As filed with the Securities and Exchange Commission on May 15, 2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)
o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2014
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Date of event requiring this shell company report For the transition period from          to

Commission File number 001-13358

Viña Concha y Toro S.A.

(Exact name of Registrant as specified in its charter)

Concha y Toro Winery Inc.

(Translation of Registrant’s name into English)

Republic of Chile

(Jurisdiction of incorporation or organization)

Casilla 213

Nueva Tajamar 481

Torre Norte, Piso 15

Santiago, Chile

(562) 2476-5000

(Address and telephone number of principal executive offices)

Patricio Garretón

(562) 2476-24765768

patricio.garreton@conchaytoro.cl

Nueva Tajamar 481

Torre Norte, Piso 15

Santiago, Chile

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
American Depositary Shares (“ADS”), each representing 20 Shares of common stock	New York Stock Exchange
Shares of common stock (“Shares” or “Common Stock”), without nominal (par) value, of Viña Concha y Toro S.A.	New York Stock Exchange*

Securities registered or to be registered pursuant to Section 12(g) of the Act.	None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.	None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Shares of common stock without nominal (par) value	747,005,982
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x    No o 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o    No x 

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes x    No o 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232,405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x    No o 

Indicate by check mark whether the Registrant is large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  

Large accelerated filer x Accelerated filer o Non-accelerated filer o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

o U.S. GAAP	x International Financial Reporting Standards as issued	o Other
	by the International Accounting Standards Board

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

o Item 17   o Item 18 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o    No x 

* Not for trading, but only in connection with the registration of ADS.

ITEM 1:	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS	2
ITEM 2:	OFFER STATISTICS AND EXPECTED TIMETABLE	2
ITEM 3:	KEY INFORMATION	2
ITEM 4:	INFORMATION ON THE COMPANY	14
ITEM 4A:	UNRESOLVED STAFF COMMENTS	45
ITEM 5:	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	46
ITEM 6:	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	65
ITEM 7:	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	75
ITEM 8:	FINANCIAL INFORMATION	80
ITEM 9:	THE OFFER AND LISTING	82
ITEM 10:	ADDITIONAL INFORMATION	83
ITEM 11:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	100
ITEM 12:	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	104
ITEM 13:	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	105
ITEM 14:	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	105
ITEM 15:	CONTROLS AND PROCEDURES	105
ITEM 16.A.	AUDIT COMMITTEE FINANCIAL EXPERT	106
ITEM 16.B:	CODE OF ETHICS	106
ITEM 16.C:	PRINCIPAL ACCOUNTANT’S FEES AND SERVICES	107
ITEM 16.D:	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	107
ITEM 16.E:	PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	107
ITEM 16.F:	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	107
ITEM 16.G:	CORPORATE GOVERNANCE	108
ITEM 17*:	FINANCIAL STATEMENTS	110
ITEM 18:	FINANCIAL STATEMENTS	110
ITEM 19	EXHIBITS	111

* The Registrant has responded to Item 18 in lieu of this Item.

-iii-

CERTAIN DEFINED TERMS

Unless otherwise specified, all references to “U.S. dollars,” “dollars” or “US$” are to United States dollars and all references to “Chilean pesos,” “pesos” or “Ch$” are to Chilean pesos. “UF” refers to the Unidad de Fomento, an accounting unit used in Chile. The exchange rate between the UF and the Chilean Peso is constantly adjusted to inflation so that the value of the Unidad de Fomento remains constant. Viña Concha y Toro S.A. (“Concha y Toro” or the “Company”), a corporation (sociedad anónima abierta) formed under the laws of the Republic of Chile (“Chile”), publishes its consolidated financial statements in Chilean pesos. The audited consolidated balance sheets of the Company and its subsidiaries as of December 31, 2014, December 31, 2013 and 2012 and the related consolidated statements of income, changes in shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2014 (the “Consolidated Financial Statements”) contained in Item 18. Unless otherwise specified, financial information regarding the Company is presented in constant Chilean pesos as of December 31, 2014 based on International Financial Reporting Standard (“IFRS”) as issued by the International Accounting Standards Board. Amounts in tables appearing in this Annual Report may not total due to rounding. “The Exchange Act” refers to the U.S. Securities Exchange Act of 1934.

Glossary of Special Terms

Lees: Sediment composed of dead yeast cells and other particles remaining in wine after fermentation. Red wine is transferred off this sediment. Some white wines are left on their lees (sur lie) to add flavor and complexity.

Maceration: Refers to period during which the must or wine remains in contact with the grape skins. Alcohol acts as a solvent, extracting color, tannin and aroma from the skins.

Malic Acid: Component of wine. Accounts for green and sour taste of wine made from unripe grapes. See “malolactic fermentation.”

Malolactic fermentation: Conversion by bacteria (not yeast) of malic acid into lactic acid. Softens wine and reduces overall acidity. A process now applied to all red wines, but not all white wines.

Must: Freshly crushed grape juice (with or without skins), pre-fermentation.

Table Wines: Non-sparkling wines with at least 11.5% alcohol by volume, which are traditionally consumed with food.

Vinífera: Of, relating to or being derived from premium grapes used in wine making.

Viniculture/Viticulture: The cultivation of grapes.

UF: The UF (Unidad de Fomento) is an inflation-indexed, peso-denominated monetary unit. The UF rate is set daily in advance, based on the change in the Chilean Consumer Price Index of the previous month. 

Units of Measure
1 Case	=	9 Liters
Centigrade	=	5/9 (Fahrenheit° - 32)
1 Hectare	=	2.47 Acres
1 Kilogram	=	2.2 Pounds
1 Kilometer	=	.62 Miles
1 Liter	=	1.057 Quarts
1 Milliliter	=	1/1000 Liter
1 U.S. Ton	=	2,000 Pounds or 907 Kilograms

TRADEMARKS

This Annual Report includes trademarks, such as “Casillero del Diablo®”, “Fetzer®” and “Bonterra®,” which are protected under applicable intellectual property laws and are the property of the Company. This Annual Report also contains trademarks, service marks, trade names and copyrights, of other companies, such as “Miller® beer” and “Johnnie Walker® whisky” which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this Annual Report may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that the Company will not assert, to the fullest extent under applicable law, its rights or the right of the applicable licensor to these trademarks and trade names.

FORWARD-LOOKING STATEMENTS

This Annual Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations and business of the Company and certain plans and objectives of the Company with respect to these items. Forward-looking statements contained in this Annual Report may be identified by the use of forward-looking terminology, such as “anticipate,” “continue,” “estimate,” “expect,” “intend,” “may,” or the negative thereof or other variations thereon or comparable terminology. In particular, among other statements, certain statements in Item 4  — “Information on the Company — Business Overview” with regard to management objectives, trends in market shares, market standing and product volumes and the statements in Item 5  — “Operating and Financial Review and Prospects” and Item 11  — “Quantitative and Qualitative Disclosures About Market Risk,” with regard to trends in results of operations, margins, overall market trends, interest rates and exchange rates are forward-looking in nature. By their nature, forward-looking statements involve risks, uncertainty, assumptions and other factors which could cause actual results, including the Company’s financial condition and profitability, to differ materially and be more negative than the results herein described.

There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, the risk factors identified in Item 3  — “Key Information — Risk Factors” of this Annual Report and in the Company’s Registration Statement on Form F-1, filed with the Securities and Exchange Commission on October 13, 1994 (No. 33-84298) and incorporated by reference hereto, levels of consumer spending in major economies, changes in consumer tastes and preferences, the levels of marketing and promotional expenditures by the Company and its competitors, raw materials and employee costs, future exchange and interest rates, changes in tax rates and future business combinations or dispositions, and the extent to which the Company can continue to plant vines and developing corresponding infrastructure.

ITEM 1: IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2: OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3: KEY INFORMATION

Selected Historical Financial Data

The selected consolidated financial data, under the captions “Consolidated Statement of Income Data,” for the years ended December 31 2014, 2013 and 2012, and “Consolidated Statements of Financial Position Data,” as of December 31, 2014 and 2013 has been derived from and should be read in conjuction with the Company´s Consolidated Financial Statements prepared in accordance with IFRS, which is included in Item 18 of this Annual Report. The selected consolidated financial data, under the captions “Consolidated Statements of Income Data,” for the years ended December 31 2011 and 2010, and “Consolidated Statements of Financial Position Data,” as of December 31, 2012, 2011and 2010 has been derived from the Company’s consolidated financial statements prepared in accordance with IFRS, which is not included in Item 18 of this Annual Report. This selected consolidated financial data also should be read in conjunction with the Consolidated Financial Statements including the notes thereto (the “Notes”), included in Item 18 herein and the statements in Item 5 — “Operating and Financial Review and Prospects”. All information is presented in Chilean pesos.

2

As of and for the Year Ended December 31,

	2014			2013			2012			2011			2010
	Ch$			Ch$			Ch$			Ch$			Ch$
(Expressed in millions of constant Ch$,
except financial ratios and Shares and per Share amounts)
Consolidated Income Statement Data
Income from ordinary activities		583,313			475,622			448,250			422,735			374,019
Operating income (1)		64,991			37,506			37,288			61,179			46,023
Non-operating income (expense), net (2)		(8,592	)		4,865			3,480			2,344			5,619
Gain (loss) attributable to equity holders of the controller		37,398			33,174			30,022			50,482			41,919
Gain (loss) attributable to equity holders of the controller per Share		50.06			44.41			40.19			67.58			56.12
Gain (loss) attributable to equity holders of the controller per ADS(3)		1,001.3			888.2			803.8			1,351.6			1,122.3
Dividend declared per Share(34)		24.00			18.90			16.10			26.00			22.45
Weighted average number of Shares Outstanding(5)		747,005,982			747,005,982			747,005,982			747,005,982			747,005,982
Consolidated Statements of Financial Position Data
Total current assets		473,925			434,356			447,628			372,484			274,821
Total assets		918,011			849,863			856,113			774,130			585,559
Total current liabilities		212,646			196,709			225,080			167,858			133,563
Other non-current financial liabilities		216,322			185,270			169,586			177,715			49,959
Equity  attributable to the owners of the controlling entity		442,981			429,215			423,877			398,504			370,675
Issued Capital		84,179			84,179			84,179			84,179			84,179
Selected Financial Ratios(6)
Operating margin		11.1	%		7.9	%		8.3	%		14.5	%		12.3	%
Net Margin		6.4	%		7.0	%		6.7	%		11.9	%		11.2	%
Financial debt to equity		62.7	%		59.0	%		64.3	%		57.9	%		21.8	%
Debt to capitalization		38.5	%		37.1	%		39.2	%		36.7	%		17.9	%

(1) Includes Gross Profit, Distribution cost and Administrative expenses and Other Income by Function.

(2) Includes Other expenses by function, Financial Income, Financial expense, Equity in income of associates and joint ventures accounted for using the equity metod net of tax, Foreign currency exchange gain and Income (expenses) by adjustment units.

(3) Determined by multiplying per share amounts by 20 (1ADS = 20 Shares).

(4) Dividends per share are espressed in historical pesos and correspond to interim and final dividend charged against net income of the corresponding fiscal year.

(5) Calculated on the basis of the number of shares outstanding and fully paid together with the pro-rata portion of the number of share outstanding but not yet fully paid for each period.

(6) These ratios, which are expressed as percentages , were calculated as follows: Operating margin = (Operating income)/(Income from ordinary activities); Net Margin = (Gain (loss) attributable to equity holders of the controller)/(Income from ordinary activities); Financial debt to equity = (Other current financial liabilities plus Other non-current financial liabilities)/(Equity attributable to the owners of the controlling entity); Debt to capitalization = (Other current financial liabilities plus Other non-current financial liabilities)/(Other current financial liabilities plus Other non-current financial liabilities plus Equity attributable to the owners of the controlling entity). Ratios presented have been rounded.

3

Unless otherwise indicated, U.S. dollar equivalent information, except export figures, for information in Chilean pesos, is based on the Observed Exchange Rate for December 31, 2014, which was Ch$606.75 per U.S. dollar. No representation is made that the Chilean peso or U.S. dollar amounts shown herein could have been or could be converted into U.S. dollars or Chilean pesos, as the case may be, at any particular exchange rate or at all.

Exchange Rates

Banco Central de Chile (the “Central Bank of Chile”) authorizes three types of exchange rates in Chile: (i) a reference rate set by the Central Bank of Chile, (ii) a rate set in the formal institutional market for foreign exchange currency and (iii) a rate set in a less regulated informal market for foreign exchange.

Pursuant to Law 18840, the Central Bank of Chile sets the dólar acuerdo, which is a forecast of exchange rates used as a reference exchange rate (the “Reference Exchange Rate”). The Reference Exchange Rate is published by the Central Bank of Chile for each day of the next month based on the following considerations: (i) the previous month’s domestic inflation rate, (ii) a factor for international inflation and (iii) a formula pegged to the U.S. dollar, the Japanese yen and the Euro. These three currencies were chosen because they are the currencies of Chile’s principal trading partners.

The Central Bank of Chile also authorizes commercial banks and certain other entities to conduct foreign exchange transactions on a free market basis (the “Formal Exchange Market”). The daily average exchange rate (the “Observed Exchange Rate”) at which transactions are carried out in the Formal Exchange Market is published daily in Chilean newspapers. Prior to September 2, 1999, participants of the Formal Exchange Market were authorized to carry out their transactions within a specified range above or below the Reference Exchange Rate (the “Exchange Band”). As of September 2, 1999, the Central Bank of Chile eliminated the Exchange Band, allowing the exchange rate to fluctuate freely. The Central Bank of Chile has announced a policy to intervene in the Formal Exchange Market only in certain exceptional cases, which interventions will be publicly disclosed. The Observed Exchange Rate as of February 28, 2015 was Ch$618.76 per U.S. dollar.

The Mercado Cambiario Informal (the “Informal Exchange Market”) is a currency market comprised of exchange houses and money changers in Chile. The Informal Exchange Market reflects the supply and demand for foreign currency and the rate of exchange in the Informal Exchange Market can fluctuate freely, above or below the Observed Exchange Rate. Since 1990, the rate of exchange for pesos into U.S. dollars in the Informal Exchange Market has been similar to that in the Formal Exchange Market.

The following table sets forth the annual high, low, average and year-end Observed Exchange Rates for U.S. dollars for each year indicated and for each month during the previous six months, as reported by the Central Bank of Chile. The Federal Reserve Bank of New York does not report any buying rate for Chilean pesos.

4

Annual High, Low, Average and Year-End
Observed Exchange Rate

			Ch$ per US$
Year	High(1)		Low(1)		Average (2)		Period-end
2008		676.75		431.22		521.79		636.45
2009		643.87		491.09		559.67		507.1
2010		549.17		468.01		509.98		468.01
2011		533.74		455.91		483.57		519.2
2012		519.69		469.65		486.59		479.96
2013		533.95		466.50		495.18		524.61
2014		621.41		527.53		570.34		606.75
September, 2014		601.66		585.29		593.88		599.22
October, 2014		598.64		576.50		588.95		576.50
November, 2014		605.46		580.62		593.91		605.46
December, 2014		621.41		606.75		612.98		606.75
January, 2015		632.03		612.47		622.11		632.03
February, 2015		632.19		616.86		622.95		618.76

(1)	Exchange rates are the actual high and low, on a day-by-day basis, for each period.
(2)	The average of the daily rates during the period.
Source: Central Bank of Chile.

Risk Factors

Risks Relating to the Company

Agricultural Risks. Wine-making and grape-growing are subject to a variety of agricultural risks. Diseases, pests, drought, frosts and certain other weather conditions can materially and adversely affect the quality, quantity and cost of grapes available to the Company from its own vineyards and from third party suppliers, thereby materially and adversely affecting the supply of the Company’s products and its profitability.

The 2012-2013 season was characterized by normal climatic conditions, absence of rain and a long harvest period. The harvest in 2013 was the most fruitful in Chilean history with 1,281 million liters, a 2.1% increase from 2012. The 2013-2014 season in general was characterized by normal weather conditions except for a frost that took place during September of 2013 in the coastal valleys. The frost impacted early grapes, mainly the white ones, affecting the volume of the 2014 harvest. Regarding volumes, the harvest was down by 22% in comparison with 2013. Future frost or drought conditions in Chile could severely affect the quantity or quality of the production of wine by the Company. See Item 4  — “Information on the Company — Chilean Wine Industry Overview.”

Phylloxera, a pest which attacks the roots of grapevines, has widely infested vineyards outside of Chile but to date has never been found in Chilean vineyards. The Company, like most Chilean wine grape growers, still uses the French root varieties which are susceptible to phylloxera. While the Company carefully screens new root stock for signs of infestation and adheres to the regulations imposed by the Servicio Agrícola y Ganadero (the “Chilean Agriculture Service”) requiring that all vegetation introduced into Chile be isolated and under observation for a period of two years, there can be no assurance that the Company’s vineyards and other Chilean vineyards will continue to be phylloxera-free. Infestation could have a material adverse effect on the Company while vineyards are being replanted and as they come into full production. See Item 4 — “Information on the Company — Chilean Wine Industry Overview — Phylloxera.”

5

Risks Associated with Higher Taxes, Tariffs. The Company’s core business is the production and sales of wines. Wines are subject to a number of taxes and tariffs, including excise taxes in the United States, in the United Kingdom and in the Company’s other principal export markets. Increases in such taxes and tariffs could depress wine consumption in those markets and could adversely affect the Company’s sales.

In addition, there is a risk that other countries could impose or threaten to impose restrictions on imports of certain countries’ wines in connection with trade negotiations with such countries. Although Chile has not been the specific target of such actions or threats from the United States, the European Union or other countries, if restrictions were imposed on Chilean wines, they could have a material adverse effect on the Company.

Increases in Chilean taxes on wine could also adversely affect the Company’s wine sales in Chile. During the first quarter of 2014, the government sent a tax reform project to be discussed in congress. The Tax Reform was published in September 29^th, 2014 and increased the excise tax on wine sales from 15% to 20.5%, a 5.5% increase. This increase took effect on October 1^st, 2014, affecting wine sales for the fourth quarter of 2014.

Risk Associated with Change in Tax Law and Interpretation. The Company and its subsidiaries are subject to tax laws and regulations in Chile, the United States, Argentina and numerous jurisdictions in which they operate. These laws and regulations are inherently complex and the Company and its subsidiaries are (and have been) obligated to make judgments and interpretations about the application of these laws and regulations to the Company and its subsidiaries and their operations and businesses. The interpretation and application of these laws and regulations could be challenged by the relevant governmental authority, which could result in administrative or judicial procedures, actions or sanctions, which could be material. 

Government Regulation. The production and sale of wine is subject to extensive regulation within and outside of Chile. Those regulations control matters such as licensing requirements, trade and pricing practices, permitted and required labeling, advertising and relations with wholesalers and retailers. For example, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives requires that any statements made by a wine producer promoting the potential health benefits of wine must be balanced and must include appropriate statements regarding the established harmful effects of alcohol use. In recent years, U.S. federal and state regulators have required warning labels and signage. Currently the Chilean Congress is discussing a new law that will regulate labeling of alcoholic beverages in Chile. There can be no assurance that new or revised regulations or increased licensing fees and related requirements will not have a material adverse effect on the Company’s business and its results of operations. See Item 4 — “Information on the Company — Government Regulation.” Future expansion of the Company’s existing facilities and development of new vineyards and wineries may be limited by present and future zoning ordinances and other legal requirements. Availability of water and requirements for handling waste water can limit the Company’s growth. While the Company believes that it will continue to be in compliance with all applicable environmental regulations, there can be no assurance that future legislative or regulatory developments will not impose restrictions which would have a material adverse effect on the Company. See Item 4  — “Information on the Company — Government Regulation.”

Dependence on Distributors. The Company relies on distributors to sell its products in export markets. As of December 31^st, 2014, 33.7% of the Company’s sales were driven by third party distributors.

In 2014 and 2013 the largest distributor was Mitsubishi Corporation (“Mitsubishi”) which serves the Japanese market. Sales to Mitsubishi represented 3.9% of the Company’s total export revenues in 2014 and 3.9% in 2013; and 2.6% and 2.5% of total revenues in 2014 and 2013, respectively. Sales to the Company’s five largest distributors, excluding Banfi, represented 11.3% and 11.6% of total export revenues in 2014 and 2013, respectively. The Company has written agreements with most of its distributors—usually one– to two–year terms, automatically renewable. In addition, the Company’s strategy to expand sales in major export markets is to a large extent dependent on the performance of its distributors. See Item 4  — “Information on the Company — Business Overview — Company Sales — Export Markets — Distribution in Export Markets.”

6

Distributors and retailers of the Company’s products often offer wines which compete directly with the Company’s products for shelf space and consumers. Accordingly, there is a risk that these distributors or retailers may give higher priority to products of the Company’s competitors. In this context, the Company has appointed certain partners exclusive distributors of the products in the corresponding territories. Additionally, the Company, in certain circumstances (as permited by local competition law), has negotiate contractual obligations, prohibiting the relevant distributor to sell other Chilean or Argentinian products in the territory. There can be no assurance that the Company’s distributors and retailers will continue to purchase the Company’s products or provide the Company’s products with adequate levels of promotional support. See Item 4  — “Information on the Company — Business Overview — Company Sales — Export Markets — Distribution in Export Markets.”

Dependence on Suppliers. The Company relies on Cristalerías de Chile S.A. (“Cristalerías”) to supply almost all of its bottle requirements. Cristalerías is a principal shareholder of one of the Company’s main competitors, Viña Santa Rita S.A. (“Santa Rita”). Although there are another two suppliers of bottles with smaller capacities. an interruption in the supply of bottles from Cristalerías to the Company for any reason could result in a short-term material adverse effect on the Company’s operations.

The Company has a license from Tetra Pak de Chile Comercial Ltda. (“Tetra Pak Chile”) to package wine in Tetra Brik packages and purchases these unassembled pre-printed packages from Tetra Pak Chile. Wine sold in Tetra Brik packages accounted for approximately 59.3% and 41.0% of the Company’s domestic sales by volume and value, respectively in 2014; and 59.8% and 42.5%, respectively in 2013. Although the Company believes that alternate suppliers are available, an interruption in the supply of Tetra Brik packages to the Company for any reason could result in a short-term materially adverse effect on the Company’s operations. See Item 4  — “Information on the Company — Business Overview — Bottling.”

The Company currently relies on approximately 900 outside vineyards for grape supplies and approximately 32 producers for bulk wine. In 2014, approximately 53.2%, of the grapes used in the production of the Company’s premium, varietal and, bi-varietal wines were purchased by the Company from independent growers in Chile. Additionally, in 2014, the Company purchased grapes and bulk wine required to produce approximately 75.6% of the popular wines sold by the Company. Most of the Company’s agreements with growers only cover one to two year’s production and are renewed from year to year. In 2014, the Company had long-term contracts with up to approximately 22.5% of its growers.

Disruptions of supplies of grapes or wine or increases in prices from these outside suppliers could have a material adverse effect on the Company’s results of operations.

Competition. The wine industry in Chile and in the Company’s export markets are intensely competitive. In Chile and in approximately 144 another countries, the Company’s wines compete with wines and other beverages from Chile and other countries. Chilean wines, in general, compete with wines produced in the United States, Europe, Australia, South Africa, South America and New Zealand. In addition, the Company’s wines compete with other beverages including soft drinks, liquors, beer and, in Chile, pisco (a Chilean grape spirit). Many of the Company’s competitors in Chile and abroad have significantly greater financial resources than the Company.

Due to competitive factors, the Company may not be able to increase prices of its wines in line with rising grape and bulk wine purchase prices, or farming, vinification, selling and promotional costs. See Item 5  — “Operating and Financial Review and Prospects.” There can be no assurance that in the future the Company will be able to compete successfully with its current competitors or that it will not face greater competition from other wineries and beverage manufacturers. See Item 4  — “Information on the Company — Company Sales — Chilean Markets — Local Competition” and “— Company Sales — Export Markets — Export Sales and Competition.”

Dependence on Consumer Spending. The success of the Company’s business depends on a number of factors which may affect the level of consumer spending and consumer spending patterns in Chile and in the Company’s export markets, including the general state of the economy, tax rates, the deductibility of business entertainment expenses under applicable tax laws and consumer preferences, confidence and income. As widely reported, the worldwide and Chilean economies have experienced adverse conditions in the past and may be subject to further deterioration for the foreseeable future, due to the slow pace of the economic recovery worldwide. The Company is subject to risks associated with these adverse conditions. These conditions include economic slowdown and its impact on consumer spending in Chile and in the Company’s export markets which in turn can affect the quantity and price of wines that customers are willing to purchase. Such changes may result in reduced demand and lower prices for the Company’s products, limitations on the Company’s ability to pass through increased taxes and higher product costs to price-sensitive consumers, increased levels of selling and promotional expenses and decreased sales of the Company’s higher-priced premium and varietal wines. Consequently, changes in consumer spending could have a materially adverse effect on the Company. See Item 5  — “Operating and Financial Review and Prospects.”

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Acquisitions and Dispositions. The Company occassionally engages in acquisitions of businesses and additional brands. We cannot assure that we will be able to find and purchase businesses at acceptable prices and terms. The Company also faces risks involved in integrating acquired businesses and personnel into the Company’s existing systems and operations, and to bring them into conformity with our trade practice standards, financial control environment and reporting requirements. Integration involves significant expense and management time and attention, and may otherwise disrupt the Company’s business. Brand or business acquisitions also may expose the Company to unknown liabilities, the possible loss of key customers and/or employees knowledgeable about the acquired business, and risks associated with doing business in countries or regions outside Chile and their respective political climates, and legal systems and/or economies, among other risks. Acquisitions could cause the Company to incur additional debt and related interest expenses, issue additional shares, and become exposed to contingent liabilities, as well as to experience dilution in earnings per share and reduction in return on average invested capital. The Company may incur future restructuring charges or recognize impairment losses on the value of goodwill and/or other intangible assets resulting from previous acquisitions, and may not achieve expected synergies, cost savings or other targets, all of which may negatively affect financial results.

From time to time, the Company evaluates potential dispositions that may no longer meet our growth, return and/or strategic objectives; such dispositions may impact the Company’s financial results, and we cannot predict the terms or conditions of such dispositions, nor expect to find acceptable buyers in a timely manner. Expected cost savings from reduced overhead relating to the sold assets may not materialize, and the overhead reductions could temporarily disrupt the Company’s other business operations. Any of these outcomes could impact the Company’s financial results.

Difficulty of Enforcing Judgments Under U.S. Federal Securities Laws.

The ability of a purchaser of American Depositary Shares (“ADS”) of the Company to enforce judgments under the U.S. federal securities laws against the Company or its directors and executive officers may be limited by several factors.

The Company is a sociedad anónima abierta (an “open stock corporation”) organized under the laws of Chile. All of the Company’s directors and officers and many of its advisors reside outside of the United States (principally in Chile). A significant portion of the assets of the Company and of these persons are located outside of the United States. However, since 2011 the Company has owned 100% of VCT USA Inc., which owns all assets of Fetzer Vineyards (an important vineyard in the U.S. market.). Since 2013 it has also owned 50% of the property of Excelsior Wine Company (a U.S. wine distributor). As a result, investors can effect service of process within the United States on the Company or its officers, directors or advisors, or enforce judgments obtained in U.S. courts that are based on U.S. federal securities law against the Company or its officers, directors, or advisors in U.S. courts.

The Company has been advised by its Chilean counsel, Baker & McKenzie Ltda., that no treaty exists between the United States and Chile for the reciprocal enforcement of foreign judgments issued by ordinary courts (except for awards issued by foreign arbitral courts, where the UN New York Convention may apply). Chilean courts, however, have enforced judgments rendered by U.S. courts without reviewing the merits of the subject matter in the case, provided that the Chilean court enforcing the judgment determines that the US. Court rendering the judgment has respected certain basic principles of due process and public policy. Those principles are basically that (a) the judgment does not contain anything contrary to the laws of Chile, notwithstanding differences in procedural rules, (b) the judgmentis not in conflict with Chilean jurisdiction, (c) the defeated party has been duly served of the claim regarding which the judgment was issued, and (d) the judgment is final under the laws of the relevant foreign jurisdiction rendering such judgment. Nevertheless, the Company has been advised by Baker & McKenzie Ltda. that a judgment rendered by a U.S. court will be considered to conflict with Chilean jurisdiction if it in any way affects properties located in Chile, which are as a matter of Chilean law subject to the laws of Chile and to the jurisdiction of Chilean courts. Because judgments entered by U.S. courts with respect to Chilean securities may be considered by Chilean courts as a judgment affecting properties located in Chile, there is a risk that such judgments may be unenforceable in Chile even if based on the civil liability provisions of U.S. securities laws, notwithstanding the ability of the judgment holder to enforce the U.S. judgment against assets in the U.S.

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If a claim is initiated in Chile, Chilean law provides that all legal actions brought by shareholders of an open stock corporation, in their capacity as such, or legal action among shareholders and the company, must be submitted to arbitration in Chile, with the exception of shareholders who individually hold, directly or indirectly, shares or securities with a book or market value equal to or lower than the equivalent to 5,000 Unidades de Fomento. Those shareholders may choose to submit their claims with the competent ordinary courts in Chile. In the case of an arbitration proceeding, the Company’s by-laws (the “By-Laws”) state that the arbitrator will be appointed by mutual consent of both parties. If the parties cannot select an arbitrator acceptable to both, an arbitrator will be appointed by the ordinary courts of Chile who must have to have served during the last 3 years as an assistant member of the Chilean Supreme Court. The By-Laws also provide that the arbitrator must act as an arbitrator ex aequo et bono, who under Chilean law would not be required to apply any particular body of law or procedures (except as a matter of public policy) and who would be authorized to decide the matter in accordance with his or her view of what is just and equitable. However, holders of an ADS who decides to file claim in Chile must take into account that, whether they seek relief in ordinary courts or in an arbitration tribunal, their claims must be based on a violation of Chilean laws, even the a Chilean judge or arbitrator may take into account potential violations the U.S. federal securities law as additional background information.

Seasonality. The wine industry in general and the Company in particular, have historically experienced and expect to continue to experience, seasonal fluctuations in revenues and net income. In the past, the Company has had lower sales and net income during the first quarter and higher sales and net income during the third and fourth quarters. The Company expects this trend to continue. Sales can fluctuate significantly between quarters, depending on the timing of certain holidays and promotional periods and on the rate at which distributor inventories are depleted through sales to wine retailers. Sales volume tends to decrease if distributors begin a quarter with larger inventory levels, which is typically the case in the first quarter of each year. See Item 4  — “Information on the Company — Business Overview — Seasonality.”

Risks Related to the ADS and Shares of Common Stock

Passive Foreign Investment Company Status of the Company. Based on the market price of the ADS and shares of Common Stock and the value and composition of the Company’s assets, the Company does not believe it was a “passive foreign investment company” for U.S. federal income tax purposes (a “PFIC”) its most recent taxable year. However, the application of the PFIC rules is subject to uncertainty in several respects, and there is no assurance that the Company will not be a PFIC for any taxable year. A non-U.S. corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. A separate determination must be made after the close of each taxable year as to whether the Company was a PFIC for that year. Because the value of the Company’s assets for purposes of the PFIC test will generally be determined by reference to the market price of the the ADS and shares of Common Stock, fluctuations in the market price of the Common Stock and ADS may cause the Company to become a PFIC. In addition, changes in the composition of the Company’s income or assets may cause the Company to become a PFIC. If the Company is a PFIC for any taxable year during which a U.S. Holder (as defined in Item 10, “Additional Information—Taxation—United States”) holds the ADS or shares of Common Stock, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. For example, such U.S. Holder may incur a significantly increased U.S. federal income tax liability on the receipt of certain distributions on the ADS or shares of Common Stock or on any gain recognized from a sale or other disposition of the ADS or shares of Common Stock. See Item 10, “Additional Information—Taxation—United States—Passive Foreign Investment Company.” 

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Risks Relating to Chile

Dependence on the Chilean Economy. As of December 2014, 67% of the Company’s total assets were located in Chile. In 2014 and 2013, sales of wine and other Company products in the Chilean market accounted for approximately 18.7% and 20.5%, respectively, of the Company’s total revenues. Historically, domestic wine sales have showed a high degree of correlation with the economic situation prevailing in a country. Accordingly, the Company’s financial condition and results of operations are dependent to a significant extent upon economic conditions prevailing in Chile. The main Chilean indicators for 2014 and 2013 were:

· Real GDP increased 1.9% in 2014 and increased 4.2% in 2013.

· Private consumption grew 2.2% in 2014 and 5.9% in 2013.

· The unemployment rate was 6.0% and 5.7% in December 2014 and 2013, respectively. As of February 2015, the unemployment rate was 6.1%, compared to 6.1% in February 2014.

· As a percentage of GDP, investment in fixed assets was 24.0% in 2014 and 26.1% in 2013.

Source: Central Bank of Chile.

The Company’s financial condition and results of operations could also be adversely affected by changes over which the Company has no control, including:

· the economic or other policies of the Chilean government, which substantially influences many aspects of the private sector;

· other political or economic developments in or affecting Chile; and

· regulatory changes or administrative practices of Chilean authorities.

The Company’s financial condition and results of operations also depend to some extent on the level of economic activity in both Latin American and other countries. Although economic conditions are different in each country, investors’ reactions to developments in one country may affect the securities of issuers in other countries, including Chile.

Volatile and Illiquid Nature of the Market for the Common Stock in Chile. The Common Stock of the Company is traded on the Bolsa de Comercio de Santiago (the “Santiago Stock Exchange”), the Bolsa Electrónica de Chile and the Bolsa de Corredores de Valparaíso — Bolsa de Valores (collectively, the “Chilean Exchanges”). The Chilean securities markets are substantially smaller, less liquid and more volatile than major securities markets in the United States. The Santiago Stock Exchange, which is Chile’s principal exchange and which accounted for approximately 92.2% of Chile’s equity trading volume in 2014, had a market capitalization of approximately Ch$ 141,545 billion (approximately US$233.0 billion) as of December 31, 2014 and an average monthly trading of Ch$ 1,642 billion (approximately US$2,704 million). The ten largest companies in terms of market capitalization represented approximately 45.1% of the aggregate market capitalization of the Santiago Stock Exchange as of December 31, 2014. Daily share trading volumes on the Santiago Stock Exchange are on average substantially lower than those on the principal national securities exchanges in the United States. The ten most widely-traded stocks in terms of trading volume accounted for approximately 39.4% of all trading volume on the Santiago Stock Exchange in 2014. During 2014, around 54.7% of the securities listed on the Santiago Stock Exchange traded an average of 85% or more of the trading days.

In addition, the Chilean securities markets may be affected by developments in other emerging markets, particularly other countries in Latin America.

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Currency Fluctuations. The Chilean peso has been subject to large fluctuations in value in the past, most recently during the past five year period and may be subject to significant fluctuations in the future. See Item 3  — “Key Information — Exchange Rates.” Fluctuations in the exchange rate between the Chilean peso and other currencies affect the performance of the Company’s ADS and the Company’s financial condition and results of operation in a variety of ways.

Because the ADS are denominated in U.S. dollars, a decrease in the value of the Chilean peso relative to the U.S. dollar may adversely affect the value of the Company and its Common Stock underlying the ADS. Whether a depreciation of the Chilean peso would adversely affect the value of the Company and its assets depends on a variety of factors, including the ability of the Company and investors to access the foreign exchange markets in Chile, the timing, volume and execution of the Company’s convertions of foreign currency into Chilean pesos, the value of revenues denominated in foreign currency relative to Chilean pesos, the relative balances of Chilean pesos and foreign currency owned by the Company at any time and market perceptions of the severity of the impact of such events on the Company. If these and other factors, that may influence the value of the Company and its assets in either direction, have an aggregate negative effect on the value of the Company and its assets, a depreciation of the value of the Chilean peso would result in a decrease of the valuation of the assets underlying the ADS in terms of U.S. dollars, thereby resulting in a decrease in the value of the ADS.

Because the Company’s export sales are primarily denominated in foreign currencies, changes in these foreign currencies to the Chilean peso may adversely affect the financial condition and results of operations of the Company. As of December 31^st, 2014, over 80% of the Company’s revenues are related to foreign sales that are denominated in U.S. dollars, Euros, Sterling Pounds, Canadian dollars, Argentine pesos, Brazilian reais, Swedish and Norwegian crowns and Mexican pesos. Changes in these foreign currencies relative to the Chilean peso may result in operating losses for the Company and its subsidiaries. In order to mitigate the short-term effect of changes in currency exchange rates, the Company enters into, from time to time, hedging contracts. See Item 5  — “Operating and Financial Review and Prospects”. Since 2011, the short-term effect of the exchange rate of the Chilean peso against the U.S. dollar have been mitigated because of the Company’s acquisition of Fetzer Vineyards in April 2011, which resulted in the Company holding substantial assets and receiving a significant income stream in U.S. dollars.

The Company holds assets in different currencies through its subsidiaries, whose assets are subject to currency fluctuation. The Company has used financial instruments to minimize this effect.

Because the Company purchases some of its supplies at prices set at U.S. dollars and sells the products in other currencies, the Company is exposed to foreign exchange risks that may adversely affect its financial condition and results of operations. Most notably, the Company purchases bottles, corks, barrels and Tetra Brik packages at prices set in U.S. dollars or Euros. To the extent that the Company sells products with these components for pesos or other currencies (apart from U.S. dollars or Euros), changes in the exchange rate of the U.S. dollar and the Euro relative to these other currencies may result in losses and may adversely affect the Company’s financial and operating results. See Item 5  — “Operating and Financial Review and Prospects.”

In addition, cash distributions with respect to shares of Common Stock underlying the ADS are paid by the Company to the Depositary on behalf of shareholders in Chilean pesos. The Depositary then converts the pesos to U.S. dollars at the then prevailing exchange rate to pay the dividend on the ADS in U.S. dollars. If the value of the Chilean peso falls relative to the U.S. dollar between the declaration of dividends and the distribution of such dividends by the Depositary, the amount of U.S. dollars distributed to holders of ADS will decrease. See Item 3  — “Key Information — Exchange Rates.”

Restrictions on Foreign Investment and Repatriation. The Law of the Central Bank of Chile authorizes the Central Bank of Chile to regulate foreign exchange transactions, including those relating to ADS facilities. At the time the ADS facility was issued, the Central Bank had issued certain regulations (the “Former Regulations”) obligating Chilean issuers   to obtain authorization from and execute an agreement with the Central Bank of Chile in order to proceed with an ADS facility.

Due to the Former Regulations, the ADS facility is subject to a contract between the Depositary, the Company and the Central Bank of Chile (the “Foreign Investment Contract”) that grants the Depositary and the holders of the ADS access to Chile’s Formal Exchange Market and permits the Depositary to remit dividends received from the Company to holders of ADS without restriction. See Item 10  — “Additional Information — Exchange Controls” for a more detailed description of the new regulations and the Foreign Investment Contract.

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Under the Foreign Investment Contract, transferees of shares withdrawn from the ADS facility will not be entitled to access Chile’s Formal Exchange Market unless the withdrawn shares are redeposited with the Depositary. Cash and property dividends paid by the Company with respect to ADS held by a non-Chilean resident holder are subject to a 35% Chilean withholding tax, which is withheld by the Company. However, stock dividends are deemed a non-taxable event pursuant to Chilean Income Tax Law and, thus, are not subject to Chilean taxation. See Item 10  — “Additional Information — Taxation.”

The Foreign Investment Contract is currently in force and will continue to govern the ADS facility until all parties agree to terminate it. If the Foreign Investment Contract is terminated, the ADS facility would then become subject to the New Regulations (as defined below). Under Chilean legislation, a Foreign Investment Contract may not be altered or affected adversely by actions of the Central Bank of Chile.

The Central Bank of Chile relaxed foreign exchange restrictions in 2002, allowing entities and individuals to purchase, sell, keep and remit abroad foreign currency without restrictions, although the Central Bank of Chile still requires reports of such transactions to be filed with it.

The Central Bank of Chile adopted a new Foreign Exchange Regulations Compendium (the “New Regulations”) published in the Official Gazette on January 23, 2002 and effective as of March 1, 2002. The New Regulations impose only three levels of restrictions or obligations on foreign exchange transactions in Chile: (i) certain transactions requiring exchange of foreign currency must be conducted through the Formal Exchange Market (i.e., a commercial bank) and reported to the Central Bank of Chile (e.g., investments, loans, deposits and certain other transactions in excess of Ch$ 6.2 millionapproximately (US$10,000)); (ii) certain transactions requiring exchanged foreign currency to be remitted abroad must be conducted through the Formal Exchange Market, though no reporting obligation exists for these transactions (e.g., all license and royalty payments to be remitted abroad); and (iii) certain transactions requiring exchange of foreign currency that are not subject to any restrictions on the means of the exchange, but must be reported to the Central Bank of Chile (e.g., payments regarding import and export transactions, etc.).

Because the Law of the Central Bank of Chile authorizes the Central Bank of Chile to regulate foreign exchange transactions, including those relating to ADS facilities, it may re-establish more restrictive regulations on foreign exchange affecting ADS holders of the Company at any time. Thus, in the event that the Foreign Investment Contract were terminated, an amendment to the New Regulations could, among other things, restrict the ability of ADS holders to dispose of the underlying shares of Common Stock of the ADS or repatriate proceeds of the Common Stock. The duration or impact of any such restrictions would be difficult to assess.

Differences in Corporate Disclosure and Accounting-Taxation Standards. The principal objective of Chile’s securities laws governing publicly traded companies, such as the Company, is to promote disclosure of all material corporate information to investors. In addition, Chilean law imposes restrictions on insider trading and price manipulation. However, the Chilean securities markets are not as highly regulated and supervised as the U.S. securities markets and Chilean disclosure requirements differ from those in the United States. These differences may result in fewer protections for ADS holders than would exist if United States securities laws governed the Company’s domestic securities transactions. Nevertheless, during 2009 a new set of rules was enacted (Law of Corporate Governance N° 20.382) in order to improve the protection of the minority shareholders; these rules focused principally on the following matters:

· Reducing information asymmetries between shareholders: The Law of Corporate Governance (i) requires the board of directors of a company to generate a set of rules designed to ensure the timely and complete release of information required by the Chilean Securities and Insurance Supervisor (“SVS”), the stock exchange markets and the general public; (ii) requires the board of directors of a company to ensure that all legal and financial information required to be released to the shareholders and the general public, shall not first be disclosed to anyone in the company other than those employees or executives who, because of their position or activity, should know this information before it is made available to shareholders and the general public; and (iii) requires the company to issue a set of rules and procedures regarding variation in or changes to securities prices, applicable to all directors and executives.

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· Strengthening the role of the independent director as a representative of minority shareholders: The Law of Corporate Governance clearly establishes who may serve in a company as an independent director and clearly states the procedure for their election. The Law of Corporate Governance requires at least one independent director on a local director’s committee.

· Ensuring the Corporate welfare in transactions with related parties: The Law of Corporate Governance provides strict procedures for approving related party transactions. Excluding minor exceptions, transactions with related parties shall have prior approval and shall be carried out only if they promote the corporate welfare.

· Long distance voting for shareholder’s meetings: The Law of Corporate Governance also authorizes long distance voting for shareholder’s meetings according to general rulings issued by the SVS.

· New right of retirement scenario: The Law of Corporate Governance includes the right of the minority shareholders to force the controlling shareholder to purchase their shares if it acquires more than a 95% stake of a company.

· Insider Information: The use of insider information for personal benefit is prohibited under Chilean corporate law.

In 2007 the SVS and the Company began a migration program from local accounting principles (Chilean GAAP) to (IFRS). Since 2010 the Company’s financial statements have been presented in accordance with IFRS principles.

In addition to the above, the Superintendency of Securities or “S.V.S.” has promoted several regulatory changes related to corporate good governance practices. The main modifications related to this matter are reflected in General Ruling Number 341, dated November 29, 2012, which provides certain rules for the annual public disclosure of information regarding corporate governance policies, standards and practices adopted by Boards of Directors, relating to matters such as conflicts of interest, hiring of external experts or consultants, time devoted by each director exclusively to the matters of a company, information to be provided to shareholders and investors, internal control and risk management policies, compensation to main executives, etc. A new and updated set of rules improving the requirements provided under General Ruling Number 341 is currently being reviewed and analyzed by the S.V.S. and is expected to come into force during 2015.

 Differences in Shareholders’ Rights. The corporate affairs of the Company are governed by Chilean law and the By-Laws. The By-Laws perform functions similar to those performed by both the certificate of incorporation and the bylaws of a corporation incorporated in the United States. See Item 10 — “Additional Information — Estatutos (By-Laws).” The principles of law applicable to the Company and its shareholders differ from those that would apply if the Company were incorporated in the United States. However, shareholders who own 5% or more of the Company as well as any of its directors are entitled to take legal action in the name of the Company against anyone who may have caused damage to the Company.

Inflation. Although inflation in Chile has moderated in recent years, Chile has historically experienced high levels of inflation. High levels of inflation in Chile could adversely affect the Chilean economy and have amaterial adverse effect on the Company’s financial condition and results of operations. The annual rates of inflation for 2014, 2013 and 2012 were 4.6%, 3.0% and 1.5%, respectively.

The Company believes that moderate inflation will not materially affect its business in Chile. Notwithstanding the foregoing, there can be no assurance that inflation in Chile will not increase significantly from its current levels and that the operating results of the Company or the value of the ADS will not be affected adversely by a continuation of or an increase in the level of inflation.

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ITEM 4: INFORMATION ON THE COMPANY

A. History and Development of the Company

Concha y Toro is a corporation (sociedad anónima abierta) organized under the laws of Chile. The Company’s deed of incorporation was executed on December 31, 1921 and the Company was registered in the Registro de Comercio de Santiago on November 6, 1922. The Company’s principal executive offices are located at Nueva Tajamar 481, Torre Norte, Piso 15, Santiago. The Company’s telephone number at that location is (562) 2476-5000 and the Internet address is www.conchaytoro.com. The complete legal name of the Company is Viña Concha y Toro S.A. 

The Company is the largest Chilean producer and exporter of wines in terms of both volume and value, with total sales in 2014 of 299 million liters and Ch$583,313 million.

The Company was founded in 1883 by Don Melchor Concha y Toro and Don Ramón Subercaseaux Mercado. Don Melchor was the grandson of Don Mateo de Toro y Zambrano, who presided over the first government following Chile’s independence from Spain in 1810. The family had received the title of Marqués de Casa Concha from King Philip V of Spain in 1718. The winery was established in the Pirque region, on the border of the Maipo River, on land which belonged to Don Melchor’s wife, Doña Emiliana Subercaseaux. The vines used came from Bordeaux, France and were the traditional varieties of that area: Cabernet Sauvignon, Merlot, Sauvignon Blanc and Semillon. These varieties were brought to Chile before phylloxera devastated French vineyards. M. de Labouchère, a French oenologist, came to Chile to oversee the planting and the first harvest. The Company remained a family business until 1921, when the Concha family decided to convert it into a limited liability stock company and issued shares to all of its family members. In 1933, these shares began trading on the Santiago Stock Exchange.

The Company owns and operates vineyards that grow grapes for use in the Company’s wine-making operations, vinification plants (which convert grapes into wine), bottling plants and its wine distribution network. Within Chile, the Company owns and operates vineyards located in Chile’s nine principal wine growing regions. In addition to its properties in Chile, the Company owns a winery and vineyards in Mendoza, Argentina, and since April 2011, it owns a winery and vineyards in California, U.S.

In domestic and export markets, the Company’s bottled wines are sold in the premium, varietal, bi-varietal and sparkling wine segments. In the domestic and export markets, the Company sells popular wines, packaged primarily in 1, 1.5 and 2.0 liter Tetra Brik packages. A small quantity of wine, 0.7% of total revenues of 2014 was sold in bulk form in domestic and export markets.

The Company sells its premium wines under brand names including: Don Melchor, Carmín de Peumo, Gravas del Maipo, Amelia, Terrunyo, Marqués de Casa Concha, Gran Reserva Serie Riberas, Casillero del Diablo, Trio and Late Harvest. The Company sells its varietal and bi-varietal wines under the brand names Sunrise, Concha y Toro and Frontera. In addition, the Company’s subsidiaries, Viña Cono Sur, Viña Maipo, Viña Canepa Viña Palo Alto, Viña Maycas del Limarí and Trivento, market their premium, varietal and bi-varietal wines under the brand names Cono Sur, Isla Negra, Maipo, Canepa, Palo Alto, Maycas del Limarí and Trivento. The Company sells popular wines under the brand names Tocornal, Clos de Pirque, Exportaciόn and Fressco. See Item 4  — “Information on the Company — Chilean Wine Industry Overview — Wine Classifications,” “— Business Overview — Company Sales — Chilean Markets” and “— Company Sales — Export Markets.” The Company sells wines under a portfolio of brands acquired in the Fetzer acquisition including: Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary and Little Black Dress.

The Company’s first initiative toward the development of more complex wines was the launching of Casillero del Diablo in 1966. Casillero del Diablo was made from selected grapes and aged two years longer than the standard Cabernet Sauvignon then being produced. Today, Casillero del Diablo is the largest seller among the Company’s premium wines. In the past eight years, the Company has focused its marketing efforts on the Casillero del Diablo brand. Through a global marketing campaign launched in August 2001 and with a new packaging originally unveiled in 2002, the Company’s target is to transform Casillero del Diablo into a global brand. In 2014, sales of Casillero del Diablo totaled 4.4 million cases.

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The Company has produced sustained growth in recent years in all areas of its business, maintaining its position as the undisputed leader in the Chilean wine industry. Concha y Toro has strongly penetrated the principal external markets, where the brand enjoys high recognition and growing brand preference. Different factors have contributed to the Company’s strength in both the domestic and external markets. Most notable are its investments in the latest technologies and production techniques for producing premium and super-premium wines, the growth and constant innovation in its own production and the launching of new products in the premium segment. In addition, the Company has a solid distribution network that complements an export strategy based on the market diversification and constant expansion. In terms of the brand marketing, in 2010 the Company entered into a sponsorship agreement with the Manchester United, the most popular soccer team in the United Kingdom and one of the world’s most recognized sporting brands.

The Company also believes that it has competitive advantages in export markets due to the lower production costs in Chile as compared to the costs faced by its competitors in other principal wine-making countries, such as the United States.

The Company conducts its operations directly and through subsidiaries. The Company’s distribution business in Chile is conducted through its wholly-owned subsidiary Comercial Peumo Ltda. (“Comercial Peumo”). In December 2000, the Company formed a fully-owned sales and distribution subsidiary in the United Kingdom, Concha y Toro UK Limited (“Concha y Toro UK”). This subsidiary commenced operations in March 2001. In 2008, Concha y Toro established distribution subsidiaries in Brazil, Sweden, Finland and Norway in order to strengthen its sales in those countries. In March 2010, Concha y Toro established a distribution subsidiary in the asian market, choosing Singapore as its base, in April 2011, the Company completed the acquisition of Fetzer Vineyards in the United States. In July 2011, the Company entered into a joint venture with Banfi  (former distributor in the U.S. market for Concha y Toro’s Chilean and Argentinean wines) to import and distribute Concha y Toro, Trivento and certain brands belonging to Fetzer into the U.S. market.

The Company’s wholly-owned subsidiary, Sociedad Exportadora y Comercial Viña Maipo SpA. (“Viña Maipo”), currently exports Viña Maipo brand wines and holds investments in affiliated companies. The Company’s wholly-owned subsidiary, Viña Cono Sur S.A., is involved in the sale, both in the local and export market of Cono Sur and Isla Negra brand wines. In 1996, the Company, through Comercial Peumo and Viña Maipo, acquired Viña Patagonia S.A. (“Viña Patagonia”), the Company’s first non-Chilean subsidiary. In 2001, Viña Patagonia changed its trading name to Trivento Bodegas y Viñedos S.A. (“Viña Trivento” or “Trivento”) to reinforce the marketability of Trivento, its main brand and range of wines. Viña Trivento is located in Mendoza, Argentina.

In recent years, the Company has launched several new wines, marketed and distributed by its subsidiaries, to strengthen its position in the premium and super-premium categories. In 2006, the Company introduced a premium wine, Palo Alto, to the market and in 2007, the Company introduced wines from Viña Maycas del Limarí, a new super premium winery. Viña Maycas del Limarí is located in the Limarí Valley, a relatively new wine region in the north of Chile that the Company believes has strong enological potential and in which the Company has invested in the recent years. In August 2009, the company launched in Chile (and in selected markets) a new line of wines, Gran Reserva Serie Riberas to strengthen the super-premium category of the Concha y Toro portfolio. The Serie Riberas line originates in vineyards located in the basins of different Chilean rivers that receive cool breezes from the coast and are noted for the freshness of their wines.

In 2009, a new subsidiary of Viña Cono Sur, Viñedos Los Robles SpA, was created to sell fair trade wines, mainly in the UK and European markets. Its main brand is Los Robles La Fonda.

In March 2007, Concha y Toro signed an agreement with winery José Canepa y Compañia Limitada covering, among other topics, the winery’s production facilities in Lo Espejo, in the Santiago metropolitan area. The agreement includes the lease of Canepa’s vinification and aging cellar and warehouse for finished products, as well as a brand licensing agreement that will allow Viña Concha y Toro to market and distribute Canepa and Mapocho brands in the domestic and international markets. These wines are managed by the wholly-owned subsidiary, Sociedad Exportadora y Comercial Viña Canepa S.A. (“Viña Canepa”).

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In 1997, the Company and Baron Philippe de Rothschild S.A. (“Rothschild S.A.”) formed a joint venture company organized under the laws of Chile, named “Baron Philippe de Rothschild - Concha y Toro S.A.” The joint venture company changed its name to Viña Almaviva S.A. in June 1998 (“Viña Almaviva”). The Company contributed approximately 40 hectares of producing vineyards located at Puente Alto to and owns 50% of the capital of Viña Almaviva. Viña Almaviva is producing a “Primer Orden,” or first-growth wine, the first of its kind ever produced in Chile. Primer Orden wines are regarded to be the equivalent of Grand Cru Classé wines from the Bordeaux region of France. In 1998, Viña Almaviva launched its first Primer Orden wine from its 1996 harvest under the name “Almaviva.” Worldwide distribution of Almaviva, in all countries except for Chile and the U.S., is handled by Bordeaux Negociants. Distribution of Almaviva in Chile is handled by the Company.

In November 2000, the Company purchased 49.6% of Industria Corchera S.A. (“Industria” or “Industria Corchera”), a cork manufacturer. In connection with the acquisition, the Company and Amorim & Irmaos S.G.P.S. S.A. (“Amorim”), a Portuguese company that produces and distributes cork worldwide, entered into a shareholders’ agreement providing for the transfer of shares and the administration of Industria Corchera. In 2008, the Company increased its ownership to 49.96%. An English translation of the shareholders’ agreement between the Company and Amorim was previously filed and is listed as Exhibit 4.2  to this Annual Report. See Item 19  — “Exhibits.” The Company and Amorim jointly own 99.93% of the capital stock of Industria Corchera. During 2014 the Company acquired through Industria Corchera S.A. a participation of 44.9667% over the Chilean associated Company and cork manufacturer Corchera Gómez Barris S.A.

In addition to producing and bottling wine under its own labels, the Company has a license from Viñedos Emiliana to use Viñedos Emiliana’s brand name in Chile. The Company bottles and sells in Chile for its own account a portion of its varietal wine production under Viñedos Emiliana’s labels, paying royalties in exchange for such rights. In addition, under a contract with Viñedos Emiliana, the Company bottles, wine produced by Viñedos Emiliana for a fee, which is sold by Viñedos Emiliana for its own account under Viñedos Emiliana’s labels in export markets. The Company and Viñedos Emiliana have a number of directors in common, as well as a significant percentage of common share ownership. See Item 7  — “Major Shareholders and Related Party Transactions — Related Party Transactions.”

On April 15, 2011, the Company completed the acquisition of Fetzer Vineyards and related assets that Brown-Forman Corporation owned in California. This acquisition contemplated a portfolio of brands with positioning in the American market, including: Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary and the license of the brand Little Black Dress wines. During 2014 Fetzer incorporated a wholly owned subsidiary called Eagle Peak Estates, LLC for the commercialization of particular products in the US market.

On July 13, 2011, Viña Concha y Toro S.A., through its subsidiary VCT USA, Inc. entered into an agreement with Banfi Vintners, former distributor of Concha y Toro’s product in United States, to create a new company between them, named Excelsior Wine Company, LLC. to be registered in Delaware. Excelsior Wine Company, LLC. is managed by Banfi and VCT USA, Inc. Excelsior Wine Company, LLC. distributes the Chilean wines of Concha y Toro and the Argentine wines of Trivento in the United States. It also distributes the brands “Little Black Dress” and “Five Rivers” that belong to our subsidiary in California, Fetzer Vineyards. A copy of the Limited Liability Agreement of Excelsior Wine Company, LLC was previously filed and is listed as Exhibit 4.4  in this Annual Report (See Item 19  – “Exhibits”).

The rest of the brands related to Fetzer Vineyards of Concha y Toro, which include the brands “Fetzer”, “Bonterra”, “Jekel”, “Sanctuary” and “Bel Arbor” among others, have their distributionhandled directly by Fetzer Vineyards through the creation of an internal unit of Sales and Marketing.

The Share Capital of Excelsior Wine Company, LLC is US$ 1,000,000. VCT USA, Inc. contributed US$ 500,000 at the date of Incorporation. VCT USA, Inc. has 50 Shares, which correspond to 50% of the Share Capital of Excelsior Wine Company, LLC. Viña Concha y Toro S.A. is the indirect owner of 50% of Excelsior Wine Company, LLC as it is the sole owner of VCT USA, Inc.

At the end of 2011, Concha y Toro entered into a joint venture with Digrans SA (the former distributor of Concha y Toro’s products for the Mexican market) to create VCT & DG Mexico. VCT & DG Mexico started operations in the first half of 2012 and it carries outthe distribution of Concha y Toro’s wines in Mexico. This joint venture is 51% owned by Concha y Toro and 49% owned by Digrans.

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The Company continued its integration strategy in 2012 by establishing two new subsidiaries: one based in Canada and another based in South Africa to serve Africa and Middle East markets.

During 2013 the company continued developing its global strategy incorporating subsidiaries in China, Gan Lun Wine Trading (Shanghai) Co Ltda. and France, Cono Sur France S.A.R.L. Cono Sur France S.A.R.L. primarily focuses on the products of Viña Cono Sur S.A. The company also entered the Brazilian retail wine market by purchasing 35% of Brazilian wine retail stores Ville du Vine (Alpha Cave Comércio de Vinhos S/A) through an investment vehicle especially incorporated for such purpose called VCT Wine Retail Participacoes Ltda. Finally, in 2013, one of the Company’s the subsidiary Viña Cono Sur S.A. formed a new entity especially designated to produce and sale the organics wines of Viña Cono Sur S.A.

During 2014, the Company through its Singaporean subsidiary VCT Group of Wineries Asia Pte. Ltd., entered into a joint venture with their its Japanese partners Mercian Corporation and Mitsubishi Corporation. In connection with this joing venture,a new legal entity called VCT Japan Company Ltd. was incorporated in Japan with an indirect participation of 41% by the Company and the right to appoint two directors out of five. This new entity manages the importation and distribution of some of the Company’s products that weren’t being distributed by the currnt distributor in the Japanese market. The same year, the Company entered into a joint venture in Canada with Charlton Hobbs incorporating Escalade Wines & Spirits Inc,. The Company indirectly owns 50% of the equity  of the new entity and appoints 3 out of 6 directors of the Company. Escalade Wines & Spirits Inc. acts as an exclusive distributor and or agent in accordance to the nature of the business in the Canadian Provinces (in certain provinces the distribution is performed directly by “Escalade” and in others by the Governmental Liquor Authorities).

Business Strategy

Concha y Toro’s business strategy seeks to sustain attractive growth rates and achieve an even greater brand penetration and visibility in the different markets. The Company has therefore developed a wide range of products with which to participate in all market segments, offering high-quality wines at competitive prices.

Concha y Toro has focused specially on growth in the premium category, a very attractive segment due to its growth potential and prices, which have enabled it to improve the sales mix and increase its average sales price.

Following this strategy, the Company has invested around Ch$407 billion (not including capitalized interest) over the last ten years in land, vineyards, infrastructure and other wine business, in order to increase its own production. This figure includes Ch$112 billion related to Fetzer acquisition in 2011. The Company has also been constantly developing new products, investigating new grape varieties and incorporing new grape-producing valleys.

In the commercial area, the Company has strengthened its global distribution network by its own distribution offices in key markets.

At the same time, in the Company has applied to Argentina the same business model it used in Chile. Viña Trivento seeks sustained growth for its exports, taking advantage of the penetration of Argentine wines in the principal markets.

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In 2014, the Company made approximately Ch$27,956 million (approximately US$46.0 million) of capital investments, including the acquisition of hectares to be planted of these vineyards, increasing vinification and cellar capacity and buying new agriculture machinery. The estimated capital expenditure budget for 2015 is approximately USD$50 million, which is intendedto support expected future growth in sales through planting of new vineyards and expanding production capacity. Investments mainly comprise acquiring and planting new vineyards, building storage and vinification facilities, expanding the bottling plant and acquiring French and American oak barrels. These capital investments are intended to increase the production of all wines with an emphasis on premium and varietal wines; however, this 2015 estimated capital expenditure budget is preliminary and still needs to be approved by the board of directors. The Company expects to continue planting wine vines and developing the corresponding infrastructure needed on certain properties owned by the Company in Chile and the United States. The Company believes that a key factor in its past success and in any future success is its ability to maintain competitive prices while improving the quality of its wines. In order to increase its market share in the domestic market, the Company has maintained price competitiveness with beer and wine from other producers; introduced new wines targeted at different consumer segments and increased marketing and advertising support for its products. In export markets, the Company believes that it can continue to consistently offer high-quality wines at competitive prices in the premium, varietal and bi-varietal segments and that those wines can successfully compete with the other European, Australian, South African and U.S. wineries. See Item 4  — “Information on the Company — Business Overview — Domestic Marketing Strategies” and ” — Export Marketing Strategy.” 

Chilean Wine Industry Overview

Wine Producing Regions - Chile. Chile is a country well-suited for growing fruit, including grapes. Geographically, Chile is a strip of land running approximately 4,345 kilometers (2,650 miles) north to south, but is only 400 kilometers (244 miles) at its widest point. It is bordered by the Andes Mountains to the east and the Pacific Ocean to the west. The area located between the town of La Serena in the north and the Bio-Bio River in the south, generally known as the Central Zone, is where vinífera grapes are grown.

The Central Zone stretches for approximately 500 kilometers (309 miles) and is located between 32° and 38° latitude south. This location coincides with the latitude band of 30° to 50°, in which virtually all of the world’s wine-producing areas are located. For example, California’s vineyards are located at approximately 34° to 38° latitude north and Australia’s vineyards at 32° to 40° latitude south. France’s vineyards are farther north between 40° and 51° latitude north.

The climate of Chile’s Central Zone is defined as temperate Mediterranean with an extended dry season. Rainfall mainly occurs during wintertime, with annual averages of 300 mm to 700 mm. Rainfall is strongly influenced by the El Niño and La Niña phenomena. If El Niño brings rainier and warmer conditions, La Niña brings dry and colder weather. Springs are usually mild, albeit not completely frost-free; when frosts do occur, they strongly affect the production of grapes. The dry season spans from summertime to the early days of fall, a pattern which favors the ripening of both red and white grapes.

The Company owns or leases vineyards in the nine principal wine-growing regions in Chile. These regions include, from north to south: Limarí, Aconcagua, Casablanca, San Antonio, Maipo, the Rapel Valley sub-regions of Cachapoal and Colchagua, Curicó and Maule. Most of these regions possess distinct weather and soil characteristics. However, they share the important characteristics of cool nights and hot days with daily temperature variations of 12°C to 20°C in the summer. This type of climatic condition is essential for growing “wine quality” grapes. See Item 4  — “Information on the Company — Business Overview — Vineyards.”

Limarí Valley. Limarí is a transversal valley that runs from east to west, from the Andes to the Pacific and is situated 400 kilometers (250 miles) north of Santiago. It is a fairly narrow valley bounded by small mountainous chains to the north and south; its main features are sedimentary and mineral soils and a semi-arid climate with strong marine influence, particularly in the area closer to the Pacific Ocean. The absence of rainfall during ripening season, in addition to the extreme luminosity of the skies, makes for concentrated grapes with enhanced color and aromas. The varieties that benefit the most from this privileged setting are Chardonnay, Sauvignon Blanc and Syrah.

Aconcagua Valley. Aconcagua Valley is located approximately 90km (56 miles) to the north of Santiago. The Aconcagua River is the main source of irrigation for the fertile lands around and thus permits our grapes to be harvested in alluvial soils. This zone is known for its benign Mediterranean weather, in which the high temperatures during the day contrast harmonically with colder nights. Some regions of this valley have been recognized as ideal for the production of red wine varieties, due to the pleasantly warm temperatures, while the coastal areas’ marine cooling breezes are suitable for the production of white wines.

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Casablanca Valley. The Casablanca Valley is located 100 kilometers (62 miles) northwest of Santiago and has deep, sandy, permeable soils and a cool climate. The Company believes that this region represents an exceptional microzone to produce premium white wines, such as Chardonnay and Sauvignon Blanc, due to its particular climate, specially its heavy marine weather and morning fog during spring and summer.

Leyda Valley. One of the most recently created Chilean denominations, this small valley was only defined as a controlled origin in 2002. San Antonio stretches to the very edge of the Pacific Ocean and its characteristic lack of significantly high relief allows for the free entry of the strong oceanic influence. The ensuing frequent breezes, fresh temperatures and clayish soils make it a favorite spot for cold-climate white varieties and Pinot Noir.

Maipo Valley. The Maipo Valley, located just west of the Andes Mountains and south of Santiago, is renowned worldwide for the excellence of its red wines. The Maipo Valley has a Mediterranean climate, with a dry summer and high daily temperature variations due to a combination of oceanic and Andean influences. Its soils are alluvial and colluvial, organically poor and abundant in gravel. They are irrigated with glacial waters flowing from the Andes mountain range.

Rapel Valley. The Rapel Valley is located 100 to 180 kilometers (62 to 112 miles) south of Santiago, between the cities of Rancagua and San Fernando. It has a warm climate and deep, rich alluvial soils, irrigated by water from the Rapel and Cachapoal Rivers. This region’s production is oriented toward red wines.

Cachapoal Valley. Part of the greater Rapel Valley, Cachapoal is located 100 to 180 kilometers south of Santiago and covers the 80–kilometer long stretch (62 to 112 miles south of Santiago) between the cities of Rancagua and San Fernando. Its benign weather, normally lacking in frosts and bringing warm summers, suits varietals that call for a delayed harvest, such as Carmenere. Irrigated by the Rapel and Cachapoal rivers, its soils have an alluvial origin and are deep and rich. Most of this valley’s production is geared toward red wines.

Colchagua Valley. This valley is part of the grand Rapel Valley. Its soils vary from the deep and fertile sandy-clay loam organically rich soils to sandy soils. Its soils are irrigated by the water from the Tinguiririca River. The valley is renowned for growing a wide range of grape varieties, where the Cabernet Sauvignon and Carmenere varietals stand out.

Curicó Valley. The Curicó Valley is similar to the Rapel Valley in terms of its geographic features, soil and climatic conditions. It is located between the Rapel and Maule Valleys and its main commercial center is the city of Curicó. The climate and soil conditions in the valley are suitable for the production of a wide variety of premium wines.

Maule Valley. The Maule Valley is located to the south of Curicó Valley, 200 to 400 kilometers (124 to 248 miles) south of Santiago. This region has a warm climate, generous winter rains and organically rich soils. Wines produced from grapes grown in the Maule Valley typically have higher alcohol content.

Non-irrigated areas in the Maule Valley are planted with a rustic grape called País, which is used to produce table wine for the popular wines segment of the domestic market.

The Company believes that Chilean land suitable for grape cultivation is cheaper than comparable land in most of the other wine-producing areas of the world. Chilean vineyards take typically three to four years after planting to produce grapes that can be used for wine making. A vineyard can produce grapes suitable for vinification for up to 40 years or more. The annual growing season starts in September and lasts until April or May. Harvest occurs between March and May, depending on the location of the vineyard and the variety of the grape being grown.

Wine Producing Regions - Argentina. The Company believes that the wine growing regions surrounding Mendoza, Argentina are capable of producing world class wines and will complement the export products currently being made in Chile.

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Luján de Cuyo Region. Luján de Cuyo is located in the upper part of the Mendoza River, 22 kilometers (13.7 miles) to the south of Mendoza city. The altitude in this area ranges from 650 to 1,060 meters (from 2,132 to 3,478 feet) above sea level. Together with Maipú, it constitutes a traditional grape-growing region known as “First Zone”. This First Zone is excellent for growing red varietals, Malbec in particular. Its soil is alluvial and sandy, somewhat organically poor but with very good drainage characteristics. Day and nighttime temperatures vary by approximately 14ºC, which favors the production of red wines.

Maipú Region. The Maipú region is located in the upper part of the Mendoza River, 18 kilometers (11 miles) to the southeast of the city of Mendoza, next to Luján de Cuyo. Its altitude is 790 meters (2,592 feet) above sea level. The area is suitable for the production of red grapes such as Malbec and Cabernet Sauvignon.

Tunuyán Region. Tunuyán is located 80 kilometers (49 miles) southwest of Mendoza city and, together with Tupungato and San Carlos, forms the Uco Valley. This valley rises to 1,400 meters (4,593 feet) above sea level, the highest grape-growing altitudes in Mendoza. Because of the altitude and proximity to the Andes, the Uco Valley has a cooler climate than Maipú Valley, which makes this region oriented towards the production of white varietals and certain red ones. Daytime and nighttime temperatures vary by approximately 25ºC, an ideal range for the development of optimum color and tannins in the grapes. Its soils are stony, sandy and very permeable, lacking in drainage or salinity problems.

Tupungato Region. The Tupungato region is located 90 kilometers (56 miles) southwest of Mendoza and rises to approximately 1,100 meters (3,600 feet) above sea level. Elegant whites andearly ripening reds grow well here. Syrah and Pinot Noir are popular examples of grapes grown in this area.

La Consulta-San Carlos Region. San Carlos region is located 110 kilometers (68 miles) southwest of Mendoza. The altitude in this area ranges from 1,000 to 1,200 meters (from 3,280 to 3,937 feet) above sea level. The area is well suited for red grapes such as Malbec.

Rivadavia Region. The Rivadavia region is located 80 kilometers (49 miles) southeast of Mendoza and is part of the East Mendocino region. Its altitude is 660 meters (2,165 feet) above sea level in a zone of sandy soil with very good drainage characteristics. The average temperature is higher than in the First Zone and Uco Valley regions which, together with the availability of water from the Tunuyán River, allows for the optimal development of different varieties of grapes, the most important of which are the Malbec and Syrah varieties.

San Martín Region. San Martín is located 50 kilometers (31 miles) to the southeast of Mendoza. Altitudes in this zone average 640 to 750 meters (2100 to 2460 feet) above sea level. Its sandy-loam and sandy-lime soils are irrigated by the Tunuyán and Mendoza rivers. The climate is temperate and is characterized by a pronounced annual temperature variation, a feature that favors the vine’s vegetative rest period during winter.

Wine Producing Regions – United States. The Company believes that the wine regions of California are capable of producing world-class wines and will complement the export products currently being made in Chile and Argentina.

Mendocino Region. With an estimated 25% of its total vineyards recognized as Certified Organic, Mendocino County holds the distinction of being the nation’s pacesetter for “green wine” production. Situated just north of Sonoma County and roughly 90 miles north of San Francisco, Mendocino makes up a vital - if not always well-known - part of California’s expansive North Coast appellation. Thanks to its consistently cool climate, Mendocino is home to some of the country’s foremost sparkling wine producers. Pinot Noir is also a big player in Mendocino.

San Luis Obispo Region. Midway between San Francisco and Los Angeles, the San Luis Obispo-wine region is comprised of three pristine viticulture areas: the Edna Valley, Arroyo Grande Valley and Avila Valley. Most wineries are well known for their hand-crafted bottlings of Pinot Noir, Chardonnay, Syrah, Grenache, Viognier, Zinfandel and more. The marine influence of the nearby Pacific Ocean provides a mild summer and warm fall, resulting in an unusually long growing season. Combined with the region’s rocky volcanic soils, these growing conditions produce fruit with intense varietal character and complex flavors that are typically found in the world’s greatest wine regions.

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Phylloxera. Phylloxera, a pest which attacks the roots of grapevines, has widely infested vineyards outside of Chile. The pest generally renders a vine unproductive within a few years following initial infestation. Although an infestation of phylloxera over time decreases the amount of fruit that a vine produces, it does not directly impair the quality of the fruit and poses no known human health hazards. Since no pesticide has been proven to be effective in stopping the spread of phylloxera, the only known solution is to replant infested vineyards with resistant root stock.

Chile is one of the few countries where pre-phylloxera Bordeaux cuttings are widely used and as such, phylloxera has not been found in Chile to date. The Company still uses the original French root varieties, introduced from France approximately 125 years ago, which remain free of this pest. To protect itself from the possibility of phylloxera infestation, the Company carefully screens all cuttings before planting. Regulations imposed by the Chilean Agriculture Service require that all vegetation introduced into the country be isolated under observation for a period of two years. There can, however, be no assurance that the Company’s and other Chilean producers’ vineyards will remain free of phylloxera infestation. Infestation would have a materially adverse effect on the Company and its production of grape crops.

Wine Classifications. Wines are classified by Chilean wine producers as either sparkling wines or table (still) wines. Sparkling wines are wines which obtain effervescence through a second alcoholic fermentation process. With the exception of popular wines, Chilean table wines are generally classified according to (i) the variety or varieties of vinífera grape from which they are made, (ii) region of origin and (iii) vintage. Table wines are also classified as either premium, varietal, bi-varietal or popular wines.

Premium wines are wines made from selected grapes of a single variety and aged in barrels. These wines receive extra care throughout the production process and command higher prices. Varietal wines can be made either of a single variety of grape or of a selective blend of varieties of grapes (known as bi-varietals). Popular wines are inexpensive wines which are not aged and are not made from a specific variety of grapes.

In 1995, the Ministry of Agriculture implemented a decree to regulate wine bottle labeling, which included the use of grape varieties, vintage years and regional denominations of origin. The decree was drafted by a committee (which included representatives of the Company) designated by the Asociación de Viñas de Chile A.G. (the “Exporters’ Association”). The decree ordered that Chilean premium and varietal wines must contain at least 75% of the variety of grapes specified on the label. This decree enhanced the image of the Chilean wine industry, by providing for better information, quality and transparency for the consumer. The Company has adopted most of the controls set forth in the decree and continues to benefit from the enhanced image of the Chilean wine industry.

B. Business Overview

Vineyards

In order to decrease its dependence on purchased grapes and wines and to gain greater control over the cost and quality of its principal raw material, the Company initiated a capital investment program at the beginning of the 1990s. To this end, the Company has purchased land and planted vines for the production of grapes for its premium, varietal and bi-varietal wines in order to maintain its production of grapes in proportion to the growth in demand of its premium wines. Over the past few years the Company has acquired land in other wine regions in order to diversify the agricultural risk.

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As of December 2014, the Company had approximately 11.848 arable hectares (approximately 29.265 acres) on 51 owned and 9 leased vineyards in the Limarí, Aconcagua, Casablanca, San Antonio, Maipo, Cachapoal, Colchagua, Curicó and Maule Valleys of the Central Zone in Chile, on 8 vineyards in the Maipú, Tupungato, Rivadavia, San Carlos, Luján de Cuyo and San Martín regions, all located in Mendoza, Argentina, and on 16 vineyards in Mendocino and San Luis Obispo in California. As of December 2014, more than 90.6% of the arable land owned or leased by the Company was planted with wine-producing grapes in various stages of maturity. Approximately 70% of the Company’s planted hectares in Chile are planted primarily with five types of noble grapes: Cabernet Sauvignon, Merlot, Carmenere, Chardonnay and Sauvignon Blanc. In recent years, the Company has increased the planting of these five varieties of grapes in response to increasing consumer demand in the United States, Europe and Asia for premium and varietal wines. In Argentina, 46% of the Company’s vineyards are planted with the Malbec variety, in line with the demand for Argentine wines in the export markets, especially in the U.S. market. Approximately 69.2% of the Company’s planted hectares in United States are planted primarily with three types of noble grapes: Cabernet Sauvignon, Merlot and Chardonnay. The Company believes that with the plantings of these noble grape varieties in Chile, Argentina and United States, it should be able to respond to the shift in consumer demand for premium and varietal wines made from these varieties of grapes. There can be no assurance, however, that consumer demand for these wines will increase in absolute terms or that consumption of wines produced by the Company from these varieties of grapes, as opposed to those produced by its competitors, will increase. In addition, there can be no assurance that competitors of the Company, either singly or in the aggregate, will not be in a better position to take advantage of changing consumer demand patterns for premium and varietal wines, by reason of planted acreage or otherwise.

The Company’s remaining land under cultivation is planted mainly with Syrah, Pinot Noir, Malbec, Viognier, Pinot Blanc, Pinot Gris, Chenin Blanc, Riesling, Gewurztraminer and Sangiovese grapes.

The Company expects that the vines planted in 2011 would be in full production in 2015.

The table below shows the Company’s currently-producing and newly-planted vineyards by valley as of December 2014.

	Currently		Plantings		Total Vineyards
	Producing		2011-2014		Planted		Fallow		Orchards (1)		Total Arable
Vineyards	(in hectares)
Chile
Limarí Valley		740		256		996		257		—		1,253
Casablanca Valley(2)		363		50		413		11		—		424
Aconcagua Valley		—		100		100		—		—		100
Leyda Valley		130		—		130		—		—		130
Maipo Valley(3)		786		95		881		10		—		891
Cachapoal Valley - Rapel Valley		1,052		379		1,431		163		—		1,594
Colchagua Valley - Rapel Valley (4)		1,684		428		2,112		93		—		2,205
Curicó Valley		585		110		695		8		—		703
Maule Valley		1,971		396		2,367		498		—		2,865
Total Chile:		7,311		1,814		9,125		1,040		—		10,165
Argentina
Mendoza Valley		1,057		86		1,143		67		—		1,210
Total Argentina:		1,057		86		1,143		67		—		1,210
United States
Fetzer(5)		433		36		469		1		3		473
Total United States:		433		36		469		1		3		473
Total General		8,801		1,936		10,737		1,108		3		11,848

(1) These hectares include 3 hectares of fruit tree planted in United States. This land can be returned to grape production.

(2) The Company has leased three vineyards in Casablanca Valley totaling 279.45 arable hectares.

(3) The Company has leased four vineyards with 159.38 arable hectares.

(4) The Company has leased two vineyards in Colchagua Valley totaling 104.39 arable hectares.

(5) The Company has leased one vineyard in San Luis Obispo totaling 75.3 arable hectares.

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 The Company believes that the diverse microclimates and soils of the areas in which its vineyards are located, as well as the trellis systems used in its vineyards, allow it to grow a wide variety of grapes and thereby offer a broad range of wines. In addition, the Company believes that this diversity helps to minimize the agricultural risks inherent in its operations.

Although Chilean winters are relatively mild, Chilean vineyards have suffered frost damage in the past; Generally, September and October are the most likely periods for frost damage, especially in the areas closest to the Andes Mountains. The Company tries to protect its grapes against risk from frost damage through various preventive techniques, including the use of helicopters and stationary propellers to raise the temperature of the air by hovering over vineyards. The Company has also taken steps to protect against soil erosion and other ecological damage by using special irrigation methods.

Wine Production Methods

Wine production methods vary by type and quality of wine. The Company uses the following production methods (certain wine industry terms used in the following discussion are defined at the beginning of this report, in “Certain Defined Terms — Glossary of Special Terms”):

Premium Reds. The Company’s premium red wines are primarily made from select Cabernet Sauvignon, Merlot, Carmenere, Syrah, Pinot Noir and Malbec grapes grown in vineyards in the Maipo, Rapel and Maule valleys. The wines are made in the Company’s Puente Alto, Cachapoal and Lourdes plants. As part of its capital expenditure program, the Company has installed the most advanced stainless steel fermentation tanks available that incorporate refrigeration and heating systems. Grapes are crushed, separated from their stems and the must is fermented with the skins and pulp in stainless steel tanks at temperatures of 28°C to 30°C (82°F to 86°F), to obtain color and develop body. The resulting wine is left in contact with the skin for longer periods in the case of premium red wines than for red varietal or bi-varietal wines. Contact with the skin and solids (the maceration process) give the wine body, color and complexity. After separation and pressing of the solids to extract press wine, the wine is subjected to a malolactic fermentation process. The malolactic fermentation uses either introduced or normally present bacteria to transform the malic acid with a lower Ph to lactic acid of higher Ph, producing a smoother and more biologically stable wine with enhanced aroma and bouquet. The wines are then aged in French and American oak barrels for a period of eight to eighteen months, depending on wine type, brand and kind of barrel, in order to obtain additional body and complexity. Once bottled, the wine is aged further in the Company’s wine cellars at Pirque for two to twelve months, depending on the brand.

Premium Whites. Grapes selected from the noblest varieties, such as Chardonnay, Sauvignon Blanc, Viognier, Riesling and Gewurztraminer from the Company’s Casablanca, Maipo, Curicó and Maule vineyards are crushed, separated from their stems and introduced into pneumatic presses in order to extract clean juice. Unlike red wines, white wines are generally fermented without their skins and seeds. In order to convert the sugar into alcohol, this juice is then fermented, with yeast, in French and American oak barrels or temperature-controlled stainless steel tanks, depending on variety, vineyard and brand. Lower temperatures between 12°C and 18°C (53°F and 64°F) are considered optimal for quality during this process. The resulting wine is aged on the fine lees in the same tanks as used in fermentation for at least six to eight months in order to obtain fruitiness, body and complexity. Once bottled, premium white wines are aged from two to twelve months in the Company’s wine cellars, depending on the brand.

Late Harvest is a sweet and aromatic dessert wine made from Sauvignon Blanc and Riesling grapes that were left on the vine to over-ripen, resulting in a high concentration of sugar and a reduction in acidity. The vinification process for Late Harvest is similar to that for the Company’s other premium white wines.

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Red Varietals and Bi-varietals. The production process for red varietal and bi-varietal wines is similar to that of premium red wines and involves grapes from the Company’s Rapel, Curicó and Maule vineyards. These wines are macerated for a shorter period of time and are stored in stainless steel tanks and non-reactive epoxy-lined cement tanks until bottling. Bottling normally begins approximately six months later.

White Varietals and Bi-varietals. Grapes from the Company’s Rapel, Curicó, Maule and Casablanca vineyards are crushed and separated from their stems before they are pressed to extract the grape juice. The juice is then fermented in temperature-controlled stainless steel tanks. The wines are stored in stainless steel tanks or in inert epoxy-lined cement tanks for three months before bottling.

Sparkling Wine. Sparkling wines are the product of a second alcoholic fermentation of wine with yeasts in isobaric tanks for a period from two to eight months, depending on the type of sparkling wine. This second fermentation allows for the retention of the characteristic effervescence. The Company produces four types of sparkling wine. Casillero del Diablo and Cono Sur are sparkling premium wines made from Chardonnay and Pinot Noir grapes. The Company also produces a standard sparkling wine made from Chardonnay, Riesling and Chenin Blanc and a Sparkling Moscato made from Moscatel grapes.

Popular Wine. The Company produced approximately 75.6% of its popular wine from grapes and bulk wine purchased from independent growers. These grapes are vinified at four locations using a process similar to that used for varietal wines. Popular wines are not aged; instead, they are bottled or packaged promptly.

Bulk Wine. Almost all the bulk wine sold by the Company is purchased from outside suppliers.

Sources of Grapes and Purchased Wine

Grapes are the main raw material in the wine making process. In 2014, approximately 53.2% of the grapes used in the production of premium, varietal and bi-varietal wines were purchased from third parties. In addition, the Company purchased grapes and bulk wine required to produce approximately 75.6%% of its popular wines. Prevailing prices for grapes at harvest time reflect market conditions. The wine-making and grape-growing are exposed to different agricultural risks (See Item 3 — “Key Information - Risks Factors – Risks Relating to the Company – Agricultural Risks”). In this regard, agricultural risks could impact the quality and quantity of the Harvest, which is refected in the volatility that the grape cost has experimented thorugh years.

Company Vineyards. In 2014, approximately 46.8% of the Company’s production of premium, varietal and bi-varietal wines was from grapes grown on the Company’s owned and leased vineyards in Chile. The Company believes that production of its own grapes offers greater control over costs and quality and improves reliability of supply. To that end, the Company continues to expand its grape production, especially in the premium category, in order to support the volume growth and to be able to improve and control the quality of its wines. The Company’s policy is that, to the extent possible, only grapes grown in the Company’s own vineyards are to be used to produce the Company’s premium wines.

Outside Suppliers. In order to satisfy its need for grapes for the production of premium, varietal, bi-varietal and sparkling wine not otherwise met by its own vineyards, as well as its requirements for grapes and bulk wine for 75.6% of its popular wines, the Company buys grapes from approximately 900 independent growers in Chile. The identity of such growers, as well as the amounts purchased from them, does not change significantly from year to year and most of these growers have been selling to the Company for many years. The main criteria used to select independent growers are geographic location, the variety of grapes grown and the grower’s farming methods. With the objective of assuring quality production, the Company offers its suppliers technical assistance based on rigorous criteria similar to that which is applied within its own wineries. The Company also purchases small quantities of grapes from entities in which several of its directors, executive officers or members of their families have an interest. See Item 7  — “Major Shareholders and Related Party Transactions — Related Party Transactions.”

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In accordance with Chilean wine industry practice, most of the Company’s agreements with growers only cover one year’s production and are renewed from year to year. This renewal is not compulsory and depends on the Company’s demand and seasonal market prices. In order to minimize the risk of crop loss, the agreements are entered into between January and April each year, after the grapes have begun to mature and the size of the crop can be more accurately estimated. Delivery schedules are agreed upon according to the degree of ripeness of each grape variety. The management of these outside vineyards is directed by the Company’s own technical personnel and the Company establishes standards regarding the use of pesticides, cultivation, harvest date, transportation system, sugar, acidity and Ph concentration. Selection of the grapes and approval of their quality is carried out by the Company’s technical department. The price of the grapes is proportional to the estimated alcohol content over 12% in the resulting wine. Payment for grapes obtained from independent growers is made mainly in ten interest-free installments throughout the year. In 2014, the Company had long-term contracts with up to approximately 32% of its growers.

Bulk Wine Purchases. The Company purchases wine in bulk from a number of outside suppliers for the wine used in the production of the Company’s popular wines. The Company’s technical department approves such wine purchases. Payments are traditionally made in ten interest-free monthly installments.

Vinification

The Company seeks to use the latest technology in all areas of vinification while maintaining the wine-making traditions of its founders. The Company has twelve wine-making plants in Chile which turn grapes into premium, varietal and bi-varietal wines. The locations of these plants and their production capacity in 2014 are shown below. Additionally, the Company leases plants, mostly to vinify generic grapes for the production of popular wines.

In Argentina, Trivento owns two plants for the vinification and aging of its wines. Additional capacity to meet its vinification needs is leased from third parties.

Fetzer in the U.S. owns two plants for the vinification and aging of its wines in Paso Robles and Hopland.

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		Production 2014		Production 2013		Production 2012
Plant	Valley	(in millions of kilograms)
Owned - Chile
Nueva Aurora	Limarí		12.1		9.9		14.8
Puente Alto	Maipo		11.0		12.7		12.3
Lo Espejo	Maipo		3.2		3.6		0.0
Cachapoal	Cachapoal - Rapel		32.4		39.4		34.6
Chimbarongo	Colchagua - Rapel		58.9		71.7		62.8
Cono Sur	Colchagua - Rapel		17.9		25.3		20.0
Peralillo	Colchagua - Rapel		2.6		2.7		3.5
Las Mercedes	Colchagua - Rapel		10.5		11.5		8.9
Lontué	Curicó		24.6		27.6		27.8
Curicó	Curicó		15.9		17.3		15.9
Lourdes	Maule		26.9		26.2		28.3
San Javier	Maule		41.1		50.6		44.9
Total Owned - Chile			257.2		298.4		273.8
Owned - Argentina:
Trivento	Maipú - Mendoza		14.6		15.0		14.4
Tres Porteñas	San Martín - Mendoza		8.0		10.9		10.8
Total Owned - Argentina			22.5		25.9		25.2
Owned - United States:(1)
Paso Robles	Paso Robles		3.4		3.0		3.1
Hopland	Hopland		14.6		16.2		14.9
Total Owned - United States			18.0		19.2		18.0

(1) Fetzer was acquired on April 2011.

In addition, the Company’s facilities at Pirque have the capacity to produce 3.0 million bottles or 2.25 million liters of sparkling wine per year.

The Company uses a combination of epoxy-lined cement tanks, stainless steel tanks and French and American oak barrels to ferment, age and store its wine. As of December 2014, the Company’s total storage and fermentation capacity in Chile was approximately 415 million liters. Total owned capacity in Argentina was 32 million liters. Trivento rents additional storage facilities, as needed, for its operation. In the United States total storage and fermentation capacity was approximately 44 million liters.

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The following table shows the Company’s approximate fermentation and storage capacity by type of container for the years indicated:

			December,
Type of Container	2014		2013		2012
Chile:	(in million liters)
Epoxy-lined cement tanks		261.3		241.6		216.2
Steel tanks		142.3		140.3		134.4
European and American oak barrels		11.3		10.1		10.0
Chilean wood casks		0.3		0.3		0.2
Total Chile		415.1		392.3		360.9
Argentina:
Epoxy-lined cement tanks		17.1		17.1		17.2
Steel tanks		13.5		13.5		12.5
European and American oak barrels		1.0		1.0		1.0
Total Argentina		31.7		31.7		30.7
United States: (1)
Steel tanks		38.4		38.4		38.4
European and American oak barrels		5.6		6.7		7.5
Total United States		44.0		45.1		45.9

(1) Fetzer was acquired on April 2011.

The Company uses American and French oak barrels for the production of all its premium wines, except Late Harvest. Although the use of oak barrels increases the Company’s winemaking costs, the Company believes that it enhances the quality of its premium wines. Oak barrels are purchased in several sizes and are treated prior to delivery in accordance with the Company’s needs. Oak barrels are used for up to two years to produce the highest quality premium wines, such as Don Melchor and are then used for another five years to enhance other wines. As of December 2014, the Company had more than 50,000 European and American oak barrels.

French oak barrels are used to make the Company’s premium Don Melchor, Carmin de Peumo, Gravas del Maipo, Amelia, Terrunyo, Marqués de Casa Concha and Trio brand wines, while American oak barrels are used for its premium Casillero del Diablo brand wine. Most of the Company’s stainless steel tanks are fitted with cooling systems to prevent wine from losing quality at higher temperatures. All of the Company’s stainless steel tanks for use during fermentation are equipped with heating and cooling systems to regulate the temperature in the fermentation process.

Bottling

After vinification and, in the case of premium wines, aging, wine is ready to be bottled. The Company has three bottling plants near the Santiago metropolitan area: Pirque, Lo Espejo and Vespucio plants and a plant in Lontué. The Pirque bottling plant, located 28 kilometers from Santiago, is the Company’s principal bottling plant and a large amount of the Company’s premium, varietal, bi-varietal and sparkling wines are bottled there. The plant has seven bottling lines (six of them automatic, and one manual) accommodating bottles of 1.5 liter, 1 liter, 750 milliliter, 375 milliliter and 187 milliliter capacities. In addition the plant has one bag-in-box line producing 2 and 3 liters capacity formats. The facility in Pirque is equipped with the most advanced bottling and labeling equipment available and has an installed capacity of 9.4 million liters per month when operating three eight hour shifts per day, six days a week.

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In March 2007, the Company leased a bottling plant from Viña Canepa. This plant has four bottling lines with a capacity of 4.5 million liters per month when operating two eight hour shifts per day, six days a week. This plant is located in Lo Espejo, in Santiago.

During 2007 the Company added a new bottling plant and logistic center—the Vespucio plant. This bottling plant includes a modern bottling line imported from Italy with a nominal capacity of 12 thousand bottles per hour when bottling 750 milliliter bottles, and 8 thousand bottles per hour when bottling 1.5 liter bottles. This bottling line is especially designed to handle large orders.

The Company’s bottling plant in Lontué, located 200 kilometers from Santiago, bottles wine in five liter glass jugs and in 0.5 liter, 1 liter, 1.5 liter and 2.0 liter Tetra Brik packages which are made of several layers of paper, aluminum and polyethylene. Similar packages are used worldwide for juice, milk, wine and other products. The Tetra Brik packaging line is completely automated. The Company has a license from Tetra Pak Chile to utilize the Tetra Brik technology and purchases pre-printed unassembled packages from Tetra Pak Chile. The Lontué plant has three Tetra Pak packaging machines with an installed capacity of 5.6 million liters per month based on three shifts operating eight hours a day, six days a week.

The Company has a quality control department which controls the raw materials used in each bottling plant and tracks the product up to the point of sale through a system of computer coding for each bottle and case produced. The Company also uses electronic monitoring equipment to ensure that bottles are filled to the correct level.

All of the Company’s premium and export wines are bottled in new bottles. Cristalerías, a principal shareholder of one of the Company’s main competitors, Santa Rita, supplies almost all of the Company’s bottles. The Company obtains the remainder of its bottles from other Chilean and Argentine manufacturers. Corks for most wines are produced in Spain and Portugal but are finished by Chilean firms. The Company owns 49.96% of the principal cork supplier, Industria Corchera. See Item 7  — “Major Shareholders and Related Party Transactions — Related Party Transactions.” Labels are produced in Chile. Chilean companies supply cases and capsules (the tin, plastic or aluminum covering for the neck of a wine bottle).

The Company believes that, except for bottles and Tetra Brik packages, alternative sources of supply are readily available. The Company believes that it could find alternate suppliers for bottles and Tetra Brik packages, though it could be adversely and materially affected in the short-term. New bottles and preprinted, unassembled Tetra Brik packages are priced in U.S. dollars. Changes in the Chilean peso to U.S. dollar exchange rate could increase the cost of components and have a material adverse effect on the Company.

Storage. The Company has four warehouses for finished wine with the following capacities: Pirque - 320,000 cases; the Vespucio I logistic center - 315,000 cases; the Vespucio II logistic center - 720,000 cases and the Lo Espejo plant - 245,000 cases.

Domestic Distribution. The Company has its own direct distribution capacity through its wholly-owned subsidiary, Comercial Peumo. It has a network of 15 regional offices to service the entire Chilean national territory and 14 Distribution Centers. Its sales force is made up of 196 salespeople, 14 supervisors, 2 business managers, 2 regional sales managers and 5 sales managers for all categories. Comercial Peumo serves approximately 15,000 customers throughout Chile, making it the largest wine-oriented distribution company in Chile In 2014, the two largest single customers accounted for approximately 4.7% and 4.4% of the Company’s domestic sales in volume and value, respectively.

A wholly-owned subsidiary, Transportes Viconto, transports bulk wine products between the Company’s cellars, production and bottling facilities and delivers wine products to container ships located in Chilean ports. Transportes Viconto relies on a thirteen truck fleet, with a complement of trailers and tanks that had transported 137 million liters in 2014 between the wine storage locations and the bottling plants.

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Company Sales - Chilean Markets

Domestic Wine Sales. The Company’s domestic sales in liters, including sales of bulk wine, in 2014, 2013 and 2012 were approximately 62.7 million liters, 59.2 million liters and 61.9 million liters, respectively, resulting in gross revenues of Ch$59,981 million, Ch$57,233 million and Ch$61,673 million, respectively.

The Company’s bulk wine sales fluctuate from year to year because the Company sells bulk wine in the domestic market to reduce excess inventories. In 2014, the ratio of bulk wine sales tototal wine sales in the domestic market was practically zero.

The Company is the largest wine producer in Chile and according to AC Nielsen, in 2014, the Company had the third largest share of the domestic market with a 27.1% share in terms of volume and a 24.7% share in value. The Company competes in all segments of the branded Chilean market and seeks to keep prices competitive to make its products attractive to consumers. Its variety of brands allows it to target different market segments, from its upscale premium Don Melchor to its popular wine lines, while maintaining a competitive price/quality relationship across the range.

The following tables show the Company’s total domestic wine sales in constant Chilean pesos and liters for each of the calendar years indicated:

	Domestic Wine Sales
	2014					2013					2012
	Mill. Ch$		%			Mill. Ch$		%			Mill. Ch$		%
Bottled wine		59,964		100.0	%		57,144		99.8	%		61,573		99.8	%
Bulk		18		0.0	%		89		0.2	%		100		0.2	%
Total		59,981		100	%		57,233		100	%		61,673		100	%

	2014					2013					2012
	Th. Liters		%			Th. Liters		%			Th. Liters		%
Bottled wine		62,658		100.0	%		59,160		100.0	%		61,934		100.0	%
Bulk		30		0.0	%		19		0.0	%		28		0.0	%
Total		62,688		100	%		59,179		100	%		61,962		100	%

The Chilean wine market can be divided into segments based on the price of a 750 ml bottle. The Company targets the following market segments: popular wines with prices ranging from Ch$800–1700 per liter; Low-end varietal wines with prices ranging from Ch$1.700–2.000; varietal wines with prices ranging from Ch$2.000–2.800; premium wines with prices ranging from Ch$2.800–5,500; super premium with prices between Ch$5.000–9.000; and ultra premium with prices over Ch$10,000.

 Local Brands and Prices. The table below lists the Company’s major brands by segments of the Chilean wine market and approximate retail prices for each brand per 750 ml bottle as of December, 2014. Prices do not vary by type of wine within brand category.

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Segment	Brand	Approximate Retail
		Price
		(As of December
		2014 Chilean pesos)
Ultra Premium	Carmín de Peumo	94,000
	Gravas del Maipo	52,000
	Don Melchor	78,000
	Terrunyo	20,990
	Amelia	20,990
Super Premium	Marqués de Casa Concha	11,490
	Gran Reserva Serie Riberas	7,290
Premium	Trio	5,190
	Casillero del Diablo	4,190
	Late Harvest(1)	2,490
Sparkling	Subercaseaux	3,690
Varietal	Sunrise	2,190
	Santa Emiliana(2)	1,990
Bi-varietal	Frontera	1,990
Popular(3)	Exportación	1,327
	Exportación Selecto	1,460
	Clos de Pirque	1,345
	Tocornal	1,145
	Fressco Cooler	1,125

________________________

(1) Late Harvest is a Sauvignon Blanc dessert wine which is only sold in 375 ml bottles.

(2) The Company has a license from Viñedos Emiliana to bottle and distribute the Company’s wine domestically under Viñedos Emiliana’s labels.

(3) Popular wine prices are per 1,000 ml.

Local Competition. The Company competes with a number of other Chilean wineries. The Company’s competitors in the premium segment are large and medium-sized Chilean wineries, mainly Santa Rita, Viña San Pedro Tarapacá S.A. (“San Pedro”), Bodegas y Viñedos Santa Carolina S.A., Viña Undurraga S.A., Viña Errázuriz S.A. and Cousiño Macul S.A. The Company also competes, to a much lesser extent, with small Chilean wineries whose production and sales of premium wines are aimed primarily at export markets. Sales in the popular wine segment are concentrated in wines packaged in Tetra Brik packages. For the Chilean industry in 2014, Tetra Brik sales represented approximately 45% of all Chilean sales by volume in the popular wine segment. The Company believes that non-Chilean wineries have negligible sales in Chile because they find it difficult to match the price-value relationship offered by Chilean wineries, especially in the popular wine segment.

Popular wines produced in Chile, including those of the Company, also compete with other beverages such as beer, pisco, spirits and soft drinks. For the two month period ended March, the ratio of popular wine price to beer price decreased to 1.07 in March 2014 from 1.16 in March 2013, explained by the combined effect of a decrease in wine prices and an increase in the beer price To stay competivie in Chile’s beverage industry,, in addition to the efforts to continue gaining market share, the Company has maintained its marketing efforts in the popular wine segment, in addition to the efforts to continue gaining market share. See Item 4  — “Information on the Company — Business Overview — Domestic Marketing Strategy.”

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The following table shows the relationship between popular wine and beer prices, in Chilean pesos, for the years indicated:

Relationship Between Popular Wine and Beer Prices (per liter)

For the two-month period ended March:	2014		2013		2012		2011		2010		2009		2008
Popular average wine price		1,247		1,264		1,286		1,289		1,050		1,045		965
Beer average price		1,163		1,091		1,057		867		822		800		743
Ratio of popular wine prices to beer prices		1.07		1.16		1.22		1.49		1.28		1.31		1.30

Source: Nielsen Retail Index and Company’s Internal Information. Measurement for the two-month period for supermarket and traditional retail (i.e. liquor and convenience stores) channels.

Domestic Marketing Strategy

In order to increase its market share in the domestic market, the Company is focusing on the most powerful brands in terms of brand health and volume. The Company is seeking to reinforce its share in the popular wine segment and to increase its share in the Premium segment with Casillero del Diablo’s portfolio.

Distribution is essential in Chile. In order to continue it’s domestic growth, the Company has to penetrate the market and distribute its wine to as many points of sale possessing alcoholic licenses as possible—including, but not limited to, bars, restaurants, and stores that sell wine—and be the leader in retail, especially given the growth of retail channels in all territories.

Regarding the portfolio of products, the Company is permanently developing new formats and updating the presentation of its products. Advertising methods and marketing strategies differ depending on whether the targeted segment is comprised of potential consumers of the Company’s premium, varietal, bi-varietal, or popular wines. During 2014, the greatest efforts were to continue in advertising on strengthening the Clos de Pirque, Casillero del Diablo, Gran Reserva and Marques de Casa Concha brands in the market through mass media campaigns, including television, radio and press. 

Marketing and Trademarketing has the challenge of continue with the strong brand health and driving the sales over the market’s normal growth.

Domestic Sales – Other Products. In the past few years, Comercial Peumo—the distribution subsidiary for the Chilean local market—has entered into new non-wine businesses, especially in the liquor and beer categories. These categories show strong growth and present an expanded business opportunity for the subsidiary. In April of 2008, Comercial Peumo signed a distribution agreement with SAB Miller—one of the three largest brewers world wide—with the aim of enhancing the Company’s presence in the imported premium beer category. Accordingly, since May of 2008, Comercial Peumo has distributed all SAB Miller’s portfolio in all distributions channels. In April 2009, Comercial Peumo signed a distribution agreement with Diageo Chile Limitada and commenced wholesale distribution of Diageo’s products in Chile, which include the different domestic distribution channels, except for the largest supermarket chains. The Diageo products covered by the agreement include Johnnie Walker whisky, Pampero rum, Baileys liquors, Smirnoff vodka, Gordons gin and Jose Cuervo tequila.

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Comercial Peumo sales of non-wine products in 2014 and 2013 totaled Ch$41,645 million and Ch$31,955 million respectively, with its new business area contributing 41.0% and 35.8%, respectively of sales of Comercial Peumo.

Company Sales - Export Markets

According to the Exporters’ Association, exports of bottled Chilean wine totaled US$ 1,590 million and 484 million liters in 2014, representing an increase of 4.5% in value, in US dollar terms, and a decrease of 3.6% in volume terms, as compared to 2013.

Export Sales and Competition. The Company is the largest exporter of Chilean wines on both a volume and value basis, with market share in 2014 of 22.9% and 27.4% (including bulk) respectively, according to the Exporters’ Association. The Company’s bottled wine market share by volume and US$ value was 32.2% and 29.7%, respectively. In 2014, the Company’s closest Chilean competitor in the bottled export segment, in terms of volume and US$ value, reported the equivalent of 13.5% and 11.3% in terms of volume and US$ value, respectively.

The following table sets forth the Company’s export market share among Chilean wine producers, as a percentage of both volume and US$ value for the years 2006 to 2014:

	Export Market Share
	Total Wine						Bottled(1) Wine
	Volume			US$ Value			Volume			US$ Value
2006		21.9	%		25.4	%		33.4	%		28.3	%
2007		22.2	%		27.4	%		34.9	%		30.2	%
2008		25.4	%		28.3	%		37.0	%		31.4	%
2009		23.8	%		28.6	%		38.4	%		32.3	%
2010		24.0	%		27.8	%		36.6	%		31.5	%
2011		24.3	%		26.3	%		33.7	%		29.7	%
2012		23.4	%		26.7	%		35.4	%		31.3	%
2013		20.8	%		26.3	%		33.9	%		30.5	%
2014		22.9	%		27.4	%		32.2	%		29.7	%

Source: Vinos de Chile, Exporter’s Association

(1) Bottled and bag-in-box.

Principal Export Markets. This section describes principal trends and markets for Company sales originated in Chile which include exports to third parties and sales of the Company’s distribution subsidiaries in the UK, Nordic countries, Brazil, Singapore and Mexico. Company sales in the export market are distributed among the premium, varietal, bi-varietal, sparkling and popular wine segments. The Company also sells bulk wine abroad.

The Company’s bottled export sales in volume in 2014, 2013 and 2012 totaled 198 million liters, 180 million liters and 175 million liters, respectively, resulting in revenues of Ch$305,373 million, Ch$305,373 million and Ch$277,889 in 2014, 2013 and 2012, respectively.

As of December 31, 2014, the Company’s principal regional export markets were Europe, the United States, Asia, South America, Central America and Canada. Each market is unique and there are differences within markets due to variations in local regulations.

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	Wine Sales in Export Markets
	2014					2013					2012
	Mill. Ch$		%			Mill. Ch$		%			Mill. Ch$		%
Bottled wine		394,308		99.5	%		305,373		99.6	%		277,889		99.8	%
Bulk		1,877		0.5	%		1,146		0.4	%		562		0.2	%
Total		396,185		100.0	%		306,519		100.0	%		278,451		100.0	%

	2014					2013					2012
	Th. Liters		%			Th. Liters		%			Th. Liters		%
Bottled wine		197,984		98.3	%		180,113		99.0	%		175,437		99.5	%
Bulk		3,503		1.7	%		1,872		1.0	%		912		0.5	%
Total		201,486		100.0	%		181,985		100.0	%		176,349		100.0	%

	Percentage of Export Sales by
	Volume to Regional Export Markets
	(excluding bulk wine sales)
Market	2014			2013			2012
Europe		51.9	%		50.9	%		51.6	%
United States		11.5	%		12.5	%		13.5	%
Central America, Mexico and the Caribbean		8.3	%		9.0	%		8.4	%
South America		10.0	%		9.4	%		9.0	%
Asia		12.3	%		11.9	%		10.8	%
Canada		3.7	%		3.8	%		4.1	%
Africa/Other		2.4	%		2.4	%		2.5	%
Total		100.0	%		100.0	%		100.0	%

	Sales in Export Markets by Volume to Regional
	Markets
	2014		2013		2012		Var %			Var %
	Th. liters		Th. liters		Th. liters		2014-13			2013-12
Europe		102,674		91,728		90,551		11.9	%		1.3	%
United States		22,779		22,553		23,655		1.0	%		-4.7	%
Central America, Mexico and the Caribbean		16,440		16,187		14,798		1.6	%		9.4	%
South America		19,730		16,951		15,756		16.4	%		7.6	%
Asia		24,289		21,456		18,975		13.2	%		13.1	%
Canada		7,368		6,846		7,263		7.6	%		-5.7	%
Africa/Other		4,703		4,392		4,439		7.1	%		-1.1	%
Total		197,984		180,113		175,437		9.9	%		2.7	%

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Europe. In 2014, sales to Europe increased by 11.9% in volume terms to approximately 102.7 million liters or 51.9% of Company sales volume in export markets. The Company’s European markets can be subdivided into three areas: Germany and non-wine-producing Western Europe, wine-producing Western Europe (except Germany) and Eastern Europe.

The Company believes that greater market opportunities exist in the United Kingdom, non-wine-producing countries of Western and Eastern Europe and Germany. Out of this group of countries,, the significant countries in 2014 were: the United Kingdom, the Netherlands, Sweden, Denmark and Finland. Among these countries, the Nordic countries (Finland, Sweden, Norway and Iceland) operate under a state-controlled system where each state purchases wine and sells it in its own stores at the retail level. The Company anticipates that in the future, the monopoly system in these countries may be replaced by a private or semi-private sales structure, but believes that because its brands are well known in these areas, the Company’s sales will not be adversely affected as a result. There can be no assurance, however, that such a regulatory change would not have a materially adverse effect on the Company’s sales to such markets. During 2009, the Company started the operations of its own distribution subsidiaries in the Nordic countries of Sweden, Finland and Norway. These subsidiaries are responsible for the distribution of Concha y Toro, Viña Maipo, Trivento, Los Robles and Fetzer wines in these markets and have added some agency brands during the course of the past year introducing the distribution of Emiliana from Chile and Stellenbosch from South Africa. Total sales in these markets in 2014 reached 12.1 million liters, representing a 25.1% increase as compared to 2013 in terms of volume.

In the United Kingdom, the Company continues to broaden direct distribution to all market segments (i.e. multiples, specialists, cash and carry, wholesalers and independent vendors) and to promote on-premise consumption (e.g., sales to restaurants), mainly through its Concha y Toro, Viña Maipo, Cono Sur, Isla Negra, Trivento, Palo Alto and Fetzer brands. Total sales in the United Kingdom in 2014 reached 58.5 million liters, representing a 16.2% increase as compared to 2013 in terms of volume.

The Company’s marketing strategy in Germany and the non-wine-producing countries of Western and Eastern Europe focuses on expanding the premium wine segment, particularly with the Casillero del Diablo brand and building brand recognition. Sales to Continental Europe increased 0.6% in volume. The Company sees great potential in this region, with the exception of important wine producing countries such as Georgia, Hungary, Bulgaria and Moldova.

In the major wine-producing countries of Western Europe (e.g., Italy, France, Spain and Portugal), where the Company faces greater competition, the Company’s marketing strategy is to shift from sales of small quantities of super-premium wines to higher volume sales of premium wines in the off trade (supermarkets and wholesale chains).

United States. Sales volume to the U.S. market accounted for approximately 22.8 million liters in 2014 and 11.5% of sales volume in export markets. Volumes decreased 1.0% in 2014. According to the Exporters’ Association in 2014 the U.S. market represented 13.4% of total Chilean bottled exports, being the first market in volume, and the Company was the leading Chilean exporter to the United States, with a market share in volume of 39.3% of total Chilean bottled wine exported to the US. Wine markets worldwide are divided into segments according to the price range of the wines and competitors differ from one segment to another. According to the wine classification method generally used in the U.S. market, the Company believes that the following wine categories are a representation of the wines sold by the Company in the United States: ultra premium, super premium, premium and popular premium. The Company believes that the Company’s wines would be classified within such categories as follows: ultra premium —Don Melchor, Amelia and Terrunyo; super premium—Marqués de Casa Concha and Gran Reserva Serie Riberas; premium—Trio, Casillero del Diablo, Palo Alto and Xplorador; and popular premium—the Company’s varietal wines and bi-varietals, including Sunrise, Frontera and Viña Maipo varietal wines, among others.

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The Company and its Chilean competitors are increasing their participation in the premium segment and establishing a strong presence in the varietal and bi-varietal segments. The Company’s strategy is to focus on sales within the premium and above categories and keep the positions in the varietal categories, especially Frontera. In the United States, the Company’s greatest market strength is in the varietal and bi-varietal segments due to the Company’s competitive price/value relationship. See Item 4  — “Information on the Company — Business Overview — Export Marketing Strategy.”

In the United States, the Company’s products principally compete with other Chilean wines, as well as Californian wines and wines imported from Italy, France, Australia, Spain, Germany, Portugal, Argentina and other wine-producing countries.

Central America, Mexico and the Caribbean. The Company’s 2014 sales volume to Central America, Mexico and the Caribbean totaled 16.4 million liters or 8.3% of the Company’s exports. The primary markets for the Company’s products in this region are Mexico, Costa Rica, Panama and the Dominican Republic. The Company has marketed its wines for more than twenty years in most of the countries in this region and the Company believes it is the largest Chilean exporter of bottled wines in all of these countries. Sales in volume terms increased by 1.6%.

VCT & DG Mexico, a joint venture between Concha y Toro and Digrans SA (“Digrans”), established at the end of 2011, started operations in the second half of 2012 and handled distribution in Mexico. This joint venture is 51% owned by Concha y Toro and 49% owned by Digrans. In 2014 VCT & DG Mexico sold 5.1 million liters.

South America. In 2014, sales to South America increased by 16.4% in volume terms to approximately 19.7 million liters or 10.0% of the Company’s total exports. Annual sales in Brazil increased 16.9% in terms of volume, as compared to 2013. The Company is currently the leading Chilean wine exporter to most of the South American countries, in most of these countries, the Company’s products are sold through exclusive local distributors, with the exception of Brazil where the Company opened a distribution subsidiary at the end of 2008, and in some countries, the Company’s secondary brands are sold by different distributors. Other significant countries in South America are Ecuador, Venezuela and Peru.

Historically, export sales to South America have been limited by economic conditions. Chilean wines have traditionally enjoyed favorable customs treatment in South American countries compared with wine produced by nations outside of the region. This advantage may end as these countries lower their tariffs or follow the global trend toward open market economies.

Canada. In 2014, the Company’s sales to Canada increased 7.6% to approximately 7.4 million liters or 3.7% of the Company’s exports. Canada is the fourth largest national export market for the Company in volume and value terms.

The Canadian market is governed by provincial monopolies in nine of the ten provinces and the three territories. The monopolies (or liquor boards) buy and sell all imported (bottled) and locally produced liquors and wines. Each province is autonomous and each provincial liquor board has its own regulations and policies. Each liquor board is also responsible as guarantor of payments to its suppliers. Because the Canadian market is a controlled market, the buying system is highly concentrated and the marketing policies are strictly regulated. The Company believes that even if privatization of the provincial monopolies takes place, its sales will not be adversely affected because its brands are well-known in Canada. However, there can be no assurance that privatization would not have a material adverse effect on the Company’s sales to the Canadian market. On the first half of 2012, the Company opened a comercial office  in Canada to serve the Canadian market. From January 1st, 2015, the Company started to distributes Concha y Toro and Fetzer’s wines in Canada. The distribution of wines is carried out through its distribution subsidiary, Escalade Wine & Spirits Inc., a joint venture between Concha y Toro y Charlton Hobbs (See Item 4 – Businee Strategy – Company Sales – Export Markes – Own Distribution Subsidiaries). Escalade Wines & Spirits Inc (“Escalade”). acts as an exclusive distributor or agent in accordance to the nature of the business in the Canadian Provinces (in certain provinces the distribution is performed directly by “Escalade” and in others by the Governmental Liquor Authorities).

Asia. The Asian market accounted for approximately 24.3 million liters in 2014, equal to 12.3% by volume of the Company’s exports. In 2014, volume sales to Asia increased 13.2% and 14.5% in value, U.S. dollar, consistent with our objective of increasing sales in terms of value at a faster pace than volume. Japan, China, Hong Kong and South Korea grew in 2014 in terms of volume. In 2014, the continued work on brand building and promotional support was fundamental for our strategy of increasing the Company’s presence and value in the region. In 2010, the Company opened its own local regional distribution company based in Singapore which has been fundamental for the performance in Asia and in 2013 the company opened a commercial office in China, a market that the company considers to have great potential.

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Other. The Company’s 2014 sales to countries in Africa and elsewhere totaled 4.7 million liters or 2.4% of the Company’s exports by volume. The largest market in this category is Mozambique. The first quarter of 2012 the Company opened an office in South Africa to serve this market.

Bulk Wine Exports. In 2014, the Company sold 3,503 thousand liters of bulk wine overseas representing 1.7% of its exports by volume. Bulk wine sales is a spot business with no long-term commitments. Sales depend on price and availability of wine in Chile and other wine growing countries. The Company purchases almost all of the bulk wine it exports from outside suppliers. The Company expects bulk wine sales to diminish in significance as it continues to promote bottled wine sales. However, bulk wine sales may continue in countries depending on price, demand and availability for such wines.

Distribution in Export Markets. The Company’s products are distributed in approximately 145 countries by independent distributors, including four governmental liquor authorities. In most countries, the Company sells wine through a second and third distributor under the brand names of its subsidiaries Cono Sur, Maipo and Canepa. The Company sells mostly “F.O.B. Chilean port” to its distributors in export markets.

In 2014, the United Kingdom, the United States, Japan, Canada and Brazil were the Company’s five largest national export markets and accounted for 56% of the Company’s exports by volume and 57% by value. The Company believes that its success in export markets is based on developing good relationships with established distributors and the good price-to-quality ratio of its products. The Company has written agreements with most of its distributors.

Independent Distributors. The Company’s exclusive agent and importer in the United States was Banfi, which imported and re-sold the Company’s products to distributors who service all 50 states. Banfi was the Company’s largest single customer in 2010, purchasing approximately 2.8 million cases of wine which represented 15.3% and 13% of the Company’s Chilean export sales by volume and value, respectively. With the creation of Excelsior Wine Company LLC, in July 2011, a joint venture between Concha y Toro and Banfi, only 33.7% of the bottled volume (including Argentina and the US) is sold by independent distributors. Sales to the Company’s five largest distributors, excluding Banfi, represented 7.7% in 2014 and 7.5% in 2013 of the total sales.

Government Liquor Authorities. In Canada and the Nordic countries, the Company’s wine is sold through government liquor authorities. In such countries, products may be offered as a general listing or a specialty listing. General listings are those that are purchased by liquor boards on a regular basis and require a minimum sales level per period (which varies depending on the Canadian province and from country to country in the Nordic countries). Sales to government liquor authorities represented 7.0% and 8.4% of the Company’s total sales (including Argentina and the US) by volume and value, respectively, in 2014. In all provinces in Canada, the Company operates with agents that work on a commission basis and are responsible for promotion and public relations. The exceptions are Alberta and British Columbia where the local liquor boards are buying from our agents or distributors.

Own Distribution Subsidiaries. In the United Kingdom, the Company’s wholly-owned subsidiary Concha y Toro UK distributes all brands of the Company and its subsidiaries, including Concha y Toro, Cono Sur and Isla Negra, Viña Maipo, Palo Alto and Trivento.

In 2008, Concha y Toro established distribution subsidiaries in Brazil, Sweden, Finland and Norway in order to strengthen its sales in those countries. These subsidiaries started their operations during the first quarter of 2009. The Nordic subsidiaries commercialize all of the Group brands including the Argentine portfolio with the exception of Cono Sur and Canepa. In Brazil, a third party distributor also sells some brands of the Company. In 2010, the company established a distribution subsidiary for the Asian market, based in Singapore, which began trading in the last quarter of 2010. In the third quarter of 2011 Viña Concha y Toro S.A., through its subsidiary VCT USA, Inc. entered into an agreement with Banfi Vintners, former distributor of Concha y Toro’s product in United States, to create a new company between them, named Excelsior Wine Company, LLC, which started operations in August 2011. In 2011 a new subsidiary located in Mexico, was created, VCT & DG Mexico SA de CV, as a joint venture between Concha y Toro and Digrans, the former distributor in Mexico which began operations in the first half of 2012 and is in charge is in charge of the distribution in Mexico.

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In 2013 VCT Norway AS was incorporated in order to support the activities of distribution of the affiliate Concha y Toro Norway AS.

During 2014 the Company through its Canadian subsidiary Concha y Toro Canada, Ltd. Entered into an agreement with local distributor Charlton Hobbs, to create a new company called Escalade Wine & Spirits Inc. This Company acts as exclusive distributor of the Company in the Canadian territories of British Columbia, Yukon, Nunavut, Alberta and Northwest territories.- In the same year the Company through its wholly owned subsidiary VCT Group of Wineries Asia Pte. Ltd., entered intoa joint venture with Japanese entities Mercian Corporation and Mitsubishi Corporation incorporating, which incorporated an affiliated called VCT Japan Company Ltd. to participate directly in the Japan’s wine supply chain to distribute some of the products of Concha y Toro that weren’t being distributed by the current distributors in the Japanese market,

Comercial Offices

During 2012 the Company established two new subsidiaries/ commercial offices: one is based in Canada and the other is based in South Africa to serve the Africa and Middle East markets. In the beggining of 2013, the Company opened a new office in Shanghai to serve the Chinese market. This same year the a Company opened new commercial office was in France to serve the European market with the products of Viña Cono Sur S.A., one of the Company’s wholly-owned subsidiaries. During the end of year 2013 and the beginning of 2014 the Company established a new commercial structure in Brazil to serve the local wine retail market.

During 2014 the Company through its Canadian subsidiary Concha y Toro Canada, Ltd. Entered into an agreement with local commissioner and distributor Charlton Hobbs, to create a new company called Escalade Wine & Spirits Inc. This Company acts as commissioner and commercial office in those Canadian Territories with local governmental liquor board as SAQ in Quebec, and the LCBO in Ontario.

Export Marketing Strategy

Concha y Toro’s export strategy seeks to sustain attractive growth rates and achieve increasingly higher brand penetration and visibility in different markets and increase consumer awareness. In this regard, the Company has developed a broad product portfolio which participates in all market segments by offering high quality wines at competitive prices, with growing brand preference and ample recognition from influential wine critics.

At the same time the Company has diversified its market scope by developing a portfolio of subsidiary wineries aiming to reach more consumers and strengthening its distribution channels. Its main subsidiaries are Viña Cono Sur, Viña Maipo, Viña Palo Alto, Viña Maycas del Limarí, Trivento Bodegas y Viñedos and Fetzer.

Another key part in the Company’s export marketing strategy has been to diversify its export markets on a regional basis. Diversification may mitigate possible economic and in some cases political changes, which could affect the marketer of the Company’s products. In particular, the Company has expanded its sales to Asian, African, Eastern European and Middle Eastern countries, where the consumption of wine has been increasing. The Company has a strong distribution network and has developed long term relationships with its international distributors. This has enabled it to invest together with its business partners in brand building and market growth.

The Company may from time to time seek to strengthen distribution of its products by taking a direct role in distribution within a region or country. The Company may also take these steps in order to increase penetration and knowledge of these markets.

The Company is seeking to focus future growth in export markets on the sale of premium and varietal wines. The Company believes future growth is possible if the Company is successful in the following efforts:

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· improving the quality of its wines as a result of state-of-the-art technology used by the Company in the vinification process and vineyard management;

· increasing production from current and new vineyards;

· changing perception of consumers, especially in the United Kingdom and the United States, with respect to the quality of Chilean wines, thereby creating a growth opportunity for the Company for its premium and higher-priced wines;

· launching new products;

· marketing efforts and upgrading packaging for all product lines with a special focus on its global brand Casillero del Diablo; and

· promotional and advertisement campaigns seeking consumer engagement, including on-premise sales (e.g., sales to restaurants).

The Company believes that there is a trend towards the consumption of premium wines from Chile certain varietal wines,  in particular, in its major export markets, principally the United States, Europe, Asia and Canada. The Company has tailored its new grape plantings to respond to this anticipated trend. See Item 4 — “Information on the Company — Business Overview — Vineyards.”

Seasonality

The Company has experienced and expects to continue to experience seasonal fluctuations in its revenues and net income. Both domestic and export wine sales tend to be lower during the first quarter of the year and higher during the third quarter, in anticipation of the year-end holiday period. Sales volumes also typically decrease if distributors begin a quarter with larger-than-normal inventory levels, which is usually the case in the first quarter of the year. For these reasons, the operating results of the Company in any one quarter of the year may not be indicative of the year-end results or the results of any other quarter.

Company Sales - Argentina

Argentine Business. In 1996, Concha y Toro began operations in Argentina with the establishment of Trivento winery, located in Mendoza. In recent years the subsidiary has experienced important growth and has become Argentina’s fourth largest export winery in terms of volume, with a 4.5% of market share of all bottled wine exported from Argentina in 2014. The operating assets of Trivento primarily include a total of 1,210 arable hectares of land, with 1,143 hectares planted, cellars with a capacity of 31.7 million liters and other wine-making equipment. In 2014, Trivento had revenues of Ch$25,747 million and sales of 2.1 million cases.

Trivento exports amounted to Ch$ 17,324 million and shipments of 1.1 million cases, representing a 10.6% increase in value and a decrease of 2.6% in the volume exported. This situation is partly driven by the increases in the average price, a consequence of the repositioning of the brand in higher price points. Trivento also exported 5.0 million liters of bulk wine, some of which were shipments to Company’s subsidiaries and bottled under Company’s brands.

Domestic sales were Ch$ 4,190 million in 2014 and Ch$ 6,035 million in 2013, with a volume of 423 thousand cases in 2014 and 494 thousand cases in 2013. The decrease is partly explained by the domestic economic conditions. Sales in the domestic Argentine market are concentrated in the popular bottled category. In addittion, domestic sales represent less than 1% of the company’s total sales.

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	Trivento Winery - Sales by
	Export		Domestic
	volume		volume
	(cases)		(cases)
2007		1,528,000		864,000
2008		1,675,000		943,600
2009		1,636,000		924,000
2010		1,753,000		863,000
2011		1,306,000		679,000
2012		1,224,000		590,000
2013		1,111,000		494,000
2014		1,082,262		427,977

Company Sales – United States

Fetzer. The operating assets of Fetzer primarily include a total of 473 hectares of land, with 469 hectares planted, cellars with a capacity of 44 million liters and other wine-making equipment. In 2014 Fetzer had revenues of Ch$61,502 million and sales of 2.5 million cases and in 2013, had revenues of Ch$56,597 million and sales of 2.6 million cases. During 2014, Fetzer also had sales of 1.1 million liters of bulk wine in the domestic market.

Affiliated Companies

Viña Almaviva. In 1997, the Company and Rothschild S.A. formed a joint venture company, Viña Almaviva, to produce a “Primer Orden” or first-growth wine in Chile. The Company contributed approximately 40 hectares of producing vineyards located at Puente Alto, Maipo Valley in exchange for 50% of the capital stock of Viña Almaviva.

In 2014, Viña Almaviva’s ordinary sales amounted of Ch$7,218 million, Ch$5,740 million in 2013 and Ch$5,409 million in 2012. Almaviva’s main markets are United Kingdom, United States, Hong Kong, Japan and China. In 2014, 2013 and 2012, the Company recognized net income from Viña Almaviva in the amounts of Ch$1,146 million, Ch$1,007 million and Ch$1,174 million, respectively, in accordance with the equity method.

Industria Corchera. In November 2000, the Company acquired 49.6% of Industria Corchera. Currently the Company’s share in Industria is 49.96%. In 2014, Industria Corchera’s total sales amounted to Ch$13,454, in 2013 Ch$11,067 million and in 2012 Ch$10,725 million. The Company in 2014, 2013 and 2012 recognized income from Industria in the amounts of Ch$189 million, Ch$98 million and Ch$319 million, respectively, in accordance with the equity method. In 2014 the Company, trough Industria Corchera, got the ownership of 44,9667% of another cork manufacturer called Corchera Gomez Barris S.A.

Southern Brewing Company Inc. (“Kross Beer”). In May 2011, the Company acquired 40% of the total shares of Kross Beer. The total price of the shares acquired amounted to Ch$1,400 million. In 2014, 2013 and 2012 Southern Brewing Company had revenues of Ch$ 1,350 million, Ch$797 and Ch$ 1,612 respectively. The Company recognized net income from Southern Brewing Company in accordance with the equity method, in the amounts of Ch$39 million, Ch$39 and Ch$28 million in 2014, 2013 and 2012 respectively. During year 2014 the Company increased its participation in Southern Brewing Company to 49%.

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Excelsior Wine Company. On July 13, 2011, Viña Concha y Toro S.A., through its subsidiary VCT USA, Inc. entered into an agreement with Banfi Vintners, former distributor of Concha y Toro’s products in United States, to create a new company, called Excelsior Wine Company, LLC. to be registered in Delaware State, US. Excelsior Wine Company, LLC. will be managed by Banfi and VCT USA, Inc. Excelsior Wine Company, LLC. imports and distributes in the United States the Chilean wines of Concha y Toro and the Argentine wines of Trivento in the United States. The Company has the ownership of 50% of the total shares of Excelsior Wine Company, LLC. Also, Excelsior distributes the brands “Little Black Dress” and “Five Rivers” that belong to the Company’s subsidiary in California, Fetzer Vineyards. Sales of Excelsior totaled Ch$ 64,850 million in 2014, Ch$ 56,390 million in 2013 and Ch$ 58,447 million in 2012. In 2011, the Company recognized net income from Excelsior in accordance with the equity method in the amounts of Ch$2,406 million in 2014, Ch$744 million in 2013 and Ch$ 1,154 million 2012.

Escalade Wine & Spirits Inc. On December 5^th, 2014, Viña Concha y Toro S.A. through its Canadian subsidiary Concha y Toro Canada, Ltd. Entered into an agreement with local distributor Charlton Hobbs, to create a new company between them, called Escalade Wine & Spirits Inc. The purpose of this joint venture is to strengthen the sales in the Canadian market. The Company through a subsidiary has the 50% of the total shares of Escalade Wine & Spirits Inc.

Alpha Cave Comercio de Vinhos S/A. On October 18, 2013, Viña Concha y Toro S.A. through its wholly owned Brazilian subsidiary, VCT Wine Retail Participacoes Ltda. Entered into an agreement with local retailers, and acquired interest in a local Brazilian stores of groceries and wines, through an entity called Alpha Cave Comercio de Vinhos S/A Inc. The Company through its subsidiary has the 35% of the total shares of Alpha Cave Comercio de Vinhos S/A

VCT Japan Company Ltd., On June 17, 2014 through its wholly owned subsidiary VCT Group of Wineries Asia Pte. Ltd., entered into a joint venture with Japanese entities Mercian Corporation and Mitsubishi Corporation and incorporated an affiliated called VCT Japan Company Ltd. to strengthen the sales in the Japanese market of some products of Concha y Toro and its subsidiaries that weren’t being distributed by the current distributor in the Japanese market. The Company through its subsidiary has the 41% of the total shares of VCT Japan Company Ltd.

Sustainability

Our century-old experience in producing superior quality wines has not only made Viña Concha y Toro a world-class player in the wine industry, but it has also provided enough experience to believes that sustainability is an essential and necessary value to attain global leadership. Viña Concha y Toro incorporates sustainability into its corporate vision integrating, in a balanced way, economic, environmental and social dimensions. The winery considers that it is essential to care for the environment throughout the production and distribution of its products, the development of its employees, people and communities where it operates, along with responsible economic growth.

Since 2012, Concha y Toro has been implementing a sustainability strategy, addressed through a top-down approach, starting with the vision and mission at its highest point, followed by six strategic pillars. Each pillar has its own specific foci, which result in specific initiatives, planned on the short, medium and long term. The sustainability strategy is subject to a process of continuous evaluation of goals and achievements, in order to incorporate necessary adjustments and restatements in each pillar.

In the framework of developing the sustainability strategy, the winery defined its priority stakeholders, according to the influence of and dependence with each group, internal or external, along the value chain. Moreover, there are different channels of communication and dialogue for each group in order to learn and improve their perception and expectations of the winery.

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As the largest wine producing company in Chile, Viña Concha y Toro is determined to become a leader on sustainability and environmental care. Its long-term environmental commitment is reflected in the pillar Environment of the winery’s sustainability strategy, where the focus is on managing resources and externalities, establishing processes and continuous improvement, and training and sharing best practices in environmental matters.

Viña Concha y Toro has inventoried its emissions of greenhouse gases (GHGs) since 2007. The emissions record has become a tool to identify opportunities to reduce the environmental footprint of the company. The measurement uses the guidelines set forth in the International Protocol for Wine GHG Emissions Calculation, which separates the sources of GHG emissions according to three areas or scopes that include the company’s direct and indirect emissions.

Concha y Toro Consolidated Carbon Footprint (Tons of CO2)
	YEAR
SCOPE	2007		2008		2009		2010		2011		2012		2013
1		15		15		15		18		39		31		35
2		11		13		13		12		14		17		20
3		33		35		128		248		276		187		193
Total		59		63		156		277		328		235		248

By observing the evolution of Concha y Toro’s carbon footprint, it can be seen that there has been a steady increase of indirect emissions (Scope 3) between 2007 and 2011. This is mainly due to the increase in the number of sources considered and the measurement limitations.  The decrease observed in the period 2011-2012 was largely attributable to the adjustment of the emission factor glass, which was 2.2 kg CO2/kg glass until 2011, currently being 1 kg CO2/kg glass. This was obtained from the Suppliers, Sustainability and Carbon Footprint program, where the main supplier of bottles made and verified a Supply Life-Cycle Assessment, which it delivered to the winery. Finally, the 5% increase in emissions for the 2012-2013 period is explained by the increased production of wine.

The GHG emissions of Viña Concha y Toro and its subsidiaries during 2013 totaled 247,994 tons of CO2e. Of these, 35,067 tons -representing 14% of total emissions- are direct emissions of the Company. In other words, about 86% of GHG emissions from the value chain correspond to emissions that are not directly controlled by the winery.

Viña Concha y Toro achieved a milestone in its commitment to environmental conservation and sustainable development strategy in 2010 by becoming the first winery in the world to measure its water footprint. The project was conducted in partnership with Fundación Chile and WaterFootprint Network, and continues to operates as a going concern in order to move  towards a comprehensive water management. As part of estimating the water footprint, the company made an assessment to determine the sustainability in each of the basins where it grows grapes, which represent most of the water footprint of the company.

The assessment considered the volume of the blue water footprint of Concha y Toro for grape production, which corresponds to surface and groundwater that is incorporated into the product, evaporated or consumed through evapotranspiration, and represents the source of greatest impact on the basin. This value was then compared with the water demands for agriculture in general and wine production in particular in each basin. The comparison of Concha y Toro’s blue water footprint with the agricultural water demand in each basin revealed that the company uses 1.5% of agricultural water from the Coastal Basin of the Rapel River, and a little over 0.5% from the Limarí River Basin. As for the contrast of the winery’s blue water footprint with water demand for wine production in each basin, the most relevant results indicate that the company uses 7.5% of water for wine production from the Maipo River Basin and 10.4% from the Limarí River Basin.

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In the agricultural area, which accounts for most of the water use, the Company has been using drip irrigation since 1991. Today, this irrigation mechanism covers almost 100% of the hectares planted making efficient use of water resources. In the winemaking and operations areas, the Company has designed washing and sanitizing procedures to minimize water consumption. Furthermore, in these areas, the Company considers water use efficiency redesigning processes and aacquiring machinery (e.g. pumps).

The conservation of biodiversity is very important for the company. The presence of different species of flora and fauna inhabiting native forests and water flows of Viña Concha y Toro shows an excellent state of conservation of the company’s natural acreage, which coexists with the production of quality and sustainable wines with unique characteristics.

The initiative “Native Forest Conservation Program” developed by the company seeks to provide a framework to protect more than 3,270 hectares of natural forest (sclerophyllous and scrubland) that it owns in its various estates. This program includes the registration of the area corresponding to this ecosystem with the National Forest Corporation (CONAF), which means the company cannot exploit this resource and has to voluntarily meet and improve its condition. During 2013 the Company continued carrying out biodiversity inventories of flora and fauna with the support of the Institute of Ecology and Biodiversity (IEB), covering 94% of the total area. Additionally, the Company plans replant to recover sectors with signs of degradation.

An important milestone in the management of climate change and greenhouse gases emissions has been the project of measuring CO2 stocks in the forests and vineyards owned by Concha y Toro. During 2013 the company conducted a study along with the Center for Global Change at the Pontifical Catholic University of Chile to quantify the amount of carbon captured and stocked in its forests and vineyards. This fixation of CO2 in the biomass of the winery’s vegetal acreage improves air quality and contributes to climate change mitigation. The study found that the winery has over 368 thousand tons of CO2 in stock, 48% more than the emissions generated by the company during 2013.

Viña Concha y Toro aims to maintain a comprehensive certification system that allows to continuously improve its processes, as part of a competitiveness strategy, in order to position itself as a leader in sustainable practices.

During 2013, the winery and its subsidiaries achieved the recertification of the National Sustainability Code of Vinos de Chile with 88% compliance. This certification system is voluntary and demosntrate the company’s commitment to environmental and social management. The winery was also certified under the Clean Production Agreement II (APL II), which serves as a management tool to improve productive, environmental, and occupational health and safety conditions, as well as efficient use of energy and water, among others.

Without a sustainability strategy in place, wine suppliers run the risk of being unable to timely respond to a market that may demand or favor sustainably produced wine. It is because demands for sustainability are increasing year by year  that the Company has been proactive in addressing this issue. In this regards, the demand for sustainable processes mainly comes from our distributors. Since 2007 the company has been the subject of ethical audits (SMETA, ETI, BSCI, Walmart, among others), which have intensified in recent years, reflecting customers’ growing interest in areas related to sustainability. Further information is available in the Company’s 2013 Sustainability Report (www.conchaytoro.com).

Government Regulation

Chilean Regulation. The Company is subject to the full range of governmental regulations generally applicable to companies engaged in business in Chile, such as labor laws, social security laws, public health, consumer protection, environmental laws, securities laws and anti-trust laws, as well as regulations to ensure sanitary and safe conditions in the production, bottling and distribution of beverages. The main regulatory entity for Chilean sociedades anónimas is the Superintendencia de Valores y Seguros de Chile (“Superintendency of Securities” or “S.V.S.”).

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Alcoholic Beverages Regulations. The Company is subject to regulation in the production and distribution of alcoholic beverages. Chilean law regulates which beverages come within the scope of regulation as “alcoholic beverages,” the type of alcohol which can be used in the manufacture of alcoholic beverages, the additional products that can be used in the production of certain alcoholic beverages and the packaging and labeling and procedures that must be followed to import alcoholic beverages. The manufacturing and bottling of alcoholic and non-alcoholic beverages is also subject to supervision by the Chilean Agricultural and Livestock Service, which inspects plants on a regular basis.

Chilean law requires a license for the manufacture and sale of alcoholic beverages and the Company believes it has all the licenses necessary for its business.

There are currently no material legal or administrative proceedings pending against the Company pertaining to any Chilean regulatory matter and the Company believes that it is in compliance in all material respects with all applicable statutory and administrative regulations relating to its business.

Environmental Regulation. The Chilean Constitution of 1980 grants all citizens the right to live in an environment free of pollution. It further provides that it is a State’s duty to enforce this right and to protect the environment. The Chilean Constitution also provides that citizens can file a complaint with the corresponding Court of Appeals seeking review of government and private party actions on the grounds that such actions infringe the citizens’ rights to a clean environment.

In 1994, the Chilean Congress enacted the Law No. 19300, which was then amended by Law No. 20417 published in January 2010 (the “Environmental Framework Law”). The Environmental Framework Law sets forth that any new project or activity or modification to an existing project or activity that may have an impact on the environment requires a favorable environmental impact assessment. The Environmental Framework establishes the basic framework and regulates all major activities that may likely have an environmental impact. It also contemplates an Environmental Impact Assessment System (EIA System).

The Environmental Framework Law also establishes environmental liability standards, according to which perpetrators of environmental damage are liable to compensate the victims and restore the environment.

A new Environmental Ministry having the responsibility of defining all environmental policies and strategies, was formally created (pursuant to Law 20417). The Ministry has an Under Secretariat with six different divisions to undertake various environmental matters. Along with the new Ministry, the law also created the Environmental Impact Evaluation Service (EIES), which is in charge of environmental authorizations and permits and coordinates the actions of all governmental entities that are required to be involved in the EIA System.

U.S. Regulation. The sale of wine in the United States is subject to extensive regulation covering virtually every aspect of the Company’s operations, including marketing, pricing, labeling, packaging and advertising. State agencies regulate the delivery and use of all alcoholic beverages within their jurisdictions, while the federal government, through the Bureau of Alcohol, Tobacco, Firearms and Explosives, is responsible for the regulation of imports through permit requirements and label approval processes. Importers of wine to the United States are required to obtain various licenses, bonds and permits, including a federal Importer’s Permit, to comply with the regulations of all such agencies.

In 1997, U.S. and Chilean news organizations announced that members of the California wine industry had petitioned the U.S. Department of Commerce to impose trade sanctions against Chilean wine producers. These rumors have been denied by the California Association of Wine Grape Growers and other industry officials and, to date, no allegations of violations of U.S. antitrust laws have been announced by any U.S. federal or state agency. There can be no assurance, however, that no U.S. federal or state agency will commence any action and/or impose any trade sanctions relating to alleged violations of U.S. antitrust laws.

The Company believes it is in compliance in all material respects with all presently applicable U.S. federal and state regulations. The Company is not aware of any matters for which it is not incompliance.

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Trademarks. The Company has Chilean registrations for the principal trademarks used in its business, including Concha y Toro, Don Melchor, Amelia, Terrunyo, Trio, Casillero del Diablo, Sunrise, Frontera, Tocornal, Maipo, Fressco and San José. Trademarks registered by subsidiaries include Cono Sur, Isla Negra, Palo Alto, Maycas del Limarí and Trivento. While the Company also has foreign registrations for many of these trademarks in most of its principal export markets, it does not have registrations for all of its trademarks in all of its export markets. As a result of the Fetzer acquisition the Company acquired a portfolio of brands which includes: Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary and the license of the brand Little Black Dress wines. The Company believes that its brands and trademarks are important to its business and is seeking to protect them through registration in many countries where they are not currently recorded.

C. Organizational Structure

The following table lists the significant subsidiaries and affiliates of the Company, the percentage of direct and indirect ownership by the Company and the respective country of incorporation:

Subsidiary	Direct and Indirect Ownership	Country of Incorporation
Inversiones Concha y Toro SpA	100%	Chile
Inversiones VCT Internacional SpA	100%	Chile
Comercial Peumo Ltda.	100%	Chile
Viña Cono Sur S.A.	100%	Chile
Sociedad Exportadora y Comercial Viña Maipo SpA	100%	Chile
Sociedad Exportadora y Comercial Viña Canepa S.A.	100%	Chile
Viña Maycas del Limarí Ltda.	100%	Chile
Transportes Viconto Ltda.	100%	Chile
Bodegas y Viñedos Quinta de Maipo SpA	100%	Chile
Concha y Toro UK Limited	100%	United Kingdom
Cono Sur Europe Limited	100%	United Kingdom
Trivento Bodegas y Viñedos S.A.	100%	Argentina
Finca Lunlunta S.A.	100%	Argentina
Finca Austral S.A.	100%	Argentina
VCT Brasil Importación y Exportación Limitada	100%	Brazil
VCT Wine Retail Participacoes Ltda.	100%	Brazil
Alpha Cave Comércio de Vinhos S/A	35%	Brazil
Concha y Toro Sweden AB	100%	Sweden
Concha y Toro Finland OY	100%	Finland
Concha y Toro Norway AS	100%	Norway
VCT Norway AS	100%	Norway
Viñedos Los Robles SPA	100%	Chile
Viña Cono Sur Orgánico SpA	100%	Chile
Viña Almaviva S.A.	50%	Chile
Industria Corchera S.A.	49.96%	Chile
Corchera Gómez Barris S.A.	44,96%	Chile
Concha y Toro Shanghai (Representative Agency).	100.0%	China
VCT Group of Wineries Asia Pte. Ltd	100.0%	Singapore
Fetzer Vineyards	100%	United States
VCT USA, Inc	100%	United States
Eagle Peak States, LLC	100%	United States
Excelsior Wine Company LLC	50%	United States
VCT Africa & Middle East Proprietary Limited	100%	South Africa
VCT México S.R.L. de C.V.	100%	Mexico
VCT & DG México S.A. de C.V.	51%	Mexico
Concha y Toro Canada. Ltd	100%	Canada
Escalade Wines & Spirits Inc.	50%	Canada
Southern Brewing Company S.A.	49%	Chile
Gan Lu Wine Trading (Shanghai) Co., Ltd.	100.0%	China
Cono Sur France S.A.R.L	100%	France
VCT Japan Company Ltd.	41%	Japon

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D. Property, Plant and Equipment

The Company’s headquarters are located at Nueva Tajamar 481, Las Condes, Santiago. The Company owns 17,048 hectares of land throughout Chile and owns 1,210 hectares of land in Argentina and 473 in the United States. Of these, approximately 11,848 hectares are suitable for planting vineyards and as of December 2014, 10,737 hectares were planted with vineyards. A majority of the remaining hectares are comprised of roads, hills and riverbanks. The remainder is used for vinification and bottling plants, cellars and other buildings. None of the Company’s properties that are material to its business are mortgaged or otherwise encumbered.

As described in the section Item 4  — “Information on the Company — Business Overview — Vineyards.”, the Company leases 618.5 hectares, comprising four leases in the Maipo Valley, three leases in the Casablanca Valley,two leases in Colchagua Valley and one lease in San Luis Obispo. All of these are long term leases expiring between 2015 and 2036.

The Company’s main equipment assets include harvesting machinery, grape crushers, concrete and stainless steel tanks and barrels. As of December 31, 2014, Concha y Toro’s aggregated winemaking and cellar capacity in Chile was approximately 415.1 million liters including 48 thousand barrels. In the Mendoza region, Viña Trivento owns two vinification and cellar facilities and a bottling plant with a total capacity of 31.7 million liters and in the United States Fetzer owns two facilities with a total capacity of 44.0 million liters. 

Comercial Peumo leases warehouses in Iquique, Antofagasta, Los Angeles and Puerto Montt for distribution. The Company leases plants for vinification of popular wine from purchased grapes. The Company believes it would be able to obtain replacement properties at acceptable costs for its leased vineyards, warehouses and vinification plants should its leases not be renewed. See Item 4  — “Information on the Company — Business Overview — Vineyards.”

Although the Company believes that it is in compliance with all applicable environmental regulations, it is still in the process of improving the water treatment systems in all of its manufacturing plants. The Company has water treatment plants or systems, owned or contracted to third parties, in all of its plants. During 2014 and 2013, the Company invested in water treatment plants resources amounting to Ch$950 million and Ch$926 million, respectively. Total investment in assets oriented towards the improvement of the environment totaled Ch$2,800 million and Ch$2,239 million in 2014 and 2013, respectively.

ITEM 4A: UNRESOLVED STAFF COMMENTS

Not Applicable.

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ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This section provides an assessment by management of the most significant trends and changes in the Company’s financial condition and results of operations. Historical results are not necessarily indicative of future performance. Forward-looking statements presented in this section are subject to a number of factors that may cause future results to differ materially from those foreseen.

Overview

Concha y Toro is principally a vertically-integrated wine producer. The Company is the largest producer of wine in Chile and also owns a winery in Argentina, Trivento Bodegas y Viñedos and a winery in the United States, Fetzer Vineyards. The Company is Chile’s leading bottled wine exporter, top-selling winery in the domestic market, number four bottled wine exporter by volume from Argentina and number ten in sales volume in United States.

The Company faces certain key challenges which involve an element of associated risk. Competition in strategically important markets is increasing in tandem with higher supplies of wine and larger efforts to market wines from producer countries. In an effort to sustain sales growth under such conditions, the Company has a portfolio of wines capable of offering what the Company believes is a highly attractive price to quality ratio. In addition, Concha y Toro has allocated further funds for the strengthening of its brand and the advertisement and marketing of its products in its main markets as well as expanding and fortifying its distribution network.

Significant factors which have impacted the Company’s operating results include sales development in both foreign and domestic markets, the pricing of its principal raw material—the cost of grapes—and exchange rates.

Consolidated sales in 2014 were Ch$583,313 million, representing a 22.6% increase over 2013. A positive performance in the foreign markets contributed to this result.

Company sales outside of Chile represented 81.3% of the sales revenues and were denominated in foreign currencies: in United States dollars, Sterling Pounds, Euros, Canadian dollars, Argentine pesos, Brazilian reais, Mexican peso and Swedish and Norwegian crowns. In general, the exposure to foreign currencies could affect the results of the Company. To mitigate the impact of this scenario as much as possible, the Company is applying a multi-currency strategy in line with its diversification in sales and hedges upcoming cash flows.

In 2014, Concha y Toro had a Gain attributable to shareholders of the controller of Ch$37,398 million, representing a 12.7% increase in comparison to 2013.

We believe that the Company is capable to be highly competitive in its major markets. Concha y Toro is a powerful brand and has competitive economies of scale. The principal measure for sustaining future growth involves ongoing investment in vineyard development and cellar capacity to raise overall production capacity and a permanent sales and marketing investment in a growing and competitive industry.

Critical Accounting Policies

A summary of the Company’s significant accounting policies is included in Note 2 to the Company’s audited Consolidated Financial Statements. The preparation of financial statements requires management to make estimates and assumptions and exert judgment. These actions affect the amounts reported in the Consolidated Financial Statements. Included below are the accounting policies which the Company considers critical to its business.

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a) Inventories:

Finished products, products in-process and supplies, are initially valued at cost, subsequent to the initial recognition, these are valued at the lower of net realizable value and cost recorded initially. Inventories of wine in bulk are valued at weighted average price, determined through the absorption costing method, which implies adding to acquisition direct costs and/or grapes production costs, indirect costs incurred in the agricultural process, and direct and indirect costs in the wine production process.

The net realizable value of finished products is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The Company and its subsidiaries have recognized impairment for obsolescence of raw materials, finished products, products in-process and supplies on the basis of technical reports and on turnover level of stocks maintained and /or from the assessment of its use in the future. For 2014, 2013 and 2012, the recognized impairments totaled ThCh$5,320,457; ThCh$3,336,798 and ThCh$3,498,188; respectively.

b) Goodwill

Goodwill generated by the acquisition of investments is not subject to amortization and, at each year-end, impairment testing is conducted. The recoverable amount is the greater between the fair value less the cost needed to sell and the value in use, which is defined as the present value of the estimated future cash flows. The approaches are commonly used in business valuations and used on the goodwill associated with the the Fetzer Vineyards Value are:

Income approach, which focuses on the income-producing capability of the entity. The most widely used methodology is the discounted cash Flow (DCF)

For the DCF analysis the following variables were used:

- Expected after-tax, debt-free cash flow from operations where the key driver is estimated net sales at rates consistent with internal budgets.

- Expected new capital expenditures which are consistent with internally developed budgets.

- Weighted Average Cost of Capital; which during 2014 was 9.5%, considering Company specific risk premium of 2.0% and Small company risk premium of 2.0%. During the prior three years the weighted average cost of capital has not varied material. External market conditions could have a significant impact on the future WACC used and could have a material impact on the estimated value of the CGU.

Market Approach, that measures value based on what other purchasers in the market have paid for businesses, or interests in businesses that can be considered reasonably similar to the subject business. Valuation multiples are considered based on financial information available and share price data for the selected guideline companies, as well as forward looking revenue and earnings estimates. Selected multiples for Fetzer during 2014 were determined based on market. Valuation multiples are calculated utilizing actual transaction prices and operating data from target companies deemed reasonably similar to the subject business.

The determined multiples for the prior two years ended December 31, 2014 were as follows:

	2014	2013
Revenue	1.8	2.0
EBITDA	14.5	18.7

Based on the methodologies described above the estimated fair value of Fetzer was substantially in excess of the cost basis and no impairment of goodwill was recorded during the year ended December 31, 2014.

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c) Property, Plant and Equipment:

Property, Plant and Equipment and Amortized Intangibles: The Company depreciates property, plant and equipment and amortizes intangibles using the straight-line method over the estimated useful lives of these assets. Estimates of useful lives are based on the nature of the underlying assets as well as the Company’s experience with similar assets and intended use. Estimates of useful lives can differ from actual useful lives due to the inherent uncertainty in making these estimates. This is particularly true for the Company’s significant long-lived assets such as vineyards, buildings, farming machinery and equipment, tanks and irrigation systems. Factors such as the conditions in which the assets are used, availability of capital to replace assets and frequency of maintenance could influence the useful lives of these assets.

The Company reviews property, plant and equipment and amortizable intangibles to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an evaluation of recoverability is required, the estimated total undiscounted future cash flows directly associated for each Cash Generating Unit (CGU) identified. If this comparison indicates that there is impairment, the amount of the impairment is calculated by comparing of fair values against, discounted cash flows to determine the recoverable amount between them and then compare to de carrying amount. (See Note 2.14 of the Consolidated Financial Statements).

d) Derivative Financial Instruments:

Company exports sales are mainly denominated in U.S. dollars, Sterling Pounds, Euros, Canadian dollars and Brazilian Reais. Thus, the Company’s financial results could be affected due to variations in exchange rates.

Regarding the Argentine subsidiaries, a portion of sales and accounts receivable are denominated in Argentine pesos, while the functional currency is the U.S. dollar. This generates a risk associated with the devaluation of the Argentine peso against the U.S. dollar. In addition, a proportion of such subsidiaries’ assets in Argentina are also denominated in Argentine pesos; thus, they are impacted by the devaluation of the Argentine peso.

In order to minimize the short-term effect of the exchange rate variations on sales denominated in foreign currency, the Company has adopted a policy of attempting to balance assets and liabilities denominated in foreign currency. With this objective, the Company enters into forward currency contracts as a way to mitigate these risks according to the exposure of the exchange rate variations related to the currency positions.

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99.2% of the global derivative instruments portfolio is comprised by contracts that qualify as hedging instruments. For accounting purposes these were subscribed by the Group Concha y Toro, within its financial risk management policy framework to mitigate the risks associated with exchange rate and interest rate fluctuations through currency forward contracts and interest rate swaps.

Derivatives are recorded by their fair value as of the date of the statement of the financial position. If this value is positive, these are recorded under item “Other financial assets” and if its value is negative, these are recorded within item “Other financial liabilities”, illustrating the change in its fair value in the comprehensive statement of income as described as follows, pursuant to the type of hedging to which it correspond (See Note 2.6.7 of the Consolidated Financial Statements):

- Fair value hedging

- Cash Flow hedging

- Net Investment Hedging

The fair value of the different derivative financial instruments is calculated using the following procedures:

- For derivatives quoted in an organized market, the quoted price at year-end is used.

- For derivatives not quoted in organized markets, the Group measures them using the discount of expected cash flows and generally accepted option valuation models on the basis of market conditions, from both, cash and futures at year-end.

e) Biological Assets

Within Biological Assets, the Company includes the agricultural product (Grapes) derived from plantations under production is destined to be treated as a raw material for the wine production process.

In accordance with IAS 41, and based on the results of analysis and calculation of the Company concluded that the fair value of grapes at the time of harvest approximates the book value and therefore the grapes at the point of harvest are measured at fair value less costs to sell, and then transferred to inventory. (See Note 2.13 of the Consolidated Financial Statements).

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f) Benefits to employees

The Company’s management uses assumptions in order to determine the best estimate for these benefits. The valuation of these obligations is performed through an actuarial calculation. The assumptions used in this calculation include the pension rotation hypothesis, the mortality rate, the discount rate, the expected rise in remuneration and the future permanence, among others. The main actuarial hypothesis used for the calculation of severance indemnity obligations is detailed in note 23.3 of the Consolidated Financial Statements.

Actuarial gains or losses that can occur due to variations of defined pre-established obligations are directly recorded in income or losses for the year.

Actuarial gains or losses arise from the deviations between estimates and actuality of the actuarial hypothesis behavior or in the reformulation of the established actuarial hypothesis.

As of December 31, 2014, the sensitivity of the value for post-employment benefits before variations in the discount rate of 1% in the case of an increase in the rate represents a decrease of ThCh$ 176,973 (ThCh$ 151,225 as of December 31, 2013) and in case of a decrease in the rate represents an increase of ThCh$ 192,572 (ThCh$ 164,113 as of December 31, 2013).

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A. Operating Results

The following discussion should be read in conjunction with the Consolidated Financial Statements, including the Notes thereto, included in Item 18  herein. The Consolidated Financial Statements are prepared in accordance with IFRS. The following table sets forth Company statement of income information expressed as a percentage of revenues for the years indicated, as well as year-to-year percentage changes covering the respective periods.

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	Year Ended December 31,						% Change			% Change
	2014		2013		2012		2014/2013			2013/2012
Income from ordinary activities		100.0		100.0		100.0		22.6	%		6.1	%
Cost of sales		-62.2		-65.5		-67.6		-5.1	%		-3.1	%
Gross profit		37.8		34.5		32.4		9.6	%		6.5	%
Selling and administrative expenses (1)		-26.9		-26.8		-24.4		0.2	%		10.0	%
Operating income(2)		11.1		7.9		8.3		41.3	%		-5.2	%
Non-operating income(3)		0.8		0.6		0.8		20.8	%		-25.9	%
Non-operating expenses (4)		-2.1		-2.3		-2.2		-8.7	%		4.6	%
Foreign currency exchange gain (losses) and  Income (expenses) by adjustment units, net.		-0.1		2.7		2.1		-104.4	%		26.5	%
Income tax expense		-2.2		-1.8		-2.3		18.6	%		-21.1	%
Gain (loss) attributable to equity holders of the controller		7.4		7.0		6.7		5.8	%		4.1	%

(1) Includes Distribution cost and Administrative expenses

(2) Includes Gross Profit, Distribution cost and Administrative expenses and Other Income by Function.

(3) Includes Financial Income and Equity in income of associates and joint ventures accounted for using the equity method net of tax.

(4) Includes Other expenses by function and Financial expense.

	Revenue Breakdown
	(in million Ch$)
	Year Ended December 31,						% Change			% Change
	2014		2013		2012		2014/2013			2013/2012
Domestic market – wine		59,981		57,233		61,673		4.8	%		-7.2	%
Domestic market – other products		41,645		31,955		28,420		30.3	%		12.4	%
Export markets		396,185		306,519		278,451		29.3	%		10.1	%
Argentina domestic		5,040		6,684		7,491		-24.6	%		-10.8	%
Argentina exports		15,794		13,672		14,178		15.5	%		-3.6	%
U.S.A. (Fetzer)
		57,127		51,066		49,389		11.9	%		3.4	%
Other		7,542		8,492		8,647		-11.2	%		-1.8	%
Total revenues
		583,313		475,622		448,250		22.6	%		6.1	%

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	Sales of Bottled Wine Breakdown
	Sales (in million Ch$)						% Change
	2014		2013		2012		2014/2013			2013/2012
Domestic market – wine		59,964		57,144		61,573		4.9	%		-7.2	%
Export markets		394,308		305,373		277,889		29.1	%		9.9	%
Argentina domestic		4,190		6,035		6,851		-30.6	%		-11.9	%
Argentina exports		15,794		13,672		14,178		15.5	%		-3.6	%
U.S.A. (Fetzer)		55,587		50,921		49,324		9.2	%		3.2	%
	Sales (in thousand liters)
	2014		2013		2012		2014/2013			2013/2012
Domestic market – wine		62,658		59,160		61,934		5.9	%		-4.5	%
Export markets		197,984		180,113		175,437		9.9	%		2.7	%
Argentina domestic		3,852		4,449		5,311		-13.4	%		-16.2	%
Argentina exports		8,813		8,712		9,500		1.1	%		-8.3	%
U.S.A. (Fetzer)		18,448		19,958		19,582		-7.6	%		1.9	%

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Year ended December 31, 2014 compared to year ended December 31, 2013
(Figures expressed in Chilean pesos (Ch$))

For the Year Ended December 31,		2014		2013		Change 14/13
Revenues (million Ch.$)			583,313		475,622	22.6%
	Wine		534,126		435,175	22.7%
	Others		49,187		40,448	21.6%
Volume (million 9 liter cases)			35.6		32.6	9.4%
	Wine		33.2		30.7	8.2%
	Others		2.5		1.9	28.1%
Cost (million Ch.$)			362,601		311,387	16.4%
	Wine		323,517		281,933	14.7%
	Others		39,084		29,454	32.7%
Gross Margin (million Ch.$)			220,712		164,235	34.4%
	Wine		210,609		153,242	37.4%
	Others		10,103		10,993	-8.1%

Revenues. Total revenues increased 22.6% to Ch$ 583,313 million from Ch$475,622 million in 2013.

Wine. Total revenues from wine sales increased 22.7% to Ch$ 534,126 million from Ch$ 435,175 million in 2013. The growth was led by increases in most markets in terms of value and volume, highlighting the increase in export markets (CL, AR & US); higher exchange rate and higher average sale price in Export Market and U.S. Domestic Market.

Domestic Market Wine. Total domestic wine sales (including bulk) increased by 4.8% to Ch$59,981 million in 2014 from Ch$57,233 million in 2013. Bottled domestic wine sales increased 4.9% to Ch$59,964 million in 2014 from Ch$57,144 million in 2013. This result reflects a growth of 5.9% in volumes and a 0.9%% lower average price. Sales of bulk wine during the period totalled Ch$17.6 million.

Non premium wine sales decreased 0.2%, as a combined effect between lower average price and higher sale volumes. We highlight the 21.0% growth in the premium (and above) category in value. Premium wines represented 28.0% of the bottled domestic sales in 2014 and 22.9% in 2013. The growth is the resultant of the strategy and focus on growth in this segment which has sought to protect the value of our brands and focus ourselves strongly on wholesalers, liquor stores and trade channels (such as restaurants, caterers, hotels, bars and pubs).

According to AC Nielsen, domestic volumes remained stable during 2014. In this scenario, Concha y Toro decreased its market share to 27.1% in 2014, in comparison to the 28.5% registered in 2013, in terms of volume.

Export Revenues. Total export sales (including sales of bulk) from Chile and sales distribution subsidiaries, totaled Ch$396,185 million, representing an increase of 29.3%.

Export sales of bottled wine increased 29.1% totaling Ch$394,308 million as compared to Ch$305,373 million in 2013. The growth was driven by a 9.9% increase in commercialized volumes and 17.5% in the average export price in Chilean pesos. In US dollars, bottled export sales from Chile and sales distribution subsidiaries, increased 12.1% totaling US$ 688 million.

Despite the difficult economic environment that affected consumption in 2014, we experienced increased salesvolumes in all export regions led by South America, Asia, Africa and Europe. Bottled sales in South America, Asia, Africa and Europe increased 31.2%, 23.1%, 21.3% and 14.1%, respectively. In the U.S. volume sales increased 1.0%; in UK increased 16.9% and Canada increased 7.6%.

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Argentine Operations. Revenues from our Argentine business (it considers only wine sales and excluding shipments to distribution subsidiaries) increased 2.3% to Ch$20,833 million driven by an increase of 15.7% in exports and a decrease of 27.5% in domestic sales. This situation is partly explained by a decrease in the average price (export and domestic) offset by higher volume in export markets.. For 2014, Trivento’s exports of bottled wine (excluding shipments to distribution subsidiaries) totaled 979 thousand cases registering a growth of 1.1% in volume in comparison to 2013. Exports in US dollar terms decreased 0.4% to US$27.7 million.

Domestic bottled wine sales in the Argentine market totaled US$7.3 million and 428 thousand cases, decreasing 37.6% in value (US dollars) and 13.4% in volume.

U.S.A. (Fetzer). In 2014 Fetzer wine sales totaled Ch$57,127 (US$99.5 million) considering 2,050 thousand cases (excluding shipments to distribution subsidiaries) In 2014 wine sales of Fetzer represented 9.8% of the total sales, and 6.3% of the total commercialized bottled volume .

Other . Other revenues comprise sales of the distribution of spirits, beers, enery drinks and mineral water; fees for bottling services; sales of fruit and other revenues increased 21.6% to Ch$49,187 million.

Domestic sales regarding the distribution of spirits, energy drinks, mineral water, premium beer and mineral water were carried out by the domestic distribution subsidiary Comercial Peumo and totaled Ch$43,649 million in 2014, representing an increase of 30.3%. The growth in the distribution business is explained by the two digits growth in the distribution of Diageo’s products, premium beers and energy drinks. In 2013 Comercial Peumo started the distribution of Monster energy drink, four years after the incorporation to the distribution business of the Diageo’s portfolio in 2009. The commercialized volumen increased 28.1% totaling 2.5 million cases during 2014.

Cost of Sales. For the period, the total cost of sales increased 16.2% to Ch$362,601 million (US$ 635.7 million) from Ch$ 311,387 million (US$ 628.8 million) in 2013. Cost of sales as a percentage of total sales decreased to 62.2% from 65.5%.

Wine. In 2014, total cost of wine sales registered an increase of 14.7% totaling Ch$323,517 million. Cost of sales as a percentage of total wine sales decreased to 60.6% from 64.8%, manly explained by higher commercialized volumes that dilute costs over higher volumes. The exchange rate also had a positive impact, considering that the exposure to foreign currencies is lower at the costs level in comparison to the revenues.

Others. In 2014, total cost of other sales registered an increase of 32.7% totaling Ch$39,084 million. Cost of sales as a percentage of total other sales increased to 79.5% from 72.8%. The distribution business of spirits, beers, energy drinks and mineral water increase 31.2% totaling Ch$ 32,114. The exchange rate had a negative impact, considering that most of the spirits, beers and energy drinks are imported products.

Gross Profit. Gross profit increased 34.4% to Ch$220,712 million in 2014. As a percentage of sales, the gross margin moved to 37.8% from 34.5% in 2013. This change is driven by lower costs of grape and higher commercialized volumes.

Wine. In 2014, the gross profit registered an increase of 37.4.% totaling Ch$210,609 million. The increased is explained by the effects mentioned above, highlighting the growth in volumes and a higher exchange rate based on the depreciation of Chilean peso against most of the currencies that the Company trades.

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Others. In 2014, the gross profit registered a decrease of 8.1% explained by the combined effect between an increase in revenues of 21.6% offset by 32.7% of higher costs.

Selling, General and Administrative Expenses (SG&A). Selling, General and Administrative Expenses (Distribution costs and Administrative expenses) increased 22.9% to Ch$156,830 million. As a percentage of revenues, SG&A increased to 26.9% from 26.8% in 2013. The increase is mainly explained by higher commercialized volumes, a major relative participation of the distribution subsidiaries in the export markets and a higher exchange rate.

Operating Income. Operating Income (includes Gross Profit, Distribution cost and Administrative expenses and Other Income and expenses by function) increased 74.0% to Ch$63,010 million compared to the Ch$36,213 million in 2013. As a percentage of sales, the operating margin increased from 7.6% to 10.8%.

Non-Operating Income. Non-operating income (includes Financial Income and Equity in income of associates and joint ventures accounted for using the equity method net of tax) increased to Ch$4,431 million from Ch$2,991 million in 2013. The increase in the Non-Operating Income is mainly explained by an increase of the profit registered in “Equity in income of associates and joint ventures accounted for using the equity method net of tax”. In this regard, the higher profit is a resultant of an increase in the Net Income registered in Viña Almaviva of 13.9% that totaled Ch$ 2,292 million and the increase in the Net Income registered in Excelsior Wine Company of 14.4% that totaled Ch$ 5,082 million, during 2014.

Financial Expenses. Financial expenses increased 10.4% to Ch$10,432 million from Ch$9,710 million in 2013. The increase in the financial expenses is mainly explained by a higher exchange rate, which impacted negatively on the debt demoninated in U.S. dollars. For further details on interest expenses, see Note 31 of the Consolidated Financial Statements.

Foreign currency exchange gain (losses) and Income (expenses) by adjustment units. Foreign currency exchange gain (losses) and Income (expenses) by adjustment units produced a gain of Ch$701 million in 2014 compared to a gain of Ch$12,877 million in 2013. For detail on foreign exchange differences, see Note 31 of the Consolidated Financial Statements.

Profit attributable to non-controlling interest. Profit attributable to non-controlling interest totaled Ch$600 million.

Profit attributable to equity holders of the controller. Profit attributable to equity holders of the controlling interest for the period increased 12.7% to Ch$ 37,398 million from Ch$33,174 million.

Income Tax Expense. In 2014 law No. 20,780 was approved in Chile which set a gradual increase in the corporate tax rate from fiscal year 2014 until fiscal year 2018. The law increased existing applicable rates for upcoming years that are used for the calculation of the temporary differences as follows, 21.0%, 22.5%, 24.0%, 25.5 % and 27% for the fiscal years 2014, 2015, 2016, 2017, 2018 and beyond, respectively. For the fiscal year 2014, the increase in the corporate tax rate generated an increase in deferred tax expense of Th.Ch$ 5,653,899 and consequently an increase in the effective tax rate to 32.62% compared with 20.68% rate registered in 2013. The effect of the increase in the corporate tax rate to 21% generated an increase in the deferred tax expense impacting negatively the net income for the fiscal year 2014 as is describe above. 

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Year ended December 31, 2013 compared to year ended December 31, 2012
(Figures expressed in Chilean pesos (Ch$))

For the Year Ended December 31,		2013		2012		Change 13/12
Revenues (million Ch.$)			475,622		448,250	6.1%
	Wine		435,175		411,183	5.8%
	Others		40,448		37,067	9.1%
Volume (million 9 liter cases)			32.6		31.9	2.2%
	Wine		30.7		30.5	0.4%
	Others		1.9		1.3	43.8%
Cost (million Ch.$)			311,387		302,963	2.8%
	Wine		281,933		271,646	3.8%
	Others		29,454		31,317	-5.9%
Gross Margin (million Ch.$)			164,235		145,287	13.0%
	Wine		153,242		139,537	9.8%
	Others		10,993		5,750	91.2%

Revenues.Total revenues increased 6.1% to Ch$ 475,622 million from Ch$448,250 million in 2012.

Wine. Total revenues from wine sales increased 5.8% to Ch$ 435,175 million from Ch$ 411,183 million in 2012. The growth in sales was driven by an increase in export markets in terms of value, volume and average sales price. The commercialized volume totaled 30.7% representing an increase of 0.4% in comparison to 2012.

Domestic Market Wine. Total domestic wine sales (including bulk) decreased by 7.2% to Ch$57,233 million in 2013 from Ch$61,673 million in 2012. Bottled domestic wine sales decreased 7.2% to Ch$57,144 million in 2013 from Ch$61,573 million in 2012. This result reflects a 4.5% decrease in volumes and a 2.8% lower average price. Sales of bulk wine during the period totalled Ch$89 million.

Non premium wine sales decreased by 4.1%, partially due to the increase in average prices of 1.9%. We highlight the 12.9% growth in the premium (and above) category in value. Premium wines represented 22.9% of the bottled domestic sales in 2012 and 20.2% in 2011.This result therefore reflects the achievements of a focus on this segment which has sought to protect the value of our brands and focus ourselves strongly on wholesalers, liquor stores and trade channels (such as restaurants, caterers, hotels, bars and pubs).

According to AC Nielsen, domestic volumes are maintained stable during the year. In this scenario, Concha y Toro decreased its market share marginally by 1.1 percentage points in 2013, reaching a market share of 28.5% in volume terms.

Export Revenues. Total export sales (including sales of bulk) from Chile and sales distribution subsidiaries, totaled Ch$306,519 million, representing an increase of 10.1%.

Export sales of bottled wine increased 9.9% totaling Ch$305,373 million as compared to Ch$277,889 million in 2012. This increase was driven by a 2.7% increase in volumes sold and a 7.0% increase in average export prices in Chilean pesos. In US dollars, bottled export sales from Chile and sales distribution subsidiaries, increased 6.7% totaling US$ 650 million.

Despite the difficult economic environment that affected consumption in 2013, we faced increases in volumes in some markets such as Asia and Europe in general. Bottled sales in Asia increased 12.8% by volume and sales volumes to Europe increased 3.3.

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In the U.S., sales decreased by 4.7%, in the UK sales decreased by 0.9%, and in Canada, sales decreased by 5.7% .

Central America/Caribbean and South America sales increased by 9.3% and 7.6%, respectively.

Argentine Operations. Revenues from our Argentine business (considering only wine sales and excluding shipments to distribution subsidiaries) decreased 6.1% to Ch$20,356 million following a 1.4% decrease in exports and a decrease of 15.3% in domestic sales. This situation is partly driven by the increases in the average price, as a consequence of the repositioning of the brand in higher price points. For the whole year 2013, Trivento’s exports of bottled wine (excluding shipments to distribution subsidiaries) totaled 968,046 cases with a 8.3% volume decrease over 2012. Exports in US dollar terms decreased 5.5% to US$27.6 million.

Domestic bottled wine sales in the Argentine market totaled US$12.2 million and 494,356 cases, decreasing 13.9% in value (US dollars) and 16.2% in volume.

U.S.A. (Fetzer). In 2013 Fetzer wine sales totaled Ch$51,066 (US$103 million) considering 2,217,540 cases (excluding shipments to distribution subsidiaries). For the year, sales of Fetzer represented 11.0% of the total sales, and 7.2% of the total bottled volume of wines sold.

Others. Other revenues comprise sales of the distribution of spirits, beers, enery drinks and mineral water; fees for bottling services; sales of fruit and other revenues increased 9.1% to Ch$40.448 million during 2013.

Domestic sales regarding the distribution of spirits, energy drinks, mineral water, premium beer and mineral water were carried out by the domestic distribution subsidiary Comercial Peumo and totaled Ch$33,564 million in 2013, representing an increase of 10.7%. The growth in the distribution business is explained by growth in the registered on the distribution of premium beers and mineral water. In 2013 Comercial Peumo started the distribution of Monster energy drink, four years after the incorporation to the distribution business of the Diageo’s portfolio in 2009. The commercialized volumen increased 43.8% totaling 1.9 million cases during 2013. 

Cost of Sales. For the period, the total cost of sales rose 2.8% to Ch$311,387 million (US$ 625.6 million) from Ch$ 302,963 million (US$ 623.9 million) in 2012. Cost of sales as a percentage of total sales decreased to 65.5% from 67.6%.

Wine. In 2013, total cost of wine sales registered an increase of 3.8% totaling Ch$281,933 million. Cost of sales as a percentage of total wine sales decreased to 64.8% from 66.1%, manly explained by a lower grape cost after both historical volume harvest in 2012 and 2013; and a higher exchange rate in some export currencies.

Others. In 2013, total cost of other sales registered a decrease of 5.9% totaling Ch$29,454 million. Cost of sales as a percentage of total other sales decreased to 72.8% from 84.5%.

The distribution business of spirits, beers, energy drinks and mineral water increase 31.2% totaling Ch$ 32,114. The exchange rate had a negative impact, considering that most of the spirits, beers and energy drinks are imported products.

Gross Profit. Gross profit increased 13.0% to Ch$164,235 million in 2013. As a percentage of sales, the gross margin moved to 34.5% from 32.8% in 2012.

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Wine. In 2013, the gross profit registered an increase of 9.8% totaling Ch$153,242 million. The increased is explained by the effects mentioned above: lower grape cost and higher exchange rate in some export currencies.

Others. In 2013, the gross profit registered an increase of 91.2% totalling Ch$ 10.993 explained by the combined effect between an increase in revenues of 9.1% offset by 5.9% of higher costs. 

Selling, General and Administrative Expenses (SG&A). Selling, General and Administrative Expenses (Distribution costs and Administrative expenses) increased 14.4% to Ch$127,610 million. As a percentage of revenues, SG&A increased to 26.8% from 24.8% in 2012.

Operating Income. Operating Income (includes Gross Profit, Distribution cost and Administrative expenses and Other Income and expenses by function) increased 0.1% to Ch$36,213 million compared to the Ch$36,164 million in 2012. As a percentage of sales, the operating margin decreased from 8.1% to 7.6%.

Non-Operating Income. Non-operating income (includes Financial Income and Equity in income of associates and joint ventures accounted for using the equity method net of tax) decreased to Ch$2,991 million from Ch$3,806 million in 2012.

Financial Expenses. Financial expenses increased 10.4% to Ch$9,710 million from Ch$8,792 million in 2012. For more details on interest expenses, see Note 31 of the Consolidated Financial Statements.

Foreign currency exchange gain (losses) and Income (expenses) by adjustment units. Foreign currency exchange gain (losses) and Income (expenses) by adjustment units produced a gain of Ch$12,877 million in 2013 compared to a gain of Ch$9,591 million in 2012. For detail on foreign exchange differences, see Note 31 of the Consolidated Financial Statements.

Profit attributable to non-controlling interest. Profit attributable to non-controlling interest totaled Ch$435 million.

Profit attributable to equity holders of the controller. Profit attributable to equity holders of the controlling interest for the period increased 10.5% to Ch$ 33,174 million from Ch$30,022 million.

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Impact of Foreign Currency Fluctuations

Over 81% of the Company’s revenues are related to foreign sales which are nominated in U.S. dollars, Euros, Sterling Pounds, Canadian dollars, Argentine pesos, Brazilian reais and Swedish and Norwegian crowns. At the same time, approximately 50% of the Company’s expenses are also denominated in foreign currency (the Company purchases part of the bottles, corks and Tetra Brik containers in prices mainly set in U.S. dollars), creating a natural currency hedge. The Company enters into forward foreign exchange agreements to minimize its exposure to the risks of changes in foreign exchange rates. See Item 11  — “Quantitative and Qualitative Disclosures About Market Risk.”

To the extent that U.S. dollar-denominated revenues exceed U.S. dollar-denominated operating costs, the Company’s results of operations will be impacted by the difference between the changes in exchange rates and the Chilean rate of inflation.

The rates of nominal depreciation of the Chilean peso against the U.S. dollar in 2014 and 2013 were 15.2% and 1.7% respectively, using average exchange rates.

The Company enters into forward foreign exchange agreements to minimize its exposure to the risks of changes in foreign exchange rates. The diversification of the export currencies also has contributed to reduce the foreign exchange risks. Since 1993, the Company has attempted to balance U.S. dollar-denominated assets and liabilities. See Item 11  — “Quantitative and Qualitative Disclosures About Market Risk.”

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B. Liquidity and Capital Resources

Liquidity

In 2014, the Company’s main source of liquidity was cash generated by its operating activities, which amounted to Ch$20,811 million. This was used for payments of financial debt and the financing of investments during the year. The cash flow for Financing Activities totaled Ch$22,906 and the cash flow used in Investment Activities was Ch$27,274. In the Company’s opinion, its working capital of Ch$261,279 million as of December 31, 2014 is sufficient for the Company’s present requirements.

On December 31, 2014, the Company cash and other cash equivalents totaled Ch$30,304 million and approximately USD$ 364,041 million was available under undrawn bank lines of credit.

Before accounting for the effect of inflation on cash and cash equivalents, the Company generated positive cash flow for the year 2014 of Ch$16.443, which was primarily the result of a positive cash flow from the operating activities totaling Ch$ 20,811 million; a negative cash flow from the investing activities totaling Ch$ 27,274 million; and a positive cash flow from the financing activities totaling Ch$ 22,906. In2013 the Company generated negative cash flow of Ch$47,023, and in 2012 the Company generated positive cash of Ch$38,898 million. The effect of variations in exchange rates resulted in an increase of Ch$1,110 million in 2014, while in 2013 and 2012, the effect of variations in exchange rate was an increase of Ch$1,145 million and a decrease of Ch$877 million, respectively.

Net cash flows from operating activities were Ch$20,811 million in 2014. The net increase is mainly explained by higher sales that come from major commercialized volumes during 2014 (9.4%). This increase was offset by higher production costs in line with the increase in volume sales and a negative impact from the raise of the corporate tax rate in the Chilean economy. The increase in the deferred tax expense (as a resultant of the increase in the corporate tax rate) totaled Ch$ 5,653,899. In 2013 and 2012 the net cash flow from operating activities totaled Ch$26,982 million and Ch$18,804 million, respectively.

Net cash flow provided by financing activities totaled a profit of Ch$22,906 during 2014. In 2014 the Company issued two bonds to prepay the bond issued in 2005 and address the maturities of short-term debt during 2015; these bonds are a 6-year and 24-year bond, respectively, that were issued on September 11, 2014, for UF 1.0 million each (Ch$24,627 million as of December 31, 2014) on the local market at an interest rate of 2.18% and 3.49% per year. In 2013 the net cash flow provided by financing activities was negative by Ch$ 47,023 million, and totaled Ch$48,648 in 2012.

Net cash flow used in investing activities was Ch$27,274 million in 2014. The principal investments in the purchasing of property, plant and equipment were focused in the agriculture area comprising the acquisition of new properties and the developing and planting of vineyards in estates purchased in previous years, investments on the oenology regarding the expansion of vinification and cellar capacity, and the acquisition of barrels. In 2013 and 2012 the net cash flow used in investing activities was Ch$27,254 millionCh$28,554 million.

The Company’s total assets increased 8.0% from Ch$849,863 million as of December 31, 2013 to Ch$918,011 million as of December 31, 2014.

Current liabilities increased 8.1%, to Ch$212,646 million as of December 31, 2014 from Ch$196,709 million as of December 31, 2013. Short term financial debt decreased to Ch$61,270 million in December 2014 from Ch$68,019 million in December 2013.

Long-term liabilities, corresponding to debt to financial institutions and a three bonds, increased to Ch$216,322 million as of December 31, 2014, from Ch$185,270 million as of December 31, 2013. One of the significant long term liabilities of the Company is a 6-year bond that were issued on November 14, 2012, for UF 1.5 million (Ch$36,941 million as of December 31, 2014) on the local market at an interest rate of 3.5% per year. In 2014 the Company issued two bonds to prepay the bond issued in 2005 and address the maturities of short-term debt during 2015; these bonds are a 6-year and 24-year bond, respectively, that were issued on September 11, 2014, for UF 1.0 million each (Ch$24,627 million as of December 31, 2014) on the local market at an interest rate of 2.18% and 3.49% per year. The principal payments for the 6-year bond will be made on semi-annual installments that begin on March 2018 and interest payments will be made on a semi-annual basis and began September 2014. The principal payments for the 24-year bond will be in semi-annual installments that begin on March 2025 and interest payments will be made on a semi-annual basis and began in September 2014. Covenants associated with the issuance of bonds payable are detailed in Note 34 to the Financial Statements — Contingencies and Restrictions. Bond covenants require the Company to maintain certain financial ratios. Among them, the Company is required to (1) maintain an indebtedness ratio (the ratio of current and long-term liabilities to shareholders’ equity plus minority interest) no greater than 1.4 times; (2) maintain, at all times, during the life of the present bond issuance, minimum equity of five million UF; and (3) maintain at all times an interest coverage ratio (the ratio of operating income plus depreciation plus operating amortization to interest expenses) of a minimum of 2.5 times. As of December 31, 2014, the Company is in compliance with all bond covenants and has a consolidated indebtedness ratio of 1.07 times, equity of Ch$442,980 million or 18.0 million UF and an interest coverage ratio is 8.15 times.

As of December 31, 2014, the Company’s total interest-bearing financial debt amounted to Ch$246,934 million of which, Ch$53,738 million was short term debt and Ch$193,196 million was long term debt with maturities to 2018 for its bank debt and 2026 for the bond debt. Approximately 93.1% of financial debt has a fixed-rate and is denominated in Pesos, U.S. dollars, Euros, Brazilian Reais, Pounds Sterling and Argentine Pesos.

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For further detail on interest bearing debt and financial instruments used for hedging as of December 31, 2014, see Item 11 — “Quantitative and Qualitative Disclosures About Market Risk.”

Capital Expenditures

Total capital expenditures which include additions to Property, Plant and Equipment and other permanent investments were Ch$ 27, 956 million in 2014, Ch$ 29,147 million in 2013 and Ch$28,309 million in 2012. Capital expenditures in 2014 in the agriculture area comprise the acquisition of new properties and the development and planting of vineyards in estates purchased in previous years. Investments in the oenology included the expansion of vinification and cellar capacity, acquisition of barrels and the acquisition of new cellars. In Argentina, new investment was oriented to vineyard development and cellar facilities. The estimated capital expenditure budget for 2015 would be around Ch$24.000 million (approximately US$40 million), which includes the development of the new land acquired in the previous years, increases of storage and fermentation facilities, expansion of the bottling plants and the acquisition of French and American oak barrels, for the production of all wines with an emphasis on premium and varietal wines, however, this figure is preliminary and still needs to be approved by the board of directors. The following table sets forth the Company’s capital expenditures for the different areas for the years 2014, 2013 and 2012.

	Capital Expenditures(1)
	(in million Chilean pesos (Ch$))
Area:	2014		2013		2012
Agriculture(2)		10,180		9,643		11,992
Oenology, technical and bottling facilities		12,677		13,546		11,009
Vina Trivento (Argentina)		1,482		1,467		1,790
Fetzer (United States)		1,327		1,807		2,471
Administration and other subsidiaries		1,586		1,863		1,048
Southern Brewing Company acquisition		—		820		—
Wine Retail Company acquisition (3)		705
Total		27,956		29,147		28,309

⁽¹⁾ The investment figures in this table correspond to amounts net of V.A.T., while figures in the Consolidated Statements of Cash Flows include V.A.T.

⁽²⁾ Agriculture expenditures consist of investments in agricultural equipment and activities in order to develop new vineyards and bring them to commercial production and to maintain or expand production at existing vineyards.

⁽³⁾ The Wine Retail acquisition considers the purchase of the 35% interest of the Company.

The Company expects to continue purchasing and developing vineyards and the related infrastructure needed to support future growth and may incur additional expenditures for vineyards if opportunities become available. Management reviews the capital expenditure program periodically and modifies it as required to meet current business needs.

C. Research and Development, Patents and Licenses, etc.

Viña Concha y Toro has been part of the Vine and Wine Business Technology Consortium (Vinnova) since 2006, together with other industry company members of Vinos de Chile A.G. (a wineries association) and the local universities Pontificia Universidad Católica de Chile, Universidad de Santiago and Universidad de Concepción. The company has channeled resources through these institutions for research in the agricultural and enological areas.

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Since 2011 the company has workrd on developing, in collaboration with the Universidad Andrés Bello the “abatement curve”, an important indicator used to evaluate the efficiency of the projects in terms of CO2 emissions. Through these institutions, the Company has channeled resources for research in agriculture and winemaking (oenology) areas and obtained relevant information to advance in its Sustainable Development Strategy.

Through the Institute of Ecology and Biodiversity (IEB), Concha y Toro is conducting an inventory of flora and fauna in the 3,272 hectares of native forest certified by CONAF as part of the Sustainable Forest Conservation and Wilderness Areas.

In 2012 the Company began a collaboration with the Center for Global Change at the Catholic University to carry out a project on estimating the accumulated carbon in forests and vineyards of the company. This delivered results in 2013, providing us with an estimate of the environmental benefits resulting from CO2 absorption in this natural sink.

Internationally, the company developed a pilot project to assess its water footprint in conjunction with the Dutch organization “Water Footprint Network” and Fundación Chile. This methodology will allow other wineries in the world to be able to measure their water footprint with this model, and the methodology for the company to do its own internal measurements.

During 2014, Concha y Toro, as leader of the Chilean wine industry, contributed to its development through the creation of its Research and Innovation Center, in the Maule valley, Chile’s Seventh Region. The Center is a clear progress towards applied research and became a place of encounter and knowledge exchange between winemakers and researchers.

This initiative represented an initial investment of US$5 million and its modern purpose-built modular facility of 16,150 square feet houses a laboratory with state-of-the-art equipment, an experimental cellar, and tasting and extension rooms. The Center for Research and Innovation has a team of top researchers, who will conduct research in the areas of: genetic material, viticulture, winemaking processes, product design and market.

Also, through strategic alliances and agreements with prestigious institutions, the Center will have international networks that will allow it to promote activities, projects and programs to strengthen its work, establishing institutional contacts to develop joint projects, and other kinds of cooperation.

D. Trend Information

The most significant trend affecting the Chilean wine industry and the Company’s results in recent years has been the global economic downturn which has impacted wine consumption in general and especially in Europe. Because of this downturn, the industry is focusing on emerging markets such as Asia, Latin America and Africa. The wine market showed adjustments in consumption during the last years, decreasing in some markets and increasing in others, with interesting commercial opportunities in new consumer areas such as Asia, Latin America and United States. The width and depth of the Concha y Toro portfolio allows the Company to respond quickly and address market demands, and its clear branding strategy has allowed the Company to improve its sales generally.

In addition, during 2012 and 2013, the Chilean peso registered a strong appreciation against all major currencies that the Company and the Chilean industry operates, having a considerable impact over a wine industry that exports around 70% of its production. In 2014, an inflection point was reached and the Chilean peso started to depreciate against major currencies. On another front, the industry has faced increasing competition in both the domestic and the export markets as a result of increasing number of competitors, greater availability of wine and the different producer countries trying to enhance their positioning worldwide.

In the Chilean domestic market, the Company faced a challenging market situation of increased competition coupled with sluggish consumption in the popular (Tetra Brik) wines segment in favor of its main substitute, beer. According to AC Nielsen wine consumption in Chile decreased by 0.8% in 2014 and decreased 3.3% in 2013 Under these conditions, and in line withthe Company’s efforts to improve profitability in this market the Company has focused on the premium segment, a segment the Company believes has demonstrated itself asan interesting growth opportunity. The Company will continue to evaluate its domestic strategy in relation to its lower-priced wines.

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In the export markets, the Company has faced increasing competition in some key markets, as the global depreciation of the new world wine producers’ currencies has made them more competitive on price, and has increased the competition in the major markets. Notwithstanding this increased competition, the Company has been able to increase its export sales in value. The most important region for the Company in terms of volume for the past three years has been Europe, especially the UK. The establishment of a subsidiary in the United Kingdom has allowed the Company to strengthen its position in this market. The Company believes it is well established in Continental Europe, the United States and Latin America.

With respect to consumption trends, the Company believes that there is a major trend towards the consumption of varietal wines in general and certain varietal wines in particular, in its major export markets, principally the United States, Europe, Asia and Canada. The Company has tailored its new grape plantings to respond to this trend. In addition, the Company has experienced a shift in the global consumption trends towards a major consumption New World wines including wines from Australia, Chile, the United States, South Africa and Argentina.

E. Off - Balance Sheet Arrangements

The Company has not entered into any transactions with unconsolidated entities whereby the Company has financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose the Company to material continuing risks, contingent liabilities or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company.

F. Tabular Disclosure of Contractual Obligations

The table below is a summary of the Company’s contractual obligations as of December 31, 2014:

	Payments due by period
			Less than		1 - 3		3 - 5		More than
	Total		1 Year		Years		Years		5 Years
	(in millions of Ch$)
Contractual Obligations
Long-term debt obligations (1)		198,044		64,141		64,461		44,171		25,271
Capital lease obligations (2)		4,625		818		1,577		800		1,430
Interests payable to banks and bonds obligations (3)		21,545		3,908		4,759		2,850		10,028
Purchase obligations (4)		16,597		6,977		7,197		2,151		272
Total		240,811		75,845		77,993		49,972		37,001

(1) Includes Payables to Banks, bonds, leasing, related accounts and provisions.

(2) Corresponds to obligations from leases of real estate properties, classified as capital leases for accounting purposes.

(3) Corresponds to payables to banks and bonds interests, whose rate of interest is fixed and variable.

(4) Corresponds to payment obligations related to the grape and wine contracts.

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ITEM 6:             DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The Company is managed by a Board of Directors consisting of seven Directors. The entire Board of Directors is elected every three years at an annual general shareholders’ meeting. Directors are not subject to term limits. If a vacancy occurs, the Board of Directors elects a temporary director to fill the vacancy until the next regularly scheduled meeting of shareholders in which Directors are elected and at which time the entire Board of Directors will be elected for a new three-year term. The Company’s By-Laws provide that directors need not be shareholders.

At the annual general shareholder’s meeting held on April 28, 2014, the entire Board of Director was subject to election. The directors elected for a new three year term were Alfonso Larraín Santa María, Rafael Guilisasti Gana, Mariano Fontecilla de Santiago Concha, Francisco Marín Estévez, Pablo Guilisasti Gana, Sergio de la Cuadra Fabres and Jorge Desormeaux Jiménez. 

The following table lists each director of the Company, his current position, his age as of March 31, years with the Company and year of appointment to the Board of Directors:   

		Age at	Years with	Current
		March 31,	the	Position
Name	Position	2015	Company	Held Since
Directors:
Alfonso Larrain Santa Maria	Chairman	78	45	1998
Rafael Guilisasti Gana	Vice Chairman	61	36	1998
Mariano Fontecilla de Santiago Concha	Director	90	40	1995
Francisco Marin Estevez	Director	75	32	1982
Pablo Guilisasti Gana	Director	60	10	2005
Sergio de la Cuadra Fabres	Director	73	10	2005
Jorge Desormeaux Jimenez	Director	64	3	2011

The following provides biographical information about the Directors of the Company.

Alfonso Larraín Santa María, Chairman

Businessman. Chairman of the board of Viña Concha y Toro since 1998, a position from which he has striven to strengthen the company’s image of prestige in the world’s main markets. He joined the company as director in 1969 and has been chief executive (1973-1989) and vice-chairman of the board (1989-1998). Over this time, he has pursued a strong policy of opening the Company to opportunities in external markets. In the 1980s, he also served for two periods in the presidency of the Association of Chilean Wine Exporters and Bottlers. He is also currently a director of Viñedos Emiliana and the Santiago Chamber of Commerce.

Rafael Guilisasti Gana, Vice Chairman

Rafael Guilisasti has been a Director and Vice Chairman of the board of Viña Concha y Toro since September 1998.  Mr. Guilisasti has a wide and outstanding experience in the Chilean wine industry.  He joined Viña Concha y Toro in 1978 and served as its Export Director between 1985 and 1998, a period of great expansion for the Company in the international markets.  He was Chairman of Vinos de Chile (formerly Viñas de Chile) between 1986 and 2003, an industry association bringing together approximately 85% of the Chilean wine-producers and whose objective is to promote Chilean wines in the international markets and review political and legal matters affecting the Chilean wine industry. 

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His experience in the financial area includes the positions of Chief Executive Officer of Viñedos Emiliana S.A., a company mainly focused on wine exports. Since April 2005, he is a member of the Directive Board of Sociedad de Fomento Fabril (“Sofofa,” the Chilean manufacturers’ association). In December 2008, he was elected President of the Confederación de la Producción y del Comercio (CPC), which is an industrial association representing the most important productive sectors of the country. He is director of Corpbanca S.A. and member of its Audit Committee since 2012, a local banking institution and president of Viñedos Emiliana.Mariano Fontecilla De Santiago Concha, Director Law studies. Former Chilean ambassador to Norway, Spain and Italy. Direct descendant of the first Marqués de Casa Concha and of the founder of the Company, Don Melchor Concha y Toro. Made an honorary member of the Chilean Brotherhood of Wine for his contribution to Chilean wines. Director of the Company for several periods, initially in 1949 yet most recently since 1995. Former President of Viñedos Emiliana 1998-2004. Currently, he is the diplomatic coordinator of Chile’s National Congress. Francisco Marín Estévez, Director Agricultural Engineer. He has served as Director of the Company since 1982. Broad experience in the private sector. Pablo Guilisasti Gana, Director Commercial Engineer. Joined Concha y Toro in 1978 and worked as Export Manager until 1986. He became director of Concha y Toro in 1999.

Between 1986 and 1999 he was General Manager of Frutícola and in 1999 elected Director. Between 1998 and 2004 he was Director of Viñedos Emiliana.

Currently is a Director of Fruticola Viconto And President of Comercial Greenvic S.A.

Sergio de la Cuadra Fabres, Director Mr. De la Cuadra is a Commercial Engineer from the Pontificia Universidad Católica de Chile, M.A. and recived a Ph.D. from the University of Chicago (1968). His broad and outstanding professional career includes positions at the country’s most important monetary institutions, particularly as Director, Vice President and President of the Banco Central de Chile (Central Bank of Chile) and as Minister of Finance in 1982. Mr. De la Cuadra has also been a Director of the Chilean Electronic Stock Exchange and an international consultant to several Latin American countries. Currently he is also a Director of other well-known Chilean companies like Petroquim S.A. and Gasco S.A. Jorge Desormeaux Jiménez, Director Mr. Desormeaux, graduated as Commercial Engineer from Catholic University of Chile in 1973, receiving the “Raúl Yver Award” to the top student of his class. In 1974 he was awarded a Fulbright Scholarship to follow a Ph. D. Program in Economics at the Massachusetts Institute of Technology (MIT). Between 1979 and 2010 he was Associate Professor at the Economics Institute of Catholic University, in the areas of Macroeconomics and International Economics. Between 1999 and 2010 he taught Macroeconomics at the MBA Program of that university. On December 1999 he became a Member of the Board of the Central Bank of Chile for a period of 10 years.

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In 2005 he joined the Board of Directors of Universidad Diego Portales.

On December 2007 he was elected Vice President of the Central Bank of Chile for a period of two years, completing his term as Board Member in December 2009.

On August 2010 he was appointed Chairman of the Commission on Reform of Financial Sector Oversight and Regulation, which on March 2011 presented a report with recommendations to the Chilean Minister of Finance.

He is currently a member the Board of Directors of AntarChile and Universidad Diego Portales, where he was elected Vice Chairman in January 2014. Since April 2010 he is also external economic adviser to Banco de Chile and several domestic companies.

Name	Position	Age at March 31, 2015	Years with the Company	Current Position Held Since
Eduardo Guilisasti Gana	General Manager (Chief Executive Officer)	62	36	1989
Andrés Larraín Santa María	Agricultural Manager	76	41	1978
Osvaldo Solar Venegas	Corporate Administration and Finance Manager (Chief Financial Officer)	53	27	2010
Cristián Ceppi Lewin	Corporate Export Manager South Zone	48	24	2006
Thomas Domeyko Cassel	Corporate Export Manager North Zone	48	21	2006
Cristián López Pascual	Corporate Export Manager Asia	43	19	2010
Carlos Halaby Riadi	Oenology Manager	62	25	2000
Enrique Tirado Santelices	Head Oenologist Don Melchor	48	22	1999
Daniel Duran Urízar	Process and Information Technology Manager	43	20	2010
Isabel Guilisasti Gana	Marketing Manager Origin Wines	57	18	2004
Tomás Larraín León.	Negotiation and Operation Manager	48	24	2013
Juan Cristóbal Goycoolea N	Marketing Manager Global Brands	40	15	2010
Cecilia Cobos	Human Resources Manager	46	2	2013
Subsidiaries
Adolfo Hurtado Cerda	General Manager Viña Cono Sur	44	17	2000
Paul Konar Elder	General Manager Viña Maipo y Quinta de Maipo	41	18	2010
Giancarlo Bianchetti G.	General Manager Fetzer Vineyards	43	15	2011

The following provides biographical information about the executive officers of the Company.

Eduardo Guilisasti Gana, Chief Executive Officer

Civil Engineer. Joined the Company in 1978 as Commercial Manager. Appointed CEO in 1989. Under his leadership the Company initiated a broad vineyard and cellar-oriented investment plan and expansion in the export markets. Highlights of this period include the Company’s consolidation of a worldwide sales network that includes 135 countries and the strengthening of the leadership position in the sale of fine wines in each market segment and the strong growth and increase in the market value of the Company. In addition, through the adoption of viticulture research and technology, the winery has transformed into a leader in the industry. He is director of Viña Almaviva, Southern Brewing Company S.A. and Molymet S.A. Also he is President of Viña Cono Sur S.A.

Andrés Larraín Santa María, Agricultural Manager

He entered in the Company at 1971 and has been the Agricultural Manager since 1978 and responsible for advancing new grape types and plantings as well as the running of every vineyard. Directs a multidisciplinary team including executives, technicians, administrative staff and skilled labor. He is former president and Vice Chairman of Frutícola Viconto.

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Osvaldo Solar Venegas, Chief Financial Officer

Commercial Engineer. Has been in charge of financial matters since 1992, initially as Financial Manager and since September 1996, as Administration and Financial Manager. Duties include managing and developing the financial area, human resources, accounting and administrative divisions. In January 2010 he was named Corporate Administration and Finance Manager. He is a director of Industria Corchera, Corchera Gomez Barris S.A.,VCT Group of Wineries Asia, Fundación Cultura Nacional and Southern Brewing Company S.A.

Cristián Ceppi Lewin, Corporate Export Manager South Zone

Commercial Engineer. Began his career at the Company as Product Manager for the Fressco and Tocornal ranges. Assumed the position of Marketing Sub-Manager for liquors and in 1992 became Marketing Sub-Manager for popular wines. Held the position of Marketing Manager from 1994 to 1996. Commercial Manager until assuming the position of General Manager at Comercial Peumo S.A. In December 2000, he was appointed Export Manager for the South Zone and in 2006 he was appointed Corporate Export Manager. He is also director of VCT & DG México S.A. de C.V.

Thomas Domeyko Cassel, Corporate Export Manager North Zone

Commercial Engineer. Joined the Company in January 1994 as Deputy CFO. Appointed International Business Manager in 1996. Moved to Mendoza, Argentina in 1997 as General Manager of Viña Trivento. Appointed Export Manager for the North Zone in December 2000 and Corporate Export Manager North Zone in 2006. He is also director of Concha y Toro UK Limited, Concha y Toro Sweden AB, Concha y Toro Finland OY, Concha y Toro Norway AS, VCT Norway A and Viña Cono Sur S.A.

Cristián López Pascual, Corporate Export Manager Asia

Publicist. In 1996, joined the marketing department of the export division. In December 2000 he joined the team that started the operation of Concha y Toro UK as Co-Manager of this subsidiary in the position of Commercial Director. In 2005, he was appointed General Manager of Concha y Toro UK, achieving in this period significant growth. As of January 2010 he was appointed Corporate Export Manager Asia. He is also director of VCTGroup of Wineries Asia Pte. Ltd. and VCT Japan Company Ltd.

Tomás Larraín León, Negotiations and Operation Manager

Agricultural Engineer. In 1991, joined Concha y Toro’s agricultural area. In 1995, he was named Agricultural Deputy Manager. Between 2001 and 2006, he was General Manager of Trivento Viñedos y Bodegas in Argentina. In February 2007, was appointed Export Manager for the U.S. market. As of December 2009 he was named Supply Contracts and New International Businesses Manager. At 2013 he was appointed as Negotiations and Operation Manager.

Daniel Duran, Process and Information Technology Manager

Civil Engineer. Joined the Company in 1995 as planning and development projects analyst. Sub-Manager of Logistics and Sub-Manager of Planning and Projects since 1998. Information Technology Manager since May 2001 and Process and Information Technology Manager since 2010 Responsible for development and implementation of technology solutions.

Carlos Halaby, Oenology Manager

Oenologist. Distinguished by the National Association of Winemaking Agronomy Engineers in Chile for presenting the “Best Viticulture Dissertation of 1980,” Carlos Halaby joined the Company in 1990. After a decade with the Company and serving as head winemaker for fine wines until March 2000, he assumed the position of Oenology Manager. Technical and administrative responsibility for the Company’s Oenology Area. He is also director of Viña Cono Sur S.A.

Enrique Tirado, Oenologist Don Melchor

Oenologist. Upon joining the Company in 1993 he started working with varietal ranges, Casillero del Diablo and Marqués de Casa Concha. He rose to head winemaker in 1997, responsible for every line of premium wine, including Amelia and Don Melchor. In 1999, his extraordinary enological sensitivity led to his appointment as winemaker for Don Melchor.

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Isabel Guilisasti, Marketing Manager Origin Wines

A graduate of the Catholic University with a degree in Art and with advanced studies in marketing. In 1998, she was appointed marketing manager of Viña Cono Sur and in 2000 she took over as Director of Communications of Concha y Toro. In 2001 she was named assistant manager for International Marketing of Fine Wines responsible for Concha y Toro’s ultra premium brands. In 2004 she was named Marketing Manager Origin Wines.

Juan Cristobal Goycoolea Nagel, Marketing Manager Global Brands

Commercial Engineer. Joined the Company’s marketing department in 2000. In 2008, named Marketing Manager for Subsidaries Wineries. In 2010 named Marketing Manager Global Brands.

Lia Vera Perez-Gacitua

Civil Engineer. Joined the Company in 2007 as Head of Costumer Services for Europe, Cono Sur and Japan. Since January 2013 is the Supply Chain Manager.

José Jottar Nasrallah

Commerecial Enginner, Joined the Company in 1999 as Planning Manager. In 2003 was appointed as Assistant Manager of Costumer Services. Between 2010 and 2014 lived in Argentina and served as CEO of Trivento Bodegas y Viñedos S.A. In 2014 was repatriated assuming as CEO of Comercial Peumo Limitada

Cecilia Cobos Zepeda, Human Resources Manager 

Commercial Engineer and MBA. She has solid experience in human resources working in prestigious companies as Emel, Fasa and Codelco. Joined the Company as Human Resources Manager in 2013. 

Subsidiaries

Adolfo Hurtado Cerda, General Manager Viña Cono Sur

Agricultural Engineer, oenologist. In 1997, Adolfo Hurtado joined Viña Cono Sur, as head oenologist of this subsidiary founded in 1996. In 2000, he was appointed General Manager. Under his direction, Viña Cono Sur has experienced strong growth with the development of a portfolio of wines recognized for their quality and constant innovation.

Paul Konar Elder, General Manager Viña Maipo y Viña Palo Alto.

Agricultural Engineer. Joined the Company’s Commercial department in 1997. In 2006 named Export Manager North Zone. In 2010 named General Manager of Viña Maipo and Viña Palo Alto, currently known as Quinta de Maipo.

Giancarlo Bianchetti González, General Manager Fetzer Vineyards.

Commercial Engineer. Joined the Company’s marketing department in 2000. In 2001, he took responsibility for the brands Casillero del Diablo, Frontera and Sunrise. He has headed the promotion and global campaign for Casillero del Diablo. In 2004 named Marketing Manager Global Brands. In 2010 he was named Corporate Export Manager USA. In August 2011 he was named General Manager Fetzer Vineyards. Since 2011 he was appointed as co-manager of Excelsior Wine Company LLC. Since 2013 he is director of Excelsior Wine Company LLC.

Family Relationships

Eduardo Guilisasti Gana, Rafael Guilisasti Gana, Pablo Guilisasti Gana and Isabel Guilisasti Gana are siblings. Alfonso Larraín Santa María and Andrés Larraín Santa María are brothers. Tomás Larraín León is the son of Andrés Larraín Santa María.

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B. Director and Officer Compensation

In accordance with the Company’s By-Laws, directors’ compensation for any given fiscal year is determined annually at the general shareholders’ meeting occurring in the immediately following fiscal year. Compensation paid in 2014 in respect of 2013 equaled 1.3% of the net profits of the Company. The amount of 300 UF per month has been allocated to cover the executive responsibilities of the chairman of the Board.

The following table sets forth the compensation paid to each of the directors of the Company in 2014, 2013 and in 2012. 

	Directors’ Compensation
	Total Compensation
	(in thousands of Ch$)
	2014		2013		2012
Attendance:
Alfonso Larraín Santa María		61,608		55,755		93,753
Rafael Guilisasti Gana		61,608		55,755		93,753
Francisco Marín Estévez		61,608		55,755		93,753
Mariano Fontecilla de Santiago Concha		61,608		55,755		93,753
Sergio de la Cuadra Fabres		61,608		55,755		93,753
Pablo Guilisasti Gana		61,608		55,755		93,753
Jorge Desormeaux Jiménez		61,608		55,755		62,502
Christian Skibsted Cortés						31,251
Remuneration:
Alfonso Larraín Santa María		86,430		81,426		78,759
Remuneration Directors’ Committee:
Rafael Guilisasti Gana		20,536		18,585		31,251
Sergio de la Cuadra Fabres		20,536		18,585		31,251
Jorge Desormeaux Jiménez		20,536		18,585		20,834
Christian Skibsted Cortés						10,417
Total		579,294		527,466		828,783

For the year ended December 31, 2014, the aggregate amount of compensation paid by the Company to senior managers, managers and to managers of the Company subsidiaries, totaling 193 executives, was approximately Ch$18,893 million.

C. Board Practices

Members of the current Board of Directors were elected at the Annual General Shareholders’ Meeting held on April 28, 2014 and will serve until April 2017, assuming no vacancies occur. The Company’s executive officers are appointed by the Board of Directors and hold office at the discretion of the Board.

There are no service contracts between the directors of the Company and the Company or any of its subsidiaries providing for benefits upon termination of a director’s employment.

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In compliance with the current Chilean rules and regulations, a Directors’ Committee was established at the Company on May 23, 2001. As of April 28, 2014, the Directors’ Committee members are Sergio de la Cuadra Fabres (President), Jorge Desormeaux Jiménez and Rafael Guilisasti Gana. The primary functions of the Directors’ Committee include:

reviewing balance sheets and financial statements and reports from accounting oversight bodies and auditors;

proposing external auditors and credit risk rating companies to the Board;

examining background information regarding the Company’s operations with related persons;

reviewing managers’ and executive officers’ compensation plans; and

monitoring internal control systems used at Viña Concha y Toro and its affiliated companies.

The Directors’ Committee convened on twelve separate occasions during the fiscal year 2014. The following were among the principal activities of the Directors’ Committee during 2014, Annual Activity Report:

At the Directors Committee (“Committee”) of March 6th, the Members s agreed to request that KPMG, Ernst & Young, BDO and RSM submit proposals to be appointed the Company’s external auditor for the period 2014. Such proposals would be submitted for the approval of the Committee, the Board of Directors and finally the Shareholders.

On March 27^th, KPMG presented to the Committee various issues related to the external auditing of the Company. Such information was approved and the Committee agreed to submit it for the approval of the Board Of Directors. Additionally, at such meeting the Committee also approved the Company’s Balance, Financial Statements, the Annual Report and KPMG’s  “Final Report of Internal Control” stating (through a letter to the “Committee”) that in accordance with the internal control  there were no difficulties detected that might impact the Company’s Financial Statements. The Committee also took note of the invitation to Auditing Company’s to be appointed as external auditing for the period 2014. Moreover, the Committee agreed to propose to the Board of Directors the appointment of the Rating Agencies “Humphreys Clasificadora de Riesgo Limitada” and “Feller-Rate Chile Clasificadora de Riesgo Limitada”. Finally the Committee approved various related transactions as well as non-auditing services provided by KPMG.

At the Committee’s April 24^th Meeting, the General Corporative Auditor of the Company briefed the Committee on the Company’s Code of Crime Prevention and the Anonymous Accusation System. The Auditor also referred to the irregularities detected at the Company’s Distribution Center “Vespucio II-”. Lastly, a report on the status of the proposals of external auditing for the period 2014 was presented.

On April 28th the decisions of the Shareholders General Meeting were reported to the Committee regarding the appointment of Members,  its president as well as the budget assigned to the Committee.

At the May 29^th Committee, the 2013 Report of Related Transactions and the 2013 Related Transaction pertaining to the purchase of grape and wine were acknowledged and approved. Additionally the General Auditor attended and reported on the different auditing procedures the Company applied internally and to its subsidiaries.  

At the June 26^th Meeting, the General Corporative Auditor updated the Committee on the auditing process applied internal and to the Company’s subsidiaries and the Auditor’s report of the were approved.  

 At the July 31st Meeting the Committee analyzed and approved the Company’s related transactions. The Members also approved the Auditor’s Annual Plan proposed by KPMG.

At the Committee of August 27^th the first semester financial report was discussed and approved.

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At the September 24th Meeting the Committee approved a new report of the Corporate General  Auditor, updating the different auditing procedures the Company applied internally and to its subsidiaries. There followed a further brief of the Company’s Code of Crime Prevention, the Anonymous Accusation System, the Corporate Library, the Score Card, the “Fixed Asset Controlling Project”, and the auditing plan. The Committee agreed to request the implementation of various actions to improve the current processes of the internal auditing.  

At the October 30^th meeting the Members acknowledge and approved the related transactions with the subsidiary Cono Sur S.A.

At the November 27^th meeting, the Committee reviewed and approved the third semester financial report (up to September 30^th). Additionally, it reviewed and approved the General Corporative Auditor’s report relating to certain aspects of the internal control of the Company. The Committee requested assistance of the General Corporative Auditor’s to communicate within the Company the internal control procedures and help for a cultural change in relating to the better compliance of such procedures.

At the last meeting of December 23^rd the 2014 Preliminary Internal Control of KPMG was acknowledged and approved (letter to the Executives of the Company).  It was agreed to verify the findings of the internal control that were identified in the letter to the Executive in the corresponding Financial Statements.

Since April 2011, the members of the Audit Committee have been: Sergio de la Cuadra Fabres, Jorge Desormeaux Jiménez and Rafael Guilisasti Gana. Sergio de la Cuadra Fabres and Jorge Desormeaux Jiménez are independent directors while Rafael Guilisasti is not independent. Mr. Guilisasti is relying on an exemption of the Listing Standards relating to Audit Committees of Rule 10A-3 promulgated under the Exchange Act. See Item 16.D. — “Exemptions from the Listing Standards for Audit Committees.”

We currently do not have a separate remuneration committee; however, the Company’s Directors’ Committee carries out the functions usually performed by this committee. It also promotes auditor independence by prohibiting auditors from providing certain non-audit services while conducting audits. The Company’s existing oversight and corporate governance practices fully honor the spirit and requirements of Sarbanes-Oxley reforms in many respects. For instance, auditor independence has been strengthened with the adoption of an auditor independence policy by the Company. See Item 16.A.  — “Audit Committee Financial Expert.”

The Company’s Board of Directors is committed to implementing measures that will promote investor confidence and market integrity. In response to Sarbanes-Oxley Act, the Company has formalized a methodology to ensure the accuracy and completeness of information disclosed to the market. The Company is committed to complying with the laws and regulations applicable in all countries in which the Company operates. Upon enactment of new laws and regulations resulting from, or coming into force from the provisions of Sarbanes-Oxley, the Company will adjust its corporate governance structure in a way so as to ascertain full compliance.

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D. Employees

As of December 31, 2014, 2013, 2012, and 2011 the Company’s Chilean operations had 2,592 2,746, 2,631and 2,821 employees, respectively. Personnel employed in the Company’s foreign subsidiaries totaled 843 employees as of December 31, 2014. The Company also hires temporary workers during the harvesting season, which in 2014 averaged 1,309 temporary workers.

Ten labor unions represent an aggregate of approximately 869 of the Company’s employees (approximately 152 administrative employees, 107 sales employees and 610 plant employees). Labor relations with unionized personnel are governed by collective bargaining agreements negotiated in 2012–2014 that expire in 2015–2017. The Company believes that has a good working relationship with its labor unions; however, the Company is unable to predict the outcome of any future negotiations with such labor unions. Upon the expiration of a contract in May 2013, Concha y Toro employees went on a 45 day strike. The strike ended because the company was able to reach a satisfactory agreement that included better work conditions for the employees. There are four contracts that expire in 2015; both parties intend to negotiate and the Company expects to formalize an agreement without any problems.

Under Chilean law, all employees who are terminated for reasons other than misconduct are entitled to the basic payment of one month’s salary for each year worked, or a six-month portion thereof, subject to a limit of 11 months’ severance pay for employees hired after August 4, 1981. Severance payments to employees hired before August 14, 1981 are not subject to this limit.

The Company does not maintain any pension or retirement programs for its employees. Workers in Chile are covered by a national pension law which establishes a system of independent pension plans administered by the Administradoras de Fondos de Pensiones (“Pension Fund Administrators”). The Company has no liability for the performance of the pension plans or any pension payments to be made to the employees in Chile.

All of the company’s workers receive an annual bonus, which correspond at least to one monthly salary, proportion to their salary and date of entry of the calendar year. This bonus does not consider temporary workers and employees who work by commissions.

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E. Share Ownership

The following table reflects the number of shares owned indirectly by the directors and executive officers and their percentage ownership of the Company at February 28, 2015. Executive officers not listed do not own shares.

Share Ownership of Directors and Senior Management(1)
	No. of Shares		% of Total
	Owned		Subscribed Shares(2)
Eduardo Guilisasti Gana(3)		178,671,286		23.9	%
Rafael Guilisasti Gana(3)		177,027,404		23.7	%
Pablo Guilisasti Gana(3)		181,828,383		24.3	%
Isabel Guilisasti Gana(3)		4,704,942		0.6	%
Alfonso Larraín Santa María(4)		82,203,409		11.0	%
Francisco Marín Estévez(5)		65,721,040		8.8	%
Mariano Fontecilla de Santiago Concha(6)		27,157,875		3.6	%
Osvaldo Solar Venegas (7)		190,076		—	(*)
Thomas Domeyko C. (8)		28,557		—	(*)
Cristián Ceppi Lewin (9)		50,294		—	(*)
Carlos Halaby Riadi(10)		224,690		—	(*)
Adolfo Hurtado Cerda(11)		211,200		—	(*)
Enrique Tirado Santelices (12)		10,876		—	(*)
Daniel Durán Urízar(13)		10,286		—	(*)
Giancarlo Bianchetti Gónzalez(14)		50,513		—	(*)
Cristián Goycolea Nagel(15)		6,040		—	(*)
José Jottar Nasrallah(16)		4,205		—	(*)
Paul Konar Elder(17)		7,030		—	(*)
Directors and Executive Officers in the aggregate		383,284,269		51.31	%

(1) Shares held directly and indirectly through investment companies and not individually owned.

(2) Calculated on the basis of 747,005,982 outstanding shares on February 28, 2014.

(3) Eduardo Guilisasti Gana, Rafael Guilisasti Gana, José Guilisasti Gana and Pablo Guilisasti Gana (collectively, the “Family Principal Shareholders”) are the sons of Mr. Eduardo Guilisasti Tagle, the former Chairman of the Company. Isabel Guilisasti Gana is the sister of the Family Principal Shareholders. Mr. Eduardo Guilisasti Tagle died on August 20, 1998. The shares attributed to each Family Principal Shareholder include 87,615,431 and 85,274,628 shares held by Inversiones Totihue S.A. (“Totihue”) and Rentas Santa Bárbara S.A. (“Santa Bárbara”), respectively, as well as shares held directly or indirectly by members of such Family Principal Shareholder’s immediate family and affiliated entities. Totihue and Santa Bárbara are controlled by the Family Principal Shareholders pursuant to powers of attorney granted by the board of directors of Totihue and Santa Bárbara. Each power of attorney grants any two Family Principal Shareholders, acting together, the power to, among others, vote or direct the voting of, or dispose or direct the disposition of, the shares held by Totihue or Santa Bárbara, as the case may be. Mr. Eduardo Guilisasti Gana is the Company’s General Manager, Mr. Rafael Guilisasti Gana is the Company’s Vice Chairman and Mr. Pablo Guilisasti Gana is a director of the Company. Ms. Isabel Guilisasti Gana was named Marketing Manager Origin Wines on July, 2004. The address for Mr. Eduardo Guilisasti Gana and Mr. Rafael Guilisasti Gana is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile. The address for Mr. Pablo Guilisasti Gana is c/o Frutícola Viconto S.A., Apoquindo 4775, Piso 16, oficina 1601, Las Condes, Santiago, Chile. The address for Ms. Isabel Guilisasti Gana is Viña Concha y Toro S.A., Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile. The other Family Principal Shareholder, Mr. José Guilisasti Gana, is neither director nor executive officer of the Company. The address for Mr. José Guilisasti Gana is Frutícola Viconto S.A., Apoquindo 4775, Piso 16, oficina 1601, Las Condes, Santiago, Chile.

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(4) Mr. Alfonso Larraín Santa María is the Company’s Chairman of the Board. The number of shares attributed to Mr. Larraín includes 991,849 shares held by his brother Andrés Larraín Santa María and 273,840 shares held by his brother in-law, Carlos Saavedra Echeverría (managers of the Company), shares held by other members of his family and affiliated entities and also includes 26,964,775 shares held by Fundación Cultura Nacional (“Cultura Nacional”). Cultura Nacional is a Chilean non-profit institution which primarily funds grade school religious education. Mr. Alfonso Larraín Santa María is the Chairman of Cultura Nacional. Mr. Larraín’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(5) Mr. Francisco Marín Estévez is a director of the Company. The number of shares attributed to Mr. Marín includes shares owned by members of his family and affiliated entities. Mr. Marín’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(6) Mr. Mariano Fontecilla de Santiago Concha is a director of the Company. The number of shares attributed to Mr. Fontecilla includes shares owned by members of his family and affiliated entities. Mr. Fontecilla’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(7) Mr. Osvaldo Solar Venegas is the Company’s Corporate Administration and Finance Manager. Mr. Osvaldo Solar is Director of Cultura Nacional, foundation that holds 26,964,775 shares of the Company. Mr. Solar’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(8) Mr. Thomas Domeyko C. is Corporate Export Manager North Zone. Mr. Domeyko’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(9) Mr. Cristián Ceppi L. is Corporate Export Manager South Zone. Mr. Ceppi’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(10) Mr. Carlos Halaby R. is Eonology Manager. Mr. Halaby’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(11) Mr. Adolfo Hurtado C. is General Manager of Viña Cono Sur. Mr. Hurtado’s address is c/o Viña Cono Sur, Avenida Nueva Tajamar 481, Torre Sur, Piso 21, Santiago, Chile.

(12) Mr. Enrique Tirado S. is Oenology Manager Don Melchor. Mr. Tirado’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(13) Mr. Daniel Durán U. is Technology and Information Manager. Mr. Durán’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(14) Mr. Giancarlo Bianchetti G. is General Manager of Fetzer Vineyards. Mr. Bianchetti’s address is c/o Fetzer Vineyards, 12901 Old River Road Hopland, CA, USA 95449.

(15) Mr. Cristóbal Goycolea Nagel is Marketing Manager for Global Brands. Mr. Goycolea’s address is c/o Viña Concha y Toro S.A., Casilla 213, Avenida Nueva Tajamar 481, Torre Norte, Piso 15, Santiago, Chile.

(16) Mr. Jose Jottar Nasrrallah is General Manager of Trivento. Mr. Jottar’s address is c/o Trivento Bodegas y Viñedos S.A., Canal Pescara 9347, Russell C.P. 5517, Maipu, Mendoza, Argentina.

(17) Paul Konar Elder is General Manager of Viña Maipo and Viña Palo Alto. Mr. Konar’s address is c/o Viña Palo Alto, Virginia Subercaseau 210, Pirque, Santiago, Chile.

(*) Less than 1%.

ITEM 7:             MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The Company’s only outstanding voting securities are the shares of its Common Stock. According to the Company’s shareholder records, the Company’s 747,005,982 shares of Common Stock outstanding were held by 1,329 shareholders of record as of February 28, 2015. There are no differences in the voting rights of the shareholders. Only the Depositary, as shareholder of record for the shares underlying the ADS (according to Circular 1375 S.V.S.), has an address in the United States.

The principal shareholders of the Company are Inversiones Totihue S.A. (“Totihue”), Rentas Santa Bárbara S.A. (“Santa Bárbara”), Banco de Chile (third party account Chapter XIV), Banco Itaú (third party account Chapter XIV), Inversiones Quivolgo S.A., Fundación Cultura Nacional (“Cultura Nacional”), Banco Santander (third party account Chapter XIV), Inversiones GDF S.A., ,, Constructora Santa Marta Ltda. (“Santa Marta”), Agroforestal e Inversiones Mahiue Ltda., The Bank of New York (according to Circular 1375 issued by the S.V.S. on February 12, 1998, hereinafter “Circular 1375 S.V.S.,” which states that the Depositary shall be the shareholder of record of the shares underlying the ADS), Inversiones La Gloria Ltda. (“La Gloria”), Foger Gestión Patriminial Ltda (“Foger”), Inversiones Rauten Ltda (“Rauten”) and AFP Provida S.A.

Santa Bárbara and Totihue are investment companies controlled by Eduardo Guilisasti Gana, Rafael Guilisasti Gana and Pablo Guilisasti Gana (collectively, the “Family Principal Shareholders”). Inversiones GDF S.A., Santa Marta, La Gloria and Quivolgo are investment companies controlled by directors of the Company.

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For information concerning the beneficial ownership in shares of Common Stock of the Family Principal Shareholders and other Directors and Executive Officers of the Company, see Item 6  — “Directors, Senior Management and Employees — Share Ownership”. The following table sets forth certain information concerning direct ownership of the Company’s Common Stock with respect to the principal holders of the outstanding subscribed shares of Common Stock. 

	As of December 31st,
	2014					2013					As of February 28, 2015
Principal Shareholders	Owned		Subscribed			Owned		Subscribed			Owned		Subscribed
Inversiones Totihue S.A. (2)		87,615,431		11.73	%		87,615,431		11.73	%		87,615,431		11.73	%
Rentas Santa Bárbara S.A. (2)		85,274,628		11.42	%		85,274,628		11.42	%		85,274,628		11.42	%
Banco de Chile Cta de Terceros		62,150,708		8.32	%		36,501,601		4.89	%		68,650,246		9.19	%
Banco Itau Cta de Terceros		59,801,955		8.01	%		50,264,439		6.73	%		58,958,204		7.89	%
Inversiones Quivolgo S.A.(4)		31,348,071		4.20	%		31,348,071		4.20	%		31,348,071		4.20	%
Fundación Cultura Nacional (5)		26,964,775		3.61	%		26,964,775		3.61	%		26,964,775		3.61	%
Banco Santander Cta de Terceros		25,877,437		3.46	%		18,038,643		2.41	%		22,485,640		3.01	%
Inversiones GDF S.A. (6)		24,492,173		3.28	%		24,492,173		3.28	%		24,492,173		3.28	%
Constructora Santa Marta Ltda. (7)		22,293,321		2.98	%		22,293,321		2.98	%		22,293,321		2.98	%
Agroforestal en Inv. Maihue Ltda		22,159,144		2.97	%		22,159,144		2.97	%		22,159,144		2.97	%
The Bank of New York (1)		18,491,040		2.48	%		21,719,100		2.91	%		18,064,000		2.42	%
Inversiones La Gloria Ltda.(4)		16,200,000		2.17	%		16,200,000		2.17	%		16,200,000		2.17	%
Foger Gestion Patriminial Ltda		15,640,089		2.09	%		15,074,960		2.02	%		15,640,089		2.09	%
Inversiones Rauten Ltda		13,094,621		1.75	%		13,094,621		1.75	%		13,094,621		1.75	%
AFP Provida S.A. (3)		11,644,697		1.56	%		17,890,464		2.39	%		11,630,297		1.56	%
Total Largest 15 Shareholders		523,048,090		70.02	%		488,931,371		65.45	%		524,870,640		70.26	%
Other Shareholders		223,957,892		29.98	%		258,074,611		34.55	%		222,135,342		29.74	%
Total		747,005,982		100	%		747,005,982		100	%		747,005,982		100	%

(1) Depositary Bank for the ADS.

(2) Investment Company controlled by the Guilisasti Family (“Family Principal Shareholders”).

(3) Chilean Pension Fund.

(4) Investment Company controlled by Mr. Alfonso Larraín Santa María.

(5) Cultura Nacional is a Chilean nonprofit institution. Shares are attributed to Mr. Alfonso Larraín, its Chairman.

(6) Investment Company controlled by Mr. Mariano Fontecilla de Santiago Concha.

(7) Investment Company controlled by Mr. Francisco Marín Estévez.

In August 1999, members of the Guilisasti family and other affiliated parties entered into a Shareholders’ Agreement relating to, among other issues, the transfer and voting of Common Stock. An English translation of such Shareholders’ Agreement was previously filed and is listed as Exhibit 3.4  to this Annual Report. See Item 19  — “Exhibits.”

Pursuant to the Shareholders’ Agreement, each party that is a holder of Common Stock agreed to provide to Totihue and Santa Bárbara the right to purchase all or part of any shares the selling shareholder wishes to sell from time to time. In addition, both Santa Bárbara and Totihue agreed to provide to one another rights to purchase all or part of any Common Stock it wishes to sell from time to time. If a shareholder gives notice of a proposal of sale, Santa Bárbara and Totihue have 30 days from the date of receipt to accept the offer (in whole or in part) to purchase the selling shareholder’s Common Stock subject to the proposed sale.

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The preferential purchase rights of Santa Bárbara and Totihue described above are applicable in the case of transfer of subscription rights of shareholders party to the Shareholders’ Agreement resulting from a capital increase, as well as in the case of issuance of capital stock in the event of a merger or split-off. The preferential purchase rights of Santa Bárbara and Totihue are not applicable to a transfer of Common Stock to certain persons, including subsidiaries in which the transferor controls 75% or more of such subsidiary’s capital stock and direct ascendants and descendants of such transferor.

The Shareholders’ Agreement is of indefinite duration and may be modified or terminated pursuant to a written agreement signed by the shareholders who are party to the Shareholders’ Agreement and, in the aggregate, hold no less than 75% of the Common Stock subject to the Shareholders’ Agreement.

B. Related Party Transactions

In the ordinary course of its business, the Company engages in transactions with its affiliates. In addition, the Company has engaged in transactions with directors and executive officers of the Company. A detail of transactions realized with subsidiaries or related parties is presented in Note 9  to the Consolidated Financial Statements – Balances and Transactions with Related Parties–. The principal transactions with such related parties during the last three fiscal years are as follows:

Viñedos Emiliana.

Viñedos Emiliana is a Chilean corporation (sociedad anónima abierta) which produces wines for export and domestic markets and is listed on the Chilean Exchanges. Viñedos Emiliana was originally a subsidiary of the Company until 1986, when the Company distributed shares of Viñedos Emiliana to the Company’s then existing shareholders. Although Viñedos Emiliana is a separate corporation, the Company and Viñedos Emiliana remain under common control. Certain principal shareholders of the Company own directly and indirectly approximately 58.15% of Viñedos Emiliana’s outstanding capital stock and, additionally, the Company and Viñedos Emiliana have other common shareholders. Viñedos Emiliana’s seven-member Board of Directors includes two of the Company’s seven directors (Rafael Guilisasti Gana and Alfonso Larraín Santa María). Viñedos Emiliana and the Company have various business dealings, the most significant of which are described below.

The Company has a license from Viñedos Emiliana to use Viñedos Emiliana’s brand name in Chile. The Company bottles (or packages in Tetra Brik containers) and sells in Chile for its own account a portion of its varietal wine production under Viñedos Emiliana’s labels. The Company pays licensing fees to Viñedos Emiliana for the use of its labels. Licensing fees are based on the Company’s gross revenues from sales of wines under Viñedos Emiliana’s labels.

Viñedos Emiliana does not have its own bottling facilities. Pursuant to a contract with Viñedos Emiliana, the Company bottles wine produced by Viñedos Emiliana. This wine is sold by Viñedos Emiliana in export markets for its own account under Viñedos Emiliana’s labels. The Company receives a per-bottle fee for bottling services provided to Viñedos Emiliana. This fee is for the same amount as the Company would charge to an unrelated wine producer for bottling services.

In 2014, the Company recognized Ch$644 million in revenues from Viñedos Emiliana, or 0.11% of total revenues, including mainly revenues from sales in bottling fees and sales of raw materials. The Company recognized revenues from Viñedos Emiliana of Ch$422 million and Ch$482 million, in 2013 and 2012 respectively. In 2014, the Company paid Viñedos Emiliana Ch$262 million in licensing fees. For the years 2013 and 2013, the Company paid Viñedos Emiliana Ch$123 and Ch$459 million, respectively.

From time to time, the Company engages in other transactions with Viñedos Emiliana, including purchases of wine in bulk at market prices, grapes and other raw materials. In 2014, 2013 and 2012 total purchases from Viñedos Emiliana totaled Ch$1,141 million, Ch$378 million and Ch$824 million respectively.

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Frutícola Viconto (“Frutícola”).

Frutícola is the Company’s principal customer for fruit. In 2014, 2013 and 2012 the Company sold Ch$10 million, Ch$10.6 million and Ch$10.5 million, respectively, of fruit to Frutícola for export. The Company also purchases grapes from Frutícola for vinification. In 2014, 2013 and 2012, the Company did not purchase any fruit from Frutícola which is a Chilean corporation (sociedad anónima abierta) listed on the Chilean Exchanges. Frutícola was formerly a subsidiary of the Company until 1986 when the Company distributed Frutícola shares to the Company’s then existing shareholders.

The Company and Frutícola are under common control. One of the Company’s seven directors is member of Frutícola’s seven-member Board of Directors (Pablo Guilisasti Gana). Mr. Andrés Larraín Santa María, the Company’s Agricultural Manager and Mr. Felipe Larraín Vial, son of the Company’s Chairman, are also directors of Frutícola. Certain Principal Shareholders directly and indirectly own approximately 52.05% of the outstanding common stock of Frutícola.

Industria Corchera

In November of 2000, the Company acquired 49.6% of the capital stock of Industria Corchera through a direct purchase of shares from Quivolgo, Totihue and two investment companies controlled by a director of the Company. Based on a prior economic valuation of Industria Corchera by PriceWaterhouse Coopers, the Company invested a total of US$6 million. In November 2002, with the acquisition of 4,818 shares, representing 0.24% of the capital stock of Industria Corchera, the Company increased its ownership in Industria Conchera to 49.84%. In 2008, the Company increased its ownership to 49.96%.

Industria Corchera is the primary cork supplier for the Company. The Company purchased Ch$5,822 million, Ch$2,053 million and Ch$5,280 million of cork and other raw material from Industria in 2014, 2013 and 2012 respectively. The Company believes that the price and terms it receives from Industria Corchera are equivalent to those available from its other cork suppliers. Mr. Osvaldo Solar Venegas, the Company’s CFO is director of Industria Corchera as well as the Company’s Vice President Rafael Guilisasti Gana. Pablo Guilisasti Gana, Concha y Toro’s Directo also acts as deputy director of Industria Corchera. Andrea Benavides Hebel, Finance Manager of Concha y Toro is also Deputy Director of Industria Corchera.

Viña Almaviva.

Viña Almaviva is a 50-50 joint venture company between the Company and Baron Philippe de Rothschild. The Company purchases from Almaviva used French oak barrels (used during one aging season) and the Almaviva wine that is sold in Chile through Comercial Peumo. Total purchases from Almaviva in 2014, 2013 and 2012 were Ch$770 million, Ch$72 million and Ch$197 million respectively. In addition, the Company sells to Almaviva raw materials and services. Sales to Almaviva totaled in 2014, 2013 and 2012, Ch$242 million, Ch$236 million and Ch$173 million respectively.

One of the Company’s seven directors is members of Viña Almaviva’s six-member Board of Directors (Eduardo Guilisasti Gana and (Rafael Guilisasti Gana). The Companys’ CEO is also a director of Almaviva. Mr. Felipe Larraín Vial, the son of the Company’s Chairman is CEO of Viña Almaviva.

Excelsior Wine Company.

On July 13, 2011, Viña Concha y Toro S.A., through its subsidiary VCT USA, Inc. entered into an agreement with Banfi Vintners, former distributor of Concha y Toro’s product in United States, to create a new company between them, called Excelsior Wine Company, LLC. to be registered in the state of Delaware, U.S. Excelsior Wine Company, LLC. will be managed by Banfi and VCT USA, Inc. Excelsior Wine Company, LLC. distributes the Chilean wines of Concha y Toro and the Argentine wines of Trivento in the United States. Excelsior Wine Company, LLC. distributes the brands “Little Black Dress” and “Five Rivers” that belong to our subsidiary in California, Fetzer Vineyards. Sales to Excelsior totaled Ch$31,371 million in 2014, Ch$30,622 million in 2013 and Ch$27,990 million in 2012.

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One of the Company’s seven directors is member of Excelsior Wine Company six-member Board of Directors (Rafael Guilisasti Gana). Mr. Giancarlo Bianchetti, the CEO of the subsidiary Fetzer Vineyards, is also director of Excelsior Wine Company as well as the CEO of Concha y Toro, Mr. Eduardo Guilisasti Gana.

Southern Brewing Company S.A.

On May 13 2011, the Company purchased 40% of the capital stock of Southern Brewing Company S.A, a brewing company owner of the brand of Chilean beers “Kross”. On that same date, Southern Brewing Company S.A. and Comercial Peumo Ltda, signed a distribution agreement for the distribution of Kross products ehich is currently in force. In April 15, 2013, the shareholders of Southern Brewing Company S.A. agreed to an increase of capital which resulted in an increase of Concha y Toro’s interest to 49%.

Mr. Eduardo Guilisasti Gana, the Company’s CEO, is a director of Southern Brewing Company S.A. as well as the Company’s CFO, Mr. Osvaldo Solar Venegas. The Company purchases the Kross Beer that is sold in Chile from Southern Brewing Company S.A. through Comercial Peumo. Total purchases from Southern Brewing Company S.A. in 2014, 2013 and 2012 were Ch$ 1,198 million, Ch$1.076 million and Ch$1.066 million respectively.

Related Transaction With Entities in Which the Directors and Executive Officers Have an Equity Interest. The Company purchases small quantities of grapes, plants and other services from entities in which several of its directors, executive officers or members of their families have interests. In 2014, 2013 and 2012, the Company purchased an aggregate of approximately Ch$4,716 million, Ch$3,198 million and Ch$5,267 million respectively, of such goods and services from such entities, and sold grapes and other services to these entities for Ch$ 9 million in 2014, Ch$ 59 million in 2013 and Ch$ 22 million in 2012.

Other. Besides formal requirements, Title XVI and Article 147, in particular, of the Chilean Corporation Law requires any related party transaction to be in Company’s interest and subject to terms and conditions customarily prevailing in the market at the time of its approval. Directors, managers and principal officers of companies that violate Article 147 are liable for losses resulting from such violation. In addition, Article 147 of the Chilean Corporation Law provides that any transaction in which a director has a personal interest or is acting on behalf of a third party must be immediately informed by the compromised Director to the boards of directors and shall only be approved if the absolute majority of the directors consider that the transaction is beneficial for the social interest. Chilean law requires that an interested director abstain from voting on such a transaction. If the absolute majority of the director is obliged to abstain for voting on any particular transaction, the transaction shall only be approved unanimously by the independent directors or by an a extraordinary shareholders meeting. See Item 10  — “Additional Information — Memorandum and Articles of Incorporation— Directors” for further information relating to conflict of interest transactions. Resolutions approving such transactions must be reported to the Company’s shareholders at the next shareholder’s meeting. Violation of Article 147 may result in administrative or criminal sanctions and civil liability to the Company and shareholders or interested third parties who suffer losses as a result of such violation. The Company believes that it has complied with the requirements of Article 147 in all transactions with related parties during fiscal year 2013.

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For additional information concerning the Company’s transactions with affiliates and other related parties, see Note 9  to the Consolidated Financial Statements — “Balances and Transactions with Related Parties.”  

ITEM 8:                 FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information.

 See Item 18  — “Financial Statements” and the financial statements referred to therein for the Consolidated Financial Statements and other financial information.

Wine Exports

Viña Concha y Toro and its subsidiaries export from Chile to 145 countries. Concha y Toro is the largest exporter in Chile. The Company also exports wine from Argentina through the subsidiary, Trivento Bodegas y Viñedos. Trivento is the fourth largest wine exporter by volume in Argentina. See “Item 4: Information on the Company — Company Sales — Argentina”. In addition, since 2011, after Fetzer’s acquisition, the Company started to export from the United States. Fetzer is the seventh largest exporter among Californian wineries. See “Item 4: Information on the Company — Company Sales — United States” 

The following table presents wine exports (including exports from Chile, Argentina and United States) by volume, in Chilean pesos and as a percentage of total sales for the last three years.

Exports by Volume and Value
	2014			2013			2012
Exports (thousand – liters)		211,888			192,294			185,849
% of total sales		70.9	%		69.6	%		67.6	%
Exports (Ch$ million)		416,854			328,721			294,924
% of total sales		71.5	%		68.5	%		65.5	%

Legal and Arbitration Proceedings

The Company is not involved in any litigation or arbitration proceedings which, if determined adversely to the Company, individually or in the aggregate, would have a material adverse effect on the Company and its subsidiaries taken as a whole, nor to the Company’s knowledge are any such proceedings threatened.

The subsidiary of the Company in Argentina, Trivento Bodegas y Viñedos S.A, is involved in three legal procedures with the Argentinean Federal Tax Bureau (“AFIP”). AFIP has challenged Trivento’s revenue declarations for years 2002, 2003, 2004, 2005 and 2006. If the court ultimately decides against Trivento, Trivento could be required to pay an aggregate amount equivalent to approximately Ch$ 2.792 million (approx. US$ 5.1 million). The three above cases are in the stage of appeal.

The subsidiary of the Company in Brazil, VCT Brasil Importación y Exportación Limitada, has been challenged by the Secretaria da Fazenda do Estado de São Paulo. This institution is demanding the reimbursement of unpaid ICMS-ST (local VAT). VCT Brasil Importación y Exportación Limitada has presented its defense in local courts. If finally local courts decide against VCT Brasil Importación y Exportación Limitada, VCT Brasil Importación y Exportación Limitada could be required to pay an aggregate amount equivalent to approximately Ch$ 16,2239.887 million (approx. US$ 29,216 million).

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Finally the Servicios de Impuestos Internos (Chilean IRS) has challenged the Company’s tax return for the year 2010 and 2011 in relation to the depreciation applied by the Company for it fixed assets (estanques). The Company filed a Tax Claim in the 4° Tribunal Tributario y Aduanero de la Región Metroipolitana. If the court ultimately decides against the Company, Concha y Toro could be required to pay an aggregate amount equivalent to approximately Ch$ 2.079 million (approx. US$ 3.3 million).

Policy on Dividend Distributions

In accordance with Chilean law, the Company must distribute cash dividends equal to at least 30% of the Company’s annual net income calculated in accordance with Chilean GAAP, unless otherwise decided by a unanimous vote of the shareholders and unless and to the extent that the Company has accumulated losses. If there is no net income in a given year, the Company may elect, but is not legally obliged, to distribute dividends out of retained earnings. Shareholders who do not expressly elect to receive a dividend other than in cash are legally presumed to have decided to receive the dividend in cash. A U.S. holder of ADS may, in the absence of an effective registration statement under the Securities Act or an available exemption from the registration requirement thereunder, effectively is required to receive a dividend in cash.

The Company’s dividend policy approved at the general shareholders’ meeting is to distribute 40% of net earnings excluding the earnings generated by Fetzer. For fiscal year 2014, interim dividends Nos. 256, 257 and 258 of Ch$3.00 per share were paid on September 30, 2014, December 30, 2014 and March 31, 2015, respectively. A final dividend No. 259 of Ch$15 per share was declared to pay on May 22, 2015 based on earnings registered during 2014 fiscal year. Total dividends disbursed against the profits of 2014 fiscal year totaled 40% of earnings, excluding earnings generated by Fetzer.

For fiscal year 2015, the Board approved to pay three interim dividends of Ch$3.0 per share, charged against the earnings of 2015 fiscal year. These will be paid on September, 2015; December, 2015; and March, 2016, while the remaining profits up to a limit of 40% of the earnings (excluding the earnings generated by Fetzer) shall be disbursed in May 2016.

The above detailed dividend policy is the Board’s intent; however, fulfillment of thi policy will be contingent on cash flows. Consequently, at the annual shareholders’ meeting, the Board shall solicit shareholder approval to modify the amounts and payment dates should the necessity arise. 

The following table sets forth the dividends paid per share of common stock in respect of each of the years indicated:

	Total Dividends Paid
Fiscal year,	Ch$ per share (1)
2008		19.55
2009		23.70
2010		22.45
2011		26.00
2012		16.10
2013		18.90
2014		24.00

(1) Dividends per share are expressed in pesos and correspond to interim and final dividend charged against net income of the corresponding fiscal year. The final dividend with respect to each year is declared and paid within the first five months of the subsequent year.

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B. Significant Changes

No significant changes have occurred since the date of our last annual financial statements.

ITEM 9:                 THE OFFER AND LISTING

Prior to the offerings of the ADS and the shares of Common Stock in October 1994, there was no public market for the Company’s securities in the United States. The Common Stock is currently traded on the Chilean Exchanges. In 2014, trading on the Santiago Stock Exchange accounted for approximately 95.7% of the trading volume of the Common Stock in Chile. The ADS are listed on the New York Stock Exchange and trade under the symbol “VCO.”

The tables below show, for the periods indicated, high and low closing sale prices of a share of Common Stock in nominal Chilean pesos and the quarterly shares trading volume of the Common Stock on the Santiago Stock Exchange. The U.S. dollar figures reflect, for the periods indicated, actual high and low closing prices for the ADS on the New York Stock Exchange in the United States. The ADS may or may not actually trade at 20 times the price per share. As of Monday October 3, 2005 the ratio of one (1) ADS representing fifty (50) ordinary shares was changed to one (1) ADS representing twenty (20) ordinary shares. Therefore, as of October 3, 2005, Viña Concha y Toro’s ADS quotation will correspond initially, to the closing quotation of September 30, 2005 divided by 2.5 (two and one half). See Item 3 — “Key Information — Exchange Rates” for the exchange rates applicable during the periods set forth below. The following information is not restated in constant Chilean pesos.

Annual High and Low Closing Sale Prices
	Chilean Pesos				U.S. Dollars Per
	Per Shares(2)				ADS(3)
Year Ended December	High		Low		High		Low
2007		1,375.0		800.0		55.2		29.8
2008		1,132.7		780.0		43.4		26.0
2009		1,200.1		931.0		45.0		28.5
2010		1,300.0		1,010.0		51.0		39.0
2011		1,296.0		842.0		54.4		32.6
2012		1,161.7		874.1		47.5		33.4
2013		1,010.0		900.0		40.7		33.1
2014		1,250.0		940.5		43.5		34.0

*On October 3, 2005 the ratio of 1 ADR to common stock changed from 1:50 to 1:20

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	Quarterly High and Low Closing Sale Prices
	Chilean Stock Trading						ADR Trading
	Chilean Pesos						U.S. Dollars Per
	Per Shares(2)						ADS(3)
	Share						Share
Year Quarter	Volume(000)(1)		High		Low		Volume(3)		High		Low
2013
1st Quarter		85,399.8		1,000.0		915.0		238,766		42.72		38.60
2nd Quarter		61,152.5		1,010.0		900.0		322,185		40.67		37.50
3rd Quarter		42,135.2		1,000.0		900.0		383,453		39.96		35.04
4th Quarter		44,254.0		1,010.0		910.0		259,137		39.50		33.10
2014
1st Quarter		44,809.8		1,133.5		0.0		334,860		41.35		34.01
2nd Quarter		51,108.4		1,077.0		0.0		273,515		43.50		38.45
3rd Quarter		54,875.3		1,100.0		0.0		231,958		41.71		37.41
4th Quarter		47,342.5		1,104.5		0.0		252,635		41.01		35.61
Month ended
September, 2014		19,212.2		1,199.0		1,133.5		134,520		41.71		38.22
October, 2014		16,588.9		1,189.9		1,077.0		79,343		41.01		36.45
November, 2014		15,407.5		1,200.0		1,100.0		55,718		39.51		36.22
December, 2014		15,346.1		1,200.6		1,104.5		117,574		40.00		35.61
January, 2015		10,214.1		1,190.0		1,120.1		58,549		39.00		36.21
February, 2015		11,494.7		1,300.0		1,150.1		60,354		41.50		36.20

(1) Source: Volume traded in the Santiago Stock Exchange, the Chilean Electronic Exchange and the Valparaiso Stock Exchange.

(2) Source: Santiago Stock Exchange. Chilean pesos per share reflect nominal price at trade date.

(3) Source: Monthly Report-The Bank of New York. Reflects actual high/low closing prices.

According to the Company’s records, as of February 28, 2015, there were 1,329 holders of record of the Common Stock. Only the Depositary, as shareholder of record for the shares underlying the ADS (according to Circular 1375 S.V.S.), has an address in the United States.

ITEM 10:           ADDITIONAL INFORMATION

A. Share Capital

Not Applicable.

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B. Memorandum and Articles of Association

The following is a summary of certain information regarding the Company’s By-Laws and provisions of Chilean law. This summary is not complete. For a complete overview of the provisions of the By-Laws discussed in this summary, you are encouraged to read the Company’s By-Laws, previously filed and incorporated by reference as Exhibit 1.1 to this Annual Report. See Item 19 — “Exhibits.”

Registration and corporate purposes. The Company is a corporation (sociedad anónima abierta) organized by means of a public deed (escritura pública) dated December 31, 1921, the abstract of which was recorded on Page 1051, Number 875, of Santiago’s Registry of Commerce in 1922 and published in Chile’s Official Gazette on November 6, 1922. Its existence was approved by a Supreme Decree Number 1556, dated October 18, 1922. After corporate amendments were made, the Company’s public deed was recorded on Page 15,664, Number 12,447 of Santiago’s Registry of Commerce in 1999 and recorded at Chile’s Securities Registry of the Superintendency of Securities under No. 0043 on June, 14, 1982. As set forth in Article 2 of the Company’s By-Laws, the purposes of the Company are: the operation and marketing of the wine-making industry in all its forms and all its distinct phases, whether with its own stock or stock purchased from third parties; the operation of agricultural real estate owned by the Company or leased from third parties; and the carrying out of real estate investments including acquiring, transferring and constructing real estate, either with its own personnel or through third parties.

Directors. Under the Chilean Corporation Law, a corporation may not enter into a contract or agreement in which a director has a direct or indirect interest (a conflicting interest transaction) without prior approval by the Board of Directors and only if the terms of the conflicting interest transaction are similar to those of an arm’s length transaction and only is it beneficial for the social interest.

If the conflicting interest transaction does not involve a “material amount,” the transaction shall be executed only with the previous approval of the Board of Directors. A conflicting interest transaction is deemed to involve a “material amount” if the amount involved is both greater than 2,000 Unidades de Fomento (as of March 31, 20154, approximately Ch$ 497.2 million) and exceeds 1% of the assets of the corporation, or if the amount exceeds 20,000 Unidades de Fomento (as of March 31, 20154, approximately Ch$ 4972.41 million) regardless of the size of the transaction. The same procedure shall be applicable in case the transaction complies with the Company’s habitual policies and in if the Company owns directly or indirectly at least the 95% of the other party in the transaction.

If the transaction does not comply with the aforementioned scenarios it will only be able to be executed if: (i) it is immediately informed to the Board of Directors, (ii) it is approved by the Board of Directors with the abstention of involved Directors; (iii) the Transaction is informed to the next shareholders meeting. In case the majority of the directors are involved in a related transaction it will only be able to execution if it is approved unanimously by the not directors involved or by an extraordinary shareholders meeting. If the Transaction is subject to an extraordinary shareholders meeting, the Board of Directors shall appoint at least one independent advisor which shall inform the shareholders before the extraordinary shareholders meeting.

The amount of any director’s remuneration is established each year at the annual shareholders’ meeting.

Directors are forbidden from borrowing or otherwise making use of corporate money or assets for their own benefit, unless previously authorized by the Board of Directors. Directors are also prohibited from borrowing or otherwise making use of corporate money or assets for the benefit of companies in which such directors are either directors or owners of a 10% interest or more, unless previously authorized by the Board of Directors. Directors who receive such loans are excluded from voting on that matter. However, shareholders’ authorization is not required if authorized by the Board of Directors. These rules can only be modified by law.

It is not necessary to hold shares of the Company to be elected a director and there is no age limit established for the retirement of directors.

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Rights, preferences and restrictions regarding shares. At least 30% of the Company’s annual net income is required to be distributed in cash to the shareholders, unless the shareholders unanimously decide otherwise. Any remaining profits may be used to establish a reserve fund (that may be capitalized at any time, amending the corporate By-Laws, by the vote of a majority of the voting stock issued), or to pay future dividends.

Compulsory minimum dividends become due thirty days after the date on which the shareholders meeting has approved the distribution of profits for that fiscal year. Any additional dividends approved by the shareholders become due on the date set by the shareholders or the Board of Directors.

According to the Company’s dividend policy, the dividends are distributed in quarterly interim payments plus a final dividend to be paid in May of the following year. Accrued dividends that corporations fail to pay or make available to their shareholders within certain periods are to be adjusted from the date on which those dividends became due and that of actual payment. Overdue dividends will accrue annual interest established for adjustable operations over the same period.

Dividends and other cash benefits unclaimed by shareholders after five years from the date on which they became due will become the property of the Chilean Fire Department.

The Company has only one class of shares and, therefore, there are no preferences or limitations on the voting rights of shareholders. Each shareholder is entitled to one vote per share. In shareholders’ meetings, determinations are generally made by a simple majority of shareholders entitled to vote. However, the Chilean Corporation Law provides that certain determinations require the vote of a two-thirds majority of the voting stock issued.

The Company’s directors are elected every three years and their terms are not staggered. Chilean law does not permit cumulative voting. However, shareholders may accumulate their votes in favor of just one person or distribute their votes to more than one person. In addition, by unanimous agreement of the shareholders present and entitled to vote, the vote may be omitted and the election made by acclamation.

In the event of liquidation, the Chilean Corporation Law provides that corporations may carry out distributions to shareholders on account of a reimbursement of capital only once secure the payment of corporate indebtedness or after its actual payment.

Under Chilean law, certain provisions affect an existing or prospective holder of securities as a result of the shareholder owning a substantial number of shares. The Securities Market Law establishes that (a) any person who, directly or indirectly; (i) owns 10% or more of the subscribed capital of a corporation (the “majority shareholders”) whose shares are registered in the Securities Registry of the Superintendency of Securities, or (ii) owns any such percentage because of the purchase of shares; and (b) all directors, the chief executive officer and the other principal officers of any corporation whose shares are registered with the Superintendency of Securities, regardless of the number of shares they own, must report any purchase or sale of shares made by such persons or entities no later than day after the date of such transactions to the Superintendency of Securities and to each of the stock exchanges in Chile where such corporation has securities registered. In addition, majority shareholders must inform the Superintendency of Securities and the stock exchanges with respect to whether the purchase is aimed at acquiring control of the corporation or merely a financial investment.

The Securities Market Law also provides that when one or more persons intend to take over a corporation subject to oversight by the Superintendency of Securities, they must give prior written notice to the Company, the Superintendency of Securities and the stock exchanges in Chile where such corporation has securities registered. This notice must include the price to be offered per share and the conditions of the proposed transaction, including the expected manner of acquiring the shares. Public notice shall be released through two publications in a newspaper of national presence as well.

Chapter XXV of the Securities Market Law was enacted in order that controlling shareholders share with minority shareholders the benefits of a change of control, by requiring that certain share acquisitions be made pursuant to a tender offer.

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The Chilean Corporation Law provides shareholders with preemptive rights. The Act requires that options to purchase stock representing capital increases in corporations and debentures duly convertible into stock of the issuing corporation, or any other securities extending future rights over such stock, must be offered, at least once, to existing shareholders, proportionally to the number of shares owned by them. This right is eminently renounceable or transferable. A corporation must distribute any bonus stock in the same manner.

The Chilean Corporation Law also provides shareholders with a right to withdraw from a corporation in certain situations. Unless there is an ongoing bankruptcy proceeding, if a shareholders’ meeting approves any of the following matters, dissenting shareholders will be automatically entitled to withdraw from the corporation upon payment by the corporation of the market value of their shares:

a) conversion of the corporation into a different type of legal entity;

b) merger of the corporation;

c) disposition of 50% or more of the assets of the corporation, whether or not including the liabilities;

d) guarantee of a third party’s liabilities with collateral exceeding 50% of the corporation’s assets;

e) establishment or extension of preferences in connection with a series of shares, or any other modification of existing preferences, in which case only dissenting shareholders in the affected series will have the right to withdraw; and curing certain errors or defects affecting the corporate charter, or amending the By-Laws in respect of one or more of the matters listed above.

In addition, shareholders may withdraw if a person becomes the owner of two-thirds of the outstanding shares of the corporation as a consequence of a share acquisition.

The Company’s By-Laws do not provide for additional circumstances under which shareholders may withdraw.

Action necessary to change the rights of holders of stock. Rights of shareholders are established by law and pursuant to the By-Laws of a corporation. Any change to the rights of shareholders must be adopted by a majority of shareholders or, in some cases, by a two-thirds majority vote, as discussed above. However, the amendment of certain rights requires a unanimous vote of the shareholders, including the right of shareholders to receive less than a 30% of the net profits for each fiscal year. Notwithstanding the foregoing, no decision of the shareholders can deprive a shareholder from his proprietary interest in its stock.

The Company’s By-Laws do not provide for additional conditions in connection with matters described in this subsection.

Shareholders’ meetings. Annual shareholders’ meetings are to be held during the first four months of each year. During the meetings, determinations are made relating to particular matters, which must be specifically indicated in the notice of such meeting. The quorum for a shareholders’ meeting is established by the presence, in person or by proxy, of shareholders representing at least an absolute majority (50% plus one) of the issued voting stock of the Company; if a quorum is not present at the first meeting, the meeting can be reconvened and upon the meeting being reconvened, shareholders present at the reconvened meeting are deemed to constitute a quorum regardless of the percentage of the voting stock represented. In that case, decisions will be made by the absolute majority of stock with voting rights present or otherwise represented. The following matters are specifically reserved for annual meetings:

a) review of the state of the corporation and of the reports of internal and independent auditors and the approval or rejection of the annual report, balance sheet, financial statements and records submitted by the officers or liquidators of the corporation;

b) distribution of profits, including the distribution of dividends;

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c) election or revocation of regular and alternate Board members, liquidators and management supervisors;

d) determinations regarding compensation of the Board members;

e) designation of a newspaper to publish the notice of meetings; and

f) in general, any other matter to be dealt with by the annual meeting relating to the Company and not specifically reserved to extraordinary shareholders’ meetings.

Extraordinary shareholders’ meetings may be held at any time. During extraordinary meetings, determinations are made relating to any matter which Chilean law or the Company’s By-Laws reserve for consideration at such extraordinary meetings, which matters shall be expressly set forth in the relevant notice. Whenever in an extraordinary shareholders’ meeting determinations must be made relating to matters specifically reserved to annual meetings, the operation and decisions of such extraordinary meeting will follow the requirements applicable to annual meetings.

The following matters are specifically reserved for extraordinary meetings:

a) dissolution of the corporation;

b) transformation, merger or spin off of the corporation and amendments to its By-Laws;

c) issuance of bonds or debentures convertible into stock;

d) transfer of corporate fixed assets and liabilities; and

e) guarantees of third parties’ obligations, except when these third parties are affiliated companies (in which case approval of the Board of Directors will suffice).

In addition to the above, annual and extraordinary shareholders’ meetings must be called by the Board of Directors in the following circumstances:

- when requested by shareholders representing at least 10% of issued stock;

- when required by the Superintendency of Securities; and

- whenever the social interest so warrants.

Only holders of stock registered in the Record of Shareholders five days before the date of the pertinent meeting may participate with the right to speak and vote in shareholders’ meetings. Directors and officers other than shareholders may participate in shareholders’ meetings with the right to speak.

Shareholders may be represented at meetings by other individuals, regardless of whether or not those persons are shareholders themselves. Representation must be conferred, in writing or public deed and for the total number of shares held by the shareholder.

Limitations on the right to own securities. The right to own any kind of property is guaranteed by the Chilean Constitution and the Chilean Corporation Law does not contain any general limitation regarding the right to own securities. There are, however, certain limitations on the right of foreigners to own securities of Chilean corporations, but only for certain special types of companies. The Company’s securities are not restricted by these limitations and the Company’s By-Laws do not contain restrictions or limitations in this respect.

Takeover defenses. The Company’s By-Laws do not contain any provisions that would have the effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries).

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Ownership threshold. The Company’s By-Laws do not contain any ownership threshold above which shareholder ownership must be disclosed.

Changes in capital. The By-Laws do not impose any conditions that are more stringent than those required by law for effecting changes in the capital of the Company.

C. Material Contracts

Viña Almaviva. On June 30, 1997, the Company entered into a joint venture with Baron Philippe de Rothschild S.A. (“Rothschild S.A.”), a French company, establishing Viña Almaviva S.A. (formerly “Baron Philippe de Rothschild - Concha y Toro S.A.”) for the production of “Primer Orden” wines in Chile. For a discussion of Viña Almaviva, see Item 4 — “Information on the Company — History and Development of the Company.” The Company owns 50% of Almaviva.

Industria Corchera. In November of 2000, the Company purchased 49.6% of the capital stock of Industria Corchera from certain directors of the Company. In November, 2002 the Company increased its ownership to 49.84%. In 2008, the Company increased its ownership to 49.96%. See Item 7 — “Major Shareholders and Related Party Transactions — Related Party Transactions” for a discussion of the acquisition and the agreements with Industria Corchera.

In connection with this acquisition, the Company and Amorim entered into a shareholders’ agreement establishing provisions, among others, for the transfer of shares and other agreements in relation to the administration of Industria Corchera. An English translation of the shareholders’ agreement between the Company and Amorim was previously filed and is listed as Exhibit 4.2 to this Annual Report. See Item 19 — “Exhibits.” The Company and Amorim jointly own 99.93% of the capital stock of Industria Corchera.

Fetzer Vineyards. In April of 2011, the Company purchased 100% of the capital stock of Fetzer Vineyards from Brown-Forman Corporation. This transaction closed in April 15, 2011. The acquisition agreement related to this acquisition is included in this Annual Report as Exhibit 4.3.

Excelsior Wine Company, LLC, on July 13, 2011, the Company entered into a joint venture with Banfi Vintners (“Banfi”) former distributor of Concha y Toro’s product in United States, to create a new company between them, named Excelsior Wine Company, LLC. which will distribute the Chilean wines of Concha y Toro and the Argentine wines of Trivento in the United States the Chilean wines of Concha y Toro and the Argentine wines of Trivento. Excelsior Wine Company, LLC. will also distribute the brands “Little Black Dress” and “Five Rivers” that belong to the Company’s subsidiary in California, Fetzer Vineyards. For a discussion of Excelsior Wine Company, LLC see Item 4 — “Information on the Company — History and Development of the Company.” The joint venture agreement is included in this Annual Report as Exhibit 4.4.

Southern Brewing Company S.A. On May 13 2011, the Company purchase a 40% of the capital stock of Southern Brewing Company S.A, a brewing company owner of the brand of Chilean beers “Kross”. On that same date, Southern Brewing Company S.A. and Comercial Peumo Ltda, signed a distribution agreement, for the distribution of Kross products which currently in force. In April 15, 2013, the shareholders of Southern Brewing Company S.A. agreed an increase of capital that resulted in an increase of Concha y Toro’s interest to 49%.

D. Exchange Controls

The Central Bank of Chile is responsible for, among other things, monetary policies and control of foreign exchange transactions.

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The Law of the Central Bank of Chile authorizes the Central Bank of Chile to regulate foreign exchange transactions, including those relating to ADS facilities. At the time the ADS facility was issued, the Central Bank had issued certain regulations (the “Former Regulations”) imposing the obligation to obtain the previous authorization from the Central Bank of Chile and the execution of an agreement with such bank in order to proceed with an ADS facility.

Due to the above, the ADS facility is subject to a contract between the Depositary, the Company and the Central Bank of Chile (the “Foreign Investment Contract”) that grants the Depositary and the holders of the ADS access to Chile’s Formal Exchange Market and permits the Depositary to remit dividends received from the Company to holders of ADS without restriction. The Foreign Investment Contract is currently in force and will continue to govern the ADS facility until all parties agree to terminate it. If the Foreign Investment Contract is terminated, the ADS facility would then become subject to the New Regulations (as defined below). Under Chilean legislation, a Foreign Investment Contract may not be altered or affected adversely by actions of the Central Bank of Chile.

The Central Bank of Chile adopted a new Foreign Exchange Regulations Compendium (the “New Regulations”) published in the Official Gazette on January 23, 2002 and effective as of March 1, 2002. The New Regulations impose only three levels of restrictions or obligations on foreign exchange transactions in Chile: (i) certain transactions requiring exchange of foreign currency must be conducted through the Formal Exchange Market (i.e., a commercial bank) and reported to the Central Bank of Chile (e.g., investments, loans, deposits and certain other transactions in excess of Ch$ 6.2 million approximately (US$10,000)); (ii) certain transactions requiring exchange of foreign currency to be remitted abroad must be conducted through the Formal Exchange Market without any reporting obligation (e.g., all license and royalty payments to be remitted abroad); and (iii) certain transactions requiring exchange of foreign currency must only be reported to the Central Bank of Chile (i.e., payments regarding import and export transactions, etc.).

Because the Law of the Central Bank of Chile authorizes the Central Bank of Chile to regulate foreign exchange transactions, including those relating to ADS facilities, more restrictive regulations on foreign exchange affecting ADS holders of the Company at any time may be imposed. Therefore, in the event the Foreign Investment Contract were terminated, an amendment to the New Regulations could, among other things, restrict the ability of ADS holders to dispose of the underlying shares of Common Stock of the ADS or to repatriate proceeds of the Common Stock. The duration or impact of any such restrictions would be difficult to assess.

The following is a summary of certain provisions that are contained in the Foreign Investment Contract. This summary does not purport to be complete and is qualified in its entirety by reference to the Foreign Investment Contract and Chapter XXVI of the former Foreign Exchange Regulations, which were filed as Exhibits 2.2 and 4.4, respectively, to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein. Although Chapter XXVI of the former Foreign Exchange Regulations is no longer in force, its terms do apply to the Company through the Foreign Investment Contract.

Under Chapter XXVI of the former Foreign Exchange Regulations and the Foreign Investment Contract, the Central Bank of Chile agreed to grant to the Depositary, on behalf of ADS holders and to any investor neither resident nor domiciled in Chile who withdraws Common Stock upon delivery of ADS (such shares of Common Stock being referred to herein as “Withdrawn Shares”), access to the Formal Exchange Market to convert pesos to U.S. dollars (and to remit such dollars outside of Chile) in respect of shares of Common Stock represented by ADS or Withdrawn Shares, including amounts received as (a) cash dividends; (b) proceeds from the sale in Chile of Withdrawn Shares; (c) proceeds from the sale in Chile of rights to subscribe for additional shares of Common Stock; (d) proceeds from the liquidation, merger or consolidation of the Company; and (e) other distributions, including, without limitation, those resulting from any recapitalization, as a result of holding shares of Common Stock represented by ADS or Withdrawn Shares. However, Chapter XXVI also provided that access to the Formal Exchange Market for repatriation of the sales proceeds of Withdrawn Shares or distributions thereon would be conditioned upon receipt by the Central Bank of Chile of certification by the Depositary (or the custodian on its behalf) that such Shares had been withdrawn in exchange for ADS, a waiver of the benefits of the Foreign Investment Contract until such Withdrawn Shares were redeposited and the Withdrawn Shares are redeposited with the Depositary. Investors receiving Withdrawn Shares in exchange for ADS will have the right to redeposit such shares in exchange for ADS, provided that the conditions to redeposit are satisfied. For a description of the Formal Exchange Market, see Item 3  — “Key Information — Exchange Rates.”

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Chapter XXVI of the former Foreign Exchange Regulations provided that access to the Formal Exchange Market for repatriation of dividend or distribution payments would be conditioned upon certification by the Company to the Central Bank of Chile that a dividend or distribution payment had been made and any applicable tax had been withheld. Cash dividends and other distributions paid by the Company with respect to ADS held by a non-Chilean resident holder are subject to a 35% Chilean withholding tax, which is withheld by the Company. However, stock dividends are deemed a non taxable event pursuant to Chilean Income Tax Law, thus, not subject to Chilean taxation. See Item 10  — “Additional Information — Taxation.”

Chapter XXVI of the former Foreign Exchange Regulations and the Foreign Investment Contract provide that a person who brings foreign currency into Chile must convert it into Chilean pesos (Liquidation restriction) on the same date and has five days within which to invest in shares of Common Stock in order to receive the benefits of the Foreign Investment Contract. If such person decides within such period not to acquire shares of Common Stock, he can access the Formal Exchange Market to reacquire U.S. dollars, provided that the applicable request to purchase U.S. dollars is presented to the Central Bank of Chile within five days, plus two additional days to request the Central Bank authorization of the initial conversion into pesos. Shares acquired as described above may be deposited for ADS and receive the benefits of the Foreign Investment Contract, subject to receipt by the Central Bank of Chile of a certificate from the Depositary (or the Custodian on its behalf) that such deposit has been effected and that the related ADS have been issued and a declaration from the person making such deposit waiving the benefits of the Foreign Investment Contract with respect to the deposited shares of Common Stock.

Access to the Formal Exchange Market under any of the circumstances described above is not automatic. Pursuant to former Chapter XXVI, such access required approval of the Central Bank of Chile based on a request presented through a banking institution established in Chile. The Foreign Investment Contract provides that if the Central Bank of Chile has not acted on such request within seven banking days, the request will be deemed approved.

As noted above, all the rights, procedures and exchange benefits contained in the Foreign Investment Contract are still in force in connection with the ADS issuance.

E. Taxation

The following discussion is a summary of certain Chilean and U.S. federal income tax considerations relating to an investment in the ADS or the shares. The discussion is based on current law and is for general information only. Moreover, while the Company’s tax advisors believe this discussion to be a correct interpretation of existing laws in force as of the date of this Annual Report, no assurances can be given that the courts or tax authorities responsible for the administration of such laws will agree with this interpretation or that changes in such laws will not occur. In addition, the discussion does not address all possible tax consequences relating to an investment in the ADS or the shares.

Each holder of ADS or shares of Common Stock should consult his or her own tax advisor regarding the particular tax consequences of the purchase, ownership and disposition of ADS or shares of Common Stock.

Chile

Chile and the United States signed in January 2010 a double taxation treaty; its ratification is pending by Chile and the United States. Diplomatic notes were exchanged in year 2011 in order to amend the treaty’s original wording. The bill has not yet entered into Chilean Congress. Entry into force is expected to take place in the short term. The following discussion is based exclusively on Chilean domestic tax legislation.

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The discussion summarizes the material Chilean income tax consequences of the purchase, ownership and disposition of ADS or shares of Common Stock by an individual who is neither domiciled in, nor a resident of, Chile for tax purposes or a legal entity that is not organized under the laws of Chile and does not have a permanent establishment in Chile (a “foreign holder”). However, it is not a full description of all tax considerations that may be relevant to a decision related to the ADS or shares of Common Stock. The discussion is based on Chilean income tax laws, regulations and rulings of the Chilean Internal Revenue Service, including Rulings No. 324 of 1990, No. 3985 of 1994, No. 1969 of 1995, No. 3807 of 2000, N° 1705 of 2006, 224 of 2008, 1948 and 3020 both of 2011, and Circular Letter No. 7 of 2002, as well as Resolution No. 36 of 2011, all of which are subject to change.

It is not intended as tax advice to any particular investor, which can be rendered only in light of that investor’s particular tax situation. For purposes of Chilean taxation, an individual holder is a resident of Chile if he has resided in Chile for more than six consecutive months in a calendar year, or a total of more than six months within two consecutive tax years.

Pursuant to the Chilean Constitution, provisions contained in statutes such as tax rates applicable to foreign investors, the computation of taxable income for Chilean purposes and the manner in which Chilean taxes are imposed and collected, may only be amended by another statute. In addition, the Chilean tax authority issues rulings, circular letters and regulations of either general or specific application and interpret the provisions of Chilean tax law. Pursuant to Article 26 of the Chilean Tax Code, Chilean taxes may not be assessed retroactively against taxpayers who in good faith relied on such rulings, regulations and interpretations, but Chilean tax authorities may change such rulings, regulations and interpretations prospectively.

Cash Dividends and Other Distributions

Cash dividends paid by the Company with respect to the ADS or shares of Common Stock held by a foreign holder will be subject to a 35% Chilean withholding tax (the “Withholding Tax”), which will be withheld and paid to the Chilean Treasury by the Company. Chile has an imputation tax system. A credit against the Withholding Tax is available based on the level of corporate income tax actually paid by the Company on the income to be distributed (the “First-Category Tax”); however, this credit does not reduce the Withholding Tax on a one-for-one basis because it also increases the base on which the Withholding Tax is imposed. From 1991 until 2001, the First-Category Tax rate was 15% resulting in an effective dividend withholding tax rate of approximately 23.52%. For 2002, the First-Category Tax rate was 16% resulting in an effective dividend withholding tax rate of approximately 22.62% and for year 2003 the First-Category Tax rate was 16.5%. From year 2004 until 2010 the First-Category Tax rate was 17%, resulting in an effective dividend withholding tax rate of approximately 21.69%. For year 2011, the First-Category Tax rate was 20%, resulting in an effective dividend withholding tax rate of approximately 18.75%. For year 2012, the First-Category Tax rate was 18.5%, resulting in an effective dividend withholding tax rate of approximately 20.25%. For year 2013, the First-Category Tax rate was set again at 20%, with the resulting effective dividend withholding tax rate of approximately 18.75%. For year 2014, the First-Category Tax rate was set at 21%, with the resulting effective dividend withholding tax rate of approximately 17.72%. For year 2015, the First-Category Tax rate is set at 22.5%, with the resulting effective dividend withholding tax rate of approximately 16.12%. For year 2016, the First-Category Tax rate would be set at 24%, with the resulting effective dividend withholding tax rate of approximately 14.47%. According to the Law No. 20780, the Chilean Tax Regime will change on 2017, as explained herein below.

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The example below illustrates the effective Chilean Withholding Tax burden on a cash dividend received by a non-resident holder, assuming a Withholding Tax rate of 35%, an effective First-Category Tax rate of 22.5% and a distribution of 50% of the net income of the Company distributable after payment of the First-Category Tax:

Company taxable income	200.0
First-Category Tax (22.5% of Ch$200)	(45.0	)
Net distributable income	155.0
Dividend distributed (50% of net distributable income)	77.5
Gross Up to compute Withholding Tax: Ch$77.5 plus Ch$22.5 First Category Tax effectively paid	(100.00	)
Withholding Tax Rate 35% of Ch$100.00 equal to Ch$35; minus credit for 50% of First Category Tax (22.5%)	12.5
Net withholding tax	(12.5	)
Net dividend received	65.00
Approximate effective dividend withholding rate (12.5/77.5)	16.12	%

In general, the effective dividend Withholding Tax rate, after giving effect to the credit for the First-Category Tax, can be calculated using the following formula:

Effective dividend Withholding Tax rate = (Withholding Tax rate (35)) - (First-Category Tax rate (22.5))

100 - (First-Category Tax rate (22.5))

Under Chilean income tax law, dividends generally are assumed to have been paid out of the Company’s oldest retained profits for purposes of determining the level of First-Category Tax that was paid by the Company. For years prior to 1991, the First-Category tax was 10%. Although this reduced First-Category Tax resulted in relatively greater amounts of distributable post-tax income for those years, the credit against the Withholding Tax for the First-Category Tax paid by the Company for those years will commensurably be diminished. Distributions of profits made with retained profits of those years, therefore, resulted in an effective dividend withholding tax rate of approximately 27.8%. Distributions of profits made with retained earnings of years 2002 and 2003, resulted or will result in an effective dividend withholding tax rate of approximately 23.52% and 22.62%, respectively. For distributions of profits generated during year 2004 until 2010, the effective dividend withholding tax is approximately 21.69%, and for distributions of profit generated on each of years 2011 and onwards, the effective dividend withholding tax was the following: (i) for those generated in 2011, approximately 18.75%; (ii) for those generated in 2012, 20.25%; (iii) for those generated in 2013, 18.75%; and (iv) for those generated in 2014, 17.72%. For distributions of profits generated on year 2015, the effective dividend withholding tax rate will be 16.12%, and for distributions of profits generated on year 2016, the effective dividend withholding tax rate will be 14.47%. According to the Law No. 20780, the Chilean Tax Regime will change on 2017, as explained herein below.

Dividend distributions paid in kind would be subject to the same Chilean tax rules as cash dividends. Stock dividends are deemed a non taxable event, thus, not subject to Chilean taxation for the shareholder at the moment the shares are distributed. Subsequent disposition of shares arising from stock dividends may be taxed in Chile (see Capital Gains). Disposition of the preemptive rights on compensated basis would be deemed in Chile as ordinary business income subject to taxation.

It is important to bear in mind that according to the Tax Reform Law from 2014 (Law No. 20780), from January 1, 2017 two Income Tax Systems will coexist between which the taxpayers must choose – and report to the IRS– within the last three months of 2016.

1) The first system is called the Income Allocation System (the “IAS”), whereby the companies shall allocate the earnings generated to their respective partners or shareholders at the end of each financial year, those who must pay the final tax –i.e., Additional Tax or Surtax–on the allocated amounts. In the event that the company or corporation decides to use this system, the corporate tax rate increase will be as follows.

Year	Rate
2014	21.0%
2015	22.5%
2016	24.0%
2017	25.0%

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2) The alternative is the system called Partial Integration System (the “PIS”), whereby companies must pay tax at a rate of 27% on profits accrued during the respective period. When choosing the PIS, partners or shareholders will be taxed on a cash basis, i.e., only for those profits that were withdrawn or distributed in the corresponding commercial year, however they may only use –through a system of imputation of credits and debits- 65% of the tax paid by the firm or company.

In the event that the company or corporation decides to use this second system, the corporate tax rate increase will be as follows:

Year	Rate
2014	21.0%
2015	22.5%
2016	24.0%
2017	25.5%
2018	27.0%

Capital Gains

Gains from the sale or exchange of ADS by a foreign holder (or ADRs evidencing ADS) outside of Chile will be deemed a foreign source income, not subject to Chilean taxation. Gains from the sale or exchange of ADS by a Chilean resident outside of Chile, will be deemed a foreign source income, but subject to taxation in Chile as Chilean residents are subject to taxes in Chile on their worldwide income.

The deposit and withdrawal of Common Stock in exchange for ADRs is not subject to Chilean taxation. Taxation, if any, will be triggered at the time Common Stocks are sold. The tax base of shares of Common Stock received in exchange for ADS for capital gains tax assessment will be the acquisition cost or basis on the shares. The basis on the shares delivered to any holder upon surrender of ADRs shall be the highest reported sales price of the shares on the Santiago Stock Exchange for the day on which the transfer of the shares is recorded under the name of the holder. Consequently, the conversion of ADS into shares of Common Stock and the immediate sale of the shares for the value established under the Deposit Agreement, as amended, would normally not generate a capital gain subject to taxation in Chile.

Prior to Law No. 20.448 published in the Official Gazette on August 13, 2010, if a capital gain was recognized on a sale or exchange of shares of Common Stock acquired upon surrender of ADRs (as distinguished from sales or exchanges of ADS abroad representing such shares) made by a foreign or Chilean resident or domiciled holder, such gain was deemed a non taxable event provided that the requirements of Article 18 ter of the Chilean Income Tax Law were met.

However, Article 18 ter was repealed and replaced by Article 107 of the same statute (pursuant to Law No. 20.448), which reproduces the rules set forth in the repealed article, but introduces a few changes as well.

The referred Article 107 entered into force on September 1, 2010. Any legal reference to Article 18 ter should be understood made to Article 107.

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The requirements of Article 107 of the Chilean Income Tax Law are: (i) the share at the time of sale must have a market presence (as recently defined in General Ruling No. 327 issued by the Chilean Superintendence of Securities on January 17, 2012, which replaces previous General Ruling No. 103, issued in year 2001). In case the market presence of the share was lost, the sale must be made within the following 90 days after the loss of the share’s market presence; (ii) the share must have been acquired and sold after April 19, 2001 (as per former Article 18 ter); and (iii) the acquisition and sale must have been made, among others, in a Chilean stock exchange market authorized by the Chilean Superintendence of Securities. We highlight that the acquisition and sale in a foreign stock exchange market was considered in Article 18 ter, but excluded in new Article 107.

In this regard, Rev. Ruling 224 of 2008 was issued in the context of Article 18 ter tax exemption on ADR operations and it confirmed that the reference contained in Article 18 ter to a foreign exchange stock market authorized by the Chilean Superintendence of Securities would cover gains derived from the transfer of shares in a Chilean company, acquired on the surrender (i.e. flowback) of ADRs acquired on the London Stock Exchange, NYSE and Madrid Stock Exchange.

However, considering that Article 107 restricts the non-taxable qualification only to shares acquired and sold in the Chilean stock market (among other situations which do not comprise foreign exchange markets), we believe there is a risk that the Revenue Authority may consider the gain derived from the transfer of shares acquired in the surrender of ADRs acquired in foreign exchange stock markets - particularly those acquired through ADR surrender after September 1, 2010 - would be considered taxable gain by the Chilean IRS, in the terms described below.

This change in law, which does not consider any transitory rules to protect taxpayers who invested in ADRs under rules established in former article 18 ter.

Considering the requirements of Article 107 are not met and a capital gain is realized at the time of the sale of Common Stock, such capital gain, made either by a foreign holder or by Chilean resident holder, will be subject to both the First-Category Tax and the Withholding Tax (the former being creditable against the latter) if either (i) the seniority on the Common Stock is less than one year since exchanging ADS for the Common Stock, or (ii) the shareholder acquired and disposed of the Common Stock in the ordinary course of its business or may be deemed an habitual trader of shares and (iii) the transaction takes place among parties deemed related, unlikely to take place in the sale is made in a stock market. In all other cases, gain on the disposition of Common Stock will exclusively be subject to the First-Category Tax (presently imposed at a rate of 22.5%) assessed as a sole tax and no second level taxation will apply e.g. the Withholding Tax in case of non-resident holder.

Amounts received by a foreign holder on the sale of preemptive rights relating to the shares of Common Stock will be deemed as business income, thus, subject to both the First-Category Tax and the Withholding Tax (the former being creditable against the latter).

Other Chilean Taxes

There are no gift, inheritance or estate taxes applicable to the ownership, transfer or disposition of ADS by a foreign holder, but such taxes will generally apply to the transfer at death or by gift of the Common Stock by a foreign holder. There are no Chilean stamp, issue, registration or similar taxes or duties payable by holders of Common Stock or ADS. 

Withholding Tax Certificates

Upon request, the Company will provide to foreign holders appropriate documentation evidencing the payment of the Withholding Tax (net of applicable First-Category Tax).

United States

The following discussion summarizes the material U.S. federal income tax consequences to U.S. Holders (as defined below) of the purchase, ownership and disposition of the ADS or shares of Common Stock. However, it is not a full description of all tax considerations that may be relevant to a decision related to the ADS or shares of Common Stock. The discussion is based on the United States Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder and judicial and administrative interpretations thereof, all as in effect on the date hereof and all of which are subject to change, which change could apply retroactively and could affect the tax consequences described below.

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The U.S. federal income tax treatment of a holder of ADS or shares of Common Stock may vary depending upon its particular situation. Certain holders (including, but not limited to, insurance companies, tax-exempt organizations, certain financial institutions, regulated investment companies, real estate investment trusts, persons liable foralternative minimum tax, persons holding offsetting positions in respect of the ADS or shares of Common Stock (including as part of a straddle, hedging, conversion or integrated transaction), tax-exempt entities,, broker-dealers, U.S. expatriates, U.S. Holders (as defined below) whose functional currency is not the U.S. dollar, partnerships or other pass-through entities or persons holding the ADS or shares of Common Stock through a partnership or other pass-through entity, traders that elect to mark-to-market, persons who acquired the ADS or shares of Common Stock pursuant to the exercise of any employee share option or otherwise as consideration and persons owning, directly or indirectly, 10% or more of the voting shares of the Company) may be subject to special rules not discussed below. Unless otherwise stated, the following summary is limited to U.S. Holders who hold the ADS or shares of Common Stock as “capital assets” within the meaning of Section 1221 of the Code. The discussion below also does not address the effect of any foreign, state or local tax law, or any federal tax law other than income tax law on a holder of the ADS or shares of Common Stock and does not address the Medicare contribution tax on net investment income. In addition, unless otherwise stated, the following discussion assumes that the Company is not currently and will not in the future be, classified as a “passive foreign investment company” (“PFIC”) within the meaning of the Code.

As used herein, the term “U.S. Holder” means a beneficial owner of the ADS or shares of Common Stock that is, for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or) created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate that is subject to U.S. federal income taxation without regard to the source of its income, or (iv) a trust if (1) it is subject to the primary supervision of a court within the United States and the control of one or more United States persons for all substantial decisions or and (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person. The term “Non-U.S. Holder” refers to any beneficial owner of ADS or shares of Common Stock other than a U.S. Holder.

The tax treatment of a partner in a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) that holds the ADS or shares of Common Stock will generally depend on the holder’s status and the activities of the partnership. Any such holder should consult its own tax advisor.

For U.S. federal income tax purposes, holders of the ADS (or ADRs evidencing the ADS) should generally be treated as the owners of the Common Stock represented by those ADS. Accordingly, no gain or loss will be recognized upon an exchange of shares of Common Stock for the ADS or an exchange of the ADS for shares of Common Stock. The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security. Accordingly, the creditability of any Chilean taxes and the availability of the reduced tax rate for any dividends received by certain non-corporate U.S. Holders, including individual U.S. Holders (as discussed below), could be affected by actions taken by intermediaries in the chain of ownership between the holders of the ADS and the Company if as a result of such actions the U.S. Holders of the ADS are not properly treated as beneficial owners of underlying shares of Common Stock.

INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL, NON-U.S. AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE ADS OR SHARES OF COMMON STOCK. 

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Cash Dividends and Other Distributions

Subject to the PFIC rules discussed below, for U.S. federal income tax purposes, the gross amount of a distribution with respect to ADS or shares of Common Stock will include the net amount of any Chilean tax withheld (i.e., the Withholding Tax reduced by any credit for First-Category Tax paid) and will be treated as a dividend on the date of receipt by the Depositary or the U.S. Holder of such shares of Common Stock, respectively, to the extent of the Company’s current and accumulated earnings and profits as determined for U.S. federal income tax purposes. U.S. Holders that are corporations will not be allowed a deduction for dividends received in respect of distributions on the ADS or shares of Common Stock. Distributions, if any, in excess of such current and accumulated earnings and profits as determined for U.S. federal income tax purposes will constitute a non-taxable return of capital to a U.S. Holder and will be applied against and reduce such U.S. Holder’s tax basis in such ADS or shares of Common Stock. To the extent that such distributions are in excess of such basis, the distributions will constitute capital gain.

With respect to certain non-corporate U.S. Holders, including individual U.S. Holders, any dividends may be taxed at the lower capital gains rate applicable to “qualified dividend income,” provided (1) the ADS or shares of Common Stock, as applicable, are readily tradable on an established securities market in the United States, (2) the Company is neither a PFIC nor treated as such with respect to the U.S. Holder for the taxable year in which the dividend was paid and the preceding taxable year, and (3) certain holding period requirements are met. Under U.S. Internal Revenue Service (“IRS”) authority, the ADS will be considered for purposes of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the New York Stock Exchange, as are the ADS (but not the shares of Common Stock). Based on existing guidance, it is not entirely clear whether dividends received with respect to shares of Common Stock may qualify as qualified dividend income because the Common Stock are not themselves listed on such a U.S. exchange. U.S. Holders should consult their own tax advisors regarding the availability of the lower capital gains rate applicable to qualified dividend income for any dividends paid with respect to the ADS or shares of Common Stock.

If a dividend distribution is paid with respect to the ADS or shares of Common Stock in Chilean pesos, the amount includable in income will be the U.S. dollar value, on the date of receipt by the Depositary or the U.S. Holder of such shares of Common Stock, respectively, of the Chilean pesos amount distributed. Any subsequent gain or loss in respect of such Chilean pesos arising from exchange rate fluctuations will generally be U.S. source ordinary income or loss for U.S. Holders. If the Depositary converts the Chilean pesos to U.S. dollars on the date it receives such pesos, U.S. Holders will not recognize any such gain or loss.

Any dividends paid with respect to the ADS or shares of Common Stock will generally constitute foreign source income for foreign tax credit limitation purposes. Subject to the limitations and conditions set forth in the Code and Treasury regulations promulgated thereunder, U.S. Holders may elect to claim a credit against their U.S. federal income tax liability for the net amount of any Chilean tax withheld (i.e., the Withholding Tax reduced by any credit for First-Category Tax paid) from dividends received in respect of the ADS or shares of Common Stock. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced rate applicable to qualified dividend income and divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed with respect to the ADS or shares of Common Stock generally will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income. The rules relating to the determination of the foreign tax credit are complex and prospective purchasers should consult their personal tax advisors to determine whether and to what extent they would be entitled to such credit. A Non-U.S. Holder of the ADS or shares of Common Stock generally will not be subject to U.S. federal income tax on dividends received on the ADS or shares of Common Stock, unless such income is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States. In such cases, a Non-U.S. Holder generally will be taxed in the same manner as a U.S. Holder. In the case of a corporate Non-U.S. Holder, “effectively connected” dividends may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate if the Non-U.S. Holder is eligible for the benefits of an income tax treaty that provides for a lower rate.

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Capital Gains

The sale, exchange or other taxable disposition of the ADS or shares of Common Stock will generally result in the recognition of capital gain or loss in an amount equal to the difference between the amount realized on the sale, exchange or other taxable disposition and the U.S. Holder’s tax basis in such ADS or shares of Common Stock. If the consideration received for the ADS or shares of Common Stock is not paid in U.S. dollars, the amount realized will be the U.S. dollar value of the payment received determined by reference to the spot rate of exchange on the date of the sale, exchange or other taxable disposition. However, if the ADS or shares of Common Stock are treated as traded on an “established securities market” and a holder is either a cash basis taxpayer or an accrual basis taxpayer that has made a special election (which must be applied consistently from year to year and cannot be changed without the consent of the IRS), the U.S. dollar value of the amount realized in a foreign currency will be determined by translating the amount received at the spot rate of exchange on the settlement date of the sale. The U.S. Holder’s initial tax basis in the ADS or shares of Common Stock will be the U.S. dollar value of such holder’s cost for the ADS or shares of Common Stock. If foreign currency was used to purchase the ADS or shares of Common Stock, the cost of such ADS or shares of Common Stock will be the U.S. dollar value of the foreign currency purchase price determined by reference to the spot rate of exchange on the date of purchase. However, if the ADS or shares of Common Stock are treated as traded on an established securities market and the holder is either a cash basis taxpayer or an accrual basis taxpayer who has made the special election described above, the U.S. dollar value of the cost of such ADS or shares of Common Stock will be determined by translating the amount paid at the spot rate of exchange on the settlement date of the purchase. 

Subject to certain exceptions and limitations, gain or loss upon the sale or other disposition of the ADS or shares of Common Stock will be long-term or short-term capital gain or loss, depending on whether the ADS or shares of Common Stock have been held for more than one year and generally will be U.S. source gain or loss. Long-term capital gains realized by individuals may be subject to tax at reduced rates. The deductibility of capital losses is subject to limitations.

As discussed above under the heading “Chile-Capital Gains,” gains realized from a sale or other disposition of shares of Common Stock by a U.S. Holder, unlike gains realized from a sale or disposition of the ADS, could be taxable in Chile. Because U.S. taxpayers generally may only take a foreign tax credit against the U.S. federal income tax liability in respect of non-U.S. source income, in the case of gains realized from the sale or other disposition of shares of Common Stock, a U.S. Holder may not be able to use the foreign tax credit for Chilean tax imposed on that gain (because such gains would generally be U.S. source for U.S. federal income tax purposes) unless such U.S. Holder can apply such foreign tax credit against its U.S. federal income tax liability in respect of non-U.S. source income.

A Non-U.S. Holder of the ADS or shares of Common Stock generally will not be subject to U.S. federal income tax on gain from the sale, exchange or other taxable disposition of such ADS or shares of Common Stock unless (i) such gain is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States or (ii) the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of such sale, exchange or other taxable disposition and certain other conditions are met. In the case of (i), the Non-U.S. Holder will be taxed in the same manner as a U.S. Holder, while in the case of (ii) the Non-U.S. Holder will be subject to U.S. federal income tax at a rate of 30% on the amount by which such Non-U.S. Holder’s U.S. source capital gains exceed such non-U.S. source capital losses. Any such gains recognized by a corporate Non-U.S. Holder may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or at a lower rate if the corporate Non-U.S. Holder is eligible for the benefits of an income tax treaty that provides for a lower rate.

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Passive Foreign Investment Company

[Based on the market price of the ADS and shares of Common Stock and the value and composition of the Company’s assets, the Company does not believe it should be treated as a PFIC with respect to its most recently closed taxable year.]³ Under the Code, a foreign corporation will be a PFIC for any taxable year in which either (1) 75% or more of its income is passive income or (2) the average percentage of the value of its assets that produce (or are held for the production of) passive income is 50% or more. If the Company was treated as a PFIC for any year during which a U.S. Holder held the ADS or shares of Common Stock, the Company will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds the ADS or shares of Common Stock, absent a special election as discussed below. The application of the PFIC rules is subject to uncertainty in several respects, and the Company cannot assure holders that it will not be a PFIC for any taxable year. If the Company is a PFIC for any taxable year during which a U.S. Holder holds the ADS or shares of Common Stock, a U.S. Holder will be subject to special tax rules with respect to any “excess distributions” the U.S. Holder receives and any gain such holder recognizes from a sale, exchange or other taxable disposition (including a pledge) of the ADS or shares of Common Stock, unless the U.S. Holder makes a “mark-to-market” or qualified electing fund (“QEF”) election (if available) as discussed below. Distributions the U.S. Holder receives in a taxable year that are greater than 125% of the average annual distributions the U.S. Holder received during the shorter of the three preceding taxable years or the U.S. Holder’s holding period for the ADS or shares of Common Stock will be treated as an excess distribution.

Under these special tax rules, (i) the excess distribution or gain will be allocated ratably to a U.S. Holder over its holding period for the ADS or shares of Common Stock, (ii) the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which the Company became a PFIC, will be treated as ordinary income, and (iii) the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge normally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ADS or shares of Common Stock cannot be treated as capital, even if the ADS or shares of Common Stock are capital assets.

In addition, if the Company is a PFIC, to the extent any of the Company’s subsidiaries are also PFICs, a U.S. Holder may be deemed to own shares in such subsidiaries that are directly or indirectly owned by the Company in that proportion which the value of the shares the U.S. Holder owns so bears to the value of all of the Company’s shares, and may be subject to the adverse tax consequences described above with respect to the shares of such subsidiaries the U.S. Holder would be deemed to own.

If the Company is a PFIC, a U.S. Holder may avoid taxation under the rules described above by making a QEF election to include such U.S. Holder’s share of the Company’s income on a current basis in any taxable year that the Company is a PFIC, provided the Company agrees to furnish the U.S. Holder annually with certain tax information. However, the Company does not presently intend to prepare or provide such information.

Alternatively, if the ADS are “marketable stock” (as defined below), a U.S. Holder can avoid taxation under the unfavorable PFIC rules described above in respect of the ADS by making a mark-to-market election in respect of the ADS by the due date (determined with regard to extensions) for such U.S. Holder’s tax return in respect of the first taxable year of such U.S. Holder during which the Company is treated as a PFIC. If a U.S. Holder makes a mark-to-market election for the ADS or shares of Common Stock, the U.S. Holder will include in income in each of the U.S. Holder’s taxable years during which the Company is a PFIC an amount equal to the excess, if any, of the fair market value of the ADS or shares of Common Stock as of the close of the U.S. Holder’s taxable year over such U.S. Holder’s adjusted basis in such ADS or shares of Common Stock. A U.S. Holder is allowed a deduction for the excess, if any, of the adjusted basis of the ADS or shares of Common Stock over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the ADS or shares of Common Stock included in the U.S. Holder’s income for prior taxable years. Amounts included in the U.S. Holder’s income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ADS or shares of Common Stock, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the ADS or shares of Common Stock, as well as to any loss realized on the actual sale or disposition of the ADS or shares of Common Stock, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ADS or shares of Common Stock. A U.S. Holder’s basis in the ADS or shares of Common Stock will be adjusted to reflect any such income or loss amounts. Further, distributions would be taxed as described above under “— Cash Dividends and Other Distributions,” except the preferential dividend rates with respect to “qualified dividend income” would not apply. A U.S. Holder will not be required to recognize mark-to-market gain or loss in respect of its taxable years during which the Company was not at any time a PFIC.

³ Subject to Company confirmation.

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The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter on a qualified exchange, including the New York Stock Exchange, or other market, as defined in the applicable Treasury regulations. The ADS are listed on the New York Stock Exchange and consequently, the mark-to-market election would be available with respect thereto, provided the ADS are traded in sufficient quantities. U.S. Holders of the ADS or shares of Common Stock should consult their tax advisors as to whether the ADS or shares of Common Stock would qualify for the mark-to-market election.

A U.S. Holder also generally can make a “deemed sale” election in respect of any time the Company ceases being a PFIC, in which case such U.S. Holder will be deemed to have sold, at fair market value, its ADS or shares of Common Stock (and shares of any of the Company’s subsidiaries that are PFICs, if any, that the U.S. Holder is deemed to own) on the last day of the Company’s taxable year immediately prior to the Company’s taxable year in respect of which the Company is not a PFIC. If a U.S. Holder makes this deemed sale election, it generally would be subject to the unfavorable PFIC rules described above in respect of any gain realized on such deemed sale, but as long as the Company is not a PFIC for future years, such U.S. Holder would not be subject to the PFIC rules for those future years.

A U.S. Holder that holds the ADS or shares of Common Stock in any year in which the Company or any of its subsidiaries is a PFIC would be required to file an annual information report with the IRS for each entity that is a PFIC, regarding distributions received on the ADS or shares of Common Stock and any gain realized on the disposition of the ADS or shares of Common Stock. U.S. Holders should consult their own tax advisors regarding the potential application of the PFIC rules to their ownership of the ADS or shares of Common Stock and the elections discussed above.

Backup Withholding and Information Reporting

Dividends paid to a U.S. Holder that does not establish an exemption and proceeds from such a U.S. Holder’s sale or other taxable disposition of the ADS or shares of Common Stock may have to be reported to the IRS. Such payments may also be subject to a backup withholding tax unless the U.S. Holder (i) provides an accurate taxpayer identification number and otherwise complies with the requirements of the backup withholding rules or (ii) otherwise establishes an exemption. 

Subject to certain certification requirements, dividends paid to a Non-U.S. Holder on and proceeds from a Non-U.S. Holder’s sale or other disposition of, ADS or shares of Common Stock will generally not have to be reported to the IRS and will not be subject to backup withholding tax.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the holder’s U.S. federal income tax liability if the required information is timely furnished to the IRS.

Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

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Additional Reporting Requirements

U.S. individuals that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 are generally required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-U.S. persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties, and (iii) interests in foreign entities. The ADS or shares of Common Stock may be subject to these rules. U.S. Holders that are individuals should consult their tax advisors regarding the application of this requirement to their ownership of the ADS and shares of Common Stock.

F. Dividends and paying agents

Not applicable.

G. Statements by experts

Not applicable.

H. Documents on Display

The Company files reports and other information with the Securities and Exchange Commission (the “SEC”). Any documents that the Company files with the SEC may be read and copied at the SEC’s public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549; and 500 Madison Street, Suite 1400, Chicago, Illinois 60661.

I. Subsidiary Information

See Item 4  “Information on the Company — Organizational Structure.”

ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s principal line of business is the production and bottling of wine for sale both domestically and internationally. The principal exposures to market risks faced by the Company are interest rate risk, foreign currency exchange rate risk and risk of fluctuations in the price of raw materials.

Interest Rate Risk

The Company’s exposure to interest rate risk relates to its debt obligations. As of December 31, 2014 the Company’s total interest-bearing financial debt (including current maturities and accrued interest) amounted to Ch$246,934 million of which, as of December 31, 2014, Ch$53,738 million is short term debt and Ch$193,964 million is long term debt with maturities through 2018 for its bank debt and 2026 for the bond debt.

As of December 31, 2014, 93.1% of the debt is fixed-rate and is denominated in Chilean pesos, US dollars, Sterling Pounds, Brasilian Reais, Euros, Argentine pesos and Mexican pesos; the rest is covered with hedging instruments. The fair market value of total bank debt, as of December 31, 2014, does not significantly differ from the value listed in the Consolidated Financial Statements. The interest rate risk arises from the uncertainty regarding interest rate at which the Company can refinance its short term debt given the current uncertainty in the global financial markets.

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The following table lists the cash flows related to interest payments, amortization of debt obligations and related interest rates by fiscal year maturing with respect to the Company’s debt obligations. The interest rates disclosed represent the weighted average rates of the portfolio at year-end and fairly represent the approximate average annual interest rates for each of the years of maturity.

Interest Bearing Debt As of December 31, 2014
(in million of Ch$)
Expected Maturity Date
		Average															Short Term and
Short-Term and		Interest Rate			2015		2016		2017		2018		2019		There after		Long-Term Debt		Fair Value
Long-Term Debt		%			Mn.Ch$		Mn.Ch$		Mn.Ch$;		Mn.Ch$		Mn.Ch$		Mn.Ch$		Mn.Ch$		Mn.Ch$
Dollar	Fixed Rate		3.03	%		28,114		32,360		39,439		15,169		—		—		115,082		118,306
Dollar	Variable Rate		1.47	%		4,859		4,854		4,854		2,427		—		—		16,994		17,474
BRL	Fixed Rate		12.74	%		6,445		—		—		—		—		—		6,445		6,444
Ch$(UF)	Fixed Rate		3.33	%		3,134		14,776		12,314		20,523		8,209		32,836		91,793		93,108
ARG$	Fixed Rate		23.71	%		4,981		425		156		—		—		—		5,562		5,262
MXN	Fixed Rate		5.19	%		1,923		—		—		—		—		—		1,923		1,923
Ch$	Fixed Rate		5.61	%		4,282		2,773		1,387		693		—		—		9,135		9,384
Total						53,738		55,188		58,150		38,812		8,209		32,836		246,934		251,901

By comparison, as of December 31, 2013 the Company’s total interest-bearing financial debt (including current maturities and accrued interest) amounted to Ch$238,447 million of which, as of December 31, 2013, Ch$64,625 million was short term debt and Ch$173,822 million was long term debt. As of December 31, 2013, most of the financed debt had a fixed-rate with maturities through 2026 as presented in the table below.

Interest Bearing Debt As of December 31, 2013
(in million of Ch$)
Expected Maturity Date
		Average															Short Term and
Short-Term and		Interest Rate			2014		2015		2016		2017		2018		There after		Long-Term Debt		Fair Value
Long-Term Debt		%			Mn.Ch$		Mn.Ch$		Mn.Ch$;		Mn.Ch$		Mn.Ch$		Mn.Ch$		Mn.Ch$		Mn.Ch$
Dollar	Fixed Rate		2.83	%		22,448		21,888		30,427		12,066		15,214		—		102,043		106,860
Dollar	Variable Rate		2.93	%		25,025		899		8,768		7,869		—		—		42,561		43,505
BRL	Fixed Rate		12.41	%		1,129		4,585		—		—		—		—		5,714		5,810
Ch$(UF)	Fixed Rate		3.93	%		3,204		2,742		14,397		14,397		14,397		20,567		69,705		70,100
Ch$(UF)	Variable Rate		4.20	%		1,177		2,331		2,331		—		—		—		5,839		6,122
ARG$	Fixed Rate		16.42	%		6,014		546		351		46		—		—		6,957		5,838
GBP	Fixed Rate		1.49	%		2,880		—		—		—		—		—		2,880		2,893
MXN	Fixed Rate		5.69	%		2,748		—		—		—		—		—		2,748		2,740
Total						64,625		32,991		56,274		34,378		29,611		20,567		238,447		243,868

Exchange Rate Risk

The primary exchange rate risk that the Company faces is the depreciation of the peso against the various currencies in which Company’s revenues are denominated. The Company’s export sales are primarily denominated in U.S. dollars, Euros, Pounds Sterling, Canadian dollars, Brazilian reais and Swedish and Norwegian crowns. During 2014 and 2013, 81.3% and 79.5%, respectively, of the Company’s total revenues were nominated in foreign currency. This risk is partly offset by the natural hedge resulting from approximately 50% of the Company’s costs and expenses being denominated in foreign currency, primarily U.S. dollars.

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Additionally, to manage and mitigate the short-term effect of changes in currency exchange rates on the Company’s functional currency based sales, the Company has adopted a policy of attempting to balance foreign exchange denominated assets and liabilities to minimize its exposure to exchange rate risks. Thus, the Company periodically purchases and/or sells forward instruments including forward exchange contracts, as part of its exchange rate hedging strategy. In addition, on a case-by-case basis, the Company fixes the exchange rate for a percentage of its exports as part of its pricing strategy related to its exports operations. The Company uses these instruments solely to reduce the financial impact of these risks and does not use forward instruments for trading purposes.

In addition, domestic sales of the Company’s Argentine subsidiaries are denominated in Argentine pesos –which represent 0.8% of total sales of the Company and would therefore be affected by the devaluation of the local currency. in order to mitigate the exchange rate risk the Company manages financial debt in Argentine pesos.

The following table sets forth the Company’s assets and liabilities subject to exchange rate risk as of December 31, 2014. The value of these foreign currency denominated assets and liabilities are represented in millions of Chilean pesos at the applicable exchange rate on December 31, 2014, which is included in the final row of the table. 

Assets and Liabilities Subject to Foreign Exchange Risk
As of December 31, 2014
(in million of Ch$/except Exchange Rate)
Applicable Currency of
Asset/Liability	USD(1)		EUR(2)		GBP(3)		CAD(4)		ARS(5)		SEK(6)		NOK(7)		BRL(8)		MXN(9)		ZAR(10)
Cash		5,279		926		3,157		117		1,294		911		1,056		869		335		23
Derivatives Contracts Current		189		2,012		325		876		—		189		72		221		158		—
Other Assets Current		112,806		15,168		37,559		3,914		20,809		10,469		2,543		21,569		9,366		6
Property, Plant and equipment		43,866		3,611		86		—		23,213		2		—		97		92		11
Derivatives Contracts Non Current		139		4,573		315		86		—		1,215		—		—		—		—
Other Assets Non Current		50,850		102		206		19		718		6		14		2,991		206		2
Total Assets		213,129		26,392		41,648		5,012		46,034		12,792		3,685		25,747		10,157		42
Derivative Contracts Current		3,152		1,096		2,014		613		—		—		—		37		—		—
Current Liabilities		57,307		4,843		13,756		983		12,952		4,018		2,235		13,463		4,307		31
Derivative Contracts Non Current		13,033		564		9,001		296		—		233		—		—		—		—
Long-Term Liabilities		99,174		—		—		—		582		—		—		—		—		—
Total Liabilities		172,666		6,503		24,771		1,892		13,534		4,251		2,235		13,500		4,307		31
Exchange Rate		606.75		738.05		944.21		522.88		70.97		78.40		81.62		228.27		41.18		52.43

(1) USD: U.S. dollar

(2) EUR: Euro

(3) GBP: Pound sterling

(4) CAD: Canadian dollar

(5) ARS: Argentine peso

(6) SEK: Swedish crown

(7) NOK: Norwegian crown

(8) BRL: Brazilian real

(9) MXN: Mexican peso

(10) ZAR: South African rand

By comparison, the following table represents the Company’s assets and liabilities subject to exchange rate risk as of December 31, 2013.

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Assets and Liabilities Subject to Foreign Exchange Risk
As of December 31, 2013
(in million of Ch$/except Exchange Rate)
Applicable Currency of
Asset/Liability	USD(1)		EUR(2)		GBP(3)		CAD(4)		ARS(5)		SEK(6)		NOK(7)		BRL(8)		MXN(9)		ZAR(10)
Cash		3.741		140		2.384		106		221		923		614		1.409		1.375		15
Derivatives Contracts Current		2.812		507		808		464		11		5		19		278		26		—
Other Assets Current		47.153		13.901		45.374		3.207		17.429		9.489		2.453		21.416		9.569		8
Property, Plant and equipment		36.528		—		—		—		—		—		—		—
Derivatives Contracts Non Current		1.436		458		90		473		—		5		—		—		—		—
Other Assets Non Current		49.952		102		102		19		1.374		5		15		1.006		95		4
Total Assets		141.622		15.108		48.758		4.269		19.035		10.427		3.101		24.109		11.065		27
Derivative Contracts Current		1.242		504		1.515		81		38		118		36		130		76		—
Current Liabilities		66.669		3.116		16.160		815		12.415		3.740		1.939		5.423		6.179		26
Derivative Contracts Non Current		1.028		1.892		4.967		140		—		1.079		—		—
Long-Term Liabilities		97.192		—		—		—		943		—		—		4.585		—		—
Total Liabilities		166.131		5.512		22.642		1.036		13.396		4.937		1.975		10.138		6.255		26
Exchange Rate		524,61		724,30		866,41		492,68		80,49		81,80		86,45		222,71		40,14		50,32

(1) USD: U.S. dollar

(2) EUR: Euro

(3) GBP: Pound sterling

(4) CAD: Canadian dollar

(5) ARS: Argentine peso

(6) SEK: Swedish crown

(7) NOK: Norwegian crown

(8) BRL: Brazilian real

(9) MXN: Mexican peso

(10) ZAR: South African rand

Commodity Price Risk

The Company relies on outside vineyards for supplies of grapes and bulk wine. Grapes purchased from outside vineyards are subject to fluctuation in price and quality and generally cost more than grapes from the Company’s vineyards.

In 2014, 53.2% of the grapes used in the production of its premium, varietal, bi-varietals and sparkling wines were purchased by the Company from independent growers in Chile. Additionally, in 2014, the Company purchased the grapes and bulk wine required to produce approximately 75.6% of the popular wines sold by the Company. Disruptions of supplies of grapes or wine or increases in prices from these outside suppliers could have a material adverse effect on the Company’s results of operations. As of December 31, 2014, the Company did not hold any grape price-sensitive instrument.

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Inflation Risk.

A unique feature of the Chilean financial markets is the volume of corporate bonds denominated in UF instead of Chilean Pesos. Investors prefer crorpoate bonds denominated in UF because they can receive specific returns without the bearing the risk of inflation; this means, however, that the risk of inflation is transferred to the debt issuer. Currently, Viña Concha y Toro is exposed to the UF (Unidad de Fomento) in the following instruments: Corporate Bonds, Bank Loans and Time Deposits, however decrease in part the Company’s total exposure.

As of December 31, 2014, 37.3% of the Company’s debt is denominated in UF. In order to hedge the fluctuation of UF, the Company entered into various swap contracts.

During 2014 the Company recognized a loss amounting to Th.Ch$ 4.429.230 which relates to the adjustment of short and long-term financial debts indexed to the variation of UF. A variation of 100 base points in the inflation that refine the UF in this period would generate a greater loss /gain amounting to ThCh$ 774.393, with effect on profit or loss. 

ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

D. American Depositary Shares

Fees and expenses

The following charges shall be incurred by any party depositing or withdrawing shares or by any party surrendering ADSs or to whom ADSsare issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the ADRs or deposited securities or a distribution of ADSs), whichever applicable:

·            taxes and other governmental charges,

·            such registration fees as may from time to time be in effect for the registration of transfers of shares generally on the share register of the Company or foreign registrar and applicable to transfers of shares to the name of the Bank of New York Mellon (“the Depositary”) or its nominee or the agent of the Depositary or its nominee on the making of deposits or withdrawals hereunder,

·            such cable, telex and facsimile transmission expenses as are expressly provided in the agreement between the Company and the Depositary

·            such expenses as are incurred by the Depositary in the conversion of foreign currency,

·            a fee not in excess of Ch$ 2,400 (aprox. US$5.00) or less per 100 ADS (or portion thereof) for the execution and delivery of ADRs and the surrender of ADRs,

·            a fee for, and deduction of such fee from, the distribution of proceeds of sales of securities or rights, such fee being in an amount equal to the fee for the issuance of ADS which would have been charged as a result of the deposit by owners of securities or shares received in exercise of rights distributed to them, but which securities or rights are instead sold by the Depositary and the net proceeds distributed.

The Company will pay the fees, reasonable expenses and out-of-pocket charges of the Depositary and those of any registrar only in accordance with the agreements in writing entered into the Depositary and the Company from time to time.

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Amounts payable by the depositary to the Company

Fees Incurred in Past Annual Period

Under the fee agreement between us and the Depositary, the Depositary agrees to pay certain fees relating to the maintenance of the ADRs. Certain fees we encounter related to our ADRs are reimbursed to us by the Depositary. From January 1, 2014 to December 31, 2014, we received from the Depositary approximately Ch$ 22.0 million (US$42,000) corresponding to the annual stock exchange listing fees.

ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14: MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

To the Company’s knowledge, no one has (i) materially modified the instruments defining the rights of the Company’s shareholders or (ii) materially modified or qualified the rights, evidenced by the Company’s registered securities, by issuing or modifying any other class of securities.

ITEM 15: CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures. The Company carried out an evaluation under the supervision and with the participation of the Company’s Management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” for the year ended December 31, 2013. Nevertheless, there are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon the Company’s evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms and that it is gathered and communicated to the Company’s Management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure as of the end of the period covered by this report.

(b) Management’s Annual Report on Internal Control over Financial Reporting. Concha y Toro’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed under the supervision of the Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It can only provide reasonable assurance regarding financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management, with the assistance of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 1992) in Internal Control-Integrated Framework.

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Based on the evaluation under these criteria, management has concluded that, as of December 31, 2013, the Company’s internal control over financial reporting was effective.

(c) Attestation Report of the Registered Public Accounting Firm See page F-3 of this Annual Report for the attestation report on the effectiveness of the Company’s internal control over financial reporting of the Company’s independent registered public accounting firm.

(d) Changes in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the period covered by this Form 20-F that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT

The Company currently does not have an audit committee financial expert serving on its Audit Committee. Under Chilean law, the Company is not required to have an audit committee financial expert serving on its audit committee.

ITEM 16.B: CODE OF ETHICS

In June 2004, the Company disclosed its first code of ethics to reflect SEC rules and other proposed regulations that were adopted by the Company’s board of directors, officers and employees. All of the Company’s officers and employees accepted the provisions of the code of ethics, which governs the actions of everyone who works for the Company, including the employees of the Company’s subsidiaries.

On May 31, 2012, the Board of Directors approved a new and updated version of the Code of Ethics and Conduct of Viña Concha y Toro and its subsidiaries. The Code summarizes those principles and ethical values and minimum behavior in which must be framed directors, officers and employees of Concha y Toro and its subsidiaries, without exception. The Company’s code of ethics deals primarily with the following issues:

· Duties of director, managers and personnel;

· Compliance with labor law and labor rights;

· Relationship with clients and suppliers;

· Conflict of interests;

· Use of property and information;

· Privileged information;

· Independence;

· Punitive liability of the Company;

· Fair behavior; and

· Compliance with environment, health and safety laws and regulations.

The Code of Ethics and Conduct is based on values that the Company defined as essentials for its activities in each processing stage and in the distribution and sale of their products. Viña Concha Toro requires from its directors, officers and employees full knowledge and commitment regarding the Code of Ethics and the ethical values of the Company in the pursuing of excellence and transparency.

A copy of the Company’s code of ethics of 2012 is available on its website (www.conchaytoro.com). The Company undertakes to provide to any person without charge, upon request, a copy of the Company’s code of ethics.

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ITEM 16.C: PRINCIPAL ACCOUNTANT’S FEES AND SERVICES

Aggregate fees for professional services rendered by KPMG Auditores Consultores Ltda. (“KPMG”), our independent registered public accounting firm, in each of the last three fiscal years, in each of the following categories are:

	2014 ThCh$		2013 ThCh$		2012 ThCh$
Audit Fees		556,767		380,567		413,612
Audit-related fees		—		19,160		—
Tax Fees		791		37,775		—
All others fees		12,927		2,737		—
Total		570,485		440,238		413,612

“Audit Fees” are the aggregate fees billed and billable by KPMG for the audit of the Company’s consolidated and annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements. Fees related to the audit of internal control over financial reporting are included in Audit Fees. “Tax fees” are for aggregate fees billed by KPMG for tax advice regarding transfer pricing, and other tax compliance review.

“All other Fees” includes audit services that are not included as regular “Audit Fees”, the main services provided in 2014 and 2013 are the following: counseling services in sustaibnability matters in Chile for 2014 and 2013, counseling services in legal matters regarding the redaction of the agreement for the compensation trade balance (“contrato de compensación de balanza comercial) in Argentina for 2014. 

Pre-approval Policies and Procedures

Chilean law states that public companies are subject to “pre-approval” requirements under which all audit and nonaudit services provided by the independent auditor must be pre-approved by the Directors’ Committee. In the Company’s case, its Directors’ Committee approves all audits, audit-related services, tax services and other services. Any services to be provided by independent auditors that are not specifically included within the scope of the audit must be pre-approved by the Directors’ Committee prior to any engagement.

ITEM 16.D: EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Mr. Rafael Guilisasti is an affiliate of the Company or a representative of such an affiliate. Mr. Rafael Guilisasti has observer status olny on the Audit Committee and is not a voting member or the chair of the committee. He also does not serve as an executive officer of the Company. Therefore, he relies on the exemption provided in Rule 10A-3(b)(1)(iv)(D) of the Exchange Act. We do not believe that his status as an affiliate materially adversely affects the ability of our Audit Committee to act independently or to satisfy the other requirements of the listing standards relating to audit committees contained in Rule 10A-3 under the Exchange Act. See Item 6.C.  — “Board Practices.”

ITEM 16.E: PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not Applicable.

ITEM 16.F: CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not Applicable.

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ITEM 16.G: CORPORATE GOVERNANCE

American Depositary Shares representing shares of Common Stock are listed on the New York Stock Exchange (“NYSE”). However, because the Company is a “foreign private issuer,” as defined in the rules of the Securities and Exchange Commission, the Company is exempt from the governance rules set forth in Section 303A of the NYSE’s Listed Companies Manual, other than the obligation to maintain an audit committee in accordance with Rule 10A-3 under the Securities Exchange Act of 1934, as amended and the obligation to notify the NYSE if any of the Company’s executive officers becomes aware of any non-compliance with any applicable provisions of Section 303A. Instead, the rules of both the SEC and the NYSE require the Company to provide a summary, included below, of the significant ways in which the Company’s corporate practices differ from those applicable to U.S. domestic companies under NYSE listing standards.

Independent Directors on the Board of Directors

According to NYSE, listed U.S. companies must have a majority of independent directors. Chilean law only requires at least one independent director and the Company’s Board of Directors is, in fact, comprised of a minority of independent directors.

Non-Executive or Independent Director Meetings

Pursuant to the NYSE listing standards, non-executive directors or independent directors of U.S. listed companies must meet on a regular basis without management present. In compliance with Chilean law, the Company does not have directors that simultaneously serve as executives, accountants or auditors of the Company. The Company’s directors may meet individually or collectively with those they deem necessary to inform themselves and make decisions regarding the company.

Directors’ Committee and Audit Committee

According to the NYSE, listed U.S. companies must have an audit committee consisting of a minimum of three independent directors who are financially literate and at least one who is a designated financial expert. Chilean law requires open stock companies with a market capitalization greater than UF 1.5 million (approximately Ch$ 35,410 million or US$63.8 million) and at least 12.5% of its shares issued with voting rights are held by individual shareholders who control or have less than 10% such shares, such as the Company, to have a Directors’ Committee, composed of three directors who meet the independence requirements under Chilean law (as described below). The Company has a Directors’ Committee, composed of a majority of independent directors as required by Chilean law, which also performs the functions of the Audit Committee required by the NYSE. For the non-independent director on the Directors’ Committee, the Company relies on an exemption of the NYSE listing standards relating to Audit Committees of Rule 10A-3 promulgated under the Exchange Act. Chilean law has no requirement for members to be financial experts.

The Directors’ Committee is responsible for

i.   reviewing balance sheets, financial statements and reports from accounting oversight bodies and auditors;

ii.  proposing outside auditors to the Board of Directors;

iii. reviewing background information regarding the Company’s operations with related parties;

iv. reviewing managers’ and chief executive officers’ compensation plans;

v. preparing an annual management report with main recommendations to shareholders;

108

vi.  informing and aadvicing the Board of Directors about hiring external auditors for non-audit neither prohibited services; and

vii. any other task established in the By-laws or entrusted by the Board of Director or the shareholders meeting. 

Director’s Independence Qualification

Under the NYSE rules, a director must meet the requirements in the “Independence Test” in order to be considered an “Independent Director.” Chilean law establishes a strict set of rules in order to consider someone as “Independent Director”. This set of rules is principally related with the person’s financial, management and kin relationship with the company, its controller and or its principal executives. Accordingly, although certain of our directors are “Independent” in accordance with Chilean law, they may not be deemed to be “Independent Directors” under NYSE listing standards.

Nominating/Corporate Governance Committee

According to the NYSE, listed U.S. companies must have a Nominating/Corporate Governance Committee composed entirely of independent directors, whose activities include identifying qualified individuals to serve on the board of directors and developing a set of corporate governance principles. This committee is not contemplated as such by Chilean law. Nominations for Board of Directors are made at the Ordinary Shareholders’ Meeting, while the Board of Directors nominates the members of the Directors’ Committee.

Corporate Governance Guidelines

According to the NYSE, listed U.S. companies must adopt corporate governance guidelines establishing the following:

(i) director qualification standards;

(ii) director responsibilities;

(iii) director access to management;

(iv) director compensation;

(v) director orientation and continuing education;

(vi) management succession; and

(vii) annual performance evaluation of the Board of Directors.

Under Chilean law, no corporate governance guidelines are required, but directors’ compensation must be discussed and voted on annually at the ordinary shareholders’ meeting.

Code of Business Conduct and Ethics

According to the NYSE, U.S. listed companies must adopt and disclose a Code of Business Conduct and Ethics for directors, officers and employees. The Code must be uploaded on the Company website or otherwise be available for shareholders to obtain a copy. A Code of Conduct and Ethics is not required by Chilean law, but it has become a common practice for Chilean companies to have a Code. The Company has a Code of Business Conduct and Ethics entitled “Code of Business Conduct and Ethics of Concha y Toro,” governing the actions of directors, officers and employees. Its observance and compliance is regulated by the senior management of the Company, including the General Manager and the Chief Financial Officer. The Code is available on the Company website at www.conchaytoro.com.

109

Internal Audit

According to the NYSE, listed U.S. companies must have an internal audit function to provide management with ongoing assessments of the company’s risk management process and the system of internal controls. Although there is no local law requirement to do so, but the Company conducts an internal audit which provides evaluation, analysis and recommendations to senior management, the Board of Directors and the Directors’ Committee.

CEO’s awareness and certification of corporate governance violations

According to the NYSE, the CEO of a U.S. listed company must annually certify to the NYSE that he or she is not aware of any violation by the Company of the NYSE’s corporate governance listing standards. Chilean law does not establish such a requirement and this provision of the NYSE does not apply to foreign private issuers such as the Company. However, according to the NYSE, all foreign private issuers, including the Company, must report to the NYSE when they become aware of a violation of the corporate governance listing standards and must provide an annual written affirmation to the NYSE of its compliance with the applicable NYSE audit committee rules and disclose significant differences with NYSE corporate governance rules applicable to domestic companies. In compliance with these rules, the Company annually submits a written annual affirmation to the NYSE.

The amended rules provide that all interested parties, not just shareholders, must be able to communicate their concerns regarding the listed company to the presiding director, or the non-management or independent directors as a group. There is no similar provision in Chilean law.

ITEM 17: FINANCIAL STATEMENTS

Not Applicable.

ITEM 18: FINANCIAL STATEMENTS

The following consolidated financial statements, together with the reports of KPMG are filed as part of this Annual Report:

	Page
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Financials Position as of December 31, 2014 and 2013 and January 1, 2013	F-6
Consolidated Statements of Income by Function for each of the years ended December 31, 2014, 2013 and 2012	F-8
Consolidated Statements of Comprehensive Income for each of the years ended December 31, 2014, 2013 and 2012	F-9
Consolidated Statements of Changes in Net Equity from January 1, 2014 to December 31, 2014	F-10
Consolidated Statements of Changes in Net Equity from January 1, 2013 to December 31, 2013	F-11
Consolidated Statements of Changes in Net Equity from January 1, 2012 to December 31, 2012	F-12
Consolidated Statements of Cash Flow for each of the years ended December 31, 2014, 2013 and 2012	F-13
Notes to the Consolidated Financial Statements	F-14

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ITEM 19 EXHIBITS

List of Exhibits

1.1* By-Laws (Estatutos) of the Company, together with an English translation filed as Exhibit 1.1 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 2000.

2.1* Form of Deposit Agreement among the Company, The Bank of New York and holders from time to time of American Depositary Receipts issued thereunder, including the form of American Depositary Receipt, filed as Exhibit 4.1 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.

2.2* Form of Foreign Investment Contract among the Company, The Bank of New York and the Central Bank of Chile relating to the foreign exchange treatment of the investment in ADS and ADRs (with English translation), filed as Exhibit 4.3 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.

2.3* Central Bank of Chile Chapter XXVI, filed as Exhibit 4.4 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.

3.1* Agency Agreement dated as of August 31, 1993 between the Company and Banfi Products Corporation, filed as Exhibit 10.1 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.

3.2* English Translation of Powers of Attorney granted by the Board of Directors of Inversiones Totihue S.A. to Family Principal Shareholders filed as Exhibit 3.2 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 1998.

3.3* English Translation of Powers of Attorney granted by the Board of Directors of Rentas Santa Bárbara S.A. to Family Principal Shareholders filed as Exhibit 33 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 1998.

3.4* English Translation of Shareholders Agreement, dated August 20, 1999, entered into by Guilisasti family and other affiliated parties relating to, among others, the transfer and voting of Common Stock filed as Exhibit 3.4 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 1999.

4.1* English Translation of the Shareholders’ Agreement, dated June 30, 1997, entered into by Viña Concha y Toro S.A. and Baron Philippe de Rothschild, relating to the creation of Viña Almaviva S.A. filed as Exhibit 4.1 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 2000.

4.2* English Translation of the Shareholders’ Agreement, dated November 15, 2000, entered into by Viña Concha y Toro S.A. and Amorim & Irmaos, S.G.P.S. S.A. relating to, among others, the transfer and voting of common stock and the management and administration of Industria Corchera, S.A. filed as Exhibit 4.2 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 2000.

4.3* Stock Purchase Agreement, dated March 1, 2011, entered into by Viña Concha y Toro S.A. and Brown-Forman Corporation relating to the acquisition of Fetzer Vineyards.

4.4* Limited Liability Company Agreement of Excelsior Wine Company, LLC dated July 14, 2011, entered into by VCT USA Inc, a fully owned subsidiary of Viña Concha y Toro and Banfi Chile LLC, a fully owned subsidiary of Banfi Products Corpotation.

8.1* List of Significant Subsidiaries. Our significant subsidiaries, their jurisdictions of incorporation and the names under which they do business are identified in Item 4 “Information on the Company — Organizational Structure.”

12.1 Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley (filed herewith).

12.2 Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley (filed herewith).

13.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley (filed herewith). (This Exhibit is furnished herewith, but not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act, as amended, except to the extent that the Company explicitly incorporates it by reference.)

*Previously filed.

111

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

VIÑA CONCHA Y TORO S.A.
	Registrant
By: /s/
	Name:	Eduardo Guilisasti G.
	Title:	Gerente General/
		General Manager
		(Chief Executive Officer)
	Date:	May 15, 2015
By: /s/
	Name:	Osvaldo Solar V.
	Title:	Gerente Corporativo de Administración y Finanzas/
		Corporate Chief Financial Officer
		(Chief Financial Officer)
	Date:	May 15, 2015

EXHIBIT INDEX

Exhibit Number
1.1*	By-Laws (Estatutos) of the Company, together with an English translation filed as Exhibit 1.1 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 2000.
2.1*	Form of Deposit Agreement among the Company, The Bank of New York and holders from time to time of American Depositary Receipts issued thereunder, including the form of American Depositary Receipt, filed as Exhibit 4.1 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.
2.2*	Form of Foreign Investment Contract among the Company, The Bank of New York and the Central Bank of Chile relating to the foreign exchange treatment of the investment in ADS and ADRs (with English translation), filed as Exhibit 4.3 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.
2.3*	Central Bank of Chile Chapter XXVI, filed as Exhibit 4.4 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.
3.1*	Agency Agreement dated as of August 31, 1993 between the Company and Banfi Products Corporation, filed as Exhibit 10.1 to the Company’s Registration Statement on Form F-1 (No. 33-84298) and incorporated by reference herein.
3.2*	English Translation of Powers of Attorney granted by the Board of Directors of Inversiones Totihue S.A. to Family Principal Shareholders filed as Exhibit 3.2 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 1998.
3.3*	English Translation of Powers of Attorney granted by the Board of Directors of Rentas Santa Bárbara S.A. to Family Principal Shareholders filed as Exhibit 3.3 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 1998.
3.4*	English Translation of Shareholders Agreement, dated August 20, 1999, entered into by Guilisasti family and other affiliated parties relating to, among others, the transfer and voting of Common Stock filed as Exhibit 3.4 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 1999.
4.1*	English Translation of the Shareholders’ Agreement, dated June 30, 1997, entered into by Viña Concha y Toro S.A. and Baron Philippe de Rothschild, relating to the creation of Viña Almaviva S.A. filed as Exhibit 4.1 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 2000.

Exhibit Number
4.2*	English Translation of the Shareholders’ Agreement, dated November 15, 2000, entered into by Viña Concha y Toro S.A. and Amorim & Irmaos, S.G.P.S. S.A. relating to, among others, the transfer and voting of common stock and the management and administration of Industria Corchera, S.A. filed as Exhibit 4.2 to the Company’s Annual Report on Form 20-F (No. 1-3358) for the fiscal year ended December 31, 2000.
4.3*	Stock Purchase Agreement, dated March 1, 2011, entered into by Viña Concha y Toro S.A. and Brown-Forman Corporation relating to the acquisition of Fetzer Vineyards.
4.4*	Limited Liability Company Agreement of Excelsior Wine Company, LLC dated July 14, 2011, entered into by VCT USA Inc, a fully owned subsidiary of Viña Concha y Toro and Banfi Chile LLC, a fully owned subsidiary of Banfi Products Corpotation.
8.1*	List of Significant Subsidiaries.  Our significant subsidiaries, their jurisdictions of incorporation and the names under which they do business are identified in Item 4 “Information on the Company — Organizational Structure.”
12.1	Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley (filed herewith).
12.2	Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley (filed herewith).
13.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley (filed herewith).  (This Exhibit is furnished herewith, but not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section.  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act, as amended, except to the extent that the Company explicitly incorporates it by reference.)
*Previously filed.

VIÑA CONCHA Y TORO S.A. AND SUBSIDIARIES

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

	Page
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Financial Position as of December 31, 2014 and 2013	F-6
Consolidated Statements of Income for each of the years ended December 31, 2014, 2013 and 2012	F-8
Consolidated Statements of other Comprehensive Income for each of the years ended December 31, 2014, 2013 and 2012	F-9
Consolidated Statements of Changes in Equity from January 1, 2014 to December 31, 2014	F-10
Consolidated Statements of Changes in Equity from January 1, 2013 to December 31, 2013	F-11
Consolidated Statements of Changes in Equity from January 1, 2012 to December 31, 2012	F-12
Consolidated Statements of Cash Flow for each of the years ended December 31, 2014, 2013 and 2012	F-13
Notes to the Consolidated Financial Statements	F-14

Ch$	-	Chilean pesos
ThCh$	-	Thousands of Chilean pesos
USD	-	United States dollars
ThUSD	-	Thousands of United States dollars
UF	-	The UF (Unidad de Fomento) is an inflation-indexed, peso-denominated monetary unit. The UF rate is set daily in advance, based on the change in the Chilean Consumer Price Index of the previous month.

F-1

  

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Viña Concha y Toro S.A.:

We have audited the accompanying consolidated statements of financial position Viña Concha y Toro S.A. and subsidiaries as of December 31, 2014 and 2013 and January 1, 2013, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three year period ended December 31, 2014. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Viña Concha y Toro and subsidiaries as of December 31, 2014 and 2013 and January 1, 2013, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2014, in conformity with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

As further described in Notes 2.1.6 and 4.2 to the consolidated financial statements, beginning on January 1, 2014 the Company has elected to change its method for accounting for biological assets in accordance with the guidance contained in Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) as issued by the IASB. The consolidated statement of financial position as of December 31, 2013 has been restated to retrospectively apply this accounting change.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Viña Concha y Toro S.A.´s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated May 15, 2015 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

 

KPMG Ltda.

Santiago, Chile
May 15, 2015

F-2

  

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Viña Concha y Toro S.A.:

We have audited the internal control over financial reporting of Viña Concha y Toro S.A. ("the Company") as of May 15, 2015, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Viña Concha y Toro S.A. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

F-3

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated the statements of financial position of Viña Concha y Toro S.A. and subsidiaries as of December 31, 2014 and 2013 and January 1, 2013, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2014, and our report dated May 15, 2015 expressed an unqualified opinion on those consolidated financial statements.

 

KPMG Ltda.

Santiago, Chile
May 15, 2015

F-4

2014
	Consolidated Financial
	Statements (Thousands of Chilean Pesos)
	As of December 31, 2014, December 31, 2013 and January 1, 2013, and for the years ended December 31, 2014, 2013 and 2012.
	Viña Concha y Toro S.A. and Subsidiaries

F-5

Viña Concha y Toro S.A. and Subsidiaries

CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2014, 2013 and January 1, 2013

				As of December 31,		As of December 31,		As of January 1, 2013 *
ASSETS	Note			2014		2013 * Restated		Restated
				ThCh$		ThCh$		ThCh$
Current Assets
Cash and cash equivalents		(6	)		30,304,154		12,850,652		58,876,331
Other current financial asset		(7	)		7,053,502		7,779,816		12,078,147
Other non-financial current assets		(16	)		18,622,371		14,415,106		10,289,993
Trade and other accounts receivable, current net		(8	)		155,179,838		140,313,528		134,361,521
Accounts receivable from related parties, current		(9	)		9,937,480		6,396,429		8,717,264
Inventories		(10	)		218,336,130		223,694,941		192,199,415
Current biological assets		(15	)		16,317,102		14,821,587		14,342,503
Current tax assets		(21	)		18,174,586		14,084,269		16,762,456
Total current assets other than assets or groups of assets for disposition classified as maintained for sale or as maintained to distribute to owners					473,925,163		434,356,328		447,627,630
Total Current Assets					473,925,163		434,356,328		447,627,630
Non-Current Assets
Other non-current financial assets		(7	)		8,630,985		2,769,009		9,493,563
Other non-financial assets, non-current		(16	)		4,839,739		3,251,274		2,737,005
Investments accounted for using the equity method		(11	)		20,311,097		17,137,522		15,477,570
Intangible assets other than goodwill		(13	)		35,515,187		30,755,821		28,803,498
Goodwill		(12	)		24,261,868		22,812,855		20,871,234
Property, plant and equipment, net		(14	)		341,758,199		330,068,153		322,210,017
Deferred tax assets		(21	)		8,769,070		8,712,421		8,892,435
Total non-current assets					444,086,145		415,507,055		408,485,322
Total Assets					918,011,308		849,863,383		856,112,952

(*) See note 4.2 Accounting Changes

See accompanying notes to these consolidated financial statements.

F-6

Viña Concha y Toro S.A. and Subsidiaries

CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION, Continued

As of December 31, 2014, 2013 and as of January 1, 2013

				As of December 31,			As of December 31,			As of January 1, 2013 *
LIABILITIES AND SHAREHOLDERS’ EQUITY	Note			2014			2013 * Restated			Restated
				ThCh$			ThCh$			ThCh$
Current liabilities
Other current financial liabilities		(18	)		61,269,989			68,018,532			103,139,210
Trade accounts payable and other current accounts payable		(20	)		83,232,308			71,568,509			73,044,975
Current accounts payable to related companies		(9	)		5,196,408			3,340,124			2,850,186
Current provisions		(24	)		29,908,164			26,820,724			20,964,117
Current tax liabilities		(21	)		22,666,874			17,409,417			16,154,482
Current accruals due to benefits to employees		(23	)		9,208,219			8,838,514			8,309,989
Other current non-financial liabilities					1,164,334			713,444			616,767
Total current liabilities other than liabilities included in groups of assets for disposition classified as maintained for sale					212,646,296			196,709,264			225,079,726
Total current liabilities					212,646,296			196,709,264			225,079,726
Non-current liabilities
Other non-current financial liabilities		(18	)		216,322,033			185,270,045			169,586,261
Non-current accounts payable to related companies		(9	)		732,466			898,543			1,086,323
Deferred tax liabilities, non-current		(21	)		42,795,572			34,612,075			33,604,714
Non-current accruals due to benefits to employees		(23	)		2,463,037			2,217,219			1,972,762
Other non-financial liabilities, non-current					71,081			61,459			333,192
Non-current liabilities					262,384,189			223,059,341			206,583,252
Total liabilities					475,030,485			419,768,605			431,662,978
Equity
Issued capital		(26	)		84,178,790			84,178,790			84,178,790
Accumulated Profits					367,635,107			347,130,684			326,929,352
Other reserves					(10,230,220	)		(2,094,013	)		12,768,637
Equity attributable to the owners of the controlling entity					441,583,677			429,215,461			423,876,779
Non-controlling interest					1,397,146			879,317			573,195
Total Equity					442,980,823			430,094,778			424,449,974
Total shareholders’ equity and liabilities					918,011,308			849,863,383			856,112,952

(*) See note 4.2 Accounting Changes

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-7

Viña Concha y Toro S.A. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION

For the years ended December 31 2014, 2013 and 2012

				From January 1			From January 1			From January 1
CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION	Note			to December 31, 2014			to December 31, 2013			to December 31, 2012
				ThCh$			ThCh$			ThCh$
Income from ordinary activities		(29	)		583,313,064			475,622,285			448,249,781
Cost of sales		(30	)		(362,600,878	)		(311,387,251	)		(302,963,228	)
Gross profit					220,712,186			164,235,034			145,286,553
Other income					1,108,421			881,490			1,296,593
Distribution costs		(30	)		(134,512,755	)		(108,403,857	)		(91,255,731	)
Administrative expenses		(30	)		(22,317,304	)		(19,206,540	)		(18,039,175	)
Other expenses by function		(30	)		(1,980,063	)		(1,293,437	)		(1,124,236	)
Income from operating activities					63,010,485			36,212,690			36,164,004
Financial income		(31	)		736,622			1,090,228			1,108,530
Financial expense		(31	)		(10,342,307	)		(9,709,871	)		(8,792,445	)
Equity in income of associates and joint ventures accounted for using the equity method, net of tax					3,694,551			1,901,470			2,697,187
Foreign currency exchange, net		(31	)		2,231,871			14,224,960			10,564,798
Expenses by adjustment units, net		(31	)		(2,933,059	)		(1,348,350	)		(973,542	)
Income before taxes					56,398,163			42,371,127			40,768,532
Income tax expense		(21	)		(18,400,999	)		(8,762,006	)		(10,465,482	)
Net income					37,997,164			33,609,121			30,303,050
Profit attributable to:
Profit attributable to equity holders of controlling interest					37,397,592			33,173,641			30,021,933
Profit attributable to non-controlling interest					599,572			435,480			281,117
Net income					37,997,164			33,609,121			30,303,050
Earnings per share
Basic and diluted earnings per share		(25	)		50.06			44.41			40.19

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-8

Viña Concha y Toro S.A. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2014, 2013 and 2012

	From January 1			From January 1			From January 1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	to December 31,			to December 31,			to December 31,
	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Net income		37,997,164			33,609,121			30,303,050
Other comprehensive income components before taxes
Currency translation difference
Gains (losses) from foreign currency translation differences, before tax (*)		4,268,484			584,247			502,116
Actuarial benefit plans
Actuarial gains (losses) from defined benefit plans		(102,731	)		(64,542	)		—
Financial assets available for sale
Gains / (losses) due to new remeasurements of financial assets available for sale, before tax (*)		(201,181	)		(31,715	)		528,678
Cash flow hedges
Gains (losses) due to cash flow hedges, before taxes (*)		(7,390,844	)		(16,930,578	)		9,685,440
Net investment hedges in businesses abroad
Gains (losses) from net investment hedges in businesses abroad, before taxes (*)		(6,228,896	)		(1,708,416	)		—
Revaluation
Other comprehensive income, before taxes, gains (losses) from revaluation (*)		1,574,200			2,169,897			—
Income tax related of other comprehensive income
Income tax related to financial assets available for sale of other comprehensive income (*)		17,476			6,069			(105,736	)
Income taxes related to cash flow hedges from other comprehensive income (*)		311,456			1,099,479			(1,669,902	)
Income tax related to defined benefit plans from other comprehensive income (*)		40,863			12,909			—
Income taxes related to changes in revaluation surplus from other comprehensive income (*)		(425,034	)		—			—
Total comprehensive income		29,860,957			18,746,471			39,243,646
Comprehensive income attributable to:
Comprehensive income attributable to equity holders of the parent.		34,915,284			18,310,991			38,962,529
Comprehensive income attributable to non-controlling interest		599,572			435,480			281,117
Total comprehensive income		35,514,856			18,746,471			39,243,646

(*) Once these concepts are settled, will be reclassified into the Consolidated Statement of Income by Function.

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-9

Viña Concha y Toro S.A. and Subsidiaries

STATEMENT OF CHANGES IN EQUITY FROM JANUARY 1, 2014 TO DECEMBER 31, 2014

														Reserves of
			Foreign					Reserves of			Reserves of gains			gains or losses in											Equity
	Issued		currency		Cash flow			gains and			and losses on			remeasurement			Other					Accumulated			attibutable to			Non			Total
	capital		translation		hedge reserves			losses on			investment in			of financial			miscellaneous		Other reserves			profits			equity holders			controlling			equity
STATEMENT OF			difference					defined  benefit			equity			assets			reserves								of the parent			interests
CHANGES IN EQUITY			reserve					plans			instruments			available for sale
	ThCh$		ThCh$		ThCh$			ThCh$			ThCh$			ThCh$			ThCh$		ThCh$			ThCh$			ThCh$			ThCh$			ThCh$
Beginning balance As of January 1, 2014		84,178,790		305,824		(4,434,625	)		(51,633	)		(1,772,289	)		421,051			3,437,659		(2,094,013	)		347,130,684			429,215,461			879,317			430,094,778
Changes in equity																																—
Comprehensive income																																—
Net income		—		—		—			—			—			—			—		—			37,397,592			37,397,592			599,572			37,997,164
Other comprehensive income (loss)		—		4,268,484		(7,079,388	)		(61,868	)		(6,228,896	)		(183,705	)		1,149,166		(8,136,207	)		—			(8,136,207	)		—			(8,136,207	)
Comprehensive income		—		4,268,484		(7,079,388	)		(61,868	)		(6,228,896	)		(183,705	)		1,149,166		(8,136,207	)		37,397,592			29,261,385			599,572			29,860,957
Dividends		—		—		—			—			—			—			—		—			(17,081,768	)		(17,081,768	)		—			(17,081,768	)
Increase (decrease) due to transfers and other changes		—		—		—			—			—			—			—		—			188,599			188,599			(81,743	)		106,856
Total changes in equity		—		4,268,484		(7,079,388	)		(61,868	)		(6,228,896	)		(183,705	)		1,149,166		(8,136,207	)		20,504,423			12,368,216			517,829			12,886,045
Final balance as of December 31, 2014		84,178,790		4,574,308		(11,514,013	)		(113,501	)		(8,001,185	)		237,346			4,586,825		(10,230,220	)		367,635,107			441,583,677			1,397,146			442,980,823

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-10

Viña Concha y Toro S.A. and Subsidiaries

STATEMENT OF CHANGES IN EQUITY FROM JANUARY 1, 2013 TO DECEMBER 31, 2013

			Foreign						Reserves of			Reserves of gains			Reserves for gains											Equity
	Issued		currency			Cash flow			gains and			and losses on			or losses from the			Other					Accumulated			attributable to			Non			Total
	capital		translation			hedge reserves			losses on			investment in			remeasurement of			miscellaneous		Other reserves			profits			equity holders			controlling			equity
STATEMENT OF			difference						defined benefit			equity			available for sale			reserves								of the parent			interests
CHANGES IN EQUITY			reserve						plans			instruments			financial assets
	ThCh$		ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$		ThCh$			ThCh$			ThCh$			ThCh$			ThCh$
Beginning balance as of January 1, 2013		84,178,790		(278,423	)		11,396,474			—			(63,873	)		446,697			1,267,762		12,768,637			326,929,352			423,876,779			573,195			424,449,974
Changes in equity																																	—
Comprehensive income																																	—
Net income		—		—			—			—			—			—			—		—			33,173,641			33,173,641			435,480			33,609,121
Other comprehensive income (loss)		—		584,247			(15,831,099	)		(51,633	)		(1,708,416	)		(25,646	)		2,169,897		(14,862,650	)		—			(14,862,650	)		—			(14,862,650	)
Comprehensive income		—		584,247			(15,831,099	)		(51,633	)		(1,708,416	)		(25,646	)		2,169,897		(14,862,650	)		33,173,641			18,310,991			435,480			18,746,471
Dividends		—		—			—			—			—			—			—		—			(12,972,309	)		(12,972,309	)		—			(12,972,309	)
Decrease due to transfers and other changes		—		—			—			—			—			—			—		—			—			—			(129,358	)		(129,358	)
Total changes in equity		—		584,247			(15,831,099	)		(51,633	)		(1,708,416	)		(25,646	)		2,169,897		(14,862,650	)		20,201,332			5,338,682			306,122			5,644,804
Final balance as of December 31, 2013		84,178,790		305,824			(4,434,625	)		(51,633	)		(1,772,289	)		421,051			3,437,659		(2,094,013	)		347,130,684			429,215,461			879,317			430,094,778

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-11

Viña Concha y Toro S.A. and Subsidiaries

STATEMENT OF CHANGES IN EQUITY FROM JANUARY 1, 2013 TO DECEMBER 31, 2012

			Foreign					Reserves of gains									Equity
	Issued		currency			Cash flow		or losses in		Other				Accumulated			attributable to			Non			Total
	capital		translation			hedge reserves		remeasurement of		miscellaneous		Total reserves		profits			equity holders			controlling			equity
STATEM ENT OF			difference					financial assets		reserves							of the parent			interests
CHANGES IN EQUITY			reserve					available for sale
	ThCh$		ThCh$			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$			ThCh$			ThCh$			ThCh$
Beginning balance As of January 1, 2012		84,178,790		(780,539	)		3,317,063		23,755		1,267,762		3,828,041		310,204,731			398,211,562			292,402			398,503,964
Changes in equity															—						—			—
Comprehensive income															—						—			—
Net income		—		—			—		—		—		—		30,021,933			30,021,933			281,117			30,303,050
Other comprehensive income		—		502,116			8,015,538		422,942		—		8,940,596		—			8,940,596			—			8,940,596
Comprehensive income		—		502,116			8,015,538		422,942		—		8,940,596		30,021,933			38,962,529			281,117			39,243,646
Dividends		—		—			—		—		—		—		(13,284,018	)		(13,284,018	)		—			(13,284,018	)
Decrease due to transfers and other changes		—		—			—		—		—		—		(13,294	)		(13,294	)		(324	)		(13,618	)
Total changes in equity		—		502,116			8,015,538		422,942		—		8,940,596		16,724,621			25,665,217			280,793			25,946,010
Final balance As of December 31, 2012		84,178,790		(278,423	)		11,332,601		446,697		1,267,762		12,768,637		326,929,352			423,876,779			573,195			424,449,974

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-12

Viña Concha y Toro S.A. and Subsidiaries

CONSOLIDATED STATEMENTS OF DIRECT CASH FLOWS

For the years ended December 31, 2014, 2013 and 2012

	From January 1			From January 1			From January 1
CONSOLIDATED STATEMENT OF CASH FLOWS DIRECT	to December 31, 2014			to December 31, 2013			to December 31, 2012
	ThCh$			ThCh$			ThCh$
Cash flows from operating activities
Classes of collections by operating activities
Collections from sales of goods and services delivered		525,772,755			426,745,448			420,431,892
Classes of payments
Payments to suppliers related to the supply of goods and services		(432,499,279	)		(336,740,553	)		(344,816,959	)
Payments to and in behalf of employees		(51,572,498	)		(50,658,136	)		(50,677,085	)
Dividends paid		(14,118,413	)		(12,026,796	)		(19,422,156	)
Dividends received		—			70,165			273,428
Interest received		1,435,201			1,106,720			83,182
Income taxes paid		(11,970,766	)		(5,978,368	)		(2,657,348	)
Other cash inflows, net		3,764,367			4,463,747			15,588,555
Net cash flows provided by operating activities		20,811,367			26,982,227			18,803,509
Cash flows from investing activities
Other payments to acquire equity or debt instruments from other entities		117,435			—			—
Amounts provided by sale of property, plant and equipmen		156,724			466,118			287,375
Purchases of property, plant and equipme		(26,182,307	)		(27,254,478	)		(27,921,939	)
Amounts provided by sale of intangible assets		—			—			8,833
Purchases of intangible assets		(2,502,661	)		(871,067	)		(837,576	)
Amounts provided by government subsidies		46,105			136,370			65,768
Dividends received		1,091,071			393,982			—
Other cash outflows, net		(128	)		—			(156,150	)
Net cash flows used in investing activities		(27,273,761	)		(27,129,075	)		(28,553,689	)
Cash flows from financing activities
Payments for other interests in equity		(200,997	)		—
Proceeds from bank borrowings		76,365,265			78,950,259			111,991,262
Loans payments		(45,273,733	)		(118,314,821	)		(53,096,961	)
Interest paid		(7,957,317	)		(7,523,985	)		(10,245,899	)
Other cash inflows (outflows)		(27,217	)		(134,823	)		—
Net cash from (used in) financing activities		22,906,001			(47,023,370	)		48,648,402
Net increase (decrease) in cash and cash equivalent, before the effects of changes in exchange rates		16,443,607			(47,170,218	)		38,898,222
Effects of variation in exchange rates on cash and cash equivalents
Effects of variation in exchange rate on cash and cash equivalents		1,009,895			1,144,540			(877,289	)
Net Increase (decrease) of cash and cash equivalents		17,453,502			(46,025,678	)		38,020,933
Cash and cash equivalents at beginning of period		12,850,652			58,876,330			20,855,397
Cash and cash equivalents at beginning of period		30,304,154			12,850,652			58,876,330

The accompanying notes form an integral part of these Consolidated Financial Statements.

F-13

Viña Concha y Toro S.A. and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. GENERAL CONSIDERATIONS

The Company’s name is Viña Concha y Toro S.A. ID No. 90.227.000 – 0, registered as an Open Corporation. The Company is located in Avda. Nueva Tajamar 481, North Tower, Floor Nº 15, Las Condes, Santiago, Chile, phone (56-2) 476-5000, fax (56-2) 203-6740, postal box No. 213, Central Post Office, Santiago, e-mail webmaster@conchaytoro.cl, Website www.conchaytoro.com, with mnemonic in Chilean Stocks: Conchatoro and mnemonic in NYSE: VCO.

Viña Concha y Toro S.A. was formed as a public limited company by means of a Public Deed dated December 31, 1921, before the Notary Public of Santiago Mr. Pedro N. Cruz. The summary was inscribed under file 1,051 numbers 875 and 987 both of the Trade Registry of Santiago from the Santiago Real Estate Custodian for 1922 and was published in the Official Gazette under No.13,420, dated November 6, 1922. The Existence Authorization Decree has the No. 1.556, dated October 18, 1922.

The Company is currently registered under file 15,664 No.12, 447 in the Business Registry from the Santiago Real Estate Custodian, corresponding to year 1999; and in the Securities Register of the Superintendence of Securities and Insurance under No.0043.

Viña Concha y Toro is the biggest wine producing and exporting company in Chile. The Company is vertically integrated and operates its own vineyards, wineries and bottling plants. The Company also operates in Argentina, through Trivento Bodegas y Viñedos S.A. and in the United States of America through Fetzer Vineyards.

The Company has developed a wide wine portfolio using the brand Concha y Toro. Likewise, the Company has fostered certain projects through its subsidiaries Viña Cono Sur, Viña Maipo, Viña Quinta de Maipo, Viña Maycas del Limarí, Viña Canepa, Viñedos Los Robles, Fetzer Vineyards and Trivento Bodegas y Viñedos. Additionally, together with the prestigious French winery Barón Philippe de Rothschild through a joint venture, Viña Almaviva S.A., produces the Almaviva icon, a first class wine.

The Company has presence in the main vineyard valleys of Chile: Valle del Limarí, Aconcagua, Casablanca, Leyda, Maipo, Cachapoal, Colchagua, Curicó and Maule.

In the distribution business, the Company participates through the subsidiaries, Comercial Peumo Ltda. (which has the most extensive own network for the distribution of wines in the domestic market), Concha y Toro UK Limited (United Kingdom) in 2008. In order to strengthen its distribution, the Company established its own distribution offices in Brazil, Sweden, Norway and Finland; these began their operations during 2009.

On March, 2010 it was formed the subsidiary VCT Group of Wineries Asia Pte. Ltd. in Singapore aimed to reinforce the presence of Viña Concha y Toro in Asia. The subsidiary is responsible to promote and distribute the products in the region.

On April, 2011, the subsidiary VCT USA Inc. was incorporated in accordance with the laws in the State of Delaware, in the United States. Through this subsidiary, the Company acquires 100 % of the shares of the U.S. wine production company, Fetzer Vineyards domiciled in California, United States of America.

This acquisition contemplated a portfolio of brand names mainly focused on the US market including, Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary and the license of Little Black Dress. Likewise, Fetzer Vineyards has 453 hectares of own and leased vineyards in Mendocino County in California and warehouses for 36 million liters in Hopland, California, and for 6.4 million liters in Paso Robles, also located in the State of California, United States. Fetzer Vineyards has bottling facilities in Hopland, California where has approximately 295 employees.

F-14

Viña Concha y Toro S.A. and Subsidiaries

On May, 2011, the Company acquired 40% of Southern Brewing Company S.A. (Cervezas Kross) with the purpose of obtaining active participation in the premium segment of domestic beer

On April, 15, 2013, a capital increase was carried out which increased the direct ownership of Viña Concha y Toro S.A. to 49%.

On July 14, 2011, VCT USA Inc. together with Banfi Corporation, formed a joint venture with interest of 50% each, in the incorporation of Excelsior Wine Company, LLC. Through this incorporation, the distribution of our products becomes performed exclusively by this new company, which was performed by Banfi Corporation prior to the above date.

In August, 2011, in order to reach new markets, the Company formed the subsidiary, VCT México S. de R.L. de C.V. and through this, jointly with Aldimerco, S.A. de C.V, incorporated, VCT & DG México S.A. de C.V., in accordance with the laws of the Federal District in Mexico. This Company commenced its operations in mid-2012, and is committed to distribute our products.

During November 2011, the Company incorporated the subsidiary, Concha y Toro Canada Limited, in the State of New Brunswick in Canada. These new subsidiary is intended to promote our products in Canada.

On January 20, 2012, was formed in Cape Town, South Africa the subsidiary VCT Africa & Middle East Proprietary Limited. These new subsidiary is intended to promote our products in Africa and Middle East.

In January 2013, it was formed Gan Lu Wine Tranding (Shanghai) Co., Ltd., this subsidiary is committed to promote our products in China.

In March of 2013, was established Viña Cono Sur Organico SpA, this subsidiary has the sole purpose of producing and selling organic grape to its parent Cono Sur S.A.

In April 2013, it was acquired 100% of the shares of the Norway company Agardh 227 AS (company with no accounting transactions and assets), changing its Company name to VCT Norway AS. This subsidiary is intended to promote and distribute the products of Fetzer Vineyards in Norway.

In June 2013, was established Cono Sur France SARL, this subsidiary aims to promote the products of Viña Cono Sur in Europe.

In September 2013, was established VCT Wine Retail in Brazil, whose objective is to perform corporate investments and ownerships in other companies.

In June 2014, Concha y Toro S.A. through its subsidiary VCT Group of Wineries Asia Pte Ltd, acquired 41% of shares of VCT Japan Company Limited, a company which is committed to the export and import wine and to operate the distribution business, in general.

In October 2014, Eagle Peak Estates, LLC was formed, a company which is committed to the trading, wine fractionation and alcoholic beverages and export of wine and related products in the United States. As of December 31, 2014, this Company has no transactions.

On December 2014, Concha y Toro Canada Ltd, together with Charton Hobbs Inc. Company constituted in accordance with the Canadian Laws, formed a joint venture in which each participates 50% in the Constitution of Escalade Wines & Spirits Inc. in order to import, export, sell, produce and distribute alcoholic beverages. As of December 31, 2014, this Company has no transactions.

In other export markets, the Company maintains strategic relationships with significant specialized distributors.

The Concha y Toro Group is composed of the companies detailed in 2.2.1.

F-15

Viña Concha y Toro S.A. and Subsidiaries

Majority shareholders

The 12 majority shareholders are as follows:

	Number of
Name	shares		Ownership %
Inversiones Totihue S.A.		87,615,431		11.73	%
Rentas Santa Barbara S.A.		85,274,628		11.42	%
Banco De Chile Cta. De Terceros		62,150,708		8.32	%
Banco Itaú Cta. De Inversionistas		59,801,955		8.01	%
Inversiones Quivolgo S.A.		31,348,071		4.20	%
Fundación Cultura Nacional		26,964,775		3.61	%
Banco Santander Cta. De Terceros		25,877,437		3.46	%
Inversiones Gdf Ltda.		24,492,173		3.28	%
Constructora Santa Marta Ltda.		22,293,321		2.98	%
Agroforestal E Inversiones Maihue Ltda.		22,159,144		2.97	%
The Bank Of New York Según Circ. 1375 S.V.S.		18,491,040		2.48	%
Inversiones La Gloria Ltda.		16,200,000		2.17	%
Total		482,668,683		64.63	%

Board of Directors

The Company is managed by the Board of Directors, which is comprised by seven members duly appointed by the General Shareholders Board. This Board of Directors serves for a three-year period, at the end of which it must be renewed in full and its members can be re-elected indefinitely. The current Board of Directors was appointed by the General Shareholders Board held on April 28, 2014, for the three-year period ending in 2017.

Pursuant to its By-laws, the Board of Directors remuneration for 2014 was established by the Company’s shareholders at the General Shareholders’ Board as 1.3% of the net profit for the year. In addition, an allowance of UF300 per month was approved for executive responsibilities of the Chairman of the Board.

The remuneration paid to the Members of the Directors’ Committee for 2014 is equivalent to one third additional to the total remuneration that the director receives as such, in accordance with Article 50 bis of the Publicly-held Corporations Act and Circular No. 1956 issued by the Chilean Superintendence of Securities and Insurance.

Staffing

As of December 31, 2014, the staffing and detail of the Company’s permanent personnel is as follows:

	Parent		Affiliates in		Affiliates
	company		Chile		abroad		Consolidated
Managers, assistant managers and main executives		89		25		69		183
Professionals and technicians		568		147		175		890
Operators, sales and administrative employees		1,273		490		599		2,362
Total		1,930		662		843		3,435

F-16

Viña Concha y Toro S.A. and Subsidiaries

NOTE 2. BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS

2.1 Basis of Preparation

2.1.1 Financial Statements

The consolidated financial statements of Viña Concha y Toro and subsidiaries as of December 31, 2014 and 2013 and the three years then ended as of December 31, 2014 have been prepared in conformity with International Financial Reporting Standards (IFRSs), issued by the International Accounting Standards Board (IASB). The consolidated financial statements have been approved by the Board of Directors on March 23, 2015.

2.1.2 Basis of Measurement

The consolidated financial statements have been prepared on the cost basis except for the following material items included in the consolidated financial statements:

- hedging financial instruments are measured at fair value;

- available-for-sale financial assets are measured at fair value;

- financial instruments with changes in profit and loss are valued at fair value;

- the provision for severance indemnities is determined on the basis of an actuarial calculation.

- Agricultural products at the time of harvest at fair value less sales cost (See note 2.13)

F-17

Viña Concha y Toro S.A. and Subsidiaries

2.1.3 Accounting Period

These Consolidated Financial Statements cover the following years:

- Classified Consolidated Statements of Financial Position as of December 31, 2014 and 2013 and as of January 1, 2013.

- Consolidated Statements of Income by Function for the years ended December 31, 2014, 2013 and 2012

- Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012.

- Consolidated Statements of Changes in Equity for the years ended December 31, 2014, 2013 and 2012.

- Consolidated Statements of Direct Cash Flows for the years ended December 31, 2014, 2013 and 2012.

2.1.4 Use of Estimates and Judgments

In preparing these consolidated financial statements, certain estimates made by the Company’s management have been used in order to quantify certain assets, liabilities, revenue, expenses and commitments which are recognized therein. These estimates basically refer to the following:

- The assessment of possible indicators of impairment losses on Property, plant and equipment, Intangible Assets, Goodwill and Investments.

- The criteria used for measuring certain assets, example, trade receivables.

- The assumptions used in the projection of discounted cash flows.

- The actuarial calculation for severance indemnity obligations.

- The fair value of derivatives or other financial instruments.

- Net realizable value and obsolescence estimates.

- Fair value of Biological Assets

Despite the fact that these estimates have been made considering the best available information as of the date of issue of these consolidated financial statements on the events analyzed, events may occur in the future obliging their amendment (upwards or downwards) over next years, which would be made prospectively, recognizing the effect of changes in estimates in the corresponding future consolidated financial statements.

F-18

Viña Concha y Toro S.A. and Subsidiaries

2.1.5 Classification of Balances as Current and Non-current

In the accompanying consolidated statement of financial position, balances are classified considering their maturity dates; i.e., current balances include those maturing in a period equal to or lower than twelve months and non-current include all those balances for a period that exceeds twelve months. In the event that there are obligations whose maturity is lower than twelve months but whose long-term refinancing is assured at the Company’s discretion, through loan agreements unconditionally available maturing at long-term, these could be classified as long-term liabilities.

2.1.6 New Standards and Interpretations Issued but not yet in force

As of the date of issue of these Consolidated Financial Statements, amendments, improvements and interpretations have been published on existing standards that have become effective, which the Company has adopted and applied as and when required. These were mandatory on the dates indicated below.

		Mandatory for annual
	New Standards, Improvements and Amendments	periods beginning on
Amendment to IAS 32	Offsetting of financial assets and financial liabilities	January 1, 2014
Amendments to IFRS 10, 12 and IAS 27	Investment Entities, Consolidated Financial Statements; Disclosure of Interest in Other Entities and Separate Financial Statements	January 1, 2014
IAS 36	Disclosure of the Recoverable Amount of Non-Financial Assets	January 1, 2014
IAS 39	Novation Of Derivatives and Continuation of Hedge Accountings	January 1, 2014
IFRICF 21	Levies	January 1, 2014
Amendments to IAS 39	Financial Instruments: Recognition and Measurement	January 1, 2014
Amendments to IAS 19	Defined Benefit Plans - Employee’s Contributions	July 1, 2014
	Improvements:
	- IFRS 1 Meaning of the application of IFRS.
	- IFRS 3 Exceptions to the scope of joint ventures.	July 1, 2014
Improvements to IFRS (2010-2012 Cycle)	- IFRS 13 Scope of paragraph 52.
	- IAS 40 Clarification between IFRS 3 and IAS 40 in classifying property as investment property or property occupied by the owner.
	Improvements:
	- IFRS 2 Definition of conditions for the acquisition of rights
	- IFRS 3 Accounting for contingencies.
Improvements to IFSR (2011-2013 Cycle)	- IFRS 8 Adds segments. Reconciliations of the total amount of reportable assets of the entity’s assets.	July 1, 2014
	- IFRS 13 Short-term receivables and payables.
	- IAS 16 Method of revaluation and adjustment of accumulated depreciation.
	- IAS 24 Key management personnel.
	- IAS 38 Revaluation proportional method and restatement of accumulated amortization.

F-19

Viña Concha y Toro S.A. and Subsidiaries 

Likewise, at the date of issuance of these Consolidated Financial Statements, the following accounting pronouncements have been issued by the IASB but have not become in force and are mandatory on the dates indicated below.

		Mandatory for annual
	New Standards	periods beginning on:
Amendment to IFRS 11	Accounting for acquisition of interest and joint operations	January 1, 2016
IFRS 14	Regulation of asset deferred accounts	January 1, 2016
Amendments to IAS 16 and I	Agricultural: Bearer plants	January 1, 2016
Amendments to IAS 16 and I	Clarification of acceptable method of depreciation and amortization	January 1, 2016
Amendment to IAS 27	Equity method in separate financial statements	January 1, 2016
Amendment to IFRS 10 and I	Sale or contribution of assets between an investor and its associate or joint venture	January 1, 2016
	Improvements:
Improvements to IFRS (2012-2014 Cycle)	- IFRS 5 Changes in methods of disposal
	- IFRS 7 Servicing contracts. Applicability of amendment to IFRS 7 to interim financial statements.	January 1, 2016
	- IAs 19 Discount rate: regional market
	- IAS 34 Disclosure of information “elsewhere in the interim financial report”
Amendment to IAS 1	Disclosure Initiative	January 1, 2016
IFRS 15	Revenue from Contracts with Customers	January 1, 2017
IFRS 9	Financial Instruments: Classification and Measurement	January 1, 2018

As of December 31, 2014, the Company opted for the early adoption of the amendments to IAS 16, Property, Plant and Equipment and IAS 41, Agriculture whose scope indicate the accounting treatment applicable to producing plants used only to develop products, see more detail in note 4.2 Changes in Accounting Policies.

Company’s management is in the process of analyzing the remaining standards to determine whether these will or will not have a significant impact on the consolidated financial statements.

2.1.7 Significant Accounting Policies

The main critical policies are as follows:

- Inventories

- Goodwill

- Property, plant and equipment

- Derivative Financial Instruments

- Biological assets

- Benefits to employees

2.2 Basis of Consolidation

The Consolidated Financial Statements include assets, liabilities, profit or loss and cash flows of Viña Concha y Toro and its subsidiaries. The effects of significant transactions performed with subsidiaries have been eliminated and it has been recognized the related non-controlling ownership which is presented in both the statement of financial position and statement of income, under non-controlling interest.

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Viña Concha y Toro S.A. and Subsidiaries

The accounting policies of direct and indirect subsidiaries are aligned with the company’s accounting policies.

2.2.1 Subsidiaries

The subsidiaries are those entities on which Viña Concha y Toro exercises, direct or indirect control, understood as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. This ability is shown in general, although not solely, from one ownership higher to 50% of voting rights.

To account for the acquisition of subsidiaries, Viña Concha y Toro uses the acquisition method. The acquisition cost is the fair value of assets delivered, equity instruments issued and liabilities incurred or assumed in the exchange date, and other costs directly attributable to the acquisition. Identifiable assets acquired, identifiable liabilities and contingencies assumed in a business combination are valued by its fair value in the acquisition date. The excess of acquisition cost on the fair value of the Company’s ownership in net identifiable assets acquired is recognized as goodwill. Whether the acquisition cost is lower than the fair value of net assets of the acquired subsidiary, the difference is directly recognized in the statement of income.

F-21

Viña Concha y Toro S.A. and Subsidiaries

The subsidiaries, whose financial statements have been included in consolidation are the following:

		Ownership Percentages
											As of
		As of December 31, 2014									December 31,
											2013
Tax ID No.	Company	Direct			Indirect			Total			Total
85.037.900-9	Comercial Peumo Ltda.		—			100.0000	%		100.0000	%		100.0000	%
84.712.500-4	Bodegas y Viñedos Quinta de Maipo SpA (Ex Viña Palo Alto SA)		54.3236	%		45.6764	%		100.0000	%		100.0000	%
82.117.400-7	Soc. Export.y Com. Viña Maipo SpA		—			100.0000	%		100.0000	%		100.0000	%
85.687.300-5	Transportes Viconto Ltda.		—			100.0000	%		100.0000	%		100.0000	%
86.326.300-K	Viña Cono Sur S.A.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Trivento Bodegas y Viñedos S.A.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Concha y Toro UK Limited		99.000	%		1.0000	%		100.0000	%		100.0000	%
Foreign	Cono Sur Europe Limited		—			100.0000	%		100.0000	%		100.0000	%
96.585.740-0	Soc. Export. y Com. Viña Canepa S.A.		—			100.0000	%		100.0000	%		100.0000	%
96.921.850-K	Inversiones Concha y Toro SpA		100.0000	%		—			100.0000	%		100.0000	%
99.513.110-2	Inversiones VCT Internacional SpA		35.990	%		64.0100	%		100.0000	%		100.0000	%
Foreign	Finca Lunlunta S.A.		—			100.0000	%		100.0000	%		100.0000	%
76.898.350-K	Viña Maycas del Limarí Limitada		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Finca Austral S.A.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	VCT Brasil Importación y Exportación Ltda.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Concha y Toro Sweden AB		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Concha y Toro Finland OY		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Concha y Toro Norway AS		—			100.0000	%		100.0000	%		100.0000	%
76.048.605-1	Viñedos Los Robles SpA		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Concha y Toro Shanghai SRO		—			—			—			100.0000	%
Foreign	VCT Group Of Wineries Asia Pte. Ltd.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	VCT USA, Inc.		100.0000	%		—			100.0000	%		100.0000	%
Foreign	Fetzer Vineyards, Inc.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Eagle Peak Estates, LLC		—			100.0000	%		100.0000	%		—
Foreign	VCT Mexico, S. de R.L. de C.V.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	VCT & DG Mexico, S.A. de C.V.		—			51.0000	%		51.0000	%		51.0000	%
Foreign	Concha y Toro Canadá Limited		—			100.0000	%		100.0000	%		100.0000	%
76.273.678-0	Viña Cono Sur Orgánico SpA.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	VCT África & Middle East Proprietary Ltd.		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Gan Lu Wine Trading (Shanghai) Co. Limited		—			100.0000	%		100.0000	%		100.0000	%
Foreign	VCT Norway AS		—			100.0000	%		100.0000	%		100.0000	%
Foreign	Cono Sur France S.A.R.L		—			100.0000	%		100.0000	%		100.0000	%
Foreign	VCT Wine Retail Participacoes Ltda.		—			100.0000	%		100.0000	%		100.0000	%

Interest of external partners, represent the portion assignable to them of own funds and profit or loss as of December 31, 2014 and 2013, of those companies which are consolidated according to the global integration method, and are presented as “Non-controlling interest”, in total equity in the attached consolidated statement of financial position and in the heading “Earnings attributable to non-controlling interests”, in the accompanying consolidated statement of income.

The interest of external partners, represent the portion assignable to them on own funds and profit and loss as of December 31, 2014 and 2013.

The translation to the presentation currency of financial statements of foreign companies with functional currency other than the Chilean peso is performed as is indicated in 2.2.2:

Foreign currency translation differences generated by the translation to the currency used in the consolidated financial statements are reported under “Foreign currency translation differences” within equity.

All balances and transactions between consolidated companies have been eliminated in the consolidation process.

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2.2.2 Functional and presentation currency

The Company has determined that its functional currency is the Chilean peso and the functional currency of each of its subsidiaries has been determined by each entity based on the economic environment in which they operate. The term foreign currency is defined as any currency other than the Chilean peso

The definition of this functional currency relates to the fact that is the currency that reflects or represents the transactions, events and terms underlying and relevant to manage the operations of Viña Concha y Toro. For such purposes, it has been considered the analysis of such variables as: sales price of its products, relevant markets for the Company, and sources of financing, among others.

In consolidation, items in the statement of comprehensive income related to entities whose functional currency is other than the Chilean peso have been translated to Chilean pesos using the average exchange rates. Items in the statement of financial position have been translated using the exchange rates prevailing at each year-end. Exchange differences associated with the translation of net assets of these entities have been carried to equity and reported in a translation reserve under a separate line.

The Company does not use a presentation currency other than the Parent’s functional currency for consolidation.

All information is presented in thousands of pesos (Th$) and has been rounded to the nearest unit value.

2.2.3 Goodwill

Goodwill generated by the purchase of investments is not subject to amortization and at each year-end an impairment testing is conducted; and if there are indications which could decrease its recoverable amount to an amount lower than the net cost recognized, an impairment loss adjustment is made.

The assignment is performed in those Cash Generating Units (CGUs) which are expected to obtain benefits from the business combination from which this acquired goodwill arose.

2.3 Operating Segment and Geographic Information

The Concha y Toro Group reports segment financial information based information provided to and reviewed by the Company’s chief operating decision maker (“CODM”) to assess segment results and make investment decisions. The board of directors and the general manager of the Company is considered to by the Company’s CODM. Management has determined that the Company has two operating segments: Wines and Other.

The activities of these two operating segments consist:

Wines: Production, distribution and merchandising of wines under all its brands, which include the agricultural operations, enology and packing operations which are transversal to all products and markets in Chile, Argentina and the United States; the storage, transportation and merchandising of these in the domestic and export markets, including the consolidation in those countries where an importer, dealer or related commercial office exist.

Other: Consists of a grouping of other non-wine related products and activities which do not specifically relate to the production, distribution and merchandising of wine. This segment also includes activities directly relate to liquor distribution and premium beers in Chile, wine bar, tours in Pirque and the sale of fruit.

The accounting policies used to determine segment information are the same as those used in the preparation of the Company´s consolidated financial statements. The CODM uses income before taxes as the measure of segment profit and loss. That measure excludes income per operating leases, sales of waste, property plant and equipment and products not considered in the segment Other as these items are not directly attributable to the operating segments. The CODM uses total assets as the measure of segment assets. That measure excludes cash and cash equivalents as these assets are not directly attributable to the operating segments. The CODM uses total liabilities as the measure of segment liabilities. That measure excludes the corporate debt, derivative financial instruments, deferred taxes and employee benefits, among others, as these liabilities are not attributable to the operating segments.

There are no inter-segment transactions.

Geographic revenue information is determined based on the actual location of the customer.

Geographic non-current asset information is determined based on the actual physical location of the assets.

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2.4	Transactions in Foreign Currency and Adjustment Units
	Transaction and Balances

Transactions in foreign currencies are recognized at the transaction date, applying the exchange rate in force at the transaction date. Balances of monetary assets and liabilities are translated at the year-end exchange rate; non-monetary entries in foreign currency which are measured in terms of historic cost are translated using the exchange rate in force at the transaction date. Non-monetary entries in foreign currencies which could be valued at fair value are translated using the exchange rate in force at the date in which the fair value is determined.

Exchange rates used to translate monetary assets and liabilities, denominated in foreign currency at each year-end in regard to the Chilean peso, are as follows:

		As of December 31,		As of December 31,
Foreing currencies	Def	2014		2013
Adjustments Units (*)	UF		24,627.10		23,309.56
U.S. Dollar	USD		606.75		524.61
Pound Sterling	GBP		944.21		866.41
Euro	EUR		738.05		724.30
Canadian Dollar	CAD		522.88		492.68
Singapur Dollar	SGD		459.35		413.99
Brazilian Real	BRL		228.27		222.71
Argentinean Peso	ARS		70.97		80.49
Norwegian Crown	NOK		81.62		86.45
Chinese Yuan	CNY		97.59		86.49
Swedish Crown	SEK		78.40		81.80
Southafrican Rand	ZAR		52.43		50.32
Mexican Peso	MXN		41.18		40.14
Japanese Yen	JPY		5.08		4.99

(*) Adjustment unit corresponds to “Unidad de Fomento” (UF) which is a chilean inflation-indexed, peso-denominated monetary unit. The UF rate is set daily in advance based in changes in the previous month’s inflation rate.

2.5 Cash and Cash Equivalents

Cash and cash equivalents correspond to balances in cash, banks and short-term highly-liquid investments that are readily convertible to known amounts of cash and subject insignificant risk of changes in their value with maturities of three months or less.

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2.6 Financial Instruments

- Financial Assets

Viña Concha y Toro S.A. and subsidiaries classify their financial assets under the following categories: at fair value with changes in profit or loss, available for sale, held to maturity and loans and accounts receivable The classification depends on the purpose with which these financial assets were acquired. Management determines the classification of its financial assets upon initial recognition.

2.6.1 Financial assets at fair value with changes in profit or loss

Financial assets at fair value with changes in profit or loss are financial assets held for trading. A financial asset is classified under this category when is mainly acquired to be sold in the short-term. Derivatives are also classified as acquired for trading unless they are designated as hedges. Assets under this category are classified as current assets and initially recognized at fair value in profit or loss.

2.6.2 Held-to-maturity financial assets

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments, have fixed maturities, and that the Company has the positive intention and ability to hold to maturity. After the initial measurement, held-to-maturity financial investments are subsequently measured at amortized cost. This cost is calculated as the amount initially recognized less capital prepayments, plus or less accumulated amortization using the effective interest rate method of any difference between the amount initially recognized and the amount at maturity, less any impairment loss determined according to market values.

2.6.3 Loans and Trade Receivable

Loans and trade receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Current assets include all recoverable items except for those with maturities exceeding 12 months from the year-end date, which are classified as non-current assets. Loan and trade receivables are included within “Trade and other current receivables” within the statement of financial position.

Trade and other current receivables, are initially recognized at their fair value (nominal amount which in some cases includes embedded interest) and subsequently at amortized cost according to the effective interest method, less an allowance for impairment loss. This cost is calculated as the amount initially recognized less capital prepayments, plus or less accumulated amortization using the effective interest rate method of any difference between the amount initially recognized and the amount at maturity, less any impairment loss determined according to market values. Gains and losses are recognized in the statement of income when items are derecognized or impaired, as well as through the amortization process. When the nominal amount significantly differs from the fair value, the item is recognized at nominal amount. An allowance for impairment loss of trade receivables is established when there is objective evidence that this occur on a case-by-case basis.

Upon failure of all pre-legal and legal collection management efforts, the Company derecognizes the assets against the allowance account established. To improve control, the Company only uses the allowance and not the direct write-off method.

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Historical and current renegotiations are not relevant and the policy consists of analyzing on a case-by-case basis in order to classify them pursuant to the existence of risk determining whether their reclassification to pre-legal collection is applicable. An allowance for overdue and amounts falling due is accrued if applicable.

2.6.4 Financial Assets available for Sale

Financial assets available for sale are those which are specially designed as such or those not qualifying within the 3 prior categories. These financial assets are included in the consolidation statement of financial position as fair value when is possible to determine this in a reliable manner. In case of ownerships in unlisted companies or that have low liquidity, generally, the market value cannot be determined in a reliable manner. When this case exists, these are valued at acquisition cost or for a lower amount if there is evidence of its impairment. Changes of fair value, net of its tax effect, are recognized in the consolidated statement of other comprehensive income, up to the alienation of these investments. Then the accumulated amount of this item is totally imputed in the gain or loss for the year. In case the fair value is lower to the acquisition cost, if there is an objective evidence that the assets has suffered an impairment which cannot be considered as temporary, the difference is directly recognized in the statement of income for the year.

- Financial Liabilities

The Company classifies its financial liabilities under the following categories: at fair value with changes in profit or loss, trade payables, interest bearing borrowings or derivatives designated as hedging instruments.

The Company’s management determines the classification of its financial liabilities upon initial recognition.

The financial liabilities are derecognized when the obligation is paid, settled or falls due.

2.6.5 Financial liabilities at fair value with changes in profit or loss

The financial liabilities are classified at fair value when held for trading or designated at initial recognition at fair value with changes in profit or loss. This category includes the derivatives not designated for hedge accounting.

2.6.6 Trade Payable

Trade payables balances are subsequently measured at amortized cost using the effective interest rate method.

2.6.7 Hedging derivatives

The global derivative instrument portfolio is 99.26% contracts qualifying as hedging instruments. These were entered into by the Concha y Toro Group within the framework of the financial risk management policy to mitigate the risks associated with exchange rate fluctuations, adjustments units (UF) and interest rates fluctuations, being these currency forward contracts and interest rate swaps.

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Viña Concha y Toro S.A. and Subsidiaries

Derivatives are recognized at fair value at the statement of financial position date. If its value is positive, these are reported under the caption “Other financial assets” when its value is negative, they are reported within the caption “Other financial liabilities”, reflecting the change in the fair value within the statement of comprehensive income as described below, according to the type of hedging to which they correspond:

a) Fair Value Hedges:

The portion of the underlying for which the risk is being hedged is valued at fair value as well as the hedging instrument, recognizing in the statement of comprehensive income the fluctuations in the value of both, netting the effects under the same caption in the statement of income.

b) Cash Flow hedges:

Changes in the fair value of derivatives are recognized, in the portion that these hedging are effective, under a reserve within Total Equity until transferred to the statement of income netting this effect against the hedging object. The results corresponding to ineffective portion of hedges are directly recognized in the statement of income.

c) Net investment hedges:

Net investments hedges in a foreign operation, including a hedge of a monetary item which is recorded as a part of the net investment, are recorded as follows: gains or losses on the hedging instrument related to the effective portion of the hedge are recognized as a charge or credit to equity accounts, whereas any gain or loss related to the ineffective portion is recognized as a charge or credit to profit or loss. When disposing of the foreign operation, the accumulated amount of any gain or loss directly recognized in equity is transferred to the statement of income.

A hedge is considered as highly effective when changes in the fair value or cash flows of the underlying directly attributable to the hedged risk, are offset with changes in the fair value or the hedging instrument cash flows, with effectiveness ranging between 80% and 125%.

2.6.8 Embedded derivatives:

The Concha y Toro Group assesses the existence of embedded derivatives in financial instruments contracts and contracts for the purchase of grape from third parties in order to determine whether their characteristics and risks closely relate to the main agreement. Should it be concluded that clauses in force in contracts were related to the main agreement, the derivative is measured at fair value.

As of December 31, 2014 and 2013, there are no embedded derivatives for both, financial instruments contracts and contracts to purchase grapes and wine.

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Viña Concha y Toro S.A. and Subsidiaries

2.6.9 Fair value and classification of financial instruments

The fair value of the different derivative financial instruments is calculated using the following procedures:

- For derivatives quoted in an organized market, for its quote at year-end.

- For derivatives non-negotiable in organized markets, the Group measures them using the discount of expected cash flows and generally accepted option valuation models on the basis of market conditions, from both, cash and futures at year-end.

In consideration of the abovementioned procedures, Viña Concha y Toro and subsidiaries classifies its financial instruments in the following levels:

Level 1 Fair value obtained through direct reference to unadjusted prices quoted.

Level 2 Fair value obtained through use of valuation techniques accepted in the market and based on prices, other than those indicated in Level 1, which are observable direct or indirectly as of the measuring date (adjusted prices).

Level 3 Fair value obtained through models internally developed or methodologies which use low liquidity or unobservable information.

2.6.10 Interest-bearing loans

All credits and loans are initially recognized at fair value of the payment received less direct costs attributable to the transaction. Subsequently to the initial recognition these are measured at amortized cost using the effective interest rate method.

Gains and losses are recognized with a charge or credit to profit or loss when liabilities are derecognized or amortized.

2.7 Non-current assets held-for-sale

Non-current assets such as property, plant and equipment whose carrying amount will be recovered through a sell and not through its ongoing use are classified as held for sale. This condition is considered as complied solely when the sale is highly probable and the asset is available for immediate sale in its current state and transferred to the current group.

These are included in non-current assets when the investment is intended to be disposed of within the twelve months following year-end.

These assets are valued at the lower of carrying amount and the estimated sales value deducting the costs required for realization, and are no longer depreciated from the time in which are classified as non-current assets held-for-sale.

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2.8 Inventory

Raw materials, products in-process, finished products and supplies, are initially valued at cost, subsequent to the initial recognition, these are valued at the lower of net realizable value and cost recognized initially. Inventory of wine in bulk are valued at weighted average price, determined through the absorption costing method, which implies adding to acquisition direct costs and/or grapes production costs, indirect costs incurred in the agricultural process, and direct and indirect costs in the wine production process.

Agricultural products (grapes) used as raw material are measured at fair value less costs of sale as of the harvest date.

The Company and its subsidiaries have recognized impairment for obsolescence of raw materials, finished products, products in-process and supplies on the basis of technical reports and on turnover level of stocks maintained and /or from the assessment of its use in the future.

2.9 Other non-financial assets

Within the other non-financial assets are shown those current prepayments. These include disbursements due to prepayments related to lease of farms, insurance and advertising. These are classified in current and non-current depending on the term of their maturity.

2.10 Investment in associates

Associates are those in which the Concha y Toro Group is in a position to exercise a significant influence, but not control or joint control, through being able to manage the decisions on its financial and operating policies. Pursuant to the equity method, the investment in a subsidiary will be initially recognized at cost and its carrying amount will be increased or decreased to recognize the portion which corresponds to the investor in the profit or loss obtained by the entity which it maintains the investment, after the acquisition date.

The net profit or loss obtained in each year by these companies is illustrated in the consolidated statement of comprehensive income as “Ownership on profit (losses) of associates accounted for using the equity method.” (Equity-accounted investees)

2.10.1 Goodwill from equity-accounted investees

Goodwill obtained in acquisitions of associates, it is not amortized and at each year-end it is estimated if there are indications of impairment which may decrease its recoverable amount to an amount lower than the net cost recognized, in whose case, an impairment adjustment is made.

The related assignation is performed in those cash generating units (CGUs) in which is expected to obtain a benefit from the business combination in which this acquired goodwill arose. This value is already added to the investment value in both cases.

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Viña Concha y Toro S.A. and Subsidiaries

2.11 Intangible Assets

2.11.1 Industrial brand rights

Viña Concha y Toro and subsidiaries commercializes its products through the registration of own brands, duly recorded and fully in force. This registration has a finite useful life. Among the main brands the Company has the Concha y Toro brand and its sub brands Don Melchor, Amelia, Terrunyo, Trio, Casillero del Diablo, Sunrise, Frontera, Sendero, Maipo and Quinta de Maipo. The subsidiaries have registered their brands Cono Sur, Tocornal, Isla Negra, Maycas del Limarí, Trivento, La Chamiza, Pampas del Sur, Eolo, Tribu, Fetzer, Bonterra, Bel Arbor, Colwater Creek, Sanctuary, Five River, Jekel, Eagle Peak, Valley Oaks, Pacific Bay, Full Circle and Decopas.

- Registered in Chile.

Viña Concha y Toro, has a portfolio of own industrial brands registered in Chile for a ten-year period, renewable. These are measure at the historical cost of registration of the brand. This value is amortized in the period of time in which the register remains in force.

- Registered abroad.

The Company also register its own brands abroad where operates in the wine business. Usually, these registration rights have an in-force period from 5 to 10 years. The registration amounts are amortized in the in-force period of the related brand registration certificate pursuant to regulations of each country. These are recognized at cost net of amortization.

Viña Concha y Toro, value the related Industrial Brand Rights at its registration cost value. Disbursements made in developments of brands are recognized as operating expenses as and when incurred.

Brands acquired prior to the date in which Viña Concha y Toro adopted its transition to IFRSs are presented at its value restated by inflation and net against their related accumulated amortization.

2.11.2 Acquired Industrial Brands Rights

Those industrial brands rights acquired in business combinations has an indefinite useful life, consequently are not amortized and are evaluated on impairment on yearly basis.

2.11.3 Domains Rights

Correspond to the rights of use for a unique internet address to which users can access. These domains can be domestic or foreign, for which its effective period will correspond to that indicated by the law of each country, which in general is not higher than 5 renewable years.

2.11.4 IT Programs

Licenses for IT programs acquired are recognized at net cost net of amortization. These costs are amortized during their estimated useful lives.

Expenses related to the development or maintenance of IT programs are recognized as an expense when incurred.

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2.11.5 Research & development

Development costs are recognized as intangible assets provided that it can be assured its technical feasibility and to demonstrate that this is able to generate probable economic benefits in the future.

Research costs are recognized as expenses when incurred. As of December 31, 2014, research expenses amounted to Th$161,330, whilst as of December 31, 2013 this expenses amounted to Th$116,690.

2.11.6 Water rights

Water rights acquired by the Company correspond to the exploitation right of water existing in natural sources associated to agricultural land which are recognized at cost. These are recognized at its purchase value, and given that are perpetual rights, these are not amortizable. However, the Company applies an annual impairment test in regard to these water rights.

2.11.7 Rights of way

Rights of way, correspond to the amounts in acquisition of rights of way, between several co-owners from the area (access to allotments, aqueduct transit, and power lines), on agricultural land of Viña Concha y Toro, in addition to those of its subsidiary Viña Cono Sur S.A. These rights are perpetual and therefore, are not amortized but subject to “impairment test” on an annual basis, adjusting the value in the event that the related market value is lower, on the basis of the last transactions performed by the Company.

2.11.8 Identification of classes of intangible assets with finite and indefinite useful lives

Description of the type of intangible assets	Useful life definition
Domains	Finite
Industrial brands (acquired)	Indefinite
Industrial brand marks registered abroad and domestically	Finite
Water rights	Indefinite
Easements	Indefinite
IT software	Finite

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2.11.9 Minimum and maximum useful lives for intangible asset amortization.

Useful life by type of intangible assets	Minimum	Maximum
Patents, rights, trademarks	5	10
IT software	3	8
Other identifiable intangible assets	3	10

2.12 Property, plant and equipment

Property, Plant and equipment are recognized at cost less accumulated depreciation and less impairment losses.

The cost of property, plant and equipment items includes its acquisition price plus all the costs directly attributable to the asset location and bringing the assets to a working condition for their intended use as expected by the Company and the initial estimate of the costs of dismantling and removing the items and restoring the site on which they are located.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Repair, maintenance and serving expenses are expensed in profit or loss hen incurred. Note that items of the Group’s property, plant and equipment require reviews on a regular basis. In this sense, the items subject to replacement are recognized separately from the remaining of the asset and with a segregation level which allows amortizing them in the period between the current and next repair.

2.12.1 Costs Policy on financial interests

Costs for the financing interest attributable to the acquisition or construction of assets which require a substantial period of before being ready for use or sale are also included as an item of property, plant and equipment. Capitalized financial expenses are obtained when applying a capitalization rate, which is determined using the weighted average of all costs for the entity’s interest between the loans in force during the year.

Financing costs incurred from the acquisition of an asset up to the date in which these are ready for use are included in the asset value as established in IAS 23.

In the event that the period used for the construction of property, plant and equipment is higher than fair time, capitalization of interest is discontinued.

2.12.2 Depreciation

Items of property, plant and equipment are depreciated on a straight-line method basis through the distribution of asset’s acquisition cost less the residual value over the estimated useful lives of each component.

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Viña Concha y Toro and subsidiaries assesses at each annual reporting date, the existence of any asset impairment loss related to property, plant and equipment. Any reversal of the impairment loss is recognized directly in the statement of income.

The useful lives of assets are detailed as follows:

Asset	Useful life years
Buildings	10 to 40
Plant and equipment	3 to 20
IT equipment	3 to 7
Fixtures and fittings	5 to 30
Motor vehicles	6
Other property, plant and equipment	3 to 20

The Company depreciates its fruit producing plants following the straight-line method over the estimated useful life on the plantations of vines and subjecting the value in each year to evaluate indications of impairment. The applied useful lives are:

	Useful life years
Vineyard plantations	20 to 30

2.12.3 Government grants

The Company has received grants from the Chilean Government, in conformity with Law on Drainage and Irrigation Law No.18.450 related to the developed wine production activity.

The amount regarding government grants for 2014 and 2013 amounted to Th$ 46,105 y Th$ 115,983, respectively

These government grants in benefit of the Company are recognized within property, plant and equipment, under the equity accounting method and deducted from the values of work in-progress and irrigation materials.

2.13 Biological Assets

The Company and subsidiaries presents within current biological assets the agricultural product (grapes) derived from plantations under production which are intended to be the supply for the wine production process.

Regarding the agricultural product (grape) which is in growing stage up to harvest, the costs are accumulated up to the harvesting time.

In conformity with IAS 41 and based on the analysis results and the Company’s calculation it was concluded that the fair value of the grapes when harvesting is close to the carrying value and consequently, the grapes at the harvest point are measured at fair value less costs of sale, and then transferred to inventory.

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2.14 Impairment of non-financial assets

On an annual basis, the Company assesses impairment loss in conformity with the methodology established by the Company in conformity with IAS 36. Assets on which this methodology applies, are as follows:

- Property, plant and equipment

- Intangible Assets

- Investments in Associates

- Other long-term assets (Projects)

- Biological Assets

Assets subject to depreciation and amortization are subject to impairment losses testing provided that any event or changes in circumstances indicate that the carrying amounts may not be recovered. An impairment loss is recognized as the excess of carrying amount over its recoverable amount. The recoverable amount is the higher of the asset fair value less the costs to sell or value in use. For the purpose of impairment testing, assets are grouped together into cash generating units (CGUs). Non-financial assets, other than goodwill that have been affected by an impairment loss are subject to reviews as of each year-end for any events which justifies the reversal of losses. Impairment tests are performed under the following methods indicated in IAS 36:

- Cash flows deducted from income prepared for groups of property, plant and equipment. (CGU) identified.

- Comparison of market fair values against cash flows to determine the recoverable amount between them and then compare to the carrying amount.

- Discounted cash inflows to assess impairment loss in investments in associates.

2.14.1 Impairment of Property, plant and equipment, Investments in Subsidiaries and Associates

These assets are subject to tests to determine impairment losses in order to verify whether there is any indication that the carrying amount is lower than the recoverable amount. If such an indication exists, the asset recoverable amount is estimated to determine the extent of the impairment loss, if any. In the event that the asset did not generate any cash flows which are independent from other assets, the Company determines the recoverable amount of the cash generating unit to which the asset belongs pursuant to the business segment (wines and others).

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2.14.2 Impairment of intangible assets

The Company performs annually tests to its indefinite-lived intangible assets for impairment or when there is an indication that an asset could be impaired.

If the recoverable value of an asset is considered as lower than its carrying amount, the latter decreases to its recoverable amount.

2.14.3 Impairment of Financial Assets

In the case of assets with trading origin, the Company has defined a policy for recording impairment provisions in function of the age of the overdue balance.

The Company has defined for its accounts receivable certain age stratification parameters and the percentages to be applied when evaluating the impairment of these items, which are analyzed on a case-by-case basis as indicated in Note 2.6.3

2.14.4 Impairment of investment in associates

Upon application of the equity method, Viña Concha y Toro S.A. and subsidiaries determine whether it is necessary to recognize an additional impairment loss for the investment maintained in its associates. On an annual basis, the Company establishes if exist an objective evidence that the investment in associates or joint ventures is exposed to impairment risk. If this is the case, the Company calculates the impairment amount as the difference between the fair value of the associate and the acquisition cost. According to IAS 36, and in the event that the acquisition cost is higher, the difference is recognized with a charge to profit or loss.

2.15 Lease Agreements

Lease agreements where all risks and substantial benefits are transferred are classified as finance leases arrangements.

Assets received through lease agreements, which meet the characteristics of a finance lease arrangement, are recognized as acquisition of property, plant and equipment at the lower between fair value and the present value of the future minimum lease payments.

Each lease payment is allocated between the liability and the finance charges to obtain constant interest rate on the debt outstanding balance.

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The related lease obligations, net of finance charges are included within other current and non-current financial liabilities. The interest element of the finance expenses is charged to the statement of income during the lease term to obtain a constant recurring interest rate on the liability remaining balance for each year. The asset acquired through a finance lease arrangement is depreciated over the lower of its useful life or the contract lifespan.

Contracts which do not comply with the characteristics required to be recognized as a finance lease are classified as operating leases.

Operating leases are those where the lesser holds a significant portion of the risks and rewards from the ownership of leased assets. Operating lease payments (net of any benefit received from the lesser) are charged to the statement of income or capitalized (if applicable) on a straight-line basis over the lease term.

2.16 Income and deferred taxes

2.16.1 Income Tax

Viña Concha y Toro SA and its subsidiaries recognizes its income taxes based on the net taxable income determined under regulations established by the Chilean Income Tax Law (ITL) and of foreign countries where certain subsidiaries are based.

The income tax expense for the year for these companies is determined as the sum of the current taxes of the different companies, resulting after the application of the tax rate on taxable income for the year once applied the tax deductions allowed.

On September 29, 2014, the Tax Reform Act was enacted, which among other matters, defines the tax system that by default applies to the companies, the corporate rate tax that, by default, will be applied gradually to companies between 2014 and 2018 and allows companies may also elect between one of the two tax systems established as Attributed or Partially Integrated, remained subject to different tax rates beginning on 2017.

The Attributed system applies to individual entrepreneurs, individual limited liability companies, communities and individual companies when the latter are formed exclusively by natural persons domiciled and resident in Chile; and the Partially Integrated system applies to the remaining taxpayers, such as open and closed corporations, joint stock companies or partnerships whose partners are not only natural persons domiciled or resident in Chile. The tax system, which by default the Company will be subject from January 1, 2017, is the Partially Integrated system.

The Company may also elect a system change, other than the default system within the last three months of the previous business year (2016), through approval from an extraordinary shareholders meeting, with a quorum of at least two thirds of the issued shares with voting rights and will be effective filing the declaration signed by the Company, accompanied by the minutes summarized as a public deed signed by the Company. The Company is bound under the applicable tax system thereon, for at least five consecutive business years. After this period, the Company is allowed to change its system, having to keep the new system for least five consecutive years.

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2.16.2 Deferred Taxes

Viña Concha y Toro S.A. and subsidiaries recognize deferred taxes originated by all temporary differences and other events that generate differences between the taxable and financial base of assets and liabilities in accordance with IAS 12 Income Taxes.

Differences between the accounting and tax balance of assets and liabilities generate deferred tax assets or liabilities which are calculated using the tax rates which are expected to be in force when assets and liabilities are realized.

Changes in deferred tax assets or liabilities not arising from business combinations are recognized in profit or loss or net equity in the consolidated statement of financial position on the basis of where the originating gain or losses arise.

Deferred tax assets and fiscal credits are only recognized when it is considered probable that consolidated entities will receive sufficient future tax earnings to recover the temporary difference deductions and apply fiscal credits.

Deferred tax liabilities are recognized for all temporary differences, except those derived from the initial recognition of business funds as well as those associated to investments in subsidiaries, associates and entities under joint control in which is possible to control its reversals and probable not to perform a revert in a predictable future.

As of the date of the consolidated statement of financial position, the unrecognized deferred tax assets are revaluated and recognized provided that is highly probable that future taxable gains will allow the recovering of this deferred tax assets.

2.17 Employee benefits

2.17.1 Employee vacations

Costs associated to personnel contractual benefits and related to services provided by employees during the year are charged to income in the related period.

2.17.2 Severance indemnities

The Company’s management use assumptions in order to determine the best estimate of these benefits. The valuation of these obligations is performed through an actuarial calculation. The assumptions used in this calculation include the pension rotation hypothesis, the mortality rate, the discount rate the expected rise in remuneration and the future permanence, among other.

Actuarial gains or losses arise from the deviations between estimates and actuality of the actuarial hypothesis behavior or in the reformulation of the established actuarial hypothesis, which are directly recognized in Other Reserves for the year.

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2.18 Provisions

The provisions are recognized when they relate to a present, legal or assumed obligations, generated as a result of a past event which can be estimated in a reliable manner and is probable that an outflow of resources embedding economic benefits will be required to satisfy this obligation.

2.19 Capital

The capital of Viña Concha y Toro is represented by ordinary shares of a unique series and with no par value.

2.20 Minimum Dividend

Article No. 79 of Law for Corporations in Chile establishes that, unless a different agreement is adopted in the related Board, for the unanimity of issued shares, the Open Corporations must distribute on an annual basis as dividend in cash to their shareholders, at prorate of their shares or in the ratio established in statutes if preferred shares exists, at least 30% of the Company’s net income of each year, except when correspond to assimilate accumulated losses from prior years.

2.21 Earnings per Share

Earnings per share is calculated as the quotient between the net earnings of the year attributable to the Parent Company and the weighted average number of ordinary shares of the Parent in outstanding during the same year. The Company does not have any potential common stock equivalents that would have a dilutive effect.

2.22 Statement of cash flows – direct method

For the purposes of the consolidated statement of cash flows, cash and cash equivalents relates to cash and highly liquid short-term investments, respectively; the latter are easily convertible in cash and subject to a non-significant risk of change in its value, with maturities of no more than 90 days.

The statement of cash flow gathers the cash movements performed during the year, determined by the direct method. In these statements of cash flow the following expressions are used as detailed below:

- Cash Flows: Incomes and egresses of cash or equivalents, including term investments lower than three months with large liquidity and low risk of value alterations.

- Operating activities: activities which constitute the main source of ordinary income for the Group, as well as other activities which cannot be classified as investment or financing.

- Investing activities: activities of acquisition, alienation or disposal by other means of non-current assets and other investments not included in cash and its equivalents.

- Financing activities: activities which produce changes in the volume and composition of the net equity and of financial liabilities.

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2.23 Revenue and expense recognition

Revenue from sales and services are recognized by Viña Concha y Toro and subsidiaries when the relevant risks and rewards from the ownership of products are transferred to the buyer; usually, when the ownership and risk are transferred to the customer and products are delivered in the agreed location or delivery is postponed in accordance with the buyer’s will, which, nonetheless becomes the owner of goods and accepts billing for those products. Revenue is measured at the fair value of the consideration received or receivable

Expenses are recognized on an accrual basis.

Revenue is presented net of value-added taxes, returns, rebates and discounts and after the elimination of sales performed among the subsidiaries, which are described as follows:

2.23.1 Sale of goods and products

Revenue from sale of goods must be recognized and recognized in the financial statements when each and all the following conditions are met:

a) The Company has transferred to the buyer the significant risks and rewards arising from the ownership of the goods;

b) The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

c) The amount of revenue can be measured reliably;

d) is probable that the economic benefits associated with the transaction will flow to the entity; and

e) The costs incurred or to be incurred in respect to the transaction can be measured reliably.

2.23.2 Revenue from rendering of services

Service revenue is recognized considering the stage of completion of transaction at the end of the reporting period provided that the outcome of the transaction can be reliably estimated.

2.23.3 Financial Income

Financial Income is recognized as soon as interests are accrued in function of the principal that is pending of payment and of the applicable interest rate.

Interest paid, accrued on loans from financial institutions and public bonds payable are used in the financing of operations, are presented as finance costs.

2.23.4 Dividends

Dividend income is recognized when the right to receive payment is established.

2.24 Environment

Concha y Toro Group presents disbursements due to environmental investments in Water Treatment Plant intended to protect the environment. The amounts of elements incorporated in facilities, machinery and equipment intended for the same purpose are considered as Property, plant and equipment.

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NOTE 3. ESTIMATES DETERMINED BY MANAGEMENT

The preparation of consolidated financial statements require that Management perform estimates and use assumptions which affect the amounts included in these consolidated financial statements and related notes. Estimates made and assumptions used by the Company are based on the historic experience, changes in the industry and information provided by qualified external sources. However, the final results could differ from estimates under certain conditions, and in some cases have a significant variation.

Estimates and significant accounting policies are defined as those that are important to properly reflect the Company’s results and financial position and/or those which require a high degree of Management’s judgment.

Main estimates and applications of the professional criteria that as a result of its variation could give rise to significant adjustments on book values of assets and liabilities within the next financial period are related to the following concepts:

3.1 Assessment of possible impairment losses

At of the closing date of each year, or in those date in which is considered as necessary, an analysis is performed to asset’s value in order to determine if there is an indication that these assets had an impairment loss. If any, estimation on the recoverable amount of this asset is performed, in this case, the coverable amount with respect to the asset’s book value. If these are identifiable assets which do not independently generate cash flows, an estimate is performed on the recoverability of the Cash Generating Unit to which this asset belongs

In the case of Cash Generating Units to which tangible or intangible assets have been assigned with an indefinite useful life, its recoverability analysis is performed systematically at each year-end or under circumstances considered as required to perform this analysis.

3.2 Financial assets of trading origin

In the case of financial assets whit trading origin, the Company has defined a policy for the recording of impairment accruals in function of the irrecoverable status for the overdue balance, which is determined through an analysis on the age, historic collection and the collection status of accounts receivable.

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3.3 Assignation of Useful lives of Property, Plant and equipment and Intangible assets of Finite Life

The Company’s management determines the estimated useful lives on technical basis and the related depreciation charges of its fixed and intangibles assets. This estimate is based on the projected life cycles of goods assigned to the respective segments: Wines and Others. The Company reviews the estimated useful lives of Property, Plant and equipment and Intangible assets, at the closing date of each annual financial report.

3.4 Actuarial calculation of severance indemnity obligations

The Company’s determination of provision for severance indemnity is agreed to the equivalent to a specific number of days per year only and under certain conditions. This has been determined through the actuarial value of the benefit accrued cost. This method allowed performing estimates based on the future permanence of those involved in this benefit, mortality rates, future increases in remunerations and discount rates, among others.

3.5 The fair value of derivatives contracts or other financial instruments (hedges)

In the case of derivative financial instruments, the assumptions used by the Group Viña Concha y Toro and subsidiaries are based on the market rates quoted, restated by the instrument’s specific features.

3.6 Expected Fair value in a business combination

The Company has recognized separately from goodwill, identifiable assets acquired and liabilities assumed at fair value at acquisition date.

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NOTE 4. CHANGES IN ESTIMATES AND ACCOUNTING POLICIES 

4.1 Changes in Accounting Policies

As of December 31, 2014, Viña Concha y Toro S.A., has opted for early application of the amendments to IAS 16 Property Plant and Equipment and IAS 41 Agriculture whose scope indicates the accounting treatment applicable to producing plants that are used only to develop products. The only significant future economic benefits from production plants arise from the sale of the agricultural products that these generate. Producing plants meet the definition of property, plant and equipment from IAS 16 and its operation is similar to manufacturing. Therefore, the amendments require that production plants are accounted for as property, plant and equipment are included in the scope of IAS 16 instead of IAS 41. The product that is developed at the production facilities will remain within the scope of IAS 41.

In order to maintain uniformity in the presentation of the financial statements and as requested by IAS 8, we have restated the financial statements at December 31, 2013 and January 1, 2013. This restatement does not have effects in equity nor in the results then presented.

Amounts reclassified from Biological Assets to Property, Plant and Equipment as of December 31, 2014, 31, 2013 and as of January 1, 2013 amounted to ThCh$ 74,214,301, ThCh$ 68,552,823 and ThCh$ 64,537,068, respectively.

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NOTE 5. FINANCIAL RISK MANAGEMENT

5.1 Analysis of Market Financial Risk

The Company is exposed to different types of market risks, among others main risks are; exchange rate risk, interest rate risk and variation risk in consumer price index.

5.1.1 Exchange Rate Risk

Due to the exporting nature of Viña Concha y Toro, the exchange rate risk corresponds to the appreciation risk of the Chilean Peso (its functional currency) with respect to the currencies in which the Company receives its Income.

The exchange rate risk exposure of Viña Concha y Toro corresponds to the net position between assets and liabilities denominated in currencies other than the functional currency. This net position is mainly generated by the differential between the addition of accounts receivable and inventories with respect to the asset and advertising contributions, financial debt and supplies costs with respect to the liability, all of them denominated in US$ Dollars, Euros, Pound Sterling, Canadian Dollars, Swedish Crowns, Norway Crowns, Brazilian Real, Mexican Pesos and Argentinean pesos.

In order to mitigate and manage the exchange rate risk, the Company reviews on a daily basis the net exposure on each currency for the existing entries, and hedge this differential mainly using currency forward operations at a term lower or equal to 90 days. In certain opportunities the Company can also use Cross Currency Swap or any other derivative.

The sensibility analysis assuming that the Company had no hedging during 2014, indicates that a depreciation /appreciation by 10 % of the Chilean peso, with respect to the different currencies in which the Company maintains assets and liabilities, would have generated a loss/gain amounting to ThCh$7,314,981. This sensitization is performed assuming that all other variables remained constant and considering, in all the aforementioned currencies, the average assets and liabilities maintained during the indicated period of time.

Sensibility analysis by currency, effect on Net Income as of December 2014:

	Depreciation 10%			Appreciation 10%
	in ThCh$			in ThCh$
U.S. Dollar		2,600,863			(2,600,863	)
Pound Sterling		2,198,378			(2,198,378	)
Euro		919,763			(919,763	)
Canadian Dollar		282,633			(282,633	)
Brazilian Real		1,230,557			(1,230,557	)
Swedish Crown		365,129			(365,129	)
Norwegian Crown		89,236			(89,236	)
Mexican Peso		375,902			(375,902	)
Argentinean Peso		(747,480	)		747,480
Total		7,314,981			(7,314,981	)

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Sensibility analysis by currency, effect on Net Income as of December 2013:

	Depreciation 10%			Appreciation 10%
	in ThCh$			in ThCh$
U.S. Dollar		2,379,502			(2,379,502	)
Pound Sterling		1,968,372			(1,968,372	)
Euro		805,667			(805,667	)
Canadian Dollar		276,659			(276,659	)
Brazilian Real		1,298,368			(1,298,368	)
Swedish Crown		329,274			(329,274	)
Norwegian Crown		88,703			(88,703	)
Mexican Peso		345,956			(345,956	)
Argentinean Peso		(907,302	)		907,302
Total		6,585,199			(6,585,199	)

Additionally, and in accordance with the sensibility of the impact on net equity and the appreciation or depreciation of each currency, the Company hedges a portion of the expected entries pursuant to its sale forecasts with currency forward sales at terms higher than 90 days.

The impact in net equity on expected entries on one part emanate from losses /gains which could generate the depreciations /appreciations of the Chilean peso with respect to the currencies in which the export is made, as well as the gains/losses which could be generated as a result of lower/higher costs in the cases in which these currencies are denominated or indexed to the variation of these currencies.

The sensibility analysis manifest that a depreciation/appreciation by 10 % of the Chilean peso with respect to the different currencies in which the Company generate income and expenses, would have represented in 2014 a loss /gain amounting to ThCh$29,239,348. This sensibility is performed assuming all other variables as constant and considering in all the aforementioned currencies, the forecasted income and expenses for the year.

Sensibility analysis by currency, effect on Equity as of December 2014:

	Depreciation 10%		Appreciation 10%
	in ThCh$		in ThCh$
U.S. Dollar		12,628,865		(12,628,865	)
Pound Sterling		9,518,676		(9,518,676	)
Euro		1,501,953		(1,501,953	)
Canadian Dollar		1,488,438		(1,488,438	)
Brazilian Real		2,146,087		(2,146,087	)
Swedish Crown		1,501,953		(1,501,953	)
Norwegian Crown		453,376		(453,376	)
Total		29,239,348		(29,239,348	)

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Sensibility analysis by currency, effect on Equity as of December 2013:

	Depreciation 10%		Appreciation 10%
	in ThCh$		in ThCh$
U.S. Dollar		11,003,821		(11,003,821	)
Pound Sterling		8,116,938		(8,116,938	)
Euro		1,289,966		(1,289,966	)
Canadian Dollar		1,387,596		(1,387,596	)
Brazilian Real		2,156,522		(2,156,522	)
Swedish Crown		1,289,966		(1,289,966	)
Norwegian Crown		429,206		(429,206	)
Total		25,674,015		(25,674,015	)

Notwithstanding the abovementioned, in scenarios of appreciation of our local currency is possible to mitigate the effect on income through adjustments in prices always considering, the appreciation level of the currencies of our competitors.

5.1.2 Interest Rate Risk

The interest rate risk impact the Company’s financial debt. As of December 31, 2014 Viña Concha y Toro had a total financial debt, net of interest, amounting to ThCh$244,576,581, 79.3% of this debt correspond to non-current liability and 20.7% correspond to current liability. At this year-end, the Company maintains 7.0% of the debt with a variable interest.

In order to reduce the interest rate risk, the Company has contracted derivatives which fix the interest rate (Swap Interest rate) for all loans which are currently subject to a variable rate, which are currently denominated in United States Dollars subject to Libor rates.

The sensibility analysis, assuming that the Company does not perform interest rate hedging, indicate that, an increase/decrease of 100 base points in interest rates in all the loans with variable interest rate, in-force during 2014, would have generated a higher/lower interest expense for the year amounting to ThCh$271,101, with effect on profit or loss.

5.1.3 Inflation Risk.

A very particular feature of the Chilean financial market is the deepness existing for corporative bonuses denominated in UF which is different for Chilean pesos. This is due to the fact that corporative bonuses in UF provide a guarantee to the investor with a specific return in actual terms, isolating the inflation risk; however this is transferred to the debt issuer. Currently, Viña Concha y Toro is exposed to the UF (Unidad de Fomento) in the following instruments: Corporate Bonds, Bank Loans and Short-term Time Deposits, these latter, decrease in part the Company’s total exposure.

As of December 31, 2014, 37.3% of the Company’s debt is denominated in UF. In order to hedge the fluctuation of UF, the Company has taken swap contracts.

During 2014 the Company recognized a loss amounting to ThCh$4,429,230 which relates to the adjustment of current and non-current financial debts indexed to the variation of UF. A variation of 100 base points in the inflation that refine the UF in this period would generate a greater loss /gain amounting to ThCh$774,393, with effect on profit or loss.

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5.2 Credit Risk

The Credit Risk relates to the uncertainty with respect to the compliance of obligations from the Company’s counterpart, for particular contract, agreement or financial instrument, when this breach generates a loss in the market value of any financial asset.

5.2.1 Accounts Receivable

The Company export to more than 145 countries abroad through dealers with whom maintain distribution contracts for its different companies and brands. On the other hand, the Company has formed distributing subsidiaries of its products in England, Sweden, Norway, Finland, Argentina, Brazil, Mexico, Singapore and China. All export sales is performed in term with direct credit, except for some punctual cases that operates with export letter of credit.

In the domestic market the sale is diversified in more than 10,000 customers, which after an internal evaluation, they are granted with a limited credit line.

The main credit risk correspond to the lack of payment of a particular customer, although in some cases there are risks associated to exchange or legal restrictions in the countries where they are located and they are temporarily restrained to comply with their payment obligations.

The Company’s policy is to cover with credit insurance all their customers. This is performed to both, domestic market customers and export customers either as nominated or non-nominated. In the cases in which the insurance company rejects to insure a particular customer, alternative mechanisms are considered in order to document the debt as the case of post-dated checks in the domestic market, export letter of credits, etc.

a) Sale to third-parties from Chile:

In the case of accounts receivable for the domestic market, 88.5% of customers have a credit insurance which covers 90% of the claim. As of December 31, 2014 the main five customers concentrate 37.0% of receivables for this market, consequently, 100% of this receivable is covered by the credit insurance. A 57.1% of accounts receivable are concentrated in customers that maintain accounts receivable in amounts higher than M$100, while a 22.8% correspond to customers with a receivable lower than M10.

For exports performed from Chile to third-parties, 82.1% have an insurance credit which covers a 90% of the claim. As of December 31, 2014 the twenty main customers concentrate a 65.4% of accounts receivable for this market, consequently, 90.5% of this receivable is covered by an insurance credit. The remaining 34.6% is comprised by 200 customers, approximately.

b) Sale to third-parties from abroad:

Bodegas y Viñedos Trivento S.A. maintains credit insurances for 97.0% of its domestic accounts receivable, and 98.7% of its export accounts receivable. In both cases, the insurance covers 90% of the claim. A 70.0% of its export accounts receivable are concentrated in the main 20 customers, from these, 99.9% of the debt is insured, while the 20 main customers of the domestic market, represents 76.3% of total accounts receivable, from these 98.2% is insured.

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The subsidiary Concha y Toro UK maintains 98.8% of its accounts receivable portfolio hedged by a credit insurance, which covers a 90% of the value. 81.0% of accounts receivable is concentrated in its 20 main customers, from these 100% of the debt is insured, while the remaining 19.0% of accounts receivable is distributed in more than 220 customers.

VCT Brazil concentrates a 65.0% of its accounts receivable in its 20 main customers, distributing the remaining 35% in more than 750 customers. 77.3% of its accounts receivable are subject to a credit insurance, which covers 90% of the value.

Fetzer maintains credit insurances for 65.5% of its domestic receivables, and 83.1% of its export receivables, in both cases, the insurance covers 90% of the claim. Additionally, 37.2% of exports are sales to state-owned monopolies.

The subsidiaries of Sweden, Norway and Finland, concentrates more than 90% of their accounts receivable in sales performed to state-owned monopolies, entities with no credit insurance due to its low credit risk.

5.2.2 Short-term investments and forward

Surpluses of cash are invested pursuant the short-term investing policy, mainly, using sell–back agreements on central bank documents, time deposits with different financial institutions, short-term mutual fund units of fixed rent. These investments are recognized as cash and cash equivalent and in investments maintained up to its maturity.

Hedging instruments, mainly Forwards and Swaps, are agreed on terms up to four years with bank institutions only.

In order to decrease the counterpart risk, and that the assumed risk is known and managed by the Company, the investments are diversified with different bank institutions. Thus, the Company evaluates the credit quality of each counterpart and the investment levels, based on: (i) its risk classification and (ii) the counterpart’s equity volume.

5.3 Liquidity Risk

Liquidity risk is defined as the inability which may confront the company in the compliance, in time and form, with the contractual obligations assumed with suppliers and financial institutions.

The Company’s main liquidity source is cash flows from operating activities. In addition, the Company has unused funding lines, and the ability to issue debt and equity instruments in the capital market.

As of December 31, 2014 the Company recognized ThCh$30,304,154 in Bank balances and time deposits additionally to bank credit lines.

In order to mitigate and manage the liquidity risk, the Company, through projected cash flows, reviews on a monthly and annual basis, its ability to fund its working capital, future investments and its debts maturities.

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- Liquidity Risk with respect to agricultural activity

The liquidity risk, with respect to the Company’s agricultural activity, correspond to the inability that may confront the Company on its compliance, in time and form, with its contractual obligations assumed with its grapes suppliers, given that the Company depends of external vineyards for its supply of grapes and wine in bulk.

Company’s non-derivative maturities including interest from financial liabilities and derivative financial liabilities as of December 31, 2014 and 2013 are disclosed as follows:

	Carrying								More than 5
As of December 31, 2014	amount		Less than 1 year		1 to 3 years		3 to 5 years		years
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Other non-derivative financial liabilities
Loans from financial entities		160,076,464		56,940,828		92,826,820		18,608,597		—
Obligations with the public		86,857,075		2,699,778		29,385,745		31,582,083		42,863,822
Sub- Total		246,933,539		59,640,606		122,212,565		50,190,680		42,863,822
Derivative financial liabilities
Hedging liabilities		30,531,157		7,403,871		19,110,571		4,016,715		—
Non-hedging liabilities		127,326		127,326		—		—		—
Sub- Total		30,658,483		7,531,197		19,110,571		4,016,715		—
Total		277,592,022		67,171,803		141,323,136		54,207,395		42,863,822
	Carrying								More than 5
As of December 31, 2013	amount		Less than 1 year		1 to 3 years		3 to 5 years		years
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Other non-derivative financial liabilities
Loans from financial entities		168,734,231		65,258,946		77,368,389		36,322,249		—
Obligations with the public		69,705,136		5,253,059		21,745,087		31,658,764		23,747,115
Sub- Total		238,439,367		70,512,006		99,113,476		67,981,013		23,747,115
Derivative financial liabilities
Hedging liabilities		14,640,026		3,192,148		5,338,668		6,109,210		—
Non-Hedging liabilities		209,184		209,184		—		—		—
Sub- Total		14,849,210		3,401,332		5,338,668		6,109,210		—
Total		253,288,577		73,913,338		104,452,144		74,090,223		23,747,115

5.4 Price Risk on Raw Material

The Company depends of external vineyards for its grapes supply and wine in bulk. The grapes purchased to external producers are subject to fluctuations of price and quality and generally are more expensive that the Company’s own grapes.

For the elaboration of premium wines, varietals (wine made exclusively or almost exclusively from one variety of grape) and sparkling, a 53.20% of grapes and wine in bulk used corresponded to independent growers of Chile. Additionally, the Company purchased close to 75.55% of the grape and wine in bulk necessary to produce wine of popular quality. The disruption in the grape or wine offer, as well as the increase in prices on the part of these external suppliers could have an adverse effect on the Company’s operating income.

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NOTE 6. CASH AND CASH EQUIVALENTS

a) This item is detailed as follows:

Cash and cash equivalents includes time deposits and balances in banks

	As of December 31,		As of December 31,
Cash and cash equivalents	2014		2013
	ThCh$		ThCh$
Time deposits and balances in banks		30,304,154		12,850,652
Total		30,304,154		12,850,652

As of December 31, 2014, the time deposits balance is detailed as follows:

As of December 31, 2014
			Monthly				Amount		Interest		Total amount
Bank	Initial	Maturity	rate			Currency	ThCh$		ThCh$		ThCh$
Banco Bilbao Vizcaya	22-12-2014	02-01-2015		0.29	%	CLP		1,000,000		870		1,000,870
Banco Santander Chile	24-12-2014	02-01-2015		0.28	%	CLP		1,500,000		980		1,500,980
Banco Bilbao Vizcaya	26-12-2014	02-01-2015		0.28	%	CLP		5,000,000		2,333		5,002,333
Banco Bilbao Vizcaya	30-12-2014	09-01-2015		0.27	%	CLP		6,500,000		585		6,500,585
Banco Itau BBA	30-11-2014	01-01-2015		0.23	%	BRL		831,294		642		831,936
	Total							14,831,294		5,410		14,836,704

As of December 31, 2013, there are no time deposits

b) Cash and cash equivalent, classified by currencies is detailed as follows:

	As of December 31,		As of December 31,
Original currency	2014		2013
	ThCh$		ThCh$
U.S. Dollar		5,278,520		3,740,960
Brazilian Real		868,714		1,409,327
Chilean Peso		16,337,019		1,923,107
Norwegian Crown		1,056,328		613,505
Swedish Crown		911,128		923,024
Pound Sterling		3,157,102		2,383,765
Mexican Peso		335,367		1,374,951
Euro		926,390		139,739
Argentinean Peso		1,293,772		221,160
Canadian Dollar		116,959		105,731
South African Rand		22,855		15,383
Total		30,304,154		12,850,652

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 7. OTHER FINANCIAL ASSETS

All financial assets are measured at fair value.

	Total current				Total Non-current
Other financial assets	Dec 31, 2014		Dec 31, 2013		Dec 31, 2014		Dec 31, 2013
	ThCh$		ThCh$		ThCh$		ThCh$
Financial investments available for sale		2,920,628		3,146,321		—		—
Hedging derivative instruments		4,054,521		2,796,594		8,630,985		2,769,009
Non-hedging derivative instruments		78,353		1,836,901		—		—
Total		7,053,502		7,779,816		8,630,985		2,769,009

- Financial investments Available-for-sale

As of December 31, 2014, financial assets available-for-sale correspond to marketable securities amounting to Th$2,920,628, from this total, 93.85% is recognized at stock exchange value and the remaining 6.15% at cost.

As of December 31, 2013, financial assets available-for-sale correspond to marketable securities amounting to Th$3,146,321, from this total 94.29% is recognized at stock exchange value and the remaining 5.71% at cost.

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NOTE 8. TRADE AND OTHER ACCOUNTS RECEIVABLES, NET

This item is detailed as follows:

	As of December 31,		As of December 31,
Description of classes of trade and other receivables, net	2014		2013
	ThCh$		ThCh$
Debtors for credit operations, net, current		143,760,821		129,014,530
Other receivables, net, current		11,419,017		11,298,998
Total		155,179,838		140,313,528

Balances included within this item, in general, do not accrue interest.

There are no restrictions to the provisions for this type of accounts receivable of significant amount.

It is important to note that the Company has dealers to sell its products through the export markets. Sales to the largest 5 distributors of the Company represented 15.7% and 15.2% of the Company’s total export revenue at December 2014 and 2013, respectively, and are expected to continue representing a significant portion of company revenues to total exports in the future.

The Company has signed agreements with the bigger portion of its dealers. Generally, these agreements are entered for a two-year period, which are automatically renewable. Besides, the Company’s strategy to increase its sales in the most significant export markets depends significantly on the Company’s dealer’s behavior.

Other receivables, current, net, is mainly comprised by bank current accounts, personnel debts and notes receivable from trading debtors.

The impairment analysis of trade debtors is as follows:

	Year 2014				Year 2013
Tranche of the portfolio	Number portfolio				Number portfolio
	customer		ThCh$		customer		ThCh$
At day		4,317		71,971,016		5,499		112,472,819
1 to 30 days		3,792		28,048,620		2,703		14,142,688
31 to 60 days		1,072		23,842,321		867		4,675,094
61 to 90 days		345		12,596,751		943		1,609,249
91 to 120 days		137		6,258,950		337		1,338,650
121 to 150 days		239		2,863,559		192		842,975
151 to 180 days		253		2,560,207		224		192,085
181 to 210 days		209		1,910,368		152		172,114
211 to 250 days		128		384,938		181		437,487
Over 250 days		1,293		4,743,108		1,766		4,430,367
Total portfolio by tranche		11,785		155,179,838		12,864		140,313,528

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Viña Concha y Toro S.A. and Subsidiaries

Movements in consolidated allowance for doubtful accounts	ThCh$
Initial balance at January 1, 2012		813,181
Increases		218,730
(Decreases)		(153,727	)
Final Balance As of December 31, 2012		878,184
Increases		1,309,012
(Decreases)		(210,989	)
Final Balance As of December 31, 2013		1,976,207
Increases		262,919
(Decreases)		(76,652	)
Final Balance as of December 31, 2014		2,162,474

Rejected notes receivable as of December 31, 2014, corresponds to 260 customers totaling Th$ 160,502, while as of December 31, 2013, these amounted to 266 customers in the amount of Th$ 123,897, in respect of notes receivable held in legal collection as of December 31, 2014, these correspond to 358 customers with a total of Th$ 261,530, while at December 31, 2013, this figure reached 249 customers in the amount of Th$ 141,077.

The portfolio as of December 31, 2014 amounted to ThCh$155,179,838 which represents a total of 11,785 customers from which none of them has come to terms to pay for their debts. At December 31, 2013 the portfolio amounted to ThCh$140,313,528, of which 12,864 none of them has come to terms to pay for their debts.

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 9. TRANSACTIONS WITH RELATED PARTIES

9.1 Information to be disclosed on related parties

Balances outstanding at year-end are not secured and are settled in cash. There are no guarantees granted or received for accounts receivable from or payable to related parties. As of December 31, 2014 and 2013, the Group has not recognized any material impairment of accounts receivable related to amounts owed by related parties. This evaluation is performed on an annual basis through an analysis of the related party’s financial position in the market in which the related party operates.

9.2 Parent Group

The controlled percentage directly and indirectly by the Parent Group is 38,80%. A non-formalized join acting agreement exists between them.

The table below details each natural person which represents to each member of the Parent. In addition, there is an indication of the legal entities and natural persons represented and its related ownership percentages. Those shareholders with percentages lower than 1% are grouped under item “others”:

GUILISASTI GANA FAMILY	27.76	%
Inversiones Totihue S.A.	11.73	%
Rentas Santa Bárbara S.A.	11.42	%
Other	4.61	%

The Companies Rentas Santa Bárbara S.A. and Inversiones Totihue S.A. are Closed Corporations, both 100% controlled directly or indirectly by the family Guilisasti Gana which is integrated by Mrs. Isabel Gana Morandé (ID No. 2.556.021-3), the brothers Eduardo Guilisasti Gana (ID No. 6.290.361-9), Rafael Guilisasti Gana (ID No. 6.067.826-K), Pablo Guilisasti Gana (ID No. 7.010.277-3), José Guilisasti Gana (ID No. 7.010.293-3), (R.I.P) and sisters Isabel Guilisasti Gana (ID No. 7.010.269-2), Sara Guilisasti Gana (ID No. 7.010.280-3), and Josefina Guilisasti Gana (ID No.7.010.278-1). The members of the family Guilisasti Gana exert its rights as legal persons or through investment companies which are totally owned by the same family. The concept “others” include companies and legal persons which correspond by 100%, directly and indirectly to the family Guilisasti Gana

LARRAÍN SANTA MARÍA, ALFONSO	7.40	%
Inversiones Quivolgo S.A.	4.20	%
Inversiones La Gloria Ltda.	2.17	%
Other	1.03	%

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Viña Concha y Toro S.A. and Subsidiaries

The Company Inversiones Quivolgo S.A. is 100% owned by Mr. Alfonso Larraín Santa María (ID# 3.632.569-0) and by family Larraín Vial, integrated by his spouse Teresa Vial Sánchez (ID# 4.300.060-8) and the brothers Felipe Larraín Vial (ID# 7.050.875-3), María Teresa Larraín Vial (ID# 10.165.925-9), Rodrigo Larraín Vial (ID# 10.165.924-0), María Isabel Larraín Vial (ID# 10.173.269-K) and Alfonso Larraín Vial (ID# 15.314.655-1). On the other hand, Inversiones La Gloria Ltda. is 100% controlled by the family Larraín Santa María, integrated by the brothers Alfonso Larraín Santa María, Andrés Larraín Santa María (ID# 4.330.116-0), Pilar Larraín Santa María (ID# 4.467.302-9), Gabriela Larraín Santa María (ID# 4.778.214-7) and Luz María Larraín Santa María (ID# 6.065.908-7).

FONTECILLA DE SANTIAGO CONCHA, MARIANO	3.64	%
Inversiones GDF S.A.	3.28	%
Other	0.36	%

The property of Inversiones GDF S.A. correspond by 100% to the family Fontecilla Lira, comprised by Mr. Mariano Fontecilla Lira (ID# 6.495.101-7), Rodrigo Fontecilla Lira (ID# 8.404.996-4), Enrique Fontecilla Lira (ID# 6.613.074-6) y Francisco Antonio Fontecilla Lira (ID# 8.671.675-5).

There are no other legal persons or entities other than the Controller Group which own shares or rights which represent 10% or more of the Company’s capital, as well as other legal persons who own less than 10% and that in the aggregate with his spouse and/or relatives reach this percentage, either directly or through legal entities.

The Company has intermediate controller entities which publicize Financial Statements that are publicly available.

9.3 Management Key Personnel

Management key personnel are those persons with authority and are responsible to plan, direct and control the Entity’s activities, either directly or indirectly, including any Board’s member (executive or not).

9.4 Senior Management Salaries

Managers and main executives are involved with an annual bonuses plan through participation on incomes and goals achievements. The global remuneration of the Company’s main executives is as follows:

Senior Management Remuneration	From January 1		From January 1		From January 1
	to December 31, 2014		to December 31, 2013		to December 31, 2012
	ThCh$		ThCh$		ThCh$
Short-term benefits to employees		18,893,055		15,767,883		12,915,446
Contract termination benefit		55,461		129,316		228,813
Total		18,948,516		15,897,199		13,144,259

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Viña Concha y Toro S.A. and Subsidiaries

9.5 Accounts receivable from related companies, current

				As of December 31,		As of December 31,
Related party ID of No.	Related party name	Nature of relationship	Type currency	2014 ThCh$		2014 ThCh$
96.512.200-1	Viñedos Emiliana S.A.	Common director	Chilean Peso		323,185		47,926
96.824.300-4	Viña Almaviva S.A.	Associate	Chilean Peso		32,563		130,128
96.512.190-0	Fruticola Viconto S.A.	Common director	Chilean Peso		2,202		2,137
Foreign	Excelsior Wine Company	Associate	US Dollar		9,563,182		6,136,724
90.950.000-1	Industria Corchera S.A.	Associate	Chilean Peso		—		39,021
78.335.990-1	Comercial Greenvic S.A.	Common director	Chilean Peso		16,348		40,493
	Total				9,937,480		6,396,429

9.6 Accounts payable to related companies, current

				As of December 31,		As of December 31,
Related party ID of No.	Related party name	Nature of relationship	Type currency	2014 ThCh$		2014 ThCh$
96.512.200-1	Viñedos Emiliana S.A.	Common director	Chilean Peso		1,712,285		1,020,352
90.950.000-1	Industria Corchera S.A.	Associate	Chilean Peso		1,997,753		2,069,200
79.592.130-3	Agrícola Las Petras Ltda.	Common manager	Chilean Peso		5,787		5,300
96.824.300-4	Viña Almaviva S.A.	Associate	Chilean Peso		4,273		31,085
99.562.040-5	Los Boldos de Tapihue S.A.	Common manager	Chilean Peso		—		3,052
76.088.641-6	Agricolas Las Pircas Ltda	Common manager	Chilean Peso		—		378
3.909.463-0	María Inés Cerda Fernández	Common manager	Chilean Peso		—		1,403
77.486.130-0	Soc. Ag. El Marco Dos Ltda.	Common manager	Chilean Peso		—		1,252
96.931.870-9	Viveros Guillaume Chile S.A.	Common director	Chilean Peso		117,914		75,148
77.486.290-0	Soc. Ag. Orrego Dos Ltda.	Common manager	Chilean Peso		270		1,551
99.527.300-4	Southern Brewing Company S. A.	Associate	Chilean Peso		172,251		129,945
78.968.020-5	Sociedad. Agricola. Santa María Ltda.	Common manager	Chilean Peso		550		—
Foreign	Digrans	Shareholder of subsidiary	Chilean Peso		1,179,095		—
78.335.990-1	Comercial Greenvic S.A.	Common director	Chilean Peso		1,537		1,458
5.084.186-3	José Eduardo Konar Silva	Common manager	Chilean Peso		1,090		—
85.630.300-4	ST Computación	Common manager	Chilean Peso		3,603		—
Total					5,196,408		3,340,124

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Viña Concha y Toro S.A. and Subsidiaries

9.7 Accounts payable to related companies, non-current.

Related party ID of No.	Related party name	Nature of relationship	Type currency	As of December 31, 2014 ThCh$		As of December 31, 2014 ThCh$
96.512.200-1	Viñedos Emiliana S.A.	Common director	Chilean Peso		732,466		898,543
Total					732,466		898,543

9.8 Detail of transactions with related parties, by entity.

Related party ID No.	Related party name	Nature of relationship	Nature of transaction	As of December 31, 2014 ThCh$		As of December 31, 2013 ThCh$
96.512.190-0	Fruticola Viconto S.A.	Common director	Sale of services and others		10,000		10,588
96.512.200-1	Viñedos Emiliana S.A.	Common director	Sale of raw materials and products		147,849		—
		Common director	Sales of services and others		495,817		422,367
		Common director	Purchase of raw materials and products		1,140,832		378,191
		Common director	Purchase of services and others		262,088		122,704
90.950.000-1	Industria Corchera S.A.	Associate	Sale of raw materials and products		—		1,840
		Associate	Purchase of raw materials		5,821,678		2,052,542
96.824.300-4	Viña Almaviva S.A.	Associate	Sale of raw materials and products		213,896		179,846
		Associate	Sales of services and others		27,635		56,569
		Associate	Purchase of raw materials and products		767,061		71,344
		Associate	Purchase of services and others		2,862		717
76.021.221-0	Agricola Gabriela Ltda.	Common director	Purchase of raw materials		283,363		570,824
		Common director	Purchase of services and others		—		—
90.310.000-1	Gasco GLP S.A.	Common director	Purchase of services and others		1,249,807		617,595
90.042.000-1	CGE Distribución S.A.	Common director	Purchase of services and others		1,735,945		1,083,365
85.201.700-7	Agrícola Alto Quitralmán Ltda	Common director	Sale of raw materials and products		529		24
		Common director	Sales of services and others		—		—
		Common director	Purchase of raw materials and products		843,388		506,837
70.017.820-K	Camara de Comercio de Stgo	Common director	Sale of raw materials and products		332		—
		Common director	Purchase of services and others		97		—
78.335.990-1	Comercial Greenvic S.A.	Common director	Sale of raw materials and products		7,722		38,697
		Common director	Sales of services and others		—		20,189
		Common director	Purchase of raw materials and products		—		—
		Common director	Purchase of services and others		66		—
86.673.700-2	Agrícola Los Alamos Ltda.	Common director	Purchase of raw materials and products		419,285		407,427
0-E	Excelsior Wine Company	Associate	Sale of raw materials and products		31,370,840		30,621,979
0-E	Digrans	Shareholder of subsidiary	Sale of raw materials and products		6,378,231		—
99.527.300-4	Southern Brewing Company	Associate	Purchase of raw materials and products		1,198,319		1,075,589
91.143.000-2	Cia.Nac.de Fuerza Electrica S.A	Common director	Sales of services and others		153,961		12,505

This note presents transactions with related parties and all other significant transactions with related parties, which total amounts are over 1% of the Company’s profit, as well as all those operations for purchase or sale of shares.

The amounts indicated as transactions in the enclosed chart, correspond to trade operations with related companies, which are performed under market conditions with respect to price involved and payment terms.

There are no allowances for doubtful accounts which are deducted from these receivables balances or guarantees related to these receivables.

Transactions and balances with Group’s subsidiaries companies are not presented.

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 10. INVENTORY

As of December 31, 2014 and 2013, inventory is detailed as follows:

	As of December 31,		As of December 31,
Classes of Inventories	2014		2013
	ThCh$		ThCh$
Wine in bulk and bottled		193,761,431		200,767,049
Semi-elaborated wine		5,221,063		4,544,441
Liquors		4,496,501		4,802,397
Material and supplies		11,331,973		10,671,573
Other products		3,525,162		2,909,481
Total inventories		218,336,130		223,694,941

Changes of estimates at net realizable value and obsolescence are as follows:

	As of December 31,			As of December 31,			As of December 31,
	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Beginning blance		(2,703,599	)		(2,450,743	)		(3,065,180	)
Estimate of net realizable value and obsolenscence		(3,981,814	)		(2,752,432	)		(1,510,380	)
Use of provision		3,649,114			2,499,576			2,124,817
Total		(3,036,299	)		(2,703,599	)		(2,450,743	)

From total cost of sale, the amounts corresponding to direct costs are as follows:

	As of December 31,		As of December 31,		As of December 31,
	2014		2013		2012
	ThCh$		ThCh$		ThCh$
Direct Cost		343,793,975		297,942,332		291,515,725

There is no inventory pledged as collateral for debt compliance.

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NOTE 11. INVESTMENTS AND INFORMATION ON INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES

11.1        Information to be disclosed on Investments in subsidiaries

I.             Investments in Chile

i.             On March 18, 2013, was formed Viña Cono Sur Orgánico SpA with a capital of $1,000,000, the only shareholder of this Company is Viña Cono Sur S.A.

II.            Investments Abroad

i.             Valuation of investments in Argentina

a.            The financial statements of the Argentinean companies Trivento Bodegas y Viñedos S.A., Finca Lunlunta S.A. and Finca Austral S.A., in which Viña Concha y Toro S.A. has indirect ownership of 100% are expressed in US$ Dollars, which is the Subsidiary’s functional currency.

b.            As on December 31, 2014, there are profits potentially remittable from subsidiaries in Argentina amounting to USD$9,653,171.41.

ii.            Valuation of investments in England

a.             The financial statements of the English company Concha y Toro UK Ltd., in which Concha y Toro S.A. own a direct ownership of 99% and indirect of 1%, are expressed in Pound Sterling, which is the functional currency of the subsidiary.

b.             As of December 31, 2014, there are gains potentially remittable from the subsidiary abroad amounting to GBP 10,763,013.54.

iii.           Valuation of investments in Brazil

The financial statements of the Company constituted in Brazil, VCT Brasil Importadora y Exportadora Ltda in which Viña Concha y Toro S.A. owns an indirect ownership of 100%, are expressed in Brazilian Real, which is the functional currency of the subsidiary.

As of December 31, 2014, there are gains potentially remittable from the affiliated abroad amounting to BRL$ 32,023,917.97 (Brazilian real)

On September 24, 2013 and according to the laws of the State of Sao Paulo, Brazil it was constituted the subsidiary VCT Wine Retail Participacoes Ltda. The Company’s capital amounts to BRL 3,140,000 (Brazilian Real) and Viña Concha y Toro S.A. has indirect ownership of 100%.

As of December 31, 2014, there are no gains potentially remittable from the subsidiary VCT Wine Retail Participacoes Ltda.

iv.           Valuation of Investments in Sweden, Finland and Norway

The financial statements of the companies constituted in Sweden, Finland and Norway, in which Viña Concha y Toro S.A. owns indirect ownership by 100%., are expressed in its local currencies, Swedish Crown, Euro and Norway Crown, respectively and represent its functional currencies in each subsidiary. At the same time, the Swedish subsidiary has 100% ownership of the subsidiary in Finland.

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On April 30, 2013, Concha y Toro Norway AS acquired 100 % of shares from Agardh 227 AS (company with no transactions and assets), domiciled in Oslo, Norway, amounting to NOK 30,000 (Norway Crowns). Thus, changing its name to VCT Norway AS. This subsidiary is intended to promote and distribute the products of Fetzer Vineyards in Norway.

c.             As of December 31, 2014, there are potentially remittable gains from these subsidiaries amounting to SEK 23,427,477.43 (Swedish crown) in Concha y Toro Sweden AB and subsidiary and NOK 6,174,154.85 (Norway Crowns) in Concha y Toro Norway AS and subsidiary.

v.           Valuation of investments in China

The financial statements of companies incorporated in China, where Viña Concha y Toro SA has direct and indirect interest of 100%, are expressed in Yuan, which is the functional currency of the subsidiaries.

Concha y Toro Shanghai Representative Office, subsidiary in which Viña Concha y Toro S.A has direct ownership of 100%, finished its operations in May 2010 and have no transactions since that date.

On June 17, 2014, in accordance with the legal requirements, has been cancelled the register in China of the subsidiary Concha y Toro Shanghai Representative Office

On January 8, 2013, was constituted Gan Lu Wine Tranding (Shanghai) Co., Ltd. With a capital of USD 210,000 (United States Dollars). The only shareholder of the latter is VCT Group of Wineries Asia Pte. Ltd.

As of December 31, 2014, there are gains potentially remittable from the subsidiary in China amounting to USD$62,056.

vi.           Valuation of investments in Singapore

The financial statements of the company incorporated in Singapore, where Viña Concha y Toro S.A. indirectly holds 100% interest, are expressed in U.S. dollars, which is the functional currency of the subsidiary.

During 2013, VCT Investments VCT International SpA, has made Capital contributions for an amount of USD 150,000 (U.S. Dollars).

At December 31, 2014, there are gains potentially remittable from the subsidiary in Singapore amounting to USD$553,737.43.

vii. Valuation of investments in the United States

a. The financial statements of companies incorporated in the United States, where Viña Concha y Toro S.A. indirectly holds 100% interest, are quoted in U.S. Dollars which is the functional currency of the subsidiaries.

b. At December 31, 2014, there are potentially remittable profits from subsidiaries in the U.S., amounting to 12,362,581.37 USD (U.S. Dollars).

c. On October 22, 2014 was constituted the Company Eagle Peak Estates. LLC, which is dedicated to the trading, fractioning of wine and alcoholic beverages and exports of wine and similar products in United States. As of December 31, 2014, the company present no transactions.

viii. Valuation of investments in Mexico

a. The financial statements of companies incorporated in Mexico, where Viña Concha y Toro S.A. indirectly holds 100% indirect interest (VCT Mexico S. de RL de CV) and indirect by 51% (VCT & DG Mexico SA de CV), are expressed in Mexican Pesos which is the functional currency of the subsidiaries.

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Viña Concha y Toro S.A. and Subsidiaries

b. During 2013, VCT Inversiones VCT Internacional SpA and Inversiones Concha y Toro SpA have made capital contributions to VCT Mexico S. de RL de CV for an overall amount of MXN$ 680,350.00 Thus, the new capital of VCT Mexico S. de RL de C.V. is valued at MXN$ 9,188,385.94 (Mexican Pesos)

c. At December 31, 2014, there are potentially remittable gains from subsidiaries in Mexico, amounting to MXN$28,456,922.52 (Mexican Pesos).

ix. Valuation of investments in Canada

a. The financial statements of the company incorporated in Canada, where Viña Concha y Toro S.A. indirectly holds 100% interest, are expressed in Canadian dollars, which is the functional currency of the subsidiary.

b. As of December 31, 2014, there are potentially remittable gains from the subsidiary in Canada, in the amount of CAD$ 178,665.40 (Canadian Dollars).

c. On December 5, 2014, Concha y Toro Canada Ltd together with Charton Hobbs Inc., a company constituted in accordance with the Canadian regulations, formed a joint venture in which participates with a 50% each in the constitution of Escalade Wines & Spirits Inc. with the objective to import, export, sale, manufacture and distribute alcoholic beverages. As of December 31, 2014, present no transactions.

x. Valuation of investments in South Africa

a. The financial statements of the company incorporated in South Africa, where Viña Concha y Toro S.A. indirectly holds 100% interest, are expressed in South African Rand, which is the functional currency of the subsidiary.

b. As of December 31, 2014, there are potentially remittable gains from the subsidiary in South Africa, in the amount of RND$1,346,251.91 (South African Rands).

xi. Valuation of investments in France

a. On June 17, 2013 was established the subsidiary Cono Sur France S.A.R.L., according to the laws of the Republic of France. Viña Concha y Toro S.A. indirectly owns 100% stake through its subsidiary Inversiones VCT International SpA, the Company’s capital amounts to EUR 20,000 (Euros).

b. As of December 31, 2014, there are potentially remittable gains from the subsidiary in France amounting to EUR52,899.

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Viña Concha y Toro S.A. and Subsidiaries

11.2 Summarized Financial Information of subsidiaries

The Total Summarized Financial Information of subsidiaries which consolidates at the closing date of the related years, before the elimination of intercompany transactions is presented as follows:

As of December 31, 2014
	County of	Functional				Assets						Liabilities								Income
Subsidiaries	incorporation	currency	Ownership %			Current		Non-current		Total		Current		Non-current		Total		Revenue		(losses) net
						ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Comercial Peumo Ltda.	Chile	Chilean peso		100	%		122,938,767		2,274,194		125,212,961		116,849,339		8,363,622		125,212,961		103,879,305		2,957,090
Viña Cono Sur S.A.	Chile	Chilean peso		100	%		72,044,772		45,907,982		117,952,754		82,497,247		35,455,507		117,952,754		66,729,386		10,979,532
Viña Cono Sur Orgánico SpA	Chile	Chilean peso		100	%		1,326,973		84,684		1,411,657		1,271,178		140,479		1,411,657		709,140		46,971
Transportes Viconto Ltda.	Chile	Chilean peso		100	%		658,751		349,345		1,008,096		209,507		798,589		1,008,096		822,352		51,206
Sociedad Exportadora y Comercial Viña Maipo SpA	Chile	Chilean peso		100	%		45,228,148		15,032,639		60,260,787		41,579,635		18,681,152		60,260,787		27,159,804		11,060,549
Sociedad Exportadora y Comercial Viña Canepa SpA	Chile	Chilean peso		100	%		3,497,684		143,986		3,641,670		3,039,118		602,552		3,641,670		2,221,871		724,792
Bodegas y Viñedos Quinta de Maipo SpA	Chile	Chilean peso		100	%		8,922,737		18,691,481		27,614,218		7,920,454		19,693,764		27,614,218		5,759,865		12,304,598
Inversiones Concha y Toro SpA	Chile	Chilean peso		100	%		14,750,560		91,592,502		106,343,062		60,588,756		45,754,306		106,343,062		—		14,741,036
Inversiones VCT Internacional SpA	Chile	Chilean peso		100	%		46,373,790		15,593,039		61,966,829		14,706,915		47,259,914		61,966,829		—		8,067,344
Viña Maycas del Limarí Ltda.	Chile	Chilean peso		100	%		1,692,779		3,298		1,696,077		840,867		855,210		1,696,077		527,665		385,687
Viñedos Los Robles SpA	Chile	Chilean peso		100	%		1,613,957		11,017		1,624,974		943,386		681,588		1,624,974		748,499		371,011
Gan Lu Wine Trading (Shanghai) Co., Ltd.	China	Yuan		100	%		201,451		65,911		267,362		141,772		125,590		267,362		935,629		39,257
VCT Group Of Wineries Asia Pte. Ltd.	Singapore	US dollar		100	%		1,862,694		325,978		2,188,672		1,077,253		1,111,419		2,188,672		2,795,215		415,349
Trivento Bodegas y Viñedos S.A. Consolidado	Argentina	US dollar		100	%		22,575,763		23,930,548		46,506,311		15,412,108		31,094,203		46,506,311		27,040,237		737,826
VCT Brasil Import. y Export. Ltda.	Brazil	Brazilian real		100	%		22,631,579		3,087,629		25,719,208		18,219,440		7,499,768		25,719,208		35,517,788		1,047,683
VCT Wine Retail Participacoes Ltda.	Brazil	Brazilian real		100	%		32,977		575,945		608,922		429		608,493		608,922		—		(70,881	)
Concha y Toro Norway AS	Norway	Norwegian krona		100	%		2,250,587		97,486		2,348,073		1,829,447		518,626		2,348,073		3,229,447		167,775
VCT Norway AS	Norway	Norwegian krona		100	%		1,341,630		351		1,341,981		1,246,239		95,742		1,341,981		1,926,818		100,690
Concha y Toro Sweden AB	Sweden	Swedish krona		100	%		7,612,474		444,825		8,057,299		6,212,001		1,845,298		8,057,299		17,437,884		818,678
Concha y Toro Finland OY	Finland	Euro		100	%		3,803,716		—		3,803,716		3,361,252		442,464		3,803,716		7,561,493		174,445
Concha y Toro UK Ltd.	England	Pound Sterling		100	%		50,127,868		248,542		50,376,410		40,176,456		10,199,954		50,376,410		116,063,813		2,877,719
VCT USA, Inc.	USA	US dollar		100	%		1,722,198		146,316,842		148,039,040		17,165,544		130,873,496		148,039,040		—		1,675,074
Fetzer Vineyards	USA	US dollar		100	%		72,672,014		87,820,946		160,492,960		13,280,279		147,212,681		160,492,960		63,681,614		1,562,906
VCT México, S. de R.L. de C.V.	Mexico	Mexican peso		100	%		98,669		1,465,515		1,564,184		14,098		1,550,086		1,564,184		—		120,991
VCT & DG México, S.A. de C.V.	Mexico	Mexican peso		51	%		9,785,333		286,201		10,071,534		7,220,217		2,851,317		10,071,534		14,810,864		1,223,616
Concha y Toro Canadá Ltd.	Canada	Canadian dollar		100	%		144,740		371		145,111		51,158		93,953		145,111		252,550		29,923
Concha y Toro Africa & Middle East Proprietary Ltd.	South Africa	South African rand		100	%		110,903		13,360		124,263		37,964		86,299		124,263		304,240		27,713
Cono Sur France S.A.R.L.	France	Euro		100	%		146,522		1,881		148,403		94,600		53,803		148,403		532,178		42,206

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Viña Concha y Toro S.A. and Subsidiaries

As of December 31, 2013
	County of	Functional				Assets						Liabilities									Income
Subsidiaries	incorporation	currency	Ownership %			Current		Non-current		Total		Current		Non-current			Total		Revenue		(losses) net
						ThCh$		ThCh$		ThCh$		ThCh$		ThCh$			ThCh$		ThCh$		ThCh$
Comercial Peumo Ltda.	Chile	Chilean peso		100	%		31,385,927		2,110,967		33,496,894		28,200,740		5,296,154			33,496,894		90,739,156		3,469,113
Viña Cono Sur S.A.	Chile	Chilean peso		100	%		20,037,420		45,750,438		65,787,858		39,928,953		25,858,905			65,787,858		59,926,418		7,644,518
Viña Cono Sur Orgánico SpA	Chile	Chilean peso		100	%		487,048		—		487,048		485,556		1,492			487,048		—		490
Transportes Viconto Ltda.	Chile	Chilean peso		100	%		607,486		284,605		892,091		146,201		745,890			892,091		663,737		24,160
Sociedad Exportadora y Comercial Viña Maipo SpA	Chile	Chilean peso		100	%		23,275,150		10,690,828		33,965,978		20,443,342		13,522,636			33,965,978		25,697,346		11,293,552
Sociedad Exportadora y Comercial Viña Canepa SpA	Chile	Chilean peso		100	%		1,367,302		132,517		1,499,819		1,124,745		375,074			1,499,819		1,262,297		434,454
Bodegas y Viñedos Quinta de Maipo SpA	Chile	Chilean peso		100	%		13,177,577		13,557,364		26,734,941		12,641,285		14,093,656			26,734,941		4,895,460		12,755,470
Inversiones Concha y Toro SpA	Chile	Chilean peso		100	%		35,189,224		71,719,037		106,908,261		75,328,781		31,579,480			106,908,261		—		14,972,100
Inversiones VCT Internacional SpA	Chile	Chilean peso		100	%		36,381,657		11,848,289		48,229,946		9,294,901		38,935,045			48,229,946		—		4,919,714
Viña Maycas del Limarí Ltda.	Chile	Chilean peso		100	%		817,533		5,006		822,539		353,176		469,363			822,539		259,024		239,830
Viñedos Los Robles SpA	Chile	Chilean peso		100	%		672,145		10,428		682,573		373,322		309,251			682,573		486,876		316,403
Concha y Toro Shangai SRO	China	Yuan		100	%		62,593		—		62,593		251,918		(189,325	)		62,593		—		—
Gan Lu Wine Trading (Shanghai) Co., Ltd.	China	Yuan		100	%		143,663		1,157		144,820		65,499		79,321			144,820		462,820		347
VCT Group Of Wineries Asia Pte. Ltd.	Singapore	US dollar		100	%		1,804,071		136,928		1,940,999		1,585,478		355,521			1,940,999		2,490,284		64,755
Trivento Bodegas y Viñedos S.A. Consolidado	Argentina	US dollar		100	%		19,768,022		22,432,862		42,200,884		13,606,635		28,594,249			42,200,884		27,616,314		1,927,215
VCT Brasil Import. y Export. Ltda.	Brazil	Brazilian real		100	%		22,988,144		1,108,481		24,096,625		13,001,199		11,095,426			24,096,625		25,169,569		616,810
VCT Wine Retail Participacoes Ltda.	Brazil	Brazilian real		100	%		2,227		—		2,227		—		2,227			2,227		—		—
Concha y Toro Norway AS	Norway	Norwegian krona		100	%		3,083,225		3,314		3,086,539		2,706,828		379,711			3,086,539		4,266,363		122,091
VCT Norway AS	Norway	Norwegian krona		100	%		2,593		—		2,593		—		2,593			2,593		—		—
Concha y Toro Sweden AB	Sweden	Swedish krona		100	%		7,008,353		289,283		7,297,636		6,188,356		1,109,280			7,297,636		14,083,683		152,277
Concha y Toro Finland OY	Finland	Euro		100	%		3,638,259		—		3,638,259		3,354,553		283,706			3,638,259		5,919,539		(65,285	)
Concha y Toro UK Ltd.	England	Pound Sterling		100	%		52,633,578		113,891		52,747,469		45,829,350		6,918,119			52,747,469		84,698,213		1,000,553
VCT USA, Inc.	USA	US dollar		100	%		1,750,581		126,285,727		128,036,308		9,081,150		118,955,158			128,036,308		—		58,531
Fetzer Vineyards	USA	US dollar		100	%		65,370,698		79,360,885		144,731,583		17,176,662		127,554,921			144,731,583		57,526,338		998,170
VCT Mexico, S. de R.L. de C.V.	Mexico	Mexican peso		100	%		174,797		938,406		1,113,203		9,750		1,103,453			1,113,203		—		407,974
VCT & DG Mexico, S.A. de C.V.	Mexico	Mexican peso		51	%		11,008,822		173,674		11,182,496		9,387,972		1,794,524			11,182,496		12,914,424		888,874
Concha y Toro Canada Ltd.	Canada	Canadian dollar		100	%		105,439		700		106,139		45,432		60,707			106,139		243,714		18,915
Concha y Toro Africa & Middle East Proprietary Ltd.	South Africa	South African rand		100	%		74,987		18,199		93,186		31,723		61,463			93,186		166,912		(9,073	)
Cono Sur France S.A.R.L.	France	Euro		100	%		14,486		—		14,486		—		14,486			14,486		—		—

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11.3 Information to be disclosed on investments in associates

A detail of main investments in associates under equity method is presented as follows:

The ownership of Viña Concha y Toro in its associates companies are as follows:

	As of December 31, 2014															As of December 31, 2013
											Income		Income													Income		Income
	Assets				Liabilities				Equity		ordinary		(losses) net			Assets				Liabilities				Equity		ordinary		(losses) net
Associates							Non-											Non-				Non-
	Current		Non-current		Current		current									Current		current		Current		current
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Viña Almaviva S.A.		7,306,315		14,494,500		952,649		724,949		20,123,217		7,217,530		2,292,426			5,028,950		14,352,792		827,224		649,841		17,904,677		5,739,748		2,013,323
Industria Corchera S.A.		11,002,571		4,685,774		6,628,583		110,822		8,948,940		13,454,455		378,829			10,066,065		3,242,135		4,481,665		104,893		8,721,642		11,066,843		195,249
Southern Brewing Company S.A (*****)		2,425,288		3,147,952		1,798,870		181,297		3,593,073		1,350,761		80,109			691,192		5,627,564		1,223,645		199,461		4,895,650		796,858		79,688
Inovacion Tecnológica Vitivinicola S.A.		92,881		—		65,010		—		27,871		—		—			92,881		—		65,010		—		27,871		212,588		—
Excelsior Wine Company		16,741,150		800,708		11,852,745		—		5,689,113		64,850,314		5,082,363			12,458,984		—		7,808,860		—		4,650,124		56,390,025		4,444,365
Alpha Cave		1,295,270		296,837		1,415,015		23,927		153,165		—		(113,169	)		—		—		—		—		—		—		—
VCT Japan Company		395,173		3,623		6,135		—		392,661		—		64,793			—		—		—		—		—		—		—
Total		39,258,648		23,429,394		22,719,007		1,040,995		38,928,040		86,873,060		7,785,351			28,338,072		23,222,491		14,406,404		954,195		36,199,964		74,206,062		6,732,625

		Investment amount				Share of gain (loss) for the year
Taxpayer ID	Company	As of December		As of December 31,		As of December 31,			As of December		Country of		Functional	Ownership
		31, 2014		2013		2014			31, 2013		incorporation		currency	percentage			Main activities of the company
		ThCh$		ThCh$		ThCh$			ThCh$
96.824.300-4	Viña Almaviva S.A. (*)		9,451,251		8,310,150		1,146,213			1,006,662		Chile	Peso Chileno		50.000	%	Production and trading of premium wine “chateau” which is mainly for exporta markets
90.950.000-1	Industria Corchera S.A. (**)		5,494,361		5,380,794		189,275			97,552		Chile	Peso Chileno		49.963	%	Manufacture, production, import, export and trading of corks caps and lids for de vineyard market in Chile and abroad
76.571.080-4	Innovacion Tecnológica Vitivinicola S.A. (***)		4,212		4,212		—			—		Chile	Peso Chileno		15.740	%	Research an experimental development
45-2968791	Excelsior Wine Company (****)		2,844,557		1,151,199		2,406,237			743,726		USA	USD		50.000	%	Import, Sale and Distribution of Wine and Liquors
76.240.720-5	Southern Brewing Company S.A (*****)		1,764,520		2,291,167		39,253			39,047		Chile	Peso Chileno		49.000	%	Corporate investment and movable capital annuitants in general
Foreign	Alpha Cave (******)		575,944		—		(18,987	)		—		Brasil	BRL		35.000	%	Retail trade of wine in Brazil
Foreign	VCT Japan Company		176,252		—		(17,104	)		—		Japón	JPY		41.000	%	Export and import of wine and distribution in general
	Total		20,311,097		17,137,522		3,744,887			1,886,987

There are no contingent liabilities associated with these investments.

(*) Investment in Almaviva SA It is presented rebated by 50% from unrealized profits generated in the sale transaction of a land in 2001 to Almaviva SA; as this is an unrealized gain for Concha y Toro SA The amount of the rebate reaches Th $ 642,190. The realization of this gain will be capitalized once the property is disposed of to a third party other than the group. In the participation is added an unrealized gain of Th$ 31,832 as of December 31, 2014 (Th $ (2,914) as of December 31, 2013).

(**) Includes goodwill equivalent to Th$ 1,023,201, Industria Corchera presented net, as indicated note 2.10.1. In the participation is added an unrealized gain of Th $ 6,419 as of December 31, 2014 (Th $ 20,906 as of December 31, 2013).

(***) It has been considered to have significant influence in this associated, because there is representation on the board of that company.

(****) The investment in Excelsior Wine Company represents 50% of its equity interest. However, it was agreed that since August 2011 VCT USA, Inc. will receive 20% of the results of each period ended until December 31, 2013. In the participation is added an unrealized gain of Th $ 291as of 31 December 2014 (Th $ 29,543) as of December 31, 2013).

(*****) On April 15, 2013,it was performed a capital increase to the associated Southern Brewing Company SA, increasing the direct participation of Viña Concha y Toro SA to 49%. In the Participation it is rebated an unrealized gain of Th $ 735 as of December 31, 2014 (Th$ 3,508 at December 31, 2013).

(******) The Investment in Alpha Cave represents 35% of its equity interest. In this is rebated the unrealized gain by Th$ 13,218 as of December 31, 2014. There is No unrealized gain as of December 31, 2013.

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Viña Concha y Toro S.A. and Subsidiaries

11.4 Goodwill for Investments in Associates:

Industria Corchera S.A.:

The Goodwill as of December 31, 2014:

- The figure presented corresponds to the investment of 49.963% of Industria Corchera SA which amounts to Th$ 1,023,201, showing no impairment

- This goodwill that was generated prior to the date of our transition to IFRS is maintained at the net value recognized to that date and is controlled in the same currency of the investment (Chilean pesos).

- The book value of goodwill is netted to its corresponding investments.

Alpha Cave Comercio de Vinhos S.A.

On September 30, 2013, Concha y Toro SA through its subsidiary VCT Wine Retail Participacoes Ltda., acquired a 35% stake in Alpha Cave Comercio de Vinhos SA, a company dedicated to retail wine in Brazil, through its brand name in Ville Du Ville.

The contribution paid for 35% of the shares of Alpha Trading Cave Vinhos SA, amounted to Th $ 597,306 ($ 2,621,834 BR Reals).

As of December 31, 2014 the Company has determined the fair value of the net assets where the initial investment value by 35% share on the shares of Alpha Trading Cave Vinhos SA M totaled $ 102,248 ($ 425,308 BR Reals).

The determined value of goodwill is netted with the investment, which amounts to M $ 495,238 ($ 2,169,526 BR Reals)

VCT Japan Company, Limited.

On June 17, 2014, Concha y Toro SA through its subsidiary VCT Group of Wineries Asia Pte Ltd, acquired 41% shares of VCT Japan Company Limited, which is engaged in the export and import of wines and retail business in general.

The amount paid for 41% of the shares of VCT Japan Company Limited was Th$ 204,212 ($ 36,900,000 yen).

To date the company is determining the fair value of the assets and liabilities of VCT Japan Company Limited, therefore, recognized goodwill is performed based on the equity at historical cost, which amounts to Th$ 14,732 ($ 2,011,774 yen).

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 12. GOODWILL

Goodwill for Investments in Subsidiaries:

Acquisition of Fetzer Vineyards, Inc.

On April 15, 2011 Concha y Toro S.A. through its subsidiary VCT USA, Inc. acquired 100% of ownership of Fetzer Vineyards, Inc., a winery located in California USA.

This acquisition is in line with the Company’s business strategy and we believe it is a very important event in the Company’s history. It is expected that this operation helps the Group to increase its global sales, as Fetzer is one of the 10 most important brands of USA in terms of sales volume. During the period elapsed from January 1 and December 31, 2014 Fetzer Vineyards, Inc. generated revenues of ThCh$63,681,614 and profits of ThCh$1,562,906 to the Company’s consolidated incomes.

The measured contribution as of April 15, 2011, of 100% of the shares of Fetzer Vineyards, amounted to Th$ 110,131,729 (USD 233,053,431) and the fair value of its net identifiable assets when purchased amounted to Th$ 89,582,287, resulting in an historical goodwill of Th$ 20,549,442

Goodwill

The value of the acquired goodwill is as follows:

Detail	As of December 31, 2014		As of December 31, 2013
	ThCh$		ThCh$
Historical cost of goodwill, Fetzer		20,549,442		20,549,442
Foreign currency translation difference		3,712,426		2,263,413
Total		24,261,868		22,812,855

Goodwill is mainly attributable to the skills and technical abilities of the workforce at Fetzer Vineyards, Inc., and to the synergies expected due to the integration of this Company with the business of Concha y Toro Group.

The Company and the seller agreed to perform this acquisition under Section 338(h) (10) (Legal Regulation of U.S.A) for tax purposes, which makes that this operation qualifies as an Asset purchase. Under this condition, the tax goodwill is deductible.

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NOTE 13. INTANGIBLE ASSETS OTHER THAN GOODWILL

13.1 Classes of Intangible Assets

Balances in the different classes of intangible assets are as follows:

	As of December 31,			As of December 31,
Description of classes of Intangible Assets	2014			2013
	ThCh$			ThCh$
Net Intangible asset		35,515,187			30,755,821
Net Intangible asset with finite life		6,197,853			4,992,254
Brands net		22,146,375			19,148,265
Water right, net		7,152,891			6,597,242
Easement right, net		18,068			18,060
Net identifiable intangible assets		35,515,187			30,755,821
Licenses, Registered Brands and other rights, net		32,773,210			29,016,868
IT Programs, net		2,741,977			1,738,953
Gross Intangible assets		46,006,501			40,204,460
Gross Intangible identifiable assets		46,006,501			40,204,460
Licenses, Registered Brands and other rights, gross		35,253,980			31,230,239
IT Programs, gross		10,752,521			8,974,221
Total, Accumulated amortization and value impairment on Intangible assets		(10,491,314	)		(9,448,639	)
Total, Accumulated amortization and value impairment on Intangible assets		(10,491,314	)		(9,448,639	)
Licenses, Registered Brands and other rights		(2,480,769	)		(2,213,371	)
IT Programs		(8,010,545	)		(7,235,268	)

As of December 31, 2014, the Company has no restrictions on intangible assets and does maintain acquisition commitments.

The book value of intangible with indefinite useful life was assigned to the cash generating unit (CGU) which corresponds to agricultural land, within the Wines segment. These intangible assets and the agricultural land have been tested for impairment, i.e. the CGU has been assessed and no impairment has been found after the tests. 

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Changes of intangible as of December 31, 2014 are detailed as follows:

	Licenses, Registered
	Brands an other						Identifiable
	Rights, Net			IT Programs Net			Intangible Assets Net
Changes in Identifiable Intangible Assets	ThCh$			ThCh$			ThCh$
Initial balance		29,016,868			1,738,953			30,755,821
Changes:
Additions		904,133			1,539,941			2,444,074
Conversion effect in foreign subsidiaries		3,181,623			238,199			3,419,822
Withdrawals		(62,016	)		161			(61,855	)
Amortization		(267,398	)		(775,277	)		(1,042,675	)
Total Changes		3,756,342			1,003,024			4,759,366
Final balance As of December 31, 2014		32,773,210			2,741,977			35,515,187

The amount due to amortization amounted to ThCh$ 1,042,675 and ThCh$981,449 as of December 31, 2014 and 2013, respectively, which is reflected in the statement of income included in item “depreciation and amortization”, within the line “administrative expenses” and “costs of sales” corresponding to the portion which forms part of the inventories cost.

Changes of intangibles as of December 31, 2013 are detailed as follows:

	Licenses, Registered
	Brands an other						Identifiable
	Rights, Net			IT Programs Net			Intangible Assets Net
Changes in Identifiable Intangible Assets	ThCh$			ThCh$			ThCh$
Initial balance		27,104,695			1,698,803			28,803,498
Changes:
Additions		499,338			687,142			1,186,480
Conversion effect in foreign subsidiaries		1,677,309			91,466			1,768,775
Withdrawals		(21,483	)		—			(21,483	)
Amortization		(242,991	)		(738,458	)		(981,449	)
Total Changes		1,912,173			40,150			1,952,323
Final balance As of December 31, 2013		29,016,868			1,738,953			30,755,821

Intangible assets with a definite useful life are amortized on a linear basis during its useful life, beginning at the moment when these are ready to be used. Those intangibles with indefinite useful lives are not amortized.

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NOTE 14. PROPERTY, PLANT AND EQUIPMENT

As of December 31, 2014, Viña Concha y Toro S.A. has opted for the early application of amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture, as indicated in Note 4.2 Accounting Changes.

The amounts reclassified from Biological Assets to Property, Plant and equipment as of December 31, 2014, 2013 and as of January 1, 2013 amounts to ThCh$74,214,301, ThCh$68,552,823 and ThCh$64,537,068, respectively.

14.1 Classes of Property, Plant and Equipment, by classes

Balances of this items are as follows:

	As of December 31,			As of December 31,
Description on classes of Property, plant and equipment	2014			2013
	ThCh$			ThCh$
Property, plant and equipment, Net		341,758,199			330,068,153
Construction in-progress, Net		3,780,455			6,227,023
Land, Net		111,340,537			109,644,681
Buildings, Net		38,483,223			35,585,099
Plant and equipment, Net		33,912,627			33,529,505
IT Equipment, Net		748,748			769,674
Fixed facilities and Accessories, Net		72,569,569			69,212,156
Vehicles, Net		1,409,025			1,345,407
Improvement of leased assets, Net		707,560			650,114
Other Property, plant and equipment, Net		4,592,154			4,551,671
Plant, Net		74,214,301			68,552,823
Property, plant and equipment, Gross		554,007,397			522,925,868
Construction in-progress, Gross		3,780,455			6,227,023
Land, Gross		111,340,537			109,644,681
Buildings, Gross		61,063,221			55,639,388
Plant and equipment, Gross		98,416,577			93,234,967
IT Equipment, Gross		4,082,705			4,066,063
Fixed facilities and Accessories, Gross		156,897,635			143,844,175
Vehicles, Gross		4,234,847			4,042,557
Improvement of leased assets, Gross		898,796			769,406
Other Property, plant and equipment, Gross		9,540,023			8,701,700
Plant, Gross		103,752,601			96,755,908
Accumulated depreciation of Property, plant and equipment, Total		(212,249,198	)		(192,857,715	)
		(22,579,998	)		(20,054,289	)
Accumulated depreciation, Buildings		(64,503,950	)		(59,705,462	)
Accumulated depreciation, Plant and equipment		(3,333,957	)		(3,296,389	)
Accumulated depreciation, IT Equipment		(84,328,066	)		(74,632,019	)
Accumulated depreciation, Fixed facilities and Accessories		(2,825,822	)		(2,697,150	)
Accumulated depreciation, Motorized vehicles		(191,236	)		(119,292	)
Accumulated depreciation on improvements of leased assets		(4,947,869	)		(4,150,029	)
Accumulated depreciation, Others		(29,538,300	)		(28,203,085	)

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Changes in Property, Plant and equipment as of December 31, 2014 and 2013 are as follows:

Reconciliation items of changes in Property, plant and equipment, by classes	Construction in progress			Land		Buildings, Net			Plant and Equipment, Net			IT Equipment, Net			Fixed facilities and accessories, Net			Motorized  vehicles, Net			Improvement of leased assets, Net			Other Property, plant and equipment, Net			Planting, Net			Property plant and equipment, Net
	ThCh$			ThCh$		ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$
Beginning balance As of January 1, 2014		6,227,023			109,644,681		35,585,099			33,529,505			769,674			69,212,156			1,345,407			650,114			4,551,671			68,552,823			330,068,153
Changes:
Additions		3,561,028			—		1,692,595			4,517,579			488,253			6,500,603			436,066			—			247,061			8,029,693			25,472,878
4% Fixed asset credit		—			—		—			(1,958	)		(2,007	)		(19,880	)		(302	)		—			—						(24,147	)
Sales of assets		—			—		—			(45,010	)		(1,200	)		(67,890	)		(5,342	)		—			—			—			(119,442	)
Reclassification of assets for work termination		(6,021,701	)		—		1,333,454			963,623			23,612			3,651,641			18,536			8,910			337,361			(315,436	)		—
Write-offs		(64,010	)		—		(6,676	)		(12,604	)		(5,515	)		(19,026	)		(710	)		—			(18,261	)		(250,125	)		(376,927	)
Depreciation expense		—			—		(2,190,677	)		(5,547,785	)		(397,074	)		(8,860,905	)		(383,350	)		(55,406	)		(838,647	)		(3,757,853	)		(22,031,697	)
Incrense (decrease) in foreign currency exchange		77,638			1,695,856		2,069,428			495,429			(126,995	)		2,172,870			(1,280	)		103,942			312,969			1,955,199			8,755,056
Other increaes (decreases)		477			—		—			13,848			—			—			—			—			—			—			14,325
Total changes		(2,446,568	)		1,695,856		2,898,124			383,122			(20,926	)		3,357,413			63,618			57,446			40,483			5,661,478			11,690,046
Final Balance as of December 31, 2014		3,780,455			111,340,537		38,483,223			33,912,627			748,748			72,569,569			1,409,025			707,560			4,592,154			74,214,301			341,758,199

* (Divestitures corresponds to sales)

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Reconciliation items of changes in Property, plant and equipment, by classes	Construction in progress			Land		Buildings, Net			Plant and Equipment, Net			IT Equipment, Net			Fixed facilities and accessories, Net			Motorized vehicles, Net			Improvement of leased assets, Net			Other Property, plant and equipment, Net			Planting, Net			Property plant and equipment, Net
	ThCh$			ThCh$		ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$			ThCh$
Beginning balance As of January 1, 2013		11,543,506			108,319,230		32,446,131			33,090,114			617,977			65,412,391			1,267,315			581,866			4,394,419			64,537,068			322,210,017
Changes:
Additions		4,887,077			—		376,886			3,361,009			450,123			8,318,967			501,254			—			469,017			6,947,531			25,311,864
4% Fixed asset credit		—			—		—			(17,777	)		(1,301	)		(18,972	)		—			—			(6,092	)		—			(44,142	)
Sales of assets		—			—		—			(59,653	)		—			(54,078	)		(30,219	)		—			(331	)		—			(144,281	)
Reclassification of assets for work termination		(8,118,952	)		403,610		3,835,008			596,413			68,163			3,214,313			—			—			1,445			—			—
Write-offs		(46,724	)		—		(10,578	)		(130,232	)		(2,009	)		(105,679	)		(12,118	)		—			(333	)		—			(307,673	)
Depreciation expense		—			—		(2,021,940	)		(6,320,884	)		(397,471	)		(8,118,644	)		(379,898	)		(44,452	)		(759,145	)		(3,555,973	)		(21,598,407	)
Incrense (decrease) in foreign currency exchange		(2,035,079	)		921,841		959,592			3,010,515			34,192			563,858			(927	)		112,700			452,691			1,025,317			5,044,700
Other increaes (decreases)		(2,805	)		—		—			—			—			—			—			—			—			(401,120	)		(403,925	)
Total changes		(5,316,483	)		1,325,451		3,138,968			439,391			151,697			3,799,765			78,092			68,248			157,252			4,015,755			7,858,136
Final Balance as of December 31, 2013		6,227,023			109,644,681		35,585,099			33,529,505			769,674			69,212,156			1,345,407			650,114			4,551,671			68,552,823			330,068,153

* (Divestitures corresponds to sales)

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14.2 Additional Information

a) Property, plant and equipment

There were no impairment indications on property, plant and equipment, other than those impairments already recognized and presented in these consolidated financial statements.

b) Commitments acquired and restrictions on acquisition of property, plant and equipment

As of December 31, 2014, commitments acquired due to acquisitions of property, plant and equipment amounted to ThCh$1,622,946 net.

The Company does not maintain restrictions on goods of property, plant and equipment, other than those reported in Note 33 Guarantees committed with third-parties.

c) Biological Assets pawned as guarantee

Grapevines of Viña Concha y Toro S.A. and subsidiaries, either in production or formation stage are not subject to any kind of restrictions, nor have been constituted as guarantees of financial liabilities.

d) Government Subsidizes

The company applies to government subsidizes related to the agricultural activity in conformity with Law 18.450 to foster watering and drain.

These subsidizes require certain conditions on its application. The company complies with these in order to obtain its benefits. Subsidizes are granted one time only and are assigned to a specific watering project. As of December 31, 2014, there are no government subsidizes received.

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14.3 Assets under financial lease

a) Financial lease

To date, there are no Property, Plant and Equipment under this condition

b) Obligations for contracts or financial leases

As of December 31, 2014 and December 31, 2013 there are no obligations due to contracts or financial leases.

14.4 Costs of capitalized interests.

The cost of capitalized interests is determined applying an average rate or weighted average of all financing costs incurred by the Company to final monthly balances of work in-progress and which comply with the requirements of IAS 23.

Rates and costs for capitalized interests are detailed as follows:

Viña Concha y Toro S.A.

	As of December 31,			As of December 31,
	2014			2013
Capitalization rate of capitalized interest, property, plant and equipment		4.16	%		3.71	%
Amounts of capitalized interest, property, plant and equipment (in ThCh$)		840,225			629,741
Total in ThCh$		840,225			629,741
Trivento Bodegas y Viñedos S. A.
		As of December 31,			As of December 31,
		2014			2013
Capitalization rate of capitalized interest, property, plant and equipment		18.69	%		11.17	%
Amount of capitalized interest, biological assets (in ThCh$)		138,284			94,271
Total in ThCh$		138,284			94,271

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14.5 Distribution of hectares as of December 31, 2014:

	Vineyards in production		Vineyards in development		Total planted vineyards		Land in turnover		Fruit trees		Total Agricultural Area
Chile
Limarí		740		256		996		257		—		1,253
Casablanca		363		50		413		11		—		424
Aconcagua		—		100		100		—		—		100
Leyda		130		—		130		—		—		130
Maipo		786		95		881		10		—		891
Cachapoal		1,052		379		1,431		163		—		1,594
Colchagua		1,684		428		2,112		93		—		2,205
Curicó		585		110		695		8		—		703
Maule		1,971		396		2,367		498		—		2,865
Total Chile		7,311		1,814		9,125		1,040		—		10,165
Argentina
Mendoza		1,057		86		1,143		67		—		1,210
Total Argentina		1,057		86		1,143		67		—		1,210
USA
Fetzer		433		36		469		1		3		473
Total USA		433		36		469		1		3		473
Total Holding		8,801		1,936		10,737		1,108		3		11,848

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Distribution of hectares as of December 31, 2013:

	Vineyards in production		Vineyards in development		Total planted vineyards		Land in turnover		Fruit trees		Total Agricultural Area
Chile
Limarí		728		333		1,061		192		—		1,253
Casablanca		365		51		416		10		—		426
Aconcagua		—		100		100		—		—		100
Leyda		130		—		130		—		—		130
Maipo		779		88		867		23		—		890
Cachapoal		1,055		360		1,415		163		10		1,588
Colchagua		1,628		439		2,067		143		—		2,210
Curicó		572		113		685		18		—		703
Maule		1,941		403		2,344		521		—		2,865
Total Chile		7,198		1,887		9,085		1,070		10		10,165
Argentina
Mendoza		1,061		93		1,154		56		—		1,210
Total Argentina		1,061		93		1,154		56		—		1,210
USA
Fetzer		429		35		464		—		3		467
Total USA		429		35		464		—		3		467
Total Holding		8,688		2,015		10,703		1,126		13		11,842

The total vineyards planted include certain long-term operating leases that the Company has in Valle de Casablanca, del Maipo and Colchagua.

Company’s land not usable for plantations such as hills, roads, etc., are not included in the total agricultural area.

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NOTE 15. BIOLOGICAL ASSETS

The Company present in current biological assets the agricultural product (grape) derived from plantations in-production which has as destination to be a supply for the wine-production process.

Regarding the agricultural product (grape) which is in growing stage up to vintage, the costs are accumulated up to the harvest time.

In accordance with IAS 41, and based on the Company’s results on the analysis and calculation it was concluded that the fair value of the grape in the harvest time approaches the carrying value and therefore the grapes in the point of harvest are measured at fair value less costs to sell, and then transferred to inventory.

15.1 Detail of groups of Current Biological Assets

Biological Assets maintained by Viña Concha y Toro S.A. and subsidiaries correspond to agricultural products – grapes.

- Reconciliation of changes in Biological Assets:

	Current			Non-current
Reconciliation of changes in Biological assets	ThCh$			ThCh$
Biological Assets, initial balance as January 1, 2014		14,821,587
Biological Assets, gross at beginning of the period		14,821,587
Biological Assets, accumulated amortization and impairment at beginning of the period		—
Net Biological Assets at beginning of the period		14,821,587
Increases other than those coming from business combinations, Biological Assets		28,825,947
Increases (decreases) for exchange difference (net), Biological Assets		355,633
Other increaces (decreases), Net		(6,995	)
Decreases due to harvests or pickup, Biological Assets		(27,679,070	)
Total Biological assets As of December 31, 2014		16,317,102
Biological Assets, gross As of December 31, 2014		16,317,102
Biological assets, Amortization and accumulated depreciation as of December 31, 2014		—

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Reconciliation of changes in Biological assets	Current			Non-current
	ThCh$			ThCh$
Biological Assets, initial balance as January 1, 2013		14,342,503
Biological Assets, gross at beginning of the period		14,342,503
Biological Assets, accumulated amortization and impairment at beginning of the period		—
Net Biological Assets at beginning of the period		14,342,503
Increases other than those coming from business combinations, Biological Assets		28,605,810
Increases (decreases) for exchange difference (net), Biological Assets		184,049
Other increaces (decreases), Net		(42,710	)
Decreases due to harvests or pickup, Biological Assets		(28,268,065	)
Total Biological assets As of December 31, 2013		14,821,587
Biological Assets, gross As of December 31, 2013		14,821,587
Biological assets, Amortization and accumulated depreciation as of December 31, 2013		—

As of December 31, 2014 and 2013, the company does not record impairments in biological assets.

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NOTE 16. OTHER NON-FINANCIAL ASSETS

As of December 31, 2014 and 2013, Other Non-financial assets are detailed as follows:

Non financial assets	As of December 31, 2014				As of December 31, 2013
	Current		Non-current		Current		Non-current
	ThCh$		ThCh$		ThCh$		ThCh$
Tax recoverable		11,602,188		—		9,246,151		627,778
Other Prepaid Expenses		2,772,863		1,565,278		2,732,461		1,295,435
Prepaid Insurance		2,501,938		—		1,241,681		—
Prepaid Advertising		421,691		—		364,604		—
Prepaid leases		731,881		1,027,890		788,858		1,199,390
Other		591,810		2,246,571		41,351		128,671
Total		18,622,371		4,839,739		14,415,106		3,251,274

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NOTE 17. FINANCIAL INSTRUMENTS

17.1 Category of Financial Instruments by nature

a) As of December 31, 2014, fair values, based on categories of financial instruments, compared against the current and non-current book value included in the consolidated statement of financial position are presented as follows:

As of December 31, 2014
			At amortized cost
			Book value		Fair value		At fair value Book value
Classification	Group	Type	ThCh$		ThCh$		ThCh$
Financial assets	Cash and cash equivalents	Balances in banks		15,467,450		15,467,450		—
		Short-term deposits		14,836,704		14,836,704		—
	Trade receivables and other accounts receivable	Trade receivables		155,179,838		155,179,838		—
Other financial assets	Accounts receivable from related companies	Current		9,937,480		9,937,480		—
		Non-current		—		—		—
	Financial assets available for sale	Current shares		—		—		2,920,628
		Non-current shares		—		—		—
	Financial assets at fair value with changes in results	Current derivatives		—		—		78,353
		Non-current derivatives		—		—		—
	Hedging assets	Current derivatives		—		—		4,054,521
		Non-current derivatives		—		—		8,630,985
Financial liabilities	Bank loans	Current		53,076,567		53,777,311		—
		Non-current		106,999,897		110,115,701		—
	Obligations with the public	Current		662,225		662,225		—
		Non-current		86,194,850		87,346,676		—
	Financial liabilities at fair value with changes in profit or loss	Current		—		—		127,326
		Non-current		—		—		—
	Hedging liabilities	Current		—		—		7,403,871
		Non-current		—		—		23,127,286
Other financial liabilities	Trade accounts and other accounts payable	Current trading creditors		61,896,066		61,896,066		—
		Other current accounts payable		21,336,242		21,336,242		—
		Other non-current accounts payable		—		—		—
	Accounts payable to related entities	Current		5,196,408		5,196,408		—
		Non-current		732,466		732,466		—

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b) As of December 31, 2013, fair values, based on categories of financial instruments, compared against the current and non-current book value included in the consolidated statement of financial position are presented as follows:

As of December 31, 2013
			At amortized cost
			Book value		Fair value		At fair value Book value
Classification	Group	Type	ThCh$		ThCh$		ThCh$
Financial assets	Cash and cash equivalent	Balances in banks		12,850,652		12,850,652
		Short-term deposits		—		—
	Trade receivables and other accounts receivable	Trade receivables		140,313,528		140,313,528
Other financial assets	Accounts receivable from related companies	Current		6,396,429		6,396,429
		Non-current		—		—
	Financial assets available for sale	Current shares		—		—		3,146,321
		Non-current shares		—		—
	Financial assets at fair value with changes in results	Current derivatives		—		—		1,757,147
		Non-current derivatives		—		—
	Hedging assets	Current derivatives		—		—		2,876,348
		Non-current derivatives		—		—		2,769,009
Other Financial liabilities	Bank loans	Current		61,412,866		61,628,457
		Non-current		107,321,365		112,141,425
	Obligations with the public	Current		3,204,334		3,247,822
		Non-current		66,500,802		66,852,040
	Financial liabilities at fair value with changes in profit or loss	Current		—		—		209,184
		Non-current		—		—		—
	Hedging liabilities	Current		—		—		3,192,148
		Non-current		—		—		11,447,878
Financial liabilities	Trade accounts and other accounts payable	Current trading creditors		56,063,675		56,063,675
		Other current accounts payable		15,504,834		15,504,834
		Other non-current accounts payable
	Accounts payable to related entities	Current		3,340,124		3,340,124
		Non-current		898,543		898,543

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17.2 Derivative Instruments

In conformity with the risk management policy, Viña Concha y Toro contracts exchange rate derivatives and interest rate derivatives, which are classified as follows:

- Fair Value Hedge

- Cash Flow Hedge

- Net Investment Hedges

- Non-hedge derivatives (Those derivatives which do not qualify under the hedging accounting)

a) Assets and Liabilities by hedging derivative instrument

The operations of financial derivatives qualified as hedge instruments were recognized in the Statement of Financial Position in Assets and Liabilities as per the following detail:

Assets and liabilities for hedging			As of December 31, 2014								As of December 31, 2014
derivative instruments	Instrument		Asset				Liability				Asset				Liability
			Current		Non-current		Current		Non-current		Current		Non-current		Current		Non-current
			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Type of interest hedging:				—		—		304,376		97,473		—		—		354,116		247,640
Cash flow hedging		Swap		—		—		304,376		97,473		—		—		354,116		247,640
Exchange rate hedging:				4,054,521		8,630,985		7,099,495		23,029,813		2,876,348		2,769,009		2,838,032		11,200,238
Cash flow hedging		Swap		91,496		2,303,389		618,792		—		379,897		608,670		340,027		59,822
Net investment hedging		Swap		—		—		—		6,653,053		—		—		47,300		2,644,764
Fair value hedging		Forward		872,726		—		719,042		—		307,508		—		1,699,758		—
Cash flow hedging		Forward		2,793,079		6,327,596		5,523,902		16,376,760		2,087,670		2,160,339		707,529		8,495,652
Net investment hedging		Forward		297,220		—		237,759		—		101,273		—		43,418		—
Total				4,054,521		8,630,985		7,403,871		23,127,286		2,876,348		2,769,009		3,192,148		11,447,878

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b) Assets and Liabilities for derivative instruments at fair value with changes in income (Non-hedging)

Derivative operations which are recognized at fair value with changes in income were recognized in the Statement of Financial Position in Assets and Liabilities as per the following detail:

Assets and liabilities for hedging			As of December 31, 2014								As of December 31, 2014
derivative instruments	Instrument		Asset				Liability				Asset				Liability
			Current		Non-current		Current		Non-current		Current		Non-current		Current		Non-current
			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Non-hedging derivative instruments				78,353		—		127,326		—		1,757,147		—		209,184		—
Derivative instruments		Forward		78,353		—		127,326		—		1,757,147		—		209,184		—
Total				78,353		—		127,326		—		1,757,147		—		209,184		—

c) Other information on instruments

A detail of financial derivatives contracted as of December 31, 2014 and 2013, its fair value and its breakdown by maturity on contractual values is detailed as follows:

			As of December 31, 2014
						Contractual values
Detail by maturity	Instrument		Fair value			Year 2015		Year 2016		Year 2017		Subsequent		Total
			ThCh$			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Type of interest hedging:				(401,848	)		5,198,588		5,085,342		4,968,662		2,440,936		17,693,528
Cash flow hedging		Swap		(401,848	)		5,198,588		5,085,342		4,968,662		2,440,936		17,693,528
Exchange rate hedging:				(17,443,803	)		181,693,499		76,548,966		150,821,634		155,321,930		564,386,029
Cash flow hedging		Swap		1,776,093			1,988,578		6,520,950		6,391,448		31,765,770		46,666,746
Net investment hedging		Swap		(6,653,053	)		—		5,279,469		5,153,359		5,028,278		15,461,106
Fair value hedging		Forward		153,684			80,880,411		—		—		—		80,880,411
Cash flow hedging		Forward		(12,779,987	)		64,672,290		64,748,547		139,276,827		118,527,882		387,225,546
Net investment hedging		Forward		59,460			34,152,220		—		—		—		34,152,220
Non-hedging derivatives				(48,973	)		4,316,321		—		—		—		4,316,321
Non-hedging derivatives				(48,973	)		4,316,321		—		—		—		4,316,321
Total				(17,894,624	)		191,208,408		81,634,308		155,790,296		157,762,866		586,395,878

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Viña Concha y Toro S.A. and Subsidiaries

			As of December 31, 2013
						Contractual values
Detail by maturity	Instrument		Fair value			Year 2015		Year 2016		Year 2017		Subsequent		Total
			ThCh$			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Type of interest hedging:				(601,756	)		4,594,244		4,494,819		4,396,904		6,406,507		19,892,474
Cash flow hedging		Swap		(601,756	)		4,594,244		4,494,819		4,396,904		6,406,507		19,892,474
Exchange rate hedging:				(8,392,913	)		223,385,382		97,719,608		76,345,529		169,257,269		566,707,788
Cash flow hedging		Swap		588,718			44,790,317		1,808,648		5,217,012		8,106,853		59,922,830
Net investment hedging		Swap		(2,692,064	)		472,861		—		4,255,623		8,106,853		12,835,337
Fair value hedging		Forward		(1,392,250	)		84,015,521		—		—		—		84,015,521
Cash flow hedging		Forward		(4,955,173	)		82,287,236		95,910,960		66,872,894		153,043,563		398,114,653
Net investment hedging		Forward		57,856			11,819,447		—		—		—		11,819,447
Non-hedging derivatives				1,547,962			43,237,049		—		—		—		43,237,049
Non-hedging derivatives				1,547,962			43,237,049		—		—		—		43,237,049
Total				(7,446,707	)		271,216,675		102,214,427		80,742,433		175,663,776		629,837,311

d) Cash flow transfer

A detail on cash flows transfers as of December 31, 2014 and as of December 31, 2013 is detailed as follows:

	Movements between December 31, 2013 and									Movements between December 31, 2012 and
Cash flow hedges	December 31, 2014									December 31, 2013
	Forward in ThCh$			Swap in ThCh$			Total in ThCh$			Forward in ThCh$			Swap in ThCh$			Total in ThCh$
Opening balance		(4,955,173	)		(13,038	)		(4,968,211	)		15,223,793			(2,780,198	)		12,443,595
Bargain purchase gain / goodwill in contracts, opening balance		(6,515,225	)		1,134,828			(5,380,397	)		(4,807,206	)		293,396			(4,513,810	)
Valuation of new contracts		896,120			374,068			1,270,188			(7,599,754	)		769,332			(6,830,422	)
Transfer to profit or loss during the period		(2,205,709	)		(121,613	)		(2,327,322	)		(7,772,006	)		1,704,432			(6,067,574	)
Final balance		(12,779,987	)		1,374,245			(11,405,742	)		(4,955,173	)		(13,038	)		(4,968,211	)

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17.3 Fair value hierarchy

The structure to obtain the fair value of financial instruments recognized at fair value in the statement of financial position. (Note 2.6.10) is detailed as follows:

As of December 31, 2014
			Level 1		Level 2		Level 3
Financial instruments measured at fair value	ThCh$		ThCh$		ThCh$		ThCh$
Financial Asset
Fair value hedging derivatives		872,726		—		872,726		—
Cash flow hedging derivative		11,515,560		—		11,515,560		—
Net investment hedging derivative		297,220		—		297,220		—
Derivatives not designed accountable as hedging		78,353		—		78,353		—
Financial assets available for sale		2,920,628		2,741,079		—		179,549
Total Financial Asset		15,684,487		2,741,079		12,763,859		179,549
Financial Liabilities
Fair value hedging derivatives		719,042		—		719,042		—
Cash flow hedging derivative		22,921,303		—		22,921,303		—
Net investment hedging derivative		6,890,812		—		6,890,812		—
Derivatives not designed accountable as hedging		127,326		—		127,326		—
Total Financial Liabilities		30,658,483		—		30,658,483		—

As of December 31, 2013
			Level 1		Level 2		Level 3
Financial instruments measured at fair value	ThCh$		ThCh$		ThCh$		ThCh$
Financial Asset
Fair value hedging derivatives		307,508		—		307,508		—
Cash flow hedging derivative		5,236,576		—		5,236,576		—
Net investment hedging derivative		101,273		—		101,273		—
Derivatives not designed accountable as hedging		1,757,147		—		1,757,147		—
Financial assets available for sale		3,146,321		2,966,772		—		179,549
Total Financial Asset		10,548,825		2,966,772		7,402,504		179,549
Financial Liabilities
Fair value hedging derivatives		1,699,758		—		1,699,758		—
Cash flow hedging derivative		10,204,786		—		10,204,787		—
Net investment hedging derivative		2,735,482		—		2,735,481		—
Derivatives not designed accountable as hedging		209,184		—		209,184		—
Total Financial Liabilities		14,849,210		—		14,849,210		—

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NOTE 18. OTHER FINANCIAL LIABILITIES

As of December 31, 2014 and 2013, Other financial liabilities are detailed as follows:

	Current				Non-current
	As of December 31,		As of December 31,		As of December 31,		As of December 31,
	2014		2013		2014		2013
Non-guaranteed	ThCh$		ThCh$		ThCh$		ThCh$
Loans from financial entities		53,076,567		61,412,866		106,999,897		107,321,365
Obligations with the public		662,225		3,204,334		86,194,850		66,500,802
Hedging derivatives		7,403,871		3,112,393		23,127,286		11,447,878
Non-hedging derivatives		127,326		288,939		—		—
Total		61,269,989		68,018,532		216,322,033		185,270,045

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Viña Concha y Toro S.A. and Subsidiaries

a) Loans from financial entities (non-derivatives), current as of December 31, 2014.

		Country of			Country	Type of								Maturities
Debtor entity		the debtor	ID No. of		of creditor	currency or	Type of	Effective			Legal					More than 90
ID No.	Debtor entity	entity	creditor entity	Name of creditor entity	company	adjustment unit	amortization	rate			rate			Up to 90 days		days to 1 year		Total
														ThCh$		ThCh$		ThCh$
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.004.000-5	Banco de Chile	Chile	US Dollar	Upon maturity		1.47	%		1.47	%		2,432,187		2,427,000		4,859,187
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.018.000-1	Scotiabank	Chile	US Dollar	Upon maturity		2.74	%		2.56	%		82,842		-		82,842
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.030.000-7	Banco del Estado de Chile	Chile	US Dollar	Upon maturity		3.09	%		3.09	%		23,286		9,708,000		9,731,286
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.030.000-7	Banco del Estado de Chile	Chile	UF	Upon maturity		4.20	%		2.77	%		8,713		2,462,710		2,471,423
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.030.000-7	Banco del Estado de Chile	Chile	Chilean Peso	Upon maturity		5.61	%		3.02	%		2,202,677		2,079,750		4,282,427
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.949.000-3	Banco Rabobank Chile	Chile	US Dollar	Upon maturity		2.63	%		2.97	%		75,262		-		75,262
Foreign	VCT Brasil Imp. Y Export. Ltda.	Brazil	Foreign	Banco Citibank S.A	Brazil	Brazilean Real	Upon maturity		13.57	%		13.57	%		738,636		5,706,750		6,445,386
Foreign	VCT USA, Inc.	USA	Foreign	Banco del Estado New York Branch	EE.UU.	US Dollar	Upon maturity		2.25	%		5.05	%		—		7,097,332		7,097,332
Foreign	VCT USA, Inc.	USA	97.949.000-3	Banco Rabobank Chile	EE.UU.	US Dollar	Upon maturity		2.98	%		2.98	%		—		9,476,007		9,476,007
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco BBVA Chile	Argentina	US Dollar	Upon maturity		3.60	%		3.60	%		—		1,651,455		1,651,455
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco BBVA Chile	Argentina	Argentinean Peso	Upon maturity		3.60	%		3.60	%		—		826		826
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Credicoop	Argentina	Argentinean Peso	Upon maturity		28.00	%		28.00	%		504,317		—		504,317
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Francés	Argentina	Argentinean Peso	Upon maturity		20.94	%		20.94	%		725,463		277,861		1,003,324
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Macro	Argentina	Argentinean Peso	Upon maturity		20.25	%		20.25	%		608,200		81,093		689,293
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Nación	Argentina	Argentinean Peso	Upon maturity		21.00	%		21.00	%		515,050		1,919,840		2,434,890
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Fondo TyC	Argentina	Argentinean Peso	Upon maturity		9.43	%		9.43	%		—		78,371		78,371
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Santander	Argentina	Argentinean Peso	Upon maturity		15.25	%		15.25	%		40,804		118,261		159,065
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Supervielle	Argentina	Argentinean Peso	Upon maturity		32.50	%		32.50	%		63,253		47,451		110,704
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Santander Rio	Argentina	Argentinean Peso	Upon maturity		19.00	%		19.00	%		45		—		45
Foreign	VCT & DG México S.A.	Mexico	Foreign	Banco Banamex	México	Mexican Peso	Upon maturity		5.19	%		5.19	%		1,923,125		—		1,923,125
				Balances to date											9,943,860		43,132,707		53,076,567

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b) Loans from financial entities (non-derivatives), non-current as of December 31, 2014.

																Maturities
		Country														More than 1		More than 2		More than 3		More than 4
Debtor		of the		ID No. of		Country		Type of currency or	Type of	Effective			Legal			year to 2		years to 3		years to 4		years to 5		More than
entity ID No.	Debtor entity	debtor		creditor entity	Name of creditor entity	of creditor		adjustment unit	amortization	rate			rate			years		years		years		years		5 years		Total
		entity				company										ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.004.000-5	Banco de Chile		Chile	US Dollar	Upon maturity		1.47	%		1.47	%		4,854,000		4,854,000		2,427,000		—		—		12,135,000
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.018.000-1	Scotiabank		Chile	US Dollar	Upon maturity		2.74	%		2.56	%		—		12,135,000		—		—		—		12,135,000
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.030.000-7	Banco del Estado de Chile		Chile	UF	Upon maturity		4.20	%		3.98	%		2,462,710		—		—		—		—		2,462,710
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.030.000-7	Banco del Estado de Chile		Chile	Chilean Peso	Upon maturity		5.61	%		5.28	%		2,773,000		1,386,500		693,250		—		—		4,852,750
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.949.000-3	Banco Rabobank Chile		Chile	US Dollar	Upon maturity		2.63	%		2.39	%		9,101,250		9,101,250		—		—		—		18,202,500
0-E	VCT USA, Inc.		USA	Foreign	Banco del Estado New York Branch		USA	US Dollar	Upon maturity		2.25	%		2.25	%		14,157,500		—		—		—		—		14,157,500
0-E	VCT USA, Inc.		USA	97.949.000-3	Banco Rabobank Chile		USA	US Dollar	Upon maturity		2.98	%		2.98	%		9,101,250		18,202,500		15,168,750		—		—		42,472,500
0-E	Trivento B. y Viñedos S. A.		Argentina	Foreign	Fondo TyC		Argentina	Argentinean Peso	Upon maturity		9.43	%		9.43	%		38,500		—		—		—		—		38,500
0-E	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco Francés		Argentina	Argentinean Peso	Upon maturity		21.38	%		21.38	%		227,061		115,896		—		—		—		342,957
0-E	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco Santander		Argentina	Argentinean Peso	Upon maturity		15.25	%		15.25	%		78,840		—		—		—		—		78,840
0-E	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco Macro		Argentina	Argentinean Peso	Upon maturity		15.25	%		15.25	%		81,093		40,547		—		—		—		121,640
					Balances to date												42,875,204		45,835,693		18,289,000		—		—		106,999,897

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c) Loans from financial entities (non-derivatives), current as of December 31, 2013.

															Maturities
		Country of			Country of
Debtor entity		the debtor	ID No. of		creditor		Type of currency or	Type of	Effective			Legal					Up to 90 days
ID No.	Debtor entity	entity	creditor entity	Name of creditor entity	company		adjustment unit	amortization	rate			rate			Up to 90 days		to 1 year		Total
															ThCh$		ThCh$		ThCh$
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.004.000-5	Banco de Chile		Chile	US Dollar	Upon maturity		1.46	%		1.46	%		2,104,170		2,098,440		4,202,610
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.018.000-1	Banco Scotiabank Chile		Chile	US Dollar	Upon maturity		1.59	%		1.45	%		3,154		4,764,926		4,768,080
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.030.000-7	Banco del Estado de Chile		Chile	US Dollar	Upon maturity		3.16	%		3.08	%		88,931		10,492,200		10,581,131
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.030.000-7	Banco del Estado de Chile		Chile	UF	Upon maturity		4.20	%		3.98	%		11,597		1,165,478		1,177,075
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.030.000-7	Banco del Estado de Chile		Chile	Pound Sterling	Upon maturity		1.49	%		1.49	%		20,498		2,859,153		2,879,651
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.039.000-6	Banco Santander Chile		Chile	US Dollar	Upon maturity		3.43	%		3.17	%		81,303		10,492,200		10,573,503
90.227.000-0	Viña Concha y Toro S.A.	Chile	97.949.000-3	Banco Rabobank Chile		Chile	US Dollar	Upon maturity		2.63	%		2.29	%		67,076		—		67,076
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco BBVA Chile		Chile	US Dollar	Upon maturity		3.60	%		3.60	%		—		571		571
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Credicoop		Argentina	Argentinean Peso	Upon maturity		23.17	%		23.17	%		87,542		884,942		972,484
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Francés		Argentina	Argentinean Peso	Upon maturity		19.94	%		19.94	%		31,737		182,352		214,089
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Itaú		Chile	US Dollar	Upon maturity		2.05	%		2.05	%		—		794,622		794,622
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Macro		Argentina	Argentinean Peso	Upon maturity		19.25	%		19.25	%		1,859		91,942		93,801
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Nación		Argentina	Argentinean Peso	Upon maturity		17.59	%		17.59	%		400,516		3,952,215		4,352,731
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Supervielle		Argentina	Argentinean Peso	Upon maturity		18.00	%		18.00	%		93,234		61,402		154,636
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Fondo TyC		Argentina	Argentinean Peso	Upon maturity		9.43	%		9.43	%		—		89,893		89,893
Foreign	Trivento B. y Viñedos S. A.	Argentina	Foreign	Banco Santander		Argentina	Argentinean Peso	Upon maturity		15.25	%		15.25	%		2,185		134,082		136,267
Foreign	VCT Brasil Imp. Y Export. Ltda.	Brazil	97.008.000-7	Banco Citibank		Brazil	Brazilean Real	Upon maturity		12.99	%		12.99	%		15,214		1,113,550		1,128,764
Foreign	VCT Brasil Imp. Y Export. Ltda.	Brazil	76.645.030-K	Banco Itaú		Chile	US Dollar	Upon maturity		3.05	%		3.05	%		87,496		2,607,934		2,695,430
Foreign	VCT USA, Inc.	EE.UU.	Foreign	Banco del Estado New York Branch		USA	US Dollar	Upon maturity		2.25	%		2.25	%		16,066		—		16,066
Foreign	VCT USA, Inc.	EE.UU.	97.949.000-3	Banco Rabobank Chile		Chile	US Dollar	Upon maturity		3.81	%		3.81	%		382,515		7,869,150		8,251,665
Foreign	Fetzer Vineyards, Inc.	EE.UU.	Foreign	Banco del Estado New York Branch		USA	US Dollar	Upon maturity		1.08	%		1.08	%		1,850,075		3,672,270		5,522,345
Foreign	VCT & DG México S.A.	Mexico	Foreign	Banco Banamex		Mexico	Mexican Peso	Upon maturity		5.69	%		5.69	%		2,740,376		—		2,740,376
				Saldos a la fecha												8,085,544		53,327,322		61,412,866

F-87

Viña Concha y Toro S.A. and Subsidiaries

d) Loans from financial entities (non-derivatives), non-current as of December 31, 2013.

		Country														Maturities
		of the				Country of										More than 1		More than 2		More than 3		More than 4
Debtor entity		debtor		ID No. of		creditor		Type of currency or	Type of	Effective			Legal			year to 2		years to 3		years to 4		years to 5		More than 5
ID No.	Debtor entity	entity		creditor entity	Name of creditor entity	company		adjustment unit	amortization	rate			rate			years		years		years		years		years		Total
																ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.004.000-5	Banco de Chile		Chile	US Dollar	Upon maturity		1.46	%		1.46	%		4,196,880		4,196,880		4,196,880		2,098,440		—		14,689,080
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.018.000-1	Banco Scotiabank Chile		Chile	US Dollar	Upon maturity		2.23	%		2.05	%		898,972		898,971		—		—		—		1,797,943
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.030.000-7	Banco del Estado de Chile		Chile	US Dollar	Upon maturity		3.09	%		3.09	%		8,393,760		—		—		—		—		8,393,760
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.030.000-7	Banco del Estado de Chile		Chile	UF	Upon maturity		4.20	%		3.98	%		2,330,956		2,330,956		—		—		—		4,661,912
90.227.000-0	Viña Concha y Toro S.A.		Chile	97.949.000-3	Banco Rabobank Chile		Chile	US Dollar	Upon maturity		2.63	%		2.29	%		—		7,869,150		7,869,150		—		—		15,738,300
Foreign	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco BBVA Chile		Argentina	US Dollar	Upon maturity		3.60	%		3.60	%		1,427,887		—		—		—		—		1,427,887
Foreign	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco Francés		Argentina	Argentinean Peso	Upon maturity		15.13	%		15.13	%		182,352		126,037		—		—		—		308,389
Foreign	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco Macro		Argentina	Argentinean Peso	Upon maturity		15.25	%		15.25	%		91,942		91,942		45,973		—		—		229,857
Foreign	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco Nación		Argentina	Argentinean Peso	Upon maturity		15.00	%		15.00	%		6,112		—		—		—		—		6,112
Foreign	Trivento B. y Viñedos S. A.		Argentina	Foreign	Fondo TyC		Argentina	Argentinean Peso	Upon maturity		9.43	%		9.43	%		87,301		43,650		—		—		—		130,951
Foreign	Trivento B. y Viñedos S. A.		Argentina	Foreign	Banco Santander		Argentina	Argentinean Peso	Upon maturity		15.25	%		15.25	%		178,776		89,388		—		—		—		268,164
Foreign	VCT Brasil Imp. Y Export. Ltda.		Brasil	76.645.030-K	Banco Itaú		Brazil	Brazilean Real	Upon maturity		12.27	%		12.27	%		4,584,960		—		—		—		—		4,584,960
Foreign	VCT USA, Inc.		USA	Foreign	Banco del Estado New York		EE.UU.	US Dollar	Upon maturity		2.25	%		2.25	%		—		18,361,350		—		—		—		18,361,350
Foreign	VCT USA, Inc.		USA	97.949.000-3	Banco Rabobank Chile		Chile	US Dollar	Upon maturity		3.81	%		3.81	%		7,869,150		7,869,150		7,869,150		13,115,250		—		36,722,700
					Saldos a la fecha												30,249,048		41,877,474		19,981,153		15,213,690		—		107,321,365

F-88

Viña Concha y Toro S.A. and Subsidiaries

NOTE 19. PROMISSORY NOTES AND BONDS PAYABLE

On September 11, 2014 the Company performed a bond issuance for a total of UF 2,000,000 corresponding to the J and K series issued by the Viña Concha y Toro SA with charge to the line of bonds registered in the Securities Register of the SVS under number 575 dated March 23, 2009.

These placement was performed in accordance with the following detail:

- UF 1,000,000 placed with charge to J Series, at a term of 6 years amortizable on a semi-annual basis with three-year grace period. The placement effective rate is UF + 2.18% and,

- UF 1.000.000 placed with charge to K Series, at a term of 24 years amortizable on a semi-annual basis, with ten-year grace period. The placement effective rate is UF + 3.49%.

Public obligations are detailed as follows:

a) Obligations for Current Bonuses as of December 31, 2014

Country

Type of

Maturities

of the

Country of

currency or

Debtor entity

debtor

ID No. of

Name of placement

creditor

adjustment

Type of

Effective

Nominal

Up to 90 days

ID No.

Debtor entity

entity

creditor entity

entity

company

unit

amortization

rate

ratel

Up to 90 days

to 1 year

Total

ThCh$

ThCh$

ThCh$

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

3.78

%

3.50

%

194,663

—

194,663

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

2.18

%

2.50

%

201,836

—

201,836

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

3.49

%

3.30

%

265,726

—

265,726

Total

662,225

—

662,225

b) Obligations for Non-Current Bonuses as of December 31, 2014

Country

Type of

Maturities

of the

ID No. of

Country of

currency or

Type of

Effective

Legal

More than 1

More than 2

More than 3

More than 4

Debtor entity

debtor

creditor entity

creditor

adjustment

amortization

rate

rate

year to 2

years to 3

years to 4

years to 5

More than 5

ID No.

Debtor entity

entity

Name of creditor entity

company

unit

years

years

years

years

years

Total

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

3.78

%

3.50

%

12,313,545

12,313,545

12,313,560

—

—

36,940,650

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

2.18

%

2.50

%

—

—

8,209,030

8,209,030

8,209,040

24,627,100

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

3.49

%

3.30

%

—

—

—

—

24,627,100

24,627,100

Total

12,313,545

12,313,545

20,522,590

8,209,030

32,836,140

86,194,850

F-89

Viña Concha y Toro S.A. and Subsidiaries

c) Obligations for Current Bonuses as of December 31, 2013

Country

Type of

Marturities

of the

Country of

currency or

Debtor entity

debtor

ID No. of

creditor

adjustment

Type of

Effective

Legal

Up to 90 days

ID No.

Debtor entity

entity

creditor entity

Name of creditor entity

company

unit

amortization

rate

rate

Up to 90 days

to 1 year

Total

ThCh$

ThCh$

ThCh$

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.036.000-K

Banco Santander Chile

Chile

U.F.

Upon maturity

4.09

%

3.90

%

277,784

2,742,301

3,020,085

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

3.78

%

3.50

%

184,249

—

184,249

Total

462,033

2,742,301

3,204,334

d) Obligations for Non-Current Bonuses as of December 31, 2013

Country

Type of

Marturities

of the

Country of

currency or

More than 1

More than 2

More than 3

More than 4

Debtor entity

debtor

ID No. of

creditor

adjustment

Type of

Effective

Legal

year to 2

years to 3

years to 4

years to 5

More than 5

ID No.

Debtor entity

entity

creditor entity

Name of creditor entity

company

unit

amortization

rate

rate

years

years

years

years

years

Total

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

ThCh$

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.036.000-K

Banco Santander Chile

Chile

U.F.

Upon maturity

4.09

%

3.90

%

2,742,301

2,742,301

2,742,301

2,742,300

20,567,259

31,536,462

90.227.000-0

Viña Concha y Toro S.A.

Chile

97.004.000-5

Banco de Chile

Chile

U.F.

Upon maturity

3.78

%

3.50

%

—

11,654,775

11,654,775

11,654,790

—

34,964,340

Total

2,742,301

14,397,076

14,397,076

14,397,090

20,567,259

66,500,802

Obligations with the public correspond to the placement in Chile of Bonuses in UF. These are presented valued at the principal value plus accrued interests at year-end.

F-90

Viña Concha y Toro S.A. and Subsidiaries

e) Issuance Expenses and Placement of equity and debt securities

Issuance expenses net of amortization as of December 31, 2014, and December 31, 2013 amounts to ThCh$818,113 and ThCh$671,479, respectively. In addition, are included as issuance expenses all disbursements due to reports of Risk Rating Agencies, legal and financial advisories, and taxes, printing house and placement commissions.

As of December 31, 2014, and December 31, 2013 the amortization amounts to ThCh$87,405 and ThCh$78,125, respectively.

NOTE 20. TRADE AND OTHER PAYABLE

This item is detailed as follows:

	Total Current				Total Non-current
	As of December 31,		As of December 31,		As of December 31,		As of December 31,
	2014		2013		2014		2013
	ThCh$		ThCh$		ThCh$		ThCh$
Trade creditors		61,896,066		56,063,675		—		—
Other creditors		7,352,292		7,060,901		—		—
Dividends payable		2,330,552		2,309,920		—		—
Prov. Minimum Dividend 30%		6,192,393		3,229,038
Retentions		5,461,005		2,904,975		—		—
Totales		83,232,308		71,568,509		—		—

Sundry Creditors debt consists mainly of personnel pension discounts and debts due to advertising contributions

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 21. INCOME TAX EXPENSE AND DEFERRED TAXES

a) Balances of deferred tax assets and liabilities are as follows:

	As of December 31,		As of December 31,
Description of deferred tax assets	2014		2013
	ThCh$		ThCh$
Depreciations		6,172		915
Provisions		4,020,600		2,952,361
Foreign currency contract		342,087		1,985,976
Personnel benefits obligations		403,068		247,817
Taxable losses		985,068		1,059,790
Other		3,012,075		2,465,562
Deferred tax assets		8,769,070		8,712,421

	As of December 31,		As of December 31,
Description of deferred tax liabilities	2014		2013
	ThCh$		ThCh$
Depreciations		18,245,644		15,347,470
Amortizations		4,180,804		3,392,385
Foreign currency contract		17,956		8,634
Revaluation of marketable securities		115,833		129,044
Personnel benefits obligations		—		4,677
Revaluations of Property, plant and equipment		9,480,283		7,022,432
Other		10,755,052		8,707,433
Deferred tax liabilities		42,795,572		34,612,075

b) Deferred tax assets, unrecognized

Deferred tax assets generated by the offsetting tax loss are recognized provided that it is highly possible the reversal of tax losses through future tax benefits. As of the financial statements date the Company has still recognizing deferred tax assets related in its affiliate, VCT Internacional Ltda, however, the amount not recognized in the prior year is indicated as follows:

	As of December 31,		As of December 31,
Description of unrecognized deferred tax assets	2014		2013
	ThCh$		ThCh$
Tax losses		—		424,044
Total unrecognized deferred tax assets		—		424,044

F-92

Viña Concha y Toro S.A. and Subsidiaries

c) Information on taxes related to amounts charged to Net Equity

The Company has recognized amounts with effect on equity, which gave rise to the deferred tax detailed as follows:

	As of December 31,			As of December 31,
Description of deferred tax liabilities (assets) recognized	2014			2013
	ThCh$			ThCh$
Revaluation of land		9,480,283			7,022,432
Forward		(311,456	)		(1,658,869	)
Revaluation of marketable securities		115,833			129,044
Personnel obligations		(40,863	)		(8,278	)
Other		(54,750	)		(54,750	)
Total recognized deferred tax assets		9,189,047			5,429,579

d) Changes of Deferred Tax

Changes of “deferred taxes” in the consolidated statement of financial position for the years 2014 and 2013 is as follows:

	Assets			Liabilities
Changes in deferred taxes	ThCh$			ThCh$
Balance as of January 1, 2013		8,892,435			33,604,714
Increase (decrease) in income		(180,014	)		5,108,944
Increase (decrease) in equity		—			(4,101,583	)
Balance as of December 31, 2013		8,712,421			34,612,075
Increase (decrease) in income		(758,770	)		393,153
Increase (decrease) in equity		—			1,341,232
Effect of transitional increase in rates (equity)		815,419			6,469,318
Balance translation adjustments (profit or loss)		—			(20,206	)
Balance as of December 31, 2014		8,769,070			42,795,572

F-93

Viña Concha y Toro S.A. and Subsidiaries

e) Composition of the expense for income tax.

1. The expense (income) for income tax, separated in deferred tax and income tax, for 2014 and 2013 are as follows:

	As of December 31,			As of December 31,			As of December 31,
	2014			2013			2012
Description of expenses (income) for current and deferred taxes	ThCh$			ThCh$			ThCh$
Current income tax expenses
Current tax expenses		11,150,034			6,421,317			9,319,098
Adjustments to prior year current tax		281,351			(3,101,788	)		352,103
Other current tax expenses		163,792			153,519			90,682
Current tax expense, net, total		11,595,177			3,473,048			9,761,883
Income deferred tax expense		7,524,102			5,288,958			—
Deferred expense (income) for taxes related to the creation and reversal of temporary differences		(718,280	)		—			703,599
Deferred tax expense, net, total		6,805,822			5,288,958			703,599
Expense (Income) in income tax		18,400,999			8,762,006			10,465,482

2. The composition of the expense (income) for income tax, considering the source (domestic or foreign) and the type of tax, for 2014 and 2013 are as follows:

	As of December 31,			As of December 31,		As of December 31,
	2014			2013		2012
Description of expense (income) in taxes of foreign and domestic	ThCh$			ThCh$		ThCh$
Current income tax expense on foreign and domestic parts, net
Current tax expense, net, foreign		5,074,171			700,754		3,213,533
Current tax expense, net, domestic		6,521,006			2,772,295		6,548,350
Current tax expense, Net, Total		11,595,177			3,473,049		9,761,883
Deferred tax expense on profits of foreign and domestic parts, net
Deferred tax expense, net, foreign		(339,380	)		1,659,405		(92,207	)
Deferred tax expense, net, domestic		7,145,202			3,629,552		795,806
Deferred tax expense, Net, Total		6,805,822			5,288,957		703,599
Expense (Income) for income tax		18,400,999			8,762,006		10,465,482

F-94

Viña Concha y Toro S.A. and Subsidiaries

f) Reconciliation of income tax expense

1. Reconciliation of values in which such amounts give rise to variations of the income tax expense recognized in the Statement of Income, beginning from the tax amount resulting after applying the taxable rate on “Income before taxes”.

	From January 1,			From January 1,			From January 1,
	to December 31,			to December 31,			to December 31,
	2014			2013			2012
Reconciliation of tax expense	ThCh$			ThCh$			ThCh$
Tax expense using the legal rate		11,843,404			8,474,225			8,153,707
Tax effect of rates in other jurisdictions		2,237,353			1,323,475			1,504,184
Tax effect of non-taxable revenues		(797,617	)		(401,622	)		(555,189	)
Tax effect of change in taxable rates		405,334			(112,488	)		55,743
Tax effect of change in taxable rates Chile		5,653,899			—			2,281,532
Taxation calculated using the effective rate		523,662			—
Other increase (decrease) in charge for legal taxes		(1,465,036	)		(521,584	)		(974,495	)
Adjustments to tax expense using the legal rate, Total		6,557,595			287,781			2,311,775
Tax expense using the effective rate		18,400,999			8,762,006			10,465,482

The expense for current tax using the legal rate is recognized with a higher expense amounting to Th$268,788 which relate to an increase in the corporate income tax from 20% to 21%.

2. Reconciliation of the effective rate (%), showing the variations to the rate in effect (21% as of December 31, 2014 and 20% as of December 31, 2013)

	As of December			As of December			As of December
	31, 2014			31, 2013			31, 2012
Tax expense using the legal rate (%)		21.00	%		20.00	%		20.00	%
Tax effect of rates in other jurisdictions (%)		3.97	%		3.12	%		3.69	%
Tax effect of non-taxable Ordinary Income (%)		-1.41	%		-0.95	%		-1.36	%
Tax effect of expenses not taxable deductible (%)		0.72	%		-0.27	%		0.14	%
Tax effect of change in tax rates (%)		10.03	%		0.00	%		5.60	%
Taxation calculated using the applicable rate (%)		0.93	%		0.00	%		0.00	%
Other increase (decrease) in legal tax charge (%)		-2.61	%		-1.22	%		-2.39	%
Adjustments to the expense for taxes using legal tax, total (%)		11.63	%		0.68	%		5.68	%
Tax expense using the effective rate (%)		32.63	%		20.68	%		25.68	%

In 2014 law No. 20,780 was approved in Chile which set a gradual increase in the corporate tax rate from fiscal year 2014 until fiscal year 2018. The law increased existing applicable rates for upcoming years that are used for the calculation of the temporary differences as follows, 21.0%, 22.5%, 24.0%, 25.5 % and 27% for fiscal years 2014, 2015, 2016, 2017, 2018 and beyond, respectively. For the fiscal year 2014, the increase in the corporate tax rate generated an increase in deferred tax expense of Th.Ch$ 5,653,899 and consequently an increase in the effective tax rate to 32.62% compared with 20.68% rate registered in 2013.

F-95

Viña Concha y Toro S.A. and Subsidiaries

g) Current tax assets are detailed as follows:

	As of December 31,			As of December 31,
	2014			2013
Description	ThCh$			ThCh$
Income tax current and prior years		18,405,694			14,315,656
Credits Income tax current		38,144			37,865
Provision for other recoverable taxes		(269,252	)		(269,252	)
Total		18,174,586			14,084,269

h) Current tax liabilities is detailed as follows:

	As of December 31,		As of December 31,
	2014		2013
Description	ThCh$		ThCh$
Income tax		21,475,014		16,949,717
Provision for taxes		1,191,860		459,700
Total		22,666,874		17,409,417

NOTE 22. LEASES

a) As of December 31, 2014 and December 31, 2013, there are no financial leases for current non-derivative financial liabilities

b) As of December 31, 2014, there are operating leases which mainly relate to leases of estates of long-term for agricultural land on which wine grapes plantations have been developed. These contracts contain no embedded derivatives due to the fact that they do not contain the features described in Note 2.6.8 Embedded Derivatives.

Minimum payments payable are detailed as follows:

Short term portion		1 to 5 year		More than 5 years		Total amount owed
ThCh$		ThCh$		ThCh$		ThCh$
	818,412		2,377,516		1,429,230		4,625,158

c) Lease expenses are detailed as follows:

	As of December 31,		As of December 31,		As of December 31,
	2014		2013		2012
	ThCh$		ThCh$		ThCh$
Leases used		7,037,474		5,357,624		4,285,133
Total		7,037,474		5,357,624		4,285,133

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 23. EMPLOYEE BENEFITS

23.1 Employee benefits and expenses

Changes in classes of expenses by employee are detailed as follows:

	From January 1 to		From January 1 to		From January 1 to
	December 31, 2014		December 31, 2013		December 31, 2012
Employee benefits and expenses	ThCh$		ThCh$		ThCh$
Profit-sharing and bonuses, current		74,655,728		64,653,416		57,127,859
Profit-sharing and bonuses, current		14,813,072		15,187,671		11,411,694
Personnel expenses		59,842,656		49,465,745		45,716,165
Salaries and wages		47,633,277		40,236,443		36,597,568
Short-term employee benefits		6,937,383		5,005,042		5,313,677
Expenses for employee benefits obligations		1,749,846		1,091,793		1,400,268
Other long-term benefits		1,436,074		1,233,469		923,641
Other employee expenses		2,086,076		1,898,998		1,481,011

23.2 Provisions for benefits to employees, current

	As of December 31,		As of December 31,
	2014		2013
	ThCh$		ThCh$
Personnel Participation		6,147,116		5,326,304
Vacacions		2,859,231		3,027,370
Others		201,872		484,840
Total		9,208,219		8,838,514

23.3 Severance Indemnities Obligations

A. General aspects:

Viña Concha y Toro and some of its subsidiaries located in Chile provide severance indemnity benefit plans to active employees which are determined and recognized in the financial statements following the criteria described in Note 2.17 accounting policies. These benefits are mainly referred to:

- Benefits of defined lending:

Severance indemnity: The beneficiaries perceive the equivalent to a determined number of days per contractual years of service at his/her retirement date and/or due to cease of his/her functions. In case of dissociation due to a Company decision, perceive the equivalent stipulated by law.

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Viña Concha y Toro S.A. and Subsidiaries

B. Openings, changes and presentation in financial statements:

Balances of obligations related with severance indemnities are as follows:

	As of December 31,		As of December 31,
	2014		2013
	ThCh$		ThCh$
Severance Indemnities Obligations		2,463,037		2,217,219
Total		2,463,037		2,217,219

The changes in obligations for employment termination benefits for the years ended December 31, 2014, 2013 and 2012 are detailed as follows:

	Severance
Employment termination benefit	indemnity
	ThCh$
Balance as of December 31, 2011		2,030,284
Current period costs of services		202,107
Cost for interest		77,387
Actuarial (Profits) losses		(190,150	)
Paid benefits		(146,866	)
Balance as of December 31, 2012		1,972,762
Current period costs of services		232,154
Cost for interest		93,964
Actuarial (Profits) losses		64,542
Paid benefits		(146,203	)
Balance as of December 31, 2013		2,217,219
Current period costs of services		248,291
Cost for interest		100,977
Actuarial (Profits) losses		102,731
Paid benefits		(206,181	)
Balance as of December 31, 2014		2,463,037

The Company’s policy is to accrue a determined number of days per year with respect to severance indemnities and in case of dissociation, the employee perceive the indemnity stipulated by law in the Chilean Labor Code (30 days per year with a limit of 11 years).

The main actuarial hypothesis used for the calculation of severance indemnity obligations is detailed as follows:

	As of December 31,			As of December 31,			As of December 31,
Actuarial assumptions	2014			2013			2012
Retirement rate		4.60	%		4.60	%		5.50	%
Mortality rate		RV-2009			RV-2009			RV-2009
Salary increase rate		3.50	%		3.50	%		3.50	%
Future permanence		7.85			7.6			7.2
Discount rate		4.78	%		5.16	%		5.68	%

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Viña Concha y Toro S.A. and Subsidiaries

The amounts recognized in the consolidated statement of comprehensive income by function are as follows:

	From January 1 to		From January 1 to		From January 1 to
	December 31, 2014		December 31, 2013		December 31, 2012
	ThCh$		ThCh$		ThCh$
Cost of services for current period		248,291		232,154		202,107
Interest cost		100,977		93,964		77,387
Actuarial (Profits) losses		—		—		(190,150	)
Benefits paid not provisioned		1,688,733		687,494		555,515
Total expense recognized in the u. Statem. of Comprehensive Income by Function		2,038,001		1,013,612		644,859

Sensitivity Analysis

As of December 31, 2014, the sensitivity of the value for post-employment benefits before variations in the discount rate of 1% in the case of an increase in the rate represents a decrease of ThCh$ 176,973 (ThCh$ 151,225 as of December 31, 2013) and in case of a decrease in the rate represents an increase of ThCh$ 192,572 (ThCh$ 164,113 as of December 31, 2013).

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 24. CURRENT PROVISIONS

24.1 Current provisions

This item is detailed as follows:

	As of December		As of December 31,
Concept	31, 2014		2013
Provision for advertising expense(1)		21,530,277		17,557,064
Other provisions (2)		8,377,887		9,263,660
Total		29,908,164		26,820,724

1. Provisions for advertising expenses correspond to the estimates of amounts payable to foreign customers - dealers on advertising services.

2. General operating expense estimates and a provision for an immaterial legal claim are included in other provisions.

Movement of current provisions between January 01, and December 31, 2014, is detailed as follows:

	Advertising
	expense provision			Other provisions			Total
Changes in provision	ThCh$			ThCh$			ThCh$
Balance as of January 1, 2014		17,557,064			9,263,660			26,820,724
Provisions constituted in the period		41,143,079			7,489,935			48,633,014
Provisions used		(37,169,866	)		(8,375,708	)		(45,545,574	)
Balance as of December 31, 2014		21,530,277			8,377,887			29,908,164

Movement of current provisions between January 01, and December 31, 2013, is detailed as follows:

	Advertising
	expense provision			Other provisions			Total
Changes in provision	ThCh$			ThCh$			ThCh$
Balance as of January 1, 2013		13,793,535			7,170,582			20,964,117
Provisions constituted in the period		28,000,297			16,869,581			44,869,878
Provisions used		(24,236,768	)		(14,776,503	)		(39,013,271	)
Balance as of December 31, 2013		17,557,064			9,263,660			26,820,724

Movement of current provisions between January 01, and December 31, 2012, is detailed as follows:

	Advertising
	expense provision			Other provisions			Total
Changes in provision	ThCh$			ThCh$			ThCh$
Balance as of January 1, 2012		13,939,484			748,502			14,687,986
Provisions constituted in the period		28,162,273			3,934,481			32,096,754
Provisions used		(30,191,011	)		(1,124,721	)		(31,315,732	)
Balance as of December 31, 2012		11,910,746			3,558,262			15,469,008

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 25. EARNINGS PER SHARE

Basic earnings per basic shares is calculated dividing the net income for the year attributable to Company’s shareholders by the weighted average of the number of common shares outstanding during the year.

As indicated, the basic earnings per share amounted to:

	From January 1		From January 1		From January 1
	to December 31, 2014		to December 31, 2013		to December 31, 2012
Basic earnings per share	ThCh$		ThCh$		ThCh$
Earnings attributable to equity holders of the Parent		43,051,491		33,173,641		30,021,933
	From January 1		From January 1		From January 1
	to December 31, 2014		to December 31, 2013		to December 31, 2012
	Units		Units		Units
Number of common shares outstanding		747,005,982		747,005,982		747,005,982
	From January 1 to December 31, 2014		From  January 1 to  December   31, 2013		From  January 1 to  December   31, 2012
	ThCh$		ThCh$		ThCh$
Basic earnings per share		57.63		44.41		40.19

Company did not have any potential common stock equivalents during 2014, 2013 and 2012 that would have a dilutive effect.

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 26. CAPITAL AND RESERVES

26.1 Subscribed and paid capital

As of December 31, 2014 the capital of Viña Concha y Toro S.A. amounts to ThCh$84,178,790 which is comprised of 747,005,982 shares of par value totally subscribed and paid.

The issuance premium corresponds to the surcharge in the placement of shares generated in the capital contributions operations. In conformity with Article 26 of Law No.18.046 for corporate companies, this concept forms part of the company’s issued capital.

26.2 Shares

- Number of shares as of December 31, 2014

					Shares with voting
	Subscribed share		Paid shares		rights
100% Paid Shares		747,005,982		747,005,982		747,005,982

- Number of shares as of December 31, 2013

					Shares with voting
	Subscribed share		Paid shares		rights
100% Paid Share		747,005,982		747,005,982		747,005,982

Shares of Concha y Toro are, ordinary, of a unique series and with no par value.

Movement of shares between January 01, and December 31, 2014, is as follows:

No. of subscribed shares at January 1, 2014	747,005,982
Movements for the year
Capital increase through share issuance	—
No. of subscribed shares at December 31, 2014	747,005,982

Movement of shares between January 01, and December 31, 2013, is as follows:

No. of subscribed shares at January 1, 2013	747,005,982
Movements for the year
Capital increase through share issuance	—
No. of subscribed shares at December 31, 2013	747,005,982

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Viña Concha y Toro S.A. and Subsidiaries

26.3 Capital Management

In order to attempt the optimization of returns to its shareholders, through the efficient management of financing costs, the Company uses several short and long-term financial sources as well as its own capital and gains generated from operations.

The Company’s objective is to maintain a proper capital structure, considering its leverage levels, financing costs (internal and external) and evaluates on a regular basis the different financing instruments available as well as the market conditions.

26.4 Other reserves

- Conversion Reserves: This amount represents the effect (profit/loss) for conversion of subsidiaries with functional currency other than pesos.

The detail of conversion differences, net of taxes is as follows:

	As of December 31,			As of December 31,			As of December 31,
Accumulated conversion difference	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Adjustment for conversion of associates		308,251			308,251			308,251
Adjustment for conversion of foreign subsidiaries		(3,929,878	)		(3,172,680	)		(586,674	)
Adjustment for exchange difference		8,195,935			3,170,253			—
Total		4,574,308			305,824			(278,423	)

- Cash flow hedge reserves: Represents the fair value of future cash flows on expected entries that qualify as hedges and that will affect income and are presented net of deferred taxes.

- Reserves for investments available for sale: This amount represents the change in market value of financial assets available for sale, consisting of investments in other companies and are presented net of deferred taxes.

- Reserves of profit and losses on benefit plans: corresponds to the variation of the actuarial values of the provision for employee’s defined benefit plans and are presented net of deferred taxes.

- Hedge Reserves of Net Investment in operations abroad: This represents the changes in fair value of derivatives of net investment abroad until the occurrence of disposal of the investment and are presented net of deferred taxes.

- Other Reserves: Correspond mainly to the price-level restatement balance on the paid-in capital accumulated from the date of transition to IFRS as Circular No. 456 of the Superintendence of Securities and Insurance.

26.5 Dividends

On April 23, 2014 was held the Company’s the General Board Meeting in which, among other, the following agreements were adopted:

1. To distribute with a charge to 2013 income, a final dividend, No. 255, as a final amount of $ 9.90 (nine pesos and ninety cents) per share, to be paid on May 23 2014. This amount is added to the dividends paid at interim, charged to net income for 2013, corresponding to Dividend No. 252 and No. 253 both of $ 3.00 per share, paid on September 30 and December 30, 2013, respectively, and a dividend No. 254 of $ 3.00 per share that was paid on March 31, 2014.

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Viña Concha y Toro S.A. and Subsidiaries

2. Maintain as its dividend policy the distribution of 40% of net income, excluding those generated by the subsidiary Fetzer Vineyards. Thus, it is the Board’s intention to distribute, with charges to income generated in 2014, three interim dividends No. 256, No. 257 and No. 258 for $ 3.00 per share each, each to be paid as provisional, respectively on September 30, and December 30, 2014 and March 31, 2015. A fourth dividend will be paid for the amount resulting, as necessary, to complete the 40% of the net income for 2014, excluding the income of the subsidiary Fetzer Vineyards which will be paid in May 2015, once known and approved the results of operations by the General Shareholders Meeting.

3. These payments of interim dividends will be subject to the Company’s cash availability. Historically, the Company has distributed 40% of net income, which is done through a final dividend paid in May of the following year, once known and approved both the income for the year and the abovementioned dividend by the General Shareholders Meeting.

4. The breakdown of dividends paid as of December 31, 2014 and December 31, 2013 is as follows:

Dividend
number	Paid Shares		Paid per share		Total ThCh$		Payment date
254		747,005,982		3.00		2,241,018	mar-14
255		747,005,982		9.90		7,395,359	may-14
256		747,005,982		3.00		2,241,018	sep-14
257		747,005,982		3.00		2,241,018	dec-14
Dividend
number	Paid Shares		Paid per share		Total ThCh$		Payment date
250		747,005,982		3.00		2,241,018	mar-13
251		747,005,982		7.10		5,303,742	may-13
252		747,005,982		3.00		2,241,018	sep-13
253		747,005,982		3.00		2,241,018	dec-13

26.6 Net profit distributable

With respect to Profits for the year, in conformity with Circular No.1945 issued by the Superintendence of Securities and Insurance, the Company’s Board during the meeting held on October 28, 2010, agreed that the determination of net profit distributable as dividends will consider the income for the year presented in Item ‘Profit (loss) attributable to the owners of the controlling entity’, deducting the significant variations in the net fair value of unrealized assets and liabilities. For the years ended as of December 31, 2014 and 2013 there were no adjustments to income.

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Viña Concha y Toro S.A. and Subsidiaries

NOTE 27. EFFECT OF VARIATIONS IN EXCHANGE RATES OF FOREIGN CURRENCY

Assets and Liabilities in Foreign Currency

		As of December 31, 2014				As of December 31, 2013
		Up to 90 days		91 days to 1 year		Up to 90 days		91 days to 1 year
Current assets		ThCh$		ThCh$		ThCh$		ThCh$
Cash and cash equivalents			30,304,154		—		12,850,652		—
	CHILEAN PESO		16,337,019		—		1,923,107		—
	USD		5,278,520		—		3,740,960		—
	CAD		116,959		—		105,731		—
	EUR		926,390		—		139,739		—
	GBP		3,157,102		—		2,383,765		—
	SEK		911,128		—		923,024		—
	NOK		1,056,328		—		613,505		—
	ARS		1,293,772		—		221,160		—
	BRL		868,714		—		1,409,327		—
	MXN		335,367		—		1,374,951		—
	ZAR		22,855		—		15,383		—
Other financial assets, current			7,053,502		—		7,779,816		—
	CHILEAN PESO		2,920,628		—		3,146,321		—
	USD		189,689		—		2,814,572		—
	CAD		876,100		—		406,958		—
	EUR		2,011,721		—		486,577		—
	UF		91,496		—		155,325		—
	GBP		324,669		—		599,946		—
	SEK		188,654		—		—		—
	NOK		71,884		—		—		—
	ARS		—		—		11,473		—
	BRL		220,572		—		151,407		—
	MXN		158,089		—		7,237		—
Other non-financial assets, current			18,622,371		—		14,415,106		—
	CHILEAN PESO		6,036,990		—		4,488,826		—
	USD		2,036,675		—		1,750,073		—
	CAD		1,752		—		2,702		—
	UF		1,803,585		—		953,508		—
	GBP		11,914		—		11,621		—
	SEK		38,189		—		42,370		—
	ARS		295,394		—		180,004		—
	BRL		8,390,784		—		6,958,796		—
	MXN		796		—		21,900		—
	ZAR		6,292		—		5,306		—
Trade and other receivables, current			155,179,838		—		140,313,528		—
	CHILEAN PESO		32,145,990		—		30,410,081		—
	USD		49,321,166		—		40,350,656		—
	CAD		3,907,022		—		3,191,605		—
	EUR		15,015,323		—		13,750,191		—
	UF		85,295		—		96,851		—
	GBP		25,011,341		—		26,401,580		—
	SEK		6,327,449		—		5,504,062		—
	NOK		1,810,629		—		1,688,234		—
	ARS		4,508,948		—		4,231,675		—
	BRL		10,011,728		—		8,587,340		—
	MXN		7,034,947		—		6,101,253		—
Trade receivables due from related parties, current			9,937,480		—		6,396,429		—
	CHILEAN PESO		9,937,480		—		6,396,429		—

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Viña Concha y Toro S.A. and Subsidiaries 

		As of December 31, 2014				As of December 31, 2013
		Up to 90 days		91 days to 1 year		Up to 90 days		91 days to 1 year
Current assets		ThCh$		ThCh$		ThCh$		ThCh$
Inventories			218,336,130		—		223,694,941		—
	CHILEAN PESO		132,801,680		—		134,436,538		—
	USD		56,187,006		—		51,219,091		—
	GBP		9,322,638		—		16,318,665		—
	SEK		4,035,382		—		3,614,380		—
	NOK		732,069		—		765,858		—
	ARS		10,968,192		—		10,415,819		—
	BRL		2,428,759		—		5,227,630		—
	MXN		1,860,404		—		1,696,960		—
Biological assets, current			16,317,102		—		14,821,587		—
	CHILEAN PESO		13,787,675		—		12,550,235		—
	USD		306,838		—		235,253		—
	ARS		2,222,589		—		2,036,099		—
Current tax assets			18,174,586		—		14,084,269		—
	CHILEAN PESO		5,711,361		—		871,509		—
	USD		4,953,935		—		5,254,592		—
	CAD		4,726		—		13,008		—
	EUR		153,019		—		151,658		—
	UF		48,706		—		48,706		—
	GBP		3,213,522		—		2,642,380		—
	SEK		67,938		—		328,139		—
	ARS		2,814,160		—		2,600,993		—
	BRL		737,982		—		422,884		—
	MXN		469,237		—		1,748,579		—
	ZAR		—		—		1,821		—
Total current assets			473,925,163		—		434,356,328		—
	CHILEAN PESO		219,678,859		—		194,223,046		—
	USD		118,273,829		—		105,365,197		—
	CAD		4,906,559		—		3,720,004		—
	EUR		18,106,453		—		14,528,165		—
	UF		2,029,082		—		1,254,390		—
	GBP		41,041,186		—		48,357,957		—
	SEK		11,568,740		—		10,411,975		—
	NOK		3,670,910		—		3,067,597		—
	ARS		22,103,055		—		19,697,223		—
	BRL		22,658,539		—		22,757,384		—
	MXN		9,858,840		—		10,950,880		—
	ZAR		29,111		—		22,510		—

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Viña Concha y Toro S.A. and Subsidiaries

		As of December 31, 2014				As of December 31, 2013
		Up to 90 days		91 days to 1 year		Up to 90 days		91 days to 1 year
Non-current assets		ThCh$		ThCh$		ThCh$		ThCh$
Other financial assets, non-current			1,780,672		6,850,313		2,258,870		510,139
	CHILEAN PESO		—		—		—		—
	USD		—		138,073		1,380,922		30,603
	CAD		—		85,685		411,951		3,755
	EUR		1,023,898		3,549,149		279,754		—
	UF		—		2,303,389		145,507		463,163
	GBP		15,431		299,878		40,736		7,267
	SEK		741,343		474,139		—		5,351
Other non-financial assets, non-current			4,839,739		—		3,251,274		—
	CHILEAN PESO		1,208,615		—		622,308		—
	USD		214,767		—		270,370		—
	UF		1,298,022		—		1,696,511		—
	GBP		94		—		87		—
	NOK		2,096		—		2,698		—
	ARS		7,703		—		637,241		—
	MXN		10,940		—		22,059		—
Investments in associates (equity-accounted investees)			20,311,097		—		17,137,522		—
	CHILEAN PESO		20,311,097		—		17,137,522		—
Net intangible assets			35,515,187		—		30,755,821		—
	CHILEAN PESO		8,559,998		—		6,963,913		—
	USD		25,115,908		—		21,965,189		—
	CAD		18,528		—		18,528		—
	EUR		102,202		—		102,202		—
	UF		695,351		—		695,351		—
	GBP		206,312		—		102,570		—
	SEK		5,131		—		5,131		—
	NOK		12,061		—		12,061		—
	ARS		555,533		—		619,933		—
	BRL		213,129		—		270,943		—
	MXN		31,034		—		—		—
Goodwill			24,261,868		—		22,812,855		—
	USD		24,261,868		—		22,812,855		—

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Viña Concha y Toro S.A. and Subsidiaries

		As of December 31, 2014				As of December 31, 2013
		Up to 90 days		91 days to 1 year		Up to 90 days		91 days to 1 year
Non-current assets		ThCh$		ThCh$		ThCh$		ThCh$
Property, plant and equipment			341,758,199		—		330,068,153		—
	CHILEAN PESO		255,018,452		—		248,590,388		—
	USD		43,865,736		—		40,755,680		—
	CAD		371		—		700		—
	EUR		3,611,085		—		3,609,205		—
	UF		15,761,829		—		15,761,829		—
	GBP		85,575		—		54,673		—
	SEK		2,361		—		5,577		—
	ARS		23,212,822		—		21,058,750		—
	BRL		97,067		—		102,166		—
	MXN		91,956		—		114,570		—
	ZAR		10,945		—		14,615		—
					—
Deferred tax assets			8,769,070		—		8,712,421		—
	CHILEAN PESO		6,509,749		—		7,108,026		—
	USD		1,258,870		—		675,413		—
	NOK		—		—		616		—
	ARS		154,491		—		116,939		—
	BRL		679,931		—		735,371		—
	MXN		163,614		—		72,472		—
	ZAR		2,415		—		3,584		—
					—
Other non-current assets			—		—		—		—
Total non-current assets			437,235,832		6,850,313		414,996,916		510,139
	CHILEAN PESO		291,607,911		—		280,422,157		—
	USD		94,717,149		138,073		87,860,429		30,603
	CAD		18,899		85,685		431,179		3,755
	EUR		4,737,185		3,549,149		3,991,161		—
	UF		17,755,202		2,303,389		18,299,198		463,163
	GBP		307,412		299,878		198,066		7,267
	SEK		748,835		474,139		10,708		5,351
	NOK		14,157		—		15,375		—
	ARS		23,930,549		—		22,432,863		—
	BRL		3,087,629		—		1,108,480		—
	MXN		297,544		—		209,101		—
	ZAR		13,360		—		18,199		—
Total assets			911,160,995		6,850,313		849,353,244		510,139

F-108

Viña Concha y Toro S.A. and Subsidiaries

		As of December 31, 2014					As of December 31, 2013
		Up to 90 days			91 days to 1 year		Up to 90 days		91 days to 1 year
Current liabilities		ThCh$			ThCh$		ThCh$		ThCh$
Other financial liabilirties, current			18,137,282			43,132,707		11,486,876		56,531,656
	CHILEAN PESO		2,202,677			2,079,750		—		—
	USD		5,765,502			30,359,794		5,878,392		42,792,313
	CAD		613,395			—		24,011		—
	EUR		1,095,587			—		484,082		—
	UF		1,289,730			2,462,710		125,146		4,369,812
	GBP		2,014,442			—		1,326,830		2,859,153
	SEK		—			—		160,546		—
	NOK		—			—		16,809		—
	ARS		2,457,132			2,523,703		655,113		5,396,828
	BRL		775,139			5,706,750		19,223		1,113,550
	MXN		1,923,678			—		2,796,724		—
Trade and other payables, current			83,232,308			—		71,568,509		—
	CHILEAN PESO		60,909,637			—		50,683,894		—
	USD		10,502,264			—		8,572,638		—
	CAD		69,821			—		87,357		—
	EUR		1,001,179			—		707,166		—
	UF		433,046			—		410,423		—
	GBP		2,837,208			—		3,468,817		—
	SEK		656,011			—		558,758		—
	NOK		136,844			—		204,477		—
	ARS		4,396,276			—		4,184,481		—
	BRL		2,120,183			—		2,081,531		—
	MXN		153,567			—		603,966		—
	ZAR		16,272			—		5,001		—
Trade payables due to related parties, current			5,196,408			—		3,340,124		—
	CHILEAN PESO		5,196,408			—		3,340,124		—
Other current provisions			29,908,164			—		26,820,724		—
	CHILEAN PESO		2,958,593			—		3,680,063		—
	USD		12,637,807			—		10,236,026		—
	CAD		906,604			—		689,208		—
	EUR		3,714,056			—		2,207,721		—
	UF		182,637			—		893,609		—
	GBP		7,795,210			—		7,355,789		—
	SEK		219,922			—		265,415		—
	NOK		76,359			—		45,410		—
	ARS		1,397,148			—		1,212,740		—
	BRL		(74,623	)		—		—		—
	MXN		79,241			—		214,490		—
	ZAR		15,210			—		20,253		—

F-109

Viña Concha y Toro S.A. and Subsidiaries

		As of December 31, 2014				As of December 31, 2013
		Up to 90 days		91 days to 1 year		Up to 90 days		91 days to 1 year
Current liabilities		ThCh$		ThCh$		ThCh$		ThCh$
Current tax liabilities			22,666,874		—		17,409,417		—
	CHILEAN PESO		5,711,332		—		5,331,267		—
	USD		447,864		—		211,664		—
	CAD		6,468		—		3,148		—
	EUR		127,828		—		35,442		—
	UF		3,332		—		3,332		—
	GBP		2,597,282		—		2,071,905		—
	SEK		3,091,541		—		2,881,837		—
	NOK		2,021,852		—		1,684,193		—
	ARS		1,809,637		—		662,189		—
	BRL		4,698,870		—		1,903,729		—
	MXN		2,150,868		—		2,620,711		—
Other non-financial liabilities, current			1,164,334		—		713,444		—
	CHILEAN PESO		—		—		120,668		—
	USD		745,605		—		175,330		—
	CAD		—		—		35,538		—
	EUR		—		—		165,475		—
	UF		—		—		3,123		—
	GBP		—		—		35,437		—
	SEK		50,354		—		897		—
	NOK		—		—		5,429		—
	ARS		368,375		—		79,753		—
	BRL		—		—		91,526		—
	CHF		—		—		20		—
	MXN		—		—		—		—
	ZAR		—		—		248		—
Current obligations for post-employment benefits			9,208,219		—		8,838,514		—
	CHILEAN PESO		8,408,914		—		7,976,398		—
	GBP		525,813		—		348,466		—
	SEK		—		—		33,639		—
	ARS		—		—		262,201		—
	BRL		273,492		—		217,810		—
Total current liabilities			169,513,589		43,132,707		140,177,608		56,531,656
	CHILEAN PESO		85,387,561		2,079,750		71,132,414		—
	USD		30,099,042		30,359,794		25,074,050		42,792,313
	CAD		1,596,288		—		839,262		—
	EUR		5,938,650		—		3,599,886		—
	UF		1,908,745		2,462,710		1,435,633		4,369,812
	GBP		15,769,955		—		14,607,244		2,859,153
	SEK		4,017,828		—		3,901,092		—
	NOK		2,235,055		—		1,956,318		—
	ARS		10,428,568		2,523,703		7,056,477		5,396,828
	BRL		7,793,061		5,706,750		4,313,819		1,113,550
	CHF		—		—		3,011,234		—
	MXN		4,307,354		—		3,224,677		—
	ZAR		31,482		—		25,502		—

F-110

Viña Concha y Toro S.A. and Subsidiaries

		As of December 31, 2014						As of December 31, 2013
		1-3 years		3-5 years		Over 5 years		1-3 years		3-5 years		Over 5 years
Non-current liabilities		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Other financial liabilities, non-current			132,448,558		51,037,335		32,836,140		94,604,569		70,098,218		20,567,258
	CHILEAN PESO		4,159,500		693,250		—		—		—		—
	USD		91,455,762		20,680,852		—		63,369,127		37,409,487		—
	CAD		275,022		20,783		—		19,226		63,009		—
	EUR		392,885		171,195		—		832,799		881,118		—
	UF		27,089,800		28,731,620		32,836,140		21,801,289		28,794,167		20,567,258
	GBP		8,261,076		739,635		—		2,565,169		2,360,256		—
	SEK		232,576		—		—		534,499		544,208		—
	ARS		581,937		—		—		897,500		45,973		—
	BRL		—		—		—		4,584,960		—		—
Trade payables due to related parties, non-current			732,466		—		—		898,543		—		—
	UF		732,466		—		—		898,543		—		—
Deferred tax liabilities			—		10,755,052		—		—		8,707,433		25,904,642
	CHILEAN PESO		—		10,755,052		32,040,520		—		8,707,433		25,904,642
Provisions for employee benefits, non-current			—		2,463,037		—		—		2,217,219		—
	CHILEAN PESO		—		2,463,037		—		—		2,217,219		—
Other non-financial liabilities, non-current			71,081		—		—		61,459		—		—
	USD		71,081		—		—		61,459		—		—
	BRL		—		—		—		—		—		—
Total non-current liabilities			133,252,105		64,255,424		64,876,660		95,564,571		81,022,870		46,471,900
	CHILEAN PESO		4,159,500		13,911,339		32,040,520		—		10,924,652		25,904,642
	USD		91,526,843		20,680,852		—		63,430,586		37,409,487		—
	CAD		275,022		20,783		—		19,226		63,009		—
	EUR		392,885		171,195		—		832,799		881,118		—
	UF		27,822,266		28,731,620		32,836,140		22,699,832		28,794,167		20,567,258
	GBP		8,261,076		739,635		—		2,565,169		2,360,256		—
	SEK		232,576		—		—		534,499		544,208		—
	ARS		581,937		—		—		897,500		45,973		—
	BRL		—		—		—		4,584,960		—		—
Total liabilities			345,898,401		64,255,424		64,876,660		95,564,571		81,022,870		46,471,900

F-111

Viña Concha y Toro S.A. and Subsidiaries

NOTE 28. OPERATING SEGMENTS, GEOGRAPHIC AND OTHER INFORMATION

a) Information as of or for the year ended December 31, 2014:

	Wine		Other		Not assigned		Total
a) Segment information on results, assets and liabilities	ThCh$		ThCh$		ThCh$		ThCh$
Revenue from external customers		534,821,201		48,307,076		184,787		583,313,064
Depreciation included in cost of sales and administrative expenses		19,358,512		13,172		—		19,371,684
Amortization		267,398		—		775,277		1,042,675
Segment profit before taxes		44,989,837		11,223,539		184,787		56,398,163
Segment assets		876,233,335		11,473,819		30,304,154		918,011,308
Segment liabilities		77,850,163		5,217,326		391,962,996		475,030,485

	Wine		Other		Not assigned		Total
b) Consolidated revenue by geographical area	ThCh$		ThCh$		ThCh$		ThCh$
Chile		58,761,956		48,307,076		184,787		107,253,819
Europe		210,532,172		—		—		210,532,172
USA		94,559,029		—		—		94,559,029
South America		62,738,266		—		—		62,738,266
Asia		50,429,629		—		—		50,429,629
Canada		18,019,766		—		—		18,019,766
Central America		33,228,830		—		—		33,228,830
Other		1,959,404		—		—		1,959,404
Africa		4,592,149		—		—		4,592,149
Total consolidated revenue		534,821,201		48,307,076		184,787		583,313,064

	Wine		Other		Not assigned		Total
c) Consolidated non-current assets by geographical areas	ThCh$		ThCh$		ThCh$		ThCh$
Chile		324,699,792		44,103		—		324,743,895
Argentina		23,930,549		—		—		23,930,549
England		248,542		—		—		248,542
Sweeden		2,361		—		—		2,361
Norway		2,096		—		—		2,096
Brazil		3,663,573		—		—		3,663,573
Asia		266,299		—		—		266,299
USA		90,915,673		—		—		90,915,673
Mexico		297,545		—		—		297,545
Canada		371		—		—		371
Africa		13,360		—		—		13,360
France		1,881		—		—		1,881
Total consolidated non-current assets		444,042,042		44,103		—		444,086,145
	Wine		Other		Not assigned		Total
d) Segment interest, taxes and additions to non-current assets	ThCh$		ThCh$		ThCh$		ThCh$
Interest and other finance income		736,622		—		—		736,622
Interesnt expense and other finance costs		—		—		10,342,307		10,342,307
Income taxes		—		—		12,747,100		12,747,100
Additions to non-current assets		25,471,702		1,176		—		25,472,878
Total		26,208,324		1,176		23,089,407		49,298,907

F-112

Viña Concha y Toro S.A. and Subsidiaries

	Wine			Other			Not assigned		Total
Segment equity accounted investees information	ThCh$			ThCh$			ThCh$		ThCh$
Investments in associates		18,005,966			2,305,131			—		20,311,097
Share net profits of associates		3,653,872			40,679			—		3,694,551
	Wine			Other			Not assigned		Total
e) Additions to consolidated non-current assets by geographical location	ThCh$			ThCh$			ThCh$		ThCh$
Chile		22,654,564			1,176			—		22,655,740
Argentina		1,294,847			—			—		1,294,847
England		66,402			—			—		66,402
Brazil		52,782			—			—		52,782
Mexico		36,980			—			—		36,980
Asia		26,603			—			—		26,603
USA		1,339,524			—			—		1,339,524
Total		25,471,702			1,176			—		25,472,878
	Wine			Other			Not assigned		Total
Cash flows by segments as of December 31, 2014	ThCh$			ThCh$			ThCh$		ThCh$
Cash flows provided by operating activities		19,084,023			1,727,344			—		20,811,367
Cash flows used in investing activities		(25,010,039	)		(2,263,722	)		—		(27,273,761	)
Cash flows provided by financing activities		—			—			22,906,001		22,906,001
Total		(5,926,016	)		(536,378	)		22,906,001		16,443,607

F-113

Viña Concha y Toro S.A. and Subsidiaries

b) Information as of or for the year ended December 31, 2013:

	Wine		Other		Not assigned		Total
a) Segment information on results, assets and liabilities	ThCh$		ThCh$		ThCh$		ThCh$
Revenue from external customers		438,197,767		37,242,130		182,388		475,622,285
Depreciation included in cost of sales and administrative expenses		17,764,049		15,199		—		17,779,248
Amortization		242,991		—		738,458		981,449
Segment profit before taxes		32,563,964		9,624,775		182,388		42,371,127
Segment assets		826,010,959		11,001,772		12,850,652		849,863,383
Segment liabilities		64,326,682		4,290,059		351,151,864		419,768,605

	Wine		Other		Not assigned		Total
b) Consolidated revenue by geographical area	ThCh$		ThCh$		ThCh$		ThCh$
Chile		42,709,463		37,242,130		182,388		80,133,981
Europe		165,465,522		—		—		165,465,522
USA		83,813,501		—		—		83,813,501
South America		66,093,734		—		—		66,093,734
Asia		34,889,493		—		—		34,889,493
Canada		14,679,970		—		—		14,679,970
Central America		24,340,440		—		—		24,340,440
Other		1,261,946		—		—		1,261,946
Africa		4,943,698		—		—		4,943,698
Total consolidated revenue		438,197,767		37,242,130		182,388		475,622,285

	Wine		Other		Not assigned		Total
c) Consolidated non-current assets by geographical areas	ThCh$		ThCh$		ThCh$		ThCh$
Chile		310,531,086		80,105		—		310,611,191
Argentina		22,432,862		—		—		22,432,862
England		113,891		—		—		113,891
Sweden		5,577		—		—		5,577
Norway		3,314		—		—		3,314
Brazil		1,108,480		—		—		1,108,480
Asia		59,393		—		—		59,393
USA		80,944,347		—		—		80,944,347
Mexico		209,101		—		—		209,101
Canada		700		—		—		700
Africa		18,199		—		—		18,199
Total consolidated non-current assets		415,426,950		80,105		—		415,507,055
	Wine		Other		Not assigned		Total
d) Segment interest, taxes and additions to non-current assets	ThCh$		ThCh$		ThCh$		ThCh$
Interest and other finance income		1,090,228		—		—		1,090,228
Interesnt expense and other finance costs		—		—		9,709,871		9,709,871
Income taxes		—		—		8,762,006		8,762,006
Additions to non-current assets		26,791,780		944		—		26,792,724
Total		27,882,008		944		18,471,877		46,354,829

F-114

Viña Concha y Toro S.A. and Subsidiaries

	Wine			Other			Not assigned			Total
Segment equity accounted investees information	ThCh$			ThCh$			ThCh$			ThCh$
Investments in associates		14,846,355			2,291,167			—			17,137,522
Share net profits of associates		1,865,931			35,539			—			1,901,470
	Wine			Other			Not assigned			Total
e) Additions to consolidated non-current assets by geographical location	ThCh$			ThCh$			ThCh$			ThCh$
Chile		23,626,942			944			—			23,627,886
Argentina		1,347,125			—			—			1,347,125
England		20,265			—			—			20,265
Brazil		20,617			—			—			20,617
Asia		7,370			—			—			7,370
USA		1,762,248			—			—			1,762,248
Total		26,791,780			944			—			26,792,724
	Wine			Other			Not assigned			Total
Cash flows by segments as of December 31, 2013	ThCh$			ThCh$			ThCh$			ThCh$
Cash flows from (used in) operating activities		11,613,012			32,197,495			(16,828,280	)		26,982,227
Cash flows used in investing activities		(26,538,503	)		(944	)		(589,628	)		(27,129,075	)
Cash flows used in financing activities		(134,824	)		—			(46,888,546	)		(47,023,370	)
Total		(15,060,315	)		32,196,551			(64,306,454	)		(47,170,218	)

F-115

Viña Concha y Toro S.A. and Subsidiaries

c) Information as of or for the year ended December 31, 2012:

	Wine		Other		Not assigned		Total
a) Segment information on results, assets and liabilities	ThCh$		ThCh$		ThCh$		ThCh$
Revenue from external customers		413,834,580		34,253,707		161,494		448,249,781
Depreciation included in cost of sales and administrative expenses		16,762,773		14,235		—		16,777,008
Amortization		259,084		—		652,375		911,459
Segment profit before taxes		35,150,786		5,456,252		161,494		40,768,532
Segment assets		789,453,761		7,782,860		58,876,331		856,112,952
Segment liabilities		62,236,373		9,013,213		360,413,392		431,662,978

	Wine		Other		Not assigned		Total
b) Consolidated revenue by geographical area	ThCh$		ThCh$		ThCh$		ThCh$
Chile		57,817,148		38,397,021		—		96,214,169
Europe		164,686,568		—		—		164,686,568
U.S.A		80,158,724		—		—		80,158,724
South America		46,091,062		1,074,810		—		47,165,872
Asia		35,634,757		—		—		35,634,757
Canada		16,350,061		—		—		16,350,061
Central America		29,090,440		—		—		29,090,440
Other		1,253,446		—		391,839		1,645,285
Africa		4,676,409		—		—		4,676,409
Total consolidated revenue		435,758,615		39,471,831		391,839		475,622,286

	Wine		Other		Not assigned		Total
c) Consolidated non-current assets by geographical areas	ThCh$		ThCh$		ThCh$		ThCh$
Chile		309,810,584		80,105		—		309,890,689
Argentina		22,432,862		—		—		22,432,862
England		113,891		—		—		113,891
Sweden		5,577		—		—		5,577
Norway		3,314		—		—		3,314
Brazil		1,108,480		—		—		1,108,480
Asia		1,108,480		—		—		1,108,480
U.S.A		80,944,347		—		—		80,944,347
Mexico		209,101		—		—		209,101
Canada		700		—		—		700
Africa		18,199		—		—		18,199
Total consolidated non-current assets		415,755,535		80,105		—		415,835,640
	Wine		Other		Not assigned		Total
d) Segment interest, taxes and additions to non-current assets	ThCh$		ThCh$		ThCh$		ThCh$
Interest and other finance income		592,665		—		—		592,665
Interesnt expense and other finance costs		—		—		8,792,445		8,792,445
Income taxes		—		—		10,465,482		10,465,482
Additions to non-current assets		28,548,920		10,977		—		28,559,897
Total		29,141,585		10,977		19,257,927		48,410,489

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	Wine			Other			Not assigned			Total
Segment equity accounted investees information	ThCh$			ThCh$			ThCh$			ThCh$
Investments in associates		14,028,798			1,448,772			—			15,477,570
Share net profits of associates		2,668,005			29,182			—			2,697,187
	Wine			Other			Not assigned			Total
e) Additions to consolidated non-current assets by geographical location	ThCh$			ThCh$			ThCh$			ThCh$
Chile		24,231,670			10,977			—			24,242,647
Argentina		1,689,817			—			—			1,689,817
England		17,660			—			—			17,660
Brazil		41,058			—			—			41,058
Asia		15,957			—			—			15,957
U.S.A		2,544,318			—			—			2,544,318
Total		28,540,480			10,977			—			28,551,457
	Wine			Other			Not assigned			Total
Cash flows by segments as of December 31, 2012	ThCh$			ThCh$			ThCh$			ThCh$
Cash flows from (used in) operating activities		9,222,464			31,135,767			(21,554,722	)		18,803,509
Cash flows used in investing activities		(27,918,565	)		(10,977	)		(624,147	)		(28,553,689	)
Cash flows provided by financing activities		—			—			48,648,402			48,648,402
Total		(18,696,101	)		31,124,790			26,469,533			38,898,222

No customer accounted for 10% or more of the Company’s total consolidated revenue during 2014, 2013 and 2012. The most significant customers regarding total sales represented, 15.7%, 15.2% and 12.8% as of December 2014, 2013 and 2012, respectively.

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NOTE 29. REVENUE

Classes of Revenue as of December 31, 2014, 2013 and 2012.

	From January 1		From January 1		From January 1
Classes of revenues	to December 31, 2014		to December 31, 2013		to December 31, 2012
	ThCh$		ThCh$		ThCh$
Sales of goods		581,803,718		473,559,131		446,430,503
Services rendered		1,509,346		2,063,154		1,819,278
Total		583,313,064		475,622,285		448,249,781

NOTE 30. COSTS AND EXPENSES BY NATURE

Costs and expenses by nature as of December 31, 2014.

							Other expenses
	Cost of sales		Distribution costs		Administrative		by function
Nature of operating costs and expenses	ThCh$		ThCh$		expenses ThCh$		ThCh$		Total ThCh$
Direct costs		343,793,975		—		—		—		343,793,975
Depreciation and amortization		4,953,357		1,273,241		931,358		—		7,157,956
Personnel expenses		11,631,571		31,340,640		15,100,917		—		58,073,128
Other		2,221,975		101,898,874		6,285,029		1,980,063		112,385,941
Total		362,600,878		134,512,755		22,317,304		1,980,063		521,411,000

Direct costs consist of wine, dry supplies (bottles, corks, and labels, among others) and the cost of woods (barrels). Depreciation and amortization indicated above correspond only to that included in item Selling and Administrative Expenses. Total depreciation amounted to ThCh$19,371,684 (see note 28), the corresponding difference of ThCh$12,213,728 is included in the direct cost.

The costs distribution and expenses by nature as of December 31, 2013 is detailed as follows:

							Other expenses
	Cost of sales		Distribution costs		Administrative		by function		Total ThCh$
Nature of operating costs and expenses	ThCh$		ThCh$		expenses ThCh$		ThCh$
Direct costs		297,942,332		—		—		—		297,942,332
Depreciation and amortization		1,471,007		1,646,458		894,130		—		4,011,595
Personnel expenses		7,885,117		27,391,375		11,369,495		—		46,645,987
Other		4,088,795		79,366,024		6,942,915		1,293,437		91,691,171
Total		311,387,251		108,403,857		19,206,540		1,293,437		440,291,085

Direct costs consist of wine, dry supplies (bottles, corks, and labels, among others) and the cost of woods (barrels). Depreciation and amortization indicated above correspond only to that included in item Selling and Administrative Expenses. Total depreciation amounted to ThCh$17,779,248 (see note 28), the corresponding difference of ThCh$11,382,242 is included in the direct cost.

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The costs distribution and expenses by nature as of December 31, 2012 is detailed as follows:

	Cost of sales		Distribution costs		Administrative		Other expenses
Nature of operating costs and expenses	ThCh$		ThCh$		expenses ThCh$		by function		Total ThCh$
							ThCh$
Direct costs		291,515,725		—		—		—		291,515,725
Depreciation and amortization		1,441,893		726,985		946,960		—		3,115,838
Personnel expenses		6,621,237		22,934,062		10,843,003		—		40,398,302
Other		3,384,373		67,594,684		6,249,211		1,124,236		78,352,504
Total		302,963,228		91,255,731		18,039,175		1,124,236		413,382,369

Direct costs consist of wine, dry supplies (bottles, corks, and labels, among others) and the cost of woods (barrels). Depreciation and amortization indicated above correspond only to that included in item Selling and Administrative Expenses. Total depreciation amounted to ThCh$16,777,008 (see note 28), the corresponding difference of ThCh$13,661,170 is included in the direct cost.

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NOTE 31. FINANCIAL RESULTS

Financial results are disclosed as follows:

	From January 1			From January 1			From January 1
Financial result	to December 31,			to December 31,			to December 31,
	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Finance costs		(10,342,307	)		(9,709,871	)		(8,792,445	)
Finance income		736,622			1,090,228			1,108,530
results from inflation-adjusted units		(2,933,059	)		(1,348,350	)		(973,542	)
Foreign currency translation difference		2,231,871			14,224,960			10,564,798
Total		(10,306,873	)		4,256,967			1,907,341
	From January 1			From January 1			From January 1
Finance costs	to December 31,			to December 31,			to December 31,
	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Expenses in bank borrowings		(4,687,445	)		(6,090,792	)		(4,561,046	)
Expenses for bonds payable and promissory notes		(232,545	)		(2,685,717	)		(1,685,694	)
Other finance expenses		(5,422,317	)		(933,362	)		(2,545,705	)
Total		(10,342,307	)		(9,709,871	)		(8,792,445	)
	From January 1			From January 1			From January 1
Finance income	to December 31,			to December 31,			to December 31,
	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Investments income		420,662			886,552			1,029,164
Other finance income		315,960			203,676			79,366
Total		736,622			1,090,228			1,108,530
	From January 1			From January 1			From January 1
Results from inflation-adjusted units	to December 31,			to December 31,			to December 31,
	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Bonds payable and promissory notes		(4,301,516	)		(1,411,890	)		(953,885	)
Bank borrowings		(127,714	)		(700	)		(138,060	)
Others		1,496,171			64,240			118,403
Total		(2,933,059	)		(1,348,350	)		(973,542	)

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	From January 1			From January 1			From January 1
Foreign currency translation differences	to December 31,			to December 31,			to December 31,
	2014			2013			2012
	ThCh$			ThCh$			ThCh$
Exchange difference in trade receivables		5,105,716			3,540,171			(3,150,829	)
Exchange difference in related parties		5,150,698			5,585,643			(1,577,145	)
Exchange difference in advertising contributions		(1,298,198	)		(854,699	)		97,568
Exchange difference in derivatives		(5,781,567	)		8,478,763			10,426,202
Exchange difference in bank borrowings		(40,143	)		(2,974,804	)		3,838,852
Other		(904,635	)		449,886			930,150
Total		2,231,871			14,224,960			10,564,798

NOTE 32. ENVIRONMENT

32.1 Information to be disclosed on disbursements related to the environment

The Company is committed to protect the environment. Consequently, each executive and operator is committed to perform their operations and to provide their services taking due care in minimizing, as long as possible and reasonable, an impact in the environment and to always comply with the related legislation in force. Likewise, persons involved with this Code, which hold information of any event or activity related to the Company, which have a pollutant effect or have a harmful effect on the environment or imply an eventual infringement of the regulation applicable, will inform the Company’s competent administrative area as soon as possible.

When legally applicable or considered necessary or correct, the Company will report this situation to its shareholders, the regulatory entities and the public in general, completely and truthful, thus, complying with requirements established by law on this matter.

32.2 Detail of information on disbursements related to the environment

As of December 31, 2014, the net balance of assets destined to improve the environment amounted to ThCh$2,800,257, which is represented in items as Constructions and works of infrastructure and Machinery and equipment. As of December 31, 2013, this balance amounted to ThCh$2,239,186, which was represented in items as Constructions and works of infrastructure and Machinery and equipment. 

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32.3 Disbursements of the period related to the environment performed as of December 31, 2014

Parent or subsidiary	Name of project	Concept for the expenditure	Identification of whether the cost is part of an asset cost or is reflected as an expense	Description of asset or expense item	Amount of expenditure ThCh$		Certain or estimated date of expenditure in the future
Viña Concha y Toro	Water treatment	Maintenance of supplies and water treatment	Reflected as an expense	Expenses in oenological warehouses and water treatments		949,897	There is no estimate
Total expenditure for the period related to the environment						949,897

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NOTE 33. COLLATERALS COMMITTED WITH THIRD PARTIES

33.1 Direct Collateral

As of December 31, 2014 and 2013 the Company has no direct collateral.

33.2 Indirect Collateral

	Debtor					Assets		Balances pending payment						Release of guarantees
Creditor	Name	Relationship		Type of guarantee		Type	Carrying amount	As of December 31, 2014 ThCh$		As of December 31, 2013 ThCh$		December 31, 2014		Act.		December 31, 2015		Act.		December 31, 2016		Act.
Banco BBVA Frances	Trivento Bod. y Viñ.		Subsidiary		Collateral				667,425		—		667,425		—		—		—		—		—
Banco BBVA Frances	Trivento Bod. y Viñ.		Subsidiary		Collateral				394,388		340,997		394,388		—		—		—		—		—
Banco Santander Santiago	Trivento Bod. y Viñ.		Subsidiary		Collateral				—		2,098,440		—		—		—		—		—		—
Banco Chile	Trivento Bod. y Viñ.		Subsidiary		Collateral				—		1,799,412		—		—		—		—		—		—
Banco Macro Argentina	Trivento Bod. y Viñ.		Subsidiary		Collateral				637,088		550,841		637,088		—		—		—		—		—
Banco Nacional de Mexico (Banamex)	Trivento Bod. y Viñ.		Subsidiary		Collateral				2,730,375		2,360,745		2,730,375		—		—		—		—		—
Banco Credicoop	Trivento Bod. y Viñ.		Subsidiary		Collateral				940,463		—		940,463		—		—		—		—		—
Banco Credicoop	Trivento Bod. y Viñ.		Subsidiary		Collateral				606,750		—		606,750		—		—		—		—		—
Banco Nación	Trivento Bod. y Viñ.		Subsidiary		Collateral				1,298,445		—		1,298,445		—		—		—		—		—

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NOTE 34. CONTINGENCIES, RESTRICTIONS AND LAWSUITS

1) Wines Contract: The Company has entered into long term agreements for grapes and wine acquisitions, with different maturities. The last of these contracts has its maturity in 2029. The estimated amount of these contracts is approximately of ThCh$10,904,850.

2) Restrictions and Limits for issuance of Public Offer Bonuses.

The restrictions or limits to which the Company is subject have its origin in the covenants associated to the issuance of public offer F, J and K Series bonuses which detail is as follows:

I. F Series bonuses, issued with charge to the line of bonds registered under number 574 in the Security Registry on March 23, 2009 and placed on 2012.

The restrictions or limits to which the Company is subject are as follows:

a) To maintain an Indebtedness Ratio not higher than 1.4 times;

b) To maintain, an equity not lower than UF5,000,000;

c) To maintain a Financial Expenses Hedging Ratio in a minimum of 2.5 times. The Financial Expenses Hedging Ratio must be calculated on the twelve-month period prior to Consolidated Financial Statements’ date;

d) To send to the Representative of Bonuses Holder, together with the quarterly and annual copies of the Consolidated Financial Statements, a letter signed by its legal representative, which leaves a record of the compliance of financial indicators set out in b) and c) above;

e) To send to the Representative of Bonuses Holder, in the same term in which these are delivered to the Chilean Superintendence of Securities, a copy of the quarterly and annual Consolidated Financial Statements, the consolidated financial statements of its subsidiaries subject to standards applicable to public traded companies; and all public information the Issuer provides to the Chilean Superintendence of Securities. Further, the Company should send a copy of risk rating reports, within the term of five working days after receiving them from its Private Raters;

f) To record on the accounting books the provisions arising from adverse contingencies that, to the Issuer administration, should be recognized in the Consolidated Financial Statements of the Company or its subsidiaries. The Issuer will look after that its subsidiary companies are adjusted to the established herein;

g) The Issuer is obligated to look after that operations with its subsidiaries or other related persons are performed in equity conditions, similar to conditions prevailing in the market. The term ‘related persons’ will comprise all those indicated in article 100 of Law No.18.045;

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h) The Issuer should establish and maintain the appropriate accounting systems based on the International Financial Reporting Standards (IFRS) and the instructions of the Chilean Superintendence of Securities. The Issuer will look after that its domestic subsidiary companies are adjusted to the established herein. However, with respect to foreign subsidiaries, these should be adjusted to accounting standards generally accepted in their respective countries, and, for consolidation purposes, the corresponding changes should be applied in order to adjust themselves to the international financial reporting standards (IFRS) and the instructions of the Chilean Superintendence of Securities. In addition, the Issuer should contract and maintain a firm of nationally or internationally renowned independent external auditors for the examination and analysis of its consolidated financial statements, on which such firm should issue an opinion on December 31, every year;

i) The Issuer should comply with the law, regulations and legal provisions applicable, including, without restrictions, the payment in a timely manner of all taxes, tributes, rates, rights and charges affecting the Issuer itself or its movable or immovable property, except those challenged in good faith an according to the relevant legal and/or administrative proceedings and, providing, in this case, the appropriate reserves are held in order to hedge such contingency, in accordance with the International Financial Reporting Standards (IFRS), and the instructions of the Chilean Superintendence of Securities.

j) To maintain during the life of the current Bonuses issuance, assets free of restricted encumbrances for an amount equivalent to at least 1.5 times the total amount of bonuses placed in force performed with charge to the line agreed in the Contract. The Issuer should send to the Representative of Bonuses Holder, as required, all information that allows verification of the indicator referred herein; and

k) To maintain insurances which reasonably protect its assets, as per the usual industry practices for the Issuer’s industry. The Issuer will look after that its subsidiary companies are adjusted to the established herein.

Acceleration Causal

a) If the Issuer falls into default or simple delay in the payment of any interest share or capital amortization of Bonuses;

b) If the Issuer does not comply with any obligation to provide information to the Representative of Bonuses Holder, and does not repair this fault within the 30 working days following the date it was required in writing by the Representative of Bonuses Holder. The Issuer should provide the Representative of Bonuses Holder with the following information: (i) A copy of the quarterly and annual Consolidated Financial Statements and the consolidated financial statements of its subsidiaries subject to the standards applicable to public traded companies; (ii) Other public information the Issuer provides to the Chilean Superintendence of Securities; (iii) A copy of risk rating reports; (iv) Report the compliance of obligations under the issuance contract, information that should be delivered within the same term that the consolidated financial statements to the Superintendence of Securities and Insurance; and (vi) Notice of all circumstances involving noncompliance or transgression of conditions or obligations under the issuance contract, as soon as the transgression occurs or comes to knowledge;

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c) Permanence of noncompliance or transgression of any other commitment or obligation agreed for the Issuer under the issuance contract or its complementary deeds, for a term of 60 days or longer after the Representative of Bonuses Holder had sent to the Issuer, through certified mail, a notice describing the noncompliance or transgression and requesting to repair it. For the aforementioned cases, except for the noncompliance or transgression regarding the Debt Ratio and the Financial Expenses Hedging Ratio, the term will be 90 days after the Representative of Bonuses Holder had sent to the Issuer, through certified mail, the aforementioned notice. The Representative of Bonuses Holder should send to the Issuer the aforementioned notice within working day following the date of verification of the Issuer noncompliance or transgression and, in all cases, within the term established by the Chilean Superintendence of Securities by a general standard as provided in the Securities Market Law, Article 109, b), if this last term was a lower period;

d) If the Issuer or significant subsidiary does not repair this fault within the 30 consecutive days following to the default date or the date of simple payment delay for a total accrued amount higher than or equivalent in pesos to UF150, 000, and as of the payment date, this obligation is not expressly postponed. In such amount will not be considered (i) the obligations subject to pending judgment or litigation for obligations not recognized by the Issued in its accounting; or, (ii) obligations corresponding to building or assets acquisition prices which payment would be objected by the Issuer due to defects or noncompliance of the contractual obligations by constructor or seller. For these purposes, foreign exchange or par rate at the calculation date will be used as the conversion basis.

e) If any other creditor of the Issuer of any of its significant subsidiaries, legitimately charged the Issuer of any of its significant subsidiaries the entire amount of a credit for a loan subject to a term, under its right to anticipate the maturity of such credit due to noncompliance of the Issuer of any of its significant subsidiaries, contained in the contract. However, cases when the credit amounts charged in advance according to the established herein, which do not cumulatively exceed UF150, 000 are excluded. For these purposes, foreign exchange or par rate at the calculation date will be used as the conversion basis.

f) If the Issuer or any significant subsidiary is declared in bankruptcy or noted insolvency, or proposes a preventive judicial agreement with its creditors or makes a written statement recognizing its inability to pay its obligations before their respective maturities, without repairing any of the aforementioned events within the term of 60 days from such bankruptcy statement, insolvency situation or preventive judicial agreement. In case the Issuer bankruptcy is declared, the Bonds will be payable in advance as provided by Law;

g) If any statement made by the Issuer in the instruments granted or subscribed with respect of the compliance of reporting requirements under the issuance contract or its complementary deeds, or any statement provided at the issuance or recording of Bonds issued with charged to this Line was or resulted to be deceitfully false or incomplete in some essential aspect;

h) If the duration term of the Issuer Company is modified to a date earlier than effective term of Bonds issued with charge to the respective line; or if the Issuer Company undergoes an early dissolution; or if there is a decrease in the capital effectively subscribed and paid in terms which do not comply with the ratio established for the financial indicator of Debt Ratio, Equity and Financial Expenses Hedging Ratio;

i) If the Issuer charge or dispose of Essential Assets or these would be disposed from a subsidiary company of the Issuer, except copulative conditions are met in the last case. (i) the Issuer constantly maintains the condition of Parent of the company which becomes owner of the Essential Assets; (ii) that such subsidiary does not dispose of or charge Essential Assets, except they are disposed from other subsidiary of the Issuer or one of its own subsidiaries which, in turn, is a subsidiary of the Issuer; (iii) that the subsidiary of the Issuer which Essential Assets are transferred to is constituted -at the time or before the disposal of such assets - severally obligated to pay Bonds issued under this Issuance Contract. The Issuer should send to the Representative, as required, all information for verification of the compliance with the referred herein; and

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j) If in the future the Issuer or any of its subsidiaries grant actual collaterals to new bonuses issuances or to any financial credit, cash credit operation or other credits, except those in the following cases: one) collaterals existent at the issuance contract date; two) collaterals created to finance, refinance or amortize the purchase price or costs including construction costs, assets acquired after the issuance contract; three) collaterals granted by the Issuer in favor of its subsidiaries or vice versa; four) collaterals granted by a company which subsequently merged with the Issuer; five) collaterals over assets acquired by the Issuer after the issuance contract, which are constituted before its purchase; and, six) extension or renewal of any collaterals herein mentioned in one) to five), inclusive. However, the Issuer or any of its subsidiaries may always grant actual collaterals to new bonuses issuances or to any financial credit, cash credit operation or other current credits, if in advance and simultaneously, they constitute collaterals at least proportionally equivalents in favor of Bonuses Holders. In this case, the collateral proportionalities will be assessed, every opportunity, by the Representative of Bonuses Holder, who, if considered sufficient, will grant collaterals’ constituent instruments in favor of the Bonuses Holders.

As of December 31, 2014 the Company complies with the aforementioned covenants.

2) J and K Series bonuses, issued with charge to the line of bonds registered under number 575 in the Security Registry on March 23, 2009 and placed on 2014.

The restrictions or limits to which the Company is subject are as follows:

a) To maintain an Indebtedness Ratio not higher than 1.4 times;

b) To maintain an Equity not lower than UF5,000,000;

c) To maintain a Financial Expenses Hedging Ratio not lower than 2.5 times, which must be calculated on the twelve-month period prior to the reporting date of the Consolidated Financial Statements;

d) To send to the Representative of Bonuses Holder, together with the quarterly and annual copies of the Consolidated Financial Statements, a letter signed by its legal representative, which leaves a record of the compliance of financial indicators set out in a) b) and c) above;

e) To send to the Representative of Bonuses Holder, in the same term in which these are delivered to the Chilean Superintendence of Securities, a copy of the quarterly and annual Consolidated Financial Statements, the consolidated financial statements of its subsidiaries subject to standards applicable to public traded companies; and all public information the Issuer provides to the Chilean Superintendence of Securities. Further, the Company should send a copy of risk rating reports, within the term of five working days after receiving them from its Private Raters;

f) To record on the accounting books the provisions arising from adverse contingencies that, to the Issuer administration, should be recognized in the Consolidated Financial Statements of the Company or its subsidiaries. The Issuer will ensure that its subsidiary companies are adjusted to the established herein;

g) The Issuer is obligated to look after that operations with its subsidiaries or other related persons are performed in equity conditions, similar to conditions prevailing in the market. The term ‘related persons’ will comprise all those indicated in article 100 of Law No.18.045;

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h) The Issuer should establish and maintain the appropriate accounting systems based on the International Financial Reporting Standards (IFRS) and the instructions of the Chilean Superintendence of Securities. The Issuer will look after that its domestic subsidiary companies are adjusted to the established herein. However, with respect to foreign subsidiaries, these should be adjusted to accounting standards generally accepted in their respective countries, and, for consolidation purposes, the corresponding changes should be applied in order to adjust themselves to the international financial reporting standards (IFRS) and the instructions of the Chilean Superintendence of Securities. In addition, the Issuer should contract and maintain a firm of nationally or internationally renowned independent external auditors for the examination and analysis of its consolidated financial statements, on which such firm should issue an opinion on December 31, every year;

i) The Issuer should comply with the law, regulations and legal provisions applicable, including, without restrictions, the payment in a timely manner of all taxes, tributes, rates, rights and charges affecting the Issuer itself or its movable or immovable property, except those challenged in good faith an according to the relevant legal and/or administrative proceedings and, providing, in this case, the appropriate reserves are held in order to hedge such contingency, in accordance with the International Financial Reporting Standards (IFRS), and the instructions of the Chilean Superintendence of Securities.

j) To maintain during the life of the current Bonuses issuance, assets free of restricted encumbrances for an amount equivalent to at least 1.5 times the total amount of bonuses placed in force performed with charge to the line agreed in the Contract. The Issuer should send to the Representative of Bonuses Holder, as required, all information that allows verification of the indicator referred herein; and

k) To maintain insurances which reasonably protect its assets, as per the usual industry practices for the Issuer’s industry, the Company will ensure that its subsidiary companies are adjusted to the established herein.

Acceleration Causal

a) If the Issuer falls into default or simple delay in the payment of any interest share or capital amortization of Bonuses;

b) If the Issuer does not comply with any obligation to provide information to the Representative of Bonuses Holder, and does not repair this fault within the 30 working days following the date it was required in writing by the Representative of Bonuses Holder. The Issuer should provide the Representative of Bonuses Holder with the following information: (i) A copy of the quarterly and annual Consolidated Financial Statements and the consolidated financial statements of its subsidiaries subject to the standards applicable to public traded companies; (ii) Other public information the Issuer provides to the Chilean Superintendence of Securities; (iii) A copy of risk rating reports; (iv) Report the compliance of obligations under the issuance contract, information that should be delivered within the same term that the consolidated financial statements to the Superintendence of Securities and Insurance; and (vi) Notice of all circumstances involving noncompliance or transgression of conditions or obligations under the issuance contract, as soon as the transgression occurs or comes to knowledge;

c) Permanence of noncompliance or transgression of any other commitment or obligation agreed for the Issuer under the issuance contract or its complementary deeds, for a term of 60 days or longer after the Representative of Bonuses Holder had sent to the Issuer, through certified mail, a notice describing the noncompliance or transgression and requesting to repair it. For the aforementioned cases, except for the noncompliance or transgression regarding the Debt Ratio and the Financial Expenses Hedging Ratio, the term will be 90 days after the Representative of Bonuses Holder had sent to the Issuer, through certified mail, the aforementioned notice. The Representative of Bonuses Holder should send to the Issuer the aforementioned notice within working day following the date of verification of the Issuer noncompliance or transgression and, in all cases, within the term established by the Chilean Superintendence of Securities by a general standard as provided in the Securities Market Law, Article 109, b), if this last term was a lower period;

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d) If the Issuer or significant subsidiary does not repair this fault within the 30 consecutive days following to the default date or the date of simple payment delay for a total accrued amount higher than or equivalent in pesos to UF150, 000, and as of the payment date, this obligation is not expressly postponed. In such amount will not be considered (i) the obligations subject to pending judgment or litigation for obligations not recognized by the Issued in its accounting; or, (ii) obligations corresponding to building or assets acquisition prices which payment would be objected by the Issuer due to defects or noncompliance of the contractual obligations by constructor or seller. For these purposes, the conversion base of foreign exchange or par rate at the calculation date will be used as the conversion basis.

e) If any other creditor of the Issuer of any of its significant subsidiaries, legitimately charged the Issuer of any of its significant subsidiaries the entire amount of a credit for a loan subject to a term, under its right to anticipate the maturity of such credit due to noncompliance of the Issuer of any of its significant subsidiaries, contained in the contract. However, cases when the credit amounts charged in advance according to the established herein, which do not cumulatively exceed UF150, 000 are excluded. For these purposes, foreign exchange or par rate at the calculation date will be used as the conversion basis.

f) If the Issuer or any significant subsidiary is declared in bankruptcy or noted insolvency, or proposes a preventive judicial agreement with its creditors or makes a written statement recognizing its inability to pay its obligations before their respective maturities, without repairing any of the aforementioned events within the term of 60 days from such bankruptcy statement, insolvency situation or preventive judicial agreement. In case the Issuer bankruptcy is declared, the Bonds will be payable in advance as provided by Law;

g) If any statement made by the Issuer in the instruments granted or subscribed with respect of the compliance of reporting requirements under the issuance contract or its complementary deeds, or any statement provided at the issuance or recording of Bonds issued with charged to this Line was or resulted to be deceitfully false or incomplete in some essential aspect;

h) If the duration term of the Issuer Company is modified to a date earlier than effective term of Bonds issued with charge to the respective line; or if the Issuer Company undergoes an early dissolution; or if there is a decrease in the capital effectively subscribed and paid in terms which do not comply with the ratio established for the financial indicator of Debt Ratio, Equity and Financial Expenses Hedging Ratio;

i) If the Issuer charge or dispose of Essential Assets or these would be disposed from a subsidiary company of the Issuer, except copulative conditions are met in the last case. (i) the Issuer constantly maintains the condition of Parent of the company which becomes owner of the Essential Assets; (ii) that such subsidiary does not dispose of or charge Essential Assets, except they are disposed from other subsidiary of the Issuer or one of its own subsidiaries which, in turn, is a subsidiary of the Issuer; (iii) that the subsidiary of the Issuer which Essential Assets are transferred to is constituted -at the time or before the disposal of such assets - severally obligated to pay Bonds issued under this Issuance Contract. The Issuer should send to the Representative, as required, all information for verification of the compliance with the referred herein; and

j) If in the future the Issuer or any of its subsidiaries grant actual collaterals to new bonuses issuances or to any financial credit, cash credit operation or other credits, except those in the following cases: one) collaterals existent at the issuance contract date; two) collaterals created to finance, refinance or amortize the purchase price or costs including construction costs, assets acquired after the issuance contract; three) collaterals granted by the Issuer in favor of its subsidiaries or vice versa; four) collaterals granted by a company which subsequently merged with the Issuer; five) collaterals over assets acquired by the Issuer after the issuance contract, which are constituted before its purchase; and, six) extension or renewal of any collaterals herein mentioned in one) to five), inclusive. However, the Issuer or any of its subsidiaries may always grant actual collaterals to new bonuses issuances or to any financial credit, cash credit operation or other current credits, if in advance and simultaneously, they constitute collaterals at least proportionally equivalents in favor of Bonuses Holders. In this case, the collateral proportionalities will be assessed, every opportunity, by the Representative of Bonuses Holder, who, if considered sufficient, will grant collaterals’ constituent instruments in favor of the Bonuses Holders.

As of December 31, 2014 the Company is in compliance with the aforementioned covenants.

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3) Restrictions and limitations for loans granted by Cooperative Centrale Raiffeissen- Boerenleenbank B.A. “Rabobank Nederland” Branch New York to VCT U.S.A.

The restrictions or limitations to which the Company and/or its subsidiary VCT USA is subject are originated in the covenants associated to the loan granted to VCT USA which has a collateral of its Parent and are summarized as follows:

a) Send to the bank, together with its publication or not after 120 days after each quarterly close, a copy of the consolidated financial statements as well as to notify the bank on a timely manner on any adverse material effect, possible noncompliance of its financial obligations, noncompliance of obligations in ERISA (Employee Retirement Income Security Act of 1974), material changes on its accounting policies.

b) The debtor, VCT USA and its subsidiaries, should maintain its assets and equipment as held historically, and is also obligated to hire and maintain insurances which reasonably cover its operating assets in accordance to usual practices of the industry in which operates.

c) VCT USA is obligated not to perform operations with its affiliates which were not in the same conditions that would be when performing these with a third party, unless these relate to transactions with affiliates which were totally of its property or between associates that were totally of its property.

Acceleration Causal

a) If VCT USA incurred in default or delay of more than 3 working days in the payment of any principal or interest installments with respect to the loan.

b) If any statement or collateral contained in the instruments granted or subscribed with respect the obligation either by VCT USA or Viña Concha y Toro, were or resulted to be deceitfully incomplete or false.

c) If VCT USA breach any obligation acquired in virtue of the aforementioned loan agreement.

d) If VCT USA or Viña Concha y Toro S.A. incur in default or simple delay in the payment of any sum owed to banks or any other creditor from one or more overdue obligation or required in advance that, exceed the amount of US$7,000,000.

e) If VCT USA or Viña Concha y Toro S.A. incur in suspension of payments or recognize through a written notice its incapacity to pay its debts or abandon its goods in benefit of its creditors or request its own bankruptcy.

f) If Viña Concha y Toro S.A. ceases to comply with the following financial indicators:

To maintain a Consolidated Debt Ratio of not higher than 1.4 times;

At all times maintain a minimum consolidated Equity not lower than UF5, 000,000;

To always maintain a Financial Expenses Hedging Ratio in a minimum of 2.5 times.

g) If VCT USA and Viña Concha y Toro S.A. refused to pay any amount in excess of seven million dollars required by ERISA breaches or final judgment of a trial.

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h) If any governmental authority expropriates all or a substantial part of the assets owned by VCT USA or Viña Concha y Toro S.A.

i) If Concha y Toro S.A. is prevented by law to remit U.S. dollars abroad or hold dollars abroad for the purpose of paying its obligations.

As of December 31, 2014 the Company is in compliance with the aforementioned covenants. 

4) Restrictions and Limits for loan in pesos granted by Banco Estado to Viña Concha y Toro S.A.:

The restrictions or limitations to which Viña Concha y Toro S.A. is subject are originated in the covenants associated with this loan to the Vineyard, which are summarized as follows:

a) Maintain all assets, properties, trademarks, permits, rights, franchises, grants or patents that are necessary for the normal conduct of its business, including its own and subsidiaries’ production assets.

b) Maintain in its consolidated financial statements the following financial indicators:

i) A Debt Ratio of not higher than 1.4 times. By “Debt Ratio” shall mean the ratio of Total Liabilities and Equity.

ii) A minimum Equity of UF5, 000,000.

iii) Financial Expenses Hedging Ratio not lower than 2.5 times. This indicator should be calculated on the twelve months preceding the date of issuance of the Consolidated Financial Statements.

In turn, the two contracts provide acceleration causal:

i) If the vineyard does not pay in full any outstanding obligation to the Bank, including especially the Financing.

ii) If the vineyard does not fully satisfy any obligation to make the second clause set forth in this instrument. Exceptionally, in the case of the obligations contained in paragraphs 3 and 4 of this clause, the Bank may only accelerate their claims if 30 days have elapsed since the notice of the failure of the Bank without becoming resolved.

iii) If the vineyard falls into default, is declared bankrupt or makes statements of judicial or extrajudicial agreement.

As of December 31, 2014 the Company is in compliance with the aforementioned covenants.

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6) Restrictions and Limits for loan in dollars granted by Rabobank Curacao NV to Vina Concha y Toro S.A.

Restrictions or limitations to which Viña Concha y Toro S.A. is subject originate in the covenants associated with this loan, summarized as follows:

a) Maintain all property, assets, rights, properties, licenses, trademarks, rights of industrial and intellectual property licenses, franchises, concessions or patents that are necessary for the normal functioning of its operations, in force, and in accordance with applicable law.

b) Maintain all assets listed above in proper operating condition at all times, without prejudice of the normal wastage derived from its use and time elapsed.

c) Maintain at all times insurances covering all assets referred to above, at least in the amounts and against the risks that apply in accordance with standard practices of companies that conduct similar activities and having the same type of properties.

d) Maintain in its consolidated financial statements the following financial ratios:

i. Ratio of Total Liabilities to Equity shall be equal or less to 1.4 times.

ii. EBITDA Ratio on Financial Costs equal to or greater than two point five times.

iii. Maintain a minimum equity equal to or exceeding UF 5,000,000.

In turn, the contract provides for acceleration grounds:

a) If the Vineyard enteres into default or simple delay in the payment of all or part of the principal, interest or any other sum associated with the Loan or the Promissory Note on the date fixed for the payment or capital amortization, for payment of interest or for the payment of any other amounts related to the loan.

b) If the Vineyard breach any of the obligations, covenants, conditions or agreements contained in this instrument, different from those indicated in point i. above and such failure is not remedied within fifteen Banking Days, from the date of the respective violation.

c) If resulted maliciously false or incomplete in some important respect, any representation or warranty made or deemed made by the Vineyard under the Credit Documents or that is contained in any certificate, document or financial statement or other state that the Vineyard deliver on any date in respect of the Credit Documents or any Credit Document, or the date on which it is made or deemed made.

d) If the vineyard does not meet any payment of principal or interest on any Indebtedness (other than the Notes or the Loan) totaling an amount exceeding the equivalent in pesos, twenty million dollars.

e) If the Vineyard incurs in payments default, provide a written recognition stating its inability to pay its debts or makes a general assignment or abandonment of assets for the benefit of its creditors or declares legal bankruptcy or insolvency of the Vineyard;

f) If any proceedings are begun by or against the Vineyard tending to its dissolution, liquidation or reorganization or reorganization of its assets, under any bankruptcy law, insolvency, reorganization and such a procedure is not rescinded within ninety calendar days from the start of this procedure; or if a legal court appoints a liquidator, auditor or other similar officer in respect of Vineyard or a substantial part of its assets.

g) If issued against the Vineyard and enforceable judgment, or writ of execution is decreed in enforcement proceedings, for the payment of money exceeding the equivalent in pesos of twenty million dollars, and these remain unresolved for a period of sixty calendar days from the said judgment and a final writ of execution is decreed in the enforcement proceedings.

As of December 31, 2014 the Company is in compliance with the aforementioned covenants.

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7) Due to its line of business, Viña Concha y Toro S.A. regularly participates, as a plaintiff or defendant in legal proceedings aimed to demand the payment of amounts third parties may owe to them or the defense against claims made by third parties because of its labor, civil and commercial links with the Vineyard. The prospects of success in these procedures vary from case to case. The Company does not believe that any of these matters could have a material impact to these financial statements.

8) In Argentina, the Federal Administration of Public Revenue (“AFIP”) through Resolution No. 364/08 dated December 16, 2008 challenged the affidavit of income tax for fiscal year 2002, and determined automatically on the amount owed to his understanding the subsidiary Bodegas y Viñedos Trivento S.A. (Trivento) on account of income tax for that period, which amounted to the sum of $1,948,918.4 Argentinean Pesos, (equivalent to Ch$ 138,314,,741.7 as of December 31, 2014) plus interest of $6,450,270 Argentinean pesos (equivalent to Ch$457,775,662 as of December 31, 2014).  In turn, the AFIP determined a fine of $974,459.22 Argentinean pesos (equivalent to Ch$69,157,371 as of December 31, 2014) The fine does not accrue interest.

The tax agency based its decision on the premise that such a sum did not resulted as a loss for computing exchange differences arising from lending operations of Trivento with Viña Concha y Toro S.A. and VCT International S.A., arguing that remittances resulting from these operations were deemed as capital contributions nature and not loans, even though so were approved by the respective Boards and by the Central Banks of both countries, being also such sums thus reflected in the accounts of all companies involved.

On February 11, 2009, resolution of the AFIP was appealed to the National Tax Tribunal, assigning the room D to this case through appeal provided under Article 76 of the LPT Law (Law No. 11,683, text ordered in 1998). In that action were reiterated and expanded each of the arguments of the defense, put forward in timely releases presented in administrative proceedings.

The matter was opened to the test, and both parties produced the evidence offered (report requirements made to local banks and expert evidence which was prepared by Estudio Contable Balter & Asoc., appointed as technical consultants). This expert report was attached to the file on March 31, 2011. Finally, on April 15, 2011, Trivento informed the court on the filing of a new appeal, also brought before the National Tax Tribunal for a new objection made by the AFIP, this time for the affidavits of tax gains made by the periods 2003 and 2004.

Upon expiration of the evidence the Court may order the parties to submit arguments, leaving the cause, after that, in a verdict status. To date, is pending in the court’s decision about allowing the allegation of the parties on the evidence produced.

Because of the amount claimed by the AFIP, by judgment dated September 17, 2009 provided for the precautionary freezing on properties and vehicles of Trivento, which the AFIP, as required by Trivento, agreed to unite on a single property (Farm and Warehouse of Tres Porteñas-San Martín). To this date, the precautionary freezing is united on this property, having released the embargo on the remaining properties and vehicles.

In office procedure for determining debt initiated by the AFIP, in relation to fiscal years 2003 and 2004, and after due filing of rebuttals in administrative offices, Trivento was notified of the AFIP Resolution No. 322/10 dated 9 December 2010, by which the Treasury officially determined a debt of $6,754,563.88 Argentinean Pesos (equivalent to Ch$479,371,399 as of December 31, 2014) plus interest of $19,145,470 Argentinean pesos (equivalent to Ch$1,358,754,006 as of December 31, 2014) and a fine of $ 4,728,194.72 Argentinean pesos (considering that fine does not accrue any interest), equivalent to Ch$335,559,979 as of December 31, 2014.

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The tax agency based its decision on the premise that it was not appropriate to attribute to the affidavits on profits for the years 2003 and 2004, those losses from previous periods, which in the opinion of the AFIP were completely absorbed in the affidavit of the year 2002.

On February 1, 2011, resolution of the AFIP was appealed to the National Tax Tribunal. In that resource, were reiterated and expanded each of the arguments of the defense, put forward in timely releases presented in administrative proceedings, which have proper evidentiary support, and it was required to build with the record which processes the impugnment of affidavit for income tax for the fiscal year 2002. The appeal was notified to the AFIP in April 2011. On April 27, 2012, Trivento was notified on the court decision to build with both records the records that processes in Room D and on April 25, 2013, Trivento was notified on the court decision to produce the accounting expertise offered by the company. AFIP opposed to this offering. The expert appointed by Trivento, Estudio Contable Balter & Asoc., appointed as technical consultants, and the expert appointed by the AFIP, presented the expert report on August 30, 2013, only remaining pending the Court’s decision with respect to allowing the allegation of the parties on the evidence produced.

Finally, in office procedure for determining debt initiated by the AFIP, in relation to fiscal years 2005 and 2006, and after due filing of rebuttals in administrative offices, Trivento was notified of the AFIP Resolution No. 363/12 dated 12 December 2012, by which the Treasury officially determined a debt of $1,138,953 Argentinean Pesos (equivalent to Ch$80,831,494.41 as of December 31, 2014), plus interest of $2,657,557 Argentinean pesos (equivalent to Ch$188,606,820 as of December 31, 2014) and a fine amounting to $797,267 Argentinean pesos (equivalent to Ch$56,582,039 as of December 31, 2014 (fine which does not accrue any interest).

The tax agency based its decision on the premise that it was not appropriate to attribute to the affidavits of income tax for the years 2005 and 2006, losses from previous periods, which in the opinion of the AFIP were completely absorbed in the affidavit of the year2002. In addition, the amount declared by Trivento accounted on Minimum Notional Income for 2006 was not found in the computer records, therefore, it was not considered as payment on account of Tax income, and failed to consider compensation of the balance in favor of AFIP with the Trivento’s Minimum Notional Income cleared balance -2006-, Trivento appealed the resolution of the AFIP to the National Tax Tribunal, on February 8, 2013. Considering this action, Trivento reiterated and expanded each argument of the defense, put forward in timely releases presented in administrative proceedings which have proper evidentiary support, and it was required to build with the record which in processes in Room D in which it is processed the impugnation on affidavit of income tax for the fiscal year 2002 (where the action was built against the office procedure for determining debt corresponding to fiscal years 2003 and 2004). On April 11, 2014 Trivento was notified of the decision of the Tax Court of the Nation, in full, to accumulate this record with two cases pending before Room D Tax Court’s Office. On July 11, 2014 Trivento was notified of the decision of the Room D of the Tax Court of the Nation ordering to produce the pending evidence consisting of an expertise on the accounting books of Trivento. The preparation of the accounting expert’s report is in charge of Balter & Assoc. who was appointed as technical consultants for Trivento, and the expert appointed by the Treasury. When the deadline given by the Court to file an extension expired, a new extension was required for 40 days, which was granted by the Court and which expires on February 19, 2015. Once the expert report is filed, the Court will be able to allow the allegation of the parties on the evidence produced.

According to the company lawyers, both Argentine and Chilean Trivento have reasonable grounds to be able to sustain that their affidavits of income tax for, 2002, 2003, 2004, 2005 and 2006 conform to the law, and estimate that this opinion will be ultimately recognized by the Argentine courts, and so was reported to both, the Company’s management and the Board of Viña Concha y Toro. Consequently, there are significant possibilities that the impugnation will be finally accepted on the amounts settled by the fiscal authority. Therefore, the Company considers that a possible disbursement on these accounts is unlikely to occur. In turn, given the complexity of the legal proceedings Trivento is facing, the Company states it is not possible to provide an estimated date for the resolution of these judgments, neither it is possible to provide an estimation of the financial impact related to these legal proceedings, neither to indicate the feasibility of reimbursement of funds on these accounts.

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9) In Brazil, the Treasury Department of the State of Sao Paulo, by way of “Tax Assessment Notice and Imposition of Fine No.4.013.335-7”, officially determined and demanded to the VCT Brazil Importación y Exportación Limitada Subsidiary the payment of R$23,621,676.61 (equivalent to Ch$5,392,120,120 as of December 31, 2014) for an eventual local tax accrual and non-payment “ICMS-ST” (equivalent to Chilean VAT). Fiscal authority claims the payment of this amount as the tax accrual and payment date was different and before the term the subsidiary uses for its payment. This would generate, according to the fiscal authorities, the existence of ICMS-ST pending payment. The authority also claims R$21,200,887.45 (equivalent to Ch$4,839,526,578 as of December 31, 2014) on account of interests and R$22,115,103.00 ((equivalent to Ch$5,084,214,562 as of December 31, 2014) on account of fine.

To date, lawyers and other expert advisors from Sao Paulo have been contacted, who are preparing the judicial defense (Tax Debt Annulment Lawsuit), based on arguments about form, regarding the nullity of tax resolution, and about substance, regarding the ICMS-ST non-requirement in the terms proposed by the authority. The Court for the State of Sao Paulo issued an order to suspend the collection regarding this ICMS-ST, its interests and fine up to obtaining a verdict of the legal claim presented by VCT Brasil Importacion y Exportacion Limitada. The State of Sao Paulo, presented an appeal to this resolution which was rejected due to formal issues.

According to the company lawyers, both Brazilian and Chilean, VCT Brazil Importación y Exportación Limitada has reasonable and solid grounds to sustain its defense and estimate there are significant possibilities that the impugnation of the amounts settled would be finally accepted by the fiscal authority. Therefore, the Company considers a possible disbursement on this account as unlikely to occur. In turn, given the complexity of the claiming process of “Tax Assessment Notice and Imposition of Fine” and its initial procedural stage, the Company states it is not possible to provide an estimated date for the resolution of this conflict, neither it is possible to provide an estimation of the financial impact related to this legal proceeding, neither to indicate the possibility of reimbursement of funds on this account.

10) By issuing the Settlements N ° 10 and 11 of August 9, 2013, the Internal Revenue Service questioned the useful life considered for purposes of calculating the tax depreciation of certain the Vineyard’s Property, plant and equipment (ponds) for Tax Years 2010 and 2011. This has resulted in an increase in the tax base of First Category.

Settlements have determined a gross tax payable amounting to $ 683,471,253, which, plus adjustments and legal interests (determined as of December 2014) amounts to $ 1,395,748.853.

The Settlements were notified on August 9, 2013.

On September 2, 2013, the Company filed with the Internal Revenue Service an administrative resource called “Voluntary Administrative Replenishment “(VAR). Which was rejected by the administrative authority through Resolution Ex. No. 31,301 dated November 18, 2013 (notified under the same date). If negative response is obtained, the company has the option of filing a tax complaint before the 4th Tax and Customs Court (TCC) of Santiago (within 90 days).

On November 30, 2013, the company filed Tax Claim against Settlements No. 10 and 11, before the 4th Tax and Customs Court of the Metropolitan Region.

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On December 23, 2013, the Court received and recorded this Tax Claim and transferred the information in order obtain response from the Internal Revenue Service.

On January 17, 2014 the Internal Revenue Service evacuated transfer, answering the claim. The Company presented a petition requesting progressive course on December 2, 2014, which was provided by the Court stating: “It will be resolved”. To date, the procedural burden rests with the Court, which must issue the resolution received by the case.

Our external advisors in this process believe that the Company’s position in the dispute raised is of great strength, having a high probability of a favorable outcome. Because of the foregoing, the Company believes that a possible reimbursement for this concept is unlikely. In turn, given the complexity of the process of ” Tax Claim”, the Company indicate that it is not feasible to provide an estimated date for the resolution of this conflict, nor is it possible to give an estimate of the financial impact associated with this litigation process, nor is it possible to indicate the possibility of a refund for this concept.

11) At December 31, 2014, there are no other litigation or likely litigation, legal or extrajudicial, taxation issues as encumbrances of any kind that have a real chance to affect the financial statements of Viña Concha y Toro S.A.

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NOTE 35. SUBSEQUENT EVENTS

Between January 1, 2015 and the date of issuance of these consolidated financial statements there are no subsequent events that may significantly affect its exposure and/or interpretation.

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