6-K 1 consolquarterlyreport.txt FORM 6-K FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of July, 2003 Commission File Number 1-12752 Glassworks of Chile (Translation of registrant's name into English) Hendaya 60 Las Condes Santiago, Chile (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F /X/ Form 40-F / / Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____ FECU (Standardized Quarterly Financial Report) 1. IDENTIFICATION 1.01.05.00 Firm Name CRISTALERIAS DE CHILE S.A. 1.01.04.00 Company RUT 90331000-6 1.00.01.10 Starting date 1/1/2003 1.00.01.20 Closing date 3/31/2003 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Consolidated ASSETS 2.0 FINANCIAL STATEMENTS 2.01 BALANCE SHEET 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
ASSETS NOTE No. 03-31-03 03-31-02 ------ -------- -------- -------- 5.11.00.00 TOTAL CURRENT ASSETS 189,995,652 129,104,672 5.11.10.10 Cash 1,690,072 2,108,799 5.11.10.20 Time deposits 41 19,415,156 24,188,103 5.11.10.30 Marketable securities (net) 4 68,519,258 13,809,242 5.11.10.40 Debtors from sales (net) 5 33,071,445 28,277,765 5.11.10.50 Documents receivable (net) 5 3,829,140 4,811,488 5.11.10.60 Sundry debtors (net) 5 1,304,178 843,657 5.11.10.70 Doc. & accts receivable 6 341,341 507,293 related Co. 5.11.10.80 Inventories (net) 7 41,119,400 32,173,737 5.11.10.90 Recoverable taxes 8 1,129,330 2,151,360 5.11.20.10 Prepaid expenses 1,714,071 1,052,945 5.11.20.20 Deferred taxes 8 937,873 1,349,049 5.11.20.30 Other current assets 10 16,924,388 17,831,234 5.11.20.40 Leasing contracts (net) 0 0 5.11.20.50 Leasing assets (net) 0 0 5.12.00.00 TOTAL FIXED ASSETS 12 131,656,508 133,935,352 5.12.10.00 Land 12 12,995,463 13,370,488 5.12.20.00 High rises & infrastructure 12 60,645,609 54,102,747 5.12.30.00 Machinery & equipment 12 123,793,441 131,087,697 5.12.40.00 Other fixed assets 12 17,455,503 13,098,503 5.12.50.00 Positive goodwill from 12 7,675,631 8,566,806 technical revaluation of fixed assets 5.12.60.00 Depreciation (minus) 12 (90,909,139) (86,290,889) 5.13.00.00 TOTAL OTHER ASSETS 146,130,600 145,037,358 5.13.10.10 Investment in related companies 14 108,429,785 111,386,138 5.13.10.20 Investment in other companies 15 821,513 1,485,663 5.13.10.30 Negative goodwill 16 9,682,180 9,061,628 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 5 184,616 218,843 5.13.10.60 Doc. & accts receivable 6 1,504 1,380 related Co. 5.13.10.65 Long-term deferred taxes 8 0 0 5.13.10.70 Intangibles 17 11,723,085 11,630,893 5.13.10.80 Amortization (minus) 17 (1,047,542) (863,954) 5.13.10.90 Other 18 16,335,459 12,116,767 5.13.20.10 Long-term leasing contracts 0 0 (net) 5.10.00.00 TOTAL ASSETS 467,782,760 408,077,382
2 LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
LIABILITIES NOTE No. 03-31-03 03-31-02 ----------- ------- -------- -------- 5.21.00.00 TOTAL CURRENT LIABILITIES 48,205,054 62,483,039 5.21.10.10 Short-term oblig. Banks & 19 9,827 1,052,539 Fin. Inst. 5.21.10.20 Short-term portion - Long-term oblig. Banks & 19 4,376,750 25,897,891 Financial Institutions 5.21.10.30 Obligations with the public 0 0 (notes) 5.21.20.40 Short-term portion oblig 22 1,323,579 583,574 with public 5.21.10.50 Long-term oblig. due within 262,515 275,557 1 year 5.21.10.60 Dividends payable 78,554 70,475 5.21.10.70 Accounts payable 19,127,672 10,238,613 5.21.10.80 Notes payable 4,794,597 4,012,533 5.21.10.90 Sundry creditors 2,950,107 557,626 5.21.20.10 Notes & accts payable related Co. 6 210,952 1,295,224 5.21.20.20 Provisions 23 9,657,719 10,529,408 5.21.20.30 Withholdings 1,766,542 2,075,454 5.21.20.40 Income tax 0 0 5.21.20.50 Earned income 2,534,105 1,736,381 5.21.20.60 Deferred taxes 8 0 0 5.21.20.70 Other current liabilities 20 1,112,135 4,157,764 5.22.00.00 TOTAL LONG-TERM LIABILITIES 145,022,572 88,760,448 5.22.10.00 Oblig with Banks & 21 44,457,024 56,932,831 Financial Inst. 5.22.20.00 Long-term oblig with public 22 88,953,080 20,596,135 (bonds) 5.22.30.00 Long-term notes payable 127,494 38,003 5.22.40.00 Long-term sundry debtors 1,087,933 1,654,216 5.22.50.00 Long-term notes & accts. 6 0 0 payable related companies 5.22.60.00 Long-term provisions 23 6,063,280 7,164,981 5.22.70.00 Long-term deferred taxes 8 4,333,761 2,374,282 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 26 37,468,548 35,937,319 5.24.00.00 TOTAL EQUITY 27 237,086,586 220,896,576 5.24.10.00 Paid-in capital 27 64,749,257 65,252,164 5.24.20.00 Reserve capital revaluation 27 323,746 (261,008) 5.24.30.00 Premium in sale of own shares 27 27,736,385 27,701,498 5.24.40.00 Other reserves 27 10,040,408 8,314,353 5.24.50.00 Retained earnings (addition 134,236,790 119,889,569 of codes 5.24.51.00 to 5.24.56.00) 5.24.51.00 Reserve future 27 115,487,218 106,277,626 dividends 5.24.52.00 Accrued profits 27 14,428,510 13,556,728 5.24.53.00 Accrued losses 27 0 0 (minus) 5.24.54.00 Profit (loss) 27 4,321,062 182,511 for the year 5.24.55.00 Prov. dividends 27 0 0 (minus) 5.24.56.00 Accr.deficit 27 0 (127,296) dev. period 5.20.00.00 TOTAL LIABILITIES 467,782,760 408,077,382
3 INCOME STATEMENT 2.02 INCOME STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
INCOME STATEMENT NOTE No. 03-31-03 03,31,02 ---------------- ------- -------- -------- 5.31.11.00 OPERATING INCOME 7,435,106 6,711,094 5.31.11.10 Gross Margin 12,818,820 11,571,979 5.31.11.11 Sales 35,372,089 31,231,841 5.31.11.12 Costs (minus) (22,553,269) (19,659,862) 5.31.11.20 Adm. & sales expenses (5,383,714) (4,860,885) (minus) 5.31.12.00 NON-OPERATING INCOME (LOSS) (1,051,789) (5,076,769) 5.31.12.10 Interest income 504,339 639,361 5.31.12.20 Income investments 14 549,170 178,032 Rel. Co. 5.31.12.30 Other non-operating 28 137,520 240,285 income 5.31.12.40 Loss investments Rel. 14 (1,649,803) (4,117,198) Co. (-) 5.31.12.50 Amortization 16 (162,076) (145,391) neg.goodwill (-) 5.31.12.60 Interest expenses (1,713,063) (1,277,158) (minus) 5.31.12.70 Other non-operat 28 (536,153) (423,441) expenses (-) 5.31.12.80 Price level 29 156,293 (161,546) restatement 5.31.12.90 Exchange differences 30 1,661,984 (9,713) 5.31.10.00 RESULTS BEFORE INCOME TAX 6,383,317 1,634,325 AND EXTRAORDINARY ITEMS 5.31.20.00 INCOME TAX 8 (1,521,340) (1,020,367) 5.31.30.00 EXTRAORDINARY ITEMS 31 0 0 5.31.40.00 PROFIT (LOSS) BEFORE 4,861,977 613,958 MINORITY INTEREST 5.31.50.00 MINORITY INTEREST 26 (540,915) (431,447) 5.31.00.00 NET INCOME (LOSS) 4,321,062 182,511 5.32.00.00 Amortization of positive goodwill 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 4,321,062 182,511
4 DIRECT CASH FLOW STATEMENT 2.03 CASH FLOW STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
DIRECT CASH FLOW STATEMENT NOTE No. 03-31-03 03-31-02 -------------------------- ------- -------- -------- 5.41.11.00 NET FLOW FROM OP. ACT. 14,616,332 11,583,075 5.41.11.10 Collection from sales debtors 50,076,077 42,372,099 5.31.11.20 Interests received 1,568,504 511,889 5.31.11.30 Dividends & other distributions 54,776 46,558 funds received 5.31.11.40 Other income 388,997 422,102 5.31.11.50 Payments to suppliers & (31,004,020) (26,698,255) personnel (-) 5.31.11.60 Interest paid (minus) (1,929,562) (781,961) 5.31.11.70 Income tax paid (minus) (1,006,355) (1,038,013) 5.31.11.80 Other expenses (467,154) (294,654) 5.31.11.90 V.A.T. & other taxes (3,064,931) (2,956,690) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (2,155,759) (2,705,018) 5.41.12.05 Proceeds from share issue 0 17,275 5.41.12.10 Loans received 0 0 5.41.12.15 Obligations with the public 0 0 5.41.12.20 Secured loans from related 35,697 933,716 companies 5.41.12.25 Other loans from related 56 0 companies 5.41.12.30 Other financing resources 0 0 5.41.12.35 Dividends paid (minus) (1,346,555) (1,951,005) 5.41.12.40 Capital distributions (minus) 0 0 5.41.12.45 Repayment of loans (minus) (815,837) (1,131,213) 5.41.12.50 Payment of obligations with the 0 0 public (-) 5.41.12.55 Repayment of secured loans from (29,120) 0 rel Co. (-) 5.41.12.60 Repayment other loans from 0 (573,791) related Co. (-) 5.41.12.65 Share issue payment (minus) 0 0 5.41.12.70 Payment of issue publ oblig 0 0 (minus) 5.41.12.75 Other financing payments (minus) 0 0 5.41.13.00 CASH FLOW FROM INVESTING ACTIVITIES (4,190,738) 461,093 5.41.13.05 Sale of fixed assets 176,101 8,672 5.41.13.10 Sale of permanent investments 0 5,118,952 5.41.13.15 Sale of other investments 0 0 5.41.13.20 Proceeds secured loans to 0 0 related Comp. 5.41.13.25 Proceeds other loans to related 969,251 33,740 companies 5.41.13.30 Other investment income 1,762,160 1,899,192 5.41.13.35 Incorporation of fixed assets (7,064,599) (4,633,149) (minus) 5.41.13.40 Capitalized interests payment 0 0 (minus) 5.41.13.45 Permanent Investments (minus) 0 (37,004) 5.41.13.50 Investments in financial (15,291) (1,575,103) instruments (minus) 5.41.13.55 Other loans to related companies 0 (2,673) (minus) 5.41.13.60 Other loans to related companies (6,680) (2,059) (minus) 5.41.13.65 Other distrib of funds on invest (11,680) (349,475) activities (-) 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD 8,269,835 9,339,150 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. (385,703) 197,327 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT 7,884,132 9,536,477 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 93,762,741 39,079,828 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 101,646,873 48,616,305
5 INCOME STATEMENT RECONCILIATION CONCILIATION BETWEEN CASH FLOW GENERATED BY THE OPERATION'S ACTIVITIES AND THE INCOME STATEMENT FOR THE YEAR 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Consolidated
CASH FLOW - INCOME STATEMENT RECONCILIATION NOTE No. 03-31-03 03-31-02 ------------------------------------------- ------- -------- -------- 5.50.10.00 Profit (Loss) for the year 4,321,062 182,511 5.50.20.00 Profit (Loss) in sale of assets 5,601 14,032 5.50.20.10 (Profit) Loss in sale of fixed assets 5,601 14,032 5.50.20.20 Profit in sale of investments (minus) 0 0 5.50.20.30 Loss in sale of investments 0 0 5.50.20.40 (Profit) Loss in sale of other assets 0 0 5.50.30.00 Non-cash losses (gains) 6,013,803 8,714,557 5.50.30.05 Depreciation for the year 3,450,664 3,350,735 5.50.30.10 Amortization of intangibles 296,830 299,612 5.50.30.15 Write-offs and provisions 1,857,759 1,060,125 5.50.30.20 Accrued earnings from investments in related (549,170) (178,032) companies (minus) 5.50.30.25 Accured losses from investments in related Co. 1,649,803 4,117,198 5.50.30.30 Negative goodwill amortization 162,076 145,391 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement (156,293) 161,546 5.50.30.45 Net exchange difference (1,661,984) 9,713 5.50.30.50 Other non-cash credits to results (minus) (8,431) (343,804) 5.50.30.55 Other non-cash debits to results 972,549 92,073 5.50.40.00 Changes in Assets affecting cash flow (incr) decreases (9,206,916) (2,714,920) 5.50.40.10 Debtors from sales 1,789,271 (635,933) 5.50.40.20 Inventory (9,041,682) (2,228,489) 5.50.40.30 Other assets (1,954,505) 149,502 5.50.50.00 Changes in liabilities affecting cash flow increases 12,941,854 4,955,449 (decr) 5.50.50.10 Accounts payable related to results for the 13,270,339 5,804,137 year 5.50.50.20 Interests payable (336,135) 485,774 5.50.50.30 Income tax payable (net) 572,809 (357,471) 5.50.50.40 Other accounts payable related to non-oper 16,844 (716,327) results 5.50.50.50 VAT and other taxes payable (net) (582,003) (260,664) 5.50.60.00 Profit (Loss) of minority interest 540,928 431,446 5.50.00.00 NET OPERATING CASH FLOW 14,616,332 11,583,075
6 0.1 Registration in the Securities Register IDENTIFICATION OF THE COMPANY AND REGISTRATION IN THE SECURITIES REGISTER The company is registered in the Securities Register under No. 061 and it is supervised by the Securities and Insurance Commission. The subsidiary S.A. Vina Santa Rita is registered in the Securities Register under number 390 of the S.V.S. (Securities and Insurance Commission). 7 02. Applied Accounting Criteria APPLIED ACCOUNTING CRITERIA a) Accounting Period These financial statements correspond to the period between January 1 and March 31 of 2003 and 2002. b) Preparation basis of financial statements: These consolidated financial statements as of March 31, 2003 and 2002 have been prepared on the basis of generally accepted accounting principles and specific norms issued by the S.V.S.; the former prevailing in case of discrepancies. c) Presentation Basis For comparison purposes, the financial statements and figures included in the disclosures for the 2002 fiscal year are presented updated according to non-accounting terms as of March 31, 2003 by 3.8%. d) Consolidation Basis The consolidated financial statements include the balances of the following subsidiaries: Cristalchile Comunicaciones S.A., Cristalchile Inversiones S.A., Ciecsa S.A. consolidated, S.A. Vina Santa Rita consolidated, and Constructora Apoger S.A. consolidated. Ciecsa consolidated includes the balances of its subsidiary Red Televisiva Megavision S.A. in which it has a 99.99% stake of its net worth and Simetral S.A. which it has a 81.5% stake of its net worth. S.A. Vina Santa Rita consolidated includes the balances of its subsidiaries Vina Carmen S.A., with a 99.9% stake in its net worth, and Sur Andino S.A., with 100% stake. Constructora Apoger S.A. includes the balances of its subsidiary Inmobiliaria Monte Azul S.A., in which it has a 99% stake. Intercompany balances, transactions, debits, and refunds were eliminated in the consolidation and has being acknowledged the shareholding of the investments minorities shown in the balance as a minority interest The subsidiaries included in the consolidation are presented on an attached chart. e) Adjustment for Currency Devaluation (Price Level Restatement) Consolidated financial statements have been restated considering the variation in the purchasing power of the currency which occurred in the 2003 fiscal year, which was 0.5% (-0.4% in 2002). 8 f) Conversion Basis Balances in foreign currency and indexed currency units have been converted to pesos at the indicated parities: 2002 2002 Ch$ Ch$ ---------- --------- U.S. Dollar 731.56 655.90 Pound Sterling 1,156.25 934.86 Swedish Crown 540.65 389.79 EURO 797.34 570.94 Unidad de Fomento 16,783.60 16,197.66 g) Marketable Securities and Time Deposits Transactions in short-term fixed income instruments (PRC) are shown at the return value of the investment, which does not exceed the market value as of March 31, 2003. Investments in shares are presented as the lower of the corrected cost and market value. Time deposits are shown at the value of the investment, plus adjustments and interest accrued as of the date of the fiscal year. Investments carried out by the parent company in Celulosa Arauco bonds are registered at the par value, without adjusting to the market value because there is the intention of keeping them until their long term due date. h) Inventory Inventory of finished products has been valued as of March 31, 2003 and 2002 at the direct production cost, duly updated, and raw materials and materials at the cost of the last purchase or its corrected cost. Those valuations do not exceed the net liquidation value. Inventory of foreign television programs to be exhibited are valued at the purchase cost at the exchange rate in effect at the closing of the fiscal year. Local programs are valued according to the terms of the respective contracts. Inventory at the closing of each fiscal year represents the value of the films and videos contracted and the proportion of repeats that are pending exhibition. The actual cost of the programs is charged to results as they are shown. i) Bad Debts (Non-collectable) The parent company and subsidiaries have made provision for bad debts that is deducted from debtors for sales and documents receivable. The criterion adopted to estimate them is the age of the balances. 9 j) Fixed Assets The property in fixed assets is shown at the purchase cost plus legal and regulatory revaluations accumulated until March 31, 2003 and 2002. k) Fixed Assets Depreciation Depreciation of these goods is calculated on updated values, according to the straight-line depreciation system, considering the estimated useful life of the goods. l) Assets in Leasing None. m) Sales Transactions with Leaseback None. n) Intangibles The corrected purchase value of trademarks as well as TV channel 9 frequency are presented as intangibles. Its amortization period is 40 years. In addition the subsidiary S.A. Vina Santa Rita includes the costs for trademark registration, which are amortized in a period of their renewal. o) Investments in Related Companies Investments in stocks and rights in related companies have been valued according to the percentage of the holding that corresponds to the Company in the equity of its affiliates and subsidiaries (V.P.P.), according to procedures established for these purposes by circular 368 of the Securities and Insurance Commission. Investments abroad have been valued according to the provisions of Technical Bulletin No. 64 of the Accountants Association. p) Goodwill Amortization Goodwill amortization resulted from comparing the price paid for the investment with the proportional equity value (VPP) that corresponds to the investment in the company's equity. Amortizations of these values are carried out in a period of twenty years. As of March 31, 2003 and 2002 there is no positive goodwill. q) Operations with repurchase and resale agreement Financial instruments acquired with a resale agreement are shown at their purchase value plus interest and adjustments accrued at the closing of the fiscal year, and they are classified in Other Current Assets, in the terms established in Circular No. 768 of the Securities and Insurance Commission. 10 r) Obligations with public Obligations for bonds issued are shown at their face value plus adjustments and interest accrued at the closing of each fiscal year. The negative goodwill obtained compared to par value is amortized proportionally to payment or redemption of the capital installments of those bonds and the expenses for the placement of long-term bonds. s) Deferred Taxes and Income Tax The parent company and its subsidiaries has complied with deferred taxes, in accounting terms, as established in Technical Bulletin No. 60 and 71 of The Accountants Association and the norms indicated in circular 1466 of the S.V.S. Income tax is recorded in the accounting on the basis of the calculation of net taxable income determined according to norms established in the Income Tax Law. t) Severance payment The parent company has established a reserve for all of the personnel's severance payment, according to the union contracts signed with their workers. This reserve is shown at the present value of the obligation. u) Sales The consolidated companies recognize operating income on an accrued basis according to generally accepted accounting principles. v) Derivative Contracts The parent company and its subsidiaries Ciecsa S.A. and S.A. Vina Santa Rita maintain Future contracts in foreign currency recorded as established in Technical Bulletin 57 of the Accountants Association of Chile. w) Computer Software The parent company and S.A. Vina Santa Rita develop computer software with their own resources and they also acquires computer packages from third parties. Disbursements due to their own development are charged to results as they are generated. Computer packages are recorded in Fixed Assets and amortized in 36 months by the parent company and in 48 months by the subsidiary S.A. Vina Santa Rita. x) Research and development expenses The companies do not show any expenses in this item. 11 y) Cash flow statement: According to current regulations of the Securities and Insurance Commission and the Accountants Association of Chile, in preparing the cash flow statement, the Company has considered time deposits and deposits with maturities under 90 days as cash. Such cash flows related to the Company's line of business, interest paid, interest income received, dividends received, and all such that is not defined as investment or Financing is included under the heading "Flow Originating in Activities of the Operation." Disbursements originating in time deposits and deposits with maturities over 90 days have been classified in the item "Investments in Financial Instruments." 12 CRISTALERIAS DE CHILE S.A. NOTE 2 - APPLIED ACCOUNTING CRITERIA COMPANIES INCLUDED IN THE CONSOLIDATED REPORT
Percentage of Shareholding -------------------------- 03.31.2003 03.31.2002 ------------------------------------ ----------- R.U.T. Ccompany Name Direct Indirect Total Total -------- ------------ --------- ---------- -------- ----------- 96.721.580-5 Cristalchile Comunicaciones S.A. 99.9980 0.0000 99.9980 99.9980 96.767.580-6 Constructora Apoger S.A. 80.0000 0.0000 80.0000 80.0000 96.608.270-4 Ciecsa S.A. 98.2737 0.0000 98.2737 98.2102 86.547.900-K S.A. Vina Santa Rita 54.0970 0.0000 54.0970 54.0970 96.972.440-5 Cristalchile Inversiones S.A. 99.9900 0.0100 100.0000 100.0000
13 03. Accounting Changes As of March 31, 2003 and 2002, there have not been any changes in the accounting criteria applied that affect the consolidated financial statements. 14 04. Marketable Securities As of March 31, 2003, this item includes the following investments: a) Th Ch$ 55,388,004 in bonds and fixed rate instruments, wich correspond mainly to investments in state bonds and of financial institutions of USA, Germany and Holland, collateralized bonds of public companies of USA (with guarantee from accounts receivable) and American mortgage bonds with state guarantee. b) Th Ch$ 9,301,239 in investment funds quotas called BBH U.S Money Market Portfolio. c) Shares for Th Ch$ 3,830,015. As of March 31, 2002, Th Ch$ 3,388,219 are included and correspond to investment in shares, Th Ch$ 10,366,343 in fixed rate mutual funds and Th Ch$ 54,680 for accrued interest of long-term bonds CRISTALERIAS DE CHILE S.A. NOTE 4 -MARKETABLE SECURITIES BALANCE COMPOSITION Type of Security Book Value ---------------- ---------- 03-31-2003 03-31-2002 ---------- ---------- Shares 3,830,015 3,388,219 Bonds 55,388,004 54,680 Shares in mutual funds 0 10,366,343 Shares in investment funds 9,301,239 0 Public tender notes 0 0 Mortgage bonds 0 0 Total Marketable Securities 68,519,258 13,809,242 15 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES SHARES
Unit Market R.U.T. Company Name Number of Participation Market Investment Corrected Shares Percentage Value Value Cost ----- ------------ --------- ------------- ------ ---------- --------- 96.512.200-1 Bodegas y Vinedos Santa Emiliana S.A. 60,440,462 9.4970 96 5,802,284 3,830,015 Value Investment Portfolio 5,802,284 3,830,015 Adjustment Provision 0 Book value, Investment Portfolio 3,830,015
16 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES FIXED RATE INSTRUMENTS
Book Value --------------------- Par Market Type of Security Value Rate % Value Provision ---------------- ---------- ---------------------- ----------- --------- Bonds of Financial Institutions in USA, Germany and Holland 15,492,461 15,492,461 1.28 15,911,401 0 US Treasury Bonds 29,005,950 29,005,950 1.17 29,019,522 0 US Mortgage Bonds, with state guarantee 4,807,804 4,807,804 1.15 4,807,804 0 Time Deposit 201,179 201,179 0.665 201,179 0 Cash Balance 22,610 22,610 0.00 22,610 0 Call Deposit 5,858,000 5,858,000 1.28 5,858,000 0 TOTAL 55,388,004 55,388,004 55,820,516 - Note: (1) The investements have been made in U.S. Dollar (79.7%) and EUROS (20.3%) and are in custody abroad. (2) These investments can be recovered with 48 hours notice.
17 05. Short-Term and Long-Term Debt As of March 31, 2003 and 2002, there are balances short-term debt in the amount of Ch$33,071,445 (Ch$28,277,765 in 2002). The bad debt reserve of Ch$649,839 in 2003 (Ch$516,495 in 2002) is shown deducting the balances of Debt from Sales and Accounts receivable. The balances of Short-term Debt are shown net of Customer Advanced Payments. Also, there is a balance of Ch$184,616 in Long Term Debt in 2003 (Ch$218,843 in 2002). 18 CRISTALERIAS DE CHILE S.A. NOTE 5 -SHORT AND LONG TERM DEBT Short and Long-term debtors Current ----------------------------------------------------------------------------------------- Up to 90 days > 90 up to 1 year Total Current (net) ---------------------- ----------------------- ----------------------- Item 03-31-2003 03-31-2002 03-31-2003 03-31-2002 Subtotal 03-31-2003 03-31-2002 ---- ---------- --------- ---------- ---------- ---------- ---------- ---------- Debts from Sales 31,875,185 27,388,450 1,644,088 1,285,717 33,519,273 33,071,445 28,277,765 Estimate of bad debtors - - - - 447,828 - - Documents receivable 3,958,138 4,893,762 73,013 37,820 4,031,151 3,829,140 4,811,488 Estimate of bad debtors - - - - - - - Misc. Debtors 1,255,253 817,823 48,925 25,835 1,304,178 1,304,178 843,657 Estimate of bad debtors - - - - - - - Long-Term ------------------------- 03-31-2003 03-31-2002 ---------- ---------- Debts from Sales 0 0 Estimate of bad debtors - - Documents receivable 0 0 Estimate of bad debtors - - Misc. Debtors 184,616 218,843 Estimate of bad debtors - - Total Long-Term Debtors 184,616 218,843
19 06. Balances and Transactions with related entities Short-term accounts receivable as of March 31, 2003 that total Th Ch$ 341,341 (Th Ch$ 507,293 in 2002) corresponding mainly to a loan granted by the subsidiary Ciecsa to Editorial Zig Zag for Th Ch$ 161,146 including interests, with maturity on 06-30-2003 at an annual interest rate of 1% and advertising sold by Red Televisiva Megavision S.A. to Metropolis-Intercom for Th $ 88,565. The balance corresponds to invoicing receivable for Th Ch$ 91,630. Short-term accounts payable totaling Th Ch$ 210,952 in 2003 (Th Ch$ 1,295,224 in 2002) corresponds to commercial transactions under 90 days for Th Ch $ 130,227, and dividends payable to Majority shareholders for Th Ch$ 80,725. In 2003 there is a long-term receivable corresponding to invoices totaling Ch Th$ 1,504 of Long-term Accounts Receivable (Ch Th$ 1,380 in 2002). 20 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCE AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS RECEIVABLE
Short Term Long Term R.U.T. Company 03-31-2003 03-31-2002 03-31-2003 03-31-2002 -------- ---------- ---------- ---------- ---------- ---------- 89.150.900-6 Vina Los Vascos S.A. 78,594 182,895 0 0 0-E Rayen Cura SAIC 0 142 0 0 83.032.100-4 Serv. Y Consultorias Hendaya S.A. 253 0 0 0 90.684.000-6 Editorial Zig-Zag S.A. 161,146 285,075 0 0 86.881.400-4 Envases CMF S.A. 5,085 61 0 0 90.320.000-6 Cia. Electro Metalurgica S.A. 108 89 0 0 96.539.380-3 Ediciones Financieras S.A. 2,751 57 0 0 79.753.810-8 Claro y Cia. 125 142 0 0 96.787.775-1 Metropolis Intercom S.A. 78,646 36,169 0 0 90.160.000-7 Sudamericana de Vapores S.A. 591 1,975 0 0 77658870-9 Marketing Meter Ltda. 0 688 0 0 96793770-3 Ediciones Chiloe S.A. 0 0 1,504 1,380 86963200-7 Forus S.A. 14,042 0 0 0 Total 341,341 507,293 1,504 1,380
21 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS PAYABLE
Short Term Long Term R.U.T. Company 03-31-03 03-31-2002 03-31-03 03-31-2002 -------- ---------- ---------- ---------- ---------- ---------- 90.320.000-6 Cia. Electro Metalurgica S.A. 11,599 0 0 0 0-E Rayen Cura S.A.I.C 11,715 0 0 0 89.150.900-6 Vina Los Vascos S.A. 1,109 16,494 0 0 79.753.810-8 Claro y Cia. 27,639 0 0 0 96.539.380-3 Ediciones Financieras S.A. 11,281 6,995 0 0 86.881.400-4 Envases CMF S.A. 134,718 16,770 0 0 78.619.370-2 Cordillera Comunicaciones Ltda. 0 208,794 0 0 90.160.000-7 Cia. Sudamericana de Vapores S.A. 12,500 6,987 0 0 96.787.775-1 Metropolis Intercom S.A. 0 14,180 0 0 0-E Televisa Internacional S.A. de C.V. 0 1,021,236 0 0 86963200-7 Forus S.A. 0 2,493 0 0 96793770-3 Ediciones Chiloe S.A. 0 183 0 0 77.658.870-9 Marketing Meter Ltda. 391 1,092 0 0 Total 210,952 1,295,224 0 0
22 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES
TRANSACTIONS 03-31-2003 -------------------------- Company R.U.T. Relationship Transaction Description Amount Effect on Result ------- ------ ------------ ----------------------- ------ ---------------- Envases CMF S.A. 86.881.400-4 Indirect affiliate Materials purchased 115,018 0 - Products sold 92 30 - Other sales 146 0 Serv. Y Consultorias Hendaya S.A. 83.032.100-4 Majority shareholder Services received 320,898 -320,898 - Dividends paid 119,267 0 - Services supplied 5,034 5,034 Cia. Electro Metalurgica S.A. 90.320.000-6 Majority shareholder Dividends paid 457,380 0 - Other sales 92 0 - Materials purchased 1,800 0 Claro y Cia. 79.753.810-8 With the president Advice received 15,474 -15,474 - Products sold 108 36 Navarino S.A. 96.566.900-0 Same Parent Services supplied 2,506 2,506 Quemchi S.A. 96.640.360-8 Same Parent Services rendered 3,135 3,135 Rayen Cura S.A.I.C. 0-E Indirect affiliate Direct sales 37,895 0 Cia. Sud-Americana de Vapores S.A. 90.160.000-7 Same Parent Freight services 125,723 -12,223 - Products sold 903 299 - Other sales 659 0 - Advertising hired 0 0 Ediciones Financieras S.A. 96.793.77-3 Indirect affiliate Services received 10,297 -10,297 Products sold 2,379 788 Services purchased 64 64 Inversiones Bayona S.A. 86.755.600-1 Majority shareholder Dividends paid 124,163 0 Vina Los Vascos S.A. 89.150.900-6 Indirect affiliate Direct sales 141,924 40,130 Materials purchased 7,531 0 Metropolis Intercom S.A. 96.787.750-6 Indirect affiliate Advertising hired 67,950 58,722 - Products sold 3,518 1,166 Forus S.A. 86.963.200-7 Affiliate Advertising hired 11,900 11,900 - Services purchased 0 0 Televisa Internacional S.A.C.V 0-E Affiliate Materials purchased 0 0 03-31-2002 -------------------------- Company R.U.T. Relationship Transaction Description Amount Effect on Result ------- ------ ------------ ----------------------- ------ ---------------- Envases CMF S.A. 86.881.400-4 Indirect affiliate Materials purchased 77 -77 - Products sold 0 0 - Other sales 0 0 Serv. Y Consultorias Hendaya S.A. 83.032.100-4 Majority shareholder Services received 273,955 -273,955 - Dividends paid 176,855 0 - Services supplied 5,015 5,015 Cia. Electro Metalurgica S.A. 90.320.000-6 Majority shareholder Dividends paid 678,229 0 - Other sales 0 0 - Materials purchased 0 0 Claro y Cia. 79.753.810-8 With the president Advice received 17,467 -17,467 - Products sold 0 0 Navarino S.A. 96.566.900-0 Same Parent Services supplied 2,528 2,528 Quemchi S.A. 96.640.360-8 Same Parent Services rendered 2,528 2,528 Rayen Cura S.A.I.C. 0-E Indirect affiliate Direct sales 0 0 Cia. Sud-Americana de Vapores S.A. 90.160.000-7 Same Parent Freight services 12,731 0 - Products sold 0 0 - Other sales 0 0 - Advertising hired 27,680 27,680 Ediciones Financieras S.A. 96.793.77-3 Indirect affiliate Services received 3,254 -3,254 Products sold 0 0 Services purchased 0 0 Inversiones Bayona S.A. 86.755.600-1 Majority shareholder Dividends paid 184,116 0 Vina Los Vascos S.A. 89.150.900-6 Indirect affiliate Direct sales 172,238 44,873 Materials purchased 12,217 0 Metropolis Intercom S.A. 96.787.750-6 Indirect affiliate Advertising hired 62,968 62,968 - Products sold 0 0 Forus S.A. 86.963.200-7 Affiliate Advertising hired 19,411 19,411 - Services purchased 2,113 -2,113 Televisa Internacional S.A.C.V 0-E Affiliate Materials purchased 910,602 910,602
23 07. Inventory An itemized list of inventory, valued according to note 2 h), is presented in the following chart: CRISTALERIAS DE CHILE S.A. NOTE 7 - INVENTORY (Consolidated)
2003 2002 Th Ch$ Th Ch$ ------- ------- Finished Products ----------------- * Cristalerias de Chile S.A. 2,350,612 2,589,531 * S.A. Vina Santa Rita 7,854,776 6,968,198 Subtotal Finished Products 10,205,388 9,557,729 Raw Materials and Fuel ---------------------- * Cristalerias de Chile S.A. 1,611,679 2,067,372 * S.A. Vina Santa Rita 21,876,798 14,637,680 Subtotal Raw Materials and Fuel 23,488,477 16,705,052 Supply Materials and Parts -------------------------- * Cristalerias de Chile S.A. 1,049,208 1,262,998 * S.A. Vina Santa Rita 1,881,918 1,564,990 Subtotal Supply Materials and Parts 2,931,126 2,827,988 Materials in Transit 627,189 360,640 -------------------- Red Televisiva Megavision S.A. (CIECSA S.A.) -------------------------------------------- Foreign taped to be broadcasted 3,230,256 2,581,147 Domestic programming to be broadcasted 636,964 141,181 3,867,220 2,722,328 Total 41,119,400 32,173,737
24 08. Deferred taxes and income taxes A) DEFERRED TAXES. Accumulated balances of deferred taxes for temporary differences, and their composition in the income tax account for effects of fiscal year results and recognition of deferred taxes, are presented on the attached charts. Amortization periods of deferred taxes have been estimated on average at 1.8 years for Short-Term Assets, 4.1 years for Long-Term Assets, and 14.4 years for Long-term Liabilities. B) INCOME TAX The parent company and its subsidiary S.A. Vina Santa Rita, made tax provisions for 16.5% of taxable income in 2003 (16% in 2002) subject to the First Category and 35% for the Single Income Tax under Art. 21, for the 2003 and 2002 fiscal years. The other consolidated subsidiaries maintain negative taxable incomes and therefore have not provisioned for this concept. Credits against taxes are shown deducting the payables obligation. The itemized list is the following: 2003 2002 Th Ch$ Th Ch$ --------- --------- Fiscal year income tax provision (1,115,303) (718,174) Single tax reserve (2,646) (3,415) --------- --------- SUB TOTAL (1,117,949) (721,589) Credits: Monthly provisional payments 967,800 1,068,986 Training expenditures 13,191 59,622 Fixed Assets credit 13,167 45,864 Advance Earnings Tax 45,940 32,093 --------- --------- CREDIT SUB TOTAL 1,040,098 1,206,565 Income Tax (77,851) 484,976 Income Tax to be Recovered 0 0 Other Taxes to be recovered: VAT Fiscal Credit 593,618 640,699 Income tax credit, previous year 613,563 1,025,675 TOTAL TAXES TO BE --------- --------- RECOVERED 1,129,330 2,151,360 25 C) TAXABLE PROFIT FUND The parent company registered the following balance of profits to be distributed: 2003 2002 Th Ch$ Th Ch$ ----------- ----------- Generated as of 12.31.1983: Profits adjustment 1,909,034 1,909,034 Generated since 01.01.1984: Without Credit 1,072,115 2,673,752 With 10% First Category Credit 22,694 82,075 With 15% First category Credit 92,502,240 100,864,409 With 15% Additional rate Credit 722 740 With 16% First Category Credit 16,906,651 3,687,712 With 16.5% First Category Credit 5,950,023 0 ----------- ----------- SUB-TOTAL TAX PROFITS 116,454,445 107,308,688 Non-income revenues 6,825,087 6,821,960 ----------- ----------- TOTAL RETAINED EARNINGS 123,279,532 114,130,648 26 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
03-31-2003 ----------------------------------------------------------- Asset Deferred Tax Liability Deferred Tax --------------------------- ------------------------ Item Short term Long Term Short Term Long Term ---- ---------- --------- ---------- --------- Temporary Differences Uncollectable accounts Provision 109,758 0 0 0 Anticipated Income 430,798 0 0 0 Vacation provision 116,444 0 0 0 Intangible Amortization 0 0 0 0 Leased assets 0 0 0 0 Manufacturing expenses 0 0 0 0 Depreciations fixed assets 0 14,781 0 8,206,606 Severance payments 2,131 148,063 0 0 Other events 0 0 0 0 Packaging reserve 172,496 0 0 0 Furnace repair provision 193,105 354,571 0 0 Stock obsolescence provision 35,356 0 0 0 Spare parts obsolescence provision 97,163 0 0 0 Lower value sale of bonds 67,740 0 53,357 810,398 Deferred customs duties 2,305 592 0 83,578 Non realized profits 124,257 61,912 0 0 Other provisions 63,435 0 14,644 0 Direct labor 21,502 0 0 0 Amortization commercial brands 33,175 0 0 0 Tax losses 0 4,639,753 0 0 Expenses assetted 0 0 240,003 0 Prepaid expenses 0 0 25,705 0 Banking reserve 0 0 0 46,882 Fixed assets, molds 0 0 0 276,739 Machinery repair provision 0 0 0 0 Others Supplementary accounts-net of amort. 198,083 3,950,255 0 3,821,025 Valuation provision 0 0 Total 1,271,582 1,269,417 333,709 5,603,178 03-31-2002 ----------------------------------------------------------- Asset Deferred Tax Liability Deferred Tax --------------------------- ------------------------ Item Short term Long Term Short Term Long Term ---- ---------- --------- ---------- --------- Temporary Differences Uncollectable accounts Provision 96,339 0 0 0 Anticipated Income 295,184 0 0 0 Vacation provision 105,810 0 0 0 Intangible Amortization 0 0 0 0 Leased assets 0 0 0 0 Manufacturing expenses 0 0 250,436 0 Depreciations fixed assets 0 5,780 0 7,647,986 Severance payments 1,790 34,004 0 0 Other events 118,054 98,555 0 0 Packaging reserve 220,841 0 0 0 Furnace repair provision 185,184 565,327 0 0 Stock obsolescence provision 43,157 0 0 0 Spare parts obsolescence provision 96,996 0 0 0 Lower value sale of bonds 43,023 0 0 228,547 Deferred customs duties 25,676 0 0 0 Non realized profits 70,936 1,612 0 0 Other provisions 0 0 0 0 Direct labor 9,000 0 0 0 Amortization commercial brands 228,198 0 0 0 Tax losses 0 5,221,201 0 0 Expenses assetted 0 0 0 0 Prepaid expenses 0 0 35,957 0 Banking reserve 11,878 0 0 0 Fixed assets, molds 0 0 0 272,382 Machinery repair provision 169,998 0 0 0 Others Supplementary accounts-net of amort. 241,066 4,688,549 154,445 4,536,703 Valuation provision 0 0 Total 1,480,998 1,237,930 131,948 3,612,212
27 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX
03/31/2003 03/31/2002 Th Ch$ Th Ch$ ---------- ---------- Current tax expense (tax provision) -1,117,949 -720,145 Adjustment tax expense (previous year) 0 0 Effects from assets or liabilities, deferred year's tax -281,339 -320,946 Tax benefit from tax losses 110 0 Effect of amortiz. of supplementary accounts for deferred assets and liabilities -127,387 20,724 Effect on assets or liabilities from deferred tax from changes in assessment provision 0 0 Other charges or credits to the account 5,225 0 Total -1,521,340 -1,020,367
28 09. Short and Long-term Leasing Contracts and Assets for Leasing (note required for leasing companies defined in circular no.939, 1990) As of March 31, 2003, ther are no balances included for this concept. 29 10. Other current assets As of March 31, 2003, this item includes investments in: a) Financial instruments with resale agreements for Th Ch$ 16,447,554 valued according to note 2 q). b) Deferred expenses for bond placement for Th Ch$ 362,238 c) Bank reserve for Th Ch$28,452. d) Positive balance for Th Ch$ 86,144 for Future Contracts in foreign currency. As of March 31, 2002, there were investments in financial instruments with resale agreements for Th Ch$ 17,762,621, valued according to note 2 q), deferre expenses for bonds placement for Th Ch$ 39,876 and Th Ch$ 28,737 for bank reserve. 30 11. Information on operations involving purchase agreements, sales agreements, sale with repurchase agreement, and purchase with resale agreement of titles or real estate securities Information about these transactions is presented in attached charts. 31 NOTE 11 - INFORMATION ON OPERATIONS OF PURCHASE COMMITMENT, SALE COMMITMENT, SALE WITH REPURCHASE AGREEMENTS AND PURCHASE WITH RESALE AGREEMENTS OF TITLES AND REAL ESTATE SECURITIES SALE WITH REPURCHASE (VRC) AND PURCHASE WITH RESALE (CRV) COMMITMENT OPERATIONS
Dates ----- Original Price Final Code Start End Counterpart Currency Set Rate Value ---- ----- --- ----------- -------- ----- ---- ----- CRV 03.26.2003 04.01.2003 Citibank N.A. Pesos 1,000,000 0.21 1,000,420 CRV 03.27.2003 04.03.2003 Banco Chile Pesos 591,500 0.20 591,776 CRV 03.27.2003 04.04.2003 Banco Santander Pesos 576,500 0.22 576,838 CRV 03.31.2003 04.04.2003 Banco Santander Pesos 300,000 0.25 300,100 CRV 03.31.2003 04.07.2003 Banco Chile Pesos 752,000 0.20 752,351 CRV 01.06.2003 04.07.2003 BBVA - BHIF Dollars 2,467,551 2.04 2,500,304 CRV 03.28.2003 04.25.2003 BankBoston Pesos 363,795 0.23 364,576 CRV 03.28.2003 04.25.2003 Banco de Credito e Inversiones Pesos 3,000,000 0.23 3,005,750 CRV 03.31.2003 04.04.2003 BankBoston Pesos 750,000 0.33 750,330 CRV 03.31.2003 04.04.2003 BankBoston Pesos 70,000 0.33 70,031 CRV 03.14.2003 04.25.2003 Banco Chile Dollars 1,795,416 1.73 1,759,288 CRV 03.31.2003 04.25.2003 Banco Chile Dollars 247,302 1.50 248,989 CRV 03.31.2003 04.04.2003 Banco Chile Pesos 50,000 0.29 50,019 CRV 03.31.2003 04.04.2003 Banco Chile Pesos 18,000 0.29 18,007 CRV 03.03.2003 04.07.2003 Banco Chile Dollars 750,280 1.77 732,819 CRV 03.07.2003 04.07.2003 Banco Chile Dollars 622,405 1.74 604,441 CRV 03.14.2003 04.25.2003 Banco Chile Dollars 299,236 1.73 293,215 CRV 03.31.2003 04.25.2003 Banco Chile Dollars 39,277 1.50 39,545 CRV 03.31.2003 04.25.2003 Banco Chile Dollars 189,114 1.50 190,404 CRV 02.24.2003 07.18.2003 Scotiabank Pesos 300,000 0.25 303,600 CRV 02.28.2003 06.30.2003 Scotiabank Pesos 100,000 0.25 101,017 CRV 03.26.2003 04.04.2003 Scotiabank Pesos 250,000 0.28 250,210 CRV 03.17.2003 04.09.2003 Banco Santander Pesos 300,000 0.21 300,483 CRV 03.20.2003 04.04.2003 Banco Santander Pesos 300,000 0.22 300,770 CRV 07.11.2002 04.25.2003 Scotiabank Dollars 286,800 1.80 295,097 CRV 11.14.2002 05.23.2003 Scotiabank Dollars 285,415 1.75 295,327 CRV 11.25.2002 06.20.2003 Scotiabank Dollars 212,400 1.85 221,803 CRV 02.12.2003 07.25.2003 Scotiabank Dollars 373,700 1.60 368,430 CRV 03.31.2003 04.25.2003 Scotiabank Dollars 145,400 1.50 147 Dates ----- Original Code Start End Counterpart Currency Instrument Market Value ---- ----- --- ----------- -------- ---------- ------------ CRV 03.26.2003 04.01.2003 Citibank N.A. Pesos PDBC 1,000,350 CRV 03.27.2003 04.03.2003 Banco Chile Pesos PDBC-PRD 591,658 CRV 03.27.2003 04.04.2003 Banco Santander Pesos PRD-PCD 576,669 CRV 03.31.2003 04.04.2003 Banco Santander Pesos PRD-PCD 300,000 CRV 03.31.2003 04.07.2003 Banco Chile Pesos PDBC-PRD 752,000 CRV 01.06.2003 04.07.2003 BBVA - BHIF Dollars PRD-ZERO 2,534,025 CRV 03.28.2003 04.25.2003 BankBoston Pesos PRD 363,879 CRV 03.28.2003 04.25.2003 Banco de Credito e Inversiones Pesos PRD 3,000,690 CRV 03.31.2003 04.04.2003 BankBoston Pesos PRD 750,000 CRV 03.31.2003 04.04.2003 BankBoston Pesos PRD 70,000 CRV 03.14.2003 04.25.2003 Banco Chile Dollars PRD 1,757,178 CRV 03.31.2003 04.25.2003 Banco Chile Dollars PRD 248,730 CRV 03.31.2003 04.04.2003 Banco Chile Pesos PRD 50,000 CRV 03.31.2003 04.04.2003 Banco Chile Pesos PRD 18,000 CRV 03.03.2003 04.07.2003 Banco Chile Dollars PRD 732,567 CRV 03.07.2003 04.07.2003 Banco Chile Dollars PRD 604,237 CRV 03.14.2003 04.25.2003 Banco Chile Dollars PRD 292,863 CRV 03.31.2003 04.25.2003 Banco Chile Dollars PRD 39,504 CRV 03.31.2003 04.25.2003 Banco Chile Dollars PRD 190,207 CRV 02.24.2003 07.18.2003 Scotiabank Pesos PRBC 300,900 CRV 02.28.2003 06.30.2003 Scotiabank Pesos PRBC 100,267 CRV 03.26.2003 04.04.2003 Scotiabank Pesos PRBC 250,140 CRV 03.17.2003 04.09.2003 Banco Santander Pesos PRBC 300,315 CRV 03.20.2003 04.04.2003 Banco Santander Pesos PRBC 300,264 CRV 07.11.2002 04.25.2003 Scotiabank Dollars PRBC 294,746 CRV 11.14.2002 05.23.2003 Scotiabank Dollars PRBC 294,587 CRV 11.25.2002 06.20.2003 Scotiabank Dollars PRBC 220,900 CRV 02.12.2003 07.25.2003 Scotiabank Dollars PRBC 366,560 CRV 03.31.2003 04.25.2003 Scotiabank Dollars PRBC 146,318
32 12. Fixed Assets Fixed Assets: CRISTALERIAS DE CHILE S.A. The Fixed Assets are shown at purchase cost plus the legal and regulatory revaluations accumulated as of March 31, 2003 and 2002. The items that make up the Company's fixed assets as of March 31, 2003 and 2002 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery, and Equipment distributed between the Padre Hurtado plant and other minor. During year 2002 the Company effected an adjustment in the value of fixed assets that were charged off with their respective accumulated depreciation. Technical Reappraisal and Adjustment of Accounting Values: The Company carried out a technical reappraisal of its fixed assets in 1979. In June 1986 it also adjusted the assets. Both operations were carried out according to the provisions established in Circular Letters No. 1529 and No. 550 respectively of the Securities and Insurance Commission. The effects of these operations, including write-offs of property, are shown on the attached chart. Depreciations: The charge against results for this item is Th Ch$ 3,450,711 in 2003 and Th Ch$ 3,357,332 in 2002. The detail is shown on an attached chart. 33 CRISTALERIAS DE CHILE S.A. AND SUBSIDIARIES NOTE 12 - FIXED ASSETS 2003 2002 ThCh$ Th Ch$ -------- -------- LAND Land and Mining Properties 12,995,463 13,425,783 Subtotal Lands 12,995,463 13,425,783 BUILDINGS AND INFRASTRUCTURE PROJECTS Hi rises and industrial buildings 29,971,138 30,973,097 Installations 30,648,388 23,326,354 Residences 26,083 26,051 Subtotal Buildings and Infrastructure Projects 60,645,609 54,325,502 Accumulated Depreciation 18,736,333 15,498,745 Fiscal year Depreciation 742,349 608,288 Subtotal Depreciations 19,478,682 16,107,033 SUBTOTAL CONSTRUCTIONS & PROJECTS 41,166,927 38,218,469 MACHINERY AND EQUIPMENT Machinery 83,977,342 89,208,390 Furnaces 35,912,456 37,563,044 Furniture and Furnishings 2,454,254 2,943,692 Tools 624,165 620,690 Rolling Stock 825,224 749,566 Subtotal Machinery and equipment 123,793,441 131,085,382 Accumulated Depreciation 62,792,548 60,816,445 Fiscal year Depreciation 2,656,474 2,697,222 Subtotal Depreciations 65,449,022 63,513,667 Subtotal Machinery and Equipment 58,344,419 67,571,715 OTHER FIXED ASSETS Spare parts 5,394,574 4,716,214 Imports in transit 785,913 1,278,062 Work in progress 8,205,218 3,956,853 Lots in Pirque and Leyda 472,652 472,057 Deferred Customs Duties 383,750 522,695 Packages and Bundling 234,545 234,251 Other 1,978,851 1,918,370 Subtotal Other Fixed Assets 17,455,503 13,098,502 TOTAL FIXED ASSETS 214,890,016 211,935,169 TOTAL ACCUMULATED DEPRECIATION 81,528,881 76,315,190 TOTAL DEPRECIATION OF THE PERIOD 3,398,823 3,305,510 TOTAL NET FIXED ASSETS 129,962,312 132,314,469 34 TECHNICAL REVALUATION AND ADJUSTMENT TO ACCOUNTING VALUES 2003 2002 Th Ch$ Th Ch$ --------- -------- LAND Land and mining properties 311,374 310,752 Subtotal net land and mining properties 311,374 310,752 BUILDINGS AND INFRASTRUCTURE PROJECTS Hi rises and industrial buildings 6,221,626 6,213,606 Installations 41,120 440,769 Subtotal Buildings 6,262,746 6,654,375 Accumulated Depreciation (4,828,036) (5,014,374) Fiscal year Depreciation (51,888) (51,822) Subtotal depreciation (4,879,924) (5,066,196) SUBTOTAL BUILDINGS AND INFRASTRUCTURE PROJECTS 1,382,822 1,588,179 TOTAL NET TECHNICAL REVALUATION 1,694,196 1,898,931 TOTAL REVALUED ASSETS 7,675,631 8,566,805 TOTAL ACCUMULATED DEPRECIATION (5,929,547) (6,616,052) TOTAL DEPRECIATION OF THE PERIOD (51,888) (51,822) TOTAL NET 1,694,196 1,898,931 35 13. Sales transactions with leaseback These type of transactions were not carried out as of March 31, 2003 and 2002. 36 14. Investments in related companies The Company has valued its investments in related companies according to rules indicated in note 2 o). EDICIONES CHILOE S.A. On February 4, 2002, the partners of Ediciones Chiloe agreed to pay 86,352 shares already subscribed. Ciecsa paid Th Ch$ 19,859, equivalent to 43,176 shares, with which its stake maintained at 50%. The payment of 135,030 shares remains outstanding, with a payment date expiring on September 2004. INVESTMENTS ABROAD RAYEN CURA S.A.I.C. On December 28, 2002, the Company sold to its subsidiary CristalChile Inversiones S.A. the investment it had in Rayen Cura S.A.I.C., a company located in the city of Mendoza, Argentina. This transaction had no effect on results. In a Shareholders Meeting held on April 18, 2002 it was agreed to suscribe and pay a capital increase of US$ 14,000,000. On April 29, 2002, Cristalchile Inversiones S.A., effected a capital increase for US$ 5,760,000 to Rayen Cura S.A.I.C., which was registered at a parity of 3.05 Argentine Pesos per US Dollar, thereby maintaining its 40.0% stake in Rayen Cura's equity. On August 6, 2002 the Board of Rayen Cura S.A.I.C. aproved the refund of part of the irrevocable contributions subscribed and paid on April 29, 2002. The total amount was US$1,500,000, of which Cristalchile Inversiones S.A. received US$600,000, equivalent to 40% of its contribution. On November 11, 2002 the Board of Rayen Cura S.A.I.C. aproved the refund of part of the irrevocable contributions subscribed and paid on April 29, 2002. The amount reimbursed was US$3,000,000, of which contributing refund issued and paid at of 29 April, 2002, the amount was US$ 3,000,000 wich Cristalchile Inversiones S.A. received US$1,200,000, equivalent to 40% of its contribution. On January 31, 2003 the Board of Rayen Cura S.A.I.C. aproved the refund of part of the irrevocable contributions subscribed and paid on April 29, 2002. The amount reimbursed was US$3,000,000, of which contributing refund issued and paid at of 29 April, 2002, the amount was US$ 3,000,000 wich Cristalchile Inversiones S.A. received US$1,200,000, equivalent to 40% of its contribution. 37 As of March 31, 2003 the financial statements of Rayen Cura S.A.I.C. presented an exchange rate of 3.17 Argentine Pesos per US Dollar. Cristalchile Inversiones, in turn, has adjusted Rayen Cura S.A.I.C.'s financial statements in order to recognize a devaluation that went from 3.17 to 3.32 Argentina Pesos per US Dollar. As a result of the operating income of the company, the Argentine Peso devaluation and the conversion of the financial statements of Rayen Cura S.A.I.C., according to Chilean regulations, Cristalchile Inversiones S.A. has recognized a Th Ch$ 167,109 during the period. On the other hand, the variation of the Dollar exchange rate in Chile during the year caused adjustments for Th Ch$ 1,186,507 and Th Ch$ 355,453 in the investment in Rayen Cura and on negative goodwill respectively, which were credited to the item Other Equity Reserves. As stipulated in Technical Bulletin No. 64 of the Accountants Association of Chile, following is the information related to investments abroad: 2003 2002 Th$ Th$ ---------- ---------- CristalChile Inversiones's share of Rayen Cura S.A.I.C. 14,694,495 12,123,740 Negative goodwill(net of amortization) 5,439,971 5,400,920 ---------- ---------- TOTAL 20,134,466 17,524,669 ========== ========== Devaluation Loss (1,955,840) (1,774,297) Accrued Income (Loss) (167,109) (1,533,245) Potentially remittable income 0 0 The investment in Rayen Cura S.A.I.C. is presented in American Dollars. 38 CRISTALERIAS DE CHILE S.A. NOTE 14- INVESTMENTS IN RELATED COMPANIES BREAKDOWN OF INVESTMENTS
Shareholder Company Investment (Percentage) Equity Country --------- ----------------------------------------------------- of Control Number of R.U.T. COMPANY Origin Currency Shares 03-31-2003 03-31-2002 03-31-2003 03-31-2002 ----- ------- ------ -------- -------- ---------- ---------- ---------- ---------- 78.619.410-5 Cordillera Comunicaciones Chile Peso 0 50.000000000 50.00000000 141,987,532 156,884,940 Holding 78.619.370-2 Cordillera Comunicaciones Chile Peso 0 0.250000000 0.25000000 142,701,038 157,673,410 Ltda. 89.150.900-6 Vina Los Vascos S.A. Chile Peso 60,000,000 43.000000000 43.00000000 12,073,526 10,771,415 90.684.000-6 Editorial Zig-Zag S.A. Chile Peso 114,516,900 49.894881220 49.89000000 711,576 597,778 96.793.770-3 Ediciones Chiloe S.A. Chile Peso 1,570,146 50.000000000 50.00000000 1,390,352 1,593,478 96.826.870-8 Inmobiliaria Don Alberto Chile Peso 3,817 38.170000000 38.17000000 35 1,345 S.A. 86.881.400-4 Envases CMF S.A. Chile Peso 28,000 50.000000000 50.00000000 32,696,734 29,887,536 0-E Rayen Cura S.A.I.C Argentina Dollar 1,376,000 40.000000000 40.00000000 36,736,238 30,309,372 TOTAL Net Result of Income Accrual VPP ------------------------------------------------------------------------------- R.U.T. COMPANY 03-31-2003 03-31-2002 03-31-2003 03-31-2002 03-31-2003 03-31-2002 ----- ------- ---------- ---------- ---------- ---------- ---------- ---------- 78.619.410-5 Cordillera Comunicaciones -2,992,322 -4,937,344 -1,496,162 -2,468,670 70,993,766 78,442,471 Holding 78.619.370-2 Cordillera Comunicaciones -3,007,359 -4,962,153 -7,518 -12,405 356,753 394,182 Ltda. 89.150.900-6 Vina Los Vascos S.A. 253,477 78,526 108,995 33,765 5,191,616 4,631,709 90.684.000-6 Editorial Zig-Zag S.A. -61,764 -89,279 -30,817 -44,512 355,040 298,261 96.793.770-3 Ediciones Chiloe S.A. -230,614 -115,139 -115,306 -57,570 695,176 796,740 96.826.870-8 Inmobiliaria Don Alberto S.A. 0 -1,584 0 -605 13 514 86.881.400-4 Envases CMF S.A. 546,135 288,532 273,066 144,265 16,348,367 14,943,768 0-E Rayen Cura S.A.I.C 417,772 -3,833,588 167,109 -1,533,435 14,694,495 12,123,749 TOTAL 108,635,226 111,631,394 Income not Book value of Realized Investment ----------------------------------------------------- R.U.T. COMPANY 03-31-2003 03-31-2002 03-31-2003 03-31-2002 ----- ------- ---------- ---------- ---------- ---------- 78.619.410-5 Cordillera Comunicaciones Holding 0 0 70,993,766 78,442,471 78.619.370-2 Cordillera Comunicaciones 0 0 356,753 394,182 Ltda. 89.150.900-6 Vina Los Vascos S.A. 0 0 5,191,616 4,631,709 90.684.000-6 Editorial Zig-Zag S.A. 0 0 355,040 298,261 96.793.770-3 Ediciones Chiloe S.A. -205,441 -245,256 489,735 551,484 96.826.870-8 Inmobiliaria Don Alberto S.A 0 0 13 514 86.881.400-4 Envases CMF S.A. 0 0 16,348,367 14,943,768 0-E Rayen Cura S.A.I.C 0 0 14,694,495 12,123,749 TOTAL -205,441 -245,256 108,429,785 111,386,138
39 15. Investments in other companies Investments in other companies that totaled Th Ch$ 821,513 as of March 31, 2003 (Th Ch$1,485,663 in 2002) are shown on the following chart: CRISTALERIAS DE CHILE S.A. NOTE 15 - INVESTMENTS IN OTHER COMPANIES
Book Value Number of Shareholding ------------------------ R.U.T. Company Name Shares (Percentage) 03/31/2003 03-31-2002 ----- ----------- --------- ------------ ---------- ---------- 96.895.100-9 Internet Holding S.A. 57,104 7.4200 220,982 882,815 0-E Bazuca.com Inc. 266,500 7.8900 600,531 599,775 96.787.750-6 Metropolis Intercom S.A. 1 0.0000 0 22 96.806.690-0 Proser S.A. 50 0.5000 0 3,051
40 16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made in different periods of S.A. Vina Santa Rita, Vina Los Vascos S.A., Ciecsa S.A., Ediciones Financieras S.A., Envases C.M.F. S.A., and Rayen Cura S.A.I.C. have produced negative goodwill whose net balance to be amortized as of March 31, 2003 totaled Th Ch 9,682,180 (Th Ch$ 9,061,628 in 2002). POSITIVE GOODWILL As of March 31, 2003 and 2002 the Company and subsidiaries do not present any balance for this item. 41 CRISTALERIAS DE CHILE S.A. NOTE 15 - GOODWILL ON INVESTMENTS NEGATIVE GOODWILL
03-31-2003 03-31-2002 ---------------------------- -------------------------- R.U.T. Company Name Amount Amortiz. Goodwill Amount Amortiz. Goodwill this period Balance this period Balance ----- ------------ ----------- --------- ------------ --------- 99.999.999-9 Rayen Cura S.A. 82,424 5,439,971 77,156 5,400,920 86.547.900-K S.A. Vina Santa Rita 12,482 593,717 12,466 642,835 96.608.270-4 Ciecsa S.A. 30,159 1,417,461 30,121 1,536,161 89.150.900-6 Vina Los Vascos S.A. 22,181 1,206,742 22,171 1,294,832 90.684.000-6 Editorial Zig-Zag S.A. 1,580 106,636 1,578 112,813 96.539.380-3 Ediciones Financieras S.A. 0 0 0 0 79.952.350-7 Red Televisiva Megavision S.A. 13,250 917,653 1,899 74,067 TOTAL 162,076 9,682,180 145,391 9,061,628
42 17. Intangibles INTANGIBLES The following values are included in this item: Th Ch$ Th Ch$ 2003 2002 -------- ------- Concession of Channel 9 frequency and regional network 10,129,861 10,117,120 Trademarks 1,593,224 1,513.773 TOTAL INTANGIBLES 11,723,085 11,630,893 ========== ========== ACCUMULATED AMORTIZATIONS From Channel 9 Frequency (862,391) (712,516) From Trademarks (185,151) (151,438) TOTAL AMORTIZATIONS (1,047,542) (863,954) ========== ========== 43 18. Other (Assets) Its composition is the following: Th Ch$ Th Ch$ 2003 2002 ---------- ---------- Celulosa Arauco bonds (*) 10,754,702 9,136,661 Price differential bond adquisition 170,716 267,297 Cash Reserve 16,597 45,500 Local programs to be exhibited over a year from the present 0 926,834 Foreign programs to be exhibited over a year from the present 1,351,598 6,301 Negative goodwill Bond Sale (Net) 2,414,627 1,074,155 Long-Term Tax VAT Vina Dona Paula 355,419 0 Expenses of bond sales 1,174,189 230,362 Prepaid Custom Duty Interests 0 208.248 Share of Las Araucarias Golf Club 2,495 0 Others 95,116 221,409 ---------- ---------- Total 16,335,459 12,116,767 ========== ========== (*) Investments in Celulosa Arauco bonds equivalent to US$13,420,000 at an annual rate of 6.95% and maturity with on March 15, 2005, its valuation and registry is in line with Circular No 368 of the Securities and Insurance Comission, as a long-term fixed rate instrument. Considering that there is the intention of maintaining the Celulosa Arauco and Constitucion S.A. bonds until their due date on March 15, 2005, the valuation and registration of the bonds fulfills the provisions in Circular Letter No. 368 of the S.V.S., as Long-term Fixed Rate Instruments. 44 19. Short-term obligations with banks and financial institutions A detailed list of operations is shown on the attached chart. 45 CRISTALERIAS DE CHILE S.A. NOTE 19- SHORT TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS
Type of Currency and Readjustment Index -------------------------------------------------------------------------------- Other Foreign Dollars Euro Yens Currencies ----------------------- ---------------- --------------- ------------- Bank or Financial 03-31- 03-31- 03-31- 3-31- R.U.T Institution 03-31-2003 03-31-2002 2003 2002 2003 2002 03-31-2003 ----- ----------------- ---------- ---------- ----- ----- ----- ----- ---------- Short term (code: 5.21.10.10) 0-E Banco Regional de Cuyo 0 0 0 0 0 0 9,827 97.036.000-K Banco Santiago 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 TOTAL 0 0 0 0 0 0 9,827 Amount capital due 0 0 0 0 0 0 0 Annual average interest rate 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Long Term - Short Term (code: 5.21.10.20) 0-E JP Morgan Chase Bank 445,743 19,554,244 0 0 0 0 0 97.036.000-K Banco Santiago 0 0 0 0 0 0 0 97.008.000-7 Citibank NA 2,020,655 1,939,280 0 0 0 0 0 0-E Banco Dresner 0 997,950 0 0 0 0 0 0-E Banco Argentaria 267,739 249,150 0 0 0 0 0 97.018.000-1 Scotiabank 0 0 0 0 0 0 0 97.006.000-6 Banco Credito e Inversiones 0 0 0 0 0 0 0 97.004.000-4 Banco Chile 0 0 0 0 0 0 0 97.030.000-5 Banco Estado 0 0 0 0 0 0 0 Other 0 0 0 0 0 0 0 TOTAL 2,734,137 22,740,624 0 0 0 0 0 Amount capital due 2,261,452 22,529,344 0 0 0 0 0 Average annual interest rate 2.01 3.6 0.00 0.00 0.00 0.00 0.00 Percentage oblig. foreign curr. (%) 62.0000 Percentage oblig. foreign curr. (%) 38.0000 Type of Currency and Readjustment Index ---------------------------------- Other Foreign Currencies U.F. Non adjustable $ Total ---------- ----------------------- ------------------------ ----------------------- Bank or Financial R.U.T Institution 03-31-2002 03-31-2003 03-31-2002 03-31-2003 03-31-2002 03-31-2003 03-31-2002 ----- ----------------- --------- ---------- ---------- ---------- ---------- ---------- ---------- Short term (code: 5.21.10.10) 0-E Banco Regional de Cuyo 4,453 0 0 0 0 9,827 4,453 97.036.000-K Banco Santiago 0 0 0 0 1,048,086 0 1,048,086 Other 0 0 0 0 0 0 0 TOTAL 4,453 0 0 0 1,048,086 9,827 1,052,539 Amount capital due 4,453 0 0 0 1,038,000 0 1,042,543 Annual average interest rate 0.00 0.00 0.00 0.00 6.96 Long Term - Short Term (code: 5.21.10.20) 0-E JP Morgan Chase Bank 0 0 0 0 0 445,743 19,554,244 97.036.000-K Banco Santiago 0 476,661 2,320,805 0 0 476,661 2,320,805 97.008.000-7 Citibank NA 0 0 0 0 0 2,020,655 1,939,280 0-E Banco Dresner 0 0 0 0 0 0 997,950 0-E Banco Argentaria 0 0 0 0 0 267,739 249,150 97.018.000-1 Scotiabank 0 421,201 447,928 0 0 421,201 447,928 97.006.000-6 Banco Credito e Inversiones 0 168,462 170,348 0 0 168,462 170,348 97.004.000-4 Banco Chile 0 307,485 218,186 0 0 307,485 218,186 97.030.000-5 Banco Estado 0 0 0 268,804 0 268,804 0 Other 0 0 0 0 0 0 0 TOTAL 0 1,373,809 3,157,267 268,804 0 4,376,750 25,897,891 Amount capital due 0 1,310,821 3,032,956 264,374 0 3,836,647 25,562,300 Average annual interest rate 0.00 3.79 7.28 4.94 0.00
46 20. Other Current Liabilities As of March 31, 2003 and 2002 , there is a balance Th Ch$ 1,112,135 and Th Ch$ 4,157,764 respectively in other current liabilities, corresponding to a difference in favor of financial institutions for future contracts in foreing currency subscribed by the Company, S.A. Vina Santa Rita and Ciecsa S.A. 47 21. Long-term obligations with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. 48 CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS
Institution Years to Maturity Bank or Currency More than 1 More than 2 More than 3 More than 5 Financial adjustment up to 2 up to 3 up to 5 up to 10 R.U.T. Institution index Thou Ch$ Thou Ch$ Thou Ch$ Thou Ch$ ------ ----------- ---------- -------- -------- -------- -------- 0-E J.P. Morgan Chase Bank Dollars 0 0 36,578,000 0 90.008.000-K Citibank N.A. Dollars 1,996,318 0 0 0 97.018.000-1 Banco Scotiabank UF 402,772 402,772 805,544 0 97.006.000-6 Banco Credito e Inversiones UF 167,836 167,836 0 0 97.004.000-5 Banco Chile UF 1,211,029 0 0 0 0-E Banco Argentaria Dollars 267,739 0 0 0 0-E Banco Regional de Cuyo Other 26,379 22,190 12,229 0 currency 97.030.000-7 Banco Estado Non-adjustment 409,851 132,188 264,375 0 97.036.000-K Banco Santiago UF 454,276 454,276 681,414 0 Total 4,936,200 1,179,262 38,341,562 0 Percentage of obligations in foreign currency 87.0000% Percentage of obligations in local currency 13.0000% Institution Years to Maturity Closing date Closing date Current period Previous period ----------- ----------------- -------------- --------------- Bank or More than 10 years Total Long- Annual Total Long- Financial Amount Period Term at closing average Term at closing R.U.T. Institution ------ ------ of Financial interest of Financial Thou Ch$ Statements rate Statements ------ ----------- -------- ---------- ---- ---------- 0-E J.P. Morgan Chase Bank 0 0 36,578,000 2.675 48,630,300 90.008.000-K Citibank N.A. 0 0 1,996,318 1.95 3,719,624 97.018.000-1 Banco Scotiabank 0 0 1,611,088 TAB 180+2.0 2,017,409 97.006.000-6 Banco Credito e Inversiones 0 0 335,672 TAB 90+2.0 504,393 97.004.000-5 Banco Chile 0 0 1,211,029 TAB 180+2.0 1,499,605 0-E Banco Argentaria 0 0 267,739 4,4525 502,288 0-E Banco Regional de Cuyo 0 0 60,798 1.60 59,212 97.030.000-7 Banco Estado 0 0 806,414 4.64 0 97.036.000-K Banco Santiago 0 0 1,589,966 TAB 180+1.8 0 Total 0 44,457,024 56,932,831
49 22. Short and long-term obligations with the public (promissory notes and bonds) The short-term balance as of March 2003 was Th Ch$ 1,323,579, of which Th Ch$1,109,212 corresponding to accrued interests and ThCh$ 214,367 to principal of bonds series A issued by S.A. Vina Santa Rita. As of March 31, 2003, there were long-term obligations with the public for Th Ch$ 88,953,080, of which Th Ch$ 68,812,760 correspond to bonds issued in UF's by the Company of series C1, C2, D1, D2; and Th Ch$ 20,140,320 correspond to bonds issued by Vina Santa Rita in UF of series A, C and D. As of March 31, 2002 there was a balance of Th Ch$ 583,574 for the short-term and Th Ch$ 20,596,135 for the long-term corresponding to bonds issued by S.A. Vina Santa Rita. This liability is shown in detail in the annex. 50 Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS) BONDS
REGISTRATION OR CURRENT INSTALLMENTS IDENTIFICATION No. DEPOSIT INDEXING INTEREST FINAL INTEREST AMORTIZATION OF INSTRUMENT SERIES FACE VALUE UNIT OF BOND RATE MATURITY PAYMENT PAYMENT ------------- ------ ---------- ------------ ---- -------- ------- ------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests 0 UF 4.75 07-15-2003 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 C2 Interests 0 UF 4.75 07-15-2003 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 D1 Interests 0 UF 5.80 07-15-2003 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 C2 Interests 0 UF 5.80 07-15-2003 SEMI-ANNUAL SEMI-ANNUAL 144-12.07.91 A 12,500 UF 6.70 06-01-2003 SEMI-ANNUAL SEMI-ANNUAL 241-15.12.00 C1 Interests 0 UF 6.25 06-01-2003 SEMI-ANNUAL SEMI-ANNUAL 241-15.12.00 D1 Interests 0 UF 6.25 06-01-2003 SEMI-ANNUAL SEMI-ANNUAL 241-15.12.00 C2 Interests 0 UF 6.25 06-01-2003 SEMI-ANNUAL SEMI-ANNUAL TOTAL CURRENT PORTION LONG-TERM BONDS 296-09.07.02 C1 1,500,000 UF 4.75 07-15-2008 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 C2 500,000 UF 4.75 07-15-2008 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 D1 1,900,000 UF 5.80 07-15-2023 SEMI-ANNUAL SEMI-ANNUAL 296-09.07.02 D2 200,000 UF 5.80 07-15-2023 SEMI-ANNUAL SEMI-ANNUAL 144-7.12.91 A 0 UF 6.70 06-01-2003 SEMI-ANNUAL SEMI-ANNUAL 241-15.12.00 C1 200,000 UF 6.25 12-15-2005 SEMI-ANNUAL SEMI-ANNUAL 241-15.12.00 D1 100,000 UF 6.25 12-15-2021 SEMI-ANNUAL SEMI-ANNUAL 241-15.12.00 D2 900,000 UF 6.25 12-15-2021 SEMI-ANNUAL SEMI-ANNUAL LONG-TERM TOTAL REGISTRATION OR ISSUE IDENTIFICATION No. PAR VALUE IN CHILE OR OF INSTRUMENT SERIES 03-31-2003 03-31-2002 ABROAD ------------- ------ ---------- ---------- ------ LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests 246,241 0 LOCAL 296-09.07.02 C2 Interests 82,080 0 LOCAL 296-09.07.02 D1 Interests 379,893 0 LOCAL 296-09.07.02 C2 Interests 39,989 0 LOCAL 144-12.07.91 A 214,367 223,905 LOCAL 241-15.12.00 C1 Interests 60,168 59,945 LOCAL 241-15.12.00 D1 Interests 30,084 29,972 LOCAL 241-15.12.00 C2 Interests 270,757 269,752 LOCAL TOTAL CURRENT PORTION 1,323,579 583,574 LONG-TERM BONDS 296-09.07.02 C1 25,175,400 0 LOCAL 296-09.07.02 C2 8,391,800 0 LOCAL 296-09.07.02 D1 31,888,840 0 LOCAL 296-09.07.02 D2 3,356,720 0 LOCAL 144-7.12.91 A 0 420,330 LOCAL 241-15.12.00 C1 3,356,720 3,362,634 LOCAL 241-15.12.00 D1 1,678,360 1,681,317 LOCAL 241-15.12.00 D2 15,105,240 15,131,854 LOCAL LONG-TERM TOTAL 88,953,080 20,596,135
51 23. Provisions and Write-Offs Provisions The Company has short-term provisions of Th Ch$ 9,657,719 as of March 31, 2003, and Th Ch$ 10,529,408 in 2002. Long-term provisions of Th Ch$ 6,063,280 and Th Ch$ 7,164,981 are recorded for the years 2003 and 2002 respectively. In the attached chart a detail for provisioned amounts is shown. Bad Debt Provisions: The Company and S.A. Vina Santa Rita and Ciecsa S.A. have established a bad debt provision of Th Ch$ 649,839 and Th Ch$ 516,495, as of March of 2003 and 2002, respectively. The companies charged Th Ch$ 7,961 to the provision in 2002. This provision is deducted from the balance of Debtors from Sales and Documents and Notes Receivable. Vacation Provision: The Company and its subsidiaries have established provisions for the total cost of vacations pending as of March 31, 2003 and 2002, as established in Technical Bulletin No. 47 of the Accountants Association of Chile. The net balance for this item is Th Ch$ 694,013 as of March 31, 2003 (Th Ch$ 652,891 in 2002). Provision for Furnace Reconstruction: This reserve is established throughout the useful life of the refractants of each smelting furnace so their repair will not distort the result of the fiscal year when the repairs are made. The Company has established a provision in the amount of Th Ch$ 3,268,385 and Th Ch$ 4,581,603 as of March 31, 2003 and 2002, respectively. 52 CRISTALERIAS DE CHILE S.A. NOTE 23: PROVISIONS 03-31-2003 03-31-2002 Thou Ch$ Thou Ch$ Short Term Commissions and Fees 2,500,931 2,197,921 Furnace reconstruction 1,170,334 1,157,401 Share of Board of Directors 1,086,638 916,902 Legal holidays 694,013 652,891 Local and foreign suppliers 728,114 499,976 Packing return to clients 1,024,731 1,186,067 Spareparts reserve 463,350 463,350 Insurance Policies 0 168,085 Advertising and marketing 154,275 499,088 Copyright 29,895 278,535 Subsidiary Loss Provision 464,977 0 Severance payments 171,373 143,925 Bonus Provision 133,484 0 Exported products loss Provision 109,734 0 Reserve indirect cost 334,781 0 Grape harvest expenses 370,398 474,164 Machinery repair 0 1,046,147 Other accounts payable provisioned 220,691 844,956 TOTAL Short term 9,657,719 10,529,408 Long Term Severance payment 3,965,229 3,740,779 Furnace reconstruction 2,098,051 3,424,202 TOTAL Long term 6,063,280 7,164,981 53 24. Severance Payment The provision for severance payments to personnel is included at its current value, as expressed in note 2 t). As oF March 2003 the provision amounts to Th Ch$ 4,136,602 (Th Ch$ 3,884,704 in 2002). As of March 31, 2003, the Company has made severance payments of Th Ch$ 802 (Th Ch$ 21,737 in 2002) chargeable against the provision. 54 25. Other long-term liabilities As of March 31, 2003 and 2002 there are no balances for this item. 55 26. Minority interest The subsidiaries that generate minority interests as of March 31, 2003 and 2002 are shown in the following chart: CRISTALERIAS DE CHILE S.A. NOTE 26: MINORITY INTEREST
NET WORTH RESULTS SHAREHOLDING --------- ------- ------------ Th Ch$ Th Ch$ Th Ch$ Th Ch$ % % ------ ------ ------ ------ --- --- 2003 2002 2003 2002 2003 2002 ---- ---- ---- ---- ---- ---- S.A.Vina Santa Rita 37,208,571 33,848,807 (553,717) (484,158) 45.90 45.90 CIECSA Consolidated 257,393 2,077,046 12,698 52,558 1.73 1.79 Constructora Apoger S.A. 1,172 9,906 61 105 20.00 20.00 Cristalchile Comunicaciones S.A. 1,412 1,560 30 48 0.01 0.01 TOTAL 37,468,548 35,937,319 (540,928) (431,447)
56 27. Changes in Equity a. Activity in 2003 and 2002 The activity of the capital and reserve accounts in the fiscal years ended in March 31, 2003 and 2002, are shown in the attached charts. b. Other Reserves The detail of this item is as follows: 2003 2002 ---- ---- ThCh$ ThCh$ ----- ----- Future capital increases 4,464,029 4,251,548 Reserve for adjustment of value of fixed assets 1,694,196 1,898,932 Adjustment for conversion difference in investment in Rayen Cura S.A.I.C. 4,099,356 2,380,773 Difference VPP Sodex (217,173) (216,900) ---------- --------- TOTAL OTHER RESERVES 10,040,408 8,314,353 ========== ========= 57 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN EQUITY
ITEM Paid-in Reserve capital Premium in Other Reserve Capital revaluation sale of shares Reserves Future Dividends ------- ----------- -------------- -------- ---------------- Balances as of 03/31/2003 Initial balance 64,749,257 0 27,598,393 9,713,099 114,912,655 Distribution result previous fiscal year 0 0 0 0 0 Final dividend previous fiscal year 0 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 0 Development period Accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 278,744 0 Owner's equity Revaluation 0 323,746 137,992 48,565 574,563 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 Final balances as of 3/31/2003 64,749,257 323,746 27,736,385 10,040,408 115,487,218 Initial balance as of 03/31/2002 62,863,356 0 26,794,558 7,942,919 102,798,113 Distribution result previous fiscal year 0 0 0 0 0 Final dividend previous fiscal year 0 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 0 Development period accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 98,828 0 Owner's equity revaluation 0 -251,453 -107,180 -31,773 -411,190 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 Final balances 62,863,356 -251,453 26,687,378 8,009,974 102,386,923 Updated Final Balances as of 03/31/2002 65,252,164 -261,008 27,701,498 8,314,353 106,277,626 ITEM Accumulated Provisional Devel. Fiscal Results Dividends Period Deficit Year Result ------- --------- -------------- ----------- Balances as of 03/31/2003 Initial balance 0 0 0 0 Distribution result previous fiscal year 17,660,662 0 0 0 Final dividend previous fiscal year -3,303,936 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 Development period Accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Owner's equity Revaluation 71,784 0 0 0 Fiscal Year Result 0 0 0 4,321,062 Provisional Dividends 0 0 0 0 Final balances as of 3/31/2003 14,428,510 0 0 4,321,062 Initial balance as of 03/31/2002 0 0 -123,129 0 Distribution result previous fiscal year 17,770,611 0 0 0 Final dividend previous fiscal year -4,657,728 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 Development period accumulated deficit 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Owner's equity revaluation -52,451 0 493 0 Fiscal Year Result 0 0 0 175,829 Provisional Dividends 0 0 0 0 Final balances 13,060,432 0 -122,636 175,829 Updated Final Balances as of 03/31/2002 13,556,728 0 -127,296 182,511
58 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN EQUITY NUMBER OF SHARES No. SERIES No. No. SHARES SHARES SHARES WITH VOTING SUBSCRIBED PAID RIGHTS ---------- ---- ------ SINGLE 64,000,000 64,000,000 64,000,000 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN EQUITY CAPITAL (AMOUNT - TH CH$) SERIES SUBSCRIBED PAID-IN CAPITAL CAPITAL ------- ------- SINGLE 64,749,257 64,749,257 59 28. Other Non-Operating Income and Expenses As of March 31, 2003 and 2002 the non-operating income totals Th Ch$ 137,520 and Ch$ 240,285 respectively. Non-operating Expenditures were Th Ch$ 536,153 in 2003 and Th Ch$ 423,441 in 2002. More detail is shown in the following chart. CRISTALERIAS DE CHILE S.A. NOTE 28: OTHER NON-OPERATING INCOME AND EXPENSES 2003 2002 ---- ---- Th Ch$ Th Ch$ ------ ------ INCOME Rentals 43,860 55,837 Tax exemptions 4,139 68,324 Indemnity for claims 0 250 Benefit Fontec Proyect 5,443 0 Amortization of non-realized profits 18,732 8,178 Sale of fixed assets 4,041 0 Sale of materials 4,753 7,047 Agricultural distribution 20,846 0 Other income 35,706 100,649 ------ ------- TOTAL NON-OPERATING INCOME 137,520 240,285 ======= ======= EXPENSES Soap operas charge off 32,376 0 Frequency and internet amortization 37,060 33,929 Professional advice 194,021 197,325 Share of Board of Directors 23,388 20,819 Contracts and contingencies 45,527 62,271 Loss in sales of fixed assets 2,373 14,797 Trademarks amortization 13,074 12,298 Amortization managment expenses (long-term) 30,727 0 Licenses 5,939 0 Insurances 10,691 4,021 Severance payments 21,311 5,827 Other expenses 114,693 72,154 ------- ------ TOTAL NON-OPERATING EXPENSES 531,180 423,441 ======= ======= 60 29. Adjustment for Price Level Restatements As a result of the application of the adjustment for price level restatements as described in Note 2 e), there was a net credit to results in the 2003 fiscal year in the amount of Th Ch$ 156,293 and a net charge against results of Th Ch$ 161,546 in 2002. Additional information organized by item on the Balance Sheet is shown in the following chart: Cristalerias de Chile S.A. NOTE 29: ADJUSTMENT FOR PRICE LEVEL RESTATEMENTS ADJUSTABILITY ASSETS (DEBITS)/CREDITS INDEX 03-31-2003 03-31-2002 ----------------------- ----- ---------- ---------- INVENTORY CPI 87,714 -120,606 FIXED ASSETS CPI 668,346 -527,798 INVESTMENTS IN RELATED COMPANIES CPI 1,288,877 -410,979 MARKETABLE SECURITIES CPI 18,997 -13,575 TIME DEPOSIT CPI 0 0 SHORT-TERM DEBTORS CPI -22,518 -8,081 SHORT-TERM DEBTORS UF 809 0 ACCOUNTS RECEIVABLE RELATED COMPANIES UF 51,766 -87,634 LONG-TERM DEBTORS UF 725 -252 OTHER NON-MONETARY ASSETS CPI 233,538 -396,773 EXPENSE AND COST ACCOUNTS CPI 238,627 -8,369 TOTAL (DEBITS)/CREDITS 2,566,881 -1,574,067 LIABILITIES (DEBITS)/ CREDITS NET WORTH CPI -1,990,017 885,990 ACCOUNTS PAYABLE RELATED COMPANIES UF -5 155 BANK LOANS CPI 0 97,494 BANK LOANS UF -3,965 0 SHORT-TERM RESERVES CPI -11,709 -4,671 SHORT-TERM CREDITORS CPI 0 0 LONG-TERM BANK LOANS CPI 0 210,485 LONG-TERM BANK LOANS UF -10,307 0 LONG-TERM RESERVES CPI -20,061 -16,280 LONG-TERM CREDITORS CPI -109 240 OBLIGATIONS WITH THE PUBLIC UF -209,738 83,496 MINNORITY INTEREST CPI -428 0 NON-MONETARY LIABILITIES CPI 1,954 66,665 NON-MONETARY LIABILITIES UF -21,092 0 INCOME ACCOUNTS CPI -145,111 88,947 TOTAL (DEBITS)/ CREDITS -2,410,588 1,412,521 (LOSS) PROFIT FROM ADJUSTMENT FOR CURRENCY DEVALUATION 156,293 -161,546 61 30. Exchange Differences There is a net credit to results in the 2003 fiscal year of Th Ch$ 1,661,984 and a net charge of Th Ch$ 9,713 in 2002 corresponding to exchange rate differences. According to dispositions of Circular No. 1560 of the Securities and Insurance Comission, the net effect on results of the assets and liabilities in foreign currency without considering the effect of inflation of the local currency, is presented in this item. More information is shown in the following chart: Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES ITEM CURRENCY AMOUNT 03-31-2003 03-31-2002 CURRENT ASSETS DOLLARS 150,763 208,463 CURRENT ASSETS OTHER CUR. -35,202 7,457 MARKETABLE SECURITIES DOLLARS 974,083 0 CLIENTS DOLLARS 234,582 82,348 CLIENTS OTHER CUR 35,503 -10,407 TIME DEPOSITS DOLLARS -102,492 -10,477 INVENTORY DOLLARS 150,432 -253 INVENTORY OTHER CUR 0 -6 INVESTMENT IN BOND DOLLARS 231,941 0 FUTURE CONTRACT EFFECT DOLLARS 1,304,942 0 INFLATIONARY EFFECT DOLLARS -170,436 0 OTHER ASSETS DOLLARS 2,196 13,791 OTHER ASSETS OTHER CUR. 4,190 2,767 TOTAL (DEBITS) CREDITS 2,780,502 293,683 SHORT TERM BANK CREDITS DOLLARS 0 -175,476 ACCOUNT PAYABLE DOLLARS 0 - DOCUMENTS PAYABLE DOLLARS -61,673 -58,382 DOCUMENTS PAYABLE OTHER CUR. -15,647 13,709 MISCELLANEOUS CREDITORS SHORT TERM DOLLARS -40,833 -410 SHORT TERM PROVISIONS DOLLARS -58,122 -1,552 LONG TERM BANK CREDITS DOLLARS -647,500 -81,974 MISCELLANEOUS CREDITORS LONG TERM DOLLARS -31,512 -4,285 LONG TERM PROVISIONS DOLLARS -28,590 -4,776 OTHER LONG-TERM LIABILITIES DOLLARS -205,311 -10,307 OTHER LONG-TERM LIABILITIES OTHER CUR. -29,330 20,057 TOTAL (DEBITS) CREDITS -1,118,518 -303,396 (LOSS) PROFIT FROM RATE OF EXCHANGE DIFFERENCE 1,661,984 -9,713 62 31. Extraordinary Items The Company does not record extraordinary items for the period January-March 2003 and 2002. 63 32. Stock and bond issue and placement expenses The Company and S.A.Vina Santa Rita effected bond placements in August 2002 and March 2001, respectively, which produced placement expenses that as of March 31, 2003 totaled Th Ch$ 3,951,054 (Th Ch$ 270,239 in 2002) The charge against results for the amortization of these expenses is Th Ch$ 90,829 in 2003 (Th CH$ 11,253 in 2002), and is done according to each series' maturity. 64 33. Cash Flow Statement CASH FLOW STATEMENT The values included in MISCELLANEOUS on the Cash Flow Statement are detailed in the following table: CRISTALERIAS DE CHILE S.A. and sbsidiaries CASH FLOW STATEMENT 1. The following details the item OTHERS: 2003 2002 Th Ch$ Th Ch$ ------ ------ 541.11.40 Other Income Received Recover VAT exportation 114,352 94,478 Discount for paid of customs duties 0 210,581 Offices and establishments rental 12,779 0 Income Tax redemption 133,416 0 Franquicia Taxable 4,139 68,324 Other income 124,311 48,719 Total 388,997 422,102 541.11.80 Other expenses paid Exchange difference 168,532 64,903 Donations 7,770 19,569 Advice Services 34,470 18,118 Severance payments 21,311 5,827 Shareholder's bonds 23,388 0 Other expenses 211,683 166,236 Total 467,154 294,654 541.13.30 Other investment income Maturity of future contracts 1,762,160 1,899,192 Total 1,762,160 1,899,192 541.13.65 Other investment disbursements Purchase of shares 11,680 0 Future contracts 0 349,475 Total 11,680 349,475 65 Following are financing and investment activities that did not generate cash flow during the fiscal year, but that commit future parent company cash flows: ITEM Amount Th Ch $ Due Date Dividend 153 5,526,400 April-03 Amounts payable investment 1,748,597 April-03 Amounts payable investment 110,808 Mayo-03 TOTAL 7,385,805 66 34. Derivative Contracts FUTURE CONTRACTS IN FOREIGN CURRENCY The parent company and its subsidiaries S.A. Vina Santa Rita and Ciecsa S.A. have signed future sales contracts in foreign currency of Th US$ 131,200 in 2003 (Th US$ 137,800 in 2002) subject to the regulations of Chapter VII of the Compendium of International Exchange Regulations of the Central Bank of Chile and Chapter 13-2 of the compilation of Regulations of Banks and Financial Institutions. Additional information is presented on the attached chart listed in the order of each quarterly expiration period. 67 CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
MATURITY OR DESCRIPTION OF CONTRACTS VALUE OF TYPE OF TYPE OF VALUE OF EXPIRATION SPECIFIC PURCHASE/ PROTECTED ITEM OR PROTECTED DERIVATIVE CONTRACT CONTRACT DATE ITEM SALE POSITION TRANSACTION ITEM ---------- -------- -------- ---- ---- ------------- ----------- ---- NAME AMOUNT ---- ------ FR CI 5,496,858 SECOND 2003 EXCH RATE P - - - FR CI 50,709,306 THIRD 2003 EXCH RATE P - - - FR CI 23,075,018 FOURTH 2003 EXCH RATE P - - - FR CCPE 742,140 FIRST 2004 EXCH RATE P DOLLAR LOAN 742,140 731,560 FR CCPE 742,140 FIRST 2004 EXCH RATE P DOLLAR LOAN 742,140 731,560 FR CCPE 2,276,250 THIRD 2003 EXCH RATE P DOLLAR LOAN 2,276,250 2,194,680 FR CCPE 1,491,200 THIRD 2003 EXCH RATE P DOLLAR LOAN 1,491,200 1,463,120 FR CI 1,513,580 THIRD 2003 EXCH RATE P - - - FR CI 1,513,580 THIRD 2003 EXCH RATE P - - - FR CI 1,442,580 FOURTH 2003 EXCH RATE P - - - FR CI 721,290 FOURTH 2003 EXCH RATE P - - - FR CI 1,456,920 FOURTH 2003 EXCH RATE P - - - FR CI 1,456,920 FOURTH 2003 EXCH RATE P - - - FR CI 721,290 FOURTH 2003 EXCH RATE P - - - FR CI 643,830 SECOND 2003 EXCH RATE P - - - FR CI 353,270 FOURTH 2003 EXCH RATE P - - - FR CI 353,270 FOURTH 2003 EXCH RATE P - - - FR CI 445,854 FOURTH 2003 EXCH RATE P - - - MATURITY OR ACCOUNTS AFFECTED TYPE OF TYPE OF VALUE OF EXPIRATION ASSETS/LIABILITIES EFFECT ON RESULT DERIVATIVE CONTRACT CONTRACT DATE NAME AMOUNT REALIZED NOT REALIZED ---------- -------- -------- ---- ---- ------ -------- ------------ FR CI 5,496,858 SECOND 2003 ASSETS 375,938 375,938 - FR CI 50,709,306 THIRD 2003 LIABILITIES 938,830 938,830 - FR CI 23,075,018 FOURTH 2003 LIABILITIES 334,902 334,902 - FR CCPE 742,140 FIRST 2004 LIABILITIES 11,760 1,180 - FR CCPE 742,140 FIRST 2004 LIABILITIES 11,777 1,197 - FR CCPE 2,276,250 THIRD 2003 LIABILITIES 78,668 2,978 - FR CCPE 1,491,200 THIRD 2003 LIABILITIES 43,622 438 - FR CI 1,513,580 THIRD 2003 LIABILITIES 52,445 52,445 - FR CI 1,513,580 THIRD 2003 LIABILITIES 52,175 52,175 - FR CI 1,442,580 FOURTH 2003 ASSETS 15,320 15,320 - FR CI 721,290 FOURTH 2003 ASSETS 6,473 6,473 - FR CI 1,456,920 FOURTH 2003 ASSETS 3,107 3,107 - FR CI 1,456,920 FOURTH 2003 ASSETS 3,671 3,671 - FR CI 721,290 FOURTH 2003 ASSETS 7,534 7,534 - FR CI 643,830 SECOND 2003 ASSETS 72,310 72,310 - FR CI 353,270 FOURTH 2003 ASSETS 11,268 11,268 - FR CI 353,270 FOURTH 2003 ASSETS 11,268 11,268 - FR CI 445,854 FOURTH 2003 LIABILITIES 8,702 8,702 -
68 35. Contingencies and Restrictions CONTINGENCIES AND COMMITMENTS As of March 31, 2003, there is a guarantee delivered in the amount of Th Ch$ 18,601,404 (Th Ch$ 15,610,022 in 2002), according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of March 31, 2003 and 2002 there are pending lawsuits and other legal actions corresponding to the subsidiary Red Televisiva Megavision, which are presented in the annexed chart. RESTRICTIONS I) SYNDICATED LOAN In relation to the syndicated loan subscribed with JP Morgan Chase Bank and other 8 creditor banks for US$ 50 million, the following specific financial obligations exist: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio to exceed the 0.45 to 1.0 ratio at any time. Capitalization is defined as the sum of Net Worth plus minority interests plus total consolidated debt. b) TOTAL CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Consolidated Net Debt to EBITDA relation to exceed the 2.5 to 1.0 ratio at any time. Consolidated EBITDA is defined as the sum of operating income plus depreciation and amortization, plus non-cash charges (as long as they have been deduced when determining operating income) and cash income for interest minus non-cash credits (as long as they have been aggregated when determining the operating income), in each case for each period. c) INTEREST COVERAGE RATIO Cristalerias de Chile S.A. will not allow the Interest Coverage Ratio to be lower than 4.0 at any time from January 1st, 2003 onwards. Interest coverage at the date of determination is defined as the ratio of non-consolidated EBITDA for the four consecutive quarters that end on, or most recently ended before, that date and interest expenses for that period. d) NET EQUITY Cristalerias de Chile S.A. will maintain a minimum amount of UF 10,000,000. 69 Cristalerias de Chile S.A. complies with 100% of restrictions agreed with the creditor banks. II) BOND ISSUE The bond issue contract signed on May 29, 2002 with Banco Chile as the bond owner's representative, established the following obligations among others: a) Financial Indicators Individual Balance: Indebtedness not higher than 1.2 times. Consolidate Balance: Indebtedness not higher than 1.4 times. b) Insurances for fixed assets of the Company and its subsidiaries. c) Other minor restrictions related with the bond issue contract. Cristalerias de Chile S.A. complies with 100% of restrictions agreed with the bonds creditors. OTHER CONTINGENCIES As of March 31, 2003 and 2002, management is not aware of any other material contingencies that could affect the Company. 70 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
BALANCES PENDING PAYMENT AS OF ASSETS COMMITTED CLOSING DATE CREDITOR OF DEBTOR TYPE OF BOOK OF FINANCIAL STATEMENTS GUARANTEE NAME RELATIONSHIP GUARANTEE TYPE VALUE 03/31/2003 03/31/2002 --------- ---- ------------ --------- ---- ----- ---------- ---------- EDIFICIO CRISTALERIAS DE COMMERCIAL DEPOSIT FLOOR 7,868 7,868 7,882 METROPOLIS AGF CHILE S.A. BANCO SANTANDER RED TELEVISIVA MEGAVISION COMMERCIAL MORTGAGE LAND 3,556,109 2,066,627 2,320,805 SCOTIABANK RED TELEVISIVA MEGAVISION COMMERCIAL PLEDGE TV EQUIP 291,538 2,032,289 2,465,337 BANCO CREDITO E RED TELEVISIVA MEGAVISION COMMERCIAL MORTGAGE TV EQUIP 95,858 504,134 674,742 INVERSIONES SUNDRY CLIENTS RED TELEVISIVA MEGAVISION COMMERCIAL ADVERTISING 0 12,454,210 10,141,256 0 GRUPO TELEVISA S.A. RED TELEVISIVA MEGAVISION COMMERCIAL PLEDGE SHARE 2,677,236 1,536,276 0 RELEASE OF GUARANTEES CREDITOR OF DEBTOR GUARANTEE NAME 03/31/2004 ASSETS 03/31/2005 ASSETS 03/31/2006 ASSETS --------- ---- ---------- ------ ---------- ------ ---------- ------ EDIFICIO CRISTALERIAS DE 0 0 7,868 0 0 0 METROPOLIS AGF CHILE S.A. BANCO SANTANDER RED TELEVISIVA MEGAVISION 47,661 0 454,276 0 454,276 0 SCOTIABANK RED TELEVISIVA MEGAVISION 421,205 0 402,772 0 402,772 0 BANCO CREDITO E RED TELEVISIVA MEGAVISION 168,462 0 167,836 0 167,826 0 INVERSIONES SUNDRY CLIENTS RED TELEVISIVA MEGAVISION 0 0 0 0 0 0 GRUPO TELEVISA S.A. RED TELEVISIVA MEGAVISION 0 0 0 0 0 0
71 CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - INDIRECT GUARANTEES
BALANCES PENDING PAYMENT AS OF ASSETS COMMITTED CLOSING DATE CREDITOR OF DEBTOR TYPE OF BOOK OF FINANCIAL STATEMENTS GUARANTEE NAME RELATIONSHIP GUARANTEE TYPE VALUE 03/31/2003 03/31/2002 --------- ---- ------------ --------- ---- ----- ---------- ---------- Societe des Participations Financieres et Industrielles RAYEN CURA S.A.I.C. AFFILIATE SOLIDARY 0 0 3,371,028 3,921,547 Envases SMF guarantee CRISTALERIAS DE AFFILIATE SOLIDARY 0 0 329,357 0 P.I.A.S CHILE S.A. RELEASE OF GUARANTEES CREDITOR OF DEBTOR GUARANTEE NAME 03/31/2004 ASSETS 03/31/2005 ASSETS 03/31/2006 ASSETS --------- ---- ---------- ------ ---------- ------ ---------- ------ Societe des Participations Financieres et Industrielles RAYEN CURA S.A.I.C. 842,757 0 842,757 0 1,685,514 0 Envases SMF guarantee CRISTALERIAS DE 0 0 0 0 329,357 0 P.I.A.S CHILE S.A.
72 CRISTALERIAS DE CHILE S.A. NOTE 35: Contingencies and Restrictions Trials
Court Cause Rol No. Origin Procesal Stage Observations Amount (Th Ch$) ----- ------------- ------ -------------- ------------ --------------- 12 3025-1997 Civil Verdicted in first instance Not provisioned 100,000 16 4822-1999 Civil Verdicted in first instance Sight and Verdict pending 10,000 2 2294-1999 Local police Second instance pending Sight and Verdict pending 3,500 1 1242-2000 Labor First instance pending Sight and Verdict pending 10,000 1 3538-2000 Labor First instance pending Sight and Verdict pending Undetermined
73 36. Guarantees obtained from third parties As of March 31, 2003 and 2002 the company has received guarantees from third parties that are shown below: Item 2003 2002 ThCh$ ThCh$ ----- ----- Rental of Property BankBoston UF 367.69 0 6,185 Rental of Property to Telecomunicaciones Cono Sur Ltda. (UF 130) 2,182 2,186 Rental of Property Office 202 AGF Building (UF 365.9) 6,141 3,951 Rental of Property Office Metropolis (UF 189.2) 3,175 0 Rental of Property Office Banco Security 5,102 0 Sight drafts suppliers 1,675 1,288 Installation of Buin Tanks (Tersanoix S.A.) 155,111 161,006 Purchase of vine stem cuttings and plants (Intelmaq) 36,383 36,383 Underground materials storehouse Buin Salfa Montajes 33,044 33,044 ------- ------- 242,813 244,043 ======= ======= 74 37. Local and Foreign Currency The following charts show the foreign currency balance as of March 31, 2003 and 2002. Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY ASSETS Items Currency Amount 03-31-2003 03-31-2002 ---------- ---------- Available funds Non-adjust. Ch$ 1,147,522 1,951,185 Other currencies 1,638 0 Dollars 537,746 151,328 Euros -50,428 0 Argentine Peso 53,594 6,286 Time deposits Dollars 7,569,134 16,664,575 Adjustable Ch$ 2,911,930 4,393,294 Non-adjust Ch$ 8,934,092 3,130,234 Marketable Securities Adjustable Ch$ 3,830,015 3,388,219 Dollars 64,662,708 10,339,303 Non-adjust Ch$ 26,535 81,720 Sales receivable Non-adjust Ch$ 25,391,410 24,111,084 Dollars 4,041,376 2,303,441 Euros 1,945,188 0 Other currencies 1,476,379 1,863,240 Argentine Peso 217,092 0 Documents Receivable Non-adjust. Ch$ 3,829,140 4,789,186 Dollars 0 7,730 Argentine Peso 0 14,572 Sundry Debtors Non-adjust. Ch$ 343,016 361,207 Adjustable Ch$ 842,716 439,454 Dollars 42,905 30,222 Argentine Peso 75,541 10,255 Other currencies 0 2,519 Documentos and Accts. Receivable Non-adjust. Ch$ 214,311 203,981 Adjustable Ch$ 127,030 303,312 Inventory Adjustable Ch$ 36,851,626 29,188,755 Non-adjust. Ch$ 278,848 141,181 Dollars 3,230,256 2,584,389 Argentine Peso 758,670 259,412 Taxes Receivable Non-adjust. Ch$ 898,842 1,437,755 Adjustable Ch$ 145,935 661,780 Dollars 9,367 0 Argentine Peso 75,186 51,825 Prepaid expenses Adjustable Ch$ 992,818 718,553 Non-adjust. Ch$ 253,435 211,515 Dollars 446,514 122,877 Argentine Peso 21,304 0 Deferred Taxes Non-adjust. Ch$ 675,273 1,349,049 Adjustable Ch$ 262,600 0 Other Current Assets Non-adjust. Ch$ 8,870,424 2,796,916 Adjustable Ch$ 331,541 9,105,997 Dollars 7,722,423 5,928,321 FIXED ASSETS Adjustable Ch$ 131,656,508 133,935,352 Investments in related companies Adjustable Ch$ 108,429,785 99,262,389 Dollars 0 12,123,749 Investments in other companies Adjustable Ch$ 821,513 1,485,663 Negative Goodwill Adjustable Ch$ 4,242,209 3,660,708 Non-adjust. Ch$ 5,439,971 5,400,920 Long-term debtors Adjustable Ch$ 184,616 218,843 Long-term documents receivable. Adjustable Ch$ 1,504 1,380 Intangibles Adjustable Ch$ 11,723,085 11,630,893 Amortization Adjustable Ch$ -1,047,542 -863,954 Other Adjustable Ch$ 937,165 1,349,740 Non-adjust. Ch$ 660,647 12,414 Dollars 14,737,647 10,546,573 Argentine Peso 0 208,040 Total Assets Non-adjust. Ch$ 56,963,466 45,978,347 Other currencies 1,478,017 1,865,759 Dollars 103,000,076 60,802,508 Euros 1,894,760 0 Argentine Peso 1,201,387 550,390 Adjustable Ch$ 303,245,054 298,880,378 75 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY CURRENT LIABILITIES
ITEM Currency Up to 90 days 03.31.2003 03.31.2002 Amount Avg.Annual Amount Avg.Annual Thou Ch$ Int. Rate Thou Ch$ Int. Rate -------- --------- -------- --------- Current Liabilities Short-term obligations with banks Adjust. Ch$ 0 0 0 7.480 and financial institutions Non-adjust. Ch$ 0 0 1,048,088 6.360 Argentine Peso 2,457 0 4,451 0 Long-term obligations with banks Adjust. Ch$ 0 0 2,397,894 7.480 and financial institutions Dollars 445,744 0 20,399,494 3.375 Non-adjust. Ch$ 134,403 2.450 0 0 Long-term obligations with 1 year Adjust. Ch$ 1,244 7.00 0 0 maturity Dollars 56,142 11.020 148,152 3.375 Obligations with the public Adjust. Ch$ 962,571 6.250 223,904 6.250 Dividends payable Non-adjust. Ch$ 78,554 0 70,475 0 Accounts payable Dollars 1,079,577 0 864,305 0 Non-adjust. Ch$ 15,852,042 0 8,955,289 0 Other currencies 0 0 15,439 0 Euros 0 0 2,689 0 Argentine Peso 0 0 47,335 0 Documents Payable Adjust. Ch$ 0 0 57,042 0 Dollars 4,221,000 0 2,804,490 0 Euros 376,419 0 407,390 0 Other currencies 0 0 317,290 0 Sundry Creditors Non-adjust. Ch$ 643,385 0 557,626 0 Dollars 2,306,722 0 0 0 Provisions Adjust. Ch$ 3,030 0 140,123 0 Non-adjust. Ch$ 6,367,243 0 7,034,811 0 Dollars 757,812 0 1,483,421 0 Argentine Peso 83,925 0 4,316 0 Euros 525,601 0 0 0 Other currencies 426,770 0 450,774 0 Withholdings Non-adjust. Ch$ 1,766,542 0 2,075,454 0 Prepaid income Non-adjust. Ch$ 2,534,105 0 1,736,381 0 Other Current Liabilities Dollars 1,112,135 0 4,123,801 0 Non-adjust. Ch$ 0 0 33,963 0 Docts and accts payable to rel co. Adjust. Ch$ 42,718 5.650 375,909 7.240 Non-adjust. Ch$ 168,234 0 3,768 0 Dollars 0 0 0 0 Total Current Liabilities - Adjust. Ch$ 1,009,563 - 3,194,872 - - Non-adjust Ch$ 27,544,508 - 21,515,855 - - Argentine Peso 86,382 - 56,102 - - Dollars 9,979,132 - 29,823,663 - - Other currencies 426,770 - 783,503 - - Euros 902,020 - 410,079 - ITEM 90 Days to 1 Year 03.31.2003 03.31.2002 Amount Avg.Annual Amount Avg.Annual Currency Thou Ch$ Int. Rate Thou Ch$ Int. Rate -------- -------- --------- -------- --------- Current Liabilities Short-term obligations with banks Adjust. Ch$ 0 0 0 7.480 and financial institutions Non-adjust. Ch$ 0 0 0 0 Argentine Peso 7,370 0 0 0 Long-term obligations with banks Adjust. Ch$ 1,373,808 0 759,373 7.480 and financial institutions Dollars 2,288,392 2.020 2,341,130 4.330 Non-adjust. Ch$ 134,403 2.450 0 0 Long-term obligations with 1 year Adjust. Ch$ 0 0 3,097 7.00 maturity Dollars 205,129 11.00 124,308 11.00 Obligations with the public Adjust. Ch$ 361,008 6.250 359,670 6.250 Dividends payable Non-adjust. Ch$ 0 0 0 0 Accounts payable Dollars 2,101,413 0 353,556 0 Non-adjust. Ch$ 94,640 0 0 0 Other currencies 0 0 0 0 Euros 0 0 0 0 Argentine Peso 0 0 0 0 Documents Payable Adjust. Ch$ 33,070 0 58,961 0 Dollars 164,108 0 367,360 0 Euros 0 0 0 0 Other currencies 0 0 0 0 Sundry Creditors Non-adjust. Ch$ 0 0 0 0 Dollars 0 0 0 0 Provisions Adjust. Ch$ 171,373 0 144,068 0 Non-adjust. Ch$ 151,631 0 114,493 0 Dollars 1,170,334 0 1,157,402 0 Argentine Peso 0 0 0 0 Euros 0 0 0 0 Other currencies 0 0 0 0 Withholdings Non-adjust. Ch$ 0 0 0 0 Prepaid income Non-adjust. Ch$ 0 0 0 0 Other Current Liabilities Dollars 0 0 0 0 Non-adjust. Ch$ 0 0 0 0 Docts and accts payable to rel co. Adjust. Ch$ 0 0 571,648 7.240 Non-adjust. Ch$ 0 0 0 0 Dollars 0 0 343,899 0 Total Current Liabilities - Adjust. Ch$ 1,939,259 - 1,896,817 - - Non-adjust Ch$ 380,674 - 114,493 - - Argentine Peso 7,370 - 0 - - Dollars 5,929,376 - 4,687,655 - - Other currencies 0 - 0 - - Euros 0 - 0 - 76
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY LONG-TERM LIABILITIES CURRENT PERIOD 03-31-2003
ITEM 1-3 Years 3-5 years Amount Average Amount Average Currency Thou Ch$ Interest Rate Thou Ch$ Interest Rate -------- -------- ------------- -------- ------------- Obligations with Banks and Dollars 2,801,667 2.82 36,846,805 0 Financial Institutions Argentine Peso 48,569 0 12,228 0 Adjustable Ch$ 4,117,845 3.79 629,910 3.79 Obligations with the public Adjustable Ch$ 3,356,720 6.09 0 0 Adjustable Ch$ 0 0 0 0 Documents Payable Dollars 113,392 0 0 0 Non-adjust. Ch$ 14,102 0 0 0 Docts Payable to related co. Adjustable Ch$ 0 0 0 0 Long-term creditors Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Sundry creditors Adjustable Ch$ 3,525 7 0 0 Dollars 1,060,574 11.21 2,464 10.93 Argentine Peso 21,370 0 0 0 Long-term provisions Dollars 2,098,052 0 0 0 Adjustable Ch$ 3,965,228 0 0 0 Deferred taxes Non-adjust. Ch$ 4,333,761 0 0 0 Adjustable Ch$ 0 0 0 0 Total long-term liabilities - Dollars 6,073,685 - 36,849,269 - - Argentine Peso 69,939 - 12,228 - - Adjustable Ch$ 11,443,318 - 629,910 - - Non-adjust. Ch$ 4,347,863 - 0 - ITEM 5-10 Years More than 10 years Amount Average Amount Average Currency Thou Ch$ Interest Rate Thou Ch$ Interest Rate -------- -------- ------------- -------- ------------- Obligations with Banks and Dollars 0 0 0 0 Financial Institutions Argentine Peso 0 0 0 0 Adjustable Ch$ 0 0 0 0 Obligations with the public Adjustable Ch$ 33,567,200 4.75 16,783,600 6.05 Adjustable Ch$ 0 0 35,245,560 5.8 Documents Payable Dollars 0 0 0 0 Non-adjust. Ch$ 0 0 0 0 Docts Payable to related co. Adjustable Ch$ 0 0 0 0 Long-term creditors Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Sundry creditors Adjustable Ch$ 0 0 0 0 Dollars 0 0 0 0 Argentine Peso 0 0 0 0 Long-term provisions Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Deferred taxes Non-adjust. Ch$ 0 0 0 0 Adjustable Ch$ 0 0 0 0 Total long-term liabilities - Dollars 0 - 0 - - Argentine Peso 0 - 0 - - Adjustable Ch$ 33,567,200 - 52,029,160 - - Non-adjust. Ch$ 0 - 0 -
77 Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY LONG-TERM LIABILITIES PERIOD PREVIOUS 03-31-2002
ITEM 1-3 Years 3-5 years Amount Average Amount Average Currency Thou Ch$ Interest Rate Thou Ch$ Interest Rate -------- -------- ------------- -------- ------------- Obligations with banks Dollars 4,221,912 4.32 0 0 and financial institutions Argentine Peso 59,212 5.26 0 0 Dollars 38,904,240 2.675 9,726,060 0 Adjustable Ch$ 3,214,444 7.48 806,963 7.48 Documents payable Adjustable Ch$ 38,003 0 0 0 Deferred Custom Duty Dollars 407,458 11.06 763,323 11.06 Obligations with public Dollars 420,340 6.3 3,362,634 6.29 Sundry creditors Adjustable Ch$ 3,627 7 1,209 7 Dollars 241,011 11 4,806 11 Long-term creditors Adjustable Ch$ 59,716 0 0 0 Dollars 173,066 0 0 0 Long-Term provisions Dollars 3,424,202 0 0 0 Adjustable Ch$ 3,740,779 0 0 0 Deferred taxes Adjustable Ch$ 2,374,282 0 0 0 Total long-term liabilities - Dollars 47,792,229 - 13,856,823 - - Argentine Peso 59,212 - 0 - - Adjustable Ch$ 9,430,851 - 808,172 - ITEM 5-10 Years More than 10 years Amount Average Amount Average Currency Thou Ch$ Interest Rate Thou Ch$ Interest Rate -------- -------- ------------- -------- ------------- Obligations with banks Dollars 0 0 0 0 and financial institutions Argentine Peso 0 0 0 0 Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Documents payable Adjustable Ch$ 0 0 0 0 Deferred Custom Duty Dollars 0 0 0 0 Obligations with public Dollars 0 0 16,813,161 6.29 Sundry creditors Adjustable Ch$ 0 0 0 0 Dollars 0 0 0 0 Long-term creditors Adjustable Ch$ 0 0 0 0 Dollars 0 0 0 0 Long-Term provisions Dollars 0 0 0 0 Adjustable Ch$ 0 0 0 0 Deferred taxes Adjustable Ch$ 0 0 0 0 Total long-term liabilities - Dollars 0 - 16,813,161 - - Argentine Peso 0 - 0 - - Adjustable Ch$ 0 - 0 -
78 38. Penalties The SVS and other administrative authorities have not imposed any penalties during the 2003 and 2002 fiscal years. 79 39. Subsequent Events On April 15, 2003 the Regular General Shareholders Meeting reached the following agreements: a) ANNUAL REPORT AND BALANCE AS OF DECEMBER 31, 2002 The Annual Report, balance and fiscal year income ended December 31, 2002 were approved. b) DEFINITIVE DIVIDEND No 153 DISTRIBUTION The distribution of final dividend No. 153 of Ch$86.35 per share was approved. The dividend was paid to registered shareholders starting on April 28, 2003 through Banco Bice. c) DIVIDEND POLICY The Board approved to distribute 40% of the fiscal year net income and credit to reserve the remaining in order to maintain the Company's growth. On the other hand the Board was authorized to grant interim dividends with charge to fiscal years' net income, and to distribute eventual dividends, with charge to future dividends fund, without having to summon a new general shareholders meeting. Such distribution would take place as long as the country's and the Company's economic situation would alow it. d) BOARD ELECTION An election of the Board was carried out, which is now integrated by: Mr. Ricardo Claro Valdes, Mr. Jaime Claro Valdes, Mr. Joaquin Barros Fontaine, Mr. Patricio Claro Grez, Mr. Gustavo de la Cerda Acuna, Mr. Cristian Eyzaguirre Johnston, Mr. Juan A. Figueroa Yavar, Mr. Patricio Garcia Dominguez, Mr. Baltazar Sanchez Guzman, and Mr. Alfonso Swett Saavedra. In a Board sesion carried out following the shareholders meeting Mr. Ricardo Claro Valdes was appointed Chairman of the Company and Mr. Baltazar Sanchez Guzman was appointed Vice-Chairman of the Company. e) EXTERNAL AUDITORS DESIGNATION According to Art. No 52 of the law 18,046 the shareholders meeting appointed Ernest & Young Ltda., as external auditors for year 2003. e) NEWSPAPER DESIGNATION According to Art. No 59 of Public Companies, the newspaper in which shareholders meeting summons would be effected was designated. "El Diario Financiero" was designated for this effect. g) BOARD COMMITTEE In board session effected following the regular general shareholders meeting the board committee members were elected, according to Art. No 50 bis Act 18,046. The independent 80 directors named were Mr. Joaquin Barros Fontaine and Mr. Patricio Claro Grez, and as a representative director of the controlling group Mr. Juan A. Figuieroa Yavar. Since the date of the closing of financial statements and the date of issue of the present report no subsequent events that could significantly affect the Company's financial and economic situation have been registered. S.A. VINA SANTA RITA On April 11, 2003 the Regular General Shareholders Meeting was effected. The following agreements were reached: The payment of final dividend No. 13 of Ch$3.05 per share corresponding to fiscal year 2002's net income was agreed, to be paid on April 28, 2003. It was agreed to maintain the Board's compensation in force, and whichn is equivalent to 2% of net income, and which is distributable among the totality of the Board's members. The amount corresponding to the President will be twice the amount that will correspond to a Director with the same seniority. Ernst&Young Servicios Profesionales de Auditorias y Asesorias Ltda., was appointed as external auditors, or in case of not being the former, Price Waterhouse or Deloitte & Touche. The Board is entitled to designate, among these, the external auditors to be hired depending on which one is the best economic alternative for Vina Santa Rita, and that at the same time at the date of hiring the auditing firm is registered under the Securities and Exchange Commission (SEC). Fitch Chile Clasificadora de Riesgo Ltda. and Clasificadora de Riesgo Humphreys Ltda. were designated to classify the bonds issued by the Company. In addition, it was agreed that the Company voluntarily maintains its shares classified, using for this effect the same companies used to classify its bonds. It was agreed that announcements for Shareholders Meetings were made in "El Diario Financiero" newspaper, or if this is not possible, in the "La Segunda" newspaper. It was agreed that at least 30% of net income would be distributed as dividends, either interim or final, as long as there are no accumulated losses. It was agreed that 2UTM (Chilean Unidades Tributarias Mensuales), with a maximum of 10 UTM per month, would be paid as compensation for assitance to each session that the Committee realices, to each of the integrants assisting. UF 586 per year were approved as budget for year 2003 to finance the Board Committee working expenses, including the honoraries of advisors that the Board might hire. In addition, the Board is entitled to designate supplementary funds if needed, informing about it in the next General Shareholders Meeting. 81 40. COMPANIES SUBJECT TO SPECIAL NORMS Not applicable 82 41. ENVIRONMENT As of March 31, 2003, no expenses have been recorded for this concept. Nevertheless, the Company, in line with its constant concern about the environment preservation effected investments for ThCh$163,452 as of March 31, 2002, to repair an electrostatic precipitator, whichs function is to filter gases emitted by our smelting processes. This makes it possible for the Company to ensure that it fulfills particulate matter discharge norms issued by the controlling agencies. The subsidiary S.A. Vina Santa Rita has invested Th Ch$ 4,561 as of March 31, 2003 ( ThCh$2,399 in 2002) to comply with the ordinances and laws related to Industrial Process and Installations. 83 42. STOCK TRANSACTIONS During 2003 and 2002 members of the Board, majority shareholders, related individuals and entities did not carry out stock transactions. 84 43. DISTRIBUTION OF SHAREHOLDERS The distribution of shareholders as of March 31, 2003 and 2002 is the following: % of Shareholding No. of Shareholders TYPE OF SHAREHOLDER 2003 2002 2003 2002 ------------------- ---- ---- ---- ---- 10% or more shareholding 34.03 34.03 1 1 Less than 10% shareholding with investment equal to or higher than 200 UF 65.82 65.81 261 261 Less than 10% shareholding with investment lower than 200 UF 0.15 0.16 815 831 TOTAL 100.00 100.00 1,077 1,093 CONTROLLER OF THE COMPANY 52.14 52.14 3 3 85 44. BOARD REMUNERATIONS During the first half of 2003 and 2002, Th Ch$ 1,086,756 and Th Ch$ 917,343 respectively were paid and provisioned for honoraries and participation according to the following detail: 2003 2002 ThCh$ ThCh$ ----- ----- Share of previous fiscal year profits 890,581 888,777 Provision of fiscal year 196,057 28,093 Fees paid 118 473 --------- ------- TOTAL 1,086,756 917,343 ========= ======= 86 45. TIME DEPOSITS 2003 2002 INSTITUTION CURRENCY Th$ Th$ ----------- -------- ---- ---- Banco de Santiago US$ 73,355 0 Banco J.P. Morgan Chase Bank US$ 341,299 0 Banco Deutsche Bank Chile S.A. US$ 2,064,301 0 Banco Santander US$ 2,423,315 0 Banco de Chile US$ 2,606,863 0 Banco de Credito e Inversiones US$ 0 5,926,878 Corp Banca US$ 0 2,103,330 Banco Santiago. UF 0 1,120,897 HSBC Bank Chile $ 2,910,728 0 Banco Santiago $ 0 5,478,252 Banco Scotiabank $ 5,009,100 8,634,367 Banco de Chile $ 3,001,203 0 Banco de Santander $ 924,992 924,379 ---------- ---------- TOTAL 19,415,156 24,188,103 ========== ========== 87 RATIO ANALYSIS CRISTALERIAS DE CHILE S.A. RATIO ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2003 AND 2002 1.- CONSOLIDATED FINANCIAL INDICATORS 03-31-2003 03-31-2002 12-31-2002 ---------- ---------- ---------- LIQUIDITY Current liquidity times 3.94 2.07 4.51 Acid ratio times 3.1 1.48 3.61 INDEBTEDNESS Leverage ratio times 0.82 0.68 0.80 Short-term debt % 24.90 41.30 21.30 Long-term debt % 75.10 58.70 78.70 Interest expenses coverage times 4.43 1.78 4.81 ACTIVITY Total assets MM Ch$ 467,783 408,077 454,741 Investments MM Ch$ 6,455 4,172 18,138 Disposal of property MM Ch$ 176 8 238 Inventory turnover Times n.a. n.a. n.a. Inventory permanence Days n.a. n.a. n.a. RESULTS Sales MM Ch$ 35,372 31,232 161,863 Cost of sales MM Ch$ 22,553 19,660 95,252 Operating Income MM Ch$ 7,435 6,711 41,818 Interest expenses MM Ch$ 1,713 1,277 6,874 Non-operating income (loss) MM Ch$ (1,052) (5,077) (13,067) E.B.I.T.D.A. MM Ch$ 11,205 5,768 47,352 After-tax Income MM Ch$ 4,321 183 17,749 Profitability Return on equity % 1.8 0.08 7.9 Return on assets % 0.9 0.04 4.1 Return on operating assets % 3.4 3.10 19.3 Profit per share $ 67.5 2.85 277.3 Return on dividends % 2.6 3.20 2.9 Current liquidity Ratio of current assets to current liabilities. Acid ratio: Ratio of uncommitted funds to current liabilities. Debt ratio: Ratio of total current liabilities to net worth. Interest Expenses Coverage: Result before taxes and interest divided by financial expenses. Inventory turnover: Ratio between sales cost of the period and average inventory. Inventory permanence: Ratio between average inventory and sales cost of the period, multiplied by 360 days. E.B.I.T.D.A.: Earnings before interest, taxes, depreciation and amortization, and special items. Return on dividends: Sum of dividends paid in the last twelve months divided by market price of stock at closing of period. 88 The main trends observed in fiscal year 2003 indicators are: LIQUIDITY INDICES An important increase in the index can be observed due to the payment of short-term bank debt, to the renegotiation of 50% of the syndicated loan, and that part of the funds obtained from the placement of bonds was invested in short-term financial instruments. A slight decrease of the indeces is observed with respect to December, since there was an increase in short-term liabilities. INDEBTEDNESS INDICES Leverage increases with respect to March 2002, due to the placement of long-term bonds in August 2002, which increased liabilities, and that was partially compensated by the prepayment of US$50 million of the syndicated loan. The distrubution between short and long-term debt shows a decrease in short-term debt due to financing decisions carried out in fiscal year 2002, that culminated with the restructuring of the syndicated loan. The interest expenses coverage index slightly decreased with respect to the previous year due to higher interest expenses originated by the bond issue from the month of August 2002 onwards. PROFITABILITY INDICES The equity and asets profitability indices show an increase respect to the first quarter 2002, due to a higher net income in the present period, as a consequence of higher operating income from higher sales and a lower non-operating loss due to lower losses in subsidiaries. The dividend return index shows a decrease due to the increase of the price of the Company's shares in the stock exchange value, and due to lower dividens paid during the last twelve months. 2. DIFFERENCE BETWEEN BOOK VALUE AND MARKET VALUE OF MAIN ASSETS. The financial statements as of March 31, 2003 have been prepared according to generally accepted accounting principles and general and specific norms of the Securities and Insurance Commission, which is the agency that regulates the Company. The valuation of the assets includes adjustment for currency devaluation, provisions, and technical revaluations. We believe the foregoing is a reasonable way to value the company's permanent investments. As of March 31, 2003 there were financial investments in shares recorded according to their acquisition price of Ch$ 3,830 million, whose market value on the same date was Ch$ 5,802 million. Likewise, there are Ch$ 64,689 million recorded as fixed rate maketable securities recorded, whose market value reached Ch$ 65,122 million. 89 3. RESULTS AS OF MARCH 2003 3a. Consolidated Result Cristalerias de Chile S.A. consolidates its results with Vina Santa Rita, CIECSA, Cristalchile Comunicaciones S.A., Cristalchile Inversiones S.A. and Apoger. Cristalerias' consolidated sales reached Ch$ 35,372 million, a 13.3% increase over 2002. This sales increase results from higher sales in the glass container business (11.4%), Santa Rita (12.8%) and CIECSA (15.0%). Consolidated operating income reached CH$ 7,435 million, a 10.8% increase, of which Ch$ 5,850 million corresponded to the glass container business and Ch$ 1,650 million to Santa Rita. CIECSA, in turn, registered a Ch$ 116 million operating loss. Net profit was Ch$ 4,321 million, compared with Ch$ 183 million in 2002. This is mainly explained by better operting results loss at Cristalchile and Santa Rita, a lower non-operating loss due to better results at subsidiaries and higher income from exchange differences. During 2003 the Company registered a lower non-operating loss of Ch$ 1,052 million, compared with a Ch$ 5,077 million non-operating loss in 2002. The Company recorded a lower net loss from subsidiaries that do not consolidate that went from Ch$ 3,939 million in 2002 to Ch$ 1,101 million in 2003 due to a lower loss in Cristalchile Comunicaciones (owner of 50% of Metropolis) and Cristalchile inversiones S.A. (owner of 40% of Rayen Cura). In addition, the Company registered a higher income from exchange diferences (Ch$ 1,662 million in 2003 v/s a Ch$ 10 million loss in 2002). The net loss from subsidiaries includes a Ch$ 1,034 million charge in 2003 (CH$ 1,041 million in 2002), corresponding to goodwill, which does not constitute cash flow. The following analysis explains Cristalerias' result based on individual financial statements, as well as those of its main subsidiaries. 3b. Individual Result The Company had non-consolidated sales of Ch$17,448 million as of March 2003, which represents a 11.4% increase compared to the previous period. Volumes sold increased by 8.1%, reaching 58,267 tons. This volume level is mainly due to higher sales of bottles for the wine and non-returnable beer markets. Operating income rose by 13.7%, reaching Ch$5,850 million due to a higher sales volume. The Company's net income reached Ch$ 4,321 million, compared to Ch$ 183 million in 2002. This result is partially explained by a higher operating income, and mainly by the non-operating income, that passed from a Ch$4,112 million loss in 2002 to a Ch$499 million loss in 2003. During 2003 a higher income wqas registered from Cristalchile Inversiones, Vina Santa Rita and Envases CMF, a positive exchange rate difference of Ch$ 1,336 million and a lower loss in Cristalchile Comunicaciones (Ch$ 1,505 million in 2003 and Ch$ 2,482 million in 2002). Additionally, a higher loss was registered from CIECSA (Ch$ 437 million in 2003, Ch$ 256 million in 2002) and higher interest expenses that reached Ch$ 1,235 million (Ch$ 673 million in 2002). 3c. Result in Subsidiaries In 2003, Santa Rita's net income reached Ch$ 1,205 million, 14.2% over 2002. In the local market, the Company attained volumes that were 10.6% higher than in year 2002. Prices in this market dropped by 5.6% in real terms, as a result of increased competition and lower cost of musts. Sales in the local market increased by 4.5%. Volume sales in the export market increased by 4.0% due to higher sales to the Canadian and Latin American markets. During the period, exports represented 54.5% of total revenues in the amount of US$ 11 million. The operating income increased by 6.6%, reaching Ch$1.650 million, mainly as a result of the increase in volumes in the export and local markets and the depreciation of the Chilean Peso vs. the U.S. Dollar. The average price in dollars per case of Santa Rita for the export market was US$ 31.4, whereas the average price for the industry was US$23.5 per case. Santa Rita's non-operating income was Ch$24 million, compared to a Ch$271 million non-operating loss in 2002. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$90 million operating loss, compared with an operating income of Ch$43 million in 2002, due to higher internal productions that resulted in increased costs. MEGA reached a 22.9% audience share during the period(21.7% in 2002)1. Net sales increased by 15.0% reaching Ch$ 4,329 million, due to an increase in live programming, which has resulted in higher audience levels. As of March 2003, MEGA had a net loss of Ch$248 million, compared to a loss of Ch$194 million in 2002. CIECSA had a Ch$445 million net loss, compared to a Ch$266 milllion net loss in 2002. Envases CMF S.A. registered a Ch$545 million net income in 2003 compared with a Ch$292 million net income in 2002. The company increased net sales by 1.1%, reaching Ch$ 8,857 million during the quarter. Sales volume dropped by 2.5%, reaching 6,092 tons. Operating income reached Ch$1,174 million, 38.9% higher than in 2002, mainly explained by sales of better margin products as well as improved operating efficiencies. At the non-operating level the company passed from a Ch$544 million loss in 2002 to a loss of Ch$357 million in 2003. In the cable TV business, Cristalchile Comunicaciones S.A. (99.99% owned by Cristalerias), is the owner of 50% of Cordillera Comunicaciones Ltda., which in turn is the owner of 99.99% of Metropolis-Intercom S.A. At March 31, 2003, Metropolis-Intercom S.A. registered sales of Ch$10,781 million compared with Ch$11,808 million during the same period the previous year. As of March 2003, Metropolis-Intercom had a net loss of Ch$1,973 million compared with a net loss of Ch$3,921 million in 2002. This result includes a depreciation charge of Ch$3.204 million (Ch$2,772 million in 2002) corresponding to the HFC network adquired in July 2000. The company ended the period with 240,000 subscribers, a 2,9% lower compared with the same date in 2002, due to a greater number disconnections due to the deteriorated domestic economic situation. As a result of the abovementioned and the negative goodwill amortization charge through Cordillera Comunicaciones of Ch$1,034 million in the period (Ch$1,041 million in 2002), Cristalchile Comunicaciones recorded a net loss of Ch$1,505 million (net loss of Ch$2,482 million in 2002). 90 4. CASH FLOW STATEMENT Through January-March 2003, a total net positive flow of Ch$ 8,270 million was generated, which is explained by a positive flow generated by operating activities of Ch$ 14,616 million which were partially offset by a negative financing flow of Ch$ 2,155 million, and a negative flow of investment activities of Ch$4,191 million. The operating flow corresponds basically to the collection of sales and financial interests and other income received that were reduced in part by payment to suppliers, taxes and interests. The negative financing flow can be explained mainly by dividends paid by Ch$ 1,347 million and net loans for Ch$ 845 million. The negative investment flow is mainly explained by the incorporation of fixed assets of Ch$ 7,065 million, which are financed with future purchase for Ch$ 1,762 million and redemption loans for Ch$ 969 million of related companies. The foregoing results in an increase in the final balance of cash and cash equivalent, which passed from Ch$ 93,763 million as of December 31, 2002 to Ch$ 101,647 million as of March 31, 2003. According to the current regulations of the SVS and the Association of Accountants of Chile, term deposits and agreements with due date less than 90 days have been considered cash and cash equivalent. 5. INTEREST RATES AND EXCHANGE RATE RISK ANALYSIS o INTEREST RATES Cristalerias and its Subsidiaries are exposed to the risk of fluctuations in interest rates on its short-term and long-term debts. As of March 31, 2003 Short-Term and Long-Term bank liabilities and obligations with the public totaled Ch$ 139,120 million, which represents 29.7% of the Company's consolidated assets. Bank credits totaled Ch$ 48,843 million, Ch$ 41,576 million of which correspond to credits in foreign currency agreed at variable rates related to the six-month Libor, Ch$ 6,121 million correspond to credits in pesos adjustable in unidades de fomento (indexed currency units) that are exposed to changes in the six-month TAB rate, and Ch$1,075 million correspond to credits in pesos at an annual rate of 4.94%. and Ch$71 million for credit in Argentine Pesos. As of March 31, 2003, the Company had funds available of Ch$ 100,552 million invested in instruments at different time periods like term deposits, bonds, fixed-rate mutual funds and resale agreements. That amount does not include Bonds for Ch$9,988 million with maturity on September 15, 2005 and investment in shares for Ch$ 3,830 million. The Company and its subsidiaries do not use secondary financial instruments at the present time to reduce risk in the event of fluctuations in interest rates. That policy will be studied permanently to evaluate the alternatives offered by the market. o EXCHANGE RATE The Company and its subsidiaries maintains liabilities in foreign currency for the equivalent to US$ 81.0 million, which represents 12.9% of its consolidated assets, and 91 which include a long-term syndicated loan of US$ 50 million of the Parent Company and Long-Term bank credits in Vina Santa Rita of US$ 7.1 million. As of March 31, 2003 the Company and its Subsidiaries maintain its investments in Dollars of US$ 122.7 million; in time deposits, bonds and fixed rate mutual funds. In addition it also has Dollar purchase future contracts of US$131.2 million. On the other hand, aproximately 39% of the Company's consolidated sales are adjusted to the exchange rate variation. At the same time, consolidated costs in foreing currency represent aproximately 27% of total costs. 92 RELEVANT EVENTS As of March 31, 2003 there have not been registered events in this item. -------- 1 Measured between 7:30 A.M. and 1:30 A.M. (i.e.:18 hours daily) from Monday through Sunday. FECU (Standardized Quarterly Financial Report) 1. IDENTIFICATION 1.01.05.00 Firm Name CRISTALERIAS DE CHILE S.A. 1.01.04.00 Company RUT 90331000-6 1.00.01.10 Starting date 1/1/2003 1.00.01.21 Closing date 3/31/2003 1.00.01.30 Type of Currency Chilean Pesos 1.00.01.40 Type of Financial Statements Individual ASSETS 2.0 FINANCIAL STATEMENTS 2.01 BALANCE SHEET 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Individual
ASSETS NOTE No. 03-31-03 03-31-02 ------ -------- -------- -------- 5.11.00.00 TOTAL CURRENT ASSETS 111,227,932 64,324,831 5.11.10.10 Cash 975,794 1,753,295 5.11.10.20 Time deposits 41 16,429,870 17,691,480 5.11.10.30 Marketable securities (net) 4 59,218,019 13,782,202 5.11.10.40 Debtors from sales (net) 5 15,630,357 14,457,887 5.11.10.50 Documents receivable (net) 5 1,785,525 2,687,538 5.11.10.60 Sundry debtors (net) 5 978,504 467,285 5.11.10.70 Doc. & accts receivable 6 2,461,660 2,687,634 related Co. 5.11.10.80 Inventories (net) 7 5,944,490 6,280,535 5.11.10.90 Recoverable taxes 8 853,045 1,387,263 5.11.20.10 Prepaid expenses 398,419 261,627 5.11.20.20 Deferred taxes 8 474,170 748,117 5.11.20.30 Other current assets 10-11 6,078,079 2,119,968 5.11.20.40 Leasing contracts (net) 0 0 5.11.20.50 Leasing assets (net) 0 0 5.12.00.00 TOTAL FIXED ASSETS 72,895,740 74,262,839 5.12.10.00 Land 12 1,497,493 1,495,610 5.12.20.00 High rises & infrastructure 12 22,076,137 17,490,948 5.12.30.00 Machinery & equipment 12 85,435,389 93,388,850 5.12.40.00 Other fixed assets 12 14,077,566 9,207,172 5.12.50.00 Positive goodwill from technical revaluation of fixed 12 7,675,631 8,566,806 assets 5.12.60.00 Depreciation (minus) 12 (57,866,476) (55,886,547) 5.13.00.00 TOTAL OTHER ASSETS 182,381,340 176,616,960 5.13.10.10 Investment in related companies 14 144,225,456 143,385,736 5.13.10.20 Investment in other companies 0 0 5.13.10.30 Negative goodwill 16 2,011,178 2,178,997 5.13.10.40 Positive goodwill (minus) 0 0 5.13.10.50 Long-term debtors 5 161,203 186,310 5.13.10.60 Doc. & accts receivable 6 22,598,303 21,253,711 related Co. 5.13.10.65 Long-term deferred taxes 0 0 5.13.10.70 Intangibles 0 0 5.13.10.80 Amortization (minus) 0 0 5.13.10.90 Other 18 13,385,200 9,612,206 5.13.20.10 Long-term leasing contracts (net) 0 0 5.10.00 TOTAL ASSETS 366,505,012 315,204,630
LIABILITIES 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Individual
LIABILITIES NOTE No. 03-31-03 03-31-02 ----------- -------- -------- -------- 5.21.00.00 TOTAL CURRENT LIABILITIES 15,342,195 36,134,431 5.21.10.10 Short-term oblig. Banks & Fin. Inst. 0 0 5.21.10.20 Short-term portion - Long-term oblig. Banks & Financial Institutions 19 445,744 19,554,244 5.21.10.30 Obligations with the public (notes) 0 0 5.21.20.40 Short-term portion oblig with public 748,203 0 5.21.10.50 Long-term oblig. due within 1 year 0 0 5.21.10.60 Dividends payable 77,453 69,650 5.21.10.70 Accounts payable 2,127,914 1,893,690 5.21.10.80 Notes payable 4,142,922 2,538,315 5.21.10.90 Sundry creditors 1,357,827 494,856 5.21.20.10 Notes & accts payable related Co. 6 146,591 263,104 5.21.20.20 Provisions 23 4,653,758 6,690,113 5.21.20.30 Withholdings 743,989 977,809 5.21.20.40 Income tax 0 0 5.21.20.50 Earned income 0 0 5.21.20.60 Deferred taxes 0 0 5.21.20.70 Other current liabilities 20 897,794 3,652,650 5.22.00.00 TOTAL LONG-TERM LIABILITIES 114,076,231 58,173,623 5.22.10.00 Oblig with Banks & Financial 21 36,578,000 48,630,300 Inst. 5.22.20.00 Long-term oblig with public 68,812,760 0 (bonds) 5.22.30.00 Long-term notes payable 0 0 5.22.40.00 Long-term sundry debtors 242,381 1,230,497 5.22.50.00 Long-term notes & accts. payable related companies 6 0 0 5.22.60.00 Long-term provisions 23 6,063,280 7,164,981 5.22.70.00 Long-term deferred taxes 8 2,379,810 1,147,845 5.22.80.00 Other long-term liabilities 0 0 5.23.00.00 MINORITY INTEREST 0 0 5.24.00.00 TOTAL EQUITY 237,086,586 220,896,576 5.24.10.00 Paid-in capital 27 64,749,257 65,252,164 5.24.20.00 Reserve capital revaluation 27 323,746 (261,008) 5.24.30.00 Premium in sale of own shares 27 27,736,385 27,701,498 5.24.40.00 Other reserves 27 10,040,408 8,314,353 5.24.50.00 Retained earnings (addition of codes 5.24.51.00 to 5.24.56.00) 27 134,236,790 119,889,569 5.24.51.00 Reserve future dividends 27 115,487,218 106,277,626 5.24.52.00 Accrued profits 27 14,428,510 13,556,728 5.24.53.00 Accrued losses (minus) 0 0 5.24.54.00 Profit (loss) for the year 27 4,321,062 182,511 5.24.55.00 Prov. dividends (minus) 0 0 5.24.56.00 Accr. deficit dev. period 27 0 (127,296) 5.20.00.00 TOTAL LIABILITIES 366,505,012 315,204,630
INCOME STATEMENT 2.02 INCOME STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Individual
INCOME STATEMENT NOTE No. 03-31-03 03-31-02 ---------------- ------- -------- -------- 5.31.11.00 OPERATING INCOME 5,849,682 5,143,933 5.31.11.10 Gross Margin 7,085,487 6,220,996 5.31.11.11 Sales 17,448,464 15,663,733 5.31.11.12 Costs (minus) (10,362,977) (9,442,737) 5.31.11.20 Adm. & sales expenses (minus) (1,235,805) (1,077,063) 5.31.12.00 NON-OPERATING INCOME (LOSS) (499,176) (4,111,732) 5.31.12.10 Interest income 433,497 453,918 5.31.12.20 Income from invmnts Rel. Co. 14 1,054,518 715,079 5.31.12.30 Other non-operating income 28 89,874 95,958 5.31.12.40 Loss invmnts Rel. Co. (-) (1,942,221) (4,350,065) 5.31.12.50 Amortization neg.goodwill (-) 16 (42,641) (42,587) 5.31.12.60 Interest expenses (minus) (1,234,535) (672,874) 5.31.12.70 Other non-operat expenses (-) 28 (231,038) (153,140) 5.31.12.80 Price level restatement 29 37,729 87,560 5.31.12.90 Exchange differences 30 1,335,641 (245,581) 5.31.10.00 RESULTS BEFORE INCOME TAX 5,350,506 1,032,201 AND EXTRAORDINARY ITEMS 5.31.20.00 INCOME TAX 8 (1,029,444) (849,690) 5.31.30.00 EXTRAORDINARY ITEMS 0 0 5.31.40.00 PROFIT (LOSS) BEFORE MINORITY INTEREST 4,321,062 182,511 5.31.50.00 MINORITY INTEREST 0 0 5.31.00.00 NET INCOME (LOSS) 4,321,062 182,511 5.32.00.00 Amortization of positive goodwill 0 0 5.30.00.00 INCOME (LOSS) FOR THE YEAR 6 4,321,062 182,511
DIRECT CASH FLOW STATEMENT 2.03 CASH FLOW STATEMENT 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Individual
DIRECT CASH FLOW STATEMENT NOTE No. 03-31-03 03-31-02 -------------------------- ------- -------- -------- 5.41.11.00 NET FLOW FROM OP. ACT. 10,025,362 7,343,691 5.41.11.10 Collection from sales debtors 24,484,071 21,009,814 5.31.11.20 Interests received 1,461,445 268,738 5.31.11.30 Dividends & other distributions 90,258 46,558 funds received 5.31.11.40 Other income 134,617 211,458 5.31.11.50 Payments to suppliers & personnel (-) (12,327,841) (11,462,671) 5.31.11.60 Interest paid (minus) (1,813,381) (505,521) 5.31.11.70 Income tax paid (minus) (765,784) (856,629) 5.31.11.80 Other expenses 33 (177,830) (84,553) 5.31.11.90 V.A.T. & other taxes (1,060,193) (1,283,503) 5.41.12.00 CASH FLOW FINANCING ACTIVITIES (1,337,904) (1,979,720) 5.41.12.05 Proceeds from share issue 0 0 5.41.12.10 Loans received 0 0 5.41.12.15 Obligations with the public 0 0 5.41.12.20 Secured loans from related companies 0 0 5.41.12.25 Other loans from related companies 0 0 5.41.12.30 Other financing resources 0 0 5.41.12.35 Dividends paid (minus) (1,337,904) (1,951,005) 5.41.12.40 Capital distributions (minus) 0 0 5.41.12.45 Repayment of loans (minus) 0 (19,479) 5.41.12.50 Payment of obligations with the public (-) 0 0 5.41.12.55 Repayment of secured loans from rel Co. (-) 0 0 5.41.12.60 Repayment other loans from related Co. (-) 0 (9,236) 5.41.12.65 Share issue payment (minus) 0 0 5.41.12.70 Payment of issue publ oblig (minus) 0 0 5.41.12.75 Other financing payments (minus) 33 0 0 5.41.13.00 CASH FLOW FROM INVESTING ACTIVITIES (3,363,292) 1,511,523 5.41.13.05 Sale of fixed assets 56,713 2,659 5.41.13.10 Sale of permanent investments 0 0 5.41.13.15 Sale of other investments 0 5,118,952 5.41.13.20 Proceeds secured loans to related Comp. 0 0 5.41.13.25 Proceeds other loans to related companies 889,139 0 5.41.13.30 Other investment income 33 967,805 920,670 5.41.13.35 Incorporation of fixed assets (minus) (5,258,623) (2,951,787) 5.41.13.40 Capitalized interests payment (minus) 0 0 5.41.13.45 Permanent Investments 0 0 5.41.13.50 Investments in financial instruments (minus) 0 (1,575,103) 5.41.13.55 Other loans to related companies (minus) 0 (3,187) 5.41.13.60 Other loans to related companies (minus) (6,646) (681) 5.41.13.65 Other distrib of funds on invest activities (-) 33 (11,680) 0 5.41.00.00 TOTAL NET CASH FLOW FOR THE PERIOD 5,324,166 6,875,494 5.42.20.00 EFFECT OF INFLATION ON CASH & CASH EQUIV. (404,304) 77,354 5.41.00.00 NET CHANGE IN & CASH EQUIVALENT 4,919,862 6,952,848 5.42.00.00 CASH & CASH EQUI AT BEGINNING OF PERIOD 73,628,508 19,141,638 5.43.00.00 CASH & CASH EQUIV BALANCE AT END OF PERIOD 78,548,370 26,094,486
INCOME STATEMENT RECONCILIATION CONCILIATION BETWEEN CASH FLOW GENERATED BY THE OPERATION'S ACTIVITIES AND THE INCOME STATEMENT FOR THE YEAR 1.00.01.30 Type of Currency: Thousands of Chilean Pesos 1.00.01.40 Type of Balance : Individual
CASH FLOW - INCOME STATEMENT RECONCILIATION NOTE No. 03-31-03 03-31-02 ------------------------------------------- -------- -------- -------- 5.50.10.00 Profit (Loss) for the year 4,321,062 182,511 5.50.20.00 Profit in sale of assets 7,268 (767) 5.50.20.10 (Profit) Loss in sale of fixed assets 7,268 (767) 5.50.20.20 Profit in sale of investments (minus) 0 0 5.50.20.30 Loss in sale of investments 0 0 5.50.20.40 (Profit) Loss in sale of other assets 0 0 5.50.30.00 Non-cash losses (gains) 4,464,732 7,152,722 5.50.30.05 Depreciation for the year 12 2,301,568 2,195,177 5.50.30.10 Amortization of intangibles 198,949 216,657 5.50.30.15 Write-offs and provisions 1,517,635 831,231 5.50.30.20 Accrued earnings from investments in 14 (1,054,518) (715,079) related companies (minus) 5.50.30.25 Accured losses from investments in 14 1,942,221 4,350,065 related Co. 5.50.30.30 Negative goodwill amortization 16 42,641 42,587 5.50.30.35 Positive goodwill amortization (minus) 0 0 5.50.30.40 Price level restatement 29 (37,729 (87,560) 5.50.30.45 Net exchange difference 30 (1,335,641) 245,581 5.50.30.50 Other non-cash credits to results (minus) (8,188) 8,178 5.50.30.55 Other non-cash debits to results 897,794 65,885 5.50.40.00 Changes in Assets affecting cash flow (incr) 2,309,958 2,046,274 decreases 5.50.40.10 Debtors from sales 2,932,298 1,264,644 5.50.40.20 Inventory (274,506) 284,927 5.50.40.30 Other assets (347,834) 496,703 5.50.50.00 Changes in liabilities affecting cash flow (1,077,658) (2,037,049) increases (decr) 5.50.50.10 Accounts payable related to results for (526,311) (1,151,343) the year 5.50.50.20 Interests payable (695,004) 22,392 5.50.50.30 Income tax payable (net) 347,635 (177,870) 5.50.50.40 Other accounts payable related to 3,399 (700,936) non-oper results 5.50.50.50 VAT and other taxes payable (net) (207,377) (29,292) 5.50.60.00 Profit (Loss) of minority interest 0 0 5.50.00.00 NET OPERATING CASH FLOW 10,025,362 7,343,691
01. Registration In The Securities Register 1. IDENTIFICATION OF THE COMPANY AND REGISTRATION IN THE SECURITIES REGISTER The company is registered in the Securities Register under N 061 and it is supervised by the Securities and Insurance Commission. 02. Applied Accounting Criteria APPLIED ACCOUNTING CRITERIA a) Accounting Period These financial statements correspond to the period between January 1 and March 31 of 2003 and 2002. b) Preparation basis of financial statements: These individual financial statements as of March 31, 2003 and 2002 have been prepared on the basis of generally accepted accounting principles and specific norms issued by the S.V. S., with the former prevailing in case of discrepancies. Investments in subsidiaries are recorded on one line in the general balance sheet at their net worth and, therefore, they have not been consolidated line by line. This treatment does not modify the net profit of the fiscal year or the net worth. These financial statements have been issued only for purposes of making an individual analysis of the company and, in consideration thereof, they shall be read together with the consolidated statements, which are required by generally accepted accounting principles. c) Presentation Basis For comparison purposes, the financial statements and figures included in the disclosures for the 2003 fiscal year are presented updated according to non-accounting terms as of March 31, 2003 by 3.8%. d) Adjustment for Currency Devaluation (Price Level Restatement) Financial statements have been corrected monetarily on the basis of considering the variation in the purchasing power of the currency which occurred in the 2003 fiscal year, which was 0.5% (-0.4% in 2002). e) Conversion Basis Balances in foreign currency and indexed currency units have been converted to pesos at the indicated parities: 2003 2002 Ch$ Ch$ --------- --------- U.S. Dollar 731.56 655.90 Pound Sterling 1,156.25 934.86 Swiss Franc 540.65 389.79 EURO 797.34 570.94 Unidad de Fomento 16,783.60 16,197.66 f) Marketable Securities and Time Deposits Transactions in fixed income instruments (PRC) are shown at the return value of the investment, which does not exceed the market value as of March 31, 2003. Investments in stock are shown at the lowest value between the corrected cost and market value. Time deposits are shown at the value of the investment, plus adjustments and interest accrued as of the date of the fiscal year. g) Inventory Inventory of finished products has been valued as of March 31, 2003 and 2002 at the direct production cost, duly updated, and raw materials and materials at the cost of the last purchase or its corrected cost. Those valuations do not exceed the net liquidation value. h) Bad Debts (Uncollectables) The parent company and subsidiaries have made provision for bad debts that is deducted from debtors for sales. The criterion adopted to estimate them is the age of the balances. i) Fixed Assets The fixed assets are shown at purchase cost plus legal and regulatory revaluations accumulated until March 31, 2003 and 2002. j) Depreciation of Fixed Assets Depreciation of this property is calculated on updated values, according to the straight-line depreciation system, considering the estimated useful life of the property. k) Assets in Leasing None. l) Sales Transactions with Leaseback None. m) Intangibles At March 31, 2003 and 2002 there was no balance in this item. n) Investments in Related Companies Investments in stocks and rights in related companies have been valued according to the percentage of the holding that corresponds to the Company in the equity of its affiliates (VPP), according to procedures established for these purposes by circular 368 of the Securities and Insurance Commission. o) Negative and Positive Investment Goodwill: Negative and positive investment goodwill have arisen when comparing the price paid for the investment made and the proportional value that corresponds to that investment in the net worth of the company. Those values are amortized over a twenty-year period. At March 31, 2003 and 2002 there was no positive investment goodwill. p) Operations with buyback and sellback agreement Financial instruments acquired with a sellback agreement are shown at their purchase value plus interest and adjustments accrued at the closing of the fiscal year, and they are classified in Other Current Assets, in the terms established in Circular No. 768 of the Securities and Insurance Commission. q) Deferred Taxes and Income Tax The company has complied with deferred taxes, in accounting terms, as established in Technical Bulletin No. 60 and the norms indicated in Circular 1466 of the S.V.S. Income tax is recorded in the accounting on the basis of the calculation of net taxable income determined according to norms established in the Income Tax Law. r) Severance payment The parent company has established a reserve for all of the personnel's severance payment, according to the union contracts signed with their workers. This reserve is shown at the present value of the obligation. s) Operating income The company recognizes the income from its operations on an accrued basis according to generally accepted accounting principles. t) Derivative Contracts The company maintains Future contracts in foreign currency, which have been recorded as established in Technical Bulletin 57 of the Accountants Association of Chile. u) Computer Software The company develops computer software with its own resources, and it also acquires computer packages from third parties. Disbursements for its own development are charged to results as they are generated. Computer packages are recorded in Fixed Assets and amortized in 36 months. v) Research and Development Expenses The companies do not show any expenses for this item. w) Cash Flow Statement: According to current regulations of the Securities and Insurance Commission and the Accountants Association of Chile, in preparing the cash flow statement, the Company has considered time deposits, fixed rate mutual fund investments and deposits with maturities under 90 days as cash. Such cash flows related to the Company's line of business, interest paid, interest income received, dividends received, and all such that is not defined as investment or Financing is included under the heading "Flow Originating in Activities of the Operation." Disbursements from time deposits and agreement with maturity of more than 90 days have been clasified in the item "Investments in Financial Instruments" 03. Accounting Changes In the 2003 and 2002 period, there have not been any changes in the accounting criteria that affect the individual financial statements. 04. Marketable Securities As of March 2003, this item is composed by the following investments: a) Th Ch$ 55,388,004 in bonds and fixed rate instruments mainly corresponding to investments in state bonds and financial institutions in USA, Germany and Holland; private American companies collateralized bonds (guaranteed by accounts receivable) and American mortgage bonds with state guarantee. b) Th Ch$ 3,830,015 in shares. At March 31, 2003 Th Ch$ 3,388,219 are included corresponding to investments in shares, Th Ch$ 10,339,303 correspond to investments in fixed rate mutual funds instruments in Dollars and Th Ch$ 54,680 corresponding to interests accrued from Bonds. CRISTALERIAS DE CHILE S.A. NOTE 4 -MARKETABLE SECURITIES- BALANCE COMPOSITION Type of Security Book Value ---------------- ----------- 03-31-2003 03-31-2002 ---------- ---------- Shares 3,830,015 3,388,219 Bonds 0 0 Mutual fund shares 0 10,339,303 Investment fund shares 0 0 Public tender promissory notes 0 0 Mortgage bonds 0 0 Fixed rate instruments and bonds 55,388,004 54,680 Total Marketable Securities 59,218,019 13,782,202 CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - SHARES
Unit Market R.U.T. Company Name Number of Share Market Investment Corrected Shares Percentage Value Value Cost ----- ------------ --------- ---------- ------ ---------- --------- 96.512.200-1 Bodegas y Vinedos Santa Emiliana S.A. 60,440,462 9.4970 96 5,802,284 3,830,015 Value Investment Portfolio 5,802,274 3,830,015 Adjustment Reserve 0 Book value, Investment Portfolio 3,830,015
CRISTALERIAS DE CHILE S.A. NOTE 4 - MARKETABLE SECURITIES - FIXED RATE INSTRUMENTS
Book Value ---------------------- Par Market Type of Security Value Rate % Value Reserve ----------------- ----- ------ ------ ------- Bonds from Financial Institutions in USA, Germany and Holland 15,492,461 15,492,461 1.28 15,911,401 0 USA Treasury bonds 29,005,950 29,005,950 1.17 29,019,522 0 Mortgage bonds USA with state guarantee 4,807,804 4,807,804 1.15 4,807,804 0 Time Deposit 201,179 201,179 0.665 201,179 0 Cash Balance 22,610 22,610 0.00 22,610 0 Call Deposit 5,858,000 5,858,000 1.28 5,858,000 0 TOTAL 55,388,004 55,388,004 55,820,516 - Note: (1) Investments have been made in U.S. Dollars (79.7%) and EUROS (20.3%) and are in custody abroad.
05. Short-Term and Long-Term Debtors At March 31, 2003 and 2002 there are balances of short-term debtors of Th Ch$ 18,394,386 (Th Ch$ 17,612,710 in 2002). There is also a balance of Th Ch$ 161,203 for Long-Term debtors in 2003 (Th Ch$ 186,310 in 2002). At March 31, 2003 and 2002 the company has established a reserve for bad debts of Th Ch$ 143,127 in 2003 (Th Ch$ 133,189 in 2002), which is deducted from Debtors for Sales. The balance of Short-term Debtors is shown net the reserve for bad debtors and customer advances. CRISTALERIAS DE CHILE S.A. NOTE 5 -SHORT AND LONG TERM DEBTORS
Current ------------------------------------------------------------------------------------------- Over 90 days Up to 90 days up to 1 year Total Current (net) ------------------------ ---------------------- ------------------------ Area 03-31-2003 03-31-2002 03-31-2003 03-31-2002 Subtotal 03-31-2003 03-31-2002 ---- ---------- ---------- ---------- ---------- -------- ---------- ---------- Debts from Sales 15,029,889 13,366,348 743,595 1,224,728 15,773,484 15,630,357 14,457,887 Estimate of non-collectable debt - - - - - - - Documents receivable 1,712,512 2,649,718 73,013 37,820 1,785,525 1,785,525 2,687,538 Estimate of bad debtors - - - - - - - Misc. debtors 929,579 441,450 48,925 25,835 978,504 978,504 467,285 Estimate of bad debtors - - - - - - - Long Term ------------------------ 03-31-2003 03-31-2002 ---------- ---------- Debts from Sales 0 0 Estimate of non-collectable debt - - Documents receivable 0 0 Estimate of bad debtors - - Misc. debtors 161,203 186,310 Estimate of bad debtors - - Total Long Term Debtors 161,203 186,310
06. Balances and Transactions with related entities I.- Balances of short-term receivables as of March 31, 2003 and 2002 amount to Th Ch$ 2,461,660 and Th Ch$ 2,687,634, respectively. Additionally, there is a Long-Term balance of Th Ch$ 22,598,303 and Th Ch$ 21,253,711, respectively. Of this, Th Ch$ 20,601,055 in 2003 corresponded to the sale of Rayen Cura S.A.I.C. shares to the subsidiary Cristalchile Inversiones S.A., equivalent to UF 1,227,451.50 , without interests and Th Ch$ 1,997,248 in 2003, corresponded to loans granted to Red Televisiva Megavision S.A. Detail of outstanding credits: 1) Loan to Red Televisiva Megavision S.A. 5.65% Annual Rate, UF adjustability 07.05.2003 17,000 UF Th Ch$ 285,321 01.05.2004 17,000 UF Th Ch$ 285,321 07.05.2004 17,000 UF Th Ch$ 285,321 01.05.2005 17,000 UF Th Ch$ 285,321 07.05.2005 17,000 UF Th Ch$ 285,321 01.05.2006 17,000 UF Th Ch$ 285,321 07.05.2006 17,000 UF Th Ch$ 285,321 01.05.2007 17,000 UF Th Ch$ 285,321 07.05.2007 17,000 UF Th Ch$ 285,321 2) Loan to Cristal Chile Comunicaciones S.A. UF adjustability 03.31.2003 847.57 UF Th Ch$ 14,225 3) There are balances for invoicing of Sales of bottles and services with the following related companies with expiration under 90 days: 2003 2002 Th Ch$ Th Ch$ ------ ------ S.A. Vina Santa Rita 1,761,674 1,867,112 Vina Los Vascos S.A. 78,594 182,895 Servicios y Consultorias Hendaya S.A. 253 - Rayen Cura S.A. - 142 Total 1,840,521 2,050,149 II.- Balances Payable in the Short-Term amount to Th Ch$ 146,591 in 2003 and Th Ch$ 263,104 in 2002, which correspond to sundry material purchased . For invoicing there are accounts payable of related companies for the following balances with expirations under 90 days: 2003 2002 Th Ch$ Th Ch$ ------- ------ S.A. Vina Santa Rita 124,165 208,110 Ediciones Financieras S.A. 2,829 3,840 Vina Los Vascos S.A. 1,109 16,494 Cia. Electro Metalurgica S.A. 2,124 0 Emvases CMF - 90 ------- ------- TOTAL 130,227 228,534 CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCE AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS RECEIVABLE
Short Term Long Term -------------------------- -------------------------- R.U.T. Company 03-31-2003 03-31-2002 03-31-2003 03-31-2002 ------- ------- ---------- ---------- ---------- ---------- 86547900-K S.A. VINA SANTA RITA 1,761,674 1,867,112 0 0 79952350-7 RED TEL. MEGAVISION S.A. 606,914 623,382 1,997,248 2,286,591 89150900-6 VINA LOS VASCOS S.A. 78,594 182,895 0 0 96721580-5 CRISTACHILE COM. S.A. 14,225 14,103 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 0 0 20,601,055 18,967,120 83032100-4 SERV. Y CON. HENDAYA S.A. 253 0 0 - 0-E RAYEN CURA S.A. I.C. 0 142 0 0 TOTAL 2,461,660 2,687,634 22,598,303 21,253,711
CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES DOCUMENTS AND ACCOUNTS PAYABLE
Short Term Long Term -------------------------- -------------------------- R.U.T. Company 03-31-2003 03-31-2002 03-31-2003 03-31-2002 ------- ------- ---------- ---------- ---------- ---------- 86547900-K S.A. VINA SANTA RITA 124,165 208,110 0 0 96608270-4 CIECSA S.A. 6,446 24,208 0 0 96972440-5 CRISTALCHILE INVERSIONES S.A. 9,917 10,362 0 0 89150900-6 VINA LOS VASCOS S.A. 1,109 16,494 0 0 96539380-3 EDICIONES FINANCIEROS S.A. 2,830 3,840 0 0 86881400-4 ENVASES CMF S.A. 0 90 90320000-6 CIA. ELECTROMETALURGICA S.A. 2,124 0 0 0 TOTAL 146,591 263,104 0 0
CRISTALERIAS DE CHILE S.A. NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES TRANSACTIONS
03-31-2003 03-31-2002 --------------------- ------------------------ Effect on Effect on Description of Results Results Company R.U.T. Relationship Transaction Amount (Debit/Credit) Amount (Debit/Credit) ------- ------ ------------ -------------- ------ ------------ ------ -------------- CLARO Y CIA. 79753810-8 With the Chairman Legal assessment 4,911 -4,911 5,764 -5,764 CIA. SUDAMERICANA DE 90160000-7 Indirect Carrier 113,503 0 12,731 0 VAPORES S.A. affiliate services VINA LOS VASCOS S.A. 89150900-6 Indirect Direct sales 141,924 40,130 172,238 44,873 affiliate Indirect Materials 7,531 0 12,217 0 affiliate purcha EDICIONES FINANCIERAS 96793770-3 Indirect Received 2 -2 3,254 -3,254 S.A. affiliate services QUEMCHI S.A. 96640360-8 Indirect Loaned services 3,135 3,135 2,528 2,528 affiliate BAYONA S.A. 86755600-1 Controlling Dividends paid 124,163 0 184,116 0 stockholder NAVARINO S.A. 96566900-0 Indirect Given services 2,506 2,506 2,528 2,528 subsidiary CIECSA S.A. 96608270-4 Subsidiary Adjustments 5 -5 155 155 CRISTALCHILE 96721580-5 Subsidiary Adjustments 33 33 51 -51 COMUNICACIONES RED TELEVISIVA 79952350-7 Related with Interests 36,272 36,272 51,734 51,734 MEGAVISION S.A. Subsidiary ENVASES CMF S.A. 86881400-4 Affiliate Materials 0 0 77 -77 purcha SERV. Y CONS. HENDAYA 83032100-4 Controlling Dividends paid 119,267 0 176,855 0 S.A. stockholder Controlling Received 256,708 -256,708 259,327 -257,327 stockholder services Controlling Given services 5,034 5,034 5,015 5,015 stockholder CRISTALCHILE INVERSIONES 96972440-5 Subsidiary Credit return 881,208 0 0 0 S.A. Subsidiary Adjustments 45,692 45,692 0 0 Subsidiary Account 38 0 0 0 payments CIA. ELECTROMETALURGICA 90320000-6 Controlling Dividends paid 457,380 0 678,229 0 S.A. stockholder Controlling Materials 1,800 0 0 0 stockholder purcha RED TELEVISIVA 79952350-7 Related with Adjustments 6,040 6,040 11,470 -11,470 MEGAVISION S.A. Subsidiary S.A. VINA SANTA RITA 86547900-K Subsidiary Container 1,359,758 384,482 1,582,307 412,234 Sales Subsidiary Packaging 107,747 0 0 0 sales Subsidiary Materials and 105,327 102 197,775 -170 services purcha Subsidiary Rent of 43,732 17,785 0 0 Vineyard RAYEN CURA S.A.I.C. 0-E Indirect Raw materials 37,895 0 0 0 affiliate sales
07. Inventory The balance of the inventory item corresponds to finished products and materials that are valued as described in Note 2 g). A detail of its composition is shown below: 2003 2002 Th Ch$ Th Ch$ --------- --------- Finished Products 2,350,612 2,589,531 Raw Materials and Fuel 1,611,679 2,067,372 Materials and spare parts to be consumed 1,049,208 1,262,998 Materials in transit 932,991 360,634 ---------- ---------- TOTAL 5,944,490 6,280,535 08. Deferred taxes and income taxes A) DEFERRED TAXES. Accumulated balances of deferred taxes for temporary differences, and their composition in the income tax account for effects of fiscal year results and recognition of deferred taxes, are presented on the attached charts. Estimated amortization periods of deferred taxes have been estimated on the average at 1.8 years for Short-Term Assets, 4.1 for Long-Term Assets, and 14.4 for Long-Term Liabilities. B) INCOME TAX The Company established tax provisions of 16.5% of First Category Income Tax in 2003 (16% in 2002) and 35% as single tax under Art. 21, for the 2003 and 2002 fiscal years. Credits against taxes are shown deducting the payable obligation. The itemized list is the following: 2003 2002 Th Ch$ Th Ch$ Fiscal year income tax reserve (912,701) (689,552) Single tax reserve (2,646) (3,415) ------------ ----------- SUBTOTAL (915,347) (692,967) Credits: Monthly reserve payments 771,723 872,821 Training expenditure 60 0 Credit fixed asset 0 0 Credit from donations 0 0 Recoverable VAT 0 0 ------------ ----------- CREDIT SUBTOTAL 771,783 872,821 INCOME TAX TOTAL 0 0 VAT Tax Credit previous fiscal year 996,609 1,207,409 TOTAL TAXES TO BE ------------ ----------- RECOVERED 853,045 1,387,263 C) TAXABLE PROFIT FUND The company showed taxable profits to be distributed: Generated as of 12.31.1983: 2003 2002 Th Ch$ Th Ch$ Profit adjustment Generated to 31.12.1983: Profits Adjustment 1,909,034 1,909,034 Generated since 01.01.1984: Without Credit 1,072,115 2,673,752 With 10% First Category Credit 22,694 82,075 With 15% First Category Credit 92,502,240 100,864,409 With 16% First Category Credit 16,906,651 3,687,712 With 15% Additional Rate Credit 722 740 With 16.5% First Category Credit 5,950,023 0 ------------ ----------- SUBTOTAL TAX PROFITS 116,454,445 107,308,688 Non-income revenues 6,825,087 6,821,960 TOTAL EARNINGS 123,279,532 114,130,648 CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX DEFERRED TAXES
03-31-2003 03-31-2002 ---------- ---------- Item Asset Deferred Tax Liability Deferred Tax Asset Deferred Tax Liability Deferred Tax ---- ------------------ ---------------------- ------------------ ---------------------- Short term Long Term Short Term Long Term Short Term Long Term Short Term Long Term ---------- --------- ---------- --------- ---------- --------- ---------- --------- Temporary Differences --------------------- Reserve non-collectable accounts 23,616 0 0 0 21,310 0 0 0 Expected revenue 0 0 0 0 0 0 0 0 Vacation reserve 29,949 0 0 0 36,080 0 0 0 Amortization intangibles 0 0 0 0 0 0 0 0 Leased assets 0 0 0 0 0 0 0 0 Manufacturing expenses 0 0 0 0 0 0 0 0 Fixed asset depreciation 0 14,781 0 4,484,098 0 0 0 4,246,732 Severance 2,131 148,063 0 0 1,790 34,004 0 0 Other events 0 0 53,357 583,339 0 0 0 0 Packaging reserve 172,496 0 0 0 220,841 0 0 0 Machinery repair reserve 0 0 0 0 169,998 0 0 0 Furnace repair reserve 193,105 354,571 0 0 185,184 565,327 0 0 Refractories obsolescence reserve 6,762 0 0 0 6,576 0 0 0 Spare parts obsolescence reserve 97,163 0 0 0 96,996 0 0 0 Deferred customs duties 2,305 592 0 83,578 25,676 0 0 0 Accumulated depreciation automoviles 0 0 0 0 0 5,780 0 0 Unrealized profit 0 61,912 0 0 0 1,613 0 0 Fixed asset, molds 0 0 0 276,739 0 0 0 272,382 Other reserve 0 0 0 0 0 98,551 0 0 OTHERS Complementary accounts-net amortization 0 19,783 0 2,487,808 16,334 136,124 0 2,802,118 Valuation reserve - - Total 527,527 560,136 53,357 2,939,946 748,117 569,151 0 1,716,996
CRISTALERIAS DE CHILE S.A. NOTE 8 - DEFERRED TAXES AND INCOME TAX INCOME TAX ITEM 03-31-2003 03-31-2002 ---- ---------- ---------- Current tax costs (tax reserve) -915,347 -689,552 Adjustment tax cost (previous year) 0 0 Effect on assets or liabilities from deferred tax of fiscal year -87,429 -121,177 Tax benefit from tax losses 0 0 Effect of amortization of complementary accounts of deferred assets and liabilities -26,668 -38,961 Effect on assets or liabilities of deferred tax for changes in evaluation reserve 0 0 Other debits or credits in the account 0 0 Total -1,029,444 -849,690 09. Short-term and long-term leasing contracts and leasing assets (note required only for leasing companies defined in circular No. 939 of 1990). At March 31, 2003 and 2002, there are no transactions for this concept. 10. Other current assets As of March 31, 2003, this item includes investments in financial instruments for Th Ch$ 6,078,079, with resale agreements valued as stated in note 2 p), of which Th Ch$ 3,220,677 correspond to agreements in Pesos and Th$ 2,534,025 correspond to agreements of less than 90 days in US$. At March 31, 2003 also there are Th Ch$ 323,377 corresponding to issuance expenses and difference in placement rate of bonds series C and D. In March 2002 there was a balance of Th Ch$ 2,119,968 for investments in Financial Instruments with resale agreement, valued as stated in note 2 p). 11. Information on operations involving purchase agreements, sales agreements, sale with buyback agreement, and purchase with sellback agreement of commercial paper or bearer securities Information about these transactions is presented on attached charts. CRISTALERIAS DE CHILE S.A.
NOTE 11 - Information on operations involving purchase agreements, sales agreements, sale with buyback agreement, and purchase with sellback agreement of commercial paper or bearer securities Sale Operations with buyback agreement (VRC) and Purchase with resale agreement (CRV) Code Dates Counterpart Original Price Rate Final Value Document ID Market Currency Set Value Dates Original Price Market Code Start End Counterpart Currency Set Rate Final Value Document ID Value ---- ----- --- ----------- -------- --- ---- ----------- ----------- ----- CRV 03.26.2003 04.01.2003 CITIBANK N.A. Pesos 1,000,000 0.21 1,000,420 PDBC 1,000,350 CRV 03.27.2003 04.03.2003 BANCO CHILE Pesos 591,500 0.20 591,776 PDBC-PRD 591,658 CRV 03.27.2003 04.04.2003 BANCO SANTANDER Pesos 576,500 0.22 576,838 PRD-PCD 576,669 CRV 03.31.2003 04.04.2003 BANCO SANTANDER Pesos 300,000 0.25 300,100 PRD-PCD 300,000 CRV 03.31.2003 04.07.2003 BANCO CHILE Pesos 752,000 0.20 752,351 PDBC-PRD 752,000 CRV 01.06.2003 04.07.2003 BBVA - BHIF Euros 2,467,551 2.04 2,500,304 PRD-ZERO 2,534,025
12. Fixed Assets Fixed Assets: The Fixed Assets are shown at purchase cost plus the legal and regulatory revaluations accumulated as of March 31, 2003 and 2002. The items that make up the Company's fixed assets as of March 31, 2003 and 2002 include mainly Land, Industrial Constructions, Infrastructure Works, Machinery, and Equipment. During 2002, the company carried out a fixed asset inventory, adjusting the value of charged-off assets with their respective accrued depreciation. Technical Reappraisal and Adjustment of Accounting Values: The Company carried out a technical reappraisal of its fixed assets in 1979. In June 1986 it adjusted those assets. Both operations were carried out according to the provisions established in Circular Letters No. 1529 and No. 550 respectively of the Securities and Insurance Commission. The effects of these operations, including write-offs of property, are shown on the attached chart. Depreciations: The charge against results for this item is Th Ch$ 2,301,568 in 2003 and Th Ch$ 2,195,177 in 2002. The detail is shown on an attached chart. FIXED ASSETS 2003 2002 Th Ch$ Th Ch$ LAND Land & mining claims 1,497,493 1,495,610 Subtotal land 1,497,493 1,495,610 *Subtotal land 1,497,493 1,495,610 CONSTRUCTIONS & INFRASTRUCTURE High rises and industrial const. 13,301,928 12,772,593 Facilities 8,748,126 4,692,304 Housing developments 26,083 26,051 *Subtotal 22,076,137 17,490,948 DEPRECIATION Accrued (8,859,417) (7,216,419) For the fiscal year (318,503) (206,604) Subtotal depreciation (9,177,920) (7,423,023) SUBTOTAL CONSTRUCTIONS & INFRASTRUCTURE 12,898,217 10,067,925 MACHINERY & EQUIPMENT Machinery 47,730,021 53,557,179 Furnaces 35,912,456 37,563,044 Furniture and Materials 1,224,294 1,704,742 Tools 349,151 354,609 Vehicles 219,467 209,276 *Subtotal 85,435,389 93,388,850 DEPRECIATION Accrued (40,775,943) (39,852,301) For the fiscal year (1,931,177) (1,943,349) Subtotal depreciation (42,707,120) (41,795,650) Subtotal machinery & equip 42,728,269 51,593,200 OTHER FIXED ASSETS Spare parts 5,394,574 4,716,214 Imports in transit 773,449 1,270,518 Works underway 7,079,643 2,365,720 Lots in Pirque and Leyda 472,652 472,057 Other 357,248 382,663 Subtotal other assets 14,077,566 9,207,172 TOTAL FIXED ASSETS 123,086,585 121,582,580 ---------------------- ------------ ------------ TOTAL ACCUMUL. DEPREC. (49,635,360) (47,068,720) ---------------------- ------------ ------------ TOTAL DEPREC FOR YEAR (2,249,680) (2,149,953) ---------------------- ------------ ------------ TOTAL NET FIXED ASSETS 71,201,545 72,363,907 ---------------------- ------------ ------------ TECHNICAL REVALUATION AND ADJUSTMENT OF ACCOUNTING VALUES 2003 2002 Th Ch$ Th Ch$ LAND Land and mining claims 311,374 310,752 Subtotal land and mining claims net 311,374 310,752 CONSTRUCTIONS & INFRASTRUCTURE High rises and industrial constructions 6,221,626 6,213,607 Facilities 41,120 440,769 Subtotal Constructions 6,262,746 6,654,376 DEPRECIATION Accrued (4,828,036) (5,014,374) For the fiscal year (51,889) (51,822) Subtotal depreciations (4,879,925) (5,066,196) Subtotal Constuctions & Infrastucture net 1,382,821 1,588,180 Total Net Technical Revaluation 1,694,195 1,898,932 TOTAL 7,675,631 8,566,806 TOTAL ACCRUED DEPREC. (5,929,547) (6,616,052) TOTAL DEPREC FOR YEAR (51,889) (51,822) TOTAL NET 1,694,195 1,898,932 13. Sales transactions with leaseback These type of transactions were not carried out as of March 31, 2003 and 2002. 14. Investments in related companies The Company has valued its investments in related companies according to the norms indicated in note 2 n). CIECSA S.A. On April 20, 2000 the Shareholders of Ciecsa S.A. agreed to increase that company's capital in the equivalent to UF 359,921 by issuing 343,750,000 shares that were fully subscribed by Cristalchile S.A. The company has paid 310,345,000 shares which corresponds to UF 324,227.49 totaling a 98.27% stake in the subsidiary. CRISTALCHILE INVERSIONES S.A. At December 31, 2002, the subsidiary Cristalchile Inversiones S.A. adjusted the financial statements of its affiliate in Argentina, Rayuen Cura S.A.C.I. in order to acknowledge the devaluation from $1.7 to $3.32 Argentine pesos per US dollar. The accounting charge against results, as a consequence of the devaluation of the Argentine Peso amounted to Th Ch$ 3,060,166 as of December 31, 2002. Cristalchile Inversiones S.A. carried out an evaluation of its Rayen Cura S.A.I.C. investment and the assets related are suitably valued. S.A. VINA SANTA RITA At December 31, 2002, the company Cristalchile de Chile S.A. has shown a non realized profit for TH Ch$ 358,116 corresponding to the sales of bottles to the the subsidiary S.A. Vina Santa Rita. CRISTALERIAS DE CHILE S.A. NOTE 14 - INVESTMENTS IN RELATED COMPANIES DETAIL OF INVESTMENTS
Country Investment of Control Number of Shareholder Company R.U.T. Company Origin Currency Shares (Percentage) Equity 03-31-2003 03-31-2002 03-31-2003 03-31-2002 96721580-5 Cristalchile Chile Peso 101,213,160 99.9980000 99.998000 71,342,238 78,832,764 Comunicaciones S.A. 86547900-K S.A. Vina Santa Chile Peso 493,959,797 54.0970000 54.097000 81,035,529 73,720,543 Rita S.A. 86881400-4 Envases CMF S.A. Chile Peso 28,000 50.0000000 50.000000 32,696,854 29,887,536 96608270-4 Ciecsa S.A. Chile Peso 619,496,305 98.2737000 98.210500 13,531,106 10,149,676 96767580-6 Constructora Chile Peso 800,000 80.0000000 80.000000 5,823 49,491 Apoger S.A. 96826870-8 Inmobiliaria Don Chile Peso 3,817 38.1700000 38.170000 34 1,345 Alberto S.A. 96972440-5 Cristalchile Chile Peso 9,999 99.9900000 99.990000 -465,023 -1,431,118 Inversiones S.A. Net Result of Income not R.U.T. Company Income Accrual VPP Realized 03-31-2003 03-31-2002 3-31-2003 03-31-2002 03-31-2003 03-31-2002 03-31-2003 03-31-2002 96721580-5 Cristalchile -1,504,834 -2,482,200 -1,504,804 -2,482,200 71,340,811 78,831,187 0 0 Comunicaciones S.A. 86547900-K S.A. Vina Santa 1,204,929 1,055,166 651,830 570,813 43,837,790 39,880,603 -358,116 0 Rita S.A. 86881400-4 Envases CMF S.A. 546,135 288,532 273,067 144,265 16,348,427 14,943,767 0 0 96608270-4 Ciecsa S.A. -444,879 -261,100 -437,172 -256,429 13,297,519 9,968,049 -245,646 -277,976 96767580-6 Constructora -306 -523 -245 -418 4,658 39,592 0 0 Apoger S.A. 96826870-8 Inmobiliaria Don 0 -1,584 0 -605 13 514 0 0 Alberto S.A. 96972440-5 Cristalchile 134,635 -1,610,623 129,620 -1,610,462 0 0 0 0 Inversiones S.A. TOTAL 144,829,218 143,663,712 -603,762 -277,976 Book value R.U.T. Company of Investment 03-31-2003 03-31-2002 96721580-5 Cristalchile 71,340,811 78,831,187 Comunicaciones S.A. 86547900-K S.A. Vina Santa 43,479,674 39,880,603 Rita S.A. 86881400-4 Envases CMF S.A. 16,348,427 14,943,768 96608270-4 Ciecsa S.A. 13,051,873 9,690,072 96767580-6 Constructora 4,658 39,592 Apoger S.A. 96826870-8 Inmobiliaria Don 13 514 Alberto S.A. 96972440-5 Cristalchile 0 0 Inversiones S.A. TOTAL 144,225,456 143,385,736
15. Investments in other companies At March 31, 2003 and 2002 there are no investments in other companies. 16. Goodwill Amortization NEGATIVE GOODWILL Stock purchases made in different periods of S.A. Vina Santa Rita, Ciecsa S.A., and Envases C.M.F. S.A., have produced negative goodwill whose net balance to be amortized as of March 31, 2003 totaled Th Ch$ 2,011,178 (Th Ch$ 2,178,997 in 2002). CRISTALERIAS DE CHILE S.A. NOTE 16 - GOODWILL ON INVESTMENTS Negative Goodwill
R.U.T. Company Name 03-31-2003 03-31-2002 ------ ------------ ---------- ---------- Amount Amortiz. Balance of Negative Amount Amortiz. Balance of Negative this period Goodwill this period Goodwill 86547900-K S.A. Vina Santa Rita 12,482 593,717 12,466 642,836 96608270-4 Ciecsa S.A. 30,159 1,417,461 30,121 1,536,161 TOTAL 42,641 2,011,178 42,587 2,178,997
17. Intangibles At March 31, 2003 and 2002 there are no values for these items. 18. Other (Assets) As of March 31, 2003, the sum of Th Ch$ 9,988,251 (Th Ch$ 9,403,958 in 2002) for sale of Bonds of Celulosa Arauco and Constitucion S.A. equivalent to US$13,653,358, at a 6.95% annual rate with maturity on September 15, 2005 is included in Other Long-term Assets. Considering that there is the intention of maintaining the Celulosa Arauco and Constitucion S.A. bonds until their due date on September 15, 2005, the valuation and registration of the bonds fulfills the provisions in Circular Letter No. 368 of the S.V.S., as Long-term Fixed Rate Instruments. In addition, at March 31, 2003 this item includes a balance for issuance expenses of bonds series C and D for Th Ch$ 982,322 and the negative goodwill produced by the placement of these for Th Ch$ 2,414,627. At March 31, 2002 the amount of Th Ch$ 208,248 is included for anticipated interests of rights of customs duties 19. Short-term obligations with banks and financial institutions Short-term obligations with Banks and Financial Institutions (5.21.10.10). As of March 31, 2003 and 2002, there are not short-term bank obligations. b) Long-term obligations with Banks and Financial Institutions (5.21.10.20). A list of operations is shown on the attached chart. CRISTALERIAS DE CHILE S.A. NOTE 19 - OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS, SHORT TERM
Type of Currency and Readjustment Index R.U.T. Bank or Financial Dollars Euros Yen Institution ---------------------- --------------------- --------------------- 03-31-2003 03-31-2002 03-31-2003 03-31-2002 03-31-2003 03-31-2002 Short term (code: 5.21.10.10) Long Term - Short Term (code: 5.21.10.20) 0-E J.P Morgan Chase Bank 445,744 19,554,244 0 0 0 0 Others 0 0 0 0 0 0 TOTAL 445,744 19,554,244 0 0 0 0 Capital amount due 0 19,452,120 0 0 0 0 Average annual interest rate 2,675 3,375 0 0 0 0 Percentage oblig. foreign curr. (%) 100.0000 Percentage oblig. foreign curr. (%) 0.0000 Type of Currency and Readjustment Index R.U.T. Bank or Financial Other Foreign Institution Currencies U.F. $ Non adjustable Total ---------------------- --------------------- --------------------- --------------------- 03-31-2003 03-31-2002 03-31-2003 03-31-2002 03-31-2003 03-31-2002 03-31-2003 03-31-2002 Short term (code: 5.21.10.10) Long Term - Short Term (code: 5.21.10.20) 0-E J.P Morgan Chase Bank 0 0 0 0 0 0 445,744 19,554,244 Others 0 0 0 0 0 0 0 0 TOTAL 0 0 0 0 0 0 445,744 19,554,244 Capital amount due 0 0 0 0 0 0 0 19,452,120 Average annual interest rate 0 0 0 0 0 0 0 0 Percentage oblig. foreign curr. (%) 100.0000 Percentage oblig. foreign curr. (%) 0.0000
20. Other Current Liabilities At March 31, 2003 , there was a balance for Th Ch$ 897,794 (TH Ch$ 3,652,650 in 2002) corresponding Future Contracts, and others current liabilities. 21. Long term liabilities with banks and financial institutions The obligations with banks and financial institutions are presented on the charts attached. CRISTALERIAS DE CHILE S.A. NOTE 21: LONG-TERM OBLIGATIONS WITH BANKS AND FINANCIAL INSTITUTIONS Long-term Obligations With Banks and Financial Institutions
Maturity --------------------------------------------------------------------------------------- Bank or Adjustment More than 10 years R.U.T. Financial index From 1 From 2 From 3 From 5 ------------------ Institution currency to 2 to 3 to 5 to 10 Amount Term ----- ----------- -------------- ------ ------ ------ ------- ------ ---- M$ M$ M$ M$ M$ 0-E J.P. Morgan Chase Bank Dollars - - 36,578,000 - - - Euros - - - - - - Yen - - - - - - UF - - - - - - Non-adj.CH$ - - - - - - Others - - - - - - Total - - 36,578,000 - - - Porcentaje de obligaciones en moneda extranjera 100.00% Porcentaje de obligaciones en moneda nacional 0.00% Bank or Financial Closing date Closing date R.U.T. Institution Current period Previous period ------ -------------------------- --------------------------- ------------------- Total Long-Term Average Total Long-Term Adjustment at closing of annual at closing of index Financial interest Financial currency Statements rate Statements --------------- -------------- -------- -------------- 0-E J.P. Morgan Chase Bank 36,578,000 2.675 48,630,300 Dollars - - - Euros - - - Yen - - - UF - - - Non-adj.CH$ - - - Others 36,578,000 48,630,300 Total Porcentaje de obligaciones en moneda extranjera 100.00% Porcentaje de obligaciones en moneda nacional 0.00%
22. Short-term and long-term obligations with the public (promissory notes and bonds) As of March 31, 2003, there are obligations with the public for UF 4,100,000, corresponding Th Ch$ 68,812,760, divided in series (C1, C2, D1, D2) with 4.75% interest in series C and 5.80% interest in series D. In short term there is a balance for Th Ch$ 748,203 corresponding to interest accrued for UF 44,579.42. Series C bonds have a final maturity of 6 years, with amortizations beginning 2 years from the closing date. Bond series D have a final maturity of 21 years with amortizations starting 6 years from the closing date. At March 31, 2002, there was no balance for this concept. Cristalerias de Chile S.A. NOTE 22: SHORT-TERM AND LONG-TERM OBLIGATIONS WITH PUBLIC (PROMISSORY NOTES AND BONDS) BONDS
REGISTRATION OR IDENTIFICATION No. CURRENT INDEXING INTEREST FINAL OF INSTRUMENT SERIES FACE VALUE UNIT OF BOND RATE MATURITY ------------- ------ ---------- ------------ ---- -------- LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests 0 UF 4.75 07-15-2003 296-09.07.02 C2 Interests 0 UF 4.75 07-15-2003 296-09.07.02 D1 Interests 0 UF 5.8 07-15-2003 296-09.07.02 D2 Interests 0 UF 5.8 07-15-2003 TOTAL CURRENT PORTION LONG-TERM BONDS 296-09.07.02 C1 1,500,000 UF 4.75 07-15-2008 296-09.07.02 C2 500,000 UF 4.75 07-15-2008 296-09.07.02 D1 1,900,000 UF 5.8 07-15-2023 296-09.07.02 D2 200,000 UF 5.8 07-15-2023 LONG-TERM TOTAL INSTALLMENTS REGISTRATION OR ------------------------------ PAR VALUE ISSUE IDENTIFICATION No. INTEREST AMORTIZATION -------------------------- IN CHILD OR OF INSTRUMENT SERIES PAYMENT PAYMENT 03-31-2003 03-31-2002 ABROAD ------------- ------ ------- ------- ---------- ---------- ------ LONG-TERM BONDS-CURRENT PORTION 296-09.07.02 C1 Interests SEMI-ANNUAL SEMI-ANNUAL 246,241 0 LOCAL 296-09.07.02 C2 Interests SEMI-ANNUAL SEMI-ANNUAL 82,080 0 LOCAL 296-09.07.02 D1 Interests SEMI-ANNUAL SEMI-ANNUAL 379,893 0 LOCAL 296-09.07.02 D2 Interests SEMI-ANNUAL SEMI-ANNUAL 39,989 0 LOCAL TOTAL CURRENT PORTION 748,203 0 LONG-TERM BONDS 296-09.07.02 C1 SEMI-ANNUAL SEMI-ANNUAL 25,175,400 0 LOCAL 296-09.07.02 C2 SEMI-ANNUAL SEMI-ANNUAL 8,391,800 0 LOCAL 296-09.07.02 D1 SEMI-ANNUAL SEMI-ANNUAL 31,888,840 0 LOCAL 296-09.07.02 D2 SEMI-ANNUAL SEMI-ANNUAL 3,356,720 0 LOCAL LONG-TERM TOTAL 68,812,760 0
23. Provisions and Write-offs Provisions: As of March 31, 2003, the Company has short-term provisions of Th Ch$ 4,653,758 and Th Ch$6,690,113 in 2002. In the Long-term, reserves are recorded of Th Ch$ 6,063,280 and Th Ch$ 7,164,981 at March 31, 2003 and 2002 respectively. In the annexed chart a detail of amounts provisioned is presented. a) Bad Debt Reserves: The Company has established a reserve for bad debts of Th Ch$ 143,127, and Th Ch$ 133,189, respectively, as of March 31, 2003 and 2002. This reserve is deducted from the balance of sales debtors, according to note 5. b) Vacation Provision: The company has established a provision for the total cost of vacations pending as of March 31, 2003 and 2002, as established in Technical Bulletin No. 47 of the Accountants Association of Chile. The net balance for this item is Th Ch$ 181,508 as of March 31, 2003 (Th Ch$ 229,351 in 2002). c) Provision for Furnace Reconstruction: This reserve is established throughout the useful life of the refractories of each smelting furnace so their repair will not distort the result of the fiscal year's net income when the repairs are made. The Company has established a reserve for this item in the amount of Th Ch$ 3,268,385 and Th Ch$ 4,581,603 as of March 31, 2003 and 2002, respectively. An itemized list of the amounts provided is shown in the attached chart. Cristalerias de Chile S.A. Note Provisions and Write-offs 03/31/2003 03/31/2002 Th$ Th$ Short Term Furnace Reconstruction 1,170,334 1,157,401 Packing for Client Return 1,024,731 1,186,066 Board Share 879,269 745,136 Reserve Subsidiary Losses 464,977 1,430,975 Provision Indirect Expenses 252,961 226,586 Legal Holiday 181,508 229,351 Severance Pay 171,373 143,925 Reserve Spare Parts 463,350 463,350 Machinery Repair 0 1,046,147 Other Reserves 45,255 61,176 4,653,758 6,690,113 Long-Term Severance Pay 3,965,229 3,740,779 Furnace Reconstruction 2,098,051 3,424,202 Total Long-Term 6,063,280 7,164,981 24. Severance Payments The provision for severance payments to personnel is included at its current value, as expressed in note 2 r). In 2003 it totals Th Ch$ 4,136,602 (Th Ch$ 3,884,704 in 2002). As of March 31, 2003 and 2002 the parent company has paid severance payments of Ch$ 802 and Th Ch$ 21,737 respectively chargeable against the provision. 25. Other long-term liabilities As of March 31, 2003 and 2002 there are no values for this concept. 26. Minority interest Not applicable to individual financial statements. 27. Changes in Equity Activity in 2003 and 2002 The activity of the capital and reserve accounts in the fiscal years ended in March 31, 2003 and 2002, are shown in the attached charts. The detail of other reserves account is the following:
2003 2002 Th Ch$ Th Ch$ Future capital increases 4,464,029 4,251,548 Reserve for adjustment of value of fixed assets 1,694,196 1,898,932 Adjustment for conversion difference in investment in Rayen Cura S.A.I.C. 4,099,356 2,380,773 VPP Difference Sodex (217,173) (216,900) ---------- --------- TOTAL OTHER RESERVES 10,040,408 8,314,353 ========== =========
CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH
Reserve Premium Reserve Paid-in capital in sale of Other Future Capital revaluation shares Reserves Dividends ------- ----------- ---------- -------- --------- Balances as of 03-31-2003 Initial balance 64,749,257 0 27,598,393 9,713,099 114,912,655 Distribution result previous fiscal year 0 0 0 0 0 Final dividend previous fiscal year 0 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 0 Development period Accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 278,744 0 Owner's equity Revaluation 0 323,746 137,992 48,565 574,563 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 ---------- ------- ---------- ---------- ----------- Final balances 64,749,257 323,746 27,736,385 10,040,408 115,487,218 ========== ======= ========== ========== =========== Balances as of 03-31-2002 Initial balance 62,863,356 0 26,794,558 7,942,919 102,798,113 Distribution result previous fiscal year 0 0 0 0 0 Final dividend previous fiscal year 0 0 0 0 0 Capital increases with cash stock issue 0 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 0 Development period accumulated deficit 0 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 98,828 0 Owner's equity revaluation 0 -251,453 -107,180 -31,773 -411,190 Fiscal Year Result 0 0 0 0 0 Provisional Dividends 0 0 0 0 0 ---------- ------- ---------- ---------- ----------- Final balances 62,863,356 -251,453 26,687,378 8,009,974 102,386,923 ========== ======= ========== ========= =========== Updated balances 65,252,164 -261,008 27,701,498 8,314,353 106,277,626 ========== ======= ========== ========= =========== Devel. Fiscal Accumulated Provisional Period Year Results Dividends Deficit Result ------- --------- ------- ------ Balances as of 03-31-2003 Initial balance 0 0 0 0 Distribution result previous fiscal year 17,660,662 0 0 0 Final dividend previous fiscal year -3,303,936 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or Profits Capitalization 0 0 0 0 Development period Accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Owner's equity Revaluation 71,784 0 0 0 Fiscal Year Result 0 0 0 4,321,062 Provisional Dividends 0 0 0 0 ---------- -- -------- --------- Final balances 14,428,510 0 0 4,321,062 ========== == ======== ========= Balances as of 03-31-2002 Initial balance 0 0 -123,129 0 Distribution result previous fiscal year 17,770,611 0 0 0 Final dividend previous fiscal year -4,657,728 0 0 0 Capital increases with cash stock issue 0 0 0 0 Reserves and/or profit Capitalization 0 0 0 0 Development period accumulated deficit 0 0 0 0 Accumulated conversion difference adjustment 0 0 0 0 Owner's equity revaluation -52,451 0 493 0 Fiscal Year Result 0 0 0 175,829 Provisional Dividends 0 0 0 0 ---------- -- -------- --------- Final balances 13,060,432 0 -122,636 175,829 ========== == ======== ========= Updated balances 13,556,728 0 -127,296 182,511 ========== == ======== =========
CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN EQUITY NUMBER OF SHARES No. SERIES No. No. SHARES SHARES SHARES WITH VOTING SUBSCRIBED PAID RIGHT ---------- ---- ----- SINGLE 64,000,000 64,000,000 64,000,000 CRISTALERIAS DE CHILE S.A. NOTE 27: CHANGES IN NET WORTH CAPITAL (AMOUNT - TH CH$) SERIES SUBSCRIBED PAID-IN CAPITAL CAPITAL ------- ------- SINGLE 64,749,257 64,749,257 28. Other Non-operating Income and Expenses As of March 31, 2003 non-operating income totaled Th Ch$ 89,874 and Th Ch$ 95,958 in 2002. Non-operating expenses amounted to Th Ch$ 231,038 in 2003 and Th Ch$ 153,140 in 2002. Further detail is presented in the annexed chart. Non-operating Income and Expenses CRISTALERIAS DE CHILE S.A. NOTE 28: OTHER NON-OPERATING INCOME AND EXPENSES 2003 2002 ---- ---- Th Ch$ Th Ch$ INCOME Offices and establishments rental 31,081 55,837 Sale of fixed assets 0 766 Sale of materials 4,753 7,048 Agricultural division 20,846 0 Amortization of non-realized profits 8,188 8,178 Sundry income 25,006 24,129 ------ ------ TOTAL NON-OPERATING INCOME 89,874 95,958 EXPENSES Professional advice 156,592 149,119 Other expenses 63,755 0 Insurance 10,691 4,021 ------ ----- TOTAL NON-OPERATING EXPENSES 231,038 153,140 29. Price-level Restatement As a result of the application of price-level restatement as described in Note 2 d), a net credit to results was generated in the 2003 and 2002 fiscal year of Th Ch$ 37,729 and Th Ch$ 87,560 respectively. Additional information is presented in the annexed chart. Cristalerias de Chile S.A. NOTE 29: ADJUSTMENT FOR PRICE LEVEL RESTATEMENTS
ADJUSTABILITY ASSETS (DEBITS)/CREDITS INDEX 03-31-2003 03-31-2002 ----------------------- ----- ---------- ---------- INVENTORY Consumer Price Index 50,850 -64,196 FIXED ASSET CPI 372,056 -294,783 INVESTMENTS IN RELATED COMPANIES CPI 732,936 -593,104 MARKETABLE SECURITIES CPI 18,997 -13,575 SHORT TERM DEBTORS CPI 800 -664 ACCOUNTS RECEIVABLE RELATED COMPANIES UF 51,766 -87,634 LONG-TERM DEBTORS UF 725 -252 SHORT TERM DEBTORS UF 809 0 OTHER NON-MONETARY ASSETS CPI 15,280 -2,039 EXPENSE AND COST ACCOUNTS CPI 190,942 -3,011 ---------- ---------- TOTAL (DEBITS)/CREDITS - 1,435,161 -1,059,258 LIABILITIES (DEBITS)/ CREDITS NET WORTH CPI -1,156,651 885,990 ACCOUNTS RECEIVABLE RELATED COMPANIES UF -5 155 SHORT-TERM RESERVES CPI -5,234 -4,671 SHORT-TERM CREDITORS CPI 0 77,677 LONG-TERM CREDITORS CPI -109 239 LONG-TERM BANK LOANS CPI 0 194,192 LONG-TERM RESERVES CPI -20,061 -16,280 PUBLIC OBLIGATION UF -161,868 0 NON-MONETARY LIABILITIES CPI 373 4,352 INCOME ACCOUNTS CPI -53,877 5,164 ---------- ---------- TOTAL (DEBITS)/ CREDITS - -1,397,432 -1,146,818 (LOSS) PROFIT FROM ADJUSTMENT FOR PRICE LEVEL RESTATEMENT 37,729 87,560
30. Exchange Differences A net credit against results was made because of exchange rate difference of Th Ch$ 1,335,641 in 2003 and a net credit of Th Ch$ 245,581 in 2002. According to the provisions in Circular Letter 1560 of the SVS of 09/20/2001, the net effect of the adjustment of adjustable assets and liabilities in foreign currency on results deducting the effect of inflation is presented in this item. Further information is shown in the attached table. Cristalerias de Chile S.A. NOTE 30: EXCHANGE DIFFERENCES
ITEM CURRENCY AMOUNT ---- -------- --------------------------- 03-31-2003 03-31-2002 ---------- ---------- FIXED (DEBITS) CREDITS AVAILABLE DOLLARS -144 445 MARKETABLE SECURITIES DOLLARS 974,083 0 TIME DEPOSITS DOLLARS -102,492 -10,476 INVENTORY DOLLARS 49,811 -12,831 BONDS INSTALLMENT DOLLARS 231,941 0 OTHER ASSETS DOLLARS 6,482 9,870 EFFECT OF FUTURE CONTRACT DOLLARS 1,142,534 0 EFFECT OF INFLATION DOLLARS -170,436 0 --------- ------ TOTAL (DEBITS) CREDITS 2,131,779 -12,992 LIABILITIES (DEBITS) CREDITS SHORT-TERM BANK LOANS DOLLARS 0 -110,596 NOTES PAYABLE DOLLARS -2,528 -49,983 NOTES PAYABLE OTHER CURRENCY 0 5,390 SUNDRY CREDITORS - SHORT TERM DOLLARS -13,638 0 LONG-TERM BANK LOANS DOLLARS -647,500 -68,684 SHORT-TERM RESERVES DOLLARS -58,133 -1,959 LONG-TERM RESERVES DOLLARS -28,590 -4,776 SUNDRY CREDITORS - LONG TERM DOLLARS -3,505 -1,981 OTHER LIABILITIES DOLLARS -42,244 0 --------- ------ TOTAL (DEBITS) CREDITS -796,138 -232,589 (LOSS) PROFIT FROM EXCHANGE DIFFERENCE 1,335,641 -245,581
31. Extraordinary Items As of March 31, 2003, there are no transactions for this item. 32. Expenses incurred in the sale of shares and debt instruments On August 2002 the company placed bond series C1, C2, D1 and D2, which resulted in expenses and rate placement differences of Th Ch$ 3,720,326 as of March 31, 2003. The amortization is being done according to the maturity of each series. Th Ch$ 323,376 are classified under other current assets and Th Ch$ 3,396,950 under other long term assets. The charge for its amortization to results amounted Th Ch$ 80,986. At March 31, 2002, there was no expenses for this item. 33. Cash Flow Statement An itemized list is included in the attached chart. CRISTALERIAS DE CHILE S.A. CASH FLOW STATEMENT 1. The following is the detail of the item OTHERS:
March 2003 March 2002 ---------- ---------- Th Ch$ Th Ch$ 541.11.40 Other income received Income Tax return 133,416 0 Discount for Custom Duties 0 139,514 Adjustment received 0 51,966 Other income 1,201 19,978 Total 134,617 211,458 541.11.80 Other expenses paid Exchange difference 168,532 64,903 Donations 7,770 19,569 Other expenses 1,528 81 Total 177,830 84,553 541.13.15 Sale of other investments Long-Term bonds share 0 181,319 Redemption Time Dep. over 90 days 0 4,937,633 Total 0 5,118,952 541.13.30 Other income from investments Maturity of future contracts 967,805 920,670 Total 967,805 920,670 541.13.65 Other investment disbursements Purchase of shares 11,680 0 Total 11,680 0
Following are financing and investment activities that did not generate cash flow during the fiscal year, but that commit future parent company cash flows:
ITEM Amount Th Ch $ Maturity ---- -------------- -------- Dividend 153 5,526,400 April-03 Imports payable investment project 1,748,597 April-03 Imports payable investment project 110,808 May-03 TOTAL 7,385,805
34. Derivative Contracts The parent company has signed future contracts in foreign currency of Th US$ 109,600 in 2003 (Th US$ 119,600 in 2002) subject to the regulations of Chapter VII of the Compendium of International Exchange Regulations of the Central Bank of Chile and Chapter 13-2 of the compilation of Regulations of Banks and Financial Institutions. As of March 31, 2003 and 2002 there was a difference in favor of financial institutions of Th Ch$ 897,794, (Th Ch$ 3,652,650 in 2002 classified under Other Current Liabilities). CRISTALERIAS DE CHILE S.A. NOTE 34: DERIVATIVE CONTRACTS
DESCRIPTION OF CONTRACTS --------------------------------------------------- PROTECTED ITEM OR MATURITY OR PURCHASE/ TRANSACTION TYPE OF TYPE OF VALUE OF EXPIRATION SPECIFIC SALE ----------------- DERIVATIVE CONTRACT CONTRACT DATE ITEM POSITION NAME AMOUNT ---------- -------- -------- ---------- ---- -------- ---- ------ FR CI 5,496,858 SECOND 2003 EXCHANGE RATE P - 0 FR CI 50,709,306 THIRD 2003 EXCHANGE RATE P - 0 FR CI 23,075,018 FOURTH 2002 EXCHANGE RATE P - 0 35. ACCOUNTS AFFECTED -------------------------------------------------- MATURITY OR VALUE OF ASSETS/LIABILITIES EFFECT ON RESULT TYPE OF TYPE OF VALUE OF EXPIRATION PROTECTED --------------------- ---------------------- DERIVATIVE CONTRACT CONTRACT DATE ITEM NAME AMOUNT REALIZED NOT REALIZED ---------- -------- -------- ---------- --------- ----------- ------ ------- ---------- FR CI 5,496,858 SECOND 2003 0 ASSETS 375,938 375,938 0 FR CI 50,709,306 THIRD 2003 0 LIABILITIES 938,830 938,830 0 FR CI 23,075,018 FOURTH 2002 0 LIABILITIES 334,902 334,902 0
Analysis of Forward Contracts in foreing currency as of 03.31.2003
INSTITUTION DATE FUTURE VALUE PROFIT (Loss) --------------------- -------------------------- ------------ -------------------------- Investment Maturity US$ March-2003 March-2002 ---------- -------- --- ---------- ---------- ThCh$ ThCh$ Banco Santander 03-13-2002 07-08-2003 4,000,000 193,153 Bank Boston N.A. 05-15-2002 05-13-2003 3,000,000 182,785 Nominal Contract: Banco Chile 09-05-2002 09-04-2003 5,000,000 49,014 - BCI 09-11-2002 09-10-2003 5,000,000 38,906 - Banco Chile 09-12-2002 09-11-2003 4,000,000 27,859 - BBVA BHIF 09-23-2002 09-22-2003 5,000,000 (99,753) - Banco Chile 09-24-2002 09-23-2003 5,000,000 (104,066) - Banco Chile 09-27-2002 09-26-2003 4,000,000 (77,362) - BCI 09-30-2002 09-29-2003 2,000,000 (46,900) - Banco Santander 09-26-2002 09-24-2003 6,500,000 (125,874) - Banco Santander 09-26-2002 09-25-2003 6,500,000 (125,210) - Banco Chile 10-02-2002 10-01-2003 6,000,000 (117,075) - Banco Santander 10-01-2002 09-30-2003 6,000,000 (130,976) - Banco Santander 10-03-2002 10-02-2003 5,000,000 (96,030) - Deutsche Bank (Chile) S.A. 10-10-2002 10-09-2003 4,000,000 (116,461) - Scotiabank 10-16-2002 10-15-2003 2,000,000 (37,275) - Deutsche Bank (Chile) S.A. 03-11-2003 09-08-2003 6,600,000 (178,654) - Deutsche Bank (Chile) S.A. 03-19-2003 09-15-2003 10,000,000 (54,640) - Deutsche Bank (Chile) S.A. 03-28-2003 11-17-2003 10,000,000 16,191 - Citibank N.A. 03-26-2003 11-10-2003 5,000,000 15,748 - Banco Chile 03-13-2003 09-10-2003 5,000,000 (111,174) - ---------- ---------- ----------- -------- --------- Sub Total 2003 109,600,000 (897,794) - Banco Chile 03-26-2002 03-19-2003 5,000,000 (75,480) Banco Chile 03-26-2002 03-19-2003 5,000,000 (75,442) BCI 03-26-2002 03-26-2003 5,000,000 (75,442) Banco Santander 03-13-2002 04-08-2003 4,000,000 (27,158) Citibank 02-28-2001 05-15-2002 3,000,000 217,446 Deutsche Bank (Chile) S.A. 03-28-2001 03-28-2003 10,000,000 (89,919) Deutsche Bank (Chile) S.A. 07-20-2001 07-22-2002 10,000,000 (153,554) Bank Boston 09-12-2001 09-11-2002 4,000,000 (153,140) Bank Boston 09-13-2001 09-12-2002 5,000,000 (172,521) Banco A Edwards 09-06-2001 09-05-2002 5,000,000 (98,877) Banco A Edwards 09-28-2001 09-27-2002 4,000,000 (196,217) Banco Santander 09-27-2001 09-26-2002 4,000,000 (194,109) Banco Santander 09-27-2001 09-26-2002 4,000,000 (193,811) Banco Santander 09-27-2001 09-26-2002 5,000,000 (241,517) Banco Santander 10-02-2001 10-01-2002 6,000,000 (348,691) Banco Santander 10-03-2001 10-03-2002 5,000,000 (252,875) Banco Santiago 21-09-2001 24-09-2002 5,000,000 (237,627) Chase Manhattan Bank 09-20-2001 09-23-2002 5,000,000 (245,449) Banco A Edwards 10-01-2001 09-30-2002 2,000,000 (96,603) Banco A Edwards 10-02-2001 10-02-2002 6,000,000 (290,267) Banco A Edwards 10-10-2001 10-09-2002 4,000,000 (268,202) Banco A Edwards 10-16-2001 10-16-2002 2,000,000 (117,735) JP Morgan Chase 11-27-2001 12-04-2002 5,000,000 (89,191) JP Morgan Chase 11-28-2001 12-11-2002 6,600,000 (125,199) Banco Santiago (EURO/US$) 12-19-2001 12-18-2002 3,500,000 (51,070) - ---------- ---------- ----------- -------- -------- 119,600,000 0 TOTAL TH Ch$ (897,794) (3,652,650)
35. Contingencies and Restrictions CONTINGENCIES AND COMMITMENTS As of March 31, 2003, there is a guarantee delivered in the amount of Th Ch$ 7,868 (Th Ch$ 7,882 in 2002), according to the detail in the attached chart. LAWSUITS OR OTHER LEGAL ACTIONS THE COMPANY IS INVOLVED IN As of March 31, 2003 and 2002 there are no pending lawsuits and other legal actions pending. RESTRICTIONS I) SYNDICATED LOAN In relation to the syndicated loan subscribed with JP Morgan Chase Bank and other 8 creditor banks for US$ 50 million, the following specific financial obligations exist: a) TOTAL CONSOLIDATED DEBT TO CAPITALIZATION RATIO Cristalerias de Chile S.A will not allow the Total Consolidated Debt to Capitalization Ratio to exceed the 0.45 to 1.0 relation at any time. b) TOTAL NON-CONSOLIDATED DEBT TO EBITDA RATIO Cristalerias de Chile S.A will not allow the Total Non-consolidated Debt to EBITDA Ratio to exceed the 2.5 to 1.0 relation at any time. Consolidated EBITDA is defined as the sum of the following: Operating income plus depreciation ansd amortization, plus non-cash charges (as long as they have been deduced when determining the operating income) and cash income for interests minus non-cash credits ,(as long as they have been added when determining operating income), in each case for each period. c) INTEREST COVERAGE RATIO Cristalerias de Chile S.A. will not allow the Interest Coverage Ratio to be lower than the following ratios at any time during the following periods: from January 1, 2003 onwards, 4.0. Interest coverage at the date of determination is defined as follows: the ratio between non-consolidated EBITDA for the period of four consecutive quarters that end, or most recently ended in, that date , and interest expenses for that period. d) NET EQUITY Cristalerias de Chile S.A. will maintain a minimum of UF 10,000,000 at any time. Cristalerias de Chile S.A. complies with 100% of the restrictions imposed by the creditor banks. II) BOND ISSUE The bond issue contract signed with Banco Chile as the bond owner's representative in May 29, 2002, established the following obligations: a) Financial Indicators Individual Balance: Leverage not higher than 1.2 times. Consolidate Balance: Leverage not higher than 1.4 times. b) Insurances for fixed assets of the company and its subsidiaries. c) The operations for which art. 44 and 89 of law 18,046 refer to must be carried out according to the conditions that these establish. d) Other minor restrictions related with the bond issue contract. Cristalerias de Chile S.A. complies with 100% of the restrictions imposed by the creditors. OTHER CONTINGENCIES As of March 31, 2003 and 2002, management is not aware of any other contingencies that could affect the company. CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - DIRECT GUARANTEES
CREDITOR DEBTOR ASSETS COMMITTED OF ------------------------------------- -------------------- GUARANTEE NAME RELATIONSHIP TYPE OF GUARANTEE TYPE BOOK VALUE --------- ---- ------------ ----------------- ---- ---------- EDIFICIO METROPOLIS AGF CRISTALERIAS DE CHILE S.A. COMMERCIAL DEPOSIT FLOOR 7,868 BALANCES PENDING PAYMENT AS OF CREDITOR DEBTOR CLOSING DATE OF ------ OF FINANCIAL GUARANTEE NAME STATEMENTS RELEASE OF GUARANTEES --------- ---- ---------------- ------------------------------------------------------- 03-31 03-31 03-31 03-31 03-31 2003 2002 2004 ASSETS 2005 ASSETS 2006 ASSETS ---- ---- ---- ------ ---- ------ ---- ------ EDIFICIO METROPOLIS AGF CRISTALERIAS DE CHILE S.A. 7,868 7,882 - - 7,868 - - -
CRISTALERIAS DE CHILE S.A. NOTE 35: CONTINGENCIES AND RESTRICTIONS - INDIRECT GUARANTEES
CREDITOR DEBTOR ASSETS COMMITTED OF ------------------------------------- -------------------- GUARANTEE NAME RELATIONSHIP TYPE OF GUARANTEE TYPE BOOK VALUE --------- ---- ------------ ----------------- ---- ---------- Societe de Participations Financieres et Industrielles Rayen Cura S.A. Affiliate Solidary - - Envases CMF Cristalerias de Chile S.A Affiliate Solidary - - BALANCES PENDING PAYMENT AS OF CREDITOR DEBTOR CLOSING DATE OF ------ OF FINANCIAL GUARANTEE NAME STATEMENTS RELEASE OF GUARANTEES --------- ---- ---------------- ----------------------------------------------------------------- 03-31 03-31 03-31 03-31 03-31 2003 2002 2004 ASSETS 2005 ASSETS 2006 ASSETS ---- ---- ---- ------ ---- ------ ---- ------ Societe de Participations Financieres et Industrielles Rayen Cura S.A. 3,371,028 3,921,547 842,757 - 842,757 - 1,685,514 - Envases CMF Cristalerias de Chile S.A 329,357 - - - - - 329,357 -
36. Guarantees obtained from third parties As of March 31, 2003 and 2002 the company has received guarantees from third parties, which are shown below: ITEM 2003 2002 Th Ch$ Th Ch$ Real Estate Lease Bank Boston UF 367.9 0 6,185 Real Estate Lease Security Bank UF 304 5,102 0 Real Estate Lease to Telecomunicaciones Cono Sur Ltda. (UF 130) 2,182 2,186 Real Estate Lease AGF Building (UF 365.9) 6,141 3,951 Real Estate Lease Metropolis Building (UF 189.2) 3,175 0 Suppliers Sight Drafts 1,675 1,288 TOTAL 18,275 13,610 37. Local and Foreign Currency Charts are attached showing the foreign currency balance as of March 31, 2003 and 2002. Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - ASSETS
ITEMS Currency Amount ----- -------- -------------------------- 03-31-2003 03-31-2002 ---------- ---------- Current Assets CASH Non-adjust Ch$ 848,275 1,645,793 CASH Dollars 127,519 107,502 TIME DEPOSITS Dollars 7,495,778 14,561,246 TIME DEPOSITS Non-adjust Ch$ 8,934,092 3,130,234 MARKETABLE SECURITIES Adjustable Ch$ 3,830,015 3,388,219 MARKETABLE SECURITIES Dollars 55,361,469 10,339,303 MARKETABLE SECURITIES Non-adjust. Ch$ 26,535 54,680 DEBTORS FROM SALES Non-adjust. Ch$ 15,630,357 14,457,887 DOCUMENTS RECEIVABLE Non-adjust. Ch$ 1,785,525 2,687,538 MISCELLANEOUS DEBTORS Adjustable Ch$ 809,645 323,246 MISCELLANEOUS DEBTORS Non-adjust. Ch$ 156,541 134,950 MISCELLANEOUS DEBTORS Dollars 12,318 9,089 DOC.&ACTS. REC. REL. CO'S. Non-adjust. Ch$ 1,840,520 2,050,147 DOC.&ACTS. REC. REL. CO'S. Adjustable Ch$ 621,139 637,488 STOCK Adjustable Ch$ 5,944,490 6,280,535 STOCK Dollars 0 0 REFUNDABLE TAX Non-adjust. Ch$ 853,045 1,387,263 EXPENSES PAID IN ADVANCE Dollars 398,419 108,731 EXPENSES PAID IN ADVANCE Adjustable Ch$ 0 152,896 DEFERRED TAXES Non-adjust Ch$ 474,170 748,117 OTHER CURRENT ASSETS Non-adjust Ch$ 3,347,825 2,119,968 OTHER CURRENT ASSETS Dollars 2,534,025 0 OTHER CURRENT ASSETS Adjustable Ch$ 196,229 0 Fixed Assets FIXED ASSETS Adjustable Ch$ 72,895,740 74,262,839 Other Assets INVESTMENT REL. CO'S. Adjustable Ch$ 144,225,456 143,385,736 NEG. INVESTMENT GOODWILL Adjustable Ch$ 2,011,178 2,178,997 LONG-TERM DEBTORS Adjustable Ch$ 161,203 186,310 L-T DOC. REC. REL. CO'S. Adjustable Ch$ 22,598,303 21,253,711 DEFERRED TAX Non-adjust Ch$ 0 0 OTHERS Dollars 13,385,201 9,612,205 OTHERS Adjustable Ch$ 0 0 Total Assets Non-adjust. Ch$ 33,896,885 28,416,577 Dollars 79,314,729 34,738,076 Adjustable Ch$ 253,293,398 252,049,977
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - CURRENT LIABILITIES
Up to 90 days --------------------------------------------------- 03-31-2003 03-31-2002 ---------------------- ----------------------- Avg. Avg. ITEM Currency Amount Annual Amount Annual ---- -------- --------- ------ ------ --------- Thou Ch$ Int. Rate Thou Ch$ Int. Rate Current Liabilities Long-Term Obligations 1-year maturity Dollars 445,744 - 19,554,244 3.375 Obligations with public Adjustable Ch$ 748,203 - - - Dividend Payable Non-adjust. Ch$ 77,453 - 69,650 - Accounts Payable Non-adjust. Ch$ 2,127,914 - 1,893,690 - Documents Payable Dollars 4,142,922 - 2,222,788 - Documents Payable Other Currencies - - 315,527 - Miscellaneous Creditors Dollars 770,446 - - - Miscellaneous Creditors Non-adjust. Ch$ 587,381 - 494,856 Doc. and Accts. Payable rel Co Adjustable Ch$ 6,446 - 24,208 - Doc. and Accts. Payable rel Co Non-adjust. Ch$ 140,145 - 238,896 - Reserves Rel. Co. Adjustable Ch$ - - - - Reserves Dollars - - - - Reserves Non-adjust. Ch$ 3,312,051 - 5,388,787 - Withholding Non-adjust. Ch$ 743,989 - -977,809 - Other Current Liabilities Dollars 897,794 - 3,652,650 - Deferred taxes Non-adjust. Ch$ - - - - Total Current Liabilities Dollars 6,256,906 - 25,429,682 - Adjustable Ch$ 754,649 - 24,208 - Non-adjust. Ch$ 6,988,933 - -9,063,688 - Other Currencies - - 315,527 - 90 Days to 1 Year ----------------------------------------------- 03-31-2003 03-31-2002 ---------------- ------------------- Avg. Avg. ITEM Currency Amount Annual Amount Annual ---- -------- ------ ------ ------ ------ Thou Ch$ Int. Rate Thou Ch$ Int. Rate Current Liabilities Long-Term Obligations - - - - 1-year maturity Dollars Obligations with public Adjustable Ch$ - - - - Dividend Payable Non-adjust. Ch$ - - - - Accounts Payable Non-adjust. Ch$ - - - - Documents Payable Dollars - - - - Documents Payable Other Currencies - - - - Miscellaneous Creditors Dollars - - - - Miscellaneous Creditors Non-adjust. Ch$ Doc. and Accts. Payable rel Co Adjustable Ch$ - - - - Doc. and Accts. Payable rel Co Non-adjust. Ch$ - - - - Reserves Rel. Co. Adjustable Ch$ 171,373 - 143,925 - Reserves Dollars 1,170,334 - 1,157,401 - Reserves Non-adjust. Ch$ - - - - Withholding Non-adjust. Ch$ - - - - Other Current Liabilities Dollars - - - - Deferred taxes Non-adjust. Ch$ - - - - Total Current Liabilities Dollars 1,170,334 - 1,157,401 - Adjustable Ch$ 171,373 - 143,925 - Non-adjust. Ch$ - - - - Other Currencies - - - -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES CURRENT PERIOD 03-31-2003
ITEM Currency 1-3 Years 3-5 years ---- -------- --------------------------- -------------------------- Amount Average Amount Average -------- ------------- ------- ------------- Thou Ch$ Interest Rate Thou Ch$ Interest Rate Obligations with Banks and Dollars - - 36,578,000 2,675 Financial Institutions Obligations with public bond Adjust. Ch$ - - - - Serie C Obligations with public bond Adjust. Ch$ - - - - Serie D Long-term Creditors Adjust. Ch$ 44,377 - - - Long-term Creditors Dollars 198,004 11.06 - - Long-term Reserves Dollars 2,098,052 - - - Long-term Reserves Adjust. Ch$ 3,965,228 - - - Deferred Taxes Non-adjust. Ch$ 2,379,810 - - - Total Long-term Liabilities Dollars 2,296,056 - 36,578,000 - Adjust. Ch$ 4,009,605 - - - Non-adjust. Ch$ 2,379,810 - - - ITEM Currency 5-10 Years More than 10 years ---- -------- ------------------------- -------------------------- Amount Average Amount Average -------- ------------- ------- ------------- Thou Ch$ Interest Rate Thou Ch$ Interest Rate Obligations with Banks and Dollars - - - - Financial Institutions Obligations with public bond Adjust. Ch$ 33,567,200 4.75 - - Serie C Obligations with public bond Adjust. Ch$ - - 35,245,560 5.8 Serie D Long-term Creditors Adjust. Ch$ - - - - Long-term Creditors Dollars - - - - Long-term Reserves Dollars - - - - Long-term Reserves Adjust. Ch$ - - - - Deferred Taxes Non-adjust. Ch$ - - - - Total Long-term Liabilities Dollars - - - - Adjust. Ch$ 33,567,200 - 35,245,560 Non-adjust. Ch$ - - - -
Cristalerias de Chile S.A. NOTE 37: LOCAL AND FOREIGN CURRENCY - LONG-TERM LIABILITIES PREVIOUS PERIOD 03-31-2002
ITEM Currency 1-3 Years 3-5 years ---- -------- --------------------------- -------------------------- Amount Average Amount Average -------- ------------- ------- ------------- Thou Ch$ Interest Rate Thou Ch$ Interest Rate Obligations with banks and Dollars 38,904,240 2.675 9,726,060 2.675 financial institutions Deferred Customs Duties Dollars 407,458 11.06 763,323 11.06 Long-term Creditors Adjust. Ch$ 59,716 - - - Long-term Reserves Dollars 3,424,202 - - - Long-term Reserves Adjustable Ch$ 3,740,779 - - - Deferred Taxes Non-adjust. Ch$ 1,147,845 - - - - - - Total Long-term Liabilities - Dollars 42,735,900 - 10,489,383 - - Adjust. Ch$ 3,800,495 - - - - Non-adjust. Ch$ 1,147,845 - - - ITEM Currency 5-10 Years More than 10 years ---- -------- ------------------------- -------------------------- Amount Average Amount Average -------- ------------- ------- ------------- Thou Ch$ Interest Rate Thou Ch$ Interest Rate Obligations with banks and Dollars - - - - financial institutions Deferred Customs Duties Dollars - - - - Long-term Creditors Adjust. Ch$ Long-term Reserves Dollars - - - - Long-term Reserves Adjustable Ch$ Deferred Taxes Non-adjust. Ch$ - - - - - - - - - - - - Total Long-term Liabilities - - - - - Dollars - - - - - Adjust. Ch$ - Non-adjust. Ch$ - - - -
38. Penalties In the 2003 and 2002 fiscal years no penalties have been applied to the company, to the members of the Board or Company Managers by the SVS or other administrative authorities. 39. Subsequent Events On April 15, 2003, in the General Regular Shareholders Meeting the following agreements were reached: a) ANNUAL REPORT AND BALANCE AS OF DECEMBER 31, 2002 The annual report, balance and distribution of the fiscal year profits finished at December 31, 2002 were approved. b) DEFINITIVE DIVIDEND N(degree) 153 DISTRIBUTION The distribution of final dividend No. 153 of Ch$86.35 per share was approved. The dividend was paid to registered shareholders starting on April 28, 2003 through Banco Bice. c) DIVIDEND POLICY The Board approved to distribute 40% of the fiscal year net income and credit to reserve the remaining in order to maintain the Company's growth. On the other hand the Board was authorized to grant interim dividends with charge to fiscal years' net income, and to distribute eventual dividends, with charge to future dividends fund, without having to summon a new general shareholders meeting. Such distribution would take place as long as the country's and the Company's economic situation would allow it. d) BOARD ELECTION An election of the Board was carried out, which is now integrated by: Mr. Ricardo Claro Valdes, Mr. Jaime Claro Valdes, Mr. Joaquin Barros Fontaine, Mr. Patricio Claro Grez, Mr. Gustavo de la Cerda Acuna, Mr. Cristian Eyzaguirre Johnston, Mr. Juan A. Figueroa Yavar, Mr. Patricio Garcia Dominguez, Mr. Baltazar Sanchez Guzman, and Mr. Alfonso Swett Saavedra. In a Board sesion carried out following the shareholders meeting Mr. Ricardo Claro Valdes was appointed Chairman of the Company and Mr. Baltazar Sanchez Guzman was appointed Vice-Chairman of the Company. e) EXTERNAL AUDITORS DESIGNATION According to Art. N(degree)52 of the law 18,046 the shareholders meeting appointed Ernest & Young Ltda., as external auditors for year 2003. e) NEWSPAPER DESIGNATION According to Art. N(degree) 59 of Public Companies, the newspaper in which shareholders meeting summons would be effected was designated. "El Diario Financiero" was designated for this effect. g) BOARD COMMITTEE In board session effected following the regular general shareholders meeting the board committee members were elected, according to Art. No. 50 bis Act 18,046. The independent directors named were Mr. Joaquin Barros Fontaine and Mr. Patricio Claro Grez, and as a representative director of the controlling group Mr. Juan A. Figuieroa Yavar. Since the date of the closing of financial statements and the date of issue of the present report no subsequent events that could significantly affect the Company's financial and economic situation have been registered. 40. Environment Following its permanent concern to preserve the environment, as of March 31, 2003 the Company has made investments of Th Ch$ 163,452 for the repair of an electrostatic precipitator to filter the gases issued by our smelting processes. The company thereby continues in compliance with the emission norms for particulate material, dictated by the fiscalizing agents. 41. TIME DEPOSITS At March 31, 2003 and 2002 the Company presents the following information: INSTITUTION Currency 2003 2002 Th Ch$ Th Ch$ Banco de A. Edwards (Chile) US$ 2,606,863 0 Banco Credito e Inversiones US$ 0 5,926,879 Banco Deutsche Bank Chile S.A. US$ 2,064,301 0 Banco J.P. Morgan Chase Bank US$ 341,299 0 Banco Santander US$ 2,483,315 0 Banco Scotiabank US$ 0 8,634,367 Banco de A. Edwards (Chile) $ 3,000,000 0 Banco Santander $ 924,992 0 Banco Santiago $ 0 3,130,234 Banco Scotiabank $ 5,009,100 0 ---------- ----------- TOTAL 16,429,870 17,691,480 ========== ========== 42. STOCK TRANSACTIONS During 2003 and 2002 fiscal years members of the board, controlling stockholders, related individuals and entities did not carry out stock transactions. 43. DISTRIBUTION OF SHAREHOLDERS The distribution of stockholders as of March 31, 2003 and 2002 is the following:
% of Shareholding No. of Shareholders ------------------------ ------------------- TYPE OF SHAREHOLDER 2003 2002 2003 2002 ------------------- ---- ---- ---- ---- 10% or more shareholding 34.03 34.03 1 1 Less than 10% shareholding with investment equal to or higher than 200 UF 65.82 65.81 261 261 Less than 10% shareholding with investment lower than 200 UF 0.15 0.16 815 831 TOTAL 100.00 100.00 1,077 1,093 CONTROLLER OF THE COMPANY 52.14 52.14 3 3
44. BOARD COMPENSATION During the years 2003 and 2002 provisions were made for participation in net income in the amount of Th Ch$ 879,269 and Th Ch$ 745,136 , respectively, according to the following detail: 2003 2002 ---- ---- ThCh$ ThCh$ Participation in previous fiscal year profits 706,426 737,836 Provision of fiscal year 172,843 7,300 -------- --------- TOTAL 879,269 745,136 ======== ======== RATIO ANALYSIS RATIO ANALYSIS OF THE INDIVIDUAL FINANCIAL STATEMENTS AS OF MARCH 31, 2003. CRISTALERIAS DE CHILE S.A. NOTES TO FINANCIAL STATEMENTS AS OF MARCH 31, 2003 AND 2002 1.- FINANCIAL INDICATORS
03-31-2003 03-31-2002 12-31-2002 ---------- ---------- ---------- LIQUIDITY Current liquidity times 7.25 1.78 6.72 Acid ratio times 6.75 1.54 6.25 DEBT Debt ratio times 0.55 0.43 0.56 Short-term debt % 11.85 38.30 12.40 Long-term debt % 88.15 61.70 87.60 Interest expenses coverage times 4.98 1.86 5.25 ACTIVITY Total assets MM Ch$ 366,505 315,205 362,567 Investments MM Ch$ 4,924 2,748 10,006 Disposal of property MM Ch$ 57 3 18 Inventory turnover times 10.5 7.1 9.1 Inventory permanence days 34,4 50,6 39,6 RESULTS Operating income MM Ch$ 17,448 15,664 71,412 Operating costs MM Ch$ 10,363 9,443 41,652 Operating result MM Ch$ 5,850 5,144 24,109 Interest expenses MM Ch$ 1,235 673 4,642 Non-operating income MM Ch$ (499) (4,112) (2,305) R.A.I.I.D.A.I.E. (EBITDA) MM Ch$ 8,496 3,489 33,602 After-tax profit MM Ch$ 4,321 183 17,749 RATE OF RETURN Return on equity % 1.9 0.1 7.9 Return on assets % 1.3 0.1 5.2 Return on operating assets % 11.9 5.2 24.3 Profit per share $ 67.5 2.7 277.3 Return on dividends % 2.6 3.2 2.9
Current liquidity Ratio of current assets to current liabilities. Acid ratio: Ratio of available funds to current liabilities. Debt ratio: Ratio of total current liabilities to net worth. Coverage of Interest Expenses: Earnings before interest and taxes divided by interest expenses. Inventory turnover: Ratio between sales cost of the period and average inventory. Inventory permanence: Ratio between average inventory and sales cost of the period, multiplied by 360 days R.A.I.I.D.A.I.E. (EBITDA) Earnings before interest, taxes, depreciation and amortization, and special items. Return on dividends: Sum of dividends paid in the last twelve months divided by market price of shares at closing of period. The main trends observed in the first quarter 2003 indicators are: LIQUIDITY INDICES An increase in the index can be observed with respect to March 2002 in the liquidity indeces due to the payment of short-term bank debt and due to the fact that funds obtained from the bond placement in August 2002 were placeed in short-term financial instruments. With respect to December 2002, an increase in the liquidity indeces can be observed due to the period's net income, which allowed an increase in current assets. INDEBTEDNESS INDICES The indebtedness index shows an increase compared with March 2002, due to the long-term bond placement effected in August 2002, which resulted in an increase of commited liabilities, partially compensated by a US$50 million prepayment of a syndicated loan. The short-term and long-term debt distribution shows a decrease in short-term debt, due to the financing decisions effected in fiscal year 2002, which resulted in the restructuring of the syndicated loan. The interest expenses coverage index registered a slight decrease with respect to the previous year due to the higher expenses associated with the bond issue effected in August 2002. ACTIVITY INDICES The Inventory turnover and inventory permanence indeces improved due to measures taken by the Company's management in order to decrease inventory. PROFITABILITY INDICES The equity and assets profitability indices show an increase with respect to the first quarter of 2002 due to a higher net income during the present quarter, which in turn is due to higher operating income as a result of higher sales. Likewise, the non-operating loss decreased due to better results in subsidiaries as well as a positive exchange rate difference. On the other hand, the return of dividends indexs shows an drop compared with the previous year due to an increase in the price of the share in the stock exchange and lower dividends paid during the period. 2. DIFFERENCE BETWEEN BOOK VALUE AND MARKET VALUE OF MAIN ASSETS. The financial statements of the company have been prepared according to generally accepted accounting principles and general and specific norms of the Securities and Insurance Commission, which is the agency that regulates the Company. The valuation of the assets includes adjustment for currency devaluation, reserves, and technical revaluations. We believe the foregoing is a reasonable way to value the Company's permanent investments. As of March 31, 2003, there were financial investments in stocks recorded according to their purchase price of Th Ch$ 3,830 million whose market value on the same date was Th Ch$5,802 million. Likewise, Ch$ 55,388 million are recorded as fixed rate marketable securities, whose market value reaches Ch$ 55,821 million. 3. RESULTS AS OF MARCH 2003 3a. Individual Result The Company had non-consolidated sales of Ch$17,448 million as of March 2003, which represents a 11.4% increase compared to the previous period. Volumes sold increased by 8.1%, reaching 58,267 tons. This volume level is mainly due to higher sales of bottles for the wine and non-returnable beer markets. Operating income rose by 13.7%, reaching Ch$5,850 million due to a higher sales volume. The Company's net income reached Ch$ 4,321 million, compared to Ch$ 183 million in 2002. This result is partially explained by a higher operating income, and mainly by the non-operating income, that passed from a Ch$4,112 million loss in 2002 to a Ch$499 million loss in 2003. During 2003 a higher income wqas registered from Cristalchile Inversiones, Vina Santa Rita and Envases CMF, a positive exchange rate difference of Ch$ 1,336 million and a lower loss in Cristalchile Comunicaciones (Ch$ 1,505 million in 2003 and Ch$ 2,482 million in 2002). Additionally, a higher loss was registered from CIECSA (Ch$ 437 million in 2003, Ch$ 256 million in 2002) and higher interest expenses that reached Ch$ 1,235 million (Ch$ 673 million in 2002). 3b. Result in Subsidiaries In 2003, Santa Rita's net income reached Ch$ 1,205 million, 14.2% over 2002. In the local market, the Company attained volumes that were 10.6% higher than in year 2002. Prices in this market dropped by 5.6% in real terms, as a result of increased competition and lower cost of musts. Sales in the local market increased by 4.5%. Volume sales in the export market increased by 4.0% due to higher sales to the Canadian and Latin American markets. During the period, exports represented 54.5% of total revenues in the amount of US$ 11 million. The operating income increased by 6.6%, reaching Ch$1.650 million, mainly as a result of the increase in volumes in the export and local markets and the depreciation of the Chilean Peso vs. the U.S. Dollar. The average price in dollars per case of Santa Rita for the export market was US$ 31.4, whereas the average price for the industry was US$23.5 per case. Santa Rita's non-operating income was Ch$24 million, compared to a Ch$271 million non-operating loss in 2002. Red Televisiva Megavision, CIECSA's main subsidiary, registered a Ch$90 million operating loss, compared with an operating income of Ch$43 million in 2002, due to higher internal productions that resulted in increased costs. MEGA reached a 22.9% audience share during the period(21.7% in 2002)(1). Net sales increased by 15.0% reaching Ch$ 4,329 million, due to an increase in live programming, which has resulted in higher audience levels. As of March 2003, MEGA had a net loss of Ch$248 million, compared to a loss of Ch$194 million in 2002. CIECSA had a Ch$445 million net loss, compared to a Ch$266 milllion net loss in 2002. Envases CMF S.A. registered a Ch$545 million net income in 2003 compared with a Ch$292 million net income in 2002. The company increased net sales by 1.1%, reaching Ch$ 8,857 million during the quarter. Sales volume dropped by 2.5%, reaching 6,092 tons. Operating income reached Ch$1,174 million, 38.9% higher than in 2002, mainly explained by sales of better margin products as well as improved operating efficiencies. At the non-operating level the company passed from a Ch$544 million loss in 2002 to a loss of Ch$357 million in 2003. In the cable TV business, Cristalchile Comunicaciones S.A. (99.99% owned by Cristalerias), is the owner of 50% of Cordillera Comunicaciones Ltda., which in turn is the owner of 99.99% of Metropolis-Intercom S.A. At March 31, 2003, Metropolis-Intercom S.A. registered sales of Ch$10,781 million compared with Ch$11,808 million during the same period the previous year. As of March 2003, Metropolis-Intercom had a net loss of Ch$1,973 million compared with a net loss of Ch$3,921 million in 2002. This result includes a depreciation charge of Ch$3.204 million (Ch$2,772 million in 2002) corresponding to the HFC network adquired in July 2000. The company ended the period with 240,000 subscribers, a 2,9% lower compared with the same date in 2002, due to a greater number disconnections due to the deteriorated domestic economic situation. As a result of the abovementioned and the negative goodwill amortization charge through Cordillera Comunicaciones of Ch$1,034 million in the period (Ch$1,041 million in 2002), Cristalchile Comunicaciones recorded a net loss of Ch$1,505 million (net loss of Ch$2,482 million in 2002). 4. CASH FLOW STATEMENT During the first quarter of 2003 a total net positive flow of Ch$5,324 million was generated, which is explained by a positive flow generated by operating activities of Ch$10,025 million, which was drooped by a negative financing flow of Ch$1,338 million and a negative flow of investment activities of Ch$3,363 million. The operating flow corresponds basically to the collection of sales and interest income, that were reduced by payment to suppliers, personnel, income tax and interests. The negative financing flow can be explained by the payment of dividends for the same amount. The investment flow is mainly explained by the collection of loans to related companies for Ch$ 889 million and the expiry of future contracts for Ch$ 968 million. This flow was used in the incorporation of fixed assets for Ch$ 5,259. The above mentioned results in an increase in the final balance of cash and cash equivalent, which passed from Ch$73,628 million as of December 31, 2002 to $78,548 million as of March 31, 2003. According to the current regulations of the SVS and the Association of Accountants of Chile, term deposits and agreements with due date less than 90 days have been considered as cash and cash equivalent. 5. INTEREST RATES AND EXCHANGE RATE RISK ANALYSIS a. Interest rates The Company is exposed to the risk of fluctuations in interest rates on its long-term debt, corresponding to a credit of US$50 million, which was renegotiated in October 2002 at a variable annual rate of LIBOR plus 0.8%. In addition, the Company issued bonds for a total of UF 4.1 million, for a period of 6 and 21 years, and which pay a fixed rate of 4.75% and 5.8% respectively (the actual placement rate was 5.3% and 6.5% respectively). As of March 31, 2003, the Company had available funds in the amount of Ch$77,555 million, invested at different terms in financial instruments such as time deposits, bonds, fixed rate mutual funds and agreements with resale commitment. This amount does not include bonds for Ch$ 9,988 million with maturity on September 15, 2005 and investments in shares for Ch$ 3,830 million. Currently the Company does not use secondary financial instruments to reduce risk in the event of fluctuations in interest rates. This policy will be studied permanently to evaluate the alternatives offered by the market. b. Exchange rate The Company maintains liabilities in dollars of US$63,3 million, which represent 12.6% of its assets, and which include a balance of a long-term syndicated loan of US$50 million. As of March 31, the Company has investments in dollars of US$103 million in time deposits, bonds and fixed rate mutual funds. In addition, it also has Dollar purchase future contracts of US$109.6 million. On the other hand, aproximately 35% of the company's revenues are adjustement by the exchange rate variation. Costs in foreing currency represent approximately 25% of the total cost. RELEVANT EVENTS RELEVANT EVENTS During the first quarter of 2003 no relevant events have been registered. -------- 1 Measured between 7:30 A.M. and 1:30 A.M. (i.e:18 hours daily) from Monday through Sunday. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Glassworks of Chile (Registrant) By: Benito Bustamante C. -------------------- Benito Bustamante C. Comptroller Date: July 2, 2003