A., welcoming and ordering the authority of Vitacura, among other considerations, to adjust its action in accordance with the regulations applicable to the date of granting the respective permit. On November 25, 2015, “SEREMI” issued an extended ruling, which reverted its previous position base on the Public Ministry’s opinion.
 
On December 23, 2015 Cencosud filed a “protection claim” to the Appellate Court, alleging to revoke the SEREMI`s new position redefined on November 25, 2015. On April 2016 the Appellate Court accepted the Cencosud’s protection claim, being appealed that decision by SEREMI against the Supreme Court. On May 30, 2016 the Supreme Court rejected the SEREMI`s pretentions, which means that the ruling originally issued on June 19, 2015 is fully valid, and it confirms the Company`s allegations. On August 17, 2016 SEREMI resolved to invalid its ruling according to the Supreme Court decision.
 
On August 17, 2016, the SEREMI resolved to invalidate the exempted resolution questioned in compliance with the Supreme Court's ruling. On January 19, 2017, the municipality constructions authority of Vitacura proceeded to invalidate the aforementioned resolution by which it paralyzed the works. On that same date, the authority issued a new resolution in which it established the expiration of the building permit, which was rendered invalid by virtue of a decision issued by the Court of Appeals of Santiago on February 2, 2017.
 
● 	During January 2016, the authority National Economic Prosecutor (Fiscalia Nacional Económica FNE) filed a claim to the Free Competition Court (Tribunal de Defensa de la Libre Competencia) against Cencosud, Walmart Chile and SMU supermarkets’ chains, for alleged collusion between the mentioned chains for a price-fixing scheme involving poultry products. On April 6, 2016, a new court´s order was issued, by which the probationary stage began since October 20, 2016.	
 
The Group answered the aforementioned request to the Court on March 22, 2016, and categorically rejected the allegations raised by the FNE in such claim. The company will keep defending itself in the process to prove its innocence.
 
To Cencosud collusion and anti-competitive practice is unacceptable and totally condemnable.
 
Potential fines in this case could be up to 30.000 UTA (approximately U.S. $24.5 million at the time of the suit filing).
 
● 	An indirectly controlled subsidiary of Cencosud S,A in Colombia is involved in litigations regarding extra contractual civil responsibility. The amounts of these claims are covered by a civil liability insurance policy.	

64

● 	The indirect controlled Cencosud Colombia S.A. was legally requested by the social welfare government authority (UGPP), about omissions, arrears and inaccuracies incurred respect the lawful contributions of several employees. The process is being driven by a local Labour Court and it suits pretentions amounted to USD $846 thousand. The Company, in consultation with its legal advisors, considers that the chances of getting a favorable ruling to the position of the company are reasonably higher than obtain an unfavorable ruling.	
 
● 	A civil lawsuit was filed against the indirectly controlled affiliate Cencosud Brasil Comercial Ltda., by the Public Employees Union in supermarkets in the State of Sergipe, which is awaiting the first instance ruling. The union is seeking compensation for overtime hours for all employees of the subsidiary for the period after May 2007. The petition was filed and supported by the ruling, albeit still not judicial, that was issued through another public civil claim, which annulled a bank of hours from May 2007 to April 2009. Based on the opinion of our legal advisors, we cannot estimate the value of the case based on the complexity of the calculations related to the process, as well as the absence of evidence in the dossier to quantify.	
 
● 	Cencosud Retail Peru S.A, an indirectly controlled subsidiary of Cencosud S,A. has several outstanding cases at the close of the financial statements for liability claims causes. Total amounts claimed raise to MUSD 14. The Company, in consultation with its legal advisors, considers that the chances of getting a favorable ruling to the position of the company are reasonably higher than obtain an unfavorable ruling.	
 
● 	The indirect subsidiary Cencosud S.A. Argentina and Jumbo Retail S.A. Argentina, present several cases pending at the close of the financial statements for claims of civil liability, the amounts claimed amount to MUSD 4,238. The Company, in consultation with its legal advisors, estimates that the chances of obtaining a judgment favorable to the company's position are reasonably superior to those of obtaining an unfavorable ruling.	
 
● 	The indirect subsidiary Cencosud S.A. Argentina and Jumbo Retail S.A. Argentina, present several cases pending at the close of the financial statements for claims of labor type with their workers, whose amounts claimed amount to MUSD 29,030. The Company, in consultation with its legal advisors, estimates that the chances of obtaining a judgment favorable to the company's position are reasonably superior to those of obtaining an unfavorable ruling.	
 
19.2 	Taxation legal proceedings	
 
As of March 31, 2017, the Group’s Companies maintain several taxation legal controversies, which the most relevant are shown as follows:

Country	Society	Grounds	Amount [1]	Stage of
the process	Expected
outcome [2]	
 	 	 	ThCh$	 	 	
 	 	 	 	 	 	
Chile 	Cencosud S.A. 	Shares transference cost 	7,500,000	Trial	Positive	
 	Cencosud Internacional Limitada 	Shares transference cost 	27,010,215	Trial	Positive	
 	Cencosud Retail S.A. 	Deductible expenses income tax 	1,915,647	Trial	Positive	
 	Cencosud Retail S.A. 	First category income tax 	8,186,021	Trial	Positive	
 	Paris Administradora Sur Limitada	First category income tax 	3,768,171	Trial	Positive	
 	Paris Administradora Centro Limitada 	Deductible expenses, offsetting losses 	2,388,090	Trial	Positive	
 	Cencosud Retail S.A. 	Deductible expenses income tax 	3,305,773	Trial	Positive	
 	Sociedad Comercial de Tiendas S.A. 	 
Income tax 	332,015	Trial	Positive	
Peru 	Cencosud Perú 	VAT or G&S tax 	1,062,694	Trial	Positive	
Brazil 	Cencosud Comercial Ltda 	Income tax 	54,940,302	Trial	Positive	
 	Cencosud Comercial Ltda 	PIS & CONFIS [3] 	20,775,069	Trial	Positive	
 	Cencosud Comercial Ltda 	Different causes – Activities Tax 	14,074,871	Trial	Positive	
 
[1] Amount refers to tax payable or tax (rebate). Amounts may vary. Fines, interest, translations and adjustments shall be also updated up to payment date, if necessary
[2] Potential outcomes are provided for the legal advisors who carry the processes
[3] The PIS and COFINS are federal social contributions designed for funding the social security system in Brazil, which are based on company's gross revenues
 
The tax contingencies and taxation legal proceedings disclosed above are deemed to be of a positive outcome.

65
 
20                      	Stock options	
 
As of March 31, 2017 the Company has shared-based compensation plans for executives of Cencosud S,A, and affiliates which had no changes compared with December 31, 2016.
 
As at September 28, 2015 the Company launched the 2016 options plan. All the Executives have accepted this plan, and they have waived in respect to any previous existing plans as at September 28, 2015, which have not been exercised by them, including those not exercised because the respective terms have been met. The change in the plan was given a treatment for following the guidance of IFRS 2 “Share based payments”.

Numbers of shares

As of
 	
Stock options granted to key executives	 
3/31/2017
 	 
12/31/2016
 	
1) Outstanding as of the beginning of the period 	 
 
675,000

35,676,984
 	
2) Granted during the period 	 
 
-

-
 	
3) Forfeited during the period 	 
 
-

(1,080,000
)	
4) Exercised during the period (see note 15.1) 	 
 
-

(33,812,984
)	
5) Expired at the end of the period 	 
 
-

(109,000
)	
6) Outstanding at the end of the period 	 
 
675,000

675,000
 	
7) Vested and expected to vest at the end of the period	 
 
675,000

675,000
 	
8) Eligible for exercise at the end of the period 	 
 
40

40

Stock options—Impact in P&L	 
As of March
31, 2017
 	 
As of March
31, 2016

ThCh$
 	 
ThCh$
 	
Impact in the income statement 	 
 
1,096,628

3,739,726

In relation to the 2016, 2015 and 2014 Retention Plans, the outstanding options as of March 31, 2017 had a weighted-average contractual life of 0.18 years, 0.13 years and 0.07 years respectively. As of December 31, 2016 those options had a weighted-average contractual life of 0.25 years, 0.25 years and 0.10 years respectively.
 
The Company utilizes a valuation model that is based in a constant volatility assumption to value its employee share options. The fair value of each option grant has been estimated, as of the grant date, using the Black Scholes option pricing model.
 
The expected volatility is based on market data information. The calculation consisted of the determination of the standard deviation from the Company’s historical closing stock prices during a time horizon approximated to the relevant maturity.

66

21                      	Assets and liabilities classified as held for sale, and discontinued operations	
 
IFRS requires assets that meet the criteria to be classified as held for sale (a) to be measured at the lower of carrying amount and fair value less costs to sell, and depreciation on such assets to cease; (b) an asset classified as held for sale and the assets and liabilities included within a disposal group classified as held for sale to be presented separately in the statement of financial position; and (c) the results of discontinued operations to be presented separately in the statement of comprehensive income.
 
IFRS 5 requires that a company “restate” its statement of comprehensive income as if the operation had been discontinued for all prior periods presented.
 
As of March 31, 2017 and December 31, 2016 assets and liabilities are presented as non-current for disposal classified as “held for sale”. According to the disclosures required by IFRS 5, the balance is the following:
 
1) Balance of the assets and liabilities classified as non-current assets for disposal - “held for sale”, as of March 31, 2017 and December 31, 2016 are presented as follows:
 
Assets	 
3/31/2017
Unaudited
 	 
12/31/2016

ThCh$
 	 
ThCh$

 

 	
Current assets	 

 
 	
Other financial assets, current 	 
 
-

5,011
 	
Other non-financial assets, current 	 
 
140,616

134,502
 	
Trade receivables and other receivables, current 	 
 
326,616

929,937
 	
Inventories, current 	 
 
950,564

877,016

 

 

Total current assets 	 
 
1,417,796

1,946,466

 

 

Non-current assets	 

 	 

 	
Trade receivables and other receivables, non-current	 
 
-

8,879,073
 	
Property, plant and equipment 	 
 
59,978,639

43,359,091
 	
Investment property 	 
 
2,939,242

2,939,242

 

 

Total non-current assets 	 
 
62,917,881

55,177,406

 

 

Total non-current assets classified as held for sale	 
 
64,335,677

57,123,872

Liabilities	 
3/31/2017
Unaudited
 	 
12/31/2016

ThCh$
 	 
ThCh$

 

 	
Current liabilities	 

 
 	
Other financial liabilities, current 	 
 
347,301

1,842,529
 	
Trade payables and other payables, current 	 
 
2,930,314

2,802,909
 	
Other provisions, current 	 
 
82,277

78,699
 	
Current provision for employee benefits 	 
 
78,742

75,319

 

 

Total current liabilities 	 
 
3,438,634

4,799,456

 

 

Non-current liabilities	 

 	 

 	
Other financial liabilities, non-current 	 
 
3,513,473

10,869,777

 

 

Total non-current liabilities 	 
 
3,513,473

10,869,777

 

 

Total non-current liabilities classified as held for sale	 
 
6,952,107

15,669,233

 
67

Detail of the assets and liabilities classified as non-current assets for disposal as “held for sale” as of March 31, 2017, and December 31, 2016 are presented below:
 
a)	Sale of non-strategic assets: Pieces of land Chile	
 
A s of March 31, 2017, date of close of these financial statements, the Company remains committed to the plan of sale of undeveloped land in Chile. The process has been planned, defined and structured in conjunction with the Property and Shopping Divisions Management.
 
The assets included in this plan correspond to assets classified among Properties Plant and Equipment and Investment Property items, whose book value is expected to be recovered through the future sale, rather than continuing using them within business units that the company operates. The sale of these assets is considered highly probable, and is expected to be materialized during the next twelve months. Key management has initiated an active program with the necessary actions to conclude agreements of significant conditions, such as the price and timing of the transactions with unrelated third parties, and finally sell them within the defined term.
The Company has taken a number of administrative and operational plans to finalize the sale, therefore it has commissioned exclusively to the brokerage society “Colliers” to market these assets so. This company has extensive expertise in real estate and finance sectors.
 
Non-current assets and liabilities classified as held for sale as of March 31, 2017, and December 31, 2016 are presented as follows:
 
Property, plant and equipment; and Investment property held for sale	 
3/31/2017
Unaudited
 	 
12/31/2016

ThCh$
 	 
ThCh$

 

 	
Land 	 
 
32,437,651

16,570,947
 	
Facilities 	 
 
348,921

348,921
 	
Furnishings 	 
 
5,511

5,511
 	
Leased assets 	 
 
5,414,316

5,414,316
 	
Buildings 	 
 
4,456,863

4,456,863

 

 

Total property, plant and equipment 	 
 
42,663,262

26,796,558

 

 

Other financial liabilities, current and non-current - Leasing	 
 
(3,860,774
)	 
 
(3,860,774
)	

 

 
 	
Investment property 	 
 
2,939,242

2,939,242

Detailed assets, classified as held for sale, has been recognized at the lower of carrying amount and fair value less costs to sell, from the moment of the reclassification.
 
b)	Gas stations - Colombia	
 
Colombian gas stations, previously reported under the “supermarkets” segment in our financial statements, has been included within the assets and liabilities held for sale as of March 31, 2016, are presented as follows:
 
Gas stations - Colombia	 
3/31/2017
Unaudited
 	 
12/31/2016

ThCh$
 	 
ThCh$

 

 	
Other non financial assets, current 	 
 
140,616

134,502
 	
Trade receivables and other receivables, current 	 
 
326,616

312,416
 	
Inventories, current 	 
 
950,564

877,016
 	
Property, plant and equipment 	 
 
17,315,377

16,562,533
 	
Trade payables and other payables, non-current 	 
 
(2,930,314
)	 
 
(2,802,909
)	
Other provisions, current 	 
 
(82,277
)	 
 
(78,699
)	
Current provision for employee benefits 	 
 
(78,742
)	 
 
(75,319
)	

 

 
 	
Total gas stations classified as held for sale 	 
 
15,641,840

14,929,540

 
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The Company determined a plan for the sale of these assets, for which is expected to be completed in one year.
 
2) Sale of the Banco Paris business
 
On December 15, 2016, a contract was signed for the sale and transfer of assets and for the transfer and assumption of liabilities between Banco Paris and Banco Scotiabank Chile, where Banco Paris sells, and transfers to Scotiabank a set of mortgage loans granted By Banco Paris to different debtors, a set of assets originated in the acquisition of mortgage bonds issued by Banco Paris under the terms of Chapter 9-1 of the updated SBIF and II. A.1 of the Compendium of Financial Regulations of the Central Bank of Chile and other financial investments made by Banco Paris, all of them net of the corresponding provisions. The sale, assignment and transfer of the assets object of this instrument will be perfected on the closing date, as this term will be defined later by the parties. The sale, assignment and transfer of the assets object of this instrument were formally completed on January 1, 2017.
 
Assets and liabilities held for sale allocated within the Banco Paris business as of December 31, 2016 are presented according to the following detail:
 
Banco Paris	 
12/31/2016
ThCh$

 
 	
Other financial assets, current 	 
 
5,011
 	
Trade receivables and other receivables, current 	 
 
617,521
 	
Trade receivables, non-current 	 
 
8,879,073
 	
Other financial liabilities, current 	 
 
(1,495,228
)	
Other financial liabilities, non-current 	 
 
(7,356,304
)	

 
 	
Net value of Banco Paris classified as held for sale	 
 
650,073

 
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22                      	Subsequent events	
 
●	The Ordinary Shareholders Meeting held on April 28, 2017, defined a final dividend of $30 per share in relation to the 2016 net distributable profits. The payment of the mentioned dividend will be made from May 17, 2017.	
 
●	On April 28, 2017, the Board of Directors has defined to apply for a voluntary delisting of its ADRs from the NYSE, in connection with the intention to terminate the ADR facility, and deregister with the Securities and Exchange Commission.	
 
ADR holders will be entitled to surrender their ADRs to Bank of New York Mellon for cancellation, and upon payment of the applicable fees, taxes and charges as provided in the deposit agreement, receive the underlying shares of common stock of Cencosud. Cencosud will maintain its listings on the Santiago Stock Exchange, the Chile Electronic Stock Exchange, and the Valpara’so Stock Exchange.

Between the date of issuance of these condensed consolidated financial statements and the filing date of this report, management is not aware of any other subsequent events that could significantly affect the consolidated financial statements.

 
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